Newmarket Gold Inc.
TSX : NMI

Newmarket Gold Inc.

July 27, 2015 06:45 ET

Newmarket Gold Identifies High-Grade Gold Mineralization on the Newly Discovered Eagle Fault Within Lower Phoenix System at Fosterville

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 27, 2015) - Newmarket Gold ("Newmarket" or the "Company")(TSX:NMI) is pleased to announce exploration results from 81 drill holes, comprising 17,002.5 metres ("m") completed during the course of a US$2.3 million exploration and resource definition program on the Lower Phoenix and Phoenix systems at Fosterville Gold Mine ("Fosterville"). The westerly dipping Lower Phoenix system hosts a number of growth exploration targets including the Lower Phoenix Footwall (LPFW), Lower Phoenix extensions, East Dipping, Kestrel and the newly identified Eagle Fault. Fosterville continues to produce extremely high-grade gold results, often containing visible gold, both in drill core and underground mine faces. The latest results confirm the presence of exceptionally high-grade drill core and continuity of gold mineralization in the Lower Phoenix system, one area that is a major source of ore at Fosterville.

Highlights and Key Drill Intercepts (Outside Mineral Resources Reported December 2014)

  • Discovery of the Eagle Fault with several holes reporting extremely high-grade gold drill intercepts. In particular, 386 g/t Au (1) over 9.15 m (ETW 3.35 m) in hole UDH1238 (Including 5,283 g/t Au(1) over 0.6 m), 268 g/t Au (1) over 7.85 m (ETW 2.77 m) in hole UDH1255 (Including 5,276 g/t Au(1) over 0.35 m) and 73.15 g/t Au (1) over 8.7 m (ETW 7.78 m) in hole UDH1240A. Visible Gold has also been observed in the upper parts of Eagle zone in underground exposures.
  • Lower Phoenix Footwall Fault returned high-grade intercept 77.87 g/t Au(1) over 6.3 m (ETW 4.33 m) in hole UDH1219A
  • An East Dipping Fault returned two significant intercepts with 246 g/t Au (1) over 0.90 m
    (ETW 0.81 m)
    in hole UDH1298 and 34.47 g/t Au over 5.1 m (ETW 4.09 m) in hole UDH1294
  • Kestrel structure returned 5.37 g/t Au over 9.75 m (ETW 5.12 m) in hole UDH1274 and 6.16 g/t Au over 11.05 m (ETW 5.12 m) in hole UDH1122

(1) Visible gold present in drill intercept, ETW - Estimated True Width, All drill results are presented in Table 1

Mr. Douglas Forster, President and Chief Executive Officer, Newmarket Gold commented: "The new drill results represent a second consecutive quarter of discoveries including the newly identified Eagle Fault and high-grade intercepts related to the previously discovered Lower Phoenix, East Dipping Faults and Kestrel structures. These results further expand the size and tenor of mineralization in Lower Phoenix and confirm significant gold mineralization at depth outside previously reported Indicated Mineral Resources. These drill results also represent the highest grades ever recorded at Fosterville and are encouraging as they support our view that Fosterville's grade profile will continue its increasing trend. Over the last six months, the performance and advancement of our exploration program has been impressive and has successfully demonstrated the potential of the Lower Phoenix system. We continue to build confidence in geological model extensions that have the potential to expand resources and reserves southwards along strike and laterally, adjacent to the existing Mineral Reserve base. Looking ahead, we remain focused on executing on near-term drill targets to ensure future sustainable production at Fosterville. We look forward to providing a Mineral Resource and Reserve update in early 2016 based on our drill results to date and those of ongoing drilling programs."

Fosterville Drilling Program

The US$2.3 million exploration program at Fosterville, which commenced late November 2014, has resulted in the completion of 81 holes comprising of 17,002.5 m to late June 2015 using four underground diamond drill rigs (Figure 1 and 2). The drilling focused on definition and exploration targets on the Phoenix, Lower Phoenix, Lower Phoenix Footwall (LPFW), East Dipping, Kestrel and newly identified Eagle Faults (Figure 3). Drilling is ongoing with four underground diamond drill rigs continuing to focus on the same targets.

A schematic geological cross section (Figure 3) illustrates the structural positions of the newly identified Eagle target with respect to the Phoenix, Lower Phoenix, LPFW, Kestrel and East Dipping Faults and associated gold mineralization.

All drill assay intercepts are provided in Table 1 and drill collars in Table 2.

