Mr. Ernest Simmons reports
ATLANTA GOLD INCREASES GOLD EQUIVALENT RESOURCES AT ITS ATLANTA PROPERTY IN IDAHO
P&E Mining Consultants Inc. of Brampton, Ont.,
has completed an independent updated resource estimate on Atlanta Gold Inc.'s
Atlanta property in Idaho, United States. The estimate incorporates all drilling
results to date, including the 57,000-foot core drilling program
completed in 2011.
P&E estimates an indicated mineral resource of 752,000 ounces of gold
within 7.77 million tons at an average grade of 0.097 ounce per ton (3.32 grams per tonne) gold, and an inferred mineral
resource of 385,900 ounces contained within 2.72 million tons at an
average grade of 0.142 ounce per ton (4.87 g/t) Au. Using a gold-to-silver price ratio of 50.35 to 1, the updated indicated
mineral resource is 785,000 gold equivalent ounces within 7.77
million tons at an average grade of 0.101 ounce per ton (3.46 g/t) AuEq, and the
inferred mineral resource is 397,300 AuEq ounces within 2.72 million
tons at an average grade of 0.146 ounce per ton (5.01 g/t) AuEq.
"Results from the 2011 exploration program have increased the indicated
gold resource by nearly 10 per cent and our inferred gold resource by 37 per cent. We
will now do some sensitivity studies on open pit cut-off grades to
optimize the economics of the project. Preliminary work indicates that
modest increases in the open pit cut-off grade will have a positive
impact on project economics. This project now requires detailed
economic and engineering studies to take it to production," said Ernest Simmons, vice-president and chief operating officer.
Details of the P&E resource estimate as at Jan. 31, 2012, are provided
in the accompanying tables.
GOLD
Area Tons Cut-off grade Grade Grade Ounces
(000s) (opt Au) (opt Au) (g/t Au) (000s)
Open pit
Indicated 7,140 0.035 0.091 3.13 652.4
Inferred 1,478 0.035 0.127 4.36 188.2
Underground
Indicated 633 0.098 0.157 5.40 99.6
Inferred 1,239 0.098 0.160 5.47 197.7
Total
Indicated 7,773 0.097 3.32 752.0
Inferred 2,717 0.142 4.87 385.9
SILVER
Tons Grade Grade Ounces
Area (000s) (opt Ag) (g/t Ag) (000s)
Open pit
Indicated 7,140 0.218 7.47 1,556.4
Inferred 1,478 0.275 9.43 406.5
Underground
Indicated 633 0.163 5.59 103.2
Inferred 1,239 0.153 5.25 189.6
Total
Indicated 7,773 0.214 7.32 1,659.6
Inferred 2,717 0.219 7.52 596.1
EQUIVALENT OUNCES
Tons Ounces of silver as gold equivalent Total equivalent ounces of gold
Area (000s) (000s) (000s)
Open pit
Indicated 7,140 29.6 682.0
Inferred 1,478 7.8 196.0
Underground
Indicated 633 3.4 103.0
Inferred 1,239 3.6 201.3
Total
Indicated 7,773 33.0 785.0
Inferred 2,717 11.4 397.3
Notes:
Mineral resources which are not mineral reserves do not have demonstrated economic viability. The
estimate of mineral resources may be materially affected by environmental, permitting, legal, title,
taxation, socio-political, marketing or other relevant issues.
The quantity and grade of reported inferred resources in this estimate are uncertain in nature, and
there has been insufficient exploration to define these inferred resources as an indicated or measured
mineral resource. It is uncertain if further exploration will result in upgrading them to an indicated
or measured mineral resource category.
The mineral resources in this news release were estimated using the CIM standards on mineral resources
and reserves, definitions and guidelines, prepared by the CIM standing committee on reserve definitions.
AuEq was calculated such that one ounce of gold eequals 50.35 ounces of silver. Metal prices used were
the Jan. 31, 2012, two-year trailing average for gold at $1,419 (U.S.) per ounce and silver at
$28.18 (U.S.) per ounce, with respective mill recoveries of 83 per cent for gold and 88 per cent for
silver. Prevailing metal prices at Jan. 31, 2012, were $1,744 (U.S.) per ounce of gold and $33.60 (U.S.)
for silver.
The historically mined tonnage from historic operations was removed from the block model.
Gold cut-off grades of 0.035 ounce per ton (1.2 g/t) for open pit and 0.098 ounce per ton (3.36 g/t)
for underground resources were established from metal prices, expected recoveries and estimated
operating costs. Operating costs for the open pit resource estimate cut-off grade calculation were
mining costs of $2 per ton, general and administrative expenses of $8 per ton, and processing and
concentrate shipping and smelter charges of $32 per ton. Operating costs for the underground resource
estimate cut-off grade calculation were mining costs of $60 per ton, genera and administrative expenses
of $8 per ton, and concentrate shipping and smelter charges of $42 per ton.
