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Press release from Marketwire

Continental Gold Announces an Updated Mineral Resource Estimate for the Buritica Project, Colombia

Monday, October 01, 2012

Continental Gold Announces an Updated Mineral Resource Estimate for the Buritica Project, Colombia06:30 EDT Monday, October 01, 2012TORONTO, ONTARIO--(Marketwire - Oct. 1, 2012) -Continental Gold Limited (TSX:CNL)(OTCQX:CGOOF) ("Continental" or the "Company") is pleased to announce an updated mineral resource estimate for the Yaraguá and Veta Sur vein systems at its 100%-owned Buriticá project in Antioquia, Colombia. Undertaken by independent consultants, Mining Associates Pty Ltd. ("MA"), the mineral resource estimate is based on 112,600 metres of drilling and 2,332 metres of underground sampling (as at June 30, 2012) and was prepared in accordance with National Instrument 43-101 ("NI 43-101"). The Company continues with a major surface and underground drilling program to expand and increase the level of confidence of the mineral resources for the Yaraguá and Veta Sur vein systems and to explore new targets at the Buriticá project. HighlightsCombined mineral resources for the Yaraguá and Veta Sur vein systems at a 3 g/t gold cut-off grade are newly estimated as: Combined Yaraguá and Veta Sur Mineral Resources above a 3 g/t gold cut-off, June 30, 2012ResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured320,00027.8691.4290,000700,0009,500,000Indicated3,420,00012.3350.61,350,0003,900,00046,300,000M & I3,740,00013.6380.71,640,0004,600,00055,800,000Inferred13,330,0008.8330.53,760,00014,200,000156,500,000Note - Reported tonnage and grade figures have been rounded from raw estimates to reflect the order of accuracy of the estimate. Minor variations may occur during the addition of rounded numbers. There have been no assumptions made as to metal prices or recoveries in this mineral resource estimate.Combined mineral resources for the Yaraguá and Veta Sur vein systems at a 4 g/t gold cut-off grade are newly estimated as: Combined Yaraguá and Veta Sur Mineral Resources above a 4 g/t gold cut-off, June 30, 2012ResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured290,00030.5751.4280,000700,0009,100,000Indicated2,890,00014.0390.71,300,0003,600,00041,500,000M & I3,180,00015.5420.71,580,0004,300,00050,600,000Inferred10,000,00010.5340.63,390,00010,900,000122,000,000Note - Reported tonnage and grade figures have been rounded from raw estimates to reflect the order of accuracy of the estimate. Minor variations may occur during the addition of rounded numbers. There have been no assumptions made as to metal prices or recoveries in this mineral resource estimate.The mineral resource estimates represent substantial increases in measured, indicated and inferred resources of gold, silver and zinc over those of the maiden mineral resource estimate for the Buriticá project (announced by the Company on September 15, 2011) reflecting the growth of the Company's drilling and sampling database. Grade-Tonnage charts demonstrate the high-grade nature and robust character of the mineral resources over a range of cut-off grades from 0 to 5 g/t gold. Furthermore, estimates of tonnage-grade per vertical-metre for the major vein domains demonstrate only limited variation through elevation ranges of more than 400 metres. Significant potential remains for future mineral resource estimate increases in the Yaraguá and Veta Sur vein systems as most of the vein domains modeled in both Yaraguá and Veta Sur are open at depth and laterally. The current mineral resource estimates also exclude a number of veins in these systems for which there was limited drilling as of June 30, 2012. "It is quite an accomplishment to drill a robust resource estimate of this size in just under two-and-one-half years since going public. I would personally like to congratulate everyone in the Company for their invaluable contributions," commented Ari Sussman, CEO. "Now with the updated mineral resource estimate in hand, we will announce a comprehensive revised exploration and development plan for the Buriticá project in the next few weeks."Details Buriticá, Continental's 100%-owned project, contains several known areas of high-grade gold and silver mineralization, of base metal carbonate-style ("Stage I") variably overprinted by texturally and chemically distinctive high-grade ("Stage II") mineralization. The two most extensively explored of these areas - the Yaraguá and Veta Sur systems - are central to this land package. The Yaraguá system has been drill-outlined along 900 metres of strike and 1,300 vertical metres and partially sampled in underground developments. The Veta Sur system has been drill intersected along 570 metres of strike and 1,180 vertical metres. Both systems are characterized by multiple, steeply-dipping veins and broader, more disseminated, mineralization