(i) All resources estimates identified in this news release with an (i) are historic in nature and pre-date the implementation of NI 43-101. The historic resource information has been obtained from internal Noranda reports which were collectively published in 1980 and which are publically available. These estimates are based on extensive underground exploration drilling and sampling, are repeated in several documents, and are believed to be highly reliable between the 19th and 49th levels. Data for resources below the 49th level are also considered to be reliable but are based on less extensive underground development and drilling. The majority of the source data is based on 10 foot (3.05 metre) assay intervals and "in-house" assaying by Noranda Inc.
The internal Noranda reports, while stating certain historic estimates as "reserves" do not provide the necessary economic parameters to make them comparable to NI 43-101 reserves. Eggert's 1976 estimate, prepared on closing of the Horne Mine complex, is the most recent resource estimate for the Horne #5 Zone and contains no specific references to cut-off grades, capping factors and relies on global resource silver grades calculated by Bancroft in 1976. The 1980 Price and Bancroft estimates draw on the work of earlier authors and internal Noranda reports.
Price's 1980 historic reserve figure is based on 375 resource blocks measuring 250 foot x 50 foot in the upper portion of the #5 Zone between the 19th and 43rd levels. No specific capping, cut-off or economic factors are included in the authors reserve statement.
Bancroft's 1980 estimate of the remnant high-grade gold resource located between the 19th and 57th levels employs a cut-off grade of 5.14 g/t, a capping factor of 17.14 g/t gold and a minimum assay interval of 10 feet (3.05 metres).
Investors are advised that no assessment of the potential for profitable extraction of the above tonnages has been made. A qualified person has not done sufficient work to classify any of the historical estimates as current mineral resources or mineral reserves as defined by NI 43-101. The Company is not treating the historical estimates as current mineral resources or reserves as defined by NI 43-101. Further compilation of the historic geological and drilling data, resource modeling and confirmation drilling will be necessary to convert the historic estimates outlined above to NI 43-101 resources/reserves.
Horne #5 Zone - Details
The Horne #5 Zone was discovered in the late 1930s and sits in the hanging wall to the former producing Horne copper-gold deposit. The Horne deposit was mined from the late 1920s to 1976 producing 54 Mt @ 6.1 g/t gold, 13.0 g/t silver and 2.2% copper. The Horne deposit served as the fundamental building block for Canadian resource giant Noranda Inc. (now owned by Xstrata PLC). Between the early 1940s and 1960s Noranda conducted a thorough evaluation of the Horne #5 Zone, to a depth of over 2,100 metres. This included the development of 5 vertical shafts and 18 horizontal working levels (see Figure 1). The Zone remains open beneath the deepest levels tested.
"The extensive underground infrastructure at Horne #5 will be of tremendous benefit in the evaluation and potential future development of this large gold-silver system," said Falco Pacific's President and CEO, Kelly Klatik, in commenting on the historic resource inventory. "Today's metal prices provide a much different economic scenario for the development of gold and silver resources than existed between the 1940s and 1960s when the Horne #5 body was being actively evaluated."
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