Prodigy Expands Magino Gold Resource by Over 55%, Including 95% in Indicated Category for 5,809,000 Ounces, Inferred: 300,000 Ounces
20.08.2012 | Marketwire
Vancouver, British Columbia, August 20, 2012 - Prodigy Gold Inc. (PDG - TSX Venture, KX3 - FWB) ("Prodigy", "Prodigy Gold", "the Company") is pleased to announce the release of an updated NI 43-101 mineral resource estimate for its flagship Magino gold project in northern Ontario. The resource estimate has been completed by Tetra Tech Wardrop ("Tetra Tech") and is constrained by geologic domains and conceptual pit shell. A summary of the mineral resource estimate is shown in the table below:Magino Project Mineral Resource Estimate
-----------------------------------------
Indicated Resource
-----------------------------------------------------------------
Cutoff Grade (gpt gold) Grade (gpt gold) Tonnes Gold (oz)
-----------------------------------------------------------------
0.20 0.74 266,137,000 6,332,000
-----------------------------------------------------------------
0.30 0.83 224,469,000 5,990,000
-----------------------------------------------------------------
0.35 0.89 203,001,000 5,809,000
-----------------------------------------------------------------
0.40 0.94 182,913,000 5,528,000
-----------------------------------------------------------------
0.50 1.06 147,676,000 5,033,000
-----------------------------------------------------------------
0.60 1.18 119,250,000 4,524,000
-----------------------------------------------------------------
0.70 1.31 96,399,000 4,060,000
-----------------------------------------------------------------
1.00 1.71 52,206,000 2,870,000
-----------------------------------------------------------------
1.30 2.14 30,158,000 2,075,000
-----------------------------------------------------------------
-----------------------------------------
Indicated Resource
----------------------------------------------------------------
Cutoff Grade (gpt gold) Grade (gpt Gold) Tonnes Gold (oz)
----------------------------------------------------------------
0.20 0.70 15,288,000 344,000
----------------------------------------------------------------
0.30 0.84 11,748,000 317,000
----------------------------------------------------------------
0.35 0.91 10,260,000 300,000
----------------------------------------------------------------
0.40 1.00 8,847,000 284,000
----------------------------------------------------------------
0.50 1.16 6,828,000 255,000
----------------------------------------------------------------
0.60 1.31 5,492,000 231,000
----------------------------------------------------------------
0.70 1.48 4,379,000 208,000
----------------------------------------------------------------
1.00 2.01 2,419,000 156,000
----------------------------------------------------------------
1.30 2.46 1,594,000 126,000
----------------------------------------------------------------
The Magino Project contains an Indicated resource of 5,808,690 ounces of gold (203.0 million tonnes grading 0.89 gpt gold and an Inferred resource of 300,164 ounces of gold (10.3 million tonnes grading 0.91 gpt gold) at a cutoff grade of 0.35 gpt gold. The mineral resource was estimated by Patrick Huxtable RPGeo, MAIG, who is a Qualified Person as defined in NI 43-101. He is an employee of Tetra Tech, and is independent of Prodigy Gold as defined by section 1.5 of NI 43-101. The mineral resource estimate includes the results from almost 68,000 metres of core drilling completed at the project since mid-September, 2011, in addition to 151,900 metres of previous core drilling. The mineral resource has an effective date of August 20, 2012; a complete Technical Report will be filed on SEDAR within 45 days of this News Release. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves.
The new resource estimate, dominated by Indicated gold resources, sets the key parameters for the proposed gold mining project as Magino advances through the feasibility process. Prodigy highlights the major implications of the resource estimate and future plans for the Magino project below:
- The resource contains a large proportion of gold resources above a grade of 0.50 gpt gold (5,033,000 ounces of Indicated resource grading 1.06 gpt gold (147.7 million tonnes) and 255,000 ounces of Inferred resource grading 1.16 gpt gold (6.8 million tonnes)), which the Company believes will provide a focus for mill head-grade optimization studies. Prodigy believes that this higher grade material will support a mine plan which maximizes mill head grade, potentially lowering cash costs per ounce and improving project NPV.
- Future trade-off studies intend to concentrate on the low-grade resource to determine the optimal method for processing this material; both conventional milling as is currently modeled and alternative, lower cost methods of gold recovery. The emphasis will be on utilizing mill capacity for higher-grade resources while still recovering the maximum amount of gold while avoiding significant project capital costs increases or higher production unit costs.
