PC Gold Inc.
TSX : PKL

PC Gold Inc.

April 18, 2011 07:30 ET

PC Gold Announces Initial 1.26 Million Ounce Gold Resource for Pickle Crow

OTTAWA, ONTARIO--(Marketwire - April 18, 2011) - PC Gold Inc. (the "Company") (TSX:PKL) is pleased to announce the first National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate for the Company's Pickle Crow gold mine property in northwestern Ontario, Canada.

The resource estimate was prepared by Fladgate Exploration Consulting Corporation and audited and approved by Micon International Limited ("Micon"). The resource estimate is entirely classified as inferred mineral resources and totals 10,150,000 tonnes averaging 3.9 g/t Au for 1.26 million ounces of contained gold (cut and diluted), comprising both potential underground and open pit mineable mineralization as shown in Table 1:

TABLE 1: PICKLE CROW INFERRED MINERAL RESOURCES – APRIL 18, 2011
Pickle Crow MineCategoryGrade
Au g/t
TonnesOuncesCut-off Grade
Au g/t
Percentage of Total Ounces
TotalUnderground5.46,522,0001,136,0002.25*90
TotalOpen Pit1.13,628,000126,0000.3510
Grand Total3.910,150,0001,262,000
* Represents a combination of potentially bulk mineable underground resources (2.0 g/t cut-off) and cut-and-fill underground resources (2.8 g/t cut-off, with vein intersections diluted to a minimum of 1 metre).

In compliance with the CIM Definition Standards requirement of "reasonable prospects for economic extraction" several mining and milling scenarios for a "new" Pickle Crow have been evaluated. These scenarios suggest reasonable prospects of sustaining future milling throughputs, and gold production, at levels considerably above historical norms for the property. Lower unit operating costs of larger mill throughputs, supported by the bulk mineable and open-pittable zones, have been used in selecting the cut-off grades for resource reporting.

Subject to dewatering and reconditioning, the mine's existing underground infrastructure (>40 km of lateral workings including three surface shafts (1, 3 and Albany) and 2 internal winze shafts) would provide direct or proximal access to every one of the underground zones included in this initial resource estimate, significantly adding to its in-situ value. Potentially open pittable resources are situated at surface under generally shallow overburden.

"This high quality initial mineral resource estimate confirms the value of the Pickle Crow gold mine asset," said Kevin Keough, President and CEO. "It provides an excellent foundation for moving the Pickle Crow project forward. The resource comprises 600,000 ounces in underground high grade veins averaging over 9 g/t, cut and diluted, the same material the old timers mined, and 536,000 ounces in new, bulk mineable underground zones averaging close to 4 g/t, with an additional new 126,000 ounce open pit component, all of which remain open for expansion. Combining feed from these various mining styles will allow for considerably more flexibility in future mine design and a potentially much larger operation than the historical operators of Pickle Crow might have imagined.

The near-term goal is to complete a preliminary economic assessment and secure permits for advanced exploration, which will include dewatering of the historic mine workings. Dewatering will allow underground drilling to be completed in support of expanding and upgrading resources and further engineering and other studies beyond the PEA to evaluate the potential for a future renewal of mining operations at Pickle Crow."

Representing the culmination of more than three years of work, this initial resource estimate reflects the digitization and modeling of a large body of data including:

  • 1,430 historical drill holes totaling 87,800 metres;
  • 103 confirmation and exploration PC Gold drill holes totaling 39,134 metres;
  • 27,826 level and stope chip samples from underground development;
  • >40 km of lateral workings and stopes; and
  • 720 metres of sampling in 45 channels from newly stripped surface areas

This initial mineral resource is restricted to the historical Pickle Crow mine proper and encompasses three areas (Shaft 1, Shaft 3, and Albany Shaft – all interconnected underground) totaling 17 separate mineralized zones, including banded iron formation "BIF" hosted, conduit-style (shear zone) hosted, and high-grade quartz vein hosted mineralization. The detailed breakout by shaft and zone is shown in Table 2, below. The mineral resource does not include mineralized zones located away from the mine such as the Powder House and new Central Pat East discovery, which provide near term avenues for further expanding the total resources present on the property. The mineral resource extends from surface to a maximum depth of 1,500 metres at Shaft 1, 930 metres at Shaft 3, and 370 metres at the shallow Albany Shaft.

