St. Eugene Mining Corporation Ltd.
TSX VENTURE : SEM

St. Eugene Mining Corporation Ltd.

February 17, 2011 07:07 ET

St. Eugene Annouces Initial Mineral Resource at Amisk Gold Project

Indicated Resource of 921,000 Ounces at 0.95 g/tonne Au Eq and Inferred Resource of 645,000 Ounces at 0.70 g/tonne Au Eq

TORONTO, ONTARIO--(Marketwire - Feb. 17, 2011) -

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN

St. Eugene Mining Corporation Limited (TSX VENTURE:SEM) ("St. Eugene" or the "Company") is pleased to announce the results of an independent mineral resource estimate for the Amisk Gold Project in northeastern Saskatchewan. Joint venture partner Claude Resources Inc. (TSX:CRJ)(NYSE Amex:CGR) has provided the Company with the following resource estimate completed by SRK Consulting Canada Inc. ("SRK"):

Indicated 30.150 M tonnes at 0.85 gpt Au and 6.17 gpt Ag (0.95 gpt AuEQ)
Inferred 28.653 M tonnes at 0.64 gpt Au and 4.01 gpt Ag (0.70 gpt AuEQ)

Jennifer Boyle, Chief Executive Officer of St. Eugene, states "This initial resource estimate is a breakthrough for the Amisk Gold Project and provides an excellent starting point. The resource is reported within a conceptual pit shell and the deposit remains open at depth and along strike, offering an excellent opportunity for continued resource growth; opportunity the Joint Venture is currently testing through our winter drill program currently underway."

A Technical Report outlining the key assumptions supporting the estimate is currently being prepared by SRK. The estimate is supported by 299 drill holes totalling 53,507 metres of which 21 holes (5,657 metres) have been completed by the joint venture partners in 2010.

Table 1 summarizes SRK's Indicated and Inferred Resource Estimate for the Amisk Gold Project:

 
Table 1: Mineral Resource Statement* Amisk Gold Project, Saskatchewan, February 9, 2011.
Resource Class   Quantity
(000's tonnes)
  Grade (g/tonne)   Contained Ounces (000's)
  Au Ag Au Eq   Au Ag Au Eq
Indicated   30,150   0.85 6.17 0.95   827 5,978 921
Inferred   28,653   0.64 4.01 0.70   589 3,692 645
* Reported at a cut-off of 0.40 grams of gold equivalent (Au Eq) per tonne using a price of U.S. $1,100 per ounce of gold and U.S. $16 per ounce of silver inside a conceptual pit shell optimized using metallurgical and process recovery of eight-seven percent, overall ore mining and processing costs of $15 per tonne and overall pit slope of fifty degrees. All figures are rounded to reflect the relative accuracy of the estimates. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

The Amisk Gold Deposit is hosted within a rhyolite flow-dome complex and overlying pyroclastic tuffs of the Amisk Volcanic Assemblage, Flin Flon Greenstone Belt. High grade gold and silver mineralization is hosted within a series of moderately to shallowly-dipping, pyrite +/- chalcopyrite-sphalerite-tetrahedrite-galena-bearing sulphide vein systems. High grade vein systems are typically flanked by wide intervals of low grade disseminated and stringer mineralization within a broad sericite alteration envelope. A detailed plan map and representative cross sections outlining the conceptual open pit and resource model are presented on St. Eugene's website www.steugenemining.ca.

Table 2 summarizes the detailed Mineral Resource estimate at a cut-off grade of 0.4 g/t Au Eq.

