TORONTO, Sept. 12, 2012 /CNW/ - Galway Resources Ltd. is pleased to
announce an initial mineral resource estimate and positive
metallurgical results from the first 30 months of drilling at its
California gold-silver property in Colombia. The resource estimate
was completed by SRK Consulting. SRK Consulting (U.S.) Inc., [SRK]
prepared a mineral resource estimate for the California deposit in
accordance with Canadian Securities Administrators (CSA) National
Instrument 43-101 (NI 43-101), and resources have been classified
according to the "CIM Standards on Mineral Resources and Reserves:
Definitions and Guidelines" (November 2010). Accordingly, the
resources have been classified as "Indicated" and "Inferred". The
metallurgical test work was carried out by McClelland Laboratories,
Inc, who has been conducting metallurgical work for some of the
largest mining and exploration companies worldwide since 1987.
Highlights: -- Indicated resources of 424,000 ounces gold in 2.39M
tonnes at 5.53 g/t using a 2.0 g/t cut-off -- Plus Inferred
resources of 666,000 ounces gold in 3.85M tonnes at 5.38 g/t using
a 2.0 g/t cut-off -- Galway's average gold grade is 40% higher than
AUX's gold grade of 3.90 g/t as originally reported by Ventana Gold
-- Additional drilling at depth and along strike, coupled with
additional drilling in the newly discovered Machuca and Catalina
zones, and the potential value associated with the Company's
fractional land position could provide additional upside (refer to
Figures 1 and 2) -- Resources do not include the newly-discovered
Catalina zones with recently-released intersections of 13.5 meters
(m) grading 3.7 g/t Au and 59.5 g/t Ag (hole GWY-244), and 7.0 m
grading 2.1 g/t Au (hole GWY-238); these zones are open in all
directions -- Resources do not include recently released
intersections such as 6.2 m grading 6.5 g/t Au (hole GWY-247) in
the new Machuca zones, which suggests a material amount of
potential due to results obtained to date, and the area is open in
all directions (e.g. west of and below 19.0 m grading 11.6 g/t Au
in hole GWY-231) -- Gold recoveries range from 93-99%. The first
round of sampling demonstrated that the mineralization is amenable
to conventional sulfide flotation -- Silver recoveries range from
86%-97%. Management believes that the flotation circuit would also
recover copper and zinc as by-product credits -- Galway has
successfully negotiated to obtain title to nine mining concessions
in California and has received confirmation from the National
Geological Service of Colombia that mining titles for 100% of six
concessions were successfully transferred and registered to Galway
Resources, including the "fractions" that appear to be directly
within AUX's La Mascota mineralized structure Gold Resources
California Deposit, Colombia Current Mineral Resource Estimate -
SRK, September 07, 2012 Galway Properties; 2.0 g/t Au cut off
Cutoff Au Au Classification (g/t Tonnes (g/t) ounces Ag (g/t) Cu
(%) Au) Indicated 2.0 2,387,000 5.53 424,000 6.93 0.072 Inferred
2.0 3,850,000 5.38 666,000 6.36 0.067 Notes: See below next table
Sensitivity to Cutoff Grade - SRK Estimated Resources, September
07, 2012 - Galway's California Project, Colombia
___________________________________________________________________________________
|Cutoff| Inferred | Indicated |
|______|_______________________________________|____________________________________|
| Au | | | | | | | | | | | |Grade | | Au | Ag | Cu | Au | | Au | Ag
| Cu | Au | |(g/t) | TONNES |(g/t)|(g/t)| (%) | Ounces | TONNES
|(g/t)|(g/t)| (%) |Ounces |
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 0.25 |114,285,600|0.64 |4.01 |0.056|2,349,207|34,246,800|0.82
|4.14 |0.062|898,355|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 0.50 |30,034,800 |1.46 |4.42 |0.060|1,414,263|9,315,000 |2.05
|4.73 |0.064|615,371|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 1.00 |17,069,400 |2.08 |4.37 |0.059|1,142,287|5,367,600 |3.09
|4.96 |0.065|533,840|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 1.25 | 4,849,200 |4.63 |6.44 |0.067| 721,786 |2,705,400 |5.08
|6.74 |0.071|442,276|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 1.50 | 4,703,400 |4.73 |6.28 |0.067| 715,260 |2,683,800 |5.11
|6.78 |0.071|441,315|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 2.00 | 3,850,200 |5.38 |6.36 |0.067| 666,470 |2,386,800 |5.53
|6.93 |0.072|424,385|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 2.25 | 3,493,800 |5.72 |6.54 |0.066| 642,042 |2,192,400 |5.83
|7.10 |0.072|411,142|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 2.50 | 2,953,800 |6.32 |6.46 |0.066| 600,654 |1,873,800 |6.42
|7.25 |0.071|387,061|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 3.00 | 2,327,400 |7.29 |6.49 |0.066| 545,742 |1,436,400 |7.55
|7.46 |0.072|348,712|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 3.50 | 1,852,200 |8.34 |6.74 |0.067| 496,415 |1,177,200 |8.49
