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Jun 28, 2012
Vancouver, BC - Barkerville Gold Mines Ltd. (TSXV:BGM) (the "Company" or "Barkerville") announced today a NI 43-101 compliant, indicated resource estimate for the Gold Quartz open pit model on Cow Mountain as well as a NI 43-101 compliant estimation of the geological potential of the 6.4 km Island Mountain, Cow Mountain and Barkerville Mountain trend. This trend is the central portion (where the Company has focused its exploration activities) of a larger 67 km trend on the Company's 1,118 sq. km property.

Geoex Limited ("Geoex") was retained to complete an independent estimate of the mineral resources and geological potential of Barkerville's property (the "Property") by management of the Company.

The indicated resources, between the elevations 3,550 feet and 4,550 feet above sea level (town elevation 4,000 feet), estimated by Geoex for the Gold Quartz open pit model on Cow Mountain are 69,039,000 tons with an average grade of 0.154 ounces gold per ton (5.28 grams/T) and 10,626,100 ounces of contained gold as summarised in the following table. Geoex is of the opinion that this resource has a reasonable prospect of economic extraction.

COW MOUNTAIN SUMMARY OF INDICATED RESOURCES, effective date December 31, 2011
(cut-off 0.025 oz/t or 0.857 g/T, In Situ and Undiluted)

 

Tons

Grade (oz/t / g/T)

Contained Gold Ounces

Waste Tons****

Subtotal

70,455,000

0.161 / 5.52

11,367,100

101,676,000

Less Historic Mining

1,416,000

0.53 / 18.2

750,000

 

 

 

 

 

 

Adjusted***

69,039,000

0.154 / 5.28

10,626,100

 

* The resource is summarized in further detail in this news release
*** The total indicated resource has been adjusted for total production from the narrow vein underground production of the Gold Quartz Mine.
**** The Waste is within the resource solids and does not include pit wall waste.


Company President and CEO J. Frank Callaghan stated:

"This resource estimate on 10% of the company's prospective gold belt, which I believe puts the Cariboo Gold Project into the world class category, coupled with the company's recent news announcing it has received the necessary permits to begin production on its Bonanza Ledge discovery, is a testament to the team we've assembled and 18 years of hard work and perseverance. The current resource estimate has been made possible through the compilation of over 7,100 drill holes totalling 347,000 meters completed by the company and previous operators, with the most significant results coming from an expanded drill program which was completed in December, 2011."

"Management received heavy opposition to the expanded drill program this past winter from the brokerage community as reflected in Barkerville's share price, but we believed strongly in our team of highly skilled geological professionals and are proud of the results the company has achieved."


The estimation of the geological potential is based upon approximately 10% of the Company's tenure encompassing the Island Mountain, Cow Mountain and Barkerville Mountain areas which are contiguous mountains separated by valleys. The Island Mountain/Aurum and Mosquito Creek Mine workings are under Island Mountain and the Cariboo Gold Quartz Mine workings are mostly under Cow Mountain but extend beneath the valley and end beneath Island Mountain and as well extend in the opposite direction beneath Barkerville Mountain.

TOTAL GEOLOGICAL POTENTIAL: ISLAND-COW-BARKERVILLE TREND (6.4 km / 4 miles)

Area:

Tons (range)

Grade (range) oz/t (g/T)

Contained Gold Ounces (range)

Island Mountain

180 - 304 million tons

0.12 - 0.16 (4.11 - 5.49)

29 - 40 million ounces

Cow Mountain

45 - 76 million tons

0.12 - 0.16 (4.11 - 5.49)

7 - 10 million ounces

Barkerville Mountain

180 - 304 million tons

0.12 - 0.16 (4.11 - 5.49)

29 - 40 million ounces

 

 

 

 

Total

405 - 684 Million Tons

0.12 - 0.16 oz/t (4.11 - 5.49)

65 - 90 Million Ounces Gold

Note, the foregoing geological potential estimates of potential quantity and grade are conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the delineation of Mineral Resources
Please see below for how the quality and grade of the geological potential estimates was determined.


