VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/09/11 -- Golden Reign Resources Ltd. (TSX VENTURE: GRR) -
As a result of a review by the British Columbia Securities Commission, we are issuing the following news release to clarify our disclosure.
Golden Reign Resources Ltd. (the "Company" or "Golden Reign") would like to clarify its disclosure and provide a comprehensive discussion and analysis of the 2009/2010 exploration results from its 87 square kilometre San Albino-Murra Gold Property, Nicaragua (the "Property").
Clarification of Corporate Disclosure
The Company does not have a National Instrument 43-101 ("NI 43-101") compliant mineral resource delineated on its Property. The Company's National Instrument 43-101 technical report (the "Report") filed on September 25, 2009 includes a historical resource estimate for the San Albino Mine from 1948 based on data from 1934, extracted from a report by R. Peale (the "Peale Report"). The British Columbia Securities Commission ("BCSC") has questioned the relevance and suitability of this estimate for public disclosure based upon its age, lack of subsequent access and verification, and subsequent work conducted on the property. This historical estimate pre-dates and is non-compliant with NI 43-101. In addition, the Report discloses a potential resource estimate for the Arras prospect, providing an estimate of potential quantity and grade, expressed as ranges. The potential mineral resource estimate was prepared in 2008 by M. Montgomery of Geosure Geological Consultants of Australia for the prior operator, Condor Resources Plc. ("Condor"). The disclosure of potential resources is contrary to section 2.2 and prohibited by section 2.3(1) of NI 43-101, as such the Report is non-compliant with NI 43-101. The Report and the potential resources estimates should not be relied upon. The Company retracts all disclosure pertaining to the potential mineral resources, including those contained in its September 30, 2009 news release, June 2010 presentation and other documents on or linked to its website. The Report, filed in conjunction with the signing of the option agreement on the Property, was based largely upon historical information available at the time of preparation. The Company has a current NI 43-101 compliant technical report substantially complete, based upon its exploration of and results and findings from the Property, which will be filed shortly.
In recent MD&A filings, the Company states that there exists a significant potential to outline and increase estimated resources and that the Property offers a low cost production opportunity. The Report does not support these disclosures. The Company does not have mineral resources to increase or to use as the basis for establishing relative production costs. The Company retracts these comments.
A copy of the Peale Report posted under historical reports on the Company's website has been removed. The Peale Report is over 60 years old and contains disclosure of resources, reserves, ore, mineral processing and economic analysis contrary to NI 43-101. The Company has not verified these estimates. The Peale Report is out of date and the public should not rely on the estimates of resources and reserves, conclusions or economic analysis contained therein.
Corporate presentations from November 2010 and June 2010 posted on the Company's website were removed. The presentations reported preliminary metallurgical test recoveries of +92%, which are not supported by the Report. To clarify, the reported recoveries pertain only to gold and are based upon Condor's public disclosure and a March 2008 report prepared by SGS Lakefield Laboratory for Condor. Two samples were tested, SAM002 and SAM005 - each by one CIL cyanidation test, then repeated to confirm results. The recoveries were identical in both tests for gold extractions, with 93% and 92% for SAM002 and SAM005, respectively. Silver recoveries were 81% and 74% for SAM002 and 70% and 71% for SAM005. The material tested was from trenching and drilling performed by Condor.
A newsletter blog written by Larry Myles (the "Larry Myles Report") posted to the Company's website under historical reports has been removed. The Larry Myles Report referenced and contained excerpts from the Peale Report, including a historical resource estimate, which are misleading and contrary to section 2.4 of NI 43-101. The 1948 historical resource estimate, stated as a gross dollar value of USD$42 million based upon the then USD$21 gold price, is misleading and contrary to NI 43-101 because it does not take into consideration costs and recoveries related to gold extraction and is not based on mineral resources. The Larry Myles Report also discusses the grade and dimensions of mineral resources which is not permitted under section 2.3(1) of NI 43-101. Further, Larry Myles Reports discloses high grade results in a manner that suggests these grades may be representative of the average grade of mineralization and discusses continuity of mineralized structures over significant distances without discussing the continuity of mineralization or grade. The Larry Myles Report provides scientific and technical information without naming the qualified person, as defined by NI 43-101, who prepared or supervised the preparation of this information, contrary to section 3.1. Mr. Myles is an employee, providing shareholder communications for the Company. The public should not rely on the Larry Myles Reports because they contain overly promotional statements and unsupported opinions that are misleading, contrary to NI 43-101 and are not prepared by a qualified person as defined under NI 43-101.