Historically the operators at Pickle Crow focused only on the narrow high-grade veins using cut-and-fill mining techniques. These techniques, combined with the $35/oz price of gold then in effect, necessitated a very high (by current standards) cut-off grade of 8.57 g/t gold, resulting in abundant moderate and low-grade resources being left within and proximal to the historical workings. The much higher present day gold price and modern mining techniques allow for the potential economic extraction of these moderate and low-grade resources, along with the remaining high-grade resources. Accordingly, the mineral resource encompasses three different categories:

  1. Underground high-grade vein resources;
  2. Bulk underground BIF and high-grade vein resources; and
  3. Open pit BIF and high-grade vein resources

An animated video and rotating 3D model of the Pickle Crow gold mine, including underground development, stopes, principal veins and BIF hosted gold zones, and resources, can be viewed on YouTube at: http://www.youtube.com/watch?v=YRtBY26PXy8

TABLE 2: PICKLE CROW INFERRED MINERAL RESOURCES – APRIL 18, 2011
DETAILED BREAKOUT BY SHAFT AND ZONE
AreaZoneHostMining TechniqueGrade
Au
g/t

Tonnes
Contained
Ounces
Cut-off
Grade
Au g/t
Shaft 1BIFBIF & VeinOpen Pit1.13,628,000126,0000.35
BIFBIF & VeinBulk Underground3.74,320,000508,0002.0
No. 1 VeinVeinUnderground10.1718,000233,0002.8
No. 5 VeinVeinUnderground5.2141,00024,0002.8
No. 9 VeinVeinUnderground5.4203,00035,0002.8
No. 11 VeinVeinUnderground6.518,0004,0002.8
No. 19 VeinVeinUnderground14.0381,000171,0002.8
Shaft 1 Total3.69,409,0001,100,000
Shaft 3No. 2 VeinVeinUnderground9.196,00028,0002.8
No. 6 VeinVeinUnderground8.2156,00041,0002.8
No. 7 VeinVeinUnderground5.849,0009,0002.8
No. 8 VeinVeinUnderground7.964,00016,0002.8
No. 12 VeinVeinUnderground11.914,0005,0002.8
No. 13 VeinVeinUnderground6.5103,00022,0002.8
Shaft 3 Total7.8482,000121,000
Albany ShaftCZ1Conduit-StyleBulk Underground4.9168,00027,0002.0
CZ3Conduit-StyleBulk Underground2.722,0002,0002.0
No. 15 VeinVeinUnderground4.742,0006,0002.8
No. 16 VeinVeinUnderground6.328,0006,0002.8
Albany Shaft Total4.9260,00041,000
TotalOpen Pit1.13,628,000126,0000.35
TotalBulk Underground3.74,510,000536,0002.0
TotalUnderground9.32,012,000600,0002.8
Grand Total Pickle Crow Gold Mine3.910,150,0001,262,000
Notes:
  1. The mineral resource estimate is entirely classified as inferred mineral resources.
  2. CIM Definition Standards were followed for mineral resources.
  3. The cut-and-fill (high-grade vein) underground component of the mineral resource has been estimated at a cut-off grade of 2.8 g/t Au over a minimum width of 1 metre. Vein widths less than 1 metre were diluted to 1 metre prior to application of the 2.8 g/t Au cut-off grade. Grade and tonnes for the cut-and-fill component of the mineral resource are reported as diluted grade and tonnes.
  4. The long-hole bulk underground (moderate-grade) component of the mineral resource has been estimated at a cut-off grade of 2.0 g/t Au.
  5. The open pit (low-grade) component of the mineral resource has been estimated at a pit discard cut-off grade of 0.35 g/t Au, using a preliminary Whittle pit shell to constrain the resource estimate and other assumed pit parameters.
  6. The open pittable mineral resource extends to a depth of approximately 150 metres below surface. Only mineralization located within the pit shell has been reported at open pit cut-off grades.
  7. The mineral resource has been estimated using a gold price of US$1,100 per ounce.
  8. High-grade assays have been capped. Each domain was capped with respect to their unique geology and statistics. Caps for cut-and-fill (high-grade vein) underground resources range from 35 g/t to 145g/t.
  9. Bulk density of 3.14 t/m3 was used for BIF and 2.70 t/m3 was used for veins.
  10. The mineral resource was calculated via block model. Three dimensional wireframes were generated using geological information. A combination of Kriging and inverse distance estimation methods were used to interpolate grades into blocks of varying dimensions depending on geology and spatial distribution of sampling.
  11. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  12. Mineral resources have been adjusted for mined out areas. Small rib and sill pillars around old stopes have not been considered.
  13. Numbers may not add due to rounding.

