Auriga Gold Corp.
TSX VENTURE : AIA

Auriga Gold Corp.

August 04, 2011 09:38 ET

Auriga Gold Announces Initial Resource Estimate for the Maverick Gold Project, Manitoba: Indicated Resources of 174,000 oz Au and Inferred Resources of 558,000 oz Au

TORONTO, ONTARIO--(Marketwire - Aug. 4, 2011) - Auriga Gold Corp. (TSX VENTURE:AIA) ("Auriga Gold" or the "Company")is pleased to report an initial NI43-101 resource estimate for the former producing Puffy Lake Gold deposit at the Maverick Gold Project, located 65 km Northeast of FlinFlon, Manitoba. Drilling to May 2011, has resulted in optimized in-pit and underground Indicated Resources totalling 174,000 ounces gold and Inferred Resources totalling 558,000 ounces gold. The resource has been estimated by P & E Mining Consultants Inc. using the results from over 300 historical drill holes by previous operators and 41 holes drilled by Auriga Gold since December 2010.

Puffy Lake Deposit, Maverick Project, Mineral Resource Estimate

TONNES
(t)
Au
(g/t)
Au
ounces
In Pit
Au 0.6 g/t cut-off
Indicated Resources 242,000 4.16 32,000
Inferred Resources 78,000 3.81 10,000
Underground
Au 2.5 g/t cut-off
Indicated Resources 702,000 6.29 142,000
Inferred Resources 3,018,000 5.65 548,000
Total Indicated Resources 944,000 5.73 174,000
Inferred Resources 3,096,000 5.61 558,000
(0) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
(1) The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.
(2) The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
(3) Grade capping of 30g/t was utilized on composites.
(4) A bulk density of 2.72 t/m3 was used for all tonnage calculations.
(5) Open pit resources were reported within an optimized pit shell.
(6) A gold price of US$1,231/oz and an exchange rate of US$0.97US=C$1.00 was utilized in the Au cut-off grade calculations of 0.6 g/t open pit and 2.5 g/t underground. Open pit mining costs were C$3.75/t for mineralized material and C$3.00/t for waste rock while underground mining costs were C$75/t. Process costs were C$17/t and G&A was C$6/t. Process recovery used was 95%.

Richard Sutcliffe, Auriga Gold's CEO, commented, "The initial resource estimate at the Puffy Lake deposit is very promising and we are particularly encouraged by the optimized in-pit resources that will form a potential starter pit for resuming operations. This resource represents a significant increase in total Au ounces over the historical results, reflecting a reduction in underground cut off grade to 2.5 g/t gold. In the next few weeks, we plan to complete a Preliminary Economic Assessment ("PEA") for the project that will provide costs and a schedule for a restart of mining operations. This project has substantial mining and processing infrastructure in place that will permit us to quickly progress to production."

The mineral resource is based on the following assumptions. The resources will be mined by open-pit and underground mining methods at a rate of approximately 1,000 tonnes per day which is the size of the existing onsite mill. Resources were reported from a block model with Gemcom GEMS software. The estimation was performed on separate domains for in-pit and underground domains using inverse distance cubed interpolation techniques. Grade was estimated into 2m x2m x2m blocks. A top cut of 30g/t gold was used. The underground resources have been estimated using a minimum true width of 1.2 meters. The in pit resources have been estimated using pit optimization software to define a pit shell and represent a potential open pit resource. Sensitivity analyses of tonnes and grade at various cut off grades are presented in the tables below. The preceding assumptions are preliminary and will require further evaluation in a PEA and/or prefeasibility studies.

Auriga Gold has commenced a summer drill program that will focus on increasing gold resources at the Puffy Lake mine property and the adjacent and on strike properties. In addition, the Company has initiated the mine redevelopment program with an environmental study, reactivation of existing mining permits and an evaluation of the cost to refurbish the on-site 1,000 tonne per day mill.

About Auriga Gold

Auriga Gold Corp. is a Canadian mine development and exploration company that is developing the Puffy Lake Mine and expanding gold resources on its Puffy Lake and Nokomis properties (the "Maverick Gold Project"). The Company plans to upgrade and expand the resources at the Maverick Gold Project and bring the Puffy Lake Mine back into production. The Puffy Lake Mine includes a 1,000 tpd flotation mill, a developed underground ramp to 135 metres depth, is road accessible and close to existing mining infrastructure. The Maverick Gold Project is located in the Flin Flon Greenstone Belt of Central Manitoba.

The resource was estimated by Fred Brown, CPG, and Eugene Puritch, P.Eng. of P&E Mining Consultants Inc. Mr. Puritch and Mr. Brown are Qualified Persons ("QP's") as defined by NI 43-101. Bruce Mackie, P.Geo., was QP for the Company's drill program and supervised the preparation of the scientific or technical information for the property. The contents of this press release has been reviewed and approved by Mr. Brown, Mr. Puritch and Mr. Mackie. An NI 43-101 technical report supporting this resource estimate will be filed on SEDAR within 45 days of this press release.

Sensitivity Analysis of Resources at various cut off grades

Underground Indicated Resource Sensitivity Analysis at cut off grades from 2.0 to 4.0 g/t Au
GRADEGROUP Tonnage AU AU
UG 1000t g/t 1000ozs
IND 4.0g/t 426 8.29 114
IND 3.5g/t 506 7.57 123
IND 3.0g/t 601 6.89 133
IND 2.5g/t 702 6.29 142
IND 2.0g/t 806 5.77 150
Underground Inferred Resource Sensitivity Analysis at cut off grades from 2.0 to 4.0 g/t Au
GRADEGROUP Tonnage AU AU
UG 1000t g/t 1000ozs
INF 4.0g/t 1,995 6.88 441
INF 3.5g/t 2,315 6.44 480
INF 3.0g/t 2,713 5.98 521
INF 2.5g/t 3,018 5.65 548
INF 2.0g/t 3,339 5.32 571
In Pit Indicated Resource Sensitivity Analysis at cut off grades from 0.6 to 2.0 g/t Au
GRADEGROUP Tonnage AU AU
PIT 1000t g/t 1000ozs
IND 2.0g/t 155 5.70 28
IND 1.5g/t 196 4.87 31
IND 1.0g/t 229 4.35 32
IND 0.6g/t 242 4.16 32
In Pit Inferred Resource Sensitivity Analysis at cut off grades from 0.6 to 2.0 g/t Au
GRADEGROUP Tonnage AU AU
PIT 1000t g/t 1000ozs
INF 2.0g/t 41 6.07 8
INF 1.5g/t 53 5.11 9
INF 1.0g/t 68 4.22 9
INF 0.6g/t 78 3.81 10

Certain information regarding the Company including management's assessment of future plans and operations, may constitute forward looking statements under applicable securities laws and necessarily involve risks associated with mining exploration and development, volatility of prices, currency fluctuations, imprecision of resource estimates, environmental and permitting risks, access to labour and services, competition from other companies and ability to access sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. A feasibility study has not been completed and there is no certainty the disclosed targets will be achieved nor that the proposed operations will be economically viable. This press release is not and is not to be construed as an offer to buy or sell securities in the United States.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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