Barkerville Gold Mines Ltd.
TSX VENTURE : BGM
FRANKFURT : IWUB

June 29, 2011 07:30 ET

Barkerville Releases Year End Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 29, 2011) - J. Frank Callaghan, President and CEO of Barkerville Gold Mines Ltd. (TSX VENTURE:BGM)(FRANKFURT:IWUB) (the "Company" or "Barkerville") has released the Company's financial statements for the year end February 28, 2011. Please see the Audited Annual Financial Statement and MD&A filed on SEDAR at www.sedar.com.

OPERATIONS

J. Frank Callaghan reports, "The fiscal year 2011 was a notable year for Barkerville which saw its start of gold production as well as significant exploration discoveries at its projects in the Cariboo Mining District of central British Columbia. A substantial part of the year was focused on getting the QR underground mine into production and the QR Mill refurbished, tested and operating - highlighted with the first dore bar being poured in September 2010. Production ramp-up and mill optimization followed to get to continued gold dore production through the QR facility's CIP and gravity circuits".

For the period, the Company shipped a total of 222.220 kg of gold dore to Johnson Matthey, a gold refiner located in Brampton, Ontario. The Company has shipped a further 148.395 kg to the date of this report. For the period, the Company recorded $8,074,494 in revenue on the sale of 5,774 oz of gold for the year (production beginning in mid-September to February year-end) with a cost of sales (costs including amortization and depletion of $1,513,650) of $4,662,039.

J. Frank Callaghan states, "We are really quite pleased with the results from our initial production for the year considering the first gold dore bar was poured in September, having an operating cash cost of production being the cost of sales net of amortization and depletion, coming in less than the originally budgeted $650 per oz for the underground production. Also less than originally budgeted; the largest increase in expenses in this first year of production over last year was repairs and maintenance, which was primarily the refurbishment of the QR Mill & Mine at $5.49 million which we originally budgeted at $6 million. The Company hopes to further decrease the cash cost of production with the potential addition of Bonanza Ledge open-pit production".

EXPLORATION

"With production underway and cash flow from operations, the Company can now re-focus on the growth aspect of the Company, both in production and gold resources. The Company has budgeted up to $10 million a year for large drilling campaigns over the next 3 years. Barkerville was one of the first companies in the province to receive a new drill permit program from the provincial government (see news release November 17, 2010) that allows up to 1,200 drill holes for 300,000 meters of drilling for the next 3 years over a larger part of Cow Mountain and Barkerville Mountain where the Company's Cariboo Gold Quartz and Bonanza Ledge proposed open-pit mines are located. Additional drill permits are also in place for 92 drill holes for up to 14,000 meters of exploration drilling to begin this year at Grouse Creek located approximately 4 km southeast of Bonanza Ledge deposit and on trend with Bonanza Ledge, Cariboo Gold Quartz and the historic Island Mountain Mines" J. Frank Callaghan states.

Through exploration and drilling during the period, the Company has made several new gold discoveries on its projects with one additional discovery being made after the end of this fiscal year, but prior to this report. See the following news releases for the year:

  • "Barkerville Intercepts Gold Beneath Bonanza Ledge and Up to 25.7 g/T at Cow Mountain"(May 3, 2010)
  • "Barkerville Makes New Gold Discovery and Drills 22.6m of 6.93 g/T Gold at Bonanza Ledge"(Sep 20, 2010)
  • "Barkerville Assays 8.7 Meters of 80.78 g/T Gold at New Discovery on Barkerville Mountain – Additional Assays Pending" (Oct 04, 2010)
  • "Barkerville Intercepts 16.7 Meters Grading 15.9 g/T Gold in Replacement Mineralization On Cow Mountain and Hits 32.6 Meters Grading 10.8 g/T gold 190m NW of Cariboo Gold Quartz Mine"(Feb 10, 2011)
  • "Barkerville Extends New Discovery Zone on Barkerville Mountain to 125 Meters – Channels Hitting Up To 23.1m of 9.78 g/T Gold with Samples of Up To 268 g/T Gold"(Feb 14, 2011)

J. Frank Callaghan comments, "Of significance this past year is the discovery of "Island Mountain style replacement gold mineralization" on Cow Mountain, the discovery of "Cow Mountain style, gold in quartz stock works" mineralization on Barkerville Mountain (at Bonanza Ledge) and two, never before encountered styles of gold mineralization".

RESOURCE UPDATES

J. Frank Callaghan also says, "NI 43-101 compliant resource updates on several different areas of the project have been now been commissioned where over 300 drill holes that have been completed, assayed and released, but have not yet been incorporated in the existing NI 43-101 resource estimates. The resource estimates to be updated include the proposed Bonanza Ledge open pit, the BC Vein and the Cariboo Gold Quartz proposed open pit. The resource updates are expected to be available by the second quarter of the fiscal year".

