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Press release from Marketwire

Probe Mines Announces Updated Resource Estimate for the Borden Gold Zone, Chapleau, Ontario: Significant Improvement in Grade, Size and Classification

Tuesday, January 15, 2013

Probe Mines Announces Updated Resource Estimate for the Borden Gold Zone, Chapleau, Ontario: Significant Improvement in Grade, Size and Classification09:15 EST Tuesday, January 15, 2013TORONTO, ONTARIO--(Marketwire - Jan. 15, 2013) -Probe Mines Limited (TSX VENTURE:PRB) ("Probe" or the "Company") - Highlights: At a 0.5 grams of gold per tonne ("g/t Au") cut-off, the Borden Gold Zone is estimated to contain a Pit Constrained Indicated Resource of 3,686,000 ounces of gold averaging 1.02 g/t Au and an additional Pit Constrained Inferred Resource of 625,000 ounces of gold averaging 1.08 g/t Au, representing an overall increase of approximately 26%, at a similar average grade, from the previous Resource Estimate. At a 1.0 g/t Au cut-off, the Borden Gold Zone estimated to contain a distinct, higher-grade zone with a Pit Constrained Indicated Resource of 1,982,000 ounces of gold averaging 1.64 g/t Au and an additional Pit Constrained Inferred Resource of 361,000 ounces of gold averaging 1.77 g/t Au, representing an overall increase in the Resource size of approximately 32%, and an increase in grade of approximately 12%. New Resource Estimate highlights the increasing grade of the Borden Gold Zone (up to 48%) observed at all cut-off levels and has the potential to enhance project`s economic viability.85% of the total Pit Constrained resource is now in the Indicated category, representing an increase of 18% from the previous Resource Estimate, from 3,112,000 ounces to 3,686,000 ounces of gold, at a 0.5 g/t Au cut-off grade.Significant increase in Global Inventory Sensitivity to the Resource Estimate with an Indicated inventory of 5,190,000 ounces of gold and an additional Inferred Inventory of 1,179,000 ounces of gold at a 0.2 g/t cut-off grade. Probe Mines Limited (TSX VENTURE:PRB) ("Probe" or the "Company") is pleased to announce that the Company has received the Updated Mineral Resource Estimate for its Borden gold deposit from P&E Mining Consultants Inc. ("P&E"), which shows a marked improvement in grade, size and quality from the previous Resource Estimate (see News Release dated April 2, 2012). The Borden Gold Zone is estimated to contain a Pit-Constrained Indicated Resource of 3,686,000 ounces of gold averaging 1.02 g/t Au and an additional Inferred Resource of 625,000 ounces of gold averaging 1.08 g/t Au, at a 0.5 g/t Au cut-off grade. This represents an overall increase of approximately 26%, at similar average grades, from the previous Resource Estimate (2,735,000 ounces averaging 1.04 g/t Au in an Indicated Resource and of 683,000 ounces averaging 0.93 g/t Au in an Inferred Resource, at a 0.6 g/t Au cut-off grade). In addition, the higher-grade core continues to improve at higher cut-off levels and is highlighted at the 1.0 g/t Au cut-off, where the Resource has increased by 32% in total contained ounces and 12% in overall average grade reflected in an estimated 1,982,000 ounces of gold averaging 1.64 g/t Au in the Indicated category and 361,000 ounces of gold averaging 1.77 g/t Au in an additional Inferred Resource. The Updated Resource Estimates represents a rigorous evaluation of the drilling completed to the end of November 2012. The most noticeable difference from previous estimates is the increase in overall grade of the deposit at all cut-off grades (see sensitivity table below) and the continuing definition of a persistent higher-grade resource that has been delineated by the drilling. In addition, there is also a significant increase in the size of the resource, particularly at the higher grade cut-offs, which has been accomplished by the infill drilling program as well as the discovery of higher grade mineralization through recent expansion drilling. The infill drilling program has also been successful at converting additional Inferred material into the Indicated category, with the result that 85% of the Resource is now in the Indicated category.With ongoing drilling, and each successive Resource Estimate, the Company's understanding of the Borden Gold Zone is improving and it is now recognized that the higher-grade core zone is an integral part of the mineralization and one of its most important aspects. At a 0.5 g/t Au cut-off, the Resource contains a significant deposit of greater than 1.0 g/t average gold grades. Although sensitivity tables are provided for both Constrained and Global sensitivity to the Resources, it is important to note that due to overall increasing grades any comparison to previous Resource Estimates should also consider average grades at each Au cut-off. Updated Resource Estimate (Pit Constrained) The Updated Resource Estimate was constrained in a preliminary Whittle open-pit optimized shell to a maximum depth of approximately 475m. For the purpose of this News Release, the Resource Estimate is reported at a cut-off grade of 0.5 g/t Au. The 0.5 g/t cut-off was chosen to better represent the higher-grade core to the mineralized zone and to provide continuity for the upcoming Preliminary Economic Assessment ("PEA"), which will be based on the Resource at a 0.5 g/t Au cut-off. The following sensitivity table presents the Resource Estimate for mineralization