U.S. Markets closed

Outcrop Gold Provides Update on Exploration Activity at Santa Ana Project and Amends Acquisition Agreement

Newsfile Corp.

Vancouver, British Columbia--(Newsfile Corp. - October 30, 2019) - Outcrop Gold Corp. (TSXV: OCG) ("Outcrop" or the "Company") is pleased to provide an update of work done on the high grade silver-gold Santa Ana project and the Company's plans for a 1,000 m drill program commencing before the end of the year. Drilling and water permits, and surface easements are in place and the Company will use Major Drilling. Man-portable rigs will be used to minimize impact to the environment.

The Company has agreed to acquire the Santa Ana project from Cedar Capital Corporation, a private British Columbia company. The acquisition of the Santa Ana project is subject to TSX Venture Exchange approval, including TSXV review of a Technical Report on the project.

In anticipation of completion of the acquisition and as part of its technical review of the Santa Ana project, Outcrop has conducted some initial exploration activities on the project including field work and data compilation and review. As part of those activities, Outcrop discovered new veins at the La Ivana target area where six or more subparallel vein zones extend for more than 1 km. The vein zones are inferred to each contain multiple, close-spaced veins. The veins show both high-grade gold and high-grade silver mineralization. Gold assays in the La Ivana target show the highest gold values recognized to date on the project, including values to 42.4 g Au/t with 338 g Ag/t sampled across a 2 m vein and 82.6 g Au/t with 476 g Ag/t in vein float.

The unusually high gold values in the La Ivana samples confirm that gold mineralization is zoned or overprinted with respect to silver mineralization and that both high-grade silver as well as is high-grade gold veins provide targets on the Santa Ana project. It is also possible that some gold is present as natural alloys with silver.

Outcrop Gold believes Santa Ana is strong high-grade primary silver project, and that the project potential is significantly enhanced by the recently recognized high-grade gold with silver in the veins. Historic colonial mining records, and limited historic drilling and high values in rock samples all indicate exceptional potential for Santa Ana.

Field Work Conducted

Outcrop exploration work includes mapping, identifying and surveying the portals of historic workings, and acquiring and compiling and historic exploration results. Local underground mapping was done to understand controls to mineralization and prevalent geometry of high-grade shoots within the veins.

Outcrop has recovered a long section of one of the historic mines that surveys shaft, production levels, and stope development to more than 260 m below the surface. Other workings are reported to extend to depths over 100m. These mining depths support a geologic and exploration model for a composite mesothermal and epithermal vein system having mineralization that likely extends to great depth. At Santa Ana it is unlikely that there is an elevation restriction to high-grade zones common in many epithermal systems.

Veins are observed to occur in packages of 3 or more parallel veins each separated by a few meters within a zone with a horizontal interval 15 to 30 m wide.

At least seven principle vein zones are recognized on the project that cumulatively provide over 7 km of length. Detailed work in the La Ivana area suggests there are numerous more unmapped or unexposed veins.



Map 1: Phase one work area delineated by black circle. La Ivana target area delineated by yellow polygon. Detailed work in the La Ivana area shows multiple parallel vein zones that are not mapped or projected. The La Manta and La Porfia veins are probably principle veins mined in the Spanish colonial era.

To view an enhanced version of Map 1, please visit:
https://orders.newsfilecorp.com/files/6343/49286_1d54bdd814de2a34_001full.jpg

The La Ivana Target Area

Planned drilling for a Phase 2 Exploration Program will be focused in the La Ivana target area shown in Map 1. The main vein zones in the La Ivana target area are La Manta and La Porfia veins. The Company identified a new vein zone named Guanabana. At least 400 m of strike inferred by outcrop, vein float and rubble, and historic workings. The Guanabana and Porfia vein zones probably reflect close-spaced vein packages and can be traced for greater than 1 km in length.

The veins range from range from 0.25 m to greater than 2 m in width and probably pinch and swell along strike. The veins show crustiform to colloform epithermal textures with secondary silica-flooding.

Importantly there are three areas of veins and old workings within or near the Ivana target area - La Porfia La Manta, and El Dorado that are named in Spanish archives from 1585. Outcrop is probably drilling in a core area of the colonial era high-grade mines. The Company believes three of the fourteen mines Spanish colonial era mines as averaging 4,300 g Ag/t from the smelter returns over an average of 1.4 occur within the La Ivana target area. (Outcrop news release of May 14, 2019).

Sampling within La Ivana target area (Phase 1 Exploration Program):

For recently the compiled historic and recent samples collected by Outcrop in the tables below - the silver equivalent values range from 7.0 g Ag Eq/t to 8,417 g Ag Eq/t- with a mean value of 1295 g Ag Eq/t and a median value of 403 g Ag Eq/t.

