Corvus Gold rallies as it expands resource estimate for North Bullfrog

Alaska and Nevada-focused resource company Corvus Gold (TSE:KOR)(OTCQX:CORVF) Monday increased its resource estimate for the 100%-owned North Bullfrog project in Nevada, reflecting a major new discovery in the northern part of the property, which is composed of three deposits separated by large undrilled areas.

The company said some of the resource areas contain higher grade resources as well as high-grade vein systems which could be targets for early mining.

Investors cheered the news, sending the stock up 9% at 57 cents as at 9.50 am EDT.

Corvus said the updated independent estimate expanded the wide indicated gold resource to 182,000 contained ounces at an average grade of 0.37 grams per tonne (g/t), plus an additional inferred gold resource of 1.41 million contained ounces at an average grade of 0.28 g/t, both at a cutoff grade of 0.20 g/t gold.

In September 2010, Corvus said North Bullfrog had an NI 43-101 compliant estimated indicated gold resource of 57,086 contained ounces at an average grade of 0.88 g/t, plus an additional inferred gold resource of 23,793 contained ounces at an average grade of 0.78 g/t, both at a cutoff grade of 0.5 g/t gold.

Corvus CEO, Jeff Pontius, said: "In addition to its increased size, the new resource is dominantly oxidized rock which has shown high gold recoveries in initial bottle roll tests.

"These early positive metallurgical results are currently being followed up with large diameter column tests which will help evaluate the potential for low cost run of mine, heap leach processing for gold extraction."

"The metallurgical results coupled with a geometry which may allow a very low strip ratio greatly enhance the project's development potential.

"The North Bullfrog project is truly emerging as a major catalyst for the future evolution of Corvus into a premier North American gold company."

The company said it has began acquiring the necessary information required for the completion of a Preliminary Economic Assessment, as well as the permitting of a major follow up resource expansion drilling program, which will focus on both the bulk tonnage and high-grade vein potential of the project.

Corvus is due to file a full NI 43-101 compliant resource report by November 11.

Corvus said Monday's resource update was focused on four of several targets in the North Bullfrog District, all of which remain open with the potential to grow significantly.

The primary host unit for the majority of the resource is a thick, oxidized, shallowly dipping volcanic unit which is commonly exposed at surface, thereby offering the potential for a very low strip ratio, the company said.

The continuity of the mineralization is considered to be good, with the company believing there is a high probability that the resource will increase with future step-out and infill drilling around the current widely-spaced holes.

In addition, the company said individually reported deposits were separated by undrilled areas, which could offer additional potential for resource expansion.

So far, drilling at the North Bullfrog project returned a number of high-grade drill intersections similar to the historic high-grade veins that were mined 7 kilometres to the south in the main Bullfrog district, Corvus said.

High-grade gold and silver veins were encountered in a number of areas, such as Yellowjacket, where 6.1 metres at 11.9 g/t gold and 8.8 g/t silver was intersected; Mayflower, where 9.1 metres at 7.18 g/t gold and 15.2 metres at 2.87 g/t gold was drilled; and at Connection, where 6.1 metres at 2.67 g/t gold and 15.2 metres at 2.44 g/t gold was returned.

As part of its follow-up grid drilling program, Corvus will be targeting high-grade structural zones to evaluate what it calls a "promising" style of mineralization.

Corvus said that ongoing metallurgical work is focusing on evaluating the potential of the bulk tonnage oxide deposits for heap leaching and, in particular, coarse "run of mine" material. The North Bullfrog property has a large number of areas that the company believes would be suitable for a large heap leach operation, as well as ready access to key infrastructure and water.

The project is located near Beatty, Nevada and covers approximately 24 square kilometres, just north of the historic Bullfrog gold mine formerly operated by Barrick Gold (TSE:ABX)(NYSE:ABX).

The property package is made up of a number of private mineral leases of patented federal mining claims and 161 federal unpatented mining claims.

Corvus was spun out of International Tower Hill Mines (TSE:ITH) in August 2010, and comprises four projects in Alaska (Chisna, Terra, LMS and West Pogo) and the North Bullfrog project in Nevada.

Recently, the company and its joint venture partner, WestMountain Index Advisor, completed 544 metres of drilling over four holes at the Terra gold project in western Alaska, confirming the extension of the Ben vein system. The existing high-grade vein was extended another 200 metres to the north, and remains open at depth and along strike.