GoldSands Development Company

May 24, 2011 16:31 ET

GoldSands Reports on Gold Production Test

LIMA, PERU--(Marketwire - May 24, 2011) -

Lima, Peru - May 24, 2011 GoldSands Development Company (OTCBB: GSDC.OB; OTCQB: GSDC) is pleased to announce updated results from our alluvial gold production test at the Company's Mika 2 Mining Concession in Peru.

The initial gold production test mining project, which is taking place within the 2.5 square kilometer area of the recent 100-hole drill program, utilizes two excavators and a mobile gravity recovery plant, in order to mine the mineralized channels identified by the drill samples.

This ongoing test mining program is expected to continue for several months, during which time various production methods will be examined and assessed. Our objectives, in addition to determining how best to maximize gold yield, will be to help develop larger capacity recovery systems to enable an increasing volume of alluvial material to be processed.

Our updated numbers from the ongoing test production for the period from March 28(th) to May 13(th )are as follows:

Gravel mined: 6395 m(3) (8364 cubic yards) Raw gold produced: 2092.46 grams (2.092 kg) (67.3 troy oz.) Raw gold grade: 320 mg/m(3 )(3.78 grains/cubic yard)

The Company cautions that the initial areas sampled may contain isolated hot or cold spots (points of unusually high or low gold yield), so we will not attempt to reach conclusions about potential alluvial gold yields based only upon the limited data from these first few weeks of test production.

In line with our original expectations, as more material and a larger area is being tested, the overall average grade has decreased (from 436 mg/m3 to 320 mg/m3). This is evidence of the reason for avoiding any conclusions about potential alluvial gold yields until a significantly greater amount of material and a larger area is tested. Notwithstanding the decrease in overall average grade, these initial raw gold recovery numbers have been higher than the gold grade values calculated during the previous Phase I and II drill programs - drill programs which indicated an average grade of 161.5 mg/m3, using a cut-off grade of 50 mg/m3. In the initial 6395m3 of material processed, the company produced approximately 2kg of raw alluvial gold (gold with impurities prior to refining).

GoldSands VP Production Rafal Swiecki remarked:

"To date through-put (measured in volume) of our test production is modest. However we are very pleased with the results thus far. We believe that there is cause for optimism going forward. The 320mg/m3 grades indicated a gold bullion value of approximately US $13/m3 (US $ 9.94/cubic yard) at today's market prices ($1500/ troy ounce). Based upon studies undertaken by IHC Merwede, the production cost of a large dredge operation could be as low as US $ 4/m3 (US $ 3.06/cubic yard)."

CEO Michael Stocker commented:

"We are very pleased with the numbers and the gold values recovered so far. These results are encouraging, however the company believes that it is to early to reach any conclusion as to whether a commercial dredge operation would be profitable on the Mika II concession. We are now identifying the next test areas to see if similar results can be confirmed on other areas of the property in the weeks and months to come."

About GoldSands Development Company

The Company's goal is to fully develop our Peruvian GoldSands project. The Company's GoldSands project in Peru consists of options on 461 square kilometers (178 square miles) of mining property, the largest such block in the district. For thousands of years, the waters of the Santiago and the Marañón rivers have been carving their way through the gold-rich mountain canyons of the Andes, carrying off gold and depositing it, as the river comes out into the plain, in the loose gravels and sands - GoldSands - in the area the Company now controls.

Results from test holes drilled during GSDC's exploratory drill program indicate the presence of alluvial gold in economical quantities. While the results from the drill programs and initial results of the ongoing test mining production are favorable, the Company cautions that these results do not indicate the presence of a commercially viable mineral deposit over most of the optioned area and an extensive amount of further exploration is needed to determine the full feasibility of the project. The Company can provide no assurance that its Peruvian GoldSands project will contain an economically viable mineral deposit. The Company has signed an agreement with Swiss Mining S.A., which is presently proceeding with the test mining production program within the 2.5 square kilometer area of the recent 100-hole drill program.

The Company has completed a social baseline study involving a series of meetings with local residents and other stakeholders in the region. We intend to work in an equitable, transparent, and socially responsible manner with local communities, suppliers and employees. We will act as stewards of the local and regional ecological systems, behaving in an environmentally responsible way, leaving a minimal "footprint" as a result of our operations. Our company is working towards building trust and sustaining relationships that go well beyond mining operations.

The full implementation of these programs will require the Company to secure additional financing.

Further information about GoldSands Development Company may be found at:

On behalf of the Board: Dr. Michael Stocker - CEO GoldSands Development Company

Disclaimer This release contains forward-looking statements that are based on beliefs of GoldSands Development Company management and reflect GoldSands Development Company's current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities and Exchange Act of 1934, as amended. When we use in this release, the words "estimate," "project," "believe," "anticipate," "intend," "expect," "plan," "predict," "may," "should," "will," "can," the negative of these words , or such other variations thereon, or comparable terminology, are all intended to identify forward looking statements. Such statements reflect the current views of GoldSands Development Company with respect to future events based on currently available information and are subject to numerous assumptions, risks and uncertainties, including but not limited to, risks and uncertainties pertaining to development of mining properties, changes in economic conditions and other risks, uncertainties and factors, which may cause the actual results, performance , or achievement expressed or implied by such forward looking statements to differ materially from the forward looking statements. The information contained in this press release is historical in nature, has not been updated, and is current only to the date shown in this press release. This information may no longer be accurate and therefore you should not rely on the information contained in this press release. To the extent permitted by law, GoldSands Development Company and its employees, agents and consultants exclude all liability for any loss or damage arising from the use of, or reliance on, any such information, whether or not caused by any negligent act or omission.

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: GoldSands Development Company via Thomson Reuters ONE


Contact Information

  • Investor Inquiries:
    North America Toll Free: 800-215-0811
    Direct Dial: 360-339-7309
    Email: Email Contact.