VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 26, 2012) - Homestake Resource Corporation (TSX VENTURE:HSR)(FRANKFURT:B6IH) ("Homestake") has completed 13 diamond holes during the 2012 exploration season for a total of 4,743 metres at its Homestake Ridge project, located in Northwest British Columbia. The program consisted of two phases, with the second phase being funded by Agnico-Eagle Mines Limited ("Agnico-Eagle"). The first phase was conducted at the South Reef target, which is located approximately 800 m to the southwest of, and on a parallel mineralized trend to, the project's current resource inventory at the Main Homestake deposit and the Homestake Silver deposit. The second phase tested shallow, on-strike projections of the South Reef target as well as several other targets on the property.
Homestake was the operator for the 2012 season and planning is underway to transfer operatorship of the property to Agnico-Eagle in January, as agreed to in the Option Agreement between the parties. Agnico-Eagle is required to spend $3.5 million in 2013 on exploration and development work on the property as part of this Option Agreement.
South Reef Phase I Drilling
Five drill holes, totaling 1,248 metres, were completed on the South Reef deposit and previously announced highlights include:
- a 4.0m interval averaging 11.4g/t gold and 3.7g/t silver from drill hole HR12-243; and
- a 2.9m interval averaging 5.9g/t gold and 2.0g/t silver, which includes a 0.5m interval averaging 16.3g/t gold and 4.6g/t silver from drill hole HR12-240.
The new holes offset three holes drilled in 2011 that tested a 75m strike-length of the South Reef deposit and returned high-grade gold from all three holes, including a 3.1m interval averaging 30.8g/t gold and 3.3g/t silver within an 8.7m interval averaging 11.3g/t gold and 1.6g/t silver from drill hole HR11-232 (see NR-14-11). Estimated true thicknesses were not calculated for the reported intervals due to uncertainty in correlating mineral intercepts with surface exposures; however, it is likely that the mineralization is sub-vertical.
South Reef Phase II Drilling
Phase II drilling consisted of eight core holes, totaling 3,495m at an approximate cost of the $1.8 million which was funded by Agnico-Eagle under the Option Agreement (see NR-04-12). All assay results are expected to be received by early January and will be reported at that time.
The combined 2012 Phase I and Phase II budgets totaled approximately $2.5 million. Agnico-Eagle has the option to spend an additional $8.5 million by December 31, 2014 to earn a 51% interest in the Homestake Ridge Project and a total of $25.3 million by 2016 to earn a 65% interest of the project, with the additional option to arrange 100% of capital expenditure funding of the project to earn an additional 5% for a total 70% working interest (see NR-04-12).
Homestake owns a 100 percent interest in the Homestake Ridge project, which is located in a prolific mineral belt in northwestern British Columbia. The project is being advanced as a potential high-grade underground mining operation with a current NI43-101 compliant Indicated Resource, at a 3.0g/t AuEq cut-off, of 191,000oz gold and 1,350,000oz silver (215,500oz AuEq) plus an Inferred Resource of 530,000oz gold and 13,470,000oz silver (775,900oz AuEq)(1). Two deposits have been delineated to date, with a third, South Reef, discovered late in 2011. Multiple exploration targets remain to be tested on the large 2585 hectare property. Agnico-Eagle has an option to fund exploration and development costs of $25.3 million over a 5-year period to earn a 65% interest in the property. Homestake also holds an option to acquire a 100% interest in the 623-square-kilometre Kinskuch project located adjacent to, and to the southeast of, Homestake's Homestake Ridge project. Homestake holds a 9.76 percent interest in Bravada Gold Corporation (TSX VENTURE:BVA), which is exploring and developing numerous gold/silver projects in Nevada.
Robert Macdonald (P.Geo) is the Qualified Person as defined by National Instrument 43-101 for the Homestake Ridge project and has reviewed and approved the technical contents of this release.
ON BEHALF OF THE BOARD
Joseph A. Kizis, Jr., President and Director
(1) The current estimate was prepared by Roscoe Postle Associates Inc. (RPA). Mineral Resources on the Main Homestake deposit were estimated previously in 2010 using a block model constrained by 3D wireframes of the mineralized zones. Mineral Resources on the Homestake Silver deposit were estimated in 2011 using a block model constrained by pierce points projected to 2D surfaces. The Main Homestake block model comprised an array of blocks measuring 5 m x 5 m x 5 m, with grades for Au, Ag, and Cu interpolated using ID3 weighting. The Homestake Silver block model comprised an array of blocks measuring 10 m x 10 m. At a 3.0g/t AuEq cut-off, the models identified an indicated resource of 888,000 tonnes averaging 6.7g/t Au, 47.2g/t Ag and 0.15% Cu and a cumulative inferred resource of 4,060,000 tonnes averaging 4.3g/t Au, 158g/t Ag.
This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general economic conditions, interest rates, commodity markets, regulatory and governmental approvals for the company's projects, and the availability of financing for the company's development projects on reasonable terms. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, the timing and receipt of government and regulatory approvals, and continued availability of capital and financing and general economic, market or business conditions. Homestake Resource Corporation does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
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