Lexam VG Gold Inc., (TSX: LEX)(FRANKFURT: VN3A)(OTCQX: LEXVF) is
pleased to announce the details of an initial resource estimate for
the Paymaster West Project in Timmins, Ontario. The resource
estimate was prepared by Consulting Mining Geologist Peter Bevan,
P.Eng, in accordance with Canadian National Instrument 43-101
standards (NI 43-101) and focused on the projects near surface gold
mineralization. The resource is based on 172 diamond drill holes,
109,120.6 feet, (33,259.9 m) of core drilling and builds on Lexam
VG's existing resources that either adjoin or are located in close
proximity to the Paymaster West Project (Fig. 1). The potentially
open pit near surface Paymaster West resource is located west of
the Dome Mine Pit, that mined gold mineralization with similar
grade.
RESOURCE ESTIMATE HIGHLIGHTS
-- Indicated resource of 3.23 million tonnes at a average grade of 1.82
grams per tonne (gpt) totalling 189,082 ounces of gold
-- Inferred resource of 2.79 million tonnes at a average grade of 1.77 gpt
totalling 154,404 ounces of gold
-- Successfully builds upon Lexam VG Gold's current gold resources (100%)
in Timmins that includes 601,756 ounces of gold in the indicated
category and 614,791 ounces of gold in the inferred
-- Excellent potential exists at Paymaster West to expand the near surface
resource and develop additional resources below the current estimate
-- A total of $10 million has been budgeted in 2011 to explore Paymaster
West and Lexam VG Gold's surrounding projects
Paymaster West Resource Estimate
The Paymaster West resource estimate includes a cut-off grade of
0.51 grams gold/t. High grade assays above 34.29 grams gold/t were
cut to this value. A conceptual open pit mining method was used for
the purpose of delineating the mineralization with a reasonable
prospect of economic extraction. Approximately 85% of the indicated
and 60% of the inferred resources are located within 600 feet of
surface. Tonnage estimates were based on a 2.81 grams/cubic
centimetre density factor. Cross-sectional method was used to
interpolate gold grade in the resource model. The database used to
establish the Paymaster West resource is based on diamond drilling
conducted by both Placer Dome (75 holes, 7958.2 metres) and VG Gold
(97 holes, 25,301.7 metres).
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Gold Gold Gold
Classification Tons Tonnes (opt) (gpt) (oz.)
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Indicated - above 600' depth 3,019,111.0 2,738,635.6 0.0536 1.84 161,690
Indicated - below 600' depth 543,400.0 492,918.1 0.0504 1.73 27,392
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total Indicated Resource 3,562,511.0 3,231,553.7 0.0531 1.82 189,082
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Inferred - above 600' depth 2,109,076.0 1,913,142.8 0.0450 1.54 95,005
Inferred - below 600' depth 962,800.0 873,355.9 0.0617 2.12 59,400
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total Inferred Resource 3,071,876.0 2,786,498.7 0.0503 1.72 154,404
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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 conceptual 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 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
December 11, 2005.
A copy of the full resource estimation report will be filed on
the SEDAR within 45 days of this news release. The mineral resource
estimates were completed by Peter Bevan, P.Eng, Consulting Mining
Geologist and are based on geological interpretations and data
supplied by the Company to Peter Bevan and modified by him for the
purposes of National Instrument 43-101 Standards of Disclosure for
Mineral Projects of the Canadian Securities Administrators.
Lexam VG Gold has the option to earn a 60% interest in the
Paymaster West Property from Goldcorp by making $6.0 million in
exploration expenditures by June 2012. Once Lexam VG Gold has given
notice that it has earned its 60%, Goldcorp has six months to
decide if it wishes to increase its ownership from 40% to 70% by
paying Lexam VG Gold $710,000 and spending $8.25 million on the
property within two years and then completing a feasibility study
by the end of year three.
Existing Resources
Lexam VG Fuller
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Indicated 1,533,489 tons grading Containing 248,005 oz.
Resources: 0.162 oz. Au/ton gold
Inferred 1,813,065 tons grading Containing 299,960 oz.
Resources: 0.165 oz. Au/ton gold
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Lexam VG Buffalo Ankerite
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Indicated 1,667,327 tons grading Containing 224,309 oz.
Resources: 0.135 oz. Au/ton gold
Inferred 2,160,734 tons grading Containing 274,632 oz.
Resources: 0.127 oz. Au/ton gold
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Lexam VG Davidson Tisdale
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Indicated 934,558 tons grading Containing 129,442 oz.
Resources: 0.139 oz. Au/ton gold
Inferred 295,857 tons grading Containing 40,199 oz.
Resources: 0.136 oz. Au/ton gold
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Buffalo Ankerite Property Diamond Drilling
Recent drilling at 100 percent owned Buffalo Ankerite is focused
on expanding the near surface gold resource in the South Mine Area.
Previous drilling by the company's predecessor had intersected
significant results that included 5.09 grams gold/t over 13.7 m and
1.61 grams gold/t over 36.1 meters and the current drilling is
following up on these positive results on the extension of the
South Mine geological structure called the South Mine North Limb.
The company began drilling the folded extension of the South Mine
in the fall of 2010 and has encountered encouraging gold
mineralization and gold values along a strike length of 200 metres
to date, with additional potential open to the west. Highlights
from the recent drilling are below with the full results shown in
Table 1. Diamond drilling in 2011 will continue to follow the North
limb as part of the planned $10 million exploration program.