The indicated resource estimates and geological potential targets have been completed by Geoex and will be provided in a report ("the Report) that will conform to the format and content required under National Instrument 43-101 ("NI 43-101") regulations of the Canadian Securities Administrators, including Form 43-101F1 The effective date of the Report will be December 31, 2011 and the Report is based upon drilling completed to that date, including assay data that was received during the 1st Quarter of 2012.

The technical work by Geoex was undertaken by Peter T. George, P.Geo., who has over 45 years of experience in the Canadian mining industry and extensive experience in the gold sector.

PROPERTY DESCRIPTION AND OWNERSHIP
The Company has been active in the Cariboo Gold District since the mid 1990's and currently holds mineral tenures covering approximately 1,117.69 square kilometres in a contiguous, elongate block covering the full extent of a 45 kilometre geological trend that hosts all of the significant lode gold deposits of the district and many significant gold showings.

In the Island Mountain-Cow Mountain-Barkerville Mountain area that covers the current resource and geological potential estimates there are no royalties payable on any of the lands. There are a few small crown grants within the Property boundaries that have been in force since the late 1800's and are owned by the estates of persons unknown. In the event of a production decision in the vicinity of one of these small claims, the government regulations would require the Company to establish a trust and pay a small annual royalty to cover the possible future event that ownership is determined.

GEOLOGY AND MINERALIZATION
The Project is underlain by the Barkerville Terrane which is part of the regional Omineca Belt of the Canadian Cordillera. The Barkerville Terrane is comprised of a late Proterozoic and/or early Paleozoic sequence of metamorphosed rocks that were deposited as continental shelf to slope marine clastic rocks along with lesser amounts of marine carbonate rocks and volcanic rocks adjacent to the craton of ancestral North America. The Barkerville Terrane is structurally the lowest exposed sequence and is more deformed and metamorphosed (lower greenschist facies) than adjacent terranes.

During the Cretaceous the rocks of the Barkerville Terrane were deep below the surface and subjected to an early period of ductile deformation that resulted in asymmetrical, overturned, isoclinal (both limbs and the axial planes dipping to the east) fold structures with the fold axes plunging shallow to the northwest. Major regional thrust faults, initiated in the post metamorphic period occur in the area, striking in a northerly direction and dipping to the east with over thrusting from east to west

Post-metamorphic upright, open folds with axial planes approximately east-west deformed the earlier period of folding such that the early fold axes now plunge to both the northwest and the southeast along the length of the Barkerville Terrane.

During the late Cretaceous to early Tertiary a major period of northwest trending dextral strike-slip faulting occurred with conjugate faults trending northwest and north, both with a significant normal component of movement. The north trending fault structures appear to be an important control for gold vein mineralization in the Wells area most of the gold mineralization was deposited at that time although it is possible that there was already earlier stage gold mineralization formed before and during the onset of metamorphism that was remobilized during the post metamorphic period.

Gold mineralization on the Property occurs as:
  1. Quartz veins located in shear-type and tension-type fractures in lithologies that are more brittle than the surrounding lithologies, and

  2. Disseminated sulphide zones (pyrite-pyrrhotite) localized in the nose of secondary, local fold structures that have the same north westerly plunge as the regional, orogeny related, asymmetrical, overturned, isoclinal (both limbs and the axial planes dipping to the east) fold structures.
Historic production is all in the vicinity of the three adjoining mountains; Island Mountain, Cow Mountain and Barkerville Mountain. Historic production is as follows:

Historic Lode Gold Production, Cariboo Gold District (Hall 1991)

Mine

Tons Milled

Oz Au Produced

Island Mtn/Aurum (1934-67)

1,245,295

569,526

Mosquito (1980-83)

103,146

34,281

Cariboo Gold Qtz (1933-59)

1,681,651

626,755

**Based upon 93% mill recovery; 95% mine recovery of resource; and 25% dilution

The mineralization is hosted primarily in the Rainbow Unit and may extend into the younger BC Unit or the older Baker Unit. Note that in the mine areas the stratigraphy is overturned due to folding and the Baker Unit is overlying the Rainbow Unit. At the time of the Cretaceous deformation, the Rainbow Unit had lower ductility than the adjoining units and intense brittle fracturing occurred that contains many quartz veins and disseminated sulphide zones (dominantly in the hinges of small amplitude folds). During the operating years of the historic mines many of the mineralized zones were too narrow to be mined economically.

