Roxgold announces initial resource estimate and drill results

VANCOUVER, BRITISH COLUMBIA–(Marketwire – Aug. 7, 2012) – Roxgold Inc. ("Roxgold" or the "Company") (TSX VENTURE:ROG) has received the initial resource estimate from AGP Mining Consultants Inc., ("AGP") of Toronto, Ontario for the 55 Zone on its 100% owned Yaramoko Property located in Burkina Faso. Resources are reported as of July 20, 2012.

MINERAL RESOURCE ESTIMATES

The results from the initial resource estimate for the Yaramoko 55 Zone returned 617,000 tonnes of Indicated resource grading 17.8 grams per tonne ("g/t" or "gpt") gold containing an estimated 354,000 ounces of gold. In the Inferred category, the initial resource estimate returned 1,244,000 tonnes grading 7.7 g/t containing an estimated 306,000 ounces of gold. The resource estimate is restricted to the 55 Zone and does not include intersections drilled on other zones discovered on the Yaramoko Property.

Classification Gold Tonnage Gold Grade Gold Contained
Cut-off (g/t) Tonnes g/t Oz
Indicated > 2.0 617,000 17.8 354,000
Inferred > 2.0 1,244,000 7.7 306,000
  • The mineral resources are classified as indicated and inferred, and comply with the CIM Definition Standards on Mineral Resources and Mineral Reserves referenced in National Instrument 43-101.
  • The Mineral Resource Estimate Parameters and Methodology used by AGP are set out later in this news release along with a table setting out the contained ounces of gold, tonnages and grades at varying cut-offs. It is important to note that increasing the cut-off grade from >2 gpt to >5 gpt does not materially impact the number of contained ounces and raises the estimated capped grade of the indicated resource to 22.6 gpt.

"The receipt of this high grade gold resource estimate marks a turning point for Roxgold," said Robert Sibthorpe, President and CEO, "and validates the strong financial support provided by our shareholders over the past year." This support has enabled the Company to rapidly establish the initial resource estimate. Roxgold can now move forward with plans to acquire the personnel and assets appropriate for an advanced exploration company approaching the development stage. The Company is currently pursuing candidates to strengthen its technical and management team. Negotiations are ongoing with accredited laboratories for the construction of an on-site prep lab or assaying facilities. The Board is committed to taking all actions necessary to ensure the successful advancement of the 55 Zone, while maintaining a strong exploration effort to discover and explore additional gold zones at Yaramoko.

The information contained in the updated Technical Report on the Geology of the Yaramoko Exploration Permit, and any subsequent resource estimate updates, will be used in the Preliminary Economic Assessment ("PEA") of the Yaramoko Property, which is currently in progress under the direction of AGP. At present, there are six drills engaged in resource expansion and resource category upgrading activities on the Yaramoko property with an additional 30 holes scheduled to be drilled on the 55 Zone during the next 2 months. The initial resource estimate does not include information from 32 holes drilled on the Yaramoko property for which assays are still pending. Roxgold management believes that there is a reasonable expectation that these holes may add to the overall resource and will convert some of the resources currently in the inferred category to the indicated category. For this reason AGP has been asked to continue to monitor the 55 Zone drill program so that an up to date estimate can be incorporated in the PEA.

The Company would like to note that the current resource estimate is based on only nine months of drilling, a period during which drill availability and other exploration infrastructure was severely limited in Burkina Faso. The initial resource estimate includes 128 holes, totaling 31,775 meters of core drilling. No drill hole with a number higher than DDH-148 was included in the resource estimate.

"The Roxgold exploration team both in Canada and Burkina Faso deserve recognition," said Lead Director Allan Fabbro, "both for the discovery of the 55 Zone in early 2011 and the three subsequent efficient drill campaigns which delineated the resource received today. Their work will allow the Company to go forward now with a promising asset and a strong treasury." The Company is particularly pleased by the high proportion of indicated to inferred resources, especially given the requirements for indicated resources generally included a drill density pattern of a maximum of 25 meters between drill intercepts. Most of the resource estimate reported here is located between surface and a depth of 250 meters, with the deposit remaining open to depth.

CORE DRILLING UPDATE AT YARAMOKO

To date, Roxgold has drilled 190 core holes totaling 54,846 meters and has an additional 18,440 meters contracted. Core drilling in the second half of 2011 established the presence of a high grade gold mineralization at the 55 Zone. During 2012, an additional 88 core holes have been drilled on the 55 Zone. Assays have been received for 56 holes, totaling 20,702 meters and assays are pending for the remaining 32 holes, comprising 14,492 meters of core. A further 39 core holes, comprising 8,078 meters, have been drilled on Yaramoko targets other than the 55 Zone. The Company recently received assay results from 29 core holes from its Phase 3 (2012) Yaramoko drilling program. Significant intercepts from the 55 Zone are set out in the Table below;

To view table please click on the following link: http://media3.marketwire.com/docs/ROGtable1.pdf

