Nevada Sunrise announces initial resource estimate for Kinsley Project

TSXV: NEV

VANCOUVER, Nov. 5, 2015 /CNW/ - Nevada Sunrise Gold Corporation ("Nevada Sunrise" or the "Company") (TSXV: NEV) is pleased to announce that Pilot Gold Inc. ("Pilot Gold") (TSX: PLG) has reported the first independent resource estimate for the Kinsley Mountain Gold Project ("Kinsley Mountain", or the "Property") in eastern Nevada.

The resource estimate defines a significant high-grade zone at the Western Flank along with near-surface oxide ounces.  Gold mineralization at Kinsley Mountain hosts sedimentary rock-hosted, similar to that mined in Nevada's Carlin and Cortez trends.  The potential for resource expansion is excellent due to widespread alteration, prospective geology and gold at surface, and over 80% of the Property is untested by drilling. All dollar amounts quoted in this news release are in US dollars.

The resource estimate for all mineralization types, using multiple cut-offs, is:

Table 1. Kinsley Mountain Mineral Resource Estimates


Indicated

Inferred


Mineralization

oz Au

g/t

Au

Tonnes

oz Au

g/t

Au

Tonnes

Cutoff

(g/t Au)

All types

405,000

2.27

5,529,000

122,000

1.13

3,362,000

-

Secret Canyon

Shale sulphide

284,000

6.04

1,461,000

39,000

2.41

508,000

1.0

Dunderberg

Shale sulphide

 and transitional

45,000

2.67

520,000

37,000

2.44

470,000

1.3

Oxide

76,000

0.66

3,548,000

46,000

0.60

2,384,000

0.2

"This initial resource estimate validates the exceptional work completed by the Kinsley Mountain joint venture, and the quality of Pilot Gold's operatorship at the Project over the last four years," said Warren Stanyer, President and CEO of Nevada Sunrise. "We believe this landmark resource represents the beginning of a new era for Kinsley Mountain, and the results of the work to date demonstrate the strong potential for discovery of additional gold mineralization."

Mineralization hosted in the Secret Canyon Shale in the Western Flank zone includes 284,000 Indicated ounces at an average grade of 6.04 g/t gold.  At a 3.0 g/t cut-off grade, most of the resource remains, delineating 248,000 Indicated ounces at an average grade of 9.15 g/t gold (see Sensitivity Table below).  The grade improves 51%, while the gold content is only reduced by 13%. Metallurgical testing of mineralized material from this zone suggests that it is amenable to production of a flotation concentrate with grades up to 312 g/t gold and recovery of up to 95% using a flowsheet including cyanidation of the tails (see Nevada Sunrise news releases dated January 19, 2015 and July 13, 2015).  The metallurgical response indicated by testing to date allows for consideration of lower cut-off grades than might ordinarily be used in modeling Carlin-type sulphide material.

Table 2: Sensitivity Table

Oxidized Mineralization

Cutoff

Indicated

Cutoff

Inferred

(g Au/t)

Tonnes

g Au/t

oz Au

(g Au/t)

Tonnes

g Au/t

oz Au

0.20

3,548,000

0.66

76,000

0.20

2,384,000

0.60

46,000

0.50

1,670,000

1.04

56,000

0.50

1,003,000

0.99

32,000

0.70

1,064,000

1.30

44,000

0.70

613,000

1.24

24,000

1.00

551,000

1.74

31,000

1.00

291,000

1.70

16,000

1.30

334,000

2.13

23,000

1.30

150,000

2.24

11,000

2.00

132,000

2.96

13,000

2.00

49,000

3.64

6,000

3.00

36,000

4.38

5,000

3.00

21,000

5.44

3,600

Mixed + Unoxidized Mineralization

Cutoff

Indicated

Cutoff

Inferred

(g Au/t)

Tonnes

g Au/t

oz Au

(g Au/t)

Tonnes

g Au/t

oz Au

0.70

1,017,000

1.82

60,000

0.70

1,196,000

1.53

59,000

1.00

694,000

2.28

51,000

1.00

724,000

1.98

46,000

1.30

520,000

2.67

45,000

1.30

470,000

2.44

37,000

2.00

308,000

3.40

34,000

2.00

219,000

3.42

24,000

3.00

146,000

4.48

21,000

3.00

93,000

4.78

14,000

4.00

66,000

5.74

12,000

4.00

42,000

6.41

9,000

5.00

31,000

7.15

7,000

5.00

25,000

7.70

6,000

Secret Canyon Mineralization

Cutoff

Indicated

Cutoff

Inferred

(g Au/t)

Tonnes

g Au/t

oz Au

(g Au/t)

