Mr. Luc Lessard reports
FALCO ANNOUNCES SIGNIFICANT INCREASE IN HORNE 5 RESOURCES
Falco Resources Ltd. has released an updated mineral resource estimate for its wholly owned Horne 5 gold project located in Rouyn-Noranda, Que. Gold-equivalent resources have increased significantly as a result of this update. The updated resource estimate now includes and combines the newly assembled historical underground channel sample database, new economic parameters as per the company's recently published preliminary economic assessment, including lowering of the net-smelter-return cut-off, additional 2016 drilling results and revised commodity pricing assumptions. New measured, indicated and inferred resources have been updated for the Horne 5 deposit, which now contains six high-grade zones.
This updated resource estimate increases gold-equivalent M&I resources by 32 per cent.
The updated resource estimate lays the foundation for the completion of a feasibility study in 2017. This update was undertaken to support feasibility work on the Horne 5 project and to convert part of indicated mineral resources into measured mineral resources by adding 14,799 samples from the historical underground channel sample database into the resource estimate.
Highlights
(at a $55/tonne NSR cut-off)
-
Horne 5 is now estimated to host:
- A measured resource of 736,000 gold-equivalent ounces, including 475,410 ounces Au contained in 9.4 million tonnes averaging 2.45 grams per tonne AuEq (1.58 g/t Au, 16.33 g/t silver, 0.18 per cent copper and 0.81 per cent zinc);
- An indicated resource of 6,336,000 ounces AuEq, including 4,088,383 ounces Au contained in 81.7 million tonnes averaging 2.41 g/t AuEq (1.56 g/t Au, 14.19 g/t Ag, 0.18 per cent Cu and 0.86 per cent Zn);
- An inferred resource of 1.71 million ounces AuEq, including 1,053,061 ounces Au contained in 22.3 million tonnes averaging 2.39 g/t AuEq (1.47 g/t Au, 22.98 g/t Ag, 0.2 per cent Cu and 0.68 per cent Zn).
- The measured and indicated resources represent 81 per cent of the total resources in AuEq content (ounces).
- The measured resources represent 10 per cent of the measured and indicated resources in AuEq content (ounces). The recently completed historical underground channel chip sample database confirmed Au, Cu and Zn modelled grades and provided the data to upgrade a portion of the indicated resource into the measured resource category.
- A feasibility study which will incorporate the updated Horne 5 resource estimate has been commenced and is planned to be completed in the first half of 2017.
- Continuing drill programs are focusing on additional exploration targets in the vicinity of the Horne 5 deposit. The company plans to drill 20,000 metres at the Horne 5 West and Quemont Extension exploration targets in 2016.
Luc Lessard, president and chief executive officer, stated: "The resource estimate update will enable Falco to aggressively pursue the advancement of the feasibility study on the Horne 5 project. Establishing an initial measured resource was critical to the advancement of the technical studies. The outlined Horne 5 prospective large bulk-tonnage underground resource has enabled Falco to commission work on developing a state-of-the-art highly mechanized mining project."
Horne 5 resource estimate
The updated Horne 5 resource estimate is based on 5,977 diamond drill holes (478,281 metres) of which 4,138 crosscut mineralized zones for a total of 177,996 m of core within these zones.
Falco's 2015 to 2016 confirmation and 2016 exploration drill holes were collared from surface. The 2015 to 2016 confirmation drill holes successfully confirmed previously drilled areas between 650 m and 2,035 m below surface. The 2016 exploration drill results completed thus far and which were included in the resource locally expanded known resource envelopes and strengthened the geological model. The historic Noranda holes were collared at depths ranging from 600 m to 2,300 m below surface across a strike length of up to 1,000 m. The majority of drilling was conducted as radiating fan drilling on 15 m spacing from 40 underground working levels developed throughout the deposit. The 15 m spacing is significantly closer than standard drill spacing used in resource estimation work at present day providing a very high level of confidence in the data. Falco sampled at one intervals and Noranda dominantly sampled at three m core lengths (which homogenizes individual higher-grade results), generating the more than 92,000 assays that were used in the resource estimate.
The National Instrument 43-101 technical report will be delivered and filed on SEDAR within the next 45 days.
