COASTAL GOLD CORP. (TSX VENTURE:COD)(OTCQX:COGGF)(FRANKFURT:CY41) ("Coastal
Gold" or the "Company") is pleased to announce an update to its National
Instrument 43-101 ("NI 43-101") mineral resource estimate for the Hope Brook
Gold Project in southwestern Newfoundland. This update incorporates results from
the 5,951 metre (m) diamond drilling program completed in fall 2012 (see press
releases dated December 11, 2012 and January 17, 2013) and the recently
completed 4,075m drilling program (see press releases dated September 16 and 25,
October 7 and 21 and November 1, 2013). The updated mineral resource estimate is
presented in Table 1 below. Highlights are as follows:
Highlights
-- Overall indicated resource increased 110% to 1,239,000 ounces of gold
-- Grade of overall indicated resource increased 30.2% to 1.93 g Au/t
-- Indicated resource in potential open pit increased 128.8% to 966,000
ounces of gold
-- Grade of indicated resource in potential open pit increased 37.4% to
1.70 g Au/t
-- Indicated resource in potential underground increased 62.7% to 273,000
ounces of gold
-- Grade of indicated resource in potential underground increased 25.9% to
3.76 g Au/t
-- Almost all of the previous potential open pit inferred resource and 61%
of the previous potential underground inferred resource was upgraded to
the indicated category
-- Resources are open along strike to the southwest and at depth with the
Connector-240 Zone target that extends 1,200m along strike being a prime
target for further drilling
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Table 1: Mineral Resource for Gold, Hope Brook Gold Project as at December
4, 2013
(see page 4 for Notes on Methodology)
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Within constraining shell Below constraining shell
@ 0.50 g Au/t cut-off @ 2.0 g Au/t cut-off
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Gold Gold Gold Gold
Category Tonnes g/t (Oz) Tonnes (g/t) (Oz)
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Indicated 17,692,000 1.70 966,000 2,254,000 3.76 273,000
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Inferred 230,000 0.89 7,000 1,101,000 3.71 131,000
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----------------------------------------------------
Table 1: Mineral Resource for Gold, Hope Brook Gold
Project as at December 4, 2013
(see page 4 for Notes on Methodology)
----------------------------------------------------
Total
----------------------------------------------------
Gold
Category Tonnes Gold g/t (Oz)
----------------------------------------------------
Indicated 19,946,000 1.93 1,239,000
----------------------------------------------------
Inferred 1,330,000 3.22 138,000
----------------------------------------------------
As shown in Table 2 below, total Indicated Mineral Resources increased 110% to
1,239,000 ounces of gold from the October 1, 2012 estimate. Most significantly,
the average grade of the Indicated Mineral Resource increased 30.2% to 1.93 g
Au/t. Almost 90% of the indicated resource is in the potential open pit. Almost
all the entire previous potential open pit inferred resource has been upgraded
to the indicated category. Mineral Resources are open along strike to the
southwest and at depth with the Connector-240 Zone target that extends 1200m
along strike being a prime target for further drilling.