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Hole Number From (m) To (m) Width (m) Gold (gpt)
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VBA-10-138 92.1 93.6 1.5 20.5
VBA-10-140 88.9 99.9 10.9 1.19
VBA-10-144 153.9 158.3 4.3 5.53
VBA-10-150 270.8 275.8 5.0 4.02
Including 0.9 14.55
VBA-10-152 308.6 322.8 14.2 1.82
Including 4.9 4.44
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Intervals reported here are core lengths. True widths are not
known at this time.
Davidson-Tisdale
In 2010, drilling occurred at the Davidson-Tisdale project
(Lexam VG Gold 68.5% - San Gold 31.5%) in order to test the
potential at depth. A total of 29 holes were drilled. No
significant mineralization was encountered in these holes. Although
no mineralization was encountered Lexam VG Gold's management
believe there is good potential to discover additional high-grade
gold mineralization at depth, similar to that discovered closer to
surface.
QUALIFIED PERSON
All exploration work was conducted under Kenneth Guy, P. Geo.,
designated Qualified Person for Lexam VG Gold, who has reviewed
this news release.
The mineral resource estimates which are effective today were
completed by Mining Geological Consultant Peter Bevan, P.Eng, and
are based on geological interpretations and data supplied by the
Company. Peter Bevan is an independent Qualified Person for the
purposes of National Instrument 43-101 Standards of Disclosure for
Mineral Projects of the Canadian Securities Administrators and has
verified the data disclosed in this release.
All drilling was completed using NQ size core. Gold analysis of
the samples collected by Lexam VG Gold was assayed by ALS Chemex.
Analysis consisted of a fire assay of a 30-gram sample with an
atomic absorption finish. Samples assaying over 10.0 grams gold per
tonne Au are re-assayed with gravimetric finish. Samples noted to
contain visible gold are analyzed via total metallic assay method.
A rigorous Quality Control and Assurance Program (QA/QC) is in
place, using control samples such as blanks and duplicate checks.
In addition, duplicate analyses of 10% of the samples are
corroborated by check assays performed at a third Party Laboratory.
To learn more about Lexam VG Gold (TSX: LEX), visit our website:
www.lexamvggold.com.
Table 1 - Buffalo Ankerite Core Drill Results
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Assay
Length From Assay Width
Hole # East North Elev (m) Dip Az (m) To (m) (m) Au-gpt GxW
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VBA-10-137 6026 5911 10989 179.0 -80 0 80.2 89.4 9.3 0.84 7.8
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VBA-10-138 6026 5911 10989 125.0 -60 354 92.1 93.6 1.5 20.50 31.2
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VBA-10-139 6026 5911 10989 146.0 -43 354 52.0 57.4 5.4 2.17 11.8
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VBA-10-140 6227 5984 10977 161.0 -70 180 88.9 99.9 10.9 1.19 13.0
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VBA-10-141 6227 5984 10977 140.0 -85 180 no significant values
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VBA-10-142 5820 6065 11020 134.0 -85 3.3 74.3 75.3 0.9 1.19 1.1
92.4 93.5 1.1 1.44 1.5
109.4 112.2 2.8 0.61 1.7
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VBA-10-143 5820 6065 11020 88.2 -45 3.3 46.5 48.2 1.7 1.21 2.1
51.0 52.3 1.3 2.52 3.3
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VBA-10-144 5620 6075 11020 215.0 -86 0 153.9 158.3 4.3 5.53 23.9
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VBA-10-145 5620 6075 11020 119.0 -45 0 76.4 77.4 1.1 2.75 2.9
86.1 87.1 1.0 1.23 1.2
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VBA-10-146 5720 5844 11030 206.0 -70 3.4 165.4 166.9 1.5 0.92 1.4
169.7 171.4 1.6 5.69 9.2
182.9 188.1 5.2 0.88 4.6
3.0 1.23 3.7
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VBA-10-147 5520 5905 11014 354.0 -85 347.5 270.0 271.1 1.1 1.50 1.7
281.1 283.6 2.4 0.68 1.7
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VBA-10-148 5520 5925 11014 245.0 -65 355 183.4 186.3 2.9 1.06 3.1
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VBA-10-149 5520 5925 11014 205.6 -45 355 no significant values
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VBA-10-150 5420 5900 11030 338.0 -75 355 248.3 250.7 2.4 1.71 4.2
257.7 260.6 2.9 1.20 3.5
270.8 275.8 5.0 4.02 20.1
0.9 14.55 13.3
299.7 305.3 5.5 1.03 5.7
310.3 314.2 4.0 1.46 5.8
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VBA-10-151 5420 5900 11030 221.0 -50 355 204.3 207.4 3.0 1.16 3.5
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VBA-10-152 5420 5900 11000 365.2 -75 175 204.6 207.3 2.7 0.74 2.0
308.6 322.8 14.2 1.82 25.8
4.9 4.44 21.6
340.9 344.0 3.0 1.30 4.0
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VBA-10-153 5448 5824 11035 203.1 -45 178 148.1 152.1 3.9 2.22 8.7
180.6 191.3 10.7 1.90 20.3
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17 holes Total BA 2010 3445.1
metres
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Intervals reported here are core lengths. True widths are not
known at this time.
To view Figure 1 - Lexam VG Gold Project Locations and
Resources, please visit the following link:
http://media3.marketwire.com/docs/lex_01_10_2011_fig_1.pdf
The TSX Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Contacts: Lexam VG Gold Corp. Tom Meredith President & CEO
416-368-0099 416-368-1539 (FAX) www.lexamvggold.com