Prodigy Gold Inc fka PDG (PDG)

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Prodigy Expands Magino Indicated Gold Resource to 2,176,000 Ounces and Inferred Gold Resource to 1,721,000 Ounces

http://tmx.quotemedia.com/article.php?newsid=45781564&qm_symbol=PDG

Prodigy Expands Magino Indicated Gold Resource to 2,176,000 Ounces and Inferred Gold Resource to 1,721,000 Ounces

Vancouver, British Columbia CANADA, November 02, 2011 /FSC/ -

Prodigy Gold Inc.
(PDG - TSX Venture, KX3 - FWB), is pleased to announce the release of an updated NI 43-101 compliant mineral resource estimate for its flagship Magino mine gold project in northern Ontario. During 2011, Prodigy Gold has more than doubled the gold resource at Magino. Using a 0.35 gpt gold cutoff, the Magino deposit contains Indicated gold resources of 2,176,000 ounces grading 1.00 gpt gold (67.6M tonnes) and 1,721,000 ounces of Inferred gold resources grading 0.99 gpt gold (54.2M tonnes). The resource estimate was completed by Snowden Mining Industry Consultants Inc. ("Snowden") of Vancouver, British Columbia and is constrained by geologic domains and a conceptual pit shell. The updated mineral resource estimate includes the results from almost 38,000 metres of core drilling completed at the project since January, 2011, in addition to 155,800 metres of previous core drilling. 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 (Note: Minor inconsistencies are due to rounding).


Prodigy Magino Project Resource Estimation November, 2011

-***-
--------------------------------------------------------------
INDICATED
--------------------------------------------------------------
CUT OFF TONNES GRADE GRAMS GOLD OUNCES GOLD
(GPT GOLD) (GPT GOLD)
--------------------------------------------------------------
2.00 5,562,000 3.36 18,705,000 601,000
1.50 10,345,000 2.60 26,928,000 866,000
1.00 20,779,000 1.91 39,605,000 1,273,000
0.75 31,730,000 1.55 49,086,000 1,578,000
0.50 50,056,000 1.21 60,368,000 1,941,000
0.35 67,555,000 1.00 67,690,000 2,176,000
0.10 99,205,000 0.76 74,297,000 2,421,000
--------------------------------------------------------------
--------------------------------------------------------------
INFERRED
--------------------------------------------------------------
CUT OFF TONNES GRADE GRAMS GOLD OUNCES GOLD
(GPT GOLD) (GPT GOLD)
--------------------------------------------------------------
2.00 4,273,000 3.47 14,836,000 477,000
1.50 7,345,000 2.73 20,096,000 646,000
1.00 15,897,000 1.91 30,411,000 978,000
0.75 25,072,000 1.53 38,335,000 1,233,000
0.50 40,464,000 1.18 47,748,000 1,535,000
0.35 54,242,000 0.99 53,537,000 1,721,000
0.10 73,087,000 0.80 58,250,000 1,873,000
---------------------------------------------------------------
-****-



Prodigy believes that the revised Magino resource estimate is significant for several reasons:

* Using a slightly higher cut off grade of 0.50 gpt gold generates an Indicated resource of 1,941,00 ounces grading 1.21 gpt gold (50.1M tonnes) and an Inferred resource of 1,535,000 ounces grading 1.18 gpt gold (40.5M tonnes). The grade-tonnage distribution suggests that optimizing the grade of the proposed open pit may produce a higher grade operation with a larger production profile than that envisioned in the previous PEA.

* The new resource estimate will be incorporated into an update to the Magino mine gold project Preliminary Economic Assessment (PEA) expected later this year. The increase in gold resources will enable Prodigy to evaluate an expansion of the proposed open-pit mining project modeled in the previous PEA. An expected increase in gold production may have an important positive impact on the project's economics.

* A detailed statistical analysis and comparison between pre-2011 drill hole data and new data from the 2011 drilling program shows that older drill hole data is statistically valid and can be used in the resource estimate (except for short (
* Inspection of the Magino gold resource block model identified multiple areas where additional drilling may further increase the Magino gold resource: Under the north-central portion of the conceptual open pit, along the southeast contact of the Webb Lake granodiorite stock, and a southwest extension of gold mineralization where potentially significant gold resources lie under the southwest high wall of the conceptual pit.

* Drilling in the Lovell Lake area, 400 metres west of the Magino gold deposit, intercepted a zone of gold mineralization similar in grade and geologic setting to the main Magino gold deposit. Although not included in the current Magino gold resource estimate, Prodigy believes further exploration in this area can augment the Magino gold deposit and potentially become a source for additional minable resources for the project.

* The block model will be utilized by Prodigy to design a drilling program with the goal of converting mineral resource to minable reserves as part of the planned full feasibility study.


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. The latest drilling commenced by Prodigy in 2011 has 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 contain areas of low grade gold 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.

The database used by Snowden contains 550 surface diamond drill holes (total of 104,941 metres; average length 190 metres) and 484 underground diamond drill holes (total of 48,896 metres; average length 100 metres). One hundred twenty seven surface drill holes were completed in the period from January 2011 to September 2011 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 many of the underground drill cores are markedly less than the surface drill cores and because of potential bias contained within some samples, Snowden elected to use only the assays from the surface drill holes and those underground drill holes relatively unbiased for the grade estimates. Geological information from all drill cores was used to develop the geological interpretation.

