Omineca Releases Technical Report

Cranbrook, BC; 07 March, 2016: Omineca Mining and Metals Ltd. (TSX-V:OMM) is pleased to announce the completion of a technical report of the Wingdam placer gold  project  prepared by Charles C. Downie, P.Geo. and Neil MacDonald BASc. This is not a Technical Report as required under Section 4 of NI 43-101, and as such it does not follow the form for Technical Reports as stipulated under Section 4.3 of NI 43-101. Mr. Downie is considered a non-independent Qualified Person as defined under NI 43-101. Mr. MacDonald is also considered non-independent and is not a qualified person under NI 43-101. The report includes information compiled from public sources and also information generated by Omineca and its’ wholly owned subsidiary company, CVG Mining Ltd. (“CVG”).

Since acquiring control of CVG and the Wingdam project in late 2013, Omineca Mining and Metals has focused on developing a viable mine plan to bring the Wingdam Project into production. This work has built upon the successful bulk-sample completed by CVG in 2012.  

The potential quantity and grade of the Wingdam Deep Lead Channel gravels are conceptual in nature, and there has been insufficient exploration to define a mineral resource. Any economic analyses or economic assessment referred to in the Technical Report on the Wingdam Property and in this News Release are preliminary in nature and are based on inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that further exploration will result in any portion of the project being delineated as a mineral resource or that the preliminary economic assessment will be realized.

In 2012, CVG successfully demonstrated the use of ground-freezing techniques to safely complete a 2.44m x 2.44 x 23.5m long drift across the Wingdam Paleo-Channel true width, extracting 173.495 ounces of coarse placer gold with a 909 Au fineness (90.9% purity) and 82 Ag fineness. “The refined-equivalent gold grade across this width amounted to 34.55 g/m3 or 0.453 oz/tonne.” (S. Kocsis 43-101 Technical Report, Oct, 2012). The bulk-sample grade closely corroborated the historical grades reported in churn drill holes completed in the vicinity of the bulk sample. Omineca has not been able to independently verify the methodology and results from historical work programs at the Wingdam. However, management believes that the historical work programs on the Wingdam Property have been conducted in a professional manner and the quality of data and information produced from them are relevant.

In 2014, the company systematically reviewed all historical work on the project and submitted an application to amend its mining permit to allow the Company to conduct additional drilling and geophysical work and test mine an initial 300m of the Wingdam Paleo-Channel.  This amendment was granted in January 2015, and the project is now permitted for production. (OMM NR January 23, 2015).

In the spring of 2015, the Company completed a field program of geotechnical drilling and seismic refraction geophysics (OMM NR April 20, 2015). A 3D model of the gold-bearing channel was subsequently developed from this drill data and seismic interpretation.  The model shows a mineable channel area approximately 60 percent greater than indicated by historical channel profiles and also indicates a series of depressions along the channel which are postulated to be potential natural traps for placer gold during deposition of the gravels. Additionally, the Company recovered representative core samples which were analyzed to determine frozen material characteristics, the results of which have now been incorporated into a detailed ground-freezing plan. 

Omineca has also thoroughly investigated other project parameters including power options, mining methods and equipment and ground-water control strategies, all culminating in the completion of a detailed mine plan together with a sophisticated financial model of the proposed operation.

Based on this work, Omineca Management is confident that the Wingdam project development has reached a stage of readiness for initial production with all permitting in place to mine an initial 300m of Paleo-Channel. The model projects that the Phase 1 operation should yield ~21,000 refined Au-equivalent (“Re-Au-Eq”) ounces from ~23,000 mined placer ounces at a production cost of ~CDN$790 per Re-Au-Eq ounce. 

The key base case assumptions used in the model were:

1.    a placer gold grade of 3.0 oz per m2 of channel bottom which was the grade and fineness demonstrated in CVG’s bulk sample (Kocsis, 2012) and also the average grade reported in the historical churn drill holes in the vicinity of the 1st phase mining,
2.    a pay gravel area of 7,747 m2 (with an average channel width of 23.82m) calculated from the results of the 2015 seismic refraction bedrock model,
3.    a placer gold fineness of 909 Au and 82 Ag as determined by ALS Laboratory analysis conducted using gold recovered from CVG’s bulk, and 
4.    a gold price of US$1,200 (CDN$1667 at a 0.72 exchange rate) and a silver price of US$15.00 (CDN$20.83).    

