News ReleaseCanadian Gold Hunter Corp. (the "Company") (TSX:CGH) is pleased to announce
completion of an updated independent resource estimate on the Donnelly
Zone at its GJ/Kinaskan gold-rich porphyry copper deposit in northern
British Columbia. The resource estimate is based on results from 56 drill
holes over a strike length of 1.5 kilometres. The base case indicated
resource, at a cut off of 0.20% copper, is 91.73 million tonnes grading
0.373% copper and 0.381 g/t gold and contains 754 million pounds of
copper and 1.12 million ounces of gold. In addition to the indicated
resource an inferred resource at the same cutoff consists of 28.04
million tonnes grading 0.354% copper and 0.369 g/t gold, containing a
further 219 million pounds of copper and 0.33 million ounces of gold.
Donnelly Indicated Resources
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Cut off Cu Tonnes Cu Au Contained Cu Contained Au
(%) (000,000) (%) (g/t) (million lbs) (million ozs)
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0.15 104.09 0.349 0.356 801 1.19
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0.20 91.73 0.373 0.381 754 1.12
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0.30 51.44 0.473 0.495 536 0.82
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0.40 28.73 0.575 0.610 364 0.56
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Donnelly Inferred Resources
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Cut off Cu Tonnes Cu Au Contained Cu Contained Au
(%) (000,000) (%) (g/t) (million lbs) (million ozs)
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0.15 31.83 0.332 0.346 233 0.35
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0.20 28.04 0.354 0.369 219 0.33
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0.30 14.41 0.459 0.496 146 0.23
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0.40 6.28 0.595 0.655 82 0.13
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This updated resource estimate was commissioned following the 2005 drill
program which successfully allowed a substantial portion of the 2004
inferred resource category to be upgraded to the indicated category. For
comparison purposes to the previous estimate, if all of the current
resources were still categorized as inferred, it would represent an
approximate 70% increase in tonnage.
The 0.20% copper cut-off grade has been chosen as the "base case"
scenario based on the recently completed feasibility study for the Red
Chris deposit (bcMetals Corporation), the nearest analogy to the Donnelly
Zone deposit. Material below this cut-off has questionable economic
expectation at this point, but at least some of it, if mined as a
consequence of gaining access to the higher grade material, might well be
segregated in a low-grade stockpile in case of exceptional metal prices.
The Donnelly Zone has been drilled to date to an average depth of about
300 metres. It is open in both directions on strike east-west, and at
depth. It is at least 1500 metres in strike length and up to (at least)
340 metres wide.
The upcoming 2006 program will consist of 14,000 metres of diamond
drilling to test the Donnelly Zone with a further 25 diamond drill holes
to as deep as 700 metres and an additional 15 holes to test other
targets. The main goal of the 2006 program is to increase the Donnelly
Zone resource at depth, within the area drilled to date, and trace the
high grade material to the west, where hole 05-076, the most westerly
hole drilled, intersected a 47 metre interval (with an estimated true
thickness of 40 metres) grading 0.83 % copper and 1.32 g/t gold in an
intense quartz-veinlet stockwork. An updated resource estimate will be
completed following the 2006 program.
Rick Bailes, President of Canadian Gold Hunter, commented, "The Donnelly
Zone continues to impress with its continuity. I am really looking
forward to our upcoming drill program, especially tracing the high grade
material further to the west."
The Donnelly Zone resource estimate was prepared by qualified person, Dr.
Giles Peatfield, P.Eng. using a manual sectional method, based on
approximately 15,600 metres of diamond drilling in 56 holes with more
than 5,000 samples assayed. Eleven of the core holes were drilled by
Texasgulf Canada Ltd. ("Tg") in 1977 and 1980; this drilling was
supervised by Dr. Peatfield. Eleven holes were drilled by the Company in
2004 and a further thirty-four in 2005. The assay results from the recent
diamond drill programs were consistent with, and corroborated, the
earlier work by Tg.
The 2005 drill program and sampling protocol were supervised by qualified
person David Mehner, P.Geo., Project Geologist for Canadian Gold Hunter.
Appropriate quality control and quality assurance protocols were utilized
on the program. Standard reference samples, blanks and duplicates were
inserted in each batch of samples for assay. The Canadian Gold Hunter
drill samples were analyzed for gold by fire assay and for copper by
atomic absorption, by ALS Chemex in North Vancouver, B. C., Canada. A NI
43-101 compliant technical report will be completed by Mr. Mehner and Dr.
Peatfield within 45 days.
The GJ/Kinaskan Property is located in northern British Columbia about 10
kilometres west of the Stewart Cassiar highway. The claims underlie an
area of about 150 square kilometres, which contains 21 significant
mineral showings, including the Donnelly, GJ and North zones.
Canadian Gold Hunter has a 100% working interest in the GJ/Kinaskan
property. The 2006 diamond drilling program will commence on or about
June 1st.
The Company also reports that the private placement announced on February
1, 2006 has closed. The Company sold, on a non-brokered, private
placement basis, 2,381,000 Flow-Through Common Shares at a price of Cdn
$1.05 per Flow-Through Share and 555,500 Common Shares (Non Flow-Through)
at a price of Cdn $0.90 per Common Share for total gross proceeds of Cdn
$3 million.
The private placement has received regulatory approval and the securities
have been issued to the investors. A finder's fee will be payable in
connection with the private placement.
The gross proceeds of the Flow-Through Shares shall be used for the
exploration of the Company's Canadian exploration projects. The Company
will use its best efforts to ensure that the exploration expenditures
qualify for the investment expenditure credits for purposes of the Income
Tax Act (Canada). The gross proceeds of the Common Shares (Non
Flow-Through) will be used for general working capital purposes.