A Vulcan block model with cell dimensions of 10 metres (X), 10 metres, (Y) 5 metres (Z), was coded to reflect the surface topography, base of overburden, Webb Lake granodiorite contacts, domain solids, and the late stage diabase dyke. A three dimensional wireframe model of the underground development, stopes, and unmineralized diabase dyke was stored as percent volumes in the block model to ensure that the reported mineral resource estimates are depleted for prior mining and unmineralized zones are excluded from estimation. The geologists at Prodigy have interpreted 17 structural domains to identify the zones of mineralization in the drill cores. These 17 domains within the Webb Lake granodiorite define the mineralized zones.

Gold grades were estimated from five metre length-weighted un-cut composites into the interpreted mineralized blocks by ordinary kriging using parameters established from analysis of the variography within each domain. 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 22 gpt gold. Minimum and maximum numbers of composites used for estimation were set to 3 and 14 per block respectively. Discretisation was set to 2 x 2 x 1. Density factors of 2.72 gm/cc were assigned to mineralized zones based on approximately 500 measurements of specific gravity performed by Prodigy.

In order to identify mineralized blocks that can be reported as a Mineral Resource, 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: 52 degree (overall pit slope); $1.25 /tonne mining cost; $1,500 per oz gold price; 95% process recovery; $7 /tonne process cost. A detailed pit model using more selective criteria and lower gold price will be used for the update to the PEA. Mineralized blocks that lie within the conceptual pit shell have been classified as either Indicated or Inferred Mineral Resource estimates. Geostatistical parameters from the kriging system were used to identify regions of better confidence estimates.

Snowden has applied an Inferred classification to blocks in the mineral resource that lie within low confidence regions and between a depth from the surface of 150 metres and within the limit of the conceptual pit shell.

Above a depth from the surface of 150 metres, resource blocks that have been estimated by at least 14 samples have been classified as Indicated resource blocks. Snowden has not classified any Measured blocks after considering the uncertainty in geological interpretation and extent of the underground workings, 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 Inc. (PDG: TSX.V) is currently evaluating the development of the Magino mine gold project in Ontario as an open-pit mining opportunity with the potential for deeper, higher grade gold production. The Magino project contains Indicated gold resources of 2,176,000 ounces grading 1.00 gpt gold (67.6 million tonnes), and 1,721,000 ounces of Inferred gold resources grading 0.99 gpt gold (54.2 million tonnes) at a cut off grade of 0.35 gpt gold. A Preliminary Economic Assessment (PEA), based on the older February 28, 2011 resource estimate, shows a pre-tax NPV of $351million and an IRR of 49% using a 5% discount rate for the project (available on SEDAR or Prodigy's web site). The proposed operation would have an average annual gold output of over 166,000 ounces a year during a nine year project life. Total gold production is estimated to be 1.50 million ounces at cash costs of approximately US$496 (Cdn$521) per ounce. The PEA will be updated using the results of the November 2, 2011 resource estimate in the coming weeks. Please note: mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA is preliminary in nature and includes Inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary assessment will be realized.

A full feasibility study for the proposed open pit mining project at Magino is scheduled for completion in mid 2012. Bringing the Magino mine project through the feasibility process and towards production, is a catalyst to growing Prodigy Gold and building substantial value for Prodigy shareholders: Today's Discovery, Tomorrow's Future.

All scientific and technical information for the Magino project, except the section labelled "Mineral Resource Estimate", has been reviewed and approved by Tom Pollock, P.Geo., Prodigy Gold's Vice President - Exploration, who is a qualified person under the definitions established by National Instrument 43-101. Drill core at Magino is boxed, covered, and sealed at the drill rig and moved to the Prodigy logging and sample preparation facilities by Prodigy Gold personnel. The core is then split down the centre using a typical table fed circular rock saw normally at one metre intervals. One half of the core is sent for assay to ALS Chemex, 2090 Riverside Dr., Timmins, ON, P4R 0A2, while the other half is returned to the core box and stored at Prodigy's sampling facility in a secure, fenced off, area. Prodigy QA/QC procedures include the regular use of blanks, standards and duplicate samples in addition to sending 10% of the samples off to a second lab for check assays. Samples assaying > 3.0 gpt gold are automatically re-assayed by the metallic screen method. Gold assays greater than 40 gpt are capped at 40 gpt when calculating composite intervals in drill holes. Drill holes are directed as much as possible perpendicular to the strike and dip of the mineralization at Magino. As a rough estimate the true thickness of the above intercepts is approximately 76%.


On behalf of the Board of Directors

Brian J. Maher
President and Chief Executive Officer



FOR FURTHER INFORMATION, PLEASE CONTACT:

Prodigy Gold Incorporated
Email: [e-mail]

Website: http://www.prodigygold.com

tel.: [phone] Fax: [phone]



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.


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Source: Prodigy Gold Inc. (TSX-V: PDG) http://www.prodigygold.com

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