and both remain open at depth and along strike, at high grades. This press release outlines updated mineral resource estimates for the Yaraguá and Veta Sur systems, superseding the maiden mineral resource estimate announced by the Company on September 15, 2011. MA was commissioned to undertake mineral resource estimations for Yaraguá and Veta Sur. Mr. Andrew J. Vigar (B.Sc., FAusIMM, MSEG and MA Director) has been responsible for estimations largely undertaken by Mr. Martin Recklies (BAppSc. (Geoscience)), which will be detailed in a Technical Report prepared in accordance with NI 43-101 to be filed on SEDAR within 45 days of this press release. There was close collaboration between MA and the Buriticá site geologists and consultants, undertaken during site visits and at MA's Brisbane offices, in particular on the selection and tagging of the vein domains in the context of available underground and surface geology. Resource modeling was based on Continental's Buriticá database as at June 30, 2012, audited and provided by Resource and Exploration Mapping Ltd., which maintains the Company's database. Database statistics are summarized below:Validated Drilling Database as of June 30, 2012Drilling/sampling typeAreaDrill-holesSamples (m)MetresSurface DH (BUSY-, BUSM-)Yaraguá and Veta Sur27681,10592,366Underground DH (BUUY-)Yaraguá8716,94317,901Channel samples, surface samples (CH-)Yaraguá underground995*2,3322,335Total1,358100,380112,602*Channel sample data stored as pseudo drill-holes In view of their geology, grade distributions and potential mining methods, Yaraguá and Veta Sur were modeled as sets of sub-parallel, steeply-dipping vein domains. In the case of Yaraguá, 33 vein domains were interpreted from geological mapping and sampling of underground developments and drilling in the upper part of the system and extended to greater depth and along strike from drill intercepts. The mineral resource estimate is constrained by domains consisting of 3D geological models. The drill-hole data (and underground channel samples where available) were displayed in section and elevation slices showing assays and geology. Intercepts were selected and coded for each vein domain based on the following selection criteria, in decreasing hierarchy:Gold grades greater than 2 g/t Au; No assays received, but a "vein" lithology code in the expected location; or Sub-grade areas where the interpreted vein domain passed through the drill-hole but was not already coded (i.e. "brought through"). Vein domains were modeled using MA's proprietary software. For Veta Sur, 25 vein domains were interpreted from drilling. Intercepts were tagged by vein domain name and several iterations of 3D sections, plans and visualizations were done to ensure geologically consistent vein domains. Other mineralization is present outside these domains but requires further delineation drilling. Informing samples were vein composites within domains, one composite sample across each vein intercept. The estimation grid size was 5 metres in X and Y with vein thicknesses (horizontal widths), and gold, silver and zinc grades estimated in unfolded space using Ordinary Krige estimation. The informing sample grades were capped on a domain or sub-domain basis as determined by geostatistical analysis. A minimum of one composite and a maximum of eight are required to estimate a block. As well as the tightly-constrained vein domains, high- grade and low-grade sub-domains were used within the vein domains, using a 3 metre*grams gold boundary. Results of the Krige estimation were validated against raw data statistics. Trend analysis against the informing samples and check estimates using Inverse Distance Squared and Nearest Neighbour (Polygonal) estimation techniques are in generally good agreement with the Krige estimates and grade patterns, highlighting the importance of the sub-domaining in minimizing grade "smearing" where data density was low. Results of the 2D estimation for each vein domain are combined to a normal 3D block model with sub-block size of 2.5 m (E) by 0.25 m (N) by 2.5 m (RL). The model was screened for topography. The number of informing samples, presence of underground development or mining, kriging variance (gold) and distance to nearest informing sample were used to define contiguous areas defining Resource Categories, are as follows:Measured Maximum of 8 informing vein composites, distance to the nearest informing sample is less than 10 metres At least 8 informing vein composites clustered within a contiguous 10-metre distance zone or drifts or rises with at least 8 face samples within a contiguous 10-metre distance zone Kriging variance is less than 50% of the maximumIndicated Maximum of 8 informing vein composites, distance to the nearest informing sample is less than 25 metres At least 3 informing vein composites clustered within a contiguous 25-metre distance zone