Mr. Claudio Ciavarella reports
KERR MINES PROVIDES OPERATIONAL AND PFS UPDATE
Following the successful 2017 phase I exploration program in the Copperstone and Footwall zones, Kerr Mines Inc. is continuing with a 15,000-metre 2018 phase II program with the objective to expand the mineral resource. The 2017 phase I program confirmed significant gold mineralization and increased the potential in expanding the resource at the company's Copperstone project in Arizona. In addition, Kerr is on track to announce the results of its prefeasibility study including a National Instrument 43-101 resource statement at the end of March, 2018. The study will enable the company to make a well-informed production decision shortly thereafter.
Martin Kostuik, president, stated: "These results conclude the very successful phase I program which was designed to confirm and upgrade the resource. We are excited to share this and our plans for 2018 during PDAC at our booth No. 2947 -- actions for 2018 include the completion of our prefeasibility study in Q1, the announcement of our production decision and the execution of the phase II exploration program."
Recap of 2017 phase I exploration program
The Copperstone zone detachment fault system historically produced over 500,000 ounces of gold from an open pit. Continuing below the open pit, the down-dip extension of the Copperstone zone and the parallel Footwall zone have been further enhanced by the phase I drilling program. The phase I 8,159-metre surface and underground drilling program is complete. The 85-hole phase I program was a combination of surface core and reverse circulation and underground core drilling. Four thousand eight hundred fifty-four metres were dedicated to the Footwall zone where a new zone of mineralization was established only 150 metres from the Copperstone zone. This new Footwall zone of 375 metres along strike by 350 metres along dip provides an immense opportunity to further expand mineralized resources (see press release dated Jan. 17, 2018). The phase I program also tested mineralization along strike and up/down-dip in the D and C portions of the Copperstone zone. Three thousand three hundred five metres of underground core were dedicated to confirmation, extension and continuity goals.
In total, core was logged for mineralization, alteration, structure, rock quality and lithology. Five thousand two hundred forty-eight fire assays, 50 metallic screens and 244 ICP analyses were performed. In addition, 665 holes of historic core drill logs totalling 83,265 metres were reinterpreted for alteration and digitized for inclusion into the 2017 resource estimate program database.
For a full table of results and map for the 2017 phase I program see the company's website.
2018 prefeasibility study
The study is on track for announcement at end of March, 2018. Operating and capital costs, ore production, metallurgical recovery, and revenue generation for the project are being summarized for inclusion in a financial model which includes operating cash flows and rates of return. Trade-offs in the study include owner versus contractor operation of the mine, a comparison of several mining methods, and ore concentrate production sales versus production and sale of final dore.
2018 phase II exploration program
Building on the achievements of the 2017 exploration program, the company is continuing to advance the project with further drilling and assaying in 2018. The objectives of the 2018 phase II exploration program are to:
Increase the mineral resource and improve the mineral classification in the Copperstone zone;
Increase the mineral resource and improve the mineral classification in the parallel Footwall zone which is located within 150 metres of the Copperstone zone;
Better define mining stopes in the D and C zones of the Copperstone zone.
The 2018 phase II program plans for up to 15,000 metres of infill and extensional drilling primarily in the Copperstone zone. Over 2,900 metres of underground access are in place, including the additional access along strike added during the phase I program. The 2018 program will utilize this access to target areas of mineralization within which to improve continuity and extend the mineralized zones into areas never before drilled from underground.
The technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 and reviewed and approved by Michael R. Smith, registered geologist, who is a qualified person as defined by NI 43-101 for this project.
About Kerr Mines Inc.
Kerr Mines is a North American gold development and exploration company currently advancing the 100-per-cent-owned, fully permitted past-producing Copperstone mine project. Copperstone is a high-grade gold project located along a detachment fault mineral belt in mining-friendly Arizona. The project demonstrates significant upside exploration potential within a 4,775-hectare (11,800 acres) land package that includes a production history of over 500,000 ounces of gold. The company's current focus is on maximizing Copperstone's potential by defining and expanding current resources and strengthening the mine's economics leading to a production decision.
Quality assurance and quality control statement
Procedures have been implemented to assure quality assurance/quality control (QA/QC) of drill hole assaying being done at American Assay Laboratories, which is ISO accredited. All portions of drill holes are being assayed and samples are securely stored for shipment to American, with chain of custody documentation through delivery. Mineralized commercial reference standards and coarse blank standards are inserted every 20th sample in sequence and results are graphed to assure acceptable results, resulting in high confidence of the drill hole assay results. When laboratory assays are received, the QA/QC results are immediately evaluated and graphed to analyze dependability of the drill hole assays. As the Copperstone project advances, additional QA/QC measures will be implemented including 1) selected duplicate assaying being done at a second accredited assay laboratory and 2) duplicate assaying of selected intervals of core (quarter splits) and reverse circulation drilling samples of selected remaining laboratory rejects. All results will be analyzed for consistency.
We seek Safe Harbor.
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