To evaluate the potential amount of contained placer gold in the pay gravels of the approximately 2,100 meters of channel upstream and downstream of the Phase 1 channel area, management use the following key assumptions: 

1.    a placer gold grade of 2.445 oz per m2 calculated by first averaging the grade of historical holes that intersected the pay gravels on each of 8 historical channel cross sections and then taking the weighted average of each of these section grades, accounting for the distances between each section both upstream and downstream of the Phase 1 channel area, and
2.    projecting the Phase 1 average pay gravel channel width of approximately 25.8 m to determine the pay gravel area upstream and downstream of Phase 1 channel.

These assumptions resulted in an estimated 132,000 placer ounces in addition to the estimated 23,000 placer ounces estimated to be contained in the Phase 1 channel area.

At a gold price of CDN$1,600 per ounce,  and allowing for an estimated CDN$2 million mine decommissioning costs, management projects that the Wingdam mine should produce a total of approximately 155,000 troy ounces of placer gold (142,000 Re-Au-Eq Ounces) at an average cost of approximately CDN$940 per Re-Au-Eq Ounces.  

The potential quantity and grade of the Wingdam Deep Lead Channel gravels are conceptual in nature, and there has been insufficient exploration to define a mineral resource. Any economic analyses or economic assessment referred to in the Technical Report on the Wingdam Property and in this News Release are preliminary in nature and are based on inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that further exploration will result in any portion of the project being delineated as a mineral resource or that the preliminary economic assessment will be realized.

With the recent increase in gold price to levels above CDN$1,500 per ounce and detailed engineering and site-specific studies completed, the Company has now shifted its attention to the raising the project financing required to begin production at Wingdam.  

About Omineca Mining and Metals Ltd.

Omineca Mining and Metals Ltd. controls a 100% interest in the Wingdam Project through its wholly owned subsidiary CVG Mining Ltd.  The 2700 ha Wingdam Project is located 45 km east of Quesnel, B.C. on the Barkerville Highway and provides a unique opportunity for Omineca to develop near-term placer gold production in a proven mining district. The property overlies both placer and hard-rock tenures along the Lightning Creek valley, where topographic conditions have created a deep overburden accumulation which effectively resulted in a large portion of the channel being excluded from conventional surface placer mining activity. This has left a deep paleo-channel containing undisturbed gold-bearing gravels.  On the Wingdam property, drilling and previous geophysical surveys indicate that the paleo-channel may occur throughout the entire 2.4km length of the Wingdam placer tenures, extending upstream and downstream an undetermined distance. Numerous attempts have been made to mine the paleo-channel at Wingdam since the late 1880s, but all were hampered by an influx of water and unstable ground conditions and were ultimately abandoned.  Omineca intends to utilize recent technological advances in mining to unlock the value of the Wingdam placer gold. 

The abundance and physical nature of the placer gold recovered in a bulk-sample extracted by CVG Mining Ltd. in 2012 indicates that it is in part, locally derived. Little or no systematic exploration work has been carried out on the property to test for the occurrence of lode gold, leaving excellent potential for the exploration and possible discovery of in-situ (hard-rock) gold mineralization in addition to the presence of a proven placer deposit.  

The Wingdam project received final permitting in January, 2015 to conduct Phase One testing along a 300m drift length, with potential for expansion contingent on favourable results

C.C. Downie, P.Geo., has reviewed and approved the technical content of this news release and is hereby identified as the “Qualified Person” under NI 43-101. 

Omineca Mining and Metals management cautions that it has been unable to independently verify the results of past historical work on the Wingdam Property. Management believes that that the historical work programs on the Wingdam Property have been conducted in a professional manner and the quality of data and information produced from them are relevant. 

On behalf of the Board of Directors

“Charles C. Downie” P.Geo.
President

For further information on OMM, please contact Mike Labach at 1 866 HUNT ORE (486 8673)
Email: mgl@ominecamining.com or visit our website at http://www.ominecamining.com

 

Cautionary Note Regarding Forward-Looking Statements

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.