Highlights:
- Indicated resources of 424,000 ounces gold in 2.39M tonnes at 5.53 g/t using a 2.0 g/t cut-off
- Plus Inferred resources of 666,000 ounces gold in 3.85M tonnes at 5.38 g/t using a 2.0 g/t cut-off
- Galway’s average gold grade is 40% higher than AUX’s gold grade of 3.90 g/t as originally reported by Ventana Gold
- Additional drilling at depth and along strike, coupled with additional drilling in the newly discovered Machuca and Catalina zones, and the potential value associated with the Company’s fractional land position could provide additional upside (refer to Figures 1 and 2)
- Resources do not include the newly-discovered Catalina zones with recently-released intersections of 13.5 meters (m) grading 3.7 g/t Au and 59.5 g/t Ag (hole GWY-244), and 7.0 m grading 2.1 g/t Au (hole GWY-238); these zones are open in all directions
- Resources do not include recently released intersections such as 6.2 m grading 6.5 g/t Au (hole GWY-247) in the new Machuca zones, which suggests a material amount of potential due to results obtained to date, and the area is open in all directions (e.g. west of and below 19.0 m grading 11.6 g/t Au in hole GWY-231)
- Gold recoveries range from 93-99%. The first round of sampling demonstrated that the mineralization is amenable to conventional sulfide flotation
- Silver recoveries range from 86%-97%. Management believes that the flotation circuit would also recover copper and zinc as by-product credits
- Galway has successfully negotiated to obtain title to nine mining concessions in California and has received confirmation from the National Geological Service of Colombia that mining titles for 100% of six concessions were successfully transferred and registered to Galway Resources, including the “fractions” that appear to be directly within AUX’s La Mascota mineralized structure
Gold Resources
California Deposit, Colombia
Current Mineral Resource Estimate – SRK, September 07, 2012
Galway Properties; 2.0 g/t Au cut off
| Classification | Cutoff (g/t Au) | Tonnes | Au (g/t) | Au ounces | Ag (g/t) | Cu (%) | |
| Indicated | 2.0 | 2,387,000 | 5.53 | 424,000 | 6.93 | 0.072 | |
| Inferred | 2.0 | 3,850,000 | 5.38 | 666,000 | 6.36 | 0.067 | |
Notes: See below next table
Sensitivity to Cutoff Grade – SRK Estimated Resources, September 07, 2012 – Galway’s California Project, Colombia
Cutoff | Inferred | Indicated | ||||||||
Au Grade (g/t) | TONNES | Au | Ag | Cu | Au | TONNES | Au | Ag | Cu | Au |
0.25 | 114,285,600 | 0.64 | 4.01 | 0.056 | 2,349,207 | 34,246,800 | 0.82 | 4.14 | 0.062 | 898,355 |
0.50 | 30,034,800 | 1.46 | 4.42 | 0.060 | 1,414,263 | 9,315,000 | 2.05 | 4.73 | 0.064 | 615,371 |
1.00 | 17,069,400 | 2.08 | 4.37 | 0.059 | 1,142,287 | 5,367,600 | 3.09 | 4.96 | 0.065 | 533,840 |
1.25 | 4,849,200 | 4.63 | 6.44 | 0.067 | 721,786 | 2,705,400 | 5.08 | 6.74 | 0.071 | 442,276 |
1.50 | 4,703,400 | 4.73 | 6.28 | 0.067 | 715,260 | 2,683,800 | 5.11 | 6.78 | 0.071 | 441,315 |
2.00 | 3,850,200 | 5.38 | 6.36 | 0.067 | 666,470 | 2,386,800 | 5.53 | 6.93 | 0.072 | 424,385 |
2.25 | 3,493,800 | 5.72 | 6.54 | 0.066 | 642,042 | 2,192,400 | 5.83 | 7.10 | 0.072 | 411,142 |
2.50 | 2,953,800 | 6.32 | 6.46 | 0.066 | 600,654 | 1,873,800 | 6.42 | 7.25 | 0.071 | 387,061 |
3.00 | 2,327,400 | 7.29 | 6.49 | 0.066 | 545,742 | 1,436,400 | 7.55 | 7.46 | 0.072 | 348,712 |
3.50 | 1,852,200 | 8.34 | 6.74 | 0.067 | 496,415 | 1,177,200 | 8.49 | 7.44 | 0.073 | 321,494 |
4.00 | 1,517,400 | 9.36 | 6.85 | 0.068 | 456,467 | 939,600 | 9.69 | 7.93 | 0.073 | 292,634 |
4.50 | 1,333,800 | 10.05 | 7.18 | 0.069 | 431,192 | 810,000 | 10.56 | 7.83 | 0.073 | 274,922 |
Notes:
- 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 Resources estimated will be converted into Mineral Reserves;
- Mineral Resources are reported in accordance with Canadian Securities Administrators (CSA) National Instrument 43-101 (NI 43-101) and have been estimated in conformity with generally accepted Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines;
- Resources are stated at a 2.0 g/t gold cut-off grade; sufficient to define potentially underground mineable resources; however mineable underground shapes have not yet been defined;
- The grades for Ag and Cu were estimated separately, and presented as associated average metal grades at the Au cutoff;
- Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding; and
- SRK is reporting resources on a 100% basis for Galway controlled concessions. Some of Galway’s concessions are 100%-owned while others have minority owners with up to a 20% participating interest, subject to Galway’s first right of refusal.
