Otis Gold Corp.
TSX VENTURE : OOO

Otis Gold Corp.

March 02, 2009 05:30 ET

Otis Drills High-Grade Gold Intercepts at Kilgore

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 2, 2009) - Otis Gold Corp. ("Otis" or the "Company") (TSX VENTURE:OOO) is pleased to announce significant drilling results from the first two core holes of a four-hole, 2,083-foot drill program at its Kilgore Gold Project, Clark County, Idaho. The results confirm the presence of high-grade gold values from potentially mineable thicknesses and intervals within a higher-grade core zone in the Kilgore Mine Ridge area. This area was only partially drill-tested by Bear Creek, Pegasus Gold, Placer Dome U.S., and Echo Bay Mines between 1983 and 1996, while exploring the property for a bulk-tonnage, volcanic-hosted epithermal gold deposit (see Otis News Release dated June 10, 2008). Otis is in the process of exploring the Mine Ridge area for the presence of a high-grade deposit that can be exploited by underground mining methods.

The results, detailed in the Table below, are based on a 0.050 opt Au cutoff grade (or 1.71 grams/tonne). Some of the more notable intercepts include 27.2' @ 0.382 opt Au in hole 08 OKC-191 and 8.5' @ 0.706 opt Au in hole O8 OKC-193. Results of detailed core logging indicate the presence of late-stage visible gold in both holes. The holes were collared approximately 125 feet apart and lie along an east-west section in the historic Mine Ridge area. Results from the remaining two holes of the four-hole drill program are pending.



-----------------------------------------------------------------
Thickness
Interval Feet Grade Metric Grade
Hole Number Feet (metres) oz/ton grams/tonne
-----------------------------------------------------------------
08 OKC-191 137.2 - 141.5 4.3 1.767 opt 60.530
(1.31)

208.5 - 215.1 6.6 0.135 opt 4.635
(2.01)

239.7 - 266.9 27.2 0.382 opt 13.085
(8.29)

313.1 - 319.0 5.9 1.581 opt 54.148
(1.80)
-----------------------------------------------------------------
08 OKC-193 261.0 - 268.5 7.5 0.241 opt 8.237
(2.29)

433.0 - 441.5 8.5 0.706 opt 24.178
(2.59)
-----------------------------------------------------------------
Note: 1 Tonne is a metric tonne which is equal to 1.1024 short tons


Historically, spacing of holes drilled at Kilgore by the above mentioned companies generally varied between 200 feet and 400 feet, and although numerous high-grade intercepts were encountered during their drilling, the goal of trying to define a bulk-tonnage, open-pit gold deposit took precedence over attempting to delineate a high-grade underground deposit. As a result, the Kilgore Mine Ridge target area was only cursorily explored and never followed-up on in any detail, until now by Otis. Some of the better historic high-grade intercepts drilled within the core target area include 90' @ 1.091 opt Au (93 PK-56), 75' @ 0.222 opt Au (94 EKR-89), 45' @ 0.331 opt Au (95 EKM-5), and 65' @ 0.243 opt Au (94 EKR-86). All of these holes are in or immediately adjacent to the Mine Ridge area, where caved underground workings dating from the 1930's exist and are also within a radius of approximately 300 feet of Otis' high-grade drill intercepts reported in this News Release. Otis geologists are currently in the process of compiling all the high-grade drilling results and detailed geology into a three-dimensional computerized model to aid in placing additional core holes to further explore and define the underground target this upcoming field season.

Kilgore comprises a large, 5 square mile, volcanic-hosted epithermal gold system situated on the northern margin of the eastern Snake River Plain. Pliocene-age mineralization is hosted in Miocene lithic and crystal tuff on the margin of a caldera setting. Mineralization style and setting, host rock type and thickness, and overall size of the mineralizing system are analogous to those characterizing the Round Mountain, Nevada and McDonald Meadows, Montana multi-million ounce volcanic-hosted disseminated gold deposits, where high-grade, coarse-gold feeder veins also exist.

Between 1983 and 1996, a total of 122,257 feet of drilling in 190 holes was conducted on the Kilgore deposit by Bear Creek, Placer Dome U.S., Pegasus Gold, and Echo Bay Mines with the goal of defining a +1 million ounce bulk-tonnage, open-pittable gold deposit. A number of 43-101 non-compliant resource estimates were computed on the bulk-tonnage mineralization by Placer Dome U.S. and Echo Bay Mines. These estimates indicate a global resource of between 561,000 and 706,000 ounces of gold contained in the deposit depending on the cutoff grade used and the Company conducting the estimate (see Otis News Release dated June 10, 2008). These estimates, which are based on the above noted drilling, are mentioned for historic and reference purposes only, the issuer is not treating them as current mineral resources, and they are not to be relied upon. Subsequent to these estimates, in 2002 Rayner and Associates and Van Brunt conducted a NI 43-101 compliant resource estimate on the Kilgore bulk-tonnage deposit. Their estimate comprises 218,000 ounces of drill-indicated gold (7.043 MM tons @ 0.031 opt Au, 0.010 Au cutoff) and 269,000 ounces of inferred gold (9.661 MM tons @ 0.028 opt Au, 0.010 opt Au cutoff).

Analysis and Otis QA/QC Program

All assay work was performed by ALS Chemex Labs, Vancouver, B.C., which has ISO 9001:2000 certification and operates in compliance with ISO17025. A 50-gram pulp of all samples was assayed for gold by Fire Assay/AA finish methods. Subsequently, all samples containing greater than 10 ppm Au and all adjacent intervals were prepped into larger 1 kg samples from their original sample rejects and assayed by metallic screen analysis to check for the occurrence of gold in both the coarse +150 mesh and fine-grained -150 mesh fractions making up each sample. The original fire assays average 6.27% higher than the metallic screen analyses obtained on the larger samples. Otis is reporting only the lower metallic screen values in the above drill results table based on the belief that the larger 1 kg metallic screen samples are more representative of the nature of the high-grade gold mineralization at Kilgore. Analytical accuracy and precision were monitored by the use of commercially purchased reagent blanks, reference samples, and sample duplicates that were randomly inserted into the sample stream.

The HQ-size core drilling was conducted by Timberline Drilling Inc., Coeur d'Alene, Idaho in November and early December 2008 employing a Boart Longyear LF 70 model core drill outfitted with a split-tube core recovery system and face-discharge bits. Total depth of holes O8 OKC-191 and 08 OKC-193 is 459.1 and 459.7 feet, respectively. Down-hole directional surveys were performed on the holes to check for drift and to provide accurate subsurface locational data information regarding three-dimensional computerized modeling of drill results. Otis is currently working to earn a 75% joint venture interest in the property from its JV partner Bayswater Uranium Corp. (see Otis News Release dated June 10, 2008).

John R. Carden, Ph.D., Lic. Geo., and 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 currently owns five precious metals projects located in Idaho and Nevada, two of which, including Kilgore, have NI 43-101 compliant resources totaling in excess of 700,000 ounces of gold.

ON BEHALF OF THE BOARD

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.

Contact Information

  • Otis Gold Corp.
    Craig T. Lindsay
    President and CEO
    (604) 683-2507
    (604) 683-2506 (FAX)
    Email: craig@otisgold.com