Table 2: Mineral Resource Statement Amisk Gold Project, Saskatchewan, February 9, 2011.
Resource Class Domain Quantity
(000's tonnes)
  Grade (g/tonne) Contained Ounces (000's)
  Au Ag Au Eq Au Ag Au Eq
Indicated C Frag LG 18,110   0.80 6.17 0.90 466 3,590 522
  C Frag HG 4,131   1.53 8.80 1.67 203 1,169 223
  SWXX LG 961   0.87 5.09 0.95 27 157 29
  SWXX HG 86   1.74 12.91 1.94 5 36 5
  EVCF 741   0.76 4.83 0.84 18 115 20
  HW 6,121   0.55 4.63 0.62 108 911 122
    Total 30,150   0.85 6.17 0.95 827 5,978 921
Inferred C Frag LG 5,510   0.76 5.60 0.85 135 993 151
  C Frag HG 91   1.63 7.64 1.74 5 22 5
  SWXX LG 2,623   0.71 4.50 0.78 60 380 66
  SWXX HG 211   1.57 10.74 1.74 11 73 12
  E Mafics 17   0.44 5.01 0.52 0.2 3 0.3
  W Mafics 69   0.42 2.89 0.46 1 6 1
  EVCF 3,412   0.68 3.99 0.74 74 438 81
  HW 16,720   0.56 3.31 0.61 303 1,778 330
    Total 28,653   0.64 4.01 0.70 589 3,692 645
       
Footnotes to the Mineral Resource Statement:    
       
  1.   Mineral resources for the Amisk Gold Deposit are reported at a cut-off of 0.40 grams of gold equivalent per tonne using a price of U.S. $1,100 per ounce of gold and U.S. $16 per ounce of silver inside a conceptual pit shell optimized using metallurgical and process recovery of eight-seven percent, overall ore mining and processing costs of $15 per tonne and overall pit slope of fifty degrees. All figures are rounded to reflect the relative accuracy of the estimates. 
       
  2.   Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves. The resource evaluation work was completed by a team of resource geologists under the supervision Glen Cole, P.Geo., a full time employee of SRK. Mr. Cole has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activities undertaken to qualify as a Qualified Person as defined by National Instrument 43-101.
       
  3.   The mineral resources reported herein have been estimated in conformity with generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best Practices" guidelines and are reported in accordance with Canadian Securities Administrators' National Instrument 43-101.   
       
  4.   The construction of the Amisk mineral resource model was the product of collaboration between Claude and SRK staff. The capture and validation of historical exploration data was initiated in January 2010 and compiled a digital database containing 299 boreholes (53,507 metres). Rigorous quality control and validation procedures, inclusive of twin holes and quartering of historic core, completed by Claude Resources. The database also includes recent drilling information on the Amisk Gold Deposit to December 31, 2010. SRK audited the procedure and visited the site and is of the opinion the data are reliable for the purpose of resource estimation.   
       
  5.   SRK was engaged in October 2010 to complete an evaluation of mineral resources reported herein. Mineral resources were estimated using a geostatistical block modeling approach constrained by mineralization wireframes. Block size was set at cubes 5 metres in size. Underground excavations were removed from modeled blocks. Block gold grade was estimated by ordinary kriging from sourced capped composite data. Search neighbourhood and estimation parametres were adjusted based on variography results. Two estimation runs were completed and grade estimates verified using other estimators. The mineral resource model was validated visually on section by section and elevation by elevation basis. Quantile-quantile plots comparing resource block and capped composite data show the usual smoothing effect of kriging particularly at higher grades, but confirm that the block model is representative of the informing data.   
       
  6.   Analysis of the cumulative probability plots for individual resource zones determined that capping of high-grade assays to limit their influence during grade estimation was necessary. Probability analysis was completed on individual resource domains with capping values ranging from 95th to 99th percentile.   
       
  7.   The resource reported herein includes an adjustment to account for underground development related to a bulk sample completed by SMDC in 1988.   
       
  8.   A Technical Report supporting the Mineral Resource Statement will be filed on SEDAR (www.sedar.com) within 45 days.   

The mineral resources for the Amisk Gold Project are sensitive to the selection of cut-off grade. Table 3 presents the quantity and grade estimates at a range of cut-off grades inside the conceptual pit shell considered for reporting the Mineral Resource Statement. A cut-off value of 0.4 g/t Au Eq was selected based on optimization results and benchmarking against similar deposits. 

