US Gold Corporation: Gold & Silver Mineralization Expands at Two Sites in Mexico: Financial News

US Gold Corporation: Gold & Silver Mineralization Expands at Two Sites in Mexico
Wednesday November 5, 2008 1:57 pm ET

TORONTO, ONTARIO--(MARKET WIRE)--Nov 5, 2008 -- US GOLD CORPORATION (Toronto:UXG.TO - News)(AMEX:UXG - News)(Frankfurt:US8.F - News) announces that drilling within the Magistral District, located in Sinaloa State, Mexico has successfully intersected more encouraging gold and silver mineralization at the Magistral Mine and Palmarito Project (Figure 1).

EXPLORATION DRILL HIGHLIGHTS

- Magistral Mine: La Prieta Zone extended 180.0 ft. (55 meters (m)) vertically and 100.0 ft. (30.5 m) along strike. Best intersection includes 0.17 ounces per ton (opt) gold over 25.0 feet (ft.), (5.66 gpt (grams per tonne) over 7.6 m) including 0.35 opt gold over 10.0 ft. (11.97 gpt gold over 3.0 m).

- Magistral Mine: Lupita Zone returned 0.13 opt gold over 20.0 ft (4.51 gpt gold over 6.1 m), including 0.25 opt gold over 10.0 ft (8.72 gpt gold over 3.0 m) indicating potential expansion at depth.

- Palmarito: New occurrence of shallow, higher-grade silver mineralization. Best intersection 6.9 opt silver over 25.0 ft. (236.6 gpt silver over 7.6 m), including 12.2 opt silver over 5.0 ft. (418.0 gpt silver over 1.5 m). There is no previous drilling in this area.

- Palmarito: Expansion of the Main Zone's vertical extent continues. Drilling to test the deep extension returned 6.7 opt silver over 6.6 ft. (231.0 gpt silver over 2.0 m) and 8.8 opt silver over 3.3 ft (301.0 gpt silver over 1.0 m).

EXPLORATION PROGRAM

Exploration discussed in this release focuses on the Magistral Mine and Palmarito Project. A total of 16 holes were completed with 2 holes failing to reach target depth. A summary of all drilling can be found at www.usgold.com. Results from the Magistral Mine are from two zones referred to as La Prieta and Lupita. The results from Palmarito's are from the Main Zone and the recently discovered Southwest Zone. Drilling in Mexico for the remainder of the year will target these areas.

LA PRIETA ZONE - MAGISTRAL MINE

The goal of the most recent exploration was to test for extensions of the La Prieta Zone to the north and southwest. Both of these goals were successfully achieved.

Reverse circulation (RC) drilling in the north area expanded the vertical extent of the gold mineralization by 180 ft (55 m) and 100 ft. (30.5 m) along strike (Figure 2). The northern section of the La Prieta Zone remains underexplored relative to other parts of the mine. Recent results are listed below:

 

              Gold                              Gold
Hole #       Grade    From      To   Length    Grade    From     To  Length
------       -----    ----      --   ------    -----    ----     --  ------

              (opt)   (ft.)   (ft.)    (ft.)    (gpt)     (m)    (m)     (m)

MPX-24        0.13   285.0   300.0     15.0     4.51    86.9   91.4     4.6

MPX-25        0.17   230.0   255.0     25.0     5.66    70.1   77.7     7.6
Including     0.35   235.0   245.0     10.0    11.97    71.6   74.7     3.0

Over the previous four months the majority of drilling around La Prieta has targeted the southwest section of the zone. New RC drilling in this area returned:

 

              Gold                              Gold
Hole #       Grade    From      To   Length    Grade    From     To  Length
------       -----    ----      --   ------    -----    ----     --  ------

              (opt)   (ft.)   (ft.)    (ft.)    (gpt)     (m)    (m)     (m)

MPX-22        0.11   215.0   235.0     20.0     3.64    65.5   71.6     6.1

When combined with earlier work, US Gold's drilling has successfully expanded the zone by approximately 200.0 ft. (60.0 m). The new data that has been generated by recent exploration is now being compiled and will be interpreted before drilling resumes.

LUPITA ZONE - MAGISTRAL MINE

Two holes were recently drilled into the Lupita Zone and they indicate that there is potential to discover additional gold mineralization at depth. Lupita is a low sulphidation epithermal vein system with a near vertical mineral structure. The current resource estimate at Lupita contains 98,242 gold ounces (NI 43-101 Pincock, Allen & Holt 2006). Results from drilling include:

 

              Gold                              Gold
Hole #       Grade    From      To   Length    Grade    From     To  Length
------       -----    ----      --   ------    -----    ----     --  ------

              (opt)   (ft.)   (ft.)    (ft.)    (gpt)     (m)    (m)     (m)

MLX-05        0.13   265.0   285.0     20.0     4.51    80.8   86.9     6.1
Including     0.25   265.0   275.0     10.0     8.72    80.8   83.8     3.0

PALMARITO PROJECT

New Higher-Grade Silver

Geological modeling at Palmarito indicates that the silver mineralization discovered to date continues to the southwest around the "Palmarito Hill," a rhyolite dome, which is a prominent feature in the area (Figure 3). Early air percussion drilling based on this model has shown good results. US Gold geologists believe this is a significant development towards expanding the potential of the area.

