Brian Skanderbeg reports
GFG PROVIDES EXPLORATION UPDATE AND INITIATES 2020 DRILL PROGRAM AT PEN GOLD PROJECT WEST OF TIMMINS, ON
GFG Resources Inc. has released the remaining drill core assay results from 2019 and has commenced its 2020 drill program at its 100-per-cent-owned Pen gold project located 40 kilometres west of the prolific Timmins gold district in Ontario, Canada.
Brian Skanderbeg, president and chief executive officer, commented: "We are excited to resume drilling at Pen as we follow up a very successful 2019 where we made a new discovery, expanded and identified new gold targets and drilled multiple economic intercepts at district-scale targets. In 2020, we begin our drilling program with a stronger model to follow up on targets such as Slate Rock, HGM, Crawford and Nib. Meanwhile, we will continue to advance earlier-staged targets that have seen limited drill testing such as the Broadway and Boundary targets. Drilling is anticipated to be complete in early April and we are optimistic that we will continue to demonstrate the prospectivity of this region of the Abitibi."
2020 phase 1 drill program
The company has resumed drilling at the project with a plan to drill approximately 3,500 metres over the coming months. The drill program will focus on follow-up drilling at the HGM, Nib and Slate Rock prospects and reconnaissance drilling of other regional targets.
Deerfoot region -- HGM prospect
Recent drilling by the company has expanded the mineralized zones at HGM down plunge and the system remains open at depth and along strike. As part of the phase 1 2020 drill program, depth continuity will be tested with two holes spaced 75 to 100 metres apart. Specifically, the holes will follow up on visible gold-bearing intervals from PEN-19-039 that assayed 7.53 grams per tonne gold over 2.2 metres (including 31.80 g/t Au over 0.5 metre) and 25.96 g/t Au over 1.0 metre (including 51.80 g/t Au over 0.5 metre) from 309.7 and 371.0 metres, respectively.
Slate Rock region
Surface sampling (rock and till) and reconnaissance drilling completed by the company have demonstrated that the Slate Rock mineralized system extends for four kilometres in the west block of the project and is associated with a multiphase diorite intrusive body. In the first quarter of 2019, following up on a till gold grain anomaly of up to 250 pristine grains and boulders containing up to 18.10 g/t Au, the company intersected 0.47 g/t Au over 25.3 metres in PEN-19-025. Gold mineralization was associated with disseminated pyrite and veinlets of pyrite and magnetite in an intensely albite-sericite-carbonate-altered diorite. As part of the continuing drill program, three or four holes will be completed to locate the source of the till and boulder anomaly, test geophysical targets 600 metres to the east, and to follow up on outcrop samples of up to 2.85 g/t Au located an additional 600 metres to the east.
Reeves region -- Nib prospect
At the Nib prospect, in the central part of the project, gold occurs in sheared and altered diorite. Three distinct northeast-trending mineralized zones were outlined by the company in 2018 with hole PEN-18-017 returning 0.89 g/t Au over 7.0 metres. This lower zone contained visible gold, up to 15 per cent arsenopyrite and pyrrhotite and 20 per cent quartz veining. As part of the 2020 drill program, two holes will be drilled across these structures to follow up on this intercept and to test the extent of the mineralized system along strike to the northeast.
-- Broadway prospect
Given the positive results from reconnaissance drilling at the Broadway prospect (described below), the company is planning to drill an additional hole to test for the southward extension of the gold-bearing structure.
Jehann East region -- Boundary trend
As reported previously, while prospecting in 2019 the investigation of a regional till gold grain anomaly identified several new gold occurrences along the three-kilometre Boundary trend. At eight different locations, grab samples collected from outcrop returned values in excess of 1.0 g/t Au with the highest assay being 6.98 g/t Au. There is no record of historic prospecting in the area and no drilling has been documented. Given the lack of outcrop in the area, one or two reconnaissance drill holes may be drilled as part of the 2020 campaign to test areas of intense alteration and to gain better geological context within this newly identified, highly prospective trend.
2019 drill program results
In the fourth quarter of 2019, the company completed 2,718 metres of drilling in eight drill holes testing six targets within the eastern portion of the project. Initial results from four drill holes were reported previously. Results from the remaining four drill holes from the 2019 program are described below.
-- Broadway prospect
The Broadway prospect is an early-stage, kilometre-scale target in the northeast portion of the project in the Tremblay region. Surface grab samples collected by the company from historic trenches and pits contained carbonate-altered and quartz-carbonate-veined diorite and returned up to 8.00 g/t Au. Historic drill logs from the 1970s and 1980s describe similar style veining and alteration although assay results were not reported. One kilometre to the south, till sampling completed by GFG returned highly anomalous gold grain counts (up to 55 grains; 84 per cent pristine) and prospecting revealed grab samples with up to 0.8 g/t Au suggesting the Broadway prospect may contain an extensive mineralized system.
Hole PEN-19-040, designed to test the extent of the vein system approximately 150 metres to the south of the historic drill holes, returned 2.29 g/t Au over 2.5 metres including 7.30 g/t Au over 0.7 metre. The gold mineralization occurs in a deformed and altered diorite approximately 25 metres uphole from the contact with fuchsite-altered and intensely deformed mafic volcanic rocks. Based on these positive results and the lack of historic drilling along trend to the south, the Broadway prospect remains a high-priority drill target.