Tonnes

g Au/t

oz Au

0.70

1,708,000

5.29

291,000

0.70

699,000

1.98

44,000

1.00

1,461,000

6.04

284,000

1.00

508,000

2.41

39,000

1.30

1,290,000

6.70

278,000

1.30

397,000

2.76

35,000

2.00

1,067,000

7.76

266,000

2.00

253,000

3.41

28,000

3.00

845,000

9.15

248,000

3.00

137,000

4.20

19,000

4.00

686,000

10.46

231,000

4.00

48,000

5.44

8,000

5.00

564,000

11.75

213,000

5.00

20,000

6.84

4,000

To view the resource block model, please click here: http://files.newswire.ca/1407/NevadaSunrise1105.pdf

The resource estimate, effective October 15, 2015, includes three separate cut-off grades, reflecting depth from surface, oxidation, and metallurgical considerations.  These include shallow oxidized rock (0.2 g/t Au cut-off); shallow transitional and sulphide mineralization, primarily hosted in the Dunderberg Shale (1.3 g/t Au cut-off), and Secret Canyon Shale-hosted sulphide and transitional mineralization (1.0 g/t Au cut-off).  Cut-off grades assume an open-pit mining scenario, using a pit floor elevation generated using Whittle software, reasonable assumptions for mining and milling costs, and a $1,300/ounce gold price. 

Resource Estimate
The Kinsley Mountain resource estimate was completed by Michael Gustin, Ph.D, CPG, of Mine Development Associates, Inc. ("MDA") of Reno, Nevada, an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended.  Estimation methods are summarized below. Further details of the estimation methods and procedures will be available in a NI 43-101 technical report, to be co-authored and released by MDA, which will be filed on SEDAR (www.sedar.com) within 45 days from the date of this release.  

The resource estimate is based on results from 77,097 metres of historical drilling in 1,158 drill holes (9 core and 1,149 reverse circulation or rotary), as well as 59,852 metres in 222 holes, including 74 core holes and 148 reverse circulation holes drilled by Pilot Gold. Quality-control data generated during the various drill programs conducted at Kinsley were independently verified by MDA as part of the project review. The resource model consists of a detailed three-dimensional geological model including lithological, structural and gold domains derived from 25 metre-spaced sections. The low, medium and high-grade gold domains, in turn, were used to constrain the interpolation of gold grades. Blocks measure 5 x 5 x 5 metres. A total of 10,016 individual assay intervals averaging 1.527 metres in length were composited into a total of 10,037 composite intervals of 1.524 metre length. Gold assay data was reviewed statistically and visually to determine appropriate grade capping levels by domain.  A total of 21 gold assays were capped prior to compositing based on the evaluation of probability plots by gold domain. In addition to the capping of assay data, the impact of anomalously high gold values was controlled by restricting their range of influence in the estimation process.  Gold grades were interpolated using inverse distance to the third power (ID3).

For mineralization to be classified as Indicated, the following criteria were used:

  • Indicated (Secret Canyon Shale): minimum of three composites; minimum of 2 holes within an average distance of 25 metres from the block;
  • Indicated (All Other Mineralization): minimum of three composites; minimum of 2 holes within an average distance of 20 metres from the block;

All remaining estimated blocks that were not classified as indicated and that meet the elevation critieria summarized below were classified as inferred.

To ensure reasonable prospects of economic extraction, the project resources were limited to elevation levels as defined by Whittle pit shells. A pit optimization was run using a $1,300/oz gold price and parameters applicable to:  (i) oxidized, potentially heap-leachable mineralization - $2.50/t processing cost, $1.41/t General and Administrative ("G&A") cost, and a gold recovery of 75%; (ii) mixed and unoxidized mineralization that could potentially be processed by flotation, leaching of the flotation tails, and custom oxidation by roaster or autoclave - $32.00/t processing cost, $7.04/t G&A cost, and 85% recovery; and (iii) mineralization hosted within the Secret Canyon Shale, which potentially could also be processed by flotation, leaching of the flotation tails, and custom oxidation by roaster or autoclave  -  $28.30 processing cost, $7.04/t G&A cost, and 95% recovery. The pits were used to define the following maximum depths below the topographic surface for the potential open-pit resources at Kinsley Mountain - 125 meters below the topographic surface on the east side of the Kinsley Range and 350 meters below the surface on the western side.

Tonnage estimates are based on 129 bulk specific gravity determinations completed by ALS Laboratories for Pilot Gold, as well as historical data, which were used to assign average values to oxidation domains of the block model. Pilot Gold drill samples were assayed by ALS Laboratory in Vancouver, B.C. for gold by Fire Assay of a 30 gram (1 assay ton) charge with AAS finish, or if over 5.0 g/t, were re-assayed and completed with a gravimetric finish. QA/QC included the insertion and continual monitoring of numerous standards and blanks into the sample stream, and the collection of duplicate samples at random intervals within each batch. 

Michael M. Gustin, Ph.D., CPG, of MDA, and located in Reno, Nevada, is an Independent Qualified Person within the meaning of NI 43-101 and is responsible for the Resource and the technical content of this news release and has reviewed and verified that such information is accurate and approves of written disclosure of same.

John R. Kerr, P.Eng., is the Company's designated Qualified Person for this news release within the meaning of NI 43-101 and has reviewed and approved the technical information contained in this release.   

About Kinsley Mountain

Kinsley Mountain is a joint venture between Pilot Gold and Nevada Sunrise, with Pilot Gold, the operator, holding a 79.1 percent interest, and Nevada Sunrise, through a wholly-owned U.S. subsidiary, holding a 20.9 percent interest. Kinsley Mountain hosts near-surface mineralization similar to other Carlin-style, sediment-hosted gold systems. The Project consists of 513 unpatented lode claims on U.S. Bureau of Land Management land plus 6 leased patents totaling 4,213 hectares (10,410 acres), and hosts a past-producing mine with an extensive exploration database and numerous, untested gold targets.

Further information on Kinsley is available in the technical report entitled "Updated Technical Report on the Kinsley Project, Elko County, Nevada, U.S.A.", effective March 1, 2015 and dated March 19, 2015, prepared by Michael M. Gustin, Ph.D., CPG, Moira Smith, Ph.D., P.Geo. and Gary L. Simmons, MMSA under the Company's Issuer Profile on SEDAR (www.sedar.com). A newly-updated technical report will be available within 45 days of the date of this news release.

About Nevada Sunrise

Nevada Sunrise is a junior mineral exploration company with a strong technical team based in Vancouver, BC, Canada, that holds interests in gold and lithium exploration projects in Nevada, USA. Our three key gold assets include a 21% interest in a joint venture with Pilot Gold at Kinsley Mountain near Wendover, a 100% interest in the Golden Arrow project near Tonopah, and a 100% interest in the Roulette gold property in the southeastern Carlin trend near Ely, with each of the properties subject to certain production royalties. The Neptune lithium property near Silver Peak is the Company's first acquisition in the field of lithium exploration, while the Clayton NE and Jackson Wash lithium properties are subject to interim agreements and are currently being evaluated by the Company.

FORWARD LOOKING STATEMENTS

All statements in this release, other than statements of historical fact, are "forward-looking information" with respect to Nevada Sunrise Gold Corporation ("Nevada Sunrise") within the meaning of applicable Canadian securities laws, including statements that address future mineral production, reserve potential, exploration drilling, the future price of gold, potential quantity and/or grade of minerals, potential size of a mineralized zone, potential expansion of mineralization, the timing and results of current or future mineral resource estimates, or other study, proposed exploration and development of our exploration properties and the estimation of mineral resources. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Nevada Sunrise to differ materially from those anticipated in such forward-looking information.

Such factors include, among others, risks related to the interpretation and actual results of historical production at Kinsley Mountain, reliance on technical information provided by third parties on any of our exploration properties, including access to historical information on the Kinsley Mountain property as well as specific historic data associated with and drill results from the property, information from Pilot Gold Inc., current exploration and development activities; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; failure of Pilot Gold Inc. to complete anticipated work programs; labor disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration, as well as those factors discussed in the section entitled "Risk Factors" in the Company's Management Discussion and Analysis for the Nine Months ended June 30, 2015, which is available under Company's SEDAR profile at www.sedar.com.

Although Nevada Sunrise has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or 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. Nevada Sunrise disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking information.

Forward-looking statements are made as of the date hereof and accordingly are subject to change after such date. Except as otherwise indicated by Nevada Sunrise, these statements do not reflect the potential impact of any non-recurring or other special items or of any dispositions, monetizations, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after the date hereof. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our operating environment. Nevada Sunrise does not undertake to update any forward-looking statements that are included in this document, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this release. The Securities of Nevada Sunrise Gold Corporation have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to the account or benefit of any U.S. person.

SOURCE Nevada Sunrise Gold Corporation

Image with caption: "Nevada Sunrise Gold Corporation (CNW Group/Nevada Sunrise Gold Corporation)". Image available at: http://photos.newswire.ca/images/download/20151105_C6755_PHOTO_EN_537699.jpg

PDF available at: http://stream1.newswire.ca/media/2015/11/05/20151105_C6755_PDF_EN_537701.pdf

For further information: Warren Stanyer, President and Chief Executive Officer, Telephone: (604) 428-8028, Facsimile: (604) 484-7143, email: warrenstanyer@nevadasunrise.ca

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