Spanish Mountain Gold Ltd. ("the Company") (TSX VENTURE:SPA) is
pleased to announce an updated resource estimate (National
Instrument 43-101 compliant) for the wholly owned Spanish Mountain
Gold Project (the "Project") in central British Columbia, Canada.
This resource estimate is an update to the previous estimate
disclosed by the Company in a news release dated November 23, 2010,
following the completion of a Preliminary Economic Assessment
("PEA") for the Project.
The updated resource at selected gold cut-off grades is as
follows:
Spanish Mountain updated resources (at a 0.30 g/t gold cut-off)
--------------------------------------------------------------------------
Gold Silver
grade grade Gold Silver
Classification Tonnes (g/t) (g/t) (ounces) (ounces)
--------------------------------------------------------------------------
Measured 11,390,000 0.81 0.60 300,000 220,000
--------------------------------------------------------------------------
Indicated 79,710,000 0.59 0.65 1,510,000 1,670,000
--------------------------------------------------------------------------
Measured plus Indicated 91,090,000 0.62 0.64 1,820,000 1,870,000
--------------------------------------------------------------------------
Inferred 170,470,000 0.50 0.67 2,740,000 3,670,000
--------------------------------------------------------------------------
The PEA had established an economic cut-off of 0.2 g/t gold
based on assumptions of operating costs for a potential open pit
operation. These assumptions will be refined within the
pre-feasibility study which is currently underway. The following
table presents the updated resource at a cut-off grade of 0.2 g/t
gold.
Spanish Mountain updated resources (at a 0.20 g/t gold cut-off)
--------------------------------------------------------------------------
Gold Silver
grade grade Gold Silver
Classification Tonnes (g/t) (g/t) (ounces) (ounces)
--------------------------------------------------------------------------
Measured 14,950,000 0.68 0.61 330,000 290,000
--------------------------------------------------------------------------
Indicated 123,070,000 0.47 0.64 1,860,000 2,530,000
--------------------------------------------------------------------------
Measured plus Indicated 138,030,000 0.49 0.64 2,170,000 2,840,000
--------------------------------------------------------------------------
Inferred 339,630,000 0.37 0.65 4,040,000 7,100,000
--------------------------------------------------------------------------
Tonnages and contained ounces presented above may not total as
shown due to rounding. Readers are cautioned that mineral
resources, which are not mineral reserves, do not have demonstrated
economic viability.
Highlights
-- A significant increase in Inferred resource has occurred within the
North Zone. A revised geological model for the North Zone now portrays a
near vertical or steeply south dipping orientation for this zone.
-- There are clearly defined areas for future in-fill drilling to aid in
re-classification of inferred ounces within the resource.
-- Mine planning for extraction of higher grade near-surface gold
mineralization within potential starter pits will be optimized during
the pre-feasibility study.
-- The schedules for completion of the pre-feasibility and feasibility
studies remain unchanged.
Brian Groves, President and CEO said today: "The updated
resource estimate has identified a significant increase in inferred
resources on the Property. Our current understanding of the North
Zone represents a distinct change from the previous assumptions
regarding the orientation of mineralization within this zone. In
addition, the data from the recently completed infill drilling
program have revealed improved continuity in this mineralized body.
While work continues towards the completion of the Prefeasibility
Study, we will now also focus on the objective of drilling within
this zone and adjacent to the Main Zone to enable a
re-classification of inferred resources to the measured and
indicated categories."
Details of the parameters used in the resource estimate are as
follows:
-- Out of a total of 674 drill holes provided, 528 diamond drill holes
penetrated the various geologic solids. Missing or unsampled intervals
were filled with 0.001 g/t gold. Samples not analyzed for silver from
earlier drill campaigns were left blank.
-- A three dimensional geologic model was produced by the Company's
geologist using Vulcan 3D mining software. The main zone mineralization
was modelled into an upper argillite unit, an altered siltstone unit, a
tuff unit and a lower argillite unit. The North zone argillite was a
separate solid. All material outside of these domains was considered
waste.
-- The gold grade distributions within the mineralized domains were
examined to determine if capping was required. In each case the
distribution for gold was strongly skewed. A lognormal cumulative
frequency plot was produced for gold in each domain and in all cases
showed multiple overlapping lognormal populations. Capping levels were
determined to reduce the effect of small high grade populations that can
be considered erratic. A similar procedure was used to cap silver
values.
-- Gold and silver were modelled separately for each geologic domain using
pairwise relative semivariograms.
-- A block model with blocks 15 x 15 x 5 meters in dimension was
superimposed over the mineralized geologic solids.
-- Ordinary kriging was used to interpolate grades into blocks within the
mineralized solids. In all cases, the kriging exercise was completed in
a series of four passes with the search ellipse for each pass being a
function of the semivariogram ranges.
The completed National Instrument 43-101 compliant report will
be available under the profile of the Company on SEDAR within 45
days.
Future Plans
The Company will now focus on the completion of additional
in-fill drilling, principally within the North Zone and adjacent to
the Main Zone with the objective of enabling a re-classification of
part of the inferred resource to the measured and indicated
categories.
This drilling will not affect the ongoing Prefeasibility Study
for the Project, which is scheduled for completion in April 2012.
The Company also expects to have the in-fill drilling and an
updated resource estimate completed in April 2012, at which time it
intends to commence a Feasibility Study for the Project.
All core samples were fire assayed at ALS Chemex Laboratory in
Vancouver, BC.
Independent resource estimate consultant Gary Giroux MASc,
P.Eng. (BC) of Giroux Consultants Ltd. has authorized the release
of this estimate. Mr. Gary Giroux is a qualified person by virtue
of education, experience and membership in a professional
association. He is independent of both the Company and ALS Chemex,
applying all of the tests pursuant to section 1.5 of NI 43-101. Mr.
Giroux visited the property on June 29, 2011.
Judy Stoeterau, P.Geo, the Company's Vice President, Geology, is
a qualified person (as defined under NI 43-101) and has reviewed
the contents of this news release.
About Spanish Mountain Gold
Spanish Mountain Gold Ltd. is focused on the responsible
development of its flagship Spanish Mountain gold project in
southern central British Columbia, Canada. The Company has more
than $19 million in working capital, has no debt and owns 100% of
four gold properties located in British Columbia. Additional
information about the Company is available on its website:
www.spanishmountaingold.com
On Behalf of the Board,
SPANISH MOUNTAIN GOLD LTD.
Brian Groves, President and CEO
This News Release contains forward-looking statements. Forward
looking statements are statements which relate to future events. In
some cases, you can identify forward-looking statements by
terminology such as "may", "should", "expects", "plans",
"anticipates", believes", "estimates", "predicts", "potential", or
"continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors that may
cause our actual results, level of activity, performance or
achievements to be materially different from any future results,
levels of activity, performance, or achievements expressed or
implied by these forward-looking-statements. Management has assumed
that these will be our major projects going forward. Risks include
that we are unable to satisfy environmental or other regulators,
that we determine that our resources are not commercially viable,
or that we have difficulties due to unavailability of labour or
equipment.
While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our
current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any
estimates, predictions, projections, assumptions or other future
performance suggests herein. Except as required by applicable law
the Company does not intend to update any forward-looking
statements to conform these statements to actual results.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
Contacts: Spanish Mountain Gold Ltd. Colin Clancy (604)
601-3651info@spanishmountaingold.comwww.spanishmountaingold.com
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