Goldstone Resources Inc.

Goldstone Resources Inc.

April 06, 2011 10:59 ET

Goldstone Reports Updated NI 43-101 Resource for Hardrock Project

TORONTO, ONTARIO--(Marketwire - April 6, 2011) - Goldstone Resources Inc. (TSX:GRC)(PINK SHEETS:GRSZF) today announced that it, together with its joint venture partner and operator Premier Gold Mines Limited (TSX:PG), has received an updated National Instrument (NI) 43-101 compliant mineral resource estimate from Micon International Limited for the Hardrock Project in which Goldstone holds a 30 percent carried interest. The estimate reports a significant increase in all categories, including the use of a measured category for the first time and is summarized in Table 1. All final data available as of February 28, 2011 were used in completing the estimate. In 2010, there were 114,000 metres of drilling at Hardrock, located near Geraldton in Northwestern Ontario, on multiple near surface and deeper zones. Many of these remain open for expansion and are the subject of an ongoing drill program in 2011.

Highlights of Micon's new mineral resource estimate include:

  • A 269% increase in Measured and Indicated resources to 2.5 million ounces.

  • A 164% increase in Inferred resources to 1.1 million ounces.

  • A 30% increase in the "potential open pit" Measured and Indicated resource grade to 2.37 grams per tonne gold (g/t Au).

  • A 37% increase in the "potential open pit" Inferred resource grade to 2.48 g/t Au.

  • Some 40% of the Measured and Indicated resource ounces are categorized as "Measured."

  • A "Whittle-Pit" analysis suggesting a strip ratio on potential open pit mineral resources of 2.1 to 1.

  • The Kailey ("potential open pit") Deposit resource is included and contains 127,000 ounces of Measured and Indicated Resources at 1.57 g/t Au and 10,000 ounces of Inferred resources at 1.48 g/t Au

"We are very pleased with progress at the Hardrock Project and support Premier's goal of developing a significant gold deposit potentially capable of mid-tier production," said Phil Cunningham, Goldstone Chairman and Interim CEO. "At the same time we continue to conduct an aggressive exploration program on our 100 percent-owned Key Lake property which is contiguous to Hardrock."

In 2011, more than 70,000 metres of drilling is planned to continue to expand and upgrade these resources. Additionally, regional exploration in the search of the "next one" in the Hardrock area is underway. The near-term goal is to secure permits for Advanced Exploration, which will include de- watering of the historic mine workings and the construction of an Exploration Ramp. The ramp will allow underground drilling to be completed in support of a preliminary economic assessment to evaluate the potential for a future mining operation to be established at Hardrock.

The mineral resources estimated for the Hardrock project (both the Hardrock and Kailey Deposits) are set out in Table 1 below. They have been subdivided into potentially underground or open pit mineable resources and reported using different cutoff grades.

Table 1 - Hardrock Project Indicated & Inferred Mineral Resources
    Cut-off Grade Resource Contained
Material Classification (au g/t) Estimate Tonnes Au Ozs
      (Au g/t)    
Open Pit Measured 0.83 2.446 6,865,000 540,000
Open Pit Indicated 0.83 2.280 5,833,000 427,500
Open Pit Measured + Indicated 0.83 2.370 12,698,000 967,500
Open Pit Inferred 0.83 2.483 615,000 49,200
Underground Measured 2.80 5.993 2,312,000 445,800
Underground Indicated 2.80 5.827 5,757,000 1,078,500
Underground Measured + Indicated 2.80 5.875 8,069,000 1,524,300
Underground Inferred 2.80 5.397 6,187,000 1,073,500
OP + UG Measured --- 3.340 9,177,000 985,800
OP + UG Indicated --- 4.042 11,590,000 1,506,000
OP + UG Measured + Indicated --- 3.732 20,767,000 2,491,800
OP + UG Inferred --- 5.133 6,802,000 1,122,700
(i) Figures may not sum due to rounding
(1) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant issues.
(2) The mineral resources were estimated using a block model with parent blocks of 25x30x10 sub-blocked to a minimum size of 5x3x2 and using Inverse Distance Cubed methods for grade estimation. A total of 12 individual mineralized domains were identified and estimated using an average top cut of 48 g/t Au. For a "potential open pit" mineral resource a cut-off grade of 0.83 g/t Au is based on a Whittle optimized pit shell and a mining recovery of 100%. For potential underground mineral resources a cut-off grade of 2.80 g/t Au and an assumed mining recovery of 100% outside of the potential open pit mining areas was used.
(3) The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.
(4) The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council November 27, 2010.