The respective gold equivalent values range from a 0.08 g Au Eq/t to 95 g Au Eq/t with a mean value of 15 g Au Eq/t and a median value of 5 g Au Eq/t.

Table 1: La Manta vein zone:

Sample Easting Northing Sample
Type
width Au Ag
(m) (g/t) (g/t)
5381 505837 566611 Rock Grab 68.60 422.00
5382 505837 566611 Rock Grab 2.32 48.30
5383 505837 566611 Rock Grab 27.50 159.00
5384 505837 566611 Rock Grab 27.80 130.00
5385 505837 566611 Rock Grab 36.10 163.00
5386 505864 566581 Channel 0.20 48.30 81.00
5387 505864 566581 Channel 0.30 7.45 20.90
5388 505862 566580 Channel 0.45 14.60 21.80
5389 505859 566582 Channel 0.30 26.20 73.10
5390 505850 566584 Channel 0.50 3.05 6.57

 

Table 2; Sampling between La Manta and La Porfia, which are 500 m apart:

Sample Easting Northing Width
(m)
Au Ag
(g/t) (g/t)
RX1346 506058 566875 0.40 3.15 45.80
RX1348 506060 566870 0.35 2.02 123.00
RX1347 506064 566877 0.30 15.80 277.00
RX1349 506060 566868 Chip 5.70 595.00
RX1341 506037 566596 Dump 82.60 476.00
RX1354 506039 566737 Dump 6.73 18.65
RX2940 506061 566838 Chip 2.45 39.10
RX2939 506061 566838 Chip 1.79 40.50
RX2938 506049 566805 Float 0.08 1.36
RX2918 505971 566232 2.00 42.40 338.00
RX1369 506021 566243 Float 0.57 69.80
RX2969 506019 566744 0.40 1.31 200.00
RX2970 506022 566742 0.70 19.00 68.80
RX2971 506020 566746 0.20 26.40 91.40
RX2973 506073 566865 2.40 31.80 143.00
RX2974 506071 566866 0.80 4.76 246.00
RX2975 506070 566866 1.20 3.48 478.00
RX2976 506066 566867 0.85 4.38 217.00
RX2946 506057 566841 0.20 2.40 237.00
RX2947 506056 566844 0.20 3.69 30.70
RX2950 506057 566844 Dump 43.30 98.50
RX2951 506057 566721 0.22 0.45 147.00
RX2953 505997 566735 Chip 0.51 476.00
RX2955 505999 566738 0.06 1.10 662.00

 

Sampling outside of La Ivana target but within the Phase 1 work area:

Table 3: El Dorado vein zone 500 m north of the central La Ivana Area but within Phase 1 work area.

Sample Easting Northing Sample width Au Ag
Type (m) (g/t) (g/t)
RX1331 505691 567010 Channel 0.45 0.20 6.31
RX1344 505691 567010 Channel 0.45 1.43 16.10
RX1333 505691 567010 Channel 0.40 0.39 53.80
RX1334 505664 566976 Channel 0.45 4.93 218.00
RX1335 505664 566976 Channel 0.30 0.09 8.04
RX1336 505664 566976 Channel 0.45 0.59 33.70
Rx1337 505659 566967 Channel 0.60 0.33 76.90
Rx1338 505659 566967 Channel 0.60 1.64 14.60
RX1339 505659 566967 Channel 0.90 2.51 252.00

 

Table 4. Royal Mines or Mina Vieja 500 m south of the La Ivana area but within Phase 1 work area.

Sample Easting Northing Sample
Type
width Au Ag
(m) (g/t) (g/t)
RX1366 506234 565916 Channel 0.25 2.99 3.12
RX1327 506246 565903 Channel 0.6 2.39 61
RX1329 506319 566069 Rock Dump 0.04 3.11
RX1330 506184 565860 Rock Dump 0.16 58.9
RX2923 506179 565201 Channel 0.25 0.15 0.28
RX2924 506179 565202 Channel 0.65 0.14 4.17
RX2934 506145 565049 Channel 0.53 0.62 93.7
RX2922 506179 565201 Channel 0.6 0.15 4.14
RX2929 505891 564961 Rock Float 94.3 93.8

 



Vein outcrop in La Ivana zone. Observed veins typically range from 0.5 to 2 m.

