US Gold Corporation

US Gold Corporation

September 13, 2010 07:30 ET

US Gold Nevada and Mexico Exploration Update

Positive Gold Bar Drill Results

Pre-Feasibility Study on Track

TORONTO, ONTARIO--(Marketwire - Sept. 13, 2010) - US GOLD CORPORATION (NYSE Amex:UXG)(TSX:UXG) is pleased to announce positive drill results from its Gold Bar Project in Nevada, and an update from regional prospects in Mexico. The best holes in Nevada encountered 0.133 opt (4.56 gpt) gold over 90 ft (27.4 m), 0.033 opt (1.14 gpt) gold over 240 ft (73.2 m) and 0.058 opt (2.01 gpt) gold over 120 ft (36.6 m). These results are encouraging and exploration is ongoing to test for extensions of this mineralization.


Recent drilling at the Gold Bar Project focused on two areas known as Cabin Creek and North Gold Ridge, which are part of the Gold Bar resource estimate.


The objective of US Gold's drilling at Cabin Creek was to expand a higher-grade envelope in order to include the mineralization in a conceptual pit design. This objective was achieved, with the best hole (GB145) returning 0.133 opt (4.56 gpt) gold over 90 ft (27.4 m). Unexpectedly, a new zone was discovered approximately 200 ft (60 m) deeper in this hole (Figure 2). This lower zone returned 0.033 opt (1.14 gpt) gold over 240 ft (73.2 m) including 0.066 opt (2.27 gpt) gold over 65 ft (19.8 m). Drilling to expand this zone to the east and west encountered narrower intercepts of lower grade. Drilling is currently focused on testing for mineralization along strike to the north and south (Figure 1).

The exceptional length of the lower intercept appears to be related to a northeast-trending fault zone where it intersects the east-dipping McColley Canyon limestone, host to most of the mineralization at Cabin Creek as well as the nearby Gold Pick and Gold Ridge deposits. Gold mineralization in the lower zone is associated with silicification that appears to be associated with the fault (Figure 2). Drilling is underway to follow the fault zone north and south along strike.


The first hole at North Gold Ridge (GB152) encountered 0.058 opt (2.01 gpt) gold over 120 ft (36.6 m) in step-out drilling 210 ft (65 m) to the southwest of the known resource (Figure 3). This intercept is contained within a channel that developed on the surface of the basement, filled with porous McColley Canyon limestone, and probably acted as a preferred pathway for gold mineralization. A similar channel is present in the West Pick area where US Gold has encountered significant mineralization, including the best results announced last year of 0.085 opt (2.90 gpt) gold over 150 ft (45.7 m) and 0.065 opt (2.24 gpt) gold over 120 ft. (36.6 m). US Gold geologists believe this is an important observation that will assist in targeting similar mineralization. Results from three additional holes in this area are pending, and additional drilling is planned to the south and west where the intercept is open.

Results from drilling at Cabin Creek and North Gold Ridge are as follows:

  HOLE# Gold   From   Length   Gold   From   Length  
    opt   ft   ft   gpt   m   m  
  GB143 0.024   400   55   0.82   121.9   16.8  
  GB144 0.023   595   25   0.80   181.4   7.6  
  And 0.037   655   25   1.28   199.6   7.6  
  And 0.065   705   10   2.24   214.9   3.1  
  GB145 0.030   165   15   1.03   50.3   4.6  
  And 0.133   260   90   4.56   79.2   27.4  
  Including 0.219   285   40   7.52   86.9   12.2  
  And 0.033   550   240   1.14   167.6   73.2  
  Including 0.066   590   65   2.27   179.8   19.8  
  GB146 0.020   125   60   0.67   38.1   18.3  
  GB149 0.027   295   55   0.91   89.9   16.8  
  GB150 0.025   590   50   0.85   179.8   15.2  
  GB151 0.020   650   40   0.69   198.1   12.2  
  And 0.050   755   20   1.70   230.1   6.1  
  GB152 0.058   310   120   2.01   94.5   36.6  
  Including 0.096   345   35   3.29   105.2   10.7  

(opt = Troy ounces per short ton, gpt = Grams per metric tonne. True width is not known at this time.)


