Urique Project: South

URIQUE AREA

The Urique zone is made up of an epithermal vein district measuring 2 x 2 km in size with more than 15 historic mines identified to date. Initial sampling at Urique yielded local bonanza grade gold and silver values with highlights of 10.6 g/t Au and 8,290.0 g/t Ag. Urique, (including the recently discovered El Rosario target) are priority targets for American Sierra Gold's drill program.

El Rosario Target

This most recently identified zone, El Rosario, is located east of the town of Urique and comprises multiple historic mines and prospects that exploited a system of high grade veins. Formal mining of this area ended in the late 1920's and consisted of several hundred metres of underground workings on three levels. These historic workings are all within a zone of strong silicification in the andesite host rocks.

As announced on our press release dated 17 November 2009, our recent exploration work in the property discovered a new gold-rich zone within the El Rosario area. The highlights of the completed work program include:

- 9.74 g/t Au and 356.7 g/t Ag over 1.68 m,
- 2.16 g/t Au and 92.5 g/t Ag over 2.93 m,
- 3.60 g/t Au and 108.2 g/t Ag over 1.87 m,
- 5.65 g/t Au and 95.9 g/t Ag over 0.45 m,
- 3.69 g/t Au and 112.7 g/t Ag over 1.10 m, and
- 3.53 g/t Au and 243.1 g/t Ag over 0.40 m.

All the abovementioned results come from the underground sampling within the Rosario tunnel. This tunnel, the largest of three known workings within the El Rosario target area, was reconditioned, re-mapped and sampled in preparation for a planned underground drill program. Previously unknown extensions to the workings were encountered and sampled resulting in the discovery of the new gold-rich zone. A total of 22 samples were taken from this zone with values ranging from 0.06 to 11.57 g/t gold and 6.6 to 358.7 g/t silver.

The El Rosario target measures approximately 175 metres wide by 400 metres long and has never been drilled. It is considered to be open along strike and to depth. Multiple +1 kilogram per tonne silver assays have been collected from various veins throughout the target.  Significant silver mineralization also occurs within the altered andesite host rocks (257 g/t silver and 0.78 g/t gold over five metres), which adds to the bulk tonnage potential of the target. In 2008, surface sampling, some 150 metres above the Rosario tunnel, encountered bonanza grades of as much as 10.6 g/t gold and 8,290.0 g/t (or 241.5 ounces per ton) silver. 

The presence of multiple vein sets hosting high-grade silver-gold mineralization, as well as felsic intrusives related to widespread alteration and mineralization of the andesitic rocks, suggests that the El Rosario target area has the potential to expand further.

The new high-grade gold zone encountered may represent an ore shoot and this concept needs to be tested by drilling. We are, therefore, currently working on the preparation of an underground drilling program which we expect to initiate in the near-term and conclude in the first months of 2010.