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Press release from Marketwire

NGEx Announces Substantial Increase in Mineral Resource Estimate and Positive Results From Initial Metallurgical Test Work for the Josemaria Project

Thursday, January 10, 2013

NGEx Announces Substantial Increase in Mineral Resource Estimate and Positive Results From Initial Metallurgical Test Work for the Josemaria Project09:15 EST Thursday, January 10, 2013VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 10, 2013) - NGEx Resources Inc. (TSX:NGQ) ("NGEx" or the "Company") is pleased to announce a substantial increase in the Mineral Resource Estimate and positive results from initial metallurgical test work for the Josemaria copper-gold porphyry deposit located in San Juan province, Argentina (please see attached map - The updated Josemaria resource is comprised of sulphide copper-gold mineralization which underlies a thin (average 60 metres) oxide zone as follows: Sulphide Copper-Gold Mineralization (0.30% copper equivalent* cutoff) 656 million tonnes at a grade of 0.36% copper and 0.26 g/t gold for a copper equivalent grade of 0.54% (5.2 billion pounds of copper and 5.6 million ounces of gold) in the Indicated Resource category; and, 326 million tonnes at a grade of 0.33% copper and 0.19 g/t gold for a copper equivalent grade of 0.46% (2.4 billion pounds of copper and 2.0 million ounces of gold) in the Inferred Resource category. Oxide Zone (0.30% copper equivalent* cutoff) 44 million tonnes at a grade of 0.22% copper and 0.33 g/t gold for a copper equivalent grade of 0.45% (0.22 billion pounds of copper and 0.47 million ounces of gold) in the Indicated Resource category; and, 6 million tonnes at a grade of 0.10% copper and 0.35 g/t gold for a copper equivalent grade of 0.34% (10 million pounds of copper and 70 thousand ounces of gold) in the Inferred Resource category. The updated resource estimate incorporates the results from 47 diamond drill holes drilled since the previous estimate in 2007, including 39 holes drilled during the 2011/2012 season. These holes are a combination of infill and step-out holes and were successful in expanding the footprint of the deposit and improving the internal continuity of the resource model. The resource cut-off grade for the new estimate is based on a copper equivalent, rather than copper-only as in the previous model. It should be noted that there is no overlap between the sulphide resource and the oxide resource.This resource remains open to expansion both towards the north and south. The expansion potential to the north is particularly interesting, as it extends beyond previously disclosed holes JMDH 49 and 50 which are the highest grade holes drilled into the deposit to date, returning intersections of 172m at 1.33% copper and 0.36 g/t gold, and 182m at 1.06% copper and 0.31 g/t gold respectively.Metallurgical test work on the sulphide copper-gold mineralization was completed by SGS Lakefield Research in Vancouver. The test work indicates that the Josemaria sulphide mineralization is amenable to standard flotation concentration. One locked-cycle test was completed and achieved copper recoveries of 85.1% and gold recoveries of 69.4%, with test concentrate grades of 25.1% copper and 16.8 g/t gold. The concentrate samples produced by this work were clean, with all deleterious elements below penalty levels. Assays for silver in the concentrate are pending. No test work has been done on the oxide mineralization to date.Wojtek Wodzicki, President and CEO of the Company, commented, "We are very pleased with the progress made at Josemaria over the past year. We have substantially increased and upgraded the resource. We successfully converted all the previous Inferred Resource to Indicated plus added a significant amount to both the Indicated and Inferred categories. Furthermore the deposit is still open in several directions and we believe that there is excellent potential to add to the current resource through additional drilling. We are especially encouraged by the exploration potential to the north of JMDH 49 and 50, two drill holes which hit shallow high grade mineralization at the northern edge of the current resource block. The Josemaria Deposit has a number of natural advantages that will work in its favour, should further work show potential to develop an open pit mining operation. The resource is shallow and lies along the top of a ridge. Groundwater is available nearby."Although Josemaria has been somewhat overshadowed by the outstanding recent results from the Company's nearby Los Helados Project, today's results confirm it as a very significant deposit in its own right