Troy jumps on golden hole Down Under (April 09, 2008)

Vancouver – On the heels of a temporary mill shutdown in Brazil that dragged its share price down, Troy Resources (TRY-T) rebounded with drill results out of Australia that prompted a 16% gain.

The Australian-based company intersected significant gold mineralization in its first deep diamond drill hole at the Two Mile Hill prospect, part of the Sandstone project in Western Australia. Two Mile Hill sits less than 3 km northeast of the mill at Sandstone.

Assay results from the first 285 metres of hole 34 showed three intercepts: 33 metres grading 1.52 grams gold per tonne from 43 metres downhole, 11 metres of 1.83 grams gold from 127 metres depth, and 108 metres grading 2.59 grams gold from 177 metres below surface. The third intercept included 3 metres grading 13.51 grams gold.

Assay results from 285 metres to the hole’s termination at 450 metres depth are pending.

The hole targeted an open stockwork of flat-lying quartz veins hosted in a tonalite intrusive and remained within tonalite over its entire length. The core showed quartz vein intersections throughout its entire length and contained 30 occurrences of visible gold, primarily within narrow quartz veins.

Troy has traced the tonalite laterally along a 200-metre strike length and to 50 metres width, however the extent of quartz vein-hosted mineralization within the intrusive rock is not yet known. A second hole, hole 727, was collared 80 metres south and 100 metres east of hole 34. It was designed to test the tonalite as well as the projected intersections of a banded iron formation near the intrusive contact on the eastern margin.

The hole cut through highly silica, carbonate, and pyrite-altered basalt to 258 metres depth where it hit the contorted, siliceous, pyrite and magnetite bearing banded iron formation until 306 metres depth. From there until the hole’s termination at 403 metres the core showed tonalite, which carried 11 occurrences of visible gold within quartz veins.

Since taking over operations at Sandstone in 1999 Troy has mined out the Bulchina, Lord Nelson, and Lord Henry pits. The latter two pits were completed in December 2007, at which time 700,000 tonnes of ore from the Lord pits had been stockpiled at the mill. Troy expected to process that ore over the following 18 months.

Results from hole 34 buoyed Troy’s share price 33 or 16% to close at $2.40. It was a well-timed gained, as the previous day saw a 12 drop following news that Troy had temporarily shut downs its Brazilian gold mill.

Troy poured its first gold dore bar at its Andorinhas mine in Para state in mid-March following successful commissioning of the mill’s first ball mill. Les than a month later, a power surge during an intense electrical storm burned out one phase of the mill’s motor winding and forced Tory to shut the mill down. The company removed the motor and sent it for repair, estimating that repairs will take roughly 2 weeks.

The storm activity is part of an unusually long and intense wet season at Andorinhas that has also slowed completion of the second ball mill. The company had expected to commission the second mill in April but now anticipates it will have to wait until May.

In the meantime Troy will continue advancing the decline access to the high-grade Mamao deposit. First ore production from Mamao is expected by the end of July. Troy is currently mining ore from the Lagao Seca open pit.

The company purchased the property as an in-situ resource in late 2006 for US$10.4 million and commenced production 16 months later for an initial capital cost of US$15.5 million. Once at full production Andorinhas is expected to produce 50,000 oz. gold per year over a mine life of at least five years.

The project has probable reserves of 1.2 million tonnes grading 6.51 grams gold for about 255,000 oz. gold. Troy certainly hopes to lengthen that mine life through exploration and recently close-to-doubled its land position through a joint venture with Horizonte Minerals (HZM-L).

The JV-agreement allows Troy to gain a 100% interest in Horizonte’s neighbouring Tangara project by paying US$800,000 and spending US$2 million in exploration over three years. Troy would also have to pay a production royalty of US$30 per oz. gold up to 500,000 oz.; after that Horizonte retains a 1% net smelter royalty up to 1 million oz. gold and a 2% NSR on production beyond 1 million oz.

Troy listed on the Toronto Stock Exchange in January after raising $22 million in its initial public offering, in which it sold some 8.5 million shares at $2.60 each. Since then Troy’s share price has ranged from $1.90 to $2.81. The company has 69.8 million shares issued.