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Table 2: Comparison to October 1, 2012 Mineral Resource Estimate
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Mineral Resource Update December 4, 2013
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Tonnes Grade
(Millions) (g Au/t) Au Oz
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Totals Indicated 19.94 1.93 1,239,000
---------------------------------------------------
Inferred 1.33 3.22 138,000
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Within Potential
Pit
Constraining
Shell Indicated 17.7 1.70 966,000
---------------------------------------------------
Inferred 0.23 0.89 7,000
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Below the
constraining
Shell Indicated 2.25 3.76 273,000
---------------------------------------------------
Inferred 1.10 3.71 131,000
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Table 2: Comparison to October 1, 2012 Mineral Resource Estimate
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Increase/
Decrease Oz
Mineral Resource Update October 1, 2012 Au
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Tonnes Grade
(Millions) (g Au/t) Au Oz
----------------------------------------------------------------------------
110%
Totals Indicated 12.4 1.48 590,000 Increase
------------------------------------------------------------
74.9%
Inferred 8.2 2.07 548,000 Decrease
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Within Potential
Pit
Constraining 128.8%
Shell Indicated 10.6 1.24 422,000 Increase
------------------------------------------------------------
98.4%
Inferred 6.5 1.91 397,000 Decrease
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Below the
constraining 62.7%
Shell Indicated 1.7 2.99 168,000 Increase
------------------------------------------------------------
13.2%
Inferred 1.8 2.62 151,000 Decrease
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Dr. Bill Pearson, P.Geo., President and CEO of Coastal Gold, stated: "We are
delighted with the results of this mineral resource update, which not only
significantly increased estimated resource ounces in the indicated category but
also substantially increased the overall grades of the resource. This milestone
will allow Coastal Gold to now complete a planned preliminary economic
assessment (PEA), which is targeted for release in early 2014. We thank the
Newfoundland and Labrador government for their support of our 2013 drilling
program though the Junior Exploration Assistance program, which allowed us to
complete additional drilling important for the resource definition."
Pearson continued: "This positive result was accomplished with two relatively
limited, but highly targeted, drilling programs and is a credit to our
exploration team lead by Coastal Gold's Chief Geologist, Dave Copeland, P.Geo.
Our technical understanding of the project continues to grow and the mineral
resources remain open along strike to the southwest and downdip. In addition to
the new drilling, this model incorporates an updated geological interpretation
utilizing a new structural model developed in the fall 2012 program as well as
an improved definition of mineralized zones. In addition, the resource update
incorporates a revised stope model and an updated mafic dyke dilution model. It
also eliminates a number of historical holes that we believe, based on new drill
data, significantly underestimated grades."
The mineral resource estimates are presented in Table 3 below at different
cut-off grades to demonstrate the sensitivity of the mineral resources to change
in grade. It is important to note that the bulk of the Indicated gold ounces are
within a potential pit using a higher cutoff grade of 0.70 g Au/t.
Table 3: Mineral Resource Estimates at Different Gold Cut-off Grades, Hope Brook
Gold Project
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Within Constraining Shell
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Cut-off Tonnes Gold Gold
Grade (millions) (g/t) (Oz)
----------------------------------------------------------------------------
greater than
1.0 10.0 2.43 784,000
------------------------------------------------------------
greater than
0.7 14.5 1.94 904,000
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greater than
Indicated 0.5 17.7 1.70 966,000
------------------------------------------------------------
greater than
0.4 19.2 1.60 988,000
------------------------------------------------------------
greater than
0.3 21.3 1.48 1,011,000
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greater than
1.0 0.1 1.13 2,000
------------------------------------------------------------
greater than
0.7 0.2 0.94 6,000
------------------------------------------------------------
greater than
Inferred 0.5 0.2 0.89 7,000
------------------------------------------------------------
greater than
0.4 0.2 0.86 7,000
------------------------------------------------------------
greater than
0.3 0.3 0.83 7,000
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----------------------------------------------
Below Constraining Shell
----------------------------------------------------------------------------
Cut-off Tonnes Gold Gold
Grade (millions) (g/t) (Oz)
----------------------------------------------------------------------------
greater than
4.0 0.7 5.59 130,000
------------------------------------------------------------
greater than
3.0 1.4 4.55 203,000
------------------------------------------------------------
greater than
Indicated 2.0 2.3 3.76 273,000
------------------------------------------------------------
greater than
1.5 2.9 3.32 308,000
------------------------------------------------------------
greater than
1.0 5.4 2.31 403,000
----------------------------------------------------------------------------
greater than
4.0 0.4 4.89 65,000
------------------------------------------------------------
greater than
3.0 0.8 4.24 104,000
------------------------------------------------------------
greater than
Inferred 2.0 1.1 3.71 131,000
------------------------------------------------------------
greater than
1.5 1.3 3.34 143,000
------------------------------------------------------------
greater than
1.0 3.0 2.14 206,000
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The updated mineral resource is based on 689 diamond drill holes totaling
141,863 m of historic and recent drilling. This includes 47 surface diamond
drill holes totaling 10,026 metres completed by Coastal Gold from October 2012
to November 2013. Mineral Resources have been estimated within a constraining
pit shell at a cut-off grade of 0.50 g Au/t and below this shell at a cut-off
grade of 2.0 g Au/t. Details on the mineral resource estimation procedures are
given in the notes below. An updated NI 43-101 Technical Report on Hope Brook
outlining the procedures for estimation of the mineral resource estimates
presented herein will be filed on SEDAR within 45 days of the date of this press
release.