and an important part of the Company's growing copper-gold resource base in the region. Ongoing exploration at Los Helados, Filo del Sol, as well as early stage targets between Josemaria and Los Helados has the potential to add additional resources."Based on its geological features and location, the Josemaria Project is classified as a copper-gold porphyry deposit. Porphyry deposits are well documented throughout the Andes and are a widespread deposit type in Argentina and Chile. Mineralization is characterized by large volumes of disseminated and vein controlled copper and gold mineralization. Josemaria is located approximately 12 kilometers to the southeast of the Company's 60% owned Los Helados Project which is located across the international border in Chile (see attached map). NGEX holds a 60% interest in the Josemaria Project and is the operator. Japan Oil, Gas, and Metals National Corporation (JOGMEC) holds a 40% interest.Summary TableThe updated Mineral Resource was estimated by Gino Zandonai, Senior Associate of Behre Dolbear International Ltd. It has an effective date of December 15, 2012 and replaces and increases the previous resource estimate completed in 2007. The following table summarizes the Mineral Resource Estimate by classification and at various cut-off grades.JOSEMARIA INDICATED MINERAL RESOURCE - SULPHIDE ZONEResource GradeContained MetalCutoff(CuEq*)MillionTonnesCu (%)Au (g/t)CuEq* (%)Cu (billion lbs)Au (million oz)0.503060.460.350.703.103.460.453880.430.320.653.684.050.404870.400.300.614.314.680.355750.380.280.574.815.180.306560.360.260.545.215.550.257310.340.250.515.545.840.208070.330.230.495.806.08JOSEMARIA INFERRED MINERAL RESOURCE - SULPHIDE ZONEResource GradeContained MetalCutoff(CuEq*)MillionTonnesCu (%)Au (g/t)CuEq* (%)Cu (billion lbs)Au (million oz)0.50730.520.300.730.840.700.451050.460.270.651.070.920.401710.400.240.561.511.320.352430.360.220.511.931.680.303260.330.190.462.362.020.254190.300.170.422.782.330.205410.270.150.373.222.69JOSEMARIA INDICATED MINERAL RESOURCE - OXIDE ZONEResource GradeContained MetalCutoff(CuEq*)MillionTonnesCu (%)Au (g/t)CuEq* (%)Cu (billion lbs)Au (million oz)0.30440.220.330.450.220.470.20610.190.300.390.260.590.10760.160.270.350.270.66JOSEMARIA INFERRED MINERAL RESOURCE - OXIDE ZONEResource GradeContained MetalCutoff(CuEq*)MillionTonnesCu (%)Au (g/t)CuEq* (%)Cu (billion lbs)Au (million oz)0.3060.100.350.340.010.070.20120.120.280.310.030.100.10240.* CuEq - Copper Equivalent is calculated using US$3.00/lb copper and US$ 1,400/oz gold, with no provision for metallurgical recoveries. The formula used is CuEq% = Cu% + 0.6806*Au (g/t). Small discrepancies may exist due to rounding errors.Estimation MethodologyThe Josemaria Mineral Resource was estimated using geological and assay data from a total of 54 diamond drill holes (25,827 metres) and 34 reverse circulation holes (13,164 metres). Of this total, 47 diamond drill holes (21,721 metres) are new since the initial resource estimate in 2007. There are 6 reverse circulation holes (2,247 metres) which were used in the initial resource estimate but not in the update as they were twinned and replaced by diamond drill holes.Copper and gold grade data is comprised of assays on sawn drill core samples. All assays were completed at ACME's lab in Santiago, Chile. Gold analyses were by fire assay fusion with AAS finish on a 30g sample. Copper was analyzed by AAS using a 4 acid digestion and samples were also analyzed for a suite of 36 elements with ICP-ES. Quality control and quality assurance protocols for the assays include the use of standard reference material, blanks, and duplicate samples (see Assay Protocols below for further details).Domains were created based on mineral zones, alteration and lithology. Mineral zones were defined by the relative abundance of chalcopyrite and pyrite and five main zones were modeled: oxide; pyrite only; pyrite > chalcopyrite; pyrite < chalcopyrite and chalcopyrite only. The Josemaria deposit consists predominantly of sulphide mineralization overlain by a thin (average 60m) oxide zone. The lithology domains were used to control the interpolation in the sulphide zone as they exhibited the most control on copper and gold grades, and the oxide zone was modelled as a separate domain.Drill hole assays were composited to 2 m intervals for grade interpolation. Specific gravity data was measured for all samples in 10 of the diamond drill holes (5,204 m) and the average value of the SG for the sulphide and oxide zones from these holes was used in the estimate (2.69 and 2.65 respectively). Blocks were estimated by ordinary kriging in a single pass. Grades were estimated in the 