Barkerville Gold Mines Updates Cow Mountain Mineral Resource

VANCOUVER, BC / ACCESSWIRE / March 31, 2015 / Barkerville Gold Mines Ltd. (TSXV: BGM) (the “Company”) is pleased to provide an updated Cow Mountain resource estimate prepared by Snowden Mining Industry Consultants (Snowden), of Vancouver, British Columbia.

The reported Mineral Resource estimate is based upon an open pit scenario for the mining of gold mineralization beneath the surface of Cow Mountain in an area immediately surrounding the underground workings of the Cariboo Gold Quartz Mine. The resource estimate involved the application of Multiple Indicator Kriging (“MIK”) for gold grade estimation of a block model using Datamine mining software. Table 1 outlines the results of the updated resource.

Table 1: 2015 Cow Mountain Mineral Resource reported at a cut-off grade of 0.5 g/t Au

Notes:

(1) Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues. The Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.

(2) 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.

(3) Contained metal may differ due to rounding.

(4) The Mineral Resource estimate stated in Table 1 is defined using 25 ft by 25 ft by 25 ft blocks.

Estimation Methodology

A Datamine block model with cell dimensions of 25 ftE by 25 ftN by 25 ftRL was coded to reflect the estimation domains. Subcelling was used to more accurately define the volumes. The block size is the same as that used for the 2012 estimate. A kriging neighbourhood analysis was carried out to confirm the validity of the block size. This block size represents 1/4 and 1/2 of the drill hole spacing. The lower limit of the block model was restricted to the 3500 ftRL because the data available below this limit is limited.

All data was composited to equal sample lengths of 5 feet prior to statistical analysis and grade estimation. This length was chosen as the majority of sample intervals (75%) were 5 feet in length or less. Declustering of the composite data was tested and the results indicated that the issue of clustering did not have any significant impact, except for the mineralization indicator. All statistics were therefore reported based on the composite file without declustering.

The gold grades within the mineralized domain were estimated with a modified Multiple Indicator Kriging (MIK) approach. Snowden used an indicator approach to define the proportion of mineralized material within the blocks. The grade in the mineralized proportion was then estimated using MIK and the total mean grade within the block was estimated using the average gold grade weighted by proportions. The density was assigned as 2.7 t/m3.

Grade estimates and models were validated by: undertaking global grade comparisons with the input drill hole composites; visual validation of the block model in cross sections; and by grade trend plots. To identify over-smoothing the Indicated Resources were compared with the grade tonnage curves obtained with global change of support. The estimate validated well.

The resource classification definitions (Indicated and Inferred) used for this estimate are those published by the Canadian Institute of Mining, Metallurgy and Petroleum in their document “CIM Definition Standards”. Classification was applied based on geological confidence, data quality and grade variability. Other considerations for the classification were the historical underground mining within the mineralized domain, with presence of large stopes; and the completion of a large re-assay campaign.

Areas classified as Indicated Resources are informed by the first search pass in the estimation and are mostly informed with samples in drill holes drilled after 1980. The remainder estimated with the first or second pass was classified as inferred. Areas where there is no informing data or only containing isolated drill holes are not classified as a part of the Mineral Resource.

Cut-off grade determination and the evaluation of reasonable prospects for economic extraction

Snowden selected a base case cut-off of 0.5 g/t Au assuming that the assumptions for the selection of this cut-off in the previous resource estimate are still valid. This cut-off was based on:

a) The existence of an open pit optimization

b) The preferred cut-off grade of 0.2 g/t Au for the Spanish Mountain, a nearby project located approximately 60km south of Cow Mountain with a similar mineralization style, with a PEA study using a gold price in the Financial Base Case of US$1100/oz.

Whilst Snowden, in this instance, does not consider it appropriate to use the cut-off grades used by Spanish Mountain to define the cut-off grade for Cow Mountain, it does provide support that the cut-off grades used are at least consistent with the PEA for that project. Snowden would caution that until a suitable mining study has been completed, the selection of a cut-off grade can at best be considered preliminary. Table 2 outlines the sensitivities of gold cut-off grade to global grade and tonnage for the current Cow Mountain estimate.

In order to demonstrate that the mineralization as estimated in the block model has a reasonable expectation of being mined at some time in the foreseeable future, Snowden completed a Whittle pit optimisation exercise using the parameters provided in Table 3. The pit optimisation exercise has not resulted in an engineered and operational open-pit mine design.

Whilst $1300/oz was the starting point for the optimisation study, the optimisation was tested for gold prices from $1005/oz to $2095/oz. The results indicated that the resource potential, as defined by the optimisation study, was constrained by the model limits laterally (the optimisation could not expand past the model boundaries, thereby limiting the evaluation to the model extents).

Table 2: 2015 Cow Mountain Indicated and Inferred Mineral Resource estimate reported over a range of cut-off grades

Notes:

(1) Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues. The Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.

(2) 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.

(3) Contained metal may differ due to rounding.

(4) The Mineral Resource estimate stated in Table 1 is defined using 25 ft by 25 ft by 25 ft blocks.

(5) The reader is cautioned that the data presented in this table should not be misconstrued as a mineral resource statement. The figures are only shown to illustrate the sensitivities of the block model quantities and grade estimates to the selection of cut-off grade.