|7.44 |0.073|321,494|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 4.00 | 1,517,400 |9.36 |6.85 |0.068| 456,467 | 939,600 |9.69
|7.93 |0.073|292,634|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
| 4.50 | 1,333,800 |10.05|7.18 |0.069| 431,192 | 810,000
|10.56|7.83 |0.073|274,922|
|______|___________|_____|_____|_____|_________|__________|_____|_____|_____|_______|
Notes: -- 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 Resources estimated will be
converted into Mineral Reserves; -- Mineral Resources are reported
in accordance with Canadian Securities Administrators (CSA)
National Instrument 43-101 (NI 43-101) and have been estimated in
conformity with generally accepted Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) "Estimation of Mineral Resource and
Mineral Reserves Best Practices" guidelines; -- Resources are
stated at a 2.0 g/t gold cut-off grade; sufficient to define
potentially underground mineable resources; however mineable
underground shapes have not yet been defined; -- The grades for Ag
and Cu were estimated separately, and presented as associated
average metal grades at the Au cutoff; -- Mineral resource tonnage
and contained metal have been rounded to reflect the accuracy of
the estimate, and numbers may not add due to rounding; and -- SRK
is reporting resources on a 100% basis for Galway controlled
concessions. Some of Galway's concessions are 100%-owned while
others have minority owners with up to a 20% participating
interest, subject to Galway's first right of refusal. Other notes:
1) The estimate of mineral resources may be materially affected by
environmental, permitting, legal, title, taxation, socio-political,
marketing, or other relevant issues, although the Company is not
aware of any such issues. 2) The quantity and grade of reported
Inferred resources in this estimation are uncertain in nature and
there has been insufficient exploration to define these Inferred
resources as an Indicated or Measured mineral resource and it is
uncertain if further exploration will result in upgrading them to
an Indicated or Measured mineral resource category. 3) A bulk
density of 2.50 t/m³ was used for all tonnage calculations. There
is little variation in density between the different rock types. 4)
The lower cut-off was ascertained using a gold price of US$1500/oz
with underground mining costs at US$65/tonne and milling plus
G&A costs at US$17/tonne. Drill Results Recent drilling has
focused on expanding the California mineralized footprint to the
south where multiple new zones have been discovered. At the Machuca
zones, based on an arbitrary physical break in the model at about
the location of the river, the drilling indicates the Machuca zones
to contain approximately 100,000 ounces Au (included in the above
stated resources). Further east, the Santa Catalina area has
recently been a focus of one of Galway's drilling programs, with
several new zones discovered. The drill collared into a zone that
returned 3.7 g/t Au over 13.5 m from surface in hole GWY-244, while
a second hole returned 2.1 g/t Au over 7.0 m, including 11.8 g/t Au
over 1.0 m in hole GWY-238 in a different zone. Figures 1 and 2 are
a plan and long section showing the relative locations of these new
zones and the resource blocks. All drill results referenced in this
press release were previously issued. Those reiterated herein are
those that were not incorporated in the resource model. Santa
Catalina Zones Drill Results, Outside The Resource Model GWY-234 --
5.0 meters grading 2.7 g/t Au and 418.3 g/t Ag, including 1.0 meter
of 6.6 g/t Au and 866.0 g/t Ag GWY-236 -- 14.0 meters grading 1.0
g/t Au and 17.9 g/t Ag, including 1.0 meter of 4.9 g/t Au and 81.3
g/t Ag -- 7.0 meters grading 1.2 g/t Au and 53.3 g/t Ag, including
1.0 meter of 4.5 g/t Au and 326.0 g/t Ag GWY-238 -- 7.0 meters
grading 2.1 Au and 15.2 g/t Ag, including 1.0 meter of 11.8 g/t Au
and 18.2 g/t Ag GWY-244 -- 13.5 meters grading 3.7 g/t Au and 59.5
g/t Ag (21.5% core recovery) -- 5.0 meters grading 2.3 g/t Au and
153.5 g/t Ag, including 1.0 meter of 6.2 g/t Au and 426.0 g/t Ag
GWY-245 -- 8.0 meters grading 1.5 g/t Au and 11.5 g/t Ag, including
1.0 meter of 5.7 g/t Au and 29.4 g/t Ag -- 1.0 meter grading 5.8
g/t Au and 93.2 g/t Ag GWY-250 -- 17.0 meters grading 1.4 g/t Au
and 29.3 g/t Ag (17.4% core recovery) Machuca Zones Drill Results,
Not Included In The Resource Model GWY-243 -- 6.0 meters grading
3.0 g/t Au and 20.1 g/t Ag, including 1.0 meter of 14.3 g/t Au and
87.1 g/t Ag -- 1.0 meter grading 5.5 g/t Au and 140.0 g/t Ag
GWY-247 -- 6.2 meters grading 6.5 g/t Au and 21.0 g/t Ag, including
1.0 meter of 31.3 g/t Au and 68.8 g/t Ag GWY-248 -- 17.0 meters
grading 2.9 g/t Au and 21.3 g/t Ag, including 1.0 meter of 19.7 g/t
Au and 76.1 g/t Ag, and 1.5 meters of 6.2 g/t Au and 81.8 g/t Ag
GWY-249 -- 4.4 meters grading 3.5 g/t Au and 52.9 g/t Ag, including
1.1 meters of 11.6 g/t Au and 172.0 g/t Ag GWY-251 -- 33.0 meters