HORNE 5 DEPOSIT -- MINERAL RESOURCE ESTIMATE
Resource Cut-off Tonnes AuEq Au Ag Cu Zn
class (NSR) (g/t) (g/t) (g/t) (%) (%)
Measured >$40 11,644,000 2.21 1.42 15.46 0.17 0.73
>$45 10,884,200 2.28 1.47 15.74 0.17 0.75
>$50 10,118,600 2.36 1.52 16.01 0.18 0.78
>$55 9,361,800 2.45 1.58 16.33 0.18 0.81
>$60 8,643,600 2.53 1.64 16.61 0.19 0.84
>$65 7,885,500 2.62 1.70 16.90 0.19 0.87
>$70 7,193,300 2.71 1.77 17.19 0.20 0.90
>$75 6,477,100 2.81 1.84 17.48 0.21 0.92
>$80 5,818,100 2.91 1.92 17.66 0.21 0.95
>$85 5,202,300 3.01 2.00 17.77 0.22 0.96
>$90 4,642,000 3.12 2.09 17.86 0.23 0.98
>$95 4,100,200 3.23 2.18 17.99 0.23 1.00
>$100 3,623,700 3.34 2.28 18.08 0.24 1.02
Resource Contained Contained Contained Contained Contained
class AuEq Au Ag Cu Zn
(oz) (oz) (oz) (lb) (lb)
Measured 826,722 530,386 5,789,209 42,781,845 186,158,376
799,424 513,969 5,506,283 41,196,031 180,655,296
769,095 495,643 5,207,294 39,505,764 174,219,296
736,424 475,410 4,914,349 37,672,449 167,402,703
702,781 454,619 4,616,673 35,830,796 160,164,077
664,417 431,243 4,285,355 33,782,384 151,210,238
626,789 408,525 3,975,881 31,729,326 141,970,341
585,214 383,485 3,639,181 29,410,622 131,694,520
544,501 359,144 3,303,540 27,225,652 121,309,845
504,116 335,148 2,972,444 25,141,955 110,615,281
465,390 311,854 2,665,172 23,105,264 100,619,066
426,051 287,638 2,371,119 21,144,745 90,605,672
389,705 265,219 2,106,521 19,317,452 81,329,166
Resource Cut-off Tonnes AuEq Au Ag Cu Zn
class (NSR) (g/t) (g/t) (g/t) (%) (%)
Indicated >$40 101,193,300 2.18 1.40 13.28 0.16 0.78
>$45 94,776,600 2.26 1.45 13.58 0.17 0.80
>$50 88,312,700 2.33 1.50 13.88 0.17 0.83
>$55 81,735,100 2.41 1.56 14.19 0.18 0.86
>$60 75,030,900 2.50 1.61 14.53 0.18 0.89
>$65 68,278,500 2.59 1.68 14.89 0.19 0.92
>$70 61,663,700 2.68 1.75 15.24 0.19 0.95
>$75 55,291,800 2.78 1.82 15.58 0.20 0.97
>$80 49,387,700 2.89 1.90 15.88 0.21 0.99
>$85 43,777,200 3.00 1.99 16.14 0.21 1.01
>$90 38,485,300 3.11 2.08 16.37 0.22 1.03
>$95 33,608,500 3.23 2.19 16.61 0.23 1.04
>$100 29,224,100 3.36 2.30 16.79 0.24 1.04
Resource Contained Contained Contained Contained Contained
class AuEq Au Ag Cu Zn
(oz) (oz) (oz) (lb) (lb)
Indicated 7,106,710 4,561,707 43,216,888 361,222,169 1,732,373,996
6,876,279 4,420,159 41,389,265 347,023,865 1,681,157,217
6,620,424 4,263,292 39,423,671 331,909,656 1,621,335,082
6,335,857 4,088,383 37,294,859 315,830,464 1,552,729,386
6,021,290 3,893,721 35,042,172 298,866,949 1,475,006,823
5,679,400 3,683,116 32,678,965 280,681,708 1,387,152,589
5,319,671 3,463,531 30,211,981 261,810,565 1,291,174,091
4,949,131 3,239,298 27,699,476 243,001,702 1,187,893,122
4,583,656 3,020,056 25,211,029 224,864,386 1,082,826,423
4,215,800 2,798,579 22,721,918 207,141,824 976,681,962
3,849,377 2,577,589 20,255,648 189,790,010 870,545,575
3,494,066 2,361,472 17,947,645 173,002,348 768,394,721
3,158,286 2,158,014 15,772,309 157,207,719 670,572,051
Resource Cut-off Tonnes AuEq Au Ag Cu Zn
class (NSR) (g/t) (g/t) (g/t) (%) (%)
Measured and
indicated >$40 112,837,300 2.19 1.40 13.51 0.16 0.77
