Greystar Resources Ltd.
TSX : GSL
AIM : GSL

Greystar Resources Ltd.

July 15, 2010 02:00 ET

Greystar Resources Announces Updated Resource for the Angostura Gold-Silver Deposit, Colombia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 15, 2010) - Greystar Resources Ltd. (the "Company") (TSX:GSL)(AIM:GSL) is pleased to announce an updated resource calculation for the Company's Angostura gold and silver deposit located in the California mining district in Colombia. The resource study is based on updated 3D geological and mineral models, and includes all of the technical data available as of January 2010, including 179,813 core assays from 938 drill holes representing 302,834 metres, and 1,768 muck samples from the exploration tunnels. The resource study was developed by Greystar under the overall supervision of consulting company NCL Ingeniería y Construcción S.A. (NCL) from Santiago, Chile.

Additional drilling carried out in 2008 and the rigorous evaluation of the resource by Greystar's geological staff working closely with NCL has provided a robust resource model for the Feasibility study (FS). Greystar has initiated the evaluation of underground resources that lie beyond the FS pit boundary but within a proximity to allow exploitation utilizing the pit infrastructure either during or after completing the open pit operation. As the cut-off date for the data employed in these resource study was January 2010, not all of the recent Los Laches drilling data has been included. The evaluation of underground potential at Angostura is a work in progress, however early indications are that underground resources could have a meaningful impact on the project.

Resource Highlights:

Operational Pit* Resource

Measured and indicated resource of 8.9 million ounces gold and 59.6 million ounces of silver
Additional inferred resource of 903,000 ounces of gold and 4.7 million ounces of silver
*An operational pit was designed by NCL using mining, metallurgical and geotechnical parameters available.

Underground Resource

Measured and indicated resource of 831,000 ounces gold and 3.8 million ounces of silver
Additional inferred resource of 437,000 ounces of gold and 2.0 million ounces of silver

Operational Pit Resource

*An operational pit was designed by NCL using mining, metallurgical and geotechnical parameters available.

  Category
  Measured Indicated Total
(Meas. + Ind.)
  Inferred
OXIDES
Kt 79,160 26,597 105,757   6,306
Au (g/t) 0.39 0.45 0.41   0.44
Ag (g/t) 3 3 3   3
Au (koz) 998 389 1,387   88
Ag (koz) 8,521 2,787 11,308   555
TRANSITION
Kt 104,003 20,758 124,761   5,523
Au (g/t) 0.61 0.89 0.66   0.84
Ag (g/t) 6 6 6   6
Au (koz) 2,039 594 2,633   149
Ag (koz) 19,373 4,163 23,536   1,111
SULPHIDES
Kt 94,505 33,540 128,045   14,519
Au (g/t) 1.00 1.75 1.20   1.43
Ag (g/t) 5 8 6   6
Au (koz) 3,036 1,885 4,921   666
Ag (koz) 16,118 8,635 24,753   2,996
TOTAL RESOURCES IN OPERATIONAL PIT
Kt 277,668 80,895 358,563   26,348
Au (g/t) 0.68 1.10 0.78   1.07
Ag (g/t) 5 6 5   6
Au (koz) 6,074 2,868 8,942   903
Ag (koz) 44,012 15,585 59,597   4,662

Underground Resource

  Category
  Measured Indicated Total
(Meas. + Ind.)
  Inferred
SULPHIDES
Kt 1,283 4,761 6,044   3,762
Au (g/t) 3.95 4.36 4.28   3.61
Ag (g/t) 17 20 19   16
Au (koz) 163 668 831   437
Ag (koz) 718 3,067 3,785   1,992

Resource Estimate Methodology

To generate the Mineral Resource Estimate the following data and methods were used:

  • Mineral resources were estimated in conformance with the CIM Mineral Resource and Mineral Reserve definitions referred to in National Instrument 43–101, Standards of Disclosure for Mineral Projects.

  • The resource study is based on an updated 3D geological and mineral model, and includes all of the technical data available as of January 2010, including 179,813 core assays from 938 drill holes accumulating 302,834 meters, and 1,768 muck samples from the exploration tunnels.

  • A review of the QA/QC database showed adequate levels of quality for the resource estimate.

  • The resource model also includes a total of nearly 9,000 specific gravity measurements from drill core. The bulk densities for oxides, transition and sulfides were obtained applying appropriate factors of correction to the specific gravity mean values.

  • Three oxidation alteration levels were defined, oxide, transition and sulfide. The oxide material is defined where the sulfide minerals have been completely or nearly completely oxidized. The transition material is characterized by the coexistence of original sulfides with variations in limonite content as the main indicator of oxidation level; and the sulfides or "fresh" material where the oxidation has not affected the rock.

  • The current model has used structural trend surfaces that follow the interpreted veins throughout the deposit. The trend surfaces guide the direction of the three axes of the search ellipsoid used for grade interpolation on a local scale and assure that the geological influence on the grade interpolation is preserved.

  • All gold assay data was split into two populations, high-grade and low-grade, using a threshold of 5 g/t gold. Both populations were composited to intervals of 2 meters, and grade capping was applied to the composites. Capping levels for the high-grade population was 50 g/t, Au for all the structural domains, 350 g/t Ag for the domains of Veta de Barro and Cristo Rey, 450 g/t Ag for the domains of Perezosa fault, Silencio – Laches and for Central area. 