Other notes:
- The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues, although the Company is not aware of any such issues.
- The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.
- A bulk density of 2.50 t/m³ was used for all tonnage calculations. There is little variation in density between the different rock types.
- The lower cut-off was ascertained using a gold price of US$1500/oz with underground mining costs at US$65/tonne and milling plus G&A costs at US$17/tonne.
Drill Results
Recent drilling has focused on expanding the California mineralized footprint to the south where multiple new zones have been discovered. At the Machuca zones, based on an arbitrary physical break in the model at about the location of the river, the drilling indicates the Machuca zones to contain approximately 100,000 ounces Au (included in the above stated resources). Further east, the Santa Catalina area has recently been a focus of one of Galway’s drilling programs, with several new zones discovered. The drill collared into a zone that returned 3.7 g/t Au over 13.5 m from surface in hole GWY-244, while a second hole returned 2.1 g/t Au over 7.0 m, including 11.8 g/t Au over 1.0 m in hole GWY-238 in a different zone. Figures 1 and 2 are a plan and long section showing the relative locations of these new zones and the resource blocks. All drill results referenced in this press release were previously issued. Those reiterated herein are those that were not incorporated in the resource model.
Santa Catalina Zones Drill Results, Outside The Resource Model
GWY-234
- 5.0 meters grading 2.7 g/t Au and 418.3 g/t Ag, including 1.0 meter of 6.6 g/t Au and 866.0 g/t Ag
GWY-236
- 14.0 meters grading 1.0 g/t Au and 17.9 g/t Ag, including 1.0 meter of 4.9 g/t Au and 81.3 g/t Ag
- 7.0 meters grading 1.2 g/t Au and 53.3 g/t Ag, including 1.0 meter of 4.5 g/t Au and 326.0 g/t Ag
GWY-238
- 7.0 meters grading 2.1 Au and 15.2 g/t Ag, including 1.0 meter of 11.8 g/t Au and 18.2 g/t Ag
GWY-244
- 13.5 meters grading 3.7 g/t Au and 59.5 g/t Ag (21.5% core recovery)
- 5.0 meters grading 2.3 g/t Au and 153.5 g/t Ag, including 1.0 meter of 6.2 g/t Au and 426.0 g/t Ag
GWY-245
- 8.0 meters grading 1.5 g/t Au and 11.5 g/t Ag, including 1.0 meter of 5.7 g/t Au and 29.4 g/t Ag
- 1.0 meter grading 5.8 g/t Au and 93.2 g/t Ag
GWY-250
- 17.0 meters grading 1.4 g/t Au and 29.3 g/t Ag (17.4% core recovery)
Machuca Zones Drill Results, Not Included In The Resource Model
GWY-243
- 6.0 meters grading 3.0 g/t Au and 20.1 g/t Ag, including 1.0 meter of 14.3 g/t Au and 87.1 g/t Ag
- 1.0 meter grading 5.5 g/t Au and 140.0 g/t Ag
GWY-247
- 6.2 meters grading 6.5 g/t Au and 21.0 g/t Ag, including 1.0 meter of 31.3 g/t Au and 68.8 g/t Ag
GWY-248
- 17.0 meters grading 2.9 g/t Au and 21.3 g/t Ag, including 1.0 meter of 19.7 g/t Au and 76.1 g/t Ag, and 1.5 meters of 6.2 g/t Au and 81.8 g/t Ag
GWY-249
- 4.4 meters grading 3.5 g/t Au and 52.9 g/t Ag, including 1.1 meters of 11.6 g/t Au and 172.0 g/t Ag
GWY-251
- 33.0 meters grading 2.3 g/t Au and 35.3 g/t Ag, including 1.0 meter of 19.9 g/t Au and 610.0 g/t Ag, and 1.0 meter of 25.8 g/t Au
Details of Galway’s California drill results are provided in the Assay Result Highlights Table on the Company’s website at www.galwayresources.com. Also on the website are all maps and sections associated with this press release, and pictures of significant visible gold from California and Vetas.
