Mega Announces 2.9 Million Ounces of Gold in Measured and Indicated Resources and 0.7 Million Ounces of Gold in Inferred Resources at Monument Bay
THUNDER BAY, ONTARIO -- (Marketwired) -- 06/17/13 -- Mega Precious Metals Inc. (TSX VENTURE: MGP) ("Mega") is very pleased to announce an updated NI 43-101 mineral resource estimate for its Monument Bay Gold Project in northern Manitoba which demonstrates a significant improvement in the size, grade distribution and confidence from the previous resource estimate (See news release dated February 22, 2012).
The Monument Bay Gold Project ("Monument Bay") is estimated to contain a Measured (M) and Indicated (I) Resource of 2.9 M ounces of gold averaging 1.3 g/t Au and additional Inferred Resources of 0.7 M ounces of gold averaging 0.8 g/t Au, including a high grade pit-constrained mineral resource of 2.8 M ounces at 1.4 g/t Au and an inferred resource of 0.3 M ounces at 1.2 g/t Au. The resource estimate has been completed by Todd McCracken, P.Geo. of Tetra Tech. Mr. McCracken is an independent qualified person, as defined by NI 43-101. The resource utilizes a 3D block model and is constrained by geological domains. The mineral resource estimate does not include the recent discovery of Tungsten mineralization with results such as hole TL12-484 which intersected 94.0 metres at 1.5 g/t gold equivalent and TL11-390 intersected 41.0 metres at 2.7 g/t gold equivalent.
The Corporation has scheduled a conference call for investors and analysts at 10:00 AM (Eastern Time) Wednesday June 19, 2013, call in details are below.
Highlights:
-- Measured and Indicated Resources of 2.9 M Ounces of Gold at 1.3 g/t Au
-- Upgrading 1.8 M ounces in classification, an overall increase of 94%
from the previous resource estimate.
-- Inferred Resources of 0.7 M Ounces of Gold
-- High Grade Starter Pit providing optionality, flexibility and potential
rapid payback
-- Monument Bay is estimated to contain a distinct, higher-grade
Measured and Indicated open-pit resource of 667,308 ounces of gold
averaging 2.7 g/t Au at a 1.5 g/t Au cut-off
-- Over 143,460 m of drilling, plus channel sampling and surface mapping
incorporated into the geological model
-- Includes over 32,500 m of drilling since the last resource update
-- Improved Confidence in the Twin Lakes Open Pit deposit with 91% of the
resource in the Measured and Indicated category
-- Additional Unconstrained Open-pit Resources at the Expanding Mid East
and AZ Zones increasing total Measured and Indicated resources to 80,084
ounces of gold and Inferred resources to 312,361 ounces of gold.
-- Defined Repeatable Cores every 180-290 m that are consistent and
predictable continue along strike and depth providing potential for
significant resource expansion
-- Recently Discovered gold and tungsten zones, offering further potential
upside
Glen Kuntz, President and CEO of Mega stated "While the Measured and Indicated resource has grown significantly, the average open-pit grade of 1.4 g/t provides high quality ounces with significant potential for resource expansion in a politically safe and mining friendly Canadian jurisdiction giving Monument Bay the potential to become Canada's next great gold mine. We are also pleased that we have identified and confirmed the repeatable high-grade domains and the discovery of Tungsten mineralization which may lead to a significant by-product credit. The inclusion of Tungsten mineralization in an updated resource is expected to increase the gold equivalent grade of the deposit making Monument Bay one of the highest- grade open-pit deposits in Canada. Collectively, these give Mega the ability to continue to deliver solid exploration results and grow a resource base which will enhance the potential economics as we progress the Monument Bay Gold Project to pre-feasibility.
Since Jan 2011, the combination of our drilling and the gold and tungsten Old Core Assay Program (OCAP) have given our shareholders good reason to be encouraged by the progress being made in significantly increasing the resources with quality higher grade ounces while advancing and de-risking the project. We are continuing to re-assay the remaining +40,000 m of old core and we are well financed with approximately $4.7 million in working capital as of March 31, 2013, to continue to progress our planned 12,000 m plus drill program at Monument Bay."
Table 1: Mineral Resource Statement, Monument Bay Gold Project
---------------------------------------------------------------------------
Gold (Au)
Cut - Off Tonnes GradeAu Ounces
Material Category Classification (000's) (g/t) (000's)
---------------------------------------------------------------------------
Measured (M) 15,543 1.5 736
-----------------------------------------------
Open Pit Indicated (I) 46,941 1.4 2,060
-----------------------------------------------
(0.7 g/t) Subtotal M & I 62,484 1.4 2,796
-----------------------------------------------
Inferred 7,630 1.2 289
------------------------------------------------------------
------------------------------------------------------------
Pit Constrained
Twin Lakes
Deposit Measured (M) 0.1 4.3 0.2
-----------------------------------------------
Underground Indicated (I) 133 5.5 24
-----------------------------------------------
(4.0 g/t) Subtotal M & I 133 5.5 24
-----------------------------------------------
Inferred 592 5.0 96
---------------------------------------------------------------------------
Measured (M) - - -
-----------------------------------------------
Mid East and AZ Open Pit Indicated (I) 4,529 0.5 80
-----------------------------------------------
Deposits (0.4 g/t) Subtotal M & I 4,529 0.5 80
-----------------------------------------------
Inferred 18,238 0.5 312
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Open Pit Total M&I 67,014 1.3 2,876
-----------------------------------------------
Combined
Deposits Total Inferred 25,868 0.7 602
-----------------------------------------------------------
Underground Total M&I 133 5.5 24
-----------------------------------------------
Total Inferred 592 5.0 96
---------------------------------------------------------------------------
Note: due to rounding, some totals may not appear to total properly
-- 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,
socio-political, marketing, or other relevant issues.
-- The 2013 mineral resource estimate is based on the combination of
geological modeling, geostatistics and Ordinary Krig grade
estimation within three-dimensional block models with mineralized
domains defined by wireframe solids.
-- The QA/QC protocol and corresponding sample preparation, shipment
procedures and analytical procedures have been reviewed by Tetra
Tech.
-- All composites have been capped where appropriate. Cut-off grades are
based on a price of US$1,372 per ounce of gold and a number of operating
cost and recovery assumptions (see details below)
The Monument Bay Gold Project is estimated to contain a Pit-Constrained Measured and Indicated Resource of 2,796,000 ounces of gold averaging 1.4 g/t Au and a Pit-Constrained Inferred Resource of 289,000 ounces of gold averaging 1.2 g/t Au, at a 0.7 g/t Au cut-off grade. The Monument Bay Gold Project is estimated to contain an Underground Measured and Indicated Resource of 24,000 ounces of gold averaging 5.5 g/t Au and Underground Inferred Resource of 96,000 ounces of gold averaging 5.0 g/t Au, at a 4.0 g/t Au cut-off grade. The resource remains open on strike and at depth with the deepest hole drilled to date of approximately 615 meters. The recent discovery at the Mid East and AZ Zone deposits are estimated to contain a Measured and Indicated Resource of 80,084 ounces of gold averaging 0.5 g/t Au and Inferred Resource of 312,361 ounces of gold averaging 0.5 g/t Au, at a 0.4 g/t Au cut-off grade. This represents an overall increase of approximately 118%, from the previous pit-constrained Resource Estimate (536,343 ounces averaging 1.69 g/t Au in the Measured and Indicated Resource and 258,481 ounces averaging 2.34 g/t Au in an Inferred Resource).
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 (Table 2), where the Resource still contains 74% of the total contained Measured and Indicated ounces and 71% of the Inferred resource ounces.
The updated resource estimate, which meets the guidelines for reporting mineral exploration programs as set out in National Instrument 43-101, was based on 501 diamond drill hole totaling over 143,460 metres (m) and 51 channel samples that tested 3 deposits along 6,100 m of strike length and to a vertical depth of over 700 m and at drill spacing of 5 to 75 m.
The geological framework at the Monument Bay deposit is comprised of a volcano-/meta-sedimentary horizon containing a thick, continuous, consistent and steeply northward dipping mylonitic zone that hosts multiple polymetallic hosted gold/tungsten deposits. Each of these deposits is open in all directions.
