ValGold Resources Ltd.
TSX VENTURE : VAL

ValGold Resources Ltd.

September 23, 2010 09:00 ET

ValGold & Northern Gold Report Initial Gold Resource for Garrcon Zones at the Garrison Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 23, 2010) - ValGold Resources Ltd. ("ValGold" or the "Company") (TSX VENTURE:VAL) is pleased to report that Northern Gold Mining Inc. (TSX VENTURE:NGM) ("Northern Gold") acting as the project operator has released the first compliant resource estimate for the Garrcon Deposit on the Garrison Gold Property. A.C.A. Howe International Limited ("Howe") has completed a mineral resource estimate for the Garrcon Deposit effective September 23, 2010. The estimate was completed in accordance with Canadian Securities Administration National Instrument 43-101 ("NI 43-101") and CIM Standards on Mineral Resources and Reserves. The resource estimate, using a block cut-off grade of 0.5 g/t gold and a specific gravity of 2.6 g/cm3, reports an Indicated Resource of 3.78 million tonnes at a grade of 1.2 g/t containing 144,000 ounces of gold. An Inferred Resource of 18.5 million tonnes at a grade of 0.9 g/t containing 530,000 ounces gold is also reported. Adding the indicated and inferred resources above to the indicated and inferred resources reported for the Jonpol Deposit in the October 2009 Technical Report filed by Northern Gold on SEDAR October 21, 2009, brings total resources on the Garrison Gold Property to 207,000 ounces gold in the indicated category and 776,000ounces gold in the inferred category.

The Garrcon Deposit Technical Report identifies, estimates and summarizes the Garrcon resources above and below the 150 meter elevation for both the indicated and inferred mineral resource categories. These resources are shown in Table 1 below:

Table 1 – Mineral Resource Category Summary (block cut-off @ 0.5 g/t gold)1
   
Tonnes Above Cut-off
  Average Gold Grade
(g/tonne)
 
Ounces
Indicated            
Less Than 150 m Deep   3,300,000   1.2   130,000
More Than 150 m Deep   480,000   0.9   14,000
Total Indicated   3,780,000   1.2   144,000
             
Inferred            
Less Than 150 m Deep   9,400,000   1.0   300,000
More Than 150 m Deep   9,100,000   0.8   230,000
Total Inferred   18,500,000   0.9   530,000
(1) Table 4 contains the Notes to the resource tables

The complete NI 43-101 compliant Technical Report on the Garrcon Deposit describing in detail among other things, the resource estimate, QA/QC, database validation and geologic model, is expected to be filed on SEDAR by October 15, 2010. Deposit modeling utilizes assay data from 65 diamond drill holes with a maximum intercept spacing of 52 meters used for the indicated resources. Maximum drill hole intercept for the inferred resources was limited to approximately 100 meters. No Measured Resources or Reserves of any category were identified. No economic work that would enable the identification of mineral reserves has been carried out. Mineral resources are not mineral reserves and by definition do not demonstrate economic viability. 

There is no certainty that all or any part of the mineral resource will be converted into mineral reserve. The resource estimate was prepared by Doug Roy, M.A.Sc., P.Eng., Associate Mining Engineer with Howe. Geological interpretation and review of assay QA/QC was provided by Ian Trinder, M.Sc., P.Geo., Senior Geologist with Howe.

Howe also includes two tables in its report that illustrate the variations in tonnes, grades and ounces contained within the Garrcon Deposit mineralized zone at various cut-off grades above the gold cut-off of 0.5 g/t that was selected for this resource calculation. Table 2 contains the data for the indicated category and Table 3 the data for the inferred category.

Table 2 – Description of the Indicated Resources of the Garrcon Gold Zones
    Indicated Resource Category
   
Less Than 150 Meters Deep
 
More Than 150 Meters Deep

Cut-off Grade
(Au g/tonne)
 
Tonnes Above Cut-Off
 
Av. Grade
(Au g/tonne)
 

Ounces
 
Tonnes Above Cut-Off
 
Av. Grade
(Au g/tonne)
 

Ounces
2.00   490,000   3.2   50,000            
1.50   660,000   2.8   59,000   18,000   1.7   980
1.00   1,300,000   2.0   84,000   150,000   1.3   6,300
0.75   2,000,000   1.6   100,000   310,000   1.1   11,000
0.50   3,300,000   1.2   130,000   480,000   0.9   14,000

 

Table 3 – Description of the Inferred Resources of the Garrcon Gold Zones
    Inferred Resource Category
   
Less Than 150 Meters Deep
 
More Than 150 Meters Deep

Cut-off Grade
(Au g/tonne)
 
Tonnes Above Cut-Off
 
Av. Grade
(Au g/tonne)
 

Ounces
 
Tonnes Above Cut-Off
 
Av. Grade
(Au g/tonne)
 

Ounces
2.00   670,000   3.5   75,000   92,000   2.4   7,100
1.50   1,100,000   2.8   99,000   460,000   1.8   27,000
1.00   2,700,000   1.9   160,000   1,400,000   1.4   63,000
0.75   4,500,000   1.4   200,000   3,700,000   1.1   130,000
0.50   9,400,000   1.0   300,000   9,100,000   0.8   230,000

Howe's deposit model identifies a broad zone of mineralization that extends over an east-west distance of 760m and remains open to the east. The mineralization averages approximately 275m wide, with the narrowest width of 175m located on the more sparsely drilled eastern end of the zone, reaching a maximum width of 375m in the more densely drilled western portion of the zone. About half of the 760m east-west length of the zone is bounded by the Destor-Porcupine fault system on the south and the contact with mafic and ultramafic rocks on the north. Widths are still open on the remainder of the 760 meter strike length. Mineralization included in the resource extends from surface across the entire zone to a depth of 125 meters on the more sparsely drilled eastern end and reaches a depth of 350 to 400 meters on the western half of the zone and remains open at depth.

