Homestake Resource Corporation (TSX VENTURE:HSR)(FRANKFURT:B6I) ("Homestake")
reported today that Roscoe Postle Associates Inc. ("RPA") has completed a
mineral resource update for the 2,585-hectare Homestake Ridge Project, which is
located in northwestern British Columbia. The update provides an initial
resource for the high-grade South Reef deposit, which the Company discovered in
late 2011, a refinement of the Main Homestake deposit, which the Company
discovered in 2005, and a minor revision of the Homestake Silver deposit, which
the Company discovered in 2009. This represents the culmination of work on the
project by Homestake since 2003 and marks the transition of the project to
Agnico Eagle Mines Limited ("Agnico Eagle"). Agnico Eagle has assumed project
management since January 2013, under an August 2012 option agreement. As part of
the option agreement Agnico Eagle is required to complete $3.5 million in
exploration expenditures on the project in 2013.
The current base-case Mineral Resource Estimate utilizing an $85NSR/t cut-off
value is as follows:
------------------------------------------------------------------------
Indicated
------------------------------------------------------------------------
Zone Tonnage AU AU AG AG
Kt g/t Au oz Au g/t Ag oz Ag
------------------------------------------------------------------------
Main 604,000 6.4 124,000 48.3 939,000
Homestake
------------------------------------------------------------------------
Total 604,000 6.4 124,000 48.3 939,000
------------------------------------------------------------------------
Inferred
------------------------------------------------------------------------
Main 2,031,000 5.6 369,000 28.6 1,868,000
Homestake
------------------------------------------------------------------------
Homestake 4,402,000 2.8 403,000 130.4 18,460,000
Silver
------------------------------------------------------------------------
South 332,000 13.0 139,000 3.6 39,000
Reef
------------------------------------------------------------------------
Total 6,766,000 4.2 911,000 93.6 20,366,000
------------------------------------------------------------------------
------------------------------------------------------------------------
Indicated
------------------------------------------------------------------------
Zone CU CU NSR AUEQ AUEQ
% Cu Mlb Cu $US/t g/t AuEq oz AuEq
------------------------------------------------------------------------
Main 0.18 2.4 294 7.3 141,000
Homestake
------------------------------------------------------------------------
Total 0.18 2.4 294 7.3 141,000
------------------------------------------------------------------------
Inferred
------------------------------------------------------------------------
Main 0.31 13.9 260 6.4 415,000
Homestake
------------------------------------------------------------------------
Homestake 0.03 2.5 185 4.7 671,000
Silver
------------------------------------------------------------------------
South 0.04 0.3 523 13.1 140,000
Reef
------------------------------------------------------------------------
Total 0.11 16.3 224 5.6 1,226,000
------------------------------------------------------------------------
The $85 NSR/t cut-off value was calculated using average long term prices of
$1,500/oz gold, $27/oz silver and $3.50/lb copper and metal recoveries of 92%
gold, 88% silver and 88% copper in blocks with greater than 0.1% Cu and just
gold and silver recoveries in blocks with less than 0.1% Cu. Provisions were
also included for estimated smelter payment terms, refining costs and
transportation. All prices are stated in $USD.
The new Mineral Resource Estimate represents an approximate 40% increase for the
Homestake Ridge Project at roughly equivalent gold and silver grades when
compared to the earlier April 6, 2011 Mineral Resource Estimates (see NR-05-11).
The increase in mineral resources is due to the identification of new high-grade
resources through additional drilling, optimization of the block models to 3D
wireframes at a 2g/t AuEq cut-off grade and a lower cut-off value due to higher
average metal prices. The 2011 resource estimate was given using a 3.0g/t AuEq
cut-off grade, which equates to an approximate $118NSR cut-off value.
Highlights from the 2013 Mineral Resource Estimate Update include:
-- The identification of new high-grade grade resources at the South Reef
deposit (139,000 ozs Au and 39,000 ozs Ag averaging 13.0g/t Au, 3.6g/t
Ag), which remains open to the northwest.
-- An updated and optimized model for the Main Homestake deposit. The
current model successfully captured a higher-grade mineral resource at
an equivalent cut-off grade when compared to the previous block model.
This resulted in an increase in grade and overall contained gold ounces.
-- The inclusion of new silver-enriched resources that were identified by
drilling in 2011 at the Homestake Silver deposit. The geological model
for the Homestake Silver deposit was updated from a 2-dimensional model
into a new 3-dimensional model to be consistent with the modeling of the
two other deposits on the property.
