Intrepid Mines Limited
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Intrepid Mines Limited

May 31, 2011 08:46 ET

Intrepid Mines Limited: Shyri Project Ecuador-Gold-Copper Porphyry Discovery at Gama Prospect

- 45 Metres at 0.71 Grams Per Tonne (g/t) Gold and 0.18% Copper, Within A Broader Zone of 101 Metres at 0.41 g/t Gold and 0.13% Copper

- Drilling Results Confirm the Porphyry-High Sulphidation Model

TORONTO, ONTARIO--(Marketwire - May 31, 2011) - Intrepid Mines Limited (TSX:IAU)(ASX:IAU) ("the Company") and Cornerstone Capital Resources Inc. ("Cornerstone") (TSX VENTURE:CGP)(PINK SHEETS:CTNXF)(FRANKFURT:GWN)(BERLIN:GWN) today announced that they have completed the first six holes of the 11-hole (2,900 metres) Phase 1 diamond drilling program on the Gama prospect, located in the northwestern part of the Shyri property in southern Ecuador.

Intrepid is earning an initial 60% interest in the Shyri project, and may earn an additional 20% on specific project areas (see below for detail of the option agreement).

Drilling commenced on March 6th, 2011 and is ongoing. A summary of assay results for holes GAD-11-001 to GAD-11-005, each of which is mineralised, is provided below in Table 1.

Highlights:

  • Hole GAD-11-002 intersected 45 metres at 0.71 g/t gold and 0.18% copper within a broader zone of 101 metres at 0.41 g/t gold and 0.13% copper in a porphyry environment.

  • Drilling results to date have confirmed the porphyry – high sulphidation epithermal deposit model developed earlier, the very large size and strong intensity of the hydrothermal alteration system present at Gama, and the widespread distribution of gold and copper within the lower, porphyry part of the system.

"The geology encountered in the first part of this scout drilling program is very encouraging," said Brooke Macdonald, Cornerstone's President. "The size, intensity and complexity of the hydrothermal systems are confirmed. Gold and copper are present over large areas and occur in multiple rock units. A significant mineralized gold-copper zone was intersected in the porphyry in hole GAD-002, and this zone is open in all directions. We are now moving north and east into the epithermal part of the system, and are hoping to receive good results from this primary target".

Table 1: Summary of Gama Drill Results, Phase 1 Program
Hole No.TargetElevationLengthFromToIntervalAuAgCuMo
(masl)(m)(m)(m)(m)*(g/t)(g/t)(ppm)(ppm)
GAD-11-001F3501231.044.0215.0Multiple 1 to 5 m wide intercepts of 0.1 to 0.2 g/t Au
126.0131.05.00.11%
136.0137.01.00.47762
215.0217.02.037.9
GAD-11-002F3448329.8125.0226.0101.00.410.13%
Including172.0217.045.00.710.18%
GAD-11-003E3410253.04.020.016.00.1388
88.0100.012.00.1534
GAD-11-004E3461187.516.042.026.00.1552
84.0159.075.00.26415
175.0187.4512.450.19331
GAD-11-005D3480261.598.0124.026.00.10
GAD-11-006C3690244.0Completed, assays pending
GAD-11-007Ermita Breccia3819In progress

* The reported intervals are core lengths. At present the true thicknesses are uncertain due to the early stage of drilling.

"Intrepid is encouraged by these results from the first drilling program at Gama Prospect. They confirm the geological model and have delivered some positive assay results. These first five holes have provided an excellent start to discovering a potentially significant gold-copper system" said Malcolm Norris, EGM Exploration and New Business at Intrepid Mines.

To view the figure associated with this release, please visit the following link: http://media3.marketwire.com/docs/fig1int531.pdf

See also www.cornerstoneresources.com for further information.

Forward-looking statements

This announcement contains certain forward-looking statements, relating to, but not limited to Intrepid's expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied.

Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Statements relating to gold resource estimates are expressions of judgment, based on knowledge and experience and may require revision based on actual production experience. Such estimates are necessarily imprecise and depend to some extent on statistical inferences and other assumptions, such as gold prices, cut-off grades and operating costs, which may prove to be inaccurate.

Qualified Person

The information in this announcement that relates to exploration results at Shyri is based on information compiled by or under the supervision of Malcolm Norris, who is a full-time employee of Intrepid Mines Limited. Mr. Norris has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and a Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr. Norris consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Logging, sampling and assaying

All holes drilled by Cornerstone are HTW (35%) and NTW (65%) in size. Geotechnical measurements such as core recovery, fracturing, rock quality designations (RQD's), hardness and photographic logging are performed systematically prior to assaying. The core is logged, magnetic susceptibility measured and key alteration minerals identified using an on-site portable spectrometer. Core is then systematically sawed in half at Cornerstone's core logging facility in Cuenca, Ecuador. Half of the core is delivered by Cornerstone employees for preparation at Acme Analytical Laboratories (ACME) facility in Cuenca. Core samples are prepared crushing 1 kg to 80% passing 2 mm (10 mesh), splitting 250 g and pulverizing to 85% passing 0.075 mm (200 mesh) (ACME code R200-250). Prepared samples are then shipped to ACME in Vancouver, Canada where samples are assayed for a multi-elements suite (ACME code 1E, 0.25g split, 4-acid digestion, ICP-ES finish). Gold is assayed using a 30 g split, Fire Assay (FA) and AA or ICP-ES finish (ACME code G601).

Quality assurance / Quality control (QA/QC)

The ACME preparation facility in Cuenca was audited by Cornerstone prior to the start of the drilling program and ACME is an ISO 9001:2008 qualified assayer that performs and makes available internal assaying controls. Duplicates, certified blanks and standards are systematically used as part of Cornerstone's QA/QC program. Rejects, a 100 g pulp for each core sample and the remaining half-core are stored in Cuenca for future use and controls.

Shyri Option Agreement

Intrepid Mines Limited ("Intrepid") is earning a 60% interest in the Shyri gold-silver-copper property under an option agreement signed with Cornerstone in January 2011. Under the terms of the Agreement, Intrepid has the ability to earn an initial 60% interest in the property by spending $US 6.0 million dollars over 5 years, with a firm commitment of $US 1.0 million in the first year. Intrepid may earn an additional 20% in specific project areas up to 5,000 hectares each. Upon designation of a Project Area, Intrepid will make a $US 750,000 private placement in Cornerstone. To earn the additional interest, Intrepid will complete a bankable feasibility study or incur expenditures of $US 20 million, whichever comes first, and make a cash payment to Cornerstone of up to $US 5.0 million based on the gold equivalent ounces in the mineral reserve. There is no limit to the number of Project Areas Intrepid may designate within the property and each 'stand-alone' Project Area requires the same earn-in requirements (see news release dated Oct 29, 2009). Cornerstone is the project operator, and manages the exploration programs in close consultation and planning with Intrepid.

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