20m × 20m x 20m block model using ordinary kriging for Au g/t and Cu%. To assign a grade to a block, composites were sourced within a search ellipsoid of dimensions similar to the anisotropies from the ranges of the directional variograms calculated for each domain.The minimum number of composites used to estimate a block was set at 2 and the maximum was 25, with a block discretization of 2x2x2. Classification of blocks into Indicated and Inferred categories was based on a distance model adjusted through creation of wireframe volumes in order to avoid having isolated blocks of one category surrounded by the other. Indicated and Inferred blocks are generally within 75 and 150 metres of a drill hole respectively.As the Josemaria project is an early-stage project, no engineering or infrastructure data or studies are available to evaluate economic development parameters for the Mineral Resource. The base-case cut-off grade of 0.3% CuEq was chosen based on comparison with other similar deposits. The Josemaria project is located in an area which currently has several copper-gold porphyry deposits in similar geologic and geographic settings which are currently in advanced exploration or development. These other projects provide useful benchmarks and have been used to select the base-case cut-off grade for Josemaria, and to provide reasonable prospects for economic extraction.It should be noted that the Mineral Resource estimate presented here is not a Mineral Reserve, and does not have demonstrated economic viability. While the Company strongly believes that the Mineral Resource warrants additional study to determine the development potential, there can be no guarantee that any or all of the Mineral Resource will ultimately be determined to be economically viable.The Mineral Resource estimate for Josemaria was prepared by Gino Zandonai, B.Sc., M.Sc. Mining, SME, MAusIMM, CRIRSCO, Senior Associate of Behre Dolbear International Ltd. in accordance with NI 43-101. Mr. Zandonai is the Qualified Person for the estimate and is independent of the Company. A Technical Report describing the details of the resource estimate will be available under the Company's profile on SEDAR within 45 days.METALLURGICAL TEST WORKThe results of the locked cycle test are shown in the table below:TestCuHeadGrade(%)CuRecovery(%)CuConcentrateGrade (%)AuHeadGrade(gpt)AuRecovery(%)AuConcentrateGrade (gpt)LCT 10.5685.125.10.4669.416.8Flotation test work was carried out by SGS Lakefield Research at its facilities in Vancouver. Test work was done on a 162 kg composite sample constructed from 8 individual drill core composite samples from 4 drill holes representing 650 meters of mineralization (totalling 1,164kg). SGS Lakefield completed a comprehensive initial test program consisting of sample preparation, rougher flotation kinetics, cleaner flotation tests and one locked cycle flotation test.Rougher and cleaner flotation tests were done in order to establish the optimum grind size, pH and reagent use to produce a commercial grade concentrate. Locked cycle flotation tests were then carried out using the following parameters:•Grind Size (p80)106 microns•Regrind Size (p80)36 microns•Rougher pH9.6•Cleaner pH11.5Additional test work will be performed on a much larger suite of samples to obtain more extensive metallurgical response data across the mineralization. This work will focus on further optimizing the balance between recovery and concentrate grade and continuing to refine the optimum flotation conditions for the Josemaria mineralization.Exploration ProgramThe Company is currently drilling at Josemaria. The main objective of the drill program is try to extend the current resource by following up the previously announced intercepts of high grade copper-gold mineralization intersected on the northern boundary of the current resource. An initial 5,000 meters has been budgeted for this step out program with a provision to expand the program contingent on results.About NGExNGEx is a Canadian mineral exploration company with exploration projects in Chile, Argentina, and Canada. The Company's shares are listed on the Toronto Stock Exchange under the symbol "NGQ". The Company's focus is on advancing its Vicuna Project which includes several large copper-gold systems including the Josemaria, Los Helados, and Filo del Sol projects, located on a contiguous land package that the Company holds in Chile's Region III and adjacent San Juan Province, Argentina. Los Helados and Filo del Sol are part of a joint venture in which the Company holds 60% and Pan Pacific Copper Corporation holds 40%. Josemaria is part of a joint venture in which the Company holds 