Buffalo Gold drilling expands Mt. Kare

Vancouver – Drilling by Buffalo Gold (BUF.U-V, BYBUF-O) is expanding known mineralized zones on the Mt. Kare project in Papua New Guinea.

Hole MK06-09A in the Western Roscoelite zone intersected an 18.3-metre section (from 17.8 metres downhole depth) grading 4.8 grams gold per tonne followed by a lower 33.4-metre interval (from 44.7 metres depth) of 15.7 grams gold that included 19.3 metres at 24.3 grams gold.

Additional recent drill intercepts include 86 metres averaging 4.2 grams gold in hole MK06-43, including 58.3 metres of 5.8 grams gold, and hole MK06-49 that cut 122 metres grading 2.4 grams gold, including 69 metres of 3.1 grams gold.

The structural block hosting gold mineralization at the Western Roscoelite zone shows indication of increased cohesiveness and higher grades towards the north. Results have led the company to subdivide the zone into north and south components, named the North-Western and South-Western Roscoelite zone respectively.

Buffalo Gold is adding a third drill rig to the property to accelerate testing of this new zone to the north, which has only undergone sparse past drilling.

The company will incorporate results from this year’s US$3.5 million, 6,500-metre drill program (consisting of 50-60 holes) into a pre-feasibility study expected by mid-2007. A resource estimate conducted in 2000 reviewed an indicated resource of 14.68 million tonnes grading 2.36 grams gold and 33.7 grams silver per tonne plus an additional 10.85 million inferred tonnes at 1.98 grams gold and 22.7 grams silver using a 1 gram gold equivalent cut-off and cutting all high grade assays to 30 grams gold.

Gold mineralization was first discovered at Mt. Kare by CRA Exploration, now part of Rio Tinto (RTP-N), in 1986 by a stream sediment sampling program. Exploration activity attracted the attention of locals that swarmed the project, extracting an estimated one million ozs. of gold from alluvial and colluvial deposits. The gold rush, with up to 10,000 people working the ground, caused CRA to abandon the property in 1993 due to a poor working relationship with the landholders.

Madison Minerals (MMR-V, MMRSF-O) acquired an option for 90% of the project in 1996 and subsequently conducted about 37,000 metres of core drilling plus extensive geophysics, geochemistry and sampling. In mid-2005, the option was acquired by offshore company Longview Capital Partners that in turn entered into an agreement with Buffalo Gold, assigning the 90% interest rights to the latter for completion of a pre-feasibility study by 2007, staged payments and completion of a bankable feasibility study by mid-2008. Additionally, upon attaining a 49% interest in the Papua New Guinea holding company Buffalo will issue 17 million shares to acquire Longview.

Mt. Kare is adjacent to the Porgera Mine, owned 75% and operated by Barrick Gold (ABX-T, ABX-N), which produced about 850,000 ozs. of gold in 2005 from both open pit and underground operations.

Shares of Buffalo Gold rallied 21% on the August 16th drill results to close up 24 at $1.40 apiece on trading volume of over 950,000. The company posts a market capitalization of $46 million based on its 33 million shares outstanding. The stock has a 52-week trading range of 24-to-$1.57.