Farallon Resources Ltd.
TSX : FAN

Farallon Resources Ltd.

October 12, 2005 09:39 ET

Initial Review of Farallon's Exciting New G-9 Discovery

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 12, 2005) -

New deposit with high grades of gold, silver, zinc and copper

Dick Whittington, President & CEO of Farallon Resources Ltd. (TSX:FAN), is pleased to provide a preliminary review of the new high grade G-9 deposit, recently discovered by drilling at the Company's Campo Morado polymetallic (zinc, gold, silver, copper, lead) project in Guerrero State, Mexico. As announced in a news release on June 2, 2005, the discovery hole 420 intersected 14% zinc over a true width of 8.1 metres; a succession of high grade intersections were made over the next three months. This review is based on the intersections from G-9 reported to date and provides a geological overview of the deposit as well as an outlook of its potential.

High grade intersections of both base and precious metals in the G-9 deposit were reported in news releases of June 2nd, September 13th and September 26th, 2005. Elevated concentrations of gold and silver are prevalent with high grade zones of zinc in the massive sulphide zones, for example, 15 g/t of gold and 609 g/t silver with 5% zinc over a true thickness of 26.5 metres in hole 486.

A preliminary geological interpretation has been made which indicates the size and scope of this new discovery. The deposit is characterized by an irregular southeast-northwest trend-line defined by faulting and contact zones between the argillite and felsic volcanic host rocks. A deposit location map, a map showing the 3 dimensional model and a cross section on the open northwest end of the deposit are attached. Fifty-metre step-outs at each end of the deposit have intersected massive sulphides, expanding the deposit to 500 metres from southeast to the northwest. The deposit is open in both directions.

A listing of the significant intersections reported to date for the G-9 deposit is provided in Table 1 (attached). As shown, the weighted average grade of the G-9 intersections is 4.52 g/t gold, 269 g/t silver, 1.41% copper, 1.32% lead and 7.95% zinc with an average true thickness of 10.6 metres. At current metal prices, the zinc equivalent grade is 22% and the gold equivalent grade is 21.0 g/t (see Notes to Table 1). Using internal factors based on prior experience at Campo Morado, the current tonnage of the mineralized zone indicated by the drilling at G-9 so far is in the range of 2-3 million tonnes with the zone remaining open in both directions and further expansion expected.

The weighted average Gross Metal Value per metre of drill intersection is US$230/tonne at estimated long term metal prices and over US$310/tonne at current metal prices. This represents a potential substantial increase in grade from the other deposits. In the recently reported resource estimates at a US$90GMV/t cut-off, the average grade of the Reforma deposit is 4.20 g/t gold, 224 g/t silver, 0.92% copper, 1.71% lead and 3.86% zinc and the average grade of the El Largo deposit is 1.12 g/t gold, 128 g/t silver, 0.40% copper 1.33% lead and 5.76% zinc. Although the above calculations for G-9 are indicative of tonnage and grade accumulations for exploration targeting purposes, the numbers should not be considered an estimation of a mineral resource. Additional infill and delineation drilling is required to determine both the resources available and their applicable category.

On a larger-scale, another key feature of the G-9 deposit is the occurrence of "stacked" felsic volcanic intervals separated by sedimentary rocks. The different felsic volcanic intervals contain "stringer mineralization", overlain by massive sulphide mineralization. Recognition of the deposition of these massive sulphides at different stratigraphic levels represents a significant step forward in developing an ongoing exploration model for the G-9 deposit and the Campo Morado district as a whole.

The drilling results at G-9 combine both the highest grades discovered on the property and massive sulphide intersections of significant length. These extend over a distance of 500 metres and are open to the southeast and northwest, confirming G-9 as the most exciting deposit discovery in the Campo Morado District to date. The high grade nature and the significant lengths of the intersections enhance the development potential of G-9 along with the entire project. Two drills are currently focused on G-9 to fully delineate this exciting new discovery. Further updates will be disclosed as this work continues.