- Drilling completed since the last resource estimate (November, 2011) has dramatically increased the Indicated gold resource at Magino: Over 95% of the gold resource is now classified as Indicated. The conversion of previously modeled Inferred resources and identification of new Indicated resources greatly increases the company's confidence in the grade distribution within the Magino gold deposit and will enhance the mine planning process during upcoming studies.
- The reported gold resources were estimated using more conservative cost and gold price parameters than previous resource estimates and closely mirror the costs reported in a previously released Preliminary Economic Assessment (December, 2011).
- The Company intends to incorporate the new resource estimate into a Prefeasibility Study (PFS) for the Magino Mine gold project, expected early in 2013. The PFS will evaluate mining, milling and gold recovery alternatives as discussed above, and identify the preferred alternative for developing the project.
- Additional drilling is being planned to finalize the resource block model as part of the PFS. Technical and condemnation drilling in areas where mine infrastructure (mill site, waste rock disposal, etc.) is planned will also continue.
Mineral Resource Estimate:
As previously reported, Prodigy Gold has focused its geological program on assessment of the wide zones of quartz-pyrite-sericite altered granodiorite that host the former underground mine workings at Magino. The latest drilling commenced by Prodigy in September, 2011 has been included in the current mineral resource estimate. The area of interest covers 1,600 metres of the 075 degree trending Webb Lake granodiorite stock and alteration zones that aggregate up to 300 metres in width, and dip steeply to depths of at least 600 metres. At Magino the Webb Lake stock is covered by up to 30 metres of fluvio-glacial material. The felsic and mafic volcanic country rock surrounding the stock contain areas of low grade gold mineralization encountered by drilling; however the main focus remains the broad low-grade alteration zones hosted by granodiorite. A late stage diabase dyke transects the Webb Lake stock.
The database used by Tetra Tech contains 1,210 diamond drill holes (total of 219,734 metres), including 242 surface diamond drill holes that were completed in the period from September 2011 to June 2012 for 67,848 metres. A Vulcan block model with cell dimensions of 10 metres (X), 10 metres, (Y) 5 metres (Z), was coded to reflect the surface topography, base of overburden, Webb Lake granodiorite contacts, domain solids, and the late stage diabase dyke. Sub-celling of the block model on 1 x 1 x 1 m spacing allows the parent block to be split once in each direction to more accurately fill the volume of the wireframes, and thus more accurately estimate the tonnes in the resource. A three dimensional wireframe model of the underground development, stopes, and unmineralized diabase dyke was stored as percent volumes in the block model to ensure that the reported mineral resource estimates are depleted for prior mining and unmineralized zones are excluded from estimation. The geologists at Prodigy have interpreted 25 structural domains to identify the zones of mineralization in the drill cores. These 25 domains are within the Webb Lake granodiorite, Lovell Lake granodiorite and the North and South meta-volcanics and define the mineralized zones.
Gold grades were estimated from five-metre length-weighted un-cut composites into the interpreted mineralized blocks by ordinary kriging using parameters established from analysis of the variography within each domain. The impact of clustered high gold grades was controlled by using a combination of "sample per hole" restrictions, maximum distance extrapolation restrictions for grades above 22 gpt gold for Webb Lake, 4.5 gpt gold for Lovell Lake, 7 gpt gold for the south meta-volcanics and 6 gpt gold for the North meta-volcanics domains. Minimum and maximum numbers of composites used for estimation were set to 2 and 32 per block respectively for the first pass and 1 and 32 respectively for the second pass estimates. Discretisation was set to 4 x 4 x 4. Density factors of 2.72 gm/cc were assigned to granodiorite mineralized zones and 2.86gm/cc for the meta-volcanics mineralized zones respectively based on approximately 4,024 measurements of specific gravity performed by Prodigy
In order to identify mineralized blocks that can be reported as a Mineral Resource, a conceptual pit shell was developed using Whittle software to identify those parts of the block model that have reasonable prospects for eventual economic extraction. Parameters used were: 48 degree (overall pit slope); $1.80/tonne mining cost; $1,388/oz gold price; 94.5% process recovery; $12.50/tonne processing cost including G&A. A detailed pit model using more selective criteria will be used for the Project economic evaluation in the PFS. Mineralized blocks that lie within the conceptual pit shell have been classified as either Indicated or Inferred Mineral Resources. Geostatistical parameters from the kriging system were used to identify regions of better confidence estimates.