Drilling during 2012 on the 55 Zone has had multiple objectives;

  • Determine the limits of mineralization and favorable lithological and structural conditions for economic gold values on the 55 Zone along strike and to depth through step-out drilling in all directions from intercepts detected in 2011.
  • Extend the 55 Zone to depth beyond 150 meters in depth after the strike boundaries were established.
  • In-fill certain areas of the 55 Zone to establish grade and width continuity of the vein(s) and to set drill intercept spacing to enable the conversion of resources from the inferred to the drill-indicated categories for inclusion in further evaluation studies.
  • Provide sufficient information such that the geological conditions necessary for gold deposition are understood in order to guide further exploration both on the 55 Zone and elsewhere on the Yaramoko Permit.

With respect to establishing the surface east – west strike extent of the 55 Zone drill holes DDH-086 and DDH-087 (previously reported) extended this distance 100 meters to the west. Eight bounding holes with no significant values (DDH-88,-91,-93,-95,-98, -100,-126 and -92) indicate that 800 meters is the probable final extent of the surface strike of the 55 Zone.

Phase 3 drilling beneath the 2011 intercepts has been successful in extending the gold mineralization to a depth of about 250 meters without significant loss of gold grade or mineralized widths. In-fill drilling at or above this level to establish continuity and to bring drill hole spacing to acceptable levels has also been largely successful with only occasional low grade (DDH-101) intercepts within the higher grade envelope.

Deeper drilling, in the western portion of the 55 Zone has encountered changes in lithologies in the areas where the veining was projected which appear to inhibit vein formation and gold deposition at the depths between 250 to 525 meters below surface. The brittle intrusive rocks which appear to host the veining and gold preferentially are replaced at these depths with basalt and structures here are generally limited to deformation and sheared zones with only minor gold values (DDH-113,-125,-130,-136,and-148). This situation improves markedly towards the central and eastern portions of the deposit with positive results from holes DDH-106, DDH-118, DDH-141 and DDH-065. Visible gold was noted in holes DDH-154 and DDH-165 at intercepts 300 meters and 375 meters below surface respectively. It also appears that the favourable intrusive host rocks persist at depth to the east beyond their surface expression. The 55 Zone demonstrates a trend to the east with depth both in gold values and favourable lithology and structure which, now recognized, will guide further drilling. This trend is shown in the polygons in the longitudinal section below. The veining in the very deep drill hole DDH-127 and the wedged intercepts from it drilled in the western portion are also located in intrusive rocks indicating that the less favourable basalts encountered in the west may not persist to depth and that the quartz veining and favorable lithology, while not auriferous in this area, persist to very great depths.

To view map please click on the following link: http://media3.marketwire.com/docs/ROGmap.pdf

EXPLORATION ACTIVITIES IN OTHER AREAS OF YARAMOKO

Core drilling has been carried out in target zones identified through previously announced reverse circulation drilling away from the 55 Zone. Assays are pending for 4 holes, comprising 891 meters, at the 109 Zone and 12 holes, comprising 3,584 meters, at the 117 Zone. Drill intercepts and assays will be reported once assays for these suites of holes are received.

Bagassi South has been the subject of two exploration campaigns in the past, Roxgold Inc. in 2010-2011 and a previous operator in 2007. Drill results from these programs yielded numerous significant gold intercepts but follow up had been deferred due to the high grade results obtained from the 55 Zone. Work on the Bagassi South property, approximately 2.5 kilometers south of the 55 Zone, has been ongoing through 2012. Work during this year has included 375 soil samples, 5,354 meters of RAB drilling in 379 holes, 14 reverse circulation holes comprising 2,224 meters and 4 core holes comprising 2,380 meters. Of the more than 4,000 samples sent for analysis to in-country accredited assay labs, assay results have been received for only the soil survey and some of the RAB holes. It is felt that, given the gold resource established now at the 55 Zone, a strong effort should be made to try and discover new gold zones in close proximity to potentially provide additional tonnage.

MINERAL RESOURCE ESTIMATE PARAMETERS AND METHOD (as provided by AGP)

