VANCOUVER, British Columbia, July 15, 2004 (PRIMEZONE) -- Capital Hill Gold, Inc. (OTCBB:CAGI) (the "Company") confirms that it has been contacted by the British Columbia Securities Commission (BCSC) with respect to the Company's disclosure for compliance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101). The BCSC has requested that the Company retract and/or restate the information previously disseminated to the public.
Retraction of Mineral Reserves and Economic Projections
In its recent news release and on its website, the Company disclosed mineral reserves and economic projections based on these reserves. This disclosure was contrary to NI 43-101 for a number of reasons. For example, the Company's disclosure of mineral reserves used noncompliant categories and was not supported by an independent technical report. In addition, the mineral reserve statements and economic projects were not based on at least a current preliminary feasibility study.
As a result, the Company specifically retracts its previous disclosure of mineral reserves along with the economic projections based on these estimates. The public should not rely on the previously disclosed estimates and projections until they have been independently verified and supported by a compliant NI 43-101 technical report and a current/updated preliminary feasibility study.
The Company also reports that there were numerous errors in its Research Profile that are unsubstantiated and misleading statements. The Company has removed the Research Profile from its web site for amendments by a Qualified Person as defined under NI 43-101.
Restatement of Historical Information
In its recent news release and on its website, the Company disclosed mineral resources that were also contrary to NI 43-101. For example, the mineral resources used noncompliant categories and were not supported by an independent technical report. Previous releases were based on historical information on the Mexican Hat property which is believed to be reliable but the accuracy of which cannot be guaranteed by the Company.
The Company is not treating these resources as current NI 43-101 defined resources, has not done the work necessary to verify the historical estimates and has not conducted any of its own resource estimates on the property. Therefore it is not able to say what portion of, if any, of the historically supported material would meet present reporting requirements under NI 43-101. As a result, these historical estimates should be considered exploration targets for further work and the public should not rely on the previously disclosed estimates until they have been independently verified and supported by a compliant NI 43-101 technical report.
Restatement of Exploration Potential
The Company based its recent exploration potential comments in addition to exploration (drilling and trenching) on the Victoria fault, the Linda and 16 zones as a result of a review of the following historical information.
On February 10,1997 Jean Descarreaux, Ph.D. P Geologist reported that in 1990 Placer Dome US Inc. conducted a *geological reserve study of the most important known gold-bearing zones on the Mexican Hat Properties. Included in his report was the following summary:
"A structurally controlled, volcanic rock hosted gold occurrence has been documented at the Mexican Hat property. The mineralogy and geochemistry are indicative of a epigenentic epithermal system. The gold is hosted by irregular fracturing. Gold is also found in low angle fault zones.
62,120 feet drilling has defined a kriged drill indicated *resource of 154,000 ounces of Gold. The total near surface *geologic resource is estimated at 300,000 ounces of Gold. Preliminary pit optimizations yield between 44,000 and 103,000 recoverable ounces of Gold from material grading 0.28 to .033 opt Au, with strip rations ranging from 4.4:1 to 5.0:1."
The potential qualities and grades referred to above are conceptual in nature. There has been insufficient exploration by the Company to define a mineral resource on the property and it is uncertain that further exploration will result in discovery of a mineral resource on the property.
Method Used
A (see Note) geological reserve study was performed on that part of the Mexican Hat Property within the limits of Sections 5 through 24, an area 950 by 1,950 feet in extent that includes the major identified gold bearing zones.
Three classifications were used:
Indicated: Gold Bearing material within 50 feet of drillhole or Trench Control
Inferred: Gold bearing material beyond 50 feet but within 100 feet of drillhole or trench control, and its extension where continually can be geologically projected to additional drillhole or trench control
Possible: Gold bearing material projected beyond 100 feet of drillhole or trench control
Estimation methods that rely on constant grade variability (polygonal, inverse distance weighting, and ordinary kriging) will produce dubious results for this deposit. Therefore indicator kriging was chosen as the estimation method.
Kriging is an acceptable method of quantifying mineral resources. While the company is in possession of a summary report of the results of kriging the Mexican Hat mineralization, detailed information such as block models is not available.
On August 25,1989 Matt Gray P. Geo. on behalf of Placer Dome US Inc. prepared a project review in which he summarizes:
"A structurally controlled gold occurrence has been documented at the Mexican Hat Property. The mineralogy and geochemistry are indicative of an epigenetic epithermal system. Surface mapping and drilling have identified six gold bearing zones. The aerial extent of the gold system identified to date is roughly 2,500 by 1,500 feet. A minimum *permissive target of 10.340 million tons at a weighted average grade of .0358 opt au (361,894contained ounces) is inferred from 41 reverse circulation and 6 diamond drillholes. Additional work is warranted by the results of this program."
The potential quality and grade referred to above is conceptual in nature. There has been insufficient exploration by the Company to define a mineral resource on the property and it is uncertain that further exploration will result in discovery of a mineral resource on the property.
On April 22,1996 Robert L. Akright Geological Consultant prepared a report at the request of Kalahari Resources, Inc. the subject of which were the Mexican Hat Properties. In this report he confirmed the amongst other things the following:
"There is an untested zone roughly cone shaped directly beneath the Mexican Hat Peak which could contain 2.5-3.0 million tons of material. Rock samples collected from the surface of this zone and surrounding zones contain anomalous gold values between .006 - 0.030 oz. Au./ton and the zone is bounded by drill holes with significant intercepts."
Again on April 22,1999 Robert L Akright Geological Consultant confirms the exploration potential and further states that "it is likely the top of the hill a cone shaped block, could be gold mineralized and with drilling could be moved from a waste rock to a *reserve category, thus increasing *reserves and reducing the stripping ratio."
The potential qualities and grades referred to above are conceptual in nature. There has been insufficient exploration by the Company to define a mineral resource on the property and it is uncertain that further exploration will result in discovery of a mineral resource on the property.
Note: terms not recognized under NI 43-101
On Behalf of the Board, KENT CARASQUERO Secretary, CFO
The information provided above has been reviewed CK Ikona, P Eng, a Qualified Person as defined by NI 43-101 who believes it accurately reflects information contained in available historical reports.
Cautionary Statements:
Statements contained in this press release, which are not historical facts, are forward looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based largely on the Company's expectations and are subject to a number of risks and uncertainties beyond the company's control, including but not limited to economic, competitive and other factors affecting the Company's operations, management team effectiveness, expansion strategies, available financing, market prices and recovery costs, government regulations involving the Company, facts and events not known at the time of this release, and other factors discussed in the Company's filings with the Securities and Exchange Commission. These statements are not guarantees of future performance and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements.