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Vetas

The Vetas gold-silver project, host of the El Volcán gold-silver mine, has been in operation for over 400 years and is the largest mine in the Vetas-California-Surata gold region of Colombia. Galway Gold's Vetas project was spun out of Galway Resources into Galway Gold after Galway Resources was acquired by AUX Acquisition 2 S.àr.l on December 20, 2012, for total consideration of approximately Cdn$340 million cash. Galway Gold holds an option to acquire a 100% interest in the Vetas project.

High hit ratio in 68 underground drill holes:
5 g/t Au or more, 282 times
10 g/t Au or more, 171 times
20 g/t Au or more, 84 times
30 g/t Au or more, 50 times
50 g/t Au or more, 36 times
100 g/t Au or more, 16 times
150 g/t Au or more, 9 times
1,000 g/t Au or more, 2 times

NI 43-101 Mineral Resource Estimate

The mineral resource estimate was prepared in accordance with NI 43-101 by Roscoe Postle Associates Inc. (RPA), of Toronto, Ontario, and incorporates 68 diamond drill holes of HQ size, reduced to NQ, drilled from underground (for a total of 33,238 meters).

Measured, indicated and inferred mineral resources have been determined from 13 wireframes representing vertically dipping gold-bearing, mineralized zones that extend for up to 550 meters laterally, covering 250m in width, and to a depth of up to 600 meters below the bottom level of the El Volcán mine. The zones remain open along strike to the northeast and southwest, and vertically to depth in El Volcán's steeply dipping vein system. In addition, none of the resource is as yet located within the area of the mine (above the bottom level of the mine, the Reina de Oro level).

The Mineral Resource estimate for the Vetas Gold Project dated November 6, 2013, is summarized in Table 1 below.

TABLE 1: MINERAL RESOURCE ESTIMATE SUMMARY - NOVEMBER 6, 2013
Galway Gold Inc. - Vetas Project
Category Tonnes Grade Contained Ounces
    (g/t Au) (g/t Ag) (oz Au) (oz Ag)
Measured          23,900 7.79 12.4 6,100      9,400
Indicated       641,000 10.62 14.9 218,800  307,700
Measured & Indicated      664,900      10.52 14.8 224,900 317,100
Inferred      1,146,000 10.30 15.3 377,000 563,000
  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, title, taxation, socio-political, marketing, or other relevant issues.
  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. The mineral resources in this press release 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.
  4. Grade capping of 50 g/t Au was utilized on raw assays.
  5. A bulk density of 2.74 t/m3 was used for all tonnage estimates.
  6. A gold price of US$1,500/oz and an exchange rate of US$0.95US=C$1.00 was utilized in the Au cut-off grade calculations of 3.0 g/t Au. Underground mining costs were assumed at US$75/t, with process costs of US$25/t and G&A of US$20/t. Process recovery was assumed at 90%.The government royalty was taken as the 4% NSR.
  7. Values in the table may differ due to rounding.
  8. The measured area of influence was 12.5m, indicated was 25m, and the inferred was 50m
  9. A minimum 1.52m (5') horizontal mining width was used.
RPA has carried out an initial Mineral Resource estimate for the un-mined area below the bottom level of the El Volcán mine using the polygonal method. The estimate is based primarily on information from underground diamond drilling and development chip sampling. Thirteen wireframes representing eight vein zones were constructed based on drill hole intercepts provided by Galway, assay grades, and the position of those assay grades relative to existing mine workings.

The resource is broken down by vein in Table 2; the average measured and indicated gold grade for each vein appears to be relatively consistent, varying from 6.2 g/t Au to 11.9 g/t Au.

Table 2: El Volcán Mineral Resource*
  Measured Indicated
Vein Name Tonnes Au g/t Ag g/t Ounces (Au) Ounces (Ag) Tonnes Au g/t Ag g/t Ounces (Au) Ounces (Ag)
BURRO           137,000 11.89 14.1 52,400 61,900
CORTEROS 3,800 6.18 12.4 800 1,500          
GREEN           101,000 8.52 12.8 27,700 41,700
LOSCAS 5,400 7.31 12.2 1300 2,100 61,100 10.43 10.2 20,500 20,100
LOSCAS FW           62,700 10.45 12.7 21,000 25,700
MANZANILLA 10,300 10.24 14.4 3400 4,700 195,800 11.28 18.8 71,000 118,200
TAJO 4,400 4.05 8.2 600 1,100 83,400 9.78 15.0 26,200 40,100
VIRGEN 1                    
Totals 23,900 7.79 12.4 6,100 9,400 641,000 10.62 14.9 218,800 307,700

  Measured & Indicated Inferred
Vein Name Tonnes Au g/t Ag g/t Ounces (Au) Ounces (Ag) Tonnes Au g/t Ag g/t Ounces (Au) Ounces (Ag)
BURRO 137,000 11.89 14.1 52,400 61,900 139,000 8.8 15.0 39,000 67,000
CORTEROS 3,800 6.18 12.4 800 1,500 150,000 18.7 26.3 90,000 127,000
GREEN 101,000 8.52 12.8 27,700 41,700 57,000 6.6 9.8 12,000 18,000
LOSCAS 66,500 10.18 10.4 21,800 22,200 150,000 7.1 8.8 34,000 42,000
LOSCAS FW 62,700 10.45 12.7 21,000 25,700 68,000 7.5 13.8 16,000 30,000
MANZANILLA 206,100 11.22 18.5 74,400 122,900 211,000 8.6 20.3 58,000 137,000
TAJO 87,800 9.50 14.6 26,800 41,200 126,000 8.7 13.8 35,000 56,000
VIRGEN 1           245,000 11.8 10.9 93,000 86,000
Totals 664,900 10.52 14.8 224,900 317,100 1,146,000 10.3 15.3 377,000 563,000
*Please see notes following Table 1

For a complete list of maps, sections and drill results at Vetas to date please refer to the Vetas Maps and Sections and Drill Results page.

Mineralization

Gold mineralization at the El Volcán mine contains favorable steeply dipping lode-style quartz veins in competent host rocks that could be successfully mined using modern bulk-tonnage longhole mining methods. The known vein system comprises numerous different epithermal veins and numerous subordinate splay veins trending NNE and dipping sub-vertically to the NW. The main quartz veins, together with splay veins, are spatially associated with shear zones hosted in porphyry and metamorphic gneiss, much like the California gold district. Grey chalcedonic quartz, colloform banded texture, vuggs and drussy quartz, with fine pyrite crystals are typical. Classic low sulfidation vein textures are common.

In the El Volcán mine, over 10,000 meters of tunnels exist, 7,345 meters of drifts were mapped and 3,769 chip and channel samples were taken from vein, wall rock and stockwork mineralization between vein sets. The mine covers an area of approximately 500 meters x 300 meters with a vertical extent of 300 meters. The dimensions of the estimated vein zones that form the resource below the mine is 550m x 250m.

The procedures for diamond drilling used at the Project, both underground at the El Volcán Mine and on surface, are consistent with industry best practices. They include surveying the location and orientation of the drill set-ups, downhole surveying at regular intervals, documentation of core recovery, and conventional and industry standard logging and sampling procedures. Core recovery is reported to average over 90% in the mineralized zones. RPA has reviewed the results of the QA/QC program implemented by Galway and considers them to be acceptable for Mineral Resource estimation. RPA is not aware of any factors that could materially impact the accuracy and reliability of the results.