  • The block model mineral resources were estimated for the 55 Zone of the Yaramoko Property. The estimate encompasses the main vein and a smaller accessory vein located on the footwall of the main vein. The estimate was completed based on the concept of an underground operation. No other zones on the Yaramoko property were evaluated.
  • The three-dimensional (3D) wireframe model was based on lithology typically taking into account grade in excess of 2.0 g/t with exception made for continuity and to account for a 1.5 meter horizontal minimum mining width. The 3D wireframe describes the shape of the mineralized horizon. The grade boundaries with the hanging wall and footwall waste are both sharp.
  • Preliminary metallurgical work is underway and no results were available in order to assess potential mill recoveries.
  • A (3D) geological and block model was generated using GEMSĀ© software. The block model matrix size of 2x5x5 metres (width x length x height) was selected with consultation with the engineering team from AGP and was based on the size that was deemed suitable for an underground narrow vein mining scenario.
  • Out of 135 drill holes intersecting the mineralization, 7 holes have assays pending and were removed from the estimate leaving the model to be interpolated with the remaining 128 holes totaling 31,775 meters of drilling completed by Roxgold from mid2011 through 2012.
  • All drill holes are diamond drill core with the majority of the samples collected and assayed within the mineralized zone between 1.0 to 1.4 metre sample intervals.
  • The composite interval selected was 1.5 metres down hole with composite remnants backstitched to the previous interval.
  • Densities were determined from 456 representative rock samples using industry standard methods. For the Main zone a density of 2.74 tonnes/metre3 and 2.72 tonnes/metre3 for the small Footwall zone was applied to the model using the density of each lithology within the 55 and 55 Footwall Zone.
  • Variography studies within the Main zone indicated a long axis pointing in the strike direction of the deposit and a short down-dip axis. The result of the variography was likely more indicative of the drilling pattern than the true trend of the deposit.
  • For the treatment of outliers, raw assays were capped to 280 Au g/t in combination with a search restrictions applied on composites values greater than 50 Au g/t. The procedure used allows the deposit to retain the high grade assays while limiting their influence during the interpolation to a maximum of 15m x 25m x 25m (width x length x height).
  • Inverse distance cube was used for the grade interpolation with a nearest neighbour check model.
  • 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 a diamond drilling density (core area) and the distance to the closest sample.
  • No mining plans have yet been prepared for the deposit however from the geometry of the deposit, it seems likely that shrinkage, cut and fill or long hole stoping mining methods, with or without backfill, may be considered for future extraction.
  • Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  • Under CIM definitions, Mineral Resources should have a reasonable prospect of economic extraction. In order to assess the Mineral Resources an insitu resource cut-off grade of 2.0 g/t gold is recommended. A gold price of US$1,100 per troy ounce was used for the estimate.
  • The quantity and grade of reported inferred resources in this estimation are conceptual in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured resource category.
  • Rounding of tonnes as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content.
  • A number of collar positions were validated during the site visit using a hand held GSP. Assays were validated against the original certificates obtained directly from the issuing laboratories. Independent character samples collected on-site all confirm the presence of gold on the property.

The following table illustrates the resource model sensitivity to a change in cut-off grade. The base case of 2.0 g/t Au selected is highlighted.

To view table please click on the following link: http://media3.marketwire.com/docs/ROGtable2.pdf

Quality Assurance/Quality Control;

Roxgold Inc. is the Project Operator and maintains a quality control program involving the use of repeat assays, inserted blanks and the use of certified standards from an accredited Canadian laboratory. Assaying from holes in Phase 3 in this News Release were carried out by TSL labs in Saskatoon, Saskatchewan and Actlabs in Ouagadougou. Roxgold has no relationship with either of these accredited laboratories.

Pierre Desautels (P.Geo), of AGP Mining Consultants Inc., provided the Company with the mineral resource estimate information and has approved the contents of this release as it pertains to that matter.

Warren Robb (P.Geo), is Chief Geologist with Roxgold Inc. and is a qualified person as defined by National Instrument 43-101 Standards for Disclosure of Mineral Projects for Roxgold and has reviewed and approved the contents of this release with regard to all other information. True width estimates of mineralization in this release were calculated from cross sections.

The full technical report will be filed within 45 days to support the information in this release.

ON BEHALF OF THE BOARD OF DIRECTORS

ROXGOLD INC.

Robert Sibthorpe, B.Sc.(Geology), M.B.A., President & CEO

FORWARD LOOKING STATEMENTS: Certain statements and information in this press release constitute "forward-looking statements" or "forward-looking information" Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "believes", "plans", "estimates", "intends", "targets", "goals", "forecasts", "objectives", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information.

Forward-looking statements or information relate to, among other things, the timing and scope of NI 43-101 technical reports in respect of the Yaramoko property, including a preliminary economic assessment.

Forward-looking statements are based on certain assumptions and are subject to risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, with respect to statements regarding the resources estimate, the assumptions set forth in this news release, and risks and uncertainties relating to the interpretation of drill results and the estimation of mineral resources, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development results will not be consistent with the Company's expectations, accidents, equipment breakdowns, risk of undiscovered, title defects and surface access, labour disputes, the potential for delays in exploration activities, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, and other risks and uncertainties, including those described under Risk Factors in each management discussion and analysis which are available under the Company's profile at www.sedar.com. Forward-looking information is based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of gold, that the Company will receive required permits and access to surface rights, that the Company can access financing, appropriate equipment and sufficient labour and that the political environment within Burkina Faso will continue to support the development of environmentally safe mining projects. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

Contact Information

 

Roxgold Inc.
Robert (Bob) Sibthorpe
604-351-8850

Roxgold Inc.
Al Fabbro
604-351-8850
[email protected]
www.roxgold.com