Prodigy Reports Indicated Gold Resources of 1,924,200 Ounces and Inferred Gold Resources of 587,100 Ounces at Magino
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/28/11 -- Prodigy Gold Incorporated (TSX VENTURE: PDG) is pleased to announce the release of an updated NI 43-101 compliant mineral resource estimate for its flagship Magino gold mine project in northern Ontario. The updated mineral resource estimate, reported within a conceptual pit shell, was completed by Snowden Mining Industry Consultants Inc. (Snowden) of Vancouver, British Columbia. Using a 0.35 gpt gold cutoff, the Magino deposit contains Indicated gold resources of 1,924,200 ounces grading 1.16 gpt gold (51.6M tonnes), a more than four-fold increase in Measured and Indicated gold resources over the previous resource estimate that was focused on higher grade underground mineable zones (InnovExplo Technical Report issued 28 May, 2009). Using the same cut off grade (0.35 gpt gold), the Magino deposit is also estimated to contain 587,100 ounces of Inferred gold resources grading 1.04 gpt gold (18.3M tonnes). A complete Technical Report will be filed on SEDAR within 45 days. The resource estimate is set out in the table below and reported at a series of cut off grades.
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Indicated
Cut off Grade
(gpt Gold) Tonnes (gpt Gold) Grams Gold Ounces Gold
2.00 6,991,000 2.86 19,969,200 642,000
1.50 11,635,000 2.41 28,036,500 901,400
1.00 20,192,000 1.90 38,336,900 1,232,600
0.75 31,532,000 1.53 48,105,600 1,546,600
0.50 46,939,000 1.23 57,785,400 1,857,800
0.35 51,633,000 1.16 59,850,000 1,924,200
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Inferred
Cut off Grade
(gpt Gold) Tonnes (gpt Gold) Grams Gold Ounces Gold
2.00 1,807,000 2.79 5,043,900 162,200
1.50 2,711,000 2.43 6,599,300 212,200
1.00 5,854,000 1.77 10,343,100 332,500
0.75 10,113,000 1.39 14,017,800 450,700
0.50 15,579,000 1.12 17,422,900 560,200
0.35 17,494,000 1.04 18,260,400 587,100
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Prodigy believes that the revised Magino resource estimate is significant for several reasons:
-- Prodigy anticipates that the new resource estimate will have a positive
impact on the planned, upcoming Preliminary Economic Assessment (PEA),
due in April 2011.
-- The Magino project has a good average gold grade by open pit mining
standards and locally exhibits zones of higher grade gold mineralization
that extend to the surface. This geometry should enhance the pit
optimization studies that are part of the ongoing PEA process. The PEA
will examine mining and processing costs in detail and utilize a lower
gold price for the base case economic analysis.
-- Deeper gold mineralization, drilled to a depth of only 600 metres and
completely open, shows that the Magino gold system has the potential to
grow further with additional exploration, not only along strike but at
depth as well. The potential for deeper, high grade gold mineralization,
has not been tested to date.
-- In-fill drilling, guided in part by the results of this resource
estimate, can add additional gold resources to Magino. Data from the on-
going in-fill drilling program will be incorporated into a further
update to the project gold resource estimate as Prodigy moves the Magino
project towards full feasibility.
-- The overall size of the Magino gold system as documented by this updated
resource estimate confirms the growing gold budget of the Goudreau-
Lochalsh district and underscores the exploration upside of the area.
Mineral Resource Estimate:
Information in this News Release that relates to Mineral Resource Estimate has been reviewed and approved by Andrew F. Ross PGeo, FAusIMM, CPGeo, who is a Qualified Person under the definitions established by National Instrument 43-101. He is independent of Prodigy Gold and an Associate of Snowden Mining Industry Consultants Inc., Vancouver, British Columbia.
As previously reported, Prodigy Gold has focused its geological program on assessment of the wide zones of quartz-pyrite-sericite altered granodiorite that host the former underground mine workings at Magino. During 2010, Prodigy relogged existing core, collected samples of previously intact core to provide fuller coverage of sampling throughout the alteration zones, and updated the drill hole and sample database accordingly to ensure consistency. Drilling commenced by Prodigy in 2011 has not been included in the current mineral resource estimate.
The area of interest covers 1,350 metres of the 075 degree trending Webb Lake granodiorite stock and alteration zones that aggregate up to 300 metres in width, and dip steeply to depths of at least 600 metres. At Magino the Webb Lake stock is covered by up to 30 metres of fluvio-glacial material. The felsic and mafic volcanic country rock surrounding the stock does contain examples of low grade mineralization encountered by drilling, however the main focus remains the broad low-grade alteration zones hosted by granodiorite. A late stage diabase dyke transects the Webb Lake stock (please see three dimensional geologic model shown below).
The database used by Snowden contains 386 surface diamond drill holes (total of 76,000 metres; average length 200 metres) and 980 underground diamond drill holes (total of 60,200 metres; average length 60 metres). Ninety-four surface drill holes were completed in the period from 1997 to 2009 and comprise HQ and NQ diameter core. All underground drill holes were completed in the period 1984 to 1991 and are dominated by AQ diameter core with some BQ diameter core, clearly clustered around the underground workings and, in some cases subsequently mined out. Since the sample volumes of the underground drill cores are markedly less than the surface drill cores, Snowden elected to use only the assays from the surface drill holes in the grade estimates. Geological information from the underground drill cores however was used to develop the geological interpretation.
