Gold Canyon Resources Inc.
TSX VENTURE : GCU
PINK SHEETS : GDCRF

Gold Canyon Resources Inc.

February 16, 2011 08:31 ET

Gold Canyon's Winter Drilling at Springpole Gold Project Produces Long Gold Intercepts and First Bonanza Grades From Portage Zone

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 16, 2011) - Gold Canyon Resources Inc. (TSX VENTURE:GCU)(PINK SHEETS:GDCRF) ("Gold Canyon" or "the Company") is pleased to announce the return of assays from the first 5 drill holes of its Winter 2011 Diamond Drill Program at its 100% controlled Springpole Gold Project, located 110 kilometers northeast of the Red Lake Mining Camp, Ontario, Canada. Highlights include hole SP11-033 that intersected the first bonanza grade gold mineralization yet encountered in the Portage Zone, including 3 meters at 53.88 grams per tonne gold (10 feet at 1.573 oz per ton gold) within 302 meters at 1.39 grams per tonne gold (991 feet at 0.041 oz per ton gold). Using an upper cut-off of 34.25 grams per tonne (1 oz per ton) for single assays, these intervals become 3 meters at 23.12 grams per tonne gold (10 feet at 0.675 oz per ton gold) and 302 meters at 1.08 grams per tonne gold (991 feet at 0.032 oz per ton gold).

"Holes SP11-033 and -34 come from an area near the middle of the Portage Zone where there is mostly historic drilling from nearly 20 years ago," comments Dr. Quinton Hennigh, Technical Advisor to Gold Canyon. "Though we are pleased that both holes produced long intervals of typical Portage style mineralization, the high grade in SP11-033 is something not previously seen in modern or historic drilling. We are hopeful further drilling in this area might produce more of this style of mineralization."

"We are also very pleased to see near surface mineralization in holes SP11-030 and -031 drilled in the gap between the Main and Portage zones," continues Hennigh. "We can now confidently say that gold mineralization is continuous for a distance of 1.35 kilometers from the Main Zone in the northwest to the present terminus of the Portage Zone in the southeast."

