PNG Gold Corporation

TSX VENTURE : PGK


PNG Gold Corporation

November 28, 2012 09:30 ET

PNG Gold Corporation Announces Diamond Drill Hole Results: 10.72 g/tonne Gold Over 3.0 Metres

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 28, 2012) - PNG Gold Corporation ("PNG Gold" or the "Company") (TSX VENTURE:PGK) is pleased to report drill core assay results and recent geological modelling from its 2012 exploration program at the Imwauna Structure, located on Normanby Island, Milne Bay province, in eastern Papua New Guinea.

Three diamond drills are currently on site with a fourth arriving next month. The Company has planned to complete 21 additional holes totalling 4,665 metres on the Imwauna Structure by December, 15, 2012 with plans to continue drilling over the holiday season.

Highlights:

Hole Number From To Core
Length
Gold
(m) (m) (m) g/tonne
IMH259 151.6 154.6 3.0 10.72

Details of assay results of diamond drill holes IMH-259 to 262 are located in Table 1.

Imwauna Structure - Points of Interest:

The assay results from these four drill holes disclosed in this press release show encouraging results as they begin to support the geological model. Geological modelling has identified moderate south plunging, high grade gold zones along the Imwauna Structure. Attached to this news release is a diagram showing a grade x thickness longitudinal section along the Imwauna Structure, with the Henry and Klink Zones identified. Drilling is now underway in these zones to trace the mineralization to depth.

The Henry and Klink Zones have previously reported drilling intercepts, as shown below:

Henry Zone Klink Zone
Hole IMH # g/tonne Au Metres Hole IMH # g/tonne Au Metres
050 16.66 1.7 094 9.50 4.6
051 22.46 2.1 101 5.90 4.9
082 36.16 5.6 163 108.00 0.4
084 10.64 2.3 174 13.98 3.0
091 21.10 3.8 204 13.11 7.4
172 34.26 2.6 215 8.16 6.3
217 32.10 1.4
218 49.86 4.0 Composite intervals are core lengths
253 111.97 6.0

About the Imwauna Structure

  • South-southwest trending Imwauna Structure is over 2.0 kilometres long, dipping steeply 80-90 degrees west and remains open along strike.
  • Previous drilling has located six zones of moderate, south plunging high-grade gold mineralization.
  • All six zones remain open to depth.
  • Geological setting is a Bonanza Gold, epithermal, low-sulphidation system.
  • PIMA studies of drill core indicate an Illite Group alteration assemblage of illite, smectite and quartz with a moderate pH level Ag > Au system.
  • Zones are typically 1-4 metres wide, hydrothermal and hydraulic brecciated, with vuggy quartz veining present.
  • Pyrite content 1%, minor arsenopyrite, traces chalcopyrite, and visible gold does occur.
  • Previous work using fluid inclusions suggest source of fluids from south and at depth.
  • Recent drilling is providing indications of zone width and thickness increasing with depth.

Kela's Prospect

In addition to the drill program underway at the Imwauna structure, a seven hole program totalling 1852 metres has been completed on the Kela's Prospect area. The purpose of the program is to locate the previously untested structure and defining its orientation as it appears to be dipping moderately to the east, towards the Imwauna Structure. Low sulphidation epithermal veining was encountered in most holes. Further drilling may be undertaken once assay results are received and the data compiled.

Table 1: Imwauna Assay Results - IMH 259-261

Hole
ID
Easting Northing Elev.
(m)
Dip Azimuth From
(m)
To
(m)
Core
Length
(m)*
Au
(g/t)
Ag
(g/t)
IMH259 288904 8886712 540 -57 282 151.60 154.60 3.0 10.72 25.4
**IMH260 288918 8886774 570 -72 105 244.95 246.45 1.5 0.23 6.6
IMH261 289203 8886959 505 -63 280 147.3 148.4 1.1 10.35 56.5
**IMH262 289089 8887025 518 -81 104 173.4 174.4 1.0 1.14 2.6
* Core lengths are not true thicknesses.
** Did not reach Imwauna Structure.

Core logging, sampling and assaying procedures

All holes drilled by PNG Gold are collared using HQ triple tube drill tools. A few holes have been reduced to NQ size at depth in the hole in order to continue the hole. Geotechnical measurements such as core recovery, fracturing and veining, rock quality designations (RQD's), hardness and photographic logging are performed systematically prior to sampling and assaying. The core is logged, samples selected by PNG Gold geologists then systematically sawn in half at the site. The one half core sample is numbered, sealed in a bag and delivered by PNG Gold to its base in Alotau where the samples are palletized and placed in secure storage prior to shipment to ALS Minerals in Townsville, QLD. The other half of the core is retained at the site.

Core samples are dried, crushed and pulverized to 85% passing through a 75 micron mesh. The pulps are assayed for gold and silver using a 50 g split, Fire Assay (FA) and AA finish. Samples grading over 100 ppm Au are subjected to a fire assay with gravimetric finish. Analyses were also carried out for the trace elements As and Pb. Rejects and pulps are stored at the lab for future reference.

Quality Assurance / Quality control (QA/QC)

The ALS Minerals lab is an ISO 9001:2008 qualified assayer that performs and makes available internal assaying controls. Duplicates, certified standards and blanks are systematically used as part of PNG Gold's QA/QC program. The company also inserts blind standards with each sample batch at the rate of about 1:10. Periodically duplicate pulps are assayed at a second independent certified assay lab. The duplicate assays are compared to original assays for reproducibility and lab bias.

Qualified Person

Mr. Lorne Warner, P.Geo, COO of PNG Gold Corporation is a qualified person in accordance with National Instrument 43-101 and has reviewed and approved the technical information contained in this news release.

Credit Agreement with New Guinea Gold Corporation

Pursuant to the previously announced credit agreement dated March 7, 2012 between the Company and New Guinea Gold Corporation ("NGG"), the Company granted NGG a credit facility in the original principal amount of $1,000,000 bearing interest of 8% per annum compounded monthly (the "Indebtedness"). The Company and NGG have now concluded settlement of the Indebtedness with the cancellation of 2,880,953 of the Company's common shares owned by NGG, and pledged as security for the Indebtedness at a deemed price of $.20 per share and the payment of $481,069.37 in cash. The Indebtedness having been fully repaid, the Company has released or will release all security interests granted by NGG in respect of the Indebtedness.

About the Imwauna gold deposit

The Imwauna exploration licence - EL 1091 - is located on the north side of Normanby Island, approximately 80 kilometres northeast of Alotau, the provincial capital of Milne Bay province, eastern Papua New Guinea. Alotau is serviced by daily flights from Port Moresby, the national capital, and scheduled coastal freighters. PNG Gold maintains a logistics base in Alotau to supply the Normanby Island site.

About PNG Gold Corporation

PNG Gold Corporation is an exploration company with an advanced stage drilling program in Papua New Guinea. PNG Gold holds a 100% interest in the Imwauna and Sehulea properties on Normanby Island, Milne Bay Province, Papua New Guinea, and trades on the TSX Venture Exchange under the symbol PGK. PNG Gold's mission is to become the premier exploration and development company in Papua New Guinea.

ON BEHALF OF PNG GOLD

Greg Clarkes, CEO and Director

PNG Gold Corporation

The securities have not been registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration thereunder or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities in the United States.

To view the diagram associated with this release, please visit the following link: http://media3.marketwire.com/docs/png1128-F1.pdf.

Neither the TSX Venture Exchange or its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • PNG Gold Corporation
    Greg Clarkes
    CEO and Director
    (604) 669 4899
    (604) 685 2345 (FAX)
    www.pnggold.com