Mineral Resource Modeling and Estimation
The mineral resource estimate was prepared in accordance with NI 43-101 by SRK Consulting (U.S.) Inc., of Tuscon, Arizona, an independent consulting company that provides services to the mining industry. The resource database incorporates 241 surface diamond drill holes (78,272 m) completed during the 2009-2012 and ongoing drill program. At the California deposit, clearly defined limits to gold mineralization are not yet established, and it is difficult to create and interpret hard boundaries to mineralization. The limits of gold mineralization were therefore modeled using a 30% probabilistic envelope based on indicator values of less than 0.1 g/t gold, 0.1 to 1.0 g/t gold, and greater than 1.0 g/t gold. Analysis of gold grade data suggests that these indicators, on average, discriminate reasonably well between areas of low grade and high grade gold mineralization and barren areas outside the main mineralization. The selection of the probability level is subjective and impacts considerably on the volume (and thus tonnage) of the gold mineralization, so visual and statistical checks were done to compare blocks at different probability with grades in the composite file.
The drill hole database consists of 241 drill holes with complete assays, 237 have been used to define the resources. Four of seven holes in the Santa Catalina zone have assays; however, there is currently insufficient information to define mineral resources for this area.
A non-linear estimation method “Median Indicator Kriging” (MIK) was used to estimate block grades. The objective was to estimate the spatial distribution of grades on the basis of block support rather than sample support. Grade capping was not used in MIK, because grade estimation is done by grade cut-off intervals. MIK was carried out on gold, silver, and copper. Median Indicator Kriging is an approximation of Multiple Indicator Kriging, which assumes that the spatial continuity of indicators at various cut-offs can be approximated by a single median indicator variogram. Resource estimation was completed using Supervisor software for variography and Datamine Studio software for creation of the resource block model. Parent block size is 12m x 20m x 9m (x,y,z), and SMU (single mining unit) block size is 2m x 5m x 3m, using an Affine correction. The complete details of the MIK methodology used at California will be presented in the NI 43-101 technical report being prepared.
Mineral resource classification is based on a combination of multiple criteria. Blocks within first search ellipse were coded as indicated if Kriging variance is less than .3, distance from nearest composite is less than 20 m, minimum number of holes used to estimate block are more than 5 and minimum number of composites used are more than 15. Blocks coded with these rules were looked on screen and final indicated out line was digitized to avoid spotted blocks appearance.
The in-situ mineral resource is reported at a 2.0g/t gold cutoff; sufficient to define potentially mineable underground resources; however potentially mineable underground shapes have not yet been defined. Resources are reported on a 100% basis for Galway controlled properties. Galway Resources has a QA/QC program in place to verify drill hole assays.
SRK, Tucson, Arizona has completed the resource estimation and will prepare a NI 43-101 technical report on resources. Ravindra Sharma is the SRK Qualified Person, as defined by NI 43-101, who is responsible for the resource estimate. He is a geologist with MAusIMM(CP) and SME Registered Member qualifications.
The main zone trend is up to 100m wide, 850m along strike, and has been defined to over 400m in depth. The Machuca zone trend is approximately 50 m wide, and is not yet fully defined as to strike and depth extent.