grading 2.3 g/t Au and 35.3 g/t Ag, including 1.0 meter of 19.9 g/t
Au and 610.0 g/t Ag, and 1.0 meter of 25.8 g/t Au Details of
Galway's California drill results are provided in the Assay Result
Highlights Table on the Company's website at
www.galwayresources.com. Also on the website are all maps and
sections associated with this press release, and pictures of
significant visible gold from California and Vetas. Mineral
Resource Modeling and Estimation The mineral resource estimate was
prepared in accordance with NI 43-101 by SRK Consulting (U.S.)
Inc., of Tuscon, Arizona, an independent consulting company that
provides services to the mining industry. The resource database
incorporates 241 surface diamond drill holes (78,272 m) completed
during the 2009-2012 and ongoing drill program. At the California
deposit, clearly defined limits to gold mineralization are not yet
established, and it is difficult to create and interpret hard
boundaries to mineralization. The limits of gold mineralization
were therefore modeled using a 30% probabilistic envelope based on
indicator values of less than 0.1 g/t gold, 0.1 to 1.0 g/t gold,
and greater than 1.0 g/t gold. Analysis of gold grade data suggests
that these indicators, on average, discriminate reasonably well
between areas of low grade and high grade gold mineralization and
barren areas outside the main mineralization. The selection of the
probability level is subjective and impacts considerably on the
volume (and thus tonnage) of the gold mineralization, so visual and
statistical checks were done to compare blocks at different
probability with grades in the composite file. The drill hole
database consists of 241 drill holes with complete assays, 237 have
been used to define the resources. Four of seven holes in the Santa
Catalina zone have assays; however, there is currently insufficient
information to define mineral resources for this area. A non-linear
estimation method "Median Indicator Kriging" (MIK) was used to
estimate block grades. The objective was to estimate the spatial
distribution of grades on the basis of block support rather than
sample support. Grade capping was not used in MIK, because grade
estimation is done by grade cut-off intervals. MIK was carried out
on gold, silver, and copper. Median Indicator Kriging is an
approximation of Multiple Indicator Kriging, which assumes that the
spatial continuity of indicators at various cut-offs can be
approximated by a single median indicator variogram. Resource
estimation was completed using Supervisor software for variography
and Datamine Studio software for creation of the resource block
model. Parent block size is 12m x 20m x 9m (x,y,z), and SMU (single
mining unit) block size is 2m x 5m x 3m, using an Affine
correction. The complete details of the MIK methodology used at
California will be presented in the NI 43-101 technical report
being prepared. Mineral resource classification is based on a
combination of multiple criteria. Blocks within first search
ellipse were coded as indicated if Kriging variance is less than
.3, distance from nearest composite is less than 20 m, minimum
number of holes used to estimate block are more than 5 and minimum
number of composites used are more than 15. Blocks coded with
these rules were looked on screen and final indicated out line was
digitized to avoid spotted blocks appearance. The in-situ mineral
resource is reported at a 2.0g/t gold cutoff; sufficient to define
potentially mineable underground resources; however potentially
mineable underground shapes have not yet been defined. Resources
are reported on a 100% basis for Galway controlled properties.
Galway Resources has a QA/QC program in place to verify drill hole
assays. SRK, Tucson, Arizona has completed the resource estimation
and will prepare a NI 43-101 technical report on resources.
Ravindra Sharma is the SRK Qualified Person, as defined by NI
43-101, who is responsible for the resource estimate. He is a
geologist with MAusIMM(CP) and SME Registered Member
qualifications. The main zone trend is up to 100m wide, 850m along
strike, and has been defined to over 400m in depth. The Machuca
zone trend is approximately 50 m wide, and is not yet fully defined
as to strike and depth extent. Metallurgical Testwork Initial
metallurgical test results have been received from six samples sent
to McClelland Laboratories, Inc., from the Company's California
gold-silver property in Colombia. The six mineralized samples were
shown to be readily amenable to conventional sulfide flotation
processing, especially for rougher flotation. Rougher concentrates
represented gold (Au) recoveries ranging from 93 to 99 percent, and
silver (Ag) recoveries ranging from 86% to 97%. These flotation
concentrates would then require further processing for precious
metals recovery through intensive cyanidation, oxidation and
subsequent cyanidation, or through roaster or autoclave processing.
