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Otis Gold Corp
Symbol OOO
Shares Issued 161,830,407
Close 2018-01-18 C$ 0.22
Market Cap C$ 35,602,690
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Otis Gold drills 24.4 m of 4.33 g/t Au at Kilgore

2018-01-18 08:41 ET - News Release

Mr. Craig Lindsay reports

OTIS DRILLS 24.4 METRES @ 4.33 G/T AU AND 53.3 METRES @ 1.23 G/T AU AT KILGORE

Otis Gold Corp. has released assay results for seven additional holes from its 25-hole, 8,000-metre, 2017 Kilgore project drill program. Bulk-tonnage intercepts of 24.4 metres grading 4.33 grams per tonne gold in hole 17 OKC-373, 53.3 m grading 1.23 g/t Au in hole 17 OKC-375 and 100.2 m grading 0.74 g/t Au in hole 17-OKC 378 have been intersected. Core logging is now complete and assays from the final nine holes outstanding will be reported when available.

The primary goal of the drill program was to follow up on open-ended drilling at depth and laterally as infill on drill intercepts achieved in 2015 and 2016, primarily in the prospective Late Cretaceous Aspen formation sedimentary host unit within and along the Aspen corridor (see news releases dated Feb. 9, 2016, and Jan. 19, 2017). Timberline Drilling of Hayden, Idaho, performed all the drilling employing two Atlas Copco CS14 track-mounted core rigs.

 2017 KILGORE DRILL INTERCEPTS -- THIRD RELEASE OF HOLES (1)
  
Hole             TD          From       To     Width       Au
ID              (m)           (m)      (m)       (m)    (g/t)

17 OKC-357    429.2         128.9    132.0       3.1     1.74
                            142.6    153.3      10.7     0.59
                            159.4    182.3      22.9     0.66
17 OKC-367    306.0          76.9     85.3       8.4     0.33
                            106.7    114.3       7.6     0.36
                            123.4    157.0      33.6     0.56
17 OKC-369    289.3                     no significant values
17 OKC-371    420.3          30.2     33.2       3.0     0.80
                             80.2     86.3       6.1     0.57
                            356.5    359.4       2.9     1.53
17 OKC-373    318.5          45.1     48.2       3.1     0.88
                            113.7    133.5      24.4     4.33
                            234.1    243.2       9.1     0.84
17 OKC-375    185.9          98.5    151.8      53.3     1.23
                            165.5    174.7       9.1     0.87
17 OKC-378    197.7           4.6     21.3      16.7     0.78
                             97.5    197.7     100.2     0.74

Holes 17 OKC-371 and 17 OKC-373 were drilled to test the south end of the Kilgore deposit. As background, in a prior exploration program, Otis geologists sampled a historic dump of mixed rhyolite and Aspen sandstone from an adit that was driven into the Cabin fault/rhyolite dome area at the southern end of the deposit. From that fieldwork conducted in 2008, grab sample K 08-01 assayed 44.4 g/t Au. To follow up on this sample result, holes 17 OKC-371 and 17 OKC-373, located on sections 11,400N and 11,300N, respectively, at the south end of the Segment 1 Road, were drilled 100 feet apart and angled eastward across the Cabin fault to test the fault and Aspen/rhyolite dome area for potential higher-grade mineralization.

Hole 17 OKC-371 was extremely altered and silicified, but had no significant values of gold. However, hole 17 OKC-373, drilled 100 feet closer to the Cabin fault/rhyolite dome area and which was also extremely altered with quartz veining and intense brecciation, contains a high-grade intercept of 24.4 m at 4.33 g/t Au at the contact between the rhyolite dome and adjacent Aspen formation. This intercept suggests that the contact between the rhyolite dome and Aspen formation in the Cabin fault area and beyond to the southeast, which remains largely untested, should now be considered a high-priority exploration target for potential higher-grade mineralization.

Holes OKC-375 and 17 OKC-378, located on sections 11,500N and 11,800N, respectively, were PQ-sized holes (diameter 3.35 inches) drilled to twin smaller HQ-sized holes (diameter 2.50 inches) previously drilled at the same sites (holes 17 OKC-357 and 16 OKC-326). This drilling was performed to evaluate how gold grade and the distribution of gold may be a function of the volume of material being sampled, and whether larger sample sizes will produce higher gold grades that are potentially more representative of the underlying gold grades at Kilgore.