>$45 105,660,800 2.26 1.45 13.80 0.17 0.80
>$50 98,431,300 2.34 1.50 14.10 0.17 0.83
>$55 91,096,800 2.41 1.56 14.41 0.18 0.86
>$60 83,674,500 2.50 1.62 14.74 0.18 0.89
>$65 76,164,000 2.59 1.68 15.10 0.19 0.92
>$70 68,857,000 2.69 1.75 15.44 0.19 0.94
>$75 61,768,900 2.79 1.82 15.78 0.20 0.97
>$80 55,205,800 2.89 1.90 16.07 0.21 0.99
>$85 48,979,500 3.00 1.99 16.32 0.22 1.01
>$90 43,127,300 3.11 2.08 16.53 0.22 1.02
>$95 37,708,700 3.23 2.19 16.76 0.23 1.03
>100 32,847,800 3.36 2.29 16.93 0.24 1.04
Resource Contained Contained Contained Contained Contained
class AuEq Au Ag Cu Zn
(oz) (oz) (oz) (lb) (lb)
Measured and
indicated 7,933,432 5,092,093 49,006,097 404,004,013 1,918,532,372
7,675,704 4,934,128 46,895,548 388,219,896 1,861,812,513
7,389,520 4,758,936 44,630,965 371,415,421 1,795,554,378
7,072,273 4,563,793 42,209,208 353,502,913 1,720,132,089
6,724,071 4,348,340 39,658,845 334,697,744 1,635,170,900
6,343,817 4,114,360 36,964,321 314,464,092 1,538,362,827
5,946,460 3,872,056 34,187,862 293,539,891 1,433,144,432
5,534,345 3,622,782 31,338,658 272,412,325 1,319,587,642
5,128,157 3,379,201 28,514,569 252,090,038 1,204,136,268
4,719,916 3,133,727 25,694,362 232,283,780 1,087,297,243
4,314,767 2,889,443 22,920,820 212,895,273 971,164,640
3,920,117 2,649,110 20,318,763 194,147,093 859,000,393
3,547,992 2,423,233 17,878,830 176,525,171 751,901,217
Resource Cut-off Tonnes AuEq Au Ag Cu Zn
class (NSR) (g/t) (g/t) (g/t) (%) (%)
Inferred >$40 29,982,700 2.09 1.27 20.20 0.18 0.62
>$45 27,554,500 2.18 1.33 21.03 0.19 0.64
>$50 24,940,000 2.28 1.39 21.98 0.20 0.66
>$55 22,283,200 2.39 1.47 22.98 0.20 0.68
>$60 20,058,400 2.49 1.54 23.94 0.21 0.70
>$65 17,472,900 2.62 1.64 25.21 0.21 0.72
>$70 15,293,600 2.75 1.74 26.48 0.21 0.74
>$75 13,406,500 2.88 1.84 27.70 0.22 0.75
>$80 11,528,900 3.04 1.96 29.10 0.23 0.77
>$85 9,821,100 3.21 2.11 30.25 0.23 0.78
>$90 8,222,900 3.41 2.29 30.98 0.25 0.77
>$95 6,927,000 3.63 2.48 31.57 0.26 0.76
>$100 5,912,700 3.84 2.68 32.15 0.27 0.74
Resource Contained Contained Contained Contained Contained
class AuEq Au Ag Cu Zn
(oz) (oz) (oz) (lb) (lb)
Inferred 2,018,308 1,225,760 19,474,995 121,579,421 408,634,980
1,930,445 1,176,117 18,634,351 114,786,950 389,104,374
1,826,125 1,116,815 17,622,512 107,406,534 365,167,423
1,709,902 1,053,061 16,463,471 99,171,805 336,101,668
1,604,361 995,491 15,437,436 91,439,498 309,347,419
1,472,114 922,946 14,159,498 80,661,116 278,551,219
1,352,929 856,634 13,019,250 71,823,610 249,906,179
1,242,755 794,507 11,940,661 64,601,999 222,924,808
1,126,483 727,514 10,784,724 57,409,881 195,709,438
1,014,192 664,774 9,552,769 50,654,094 168,612,199
902,741 604,603 8,189,164 44,700,861 139,977,418
807,727 552,850 7,030,524 39,678,474 115,974,677
729,660 509,966 6,112,206 35,554,367 96,081,089
1. The effective date of the resource estimate is Sept. 26, 2016. The
independent and qualified persons for the mineral resource estimate as
required by National Instrument 43-101 are Carl Pelletier, PGeo, BSc, and
Guilhem Servelle, PGeo, MSc, both employees of InnovExplo Inc.