McClelland advised that it may be beneficial to recover the coarser
free Au particles though simple gravity concentration at the
beginning of the processing circuit. Gravity alone liberated
between 35 and 68 percent of the gold in the six evaluated samples.
A representative cross section of mineralization along Galway's
portion of the California trend was provided in the six
metallurgical samples sent to McClelland Labs. This included near
surface and deeper mineralization, as well as samples with high and
low grades taken along the northeast, central and southwest
portions of the property. Galway expects the flotation circuit to
also recover copper and zinc as by-product credits in the
concentrate, which would be in keeping with the copper concentrate
reported by Ventana Gold on its adjoining ground (acquired by AUX
Canada for $1.5 billion in cash) where recoveries were reported to
be 86% for gold, 93% for silver and 83% for copper. Flotation, with
possible head end gravity, concentration appears to be the best
processing option for the California mineralization represented by
the 6 met samples. Additional metallurgical tests were recommended
to develop the optimal method for treating concentrate products,
including intensive cyanidation with regrind, roasting or pressure
and/or bio oxidation for precious metals recovery. Mineralization
Intercepts reported above and in previously reported drill holes
are hosted by silicified zones, breccias, fracture zones and
stockwork, typical of the district, which includes Eco Oro's
(formerly Greystar Resources') and AUX's (formerly Ventana Gold's)
National Instrument 43-101 compliant resources, Angostura and La
Bodega, respectively. The principal geologic control in the
California-Angostura District is a linear structural corridor that
trends northeast-southwest and dips steeply to the north. Segments
of this zone host the resources reported by both Eco Oro and AUX,
and Galway is exploring another segment along the same structural
corridor. The entire corridor may be one continuous mineralized
zone through all three properties. The mineralized zone identified
on Galway's properties is characterized by hydrothermal alteration
and mineralization within various phases of pervasively altered
intrusive porphyries. Mineralization remains open along strike
where untested, at depth along the entire Zone, and across the
width of the structure in most places. Follow-up The Phase 1
exploration program at California has successfully resulted in a
resource estimate in line with management's expectations.
Mineralization in the Pie de Gallo, Machuca, and Santa Catalina
zones remain open in all directions. Drilling has been curtailed in
California pending an analysis of the work that has been completed
to date. The resource has identified a number of drill targets.
Additional surface drilling in Vetas awaits drill platform
permission and construction. Two drills remain underground. Future
work at California will entail: -- Step-out Phase 2 drilling to
extend the Machuca and Santa Catalina zones; -- Phase 2 drilling
will include the testing of deep targets below the main Pie de
Gallo trend; -- Development and deep drilling options underground
to be studied via an existing extensive hangingwall adit; -- Infill
drilling to advance 'inferred resources' into the 'indicated'
category; -- Comprehensive metallurgical testing to better
determine precious metal recoveries; -- Continued scoping and
baseline studies to advance the permitting process; and -- The
initiation of environmental impact, scoping and feasibility studies
in a timely fashion. The technical report on the California deposit
in Colombia will be filed within 45 days of this news release. The
foregoing geological disclosure has also been reviewed and verified
on behalf of Galway by Michael Sutton (a qualified person for the
purpose of National Instrument 43-101, Standards of Disclosure for
Mineral Projects). For full QC/QA procedures see previous drilling
results press releases. For complete drill results please visit
www.galwayresources.com. About The Company Galway Resources is a
mineral exploration company primarily focused in northeast
Colombia, with gold exploration occurring at the California and
Vetas gold projects. The Company also has the Victorio
molybdenum-tungsten project, with excellent infrastructure, in
southwestern New Mexico. A positive scoping study was completed by
SRK in 2008. The recent surge in tungsten pricing, coupled with a
steady molybdenum price, has prompted management to reassess
strategic alternatives to advance the Victorio project. Neither the
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. Forward Looking Statements: Forward-Looking
Statements: Statements in this release that are forward-looking
statements are subject to various risks and uncertainties
concerning the specific factors disclosed under the heading "Risk
Factors" and elsewhere in the Company's periodic filings with
Canadian Securities Regulators. Such information contained herein
represents management's best judgment as of the date hereof based
on information currently available. The Company does not assume the
obligation to update any forward-looking statement.
Galway Resources Ltd. CONTACT: Galway Resources Ltd.Investor
Relations1-800-475-2412www.galwayresources.com
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