NSGold provides corporate update

BEDFORD, NS, May 24, 2013 /CNW/ - NSGold Corporation (TSXV: NSX) is pleased to provide shareholders with the following update.

Financial Update

In light of the continued challenging market conditions that exist for junior exploration and mining companies, the management of NSGold has recently enacted a number of measures to enable the Company to be one of the "survivors" of this market correction and to be able to participate in a meaningful way in the next leg up in the Commodities Super-Cycle.

As press released on December 11, 2012 NSGold's founder and chairman, Hans Van Hoof, provided the Company with a $500,000 loan facility from Van Hoof Industrial Holdings Ltd. ("VHIH loan"), a company controlled by Mr. Van Hoof.  A simple loan facility agreement has been signed and an initial draw down of $100,000 has been received this month. The loan agreement provides for no fees, options or warrants.  These funds are earmarked for additional study work for the Mooseland Gold Property, initial exploration of the Silver Hill Property in Nevada, evaluation of acquisition opportunities and general corporate purposes.

NSGold management has recently completed a comprehensive review of its operating budget and has enacted a number of measures to reduce costs including the implementation of a 40% reduction in contract administration and geological services.  The only compensation received by Mr. Van Hoof continues to be an annual salary of $1.

Mooseland Gold Property, Nova Scotia

NSGold's core asset is the 100% owned Mooseland Gold Property located in Halifax County, Nova Scotia. The Mooseland gold deposit occurs within a typical Meguma structure with steeply dipping limbs. The gold bearing quartz veins at Mooseland occur on both limbs of the fold with similar widths and grades. Total inferred mineral resources for the Mooseland Gold Project are estimated at 454,000 ounces of gold using a cut-off grade of 2.6 grams per tonne (see NSGold news release dated June 5, 2012).    This estimate is based on drill core assay results from historic and recent drilling programs totaling 45,382 meters in 183 drill holes. A summary of the June 2012 resource estimate is provided in the table below.

Mooseland Summary of Non-Diluted Inferred Mineral Resources
  Cut-off Grade
(g/tonne)
Tonnes Above
Cut-off
Average Diluted
Grade (g/tonne)
Ounces
West Zone 2.6 1,460,000 5.52 259,000
East Zone 2.6 1,060,000 5.72 195,000
Total 2.6 2,520,000 5.6 454,000

NSGold holds the Mooseland Property free and clear subject only to a gross metal royalty payable to Globex Mining equal to four percent of all metals produced from the property. Globex also has the right to receive a five percent (5%) interest in the issued and outstanding share capital of NSGold at the time the Mooseland Property enters into production. The Mooseland Property is comprised entirely of Crown owned land with no privately owned portions.

The equity market is currently valuing the Mooseland resource at less than $5 per ounce (i.e. market capitalization per ounce of gold). This represents a reduction in value of 50% compared to one year ago. It is the view of NSGold management that the underlying conditions that fueled the commodities "super-cycle" in recent years continue today, and will continue for the foreseeable future. Furthermore, there has been a renewed interest in the Nova Scotia goldfields where historic production exceeds one million ounces. Resources Appalaches (APP:TSXV) recently secured a $10 million financing for the re-development of the Dufferin Gold Mine and in April 2013 the Supreme Court of Nova Scotia upheld the expropriation order relating to one of the key land titles for the Touqouy Gold Project being developed by Atlantic Gold (ATV:ASX) thus enabling that project to move forward.  Atlantic Gold has announced plans for the development of an open pit gold mine at Touqouy with annual gold production of 84,000 ounces. The Mooseland Property is located approximately 13 kilometers from the Touquoy Project and 65 kilometers from the Dufferin Mine.  A previous holder of the Mooseland Property, in 2004, trucked a 2,000 tonne bulk sample of ore taken from underground at Mooseland to the Dufferin mill facility for processing.

NSGold management will continue to closely monitor the advancement of these and other nearby gold projects.

