|September 12, 2012|
Galway Releases Maiden California Resource Estimate; 93-99% Metallurgical Recoveries
Toronto, Ontario: September 12, 2012 - Galway Resources Ltd. (GWY: TSX-V) is pleased to announce an initial mineral resource estimate and positive metallurgical results from the first 30 months of drilling at its California gold-silver property in Colombia. The resource estimate was completed by SRK Consulting. SRK Consulting (U.S.) Inc., [SRK] prepared a mineral resource estimate for the California deposit in accordance with Canadian Securities Administrators (CSA) National Instrument 43-101 (NI 43-101), and resources have been classified according to the "CIM Standards on Mineral Resources and Reserves: Definitions and Guidelines" (November 2010). Accordingly, the resources have been classified as "Indicated" and "Inferred". The metallurgical test work was carried out by McClelland Laboratories, Inc, who has been conducting metallurgical work for some of the largest mining and exploration companies worldwide since 1987.
California Deposit, Colombia
Current Mineral Resource Estimate - SRK, September 07, 2012
Galway Properties; 2.0 g/t Au cut off
Sensitivity to Cutoff Grade - SRK Estimated Resources, September 07, 2012 - Galway's California Project, Colombia
Recent drilling has focused on expanding the California mineralized footprint to the south where multiple new zones have been discovered. At the Machuca zones, based on an arbitrary physical break in the model at about the location of the river, the drilling indicates the Machuca zones to contain approximately 100,000 ounces Au (included in the above stated resources). Further east, the Santa Catalina area has recently been a focus of one of Galway's drilling programs, with several new zones discovered. The drill collared into a zone that returned 3.7 g/t Au over 13.5 m from surface in hole GWY-244, while a second hole returned 2.1 g/t Au over 7.0 m, including 11.8 g/t Au over 1.0 m in hole GWY-238 in a different zone. Figures 1 and 2 are a plan and long section showing the relative locations of these new zones and the resource blocks. All drill results referenced in this press release were previously issued. Those reiterated herein are those that were not incorporated in the resource model.
Santa Catalina Zones Drill Results, Outside The Resource Model
Mineral Resource Modeling and Estimation
The mineral resource estimate was prepared in accordance with NI 43-101 by SRK Consulting (U.S.) Inc., of Tuscon, Arizona, an independent consulting company that provides services to the mining industry. The resource database incorporates 241 surface diamond drill holes (78,272 m) completed during the 2009-2012 and ongoing drill program. At the California deposit, clearly defined limits to gold mineralization are not yet established, and it is difficult to create and interpret hard boundaries to mineralization. The limits of gold mineralization were therefore modeled using a 30% probabilistic envelope based on indicator values of less than 0.1 g/t gold, 0.1 to 1.0 g/t gold, and greater than 1.0 g/t gold. Analysis of gold grade data suggests that these indicators, on average, discriminate reasonably well between areas of low grade and high grade gold mineralization and barren areas outside the main mineralization. The selection of the probability level is subjective and impacts considerably on the volume (and thus tonnage) of the gold mineralization, so visual and statistical checks were done to compare blocks at different probability with grades in the composite file.
The drill hole database consists of 241 drill holes with complete assays, 237 have been used to define the resources. Four of seven holes in the Santa Catalina zone have assays; however, there is currently insufficient information to define mineral resources for this area.
A non-linear estimation method "Median Indicator Kriging" (MIK) was used to estimate block grades. The objective was to estimate the spatial distribution of grades on the basis of block support rather than sample support. Grade capping was not used in MIK, because grade estimation is done by grade cut-off intervals. MIK was carried out on gold, silver, and copper. Median Indicator Kriging is an approximation of Multiple Indicator Kriging, which assumes that the spatial continuity of indicators at various cut-offs can be approximated by a single median indicator variogram. Resource estimation was completed using Supervisor software for variography and Datamine Studio software for creation of the resource block model. Parent block size is 12m x 20m x 9m (x,y,z), and SMU (single mining unit) block size is 2m x 5m x 3m, using an Affine correction. The complete details of the MIK methodology used at California will be presented in the NI 43-101 technical report being prepared.
Mineral resource classification is based on a combination of multiple criteria. Blocks within first search ellipse were coded as indicated if Kriging variance is less than .3, distance from nearest composite is less than 20 m, minimum number of holes used to estimate block are more than 5 and minimum number of composites used are more than 15. Blocks coded with these rules were looked on screen and final indicated out line was digitized to avoid spotted blocks appearance.