US Gold has received competitive bids from six engineering groups to complete a pre-feasibility study on Gold Bar, and anticipates awarding the contract by September 17th. Completion of that study expected in Q3 2011. The pre-feasibility will look to further advance the positive results announced earlier this year in the Preliminary Economic Assessment (1)(PEA). US Gold's objective is to lengthen the projected mine-life through exploration and optimization concurrent with the completion of the pre-feasibility study. Highlights of the 2010 PEA are as follows:

  • Projected annual production of approximately 60,000 ounces of gold over a 6 year mine life, at an estimated cash cost of $560 per ounce (oz).
  • Pre-tax discounted Net Present Value (NPV) of $105 million at $1150 per oz gold and 6% discount rate, giving an Internal Rate of Return (IRR) of 60%.
  • Estimated initial capital expenditure of $40 million, life-of-mine (LOM) capital expenditure of $47 million, and pay-back period of 3 years at $1150 per oz gold.


In Mexico, US Gold has five core and two percussion drills operating. These drills are focused on expanding the mineralization at El Gallo, where an updated resource estimate is due in October, as well as testing three promising regional prospects (Figure 4).


The Los Mautos prospect is located 6.5 miles (11 km) northeast of El Gallo and shares many similar geological features. Los Mautos is comprised of a number of breccia bodies that outcrop at surface. Like El Gallo, these are shallow-dipping zones characterized by strong silicification and have NW and NE structural trends. Breccia bodies are the most important host for silver at El Gallo. Over 3,000 rock chip samples and 6,450 soil samples have been taken on the project, covering an area 14,100 ft (4,300 m) long by 3,900 ft (1,200 m) wide. Selected rock chip samples are highlighted below. Drill permits for this project were received in late August and percussion drilling has been initiated.

  Silver Grade (opt) Gold Grade (opt)     Silver Grade (gpt)   Gold Grade (gpt)  
  8.8 0.005     302   0.16  
  12.1 0.012     414   0.42  
  49.9 0.028     1,710   0.94  
  36.6 0.015     1,260   0.50  
  38.8 0.011     1,330   0.39  
  35.3 0.08     1,210   2.71  


Chapotillo is located 6.5 miles (10.5 km) northwest of El Gallo. The mineralization is structurally controlled in a northwest-striking vein and is typical of many gold-silver epithermal veins found throughout Mexico. A total of 1,100 rock chip samples have been taken on the project, covering a strike length of 4,925 ft (1,500 m). Selected rock chip samples are highlighted below. Drill permits for this project were received in late August and two core holes have been completed to date. Results from this drilling are expected in late September.

  Silver Grade (opt) Gold Grade (opt)     Silver Grade (gpt)   Gold Grade (gpt)  
  22.8 0.069     1,790   3.42  
  16.5 0.089     567   3.06  
  9.01 0.180     311   6.16  
  10.4 0.080     355   2.75  
  14.1 0.309     483   10.60  
  9.0 0.167     308   5.71  


Piedra de Oro is located 20 miles (32 km) northeast of El Gallo. Unlike the other two prospects, the primary focus of US Gold's drilling here is for gold. A total of 24 samples were taken from historical underground workings. Each of the samples returned very encouraging gold values. Drill permits were received during the first week of September and core drilling has commenced. Assays values for the 24 samples are shown below.