During Q1 2013 NSGold engaged GPX Gold Royalty Corp. to complete a metallurgical scoping study for the Mooseland Gold Project.  GPX Gold provides metallurgical studies as a service to gold mine owners-operators who have completed preliminary investigation and are in need of detailed metallurgical information to proceed with a final evaluation or project implementation. The study is being undertaken by GPX Gold's affiliate company, Resources Mining Technologies.  The scoping study entails the completion of ore analysis including sample preparation, work index, head grades, and fractional analysis by size. Major gold processing routes will be evaluated; including gravity, flotation and cyanidation recovery, and a preliminary gold extraction flow sheet will be developed. Basic reagent consumptions will also be determined. All analysis and assays are being conducted by McLelland Laboratories in Sparks, Nevada, a well-respected independent laboratory. This scoping study is a logical preliminary step for advancing the Mooseland Gold Project.  Ultimately NSGold hopes to undertake a more advanced definitive metallurgical study and mining study which could support a mining production plan.

NSGold has recently submitted an application for matching funding under a Provincial government incentive program for the completion of an evaluation of open-pit mining of the West Zone at Mooseland.   The West Zone comprises 57% (259,000 ounces) of the total inferred mineral resources for the Mooseland Gold Project. Of particular significance from a potential open-pit mining perspective is the relatively shallow depth (generally 0.5-1.5 meters) of overburden covering the West Zone deposit and the geometry of the near surface saddle veins. A shallow-hole drill program at the West Zone was carried out in Q4 2012 and the results confirmed the near surface gold mineralization. Thirteen of fifteen drill holes encountered the expected, relatively sulphide rich, quartz bearing argillite zones. The other two holes encountered old workings near the surface and were discontinued. Significant gold values returned are listed below;

  • 9.93 gpt over 1.0 meter in Hole NSG-1-12   starting at 25.2 meters
  • 7.10 gpt over 1.0 meter in Hole NSG-3-12   starting at 67.2 meters
  • 36.80 gpt over 0.6 meters in Hole NSG-8-12 starting at 30.9 meters
  • 6.25 gpt over 1.0 meter in Hole NSG-8-12   starting at 74.3 meters
  • 15.21 gpt over 1.7 meters in Hole NSG-8-12 starting at 77.7 meters
  • 11.49 gpt over 1.0 meter in Hole NSG-10-12 starting at 51.8 meters
  • 8.44 gpt over 1.0 meter in Hole NSG-10-12 starting at 54.8 meters
  • 9.44 gpt over 1.0 meter in Hole NSG-13-12 starting at 48.0 meters
  • 18.76 gpt over 1.0 meter in Hole NSG-15-12 starting at 22.9 meters

All holes were drilled at angles between 45 and 47 degrees and core angles were generally in excess of 60 degrees, averaging between 65 and 70 degrees, resulting in true widths being seven to nine percent less than core lengths.

Silver Hill Property, Nevada

NSGold holds an option to acquire a 100% interest in the Silver Hill Property located along the prolific Getchell Trend in Nevada (see NSGold news release dated January 9, 2013).  The Getchell Trend is a major linear structure that has provided structural preparation for the introduction of gold and silver mineralization related to Cretaceous intrusive rocks that are found along the trend. Barrick Gold's Getchell deposit (approximately 25 miles to the NNE) and Atna Resource's Pinson deposit (approximately 20 miles to the NNE) are both multi-million ounce gold deposits with Getchell exceeding 10 million ounces. The Adelaide deposit (Wolfpack Gold Corp) located approximately 3.5 miles to the SSW has reported historic gold and silver production.

The Silver Hill property is comprised of 36 unpatented claims encompassing a 2,500 to 3,000 foot long shear zone that transects the western flank of Edna Mountain. The presence of silver, copper, arsenic and tungsten in the mineralized shear zone, which is thought to be part of the Golconda Thrust, suggests potential for sediment-hosted and/or skarn-related gold mineralization, similar to the Adelaide and McCoy deposits to the southeast, or possibly related to adjacent intrusive activity and gold-silver mineralization found near skarns at the Chimney Creek, Getchell, Pinson and Preble mines to the north.

