Xmet Inc. Reports a 56% Increase in NI 43-101 Mineral Resources on Duquesne-Ottoman

Toronto ON - Xmet Inc. (TSX V-XME) is pleased to announce it has received a National Instrument (NI) 43-101 compliant Mineral Resource estimate from Watts, Griffis McOuat Limited ("WGM") Consulting Geologists and Engineers of Toronto, Canada for the Duquesne-Ottoman Property, located near Rouyn-Noranda in Northwestern Quebec. WGM is an established, internationally recognized consulting firm with extensive experience in the calculation of NI-43-101 compliant resource estimates. Highlights of the new NI 43-101 Duquesne-Ottoman Resource estimate include:
  • Inferred Resources of 4,171,000 tonnes at an average grade of 5.42 g/t Au (6.36 g/t Au uncut) hosting 727,000 cut ounces Au (853,000 uncut ounces Au)
Xmet’s Phase 1 - 13,000 meter, drill program, completed in April 2011, generated a 56% increase in the inferred resource (cut) from the previously reported November 8, 2010 NI 43-101 inferred resource estimate for the Duquesne-Ottoman property, published on SEDAR (www.sedar.com). Drilling highlights from the Phase 1 program were summarized in a press release dated April 28th, 2011 (www.xmet.ca). These latest results demonstrate that there is excellent potential to develop additional resources amenable to underground extraction below the areas identified in the current Mineral Resource estimate. "We are very pleased to report this updated NI 43-101 compliant resource estimate for the Duquesne-Ottoman project, said Bill Yeomans, Senior Vice-President Exploration for Xmet. Our all-inclusive cost for the Phase 1 drill program, including our rebate from the Quebec Exploration Refund Incentive Program, was approximately CDN $1.3 million dollars. Our highly skilled exploration and management team generated an additional 328,000 ounces during the first 12 months of drilling and exploration at Duquesne-Ottoman, for an all-inclusive discovery-cost of less than CDN $4.00 per ounce. The project is well endowed with excellent infrastructure, meaning that there are no high logistics expenses typically associated with more remote projects." He further added that "the average value for inferred gold resource has risen significantly over the past year for projects located in good jurisdictions with established infrastructure. Our updated NI 43-101 compliant uncut resource now stands at 853,000 ounces. Our Phase 2 Drill program will commence in the immediate future, targeting further resource expansion on the property". Details for the Mineral Resource estimate, using a cut-off grade of 3.0 g/t Au over a 2.5m minimum horizontal width, are outlined in the table and resource statement below. A location map of the deposits is attached to this press release (Figure 1).

Table 1 Duquesne-Ottoman Project –Inferred Mineral Resource Effective Date September 8, 2011

