Mr. Frank Callaghan reports
BARKERVILLE ANNOUNCES A NI 43-101 COMPLIANT INDICATED RESOURCE OF 10,626,100 OZ GOLD
Barkerville Gold Mines Ltd. has released an NI 43-101-compliant indicated resource estimate for the gold quartz open-pit model on Cow Mountain, as well as an NI 43-101-compliant estimation of the geological potential of the 6.4-kilometre Island Mountain, Cow Mountain and Barkerville Mountain trend. This trend is the central portion (where the company has focused its exploration activities) of a larger 67-kilometre trend on the company's 1,118-square-kilometre property.
Geoex Ltd. was retained to complete an independent estimate of the mineral resources and geological potential of Barkerville's property by management of the company.
The indicated resources, between the elevations 3,550 feet and 4,550 feet above sea level (town elevation 4,000 feet), estimated by Geoex for the gold quartz open-pit model on Cow Mountain, are 69,039,000 tons with an average grade of 0.154 ounce per ton gold (5.28 grams per tonne) and 10,626,100 ounces of contained gold as summarized in the attached table. Geoex is of the opinion that this resource has a reasonable prospect of economic extraction.
COW MOUNTAIN SUMMARY OF INDICATED RESOURCES, EFFECTIVE DATE DEC. 31, 2011
(cut-off of 0.025 ounce per ton or 0.857 g/t, in situ and undiluted)
Grade Grade Contained Waste tons
Tons (oz/t) (g/t) gold ounces (iii)
Subtotal 70,455,000 0.161 5.52 11,367,100 101,676,000
Less historic mining 1,416,000 0.53 18.2 750,000
Adjusted (ii) 69,039,000 0.154 / 5.28 10,626,100
(i) The resource is summarized in further detail in this news release.
(ii) The total indicated resource has been adjusted for total production
from the narrow-vein underground production of the gold quartz mine.
(iii) The waste is within the resource solids and does not include pit wall
waste.
Company president and chief executive officer, J. Frank Callaghan, stated:
"This resource estimate on 10 per cent of the company's prospective gold belt, which I believe puts the Cariboo gold project into the world-class category, coupled with the company's recent news announcing it has received the necessary permits to begin production on its Bonanza Ledge discovery, is a testament to the team we've assembled, and 18 years of hard work and perseverance. The current resource estimate has been made possible through the compilation of over 7,100 drill holes totalling 347,000 metres completed by the company and previous operators, with the most significant results coming from an expanded drill program which was completed in December, 2011.
"Management received heavy opposition to the expanded drill program this past winter from the brokerage community as reflected in Barkerville's share price, but we believed strongly in our team of highly skilled geological professionals and are proud of the results the company has achieved."
The estimation of the geological potential is based upon approximately 10 per cent of the company's tenure encompassing the Island Mountain, Cow Mountain and Barkerville Mountain areas which are contiguous mountains separated by valleys. The Island Mountain/Aurum and Mosquito Creek mine workings are under Island Mountain, and the Cariboo gold quartz mine workings are mostly under Cow Mountain but extend beneath the valley and end beneath Island Mountain and as well extend in the opposite direction beneath Barkerville Mountain.
TOTAL GEOLOGICAL POTENTIAL: ISLAND-COW-BARKERVILLE TREND
(6.4 km/four miles)
Grade (range) Contained gold
Area Tons (range) oz/t (g/t) ounces (range)
Island Mountain 180 million to 304 million 0.12 to 0.16 29 million to 40 million
(4.11 to 5.49)
Cow Mountain 45 million to 76 million 0.12 to 0.16 seven million to 10 million
(4.11 to 5.49)
Barkerville Mountain 180 million to 304 million 0.12 to 0.16 29 million to 40 million
(4.11 to 5.49)
405 million to 684 million 0.12 to 0.16 65 million to 90 Million
Total (4.11 to 5.49)
Note:
(1) The foregoing geological potential estimates of potential quantity and
grade are conceptual in nature, and there has been insufficient exploration
to define a mineral resource, and it is uncertain if further exploration
will result in the delineation of mineral resources.
(2) Please see below for how the quality and grade of the geological potential
estimates were determined.
The indicated resource estimates and geological potential targets have been completed by Geoex and will be provided in a report that will conform to the format and content required under National Instrument 43-101 regulations of the Canadian Securities Administrators, including Form 43-101F1. The effective date of the report will be Dec. 31, 2011, and the report is based upon drilling completed to that date, including assay data that were received during the first quarter of 2012.