A GEMS block model with cell dimensions of 5 metres (X), 5 metres, (Y) 5 metres (Z), was coded to reflect the surface topography, base of overburden, Webb Lake granodiorite contacts, and the late stage diabase dyke. A three dimensional wireframe model of the underground development and stopes was stored as percent volumes in the block model to ensure that the reported mineral resource estimates are depleted for prior mining.
To view the map accompanying this press release please visit the following link: http://media3.marketwire.com/docs/prodmap228.pdf
A threshold grade of 0.1 gpt gold was found to generally identify the broad zones of mineralization in the drill cores. This grade threshold was then used to generate a three dimensional categorical indicator model of the mineralized zones, after describing the mineralization continuity by indicator variography. The extents of the mineralized zones were constrained by ensuring any unsampled drill hole intervals were assigned a 'zero' gold grade. Mineralized blocks were further limited by ensuring that the amount of extrapolation was set to a maximum of 60 metres from samples and that any blocks not achieving an 80% probability (of being at least 0.1 gpt gold) were subsequently re-categorized as 'barren'.
Gold grades were estimated from one metre length-weighted un-cut composites into the interpreted mineralized blocks by multiple indicator kriging, using parameters established from multiple indicator variography. The impact of clustered high gold grades was controlled by using a combination of 'sample per hole' restrictions, octant search and maximum distance extrapolation restrictions for grades above 7 gpt and 77 gpt gold. Any target blocks that remained uninformed after the first pass search were identified as 'Inferred'. Grades for these blocks were subsequently estimated using a broader search ellipse. Minimum and maximum numbers of composites used for estimation were set to 12 and 40 per block respectively. Discretisation was set to 3 x 3 x 3. Density factors of 2.87 and 2.77 gm/cc were assigned to granodiorite and mafic - felsic country rock.
In order to constrain the resource estimate, a conceptual pit shell was developed using Whittle software to identify those parts of the block model that have reasonable prospects for eventual economic extraction. Parameters used were: 50 degree (overall pit slope); $1.25 /tonne mining cost; $1400 per oz gold price; 95% process recovery; $7 /tonne process cost. A detailed pit model using more selective criteria will be used for the PEA.
After considering the distribution of composites in the deeper parts of the deposit through the examination of kriging variance, Snowden has applied an Inferred classification to all blocks in the mineral resource that lie beyond depths of 300 metres but within the limit of the conceptual pit shell.
Above a depth of 300 metres, resource blocks that lie within the median indicator range of continuity and have been estimated by at least 12 samples have been classified as Indicated resource blocks. Snowden has not classified any Measured blocks after considering the uncertainty in geological interpretation, the high nugget environment, short ranges of gold grade continuity, use of assigned densities and the current drill spacing. Snowden notes that Prodigy Gold has an ongoing drill program to in-fill the existing drill pattern.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves. In the above mineral resource table there may be inconsistencies due to rounding. Estimates are rounded since the figures are not precise calculations.
About Prodigy Gold: Prodigy Gold Incorporated (TSX VENTURE: PDG) was created by unifying the assets of two Canadian Junior exploration companies: Kodiak Exploration Limited and Golden Goose Resources Inc. Prodigy is currently evaluating the Magino mine project in Ontario as an open-pit mining opportunity with the potential for deeper, higher grade gold production The company is producing a Preliminary Economic Analysis (PEA), establishing the economic parameters of an open pit mining operation at Magino. The PEA is expected to lead to a full feasibility study, projected for early 2012. Bringing the Magino Mine project through the feasibility process and towards production, coupled with the exploration potential of our Beardmore-Geraldton exploration properties, are the catalysts to growing Prodigy Gold, building substantial value for Prodigy shareholders: Today's Discovery, Tomorrow's Future.
All scientific and technical information in this news release, except for the section titled 'Mineral Resource Estimate', has been reviewed and approved by Tom Pollock, P. Geo., Prodigy Gold's Vice President of Exploration, who is a qualified person under the definitions established by National Instrument 43-101. Prodigy Gold QA/QC procedures are as follows: Prodigy Gold drill cores are split down the center with a typical table feed circular rock saw or are split with a hydraulic slitting device. Sample intervals are selected according to geologic contacts, visible mineralization, and alteration, placed into sample bags and shipped to the assay lab where they are quantitatively analyzed for select elements. Drill cores are boxed, covered, and sealed at the drill rig and moved to the Prodigy Gold logging and sample preparation facilities by Prodigy Gold personnel. Prodigy Gold angle core holes are directed perpendicular to the mapped dip of the vein therefore reported drill hole intercepts approximate true thickness of the vein. All Prodigy Gold samples are currently being assayed by Chemex ALS, 2090 Riverside Dr, Timmins, ON P4R 0A2. Blank and standard samples are routinely submitted with all sample batches sent to the lab for assay. Samples are routinely sent to other labs for additional checks.
On behalf of the Board of Directors
Brian J. Maher, President and Chief Executive Officer
This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the Magino mine property and other future plans, objectives or expectations of Prodigy Gold Incorporated (the 'Company') are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, exploration cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.
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:
Prodigy Gold Incorporated
Brian J. Maher
President and Chief Executive Officer
1-604-688-9006
1-604-688-9029 (FAX)
ir@prodigygold.com
www.prodigygold.com