The results below show that the silver mineralization is higher-grade, near surface, with potential to expand. Highlights from the first hole drilled in this new area, termed the Southwest Zone, include:

 

Hole #      Silver    From      To   Length   Silver    From     To  Length
------      ------    ----      --   ------   ------    ----     --  ------

              (opt)   (ft.)   (ft.)    (ft.)    (gpt)     (m)    (m)     (m)

PM-6           6.9    35.0    60.0     25.0    236.6    10.7   18.3     7.6
Including     12.2    50.0    55.0      5.0    418.0    15.2   16.8     1.5

Drilling at Palmarito's Main Zone, located in the northwest part of the project, extended the mineralization this year a total of 725.0 ft. (220.0 m) or 120% to 1,050 ft. (320 m) below surface. The most recent RC hole (shown below) was drilled 325.0 ft (100 m) northeast of a recently (09-25-2008) announced hole (PMX-38) that returned 23.7 opt silver over 5.9 ft., (814.0 gpt silver over 1.8 m), including 31.0 ft. grading 9.2 opt silver (313.8 gpt silver over 9.5 m). Drilling has demonstrated consistent grade and continuity.

 

Hole #      Silver    From      To   Length   Silver    From     To  Length
------      ------    ----      --   ------   ------    ----     --  ------

              (opt)   (ft.)   (ft.)    (ft.)    (gpt)     (m)    (m)     (m)

PMX-42         5.2  1003.9  1007.2      3.3    177.0   306.0  307.0     1.0
And            8.8  1020.3  1023.6      3.3    301.0   311.0  312.0     1.0
And            6.7  1043.3  1049.9      6.6    231.0   318.0  320.0     2.0

ABOUT US GOLD

US Gold Corporation is a United States based gold exploration company exploring throughout northeastern Nevada and Mexico. US Gold's shares trade on the American and Toronto Stock Exchanges under the symbol UXG.

QUALIFIED PERSON

This news release has been viewed and approved by Steve Brown, Senior Geologist and Project Manager, who is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of exploration undertaken by the Company at its Magistral Mine and Mexican exploration properties. All samples were analyzed by ALS Chemex. Samples from Palmarito were analyzed utilizing a 4 acid digestion with ICP finish. Samples from the Magistral Mine were analyzed by fire assay. True width of the mineralized zones has not been determined.

Drilling was completed by reverse circulation (5 ft. (1.5 m) sample intervals) and conventional rotary (5 ft. (1.5 m) meter sample interval). Diamond drilling was completed with HQ and NQ core. Samples intervals were selectively chosen for mineralized areas based on geological characteristics.

Certain statements contained herein and subsequent oral statements made by and on behalf of the Company may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as "intends," "anticipates," "believes," "expects" and "hopes" and include, without limitation, statements regarding the Company's results of exploration, plan of business operations, potential contractual arrangements, receipt of working capital, anticipated revenues and related expenditures. Factors that could cause actual results to differ materially include, among others, those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and other filings with the Securities and Exchange Commission, under the caption "Risk Factors". Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking statements. Except as otherwise required by applicable securities statutes or regulations, the Company disclaims any intent or obligation to update publicly these forward looking statements, whether as a result of new information, future events or otherwise.

Cautionary Note to U.S. Investors - All mineral resources have been estimated in accordance with the definition standards on mineral resources and mineral reserves of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in National Instrument 43-101, commonly referred to as NI 43-101. U.S. reporting requirements for disclosure of mineral properties are governed by the United States Securities and Exchange Commission (SEC) Industry Guide 7. Canadian and Guide 7 standards are substantially different.

The SEC permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this news release, such as "reserves," "resources," "geologic resources," "proven," "probable," "measured," "indicated," and "inferred," that the SEC guidelines strictly prohibit us from including in our filings with the SEC. U.S. Investors should be aware that the issuer has no "reserves" as defined by Guide 7 and are cautioned not to assume that any part or all of mineral resources will be confirmed or converted into Guide 7 compliant "reserves". Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute Guide 7 complaint "reserves" by SEC standards as a in-place tonnage and grade without reference to unit measures.

To view the associated figures with this press release, please visit the following links:

http://media3.marketwire.com/docs/UXGMexicoFig1.pdf

http://media3.marketwire.com/docs/UXGMexicoFig2.pdf

http://media3.marketwire.com/docs/UXGMexicoFig3.pdf