The technical work by Geoex was undertaken by Peter T. George, PGeo, who has over 45 years of experience in the Canadian mining industry and extensive experience in the gold sector.
Property description and ownership
The company has been active in the Cariboo gold district since the mid-1990s, and currently holds mineral tenures covering approximately 1,117.69 square kilometres in a contiguous, elongate block covering the full extent of a 45-kilometre geological trend that hosts all of the significant lode gold deposits of the district and many significant gold showings.
In the Island Mountain-Cow Mountain-Barkerville Mountain area that covers the current resource and geological potential estimates, there are no royalties payable on any of the lands. There are a few small Crown grants within the property boundaries that have been in force since the late 1800s and are owned by the estates of persons unknown. In the event of a production decision in the vicinity of one of these small claims, the government regulations would require the company to establish a trust and pay a small annual royalty to cover the possible future event that ownership is determined.
Geology and mineralization
The project is underlain by the Barkerville terrane which is part of the regional Omineca belt of the Canadian Cordillera. The Barkerville terrane comprises a Late Proterozoic and/or Early Paleozoic sequence of metamorphosed rocks that were deposited as continental shelf to slope marine clastic rocks along with lesser amounts of marine carbonate rocks and volcanic rocks adjacent to the craton of ancestral North America. The Barkerville terrane is structurally the lowest exposed sequence, and is more deformed and metamorphosed (lower greenschist facies) than adjacent terranes.
During the Cretaceous, the rocks of the Barkerville terrane were deep below the surface and subjected to an early period of ductile deformation that resulted in asymmetrical, overturned, isoclinal (both limbs and the axial planes dipping to the east) fold structures with the fold axes plunging shallow to the northwest. Major regional thrust faults initiated in the postmetamorphic period occur in the area, striking in a northerly direction and dipping to the east with overthrusting from east to west.
Postmetamorphic upright, open folds with axial planes approximately east-west deformed the earlier period of folding such that the early fold axes now plunge to both the northwest and the southeast along the length of the Barkerville terrane.
During the Late Cretaceous to Early Tertiary, a major period of northwest-trending dextral strike-slip faulting occurred with conjugate faults trending northwest and north, both with a significant normal component of movement. The north-trending fault structures appear to be an important control for gold vein mineralization in the Wells area where most of the gold mineralization was deposited at that time although it is possible that there was already earlier-stage gold mineralization formed before and during the onset of metamorphism that was remobilized during the postmetamorphic period.
Gold mineralization on the property occurs as:
-
Quartz veins located in shear-type and tension-type fractures in
lithologies that are more brittle than the surrounding lithologies;
-
Disseminated sulphide zones (pyrite-pyrrhotite) localized in the nose of
secondary local fold structures that have the same northwesterly
plunge as the regional, orogeny-related, asymmetrical, overturned,
isoclinal (both limbs and the axial planes dipping to the east) fold
structures.
Historic production is all in the vicinity of the three adjoining mountains: Island Mountain, Cow Mountain and Barkerville Mountain. Historic production is as shown in the attached table.
HISTORIC LODE GOLD PRODUCTION, CARIBOO GOLD DISTRICT (HALL 1991)
Mine Tons milled Au produced
(oz)
Island Mtn/Aurum (1934 to 1967) 1,245,295 569,526
Mosquito (1980 to 1983) 103,146 34,281
Cariboo gold quartz (1933 to 1959) 1,681,651 626,755
(i) Based upon 93-per-cent mill recovery, 95-per-cent mine recovery of resource
and 25-per-cent dilution.
The mineralization is hosted primarily in the Rainbow unit and may extend into the younger BC unit or the older Baker unit. Note that in the mine areas, the stratigraphy is overturned due to folding and the Baker unit is overlying the Rainbow unit. At the time of the Cretaceous deformation, the Rainbow unit had lower ductility than the adjoining units and intense brittle fracturing occurred that contains many quartz veins and disseminated sulphide zones (dominantly in the hinges of small amplitude folds). During the operating years of the historic mines, many of the mineralized zones were too narrow to be mined economically.
In the immediate vicinity of the historic mines, the Rainbow unit can be mapped along a strike length of approximately eight kilometres (five miles) and has been traced at least another 16 km (10 miles) to the south into the Cunningham Creek area.
The regional stratigraphy within which the Rainbow unit occurs has been mapped to the Cariboo Lake area, 32 km (20 miles) to the south of Barkerville Mountain.
Status of exploration, development and operations
Because of the size of the property, exploration will be continuing for many years. The company is currently permitted for start-up of open-pit mining of the Bonanza Ledge deposit on Barkerville Mountain.