TABLE 1 - SIGNIFICANT INTERSECTIONS G-9 DEPOSIT
--------------------------------------------------------------------
Drill True True
Section Hole From To Interval Thickness Thickness
Number Number (metres) (metres) (metres) (metres) (feet)
--------------------------------------------------------------------
5050E 481 459.4 494.6 35.2 34.9 114.3
--------------------------------------------------------------------
481 503.0 522.5 19.5 19.3 63.3
--------------------------------------------------------------------
483 482.4 495.5 13.1 13.0 42.6
--------------------------------------------------------------------
486 504.1 509.5 5.4 5.3 17.3
--------------------------------------------------------------------
486 526.5 529.7 3.2 3.1 10.2
--------------------------------------------------------------------
486 535.8 545.0 9.2 9.0 29.4
--------------------------------------------------------------------
486 549.3 576.5 27.2 26.5 86.9
--------------------------------------------------------------------
486 592.4 593.8 1.4 1.4 4.5
--------------------------------------------------------------------
5100E 468 491.0 502.2 11.2 10.0 32.7
--------------------------------------------------------------------
474 433.3 451.1 17.8 17.7 58.1
--------------------------------------------------------------------
474 460.1 464.9 4.8 4.8 15.6
--------------------------------------------------------------------
479 423.2 445.2 22.0 21.6 71.0
--------------------------------------------------------------------
5150E 436 472.1 476.1 4.0 3.8 12.3
--------------------------------------------------------------------
436 524.7 525.8 1.1 1.0 3.2
--------------------------------------------------------------------
5250E 420 377.4 392.3 14.9 8.1 47.3
--------------------------------------------------------------------
5300E 464 348.2 372.0 23.8 23.5 77.1
--------------------------------------------------------------------
5350E 458 369.0 372.0 3.0 3.0 9.7
--------------------------------------------------------------------
467 303.2 306.9 3.8 3.5 11.3
--------------------------------------------------------------------
467 317.3 335.1 17.8 16.4 53.7
--------------------------------------------------------------------
5400E 484 353.1 356.3 3.3 3.0 9.9
--------------------------------------------------------------------
484 399.9 406.9 7.0 6.5 21.3
--------------------------------------------------------------------
485 343.9 352.1 8.3 7.9 25.9
--------------------------------------------------------------------
485 407.0 409.0 2.0 1.9 6.3
--------------------------------------------------------------------
Weighted Average 11.3 10.6 34.9
--------------------------------------------------------------------


--------------------------------------------------------------------
Drill GMV US$/t GMV US$/t
Section Hole Au Ag Cu Pb Zn Long term Current
Number Number g/t g/t % % % prices(1) prices(2)
--------------------------------------------------------------------
5050E 481 2.16 253 2.96 1.82 8.38 240 353
--------------------------------------------------------------------
481 2.72 209 1.45 1.05 14.7 273 374
--------------------------------------------------------------------
483 5.19 191 1.36 0.55 10.6 249 339
--------------------------------------------------------------------
486 2.40 115 1.67 0.79 9.81 201 282
--------------------------------------------------------------------
486 2.79 171 1.32 1.43 6.10 169 239
--------------------------------------------------------------------
486 3.35 162 1.61 1.07 10.2 225 313
--------------------------------------------------------------------
486 15.1 609 0.90 1.01 5.22 374 499
--------------------------------------------------------------------
486 1.14 96 1.15 0.44 4.92 114 163
--------------------------------------------------------------------
5100E 468 1.48 73 0.42 0.52 5.26 102 139
--------------------------------------------------------------------
474 3.19 242 1.51 1.28 2.22 146 213
--------------------------------------------------------------------
474 13.6 834 0.41 3.66 4.30 389 524
--------------------------------------------------------------------
479 1.60 98 0.54 0.78 6.83 130 177
--------------------------------------------------------------------
5150E 436 1.29 62 0.37 0.74 4.91 93.9 128
--------------------------------------------------------------------
436 1.42 184 1.46 0.58 1.17 98.2 147
--------------------------------------------------------------------
5250E 420 1.06 67 1.76 0.69 14.2 308 313
--------------------------------------------------------------------
5300E 464 3.68 195 0.89 0.72 12.2 239 322
--------------------------------------------------------------------
5350E 458 0.56 39 2.56 0.02 3.43 109 171
--------------------------------------------------------------------
467 3.76 259 0.57 1.60 4.02 158 217
--------------------------------------------------------------------
467 6.56 545 1.38 3.85 6.69 302 422
--------------------------------------------------------------------
5400E 484 0.63 129 2.28 0.91 13.2 235 334
--------------------------------------------------------------------
484 3.79 255 0.54 2.37 2.90 148 207
--------------------------------------------------------------------
485 4.76 370 2.14 1.42 5.51 240 342
--------------------------------------------------------------------
485 0.41 26 1.46 0.31 4.31 91.9 137
--------------------------------------------------------------------
Weighted Average 4.52 269 1.41 1.32 7.95 234 319
--------------------------------------------------------------------