falling within the preliminary optimized pit shell, assuming a gold price of US$1,200/oz and a metallurgical recovery of 92%.An image of the Pit-Constrained Resource is available on the Company's website at http://www.probemines.com/s/Borden_Lake.asp?ReportID=565388. Pit-Constrained Indicated Mineral Resource Estimate Sensitivity Table 1,2,3,4,5Cut-Off Au (g/t)Cumulative Tonnage 1,2 (000's)Average Au Grade (g/t)Cumulative Au oz 1,2 (000's)1.514,4522.341,0861.320,7442.051,3681.037,6001.641,9820.946,4181.512,2500.857,8261.382,5610.772,6161.252,9170.691,1231.133,303 0.5 112,844 1.02 3,686 Pit-Constrained Inferred Mineral Resource Estimate Sensitivity Table 1,2,3,4,5Cut-Off Au (g/t)Cumulative Tonnage 1,2 (000's)Average Au Grade (g/t)Cumulative Au oz 1,2 (000's)1.52,5452.612141.33,5532.272591.06,3511.773610.97,7611.624040.89,6031.474540.711,7811.345060.614,5101.21563 0.5 18,036 1.08 625 1. Tonnes and Au ounces have been rounded to the nearest thousand2. Figures/numbers for resource tonnes and ounces may not sum due to rounding3. In the pit optimization, the following parameters were utilized:• Gold price US$1,200/oz• Exchange rate US$0.95= CDN$1.00• Mining cost $1.65/tonne• Process cost $8.00/tonne• Process Recovery 92%• G&A cost $1.00/tonne• Pit Slopes 50 degrees4. An over-all grade capping of 20 g/t Au and a range restriction of 60 m to grades of 8g/t or higher was implemented on composite samples prior to estimation.5. Variable bulk Densities of between 2.36 and 3.90 t/m3 were used. Resource Estimate Comparison (previous v. current) For the new Resource Estimate the Company has adopted a different approach from previous estimates by specifically targeting higher-grade mineralization and restricting the search radius for Inferred Resources. This allows for a more realistic estimation of contained gold in the deposit and potential enhancement in the projects economic viability. The following tables illustrate the improved quality of the New Resource Estimate from the previous Resource Estimate, with respect to grade, size and classification in the pit-constrained models:Comparison of Pit-Constrained Indicated Mineral Resource Estimate (Previous v. New)PreviousPreviousNEWNEWChangeChange% Change% Change Cut-off Grade g/tAverage Au Grade g/tCumula- tive Au oz (000's)AverageAuGradeg/tCumula-tiveAu oz(000's)Average Au Grade g/tCumula- tive Au oz (000's)Average Au Grade %Cumula- tive Au oz %1.52.016562.341,0860.3343016%66%1.01.461,4971.641,9820.1848512%32%0.50.943,1121.023,6860.085748%18%Comparison of Pit-Constrained Inferred Mineral Resource Estimate (Previous v. New)PreviousPreviousNEWNEWChangeChange% Change% Change Cut-off Grade g/tAverage Au Grade g/tCumula- tive Au oz (000's)AverageAuGradeg/tCumula-tiveAu oz(000's)Average Au Grade g/tCumula- tive Au oz (000's)Average Au Grade %Cumula- tive Au oz %1.51.77872.612140.8412748%146%1.01.312901.773610.467135%24%0.50.848071.086250.24-18228%-23%At all cut-offs in the Indicated category, the Estimated Resources have all grown and grades have increased from 0.08 to 0.33 g/t Au, while grades for all cut-offs in the Inferred category have increased between 0.24 and 0.84 g/t Au. Although there are some losses in the Inferred classification, these are mostly due to upgrading of previous Inferred Resources into new Indicated Resources and/or the restricted search radius for new Inferred Resources. When compared solely on Average Grade, in all cases the new Resource Estimate has increased significantly from the previous Resource Estimate in terms of size and quality. Global Sensitivity of the Updated Resource Estimate A global unrestrained sensitivity table ("Global") for the updated Indicated estimate is presented below, which, at a 0.5 g/t Au cut-off, contains 3,983,000 ounces of gold averaging 1.00 g/t Au contained within 124.3 M tonnes, and for the Inferred estimate contains an additional 840,000 ounces Au averaging 0.99 g/t Au contained within 26.4 M tonnes. The following two tables summarize the Global sensitivity of the Borden Gold Zone Resource estimate in the Indicated and Inferred resource categories, respectively, at selected cut-off grades: Global Sensitivity to Indicated Mineral Resource Estimate 1,2.3Cut-Off Au (g/t)Cumulative Tonnage 1,2 (000's)Average Au Grade (g/t)Cumulative Au oz 1,2 (000's)1.514,9942.341,1261.039,5071.632,074 0.5 124,259 1.00 3,983 0.4154,1850.894,4150.3188,7920.794,8030.2237,9510.685,190Global Sensitivity to Inferred Mineral Resource Estimate 1,2,3Cut-Off Au (g/t)Cumulative Tonnage 1,2 (000's)Average Au Grade (g/t)Cumulative Au oz 1,2 (000's)1.52,9322.522381.07,5811.71416 0.5 26,361 0.99 840 0.433,3880.889410.343,0790.761,0490.259,7920.611,1791. Tonnes and ounces have been rounded to the nearest thousand2. Figures/numbers for resource tonnes and ounces may not sum due to rounding3. Sensitivity values are not mineral resources and should not be construed as such. Summary The Updated Resource Estimate highlights a number of key features of the Borden Gold Zone, including:-The improved delineation and increasing grade of the higher-grade zone within the deposit, which may positively influence future economic studies;-Increasing Resource size and grade at all cut-offs, with an approximately 26% overall increase in the resource at the 0.5 g/t Au cut-off, at similar average grades to the previous Estimate, and a 32% increase in the overall size of the higher-grade core and a 12% increase in grade at the 1 g/t Au cut-off;-Improved confidence in the deposit through upgrade of the majority (85%) of the Resource into the Indicated category, at a 0.5 g/t cut-off;This Updated Resource will also be used to complete the project throughput analysis that will support the project financials associated with the PEA, which is expected to be completed by the end of the first quarter (calendar) of 2013. Based on the information available, it has been decided to accelerate the characterization of additional components of the project development in order to prepare for a seamless transition to the Pre-Feasibility study which is planned to follow the release of the PEA. A Progress Report on metallurgical results has been received and is very encouraging as it has identified an improved metallurgical response when compared to the Initial Scoping work undertaken in 2011, particularly for the lower grade portion of the resource. This should result in an improved cut-off grade determination and an improved conversion of the mineral inventory into resources. The metallurgical work is ongoing and includes additional work to determine the best specific metallurgical approach to improve overall project economics. This will include consideration of many technical factors and the Board has decided that the metallurgical data would be more meaningful if released in the context of the final conclusions on processing that will be part of the PEA release.Dr. David Palmer, President of Probe, states: "We are extremely pleased with the results of the current Resource Estimate as the Borden Gold Zone continues to not only grow, but is also improving from a potential economic standpoint. Bulk tonnage deposits are grade sensitive, and our ability to target higher average grades distinguishes our deposit and provides a solid base from which to evaluate a potential development project. The recently identified high-grade interval on Section 1200 is a clear example of the project's growing potential, and indicates that there is still much more to come for this property. During 2013, we will be focused on evaluating the new high-grade mineralization and further improving the deposit and advancing the project development."The updated resource estimate, which meets the guidelines for reporting mineral exploration programs as set out in National Instrument 43-101, was based on 313 diamond drill holes, totaling over 94,000 metres, that tested the gold horizon along approximately 2,100 metres (m) of strike length and to a vertical depth of over 550 metres at spacings of between 50 to 100 metres. The Resource was modeled on 5 m x 5 m x 5 m block size. Mineralization of the Borden Gold Zone is comprised of a volcano-/meta-sedimentary horizon containing a thick, continuous and consistent zone of gold-bearing disseminated sulphide mineralization. The deposit still remains open in all directions.Mineral resources do not have demonstrated economic viability. The estimate of mineral resources may also be materially affected by other relevant factors or issues. There is no guarantee that the project will be placed into production. P&E is currently in the process of completing the NI 43-101 Technical Report resource sections for inclusion in BBA Inc.'s PEA, for which the results are expected in late Q1 2013.The mineral resource estimate was calculated using Ordinary Kriging. The mineralized material was classified into the Indicated or Inferred mineral resource category on the basis of a combination of the following factors: (a) confidence in the geological and mineralization continuity, (b) the position of blocks in relation to the range of influence as defined by the variography and (c) and the search ellipse ranges. David Palmer, Ph.D., P.Geo., is the qualified person for Probe Mines. The contents of this news release have been reviewed and approved by Independent Qualified Persons Eugene Puritch, P.Eng., of P&E Mining Consultants Inc. and Mr. Yves Dessureault, P.Eng, of BBA Inc.About Probe Mines: Probe Mines Limited is a Canadian precious metals exploration company whose key asset is the Borden Gold Zone in Ontario, Canada. As of October 31, 2012, the Company had approximately $22 million in treasury and a portfolio of highly prospective mineral properties. On November 29, 2012, Probe disposed of its Goldex royalty and received $14 million with the possibility of receiving up to an additional $4 million based on production milestones. The Company is actively exploring a significant new gold resource on its Borden Gold Zone near Chapleau, Ontario and has a 100% interest in the Black Creek chromite deposit located in Northern Ontario. The Company's shares trade on the TSX Venture Exchange under the symbol PRB.To find out more about Probe Mines Limited, visit our website at www.probemines.com.On behalf of Probe Mines Limited,Dr. David Palmer, President & Chief Executive OfficerForward-Looking Statements This News Release includes certain "forward-looking statements". These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.Shares Issued: 65,391,491FOR FURTHER INFORMATION PLEASE CONTACT: Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Contact Information: Probe Mines LimitedKaren WilloughbyDirector of Corporate Communications(866) 936-6766info@probemines.comProbe Mines LimitedPatrick LangloisVice President, Corporate Development(416) 777-6703patrick@probemines.comwww.probemines.com