Mr. Trent Mell reports

FALCO OUTLINES SIX GOLD ZONES ADJACENT TO HORNE 5 DEPOSIT

Falco Resources Ltd. has identified six gold zones with significant grade and continuity located adjacent to its Horne 5 deposit. Along with five previously disclosed zones (see July 10 news release), these 11 gold zones identified from historical drilling demonstrate the potential to add to the Horne 5 resource estimate.

Selected highlights

• Falco has identified what it believes to be the downdip extension of the Horne West gold deposit. The Lower West zone is located within a very large underexplored mineralized corridor with dimensions of 250 metres by 380 m by 620 m at a vertical depth of 800 m. The zone remains open above and below;
• The Lower West zone drill results include 14.6 m of 5.53 grams per tonne gold in hole HN_21-2822; 8.5 m of 10.40 g/t Au, including 4.5 m of 17.83 g/t Au in hole HN_9-90; and 12.2 m of 4.29 g/t Au, including 6.1 m of 6.69 g/t Au in hole HN_2845;
• 10 m of 5.49 g/t Au in hole HN_09-281 (AM zone);
• 21 m of 2.87 g/t Au, including 3.10 m of 18.22 g/t Au in hole HN_47-8676 (AA zone);
• 6.10 m of 6.51 g/t Au in hole HN_09-558 (K zone).

"I am particularly excited by the discovery of the Lower West zone due to the relationship that appears to exist with the near-surface Horne West deposit," said Trent Mell, president and chief executive officer. "An immediate objective will be to assess the potential continuity between the Horne West deposit and the Lower West zone. We will also evaluate whether these 11 zones and other known targets can be incorporated with Horne 5 resource estimate into a larger Horne complex resource estimate. The opportunity is clear but additional work and community consultations are required."

The broad zones of gold mineralization were identified from compilation, digitization and analysis of 80 years of historical data that were never publicly disclosed. This vast and laborious undertaking is still under way and additional results will be released in the coming weeks.

All 11 gold zones within the Horne complex fall within less than a two-kilometre radius of the Horne and Quemont mines, two former gold-rich volcanogenic massive sulphide deposits that produced 14 million ounces of gold. The size of the zones and their proximity are key factors governing their possible contributions to the current Horne 5 resource estimate.

Select drill intercepts from the six zones are included in the table. All zones remain open and are considered prime exploration targets.

                                                                            
             HIGHLIGHTED HISTORICAL DRILL RESULTS

                                   Core
Hole               From     To   length*   Au    Ag   Cu   Zn
                     (m)    (m)      (m) (g/t) (g/t)  (%)  (%)

HN_21-2822          0.6   15.2     14.6  5.53    NA   Tr   NA
HN_21-2845          4.5   16.8     12.2  4.29    NA   Tr   NA
including           4.6   10.7      6.1  6.69    NA   NA   NA
HN_21-2831          0.8   12.2     11.4  3.70    NA   Tr   NA
HN_9-90           262.5  271.0      8.5 10.40    NA   NA   NA
including         262.5  267.0      4.5 17.83    NA   NA   NA
HN_21-2866          1.5    3.0      1.5 24.00    NA   NA   NA
RN_9-28           163.0  163.8      0.5 17.83    NA   NA   NA
HN_09-558          62.5   68.6      6.1  6.51    NA   NA   NA
including          65.5   67.0      1.5 14.40    NA   NA   NA
HN_09-381          77.7   86.9      9.1  3.89    NA   NA   NA
including          85.0   86.5      1.5  9.60    NA   NA   NA
HN_09-281          56.0   59.0     10.0  5.49    NA   NA   NA
HN_49-4805         18.3   22.9      4.6  2.74  4.80   NA   NA
including          21.3   22.8      1.5  6.17 10.29   NA   NA
HN_49-4817         12.2   24.4     12.2  2.06 25.80   Tr   NA
including          15.2   16.7      1.5  4.11 60.34   NA   NA
HN_47-8676          3.0   24.0     21.0  2.87    NA   Tr   Tr
including           9.1   12.2      3.1 18.22    NA   Tr   Tr
HN_S-345          292.6  294.1      1.5 10.97    NA   NA   NA
HN_S-345          416.0  419.0      3.0  5.49    NA   NA   NA
HN_S-362          245.0  248.0      3.0  4.80    NA   NA   NA
HN_33-2926        189.0  190.5      1.5  8.91    NA   Tr   NA
HN_33-3312         45.5   47.0      1.5  6.17    NA   NA   NA

* All intercepts reported are downhole lengths, not true
thicknesses, from underground holes. Only the V zone was
drilled from surface. Insufficient drilling has been
completed to date to define the orientation of the
mineralized zones in space. The data are historical in nature
and Falco has not independently verified the results;
consequently, these results should not be relied upon.
                                                      
 

Zone identification was based on compilation of over 6,400 (460,000 metres) historical drill holes from Falco's extensive archives on the Horne complex area. Historical drilling focused on base metals, leaving an extensive underutilized database. Falco has recently identified several new high-grade gold targets, all of which have never been evaluated or expanded upon. Once finalized, the results of these isolated targets will be summarized in an upcoming news release.

Overview of six zones

Lower West zone

Lower West zone is believed to be the downdip extension of the Horne West gold deposit, a historic near-surface gold-zinc deposit with significant historical intersections including 520 m of 4.9 g/t Au and 10.7 m of 9.58 g/t Au (core length for both). The Lower West zone is the largest of the six new zones and is located within a large underexplored mineralized corridor with dimensions of 250 m by 380 m by 620 m at 800 m vertical depth and 1,110 m west of Horne 5. The zone remains open above and below.

