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Orca Gold Provides Update on Current Ongoing Activities in Block 14 Project

Orca Gold Inc. is pleased to provide an update on current activities relating to the ongoing Feasibility Study (FS) and exploration activities at its Block 14 Gold Project in The Republic of The Sudan.

A Revised PEA* of Block 14 (see Company news release dated May 30, 2017), using a gold price of US$ 1,100/oz for mine design and US$ 1,200/oz for economic analysis, showed a project with in-pit mineral resources of 41.0Mt @ 1.46g/t for 1,928 Koz in the Indicated category and 3.4Mt @ 1.56g/t for 173 Koz in the Inferred category, a mill throughput of 3.4Mtpa, strong economics with an after-tax NPV7% of US$ 227.7 million and an IRR of 23.1%. On the basis of this study, the Company moved straight into a FS.

The FS, which is being conducted by a group of internationally recognized consultants managed by Lycopodium Minerals Pty Ltd, is well underway and comprised of several elements:

Resource Expansion

The pit designs used in the Revised PEA were restricted by a lack of information at depth in a number of areas of the deposit. In late August, the Company commenced a 25,000-metre drill programme to extend the resource model at depth at both Galat Sufar South (GSS) and Wadi Doum.

Four diamond core rigs are currently operating at GSS with approximately 6,000 metres completed to date and first results expected shortly.

The Company intends to announce a new Mineral Resource in December, then will continue beyond that with further resource expansion and the testing of the numerous high grade targets, which exist in Block 14.

Water Resource Expansion Drilling

The airborne geophysical survey completed in Q2 was successful in discovering a previously unknown aquifer system 85km west of Block 14 (see Company news release dated May 30, 2017). The survey indicates that this aquifer has an area of at least 562km2 and that it is open to the north and west. Initial drilling of this aquifer in June 2017 defined a water resource over 63km2, sufficient to support a 3.4Mtpa process plant for a +13-year mine life - the basis of the Revised PEA.

The Company is currently drilling an additional four water exploration holes with the objective of significantly extending the water resource to support a larger process operation at Block 14.

The first hole of this new water drilling programme successfully intersected the aquifer on September 15, 2017. The remaining three holes are expected to be completed by the end of September.

Throughput Study

The initial discovery of the new larger water supply for the project allowed the plant throughput to be increased to 3.4Mtpa (from 1.8Mtpa in the 2016 PEA). Anticipating further expansion of this water resource, the Company's mining consultant, Deswick UK Ltd, has analyzed mining options up to 6.0Mtpa, based upon estimated process and capital costs supplied by Lycopodium. Modelling of these throughput scenarios will be refined upon completion of the current water drilling programme. A final decision on the ultimate mining and process plant capacity is expected to be made and reported in October.

Metallurgical Testwork

65 variability samples and a number of composites are currently being tested by SGS Vancouver.

Geotechnical Drilling

A 1,200-metre geotechnical drill program is 40% complete.

Engineering Studies

On completion of the Throughput Study in early October, the FS plant capacity will be established and Lycopodium will commence detailed engineering work.

Delivery of Feasibility Study

The FS is due for completion in late Q1/early Q2 2018.

Commenting on the current activity at Block 14, Rick Clark, CEO and Director of Orca, said, "We are flat with our drilling on site and the study work being conducted by our consultants. Our move straight to a Feasibility Study and our current program are a function of the confidence that we and our consultants have in Block 14 and The Sudan. The Revised PEA highlighted one of the leading undeveloped gold projects in Africa and we are optimistic that the Feasibility Study will establish a significant further increase in project scope and economics. We look forward to keeping the market updated over the coming months."

*The Preliminary Economic Assessment is preliminary in nature, that it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.


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