Kriging variance is less than 50% of the maximumInferred Minimum of 3 informing vein composites, distance to the nearest informing sample less than 50 metres At least 2 informing vein composites clustered within a contiguous 50-metre distance zone Some additional areas included at depth where geological continuity is good but drilling is sparse, must have at least one informing sample within the maximum search range of 200 metres. Areas within a vein domain already taken by development and/or historical mining have been removed and screened for topography. Volumetric estimates were converted to tonnage estimates utilizing an average specific gravity of 3.1, based on core measurements and computed from multi-element assay data. Grade-Tonnage charts for 0 to 5 g/t gold cut-off grades are presented below (Figures 1a and 1b) by mineral resource category for both the Yaraguá and Veta Sur vein systems. These are the capped Ordinary Krige estimates for vein domains, diluted to one-metre minimum horizontal widths with geostatistics-based grades of 0.4 g/t gold and 4-6 g/t silver and 0.16-0.17% zinc. To view Figures 1a and 1b, please visit the following link: http://media3.marketwire.com/docs/cnl_f1a_f1b.pdfThese results demonstrate the high-grade nature and robust character of the Yaraguá and Veta Sur vein systems over a broad range of gold cut-off grades. The mineral resource tonnes tabled in Figure 1a and 1b are only within the tightly-constrained vein domains and thus do not reflect large quantities of undefined lower-grade (less than 3 g/t Au) material outside the currently-defined vein domains. The results presented below are capped Krige estimates at 3 g/t and 4 g/t gold cut-off grades and for one-metre minimum horizontal vein thicknesses. These gold cut-off grades reflect the range of conceptual costs for underground development, mining and treatment.Yaraguá Vein SystemYaraguá Mineral Resources classified above a 3 g/t gold cut-off gradeResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured310,00028.2701.4280,000700,0009,500,000Indicated2,430,00012.7310.8990,0002,400,00041,500,000M & I2,740,00014.5350.81,270,0003,100,00051,100,000Inferred8,100,0008.9310.72,320,0008,000,000131,600,000Yaraguá Mineral Resources classified above a 4 g/t gold cut-off gradeResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured280,00030.7761.4280,000700,0009,000,000Indicated2,090,00014.2330.8950,0002,200,00037,400,000M & I2,380,00016.2380.91,230,0002,900,00046,400,000Inferred6,080,00010.8300.82,100,0005,900,000103,600,000Note - Reported tonnage and grade figures have been rounded from raw estimates to reflect the order of accuracy of the estimate. Minor variations may occur during the addition of rounded numbers. There have been no assumptions made as to metal prices or recoveries in this resource estimate.These mineral resource estimates for the Yaraguá vein system are largely contained in 27 vein domains modeled over average strike extents of 550 metres and average depths extents of 500 metres (Figures 2 and 3). All modeled veins are open at depth and along strike. A significant proportion of and the increase in the measured and indicated resources (relative to the 2011 maiden mineral resource estimate) reflects the underground sampling of several of the major vein domains and also the intensity of drilling in the central part of the vein system. A chart of tonnage and gold grade (calculated at 50 vertical metre intervals) versus elevation (500 metre range) for the most drilled portion of the Yaraguá resource (above 3 g/t gold) is presented below. To view Table 1, please visit the following link: http://media3.marketwire.com/docs/yaragua_tab.pdfLevel slice tonnages decrease above RL's of 1,500 metres due to a lack of drilling and due to various veins intersecting with the topographic surface. Tonnages decrease below 1,200 metres RL due to sparse drilling-data, resulting in limited modeling of the vein domains at depth. Tonnages and grades otherwise show limited variation over a 400-metre elevation range. The table appended to the tonnage-grade versus elevation chart also shows tonnage (millions of tonnes) and gold resources (thousands of ounces) for each 50 vertical metre slice, also illustrating the substantial character of the Yaraguá resource over a 500-metre vertical range.Veta Sur Vein SystemVeta Sur Mineral Resources classified above a 3 g/t gold cut-off gradeResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured10,00016.1250.35,0008,000100,000Indicated990,00011.3470.2360,0001,500,0004,700,000M & I1,000,00011.4470.2370,0001,500,0004,800,000Inferred5,230,0008.5370.21,430,0006,200,00024,900,000Veta Sur Mineral Resources classified above a 4 g/t gold cut-off gradeResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured7,00020.7270.35,0006,00040,000Indicated790,00013.3530.2340,0001,300,0004,100,000M & I800,00013.4520.2350,0001,300,0004,100,000Inferred3,920,00010.2400.21,290,0005,000,00018,400,000Note - Reported tonnage and grade figures have been rounded from raw estimates to reflect the order of accuracy of the estimate. Minor variations may occur during the addition of rounded numbers. There have been no assumptions made as to metal prices or recoveries in this resource estimate.These mineral resource estimates for the Veta Sur vein system are mainly contained in 24 vein domains modeled over average strike extents of 450 metres and average depths extents of 450 metres. All modeled veins are open to depth and along strike. Measured and indicated resource estimates are currently confined to the more intensively-drilled central part of the Veta Sur vein system. A chart of tonnage and gold grade (calculated at 50 vertical metre intervals) versus elevation (500 metre range) for the bulk of Veta Sur resource (above 3 g/t gold) is presented below. Tonnages for level slices decrease at higher RL's, due to the intersection of certain veins with the topographic surface and also limited drilling at shallow depths. Lower tonnages at lower RL's reflect limited deep drilling, but gold grades continue to be high-grade in these areas and attest to the potential of deep Veta Sur. The Table appended to the tonnage-grade versus elevation chart further illustrates the substantial nature of the Veta Sur resource over a 500 metre vertical extent. The majority of both the Yaraguá and Veta Sur resource estimates in the tonnage-grade versus elevation tables are all at RL's higher than proposed plan tunnel development, which is anticipated to commence towards the end of the fourth quarter, 2013 (Figure 3).To view Table 2, please visit the following link: http://media3.marketwire.com/docs/Veta%20Sur_tab.pdfCombined Yaraguá and Veta Sur Mineral Resources Combined Yaraguá and Veta Sur Mineral Resources above a 3 g/t gold cut-off, June 30, 2012ResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured320,00027.8691.4290,000700,0009,500,000Indicated3,420,00012.3350.61,350,0003,900,00046,300,000M & I3,740,00013.6380.71,640,0004,600,00055,800,000Inferred13,330,0008.8330.53,760,00014,200,000156,500,000Combined Yaraguá and Veta Sur Mineral Resources above a 4 g/t gold cut-off, June 30, 2012ResourceGradesMetalCategoryTonnesAu g/tAg g/tZn %Au ozAg ozZn lbMeasured290,00030.5751.4280,000700,0009,100,000Indicated2,890,00014.0390.71,300,0003,600,00041,500,000M & I3,180,00015.5420.71,580,0004,300,00050,600,000Inferred10,000,00010.5340.63,390,00010,900,000122,000,000Note - Reported tonnage and grade figures have been rounded from raw estimates to reflect the order of accuracy of the estimate. Minor variations may occur during the addition of rounded numbers. There have been no assumptions made as to metal prices or recoveries in this resource estimate.The tabulated mineral resource estimates are for areas in the Yaraguá and Veta Sur systems with adequate sampling densities to permit estimation. Tonnage-grade per vertical metre estimates for the major vein domains demonstrate only limited variation through depth ranges of more than 400 metres. Further drilling at the Buriticá project has continued to demonstrate that both systems are open along strike and at depth, as well as delineating other veins on the margins of the current mineral resource model. Dr. Vic Wall, Special Advisor to Continental, oversaw the mineral resource modeling and noted, "The Mining Associates mineral resource model for the Yaraguá and Veta Sur vein systems is well constrained geologically and conservative in its estimations. I am confident in the results which are reinforced by more recent drilling. The gold and silver resource estimates in both systems are likely to grow substantially from infill and step-out drilling and mineral resource confidence levels will increase with planned underground drilling. Exploration of other (to-date largely untested by drilling) targets will likely contribute to realizing additional multimillion ounce precious metal potential of Continental's broader Buriticá project." Technical Information Vic Wall, PhD, Special Advisor to the Company and a qualified person (QP) for the purpose of NI 43-101, has prepared or supervised the preparation of, or approved, as applicable, the technical information contained in this press release. Dr. Wall is a geologist with over 35 years' experience in the minerals mining, consulting, exploration and research industries. Following a career in Australian and North American academes, he held senior positions in a number of multinational major and junior minerals companies. A Fellow of the Australian Institute of Geoscientists, Dr. Wall is Principal of Vic Wall & Associates, a Brisbane-based consultancy that provides geoscientific services to mineral companies and government agencies, worldwide. The technical information in this press release relating to mineral