60% and Japan Oil, Gas, and Metals National Corporation (JOGMEC) owns 40%. In addition to the Vicuna Project the Company holds an extensive portfolio of 100% owned early stage exploration projects located in Chile and Argentina. It also owns a 100% interest in the GJ copper and gold project located in British Columbia Canada. The GJ project is optioned to Teck Resources who are earning up to a 75% interest.On behalf of the boardWojtek Wodzicki, President and CEOQualified Person and Assay ProtocolsMr. Bob Carmichael, B.A.Sc, P.Eng., is the Qualified Person as defined by National Instrument 43-101. Mr. Carmichael is Vice President, Exploration for the Company and has reviewed and approved the technical information contained in this news release. The Quality Control/Quality Assurance (QA/QC) program on the Josemaria Project is under the management of Diego Charchaflie M.Sc., P.Geo (BC), a Qualified Person pursuant to NI 43-101. Mr. Gino Zandonai, B.Sc., M.Sc. Mining, SME, MAusIMM, CRIRSCO, Senior Associate of Behre Dolbear International Ltd. is the Qualified Person who carried out and is responsible for the Mineral Resource estimate disclosed herein. Mr. Zandonai has reviewed and approved the technical information in this news release which pertains to that estimate.Grade data is based on chemical assays of split drill core samples. The drill core was logged, sawed, and half cores were sampled in their entirety in two meter intervals or intervals corresponding to geologic breaks determined by Company personnel. Samples were shipped to Acme Labs in Mendoza, Argentina and pulps were forwarded to the ACME lab in Santiago, Chile. Samples were crushed, split and 500g was pulverized to 85% passing 200 mesh. Gold analyses were by fire assay fusion with AAS finish on a 30g sample. Copper was analyzed by AAS using a 4 acid digestion and samples were also analyzed for a suite of 36 elements with ICP-ES. Copper and gold standards as well as blanks and duplicates (field, preparation and analysis) were randomly inserted into the sampling sequence for Quality Control. On average, 9% of the submitted samples correspond to Quality Control samples.Cautionary Note Regarding Forward-Looking StatementsThis news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of NGEx Resources Inc. Forward-looking statements include, but are not limited to, statements with respect to the estimation of commodity prices, mineral reserves and resources, the realization of mineral reserve estimates, capital expenditures, costs and timing of the development of new deposits, the success of exploration activities, permitting time lines, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining activities, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotations thereof. All such forward-looking statements are based on the opinions and estimates of the relevant management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond the Company's ability to control or predict.Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks and uncertainties relating to, among other things, changes in commodity prices, currency fluctuation, financing, unanticipated reserve and resource grades, infrastructure, results of exploration activities, cost overruns, availability of materials and equipment, timeliness of government approvals, taxation, political risk and related economic risk and unanticipated environmental impact on operations as well as other risks and uncertainties described under "Risks Factors" in the Company's Annual Information Form available under the Company's profile at and the Company's website.Although the Company has attempted to identify important factors that would cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated, or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. All of the forward-looking statements contained in this document are qualified by these cautionary statements. Readers should not place undue reliance on forward-looking statements. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans and allowing investors and other to get a better understanding of the Company's operating environment. These factors are not, and should not be construed as being, exhaustive. Statements relating to "mineral reserves" or "mineral resources" are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral reserves and mineral resources described can be profitably produced in the future. The forward-looking information contained in this press release is expressly qualified by this cautionary statement. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: NGEx Resources Inc.Sophia ShaneCorporate Development(604) 689-7842(604) 689-4250 (FAX)