Geological Potential

The Pickle Crow gold mine produced a total of 1.47 million ounces of gold in its 31 years of operation between 1935 and 1966. The workings extend over 3 kilometres along strike of the core mine trend, and to a maximum depth of 1.2 kilometres. This initial resource estimate suggests that, in addition to the ounces removed by past mining, at least another 1.26 million ounces of gold remain within approximately the top 1 kilometre of the core mine trend. Therefore, more than 2.5 million ounces of gold was originally hosted from surface to a depth of 1 kilometre within the core mine trend.

Deep drilling by the Company has confirmed the vertical continuity of the mineralized system below the historic workings. The historically top-producing (>500,000 ounce) No. 1 vein structure was intersected 210 metres below the lowest mined level on this vein, returning 134.26 g/t gold over 3.20 metres (3.92 oz/ton over 10.5 feet) from 1,139.80 metres to 1,143.00 metres in hole PC-09-052A, including 838.14 g/t gold over 0.50 metres (24.45 oz/ton over 1.6 feet) (press release, February 22, 2010). The Company later intercepted this same structure 680 metres below the lowest mined level on this vein (1,570 metres down hole) (press release, July 19, 2010).

The Company has also made several discoveries lateral to the historic workings. Most significantly, the No. 19 vein which returned 43.28 g/t gold over 13.13 metres (1.26 oz/ton over 43.1 feet) in hole PC-10-052-W02, including 138.89 g/t gold over 4.00 metres (4.05 oz/ton over 13.1 feet) (press release, March 23, 2010).

Results and discoveries such as these confirm that strong potential exists to increase the property's mineral resource base through further exploration of areas lateral to and below the workings.

The mineral resource estimate for the Pickle Crow gold mine property has been audited and approved by B. Terrence Hennessey, P.Geo., MAusIMM, Vice President of Micon, an independent Qualified Person as defined by NI 43-101, who has also reviewed and approved the contents of this press release. A NI 43-101 technical report on the mineral resource estimate will be filed on SEDAR within 45 days of this press release. The contents of this press release have also been reviewed and approved by Neil Pettigrew, M.Sc., P.Geo., Vice President, Exploration for PC Gold and the Company's Qualified Person as defined by NI 43-101.

Micon has provided consulting services to the international mining industry since 1988, with particular focus upon mineral resource estimations, metallurgical services, mine design and production scheduling, environmental consulting services, preparation of pre-feasibility and feasibility studies, independent reviews of mining and mineral properties, project monitoring, independent engineer roles, financial analysis and litigation support.

This news release may contain forward looking statements characterized by words such as "believe", "estimate", "expect", "potential", "could", "project", "may", and similar expressions typically used to identify forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

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