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TABLE OF CONTENTS Dec 17 - 23, 2012 Volume 98 Number 44 - 0 comments

Bullfrog a prince for Corvus

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VANCOUVER 2012-12-12

Vancouver-based junior Corvus Gold (KOR-T) has released an updated preliminary economic assessment (PEA) on its wholly owned North Bullfrog low-grade gold project in southern Nevada that models a heap-leach mine averaging 74,800 oz. gold production annually over a 10-year life.

Corvus now foresees a two-stage development that would carry lower upfront capital costs and result in a faster road to production. Average anticipated gold output at Bullfrog has been bumped from 57,700 oz. annually under the previous PEA to 74,800 oz., and mine life has been cut by two years.

Planned throughput rates have jumped from 44,000 tonnes per day to 55,000 tonnes per day, while expected total operating costs have risen from US$4.27 per tonne to US$4.60 per tonne. Gold recoveries have improved from 69% to 75%, and strip ratio has remained consistent around 0.48 to 1.

The new proposal sees Bullfrog brought into production by 2014, two years earlier than before. Under the PEA upfront capital costs for a first phase would drop 12% to US$60 million.

Corvus would initiate operations on its patented mining claims — which contain portions of the Mayflower and Jolly Jane deposits — before tapping deposits located on federal land claims during a second phase that would cost another US$34 million in capital expenditures.

The first phase would cover two years of production at a 7,700-tonne-per-day throughput rate before Corvus starts construction on phase two in its second year, which would ramp-up throughput to design specifics by adding an additional capacity of 48,000 tonnes per day by 2017.

Corvus’ new model has mixed results on the economic numbers. Bullfrog’s pre-tax, pre-royalty net present value (NPV) now sits at US$166 million with a 26% internal rate of return at a 5% discount rate. The previous model carried an NPV of US$118 million and an IRR at 29%. The company has benefitted from a recent jump in gold prices, with its earlier study using a US$1,300 per oz. gold price, while the updated study models US$1,479 per oz.

In-pit resources also saw a slight bump as a result of infill drilling at the Mayflower target and an increased amount of bulk-density data at the Jolly Jane and Sierra Blanca zones.

Corvus has not included its Yellow Jacket feeder zone in any estimates, and roughly 21% of its resources lie in the indicated category.

Bullfrog’s pit holds 21 million indicated tonnes grading 0.3 gram gold per tonne for 209,250 contained oz. gold, along with 115 million inferred tonnes grading 0.22 gram gold for 804,570 contained oz. gold. The in-pit resources assume a 0.1 gram gold cut-off.

In November, Corvus released results from the maiden hole in a second-phase drill program collared at the Yellow Jacket target. Earlier this year the company identified a high-grade feeder zone at Yellow Jacket when it cut 72 metres grading 1.74 grams gold and 98 grams silver in hole 12-138. Yellow Jacket hosts fault-controlled gold and silver mineralization over a 700-metre strike length, and remains open.

The most recent program is composed of 780 metres of core over four holes and targets vein mineralization that remains open to the north and at depth. Corvus’ most recent results come from hole 12-183, which cut 49 metres averaging 1.9 grams gold and 43 grams silver from 80 metres depth, and includes a higher-grade interval of 10.4 metres grading 4.7 grams gold and 119 grams silver.

In early December, Corvus announced it had increased its land package at Bullfrog by 52%, or 23.5 sq. km, through the staking of 297 federal mining claims. The company’s land package now covers 68 sq. km.

“Our recent land acquisition is in response to the high-grade vein potential we see in our north district and to the east,” CEO Jeff Pontius commented after the staking initiative. “These newly discovered high-grade systems have little surface expression, and we feel the potential for new discoveries in this area is very high. We are excited to not only follow-up and expand the Yellow Jacket discovery, but to begin exploring new targets generated from our new structural and geophysical data.”

Corvus saw a more trading activity following the updated PEA, as 123,500 shares traded hands en route to a $1.70 daily close. The company is sitting near its 52-week high of $1.84, has 53 million shares outstanding, and a $90-million market capitalization.

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Related Press Releases
Corvus Gold Announces Exploration Results from New Western & Eastern Zone Target Areas, North Bullfrog Project, Nevada
Corvus Gold Announces Latest Exploration Results from Three New Target Areas on its North Bullfrog Project, NV
Corvus Gold Identifies New High-Grade Gold Zone and Expands NW Sierra Blanca Target Area, North Bullfrog Project, NV

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