Southwestern Resources Corp.
TSX : SWG

Southwestern Resources Corp.

December 11, 2006 07:01 ET

Southwestern Announces Increase of 215% in Measured and Indicated Resources at Boka 1 in China

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 11, 2006) - Southwestern Resources Corp. (TSX:SWG) ("Southwestern" or "the Company") announces an increase of 215% in the measured and indicated resource categories at the Boka 1 deposit in Yunnan Province, China (compared to the June 2005 Hatch Report (1)). Measured and indicated resources at Boka 1 now total 31.2 million tonnes grading 3.05 grams per tonne gold (3.1 million ounces) with an additional 8.9 million tonnes grading 2.66 grams per tonne gold (0.8 million ounces) in the inferred category, confirming Boka as a world-class gold deposit. An inferred resource at Boka 7, as calculated in the Hatch Report, contains an additional 14.5 million tonnes grading 2.75 grams per tonne (1.3 million ounces).

"This is an important milestone for the project and the Company, and it allows us to move forward with confidence to complete the pre-feasibility study," said Southwestern's President and Chief Executive Officer John Paterson. "In the meantime drilling continues at Boka 1, and our latest drilling results show an expansion toward the north of the Boka 1 South Zone (2). We are also advancing other targets at Boka, particularly Boka 19, which we are confident will add to the known resource base."

In recognition of the significance of the Boka discovery, Southwestern was presented with the Prospector/Explorer of the Year award from the Chinese Ministry of Land and Resources at the China Mining Conference in November 2006. Mr. Paterson said: "This is a new award that recognizes the most significant mineral deposit discovery of the year and rewards industry leaders for their innovation and achievements in China. The development of the Boka deposit will have lasting benefits for the people and government of China and we are delighted to have been recognized for our work."

Boka Resource Estimate

The following table details the entire resource within the modeled mineralized envelopes, broken down by classification in accordance with National Instrument 43-101 guidelines. No cut-off grade was used in the reporting of this mineral resource estimate, and the lowest individual block value is 0.9 grams per tonne gold. Grades were capped at 45 grams per tonne gold for Boka 1 and 31 grams per tonne gold for Boka 7.



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Gold Ounces of
Tonnes (grams per gold
Area Classification (millions) tonne) (millions)
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Boka 1 North
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Measured 8.36 2.74 0.74
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Indicated 12.55 3.05 1.23
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Measured and Indicated 20.91 2.92 1.97
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Inferred 3.54 2.49 0.28
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Boka 1 South
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Measured 1.45 3.67 0.17
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Indicated 8.81 3.25 0.92
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Measured and Indicated 10.26 3.31 1.09
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Inferred 5.32 2.78 0.48
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Total
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Measured 9.81 2.88 0.91
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Indicated 21.36 3.13 2.15
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Measured and Indicated 31.17 3.05 3.06
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Inferred 8.86 2.66 0.76
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Boka 7 (Hatch Report, June 2005)
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Inferred 14.52 2.75 1.28
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A total of 171 diamond drill holes were completed at 50-metre spacing to estimate gold mineral resources at Boka 1. The resource estimate also used sample data from surface trenches and adits. Modeling of the extents of mineralization upon which the estimation is based relies on a combination of lithology, structure and grade. Minimum lode thickness was modeled at four metres. Footwall and hanging wall boundaries are generally very sharp with respect to grade. Down dip and along strike, continuity of the mineralization is good in the main lodes. Estimation was undertaken using ordinary kriging into 25 by 25 by 6 metre blocks whose volumes are weighted to conform to the exact volumes of the modeled lodes. Assay data was composited to two-metre intervals and a top cut of 45 grams per tonne gold was applied to the composited values before estimation.

The Boka 1 mineral resource estimate was prepared by Danny Kentwell, MAusIMM and Louis Bucci, MAusIMM of SRK Consulting, an independent international engineering consulting company. Assay and geological data used in compiling this resource estimate has been verified by Louis Bucci by direct observation of drilling, sampling, sample preparation, logging and laboratory visits. Assay and geological data used in compiling this resource has been verified by Danny Kentwell by analysis of assay, QA/QC checks, duplicates, standards and repeats and database/statistical validation.

