Horseshoe Gold Mining Inc.
TSX VENTURE : HSX

September 19, 2007 13:05 ET

Horseshoe Gold Mining Inc.: 2007 DO-27 Bulk Sample Results Confirm Grade of Main Lobe at 0.89 Carats/Tonne, 1,724.57 Carats of Diamonds Recovered, including Fancy Yellow Gems

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 19, 2007) - Horseshoe Gold Mining Inc. (TSX VENTURE:HSX) -

Peregrine Diamonds Ltd. has released the results of the 2007 DO-27 Bulk Sample program to its joint ventures partners.

The 2007 bulk sample average modeled grade for the Main Lobe pyroclastic kimberlite (PK) is 0.89 carats per tonne (89.13 carats per hundred dry tonnes), confirming Peregrine's previous bulk sample estimates of 0.90 carats per tonne in 2005 and 0.88 carats per tonne in 2006. The Main Lobe PK lithology represents at least 80% of the DO-27 kimberlite complex.

In total, 18,371 diamonds greater than +1 DTC sieve size (approximately +1.1 millimeter), comprising 1,724.57 carats, with an average stone size of 0.094 carats per stone, were recovered from approximately 2,520 dry tonnes of kimberlite from all lithologies in the Main and Northeast Lobes of DO-27 in the 2007 bulk sample.

The twenty largest diamonds recovered in 2007 are 9.45, 7.03, 6.03, 5.17, 4.84, 4.35, 4.19, 3.62, 3.48, 3.38, 3.23, 3.18, 3.12, 3.08, 3.03, 2.86, 2.82, 2.67, 2.53 and 2.48 carats with twelve of these stones being gem or near gem-quality. Of particular interest is the recovery of fancy yellow gem-quality diamonds, including a very high quality 4.35 carat stone. This is the first occurrence of fancy coloured gems being recovered from DO-27.

The 2007 bulk sample tonnage was obtained from 28 large diameter (24"-28") drill holes (LDD) completed to a maximum depth of 295 meters below surface. Extracted kimberlite tonnage estimates were calculated using a down-hole caliper and a three-dimensional density model of the various kimberlitic lithologies prepared by AMEC Americas Ltd. As some of the LDD holes were drilled to achieve maximum kimberlite volume extraction, these particular holes were not suitable for tonnage estimation and grade calculations and therefore have been omitted from those calculations; however, all recovered diamonds can and will be used for diamond valuation.

Since different sizes and types of bottom size screens were used in the 2005, 2006 and 2007 bulk sample drilling and processing, all grade results were normalized to a uniform datum of a 1.0-millimeter bottom screen size for the 2006 bulk sample results and a 1.4-millimeter bottom screen for the 2007 bulk sample results, and then modeled. This procedure is in accordance with industry standard practice when calculating diamond grades from multiple bulk samples that have different bottom screen size data sets. The 2005 bulk sample was not suitable for modeling due to its small size relative to the 2006 and 2007 bulk samples.

Please see the Peregrine News Release for the details of the 2006 and 2007 normalized grades.

Lithologies other than PK in the Northeast Lobe are volumetrically insignificant and therefore those particular samples were not suitable for normalized grade estimation, resulting in slightly smaller total carats recovered for 2007 compared to the actual carats recovered (1,693.39 carats versus 1,724.57 carats).Please see the Peregrine News Release for the details of the diamond size distribution for all diamonds recovered in the 2005, 2006 and 2007 bulk samples.

Howard Coopersmith, Peregrine's external Qualified Person, commenting on the 2007 results stated:

- One of the main goals in the 2007 bulk sample campaign has been to collect a larger diamond parcel for a more statistically robust and representative revenue estimate, and in particular to assess more stones in the +3 grainer (greater than .75 carats) categories. This goal has been achieved.

- DO-27 contains a sub-population of well formed crystals of exceptional colour which in this year's larger parcel is showing up in the coarser sizes, and will likely represent the bulk of the total value.

- The average valuation for the 2007 sample is expected to be higher than that of the 2005 and 2006 sample due to coarser diamond size distribution and an overall increase in average diamond quality.

- Consistency of grade from the 2005, 2006 and 2007 bulk samples is positive.

- 18% of the 2007 parcel by weight occurs as stones greater than 0.50 carats.

- 4 stones are greater than 5 carats each; 22 stones are between 2 and 5 carats each; 51 stones. Are between 1 and 2 carats each; 219 stones are between 0.5 to 1 carats each.

- A population of fancy yellow gems is positive.