Gross metal value per tonne (GMV/t) is the sum of the grades times
the metal prices of gold, silver, copper, lead and zinc. These values
do not take into account mining or processing costs and do not have
economic significance.
Zinc Equivalent (%): (Au g/t x 15.17/14.51) + (Ag g/t x 0.2421/14.51)
+ (Cu % x 40.21/14.51) + (Pb % x 9.927/14.51) + Zn %
Gold Equivalent (g/t): (Au g/t) + (Ag g/t x 0.2421/15.17) +
(Cu % x 40.21/15.17) + (Pb % x 9.927/15.17) + (Zn % 14.51/15.17)
(1) Long term metal prices: Au US$375.00/oz; Ag $US$5.50/oz;
Cu US$1.00/lb; Pb US$0.25/lb; Zn US$0.51/lb
(2) Current metal prices: Au US$471.80/oz; Ag US$7.53/oz;
Cu US$1.82/lb; Pb US$0.45/lb; Zn US$0.66/lb


Dick Whittington said:

"G-9 is developing into a significant polymetallic deposit with great resource potential both in terms of grade and tonnage. To date, the focus has been on the gold, silver and zinc; however, as hole 481 attests, there is excellent potential for good grades of copper as well. While it is premature to include this deposit into the resource base for the Pre-Feasibility Study that is currently underway, it will no doubt be incorporated into the resource base for the Feasibility Study that is anticipated to commence next year. We will be focusing considerable time and effort on defining the size and scope of this exciting new discovery."

The in-house qualified person for the drilling program at Campo Morado is Daniel Kilby, P.Eng. ALS Chemex is the analytical laboratory for the project; sample preparation is done in Guadalajara, Mexico and analysis is done in Vancouver, BC. All samples are assayed for gold by fire assay fusion with a gravimetric or Atomic Absorption (AA) finish. Silver, copper, lead, zinc and 27 to 30 additional elements are determined for all samples by acid digestion, followed by an AA or ICP finish. Duplicates are analyzed by Acme Analytical Laboratories in Vancouver.

Farallon has a strong cash position of C$13.2 million. Based on the success of the Company's 2004-2005 exploration and engineering programs, a new budget of $10.4 million was approved at mid-year that will enable the Company to complete its current drilling program and conclude a Pre-Feasibility Study by early 2006.

ON BEHALF OF THE BOARD OF DIRECTORS

J.R.H. Whittington, President and CEO

Forward Looking Information

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve or resources potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. The likelihood of future mining at Campo Morado is subject to a large number of risks and will require achievement of a number of technical, economic and legal objectives, including obtaining necessary mining and construction permits, completion of Pre-feasibility and final Feasibility studies, preparation of all necessary engineering for pits and processing facilities as well as receipt of significant additional financing to fund these objectives as well as funding mine construction. Such funding may not be available to the Company on acceptable terms or on any terms at all. There is no known ore at Campo Morado and there is no assurance that the mineralization at Campo Morado will ever be classified as ore. For more information on the Company and the risk factors inherent in its business, investors should review the Company's Annual Information Form at www.sedar.com.

To view the maps accompanying this press release please click on the following links:

http://www.ccnmatthews.com/docs/g9fan.pdf

http://www.ccnmatthews.com/docs/fanmap2.pdf

http://www.ccnmatthews.com/docs/fanmap3.pdf

No regulatory authority has approved or disapproved the information contained in this news release.

Contact Information

  • Farallon Resources Ltd.
    Shawn Wallace
    Investor Services
    (604) 684-6365 or Toll Free: 1-800-667-2114
    (604) 684-8092 (FAX)
    www.farallonresources.com