The Dufferin Mine is a high-grade underground gold mine and fully permitted mill in Nova Scotia, Canada, with historic and recent production, a planned near-term restart, and potential for extensive expansion. The mine is currently on care and maintenance as MDGC completes improvements to the electrical system.  The care and maintenance phase is expected to change to mine operations on April 1st, 2017. Maritime Dufferin Gold Corp (MDGC) has a project turnaround plan and team in place so that production can recommence within 120 days. The mine has a 300 tpd gravity and flotation mill and, with certain upgrades and refurbishment, all necessary infrastructure in place to conduct full-scale gold mining operations.

MDGC is preparing to resume mining of an approximately 15,000 tonnes identified as having insitu grades of approximately one ounce per tonne gold.  Mill repairs and rehabilitation are complete with the mill concluding two short test runs which confirmed that the crushing, screening, grinding and gravity concentration circuits are working properly. Milling is expected to commence on stockpiled materials identified to contain gold mineralization at or above 2.5 g/t following completion of some modifications to the tailings impoundment which are expected to be completed shortly. Milling of freshly mined mineralized material will commence before the end of April following the restart of mining operations.  A Preliminary Economic Assessment was completed and posted to SEDAR on January 24, 2017 and indicates a 10 year mine life.

The Dufferin deposit is faulted in half and offset into East Dufferin and West Dufferin. East Dufferin was discovered in the early 1980s, and has seen only limited mining and bulk sampling, with 2001 production of 55,000 tonnes averaging a recovered grade of 13.4 g/t Au. Mine development and drilling have intersected 17 mineralized vein systems over 1.6 km of strike length, and recent drilling returned numerous high-grade intercepts such as 287 g/t Au over 1 m.

At West Dufferin gold was first discovered in 1868, followed by mining of 41,000 ounces at a recovered grade of 11.9 g/t Au. Subsequent exploration by Cominco (1930s), Sulpetro (1970s), Jascan (1980s), and NYCON Resources (2000s) has identified 18 vein systems and demonstrated the continuity of gold-bearing veins over a strike length of 1.5 km. The entire mineralized system at both East and West Dufferin has a strike length of over 3 km and is open to the east, west, and at depth.


Gold From Dufferin Mine

The project comprises 1,684 ha, accessible by gravel road 25 km from Sheet Harbour in southeastern Nova Scotia, about 135 km northeast of Halifax.

Mineralization at Dufferin consists of quartz veins occupying multiple vertically stacked fold hinges in metamorphosed sediments. Dufferin and other deposits in the district are orogenic-type gold deposits, which have produced a majority of the world’s gold, including many of those in the Canadian Shield and the Meguma Terrane of Nova Scotia, where Dufferin is located. Veins at Dufferin are composed principally of quartz and carbonate minerals, with numerous sulfides, galena being the best predictor of gold grade. Gold occurs dominantly as free gold and contains about 5% silver.

Expansion and exploration potential at Dufferin are excellent. More than 35 quartz saddle reef zones have been identified, of which only a few have been mined. The >3-km-long deposit is open to the east, west, and at depth. Depth potential is particularly promising: orogenic gold deposits are known for great depth extents. Dufferin’s closest analogue is Bendigo, Australia, which attained depths of >1,000 m over 8,000 m of strike length and produced over 38 million ounces of gold.


Resource Capital Gold Corp. has provided a project update for the Dufferin gold project in Nova Scotia. Successful bulk sampling and milling operations continue to deliver positive results in advancing the Project toward full operations. During part-time bulk sampling operations in September, the Company recovered an average of 8.0 grams of gold per tonne of material test mined and milled, processing a total of 3,235 tonnes during the month. The recovered grade represents a 27% increase over the recovered grade during July and August.

The increase in recovered grade comes in response to a concerted effort by the Company to identify and target zones of mineralization containing elevated amounts of gold, as well as to conduct efficient mining to minimize dilution. The positive experience gained is now being employed in additional working faces being developed in Saddles 5 and 6, as the Company expands its activities toward full operations.

The Company is now conducting mining activities on a 24-hour, 7-day basis, with test milling on a 24-hour basis during week days. Activities include developing additional mining faces for the purpose of increasing the production rate to continue to feed the test milling while accumulating a stockpile to enable the mill to commence activities on a 24-hour, 7-day basis as well. The Company plans to continue increasing mining and processing rates over the balance of the current quarter to reach full capacity during 2018.

The Company is not basing its production decision on a feasibility study of mineral reserves demonstrating economic and technical viability; as a result there is increased uncertainty and economic and technical risks of failure associated with its production decision.