PRODUCTION

"The Company has begun work to increase its production profile for this and subsequent years by completing the purchase of its second milling facility to be relocated at the site of its Cariboo Gold Quartz proposed open pit mine on Cow Mountain and upgraded to a milling capacity of 3,000 tonnes per day and continuing to pursue a mining permit to begin production at the proposed Bonanza Ledge open pit mine, and by continuing development work at the North Zone at the QR Mine".

Bonanza Ledge

The Company has defined a mineable resource, developed a mine and reclamation plan, and completed a Preliminary Assessment Report of the economic feasibility of the proposed open pit at Bonanza Ledge. These form the basis for an application pursuant to the BC Mines Act to produce up to 70,000 tonnes of ore per year that was submitted in April 2006. The Company has since received comments from government review agencies, completed supplemental engineering and environmental work, and submitted updates. The Company's Mines Act permit application for the proposed open-pit mine at Bonanza Ledge is currently in the BC Mines Act review process. The Review Committee is expected to make a decision in the third quarter of fiscal 2012.

The Company's pre-feasibility study relating to this deposit titled "Pre-Feasibility Study of the Bonanza Ledge Deposit, Wells, BC, Canada" and dated August 17, 2009, was prepared by EBA Engineering Consultants Ltd. and is posted on the Company's SEDAR profile. The Company continues to pursue a mining permit and intends to begin production at Bonanza Ledge as soon as the necessary permits and approvals are obtained.

Second Mill, "The Goldstream Mill"

On November 16th 2010, the Company completed the acquisition of the Goldstream mill facility including, tailings pond, and related mineral leases & claims which are located in the Revelstoke mining division, British Columbia. Consideration was $750,000 and $1.5-million in common shares in the first year and $550,000 and $500,000 in common shares in the second year.

It is the Company's intention, subject to necessary approvals and permits, to relocate, refurbish and upgrade the Goldstream mill facility to the base of Cow Mountain, near Wells, BC, where two of Barkerville's NI 43-101 gold resources and proposed open-pit deposits are located in Central British Columbia. Upon relocation, the Company plans to upgrade the mill with an additional ball mill and a CIP circuit, to an increased capacity of 3,000 tonnes per day. The Cariboo Gold Project, (Gold Quartz Mine) on Cow Mountain, is anticipated to re-enter the BC Environmental Assessment Process in the first half of fiscal 2012.

First Nations

In November 2010, the Company and the local First Nations, the Lhtako Dene First Nation (Red Bluff Band) signed a Project Agreement to develop the Bonanza Ledge and the Cariboo Gold projects (see news release Dec 09, 2010).

About Barkerville Gold Mines Ltd.

Since the mid 1990s the Company has focused on exploration and development of gold projects in the Cariboo Mining District in central B.C. The Company's mineral tenures now cover over 1,225 square kilometers, encompassing seven past producing hard rock mines and three NI 43-101 gold deposits, including the QR Mine & Mill. The QR Property was acquired in February 2010 and includes a 900 tonne/day gold milling facility and a permitted gold mine located approximately 110 kilometers by highway and all-weather road from the Barkerville Gold Camp. Mining operations commenced at QR in the first quarter of fiscal 2011 and the Company began pouring doré gold in September 2010. In November 2010, the Company acquired a second permitted mill currently on care and maintenance in Revelstoke, B.C. for relocation to the Barkerville Gold Camp near Wells, B.C. and upgrade to a 3,000-tonne/day facility subject to government approvals. In November 2010 the Company and the Lhtako Dene First Nation also signed a Project Agreement in relation to its Bonanza Ledge and Cariboo Gold Projects. The Company has not hedged any of its future gold production.

The technical information in this News Release has been reviewed and approved by Chief Geologist Jim Yin, PhD, P.Geo, a qualified person as defined in National Instrument 43-101.

On behalf of the Board of Directors,

J. Frank Callaghan, President and CEO

This News Release contains forward-looking statements. Forward-looking statements are statements which relate to future events and conditions and therefore involve inherent risks and uncertainties. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our industry, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. All phases of the Company's operations are subject to environmental regulation and governmental approval and permits and there can be no assurance that the Company will obtain all the requisite permits for future development. Mining is an inherently risky business with large capital expenditures and cyclical metals markets.

Neither the 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.

Contact Information

  • Barkerville Gold Mines Ltd.
    J. Frank Callaghan
    President and CEO
    (604) 669-6463