Table 3: 2015 Pit optimization parameters for establishing Reasonable Prospects of Economic Extraction

Comparison with previous estimate (Snowden 2012)

The updated Mineral Resource estimate has been compared with that previously prepared by Snowden (Geoex, Apex, Snowden 2012) at the 0.40 g/t cut-off to understand the changes in the reported numbers (Table 4). The most significant difference in the data set used for the updated estimate is the new assay values from the re-assay program. The two estimates have similar model extents and the MIK methodology was used for both. The previous estimate had large portions of assigned data. This assigned data has now been replaced with the results of the re-assay program increasing confidence in the data. This increase in confidence is reflected in the increase in indicated category. The large increase (262%) in the Indicated global tonnage is from the inclusion of previously excluded blocks that were informed with assigned data in the previous estimate and are now included because the assigned data is replaced with the results from the re-assay program. Snowden considers the comparison acceptable.

Table 4: Comparison of Snowden 2015 and Snowden 2012 estimates at 0.4 g/t gold cutoff

Discussion of New Results

The Cow Mountain database was updated with the results of the re-assay program outlined in the recommendations section of the 2012 report (Geoex, Apex, Snowden, 2012). A total of 27,473 coarse reject samples in drill holes from 2009 to 2012, which were originally assayed with standard fire assay method with atomic absorption finishing, were re- assayed using screen metallic analysis. A total of 7,698 non-assayed intervals in pre-existing drill holes from 2007 to 2011 were also assayed and incorporated into the estimate.

In the previous estimate the drill holes CM12-04, CM12-05, CM12-06 and CM12-07 were discarded because there were large differences between the survey at the collar and the downhole survey data. In the 2015 estimate these drill holes were used for the resource estimate and the downhole inclination was assigned from the deviations measured at the collar.

A set of historic underground drill hole data excluded from the previous estimate was revised and incorporated into this estimate because the position can now be verified with the underground tunnels from adjacent levels. Drill holes reported in the previous estimate but lying outside of the mineralized zone were excluded in this estimate. In the year 2014 ten new drill holes were drilled logged and assayed, five of these drill holes are outside of the main estimation domain. There was no drilling in the year 2013. In addition results from the re-assaying project carried out in 2014 were included in the updated database. In total, 1,464 drill holes were utilized to inform the 2015 resource update.

An estimation approach similar to that one applied in the previous estimate was used but with estimation parameters reviewed and modified to reflect changes resulting from incorporation of the new data.

Commentary

BGM continues to build an exploration and development plan based on primary ore and mineralizing controls from first principles in keeping with management’s previously stated goals (see press release dated March 17, 2015). This undertaking has commenced under the direction of Paul Geddes, VP Exploration and will require a period of time for compilation that includes all available historical underground and production data. Additionally, an assessment of the company’s extensive landholdings and external assets will also be made in order to extract value and maintain focus. BGM management is of the view that current market conditions, deposit suitability and permit timing dictate that alternate courses be considered. A series of smaller scale, high grade, relatively low capex operations will be of prime consideration to the current team and is well within current management’s areas of expertise, experience and proficiency.

Tom Obradovich, President and CEO of BGM stated, “Our recent success with small scale test mining of the Bonanza Ledge deposit, combined with the vast amount of gold successfully mined in the past gives credence to the traditional tried and true methods of extracting narrow vein deposits. Our approach to the Wells high grade deposit area will be to let the deposit characteristics dictate our timing, methods and approach”.

“All exploration, development and corporate decisions from our new management team will be logical and suitable based on geology, geometry and realistic assumptions with regards to markets, financing and timing”, added Greg Gibson, Chairman of BGM.

Qualified Persons

Mineral Resources reported for the Cow Mountain deposit were prepared by Dr. Adrian Martinez Vargas PhD under the supervision of Walter Dzick P.Geo., Principal Consultant, and reviewed by Lynn Olssen General Manager Geoscience, all employees of Snowden. All Snowden employees named above are Qualified Persons as defined in NI 43-101. Snowden is independent of BGM. Walter Dzick, P.Geo.,MAusIMM, APEGBC, AIPG, a Qualified Person as defined by National Instrument 43-101, is responsible for the Cow Mountain resource estimate and has read and approved the technical information contained in this news release.

About Barkerville Gold Mines Ltd.

Since the mid-1990s the Company has focused on exploration and development of gold projects in the Cariboo Mining District in central B.C. The Company’s mineral tenures cover 1,164 km2 along a strike length of 60 km and approximate width of 20 km, including the Cariboo Gold Project, the Bonanza Ledge Gold Project, the Barkerville Mountain and Island Mountain exploration targets and seven past producing hard rock mines. The QR Property was acquired in February 2010 and includes a 900 tonne/day gold milling facility and a permitted gold mine located approximately 110 km by highway and all-weather road from the Barkerville Gold Camp. In November 2010, the Company acquired a second permitted mill currently on care and maintenance in Revelstoke, B.C. The Company has completed significant drilling and exploration programs and, together with the historical data, is compiling all information to determine the geologic models and updated technical reports to continue with exploration and development of the Cariboo Gold projects. This news release has been prepared on behalf of the Board of Directors of the Company which takes full responsibility for its contents.

For further information on Barkerville Gold Mines Ltd., please contact:

Greg Gibson
Chairman and Director
ggibson@barkervillegold.com

Cautionary Statement on Forward -Looking Information

Neither the TSX Venture Exchange (“TSXV”) nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, the Company’s objectives, goals or future plans, statements regarding exploration results and exploration plans. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

SOURCE: Barkerville Gold Mines Ltd. 

ReleaseID: 427374