Resource World Magazine

MINI NG Otis Gold expanding Idaho gold resources by Ellsworth Dickson If a company has an open ended gold deposit, just how much drilling should it carry out? Once the project passes the million-ounce level should the focus change from building resources while living on private placements to generating revenue? In other words, when is the best time to build a mine and achieve commercial production? These are important questions that Craig Lindsay, President and CEO of Otis Gold Inc. [OOO-TSXV; OGLDF-OTCQX] is addressing. The flagship project of the company is the 100%-owned Kilgore gold project (no NSRs) in eastern Idaho, a mining friendly state. Accessible by car and 75 miles north of Idaho Falls, the project has been steadily building ounces in the ground over the past several years. Currently, the advanced-stage Kilgore Project has NI 43-101 compliant indicated resources totaling 520,000 ounces of gold (27.3 million tonnes grading 0.59 grams gold/tonne) and inferred resources of 300,000 ounces (20.2 million tonnes of 0.46 grams/tonne). Diamond drilling at the 100%-owned Kilgore gold project in eastern Idaho. Photo While this grade may appear on the lower end of the courtesy Otis Gold Corp. scale, keep in mind that the stripping ratio of the proposed A smaller 1,700-metre reverse circulation drill program is curopen pit operation is only 1.5:1 (waste:ore). Many of the drill holes are well over or close to 1.0 gram gold/tonne; eg, 55.4 rently underway with another 7,000 metres planned for 2013 metres of 6.15 grams/tonne and 118.8 metres of 0.89 grams/tonne. focused on the North Target and Prospect Ridge areas, and Lindsay The 5,130-acre Kilgore Project is situated on a hill that features is confident they will top the million-ounce level with this program. no settlements or developments of any kind and overlooks a Then the project will shift gears with the business strategy aimed at broad collapsed caldera where ranching and farming take place. achieving commercial gold production. In the near term, this will The company has acquired land at the base of the hill that could involve updated resource estimates, environmental baseline studies be suitable for a mill site and keeps mining activities well away and a preliminary economic assessment (PEA). Pending a favorable PEA, the company will move into a permitting and ultimately a from any other land uses. Considerable drilling has been completed at the Kilgore Project, mine financing and construction phase. Several other major prospective targets exist, including Gold including over 66,000 metres of historical drilling. During 2011, a total of 9,200 metres were drilled in 43 holes when 28 of the holes Ridge and Dog Bone Ridge, which have the potential to develop encountered gold mineralization. In addition, metallurgical test- into additional deposits. Otis Gold has three other gold projects in Idaho; the early-stage ing was successfully completed in column leach tests on 1.5-inch crush material at McClelland Labs. Detailed soil sampling was also Hai Project and the Gold Bug Project as well as the intermediateconducted at the North Target and Prospect Ridge areas to assist stage Oakley Project which hosts a NI 43-101 compliant indicated resource of 235,000 ounces of gold grading 0.55 grams gold/ with 2012 drill targeting. Earlier, in 2010, an environmental scoping study was carried tonne. The Oakley Project in south-central Idaho is available for out by independent consultants Golder Associates Inc. that stated joint venture. Otis Gold has 50.1 million shares outstanding with institutions in its report, "No issues have been identified that are considered fatal flaws." Another feature of the property is that all natural holding between a 35-40% ownership interest. The company has water drainage is internal – no water flows into salmon spawning a favorable, if under-valued, valuation compared to its peers with a market capitalization per ounce of only $8.50/oz. n grounds or rivers. 68 www.resourceworld.com DECEMBER 2012/JANUARY 2013

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