2009/2010 Exploration Results
Summary
During the period from October 2009 to the end of 2010, the Company completed reconnaissance level exploration across the entire Property, with a focus on the southern (San Albino) district and the northern (Murra) district.
In the San Albino District, the Company completed a core drilling program, totaling 1,514.75 metres, over the San Albino Mine and Arras prospects. Drilling confirmed the thickness, grade and continuity of the San Albino Mine mineralization. The program also extended the mineralization of the San Albino zone along strike and down dip. Nine diamond drill holes totaling 1,269.21 metres were drilled at the San Albino Mine area. The entire drill core from each drill hole was photographed, logged, sawed in half, sampled and assayed. All samples were assayed for gold (metallic screen methods) and 30 element ICP analysis, including silver. At the Arras prospect, located approximately 450 metres southeast of the San Albino Mine, three historical reverse circulation holes were twinned by core drilling. The primary objective of drilling at the Arras prospect was to compare and contrast the assay results received from the two methods of drilling and to determine the most accurate method of evaluating the Property. Additionally, twinning of prior drill holes may provide or increase confidence placed on historical data and validate prior work. A total of 5 short drill holes were cored at the Arras prospect, totaling 244.92 metres. The entire drill core from each drill hole was photographed, logged, sawed, sampled and assayed. All samples were assayed for gold (metallic screen methods) and 30 element ICP analysis, including silver.
The Company completed additional work in the San Albino Mine area, including the excavation of thirteen trenches in order to expose additional mineralized zones.
A regional sampling program identified several targets which require extensive surface work and evaluation. Numerous showings and historical mine workings situated south of the Arras prospect, including San Pablo and Las Conchitas, were examined and sampled in a preliminary manner during November, 2009 and January, 2010. During the same period, numerous showings in the Murra District were also sampled and mapped in a preliminary manner.
In the central district of the Property reconnaissance mapping and sampling has only recently commenced. Significantly more work is required in 2011 to properly assess and evaluate this area.
Drilling Program
R & R Drilling Corp. ("R&R Drilling") was contracted for the 2010 diamond drilling program. R & R Drilling employed a Longyear 38 drill rig. Initially, R & R Drilling was using HQ rods and core barrel (6.3cm core diameter) for holes less than 150 metres deep and NQ rods and core barrel (4.6 cm core diameter) for deeper holes. Due to the fractured nature of the rock at the San Albino Mine area and proximity of drilling to the historical underground workings, difficulties with core recovery were experienced. Recoveries varied but on average were approximately 50%. As a result, very early in the program the Company began using HQ-3 triple tube for both short and long holes in order to improve core recovery of clay and fault gouge. This increased the average recovery to approximately 70% to 80%.
Access to the drilling areas was by existing roads and trails, which resulted in minimal environmental impact. All 5x5m drill pads were made by hand using local labour. At the end of the drilling program, reclamation of the impacted areas was performed.
Drilling Control
The collar of each drill hole was originally surveyed using a hand held GPS survey instrument. The direction of each hole was surveyed using a compass and the inclination of the hole was surveyed using an inclinometer.
After completion of each drill hole was completed the deviations in the hole, both in direction and dip, were measured using a standard single-shot clockwork Tropari downhole survey tool. Downhole surveys for dip and magnetic azimuth were made at approximately 100 metre intervals within each of the drill holes.
Core Handling, Logging, Sampling, Quality Control, and Security
Drill core was removed from the core barrel and carefully placed in marked core boxes. The boxes were marked with the respective drill hole number and box number. After each interval of drill core was placed in the box, the depth of the hole at that interval was marked on a wooden core block and placed in the box. The boxes were secured and transported to the Company's core logging facility in Jicaro.
In Jicaro, under the supervision of the Company's geologists, the core boxes were placed in consecutive order on logging tables where they were logged both geologically and geotechnically. The core was measured in each of the boxes and using the core blocks for control. The beginning depth and end depth of core in each box was noted on the outside end of the box. Core intervals were marked at one metre intervals in the box. Geotechnicians proceeded to calculate the core recovery, RQD (rock quality description), rock hardness and compressibility.