  • Hole SP11-033 drilled to a depth of 250.5 meters, was designed to test shallow and intermediate depths of the Portage Zone. It drilled above hole SP10-005 drilled last winter 2010, and above SP10-029 drilled in the summer of 2010, which tested the zone at depths of nearly 250 meters. SP11-033 was drilled at an azimuth of 220 degrees true north and inclination of -45 degrees. It was drilled from the same location as hole SP11-032 (inclination of -45 degrees), which was lost in bad ground at a depth of 70 meters. SP11-033 intersected the first bonanza grade gold mineralization yet encountered in the Portage Zone, including 3 meters at 53.88 grams per tonne gold (10 feet at 1.573 oz per ton gold) within 302 meters at 1.39 grams per tonne gold (991 feet at 0.041 oz per ton gold). The high grade interval includes a one meter interval at 126.51 grams per tonne gold (3 feet at 3.694 oz per ton). Using an upper cut-off of 34.25 grams per tonne (1 oz per ton) applied to this sample, these intervals become 3 meters at 23.12 grams per tonne gold (10 feet at 0.675 oz per ton gold) and 302 meters at 1.08 grams per tonne gold (991 feet at 0.032 oz per ton gold). Encouragingly, SP11-033 encountered gold mineralization beginning at 13 meters at the beginning of bedrock immediately below the lake bed.
  • Hole SP11-034 was collared approximately 100 meters southeast of SP11-033; drilled at an azimuth of 220 degrees true north, an inclination of -45 degrees and drilled to a total depth of 379.5 meters. This hole tested intermediate levels of the Portage Zone in an area where only 20 year old historic drill holes are present. Two mineralized intervals were encountered; 73.5 meters at 1.18 grams per tonne gold (241 feet at 0.034 oz per ton gold) beginning at 37 meters down hole, and 169 meters at 1.08 grams per tonne gold (554 feet at 0.032 oz per ton gold) beginning at 162 meters down hole including 51 meters at 2.20 grams per tonne gold (167 feet at 0.064 oz per ton gold). It is clear that the Portage Zone bifurcates in this location, something seen locally in previous drill holes elsewhere along the zone.
  • Holes SP11-030 and -031 both tested an 80 meter wide near surface gap between the Portage Zone and the Main Zone further northwest. SP11-030 was drilled at an azimuth of 220 degrees true north and inclination of -45 degrees, and drilled to a downhole depth of 241 meters; SP11-was collared approximately 50 meters southeast from SP11-030 and was drilled with the same orientation to a downhole depth of 238 meters. Hole SP11-030 encountered 59 meters at 2.51 grams per tonne gold (194 feet at 0.073 oz per ton gold) beginning at 14 meters down hole, and hole SP11-031 encountered 85.6 meters at 1.09 grams per tonne gold (281 feet at 0.032 oz per ton gold) beginning at 5.4 meters down hole. These results indicate the Portage and Main zones are connected and form one single body of gold mineralization.
  • Core recovery remains a challenge in the Portage Zone which is comprised of soft, broken, highly altered rock. Numerous intervals of no core recovery were encountered in holes SP11-033 and -034. Hole SP11-032 was lost in bad ground when the core barrel broke off. Note that in the table below, many intervals of no core recovery in holes SP11-033, and -034, fall within mineralized intervals and in some cases higher grade intervals. These zones are given a grade of zero when calculating weighted averages reported below, and therefore have a negative effect on the overall results. The Company continues to work diligently with the drill contractor to mitigate loss of core. This includes use of specialized mud mixes, slower drilling and the use of specialized soft core recovery tools. As a consequence, the total meters drilled thus far stands at approximately 3,000 meters. It is hoped that the pace will pick up over the next few weeks of the drill program as new measures are being taken to improve the speed of drilling. The Company now expects to complete around 6,000 meters, less than the 9,000 meters originally planned. Plans are underway to bring in two barges across the winter road before breakup so that drilling may continue in late spring to early summer. Critical holes that are not completed this winter will be drilled in that period so that the Company can meet its goal of revising a resource estimate in 2011, and continuing the exploration effort at Springpole.

Summary of Results from the Portage Zone

        Gold Gold (grams     Gold (oz
  From To Length (grams per per tonne) – top Length Gold (oz per ton) – top
Hole (meters) (meters) (meters) tonne) cut to 34.25 gpt (feet) per ton) cut to 1 opt
SP11-032 13.0 70.0 57.0 0.54 NA 187 0.016 NA
Hole ends in mineralization; terminated due to difficult drilling conditions        
 
SP11-033 13.0 315.0 302.0 1.39 1.08 991 0.041 0.032
includes 13.0 278.0 265.0 1.52 1.17 869 0.044 0.034
includes 200.0 208.0 8.0 2.29 NA 26 0.067 NA
includes 228.0 278.0 50.0 5.45 3.61 164 0.159 0.105
includes 228.0 253.0 25.0 8.81 5.12 82 0.257 0.150
includes 230.0 233.0 3.0 53.88 23.12 10 1.573 0.675
includes 230.0 231.0 1.0 126.51 34.25 3 3.694 1.000
includes 274.0 275.5 1.5 14.40 NA 5 0.420 NA
Intervals of no core recovery were encountered at 146.5-148.0, 203.5-205.0, 235.0-236.5, 239.5-244.0 and 302.5-304.0 m    
Zones of no recovery were given 0 gold grade in the weighted calculations above      
 