Tables 3 and 4 below, present the tonnes and grades from the block model used for the Mineral Resource estimate at a range of cut-off grades in order to demonstrate the sensitivity of the estimates. The cut-off value of 0.83 g/t Au for "potential open pit" and 2.80 g/t Au for deeper, potential underground mineralization, was derived using the parameters listed in Table 2 below.

Table 2 – Assumed operating costs, metal pricing, and metallurgical recovery used to determine cut-off grades for the Hardrock Mineral Resource Estimate.
Item Units Cost
Open Pit Mining Cost CAN$/All Material Tonne $3.00
Underground Mining Cost CAN$/Ore Tonne $60.00
Processing Cost CAN$/Ore Tonne $20.00
G&A Cost CAN$/Ore Tonne $1.00
Gold Price US$/Troy Ounce $1,000.00
Mill Recovery Percent 90%
Exchange Rate US$ to CAN$ 1.000
Table 3 - Sensitivity of the "Potential Open Pit" Resource Estimates at Various Cutoff Grades
Measured and Indicated Resources
Cutoff Au Resource Contained
(Au g/t) (g/t) Tonnes Au Ozs
0.5 1.848 18,201,000 1,081,500
0.8 2.327 13,055,000 976,900
1.0 2.611 10,896,000 914,600
1.5 3.422 6,871,000 756,100
2.0 4.181 4,744,000 637,800
2.5 4.890 3,480,000 547,200
3.0 5.591 2,626,000 472,200
3.5 6.269 2,040,000 411,100
4.0 6.961 1,601,000 358,500
4.5 7.703 1,259,000 311,800
5.0 8.456 1,004,000 273,000
Inferred Resources
Cutoff Au Resource Contained
(Au g/t) (g/t) Tonnes Au Ozs
0.5 1.848 937,000 55,700
0.8 2.437 633,000 49,600
1.0 2.681 547,000 47,100
1.5 3.629 328,000 38,300
2.0 4.969 193,000 30,800
2.5 6.745 117,000 25,400
3.0 8.792 78,000 22,000
3.5 11.318 53,000 19,500
4.0 13.473 42,000 18,000
4.5 16.179 32,000 16,800
5.0 18.646 27,000 15,900
Table 4 - Sensitivity of the Potential Underground Resource Estimates at Various Cutoff Grades
Measured and Indicated Resources
Cutoff   Resource Contained
(Au g/t) Au (g/t) Tonnes Au Ozs
2.0 4.567 12,848,000 1,886,500
2.5 5.389 9,497,000 1,645,700
3.0 6.222 7,226,000 1,445,700
3.5 7.074 5,623,000 1,278,900
4.0 7.864 4,547,000 1,149,600
4.5 8.719 3,678,000 1,031,300
5.0 9.548 3,044,000 934,500
Inferred Resources
Cutoff   Resource Contained
(Au g/t) Au (g/t) Tonnes Au Ozs
2.0 4.410 9,145,000 1,296,600
2.5 5.080 6,989,000 1,141,500
3.0 5.690 5,533,000 1,012,500
3.5 6.302 4,428,000 897,400
4.0 6.904 3,588,000 796,600
4.5 7.698 2,763,000 683,800
5.0 8.342 2,272,000 609,400