"We are pleased with the excellent results and recoveries achieved during September," said George S. Young, CEO of the Company. "We are achieving our objectives of delineating and targeting the highest grade material from numerous faces simultaneously as we develop into new areas. In just three months since receiving our permits, we have developed into numerous faces in the mine, demonstrated the efficiency of the mill and flowsheet in recovering the free gold from the materials mined, refined our approach to mining in such a way that we are able to delineate and target high grade materials to be extracted, and improved our ability to selectively mine with minimal dilution, all while producing over 2,113 ounces for sale from limited operations. We are well on our way to bringing the mine and mill into full operation."

About Resource Capital Gold and the Dufferin Project

Resource Capital Gold Corp. is developing the high-grade Dufferin Gold Mine and mill in Nova Scotia, with initial gold production from test milling achieved in March 2017. The Dufferin project covers 1,684 hectares in 104 mineral claims which contain more than 14 east-west trending "saddle reef" quartz vein gold-bearing structures, each with free-milling gold. The stacked gold reefs are open at depth and extend along trend for over 3.2 kilometers.

The Company is also advancing the Tangier and Forest Hill gold projects and is preparing preliminary economic assessments ("PEAs") on both.

Additional information with respect to the Dufferin gold project is available in the revised technical report of the Company filed on SEDAR entitled "Revised Preliminary Economic Assessment of the Dufferin Gold Deposit", dated as of April 3, 2017.

About the Forest Hill property

Forest Hill is an advanced gold project with a drilled gold resource. Gold was discovered in 1893, followed by production, which up to 1916 produced 26,792 ounces at an overall recovered grade of 16.6 g/t Au. In the 1980s, a 230-m shaft was sunk and approximately 94,000 tonnes of mineralized material mined. A total of 10 km of underground workings exist on the project, along with 249 surface drill holes totaling 34,413 m and 127 underground drill holes totaling 7,267 m. The project comprises 1,840 hectares in 115 exploration claims.

Steeply dipping stratabound quartz veins on the south limb of the east-west trending Forest Hill anticline contain free-milling gold. Numerous veins have been encountered on the property, and they have been tracked for over 600 m along strike and 250 m down dip with excellent continuity demonstrated by drilling and mine workings.

The project shows very good grades, and bulk sampling during the 1980s returned grades between 9.2 g/t Au and 13.8 g/t Au for diluted mineralized material, with 94.9% overall recovery, of which 74.2% recovery was attained by gravity methods alone. The expansion potential at Forest Hill is very good, with mineralization open at depth along the entire mineralized system.

Additional information with respect to the Forest Hill project is available in the technical report of the Company filed on SEDAR entitled "Technical Report - Forest Hill Gold Property, Nova Scotia, Canada", with an effective date of April 10, 2017.

About the Tangier property

Tangier was the site of the first gold discovery in Nova Scotia in 1860. Total historic gold production up to 1919 is estimated at 29,000 ounces at a recovered grade of 17.5 g/t Au. The property saw several phases of bulk sampling during the 1980s and 1990s, the best of which was 2,578 tonnes with a recovered grade of approximately 16 g/t Au.

A total of 211 surface and underground drill holes have been completed on the property. Past mining activities have developed 3,300 m of underground workings. The mine sits on a project area of 1,904 hectares in 119 exploration claims.

The Tangier gold deposit is situated along the east-west trending Tangier anticline, a structure that has been traced for 7.3 km. Within this anticline, two sections totaling 1.4 km have been explored with drilling and past mining, which demonstrate good continuity of gold-bearing quartz veins to depths of 300 m. Gold-bearing quartz veins have been identified over a total strike length of 3.4 km on the property. This work has identified 70 or more gold-bearing quartz veins, demonstrating an extensive mineralized system.

Mineralization at Tangier consists of coarse flake gold and nuggets in generally stratabound quartz veins up to 1.5 meters thick containing calcite and up to 5% sulfide minerals, including pyrite, pyrrhotite, arsenopyrite, sphalerite, and galena. The characteristics of the mineralization indicate that the deposit is an orogenic gold deposit, similar to the Dufferin Mine and others in Nova Scotia's Meguma Terrane.

Additional information with respect to the Tangier project is available in the technical report of the Company filed on SEDAR entitled "Tangier Gold Property Technical Report", with an effective date of April 7, 2017.

Qualified Persons

The scientific and technical data contained in this news release was reviewed and approved by David Smith, CPG, who is a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects.

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