In the immediate vicinity of the historic mines, the Rainbow Unit can be mapped along a strike length of approximately 8 km (5 miles) and has been traced at least another 16 km (10 miles) to the south into the Cunningham Creek area.

The regional stratigraphy within which the Rainbow Unit occurs has been mapped to the Cariboo Lake area, 32 km (20 miles) to the south of Barkerville Mountain.

STATUS OF EXPLORATION, DEVELOPMENT, AND OPERATIONS
Because of the size of the Property, exploration will be ongoing for many years. The Company is currently is permitted for start-up of open pit mining of the Bonanza Ledge deposit on Barkerville Mountain.

It is anticipated that the Company will initiate permitting for an open pit operation on Cow Mountain approximately 3 km (1.8 miles) from the Bonanza Ledge deposit.

QUALIFIED PERSONS OPINION ON ADEQUACY OF THE DATABASE

The Qualified Person, based upon site visits on October 13 to 14, 2010, March 20 to 24, 2011, and April 23 to 27, 2012 is of the opinion that:
  • the Company's sampling methods and QAQC practices meet NI 43-101 standards;
  • the drilling and assay database is of sufficient quality for use in the estimation of mineral resources and to provide the basis for the conclusions presented in this summary,
In preparation for writing the Report, the Qualified Person worked intensively with the Company's database and found no serious errors or deficiencies.

The Qualified Person has reviewed all relevant technical information and has found no discrepancies, errors or omissions that would be material to the opinions expressed in the Report.

The Qualified Person did not undertake any check assays as the Company's QAQC procedures were reviewed and their practices meet NI 43-101 standards.

MINERAL RESOURCE ESTIMATE
The current indicated resources estimated by the Geoex for the Cow Mountain open pit model are 69,039,000 tons with an average grade of 0.154 ounces gold per ton (5.28 g/T) and 10,626,100 ounces of contained gold as summarised in the following table. The Qualified Person is of the opinion that this resource has a reasonable prospect of economic extraction.

SUMMARY OF INDICATED RESOURCES (cut-off 0.025 oz/t or 0.857 g/T, In Situ and Undiluted), effective December 31, 2011

Bench**

Tons

Grade oz/t (g/T)

Contained Au oz

Waste Tons****

% of Bench Untested by Drilling

4550

4,367,000

0.026 (0.89) 

113,500

1,532,000

22%

4450

8,791,000

0.045 (1.54)

395,600

2,561,000

32%

4350

11,596,000

0.072 (2.47)

834,900

2,047,000

23%

4250

9,947,000

0.069 (2.37)

686,300

4,796,000

57%

4150

6,722,000

0.078(2.67)

524,300

9,754,000

60%

4050

6,988,000

0.151 (5.18)

1,055,200

12,466,000

64%

3950

6,522,000

0.617 (21.2)

4,024,100

13,389,000

>70%

3850

6,171,000

0.453 (15.5)

2,795,500

13,125,000

>70%

3750

4,033,000

0.056 (1.92)

225,800

14,372,000

>70%

3650

3,100,000

0.063 (2.16)

195,300

13,749,000

>70%

3550

2,218,000

0.237 (8.13)

526,600

13,885,000

>70%

SUBTOTAL

70,455,000

0.161 (5.52)

11,376,100

101,676,000

 

Less Historic Mining

1,416,000

0.53 (18.2)

750,000

 

 

 

 

 

 

 

 

Adjusted TOTAL

69,039,000

0.154 (5.28)

10,626,100

INDICATED

RESOURCE

** The Bench Number is the elevation in feet above sea level on the floor of the 100-foot high bench
*** The total indicated resource has been adjusted for total production from the narrow vein underground production of the Gold Quartz Mine.
**** The Waste is within the resource solids and does not include pit wall waste.