Sensitivity Analysis
The Updated Resource Estimate represents a rigorous evaluation of both the 2012 drilling (40 holes and over 12,500 m plus 20,000 m from the old core assay program (OCAP) in addition to the inclusion of all of the surface mapping/sampling programs and the University of Manitoba Research Program completed to the end of January 2013. The Updated Resource Estimate was constrained in a preliminary open-pit optimized shell (Datamine NPV Scheduler) to an average Depth of 380 m. For the purpose of this news release, the Pit constrained resource estimate is reported at a cut-off grade of 0.7 g/t Au and for Underground a cut-off grade of 4.0 g/t Au was used. Both cut-off's were chosen to better represent the higher-grade core to the mineralized zone and to provide continuity for future resource estimates and a Preliminary Economic Assessment ("PEA") when and if the Corporation deems it appropriate.
The most noticeable difference from previous estimates is the significant increase in the size and overall persistent higher grade nature of the deposit at different cut-offs (Table 2), due to the combination of the OCAP, infill drilling programs, surface exploration and University of Manitoba research program. As such the corporation's understanding of the Monument Bay Gold Project is improving with each resource estimate and it is now recognized that each deposit has repeatable higher-grade cores along with a strong Tungsten correlation providing the components needed to increase the grade and growing the overall resource. At a 1.0 g/t Au cut-off, the resource contains a significant deposit of greater than 1.8 g/t average gold grades.
Tables 2 and 3 below, present the tonnes and grades from the block model used for the Mineral Resource Estimate at a range of cut-off grades in order to demonstrate the sensitivity of the estimates. The analysis indicates the robust nature of the overall resource and potential to optimize the grade and maximize margins.
Table 2: Sensitivity of the pit constrained Monument Bay Resource Estimates
at Various Cut-off Grades
----------------------------------------------------------------------
Measured and Indicated Resources
----------------------------------------------------------------------
Tonnes Gold (Au) Grade Au Ounces
Cut-off (Au g/t) (000's) (g/t) (000's)
----------------------------------------------------------------------
0.4 120,509 1.0 3,790
----------------------------------------------------------------------
0.6 77,248 1.3 3,103
----------------------------------------------------------------------
(i)0.7 62,484 1.4 2,796
----------------------------------------------------------------------
0.8 50,234 1.6 2,502
----------------------------------------------------------------------
0.9 41,789 1.7 2,271
----------------------------------------------------------------------
1.0 35,281 1.8 2,073
----------------------------------------------------------------------
1.5 17,048 2.5 1,360
----------------------------------------------------------------------
Inferred Resources
----------------------------------------------------------------------
Tonnes Gold (Au) Grade Au Ounces
----------------------------------------------------------------------
Cut-off (Au g/t) (000's) (g/t) (000's)
----------------------------------------------------------------------
0.4 12,603 0.9 374
----------------------------------------------------------------------
0.6 8,848 1.1 314
----------------------------------------------------------------------
(i)0.7 7,630 1.2 289
----------------------------------------------------------------------
0.8 6,578 1.3 264
----------------------------------------------------------------------
0.9 5,532 1.3 235
----------------------------------------------------------------------
1.0 4,578 1.4 206
----------------------------------------------------------------------
1.5 1,120 1.9 69
----------------------------------------------------------------------
Table 3: Sensitivity of the Underground Monument Bay Resource Estimates at
Various Cut-off Grades
-----------------------------------------------------------------------
Measured and Indicated Resources
-----------------------------------------------------------------------
Tonnes Gold (Au) Grade Au Ounces
Cut-off (Au g/t) (000's) (g/t) (000's)
-----------------------------------------------------------------------
1.0 18,188 1.6 925
-----------------------------------------------------------------------
2.0 2,925 2.7 250
-----------------------------------------------------------------------
2.5 1,282 3.2 133
-----------------------------------------------------------------------
3.0 598 3.8 73
-----------------------------------------------------------------------
(i)4.0 133 5.5 24
-----------------------------------------------------------------------
Inferred Resources
-----------------------------------------------------------------------
Tonnes Gold (Au) Grade Au Ounces
Cut-off (Au g/t) (000's) (g/t) (000's)
-----------------------------------------------------------------------
1.0 33,744 1.5 1,572
-----------------------------------------------------------------------
2.0 2,857 3.0 273
-----------------------------------------------------------------------
2.5 1,271 4.0 161
-----------------------------------------------------------------------
3.0 854 4.5 124
-----------------------------------------------------------------------
(i)4.0 592 5.0 96
-----------------------------------------------------------------------
(i) Cut-off used for June 17, 2013 resource estimate
The cut-off value of 0.7g/t Au for potential open pit and 4.0 g/t Au for deeper, potential underground mineralization was derived using the parameters listed in Table 4 below.
