Continental Gold Provides an Exploration and Development Update for Its Buritica Project, Colombia
TORONTO, ONTARIO -- (Marketwire) -- 10/22/12 -- Continental Gold Limited (TSX: CNL)(OTCQX: CGOOF)("Continental" or the "Company") is pleased to provide a revised development plan, including the commencement of a Pre-Feasibility Study ("PFS"), and an exploration update for its 100%-owned Buritica project located in Antioquia, Colombia.
Pre-Feasibility Study
The Company has made the decision to commence with a PFS, which will determine the mining and processing parameters and establish the associated capital expenditures and operating costs for Buritica.
On October 1, 2012, the Company announced an updated mineral resource estimate prepared in accordance with National Instrument 43-101 ("NI 43-101"), consisting of Measured and Indicated mineral resources of 3,740,000 tonnes of mineralized material containing 1,640,000 ounces of gold grading 13.6 g/t gold, 4,600,000 ounces of silver grading 38 g/t silver, and 55,800,000 pounds of zinc grading 0.7% zinc. The Inferred mineral resource is 13,330,000 tonnes of mineralized material containing 3,760,000 ounces of gold grading 8.8 g/t gold, 14,200,000 ounces of silver grading 33 g/t silver and 156,500,000 pounds of zinc grading 0.5% zinc.
The Company's decision to commence a PFS is based on the larger than anticipated increase in the Measured and Indicated resources in the updated mineral resource estimate and as a result of the recent clarifications by the Canadian Securities Administrators governing expectations for preliminary economic assessments ("PEA"). The Company's PFS replaces the previously-announced plan to commence a PEA (see March 28, 2012 press release). The Company believes that, with the planned underground development, it will be able to significantly increase the number of Measured and Indicated ounces with aggressive underground drilling ahead of the study. The study is anticipated to be completed in the first half of 2014.
Development Update
On August 30, 2012, the Company received formal approval for the modification of its existing Environmental Impact Assessment from Corantioquia, the autonomous regional corporation responsible for issuing and controlling environmental permits in Antioquia, Colombia. The environmental permit amendment allows the Company to commence underground development and the construction of a six-kilometre switchback road originating from the existing paved road at Buritica down into the Higabra valley. The development schedule remains on track with the following items:
-- Construction of an approximately one-kilometre underground access tunnel
measuring 4.5 metres x 5.0 metres in the Higabra Valley is expected to
commence by late November 2012. Although this tunnel will eventually
serve as the main access for all underground development by connecting
with planned ramps at both the Yaragua and Veta Sur vein deposits, the
initial use will be for underground definition and vertical expansion
drilling of the Yaragua and Veta Sur vein deposits and exploration
drilling of the La Mano and La Estera vein systems. Diamond drilling is
expected to commence from this tunnel in Q2/Q3 2013 once 650 metres of
development is completed and has crossed west of the Tonusco fault
(Figure 1);
-- Construction of an approximately three-kilometre ramp measuring 3.5
metres x 3.5 metres to access the Veta Sur vein deposit will commence in
December 2012. The ramp entrance will start at a slightly higher
altitude than the top of the deposit at approximately 1,700 metres above
sea-level and will culminate at approximately 1,450 metres above sea-
level. Infill diamond drilling from underground will commence from the
ramp once 150 metres of development is complete. Subsequent drill-
chambers are planned at 100 metre intervals as development continues to
advance (Figure 2); and
-- Construction of a six kilometre-long switchback road will commence
during Q2 2013, connecting the existing main paved Buritica road that
traverses the project at higher elevations with the future
infrastructure site in the Higabra Valley at approximately 1,000 metres
above sea level.
"Mobilization of equipment and personnel into the Higabra Valley is underway with both jumbos required for each development already at site," commented Mark Moseley-Williams, President and COO. "Once some development has been completed, we will update our shareholders on anticipated advance rates and timelines."
Exploration Update (Figures 3 and 4)
The Company has generated multiple exploration targets through geophysics and systematic soil geochemistry surrounding the Yaragua and Veta Sur vein deposits, within the greater Buritica area. The Company intends to further explore the Yaragua and Veta Sur vein deposits and conduct a first-pass diamond-drilling program on each of the additional targets. The following exploration program is scheduled for the next 12 months:
-- On October 1, 2012, a Phase IV, minimum 100,000 metre diamond drilling
program commenced with five surface and two underground drill-rigs. The
Company expects its drill productivity to increase to 8,000 metres per
month between November 2012 and March 2013, reflecting an increase of
2,000 metres per month over the average of the recently-completed Phase
III drill program. At least one additional surface drill-rig and two
additional underground drill-rigs will be added to the program by the
end of Q1 2013, which will further increase the productivity rate to
10,000 metres per month.
-- Multiple new drill-holes have been completed at the Yaragua and Veta Sur
vein deposits with an emphasis on drilling outside of the updated
mineral resource estimate block model. Of potential significance are
drill-holes BUSY278, which tested Veta Sur at depth, and BUSY291, which
tested Veta Sur at modest depths and more importantly, the western
portion of Yaragua at greater depths. Both holes were completed using a
high-power rig culminated at greater than 1,000 metres down-hole. Assay
results from these and other holes into the Yaragua and Veta Sur vein
deposits are expected prior to the end of October 2012.
