NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OF THIS RELEASE.
TORONTO, ONTARIO--(Marketwire - Nov. 12, 2012) - Gowest Gold Ltd. ("Gowest" or the "Company") (News - Market indicators)(OTCBB:GWSAF) is pleased to update investors on the feasibility of initiating mining operations at its wholly-owned Frankfield East deposit in the Timmins Gold Camp prior to 2015. Accordingly, Gowest has entered into a memorandum of understanding with an existing third party processor in the Timmins area, which has sufficient milling capacity to be able to process ore from the Frankfield East gold deposit for a fee. The current plan is to produce a high-grade gold concentrate to be sold through a separate off-take agreement.
In preparation for negotiating a final agreement with the third party processor in the first half of 2013, Gowest is preparing a number of engineering, metallurgical, and mine development studies aimed at establishing appropriate technical, operational and economic parameters required by all parties. With the baseline environmental study completed at the Frankfield East deposit this past summer, current plans include Gowest securing appropriate mining permits to enable it to begin mine development at Frankfield East towards the end of 2013.
As previously reported, Gowest has focused on a number of potential ways to optimize the economics of mining and processing operations from the Frankfield East deposit. This includes a recently completed commercial test of ore sorting equipment by Commodas Ultrasort Inc., a world leader in the production of ore sorting equipment. This full scale ore sorting test clearly demonstrated significant economic opportunities, including a reduction in the quantities of rock being handled, while more than doubling the gold content in the crushed material sent to the final processing facilities (see Gowest news release dated September 10, 2012.) At the same time, other detailed metallurgical studies have also demonstrated the potential for the production of a concentrate from the Frankfield East ore with a grade of more than 90 grams of gold per tonne ("g/t") (see Gowest news release dated February 1, 2012.) Either or both of these approaches will enhance the economics of the already robust third party processing plan.
Greg Romain, Gowest's President and CEO stated, "We have been extremely pleased with the ongoing discussions taking place with these potential partners. The results of our Preliminary Economic Assessment demonstrated the potential at a gold price of $1,500 per ounce for Gowest to generate cash flows of greater than $50 million per year from the production of 95,000 ounces of gold starting within 30 months. This scenario was achieved with an estimated capital cost of approximately $60 million, giving an internal rate of return on all equity basis of 50% and a payback of 1-2 years. We are now reviewing financing options and completing a more detailed evaluation to further define the optimal parameters for a short term custom milling arrangement. We look forward to providing updates as we move into 2013."
Frankfield East Gold Deposit
The Frankfield East deposit has been estimated to contain NI 43-101-compliant resources including 348,000 ounces of gold in the Indicated category (1,621,000 tonnes at a grade of 6.68 g/t Au) plus 838,900 ounces of gold in the Inferred category (4,342,000 tonnes at a grade of 6.01 g/t Au). The deposit is currently 1.3 kilometres along strike and remains open including at depth beyond the approximately 800 metres that have been drill tested to date.
Issuance of Shares
Gowest also announces that it intends to issue, subject to TSX Venture Exchange approval, an aggregate of 125,000 common shares to non-management directors of the Corporation (31,250 common shares per director), at a deemed price of $0.08 per share, as partial payment of fees owed to such directors in respect of the quarter ended July 31, 2012. The aggregate deemed value of the common shares to be issued is $10,000. The shares are being issued in lieu of cash in order to conserve the cash resources of the Corporation.
This press release has been reviewed by Mr. Darren Koningen, P. Eng., Gowest's Technical Advisor for Project Development. Mr. Koningen is a Qualified Person under National Instrument 43-101.
Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100% owned Frankfield East gold deposit, part of the Company's North Timmins Gold Project (NTGP). Gowest is exploring additional gold targets on the 90-square-kilometre NTGP land package and continuing to evaluate area, which is part of the prolific Timmins, Ontario gold camp.
This news release contains certain "forward looking statements". Such forward-looking statements involve risks and uncertainties. The results or events depicted in these forward-looking statements may differ materially from actual results or events. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.