The Boka project is a joint venture between Southwestern (90%) and Team 209 of the Yunnan Nuclear Industry of Yunnan Province (10%). Boka is comprised of three mining permits and three exploration permits covering an area of 157 square kilometres in northern Yunnan Province, China. Southwestern discovered Boka in late 2002 and has been actively drilling on the property for the past four years. At present five diamond drill rigs are operating on the property. A pre-feasibility study at Boka 1 is under way, focusing on geological modeling, mining and metallurgy, environmental and social impact studies. Resources at Boka will continue to be updated as drilling progresses. The pre-feasibility study is being carried out under the direction of Ausenco Limited and is anticipated to be completed by the second quarter of 2007.

About Southwestern

Southwestern is a Vancouver-based mineral exploration company engaged in the identification, acquisition, evaluation and exploration of gold, silver and base metals mineral properties in China and Peru. The Company has a number of significant projects including the Liam Gold-Silver Project in Peru with Newmont, the Antay Porphyry Copper-Gold Project in Peru with Anglo American Exploration Peru S.A. and the Boka Gold Project in China with Team 209, where a major drilling program is being conducted. The Company is also exploring for porphyry copper-gold in a large area of southwestern Yunnan Province, China under a joint venture with Newmont Overseas Exploration Limited, and has entered into a Joint Venture Heads of Agreement with Inco Limited, a subsidiary of CVRD Canada Inc., to carry out mineral exploration for nickel, copper and platinum group metals in Yunnan and Sichuan provinces, China. Southwestern also owns 50.3% of the recently listed Zincore Metals Inc., which holds zinc assets in Peru. At the end of September 2006, the Company had working capital of $47.2 million, total assets of over $100 million, and no debt. Southwestern is a reporting issuer in British Columbia, Alberta, Manitoba, and Ontario and trades on the Toronto Stock Exchange under the symbol SWG.

Quality Control

Southwestern has implemented a quality control program to ensure best practice in lithogeochemical sampling and analysis of soil, rock chips, trench, tunnel and drill core samples.

All drill core samples (approximately two metre, half-core composites) are shipped directly in security sealed bags to the SGS-China Laboratories preparation facility in Kunming. The entire composite is prepped to -10 mesh and a 500 gram split is sent to the SGS-CSTC Standards Technical Services Ltd. facility in Tianjan for conventional fire assay using a 50 gram charge. Other elements are analyzed using ICP methods at the SGS Canada Inc. facilities in Mississauga, Ontario.

Exploration samples (rock chip, soil, trench and tunnel) are shipped directly in security sealed bags to the assay laboratory of the Northwest Non-Ferrous Geology Research Institute (ISO 9002) located in Xian, Shanxi Province, China and are digested in an aqua regia acid digestion and analyzed for gold and various other elements using atomic absorption.

The Company submits its own standards as a measure of the accuracy of the analysis. Field duplicates and pulp duplicates are routinely analyzed for precision. Routine assay checks from drill core are made at ALS Chemex in Vancouver, B.C. Sample results are received in batches and not as assays for an entire drill hole.

The exploration program for China is being carried out by John Zhang, Project Manager for Southwestern in China. John Paterson, President and Chief Executive Officer of Southwestern, and a member of AUSIMM, is the project's Qualified Person ("QP") as defined under National Instrument 43-101. As the QP, he has prepared or supervised the preparation of the scientific or technical information for the property. Paul Schmidt, P. Eng, a highly experienced metallurgical and project manager, has joined the Southwestern team and is responsible for overseeing the preparation of the Boka pre-feasibility study.

Forward-looking Statements

Statements in this release that are forward-looking are subject to various risks and uncertainties concerning the specific factors disclosed in the Company's Annual Information Form for the fiscal year ended December 31, 2005 under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.

(1) Refer to the Company's news release dated July 18, 2005, available on www.swgold.com.
(2) Refer to the Company's news release dated November 30, 2006, available on www.swgold.com.


Contact Information

  • Southwestern Resources Corp.
    Timo Jauristo
    Vice President Corporate Development
    (604) 669-2525
    (604) 688-5175 (FAX)
    or
    Southwestern Resources Corp.
    Meghan Brown
    Manager Investor Relations
    (604) 669-2525
    (604) 688-5175 (FAX)
    Email: info@swgold.com
    Website: www.swgold.com