When the geotechnicians completed their logging, a geologist proceeded to log the core describing the petrography and mineralogy and measured the structures evident in the core. Upon completion of the geological description, the geologist marked the core intervals for sampling. The total length of core was sampled. In areas where there was no apparent mineralization, the sample interval was a standard two metres. In areas of vein mineralization, the sample interval varied according to geology but was seldom more than one metre. The sample interval was marked with a wax pencil and a numbered sample tag was inserted at the beginning of the interval. This number, along with the drill hole number and sample depth were recorded for reference against laboratory results. The core was then photographed for permanent record.
After the sample intervals were marked and tagged the core box was transported to the sampling facility where trained technicians, under the supervision of the geologist, cut the core in half with a rock saw. Half of the core was removed and placed into plastic sample bags in which the numbered sample tag had been placed. The sample bags were also marked with the same unique sample number. The bags were sealed with a zip tie and stored in a secure place prior to being shipped to the laboratory. The other half of the core remains in the box for future reference and archival requirements and is stored in a locked area with restricted assess within the core logging facility.
San Albino Mine area
The primary objectives of the 2010 drill exploration program were to (1) confirm and evaluate the size and grade of known mineralized zones within the San Albino Mine area and (2) test the lateral and down-dip extension of the San Albino vein mineralization. The historical San Albino Mine area contains two primary mineralized zones some 450 metres apart - the San Albino zone and the Arras/San Lorenzo zone.
A fence of nine drill holes was drilled at five sites, approximately 25 to 50 metres apart. Except for drill hole SA10-01, two holes were drilled from each drill pad; one was angled between 45 to 55 degrees and the other between 70 to 90 degrees.
The gold bearing structures strike northeast-southwest (60 degrees) and consist of quartz veins containing small amounts of galena, pyrite, sphalerite, arsenopyrite and native gold. The quartz veins lie within graphite flooded shear zones. The hanging and footwall sections of the vein consist of mineralized quartz veinlets within the graphite altered fault gouge.
The San Albino vein lies within a large shear zone of phyllites and schists. The sheared rocks are quite porous and amenable to the emplacement of gold by mineralizing fluids; thus, mineralization is often found in both the quartz vein and country rock adjacent to the vein. The Company sampled and assayed the entire length of each drill hole; however, only mineralized intervals are reported in this news release.
Historical data from the San Albino Mine was compiled and used to locate the position and orientation of the San Albino vein. Drill hole SA10-01 was designed to intersect the 400 level of the San Albino Mine in order to confirm the location of the drift and determine the elevation of the adit. The adit was intersected at a depth of 29.0 metres, where most of the vein appears to be mined out; however, significant mineralized intervals were still intersected (see table below).
Drill holes SA10-02 to SA10-05 each intersected the San Albino vein and extended the strike length of the known vein to the southwest for an additional 62 metres, to approximately 200 metres. Drill hole SA10-04 identified a new, parallel mineralized zone, approximately 86 metres below the San Albino zone.
Two holes, SA10-06 and SA10-09, were drilled to a depth of approximately 300 metres to test for additional mineralized structures situated parallel to the San Albino vein. Drill hole SA10-06 intersected a total of four highly mineralized gold zones, ending at 284.38 metres within a graphitic schist package hosting gold mineralization. The San Albino zone was intersected at 48.2 metres. The three new parallel gold zones were intersected at 128.93 metres, 247.50 metres and 268.00 metres depth, respectively. Drill hole SA10-08 was stopped short at 43.22 metres depth due to very poor recovery; however, the San Albino vein (Zone 1) was intersected. Drill hole SA10-09, drilled from same location as SA10-08, reached a depth of 284.38 metres. It intersected the San Albino zone and a second, mineralized vein believed to be Zone 2, which was initially located by drill hole SA10-04.
A cross-section (accompanying this news release) from San Albino drill hole SA10-06 to the Arras surface showing indicates that the Arras mineralized zone can be traced 450 metres down dip. The Arras zone, which has already been traced for 200 metres along strike, is open in both directions and down dip. The third intersection in drill hole SA10-06, which returned 4.0 metres of 13.67 g/t gold and 31.41 g/t silver including 0.8 metres of 42.28 g/t gold and 123.0 g/t silver, and the Arras mineralization are not only visually similar but also chemically similar in that the silver to gold ratio is approximately 2:1. Additional drilling is required to conclusively determine if in fact Zone 3 intersected beneath San Albino Mine is the down-dip extension of the Arras vein.
Detailed results from the 2010 diamond drill program are presented in tabular format below.