Lower Phoenix, Lower Phoenix Footwall and Eagle Faults

The high-grade drill intercepts reported in holes UDH1255 and UDH1238 are associated with the junction of two mineralized faults, namely the west dipping Lower Phoenix and east dipping Eagle Faults. Adjacent to this junction the moderately west dipping LPFW structures are also strongly mineralized. All these structures commonly have visible gold in drill core and underground development (Figure 3). The overall mineralized system plunges to the south for at least 450 m and is untested along strike (Figure 4). The Lower Phoenix area will continue to be the focus of step out exploration and resource development programs (Figure 5).

The identification of these high-grade mineralized zones represents new and exciting exploration targets and assists with the geological understanding at Fosterville. The upper extents of this zone have been exposed through recent underground development on the 4340 m and 4320 m levels with detailed mapping aiding the focus of ongoing detailed drill programs which are required to adequately define these enriched mineralized zones.

The newly identified high-grade Eagle Fault is located in the footwall of the Lower Phoenix zone and differs from the previously mapped East Dipping Faults due to its structural relationship with bedding. Although it is most strongly mineralized at the junction with the Lower Phoenix Fault, the mineralization is also higher-grade down-dip for a distance of approximately 60 m (Figure 3). The dip and strike extent provides a significant opportunity for Mineral Resource / Reserve growth laterally adjacent to existing Mineral Reserves within the Lower Phoenix zone. The exploration and resource development will focus on this area in the coming months to allow for these higher grade zones to be included in a Mineral Resource and Reserve update for the Fosterville in early 2016. This drilling has the potential to increase Mineral Reserves on these high-grade zones, and contribute to the near term production profile due to the proximity to existing development

East Dipping Faults and Kestrel Structures

Drilling to date has improved confidence in the mineralization associated with the East Dipping Faults and Kestrel Structure, which also occur next to the Lower Phoenix Mineral Reserves. The width and high-grades of intercepts in drill holes UDH1298, UDH1294, UDH1274 and UDH1122 highlight the potential for Mineral Resource growth in these zones. (See Figures 6 and 7).

The East Dipping mineralized zones occur on a number of Faults that are mainly parallel to bedding. Underground mapping has identified highly mineralized ladder stockwork veins perpendicular to the bedding orientation. The zones that are typically limited in dip extent (Figure 3), occur in the footwall of the Lower Phoenix zone, and have been defined over a 1 km strike length. The East Dipping Faults contain significant visible gold in proximity to west dipping fault junctions.

The Kestrel mineralization is associated with a syncline axial plane and its limbs in proximity to the syncline. The strongest mineralization is associated with the axial plane and occurs as a vertical zone of quartz-carbonate stockwork veining and disseminated sulphide mineralization. The mineralization is traceable for approximately 1 km in strike and has dip lengths of up to 80 m. Preferentially enriched zones will be closely evaluated in upcoming Mineral Reserve studies.

Phoenix Structure

Drilling has continued to test for along strike (down-plunge) extensions of the Phoenix mineralization as part of the Company's growth project plan. Recently completed drilling targeted the Phoenix mineralization, approximately 25 m south of Mineral Resources and 125 m south of the Central Mineral Reserves. A drill result of 3.4 g/t Au over 3.4 m (ETW 3.33 m) in UDE113A confirms that the Phoenix structure continues to be mineralized to the 6325 mN and requires additional drilling to evaluate Mineral Resource/Reserve growth potential along this structure (Figure 5)

In addition, continued resource definition drilling on the Phoenix structure has also returned positive drill results outside M&I Mineral Resource extents, with UDH1016 returning 7.49g/t Au over 5.05 m (ETW 4.59 m).

Qualified Person

Mark Edwards, MAusIMM (CP), MAIG, General Manager, Exploration, Newmarket Gold, is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this press release.

QAQC information is provided at the bottom of Table 1.

ON BEHALF OF THE BOARD

Douglas Forster, M.Sc., P.Geo.

President & Chief Executive Officer

About Newmarket Gold Inc.

Newmarket Gold is a Canadian-listed gold mining and exploration company with three 100% owned operating mines across Australia. The Company is focused on creating substantial shareholder value by maintaining a strong foundation of quality gold production, over 200,000 ounces annually, generating free cash flow and maintaining a large resource base as it executes a clearly defined gold asset consolidation strategy. The Company is focused on sustainable operating performance, a disciplined approach to growth, and building gold reserves and resources while maintaining the high standards that the Newmarket Gold core values represent.

Cautionary Note Regarding Forward Looking Information

Certain information set forth in this news release contains "forward-looking statements", and "forward-looking information under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements, which include the Company's expectations about its business and operations, and are based on the Company's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "will", "expects", "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance or outcomes and undue reliance should not be placed on them. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are included in this press release or incorporated by reference herein, except in accordance with applicable securities laws.

To view the figures and tables associated with this press release, please visit the following link: http://media3.marketwire.com/docs/FostervilleExplorationPR1%20-%201018767%20-2.pdf

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