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GFG releases 2020 Drill Results and Begins Program at Pen Gold Project West of Timmins

Feb 24, 2021

“We are very pleased to have discovered new gold systems at the Boundary, Sewell North and Broadway targets with our first pass drill testing. Outlining new gold systems validates our methodical and disciplined exploration strategy as these targets are multi-kilometre in size, have no historic drilling and are under till cover,” said Brian Skanderbeg, President and CEO. “The follow-up drilling at Nib intercepted several broad zones of gold mineralization. These will require further analysis and drilling to better understand the controls of the gold system and isolate continuity of the high-grade mineralization.”

GFG Resources Inc. is reporting the remaining results from its Phase 2 2020 drill program at its 100% owned Pen Gold Project. During the Phase 2 drill program, the Company drilled 8,950 metres (“m”) from 30 holes testing multiple targets at Sewell, Sewell North, Boundary, Nib, HGM, Crawford, Broadway and Broadsword.

The Company also announces that drilling has resumed at Pen and the first drill hole at Slate Rock has been completed. The 2021 winter drill program of 4-5,000 m is designed to follow-up on recent discoveries and test newly generated targets such as the R66 Prospect. The Company anticipates completing the winter drill campaign in April 2021.

Mr. Skanderbeg added, “Looking ahead, we are excited to begin our fully-funded 2021 winter drill program that will test several targets with 4-5,000 m of drilling. We are optimistic that we can deliver strong results from following up on our more advanced targets and the potential for new discovery at our high-grade R66 target.”

2020 Phase 2 Drill Program Results 
The Company completed a total of 30 holes (8,950 m) testing numerous targets in the eastern portion of the Project (see Table 1 and Figures 1-6). The Phase 2 drill program was designed to follow-up on the high-grade gold intercepts at the Nib, HGM and Sewell prospects and to test new targets at Sewell North, Boundary, Broadway and Broadsword. Initial results from nine drill holes were reported previously (see news release: “GFG Announces Initial Drill Results from Recently Completed Phase 2 Drill Program at the Pen Gold Project West of Timmins, ON”). Results from all the remaining drill holes from the drill program are outlined below.

The Boundary Trend was identified in 2019 through systematic till sampling and follow-up prospecting that outlined six new gold showings along a three kilometre (“km”) trend within the eastern portion of the Project (see Figure 2). Surface rock grab and channel sampling returned up to 11 grams per tonne gold (“g/t Au”) associated with quartz veined, carbonate-sericite altered mafic volcanic and intrusive rocks. The Company completed six holes along the Boundary Trend and in the westernmost hole, PEN-20-070, two zones were encountered in carbonate-altered mafic volcanic rocks that returned 4.66 g/t Au over 1.2 m at 190.5 m and 5.02 g/t Au over 0.7 m at 264.9 m (see Figure 3). The lower zone is of particular interest as it consists of an interval of high strain and quartz-carbonate flooding at the contact with the underlying sedimentary rock package. Management believes the strain, alteration and structural setting are a strong indicator to host a significant gold system and plans to follow-up drilling in the 2021 winter drill program.

Sewell North
Reconnaissance drilling at the Sewell North Prospect in 2020 identified a new gold zone along a parallel structure approximately one km north of the Sewell Prospect. Hole PEN-20-054 encountered a quartz-carbonate vein system in strongly sheared and altered diorite that returned 4.56 g/t Au over 0.7 m at 15.7 m downhole. Initial follow-up drilling has confirmed that the style of veining and alteration is analogous to the Sewell Prospect which has returned values up to 33.80 g/t Au over 1.05 m (see Figure 4). A structural study of recently completed drone magnetic survey data has highlighted several priority structural corridors that the Company plans to drill test as part of the winter drill program.