As a comparison, if we use a gold price of $1300 USD our cut-off value for the potential open pit would increase to 0.8 g/t and the potential underground would stay at 4.0 Au g/t cut-off. This would translate into a resource of 2.5 M Measured and Indicated pit constrained gold ounces and the Inferred would be 0.3 M pit constrained gold ounces. If we used a gold price of $1,400 USD our cut-off value for the potential open pit would decrease to 0.6 g/t and the potential underground would stay at 4.0 Au g/t cut-off. This would translate into a resource of 3.1 M Measured and Indicated pit constrained gold ounces and the Inferred would be 0.3 M pit constrained gold ounces.
Resource Parameters and Assumptions
Table 4: Summary of Resource Parameters and Assumptions used for the pit
constrained Monument Bay Resource Estimate
----------------------------------------------------------------------------
Parameter or Assumption Twin Lakes Deposit
----------------------------------------------------------------------------
Date of Data Used Jan 31, 2013
----------------------------------------------------------------------------
Number of drill holes and Surface 501 drill holes and 51 Channel
Samples samples
----------------------------------------------------------------------------
Long Term Gold Price per Ounce $1,372
----------------------------------------------------------------------------
Cut-Off Grade O/P (g/t) 0.7
----------------------------------------------------------------------------
Cut-Off Grade U/G (g/t) 4.0
----------------------------------------------------------------------------
Processing $/tonne O/P $ 8.73
----------------------------------------------------------------------------
Mining $/tonne O/P $ 1.82
----------------------------------------------------------------------------
Mill Recovery (%) 95%
----------------------------------------------------------------------------
G&A Cost (fly in/out Camp) $/tonne
milled $0.24
----------------------------------------------------------------------------
Assumed O/P Slope Angle 55
----------------------------------------------------------------------------
O/P Strip Ratio 5.2
----------------------------------------------------------------------------
Specific Gravity (SG) 2.73
----------------------------------------------------------------------------
Block Model & Interpolation Software Datamine NPV Scheduler
----------------------------------------------------------------------------
Interpolation Method OK
----------------------------------------------------------------------------
Block Sizes (mxmxm) O/P 30x30x30 (subblocked)
----------------------------------------------------------------------------
Block Sizes (mxmxm) U/G 30x30x30 (subblocked)
----------------------------------------------------------------------------
Cap Grade (g/t) 88.0
----------------------------------------------------------------------------
Number of Domains 3
----------------------------------------------------------------------------
All costs are in US dollars
The mineral resource estimates used the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by CIM Standing Committee on Reserve Definitions and adopted by CIM Council on November 27, 2010. The mineral resource estimates are classified as "measured", "indicated", or "inferred" as defined by CIM. The Corporation intends to file a National Instrument 43-101 ("NI 43-101") compliant technical report in respect of the updated mineral resource estimate on SEDAR and on the Corporation's website within 45 days of this news release.
According to the CIM definitions, a Mineral Resource must be potentially economic in that it must be "in such form and quantity and of such grade or quality that it has reasonable prospects for economic extraction."
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.
Technical Discussion and Analysis
The currently announced resource represents the first consolidated statement of three deposits comprising the 100%-owned Monument Bay Gold Project. The Twin Lakes Deposit represents 96% of the total Measured and Indicated (M+I) ounces and 41% of the total Inferred ounces.
Some choices (and changes) have been made in completing the estimation in June 2013 estimate that Mega believes results in an improved overall resource estimate. Some of these include:
-- Revised Geological Model using domain modeling and improved
understanding of the geological setting
-- Cut-off grades
-- Revised block sizes for underground (U/G) and open pit (O/P) material at
the deposits
-- Inclusion of detailed surface mapping/sampling
-- Inclusion of University of Manitoba related research
The aggregate impact of these choices and adjustments has resulted in a 138% increase of M+I and 92% Inferred ounces reported at Twin Lakes O/P Deposit. These changes do not include the addition of Tungsten as a gold equivalent. Tungsten assays to date are increasing the gold equivalent grade by an average of 32% (See news release dated Feb 25, 2013).