The mineralization is mainly hosted by pyritized rhyolite breccia and tuff locally intruded by metadiabase, and bordered by the Andesite fault to the south. Several drill holes returned anomalous gold values, the most significant being:

• 10.40 g/t Au over 8.5 m (RN_9-90);
• 5.53 g/t Au over 14.6 m (HN_21-2822);
• 4.29 g/t Au over 12.2 m (HN_21-2845);
• 24.00 g/t Au over 1.5 m (HN_21-2866);
• 17.83 g/t Au over 0.5 m (RN_9-28).

Compilation and analysis of historical data for the Horne West deposit are nearing completion and will be disseminated in an upcoming news release.

K zone

The K zone is 450 m northeast of Horne 5 at a vertical depth of 308 m and lies within a relatively unaltered andesite. Six holes intersected this mineralized body, associated with a mineralized domain having dimensions of 185 m by 55 m by 30 m, and open above and below its current elevation. Three holes returned grades higher than three g/t Au, with hole HN_09-558 intersecting 6.51 g/t Au over 6.1 m, including 14.40 g/t over 1.5 m.

AM zone

The AM zone is 340 m southeast of Horne 5 at a depth of 310 m and lies within a relatively unaltered rhyolite breccia. Mineralization is defined by a 170 m by 35 m by 30 m pyritized body running parallel to the main east-west diabase dike that cuts the Horne 5 deposit. The zone appears to be terminated to the north and east by a large syenite porphyry and metadiabase but remains open above and below. The zone is intersected by five holes, three of which contain grades better than three g/t Au. Hole HN_09-381 assayed 3.89 g/t Au over 9.1 m, including 9.60 g/t Au over 1.5 m.

An isolated zone of VMS mineralization lies 50 m northeast of AM zone along the northern border of a syenite porphyry intrusion. Mineralization consists of massive pyrite with traces of sphalerite and chalcopyrite within the host rhyolite. The best gold value intersected in this zone is 2.06 g/t Au over 1.5 m.

AA zone

The AA zone is a deep target located 338 m south of Horne 5 and about 1,800 m below surface encapsulated within a mineralized body with dimensions of 80 m by 25 m by 60 m and open in elevation with some restrictions laterally. Mineralization is hosted by slightly to well-pyritized rhyolite and rhyolite breccia with trace chalcopyrite and galena. The highest reported intersection is from hole HN_47-8676 grading 2.87 g/t Au over 21.0 m, including 18.22 g/t over 3.1 m. Other significant intercepts include hole HN_49-4805 with 2.74 g/t Au over 4.6 m and HN_49-4817 with 2.06 g/t Au over 12.2 m.

V zone

The V zone is a shallow target located near Horne West at a depth of just 220 m. The zone lies within a 500 m by 200 m by 75 m mineralized corridor that appears open laterally and at depth. Mineralization is hosted in a rhyolitic assemblage that may extend westward across the Horne Creek fault. All historical drilling was from surface of which holes HN_S-362 and HN_S-345 returned the best intercepts of 4.80 g/t Au over three m and 10.97 g/t Au over 1.5 m.

Z zone

The Z zone is the farthest zone from Horne 5, located 1,830 west at a depth of 1,200 m. Four drill holes intersected mineralization defining this 280 m by 30 m by 30 m mineralized corridor, which is open at depth and above with some restrictions to the north and south. Developed principally within the Powell granite, mineralization consists of quartz veins with disseminated pyrite within the host granite. Hole HN_33-2926 reported the best intersection of 8.91 g/t Au over 1.5 m and HN_33-3312 returned 6.17 g/t Au over 1.5 m.

Next steps

Falco's current strategy consists of identifying opportunities to increase the size of the resource estimate within the Horne complex while also pursuing top exploration targets within the remainder of its 728-square-kilometre land package.

Outside the Horne complex, Falco is completing the first phase of a regional exploration program on a number of targets, including the Riviere Mouilleuse (Rimo) property. Rimo is a largely untested target that shows strong similarities to the Horne complex stratigraphy. Results of this phase of work will be available in the coming weeks.

Within the Horne complex, Falco intends to conduct drill programs to expand on the most prospective target areas, as controls on mineralization and zone distribution are better understood. In particular, Falco plans to test zones that have the best chance of positively impacting the current resource.

In March, 2014, Falco announced a 2.2-million-ounce inferred gold resource estimate (25.3 million tonnes at 2.64 g/t Au, 0.23 per cent copper and 0.7 per cent zinc) for the Horne 5 deposit. Horne 5 is one of a number of known zones of gold and polymetallic mineralization which forms the Horne Mine complex, centred around the former producing Horne copper-gold deposit. Falco is now focused on areas adjacent to Horne 5, expanding its geologic model to incorporate a number of former producers, including the Remnor, Quemont, Joliette and Chadbourne deposits, and high-priority exploration targets such as Horne West.

Historic drilling within the Horne complex area focused on copper-dominant base metal mineralization to feed the adjacent Horne smelter. Gold-only and zinc-rich intercepts were assigned a lower priority for follow-up, leaving an extensive database with substantial potential that Falco is aggressively pursuing throughout the Rouyn-Noranda camp.

Qualified person

Stephane Poitras, exploration manager (PGeo), is the qualified person for this release as defined by National Instrument 43-101, and has reviewed and verified the technical information contained herein. Mr. Poitras is an employee of Falco and is non-independent.

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