  Gold Grade Gold Grade  
  (opt) (gpt)  
  0.576 19.75  
  0.744 25.5  
  0.274 9.41  
  0.141 4.85  
  0.309 10.6  
  0.322 11.05  
  0.031 1.06  
  0.650 22.3  
  1.012 34.7  
  0.314 10.75  
  0.340 11.65  
  0.305 10.45  
  0.012 0.404  
  0.147 5.05  
  0.960 32.9  
  0.913 31.3  
  1.068 36.6  
  0.433 14.85  
  0.481 16.5  
  1.018 34.9  
  1.234 42.3  
  1.476 50.6  
  0.360 12.35  
  0.939 32.2  


US Gold's goal is to qualify for inclusion in the S&P 500 within the next 5 years. US Gold explores for gold and silver in the Americas, has an exciting silver discovery called El Gallo in Mexico, and is advancing its Gold Bar Project in Nevada towards production. US Gold has a strong treasury and is debt free. The company's shares are listed on the NYSE Amex and the Toronto Stock Exchange under the symbol UXG, trading 1.2 million shares daily. US Gold's shares are also included in S&P/TSX and Russell indices.


Disclosure for Nevada projects in this news release has been prepared, reviewed and approved by Robert L. Kastelic, CPG, US Gold's Senior Consulting Geologist, who is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of mineral exploration undertaken by the company at its Nevada exploration properties. All assays are uncut, with analysis conducted by ALS Chemex utilizing a 30 gram fire assay charge with an AA finish. Samples returning greater than 10 ppm gold were re-analyzed using gravimetric fire assay. Drilling was performed with a standard reverse circulation (RC) rig, and samples are 5 feet in length. Quality assurance/quality control is assured by inserting standards and blanks every 40th sample and check assays sent to a second lab every 20th sample.

Disclosure for Mexico projects in this news release has been viewed and approved by John Read, US Gold's consulting geologist, who is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of exploration undertaken by the Company at its Mexican exploration properties. Samples were shipped to ALS Chemex in Hermosillo for sample preparation and analysis by 4-acid digestion with ICP determination for silver and fire assay for gold. Samples returning greater than 1500 ppm silver or 10 ppm gold were re-analyzed using gravimetric fire assay.

(1) The PEA was prepared by Telesto Nevada Inc. ("Telesto") of Reno, Nevada in accordance with the requirements of Canadian National Instrument 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101"). It contemplates a conventional open pit mining operation and heap leach gold recovery. The mine plan calls for the extraction of 13.1 million tonnes at an average grade of 1.0 gram gold per tonne (gpt) containing 421 thousand ounces of gold. The PEA is based on the mineral resource estimate announced on March 31, 2010 also by Telesto. The PEA is an estimate of the economic viability of the project and does not contemplate a number of important engineering and regulatory factors. Further study is required prior to making a production decision.

Certain statements contained herein and subsequent oral statements made by and on behalf of the Company may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as "intends," "anticipates," "believes," "expects" and "hopes" and include, without limitation, statements regarding the Company's results of exploration, plan of business operations, potential contractual arrangements, receipt of working capital, anticipated revenues and related expenditures. Factors that could cause actual results to differ materially include, among others, those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and other filings with the Securities and Exchange Commission, under the caption "Risk Factors". Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking statements. Except as otherwise required by applicable securities statutes or regulations, the Company disclaims any intent or obligation to update publicly these forward looking statements, whether as a result of new information, future events or otherwise.

U.S. investors should be aware that the issuer has no "reserves" as defined by Guide 7 and are cautioned not to assume that any part or all of the potential target mineral resources will ever be confirmed or converted into Guide 7 compliant "reserves."

This press release also contains information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.

To view Figure 1 – Cabin Creek – Plan View (Aerial View) of New Lower Mineral Zone, please visit the following link:

To view Figure 2 – Cabin Creek – Cross Section A – A', please visit the following link:

To view Figure 3 – North Gold Ridge – Plan View (Aerial View), please visit the following link:

To view Figure 4 – El Gallo District – US Gold Property Map (533,000 acres), please visit the following link:

Contact Information

  • US Gold Corporation
    Stefan M. Spears
    Vice President, Projects
    (647) 258-0395 or Toll Free: (866) 441-0690
    (647) 258-0408 (FAX)
    Mailing Address
    US Gold Corporation
    99 George Street, 3rd Floor
    Toronto, ON M5A 2N4