Copper Content Assessment
In the previous estimates of mineral resources for Hope Brook copper was not
interpolated due to a lack of assay data in historical drilling. New drilling
and access to additional historical data for copper has improved the copper
database, however the data distribution is still too dispersed to allow an
accurate assessment of copper grade. In addition, much of the historical
sampling was not continuous and therefore is more difficult to use for resource
estimation.
To better understand the distribution of copper within the Hope Brook deposit it
was decided to assess copper separately and report it as an exploration target.
Coastal advises that the potential quantity and grade of the target is
conceptual in nature, that there has been insufficient exploration to define a
copper mineral resource, and that it is uncertain if further exploration will
result in the target being delineated as a copper mineral resource.
A pessimistic scenario assumes that samples assayed for gold but not for copper
have a value of 0% copper. For an optimistic scenario, the missing copper assays
were ignored during the interpolation of the model, assuming that copper is
present but that the previous operator did not submit the sample for copper
analysis. With this scenario, the grade of the interval was estimated only from
those samples with copper assay values. The copper values are reported using a
0.50 Au g/t cut-off for material within the resource constraining shell and 2.0
g/t cut-off for material below the resource constraining shell. The copper
exploration target is estimated to range from a low of 19.0 million tonnes
grading 0.06% copper containing 25.0 million lbs of copper to a high of 21.0
million tonnes grading 0.10% copper containing 46.0 million lbs of copper. This
exploration target is separate and distinct from the NI 43-101 compliant mineral
resource estimate for gold reported elsewhere in this press release.
Notes on Mineral Resource Estimation Methodology:
1. Mineral resources are estimated in conformance with the CIM Mineral
Resource definitions referred to in NI 43-101 Standards of Disclosure
for Mineral Projects. Pierre Desautels, P.Eng., Principal Resource
Geologist, and Jay Melnyk, P.Eng., Principal Mining Engineer, both of
AGP Mining Consultants and Qualified Persons under NI 43-101 who are
independent of the Company, have prepared and authorized the release of
the mineral resource estimates presented herein. The Coastal Gold and
historical diamond drill hole databases and geological model developed
by Coastal Gold were reviewed and validated by Michael Cullen, P.Geo.,
of Mercator Geological Services, a Qualified Person as defined under NI
43-101 who is independent of the Company. This mineral resource estimate
is an update of the NI 43-101 mineral resource estimate released by the
Company on October 1, 2012 (see press release October 1, 2012).
2. Specific gravities were determined by Coastal Gold for a representative
number of rock and mineralization types using industry standard methods.
A total of 3,650 determinations exist in the database. The average value
for each modeled domain was applied to the block model. Specific
gravities were further confirmed in testing of representative core
samples by G&T Metallurgical Services, a division of ALS Metallurgy.
3. Detailed geological logging and sectional interpretations by Coastal
Gold led to the development of three-dimensional (3D) domain models
based mainly on assay results and partially on lithological controls.
