Buffalo Gold's indicated resource at 1.4 million oz Au
2007-06-21 14:57 ET - News Release
See News Release (C-BUF) Buffalo Gold Ltd
Mr. Damien Reynolds of Buffalo Gold reports
BUFFALO GOLD RELEASES NEW RESOURCE ESTIMATE FOR MT. KARE
Buffalo Gold Ltd. has received an updated mineral resource estimate for the Mt. Kare gold project which sees a 22-per-cent increase of the total property resources into the indicated category compared with the previous estimate.
The new resource estimate incorporates data from Buffalo's 2006 infill drilling program. That program was designed to convert inferred ounces to indicated ounces, as a requirement of the economic study for Buffalo to earn into the Mt. Kare project from Madison Minerals Inc. The resource estimate has been successfully increased from 1.1 million ounces of gold (see news in Stockwatch June 26, 2006) to 1.4 million ounces of gold in the indicated category, at a gold equivalent cut-off of one gram per tonne (g/t). The drilling also delineates a higher-grade core which runs most of the length of the Western Roscoelite zone and contains the majority of the 743,000 ounces gold or 4.59 million tonnes at 5.04 g/t gold with a gold-equivalent cut-off of three g/t.
MT. KARE MINERAL RESOURCE ESTIMATE
Mineral Cut-off Contained
resource equivalent tonnes Au Ag ounces Au
category (AuEq g/t) (thousands) (g/t) (g/t) (thousands)
Indicated 1.0 18,830 2.31 17.31 1,396
2.0 8,559 3.66 22.51 1,008
3.0 4,587 5.04 25.37 743
Inferred 1.0 5,753 1.56 9.53 288
2.0 1,331 2.77 11.77 119
3.0 476 3.85 11.22 59
These estimates are based on a block model where the gold-equivalent service variable is derived from the sum of the gold and silver grades under the assumptions of a gold price of $550 (U.S.) per ounce and a silver price of $10 (U.S.) per ounce (AuEq g/t equals Au g/t plus (10/550) multiplied by Ag g/t).
While the 2006 work increased the understanding and confidence in the mineralization at Mt. Kare, Buffalo believes that there is potential for significant additional mineralization outside of the known zones. Buffalo and Madison therefore agreed in May of 2007 to award Buffalo 60 per cent of the joint venture immediately and defer the Type 2 preliminary economic feasibility study to instead complete detailed exploration work on the many targets throughout the property (see news in Stockwatch May 18, 2007).
Based on the recent aeromagnetic survey, geological mapping and surface sampling, the company has outlined 18 new targets on the Mt. Kare joint venture licence area and the adjacent 100-per-cent-owned Buffalo licence. Buffalo is currently in the process of following up on those targets. New geological team members have been hired and fly-in camps have been established to aid in exploration.
In addition, Buffalo has applied for a new 100-per-cent-owned licence adjacent to the current holdings. The new licence, if awarded, will increase the total land package by approximately 30 per cent, to approximately 660 square kilometres. A map showing the new exploration targets is posted on the company's website.
Mineral resource estimation method
The resource model, including the underlying database and QA/QC verification, was completed by Robert Sim of Longview Technical and Dr. Bruce Davis in accordance with accepted industry standards. The basic modelling parameters and approach are summarized as follows:
Total of 340 drill holes (55,300 metres) composited to standard sample length of two metres;
Nominal block size of 10 by 10 by five millivolts;
Probability shell approach used to control domains of higher-grade gold and silver mineralization;
Top-cutting of outlier grades by domain;
Ordinary kriging used for grade estimates for gold and silver in model;
Inverse distance weighting (IDW to the power of two) used for bulk density in model.
The updated resource estimate was verified by Lynn Olssen of Snowden Mining Industry Consultants. Snowden validated the earlier estimate in its NI 43-101 technical report on the Mt. Kare project delivered to Buffalo in May, 2006 (see news in Stockwatch June 26, 2006). Snowden reviewed and validated the recent work, and will complete an NI 43-101 technical report incorporating the resource estimate on behalf of Buffalo to be filed on SEDAR within 45 days of this release. Snowden has reviewed the contents of this release.
Brian McEwen, PGeo, president and chief operating officer of Buffalo, is the qualified person for the Mt. Kare project.
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