TORONTO, ONTARIO–(Marketwired – Jan. 29, 2015) – Continental Gold Limited (TSX:CNL)(OTCQX:CGOOF) (“Continental” or the “Company”) is pleased to announce results for 15 diamond drill-holes through the Veta Sur vein system at the Company’s 100%-owned Buriticá project in Antioquia, Colombia. Drilling continues with the goal of upgrading Inferred resources into the Measured and Indicated categories under National Instrument 43-101 (“NI 43-101”) guidelines, and delivering overall robust mineral resource growth. The Company recently released a Preliminary Economic Assessment (the “2014 PEA”) of the Buriticá Project. The 2014 PEA (entitled “Buritica Gold Project, NI 43-101 Technical Report Preliminary Economic Assessment, Antioquia, Colombia”, and dated December 22, 2014 with an effective date of November 17, 2014) is preliminary in nature and includes inferred mineral resources that are considered to be too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty the 2014 PEA will be realized. Further, mineral resources are not mineral reserves and have not demonstrated economic viability.
These and other extensions of the Veta Sur system shown in Table 1 are all in proximity to mining development proposed in the 2014 PEA.
“2014 infill and extension drilling at Veta Sur continuously intersected superior results compared to the current mineral resource estimate,” commented Ari Sussman, CEO of Continental. “We look forward to the next mineral resource estimate for the Buriticá project, anticipated in late Q2 2015, and expect to see growth in both the Measured and Indicated ounces.”
Continental’s 100%-owned, 62,348-hectare project, Buriticá, contains several known areas of high-grade gold and silver mineralization, of base metal carbonate-style (“Stage I”) variably overprinted by texturally and chemically distinctive high-grade (“Stage II”) mineralization. The two most extensively explored of these areas (the Yaraguá and Veta Sur systems) are central to this land package. The Yaraguá system has been drill-outlined along 1,100 metres of strike and 1,700 vertical metres and partially sampled in underground developments. The Veta Sur system has been drill-outlined along 1,000+ metres of strike and 1,800 vertical metres and has been partially sampled in underground developments. Both systems are characterized by multiple, steeply-dipping veins and broader, more disseminated mineralization and both remain open at depth and along strike, at high grades. See “About Continental Gold” below for a précis of the 2014 PEA prepared in accordance with NI 43-101. This release documents the results of infill and extension drilling to the north and northwest through central Veta Sur. Significant new drill intercepts are listed below in Table I and are referenced in Figures 1 and 2.
Table I: Drilling Highlights
* Intercepts calculated at 1 g/t gold + 50 g/t silver cut-off grades for minimum intervals of 0.5 metres, with up to 30% internal dilution. True widths not accurately known but generally are between 30% of the down-hole interval and near true width. Drill-holes designated “BUUY” were collared from underground, and drill-holes designated “BUSY” were collared at surface. Holes directionally-drilled from “mother holes” (BUUYDxxx or BUSYDxxx) are designated BUUYxxxDxx or BUSYxxxDxx), as the case may be.
** Intercepts in vein domains are respectively nominated by vein code (e.g. V34) whereas other intercepts are designated as below or outside of the current Veta Sur mineral resource envelopes. Intercepts with grades X thicknesses apparently significantly greater than for the corresponding vein domains in the current resource block model are also highlighted in gray.
Eight holes (BUSY369D04 to BUSY369D11, inclusive) and a further six holes (BUUY289D01 to BUUY289D06, inclusive) were respectively deviated and directionally drilled from “mother” holes BUSY369D and BUUY289D, to the south of Veta Sur. The deviated holes were drilled to the north and northwest across the Veta Sur system, infilling central areas of the mineral resource envelope as well as targeting potential extensions to depth (Figures 1 and 2). Holes drilled to the northwest also targeted potential southwest extensions of the deeper Veta Sur and far western Yaraguá systems (Figures 1 and 2).
In central Veta Sur, drill holes encountered multiple vein families over 300 metres of vertical and lateral extents with apparent grades X thicknesses generally comparable with or significantly greater than those expected from the current mineral resource block model. Broad and/or high-grade intercepts and related master veins include:
These and other intercepts (highlighted in Table I) in the 1,100 to 1,400-metre range of elevations will contribute to increased confidence levels of high-grade gold and silver mineral resources in master veins of central Veta Sur. The grade X thicknesses encountered are particularly encouraging for potential mining in an area that is close to main haulage development proposed in the 2014 PEA.