2. Mineral resources are not mineral reserves and have not demonstrated
economic viability.
3. While the results are presented undiluted and in situ, the reported
mineral resources are considered by the qualified persons to have reasonable
prospects for economic extraction.
4. These estimates include six low-grade gold-bearing mineralized zones.
5. The principal low-grade gold-bearing mineralized zone includes six
high-grade gold-bearing zones, one high-grade copper-bearing zone, one
high-grade zinc-bearing zone and three high-grade silver-bearing zones. Note
that these high-grade zones may overlap each other.
6. Resources were compiled at NSR cut-offs of $40, $45, $50, $55, $60, $65,
$70, $75, $80, $85, $90, $95 and $100 per tonne for sensitivity purposes.
7. The official base-case resource is reported at a $55-per-tonne NSR
cut-off.
8. The appropriate NSR cut-off will vary depending on prevailing economic and
operational parameters to be determined.
9. NSR estimates are based on the following assumptions: exchange rate of
$1.30/$1 (U.S.), metal prices of: gold at $1,300 (U.S.)/ounce, silver at
$18.50 (U.S.)/ounce, copper at $2.15 (U.S.)/pound and zinc at $1.00
(U.S.)/pound (long-term analyst consensus price forecast study). Net
recoveries were 86.8 per cent for gold, 74.9 per cent for silver, 67.3 per
cent for zinc and 74.0 per cent for copper. Smelting cost (including
transportation) of $6.52 per tonne (based on the cost mine service as well as
on non-public smelter contract obtained from one of the proposed destinations
and on talks with transport providers.
10. Gold-equivalent calculations assume these same metal prices.
11. Inferred resources are separate from indicated resources.
12. The quantity and grade of reported inferred resources in this estimate
are uncertain in nature, and there has not been sufficient work to define
these inferred resources as indicated or measured resources. It is uncertain
if further work will result in upgrading them to an indicated or measured
mineral resource category.
13. The resource was estimated using Geovia GEMS 6.7. The estimate is based
on 5,977 diamond drill holes (478,281 metres) of which 4,138 crosscut
mineralized zones for a total of 177,996 m of core within these zones. For
silver the estimate also uses the results of an exhaustive metallurgical test
comprising 2,112 diamond drill holes assayed for silver over a total length
of 75,540 metres. A minimum true thickness of seven m was applied, using the
grade of the adjacent material when assayed or a value of zero when not
assayed. Only the silver interpolation in the inferred resources does not use
the material when not assayed.
14. The estimate database contains also 14,799 channel samples for a total of
23,791 m from drifts historically sampled. Channel sample data were only used
for distance to composite criterion for resource classification purposes.
15. Ninety-one per cent of density values was estimated using historical
drill hole iron assay data and Falco density data for an average of 3.41
grams/cubic centimetre. Interpolation method uses three-pass ID2 for the
ENV_A and HG_A to HG_F zones. Eight per cent of density values was fixed at
2.88 g/cubic cm for ENV_B to ENV_E zones due to the scarcity of the data.
2.88 g/cubic cm representing the median of the available data. One per cent
of density values was fixed at 2.67 g/cubic cm for ENV_F zone due to the
scarcity of the date and to adequately characterize this quartz-rich zone.
