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Corvus Gold PEA outlines two stage development and near term production strategy for North Bullfrog Gold Project, Nevada
Friday, Dec 07, 2012

VANCOUVER, Dec. 6, 2012 /PRNewswire/ - Corvus Gold Inc. ("Corvus" or the "Company") - (TSX: KOR, OTCQX: CORVF) is pleased to announce the results of an independently prepared Preliminary Economic Assessment ("PEA") for the North Bullfrog Project, Nevada. The two phased PEA development plan is based on the Company's updated resource estimate and does not include any of the 2012 drilling outside of the Mayflower deposit infill drilling.

The study produced a robust positive economic analysis for a conceptual, low capex, heap leach project that generates average annual gold production of 74,800 ounces over 10 years (Figure 1), at a life of mine ("LOM") strip ratio of 0.48 to 1 (overburden to process feed), indicating a pre-tax, pre-royalty NPV(5%) of $166M , and an IRR of 26% at $1,479 per ounce gold price (Table 1). All dollar figures are in US$.

The PEA also shows the project has a considerable leverage to gold price, with a pre-tax, pre-royalty NPV(5%) of $345 M and an IRR of 43% at $1,800 per ounce gold price(Table 2).

North Bullfrog Project Highlights:

Two (2) phase project development with initial mining on patented mining claims to create potential for initial production in late 2014, two years early.

Large in-pit resource of 1.0 M ounces contained and 765,000 ounces recoverable gold.

High gold recovery with low cost heap leach system averaging 75% gold recovery over life of project.

Average annual production of 74,800 ounces of gold at total cash cost of $816/ounce.

Low entry cost gold project with initial capex for both phases at $95M (phase I at $60M ) inclusive of contingency and pre-production/indirect costs, phase II development drilling, engineering and permitting, added crushing plant and infrastructure upgrades.

New PEA does not include 2012 exploration results which indicate significant expansion potential:

high-grade Yellow Jacket results (4.3m of 20.0 g/t gold & 1,519 g/t silver)

bulk tonnage step out drilling (52m of 0.8 g/t gold)

the potential of byproduct silver impacting the project economics - silver recovery unaccounted for in PEA

Favourable low strip ratio of 0.48.

Potential fast track development project that is within the scope of a junior producer having strong leverage to gold with NPV(5%) $345M, 43% IRR & 3.2 year payback at $1,800 gold.

Favourable permitting environment with recent examples of timely approvals.

Excellent infrastructure for mine development, highway and grid power a few kilometres from deposit and an existing, skilled mining workforce in the nearby communities.

Recently expanded land package to 68 km² to cover potential gold system extension and to address potential future mining operation.

Jeffrey Pontius, CEO of Corvus, stated: "These initial results are very impressive and reinforce the potential for creating a new near-term Nevada gold producer.  The low cost project, linked with a low initial capex, attractive start-up phase, a favourable permitting environment, and an excellent infrastructure and labour force, significantly de-risk this highly prospective project.  With recent successes in our step out and high-grade drilling programs we see this initial positive PEA as a critical first step in developing what we believe will be one of Nevada's next gold mines."

PEA Description

The PEA assumes a 2 Phase development of a conventional drill and blast, surface mine using haul trucks and front end loaders, and heap leach processing of the mineralized material. Mineralized material would be delivered to a crushing plant, where it would be crushed to 80% passing minus 19 mm (¾ inch), then transported and stacked on heap leach pads, using both truck loading and a conveyor/stacker. Leach solution would be used to dissolve the gold and would be processed through a standard carbon-in-column leach plant, with a gold doré produced in an on-site refinery. Physical data for the mine operation are summarized in Table 3.

The PEA utilized preliminary estimates of heap leach recovery based on bottle roll testing and preliminary column leach testing data from ongoing metallurgical tests on composite samples constructed from Mayflower, Jolly Jane, Savage Valley and Sierra Blanca 2012 PQ core drilling. The process recovery assumptions indicated an average recovery of 75% of fire assay grade.

The Company cautions that the PEA is preliminary in nature, and is based on technical and economic assumptions which will be further evaluated in more advanced studies. The PEA is based on the North Bullfrog resource model (as at October, 2012) which consists of material in both the indicated and inferred classifications. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. The current basis of project information is not sufficient to convert the mineral resources to mineral reserves, and mineral resources that are not mineral reserves do not have demonstrated economic viability. Accordingly, there can be no certainty that the results estimated in this PEA will be realized. The PEA results are only intended as an initial, first-pass review of the potential project economics based on preliminary information.

The Company will file an updated NI 43-101 technical report, which will include the results of the PEA, (the "Report") on SEDAR within 45 days, and investors are urged to review the Report in its entirety.

Estimated initial capital costs are listed in Table 4, which include the initial capital for Phase 1 of the project on patented claims, and the start up capital for Phase 2 mining on Federal land. The Phase 2 start up capital considers the contribution of cash flow from the first 2 years of the Phase 1 operation. Phase 1 capital includes $12 M for feasibility resource definition and engineering and both infrastructure and mobile equipment that are utilized for the project LOM. Life of mine sustaining capital is estimated to be $128.3 M.

About the North Bullfrog Project, Nevada

Corvus controls 100% of its North Bullfrog Project, which covers approximately 68 km² in southern Nevada just north of the historic Bullfrog gold mine formerly operated by Barrick Gold Corp.  The property package, shown in Figure 2, is made up of a number of private mineral leases of patented federal mining claims and 758 federal unpatented mining claims.  The project has excellent infrastructure, being adjacent to a major highway and power corridor.

The project currently includes numerous prospective gold targets with four (Mayflower, Sierra Blanca, Jolly Jane and Connection) containing an estimated Oxidized Indicated Resource of 27 Mt at an average grade of 0.28 g/t gold for 246,810 ounces of gold and an Oxidized Inferred Resource of 234.5 Mt at 0.18 g/t gold for 1,387,870 ounces of gold (both at a 0.1 g/t gold cutoff), with appreciable silver credits.  Unoxidized Inferred mineral resources are 221.6 Mt at 0.19 g/t for 1,361,000 ounces of gold (at a 0.1 g/t gold cutoff).

Mineralization occurs in two primary forms: (1) broad stratabound bulk-tonnage gold zones such as the Sierra Blanca and Jolly Jane systems; and (2) moderately thick zones of high-grade gold and silver mineralization hosted by structural 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 at http://www.corvusgold.com/investors/video/.

SOURCE Corvus Gold Inc.

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