  • The block model uses regular blocks of 6 x 6 x 6 metres constructed using the software Datamine. Search distances for the probability and grade interpolation are supported by variography results. The probability of a block to contain high-grade mineralization was interpolated using an indicator approach which applied a floating ellipsoid with radii developed for five different domains. The probability interpolation used an inverse distance to the twelfth (ID12) power to minimize undue grade projection. As a result of the probability interpolation, each block contains an estimate of the volume of high-grade and of the volume of low-grade mineralization. To avoid over estimating of high grade, a 30-metre radius was used to restrict the impact of the high grade.

  • The grade interpolation was undertaken weighing the grade information by the inverse of the square of the distance to the block being estimated (ID2). In a first interpolation step, the low grade material in each block was interpolated from surrounding low grade composites using ellipses for the first search with a radius between 30 to 50 metres in strike and between 30 and 62.5 m in dip, depending on the domain, and a fixed 6 metres for cross strike in both searches; while the second search corresponding to the range of the variograms, being 2 times the first one. The grade of the high grade material in each block was interpolated from surrounding high grade composites using the same search ellipsoids as were used for the probability interpolation. A second grade interpolation step followed for which the ellipsoid axes were doubled. Blocks beyond the reach of this larger search were not estimated.

  • The classification of the resources was based primarily on the number of drill holes used for the interpolation. The requirement for measured resources is to require at least 2 drill holes in the first search ellipsoid (50% of the range of the variograms). For indicated, at least 1 drill hole is required using the first search ellipsoid. The material interpolated with the second search ellipse, formed by 100% of the range of the variogram, was classified as inferred. These classification parameters are considered appropriate according to the intensity of the drilling and the continuity of the mineralization in the ore body.

  • For the resources reported for US$850/oz Au and US$ 12/Oz Ag, an operational pit was designed by NCL using mining, metallurgical and geotechnical parameters available.

  • The portions of the block model beneath these operational pits were examined to determine the zones which might support the necessary capital for development. The portions that were too isolated or with insufficient grade or tonnage for underground mining were categorized as waste.

  • The open pit and underground resources are reported using an incremental cut off grade, where each block in the model is economically evaluated using the gold and silver prices, metallurgical model and processing costs. The blocks with positive revenue are considered mineral. This methodology is more rigorous than simply applying an overall cut off grade.

The above information has been reviewed and approved by Mr. Rodrigo Mello, Senior Geologist with NCL Ingeniería y Construcción S.A., Santiago, Chile a "qualified person" as that term is defined in National Instrument 43-101 and Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies, which outline standards of disclosure for mineral projects. The complete NI 43-101 compliant Technical Report will be filed on SEDAR at www.SEDAR.com within 45 days.

Glossary of Key Terms

Block Model -- The sub-division of a mineral deposit into a regular, three-dimensional grid of blocks. The grade of each block is estimated from a set of nearby sample values.

Contained Ounces, Contained Gold -- Represents ounces in the ore before losses during the applicable metallurgical process.

Cut-off Grade -- The minimum grade at which a unit of ore will be mined or treated. At the cutoff grade, the value is equal to the costs associated with mining and/or treating the unit of ore.

Dilution -- The effect of waste or low-grade material which is unavoidably included in the mined ore, lowering the mining grade.

Grade -- The amount of metal in each ton of ore, expressed as grams per tonne for precious metals (or as troy ounces per short ton in the imperial system), and as a percentage for most other metals.

Mineral Resource -- A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral resources are sub-divided, in order of increasing geological confidence, into inferred, indicated and measured categories.

Inferred Mineral Resources -- An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence, limited sampling and reasonably assumed but not verified geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Indicated Mineral Resource -- An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Measured Mineral Resources -- A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from location such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
Mineral resources, which are not mineral reserves, do not have demonstrated economic viability.

Tonne -- Equal to 1,000 kilograms.

Underground -- Where the minerals are explored or mined entirely from tunnels, shafts or drifts.

About Greystar Resources Ltd.

Greystar Resources Ltd. is a precious metals exploration and development company that is currently completing a feasibility study on its wholly owned, multi-million ounce Angostura gold-silver deposit in northeastern Colombia. A positive prefeasibility study announced on March 25, 2009 envisions average annual production at Angostura of 511,000 ounces of gold and 2.3 million ounces of silver over a 15 year mine life.

Forward-Looking Statements

Certain statements in this news release are "forward-looking" within the meaning of Canadian securities legislation. They include statements about future management and the Company's anticipated transition from a gold exploration company to a gold production company. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and other contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in the forward-looking statements. These factors include, among others, conclusions or realization of mineral resources, the actual results of exploration activities, possible variations in ore grade or recovery rates, fluctuations in the price of gold and silver, risks relating to additional funding requirements, political and foreign risks, production risks, environmental regulation and liability, government regulation as well as other risk factors set out under the heading "Risk Factors" in the Annual Information Form dated March 26, 2010 which is available on SEDAR at www.sedar.com. Investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

Neither the Toronto Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed and neither accepts responsibility for the adequacy or accuracy of this news release.

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