Corvus Starts Alaska exploration, gets Mayflower Permit

Mr. Jeff Pontius reports


Corvus Gold Inc. has started exploration activities on its Alaskan projects. The company’s Alaskan joint venture partners have indicated that significant exploration work, including drilling, is planned for both the West Pogo and Terra properties this summer, with a surface program anticipated on the Chisna property. This work is part of the 2012 partner-financed Alaskan exploration programs required under the company’s existing joint venture agreements, and should significantly advance these properties.

In addition, the company has been notified by the Nevada Bureau of Mining Regulation and Reclamation that the permit for the expanded exploration- and development-related work on the private lands within the North Bullfrog project has been approved. Accordingly, drilling on the Mayflower deposit will begin shortly. Work at the Mayflower deposit will include the necessary engineering work and resource definition required for a completion of a feasibility study. Phase 2 drilling on the federal land portion of the North Bullfrog project, where recent exploration success outlined a potential high-grade feeder zone (see news release dated May 23, 2012) as well as resource expansion potential (see news release dated Feb. 29, 2012), is expected to start in the fall of 2012, subject to drill permit issuance.

Jeff Pontius, chief executive officer, stated: “The start of our joint venture exploration programs in Alaska is an exciting next step in advancing these new gold discoveries using partner financing while Corvus stays focused on moving our Nevada project toward anticipated production. Corvus’s Alaskan projects represent significant downstream growth potential for the company for both major new gold discoveries and to augment our future anticipated production profile. The timely Mayflower permit approval will allow the company to rapidly move the project to feasibility completion by early next year. This program will not only allow the completion of key development work, but also exploration to assess the expansion potential of the deposit. It is truly an exciting time for Corvus.”

Alaska programs

Joint venture partner Alix Resources Corp. has informed the company that it will be mobilizing a core rig to the joint venture area in the second half of June, and that it intends to initially drill two holes on the West Pogo claim block this summer. The Alix program will be following up on untested structurally related gold targets developed by Alix geologists from work on adjacent properties that are now part of the joint venture.

Westmountain Index Advisors Inc. (WIA), which has joint ventured the Terra property, has informed the company that it will be opening the Terra camp in late June, and is mobilizing a core drill together with mining and excavation equipment to Alaska in June, with the intention of completing the mill installation and commencing initial operation with stockpiled material, as well as beginning the construction of the road from the Terra camp to the main mining area (Ben vein). Diamond drilling will focus on the continued extension of the Ben vein to the north, as well as infilling the additional 200 metres of vein extension delineated in 2011 (see news release dated Dec. 6, 2011).

Ocean Park Ventures Corp. (OCP), which has joint ventured the Chisna property, has not finalized its exploration program for the summer, but has indicated to the company that it will be limited in scope as necessary to fulfill its remaining 2012 work commitment.

About the West Pogo gold project

Alix optioned the 24-square-kilometre West Pogo claim block in February, 2012, and, under the terms of the option agreement, can earn a 60-per-cent interest in the property by incurring expenditures of $5-million (U.S.) over five years. Corvus has reserved a 2- to 3-per-cent net smelter return (NSR) royalty on the project, with Alix having the right to purchase 1 per cent for $1-million (U.S.) (see news release dated March 5, 2012).

The West Pogo project is located approximately five kilometres to the west of Sumitomo Metals Corp.’s Pogo gold mine. The Pogo mine road and power line pass through the West Pogo property, providing easy access to the property. At West Pogo, there is the potential to discover high-grade gold mineralization in both steeply and shallowly dipping structural zones. Surface mapping and sampling in 2011 identified two more-than-one-kilometre-long east-west-trending zones of alteration and mineralization on the property. Mineralization is associated with zones of sericite-dolomite alteration in the host quartz monzonite and with silica-flooded breccias, which have produced grab samples with up to 118.5 grams per tonne gold. One north-south-oriented shallow hole drilled in 2003 encountered broad zones of gold mineralization in altered quartz monzonites, but missed breccia-style mineralization. In 2011, a 3-D induced polarization survey covering five square kilometres over the main alteration zones highlighted a series of northwest-trending cross-structures, which may be the control on the high-grade mineralization, thus explaining why the original drill hole missed the high-grade zone.

About the Terra project

Terra Gold Corp. (Terra Alaska), a subsidiary of WIA, is Corvus’s joint venture partner on the Terra project. Terra Alaska has the right to earn a 51-per-cent interest in the Terra gold project from Corvus by spending a total of $6-million (U.S.). Terra Alaska can further increase its ownership to 80 per cent with an additional $3.05-million (U.S.) investment, bringing its capital investment to a total of $9.05-million (U.S.) over a four-year period, with the 2012 work commitment being approximately $1-million (U.S.).

