Crown Gold Corporation
TSX VENTURE : CWM

Crown Gold Corporation

May 05, 2011 09:25 ET

Crown Gold Receives Conceptual Underground Mine Design for Monte Cristo: Production Possible Within Six Months of Start-Up

TORONTO, ONTARIO--(Marketwire - May 5, 2011) - Crown Gold Corporation ("Crown" or the "Company") (TSX VENTURE:CWM) has received a Conceptual Decline & Development Report from Golder Associates ("Golder") for underground mining of the McLean "Main Lode" resource on Crown's Monte Cristo property in Esmeralda County, Nevada. The study provides a preliminary underground design to mine the existing National Instrument 43-101 compliant inferred resource of 226,000 ounces of gold grading 7.2 g/t gold at a 2.0 g/t cut-off contained in the Main Lode, the steeply dipping part of the McLean deposit. This is designated by Golder as "milling ore" to be treated at a custom offsite facility. Golder did not review the NI 43-101 report on the potential resources at Monte Cristo. The model was used as supplied.

The NI 43-101 compliant gold resources for the whole McLean Lode, that includes both the Main Lode and "Upper Zone" resources, are:

cut off g/tgmtonnesg/tounces
2.07,377,2741,025,6857.2237,548
1.08,673,9751,923,3494.5279,302
0.59,475,0413,158,3473.0306,787

The Golder design work used Vulcan mine planning and modelling software after importing a SURPAC generated block model supplied by Crown. The optimum design selected locates the portal on the existing McLean open-pit wall at between 70 to 100 feet below surface. A spiral ramp in the footwall east of the deposit would provide access to the bottom of the current Main Lode resource, approximately 800 ft deep. Lateral development levels would be placed at 50 foot vertical intervals extending in a NE-SW direction up to 600 ft along strike. From the development levels, crosscuts into the resource would allow mining by cut and fill stoping.

Cost of the decline ramp, footwall and connection drifts, equipment passing bays and 3 ventilation raises - a total of 27,083 feet of development is estimated to be $25.6 million, calculated at $57 per ton with a total 448,700 tons excavated. The decline design cross section size is 13.1 ft (4 m) in width and 16.4 ft (5 m) in height with a minimum default curve radius of 50 ft and maximum grades of 12% for all straight drift and decline segments and 10% for all curves allowing for 45 ton haul truck and 19 ton LHD equipment.

The proposed design allows for mine production to start after construction of only approximately one third of the total ramp constructed with development drifts providing access to the upper part of the resource. This time period is estimated conservatively at six months from commencement of construction.

Although not part of the conceptual study, Golder has indicated that an estimated additional 41,000 ounces of gold, contained in material grading between 1 g/t and 2 g/t gold, below mill grade cut-off, would be excavated in the planned development. Golder suggests that this low grade material may be economically treated in an on-site heap leach operation to recover additional ounces of gold. The study recommends that geotechnical work, a hydro-geological study, ventilation analysis and review of heap leach test work be completed to advance design from conceptual to preliminary levels. Approximately 300,000 tons of oxide ore was mined from the pit in the 1980's and leached on a nearby heap.

Additional gold above a 1 g/t gold cut-off occurs in mineralized material in the shallow, flat lying McLean Upper Lode portion of the deposit but drilling is too wide-spaced for 43-101 compliant modeling. Management believes that up to an additional 250,000 ounces of gold may also be available from this material for on-site heap leaching.

Crown Gold signed a memorandum of understanding with American Mining Corporation ("AMC") on November 17, 2010 to secure milling facilities for Monte Cristo ore. AMC's Silver Peak milling complex is currently under development approximately 40 miles south of the McLean resource.

Crown also recently signed a letter of intent with an arm's length private Canadian company, Argentium Resources Inc. ("Argentium"), to sell Crown's Monte Cristo, Sugarloaf and Blue Sphinx properties in Nevada for $16,000,000 in cash and securities (see News Release of March 28, 2011). Closing is expected to be on or about June 30, 2011.

About Crown

Crown Gold, formed last year by the amalgamation of Crown Minerals and Gold Summit, is exploring for high grade gold and silver deposits in Nevada and Ontario.

In Ontario, Crown has its McKenzie Island property at Red Lake where a spring work program is being planned to follow up on its successful drill program this past February that yielded promising results, including 2.2 oz/gold over 3 feet (see Crown's news release dated March 3, 2011). Crown's other northwest Ontario properties are its Sakoose property near Kenora and its Surprise Lake property in the Uchi Belt, east of Red Lake. In northeastern Ontario, Crown holds three other strategic land positions: one adjacent to Trelawney's Chester discovery near Gogama, another at the old Stairs Mine near Matachewan and a third in the heart of the Timmins camp.

In Nevada, in addition to its Monte Cristo, Sugarloaf and Blue Sphinx properties, Crown has two other gold exploration properties, Gold Springs and Black Warrior, each of which contains well-defined, essentially undrilled, targets.

Larry Kornze, Senior Consultant to Crown Gold and a registered Professional Engineer/Geologist, is designated as the Qualified Person under National Instrument 43-101 and has reviewed and approved the contents of this news release.

For more information please see the Crown website at www.crowngoldcorp.com.

This press release contains forward-looking statements within the meaning of applicable Canadian and U.S. securities regulation, including statements regarding the future activities of the Company. Forward-looking statements reflect the current beliefs and expectations of management and are identified by the use of words including "will", "anticipates", "expected to", "plans", "planned" and other similar words. Actual results may differ significantly. The achievement of the results expressed in forward-looking statements is subject to a number of risks, including those described in the Company's management discussion and analysis as filed with the Canadian securities regulatory authorities which are available at www.sedar.com. Investors are cautioned not to place undue reliance upon forward-looking statements.

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.

Contact Information

  • Crown Gold Corporation
    Mr. Stephen Dunn
    President and CEO
    (416) 361-2827

    Crown Gold Corporation
    Dr. Anthony Taylor
    Executive Chairman
    (775) 284-7200
    info@crowngoldcorp.com