The in-situ mineral resource is reported at a 2.0g/t gold cutoff; sufficient to define potentially mineable underground resources; however potentially mineable underground shapes have not yet been defined. Resources are reported on a 100% basis for Galway controlled properties. Galway Resources has a QA/QC program in place to verify drill hole assays.
SRK, Tucson, Arizona has completed the resource estimation and will prepare a NI 43-101 technical report on resources. Ravindra Sharma is the SRK Qualified Person, as defined by NI 43-101, who is responsible for the resource estimate. He is a geologist with MAusIMM(CP) and SME Registered Member qualifications.
The main zone trend is up to 100m wide, 850m along strike, and has been defined to over 400m in depth. The Machuca zone trend is approximately 50 m wide, and is not yet fully defined as to strike and depth extent.
Initial metallurgical test results have been received from six samples sent to McClelland Laboratories, Inc., from the Company's California gold-silver property in Colombia. The six mineralized samples were shown to be readily amenable to conventional sulfide flotation processing, especially for rougher flotation. Rougher concentrates represented gold (Au) recoveries ranging from 93 to 99 percent, and silver (Ag) recoveries ranging from 86% to 97%. These flotation concentrates would then require further processing for precious metals recovery through intensive cyanidation, oxidation and subsequent cyanidation, or through roaster or autoclave processing. McClelland advised that it may be beneficial to recover the coarser free Au particles though simple gravity concentration at the beginning of the processing circuit. Gravity alone liberated between 35 and 68 percent of the gold in the six evaluated samples.
A representative cross section of mineralization along Galway's portion of the California trend was provided in the six metallurgical samples sent to McClelland Labs. This included near surface and deeper mineralization, as well as samples with high and low grades taken along the northeast, central and southwest portions of the property. Galway expects the flotation circuit to also recover copper and zinc as by-product credits in the concentrate, which would be in keeping with the copper concentrate reported by Ventana Gold on its adjoining ground (acquired by AUX Canada for $1.5 billion in cash) where recoveries were reported to be 86% for gold, 93% for silver and 83% for copper.
Flotation, with possible head end gravity, concentration appears to be the best processing option for the California mineralization represented by the 6 met samples. Additional metallurgical tests were recommended to develop the optimal method for treating concentrate products, including intensive cyanidation with regrind, roasting or pressure and/or bio oxidation for precious metals recovery.
Intercepts reported above and in previously reported drill holes are hosted by silicified zones, breccias, fracture zones and stockwork, typical of the district, which includes Eco Oro's (formerly Greystar Resources') and AUX's (formerly Ventana Gold's) National Instrument 43-101 compliant resources, Angostura and La Bodega, respectively. The principal geologic control in the California-Angostura District is a linear structural corridor that trends northeast-southwest and dips steeply to the north. Segments of this zone host the resources reported by both Eco Oro and AUX, and Galway is exploring another segment along the same structural corridor. The entire corridor may be one continuous mineralized zone through all three properties. The mineralized zone identified on Galway's properties is characterized by hydrothermal alteration and mineralization within various phases of pervasively altered intrusive porphyries. Mineralization remains open along strike where untested, at depth along the entire Zone, and across the width of the structure in most places.
The Phase 1 exploration program at California has successfully resulted in a resource estimate in line with management's expectations. Mineralization in the Pie de Gallo, Machuca, and Santa Catalina zones remain open in all directions. Drilling has been curtailed in California pending an analysis of the work that has been completed to date. The resource has identified a number of drill targets. Additional surface drilling in Vetas awaits drill platform permission and construction. Two drills remain underground.
Future work at California will entail:
About The Company
Galway Resources is a mineral exploration company primarily focused in northeast Colombia, with gold exploration occurring at the California and Vetas gold projects. The Company also has the Victorio molybdenum-tungsten project, with excellent infrastructure, in southwestern New Mexico. A positive scoping study was completed by SRK in 2008. The recent surge in tungsten pricing, coupled with a steady molybdenum price, has prompted management to reassess strategic alternatives to advance the Victorio project.
For further information contact:
Galway Resources Ltd.
Neither the 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.
Forward Looking Statements:
Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian Securities Regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.
You can view the Next News Releases item: Fri Sep 14, 2012, Galway Intersects Several Zones of High Grade Gold Mineralization at Vetas, Including 157.4 g/t Over 4.15 m, and Discovers Another New Vein Containing 19.5 g/t Over 1.29 m, 100 m West of the Mine
You can view the Previous News Releases item: Thu Sep 6, 2012, Galway Intersects 11.6 g/t Au Over 19.0 m, Expands Machuca
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