The wireframing resulted in a high grade envelope (approximately 2.0 g
Au/t cut-off grade) within a lower grade silicic domain (between 0.5 g
to 1.0 Au/t cut-off grade) that encompasses the bulk of the
mineralization. These domains were utilized in the variography studies
and in grade interpolation constraints. A footwall pyrite domain and a
hanging wall argillic alteration domain were also wireframed to enable
interpolation of local areas of mineralization. The mineralization is
cut by a series of mafic dikes that could not be individually
wireframed, therefore a statistically derived dike model was constructed
that was calibrated with available surface and historical underground
geological information. The model prepared for the October 1, 2012
resource estimate was updated based on the new 2012 and 2013 diamond
drilling information.
4. For the treatment of outliers each statistical domain was evaluated
separately for gold and a combination of grade capping and search
restrictions imposed on threshold values was used to restrict the
influence of outliers. Capping only affected a small number of samples.
5. The composite intervals selected were 2.5 metres. Grade capping was
applied prior to compositing.
6. A 3D geological block model was generated using GEMS(C) software. The
block model matrix size is 10 metres by 5 metres by 5 metres. This was a
reduction in size from the previous model (15 metres by 5 metres by 10
metres) to improve selectivity of potential mining. Ordinary kriging was
used for all domains with inverse distance and nearest neighbour check
models. The interpolation was carried out in multiple passes with
increasing search ellipsoid dimensions. Classification for all models
was based primarily on the pass number followed by an adjustment to the
class model, based on the distance to the closest sample and kriged
variance. Confirmation of the historical stope location by 2012 and 2013
Coastal Gold drilling allowed the upgrading of most of the previous
inferred blocks in the immediate area surrounding the three dimensional
modelled stopes.
7. Contained copper was assessed as a target for further exploration using
a range of values due to the uncertainty originating from missing assays
in the historical dataset and does not form part of the mineral resource
statement.
8. The reported mineral resources are considered to have reasonable
prospects of economic extraction. A Lerchs Grossman optimized
constraining shell was generated to constrain the potential open pit
material. This shell was designed using design parameters and costs for
comparable deposits, 86% recovery based on new metallurgical testing and
historical plant performance and a gold price of US$1,400 per ounce,
which is below the three year moving average price. The constraining
shell extends down to the 4,800 metre level, the deepest level developed
in the historical mine at approximately 340 metres below surface.
9. The rounding of tonnes as required by NI 43-101 reporting guidelines may
result in apparent differences between tonnes, grade and contained
ounces.
10. Mineral resources that 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,
sociopolitical, marketing, or other relevant issues.
11. The quantity and grade of reported inferred mineral resources in this
estimation are uncertain in nature and there has been insufficient
exploration to define these inferred mineral resources as indicated or
measured mineral resources and it is uncertain if further exploration
will result in upgrading them to indicated or measured mineral
resources.
ABOUT COASTAL GOLD
Coastal Gold is a Canadian mineral exploration company listed on the TSX Venture
Exchange under the symbol "COD". Coastal Gold's flag ship property is the Hope
Brook Gold Project located in southwestern Newfoundland, which has 19.9 million
tonnes at 1.93 g Au/t for 1,239,000 ounces of indicated mineral resources and
1.3 million tonnes at 3.22 g Au/t for 138,000 ounces of inferred mineral
resources. Coastal Gold is currently completing a Preliminary Economic
Assessment (PEA) on the Hope Brook Gold Project which is expected to be released
in early 2014.
SAMPLING, ASSAYING AND QUALITY CONTROL
All drill core in the Coastal Gold diamond drilling programs (NQ (47.6 mm), BQTK
(40.6mm) and BQ (36.4mm)) was logged, photographed and then sawn in half with
one-half sent to the laboratory for analysis and the other half retained and
stored on site. All core samples were prepared and assayed at ALS Chemex, with
sample preparation done in Sudbury and analytical work done in Vancouver. All
locations of ALS Chemex are ISO 9001:2000 certified. The entire sample received
is weighed and crushed to = 70% passing 2mm (10 mesh). A sample split of up to
1,000g is then pulverized to = 85% passing 75 microns (200 mesh) to produce a
homogenized sample. A 50g aliquot is used for fire assaying with an atomic
absorption (AA) finish to determine gold concentration. Copper is initially
analyzed using a four acid digestion ICP (inductively coupled plasma-atomic
emission spectrometry) method. Any results for copper greater than 10,000 ppm
are assayed further by a four acid digestion and "ore grade" ICP method.
