Otis Gold Corp.

Otis Gold Corp.

September 07, 2011 08:30 ET

Otis Drills Discovery Holes at Prospect Ridge; Mine Ridge Deposit Continues to Grow

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 7, 2011) - Otis Gold Corp. (TSX VENTURE:OOO)(OTCQX:OGLDF)(PINK SHEETS:OGLDF) ("Otis" or the "Company") is pleased to announce results from the first seven core holes of its Kilgore Gold Project ("Kilgore") drill program, Clark County, Idaho, all of which contain significant intercepts. Highlights of the drill program include:

  • The first four holes drilled at Prospect Ridge, located to the southeast and on strike with the known Mine Ridge deposit, intercepted gold mineralization, and are roughly on strike with historic Echo Bay hole 95 EKR-98 that contains 27.4 m @ 1.30 g/t Au and is located approximately 300 metres to the southeast of the first four Prospect Ridge holes. This is significant as Otis has long believed that Kilgore has the potential to host additional deposits to the existing Mine Ridge deposit; and
  • The first three holes drilled at Mine Ridge, which were placed as infills to test gaps that exist in the Mine Ridge deposit, also intercepted significant gold mineralization. This is important as the holes continue to confirm excellent continuity of the thickness and grade found throughout the known Mine Ridge deposit.

Prospect Ridge Drill Program: The first four holes drilled into the rhyolite dome at Prospect Ridge, specifically 11 OKC-248, 249, 251, and 252, collectively comprise intercepts that extend the Mine Ridge deposit at least 130 metres beyond its previously known southeastern boundary, which remains open to the southeast. These intercepts include 64.0 metres (m) of 0.40 grams per tonne gold (g/t Au), inclusive of 22.9 m @ 0.78 g/t Au, all in hole 11 OKC-252, and 10.6 m @ 1.20 g/t Au in hole 11 OKC- 249 (see Table 1 below). Furthermore, these intercepts are roughly on strike with historic Echo Bay hole 95 EKR-98 that contains 27.4 m @ 1.30 g/t Au and is located approximately 300 metres further to the southeast. No drilling currently exists between the new Otis hits and this historic Echo Bay hole, leaving potential to expand the deposit even further southeast, possibly to the lithic tuff host on the southeast side of the dome.

Mine Ridge Drill Program: The remaining three holes of this first seven were drilled as infill holes to test gaps that exist in the central portion of the Mine Ridge deposit. Results continue to confirm good continuity of thickness and grade found throughout the deposit. All three holes contain significant intercepts that include 32 m @ 1.15 g/t Au in hole 11 OKC-247, 32.0 m @ 0.60 g/t Au and 18.2 m @ 1.29 g/t Au in hole 11 OKC-250, and 61.9 m @ 0.59 g/t Au and 33.1 m @ 1.27 g/t Au in hole 11 OKC-253 (see Table 1 below).

These new intervals, in combination with other significant bulk-tonnage intercepts determined for the majority of the Company's core holes drilled during 2008 through 2010 in the main Mine Ridge deposit area, all support a high degree of confidence concerning continuity of mineralization throughout the deposit. These results further indicate mineralized thicknesses and average grades that are greater than those constituting the majority of the intervals comprising the historic Kilgore NI 43-101 compliant resource (Otis March 2, 2009 News Release). Based on these overall results, Otis continues to expect that there is a strong probability to increase the overall size, grade, and economic viability of the Kilgore Mine Ridge deposit.

With the recent addition of three more planned holes to offset and infill critical areas, Otis' 2011 Kilgore drill program now comprises approximately 10,000 metres of core drilling spread among a minimum of 40 holes.

Table 1. Otis Gold 2011 Kilgore Gold Project Drill Highlights – First Seven Holes
Hole Number From (metres ) To (metres ) Thickness (metres ) Grade (g/t Au )
11 OKC-247 72.2 104.2 32.0 1.15
11 OKC-248 50.3 51.8 1.5 2.76
70.1 73.1 3.0 0.52
108.0 114.3 6.3 0.43
11 OKC-249 106.1 109.1 3.0 0.93
182.3 192.9 10.6 1.20
11 OKC-250 48.2 80.2 32.0 0.60
124.4 142.6 18.2 1.29
192.9 194.4 1.5 2.05
11 OKC-251 39.0 40.5 1.5 0.78
104.6 107.6 3.0 0.72
11 OKC-252 128.9 192.9 64.0 0.40
includes 133.5 156.4 22.9 0.78
11 OKC-253 69.5 131.4 61.9 0.59
includes 101.5 117.7 16.2 0.90
includes 125.3 131.4 6.1 1.14
206.0 239.1 33.1 1.27

Work on an updated NI 43-101 resource estimate and three-dimensional computer modeling of the deposit is currently being conducted by Mr. Dean Turner, P. Geo., Littleton, Colorado, an Independent Qualified Person as defined by NI 43-101. This new estimate, considered an interim resource estimate because it will not include any of this year's drill results, is anticipated to be completed before the end of the third quarter of this year. Otis is still extending the limits of the deposit and, as a result, this interim resource will be updated with the 2011 drilling results in the first quarter of 2012.

Locations of these first seven holes, which total 1,763 metres of drilling, and their corresponding assay intercepts, are shown in a drill-hole location map available on the Otis Gold Corp. website at www.otisgold.com/projects/kilgore/technical/.

Analysis and Otis QA/QC Program

All assay work was performed by ALS Chemex Labs, Elko, Nevada, which has ISO 9001:2008 quality management system certification and ISO 17025:2005 technical capability accreditation. A 50-gram pulp of all samples was assayed for gold by Fire Assay/AA finish methods. Certified reference materials, duplicates, and blanks were inserted into the sample stream for quality control.

True bulk-tonnage widths are estimated to be between 90% and 100% of the drilled interval, based on their estimated dip, association with diking, and continuity of mineralization between drill holes. The HQ3-size core drilling is being performed by Timberline Drilling, Inc., Coeur d'Alene, Idaho, employing two Sandvik DE-140 core drills outfitted with a triple-tube core recovery system and face-discharge bits. Drilling continues on a full-time, around-the-clock basis. Currently, due to the high volume and backlog of samples submitted to geochemical labs as a result of intense drilling activity for gold in the United States, ALS Chemex is running about 30 days behind schedule. As a result of this situation and with the 2011 Kilgore Project drilling and logging projected to be completed by early December, results for the remaining 33 holes will be reported as they are received through the fall of 2011 and into the early winter of 2012.

John R. Carden, Ph.D., Lic. Geo., a Qualified Person as defined by National Instrument Policy 43-101, is responsible for the technical information contained in this News Release.

About the Company

Otis is a resource company focused on the acquisition, exploration, and development of precious metal deposits in Idaho, USA. Otis is currently developing its flagship property, the Kilgore Gold Project, Clark County, Idaho.


Craig T. Lindsay, President and CEO

This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The TSX Venture Exchange has neither approved or disapproved of the contents herein.

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