To view an enhanced version of this graphic, please visit:
https://media.zenfs.com/en-us/newsfile_64/28954d856c8c2b2a0c04a68c27e86b49


Planned drill program (Phase 2 program)

Following the completion of a sampling and mapping program in the Phase 1 work area, the planned drill program will include five to six drill holes on three sections are planned to test up to 400 m length of a closely spaced vein. Depths of 60 to 120 m are planned as in most cases the veins are sub-cropping or near surface. Drill stations will be located generally between Guanabana Mine and vein outcrops to the north. Vein geometry here is best understood and rock samples have the highest gold and silver values. Importantly, the Ivana target area may contain some of the principle veins in the Santa Ana project that correspond with the extremely high-grade with fourteen mines producing extremely high silver grades.

Outcrop Gold believes from mapping and reconnaissance prospecting that historic drilling by Condor Precious Metals ("Condor") did not test a principle district vein or principle historic mining area, even though it provided intercepts as high as 1.3 m at 2,545 g Ag Eq/t (Outcrop news release dated May14, 2019).

There is no historic testing the of the veins developed in the Spanish colonial are but three of those veins (La Manta, La Porfia, and El Dorado) are thought to be in the La Ivana target area or the Phase 1 work area. It is highly likely that many of the principle Spanish colonial mines are caved and or flooded but still with high-grade silver and gold mineralization continuing below the lowest level worked and horizontally strike.



Map 2: Drill locations are shown. La Ivana target shows evidence of at least six vein zones.

To view an enhanced version of Map 2, please visit:
https://orders.newsfilecorp.com/files/6343/49286_1d54bdd814de2a34_003full.jpg

QA/QC for sampling

Outcrop Gold's control procedures for sampling including the insertion of commercial certified standards and blanks. Samples were sent to the ALS laboratories sample preparation laboratory in Bogota, Colombia, where they were dried, crushed, split and pulverized and subsequently delivered to the ALS Laboratory in North Vancouver for analysis. The samples were analysed for gold using standard fire assay on a 50-gram sample with a gravimetric finish, and for multiple elements by ICP-MS using either an aqua regia (ME-MS41) digestion. High silver results triggered ore grade Ag analysis using the AG-OG62 procedure.

Outcrop Gold believes that based on a comparison of current sampling results to historic sampling results, that historic samples are reliable at this stage of exploration.

Transaction Update

The Company had previously entered into a share purchase agreement dated May 13, 2019 with Cedar Capital Corporation to acquire the Santa Ana project. Under the agreement terms, Cedar could terminate the agreement by providing notice to the Company if the transaction did not complete by June 30, 2019. As a result of the decrease in the market price for the Company's shares, and in lieu of termination of the transaction, the Purchaser and Company agreed to an amended and restated share purchase agreement, pursuant to which the the Company may acquire the Santa Ana project for 24 million consideration shares. Closing of the Santa Ana acquisition is subject to TSXV and shareholder approval. The Company expects to hold a shareholder meeting in the coming weeks to approve the issuance of the consideration shares as provided under the amended and restated agreement.

Private Placement

The Company will limit the previously announced placement to $1,250,000 for currently needed funding in order to reduce the impact of share dilution.

About Santa Ana

The Santa Ana project comprises one concession of 669 ha and two applications that total 2,869 ha located in the Municipality of Falan, Tolima Department, Colombia, approximately 15 km southeast of the of the town of Mariquita, and 190 km from Bogota, Colombia's capital city. The Santa Ana project covers a significant part of the Mariquita District where mining records date to at least 1585.

The Mariquita District is the highest primary silver district in Colombia. Under colonial Spanish era control of the mines, silver grades were reported to be among the highest in Latin America with the fourteen mines of Santa Ana producing average smelter returns of 4,300 g Ag/t from veins averaging 1.4 m wide.

About Outcrop Gold

Outcrop is a gold prospect generator active in Colombia acquiring gold exploration projects with world-class discovery potential. Outcrop performs its own grass roots exploration and then employs a joint venture business model on its projects to maximize investor exposure to discovery and minimize financial risk. Outcrop has Newmont Goldcorp as a funding partner on its Lyra project in Antioquia directly south of Buritica.

Qualified person

The technical information in this news release has been approved by Joseph P Hebert, a qualified person as defined in NI43-101 and President and CEO of the Company.

ON BEHALF OF THE BOARD OF DIRECTORS

Joseph P Hebert, Chief Executive Officer
Tel: +1-775-340-0450
Email: joseph.hebert75@gmail.com
www.outcropgoldcorp.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.Certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the Transaction and the completion thereof and the Company's ownership interest in the Property upon completion of the Transaction. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "potential", "we believe", or variations of such words and phrases or statements that certain actions, events or results "will" occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Outcrop to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including: the receipt of all necessary regulatory approvals for completion of the transaction, the results of exploration work, the availability of financing to fund exploration, local regulations and approvals and other factors. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Outcrop will not update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/49286