Table 3: Global Block Model Quantity and Grade Estimates, Amisk Lake Gold Project at Various cut-off Grades.
Grade Indicated   Inferred
Au Eq
(gpt)
Quantity
(tonnes)
  Au Eq (gpt)   Ounces
Au Eq
  Quantity
(tonnes)
Au Eq (gpt)   Ounces
Au Eq
0.10 47,496,802   0.70   1,068,940   102,734,810 0.36   1,189,080
0.20 44,036,914   0.75   1,061,865   72,604,675 0.45   1,050,433
0.30 37,422,417   0.83   998,622   45,000,464 0.57   824,675
0.40 30,150,090   0.95   920,881   28,653,135 0.70   644,854
0.50 23,533,117   1.09   824,702   19,446,358 0.82   512,676
0.60 18,322,858   1.25   736,367   13,665,490 0.94   412,994
0.70 14,359,129   1.41   650,936   9,491,034 1.07   326,504
0.80 11,418,785   1.58   580,054   6,659,786 1.20   256,941
0.90 9,206,976   1.76   520,980   4,825758 1.34   207,903
1.00 7,606,617   1.93   471,998   3,589,543 1.48   170,802
1.50 3,472,946   2.80   312,642   1,078,945 2.16   74,928
Note: The reader is cautioned that the figures in this table should not be misconstrued with a Mineral Resource Statement. The figures are only presented to show the sensitivity of the block model estimates to the selection of cut-off grade.

A team of personnel from Claude and SRK was involved in the preparation of the Mineral Resource Statement for the Amisk Gold Deposit, including Brian Skanderbeg (P. Geo.), Philip Ng (P. Eng), Mike Glover and Kim Litke of Claude Resources; and Glen Cole (P. Geo.), Sebastien Bernier (P. Geo.) and Goran Andric (P. Eng.) of SRK. All data considered for resource evaluation was reviewed by SRK, with Mr. Glen Cole (P. Geo.) a full time employee of SRK and independent from Claude assuming professional responsibility. Mr. Cole has reviewed the content of this News Release.

Wes Hanson, P.Geo., Chairman of St. Eugene, is the Qualified Person who has reviewed and approved the contents of this news release for and on behalf of St. Eugene. Brian Skanderbeg, P.Geo., Claude's Vice-President Exploration, is the Qualified Person who has reviewed and approved the contents of this news release for and on behalf of Claude. Claude, as operator, has implemented a rigorous Quality Assurance and Quality Control program to ensure best practices in sampling and analysis of drill core. Drill core was halved and samples averaging 1.5 to 2.0 metres were submitted to TSL Laboratories in Saskatoon, Saskatchewan and/or ALS Chemex in Vancouver, British Columbia, both ISO approved facilities. Quality assurance and quality control procedures have been implemented including the use of blanks, standards and duplicates. Core samples were analyzed by a 30 gram gold fire assay with an atomic absorption, conventional gravimetric and/or screen fire techniques.

St. Eugene holds a 35% participating interest and Claude, as operator, holds a 65% interest in the Amisk Joint Venture Project.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

This news release of St. Eugene contains statements that constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause St. Eugene's actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "potential" and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur. Forward-looking statements in this document include statements regarding St. Eugene's expectations regarding ownership, entitlements, drilling and exploration activities on properties in which St. Eugene has, or believes it has an interest. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements, and readers are cautioned not to place undue reliance on these forward-looking statements. Any factor could cause actual results to differ materially from St. Eugene's expectations. St. Eugene undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change, unless otherwise required by law.

THESE 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 OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

Neither the TSX Venture Exchange nor 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

  • St. Eugene Mining Corporation Ltd.
    Jennifer L. Boyle, B.A., LL.B.
    Chief Executive Officer
    (647) 430-0966 (work) or 416-904-2714 (cell)
    jennifer@capexgroupinc.com
    or
    St. Eugene Mining Corporation Ltd.
    Wes Hanson, P. Geo.
    Chairman of the Board of Directors
    (647) 202 7686 (cell)
    Wes.hanson@me.com