SA 10-01 (90 degrees) -- 53.3 metres ------------------------------------------------------------------------- Sample No From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- ZONE 1 ------------------------------------------------------------------------- 171437 27.00 29.00 2.0 0.06 177.2 ------------------------------------------------------------------------- 171438 29.00 31.00 2.0 7.72 111.5 ------------------------------------------------------------------------- 171439 31.00 32.00 1.0 4.91 7.7 ------------------------------------------------------------------------- 171440 32.00 33.00 1.0 9.18 5.0 SA 10-02 (130 degrees / 60 degrees) -- 109.71 metres ------------------------------------------------------------------------- Sample No From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- 171481 54.00 55.00 1.0 4.00 9.6 ------------------------------------------------------------------------- 171482 55.00 56.00 1.0 54.64 24.7 ------------------------------------------------------------------------- 171484 56.00 57.00 1.0 0.97 1.6 ------------------------------------------------------------------------- SA 10-03 (130 degrees / 45 degrees) -- 58.84 metres ------------------------------------------------------------------------- Sample No From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- 171554 45.12 45.73 0.61 20.42 16.9 ------------------------------------------------------------------------- 171555 45.73 47.25 1.52 6.87 17.8 ------------------------------------------------------------------------- SA 10-04 (130 degrees / 45 degrees) -- 146.91 metres ------------------------------------------------------------------------- Sample No From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- 171601 46.40 47.60 1.20 0.86 2.2 ------------------------------------------------------------------------- 171602 47.60 48.25 0.65 7.65 8.3 ------------------------------------------------------------------------- 171603 48.25 49.00 0.75 0.21 1.0 ------------------------------------------------------------------------- 171686 134.10 135.25 1.15 2.40 4.1 ------------------------------------------------------------------------- SA10-05 (130 degrees / 80 degrees) -- 79.25 metres ------------------------------------------------------------------------- Sample No From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- 171733 42.00 43.00 1.00 1.80 1.8 171737 44.00 45.00 1.00 2.30 2.4 ------------------------------------------------------------------------- SA10-06 (130 degrees / 55 degrees) -- 284.38 metres ------------------------------------------------------------------------- Sample No. From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- ZONE 1 ------------------------------------------------------------------------- 171808 48.20 48.70 0.50 24.00 40.6 ------------------------------------------------------------------------- 171809 48.70 49.20 0.50 0.52 2.1 ------------------------------------------------------------------------- 171810 49.20 49.55 0.35 3.60 3.6 ------------------------------------------------------------------------- 171811 49.55 50.25 0.70 29.06 26.0 ------------------------------------------------------------------------- 171813 50.25 50.60 0.35 61.95 32.2 ------------------------------------------------------------------------- 171814 50.60 51.30 0.70 19.84 27.4 ------------------------------------------------------------------------- ZONE 2 ------------------------------------------------------------------------- 171893 128.93 129.93 1.00 17.05 11.7 ------------------------------------------------------------------------- ZONE 3 ------------------------------------------------------------------------- 172973 247.50 248.50 1.00 9.04 7.7 ------------------------------------------------------------------------- 172974 248.50 249.70 1.20 2.94 3.7 ------------------------------------------------------------------------- 172975 249.70 250.10 0.40 40.66 58.8 ------------------------------------------------------------------------- 172977 250.10 250.50 0.40 43.89 187.2 ------------------------------------------------------------------------- 172978 250.50 251.50 1.00 8.30 15.1 ------------------------------------------------------------------------- ZONE 4 ------------------------------------------------------------------------- 171997 268.00 269.00 1.00 9.22 5.2 ------------------------------------------------------------------------- SA10-07 (130 degrees / 80 degrees) -- 219.46 metres ------------------------------------------------------------------------- Sample No. From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- 171920 25.80 26.45 0.65 8.39 12.4 ------------------------------------------------------------------------- 171921 26.45 28.00 1.55 2.95 5.9 ------------------------------------------------------------------------- SA10-08 (130 degrees /55 degrees) -- 43.28 metres ------------------------------------------------------------------------- Sample No. From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- 172065 39.62 40.12 0.50 0.96 4.9 ------------------------------------------------------------------------- 172067 40.12 41.48 1.36 7.91 8.9 ------------------------------------------------------------------------- SA10-09 (150 degrees / 55 degrees) -- 284.38 metres ------------------------------------------------------------------------- Sample No. From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- ZONE 1 ------------------------------------------------------------------------- 172086 38.90 39.30 0.40 8.21 34.7 ------------------------------------------------------------------------- 172087 39.30 41.30 2.00 39.30 21.0 ------------------------------------------------------------------------- 172088 41.30 42.23 0.93 9.50 6.1 ------------------------------------------------------------------------- 172089 42.23 42.73 0.50 9.92 12.1 ------------------------------------------------------------------------- ZONE 2 ------------------------------------------------------------------------- 172155 115.00 116.00 1.00 3.73 3.6 -------------------------------------------------------------------------
Drill Hole Location Map can be reviewed at the end of the news release.
