Vancouver, British Columbia, Canada. May 12, 2008. Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold” or the “Company”) is pleased to provide the following corporate update.
EXPLORATION AND OPERATIONS
The Company’s project activities continue to be managed by Cordilleran Exploration Company (“Cordex”), owned and operated by John Livermore and Andy Wallace. The Company’s exclusive agreement with Cordex has been extended to the end of 2009 and is renewable up to the end of 2013 under certain conditions.
The Company’s generative activities are designed to identify and acquire projects with ore grade values in a geological setting with the potential to host a large gold deposit amenable to open pit mining. During the 2007 field season the Company’s generative programs have resulted in the staking and acquisition of five additional properties in northeast Nevada: Grulla, Stage, Red Hills, White Horse Flats and Ferguson Flats. With the 2008 acquisition of the White Horse North Project and the Awakening Property, Columbus Gold’s portfolio now consists of 31 projects (click here for a location map) which are 100% controlled (subject to underlying royalties) of which 25 are gold projects located in Nevada.
To date the Company has optioned an initial interest of 51% to 60% on 14 of its Nevada gold projects to third parties including Barrick Gold, Newmont Mining and Agnico-Eagle. Columbus Gold believes that it is the 4th largest landowner in Nevada based on number of gold projects and that it ranks 2nd in the state for the most projects under option to third parties. As new acquisitions are advanced and targets delineated through geological mapping, geochemical sampling and geophysics, it is likely that other projects will be optioned to third parties for drilling; additional joint-ventures are anticipated in 2008.
The Company’s joint-venture partners plan combined 2008 exploration expenditures totaling an estimated $4.65 million on Columbus Gold projects with drilling planned on up to seven properties including drilling by Newmont Mining at Scraper located on the northern extension of the Carlin Trend (click here) and where they recently completed geochemical work, a gravity survey and other geophysics in preparation for drilling; Barrick Gold has planned a geophysical program in preparation for an anticipated 11,000 ft (3,352 m) drilling program at Utah Clipper and Crestview located directly adjacent to the Pipeline-Gold Acres gold mine complex on the Battle Mountain Trend; and, approximately 8,000 ft (2,438 m) of drilling is planned at Summit by Agnico-Eagle Mines Limited to test geochemical targets identified in last year’s sampling program which consisted of approximately 2,500 soil, rock, and stream sediment samples. The Summit Property is located within one mile of Fronteer’s and AUEX’s drilling at the important Long Canyon discovery and within 1.5 miles of Agnico-Eagle’s and AUEX’s drilling at the Acrobat/Juggler discovery (click here).
In addition, subject to the availability of drill rigs, Sniper Resources is planning to drill 24 rotary holes in a planned 14,400 ft (4,389 m) program at Guild; four holes totaling 4,100 ft (1,249 m) are planned by Platte River Gold at Chert Cliff; and, eight to ten diamond drill holes are planned by Portage Minerals at Golden Mile.
In addition to the drill programs on these seven Columbus Gold projects planned by joint-venture partners in 2008, Columbus Gold plans to drill its Bolo and Awakening properties. Bonds are in place, permitting has been obtained and a drill rig is scheduled to be delivered to Awakening in June and subsequently moved to Bolo.
The Awakening Property was recently explored with a series of excavator trenches followed by the drilling of six rotary holes in January 2008 (click here for detailed results) which identified thick zones of low grade mineralization in quartz stockworks, potentially minable by open pit. A geologic mapping and geophysical program is in progress. Columbus Gold has permitted 24 drill sites and expects to drill 12 holes in an 8,000 ft (2,438 m) Phase I program in June.
At Bolo, the 19 hole, 9,890 ft (3,014 m) Phase I drilling program completed in December 2007 (click here for detailed results) combined with surface sampling and mapping, has confirmed the presence of a very large Carlin-type mineralized system present over an area of at least 6 sq. miles (15.5 sq. kilometers). Fifteen of the 19 holes completed intercepted anomalous gold values, however, due to difficult drilling conditions several holes were abandoned while still in alteration, prior to reaching planned target depth. Detailed logging of the drill holes suggests that the Company may have missed several important structures in its original surface mapping program as the gold grades encountered were significantly lower in the drill results then from surface sampling. Additional geologic mapping and geophysical programs consisting of ten line miles of CSAMT surveying and a ground magnetic survey are complete and are presently being interpreted. The geophysics combined with the new mapping are assisting in identifying cross-structures which may be controlling better grade. Columbus Gold has permitted 33 drill sites and expects to drill 12 holes in an 8400 ft (2,560 m) Phase II drilling program designed to intercept these important cross-structures and also test numerous untested targets. Phase II at Bolo is expected to begin immediately upon completion of Phase I drilling at Awakening.
FINANCIAL AND CORPORATE
On May 5th, 2008, the Company announced that it has transferred its Silver District, Silver Dome, Clanton Hills and Keg silver properties to a newly formed subsidiary, Columbus Silver Corporation with the intent of completing an initial public offering (“IPO”) to raise proceeds of up to $5,250,000. The IPO process was chosen as the most effective way of maximizing the Company’s investment in its silver assets and the creation of a silver focused company should provide an effective mechanism to finance exploration activities while providing Columbus Gold and its shareholders with a valuable retained interest in any future growth in value of Columbus Silver and the silver projects. A 27 hole, 10,000 ft (3,048 m) drilling program is planned for the Silver Dome Project on completion of the IPO.
Columbus Gold’s current working capital position of $2,359,000 combined with loan repayments and consideration for the transfer of the silver assets to Columbus Silver of approximately $1 million payable upon closing of the Columbus Silver IPO, totals approximately $3.4 million and will more than enable Columbus Gold to carry out its exploration plans and fulfill its projected general and administrative expenditures into the first quarter of 2010.
At the Company’s AGM held on May 9th, 2008, John Prochnau did not stand for re-election as a Non-Executive Director but will remain actively involved in the Company’s affairs as a Special Advisor reporting to the Board of Directors on general business strategy, project generation and development. Mr. Prochnau has concurrently tendered his resignation as a director of several publicly traded mining companies, reflecting his desire to focus exclusively on the technical and geological aspect of the industry in his new capacity of Special Advisor.
Andy Wallace is a Certified Professional Geologist (CPG) with the American Institute of Professional Geologists and is the Qualified Person under NI 43-101 who has reviewed and approved the technical contents of this news release. Mr. Wallace is a partner of Cordilleran Exploration Company (“Cordex”), which is conducting exploration and project generation activities for Columbus Gold on an exclusive basis.
ON BEHALF OF THE BOARD,
Robert F. Giustra
President & CEO, Director
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
For more information contact: