SOURCE: St. Elias Mines Ltd.

St. Elias Mines Ltd.

July 26, 2012 18:19 ET

St. Elias Mines Ltd. -- Tesoro Gold Project -- Diamond Drilling and Trenching Results

VANCOUVER, BC--(Marketwire - Jul 26, 2012) - Lori McClenahan, President and CEO of St. Elias Mines Ltd. (TSX VENTURE: SLI) (PINKSHEETS: SELSF) (FRANKFURT: EKL) (US Clearing Symbol: SELSF) announced today that results of drill holes TE-36 to TE-43 as well as the results of trenching at the Tesoro Gold Project, located in southwestern Peru. Forty-three diamond drill holes, totaling 12,740 metres, were completed. To date the drilling has tested a variety of targets including:

  • Titan 24 geophysical targets (including chargeability highs, resistivity lows and gradients);
  • Down dip and along strike extensions of known gold mineralization hosted in quartz veins;
  • Combined geophysical and geological targets..

The drilling to date has not encountered the causative sources of the Quantec Titan 24 geophysical anomalies. The data are being re-evaluated by third party geophysicists.

Despite the inconclusive results from the drill holes that specifically targeted the geophysical anomalies reported by Quantec, many of the drill holes that tested geological targets did intersect gold at depth. Examples of drill holes with relatively deep intersections include DDH TE-14 (7.08 g/t Au at a true depth of 276 metres) and DDH TE-29 (6.08 g/t Au at a 275-metre true depth).

Drill Core Assays: DDH TE-36 to DDH TE-43

The following Table 1 presents drill hole intercepts greater than 1.0 g/t gold, and Table 2 presents drill intercepts greater than 0.5g/t and less than 1.0 g/t gold (please note that the data presented in Table 1 are distinct from the data in Table 2).

Table 1 - drill intercepts with gold grades greater than - 1ppm (1 g/t)
Hole ID Hole Depth (meters)   From
DDH_TE_36 133.50   99.00 100.50 1.50 10.26
DDH_TE_36 133.50   100.50 102.07 1.57 5.693
DDH_TE_38 103.50   79.50 80.71 1.21 1.902
DDH_TE_39 120.00   102.56 103.06 0.50 1.789
Table 2 - drill intercepts with gold grades greater than > 0.5 ppm (0.5g/t) - 1ppm (1 g/t)*
Hole ID Hole Depth (meters) Zones
DDH_TE_37 102.00   18.64 20.05 1.50 0.692
DDH_TE_38 103.50   30.81 31.31 0.50 0.545
DDH_TE_41 505.80   358.40 358.90 0.50 0.703
DDH_TE_41 505.80   466.50 467.00 0.50 0.82

The gold grades in the attached table are uncut, and the reported drill core intercept widths do not necessarily reflect the true width of the mineralization encountered. *Note: 1 ppm = 1/g/t

As previously announced on May 29, 2012 the Company has suspended drilling at the Tesoro Project and is evaluating all project data and exploration options to advance the Project.

The drilling program itself ran smoothly, without interruption and was completed within budget. Management is extremely pleased with the professional manner in which Energold Drilling's Peruvian subsidiary conducted and supported the program.

The Company utilizes an industry-standard quality assurance/quality control program. HQ and NTW diamond drill core is sawn in half, and one-half is shipped to the ISO-certified CERTIMIN Peru SA assay laboratory in Lima, Peru, for chemical analysis. Blanks, duplicates and certified reference standards are inserted into the sample stream to monitor laboratory performance. Samples from the trenching program were also sent to CERTIMIN.

The Company has also completed a mechanized trenching program on the Property. A total of approximately 4,250 linear meters of trenching in 66 trenches were completed. 557 samples, from the wall rock and quartz veins, were collected and submitted for analysis from these trenches. The majority of the trenching was completed in the area between Zona Central and Zona Sur.

417 Wall Rock Samples Au ppm
Maximum grade 0.525
Minimum grade < 0.005
Average grade 0.032
140 Quartz vein or Mineralized Structure Samples ("QV or MSS") Au ppm
Maximum grade 22.36
Minimum grade < 0.005
Average grade 1.35
Maximum Sample Width ("QV or MSS") 0.80m
Minimum Sample Width ("QV or MSS") 0.01m

A Brief History of the Tesoro Gold Project

The Tesoro gold project is 100 per cent owned by the company with no underlying royalties. The property covers approximately 6,974 hectares (17,436 acres) and is part of the prolific 300-kilometre by 30 km Nazca-Ocona gold belt parallel to the Pacific Coast of southwestern Peru. The Nazca-Ocona gold belt has a long mining history dating back to pre-Incan time. In this belt, gold in quartz veins and the host fault structures occurs with disseminated sulphides, notably pyrite and chalcopyrite. The continuity of the regional-scale fault structures that host the gold-bearing quartz veins and fracture-fillings is impressive. While the veins tend to be narrow, their grades can be in the multi-ounce range. The mineralized structures often extend along strike for several kilometres and certain structures in the gold mines of the district are known to extend to depths of one kilometre.

At the Tesoro project, the Company has identified five mineralized zones that collectively host more than 50 auriferous quartz veins. Underground exploration and development work has been conducted on three of these veins (C1, C2 and A4 veins). The veins are thought to have formed at medium depths ("mesothermal"). Mining in Canada, the USA, Mexico, South America and other parts of the world has established that gold-bearing shoots occurring in this type of vein can extend from surface to depths of a kilometre or more.

To date, a total of 1,157 tons of bulk sample material averaging 0.93 ounce per ton gold has been extracted from underground exploration workings at several locations on the Tesoro property including:

  • 643 tons averaging 0.77 ounce per ton gold from the A4 vein;
  • 451 tons averaging 0.99 ounce per ton gold from the C1 vein;
  • 63 tons averaging 2.04 ounces per ton gold from the C2 vein.

The gold-bearing structures at the Tesoro property have not been fully explored to depth or along strike. There remains great potential for the discovery of additional gold mineralization.

Qualified Person

The technical contents of this news release have been verified by George Sivertz, P. Geo, a Canadian consulting geologist working in Peru, who is a Qualified Person as defined in National Instrument 43-101 (standards of disclosure for mineral projects).

(signed "Lori McClenahan")
Lori McClenahan,

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This News Release may contain forward-looking statements including, but not limited to, comments regarding the timing and content of upcoming work programs, geological interpretations, potential mineral recovery processes, etc. 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 statement.

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