VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 25, 2013) - Homestake Resource Corporation (TSX VENTURE:HSR)(FRANKFURT:B6I) ("Homestake") reported today that Roscoe Postle Associates Inc. ("RPA") has completed a mineral resource update for the 2,585-hectare Homestake Ridge Project, which is located in northwestern British Columbia. The update provides an initial resource for the high-grade South Reef deposit, which the Company discovered in late 2011, a refinement of the Main Homestake deposit, which the Company discovered in 2005, and a minor revision of the Homestake Silver deposit, which the Company discovered in 2009. This represents the culmination of work on the project by Homestake since 2003 and marks the transition of the project to Agnico Eagle Mines Limited ("Agnico Eagle"). Agnico Eagle has assumed project management since January 2013, under an August 2012 option agreement. As part of the option agreement Agnico Eagle is required to complete $3.5 million in exploration expenditures on the project in 2013.
The current base-case Mineral Resource Estimate utilizing an $85NSR/t cut-off value is as follows:
|Kt||g/t Au||oz Au||g/t Ag||oz Ag||% Cu||Mlb Cu||$US/t||g/t AuEq||oz AuEq|
The $85 NSR/t cut-off value was calculated using average long term prices of $1,500/oz gold, $27/oz silver and $3.50/lb copper and metal recoveries of 92% gold, 88% silver and 88% copper in blocks with >0.1% Cu and just gold and silver recoveries in blocks with <0.1% Cu. Provisions were also included for estimated smelter payment terms, refining costs and transportation. All prices are stated in $USD.
The new Mineral Resource Estimate represents an approximate 40% increase for the Homestake Ridge Project at roughly equivalent gold and silver grades when compared to the earlier April 6, 2011 Mineral Resource Estimates (see NR-05-11). The increase in mineral resources is due to the identification of new high-grade resources through additional drilling, optimization of the block models to 3D wireframes at a 2g/t AuEq cut-off grade and a lower cut-off value due to higher average metal prices. The 2011 resource estimate was given using a 3.0g/t AuEq cut-off grade, which equates to an approximate $118NSR cut-off value.
Highlights from the 2013 Mineral Resource Estimate Update include:
RPA suggests that an underground mining scenario is appropriate for the project and has recommended an $85 NSR cut-off value for the base-case resource estimate. Also reported are $65, $120, and $140, NSR cut-off values (see Table 1), which demonstrate both a significant increase in tonnage and contained gold and silver ounces at the lower $65 NSR cut-off value, and significant increases in gold and silver grades at incrementally higher cut-off values. A NI 43-101-compliant Technical Report will be posted on Sedar within 45 days.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be classified as mineral reserves. There is no assurance that any part of the resources will ultimately be converted to mineral reserves.
Optionee Agnico Eagle has advised that it continues with project planning for the upcoming exploration program, which will include surface exploration, ground geophysics and diamond drilling with the objective of identifying and outlining additional deposits and mineral resources at the property. Exploration field work on the property should resume in the late June to early July timeframe.
President Joe Kizis commented, "Homestake's consistent and systematic exploration efforts since 2003 have yielded three significant deposits at Homestake Ridge, making it now one of the top undeveloped higher-grade precious metal projects in the world. As Agnico Eagle assumes exploration and development of the Homestake Ridge property with a 2013 budget of $3.5million, we are confident that additional high-grade resources will be found, which will ultimately result in increased value for Homestake's shareholders. Few junior explorers are as well positioned for success during this period of market uncertainty."
Homestake Resource Update Parameters
The current estimate was carried out using separate block models constrained by 3D wireframes of the mineralized zones. The block models comprised an array of blocks measuring 5 m x 5 m x 5 m, with grades for Au, Ag, and Cu interpolated using Inverse Distance to the Third Power (ID3) weighting. Gold equivalence and NSR values were calculated afterward from the interpolated block grades.
The interpolations were carried out in three passes using progressively larger search radii of 30m, 50m and 100m. For the first and second passes, the interpolation was restricted to a minimum of three and a maximum of eight composites, with a maximum of two composites from any one drill hole (i.e. a minimum of two drill holes required). In the third pass, the composite constraints were a minimum of one and a maximum of two from a single drill hole.
