Doubling of gold resource at Clavos has Sage looking to 2014 production

Hopes by Sage Gold Inc. to bring its Timmins Gold Camp property to production in 2014 have been strengthened by a recent doubling of its gold ounces and the potential for a tripling of its former resource.

In 2010, Sage optioned the Clavos property in the camp from St Andrew Goldfields (trading as SAS). Clavos was briefly in production between 2005 and 2007 and SAS invested $46 million in mine and infrastructure development.

Sage (trading as SGX) has formed a Joint Venture with SAS (owns 40%) after meeting the requirements to now own 60% of the Clavos property. The company’s new NI43-101 Resource estimate for Clavos was completed by Roscoe Postle Associates (RPA) in October 2012.

The total resource includes Indicated mineral resources of 1,258,400 tonnes at 4.81 g/t Au totalling 194,600 ounces of gold and Inferred mineral resources of 796,000 tonnes at 4.7 g/t Au representing 120,000 ounces. These resources are reported at a base case cut-off grade of 2.75 g/t Au and individual assays have been capped at 60g/t.

This 2012 resource estimate represents a 113% increase in total ounces relative to the last published resource of October 2006 (by SAS) and is based on a long term gold price assumption of USD$1600/Oz and a cut-off grade of 2.75 g/t Au. The SAS 2006 mineral resource was calculated at a gold price assumption of USD$500/Oz and a cut-off grade of 4 g/t Au.

Sage president and CEO  Nigel Lees says “the Clavos deposit remains open down dip and along strike providing a continuing opportunity to potentially increase the mineral resource with additional drilling.

We are very pleased with this new resource study. The growth in gold ounces relative to the previous published mineral resources reflects the inclusion of additional underground and surface drilling into the drill database and the addition of the 960 zone and Sediment deposits.

A Preliminary Economic Assessment (PEA) is being prepared which will analyse the economic potential of the mineral resources within the footprint of the existing infrastructure. This PEA is anticipated to be completed in six weeks.

A closure plan has been filed and a project description of the proposed advanced exploration program is being prepared. Public and First Nation consultation is currently underway.

Assuming a positive PEA and completion of financing, Sage anticipates that it will commence dewatering the existing Clavos workings in the first quarter of 2013.”

Lees believes there is the potential to at least triple the size of the resource at Clavos from what it is now. So far, the company has spent over $3 million on drilling and data compilation in determining the resource.

Lees says his plans involve bulking up staff with experienced mining personnel, as well as looking for more gold assets in the Timmins area.

“We like Timmins as a camp very much. There is the opportunity for consolidation there. But our focus remains to proceed with Clavos toward production.”

Sage’s CEO says he expects between 25,000 to 30,000 ounces per year of commercial production initially, which is anticipated to expand with the resource base.

“Our long-term strategy is to acquire deposits with near-term production potential, and Clavos fulfills this very well. We like the location, the fact that it has a compliant resource estimate, as well as the fact that it has excellent infrastructure, low capex and relatively good grades.”

Lees also notes that the property has a mill available, owned by St Andrew, so there is no need to build one.

Sage says the Clavos Gold property comprises 2,540 hectares and is located in a prolific gold camp where over 110 million ounces of gold have been produced historically.

Sage is a Canadian exploration and development company with projects in Timmins and Beardmore in Northern Ontario. The company is focused on becoming a near-term gold producer in 2014.

The company also has a portfolio of exploration properties in the Northwestern Ontario Beardmore-Geraldton Gold Camp. There is a NI43-101 Resource on the Lynx Cu-Ag-Au property. The Inferred Resource defined to date comprises 1,936,000 tonnes at an average grade of 1.44% Cu, 39.6 g Ag/T and 0.58 g Au/T and contains 61.3 million pounds of copper, 2.24 million troy oz of silver and 33,000 troy oz of gold. These resources are reported at a cut-off grade of 0.5% copper.

The Sage Gold management team and board have extensive experience in finding, developing and financing new projects. Sage continues to identify additional properties for acquisition to further enhance shareholder value and create cash flows.