Previous drilling by GFG at the Nib Prospect identified several northeast-trending gold zones within quartz-carbonate veined and variably albite-silica-carbonate altered diorite with associated arsenopyrite and pyrrhotite mineralization. Four holes were completed during the Phase 2 program to test for strike and depth extensions to the intercept in hole PEN-20-047 which returned 71.27 g/t Au over 8.5 m. This follow-up drilling has successfully traced multiple vein zones on strike and at depth with values up to 6.27 g/t Au over 1.0 m and 0.92 g/t Au over 13.0 m in hole PEN-20-062 and 0.81 g/t Au over 10.0 m in hole PEN-20-061 (see Figure 5). These holes were drilled as 50 m step-outs along strike to the northeast and southwest. While unable to trace the very high-grade intercept, the consistent character and width of the vein zones are significant and deserve further consideration. The Company is currently analyzing the recently acquired data to better understand the controls of the system to guide future drill programs.

In 2020, the Company drilled three holes to determine the extent of the gold system along the Broadway Trend with 300 m and 600 m step-outs holes from hole PEN-19-040 that returned 7.30 g/t Au over 0.7 m in veined and carbonate-altered diorite (see news release: “GFG Provides Exploration Update and Initiates 2020 Drill Program at Pen Gold Project West of Timmins, ON”). As predicted from the extent of the till gold-grain anomaly, these reconnaissance drill holes have now successfully traced the gold system for over one km from the surface showing in the north to hole PEN-20-065 in the south that returned 5.43 g/t Au over 0.5 m (see Figure 6). Given the scale and consistent character of the intersected veins, the Broadway Trend remains a high priority exploration target.

2021 Phase 1 Drill Program
The Company has resumed drilling at the Project with a plan to drill 4-5,000 m over the coming winter months. The fully funded drill program will have a primary focus on the Slate Rock and R66 targets in the west block of the Project and other priority targets such as Sewell North, Boundary, Broadway and Nib in the east block of the property (see Figure 1).

Slate Rock 
Gold mineralization at Slate Rock occurs in a multi-phase diorite intrusion and has been traced intermittently with gold grains in till, surface rock samples and drill core for a strike length of over three km. Exploration has been focused up-ice of boulder samples that returned up to 18.0 g/t Au at the head of a till anomaly that peaked at 220 grains of gold (84% pristine). Initial drilling in 2019 returned significant intercepts such as 0.47 g/t Au over 25.3m including 3.58 g/t Au over 1.0 m associated with intense quartz-sericite-albite alteration, pyrite-magnetite mineralization and quartz-carbonate veining. In 2020, drill hole PEN-20-047, collared 800 m to the west, encountered multiple mineralized zones including a visible gold bearing interval that graded 0.29 g/t Au over 25.5m including 2.36 g/t Au over 1.0 m. As part of the winter drill program, the Company plans to drill four holes to follow-up on this visible gold bearing interval and related geophysical anomalies beneath Slate Rock Lake.

Prospecting of a priority regional structural target in 2020 identified a significant new gold showing, R66, in the west block of the property in a low-lying area with no documented historic gold exploration or drilling (see news release: “GFG Identifies New High-Grade Gold Target and Provides Drilling Update at the Pen Gold Project, West of Timmins, ON). The recently discovered, northeast-trending quartz-carbonate veining, occurs within highly strained and carbonate altered intermediate to mafic volcanic rocks and has returned outcrop sample results up to 8.39, 11.10, 21.60 and 65.90 g/t Au. Veining occurs proximal to a prominent mafic-ultramafic contact and along a northeast structural corridor that shows a distinct magnetite destruction signature. As part of the on-going drill program, the Company plans to test the depth extension of the veins discovered on surface and to test several regional targets along the one-kilometer corridor.

In 2021, the Company will continue to prioritize its focus on the Pen Gold Project with a budget of approximately C$3.0 million. The 2021 exploration plans at Pen are fully funded and include 8-10,000 m of drilling, drone magnetic surveys, prospecting, mapping and till sampling.

In addition to its activities in Canada, the Company continues to execute on its strategic process to advance its 100% owned Rattlesnake Hills Gold Project (“RSH”) in Wyoming. The Company remains confident that it will have the opportunity outline a plan to advance the RSH project in the coming months.

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