16. Compositing was done on drill hole sections falling within
the mineralized zones (composite equals three metres). Tails shorter than
0.75 m were not created.
17. Resources were evaluated from drill holes using an ID2 interpolation
method in a block model (block size equals five by five by five m).
18. High-grade capping was done on raw assay data and established on a
per-zone basis for gold (g/t) (HG_A: 35; HG_B: 35; HG_C: 25; HG_D: 35; HG_E:
25; HG_F: 35; ENV_A: 35; ENV_B: 25; ENV_C: 25; ENV_D: 20; E NV_E: 35; ENV_F:
25) and for silver (g/t) (SG_HG: 100; HG_D: 165; HG_F: 165; ENV_A_SG_Low:
110; ENV_B: 100; ENV_C: 100; ENV_D: 100. Capping grade selection is supported
by statistical analysis. No capping was applied to the Cu and Zn data based
on statistical analysis.
19. The mineral resources presented herein are categorized as measured,
indicated and inferred. The inferred category is only defined within the
areas where blocks were interpolated during pass one or pass two in areas
where continuity is sufficient to avoid isolated blocks. The indicated
category is only defined by blocks interpolated in areas where the maximum
distance to the closest drill hole composite is less than 25 m for blocks
interpolated in passes one and two. The measured category is only defined by
blocks classified as indicated and in sufficient proximity to sampled drifts
(less than 15 m). The average distance to the nearest composite is 6.97 m for
the measured resources, 10.01 m for the indicated resources and 40.10 m for
the inferred resources.
20. Tonnage estimates were rounded to the nearest hundred tonnes. Any
discrepancies in the totals are due to rounding effects. Rounding practice
follows the recommendations set out in National Instrument 43-101.
21. Canadian Institute of Mining, Metallurgy and Petroleum definitions and
guidelines were followed in estimating mineral resources.
22. InnovExplo is not aware of any known environmental, permitting, legal,
title-related, taxation, socio-political, marketing or other relevant issues
that could materially affect the mineral resource estimate.
23. Metal contained in ounces (troy) equals metric tonnes times grade divided
by 31.10348. Calculations used metric units (metres, tonnes and g/t). Metal
contents are presented in ounces and pounds.
Qualified person
Carl Pelletier (PGeo, BSc) and Guilhem Servelle (PGeo, MSc) are the qualified persons as defined by National Instrument 43-101 for the mineral resource estimate data in this release as they relate to the technical information in the 2014 and 2016 Horne 5 project resource estimate update, and they have reviewed and verified the technical information contained herein. Mr. Pelletier and Mr. Servelle are consulting geologists with InnovExplo Inc. and fulfill the requirements to be qualified person for the purposes of NI 43-101.
Claude Bernier, exploration manager (PGeo, Eng), 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. Bernier is an employee of Falco and is non-independent.
The scientific and technical information regarding the cut-off evaluation set out in this news release has been approved by Francois Girard, deputy director -- InnovExplo. Mr. Girard is an Eng with the Ordre des ingenieurs du Quebec and is a qualified person as defined by NI 43-101.
Quality assurance/quality control
Falco has implemented a strict quality control program to comply with best practices in the sampling and analysis of drill core. As part of its QA/QC program, Falco inserts certified external mineralized standards. In the mineralized zones, each shipment comprises 27 samples in 2015 and 20 samples in 2016. Every shipment is composed of 23 or 20 samples, a standard, a blank, a pulp duplicate (in 2015) and a reject duplicate placed at the end of the batch to test the laboratory analysis methods and precision for each shipment of samples. Blanks and standards are inserted within the normal sample number sequence. Assay results and certificates of analysis are interpreted and reported on a regular basis. If anomalies are detected, the laboratory is advised and the entire batch of samples is reassayed. In non-mineralized zones, every shipment is composed of 27 or 20 samples, which include a standard and a blank. In non-mineralized zones, if anomalies are detected, the laboratory is advised, but the batch of samples is not necessarily reassayed.
Falco is one of the largest mineral claim holders in Quebec, with extensive landholdings in the Abitibi greenstone belt. Falco's principal property is the Horne mine, which was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Osisko Gold Royalties is the largest shareholder of the company and currently owns 16.2 per cent of the outstanding shares of the company.
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