Bulk densities were based on a total of 2,308 measurements taken by Homestake field personnel from the mineralized zones. Where enough measurements were available, average densities were estimated for the individual zones. These density values ranged from 2.66 t/m3 to 2.85 t/m3. For zones with too few measurements to determine a reliable mean, the average for the entire dataset, 2.75 t/m3, was used.
The mineralized zones were defined by Homestake personnel in consultation with RPA. The mineralized wire frames were identified using a nominal grade cut-off of 2.0 g/t AuEq, and a minimum horizontal width of 2.0m.
|Table 1: Summary of Mineral Resources at Homestake Ridge |
|Main Homestake Deposit - Indicated Resources|
|Main Homestake Deposit - Inferred Resources|
|Homestake Silver Deposit - Inferred Resources|
|South Reef Deposit - Inferred Resources|
|Combined Main Homestake + Homestake Silver + South Reef Resources|
High assays were capped, prior to compositing, at various levels depending on the statistical characteristics of the individual zones.
The Homestake Silver and South Reef resource estimates were entirely classified as Inferred Mineral Resources. For all zones, blocks qualified as at least Inferred if they fell within 75 m of a drill hole intercept. In the Main Homestake, blocks within 20 m of the nearest intercept, and estimated by at least two drill holes were tagged as eligible for upgrade to Indicated. Polygons were manually drawn around panels of contiguous Indicated-eligible blocks, which were then upgraded to an Indicated classification.
To view Figure 1, click on the following link: http://media3.marketwire.com/docs/h424m.pdf
About Homestake Resource Corporation
Homestake owns a 100 percent interest in the Homestake Ridge project, located in the Kitsault Mineral district in northwestern British Columbia. The project is being advanced as a potential high-grade underground mining operation. At an $85 NSR cut-off value and based on drilling completed through 2012, the project contains an estimated NI 43-101 compliant Indicated Resource of 124,000oz gold and 939,000oz silver (141,000oz AuEq) plus an Inferred Resource of 911,000oz gold and 20,366,000oz silver (1,225,785oz AuEq) at the Main Homestake, Homestake Silver and South Reef deposits. Visit the Company website at www.homestakeresource.com to see how the Homestake Ridge resource estimate compares to gold deposits worldwide, as ranked by Natural Resource Holdings (June 2012).
To date, 251 holes were drilled for a total of 70,533 metres, and multiple exploration targets remain to be tested on the large 2,585-hectare property. Agnico Eagle Mines Limited has assumed project management since January 2013 under an option agreement signed in August 2012 to fund exploration and development costs of $25.3 million over a 5-year period to earn a 65% interest in the property.
Homestake holds an option to acquire a 100% interest in the 623-square-kilometre Kinskuch project, located adjacent to, and to the southeast of, the Homestake Ridge project. Diamond drilling along the Illiance trend on the Kinskuch property during 2011 was successful in intersecting high-grade silver/lead/zinc VMS mineralization in three of four holes. Surface soil and rock-chip sampling along the trend in 2012 extended mineralization to a 4.5-kilometre strike-length; Homestake will be aggressively exploring this trend in 2013.
Homestake owns a 10.19 percent equity interest in Bravada Gold Corporation (TSX VENTURE:BVA) which is exploring and developing numerous gold/silver projects in several of Nevada's prolific gold belts. At the advance-stage Wind Mountain project, BVA has received a positive PEA from an independent engineering company for an open-pit/heap-leach operation. Bravada is currently conducting additional exploration at Wind Mountain under a funding and option agreement with Argonaut Gold Corporation.
Rob Macdonald (P.Geo.) is the Vice-President of Exploration for Homestake and is the Qualified Person responsible for reviewing the technical results in this release. David Rennie, P. Eng. and Principal Geologist for Roscoe Postle Associates Inc., is the Independent Qualified Person responsible for preparation and review of the Mineral Resource Estimate.
On behalf of the Board of Directors
Joseph A. Kizis, Jr., Director, President, Homestake Resource Corporation
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, receipt of property titles, 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 statements. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general economic conditions, interest rates, commodity markets, regulatory and governmental approvals for the company's projects, and the availability of financing for the company's development projects on reasonable terms. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, the timing and receipt of government and regulatory approvals, and continued availability of capital and financing and general economic, market or business conditions. Homestake Resource Corp. does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
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