Mineral resources contained within a preliminary optimized pit shell are
considered to be amenable to lower-cost open pit extraction, whereas
mineral resources below this are considered to be amenable to
underground extraction. Open pit slopes were 50 degrees.
The average gold equivalent grades (including silver resources as a gold
equivalent) for the open pit resource are 0.096 ounce per ton (3.28 g/t) AuEq in
the indicated resource classification and 0.133 ounce per ton (4.55 g/t) AuEq in
the inferred open pit resource classification. The average gold
equivalent grades for the underground resource are 0.163 ounce per ton (5.58 g/t)
AuEq in the indicated resource classification and 0.162 ounce per ton (5.57 g/t)
AuEq in the inferred underground resource classification.
Certain technical measurements in this news release have been converted
to metric based on the following conversion factors:
- Measure of concentration:
- One troy ounce per short (imperial) ton equals 34.2857 grams per metric tonne,
or 34.2857 parts per million;
- Linear measure:
- One metre equals 3.2808 feet;
- One centimetre equals 0.3937 inch;
- One kilometre equals 0.621371 mile.
Quality control and assurance
Exploration program drill samples were handled and assayed in accordance
with National Instrument 43-101 standards. Assaying was done by Inspectorate America
Corp. of Sparks, Nev., United States. Inspectorate is an international laboratory that has operated in Nevada for more than 10
years. Samples were 30-gram fire assays of split NQ-sized core (4.76
centimetres in diameter). The NQ-diameter drill core samples were
split in half, with one-half retained in its original core box and the
second half sent to Inspectorate. Quality control and quality assurance of
the analytical results were monitored by inserting standards, blanks
and duplicates into the sample run for approximately every 30 samples
at the project site.
Qualified persons
The independent qualified persons as defined by National Instrument 43-101 for the
purpose of this news release regarding the Atlanta project resource
update are Fred Brown, CPG, Tracy Armstrong, PGeo, and Eugene Puritch,
PEng, all of P&E of Brampton, Ont. The
contents of this news release have been reviewed and approved by Mr.
Puritch. P&E is an established and
internationally recognized geological and mine engineering consulting
firm specializing in resource estimates, scoping, prefeasibility
studies and participation with other consulting firms on feasibility
studies, with over 130 projects undertaken in the last seven years. P&E
has certificates of authorization from the Association of Professional
Geoscientists of Ontario, Professional Engineers of Ontario, the
Association of Professional Engineers and Geoscientists of Saskatchewan,
and Professional Engineers and Geoscientists of Newfoundland and
Labrador.
Fred Brown, CPG, PrSciNat, of P&E, is a certified professional
geologist (No. 11015) with the American Institute of Professional
Geologists, and is a registered professional natural scientist with the
South African Council for Natural Scientific Professions (No. 400008/04). He
has over 25 years of worldwide experience in mining resource and
reserve assessments and related work.
Tracy Armstrong, PGeo, a graduate of Queen's University in
Kingston, Ont., with a BSc (honours) in geological sciences (1982), is
a geological consultant currently licensed by the Order of Geologists
of Quebec (licence No. 566), by the Association of Professional
Geoscientists of Ontario (licence No. 1204), and by the Association of
Professional Engineers and Geoscientists of British Columbia (licence
No. 34720). She is an independent geological consultant contracted by P&E, and has worked as a geologist continuously
since her graduation from university.
Eugene Puritch, PEng (Haileybury School of Mines, Queen's
University), president of P&E, has more than 30 years of experience in
mine evaluation and resource estimating for some of Canada's largest
mining companies. He has undertaken more than 300 resource estimates
and mine designs in his career, many of which formed the basis for
feasibility studies and subsequent production decisions. Prior to
co-founding P&E, Mr. Puritch was regularly under contract to provide
his services to Micon International Ltd., Aker Solutions Canada Inc.,
A.C.A. Howe International Ltd. and Strathcona Mineral Services.
Information concerning estimates of mineral reserves and resources
The mineral resource estimates reported in this news release were
prepared in accordance with National Instrument 43-101, standards of
disclosure for mineral projects, as required by Canadian
securities regulatory authorities. For United States reporting
purposes, the United States Securities and Exchange Commission applies different standards in order to classify mineralization as a
reserve. In particular, while the terms measured, indicated and
inferred mineral resources are required pursuant to National Instrument 43-101, the
SEC does not recognize such terms. Canadian standards differ
significantly from the requirements of the SEC. Investors are cautioned
not to assume that any part or all of the mineral deposits in these
categories constitute or will ever be converted into reserves. In
addition, inferred mineral resources have a great amount of uncertainty as to their existence and their economic feasibility. It
cannot be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category.
We seek Safe Harbor.
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