Elsewhere in central to western Veta Sur, drilling intersected multiple veins below or to the southwest of the current mineral resource envelope (Table 1), substantially extending the lateral and vertical extents of northern vein families in this area (Figures 1 and 2). Key intercepts and their relationships to the Veta Sur mineral resource envelope, include:
These and other extensions of the Veta Sur system shown in Table 1 are all in proximity to mining development proposed in the 2014 PEA.
To the north and west of the current Veta Sur mineral resource envelope, two drill holes (BUSY369D10 (from 517 metres down-hole) and BUUY289D05 (from 700 metres down-hole) encountered multiple families of veins that are interpreted to represent as-yet unmodelled northern Veta Sur vein families, and also the farthest yet-drilled western extensions of the Yaraguá vein system (Figure 1). Significant intercepts include:
Vic Wall, PhD, special advisor to the Company and a qualified person for the purpose of NI 43-101, has prepared or supervised the preparation of, or approved, as applicable, the technical information contained in this press release. Dr. Wall is a geologist with 35 years’ experience in the minerals mining, consulting, exploration and research industries. Following a career in Australian and North American academes, he held senior positions in a number of multinational major and junior minerals companies. A Fellow of the Australian Institute of Geoscientists, Dr. Wall is Principal of Vic Wall & Associates, a Brisbane-based consultancy that provides geoscientific services to mineral companies and government agencies, worldwide.
The Company utilizes a rigorous, industry-standard QA/QC program. HQ and NQ core is sawn or split with one-half shipped to a sample preparation lab in Medellín run by ALS Colombia Limited (“ALS”) in Colombia, whereas BQ core samples are full core. Samples are then shipped for analysis to an ALS-certified assay laboratory in Lima, Peru. The remainder of the core is stored in a secured storage facility for future assay verification. Blanks, duplicates and certified reference standards are inserted into the sample stream to monitor laboratory performance and a portion of the samples are periodically check assayed at ACME Analytical Laboratories in Vancouver, British Columbia and/or Inspectorate America Corp. in Reno, Nevada.
The Company does not receive assay results for drill-holes in sequential order; however, all significant assay results are publicly reported. A listing of assay results to date for the Buriticá project is available on the Company’s website at www.continentalgold.com.
For additional information on the Buriticá project, please refer to the 2014 PEA, led by M3 Engineering and Technology of Tucson, Arizona, with contributions from other independent consultants including NCL Ingeneria y Construccion SPA, which was responsible for the underground mine plan for the project. The 2014 PEA is available on SEDAR at www.sedar.com, on the OTCQX at www.otcmarkets.com and on the Company website at www.continentalgold.com
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 Buriticá gold project to production. On November 17, 2014, the Company announced the 2014 PEA, the results of which included an 18-year mine life based on 20,055,000 tonnes grading 7.80 g/t gold and 19.35 g/t silver, resulting in 4,777,000 ounces of recovered gold and 7,088,000 ounces of recovered silver, and utilized the May 2014 mineral resource estimate prepared in accordance with NI 43-101. The 2014 PEA concludes an after-tax net present value at a 5% discount of $1.08 billion and an after-tax internal rate of return of 31.5% on an initial capital cost of $390.3 million with a payback of 2.8 years. The 2014 PEA technical report is available on SEDAR at www.sedar.com and on the Company website at www.continentalgold.com.
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 newest hard rock gold producer in Colombia, Continental has achieved major advances with the access tunnel, which is providing access for underground drilling and will eventually be used for commercial production. A Phase VII drill program is underway at the Buriticá project to further delineate the mineral resources and drill new target zones identified within its concessions.
Additional details on the Buriticá project and the rest of Continental’s suite of gold exploration properties are available at www.continentalgold.com.
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This press release contains or refers to forward-looking information under Canadian securities legislation, including statements regarding the estimation of mineral resources, results of the 2014 PEA, advancing the Buriticá project, exploration results, potential mineralization, potential development of mine openings, potential improvement of mining dilution grades, timing of an updated mineral resource estimate, and exploration and mine development plans, and is based on current expectations that involve a number of significant business risks and uncertainties. Forward-looking statements are subject to 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, an inability to advance the Buriticá project to the next level, 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. Specific reference is made to the most recent Annual Information Form on file with Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements. All of the forward-looking statements made in this press release are qualified by these cautionary statements, and are made as of the date hereof. 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.
Figure 1 – Plan View of highlights of new drilling, showing the surface projection of veins in the current (2014) Veta Sur and Yaraguá mineral resource models on geology-topography. Line A-B refers to the section line for Figures 2.
Figure 2 – Long Section, (line A-B on Figure 1), showing highlights of new drilling against the outlines of the 2014 Veta Sur mineral resource envelope.