Metallurgical Testwork
Initial metallurgical test results have been received from six samples sent to McClelland Laboratories, Inc., from the Company’s California gold-silver property in Colombia. The six mineralized samples were shown to be readily amenable to conventional sulfide flotation processing, especially for rougher flotation. Rougher concentrates represented gold (Au) recoveries ranging from 93 to 99 percent, and silver (Ag) recoveries ranging from 86% to 97%. These flotation concentrates would then require further processing for precious metals recovery through intensive cyanidation, oxidation and subsequent cyanidation, or through roaster or autoclave processing. McClelland advised that it may be beneficial to recover the coarser free Au particles though simple gravity concentration at the beginning of the processing circuit. Gravity alone liberated between 35 and 68 percent of the gold in the six evaluated samples.
A representative cross section of mineralization along Galway’s portion of the California trend was provided in the six metallurgical samples sent to McClelland Labs. This included near surface and deeper mineralization, as well as samples with high and low grades taken along the northeast, central and southwest portions of the property. Galway expects the flotation circuit to also recover copper and zinc as by-product credits in the concentrate, which would be in keeping with the copper concentrate reported by Ventana Gold on its adjoining ground (acquired by AUX Canada for $1.5 billion in cash) where recoveries were reported to be 86% for gold, 93% for silver and 83% for copper.
Flotation, with possible head end gravity, concentration appears to be the best processing option for the California mineralization represented by the 6 met samples. Additional metallurgical tests were recommended to develop the optimal method for treating concentrate products, including intensive cyanidation with regrind, roasting or pressure and/or bio oxidation for precious metals recovery.
Mineralization
Intercepts reported above and in previously reported drill holes are hosted by silicified zones, breccias, fracture zones and stockwork, typical of the district, which includes Eco Oro’s (formerly Greystar Resources’) and AUX’s (formerly Ventana Gold’s) National Instrument 43-101 compliant resources, Angostura and La Bodega, respectively. The principal geologic control in the California-Angostura District is a linear structural corridor that trends northeast-southwest and dips steeply to the north. Segments of this zone host the resources reported by both Eco Oro and AUX, and Galway is exploring another segment along the same structural corridor. The entire corridor may be one continuous mineralized zone through all three properties. The mineralized zone identified on Galway’s properties is characterized by hydrothermal alteration and mineralization within various phases of pervasively altered intrusive porphyries. Mineralization remains open along strike where untested, at depth along the entire Zone, and across the width of the structure in most places.
Follow-up
The Phase 1 exploration program at California has successfully resulted in a resource estimate in line with management’s expectations. Mineralization in the Pie de Gallo, Machuca, and Santa Catalina zones remain open in all directions. Drilling has been curtailed in California pending an analysis of the work that has been completed to date. The resource has identified a number of drill targets. Additional surface drilling in Vetas awaits drill platform permission and construction. Two drills remain underground.
Future work at California will entail:
- Step-out Phase 2 drilling to extend the Machuca and Santa Catalina zones;
- Phase 2 drilling will include the testing of deep targets below the main Pie de Gallo trend;
- Development and deep drilling options underground to be studied via an existing extensive hangingwall adit;
- Infill drilling to advance ‘inferred resources’ into the ‘indicated’ category;
- Comprehensive metallurgical testing to better determine precious metal recoveries;
- Continued scoping and baseline studies to advance the permitting process; and
- The initiation of environmental impact, scoping and feasibility studies in a timely fashion.
The technical report on the California deposit in Colombia will be filed within 45 days of this news release. The foregoing geological disclosure has also been reviewed and verified on behalf of Galway by Michael Sutton (a qualified person for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects). For full QC/QA procedures see previous drilling results press releases. For complete drill results please visit www.galwayresources.com.
About The Company
Galway Resources is a mineral exploration company primarily focused in northeast Colombia, with gold exploration occurring at the California and Vetas gold projects. The Company also has the Victorio molybdenum-tungsten project, with excellent infrastructure, in southwestern New Mexico. A positive scoping study was completed by SRK in 2008. The recent surge in tungsten pricing, coupled with a steady molybdenum price, has prompted management to reassess strategic alternatives to advance the Victorio project.
For further information contact:
Galway Resources Ltd.
Investor Relations
1-800-475-2412
www.galwayresources.com
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.
Forward Looking Statements:
Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading “Risk Factors” and elsewhere in the Company’s periodic filings with Canadian Securities Regulators. Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.