Treasury Metals drills gold to the northeast at Goliath, outside of current resource

Treasury Metals (TSE:TML) reported Monday drill results from the first phase of its 2012 exploration program at the Goliath gold project east of Dryden, Ontario, showing there is potential to expand the resource at the site.

The first phase of the 20,000 metre program was designed to test a number of targets on the 49 square kilometre property block outside of the known mineral resource area.

The company said Monday that the first phase so far has found both high and low grade gold values in a new lithologic sequence in the northeast, several kilometres from the current resource.

The 2012 drilling campaign started in February and was made up using historical data from Teck Resources (NYSE:TCK) (TSE:TCK.B), as well as additional geological information from Treasury's own airborne survey completed last July.

Treasury noted that there is approximately 11.5 kilometres of strike length along the prospective auriferous horizon beginning at the end of the eastern  resource area, and continuing to the far northeast corner of the  property block.

The drilling so far has also indicated the possibility of additional open pit material to the west of the current proposed pit.

In addition, the C Zone is of "relatively constant thickness" with typical plus cut-off grade values along the eastern end of the resource, Treasury said. It is shown projecting toward the newly-acquired property toward the northeast.

Recently, Treasury acquired around 129 hectares of property, covering prospective ground along strike to the northeast, which is expected to extend coverage over previously untested down-dip targets, it said, as exploration expands eastward.

The Goliath property now sits on an NI 43-101 compliant resource of 1.63 million ounces of gold (1.7 million ounces of gold-equivalent) in the inferred and indicated categories combined, at an average grade of 2.0 grams per tonne (g/t).

Treasury is expecting to produce an updated mineral resource estimate in early 2013. The company's 2012 drilling program followed its 50,000 metre in-fill and expansion drilling campaign last year, which led to the latest resource estimate released in November 2011.

Highlights of latest drilling program were focused on three main areas.

The first, the Fold Zone, saw five holes drilled in a north-northwest fence, 3.1 kilometres to the northeast of the eastern end of the current resource. Of particular interest were intercepts of 2 metres at 6 g/t gold in hole TL12-247, and 3 metres of 2.27 g/t gold.

Meanwhile, hole TL12-248 returned two separate 8 metre intercepts, at 0.39 and 0.33 g/t gold, respectively, ocurring in the 28 metre interval that holds a separate intercept of 1.5 metres at 12.44 g/t gold.

In the Western Resource Extension area, 10 holes were drilled to test 700 metres of strike, where the most significant results yielded 3.32 metres of 1.05 g/t gold in hole TL12-235. This was some 700 metres to the west of the proposed main open pit.

Additional drilling is planned for this area later in the year, Treasury said.

Meanwhile, in the Eastern Resource Extension area, 13 holes were drilled to primarily target the C Zone, where the company saw substantial widths of mineralization with hole TL12-258. This hole hit 23.66 metres of 0.56 g/t gold, while hole TL12-240 returned 2 metres at 11.62 g/t gold.

The company said the latter hole is interpreted to be in a zone footwal to the C Zone, where follow-up drilling to the east is warranted. This has the potential to increase the resource size, and upgrade the inferred resources to the indicated cateory, the gold miner added.

More diamond drill holes from the 20,000 metre exploration program  primarily focused in the Fold Zone, the Eastern Resource Extension and  the Far East area of the property will be released in the near future, Treasury said.

An updated preliminary economic assessment is also anticipated soon.