The Qualified Person used Amine software for 3D digital modeling in AutoCAD. Amine is fully integrated mining software (drill hole planning, drill hole logging, resource and reserve estimates, stope planning, lateral and vertical development planning, etc) developed by Noranda Limited and now marketed independently by a third-party, Flairbase, of Montreal, Quebec.

Based upon all of the available historic and current drilling and assay data and using cross-sections at 400 foot intervals along a strike length of 3200 feet, the Qualified Person interpreted the outline of the mineralized zone and the outline of pit walls based on a 55 degree slope. Subsequently, in plan-view the Qualified Person created resource and total pit outlines at 100-foot vertical intervals to a depth of 1,000 feet below surface.

For the purpose of estimation of the resource tonnage and grade, 3D solids of 100-foot hypothetical pit benches were created as well as a 3D solid of the total pit in order to determine the stripping ratio of pit waste tons to resource tons Probably 8 to 10 to 1 waste to ore.

For the purpose of initial resource estimation for an open pit, a block model was created with 25x25x25-foot blocks. To calculate the resource, a horizontal search ellipse area that has major and intermediate axes of 100 feet and a vertical minor axis of 50 feet was used and to be considered an "ore" block must have at least 1 drill hole intercept within the search volume otherwise the block was tagged as "waste".

For estimation of a bulk mining resource, the Qualified Person is of the opinion that these estimation parameters are suitable to classify the resource as an Indicated Resource as defined in NI43-101. Areas where drilling is sparse are classified as waste.

Output of the Amine estimation procedure provides grade and tonnage for blocks above the cut-off grade, mineralized blocks (i.e. meeting the block category of 1 drill hole intercept within the search ellipse range) but below the cut-off grade, and waste which means there is no drill hole intercept.

The Qualified Person has reviewed in plan-view the Amine output showing intercepts used in the resource calculation and areas where there are no intercepts and concludes that there would be significant co-mingling of the above cut-off blocks and mineralized blocks below cut-off. Open pit mining methods would probably have to take both classifications of mineralized blocks in order to recover the "above cut-off blocks". The Qualified Person concludes from the same review of the Amine output that there are large contiguous undrilled areas that could be mined as waste and hence not milled if, as future drilling is completed, it remains as waste.

GEOLOGICAL POTENTIAL ESTIMATES
The estimation of the geological potential is based only upon the Island Mountain, Cow Mountain and Barkerville Mountain areas which are contiguous mountains separated by valleys. The Island Mountain/Aurum and Mosquito Mine workings are under Island Mountain and the Cariboo Gold Quartz Mine workings are mostly under Cow Mountain but extend beneath the valley and end beneath Island Mountain and as well extend in the opposite direction beneath Barkerville Mountain.

All of the production was from mineralization within the Rainbow Unit. The mine workings extend to a maximum depth of 2500 feet above sea level. The mineralization is open along strike and at depth from the workings. The Rainbow Unit extends continuously throughout the whole mine area and beyond. The mineralization in all of the mines is the same, with production from both quartz vein-type and disseminated sulphide-type settings.

The estimation of geological potential is focussed upon initial open pit mining to 1000 feet (3,550 elevation above sea level) below surface followed by an additional 1000 feet (2,500 feet above sea level) of underground bulk mining (probably room and pillar) by ramp access with large equipment.

The open pit geological potential along strike in both directions from Cow Mountain is based upon the current resource estimate adjusted for differences in strike length of mineralization at Cow Mountain (4300 feet) vs the strike length at Island Mountain (8,600 feet, therefore 2 times the potential at Cow Mountain) and the strike length at Barkerville Mountain, similar to Island Mountain, and therefore geological potential similar to that at Island Mountain.