Arras Prospect
The mineralized structure in the Arras area, situated approximately 450 metres southeast of the San Albino Mine, is believed to structurally lie underneath the San Albino mineralization.
Drilling by the previous operator, Condor Resources Plc, outlined high-grade, near surface mineralized structures some 200 metres long and open along strike in both directions, with excellent gold intercepts. This drilling was done mainly by Reverse-Circulation (RC) drilling.
The Company evaluated the previous RC results by twinning three of the earlier holes with core drilling. In vein type gold deposits, core drilling has greater accuracy in determining both grades and widths of the zones. Core drilling also provides useful geological information on the structural controls to the mineralization, which RC drilling cannot provide. RC provides larger intervals but there exists a high risk of cross-contamination if the drilling process is not done correctly. Because the drilling method, core recovery, sample sizes and sampling intervals are inevitably different, there cannot be a one-to-one comparison between the assay results of the two drilling methods. Despite this, core drilling has confirmed the existence of the mineralized zones and provided more accurate grades and widths of the zones.
The 2010 drill program at Arras has confirmed high-grade, near surface mineralization. The silver to gold ratio is roughly 2.5:1 at Arras, as compared to the 1:1 silver to gold ratio received from drilling at the San Albino Mine area.
A total of five diamond drill holes were completed at the Arras prospect. Drill holes AR10-01, AR10-03, AR10-04 and AR10-05 all intersected the Arras zone mineralization. Drill hole AR10-02 was collared in the same location as AR10-01; however, due to drilling difficulties encountered the hole was terminated before it reached the mineralized zone.
Only mineralized intervals intersected at the Arras prospect are presented below:
AR10-01 (130 degrees /90 degrees) -- 85.50 metres ------------------------------------------------------------------------- Sample No. From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- 172298 80.77 81.40 0.63 2.58 8.9 ------------------------------------------------------------------------- 172299 81.40 82.10 0.70 0.09 2.7 ------------------------------------------------------------------------- 172300 82.10 83.25 1.15 31.51 83.6 ------------------------------------------------------------------------- 172301 83.25 84.00 0.75 1.47 1.4 -------------------------------------------------------------------------
Drill hole AR10-01 twinned Condor's reverse circulation hole SARC021 which intersected 4.0 metres of 16.3 g/t gold. The drill hole intersected the Arras mineralized zone at a depth of 80.77 metres. Core logging and assay results revealed that the mineralized zone and quartz veining are narrower than as reported by Condor.
AR10-02 (130 degrees /60 degrees) -- 90.83 metres
Drill hole AR10-02 was collared in the same location as AR10-01; however, due to drilling difficulties encountered the hole was terminated before it reached the mineralized zone. There was no quartz veining or visible mineralization intersected in AR10-02; however, assay results indicate two separate zones of anomalous gold, silver and zinc values within schists at depths projected by AR10-01.
AR10-03 (130 degrees /90 degrees) -- 21.34 metres ------------------------------------------------------------------------- Sample No. From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- ZONE 1 ------------------------------------------------------------------------- 172350 0.00 1.52 1.52 0.16 14.8 ------------------------------------------------------------------------- 172351 1.52 2.74 1.22 5.90 18.1 ------------------------------------------------------------------------- 172352 2.74 4.88 2.14 21.43 47.3 ------------------------------------------------------------------------- ZONE 2 ------------------------------------------------------------------------- 172355 7.92 9.14 1.22 8.78 21.1 ------------------------------------------------------------------------- ZONE 3 ------------------------------------------------------------------------- 172357 15.85 16.76 0.91 1.22 4.8 -------------------------------------------------------------------------
Drill hole AR10-03 twinned Condor's reverse circulation hole SARC013 which returned 4 metres of 28.2 g/t gold.