It is anticipated that the company will initiate permitting for an open-pit operation on Cow Mountain approximately thee km (1.8 miles) from the Bonanza Ledge deposit.
Qualified person's opinion on adequacy of the database
The qualified person, based upon site visits on Oct. 13, 2010, to Oct. 14, 2010, March 20, 2011, to March 24, 2011, and April 23, 2012, to April 27, 2012, is of the opinion that:
-
The company's sampling methods and quality assurance/quality control practices meet NI 43-101
standards;
-
The drilling and assay database is of sufficient quality for use in the
estimation of mineral resources and to provide the basis for the
conclusions presented in this summary.
In preparation for writing the report, the qualified person worked intensively with the company's database and found no serious errors or deficiencies.
The qualified person has reviewed all relevant technical information and has found no discrepancies, errors or omissions that would be material to the opinions expressed in the report.
The qualified person did not undertake any check assays as the company's QA/QC procedures were reviewed and their practices meet NI 43-101 standards.
Mineral resource estimate
The current indicated resources estimated by Geoex for the Cow Mountain open-pit model are 69,039,000 tons with an average grade of 0.154 ounce per ton gold (5.28 grams per tonne) and 10,626,100 ounces of contained gold as summarized in the attached table. The qualified person is of the opinion that this resource has a reasonable prospect of economic extraction.
SUMMARY OF INDICATED RESOURCES
(cut-off of 0.025 ounce per ton or 0.857 g/t, in situ and
undiluted (effective Dec. 31, 2011))
% of bench
untested
Grade Contained Au Waste by
Bench (i) Tons oz/t (g/t) oz tons (iii) drilling
4550 4,367,000 0.026 (0.89) 113,500 1,532,000 22%
4450 8,791,000 0.045 (1.54) 395,600 2,561,000 32%
4350 11,596,000 0.072 (2.47) 834,900 2,047,000 23%
4250 9,947,000 0.069 (2.37) 686,300 4,796,000 57%
4150 6,722,000 0.078 (2.67) 524,300 9,754,000 60%
4050 6,988,000 0.151 (5.18) 1,055,200 12,466,000 64%
greater
3950 6,522,000 0.617 (21.2) 4,024,100 13,389,000 than 70%
greater
3850 6,171,000 0.453 (15.5) 2,795,500 13,125,000 than 70%
greater
3750 4,033,000 0.056 (1.92) 225,800 14,372,000 than 70%
greater
3650 3,100,000 0.063 (2.16) 195,300 13,749,000 than 70%
greater
3550 2,218,000 0.237 (8.13) 526,600 13,885,000 than 70%
Subtotal 70,455,000 0.161 (5.52) 11,376,100 101,676,000
Less
historic
mining 1,416,000 0.53 (18.2) 750,000
Adjusted
total 69,039,000 0.154 (5.28) 10,626,100
(ii) The bench number is the elevation in feet above sea level on the floor
of the 100-foot-high bench.
(ii) The total indicated resource has been adjusted for total production
from the narrow-vein underground production of the gold quartz mine.
(iii) The waste is within the resource solids and does not include pit wall
waste.
The qualified person used Amine software for 3-D digital modelling in AutoCAD. Amine is a fully integrated mining software (drill hole planning, drill hole logging, resource and reserve estimates, stope planning, lateral and vertical development planning) developed by Noranda Ltd. and now marketed independently by a third party, Flairbase, of Montreal, Que.
Based upon all of the available historic and current drilling and assay data, and using cross-sections at 400-foot intervals along a strike length of 3,200 feet, the qualified person interpreted the outline of the mineralized zone and the outline of pit walls based on a 55-degree slope. Subsequently, in plan view, the qualified person created resource and total pit outlines at 100-foot vertical intervals to a depth of 1,000 feet below surface.
For the purpose of estimation of the resource tonnage and grade, 3-D solids of 100-foot hypothetical pit benches were created, as well as a 3-D solid of the total pit in order to determine the stripping ratio of pit waste tons to resource tons, probably 8-to-1 to 10-to-1 waste to ore.
For the purpose of initial resource estimation for an open pit, a block model was created with 25-foot by 25-foot by 25-foot blocks. To calculate the resource, a horizontal search ellipse area that has major and intermediate axes of 100 feet, and a vertical minor axis of 50 feet was used, and to be considered, an ore block must have at least one drill hole intercept within the search volume otherwise the block was tagged as waste.
For estimation of a bulk mining resource, the qualified person is of the opinion that these estimation parameters are suitable to classify the resource as an indicated resource as defined in NI 43-101. Areas where drilling is sparse are classified as waste.