Table 4: Notes to the above tables as applied by Howe for the resource estimations
  • The cut-off grade for mineralized zone interpretation was 0.1 g/tonne Au.
  • Block cut-off grade for defining Mineral resources was 0.5 g/tonne Au.
  • No top-cut grade was used. In the author's opinion the use of a top cut-off would not have significantly affected the results.
  • Gold price was US$900 per ounce.
  • Zones extended up to 100m son-dip from last intercept. Along strike, zones extended halfway to the next cross-section.
  • Minimum width was 5m, though in no place was the zone that narrow.
  • The tonnes quoted are not diluted.
  • Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  • Resource estimate prepared by Doug Roy, M.A.Sc., P.Eng.
  • A specific gravity (bulk density) value of 2.6 was applied to all blocks (a representative value based on a limited number of measurements).
  • Ordinary block Kriging ("OBK") was used for estimating block grades.
  • Indicated Resources were identified where the sample intercept spacing was 50m or less.
  • No Measured Resources or Mineral Reserves of any category were identified.

Howe recommends that the current infill drilling program within the resource area be continued to both upgrade the quality of the resources to more assured categories and to add internal resources by decreasing drill hole spacing. In addition step out holes should be drilled further to the east to follow and define the on-strike continuity of the Garrcon zones.

In its news release of September 23rd, Northern Gold reported that the current drill program is focusing on the top 200m of mineralization to develop sufficient resources to bring the Garrcon Deposit to a production decision as soon as possible. In addition, this initial resource estimate on the Garrcon Deposit is based on the first round of drilling plus the drilling by ValGold and previous operators. The results of the ongoing 10,000m drill program will be included in the follow-up resource calculation that Northern Gold indicated may be completed in the first part of 2011. The new drilling is intended to add to the initial resource and to demonstrate the continuity of the shallow mineralization. As of August 31st 2010 Northern Gold has completed 4,454m of the 10,000m drill program and intends to release assay results as they become available.

Qualified Persons

Technical information related to the Garrcon mineral resource estimate contained in this press release has been reviewed and approved by Doug Roy, M.A.Sc., P.Eng. and Ian Trinder, M.Sc., P.Geo., both independent Qualified Persons as defined by NI 43-101, with the ability and authority to verify the authenticity and validity of this data.

The Garrison Gold Property

The Garrison Gold Property is 100% owned by ValGold. It is located on the Golden Highway in the world renowned mining district of Kirkland Lake and Timmins in North Eastern Ontario. The Property occurs within the Abitibi greenstone belt along the Porcupine-Destor and the Munro Fault systems. The Property hosts several gold mineralized showings, including the advanced stage Jonpol and Garrcon Deposits and the less advanced 903 gold mineralized area. Drilling has been carried out on all three of the areas with the earliest work dating back to the 1930's. The Property has mining infrastructure and producing gold mines are located in close proximity. The Jonpol Project contains an Indicated Resource of 253,100 tonnes grading 7.77 g/tonne Au containing approximately 63,000 ounces of gold and an Inferred Resource of 1.6 million tonnes grading 4.93 g/tonne Au containing in the order of 247,000 ounces of gold as reported in a NI 43-101 Technical Report filed by Northern Gold on SEDAR on 21 October 2009. 

The Option Agreement

Under the terms of the Option Agreement, Northern Gold may acquire an initial 50 percent undivided interest in the Garrison Gold Property by making cash payments to ValGold of $1,000,000 over four years, with all or part of the payments being made in Northern Gold stock at Northern Gold's option, using a 20-day value weighted average price subject to regulatory approval. To earn the 50 percent interest Northern Gold must also complete work on the property in the amount of $4,000,000 over four years, with $500,000 being spent on the property in the first year of the agreement and not less than $750,000 to be expended in each of the subsequent years. 

After earning the initial 50 percent interest, Northern Gold may increase its interest to 80 percent by making additional cash payments to ValGold of $1,000,000 over four years with all or part of the payments being made in Northern Gold stock equivalent, priced using a 20-day value weighted average price and completing additional work on the property in the amount of $4,000,000 over four years.

To date, ValGold has received its first 2 of 5 option payments. The first $200,000 payment was made by the issuance of 2.2 million Northern Gold shares and the second payment was paid in cash. As reported on September 13, 2010, Northern Gold has expended approximately $1.1 million of the $4.0 million required to earn its initial 50% interest.

For more information on ValGold and its portfolio of international projects, visit our website at www.valgold.com.

Stephen J. Wilkinson, President & Chief Executive Officer

SEC 12g3-2(b) exemption 82-3339

Caution concerning forward-looking statements: The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied in the forward-looking information. Factors that may cause actual results to vary include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic condition or conditions in the financial markets and the inability to raise additional financing. Readers are cautioned to not place undue reliance on this forward-looking information. The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events except as may be required under applicable securities laws. 

No regulatory authority has approved or disapproved the information contained in this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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