SP11-034 37.0 110.5 73.5 1.18 NA 241 0.034 NA
includes 76.0 109.5 33.5 1.56 NA 110 0.046 NA
  162.0 331.0 169.0 1.08 NA 554 0.032 NA
includes 246.0 297.0 51.0 2.20 NA 167 0.064 NA
includes 246.0 249.0 3.0 18.51 NA 10 0.540 NA
Intervals of no core recovery were encountered at 249.0-256.5, 258.0-259.5, 261.0-265.5, 270.0-271.5, 277.5-279.0, 285.0-286.5 and 298.5-300.0 m
Zones of no recovery were given 0 gold grade in the weighted calculations above      

Reported intervals apply a 0.2 gram per tonne gold (0.006 oz per ton gold) cutoff.
Weighted averages were used to calculate all reported intervals.
Internal dilution within reported intervals does not exceed core lengths of 12 meters.
1 troy ounce = 31.103 grams
Conversion factor – grams per tonne to troy ounces per short ton; g/t divided by 34.2857 or g/t multiplied by 0.0292 1 meter = 3.28 feet

Summary of Results from the Portage-Main Zone Gap

  From To Length Gold (grams Length Gold (oz per
Hole (meters) (meters) (meters) per tonne) (feet) ton)
SP11-030 14.0 73.0 59.0 2.51 194 0.073
includes 25.0 66.0 41.0 3.32 134 0.097
includes 30.0 41.0 11.0 7.28 36 0.213
includes 34.0 37.0 3.0 12.69 10 0.371
 
SP11-031 5.4 91.0 85.6 1.09 281 0.032
includes 23.0 53.0 30.0 1.45 98 0.042
includes 65.0 91.0 26.0 1.38 85 0.040
includes 82.0 87.0 5.0 3.12 16 0.091

Reported intervals apply a 0.2 gram per tonne gold (0.006 oz per ton gold) cutoff.
Weighted averages were used to calculate all reported intervals.
Internal dilution within reported intervals does not exceed core lengths of 12 meters.
1 troy ounce = 31.103 grams
Conversion factor – grams per tonne to troy ounces per short ton; g/t divided by 34.2857 or g/t multiplied by 0.0292 1 meter = 3.28 feet

The Winter 2011 Diamond Drill Program is part of an ongoing program of drilling and remodeling of the Springpole Gold deposit to move it towards prefeasibility. Drilling is planned to continue through April 2011, at which time work will begin on revising the resource estimate for the deposit.

Springpole is an alkaline intrusion hosting a gold system that represents a potentially new style of Canadian Archean Shield gold deposit. Springpole shares many similarities with deposits such as the Cripple Creek Gold deposit in Colorado. The Portage Zone is hosted by a trachytic porphyry intrusion displaying polyphase autolithic breccias that contain gold mineralization of remarkably uniform grade. Other zones, including East Extension, Camp and Main, consist of high grade veins and pods hosted in diatreme breccias composed of intrusive and country rocks. These diatreme breccias surround the northwest and northern margins of the Portage Zone. The known mineralized zones underlie a total known area of about 4 square kilometers representing only about 15 percent of the greater alkaline intrusive complex which yet remains to be explored.

Core was logged, then split using diamond saws, with one half sent for analyses and the other half stored for future reference. Quality control programs include the use of field and laboratory duplicates, standards, blanks, and internal and external check assaying. Certified sample standards were submitted with the normal sample stream. Gold and silver assays were completed by SGS Canada Inc. in Red Lake and Toronto, Ontario using a 30 gram charge, fire assay, with an ICP finish. For over limit assay results, initial assays in excess of 10.0 grams per tonne Au, a gravimetric finish is utilized.

Quinton Hennigh, Ph.D., P.Geo. and Alan Roberts, M.Sc., P.Geo. are the Qualified Persons pursuant to National Instrument 43-101 responsible for, and have reviewed and approved, the technical information contained in this news release. Dr. Hennigh is acting as a technical adviser to Gold Canyon and Alan Roberts is the Senior Geologist of Alaska Earth Sciences, Inc. and Project Manager at Springpole.

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 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 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: www.goldcanyon.ca.

Akiko Levinson, President & 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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