Newstrike continues to define high-grade zone at Ana Paula

Vancouver – The latest drilling at Newstrike Capital‘s (NES-V) Ana Paula project continues to confirm a high-grade central gold system, while recent step out drilling is less clear.

The company is conducting delineation drilling on the Breccia Zone, which sits in the southeast section of a one by two km surface gold geochemical anomaly at the project. So far the company sees the Breccia Zone as an irregularly-shaped body plunging steeply to the southwest with rough dimensions of 250 metres by 150 metres and a 250-metre vertical depth.

The most recent results from the zone include hole 11-71 that hit 247 metres grading 4.44 grams gold per tonne from surface, and included a 1.2-metre section grading 305.15 grams gold at 235 metres depth. Other recent results include hole 11-72 that cut 101.5 metres carrying 2.43 grams gold from 210 metres depth, hole 11-70 that cut 212 metres averaging 1.41 grams gold from 84 metres downhole, and hole 11-69 that intersected 93.4 metres carrying 0.51 gram gold from 99 metres.

In September the company released four holes that tested northern and northwest extensions of the mineralization. Results included 3 metres grading 0.77 gram gold in hole 65, 5 metres grading 0.44 gram gold in hole 63, 31 metres grading 0.55 gram gold in hole 66 and 10.9 metres carrying 0.53 gram gold in hole 61.

In the September round of results holes drilled near the mineralized breccia body again proved to be the best. There, hole 11-68 cut 119.6 metres grading 3.76 grams gold from 268 metres depth and then 88.6 metres carrying 2.58 grams gold from 432 metres downhole, hole 11-64 returned 65.8 metres grading 1.19 grams gold from 478 metres downhole, and hole 11-62 cutting 49 metres averaging 0.55 gram gold from 322 metres depth. All holes on the project continue to return low to moderate silver grades as well.

Overall the company has drilled roughly 10,000 metres over 17 holes in the Breccia Zone this year plus about 20,000 metres over 61 holes in step-out and infill drilling since late 2010. The company recently added a third drill rig to the project and will shortly add a fourth.

Newstrike has concentrated the vast majority of its drilling on the northeast and southeast sections of a 400 metre by 600 metre section of the greater surface anomaly so far identified. Holes 11-63 and 65 from the Septemver results were the first drilled in what the company considers the northwest quadrant of the area. Holes 11-56 and 67, respectively intersecting 7.6 metres grading 1.15 grams gold from 477 metres depth and 4.5 metres grading 0.81 gram gold from 16 metres depth, were the first drilled in the southwest quadrant.

Results from Ana Paula so far conform to the style of mineralization found at other gold-bearing iron skarn-porphyry discoveries in the Guerrero Gold Belt. The company notes that the most common geological settings are disseminated and stockwork intrusion hosted deposits that typically produce a large volume of low grade gold mineralization. Other resource companies active in the area include Goldcorp (G-T, GG-N) with its operating Los Filos gold mine 28 km southeast, Torex Gold Resources (TGX-T) with its Morelos project and Cayden Resources (CYD-V) with its Morelos Sur project.

Ana Paula hosts a 3% net smelter return royalty payable to Goldcorp’s local subsidiary, from which Newstrike acquired the project in 2010.

Newstrike’s share price dropped 4¢ to $2.86 on the latest news. The company has a 52-week share price range between 50¢ and $3.37 and has 82.6 million shares outstanding.