GoldSands Development Company
OTC Bulletin Board : GSDC
OTCQB : GSDC

April 25, 2011 08:00 ET

GoldSands Reports on Gold Production Test

LIMA, PERU--(Marketwire - April 25, 2011) - GoldSands Development Company (OTCBB:GSDC) (OTCQB:GSDC) is pleased to announce initial results from our alluvial gold production test, which was initiated on March 28th at the Company's Mika 2 Mining Concession in Peru.

In partnership with Swiss Mining S.A., we have begun test mining production at our GoldSand's Mika 2 site. This first test gold production is a significant step forward for the Company and should provide important information towards an assessment of potential commercial gold production on our Peruvian GoldSands properties.

GoldSands has the right to and has been monitoring, at its own expense, all activities performed by Swiss Mining or its sub-contractors as related to the test-mining production Agreement. This includes, but is not limited to, the right to make site inspections at any time; to bring experts and consultants onsite to examine or evaluate work in progress or completed work; to examine the books, ledgers, documents, papers, and records pertinent to this Agreement; and to observe personnel in every phase of their performance of the related work.

This 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 to mine the mineralized channels identified by the drill samples.

The test production has multiple objectives:

  • to verify the mining gold grades;
  • to determine the most efficient production methodology;
  • to develop the production monitoring and security systems; and
  • to determine the best environmental restoration procedures.

The ongoing test mining program is expected to continue for several months, during which time various production methods will be assessed in order to maximize yields, as well as to help develop larger capacity recovery systems that should enable an increasing volume of alluvial material to be processed.

Our recovery numbers from the initial test production period (March28th – April 14th) are as follows:

Gravel mined:2134 m3
Raw gold produced:931 grams (.931 kg) or 29.9 troy oz.
Raw gold grade:436 mg/m3.

These initial raw gold recovery numbers of 436 mg/m3 are higher than the gold grades calculated during the previous Phase I and II drill programs. Those drill programs indicated an average grade of 161.5 mg/m3 using a 50 mg/m3 cut off. Previous to this, other drill results at the project had indicated average values as high as 286.5 mg/m3. The Company cautions that these results have not been independently verified and that this initial area sampled may contain isolated hot or cold spots (of unusually high or low gold yields), so we will not attempt to reach any conclusions about potential alluvial gold yields based upon limited data from just the recent few weeks of test production.

GoldSands CEO Michael Stocker remarked:

"The GoldSands Development Company team is excited about achieving our first gold production. Even though these early gold values are very encouraging, they are so far only on a very small scale. At this time, it is not possible to draw any conclusions about future large scale production volumes and gold recoveries based solely upon these initial findings."

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. These GoldSands were laid down by eons of alluvial erosion. For millions 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 in the loose gravels and sands - GoldSands - in the area the Company now controls.

Results from test holes drilled during GSDC's 26-hole Phase I exploratory drill program indicate the presence of alluvial gold. The Company has also completed its Phase II drill program focused on grid drilling a 2.5 square kilometer region. While the results from the Phase I drill program, the Phase II, 100-hole drill program and initial results of the test mining production disclosed in this release are favorable, the Company cautions that these results do not indicate the presence of a commercially viable mineral deposit 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. to begin a test mining production program within the 2.5 square kilometer area of the recent 100-hole drill program.

Additionally, 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. This approach to the development of the area provides a platform for continual dialogue to identify and address any project with a high business potential in relation with our gold exploration efforts with a focus on building long-term relationships for development of the region of Manseriche and Loreto in the best interests, not only of Peru, but for our investors and shareholders as well.

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

Further information about GoldSands Development Company may be found at: www.goldsandsco.com

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.

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