-- Based on the initial positive diamond drill results for the La Estera
and La Mano vein systems (see September 13, 2012 press release), three
drill rigs were mobilized in late September in order to expedite
productivity. Four new drill holes have been completed (BUSY319,
BUSY322, BUSY325 and BUSY327) and each has visually intersected multiple
veins. Three additional holes are currently underway (BUSY328, BUSY330
and BUSY331), with visual intersections of multiple veins in BUSY328 and
BUSY331, while drill-hole BUSY330 has only just ensued and has not yet
reached its initial target depth. Results will be released in a timely
fashion with first assays expected towards the end of November 2012.
-- A visual discovery of a potentially new vein system called San Agustin
has been made in BUSY324. San Agustin is located approximately 200
metres NNW of the Yaragua vein deposit. BUSY324 was drilled for over
1,200 metres and initially tested the outside western edge of the block
model for the Yaragua vein deposit. The hole then continued north and
successfully intersected San Agustin veins laterally below significant
artisanal workings at surface. Given the visual intersections of veins
at over 1,000 metres down-hole, a second drill-hole (BUSY329) was
immediately collared from the same pad and is currently underway.
Results from BUSY324 are expected in late November 2012.
-- Ground truthing continues on regional Buritica targets and it is
expected that initial drilling will begin in Q1 2013 on Pinguro, Guarco
and Pajarito (Figure 4).
"Overall activity has picked up significantly in recent weeks and our team is elated about the tasks in front of them," commented Ari Sussman, CEO. "Drilling our new discoveries at La Estera and La Mano is truly exciting. We are going to be aggressive as possible to determine the potential of these targets, as well as additional targets in the greater Buritica area."
About Continental Gold
Continental Gold Limited is an advanced-stage exploration and development company with an extensive portfolio of 100%-owned gold projects in Colombia. Spearheaded by a team with over 40 years of exploration and mining experience in Colombia, the Company is focused on advancing its high-grade Buritica gold project to production.
In August 2012, Continental achieved an important milestone, receiving formal approval for the modification of its existing Environmental Impact Assessment. The amendment allows the Company to build a six-kilometre switchback road and begin underground development by constructing a one-kilometre access tunnel. With a goal of being the first modern-day gold producer in Colombia, Continental will commence the construction of the access tunnel in H2 2012, initially providing access for underground drilling and eventually used for commercial production. A Phase IV drill program is underway at the Buritica project to further delineate the mineral resource and drill new target zones identified within its concessions.
Additional details on the Buritica project and the rest of Continental's suite of gold exploration properties are available at www.continentalgold.com.
The scientific and technical information contained in this press release has been reviewed and approved by Mark Moseley-Williams, President and Chief Operating Officer of the Company, who is a qualified person within the meaning of NI 43-101.
For additional technical information on the Buritica project, please refer to the technical report entitled "Mineral Resource Estimate of the Buritica Gold Project, Colombia" dated October 24, 2011, as amended November 23, 2011, available on SEDAR at www.sedar.com, on the OTCQX at www.otcmarkets.com and on the Company website at www.continentalgold.com.
Forward-Looking Statements
This press release contains or refers to forward-looking information under Canadian securities legislation, including statements regarding the estimation of mineral resources, exploration results, potential mineralization, exploration and mine development plans, timing of the commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to convert estimated mineral resources to reserves, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward- looking statements. These forward-looking statements are made as of the date hereof and the Company assumes no responsibility to update them or revise them to reflect new events or circumstances other than as required by law.
Differences in Reporting of Resource Estimates
This press release was prepared in accordance with Canadian standards which differ in some respects from United States standards. In particular, and without limiting the generality of the foregoing, the terms "inferred mineral resources," "indicated mineral resources," "measured mineral resources" and "mineral resources" used or referenced in this press release are Canadian mining terms as defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves (the "CIM Standards"). The CIM Standards differ significantly from standards in the United States. While the terms "mineral resource," "measured mineral resources," "indicated mineral resources," and "inferred mineral resources" are recognized and required by Canadian regulations, they are not defined terms under standards in the United States. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. Readers are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into reserves. Readers are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian regulations; however, United States companies are only permitted to report mineralization that does not constitute "reserves" by standards in the United States as in place tonnage and grade without reference to unit measures. Accordingly, information regarding resources contained or referenced in this press release containing descriptions of our mineral deposits may not be comparable to similar information made public by United States companies.
To view the figures associated with this press release, please visit the following links:
Figure 1: http://media3.marketwire.com/docs/CNL1019figure1.pdf
Figure 2: http://media3.marketwire.com/docs/CNL1019figure2.pdf
Figure 3: http://file.marketwire.com/release/1019CNL_figure3.pdf
Figure 4: http://media3.marketwire.com/docs/1019CNL_figure4.pdf
Contacts:
Continental Gold Limited
Nisha Hasan
Director, Investor Relations
+1.416.583.5611
info@continentalgold.com
www.continentalgold.com