Hardrock Deposit

The Hardrock Project is located approximately 4 kilometres south of the town of Geraldton, Ontario and is host to several past-producing mines which collectively produced more than 3 million ounces of gold from depths primarily within 600 metres of surface between 1938 and 1968. Underground resources are located proximal to and below the historic mine workings. New discoveries including the High-Grade North Zone and the F2 East Zone will be the focus of the planned underground drill program. The current Mineral Resource estimate uses 11 identified mineralized domains to develop a combination potential open pit and underground mineral resource. The Hardrock Project benefits from development advantages with the Trans-Canada Highway, Trans-Canada Pipeline, and major power lines running through, or in close proximity to, the Project site. Significant services and a skilled labour pool exist with several communities located within 30 kilometres. The Hardrock Project is operated under a joint venture with Goldstone Resources Inc. (TSX:GRC).

Kailey Deposit

The Kailey deposit is located about 2 km north of the Hardrock deposit at the location of the former historically operated Little Long Lac gold mine. The Kailey mineralized zone is a small lower-grade potential open pit mineral resource.

Resource Statement

The mineral resource estimates in this press release use the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by CIM Standing Committee on Reserve Definitions and adopted by CIM Council on November 27, 2010. The mineral resource estimates provided in this report are classified as "measured", "indicated", or "inferred" as defined by CIM.

According to the CIM definitions, a Mineral Resource must be potentially economic in that it must be "in such form and quantity and of such grade or quality that it has reasonable prospects for economic extraction". For the Hardrock deposit, a gold cut-off grade was assigned based on economic assumptions and was used in the resource estimations. Table 2 above shows the economic parameters used in the gold cut-off grade calculation.

The estimated costs for the Hardrock deposit, mined as an open pit, are $3.00 + $20.00 + $1.00 = $24.00/t milled which works out to an estimated gold cut-off of 0.83 g/t. The estimated costs for the Hardrock deposit, mined as an underground, are $60.00 + $20.00 + $1.00 = $81.00/t milled which works out to an estimated gold cut-off of 2.80 g/t. Resources reported in this press release use an estimated potential open pit gold cut-off of 0.83 g/t and for a potential underground use 2.80 g/t.

The mineral resource estimate presented in Table 1 is effective as of 5 April 2011. The mineral resources listed in Table 1 were estimated by Sam J. Shoemaker, Jr., M.AusIMM, and Registered Member-SME. Mr. Shoemaker is a QP as defined in NI 43-101 and is independent of Premier Gold.

Stephen McGibbon, P. Geo., is the Qualified Person for the information contained in this press release and is a Qualified Person within the meaning of National Instrument 43-101.

About Goldstone

Formed by a late 2009 merger of Ontex Resources and Roxmark Mines, Goldstone Resources is a gold exploration and development company operating in the historically significant Geraldton- Beardmore camp of Northwestern Ontario and focused on gold exploration and deposit delineation at its Key Lake, Brookbank, Northern Empire and Leitch-Sand River gold properties, and as a partner in the Hardrock Project joint venture with Premier Gold Mines Limited. The camp is host to several past producers in a district that has historical production of more than 4.1 million ounces of gold from high grade ore before being shut down primarily as a result of a $35 gold price—and to Goldstone's fully permitted, expandable 200-TPD Northern Empire mill.

Further information is available on the Company's website at and on SEDAR under the Company's profile at

Forward-Looking Statements

This news release may contain forward-looking information under applicable securities laws concerning Goldstone's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward looking information is frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "intend" and similar words referring to future events and results. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, delay or inability to raise additional financing on satisfactory terms, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions and changes in conditions in the financial markets. Readers are cautioned not to place undue reliance on this forward-looking information as actual results may differ materially from those expressed or implied in the forward looking information. Goldstone does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

Contact Information

  • Goldstone Resources Inc.
    Philip Cunningham
    Chairman and Interim CEO
    (416) 860-1636