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GFG announces Initial results from drill program at Pen Gold Project West of Timmins

Dec 27, 2020

GFG Resources Inc. reports initial results from nine holes from its recently completed 8,900 metre, Phase 2 2020 drill program at its 100% owned Pen Gold Project. During the Phase 2 drill program, the Company completed a total of 30 holes testing multiple targets at the Sewell, HGM, Crawford, Nib, Boundary, Broadway and Broadsword regional targets (see Figure 1). The remaining 21 holes are being processed and the Company will release the results as they become available.

A significant exploration program is being planned for 2021 to further follow-up on recent discoveries and test newly generated targets such as the R66 Prospect. The Company expects to begin the 2021 program in late-January with approximately 5,000 m of drilling to be completed in Q1.

The Project is located approximately 40 kilometres (“km”) west of the prolific Timmins Gold District in Ontario. The contiguous land package, one of the largest in the region, consists of approximately 475 square km and is situated between Newmont’s Borden Gold Mine and Pan American Silver’s Timmins West Mine. The Project covers an approximately 55-kilometre-long section of Archean greenstone that contains the interpreted western extension of the Porcupine-Destor Fault Zone within the same geological setting that hosts many of the gold deposits found in the Timmins Gold Camp.

“In 2020, we set out to drill 12,000 m and complete a significant regional surface program; we executed the plan successfully and were below budget,” stated Brian Skanderbeg, President and CEO. “This year our team performed exceptionally well by developing new high-grade gold targets such as R66, testing 12 different targets, yielding new discoveries, expanding several known zones and engaging Alamos Gold as a strategic partner. We accomplished this during a time that brought unique challenges to us all.”

“We are encouraged by these initial results as we discovered a new gold zone at Sewell North, successfully expanded the HGM system up-dip and along strike and confirmed mineralization at depth at the Nib Prospect. With the drill program now complete, our focus will be on analyzing the significant amount of data that we have accumulated in 2020. We look forward to receiving the remaining assays from 21 holes and to starting the new year with an aggressive 5,000 m drill program.”

2020 Phase 2 Initial Drill Program Results
The Company completed a total of 30 holes (8,900 m) testing numerous targets in the eastern portion of the Project (see Table 1 and Figures 1-5). The Phase 2 drill program was designed to follow-up on the high-grade gold discovery at the Nib Prospect (PEN-20-47: 71.27 grams of gold per tonne (“g/t Au”) over 8.5 m, including 511.00 g/t Au over 1.15 m), conduct step-out holes at the HGM and Sewell prospects and to test earlier stage targets at Sewell North, Boundary, Broadway and Broadsword. These initial drill results are from the Sewell North, HGM, Nib and the Boundary prospects.

Sewell North Prospect
Reconnaissance drilling with three holes at the Sewell North Prospect intercepted a new gold discovery along a parallel structure approximately one km north of the Sewell Prospect (see Figure 2). Prior to GFG, the target area had seen no drill testing. Hole PEN-20-054 returned 4.56 g/t Au over 0.7 m at 15.7 m downhole. Gold mineralization is hosted in a quartz-pyrite-tourmaline vein system associated with strongly-sheared, albite-silica altered diorite, a geological setting is similar to the Timmins West Mine, which is located 20 km to the northeast. Based on these encouraging results, two follow-up holes have been completed with assays pending. The Company plans to drill test this prospective zone further in early 2021.

HGM Prospect
Previous drilling at the HGM Prospect has outlined several distinct zones of gold mineralization with high-grade intervals that include 21.59 g/t Au over 3.9 m and 7.53 g/t Au over 2.2 m. As part of the 2020 drill program, two holes were drilled to test for the western and depth extensions to these zones (see Figure 3).

Hole PEN-20-052 was designed to test the up-dip western continuity of the system. The hole intersected four distinct zones of gold mineralization associated with disseminated pyrite within silica-carbonate altered, quartz-veined mafic volcanic stratigraphy between 150 and 290 m downhole. Results include 0.55 g/t Au over 5.0 m, 1.24 g/t Au over 1.50 m and 0.88 g/t Au over 4.5 m.

Hole PEN-20-053 was designed to test the western plunge continuity of the system. The hole intersected three distinct zones of mineralization associated with disseminated pyrite within silica-carbonate altered, quartz-veined mafic volcanic stratigraphy between 375 and 407 m downhole. Results include 1.03 g/t Au over 1.3 m, 1.17 g/t Au over 2.0 m and 0.98 g/t Au over 1.8 m.

The program was successful in confirming the stacked nature of the mineralization and the continuity of the system both down-plunge and up-dip to the west. The system remains open at depth and down-plunge.

Nib Prospect
Previous drilling by GFG outlined three distinct northeast-trending mineralized zones within sheared and altered diorite at the Nib Prospect. Phase 2 drilling included four holes that focused on the uppermost zone where hole PEN-20-47 encountered 71.27 g/t Au over 8.5 m at 50 m below surface and on the strike and depth extensions of several footwall vein systems.

Assays have been received for two holes that tested the depth continuity of the Nib mineralization on 25 and 50 m step-outs (see Figures 4 and 5).   The two holes outlined new zones and extended those intercepted in hole PEN-20-47 to depth, albeit at lower grades. Hole PEN-20-59 returned 1.65 g/t Au over 1.7 m and 0.57 g/t over 3.6 m from depths of 110 and 142 m downhole. Hole PEN-20-60 intersected several zones of mineralization from depths of 249 to 495 m downhole highlighted by returned 0.90 g/t Au over 3.0 m, 0.81 g/t Au over 6.0 m and 1.14 g/t Au over 6.0 m. Gold mineralization is associated with disseminated pyrite-arsenopyrite within quartz-veined and variably albite-silica-carbonate altered diorite. The system remains open at depth and assays are pending on two holes that tested the strike continuity of the system on 50 m step-outs.

Boundary Prospect
The Boundary Prospect was identified in 2019 through systematic till sampling and follow-up prospecting that outlined six new gold showings along a three km trend within the eastern portion of the Project. Surface rock grab and channel sampling returned up to 11 g/t Au associated with quartz veined, carbonate-sericite altered mafic volcanic rocks. During the 2020 Phase 2 drill program, GFG completed six holes testing a number of targets along the trend. To date, results have been received for 2 holes that returned no significant intercepts while results from the remaining four holes are pending.

Following a significant 2020 exploration program, the Company will now focus on reviewing and analyzing the received and pending drill results and prepare for its up-coming drill program of approximately 5,000 m that is scheduled to begin in late January. The up-coming program is fully funded as the Company maintains a strong cash position of approximately C$4.3 million.

The Company continues to see significant delays in assay lab turnaround, in some instances over seven weeks, and anticipates receiving the remaining assay results in the new year. Once received, the Company looks forward to providing an update.

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