South Grass Valley Carlin-Type Gold Project

RENO, NV - Nevada Exploration Inc. (NGE) reported on the exploration program at its South Grass Valley Carlin-type gold project. Current drill hole SGVC013 has entered Paleozoic “lower-plate” bedrock, and is currently at 630 meters drilling through the Goodwin Formation towards the Clm unit that hosts the Company’s primary East Golden Gorge target. SGVC013 appears to currently be drilling through the Water Canyon structural corridor, the sampling of which is an important objective for the drill hole. Drilling was halted for two weeks due to technical and mechanical issues that have now been resolved. During January, the Company finished a 50-square-kilometer passive-seismic geophysical survey, the data from which will be analyzed with the goal of improving the structural resolution of NGE’s geologic model at the Project.

NGE President and CEO, James Buskard, said, “Drilling conditions in these Carlin systems are generally difficult, and SGVC013 has provided some particular challenges around the bedrock contact. Our drilling partner Drill NV has been able to get through this zone, and we’re now into lower plate drilling through the Goodwin Formation - the formation that sits above what we believe to be the Hales Formation, which contains our Clm host unit.

We’re still relatively high in the stratigraphy compared to where we expect to encounter the Clm unit; however, this hole was purposely located along the projection of the Water Canyon structural corridor to collect important information about this feature, which we believe represented the primary source of mineralized hydrothermal fluids into the district. As we would expect this close to a district-scale corridor, we’re seeing extensive fault-related damage zones, as well as tectonic brecciation, known to provide important rock preparation that can improve grades within deposits.   There is still a ways to go until we’re down to the targeted unit, though we’re pleased that the initial indications suggest we’ve reached, and are in fact currently drilling through, our projected corridor.

These early holes of our Phase 3 drilling program continue to validate our exploration model, and as we’ve shared, our job is to now identify potential traps within this large Carlin-type mineral system that could have concentrated the gold, which we know are often structurally related. With the objective of potentially providing new data to improve the structural resolution of our geologic model, we’ve agreed to participate in an academic and industry research collaboration to look at the use of passive-seismic geophysics in Carlin-type systems. With our partners, we laid out a program at South Grass Valley designed to use the seismic energy generated at Cortez to the north to activate the array of sensors. The sensors were deployed in December and retrieved in January, and the data is now being sent to our industry partner for processing.

As this is a new application for the method, we will be reviewing the data outputs in terms of what questions they can answer, though based on what we know about how the method has worked in other settings, we’re optimistic that we should get some good top of bedrock information, which could be helpful in mapping the surface projection of important high-angle structural features.   Beyond mapping the bedrock surface, we’re also hoping to see contrast that can improve our understanding of how the Water Canyon structural corridor passes through the district. From a research perspective, what will be most interesting is if the method is able to recognize differences in bedrock related to fluid pathways or alteration associated with hydrothermal fluid flow, which is the mechanism that brings gold into these districts. Once we begin to see the preliminary outputs, we look forward to sharing more about the program.”