Gold Canyon Resources Inc.

Gold Canyon Resources Inc.

November 14, 2012 06:30 ET

Gold Canyon's Projects and Corporate Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 14, 2012) - Gold Canyon Resources Inc. (TSX VENTURE:GCU)(PINKSHEETS:GDCRF) ("Gold Canyon" or "the Company") is pleased to provide an update of the Company's activities.

"The Company recently reported a significant increase in its National Instrument 43-101 ("NI 43-101") mineral resource estimate at its flagship property, the Springpole Gold Project ("the Project") in northwest Ontario, on October 17, 2012. Achieving this milestone was one of many objectives we have been working towards this year," stated Troy J. Fierro, CEO and Director of Gold Canyon. "Furthermore, the transformation from an exploration to a development company requires changing the way we conduct our business, including its communications. With that in mind, the Company intends to advance its marketing and investor relations programs to meet the needs of our investors and future investors. Unlocking value for shareholders can only be achieved if we keep the market informed of our progress in a timely fashion."

Corporate Activities:

On July 3, 2012, the Company completed a $15 million dollar financing to support on-going activities. Since then, the Company has received additional funds, as a result of warrants and stock options that were exercised, for proceeds of $4,020,386. Therefore, the Company has no immediate plans for securing additional financing. The Company expects the Springpole Preliminary Economic Assessment (PEA) and the Chambe Project Phase II results to unlock additional value for the Company and provide for various funding alternatives in Q2 of next year.

Presently, the Company is operated and managed by a select team of professionals and various consultants. As the workload increases the Company will hire qualified staff to manage the various aspects of its business.

Springpole Gold Project:

Over the last three years, the Company has completed nearly 80,000 meters of drilling at the Project. During that time, two NI 43-101 resource estimates have been generated (announced in news releases dated October 17, 2012, and February 27, 2012, which can be found on the Company's website: Work has now advanced towards the completion of the first Preliminary Economic Assessment (PEA) scheduled for Q1/Q2 2013. SRK Consulting (Vancouver) completed the latest resource estimate and has been contracted to complete the PEA. The PEA is considering a phased approach to development, which attempts to minimize initial capital expenditures, reduce plant throughput, and lower strip ratio in the initial years of development to provide for rapid payback of capital.

A majority of the Company's budget has been directed towards drilling and its supporting activities; however, there have been other equally important on-going activities required to advance the Project including:

  • The Company has expanded its land holding, to encompass over 80,000 acres, to ensure adequate area for future infrastructure and exploration.
  • In October 2012, the Company formally initiated the environmental assessment for an access road to the Springpole Gold Project following a lengthy pre-submission consultation process. The access road would facilitate on-going exploration and future potential development of the Project. In parallel with the environmental assessment, the Company is initiating the technical reviews of the federal approval and the four provincial approvals that are required to construct the access road.
  • Baseline technical studies were initiated in 2010 and are continuing by independent, qualified consultants with participation of personnel from local First Nation communities. These studies have been scoped to collect the information that is required to complete an environmental assessment and approvals process for the future potential development of the Springpole Gold Project. In parallel with the on-going baseline studies and road approvals process, the Company intends to formally initiate an outreach program regarding the future potential development of the Project.
  • The Company has evaluated its land holdings at the Springpole Gold Project and is initiating a phased approach to bring strategic mining claims to lease, pursuant to Section 81 of the Mining Act. This will facilitate on-going exploration and the future potential development of the Project. The Company has submitted an application to the Ministry Northern Development and Mines to lease 75 claims covering an area of 1,664 ha in the main project area. An application will be submitted in early 2014 for an additional 17 claims, covering 4,224 ha for additional site development, and the Company is considering tenure options for additional infrastructure development, including a potential powerline right of way.
  • The Company has submitted a System Impact Assessment application to the Independent Electricity Systems Operator, which is the first step towards securing a connection to the Hydro One grid and an allotment of electricity for the Springpole Gold Project.
  • Communications are continuing with First Nation communities of Cat Lake, Slate Falls, Lac Seul and Wabauskang, as well as the Métis Nation of Ontario, regarding the Project plans and development of an access corridor to the site. Two Open House information sessions were provided in 2012 to each of Cat Lake, Slate Falls and Lac Seul First Nations regarding environmental and archaeological baseline studies. In 2012, the Project achieved a First Nation employment rate of approximately 40% of the camp operation workforce, and 10% of the drilling workforce, while camp construction and drilling operations were ongoing. Additionally, one or more First Nation workers participated in all baseline environmental and archaeological studies on the Project.
  • Formal communications with local stakeholders were initiated in April 2012 regarding pre-consultation for an access corridor to the Project. Communications included distribution of informational mailings, phone contact and one-on-one meetings, as requested by the stakeholders. Pre-consultation feedback was incorporated into the Draft Environmental Study Report, which is currently under review.
  • Preparations are in progress for the 2013 winter drilling program scheduled for late January or early February. Objectives of this program will include: geotechnical drilling for pit slope stability analysis, resource expansion around the Portage Zone, and select in-fill drilling.