Internal quality control includes the use of blanks, duplicates and standards in
every batch of samples. The Company also conducts internal check assaying using
certified external reference standards and blanks. Regular external check assays
are performed at a second certified Canadian commercial laboratory. Coastal Gold
also inserts external reference standards as well as blank granite drill core in
each sample batch as a further external check.
QUALIFIED PERSONS
David Copeland, P.Geo., Chief Geologist, and Dr. Bill Pearson, P.Geo., President
& CEO of Coastal Gold, both Qualified Persons as defined by NI 43-101, have
reviewed and approved the scientific and technical content of this news release.
Pierre Desautels, P.Eng., Principal Resource Geologist, and Jay Melnyk, P.Eng.,
Principal Mining Engineer, both of AGP Mining Consultants and Qualified Persons
under NI 43-101 who are independent of the Company, have prepared and authorized
the release of the mineral resource estimates presented herein. The Coastal Gold
and historical diamond drill hole databases and geological model developed by
Coastal Gold were reviewed and validated by Michael Cullen, P.Geo., of Mercator
Geological Services, a Qualified Person as defined under NI 43-101 who is
independent of the Company.
Cautionary Note Regarding Forward-looking Information
This press release contains "forward-looking information" within the meaning of
applicable Canadian securities legislation. Forward-looking information
includes, but is not limited to, statements regarding the exploration prospects
with respect to the Hope Brook project, the Company's future plans, the expected
timing for completion of a PEA for the Hope Brook project, and the estimation of
mineral resources. Generally, forward-looking information can be identified by
the use of forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or variations
of such words and phrases or state that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking information is subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of activity,
performance or achievements of the Company to be materially different from those
expressed or implied by such forward-looking information, including but not
limited to: general business, economic, competitive, political and social
uncertainties; the actual results of current exploration activities; future
prices of mineral prices; failure of plant, equipment or processes to operate as
anticipated; accidents, labour disputes and shortages and other risks of the
mining industry. Although the Company has attempted to identify important
factors that could cause actual results to differ materially from those
contained in forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be no
assurance that such information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
information. The Company does not undertake to update any forward-looking
information, except in accordance with applicable securities laws.
Information Concerning Estimates of Indicated and Inferred Resources
This news release uses the terms "indicated resources" and "inferred resources".
Coastal Gold advises investors that although these terms are recognized and
required by Canadian regulations (under NI 43-101), the U.S. Securities and
Exchange Commission does not recognize them. Investors are cautioned not to
assume that any part or all of the mineral deposits in these categories will
ever be converted into mineral reserves. In addition, inferred resources have a
great amount of uncertainty as to their existence, and economic and legal
feasibility. It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of feasibility or
pre-feasibility studies, or economic studies except for preliminary economic
assessments as defined under NI 43-101. Investors are cautioned not to assume
that part or all of an inferred resource exists, or is economically or legally
mineable.
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.
To view figure 1 and figure 2, please visit the following link:
http://media3.marketwire.com/docs/915690.pdf
FOR FURTHER INFORMATION PLEASE CONTACT:
Coastal Gold Corp.
65 Queen Street West, Suite 815,
Toronto, Ontario, Canada
M5H 2M5
Rob Hopkins, Manager, Investor Relations
Tel: 416-861-5899
Email: info@coastalgold.ca
Web: www.coastalgold.ca
Bill Pearson, President & CEO
Tel: 416-861-2968
Email: president@coastalgold.ca
Web: www.coastalgold.ca
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