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Tepal Project

Resource Estimation Details

Results from the update resource estimate are as follows:

Updated Total Tepal Project Resource Estimate1 - March 2012
Category
Tonnes (t)
Au (g/t)
Cu (%)
Ag (g/t)
Mo (%)
Au (oz.)
Cu (lbs)
AuEq2 (oz.)
Measured
34,100,000
0.48
0.25
0.95
0.002
528,000
185,000,000
1,037,000
Indicated
153,700,000
0.26
0.19
1.67
0.004
1,276,000
628,000,000
3,003,000
Meas & Ind
187,800,000
0.30
0.20
1.54
0.004
1,804,000
813,000,000
4,040,000
Inferred
35,700,000 
0.16
0.15
1.68
0.006
182,000
120,000,000
512,000
Au = gold, Cu = copper, Ag = silver, Mo = molybdenum, g/t = grams per tonne, % = percent, oz. = ounces, lbs. = pounds,
1The in situ resource stated in the table conforms to CIM guidelines for reasonable potential for economic extraction and is not to be confused as reserves. Resource numbers above are rounded to nearest 100,000 tonnes, 1,000 oz Au, 1,000,000 lbs Cu and 1,000 oz. AuEq
2AuEq = gold equivalent and is calculated using gold and copper only using $1000 Au, $2.75 Cu metal prices (AuEq = (lbs. Cu*$2.75/$1000) + Au oz.). All dollar values stated are $USD.


For comparison with the March 2011 resource estimate please see the Company's March 16, 2011 News Release at www.geologix.ca.

The March 2012 resource estimate now includes results for Ag and Mo in the Tepal North and South Zones which were not consistently assayed in historic drill programs. Infill drilling and the re-assaying of 1688 historic pulps supplied sufficient data to permit Ag and Mo to be estimated for these zones.

The resources for the three main zones are shown in the tables below.

North Zone - Resource Estimate1 - March 2012
Category
Tonnes
Au (g/t)
Cu (%)
Ag (g/t)
Mo (%)
Au (oz)
Cu (lbs)
AuEq2 (oz)
Measured
14,100,000
0.50
0.29
0.78
0.002
228,000
89,000,000
473,000
Indicated
55,300,000
0.30
0.21
1.01
0.002
533,000
252,000,000
1,226,000
Meas & Ind
69,400,000
0.34
0.22
0.96
0.002
761,000
341,000,000
1,699,000
Inferred
900,000
0.22
0.21
1.21
0.003
7,000
4,000,000
18,000


South Zone - Resource Estimate1 - March 2012
Category
Tonnes
Au (g/t)
Cu (%)
Ag (g/t)
Mo (%)
Au (oz)
Cu (lbs)
AuEq2 (oz)
Measured
20,000,000
0.47
0.22
1.07
0.002
300,000
96,000,000
564,000
Indicated
21,000,000
0.45
0.20
1.17
0.002
305,000
91,000,000
555,000
Meas & Ind
41,000,000
0.46
0.21
1.12
0.002
605,000
187,000,000
1,119,000
Inferred
400,000
0.40
0.16
0.95
0.002
5,000
2,000,000
11,000


Below the South Zone pit shell, indicated and inferred material has been identified that has not had economic parameters applied and is not included in the resource estimate. This material totals 4.8 million tonnes grading 0.57 g/t Au, 0.27 % Cu, 1.12 g/t Ag and 0.003% Mo at a $20.00 equivalent cut-off which is considered a preliminary suitable equivalent value that could potentially give a reasonable prospect for economic extraction. However, an underground economic study needs to be completed to identify the appropriate cut-off. The material remains open in several directions and requires further drilling to identify size, grade and reasonable economic potential for inclusion into stated mineral resources.

Tizate Zone - Resource Estimate1 - March 2012
Category
Tonnes
Au (g/t)
Cu (%)
Ag (g/t)
Mo (%)
Au (oz)
Cu (lbs)
AuEq2 (oz)
Indicated
77,400,000
0.18
0.17
2.29
0.006
438,000 
285,000,000
1,222,000
Inferred
34,400,000
0.15
0.15
1.70
0.007
170,000
115,000,000
486,000


Oxide and Sulphide Resources1 - March 2012
Category
Tonnes (t)
Au (g/t)
Cu (%)
Ag (g/t)
Mo (%)
Au (oz)
Cu (lbs)
AuEq2 (oz)
Oxide Meas & Ind
21,100,000
0.34
0.21
1.18
0.002
233,000
96,000,000
497,000
Oxide Inferred
700,000
0.19
0.13
2.01
0.002
4,000
2,000,000
10,000
Sulphide Meas & Ind
166,700,000
0.29
0.20
1.59
0.004
1,571,000
717,000,000
3,543,000
Sulphide Inferred
35,000,000
0.16
0.15
1.67
0.007
177,000
118,000,000
502,000


The mineral resources were estimated using Datamine Studio V3 mining software. Grades for Au, Cu, Ag and Mo were interpolated by ordinary kriging into blocks that are 10 metres by 10 metres by 5 metres in height representing the mineralized envelopes. Grades were estimated inside the mineralized envelopes based on an $8.70 equivalent cut-off calculated using a $1000 gold price and $2.75 copper price, designed by Geologix and validated by Micon. Mineral resources were further constrained within a Whittle resource pit shell based on $1,300 Au/oz and $3.30/lb for Cu (Ag and Mo values were not included) and reported above a $5.00 economic cut-off. The Whittle pit shell constraints utilized the following parameters:

Metallurgical Recoveries
North and South Zones Oxide: 78.4% Au, Cu 14.3%  - Sulphide 60.7% Au, 87.4% Cu
Tizate Oxide: 68.8% Au, Cu 6.8%  - Sulphide 66.2% Au, 85.3% Cu
Metals Used and Metal Prices ($USD)
Gold, Copper $1300 Au, $3.30 Cu
Operational Constraints
Pit Slope Angle 45 degrees
Operating Cost (Oxide and Sulphide) Mining:$1.35/t, Processing: $4.30/t, G&A: $0.68/t


All assays were composited to a 2 metre length prior to block estimation, and composite grades were evaluated for outliers. After evaluation, capping was applied to both oxide and sulphide mineralization for Au, Cu, Ag and Mo, where needed. The blocks were interpolated in three successive passes with each pass having a larger search volume. Search radii were designed from variogram parameters and local drill spacing. For the North and South zones interpolation passes one and two correspond to a classification of Measured and Indicated respectively and required at least five samples representing at least two drill holes. The remaining blocks within the North and South zone resource solids were interpolated with a third pass, which required at least 4 samples from at least one hole and were classified as Inferred. The Tizate zone was interpolated in two passes. The first required at least five samples representing at least two drill holes for a classification of Indicated, the second required at least 4 samples from at least one hole for a classification of Inferred.

The resource estimate was completed by David Makepeace, M.Eng., P. Eng., Senior Geologist, of Micon International Ltd., Vancouver, B.C. and is based on geological interpretation supplied by the Company to Micon. Mr. Makepeace is an 'independent qualified person' for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators and has verified the data disclosed in this news release. The Company's Resource Geologist, Andrew Hamilton, B.Sc., P. Geo., a 'qualified person' for the purposes of NI 43-101, has approved the disclosure contained in this news release.