AR10-04 (130 degrees /55 degrees) -- 25.91 metres ------------------------------------------------------------------------- Sample No. From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- 172361 6.10 7.62 1.52 3.11 32.8 ------------------------------------------------------------------------- 172362 7.62 10.67 3.05 10.92 26.6 ------------------------------------------------------------------------- 172363 10.67 13.72 3.05 3.11 6.7 ------------------------------------------------------------------------- 172364 13.72 16.76 3.04 0.74 5.3 -------------------------------------------------------------------------
Drill hole AR10-04 was design to twin reverse circulation hole SARC05 which returned 4 metres of 17.9 g/t gold. The drill hole had very poor core recovery. Samples were taken between footage blocks.
AR10-05 (132 degrees /55 degrees ) -- 21.34 metres ------------------------------------------------------------------------- Sample No. From (m) To (m) Length (m) Gold (g/t) Silver (g/t) ------------------------------------------------------------------------- ZONE 1 ------------------------------------------------------------------------- 172365 0.00 1.83 1.83 1.63 11.3 ------------------------------------------------------------------------- 172366 1.83 2.44 0.61 0.22 7.1 ------------------------------------------------------------------------- ZONE 2 ------------------------------------------------------------------------- 172377 12.20 13.72 1.52 3.61 9.5 -------------------------------------------------------------------------
Drill Hole Location Map can be reviewed at the end of the news release.
Trenching Program
The Company conducted additional evaluation of the area around San Albino Mine Area. An examination of old Spanish workings and trenches where the previous operator sampled high grade gold mineralization was also completed. Grab samples were taken from these areas to confirm the presence of gold and silver mineralization. Approximately 200 metres south east of the San Albino Mine, the trace of the El Naranjo vein was recognized at the mouth of the El Naranjo tunnel, old Spanish pits and mine dumps. A trench location map is provided at the end of the news release.
Old Mill Site
An ore dump located above the old mill site and several old Spanish workings situated approximately 400 meters north-east of the San Albino Mine were examined. Five hand trenches were dug over the ore dumps and across the trace of the 60 degrees structures for a total of 60 metres. In all, 53 one metre channel samples were collected from these trenches and sent to the Inspectorate America Corporation ("Inspectorate") preparation facility for gold assay.
Samples with only increased gold values from the old mill site trenching are presented below:
Sample # Description Type of Sample Width (m) Au (g/t) Ag (g/t)
---------------------------------------------------------------------------
171148 Trench 1,vertical at channel 0.60 19.22 18.40
beginning of
trench
---------------------------------------------------------------------------
171147 Trench 1, bottom, end channel 1.0 7.15 3.50
of trench
---------------------------------------------------------------------------
171149 Trench 1, vertical at channel 0.60 20.08 17.80
end of trench
---------------------------------------------------------------------------
171171 Trench 2, vertical at channel 0.68 1.76 5.70
beginning of
trench
---------------------------------------------------------------------------
171167 Trench 2, 8 metres channel 1.0 0.49 1.40
along bottom of
trench
---------------------------------------------------------------------------
171168 Trench 2, 9 meters channel 1.0 7.10 16.50
along bottom of
trench
---------------------------------------------------------------------------
171169 Trench 2, 10 metres channel 1.0 15.02 26.3
along bottom
of trench
---------------------------------------------------------------------------
171170 Trench 2, 10.6 metres channel 0.6 10.29 22.30
along bottom
of trench
---------------------------------------------------------------------------
171172 Trench 2, vertical at channel 0.68 2.60 5.50
end of trench
---------------------------------------------------------------------------
San Albino (Naranjo) Trenching Program
At the San Albino Mine area eight trenches were completed. The trenches were designed to test the surface trace of the San Albino vein system, situated on the eastern slope of the San Albino hill. The area of trenching lies above the El Naranjo high-grade mineralized vein and is surrounded by historical Spanish surface workings. The hand dug trenches are spaced approximately 50 metres apart, averaging 20 metres in length, 1.8 metres in depth and 80 centimetres in width. A total of 94 channel samples, ranging from one to two metres in length, were collected.
The channel samples are 5 centimetres wide, cut along the trench wall and oriented perpendicular to the strike of the vein and/or shear zone. Continuous channel samples were chiseled and collected in one and two metre intervals for the entire length of each trench. Sample intervals were selected according to geologic contacts and visible mineralization, placed into a sample bag, and shipped to the Inspectorate assay lab for quantitative analysis of select elements.
