Tue Nov 30, 2004
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Nevada Pacific Gold Ltd. (TSX Venture Exchange - Symbol NPG) wishes to announce the operating results for three months ended September 30th, 2004 and the Company's fiscal first quarter.
The Magistral Mine
The Company continued a revitalization program at the mine during the first quarter. The program is increasing long term operating efficiencies, lowering operating costs and increasing annual gold and silver production. During the revitalization period, which is expected to be completed on December 31, 2004, the mine will experience reduced gold production with all production related costs capitalized and offset by precious metal sales.
During the quarter The Magistral Mine produced 3,205 ounces gold and sold 3,272 ounces at an average price of US$400. Since the acquisition, the Mine has produced 12,435 ounces of gold. Silver continues to be stockpiled and at September 30, 2004 stood at 5,575 ounces.
The mine is continuing to experience improved results from the revitalization projects that have been completed. The remine program that involved rehandling the crushed ore on the leach pad to add lime for pH control and to reduce the effects of solution channelling continues to yield positive results. All pregnant solutions from the leach pad show improved pH that has helped reduce cyanide requirements and copper levels in the solution. In addition, the three additional carbon columns, larger pumps and a new boiler installed in mid-year continue to provide higher solution flow rates through the processing plant. For the quarter, average plant capacity was 257 cubic metres per hour, an 8% increase over the previous quarter.
Several projects were completed in the first quarter of the company's 2005 fiscal year that have set the mine on a firm footing for sustained profitable production beginning January 2005. Additional mine equipment was purchased and placed into service late in the quarter, including one CAT 992 12 cubic yard front end loader and two CAT 777 90-ton trucks that will increase the mining fleet capacity to approximately 7 million tonnes per year. The secondary crushing circuit was modified to produce a finer product by replacing the standard cone with a short head configuration. Projects still underway include the installation of a larger screen plant and new conveyors that will be configured to close the crushing circuit. These projects are expected to be completed in late December and are planned to be fully operational in January 2005. These improvements will help ensure an average at the crusher throughput of 960,000 tonnes per annum and an average crushed ore size of 80% finer than ½". The resulting improvement in gold recovery is estimated to be approximately 5%.
Finally a comprehensive organizational review was completed which resulted in a 10% labour force reduction, primarily in the administrative areas. As part of this reorganization, mine security was outsourced to a contract security company. Communication improvements are planned for completion in December that will allow for the administrative, accounting and purchasing groups to be moved to the mine site and the Mocorito office to be closed. With these and other changes, operating costs are projected to be reduced.
During the first quarter of fiscal 2005 the Magistral Gold Mine produced 3,205 ounces of gold and 2,294 ounces of silver. A total of 129,030 tonnes of ore and 826,679 tonnes of waste were mined with a waste to ore strip ratio of 6.4:1. The average grade of the mined ore was 1.4 grams gold per tonne for a total of 5,786 ounces of gold. The recoverable gold inventory remaining on the heap at September 30, 2004 was estimated to be 6,805 ounces
Subsequent to the end of the Company's first fiscal quarter Nevada Pacific made the final payment of US$ 1,450,000 to Queenstake Resources Ltd. on November 12, 2004 completing the purchase of the Magistral Gold Mine. All security granted by the Company has been returned to the company and security registrations are being discharged.
Magistral Mine Exploration Review
One of the most important developments resulting from the systematic review of the Magistral Gold Mine is the identification of exploration targets within the immediate and district area of the mine. During the first fiscal quarter, compilation of previous exploration data combined with surface mapping and sampling has successfully demonstrated the potential to increase the presently defined resources adjacent to existing mining operations and to discover and develop additional resources throughout the Magistral mining camp. Subsequent to quarter end the Company announced the commencement of a US$1 million exploration program at the mine that will include approximately 20,000 meters of drilling. The two-tiered program has been designed to develop additional gold reserves and resources adjacent to the existing mining operations as well as drill testing several near-mine mineralized areas that have been identified by Magistral's geological team. The principal drill targets in the immediate area of the Mine are the La Prieta High Grade Zone, the Samaniego Open Pit, the West San Rafael Zone, the San Rafael Open Pit, the Lupita-Sagrado Corazon Reserve/Resource Areas, the Lucy Zone, the South of Sagrado Corazon and the Cerritos Porphyry System.
Ross Zawada, P. Geol., is a Qualified Person as defined by National Instrument 43-101 and is responsible for exploration program design and quality control undertaken by the Company at their Mexican Operations.