resource estimates is based on technical information prepared under the direction and supervision of Andrew J. Vigar, a consultant geologist (FAusIMM, MSEG) holding a B.Sc (Applied Geology), with over 30 years' experience including specialist experience in resource evaluation and mining of gold deposits. Mr. Vigar, an independent QP (as defined in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves and NI 43-101) has reviewed this press release and consented to the inclusion in this press release of extracts from, or a summary of, the technical information prepared under his direction and supervision. For additional technical information on the Buriticá project, please refer to the technical report entitled "Mineral Resource Estimate of the Buriticá Gold Project, Colombia" dated October 24, 2011, as amended November 23, 2011, available on SEDAR at www.sedar.com, on the OTCQX at www.otcmarkets.com and on the Company website at www.continentalgold.com.About Continental Gold Continental Gold Limited is an advanced-stage exploration and development company with an extensive portfolio of 100%-owned gold projects in Colombia. Spearheaded by a team with over 40 years of exploration and mining experience in Colombia, the Company is focused on advancing its high-grade Buriticá gold project to production. In August 2012, Continental achieved an important milestone, receiving formal approval for the modification of its existing Environmental Impact Assessment. The amendment allows the Company to build a six-kilometre switchback road and begin underground development by constructing a one-kilometre access tunnel. With a goal of being the first modern-day gold producer in Colombia, Continental will commence the construction of the access tunnel in H2 2012, initially providing access for underground drilling and eventually used for commercial production. A Phase III drill program is underway at the Buriticá project to further delineate the resource and drill new target zones identified within its concessions. Additional details on the Buriticá project and the rest of Continental's suite of gold exploration properties are available at www.continentalgold.com.Forward-Looking Statements This press release contains or refers to forward-looking information under Canadian securities legislation, including statements regarding the estimation of mineral resources, exploration results, potential mineralization, exploration and mine development plans, timing of the commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to convert estimated mineral resources to reserves, 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, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and the Company assumes no responsibility to update them or revise them to reflect new events or circumstances other than as required by law. Differences in Reporting of Resource Estimates This press release was prepared in accordance with Canadian standards which differ in some respects from United States standards. In particular, and without limiting the generality of the foregoing, the terms "inferred mineral resources," "indicated mineral resources," "measured mineral resources" and "mineral resources" used or referenced in this press release are Canadian mining terms as defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves (the "CIM Standards"). The CIM Standards differ significantly from standards in the United States. While the terms "mineral resource," "measured mineral resources," "indicated mineral resources," and "inferred mineral resources" are recognized and required by Canadian regulations, they are not defined terms under standards in the United States. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. Readers are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into reserves. Readers are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian regulations; however, United States companies are only permitted to report mineralization that does not constitute "reserves" by standards in the United States as in place tonnage and grade without reference to unit measures. Accordingly, information regarding resources contained or referenced in this press release containing descriptions of our mineral deposits may not be comparable to similar information made public by United States companies.To view "Figure 2: Plan view of 3D Model of Yaraguá and Veta Sur vein systems, showing drilling and proposed developments," please visit the following link: http://media3.marketwire.com/docs/928CNL-f2.pdfTo view "Figure 3: View of 3D model of Yaraguá and Veta Sur vein systems (looking west) with drilling and proposed developments," please visit the following link: http://media3.marketwire.com/docs/928CNL-f3.pdfFOR FURTHER INFORMATION PLEASE CONTACT: Nisha HasanContinental Gold LimitedDirector, Investor Relations+1.416.583.5611info@continentalgold.comwww.continentalgold.com