July 19, 2005 09:12 ET

New Sleeper Gold Corporation Reports Financial Results for the Year Ended March 31, 2005 and Option Agreement on Clover Property

LONGUEUIL, QUEBEC--(CCNMatthews - July 19, 2005) - New Sleeper Gold Corporation (TSX VENTURE:NWS) is pleased to announce the filing of its consolidated financial statements and related notes for the year ended March 31, 2005 as well as the management's discussion and analysis prepared in conjunction with such statements. These documents can be viewed electronically on SEDAR ( and on the New Sleeper's web site (

New Sleeper's Annual General and Special Meeting will be held at the Hilton Toronto, 145 Richmond Street West, Toronto, Ontario, on September 15, 2005, at 10:00 am (Toronto time).

Financial Results

For the year ended March 31, 2005, the Company incurred a loss of $2,271,600 or $0.06 per share compared to a loss of $1,062,700 or $0.05 per share for the initial 136-day period ended March 31, 2004 (i.e. since the date of incorporation of Former NSGC).

Interest income related to the average cash equivalent available to the Company for the year amounted to $168,000 and $50,400 for the period ended March 31, 2004. Other revenues related to the 16.5% working interest in the Three Hills property amounted to $26,100 for year ended March 31, 2005.

For the year, the Company incurred administrative expenses of $1,244,400 and business development expenses amounted to $600,100 compared to $477,000 and $206,400 respectively in the previous 136-day period ended March 31, 2004.

Stock based compensation related to options to purchase shares granted during the year (see note 12c to the Consolidated Financial Statements) amounted to $361,800 and to $659,400 in the previous period. The contributed surplus was increased by the same amounts.

Loss on foreign exchange for the period amounted to $339,200 compared to a gain of $232,100 for the previous period and resulted mostly from timing differences between the date where investments in monetary items denominated in US dollars were made and the exchange rate as at March 31, 2005.

An analysis of administrative and development expenses totaling $1,844,500 for the year and $683,400 for the previous period can be summarized as follows:

Remuneration $835,300 $274,600
Professional fees, legal, accounting
and other $151,000 $221,300
Travel expenses $306,100 $107,200
Insurance, rentals and other office
expenses $552,100 $80,300
$1,844,500 $683,400

Consolidated Cash Flows

Operating Activities

After making adjustments in respect of share-based compensation, amortization, loss on foreign exchange, future income tax recovery and other non-cash items, cash used in operations totalled $1,727,900 for the year ended Mach 31, 2005, compared to $472,900 for the previous period. After changes in working capital items cash flows used in operating activities amounted to $2,056,600 for the year ended March 31, 2005 and to $393,800 for the previous period.

Investing Activities

On January 9, 2004, as described in Note 4a to the consolidated financial statements, the Company acquired an interest of 50% in the Sleeper Project for a cash cost of $15,571,200. At the same time, another amount was put in escrow in view of obtaining a surety bond to replace another bond and trust fund posted with US environmental agencies. Out of the escrow account, and as further described in Note 7 to the consolidated financial statements, an insurance backed financial assurance program was paid for to include a mine reclamation policy and a pollution legal liability policy for the project. The premium included a commutation account to cover certain reclamation costs. The net participation of the Company in the escrow account, the prepaid insurance premium and the commutation account amounts to respectively $1,659,900, $1,390,300 and $2,004,500 for the period ended March 31, 2004. The commutation account amounting to $1,641,700 was released from escrow during the year ended March 31, 2005.

For the year ended March 31, 2005, the participation of the Company in exploration expenditures on the property has amounted to $4,437,500 ($4,597,700 in cash), of which $1,153,000 for geology and $2,541,600 in drilling and assaying costs. From the date of the acquisition to March 31, 2004, the participation of the Company in exploration expenditures on the property has amounted to $593,300 ($370,500 in cash).

Investments on the property are summarized in the "Consolidated Expenditures on Exploration Projects" statement.

For the period ended March 31, 2004, an inflow of $107,400 resulted from the reverse take over described in Note 4b to the consolidated financial statements.

