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Leagold Commences Development Of Bermejal Underground

September 25, 2017 Download PDF

Vancouver, September 25, 2017 – Leagold Mining Corporation (TSX:LMC; OTCQX:LMCNF) (“Leagold” or the “Company”) has completed the surface preparation and has now commenced portal development for the 1,325 metre long exploration ramp that will provide access to the high-grade mineralization of the Bermejal Underground deposit.

Neil Woodyer, CEO stated “We have been steadily advancing the development of the Bermejal Underground as an expansion project at our Los Filos mine, and the start of the portal and ramp is a significant achievement within our initial six months of ownership. The contribution from underground mining at Bermejal will add approximately 150,000 ounces per year to the operation and bring the combined production rate to 350,000 ounces per year once fully operational.”

The portal is located in carbonate rocks on the north side of the mined-out portion of the Bermejal open pit (Figure 1). The US$13M capital budget includes a total of 3,136 metres (m) of ramp and cross-cut development and two ventilation raises totalling 560 vertical m that will be developed using a raise bore (Figure 2). A spur at the 650 m point of the main ramp will provide access to a test mining area on the southeastern part of the Bermejal Underground deposit and the mineralized body will be intersected in mid H1 2018. The exploration ramp will allow initial mining to begin in the test stope for the collection of a large-scale sample for metallurgical testing and leaching on the existing heap leach pads. The main ramp continues to the central portion of Bermejal Underground and will intersect mineralization in that area in late 2018. The design of the portal and ramp is fully dimensioned for eventual use as a production ramp and includes cut-outs for underground drilling. This development program provides the opportunity for drilling and mining over a strike length in excess of 1,200 m and along a vertical extent of more than 300 m of the Bermejal Underground deposit.

The ramp will provide access to the eastern and central portions of the deposit and will enable additional exploration, demonstrate the minability of Bermejal Underground, and advance the project towards declaration of reserves.

Leagold has selected Cominvi, S.A. de C.V. as the portal and ramp development contractor. Cominvi currently provides contract mining and development services in the Los Filos Underground mine, which has the same host rocks and type of mineralization. The contractor was mobilized in September, surface preparation of the portal area was completed (Figure 3) and the first blast for the portal is scheduled for September 25th.

Figure 1: Plan View Map of Bermejal Underground Portal and Ramp Location


Figure 2: Vertical Longitudinal Section of Bermejal Underground Development


Figure 3: Portal Location Prior to Commencement of Development


Oxide mineralization along the Bermejal intrusive has an average grade of 6.7 grams per tonne (“gpt”) in the currently reported Measured and Indicated mineral resources. The recent drilling in the eastern and central portions of Bermejal Underground has provided consistent intercepts at similar grades as well as intervals of higher grade mineralization including the following results (see Table 1):

Table 1: Recent Drilling Program Highlights per Key Zone in Bermejal Underground Deposit

Sector

Hole ID

Zone

From (m)

To (m)

Length (m)

True Width (m)

Grade (g/t Au)

Capped (g/t Au)

Central2

BU-16-17

UI

116.75

137.65

20.90

18.78

7.2

East2

BU-20-17

UI

280.60

294.80

14.20

13.34

6.8

Central3

BU-23-17

Sill/LC

454.55

476.15

21.60

20.30

8.0

Central3

BU-37-17

LC

411.95

420.85

8.90

8.60

16.8

Central1

BD-02-16

LI

585.15

671.05

85.90

29.21

25.3

18.5

Central1

BD-05-16

LI

595.70

638.80

43.10

21.55

13.0

12.4

Central3

BU-41-17

LI

451.65

490.50

38.85

13.29

17.6

17.4

Central3

BU-31-17

LI

455.95

519.80

63.85

26.98

18.4

15.5

NOTES:

  1. Intervals mentioned in the April 12, 2017 news release
  2. Intervals mentioned in the July 13, 2017 news release
  3. Intervals mentioned in the August 31, 2017 news release
  4. UI = Intrusive Contact above Junction with Sill; UC = Upper Contact of Sill; LC = Lower Contact of Sill; LI = Intrusive Contact below Junction with Sill
  5. Only intercepts with over 3 grams per tonne and diluted to a minimum true width of 3 metres are shown
  6. Individual assays within the intercepts were capped using 40 g/t limit

Bermejal Underground Expansion Project Activities Update

An environmental permit for the mine portal and exploration ramp was completed in July 2017 (see news release dated July 31, 2017).

The Bermejal Underground drilling program is now over 50% complete with 28,846 m drilled of the planned 56,000 m. A total of 67 of the planned 113 holes have been drilled. The entire drilling program is expected to be completed within 2017 and these drill hole results will be incorporated in an updated resource estimate at the end of 2017. All holes intersected iron-oxide skarn mineralization as targeted and only two holes (BU-36-17, BU-40-17) were below a 3 gpt over 3 m diluted minimum width threshold.

The drilling shows consistent oxide mineralization at carbonate/intrusive contacts either along the intrusive contact or below the intersection between the sill and the Bermejal intrusive contact. The mineralization in the Bermejal Underground deposit remains open in several directions.

Qualified Persons

Doug Reddy, P.Geo, Leagold’s Senior Vice President – Technical Services, is a Qualified Person under NI 43-101, and has reviewed and approved the technical contents of this news release on behalf of Leagold.

About Leagold Mining Corporation

Leagold is building a new mid-tier gold producer with a focus on opportunities in Latin America. Leagold is based in Vancouver, Canada and is listed on the TSX under the trading symbol “LMC” and trades on the OTCQX market as “LMCNF”. The recent acquisition of the Los Filos Mine, a low-cost gold producer in Mexico, provides an excellent platform for growth.

For more information on Leagold please visit the Company website at www.leagold.com or contact:

Meghan Brown, VP – Investor Relations

+1-604-398-4525

mbrown@leagold.com

This news release contains "forward-looking statements" and “forward looking information” (as defined under applicable securities laws), including but not limited to plans for future development of the Los Filos Mine. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "expects", "expected", "budgeted", "forecasts" and "anticipates". Forward-looking statements and information, while based on management's best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the Los Filos Mine, risks related to the successful integration of the acquisition; risks related to international operations; risks related to general economic conditions and credit availability, actual results of current exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables, possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which Leagold operates. Although Leagold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements and forward-looking information are made as of the date hereof and Leagold disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements or forward-looking information contained herein to reflect future results. Accordingly, readers should not place undue reliance on forward-looking statements and information. Please refer to Leagold's most recent filings under its profile at www.sedar.com for further information respecting the risks affecting Leagold and its business.

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