Specifically, the unsplit five-foot interval of PQ core has a volume that is 259 per cent larger than the HQ core (a volume of 2,115.4 cubic inches with the PQ core compared to a volume of 589 cubic inches with the split HQ core). In both cases, the PQ holes contain more gold (higher average grade mineralized intercepts) than the split HQ holes. A comparison of gold grades from PQ and HQ twin holes for the same mineralized intervals (same thickness and depth) shows that PQ hole 17 OKC-375 contains an average grade that is 262 per cent greater than its HQ twin counterpart, hole 17 OKC-357 (53.3 m thick intercept from 98.5 m to 151.8 m). Similarly, comparison of gold grades of PQ and HQ twins 17 OKC-378 and 16 OKC-326 for the same mineralized interval studied (100.2 m from 97.5 m to 197.7 m) shows a 42.3-per-cent increase in grade for the PQ hole compared with the HQ hole (see associated table and Otis new release dated Oct. 31, 2016). It should be noted that the majority of historical exploration drilling at Kilgore completed by Otis and prior operators was completed with HQ and NQ (diameter 1.87 inches) core, most of which was split for assay purposes.

It would appear from the limited testing to date using larger sample size results in higher-grade intercepts that could be potentially more representative of the underlying gold grades that exist at Kilgore. From the above, Otis is now examining the merits of drilling additional PQ holes to determine if the gold grades throughout the deposit could have a negative bias in reported grade or, in other words, be underreported.

Holes 17 OKC-367 and 17 OKC-369 are located on sections 11,700N and 11,800N, respectively. These holes targeted the Aspen formation at depth and laterally in the Segment 1 Road area of the Aspen corridor. Hole 17 OKC-367 was drilled to determine the extent of mineralization in the Aspen formation in the southeastern part of the Aspen corridor, and hole 17 OKC-369 was drilled to test the northeastern boundary of the corridor in the same general area. Hole 17 OKC-367, which was a vertical hole, was successful in extending mineralization deeper into the Aspen, and hole 17 OKC-369 served to define the limit of the corridor and the deposit (hole contained no significant values), bounding the mineralization to the southeast.

Otis president and chief executive officer, Craig Lindsay, stated: "Drilling continues to demonstrate the continuity of the Kilgore deposit. Just as importantly, as with prior years drilling, we continue to find new opportunities for expansion such as that which exists at the southeastern end of the deposit around the high-grade intercept in hole 17 OKC-373. PQ/HQ core studies will continue."

Analysis and quality assurance/quality control program

All assay work is being performed by ALS Chemex Labs, which has quality management system certification and technical capability accreditation. A 50-gram pulp of all samples is assayed for gold by fire assay/AA (atomic absorption) finish methods. RockLabs-certified reference material and internally generated blanks are inserted into the sample stream every 10 samples for quality control.

True widths are estimated between 80 per cent and 100 per cent of the drilled interval, based on their approximate dip, association with diking, the orientation of sedimentary bedding and continuity of mineralization between drill holes. Intercepts reported in the associated table are calculated using a 0.20 g/t Au cut-off grade and may include a few internal waste intervals less than 4.5 m using this cut-off.

The qualified person under National Instrument 43-101 for this news release is Bruno Barde, PGeo, who has reviewed and approved its technical content.

About the Kilgore project

The Kilgore project contains a current NI 43-101 (dated Sept. 12, 2012) indicated resource of 520,000 ounces Au in 27.4 million tonnes at a grade of 0.59 g/t Au and an inferred resource of 300,000 ounces Au in 20.2 million tonnes at a grade of 0.46 g/t Au. The deposit is part of an extensive low-sulphidation quartz-adularia epithermal hydrothermal system hosted in Tertiary volcanic rocks and basement Aspen formation calcareous siltstone, shale and sandstone of Late Cretaceous age. Gold mineralization is of the traditional disseminated, bulk-tonnage type similar to that comprising the classic volcanic-hosted gold deposits at Round Mountain, Nevada, and McDonald Meadows, Montana. The preparation of an updated NI 43-101-compliant resource calculation is continuing and will be released when available.

About Otis Gold Corp.

Otis is a resource company focused on the acquisition, exploration and development of precious metal deposits in Idaho. Otis is currently developing its flagship property, the Kilgore project, located in Clark county, Idaho.

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