Output of the Amine estimation procedure provides grade and tonnage for blocks above the cut-off grade, mineralized blocks (such as meeting the block category of one drill hole intercept within the search ellipse range) but below the cut-off grade and waste, which means there is no drill hole intercept.
The qualified person has reviewed in plan view the Amine output showing intercepts used in the resource calculation and areas where there are no intercepts and concludes that there would be significant co-mingling of the above cut-off blocks and mineralized blocks below cut-off. Open-pit mining methods would probably have to take both classifications of mineralized blocks in order to recover the above cut-off blocks. The qualified person concludes from the same review of the Amine output that there are large contiguous undrilled areas that could be mined as waste and hence not milled if, as future drilling is completed, it remains as waste.
Geological potential estimates
The estimation of the geological potential is based only upon the Island Mountain, Cow Mountain and Barkerville Mountain areas which are contiguous mountains separated by valleys. The Island Mountain/Aurum and Mosquito mine workings are under Island Mountain, and the Cariboo gold quartz mine workings are mostly under Cow Mountain but extend beneath the valley and end beneath Island Mountain and as well extend in the opposite direction beneath Barkerville Mountain.
All of the production was from mineralization within the Rainbow unit. The mine workings extend to a maximum depth of 2,500 feet above sea level. The mineralization is open along strike and at depth from the workings. The Rainbow unit extends continuously throughout the whole mine area and beyond. The mineralization in all of the mines is the same, with production from both quartz vein-type and disseminated sulphide-type settings.
The estimation of geological potential is focused upon initial open-pit mining to 1,000 feet (3,550 elevation above sea level) below surface followed by an additional 1,000 feet (2,500 feet above sea level) of underground bulk mining (probably room and pillar) by ramp access with large equipment.
The open-pit geological potential along strike in both directions from Cow Mountain is based upon the current resource estimate adjusted for differences in strike length of mineralization at Cow Mountain (4,300 feet) versus the strike length at Island Mountain (8,600 feet, therefore two times the potential at Cow Mountain) and the strike length at Barkerville Mountain, similar to Island Mountain, and therefore geological potential similar to that at Island Mountain.
Note: All estimates of geological potential, targets, quality and grade are conceptual in nature, and there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the delineation of mineral resources.
Cow Mountain indicated resource estimate and further geological potential
The current indicated open-pit resource at Cow Mountain is approximately 69 million tons with contained ounces of 10.63 million ounces (0.154 ounce per ton/5.28 g/t), therefore, the geological potential beneath the pit for an additional 1,000 feet is estimated to be 62 million to 76 million tons grading 0.12 ounce to 0.16 ounce per ton (4.11 g/t to 5.49 g/t), with contained gold of seven million to 10 million ounces. There have been a total of 2,638 drill holes on Cow Mountain totalling 145,600 metres. Assay data range is from zero to (iii) in the Cow Mountain area.
Island Mountain geological potential
Island Mountain has geological potential for both the open-pit and underground scenario, and has twice the strike length of the Cow Mountain scenario, therefore the geological potential at Island Mountain is 180 million to 304 million tons grading 0.12 ounce to 0.16 ounce per ton (4.11 g/t to 5.49 g/t), with contained gold of 29 million to 40 million ounces. There have been a total of 3,947 drill holes on Island Mountain totalling 119,419 metres, with an assay data range similar to Cow Mountain.
Barkerville Mountain geological potential
Barkerville Mountain has the same geological potential as Island Mountain for both the open-pit and underground scenario, and has twice the strike length of the Cow Mountain scenario, therefore the geological potential at Barkerville Mountain is 180 million to 304 million tons grading 0.12 ounce to 0.16 ounce (4.11 g/t to 5.49 g/t) per ton, with contained gold of 29 million to 40 million ounces. There have been a total of 538 drill holes on Barkerville Mountain totalling 73,300 metres, with an assay data range similar to Cow Mountain.
Total geological potential of the Island-Cow-Barkerville trend
The total geological potential of the 6.4-kilometre-long (four-mile-long) mineralized trend is 405 million to 684 million tons grading 0.12 ounce to 0.16 ounce (4.11 g/t to 5.49 g/t) per ton, with contained gold of 65 million to 90 million ounces.
The technical information in this news release has been reviewed and approved by the author, Peter T. George, PGeo, and the company's chief geologist, Jim Yin, PhD, PGeo, both qualified people as defined in National Instrument 43-101.
We seek Safe Harbor.
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