Tetra Tech has applied an Indicated classification to blocks in the mineral resource that satisfied the estimation parameters for the first pass estimations. Tetra Tech has applied an Inferred classification to blocks in the mineral resource that satisfied all estimation parameters for the second pass estimations. Tetra Tech has not classified any measured resources after considering the uncertainty in geological interpretation, extent of the underground workings, the high nugget environment, short ranges of gold grade continuity, use of assigned densities and the current drill spacing. Tetra Tech notes that Prodigy Gold has an ongoing drill program to in-fill the existing drill pattern.
Qualified Persons:
The technical and scientific disclosure of the mineral resource estimate has been reviewed and approved by Patrick Huxtable RPGeo, MAIG (geology and mineral resource), Anoush Ebrahimi P.Eng., APEGBC (pit-shell parameters) who are qualified persons as defined by National Instrument 43-101. Mr. Huxtable and Mr. Ebrahimi are employees of Tetra Tech, and independent of the Company.
About Prodigy Gold:
Prodigy Gold Inc. (PDG: TSX.V) is currently evaluating the development of the Magino mine gold project in Ontario as an open-pit mining opportunity with the potential for deeper, higher grade gold production. The Magino project contains Indicated gold resources of 5,809,000 ounces grading 0.89 gpt gold (203.0 million tonnes), and 300,000 ounces of Inferred gold resources grading 0.91 gpt gold (10.3 million tonnes) at a cut off grade of 0.35 gpt gold. Included within this resource estimate is a higher grade zone consisting of 5,033,000 ounces grading 1.06 gpt gold (147.7 million tonnes) of Indicated resource and 255,000 ounces of Inferred gold resources grading 1.16 gpt gold (6.8 million tonnes). Please see the Prodigy Gold press release dated August 20, 2012, for more details. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves.
A Prefeasibility Study for the proposed open pit mining project at Magino is scheduled for completion early in 2013. Bringing the Magino mine project through the feasibility process and towards production is a catalyst for growing Prodigy Gold and building substantial value for Prodigy shareholders: Today's Discovery, Tomorrow's Future.
All scientific and technical information for the Magino project, except the section labelled "Mineral Resource Estimate", has been reviewed and approved by Tom Pollock, P.Geo., Prodigy Gold's Vice President - Exploration, who is a qualified person under the definitions established by National Instrument 43-101. Drill core at Magino is boxed, covered, and sealed at the drill rig and moved to the Prodigy logging and sample preparation facilities by Prodigy Gold personnel. The core is then split down the centre using a typical table fed circular rock saw normally at one metre intervals. One half of the core is sent for assay to Activation Laboratories Ltd., 33 Iroquois Road, ON, P4N 7C5, while the other half is returned to the core box and stored at Prodigy's sampling facility in a secure, fenced off, area. Activation Laboratories are ISO/IEC 17025 certified and are at arm's length to Prodigy. Prodigy QA/QC procedures include the regular use of blanks, standards and duplicate samples in addition to sending 10% of the samples to ALS Chemex, 2090 Riverside Dr., Timmins, ON, P4R 0A2 for check assays. ALS Chemex is at arm's length to Prodigy and is ISO 9001:2008 certified. Samples assaying > 3.0 gpt gold are automatically re-assayed by the metallic screen method. Gold assays greater than 40 gpt are capped at 40 gpt when calculating composite intervals in drill holes. Drill holes are directed as much as possible perpendicular to the strike and dip of the mineralization at Magino. As a rough estimate the true thickness of the above intercepts is approximately 76%.
On behalf of the Board of Directors
Brian J. Maher
President and Chief Executive Officer
FOR FURTHER INFORMATION, PLEASE CONTACT:
Prodigy Gold Incorporated
Email: ir@prodigygold.com
Website: www.prodigygold.com
tel.: 1-604-688-9006
Fax: 1-604-688-9029
This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the Magino mine property and other future plans, objectives or expectations of Prodigy Gold Incorporated (the "Company") are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, exploration cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.