Medgold-Centerra Drilling Program at Lagares Project, Portugal Intersects 17.5 m of 4.5 g/t Au - Seite 2

Lagares Property

The Lagares property is one of four mineral concessions Medgold holds in the Valongo Belt, all of which are currently under option to Centerra.

The first phase of significant work being conducted at the Lagares property is a program of 3,000 metres of diamond drilling, of which 1,192 metres have been drilled in 12 holes. To date, 497 assays have been received from the first 5 drill-holes, a few of which are discussed above. The current program includes some verification drilling, to confirm results obtained by previous drilling campaigns, but the majority of this year's drill-holes are designed as exploration holes inclined between 60 and 70 degrees to the southwest, beneath the limits of the historical drilling. Previous explorers, including the Romans, generally targeted oxide mineralization due to the very high gold grades and excellent gold recoveries typically obtained with this material. However, the sulphide-associated gold mineralization has not been well tested, and the recent drilling has intersected some broad widths of semi-massive sulphide mineralization, predominantly pyrite, where the highest gold grades have been identified.

The early drilling results of the ongoing drilling program demonstrate a good positive correlation with both the historical drilling and our recent channel-chip results. The Company's geological model for the Lagares system has also evolved, and we now understand that the strongest mineralization is hosted in shallow-dipping tabular zones broadly associated with the northwest-trending Railway Fault.

Outcropping gold mineralization extends along a northwest-trending strike of 4 kilometres with only 500 metres drill-tested by Medgold. Gold-associated hydrothermal alteration in the granitic host-rock is up to 200 metres wide and is continuous for over 100 metres vertically, showing a zonation from silica-pyrite through phyllic and kaolinite alteration to low-temperature propylitic alteration. The highest gold grades are associated with the silica-pyrite alteration phase.

Due to access restrictions, three drill-holes were steeply inclined towards the northeast, effectively sub-parallel to the dip orientation of the mineralization, but still intersected the shallowly northeast-dipping, tabular mineralized zones, albeit obliquely. Assays are pending for these drill-holes, however, geological information provided by these drill-holes suggests that the mineralized zones extend at low-angles to the northeast beyond the main hill of the Castromil prospect beneath valley lands where no bedrock is exposed. The continuity of these zones will be the focus of future drilling.