  1. The resources reported in this release occur in a number of closely spaced steeply dipping sub parallel zones. All drilling used for the estimate was completed in the period from 1994 to 2011.
  2. Resources estimated using polygonal estimation methods on vertical longitudinal sections. A cutting factor of 30 g/t Au was applied. A cut-off grade of 3.0 g/t Au and a minimum horizontal width of 2.5m is based on possible underground mining and a recovery of 100% is assumed;
  3. Figures may not total due to rounding;
  4. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant issues;
  5. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category;
  6. The Mineral Resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.
Zones WGM identified eight (8) zones hosting the gold mineralization, including three new zones discovered during the course of the Phase 1 drill program at Nip-Nord and Sud, and the 20-20 zone. The eight zones hosting the gold mineralization remain open at depth and in some cases along strike and up dip. A recent trenching program at the Shaft Zone reported significant gold mineralization on surface associated with major structures controlling the gold mineralization. Duquesne-Ottoman Project The Duquesne-Ottoman Project is located approximately 50 kilometres north of Rouyn-Noranda in Northwestern Quebec and is immediately adjacent to three past-producing mines on properties currently held by Clifton Star Inc.(See June 23 news release at www.xmet.ca and Figure 2). The Duquesne-Ottoman Project benefits from development advantages including Highway 393 and logging roads on the property, and a major power line located 1 km east of the property. Specialized services and a skilled labour pool exist in several communities within 30 kilometres of the Duquesne-Ottoman Project, meaning that the contractors and exploration team live in the Noranda area, eliminating the need for camps. The project also holds significant potential for the discovery of additional mineral resources. Historic estimates exist for the Duquesne-Ottoman Project. John Reddick, of Reddick Consulting Inc. (RCI) prepared a National Instrument (NI) 43-101 compliant Mineral Resource estimate for the Duquesne-Ottoman property in 2010 which was publicly released by Xmet on November 8, 2010 and reported on SEDAR at www.sedar.com . The Historic estimates were based on data that do not include all currently available drilling, and assumed considerably different gold prices and operating costs than might be expected at present, and are therefore not considered relevant and should not be relied upon. Xmet is not treating the Historic estimates as relevant or as current mineral resources or mineral reserves. Xmet Inc. ("Xmet") is the operator and can earn a 75% interest in the Duquesne-Ottoman property from Globex Mining Enterprises Inc. (TSX:GMX) by investing a total of $8.2 million in exploration on the property and making cash payments totalling CDN $7.08 million over six (6) years. Resource Statement A total of 22,749 samples in 135 drill holes, representing approximately 66,750 metres of drilling were used for the estimate. All the drilling used for the estimate was done in the period 1994- 2011. Additional historical drilling which could not be validated also occurs in the area of the resources. Earlier holes were drilled by Santa Fe Canadian Mining Ltd., Kinross Gold Corporation, Queenston Mining Inc. and Diadem Resources Ltd. The Mineral Resource is constrained by limiting intervals to interpreted, multiple zones that demonstrate continuity of mineralization along strike and down-dip between adjacent drill holes. Metal grades were interpolated using polygons with a maximum radius of 60m using a polygonal estimation method. Metal prices of US$960 per troy ounce of gold, based on the three year trailing average, were used to estimate cut-off grade values for the estimate. Individual zones were modelled that reflected the continuous nature of gold mineralisation in a number of different zones. Mineral Resources were classified as Inferred in each zone if:
  1. the composited interval for a zone had a minimum grade of 3.0 gpt Au (cut) and a minimum horizontal width of 2.5 m; and either
  2. a polygon meeting the above criteria was also contiguous with another polygon for the same zone that also met the minimum grade and width criteria; or
  3. for isolated polygons; if they occurred up or down dip and along the interpreted plunge line of the zones.
Assay grades were composited to a minimum of 2.5m horizontal width based on the interpreted dip of the zones prior to resource estimation. Unsampled intervals were included in the composites at nil grades. A top cut of 30 g/t Au was applied to the assays before calculation of composite grades on the basis of statistical analysis. The gold grade cut-off value, at 3.0 g/t Au, is based on the assumption that the deposit is of a potential size and nature to allow for possible underground mining. The cut-off value of 3.0 g/t Au was derived from recent technical reports filed on SEDAR and in-house technical data from RCI for similar deposit types. Specific Gravity used in these estimates was 2.70. Recoveries are assumed to be 100%. A copy of the full resource estimation report will be available on the SEDAR website (www.sedar.com) within 45 days of this press release. The mineral resource estimates which are effective today were completed by Kurt Breede, P.Eng., Senior Resource Engineer and Vice President, Marketing of Watts, Griffis McOuat Limited ("WGM") Consulting Geologists and Engineers of Toronto, Canada, and are based on geological interpretations and data supplied by the Company to WGM and modified by WGM. Kurt Breede is an ‘independent qualified persons’ for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators and has verified the data disclosed in this release. David Power-Fardy, M.Sc. P.Geo, Senior Geologist, WGM is qualified as an ‘independent qualified person’ for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, has verified the sampling procedures and QA/QC data delivered to WGM and is of the opinion that the data are of good quality and suitable for use in the resource estimates. About Xmet Inc Xmet Inc., through its wholly-owned subsidiary Duquesne-Ottoman Mines Inc. ("Duquesne-Ottoman Mines"), carries out gold resource exploration and development. Pursuant to the terms of a mining option agreement between Duquesne-Ottoman Mines and Duparquet Assets Ltd., Duquesne-Ottoman Mines can earn an option to purchase 75% of the common shares in the capital of Duparquet Assets Ltd, which legally and beneficially owns 20 claims (commonly referred to as Duquesne West) and 40 claims (commonly referred to as Ottoman) covering an area of 928.6 hectares located approximately 30 kilometres north of the city of Rouyn-Noranda and 10 kilometres east of the village of Duparquet within the townships of Duparquet and Destor in the Province of Quebec. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.Mr. Bill Yeomans, P.Geo., Xmet’s Senior Vice-President Exploration, Director, is the designated Qualified Person responsible for this release. For further information, please contact: Xmet Inc. Charles Beaudry, President and COO Phone (416) 644-6588 E-mail: cbeaudry@xmet.ca or Stephen Stewart, V.P. Business Development Phone: (416) 644-6588 E-mail: sstewart@xmet.ca Figure 1: Location of Gold Zones on Duquesne-Ottoman Property, Figure 2: Location of Duquesne-Ottoman property in relation to surrounding historic gold mines and other gold deposits.
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