Dec 07, 2010
Spanish Mountain Provides Clarification on Preliminary Economic Assessment (PEA) for the Spanish Mountain Gold Project
Spanish Mountain Gold Ltd. ( the "Company") (SPA-TSXV) and AGP Mining Consultants ("AGP") hereby provide clarification of details with respect to the National Instrument 43-101 ("NI 43-101") compliant Preliminary Economic Assessment ("PEA") study for its 100%-owned Spanish Mountain project in south-central British Columbia. The results of the study were initially disclosed by the Company in the news release issued on November 23, 2010.
As a precursor to the PEA study, a new global mineral estimate was prepared by AGP, the details of which will be presented in the formal report to be filed under the profile of the Company on SEDAR later this month. A base-case pit design was developed for the purpose of the PEA study using assumptions of a gold price of US$950 per ounce and on costs derived within the PEA study. The amount of gold contained within such a pit is dependent on the assumptions used and should those assumptions change, the contained gold will also change. This can be seen in the appended Figure 1, which includes the outline of the PEA pit design at US$950 per ounce gold and the outline of a conceptual pit shell at US$1,100 per ounce gold.
Figure 1 shows a vertical section oriented north-south through the Main and North Zones of mineralization. The Company believes that some of the mineralized material that currently lies outside of the PEA pit design using the assumption of a US$950 per ounce of gold may fall into a future pit design as the Company continues to optimize the pit based on a refinement of operating costs and assuming an appreciating gold price. Gold contained within conceptual pits will be presented in the formal report as a sensitivity analysis and will include the pit shell based on a gold price of US$1,100 per ounce.
Figure 1: Spanish Mountain Gold Project - vertical section oriented north-south through the Main and North Zones of mineralization
In the news release of November 23, 2010, the Company disclosed a statement of a NI 43-101 compliant Inventory of Mineralized Material. This should properly have been referred to by AGP as the Mineral Resource contained within the PEA pit design. That information is reprinted here as Table 1 below:
Table 1 Mineral Resource within the PEA Pit Design - US$950/oz
The Company and AGP are working expeditiously to file the formal report during December, 2010. The following information is provided for clarification purposes:
Areas of Opportunity
The PEA results provide clear drill targets for the Company to potentially enhance the project's Mineral Resources and project economics. The focus of the drilling program in early 2011 will include:
NI 43-101 Statement in respect of PEA and Qualified Persons
The company cautions, in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects as adopted by the Canadian Securities Regulators, that the PEA referred to herein is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic consideration applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Mr. Michael Waldegger, P.Geo. and Mr. Gordon Zurowski, P.Eng of AGP Mining Consultants of Barrie, Ontario are Qualified Persons within the meaning of NI 43-101.
Mr. Waldegger and Mr. Zurowski have reviewed and approve the contents of this news release.
About Spanish Mountain Gold
Spanish Mountain Gold Ltd is focused on the responsible development of its flagship Spanish Mountain gold project in southern central British Columbia. The Company has no debt and owns 100% of all four gold properties located in British Columbia. Additional information about the Company is available on its website: www.spanishmountaingold.com
On Behalf of the Board,
SPANISH MOUNTAIN GOLD LTD
President and CEO
B&D Capital Partners
This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors - including the availability of funds, the results of financing and exploration activities, the interpretation of drilling results and other geological and metallurgical data, risks associated with the estimation of mineral resources and the geology, grade and continuity of mineral deposits, project cost overruns or unanticipated costs and expenses -- that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com). Forward-looking statements can often be identified by the use of words such as "plans", "expects", "is expected", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "believes" or variations (including negative variations) of such words and phrases. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.