In Mega's opinion, this change to the quality of the ounces is a significant improvement in how the block model reflects the data and in-situ mineralization both locally and regionally.
Monument Bay Gold Project is located 52 kms North of Red Sucker First Nation located on Red Sucker Lake, Manitoba. The property is located in an area of low topographic relief and outcrop is fairly rare. Manitoba's Current Northern Development Strategy is building all-purpose roads and infrastructure improvements within the region. Once these are complete, we will have all purpose roads and power lines that are within approximately 52 kms of our project area.
All of the open pit mineralization has been identified where mineralized gold/tungsten bearing veins come to surface/near surface and the underground component consists of veins that are the continuation of these veins below the conceptual open pit.
The Mid East deposit is located on the same gold/tungsten bearing structure, approximately 2 kms to the east of the Twin Lakes Deposit and the AZ Zone is located on a parallel structure that is less than 300 m to the south of the Twin Lakes Deposit. Both of these deposits are surface/near surface deposits and may be amenable to being evaluated as an open pit mining resource. Mega currently regards the Mid-East and AZ Zone deposits as early stage resources with potential to grow. Their proximity to the Twin Lakes Deposit may be beneficial to any potential future development at these sites.
All of the deposits remain open both along strike and down-plunge and new prospective horizons located in close proximity to the current resource are currently being further defined by drilling, OCAP, and surface exploration which will provide valuable information to make additional new discoveries.
Live Conference Call Access Information
The Corporation has scheduled a conference call for investors and analysts at 10:00 AM (Eastern Time) Wednesday June 19, 2013. The Monument Bay Technical Presentation which will accompany this call will be available for download after 4pm on June 18, 2013 at:
http://www.megapmi.com/assets/files/monument_bay/2013/_June_2013_Resource_Update.pdf
North American Toll-Free Number: 1.866.261.676, Participant Code: 6714263#
International Toll-Free Number: 0080045622524, Participant Code: 6714263#
International Toll Number: 416.850.2050, Participant Code: 6714263#
Qualified Person Comments
Mr. Todd McCracken, P.Geo. of Tetra Tech and Wenchang Ni, P.Eng of Tetra Tech are Qualified Persons and independent of the Company as defined by Section 1.5 of the NI 43-101 guidelines and have reviewed and approved the technical information contained in this release. The resource estimate has been prepared in compliance with National Instrument 43-101 and form NI 43-101F1, which requires that the estimate be prepared in accordance with the "CIM Definition Standards on Mineral Resources and Mineral Reserves as prepared by the CIM Standing Committee on Reserve Definitions and as adopted by CIM Council, December 11, 2005.
Mega Precious Metals Inc. is a well financed Canadian-based mineral exploration company with several projects in Northwestern Ontario, Manitoba and Nunavut. The Company is committed to an accelerated growth strategy and is backed by a team of experienced mining experts and a strong financial position. The Company is poised for rapid expansion through quick response to new opportunities and changes in the market. Mega's common shares trade on the TSX Venture Exchange under the symbol MGP.
For further information and presentation material, please review the Mega website at www.megapmi.com.
Forward-looking Statements
Certain statements in this press release relating to the Company's exploration activities, project expenditures and business plans are "forward-looking statements" within the meaning of securities legislation. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable. The Company makes no representation that reasonable business people in possession of the same information would reach the same conclusions. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In particular, fluctuations in the price of gold or in currency markets could prevent the Company from achieving its targets. Readers should not place undue reliance on forward-looking statements. More information about risks and uncertainties affecting the Company and its business is available in Mega Precious Metal's filings which are posted on sedar at www.sedar.com.
There is no guarantee that drill results reported in this news release will lead to the identification of a deposit that can be mined economically, and further work is required to identify a reserve or resource.
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.
Contacts:
Mega Precious Metals Inc.
Glen Kuntz, P.Geo.
President and Chief Executive Officer
807-766-3380 or TF: 877-592-3380
info@megapmi.com
www.megapmi.com