RPA suggests that an underground mining scenario is appropriate for the project
and has recommended an $85 NSR cut-off value for the base-case resource
estimate. Also reported are $65, $120, and $140, NSR cut-off values (see Table
1), which demonstrate both a significant increase in tonnage and contained gold
and silver ounces at the lower $65 NSR cut-off value, and significant increases
in gold and silver grades at incrementally higher cut-off values. A NI
43-101-compliant Technical Report will be posted on Sedar within 45 days.
Mineral resources that are not mineral reserves do not have demonstrated
economic viability. Inferred resources are considered too speculative
geologically to have economic considerations applied to them that would enable
them to be classified as mineral reserves. There is no assurance that any part
of the resources will ultimately be converted to mineral reserves.
Optionee Agnico Eagle has advised that it continues with project planning for
the upcoming exploration program, which will include surface exploration, ground
geophysics and diamond drilling with the objective of identifying and outlining
additional deposits and mineral resources at the property. Exploration field
work on the property should resume in the late June to early July timeframe.
President Joe Kizis commented, "Homestake's consistent and systematic
exploration efforts since 2003 have yielded three significant deposits at
Homestake Ridge, making it now one of the top undeveloped higher-grade precious
metal projects in the world. As Agnico Eagle assumes exploration and development
of the Homestake Ridge property with a 2013 budget of $3.5million, we are
confident that additional high-grade resources will be found, which will
ultimately result in increased value for Homestake's shareholders. Few junior
explorers are as well positioned for success during this period of market
uncertainty."
Homestake Resource Update Parameters
The current estimate was carried out using separate block models constrained by
3D wireframes of the mineralized zones. The block models comprised an array of
blocks measuring 5 m x 5 m x 5 m, with grades for Au, Ag, and Cu interpolated
using Inverse Distance to the Third Power (ID3) weighting. Gold equivalence and
NSR values were calculated afterward from the interpolated block grades.
The interpolations were carried out in three passes using progressively larger
search radii of 30m, 50m and 100m. For the first and second passes, the
interpolation was restricted to a minimum of three and a maximum of eight
composites, with a maximum of two composites from any one drill hole (i.e. a
minimum of two drill holes required). In the third pass, the composite
constraints were a minimum of one and a maximum of two from a single drill hole.
Bulk densities were based on a total of 2,308 measurements taken by Homestake
field personnel from the mineralized zones. Where enough measurements were
available, average densities were estimated for the individual zones. These
density values ranged from 2.66 t/m3 to 2.85 t/m3. For zones with too few
measurements to determine a reliable mean, the average for the entire dataset,
2.75 t/m3, was used.
The mineralized zones were defined by Homestake personnel in consultation with
RPA. The mineralized wire frames were identified using a nominal grade cut-off
of 2.0 g/t AuEq, and a minimum horizontal width of 2.0m.
Table 1: Summary of Mineral Resources at Homestake Ridge
Main Homestake Deposit - Indicated Resources
------------------------------------------------------------------------
Cut Off Tonnes Au Au Ag Ag
(NSR$/t) (g/t) (oz) (g/t) (oz)
------------------------------------------------------------------------
140 421,000 8.1 109,000 62.7 849,000
120 482,000 7.4 115,000 57.0 883,000
85 604,000 6.4 124,000 48.3 939,000
65 652,000 6.0 127,000 46.5 973,000
------------------------------------------------------------------------
Main Homestake Deposit - Indicated Resources
--------------------------------------------------------------
Cut Off Cu Cu NSR AUEQ AUEQ
(NSR$/t) (%) (Mlb) ($US/t) (g/t) (oz)
--------------------------------------------------------------
140 0.23 2.1 374 9.2 125,000
120 0.21 2.2 343 8.4 131,000
85 0.18 2.4 294 7.3 141,000
65 0.17 2.5 278 6.9 144,000
--------------------------------------------------------------
Main Homestake Deposit - Inferred Resources