Many of the trenches did not reach bedrock and overburden samples were collected. In four of the trenches the Company intersected significant gold values representative of the mineralized system. In trench #5, the Company intersected 3.0 metres of continuous mineralization averaging 7.11 g/t gold and 15.70 g/t silver.
The most significant assay results from trenching are presented in the following table:
Table of San Albino (Naranjo) Trench Results:
Assay
Results
Sample Sample Au Ag
Sample # Location Type Description (g/t) (g/t)
-------------------------------------------------------------------------
171036 San Albino- Channel Bedrock not reached, 3.10 2.50
Trench Sample - 2m overburden
No SAT1/526-
10
-------------------------------------------------------------------------
171047 San Albino- Channel Bedrock not reached, 1.77 2.00
Trench Sample - 2m overburden
No SAT2/529-
10
-------------------------------------------------------------------------
San Albino- Channel Quartz vein, 10.79 9.10
Trench Sample - 2m manganese, and iron
171214 No SAT4/531- oxide
10
-------------------------------------------------------------------------
San Albino- Vertical Schists intruded by 3.15 2.40
Trench Channel quartz veinlets,
No SAT4/531- Sample - contain limonite,
171217 10 1.8m hematite and
graphite.
-------------------------------------------------------------------------
171226 San Albino- Channel Phyllites intruded 2.27 2.70
Trench Sample - 1m with quartz veinlets
No SAT5/603-
10
-------------------------------------------------------------------------
San Albino- Channel Phyllites intruded 17.89 43.00
Trench Sample - 1m by
171227 No SAT5/603- quartz veinlets with
10 Fe-oxide, hematite,
Fe-oxide, hematite,
scorodite
-------------------------------------------------------------------------
171228 San Albino- Channel Milky quartz vein 1.18 1.40
Trench Sample - 1m
No SAT5/603-
10
-------------------------------------------------------------------------
San Albino- Channel Phyllites intruded 1.37 1.40
Trench Sample - 1m by
171236 No SAT5/603- quartz stringers
10 with
hematite
-------------------------------------------------------------------------
Sample Preparation, Analysis and Security
All samples were placed into marked and sealed sample bags, trucked by the field manager for Nicaragua to Managua where they were then shipped by DHL courier to Inspectorate's Guatemala laboratory, a preparation facility of Inspectorate, a certified USA based laboratory. While in Nicaragua, the samples were under the direct control of the Qualified Person and/or the Company's field manager.
The samples were crushed to -10 mesh, then split to 500 gram sample and couriered via DHL to Inspectorate's analytical laboratory in Richmond, British Columbia, Canada. The 500 gram samples were analyzed for gold using metallic screen preparation and fire analysis methods and for silver and 30 elements by using Inductively Coupled Plasma Spectroscopy (ICP).
Method of Metallic Gold Analysis by Fire Assay
Due to the coarse nature of gold mineralization, all gold analyses were completed using 500 gram metallic screen separation and fire assay analysis. This analytical technique mitigates to a certain extent the nugget effect of coarse gold. However, the Company recognizes that there is not a very good duplication of results. A nugget effect problem exists.
Sample prep:
a. Samples are dried and crushed to -10 mesh, riffle split to 500 grams and
pulverized, the coarse fraction is then screened out by using a 150 mesh
size screen. The entire +150 mesh and two and sometimes three portions
of minus fraction (30 grams each) are assayed separately and a combined
total gold in grams is calculated based on the weight of both fractions.
Fire assays:
b. Entire portion of +150 mesh pulp samples and 30 grams of -150 mesh pulp
sample were weighed into separate fusion pot with chemical fluxes such
as lead oxide, sodium carbonate, borax, silica flour, baking flour or
potassium nitrate, after the sample and fluxes had been mixed
thoroughly.
c. The sample was then charged into a fire assay furnace at 2000 degrees F
for one hour, at this stage, lead oxide would be reduced to elemental
lead and slowly sunken down to the bottom of the fusion pot and
collected the gold and silver along the way.
d. After one hour of fusion, the sample was taken out and poured into a
conical cast iron mould. The elemental lead which contained precious
metals would stayed at the bottom of the mould and any unwanted
materials called slag would floated on top and removed by hammering, a
"lead button" is formed.
e. The lead button was then put back in the furnace onto a preheated cupel
for a second stage of separation, at 1650 degrees F, the lead button
became liquefied and absorbed by the cupel, but gold and silver which
had higher melting points would stayed on top of the cupel.
f. After 60 minutes of cupellation, the cupel was then taken out and
cooled, the concentration of gold in dore bead is determined by
gravimetric method and/or volumetric method to assure total recovery.
g. Gravimetric determination - the dore bead is transferred into a
porcelain cup, the silver content is dissolved in HNO3 acid on hotplate
and removed, the gold content is annealed, let cooled and then weighed.
h. Volumetric determination - the dore bead is transferred into a test tube
and digested with acids in hot water bath. The gold in solution is
determined by using Atomic Absorption Spectrometer by comparing with a
set of gold standard solutions. The total gold value, are calculated
based on results from both plus and the average of minus portions and
back calculated based on original sample weight.