Deerfoot region -- Crawford prospect
The company completed two holes at the Crawford prospect, which was discovered by GFG in 2018, with hole PEN-19-016 returning 21.26 g/t Au over 1.7 metres at the sheared contact between quartz-porphyry and mafic volcanics. Gold mineralization at Crawford is hosted in the same mafic volcanic package that hosts gold at the HGM prospect located 500 metres to the east where the company recently drilled 7.53 g/t Au over 2.2 metres and 25.96 g/t Au over 1.0 metre. While these two prospects have distinct styles of mineralization, the occurrence of high-grade gold in the same mafic volcanic package demonstrates the high prospectivity of this segment of the Destor Porcupine fault zone.
Hole PEN-19-041 was drilled to test for western extension to the Crawford gold mineralization and returned 8.70 g/t Au over 0.6 metre from an interval of porphyry within an upper ultramafic unit. Hole PEN-19-042 was drilled to test for depth extension to the mineralization at Crawford beneath historic holes that returned 0.53 g/t Au over 8.0 metres, including 3.56 g/t Au over 1.0 metre. The prospective mafic volcanic package was intersected; however, only low gold values (0.1 g/t Au over 10.0 metres) were returned.
The company anticipates completing the current drill program in April, 2020. In addition to the continuing drill program at the Pen gold project, the company will complete a prospecting, mapping and till sampling program in the summer months and a second 3,500-metre drill program during the third and fourth quarters of 2020.
RESULTS FROM THE 2019 PHASE 2 DRILL PROGRAM AT THE PEN GOLD PROJECT
Hole ID (1) From To Length (2) Au
(m) (m) (m) (g/t)
PEN-19-035 39.1 40.1 1.0 1.21
and 47.0 48.0 1.0 2.89
PEN-19-036 269.6 277.0 7.4 0.93
incl. 269.6 270.8 1.2 2.86
and 321.4 322.7 1.3 0.42
PEN-19-037 no significant intercept
PEN-19-038 no significant intercept
PEN-19-039 146.2 147.4 1.2 0.49
and 215.8 216.3 0.5 0.63
and 233.6 234.6 1.0 1.24
and 309.7 310.2 2.2 7.53
incl. 310.2 310.7 0.5 31.80
and 371.0 372.0 1.0 25.96
incl. 371.5 372.0 0.5 51.80
PEN-19-040 192.5 195 2.5 2.29
incl. 194.3 195 0.7 7.30
PEN-19-041 81.0 81.6 0.6 8.70
PEN-19-042 168.9 179 10.1 0.10
* Gold intervals reported in the above table are at 0.1 g/t cut-off. Weighted averaging
has been used to calculate all reported intervals. True widths are estimated at 70 to
90 per cent of drilled thickness.
(1) Results from all drill holes from the 2019 phase 2 program are included for
completeness. Results from PEN-19-035, -036, -037 and -039 were reported previously.
(2) True width is unknown.
Granting of stock options
Pursuant to the company's executive compensation program, the company announced that it has granted stock options to officers, employees and senior consultants to purchase up to an aggregate of 972,500 common shares of the company. These stock options vest over three years and are exercisable for a period of five years at a price of 16 cents per common share.
The company is also pleased to announce that the company's president and chief executive officer and its board of directors will maintain their reduced annual cash compensation in a continued effort to maximize the company's in-the-ground exploration expenditures. In lieu of the reduced compensation, the company will grant the president and chief executive officer and its board of directors stock options to purchase an aggregate of 744,520 common shares of the company. These options vest over three quarters and are exercisable for a period of five years at a price of 16 cents per common share.
The incentive and compensation stock options were granted in accordance with the company's stock option plan which provides for the issuance of up to 10 per cent of the issued capital at any time. Currently, the company has a total of 6,253,547 options outstanding, representing 5.7 per cent of the issued capital of the company.
About GFG Resources Inc.
GFG Resources is a North American precious metals exploration company focused on district-scale gold projects in Tier 1 mining jurisdictions, Ontario and Wyoming. In Ontario, the company owns 100 per cent of the Pen and Dore gold projects, two large and highly prospective gold properties west of the prolific gold district of Timmins, Ont., Canada. The Pen and the Dore gold projects have the same geological setting that hosts most of the gold deposits found in the Timmins gold camp which have produced over 70 million ounces of gold. In Wyoming, the company has partnered with Newcrest Mining Ltd. through an option and earn-in agreement to advance the Rattlesnake Hills gold project.
Mr. Skanderbeg is the qualified person for the information contained in this press release and is a qualified person within the meaning of National Instrument 43-101. Mr. Skanderbeg has reviewed the sampling and quality assurance/quality control procedures and results thereof as verification of the sampling data disclosed above and has approved the information contained in this news release.
Quality assurance and quality control
Drill core samples are being analyzed for gold by Activation Laboratories Ltd. in Timmins, Ont. Gold analysis consists of the preparation of a 500-gram pulp and an assay of a 50-gram aliquot by lead collection fire assay with an atomic absorption spectrometry finish (package 1A2-50). Samples assaying above five parts per million Au are routinely rerun using a gravimetric finish (package 1A3-50). Mineralized zones containing visible gold are analyzed by a screen metallic fire assay method. Selected samples are also undergoing multielement analysis for 59 other elements using a four-acid digestion and an ICP-MS (inductively coupled plasma mass spectrometry) finish (package MA250) by Bureau Veritas Commodities Canada Ltd. in Vancouver, B.C. Quality control and assurance measures include the monitoring of results for inserted certified reference materials, coarse blanks and preparation duplicates of drill core.
Sampling protocols, quality control and assurance measures, and geochemical results related to historic till, rock grab and drill core samples quoted in this news release have not been verified by the qualified person and therefore must be regarded as estimates.
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