------------------------------------------------------------------------
Cut Off Tonnes Au Au Ag Ag
(NSR$/t) (g/t) (oz) (g/t) (oz)
------------------------------------------------------------------------
140 1,158,000 8.2 307,000 42.1 1,568,000
120 1,357,000 7.4 325,000 37.7 1,646,000
85 2,031,000 5.6 369,000 28.6 1,868,000
65 2,240,000 5.3 380,000 26.7 1,920,000
------------------------------------------------------------------------
Main Homestake Deposit - Inferred Resources
--------------------------------------------------------------
Cut Off Cu Cu NSR AUEQ AUEQ
(NSR$/t) (%) (Mlb) ($US/t) (g/t) (oz)
--------------------------------------------------------------
140 0.33 8.4 375 9.2 341,000
120 0.31 9.4 339 8.3 362,000
85 0.31 13.9 260 6.4 415,000
65 0.30 14.7 243 5.9 428,000
--------------------------------------------------------------
Homestake Silver Deposit - Inferred Resources
------------------------------------------------------------------------
Cut Off Tonnes Au Au Ag Ag
(NSR$/t) (g/t) (oz) (g/t) (oz)
------------------------------------------------------------------------
140 2,250,000 3.8 278,000 190.4 13,774,000
120 2,802,000 3.5 317,000 168.8 15,202,000
85 4,402,000 2.8 403,000 130.4 18,460,000
65 5,384,000 2.5 437,000 117.8 20,394,000
------------------------------------------------------------------------
Homestake Silver Deposit - Inferred Resources
--------------------------------------------------------------
Cut Off Cu Cu NSR AUEQ AUEQ
(NSR$/t) (%) (Mlb) ($US/t) (g/t) (oz)
--------------------------------------------------------------
140 0.03 1.6 258 6.6 478,000
120 0.03 1.9 233 6.0 537,000
85 0.03 2.5 185 4.7 671,000
65 0.02 2.8 165 4.2 733,000
--------------------------------------------------------------
South Reef Deposit - Inferred Resources
------------------------------------------------------------------------
Cut Off Tonnes Au Au Ag Ag
(NSR$/t) (g/t) (oz) (g/t) (oz)
------------------------------------------------------------------------
140 297,000 14.2 136,000 3.8 36,000
120 311,000 13.7 138,000 3.7 37,000
85 332,000 13.0 139,000 3.6 39,000
65 341,000 12.8 140,000 3.6 39,000
------------------------------------------------------------------------
South Reef Deposit - Inferred Resources
--------------------------------------------------------------
Cut Off Cu Cu NSR AUEQ AUEQ
(NSR$/t) (%) (Mlb) ($US/t) (g/t) (oz)
--------------------------------------------------------------
140 0.04 0.3 571 14.3 137,000
120 0.04 0.3 551 13.8 138,000
85 0.04 0.3 523 13.1 140,000
65 0.04 0.3 512 12.8 141,000
--------------------------------------------------------------
Combined Main Homestake + Homestake Silver + South Reef Resources
------------------------------------------------------------------------
Tonnes Au Au Ag Ag
(g/t) (oz) (g/t) (oz)
------------------------------------------------------------------------
$140/t Cut-off
Indicated 421,000 8.1 109,000 62.7 849,000
Inferred 3,705,000 6.1 721,000 129.1 15,378,000
$120/t Cut-off
Indicated 482,000 7.4 115,000 57.0 883,000
Inferred 4,470,000 5.4 779,000 117.5 16,885,000
$85/t Cut-off
Indicated 604,000 6.4 124,000 48.3 939,000
Inferred 6,766,000 4.2 911,000 93.6 20,366,000
$65/t Cut-off
Indicated 652,000 6.0 127,000 46.5 973,000
Inferred 7,965,000 3.7 957,000 87.3 22,353,000
------------------------------------------------------------------------
Combined Main Homestake + Homestake Silver + South Reef Resources
------------------------------------------------------------------
Cu Cu NSR AUEQ AUEQ
(%) (Mlb) ($US/t) (g/t) (oz)
------------------------------------------------------------------
$140/t Cut-
off
Indicated 0.23 2.1 374 9.2 125,000
Inferred 0.13 10.3 320 8.0 956,000
$120/t Cut-
off
Indicated 0.21 2.2 343 8.4 131,000
Inferred 0.12 11.6 287 7.2 1,037,000
$85/t Cut-
off
Indicated 0.18 2.4 294 7.3 141,000
Inferred 0.11 16.3 224 5.6 1,226,000
$65/t Cut-
off
Indicated 0.17 2.5 278 6.9 144,000
Inferred 0.10 17.8 202 5.1 1,301,000
------------------------------------------------------------------
Notes:
1. Mineral Resources were constrained using a 2g/t AuEq grade shell.
2. CIM definitions were followed for Mineral Resources.
3. Mineral Resources are estimated using an average long-term gold price of
US$1,500 per ounce Au, US$27 per ounce Ag, and US$3.50 per pound Cu,
with an exchange rate of C$1.00=US$1.00.
4. NSR and Gold equivalence were calculated using Au, Ag and Cu
metallurgical recoveries of 92% Au, 88% Ag and 88% Cu in blocks where
Cu%greater than 0.1%; and where calculated using just Au and Ag
recoveries in blocks with less than 0.1% Cu
High assays were capped, prior to compositing, at various levels depending on
the statistical characteristics of the individual zones.
The Homestake Silver and South Reef resource estimates were entirely classified
as Inferred Mineral Resources. For all zones, blocks qualified as at least
Inferred if they fell within 75 m of a drill hole intercept. In the Main
Homestake, blocks within 20 m of the nearest intercept, and estimated by at
least two drill holes were tagged as eligible for upgrade to Indicated. Polygons
were manually drawn around panels of contiguous Indicated-eligible blocks, which
were then upgraded to an Indicated classification.
To view Figure 1, click on the following link:
http://media3.marketwire.com/docs/h424m.pdf
About Homestake Resource Corporation
Homestake owns a 100 percent interest in the Homestake Ridge project, located in
the Kitsault Mineral district in northwestern British Columbia. The project is
being advanced as a potential high-grade underground mining operation. At an $85
NSR cut-off value and based on drilling completed through 2012, the project
contains an estimated NI 43-101 compliant Indicated Resource of 124,000oz gold
and 939,000oz silver (141,000oz AuEq) plus an Inferred Resource of 911,000oz
gold and 20,366,000oz silver (1,225,785oz AuEq) at the Main Homestake, Homestake
Silver and South Reef deposits. Visit the Company website at
www.homestakeresource.com to see how the Homestake Ridge resource estimate
compares to gold deposits worldwide, as ranked by Natural Resource Holdings
(June 2012).
To date, 251 holes were drilled for a total of 70,533 metres, and multiple
exploration targets remain to be tested on the large 2,585-hectare property.
Agnico Eagle Mines Limited has assumed project management since January 2013
under an option agreement signed in August 2012 to fund exploration and
development costs of $25.3 million over a 5-year period to earn a 65% interest
in the property.
Homestake holds an option to acquire a 100% interest in the 623-square-kilometre
Kinskuch project, located adjacent to, and to the southeast of, the Homestake
Ridge project. Diamond drilling along the Illiance trend on the Kinskuch
property during 2011 was successful in intersecting high-grade silver/lead/zinc
VMS mineralization in three of four holes. Surface soil and rock-chip sampling
along the trend in 2012 extended mineralization to a 4.5-kilometre
strike-length; Homestake will be aggressively exploring this trend in 2013.
Homestake owns a 10.19 percent equity interest in Bravada Gold Corporation (TSX
VENTURE:BVA) which is exploring and developing numerous gold/silver projects in
several of Nevada's prolific gold belts. At the advance-stage Wind Mountain
project, BVA has received a positive PEA from an independent engineering company
for an open-pit/heap-leach operation. Bravada is currently conducting additional
exploration at Wind Mountain under a funding and option agreement with Argonaut
Gold Corporation.
Rob Macdonald (P.Geo.) is the Vice-President of Exploration for Homestake and is
the Qualified Person responsible for reviewing the technical results in this
release. David Rennie, P. Eng. and Principal Geologist for Roscoe Postle
Associates Inc., is the Independent Qualified Person responsible for preparation
and review of the Mineral Resource Estimate.
On behalf of the Board of Directors
Joseph A. Kizis, Jr., Director, President, Homestake Resource Corporation
This news release may contain forward-looking statements including but not
limited to comments regarding the timing and content of upcoming work programs,
geological interpretations, receipt of property titles, potential mineral
recovery processes, etc. Forward-looking statements address future events and
conditions and therefore involve inherent risks and uncertainties. Actual
results may differ materially from those currently anticipated in such
statements. These statements are based on a number of assumptions, including,
but not limited to, assumptions regarding general economic conditions, interest
rates, commodity markets, regulatory and governmental approvals for the
company's projects, and the availability of financing for the company's
development projects on reasonable terms. Factors that could cause actual
results to differ materially from those in forward looking statements include
market prices, exploitation and exploration successes, the timing and receipt of
government and regulatory approvals, and continued availability of capital and
financing and general economic, market or business conditions. Homestake
Resource Corp. does not assume any obligation to update or revise its
forward-looking statements, whether as a result of new information, future
events or otherwise, except to the extent required by applicable law.
We seek safe harbor.
FOR FURTHER INFORMATION PLEASE CONTACT:
Homestake Resource Corporation
Liana Shahinian
1-888-456-1112 or 604-641-2773
liana@mnxltd.com
www.homestakeresource.com
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