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Spanish Mountain Gold Ltd. ( the
"Company") (TSX-V:SPA
- News) and AGP Mining
Consultants ("AGP") hereby provide clarification of details with
respect to the National Instrument 43-101 ("NI 43-101") compliant
Preliminary Economic Assessment ("PEA") study for its 100%-owned
Spanish Mountain project in south-central British Columbia. The results of
the study were initially disclosed by the Company in the news release issued
on November 23, 2010.
As a precursor to the PEA study, a new
global mineral estimate was prepared by AGP, the details of which will be
presented in the formal report to be filed under the profile of the Company
on SEDAR later this month. A base-case pit design was developed for the
purpose of the PEA study using assumptions of a gold price of US$950 per
ounce and on costs derived within the PEA study. The amount of gold contained
within such a pit is dependent on the assumptions used and should those
assumptions change, the contained gold will also change. This can be seen in
the appended Figure 1, which includes the outline of the PEA pit design at
US$950 per ounce gold and the outline of a conceptual pit shell at US$1,100
per ounce gold.
Figure 1 shows a vertical section
oriented north-south through the Main and North Zones of mineralization. The
Company believes that some of the mineralized material that currently lies
outside of the PEA pit design using the assumption of a US$950 per ounce of
gold may fall into a future pit design as the Company continues to optimize
the pit based on a refinement of operating costs and assuming an appreciating
gold price. Gold contained within conceptual pits will be presented in the
formal report as a sensitivity analysis and will include the pit shell based
on a gold price of US$1,100 per ounce.
In the news release of November 23,
2010, the Company disclosed a statement of a NI 43-101 compliant Inventory of
Mineralized Material. This should properly have been referred to by AGP as
the Mineral Resource contained within the PEA pit design. That information is
reprinted here as Table 1 below:
Table 1: Mineral Resource within the PEA Pit Design- US$950/oz
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Classification Tonnes Gold Grade (g/t) Gold Contained (oz)
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Measured 4,875,900 1.05 164,600
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Indicated 72,498,800 0.52 1,207,500
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Measured + Indicated 77,374,700 0.55 1,372,100
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Inferred 39,531,300 0.48 611,100
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The Company and AGP are working
expeditiously to file the formal report during December, 2010. The following
information is provided for clarification purposes:
-- The term "Mineral Resource" presented in Table 1 now refers to the gold
contained within the pit design that is envisaged to be mined and
processed in the conceptual mining plan described in the PEA study.
-- The Mineral Resource is contained within the base case US$950 per ounce
gold PEA pit and represents the portion of the Inventory of Mineralized
Material within the PEA pit above the cut-off grade of 0.2 g/t gold. The
Inventory of Mineralized Material will be described fully in the formal
report. This Inventory refers to mineralization both inside and outside
of the PEA pit boundary. Some of this material may be re-classified as a
Resource should further optimization of pit designs include such
material.
-- The Mineral Resource in Table 1 was calculated at a cut-off of 0.2 g/t
gold, which is based on all mining and processing costs contained within
the PEA. This cut-off grade was determined to be the breakeven point for
the inclusion of mineralization in the Mineral Resource using a gold
price assumption of US$950 per ounce.
-- The news release issued on November 23, 2010 also presented details of
the process used by Michael Waldegger, P.Geo to arrive at the new
resource estimate. Specific references to gold grade shells of 0.6 g/t
relate to a modeling methodology employed by Mr. Waldegger to identify
areas that demonstrate consistent lateral continuity within the total
resource model. The reference to a grade shell of 0.6 g/t gold does not
refer to a gold cut-off grade for the project as a whole.
The updated resource was estimated by
Michael Waldegger, P.Geo., an independent
qualified resource evaluator, with an effective date of November 19, 2009 and
complies with NI 43-101. Mr. Waldegger of AGP
Mining Consultants of Barrie, Ontario is a Qualified Person within the
meaning of NI 43-101. The methodology employed by Mr. Waldegger
in preparing the updated resource estimate was previously disclosed by the
Company on November 23, 2010.
Areas of Opportunity
The PEA results provide clear drill
targets for the Company to potentially enhance the project's Mineral
Resources and project economics. The focus of the drilling program in early
2011 will include:
-- targeting mineralized material located below and outside of the base
case PEA pit design that are considered to be areas of high potential to
supplement the current Mineral Resource,
-- improving the level of confidence in areas of gold mineralization that
currently fall into the inferred resource category and
-- additionally, generating drilling targets on the Cedar Creek property
which was acquired earlier this year and commencing drilling on these
targets early in 2011.
In addition, refinement of operating
cost estimates will be ongoing and any reduction in these costs may expand
the conceptual pit boundaries with an attendant increase in the Mineral
Resources within the pit shell.
NI 43-101 Statement in respect of PEA
and Qualified Persons
The company cautions, in accordance with
National Instrument 43-101-Standards of Disclosure for Mineral Projects as
adopted by the Canadian Securities Regulators, that the PEA referred to herein
is preliminary in nature, includes inferred mineral resources that are
considered too speculative geologically to have the economic consideration
applied to them that would enable them to be categorized as mineral reserves,
and there is no certainty that the PEA will be realized. Mineral resources
are not mineral reserves and do not have demonstrated economic viability.
Mr. Michael Waldegger,
P.Geo. and Mr. Gordon Zurowski, P.Eng of AGP Mining
Consultants of Barrie, Ontario are Qualified Persons within the meaning of NI
43-101.
Mr. Waldegger
and Mr. Zurowski have reviewed and approve the
contents of this news release.
About Spanish Mountain Gold
Spanish Mountain Gold Ltd. is focused on
the responsible development of its flagship Spanish Mountain gold project in
southern central British Columbia. The Company has no debt and owns 100% of
all four gold properties located in British Columbia. Additional information
about the Company is available on its website: www.spanishmountaingold.com.
On Behalf of the Board,
SPANISH MOUNTAIN GOLD LTD.
Brian Groves, President and CEO
To view the map associated with this
release, please visit: http://media3.marketwire.com/docs/spa-map1.pdf.
This news release contains
forward-looking information, which involves known and unknown risks, uncertainties
and other factors that may cause actual events to differ materially from
current expectation. Important factors - including the availability of funds,
the results of financing and exploration activities, the interpretation of
drilling results and other geological and metallurgical data, risks
associated with the estimation of mineral resources and the geology, grade
and continuity of mineral deposits, project cost overruns or unanticipated
costs and expenses -- that could cause actual results to differ materially
from the Company's expectations are disclosed in the Company's documents
filed from time to time on SEDAR (see www.sedar.com).
Forward-looking statements can often be identified by the use of words such
as "plans", "expects", "is expected",
"scheduled", "estimates", "forecasts",
"intends", "anticipates" or "believes" or
variations (including negative variations) of such words and phrases. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release. The
company disclaims any intention or obligation, except to the extent required
by law, to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this release.
Contact:
Contacts:
Spanish Mountain Gold Ltd.
Brian Groves
President and CEO
(604) 601-3651
info@spanishmountaingold.com
www.spanishmountaingold.com
B&D Capital Partners
(604) 685-6465
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