Financing Activities

For the year ended March 31, 2005, 96,667 common shares were issued pursuant to the exercise of warrants for $36,250, and expenditures related to the issuance of common shares in the previous period amounted to $158,100. For the period ended March 31, 2004, and as more fully described in Note 12a of the Consolidated Financial Statements, the product of shares and warrants issues amounted to $34,060,000, of which $32,922,000 in cash. Common shares issue expenses amounted to $3,627,200 ($2,441,300 in cash).

Balance Sheet

At March 31, 2005, the Company's assets stood at $32,402,100 ($35,046,600 in 2004) including $4,198,700 in cash and cash equivalents ($9,162,400 in 2004) and $24,790,000 in exploration projects ($20,352,500 in 2004).

At March 31, 2005, working capital stood at $4,171,200, net of current liabilities amounting to $419,000.

Based on assumptions from Management, the present value of the participation of the Company in the environmental obligations to which the Sleeper Project is subjected under the terms of permits granted by the U.S. Bureau of Land Management and the Nevada Division of Environmental Protection in connection with past operations amounts to $526,300 as at March 31, 2005 compared to $657,400 as at March 31, 2004. The Company paid for an insurance-backed financial assurance program including a mine reclamation policy and a pollution legal liability policy for the Sleeper project. The mine reclamation policy included a commutation account of $1,760,970 as at March 31, 2005, ($2,053,771 as at March 31, 2004). This account will used to pay reclamation costs and indemnity claims paid by the Company from time to time. The Company has further accounted for $3,301,000 ($3,488,000 as at March 31, 2004) in future income taxes related to the acquisition of the Sleeper Project.

As discussed above in "Financing Activities", the capital stock amounts to $34,096,200. The contributed surplus related to stock base compensation amounts to $1,021,100 and the deficit totals $6,961,500.

Exploration Activities

The Company is engaged in the exploration and development of the Sleeper Project through a participation of 50% in a joint venture, New Sleeper Gold LLC ("NSG LLC"). The Sleeper Project, located in the Awakening Mining District, Humboldt County, Nevada, U.S.A. is the principal property on which it intends to expend a substantial portion of its funds. The Company may also stake or acquire other lands or mineral properties as such opportunities arise.

The Sleeper Project comprises 1,010 unpatented lode and placer mining claims totaling approximately 30 square miles (8,175 hectares), in Desert Valley and the adjoining Slumbering Hills, Awakening Mining District, Humboldt County, Nevada, U.S.A. These claims cover parts of Sections 3 to 11, 14 to 23 and 26 to 36, inclusive, in Township 40 North, Range 35 East, and Sections 1 to 3, and 10 to 12, inclusive, Township 39 North, Range 35 East, Mount Diablo Base and Meridian, Humboldt County, Nevada, U.S.A. The claims are contiguous. The U.S. Government owns the surface rights to the unpatented lode and placer claims.

The Sleeper Project covers a large area and includes many quality exploration targets. Viable target types include near surface bulk mineable mineralization as well as high-grade bonanza gold-silver epithermal vein mineralization that would likely involve underground mining.

During 2004, NSG LLC conducted an extensive work exploration program to advance the knowledge of the property. In terms of identifying and ranking targets for drilling NSG LLC's goal were to: 1) confirm and increase the level of confidence in known gold resources, and 2) find additional gold resources.

Initial exploration efforts were focused on the most advanced and best known targets, namely, West Wood, Facilities and the Sleeper Pit areas. Additional exploration work and drilling were carried out in the Alma-Dome-Electrum areas, the Bedrock Casino prospect, the Sleeper South areas, and on Heap Leach Pad 1.

West Wood

The West Wood zone is located on the south western edge of the Sleeper Pit. Previous work by Amax and X-Cal had identified a gold bearing hydrothermal breccia body. An aggressive program of core drilling to test the volumetric potential and gold distribution of the breccia system was carried out.

The mineralization was not closed off at the north or south margin of the breccia. The southern portion of the breccia appears offset to the west. The mineralization at West Wood is included in the resources calculation currently underway.

Facilities Area

The Facilities area is located on the east side of the Sleeper Pit, in the area where Amax's crusher treatment plant was located. Twenty-two reverse circulation holes totaling 13,985 feet (4,262 m) were completed to test previously identified low-grade mineralization in this area.