Silver Hill has seen very little if any exploration activity since the 1980's. A previous owner is reported to have hand-sorted and shipped high grade silver ore to smelters in Tacoma and El Paso in the late 1970's and early 1980's. Silver Hills Mining Corporation, a small privately owned company, is reported to have leached coarse run-of-mine material from a small pit in the 1980's. A limited sampling program was carried out in 1988 with seventeen rock samples collected at the Silver Hill property and its extension to the north. The highest grade silver assays received were in the area of the main Silver Hill prospect, with silver values ranging from 18.9 ppm to 207.5 ppm. Anomalous gold and arsenic values were also reported in most of these samples.

NSGold intends to commence an initial exploration program at Silver Hill in June 2013. The program will entail geological mapping and sampling with the objective of identifying drill targets.

Investment in NSX Silver

NSGold owns 1,875,804 shares of NSX Silver Inc. (NSY:TSXV) which was "spun out" of NSGold in 2012.  The management of NSGold is extremely encouraged with the results generated from the continued exploration by NSX Silver of its 6,000 plus hectare land position situated in the Sierra Madre Occidental and near the well-known Mulatos, Ocampo and Delores mining districts. NSX Silver's systematic exploration has recently generated two new discoveries - the Santa Rosalita and La Prieta zones (see NSX Silver news release dated May 16, 2013).  Additionally, the 2012 and 2013 drill campaigns carried out at the Dios Padre Silver Project returned very encouraging results, with the most significant results from the 2013 campaign listed below;

  • 107.4 gpt silver over 26.6 meters in hole DP-21-2013
  • 234.6 gpt silver over 18.9 meters in hole DP-21A-2013
  • 288.2 gpt silver over 41.0 meters in hole DP-26-2013
  • 443.0 gpt silver over   8.6 meters in hole DP-29-2013
  • 208.2 gpt silver over 12.0 meters in hole DP-30-2013

The management of NSGold believes that the NSX silver shares will be an important asset for the Company in the mid to long term.  The NSX Silver shares are presently pledged as collateral for the VHIH loan.

Other

NSGold also announces that its Board of Directors has approved an increase in the maximum number of shares that may be issued under the 2010 Stock Option Plan from 2 million shares to 4 million shares, subject to approval of the TSX Venture Exchange.  Furthermore, the Board of Directors has granted stock options under the 2010 Stock Option Plan to four of NSGold's directors and officers in respect of an aggregate of 1 million common shares, and to four employees and consultants in respect of an aggregate of 280,000 common shares.  The exercise price of the stock options is $0.10, and the stock options expire ten years from the date of grant.  None of the stock options may be exercised until such time as the amendment to the 2010 Stock Option Plan is approved by the TSX Venture Exchange.

Qualified Person

Perry MacKinnon P. Geo., Chief Geologist, for NSGold, a qualified person as defined by National Instrument 43-101 has reviewed the information provided in this news release.

About NSGold

NSGold Corporation is a mineral exploration company actively exploring for gold in Nova Scotia, Canada. NSGold's principal property is the Mooseland Gold Property. NSGold's shares are listed on the TSX Venture Exchange under the symbol NSX.

Forward-Looking Statements

This news release contains statements that may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian securities legislation.  Forward-looking information and statements may include, among others, statements regarding the future plans, costs, objectives or performance of NSGold Corporation ("NSGold"), or the assumptions underlying any of the foregoing.  In this news release, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements.  Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved.  No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that NSGold or its shareholders will derive.  Forward-looking statements and information are based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond NSGold's control.  These risks, uncertainties and assumptions include, but are not limited to, those described under "Risks and Uncertainties" in NSGold's Management Discussion and Analysis for the Year ended December 31, 2012, which is available on SEDAR at www.sedar.com, and could cause actual events or results to differ materially from those projected in any forward-looking statements.  NSGold does not intend, nor does NSGold undertake any obligation, to update or revise any forward-looking information or statements contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.

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.

 

 

SOURCE: NSGOLD CORPORATION

For further information:

Glenn A. Holmes
Chief Executive Officer, NSGold Corporation
(902) 798-1148
glenn.holmes@nsgoldcorp.com

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