Malawi REE Project:

The drill program of the Phase II work has ended at the Company's Chambe Basin rare earth elements (REE) joint venture project in Malawi, Africa (see news release dated August 9, 2012). The Chambe Basin REE Project, covered by a 400 sq km exclusive prospecting license held by the Company's wholly owned joint venture subsidiary, Spring Stone Limited, a Malawi Corporation, is a joint exploration and development program undertaken pursuant to a Project Venture Agreement (PVA) between Gold Canyon (33%) and partner, Japan Oil, Gas and Metals National Corporation (JOGMEC; 67%). Mitsui Mineral Development Engineering Co., Ltd (MINDECO) of Japan is the contract operator of the program. Phase II work encompasses:

  • Drilling of 176 shallow core holes (expanded from a previously announced 167 hole program) on a staggered 200 meter grid to test a 3 to 26 meter thick horizon of kaolinite/halloysite clay for clay-type REE deposits within the 3.2 kilometer diameter basin.
  • Bulk leach tests that will evaluate the metallurgical properties of these clays have been conducted in Zomba, Malawi. Multiple baseline surveys for an Environmental Impact Assessment by Golder Associates Ltd. have been formally initiated. The PVA partners anticipate the completion of a mineral resource calculation and the assembling of financial data towards the end of Q1 2013.

About Gold Canyon Resources Inc.:

Gold Canyon is engaged in the acquisition and exploration of mineral and precious metals properties. The Company controls a 100% interest in the Springpole Gold - Horseshoe Island Gold, Platinum, Palladium Project and a minority interest in the Favourable Lake Poly-metallic property currently under option to Guyana Frontier Mining Corp. pursuant to an option and joint venture agreement entered into in December 2005 - all in the Red Lake Mining District of Ontario, Canada.

Through its wholly owned U.S. subsidiary, Gold Canyon Resources USA Inc., the Company controls a 100% interest in the Cordero Gallium Project situated in Humboldt County, Nevada, U.S.A.

Gold Canyon entered into a REE Joint Exploration Agreement with the Japan Oil, Gas and Metals National Corporation (JOGMEC) in January 2009.

Additional information can be found on the Company's website:

Troy J. Fierro, CEO & Director

Certain statements contained in this news release using the terms "may", "expects to", "project", "estimate", "plans", and other terms denoting future possibilities, are forward-looking statements in respect to various issues including upcoming events based upon current expectations which involve risks and uncertainties that could cause actual outcomes and results to differ materially. The future conduct of the Company's business and the feasibility of its mineral exploration properties are dependent upon a number of factors and there can be no assurance that the Company will be able to conduct its operations as contemplated and the accuracy of these statements cannot be guaranteed as they are subject to a variety of risks that are beyond our ability to predict or control and which may cause actual results to differ materially from the projections or estimates contained herein. The risks include, but are not limited to, the risks described in the above press release; those risks set out in the company's disclosure documents and its annual, quarterly and current reports; the fact that exploration activities seldom result in the discovery of a commercially viable mineral resource and are also significant amounts of capital to undertake and the other risks associated with start-up mineral exploration operations with insufficient liquidity, and no historical profitability. The Company disclaims any obligation to revise any forward looking statements as a result of information received after the fact or regarding future events.

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 news release.

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