Based on 2004 modelling and drilling, the original target concept of defining a low-grade, greater than 100,000 ounce oxide gold resource, amenable to open-pit mining methods, has been discounted. However, a smaller higher-grade resource contained in structural corridors, as well as extensions of known mineralization from Amax's Office Pit would appear to exist. Further drilling to confirm and quantify this will be required. The resources at Facilities are included in the ongoing resource work.

Sleeper Pit

Considerable effort was expended on drilling deep under the Sleeper Pit. Six core holes and a directional drill hole for 14,744ft (4494m) drilled to the east were completed. With holes set at a declination of 45o, the under-pit drilling cut down dip projections of the Sleeper and Wood veins mined by Amax. The strike length covered by the drilling was 0.75 miles (1.2km). This drilling intersected alteration, silicification and sulfide zones which are interpreted to be feeder zones to the mineralization mined in the pit but gold grades were less than 1g/t Au.


The Alma-Dome-Electrum areas are located approximately 5 km (3 mi) south-east of the Sleeper Pit. Detailed surface and underground mapping, rock chip and channel sampling programs were completed in the old Alma mine area. Preliminary mapping and rock chip sampling programs were completed in the Dome and Electrum areas, to add to previous geochemistry work. An extensive 1,800 sample soil grid was completed over the entire Alma-Dome-Electrum complex to give more complete geochemical coverage. These programs identified a number of multi-element anomalies in the Mesozoic midstones and sandstones.

The first pass RC drilling at Dome did not encounter ore grade intercepts but confirmed that quartz-sericite-pyrite alteration and anomalous values exist at depth with the Dome rhyolite. Testing of the north-south high-grade structural trend at Alma showed erratic gold values tightly controlled by narrow fracture zones. Testing of the Electrum anomalies will take place in 2005. No further work is currently planned at Alma or Dome as higher priority targets exist in the vicinity of the Sleeper Pit.

Leach Pad 1

A program of 17 Sonic drilling holes was planned for Leach Pad 1 to test for residual gold unextracted by the previous leaching due to inefficiencies in the process. This program is allied to metallurgical testwork to determine whether retreatment of this pad and possibly other leach pads is justified. As of year-end, the testwork was still in progress.

Other Geological Activities

In addition to testing the above mentioned obvious drill targets, considerable work was done to improve the geologic model of the Sleeper deposit. This entailed geological compilation, ground gravity surveys, electrical geophysics (IP), soil and rock geochemistry, and a mercury vapor survey over all of the non-outcropping areas of the 30 square mile claim block. The strategy behind this activity was to define other exploration targets within the project area that might lead to discovery of another "Sleeper-like" deposit. By year-end, a number of targets had been identified in the hills to the east of the Sleeper pit and in the pediment west of the pit.


The Company has liquidity of $4,198,700 as at the end of the year and believes that it will be able to meet its commitments into 2005.

The Company's efforts in 2005 will be focused on continuing to find sufficient gold mineralization at Sleeper to justify redevelopment of a mine. The sources of this mineralization could be known areas in the vicinity of the mined-out pit which are currently the subject of a resource calculation exercise, or the discovery of a "new" Sleeper-style gold deposit.

The resource calculation is due for completion in the fourth quarter of calendar 2005. In addition to the resources themselves, some potential economics of mining and processing will be investigated.

Management continues to believe that there is a significant possibility that additional Sleeper-style orebodies exist in the vicinity of the mine. Generative exploration activities in 2004 have identified a number of possible targets that will be followed up in 2005.

The Sleeper joint venture technical committee has approved a US $5 million work program for 2005 to advance these activities. However, a significant portion of this is discretionary and predicated on following up exploration success. The participants equally fund the costs of this program.

In addition, the Company's management has identified a number of other projects that are attractive to the Company. Management believes that it is prudent to diversify the Company's portfolio, provided strict criteria are met for any new projects. It is anticipated that one or two new projects will be brought in during 2005. These will also make best use of the Company's resources particularly the technical expertise of the Company's personnel.