The Terra gold project is a high-grade gold vein system with a current National Instrument 43-101 inferred resource of 428,000 tonnes at 12.2 g/t gold (using a cut-off grade of five g/t gold) for contained metal content of 168,000 ounces. The project’s primary focus is the Ben vein, where 28 drill holes completed to date have returned 111 vein intersections of over three g/t gold. Initial metallurgical work has indicated a high recovery rate via gravity circuit, illustrating potential for near-term production. Given the high-grade nature of the gold veins, coupled with the favourable mining configuration and gravity recovery characteristics, the deposit may be amenable to near-term gold production. Further information on the Terra project can be found at Corvus’s website.

About the Chisna project

The Chisna project is focused on a new and emerging Alaskan gold and copper-gold porphyry belt of deposits with copper and gold mineralization associated with mid-Cretaceous intrusions of similar age to the Pebble deposit to the west and the Orange Hill deposit to the east. At present, the Chisna project consists of approximately 232,000 acres of Alaska State mining claims and land leased from Ahtna Corp. The Chisna property has good infrastructure as it sits between two major highways, has access to grid power and has an extensive winter road network, making this a unique development setting in Alaska.

Corvus and its predecessor in title, International Tower Hill Mines Ltd., began exploration on the project in 2006 and discovered the Grubstake porphyry copper system in 2007. Since 2010, the Chisna project has been operated as a joint venture between Raven Gold Alaska Inc. (a subsidiary of Corvus) and Ocean Park Alaska Corp. (OCPA) (a subsidiary of OCP), with OCPA having the right to earn a 51-per-cent interest by incurring $20-million (U.S.) in exploration expenditures over a five-year period, thereby providing Corvus with a no-cost assessment of this belt. OCPA may earn an additional 19 per cent by producing a bankable feasibility that delineates a mining project on the Chisna property that produces at least 300,000 gold equivalent ounces per year.

About the North Bullfrog project, Nevada

Corvus, through Corvus Gold Nevada Inc., controls 100 per cent of the North Bullfrog project, which covers approximately 43 square kilometres in southern Nevada, just north of the historic Bullfrog gold mine, formerly operated by Barrick Gold Corp. The property package is made up of a number of leased, patented federal mining claims and 461 federal unpatented mining claims. The project has excellent infrastructure, being adjacent to a major highway and power corridor. The company and its independent consultants completed a robust positive preliminary economic assessment on the existing resource in February, 2012.

The project currently includes numerous prospective gold targets, with four (Mayflower, Sierra Blanca, Jolly Jane and Connection) containing a National Instrument 43-101 estimated indicated resource of 15 million tonnes at an average grade of 0.37 g/t gold for 182,577 ounces of gold, and an inferred resource of 156 million tonnes at 0.28 g/t gold for 1,410,096 ounces of gold (both at a cut-off of 0.2 g/t), with appreciable silver credits. Mineralization occurs in two primary forms: (i) broad, stratabound bulk-tonnage gold zones such as the Sierra Blanca and Jolly Jane systems; and (ii) moderately thick zones of high-grade gold and silver mineralization hosted in structural feeder zones with breccias and quartz-sulphide vein stockworks, such as the Mayflower and Yellowjacket targets. The company is actively pursuing both types of mineralization.

A video of the North Bullfrog project showing location, infrastructure access and 2010 winter drilling is available on the company’s website.

Qualified person and quality control/quality assurance

Jeffrey A. Pontius (CPG 11044), a qualified person as defined by National Instrument 43-101, has supervised the preparation of the scientific and technical information (other than the Terra and North Bullfrog resource estimates) that forms the basis for this news release, and has approved the disclosure herein. Mr. Pontius is not independent of Corvus, as he is the CEO and holds common shares and incentive stock options.

Gary Giroux, MSc, PEng (British Columbia), a consulting geological engineer employed by Giroux Consultants Ltd., has acted as the qualified person, as defined in National Instrument 43-101, for the Giroux Consultants Ltd. mineral resource estimates at both Terra and North Bullfrog. He has over 30 years of experience in all stages of mineral exploration, development and production. Mr. Giroux specializes in computer applications in ore reserve estimation, and has consulted both nationally and internationally in this field. He has authored many papers on geostatistics and ore reserve estimation, and has practised as a geological engineer since 1970 and provided geostatistical services to the industry since 1976. Both Mr. Giroux and Giroux Consultants Ltd. are independent of the company under National Instrument 43-101.

The company’s assay quality assurance/quality control program at North Bullfrog was designed and is supervised by Russell Myers (CPG 11433), president of Corvus. On-site employees at the project log and track all samples prior to sealing and shipping. Quality control is monitored by the insertion of blind certified standard reference materials and blanks into each sample shipment. All resource sample shipments are sealed and shipped to ALS Chemex in Reno, Nev., for preparation, and then on to ALS Chemex in Reno, Nev., or Vancouver, B.C., for assaying. ALS Chemex’s quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025:1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Finally, representative blind duplicate samples are forwarded to ALS Chemex and an ISO-compliant third party laboratory for additional quality control.

We seek Safe Harbor.