Nevada Pacific US Exploration
Limousine Butte
On September 7, 2004, the Company signed a binding letter agreement with Placer Dome U.S. Inc. ("Placer Dome"), a wholly owned subsidiary of Placer Dome Inc., whereby Placer Dome has the right to earn a 60% interest in the Limousine Butte project by spending $4,000,000 on exploration over a five-year period. Placer Dome can earn an additional 15% interest by completing a feasibility study.
Following the quarter end staking of unpatented mineral claims by Placer Dome has more than doubled the size of the Limousine Butte project. As a result of Placer Dome's staking program, the Company and Placer Dome now control a large land position of approximately 31 square miles (20,000 acres) of the prospective corridor of alteration and gold mineralization. Placer Dome is completing detailed geologic mapping and sampling in the Resurrection Ridge area of the Limousine Butte project. Placer Dome indicates its current fieldwork will focus on determining structural intersections, lithology, continuity, orientation and mineralogy of the high-grade mineralization found in the Resurrection Ridge area. Placer Dome also plans to generate a 3-D model of the known gold mineralization at Resurrection Ridge in order to aid in resource definition and future drilling efforts. Property wide exploration including a drilling program is anticipated to commence in early 2005.
Keystone
On September 7, 2004, the Company signed a binding letter agreement with Placer Dome, whereby Placer Dome has the right to earn a 60% interest in the Keystone project by spending $5,000,000 on exploration over a five-year period. Placer Dome can earn an additional 15% interest by completing a feasibility study.
As a result of initial fieldwork by Placer Dome's exploration team, a priority area in the northeastern portion of the property has been identified. Placer Dome indicates that it will continue exploration with geophysics and geochemistry covering approximately three square miles over the priority area. The proposed work plan will include detailed geologic mapping and sampling, collection and analysis of approximately 500 soil samples taken on a 400 x 400 foot grid, and a 7.5 line mile Controlled-Source Audio-Frequency Magneto-Telluric (CSAMT) geophysical survey. A drilling program is planned for 2005
Cornerstone (Pat Canyon)
During the quarter, surface exploration on the Company's Cornerstone project identified a potentially significant structural zone of alteration and gold mineralization. Cornerstone is situated on the Cortez Gold Trend; approximately 12 miles south of Placer Dome's recently discovered multi-million ounce Cortez Hills and Pediment gold deposits in Eureka County, Nevada.
The surface alteration consists of local zones of iron oxides, carbonate and jasperoid breccia. To date, the zone has been traced for over 3,000 feet along a north-northeast strike direction and up to 800 feet in width. Initial sampling by Nevada Pacific has returned significant gold values and elevated pathfinder elements. Results of the first 35 rock chip samples taken by Nevada Pacific along the zone have been received from ALS Chemex with 12 of these samples returning gold values of greater than 2 ppm with a high of 7.87 ppm (0.228 opt). Surface sampling in the Flag zone revealed a total of 24 of 69 assays greater than 0.025 ounces per ton gold with two samples running as high as 0.274 opt and 0.317 opt. Pathfinder elements range in value up to 1815-ppm arsenic, 296-ppm antimony and 8.08-ppm mercury, indicating classic Carlin-style mineralization in this under-explored area. These results show the zone to be more continuous than previously thought along the 3,000 foot by 800-foot zone. A detailed soil-sampling program over this entire area has been completed. When the assay results are received and permitting has been completed a trenching and drilling program will commence.
Mr. Curt Everson, P.Geol., M.Sc. is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of exploration undertaken by the Company in Nevada
Cautionary Statement on Forward-Looking Information
Certain information set forth in this report contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties including: the results of current operation and exploration activities; market reaction to future operation and exploration activities; significant changes in metal prices; currency fluctuations; increases in production costs; differences in ore grades; recovery rates; and tonnes mined from those expected; changes in mining, or heap leaching rates from currently planned rates; general market and industry conditions; and other factors detailed in the Company's public filings.
Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise an, as such, undue reliance should not be placed on forward-looking statements. Nevada Pacific Gold Ltd's actual results, programs and financial position could differ materially from those expressed in or implied by these forward-looking statements, and accordingly, no assurance can be given that the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Nevada Pacific Gold Ltd. will derive therefrom. Nevada Pacific Gold Ltd. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Nevada Pacific Gold Ltd. was founded in March 1997. The Company owns the operating Magistral Gold Mine in Mexico and an exploration property portfolio covering approximately 75 square miles of mineral rights including portions of two significant gold producing belts in the State of Nevada. The Company's BMX, Keystone and Limousine Butte projects are optioned to Placer Dome. A description of these projects, including maps and photographs can be viewed on the Company's website at: http://www.nevadapacificgold.com.
ON BEHALF OF NEVADA PACIFIC GOLD LTD.
"Richard J. Barclay"
CEO and Director