Gowest Gold Ltd.

TSX VENTURE : GWA
OTCBB : GWSAF


Gowest Gold Ltd.

November 20, 2012 08:15 ET

Gowest Increases Indicated Gold Resources by 170% to 945,600 Oz. at Frankfield East, North Timmins Gold Project

Overall Resource Increases; Remains Open at Depth & Along Strike

TORONTO, ONTARIO--(Marketwire - Nov. 20, 2012) - Gowest Gold Ltd. ("Gowest" or the "Company") (TSX VENTURE:GWA)(OTCBB:GWSAF) -

  • Latest estimate includes 945,600 ounces of indicated gold ("Au") resources plus an additional 536,800 ounces of inferred gold resources.

  • The large increase (170%) in indicated ounces of gold demonstrates the impact of the recent drill program, which was aimed at increasing the confidence of the resources contained in the upper elevation of the deposit in preparation for detailed mine planning and engineering studies for planned fast-tracking of the project development.

  • Current indicated ounces are estimated from surface to a maximum depth of 400 metres ("m") and along a strike of 950m. In this area of the deposit resources have been better defined at over 2,000 gold ounces per vertical meter. Inferred resources are at depths of between 400m and 1000m.

  • Significant upside potential remains as mineralization remains open along strike and at depth. The drilling completed to date has allowed the Company to demonstrate the continuity of mineralised structures down to a vertical depth in excess of 1000m.

Gowest Gold Ltd. today provided an update on its gold resources at its 100%-owned Frankfield East Gold Deposit, part of its North Timmins Gold Project in the prolific Timmins Gold Camp in Ontario, Canada. The updated resource (see Table 1) contains approximately 945,600 ounces of gold in the indicated category (6.0 million tonnes at a grade of 4.9 grams per tonne ["g/t"] Au) and 536,800 ounces of gold in the inferred category (3.7 million tonnes at a grade of 4.2 g/t Au). As was used in the Company's recent Preliminary Economic Assessment, the current estimate is based on a 3.0 g/t Au cut-off and a conservative gold price of US$1,200/oz. This new resource estimate has been completed by Neil N. Gow, P. Geo., an independent Qualified Person, and reported in accordance with Canadian Securities Administration National Instrument 43-101 ("NI 43-101") requirements and CIM Standards on Mineral Resources and Reserves.

Table 1. Frankfield East Gold Deposit - Resource Estimate
INDICATED RESOURCES
Zone Tonnes Avg. Grade (g/t Au) Contained Gold Ounces
Main Zone (MZ1) 1,487,400 5.05 241,500
Main Zone (MZ2) 1,336,800 4.66 200,300
Hanging Wall (HWZ1) 1,379,500 4.84 214,700
Hanging Wall (HWZ2) 1,285,400 5.01 207,000
Hanging Wall (HWZ3) 527,400 4.84 82,100
TOTAL 6,016,500 4.88 945,600
INFERRED RESOURCES
Zone
Tonnes
Avg. Grade (g/t Au) Contained Gold Ounces
Main Zone (MZ1) 2,838,100 4.66 425,200
Main Zone (MZ2) 94,700 3.28 10,000
Hanging Wall (HWZ1) 541,100 3.99 69,400
Hanging Wall (HWZ2) 119,300 4.42 17,000
Hanging Wall (HWZ3) 99,700 4.75 15,200
TOTAL 3,692,900 4.22 536,800
Notes:
1. Resource estimate completed using a 3D block model with wireframes. The wireframes were built using a cut-off grade of 3 g/t Au over a minimum core length of 2 m and 1 m composites. In mineralized regions which did not meet this requirement a cut-off grade of 1 g/t Au over a minimum core length of 2 m was used.
2. Tonnes and ounces have been rounded to the closest 100 tonnes or ounces.
3. Resources were estimated using commercial mining software. Wireframe edges are "snapped" to Mineralized intercepts. Composites were calculated inside of wireframe constraints. Block grades are assigned using inverse distance squared with minimum 4, maximum 10 samples and isotropic ellipse. Maximum search distance is 100 m radius with the exception of the inferred HWZ2 and HWZ3 resources where a 50 m radius is used.
4. Top-cut of 25 g/t Au is used.
5. Gold price is US$1200 per ounce.
6. The Frankfield East mineralization has an average specific gravity of 2.85. Where a measured specific gravity for the composite interval is not available the average of 2.85 is used.
7. Indicated resources are identified above the -100 m level (top 400 m of the deposit) where drill hole spacing is approximately 50 m or less. Inferred resources are identified below the -100 m level

The Frankfield East deposit modeling utilizes assay data from 292 diamond drill holes, including 60 holes for 20,319 metres that had not been included in the previous estimate. In line with the Company's recently announced plans to accelerate the timetable for putting the Frankfield East deposit into production, (see Gowest news dated Nov. 12, 2012), a more detailed method was used for this latest resource estimate resulting in a block model more suitable for mine planning. The lower overall average resource grades are the result of the use of the 3D block modelling techniques. However, consistent with the previous resource estimates, the majority of the resource ounces in the project are contained in blocks greater than a 4 g/t Au cut-off with an average grade in excess of 6 g/t Au (see Table 2).

Noted Kevin Montgomery, Gowest Exploration Manager, "We have now delineated the mineralized structures to below 1000m and demonstrated good continuity of mineralisation within each structure. This is especially true for the upper 400m of the deposit, which is key to allowing us to advance our mine design. Immediate drilling will focus on tighter infill drilling for underground mine development."

The Frankfield East mineralization is contained within a series of parallel zones that extend into the host rock away from the main zone located adjacent to the geological contact structure. Approximately half of the indicated resource ounces of gold are presently contained within the main zone area ("MZ1-2"). The remaining indicated ounces are located in the other three parallel structures ("HWZ1-3").

The presence of multiple mineralized structures is significant in that it dramatically increases the density of gold ounces per vertical meter, which allows for lower overall mining costs as more gold can be mined for the same mine development costs (e.g. mine shaft, ramp, etc.). While the focus during the last drill campaign was to increase confidence in the resources above 400m of depth, the Company believes future drilling below 400m has the potential to convert more of the deep mineral potential for the deposit into additional gold resource ounces.

Greg Romain, President and CEO of Gowest commented, "We are pleased to be able to report this sharp increase in the indicated resource ounces as we focus our efforts on accelerating the project towards production. The next stage of development will utilize this information to complete detailed mine planning studies as part of our ongoing engineering work. We are confident that accelerating our plans to bring the Frankfield East deposit into production in about 30 months is the best course for us and for our investors. We look forward to providing further updates as we move into 2013."

Table 2 below shows the variations in tonnes, gold grade and contained ounces in the mineral resource estimate summarized at various cut off grades between 3.00 g/t Au and 4.50 g/t Au. The figures in the table demonstrate the robust nature of the Frankfield East deposit and the potential to respond to fluctuations in gold prices by adjusting the cut-off grade to change the average gold grade of the deposit with relatively limited impact on the overall deposit resources. The base case resource estimate (3 g/t Au cut-off) was selected as a conservative starting point based on mining techniques for similar deposits in the Timmins camp and engineering information contained in the Company's previously released Preliminary Economic Assessment.

Table 2. Cut-off sensitivities of Frankfield East Deposit Indicated Mineral Resources

Cut-off Grade (g/t Au) Tonnes Avg. Grade (g/t Au) Contained Gold Ounces
3.0 6,016,500 4.88 945,600
3.5 4,208,200 5.38 732,500
4.0 3,274,400 6.05 638,100
4.5 2,484,300 6.48 515,800

Qualified Person

Technical information related to Gowest's Frankfield East mineral resource estimate contained in this press release has been reviewed and approved by Neil N. Gow, P. Geo., an independent Qualified Person as defined by NI 43-101, with the ability and authority to verify the authenticity and validity of this data. The NI 43-101 Technical Report on the Mineral Resource Estimate for the Frankfield East Deposit will be filed on SEDAR within 45 days of this press release. Mr. Kevin Montgomery, P. Geo., Manager of Exploration for Gowest, a Qualified Person under NI 43-101, has prepared or supervised the scientific or technical information for the property and verified the data disclosed in this press release.

About Gowest

Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100% owned Frankfield East gold deposit, part of the Company's North Timmins Gold Project (NTGP). Gowest is exploring additional gold targets on the 90-square-kilometre NTGP land package and continuing to evaluate area, which is part of the prolific Timmins, Ontario gold camp.

Forward-looking statements

This news release contains certain "forward-looking statements". Such forward-looking statements involve risks and uncertainties. The results or events depicted in these forward-looking statements may differ materially from actual results or events. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.

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