The Company's operations and activities are financed through cash resources generated by equity issues. While the Company believes it has sufficient resources to fund the majority of activities in 2005, future exploration is dependent on the availability of this funding.

The availability of this funding is dependent not only on exploration success but on certain factors beyond its control, such as general market liquidity, price of gold, and willingness of investors to make more speculative exploration investments.

It is anticipated that the Company will find it necessary to raise further capital towards the end of 2005.

Management will use its best efforts to obtain funding, and utilize this funding on projects it believes justify such investment.

Option on Clover Property, Nevada

New Sleeper Gold Corporation (TSX VENTURE:NWS) is pleased to announce that is has entered into an option agreement with Atna Resources Ltd. (TSX:ATN) in connection with the Clover property located in Nevada. The agreement provides that New Sleeper may acquire up to a 70% interest in Atna's rights in the Clover property and form a joint venture. The Clover property is located about 18 km west of Newmont's Ken Snyder Mine and is situated along the northern margin of the Midas trough, on the southwest flank of the Snowstorm Mountains.

Under the terms of the agreement, New Sleeper may earn a 55% interest by paying to Atna US$50,000 upon execution of the option agreement (which amount has been paid), spending US$2,000,000 on exploration and development expenditures on the Clover property within 4 years and completing, over a 24-month period, a 10,000 ft drilling program. The expenditure and drilling requirements are divided into three phases ending respectively six months, twelve months and twenty-four months from the date of the option agreement. Upon exercise of the initial option, a joint venture (New Sleeper 55% / Atna 45%) would automatically be formed and New Sleeper may elect to earn an additional 15% interest by completing a full feasibility study.

Clover is underlain by mid-Miocene aged bi-modal volcanic rocks, on the western margin of the Northern Nevada Rift. These rocks are the stratigraphic equivalents to units that host bonanza veins in the Midas district. Altered rhyolitic volcaniclastic rocks exposed throughout the property contain anomalous gold (20-70 ppb).

Gold mineralization occurs within a north-northwest trending, structurally complex corridor named the Jake Creek trend. Mineralization occurs within two zones that are largely open along strike and down-dip. This northwesterly trending structural corridor hosts altered and mineralized volcanic rocks in a similar setting to the Ken Snyder Deposit. Drilling by previous operators intersected mineralized and veined breccias with significant intercepts including 9.7m grading 25.3 g/t Au, 7.6m of 7.9 g/t Au, and 3m grading 10.0 g/t Au. High-grade float boulders grading up to 30.9 g/t Au and 308.6 g/t Ag in grab samples, were discovered on the property, approximately 3km north-northwest of this drilling.

The technical information contained in this release was reviewed by Mr. Adrian Fleming, a qualified person under Canadian Securities Administrators National Instrument 43-101. Mr. Fleming is a corporate member of the Australasian Institute of Mining and Metallurgy, a member of the Australian Institute of Geoscientists, and a member of the Society of Economic Geologists. Mr. Fleming is the Exploration Manager for New Sleeper's project in Nevada.

Forward Looking Statements

Some of the statements contained in this press release are forward-looking statements. Forward-looking statements are not historical facts, and are subject to a number of risks and uncertainties beyond the Company's control, including statements regarding potential mineralization and reserves, exploration results and future plans and objectives of the Company. There is no assurance that indicated or measured resources, or probable or proven reserves will be defined at the Sleeper Project. The successful exploration and development of the Sleeper Project will depend on many factors, including successful completion of a feasibility study, substantial additional financing for exploration and development of a mine at the Sleeper Project, unpredictable fluctuations in the gold price and currency exchange rates; and the additional risks and information described in detail in the "Risk Factors" section of the Filing Statement filed by New Sleeper Gold Corporation on March 19, 2004 accessible at

Forward-looking statements contain in this release are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. There can be no assurance that such statements will prove accurate. Actual results may differ materially from those anticipated or projected.

Additional information

Additional information about the Company is available through regular filings and press releases on SEDAR ( and on the Company's website (

The consolidated financial statements and explanatory notes for the year ended March 31, 2005 are available in PDF format through the CCNMatthews' website at:

The Management's Discussion and Analysis (MD&A) is also available at the following address:

Contact Information