Note all estimates of geological potential targets quality and grade are conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the delineation of mineral resources


Cow Mountain Indicated Resource Estimate and Further Geological Potential

The current indicated open pit resource at Cow Mountain is approximately 69 million tons with contained ounces of 10.63 million ounces (0.154 ounces per ton/5.28 g/T). Therefore the geological potential beneath the pit for an additional 1000 feet is estimated to be 62 to 76 million tons grading 0.12 to 0.16 ounces per ton (4.11 - 5.49 g/T), with contained gold of 7 to 10 million ounces. There have been a total of 2,638 drill holes on Cow Mountain totalling 145,600 meters. Assay data range is from 0 to 4.87 ounces per ton (166.94 g/T) in the Cow Mountain area.

Island Mountain Geological Potential
Island Mountain has geological potential for both the open pit and underground scenario and has twice the strike length of the Cow Mountain scenario, therefore the geological potential at Island Mountain is 180 to 304 million tons grading 0.12 to 0.16 ounces per ton (4.11 -- 5.49 g/T), with contained gold of 29 to 40 million ounces. There have been a total of 3,947 drill holes on Island Mountain totalling 119,419 meters, with an assay data range similar to Cow Mountain.

Barkerville Mountain Geological Potential
Barkerville Mountain has the same geological potential as Island Mountain for both the open pit and underground scenario and has twice the strike length of the Cow Mountain scenario, therefore the geological potential at Barkerville Mountain is 180 to 304 million tons grading 0.12 to 0.16 (4.11 -- 5.49 g/T) ounces per ton, with contained gold of 29 to 40 million ounces. There have been a total of 538 drill holes on Barkerville Mountain totalling 73,300 meters, with an assay data range similar to Cow Mountain.

TOTAL GEOLOGICAL POTENTIAL OF THE ISLAND-COW-BARKERVILLE TREND
The total geological potential of the 6.4 km (4 mile) long mineralized trend is 405 to 684 million tons grading 0.12 to 0.16 (4.11 -- 5.49 g/T) ounces per ton, with contained gold of 65 to 90 million ounces.


About Barkerville Gold Mines Ltd.
Since the mid-1990s the Company has focused on exploration and development of gold projects in the Cariboo Mining District in central B.C. The Company's mineral tenures now cover over 117,691.14 hectares, encompassing seven past producing hard rock mines and three NI 43-101 gold deposits, including the QR Mine & Mill. The QR Property was acquired in February 2010 and includes a 900 tonne/day gold milling facility and a permitted gold mine located approximately 110 kilometers by highway and all-weather road from the Barkerville Gold Camp. Mining operations commenced at QR in the first quarter of fiscal 2011 and the Company began pouring doré gold in September 2010 and continued until December 2011. In November 2010 the Company acquired a second permitted mill currently on care and maintenance in Revelstoke, B.C. for relocation to the Barkerville Gold Camp near Wells, B.C. and upgrade to a +3,000-tonne/day facility subject to all necessary government approvals. In November 2010 the Company and the Lhtako Dene First Nation also signed a Project Agreement in relation to its Bonanza Ledge and Cariboo Gold Projects. The Company has completed significant drilling and exploration programs and together with the historical data is compiling all information to determine geologic models and updated technical reports to continue with exploration and development of the Cariboo Gold projects.

The technical information in this news release has been reviewed and approved by the author Peter T. George, P.Geo, and the Company's Chief Geologist Jim Yin, PhD, P.Geo, both qualified people as defined in National Instrument 43-101.

This news release has been prepared on behalf of the Board of Directors which takes full responsibility for its contents.

"J. Frank Callaghan"

J. Frank Callaghan
President and CEO

Certain information in this news release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions, including the listing and trading of the Company's common shares on the TSX Venture Exchange. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward-looking information. The forward-looking information in this news release describes the Company's expectations as of the date of this news release.

The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. Material factors which could cause actual results or events to differ materially from such forward- looking information include, among others, the Company's ability to engage and retain qualified key personnel, employees and affiliates, to obtain capital and credit and to protect its property rights.

The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
 


*please refer to cautionary note