Method of 30 element analysis by Aqua Regia digestion/ICP
a. 0.50 grams of sample is digested with diluted Aqua Regia solution by
heating in a hot water bath, at about 95 Celsius for 90 minutes, then
cooled and bulked up to a fixed volume with de-mineralized water, and
thoroughly mixed. Digested samples are let settled over night to
separate residue from solution.
b. The specific elements are determined using an Inductively Coupled Argon
Plasma spectrophotometer.
All elements are corrected for inter-element interference. All data are subsequently stored onto computer diskette.
Quality Assurance and Quality Control
All gold analyses are 500 gram metallic screen assays. While the laboratory has gold standards for the actual chemical analysis, it is often difficult to acquire 500 gram coarse commercial standards. This problem was resolved by using a duplicate sample from every tenth sample tested to provide a blind copy for analytical control. This treatment assists in measuring the nugget effect problem associated with this coarse gold type of mineralization. Subsequent to completion of the 2010 drill program, a source of a barren rock to be used as blanks in the analytical process has been located. Now, every tenth sample will be either a duplicate or a blank.
The ICP Spectrometer analysis is first calibrated using three sets of Certified Standards and a blank. The test samples are then run in batches. A batch of samples consists of 38 or less. An in-house standard and an acid blank are placed in front of each set, which are both digested along with the samples. A known standard with characteristics best matching the samples is chosen and placed after every fifteenth sample, and again at the end of every batch. Every 20th sample is re-assayed using a new sample cut, weighed, digested placed at end of the batch. The results from these know standards are closely examined to detect any calibration drift.
Legal Survey
A geodetic survey was completed in the mid October, 2010. The instrument used was a Leica SR20 Single Frequency Survey Instrument. This instrument is a differential GPS unit which uses a base station unit to provide millimetre control. All Property boundary survey points were marked with a labeled concrete monument and metal pin. Drill hole collars were surveyed as well. A concrete monument with metal pin also marked the entrances to the various tunnels on the Property. The data was processed using Leica Geo Office software. Topographic survey data has been collected in UTM coordinates using the WGS 84 datum. Control point was established which will be used in future as a local survey point.
Qualified Person
John M. Kowalchuk, P.Geo, a geologist and qualified person (as defined under NI 43-101) has reviewed the technical information contained in this news release.
On behalf of the Board,
Kim Evans, CGA, President & CEO
About Golden Reign:
Golden Reign Resources Ltd. is a publicly listed (TSX VENTURE: GRR) mineral exploration company engaged in exploring the San Albino-Murra Property located in Nueva Segovia, Nicaragua. Held under a 25 year mining license expiring February 3, 2027, the property covers an area of 8,700 hectares (87 sq km).
The Company has outlined a structural corridor approximately 3 kilometres wide by 15 kilometres long, which spans the Property, stretching from Las Conchitas in the south to the northeast mining town of Murra. Old workings exist along the corridor. The San Albino Mine flanks the northwestern edge of this structural trend.
Under the terms of the option agreement, the Company may acquire an 80% interest in the Property over a four year period by making cash payments totalling US$450,000, issuing 4,000,000 common shares from treasury and incurring aggregate exploration expenditures of US$5,000,000.
Nicaragua, a mining-friendly jurisdiction, is situated in the Central American Gold Belt, which extends from Costa Rica in the south to Guatemala in the north. Within this prolific gold belt, estimates of historical production total more than 20 million ounces.
For additional information please visit our website at www.goldenreign.com and SEDAR www.sedar.com.
To view the maps associated with this press release, please click on the following link: http://media3.marketwire.com/docs/grr39m.pdf
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Contacts:
Golden Reign Resources Ltd.
Kim Evans, CGA
President & CEO
(604) 685-4655 or Toll Free: 1-888-685-4655
(604) 685-4675 (FAX)
www.goldenreign.com