Some of the important diamonds recovered are as follows:



9.45 ct. white/grey aggregate 7.03 ct. off white octahedron
(near gem) (broken)
6.03 ct. white (colourless) 4.35 ct. fancy yellow
irregular (broken) octahedron
4.19 ct. white (colourless) 3.08 ct. light brown
octahedron octahedron (broken)
3.03 ct. light brown 2.82 ct. light brown
tetrahexahedroid octahedron
2.67 ct. light brown 2.53 ct. white (colourless)
octahedron (broken) tetrahexahedroid
2.48 ct. white (colourless) 2.37 ct. white (colourless)
octahedron tetrahexahedroid
2.27 ct. brown octahedron 2.00 ct. white (colourless)
octahedron
1.77 ct. white (colourless) 1.63 ct. white (colourless)
octahedron tetrahexahedroid
1.54 ct. white (colourless) 1.42 ct. white (colourless)
tetrahexahedroid tetrahexahedroid
1.38 ct. white (colourless) 1.26 ct. white (colourless)
octahedron cube
1.07 ct. fancy yellow 0.84 ct. fancy yellow
octahedron octahedron


Tinus Oostervelt calculated the diamond grades for the various lithologies reported here. Mr. Oostervelt, a professional mining engineer and Qualified Person as defined by National Instrument 43-101, is regarded as one of the leading authorities in diamond resource evaluation and diamond geostatistics. He has more than 30 years experience in diamond mine development, including nearly a decade as Ore Evaluation Consultant to De Beers and Anglo American, involved in evaluating all of De Beers' diamond properties worldwide, and an additional 15 years of experience as an independent diamond resource consultant based in South America.

The 2007 DO-27 bulk sample, as in previous years, was processed at the Bulk Sample Test Facility at BHP Billiton's Ekati™ Diamond Mines, NT, Canada. Diamond recovery was by standard DMS concentration, X-ray sorter and grease table recovery circuits. Although this facility is not ISO/IEC 17025 accredited, industry standard chain of custody and security protocols were adhered to and sample integrity and process recovery efficiency is considered high. In addition, extensive QA/QC, as well as internal and external audits were utilized during bulk sample extraction and processing. The kimberlite rock lithologies reported are relatively homogenous and are representative of the sampled area.

The diamonds are at BHP Billiton's Sorting and Valuation Facility in Yellowknife, NT, where they have been cleaned and are awaiting shipment to Antwerp, Belgium for valuation by independent valuators. The valuations are anticipated to be completed in November 2007. Photographs of the 4.35 carat fancy yellow gem and 4.19 carat white gem can be seen on Peregrine's web site at 222.pdiam.com, under Photo Gallery/Diamond Photos. Photographs of additional DO-27 diamonds will be posted on Peregrine's web site in October 2007.

AMEC Americas Ltd is preparing an internal Preliminary Technical Assessment (PTA) report on DO-27, including a resource estimate for this mineralized deposit. The PTA, which investigates various potential mining and processing scenarios for DO-27, is currently incorporating the recent positive kimberlite pre-concentration results released by Peregrine on July 24, 2007. Additional high water pressure pre-concentration test results, which are anticipated to further enhance kimberlite pre-concentration, are expected next month and will be incorporated with the new diamond valuation results into the PTA.

The pre-concentration results received to date could have a very significant impact on potential project economics and is a prominent focus of the PTA. An average pre-concentration ratio of 5:1 for the Main Lobe PK at DO-27, for example, could result in a concentrate grade of approximately 4.5 carats per tonne.

The grade of the Main Lobe PK of 0.89 carats per tonne, before any pre-concentration, compares favorably to the published data for kimberlite pipes at BHP Billiton's Ekati™ Diamond Mine in the Annual Information Form of Dia Met Minerals, dated June 14, 2000, which reported, as part of the feasibility study, an average grade for five of the Ekati™ pipes (Fox, Sable, Panda -underground and open pit, Misery and Koala - underground and open pit) of 1.09 carats per tonne. In addition, the occurrence of fancy yellow gem diamonds at DO-27, which also occur at Ekati's™ Misery pipe, adds an important additional source of average diamond value enhancement not previously recognized at DO-27.

Howard Coopersmith and Jennifer Pell, Qualified Persons as defined by National Instrument 43-101, as well as AMEC Americas Ltd., have reviewed all procedures and data and have approved the contents of this release.

Horseshoe Gold Mining Inc. has a 20% interest in DHK Diamonds Inc., which has a 10.774% interest in the WO Joint Venture.

On behalf of the Board of Directors

James E. McInnes, President

Contact Information

  • Horseshoe Gold Mining Inc.
    James E. McInnes
    President
    (604) 662-4480
    (604) 685-0553 (FAX)