Gainey Intersects Further Near-Surface Mineralization of 34.2 Meters of 2.39 g/t Au Eq at La Nueva Victoria, Mexico

October 04, 2016 – Vancouver, British Columbia – Gainey Capital Corp. (TSXV: GNC) (OTCQX: GNYPF) (“Gainey” or the “Company”) is pleased to announce assay results from the second and third holes of the Company’s Phase 1 drill program at the near surface, La Nueva Victoria Mineralized Zone (“La Nueva Victoria”) of the El Colomo property in Sierra Madre Golden Belt, Mexico.

The mineralization encountered in hole DHEC160002 (“Hole 2”) commenced at 19.40 meters from surface for 72.20 meters of 0.41 g/t Au and 20.21 g/t Ag (0.69 g/t Au Eq) and for hole DHEC160003 (“Hole 3”) commenced at 10.50 meters from surface for 34.20 meters of 1.19 g/t Au and 86.57 g/t Ag (2.39 g/t Au Eq).

 

Table 1 – Holes DHEC160002/3 from the La Nueva Victoria Zone at El Colomo:

HOLE ID

FROM(m)

TO(m)

Width(m)

Au_g/t

Ag_g/t

Au_Equivalent*

DHEC160002

19.40

91.60

72.20

0.41

20.21

0.69

Including

57.00

73.20

16.20

0.74

28.88

1.14

DHEC160003

10.50

44.70

34.20

1.19

86.57

2.39

Including

10.50

14.00

3.50

4.32

438

10.39

And

27.10

44.70

17.60

1.29

37.06

2.29

*Au Equivalent calculated using a price of $1,300 US/oz for gold and $18 US/oz for silver.

 

Holes 2 and 3 targeted the center of the silicified vein breccia zone, consisting of gray quartz veining and permeable lithic tuff. Hole 2 was targeted at -80° below, the previously released, hole DHEC160001 and Hole 3 was targeted to intersect this zone to the northwest, by approximately 28 meters. Hole 1 intercepted over 70 meters of 1.14 g/t Au Eq (please see the Company’s news release dated September 28th, 2016).

Rafael Gallardo, Senior Geologist of Minera Cascabel S.A. de C.V., who is leading the drill program, commented, “the results encountered from drill holes 2 and 3 show that Au-Ag mineralization is being encountered near surface and the mineralized structure is open at depth and along strike at La Nueva Victoria.”

David Coburn, CEO of Gainey, commented, “we are encouraged by the further success of the drill program at the La Nueva Victoria zone. This is one of 21 surface mineralized zones that we have identified in the 3 km by 1 km area of the El Colomo Project referred to as the “Golden Corridor” and we are looking forward to progressing through our drill testing of these zones to evaluate their mineralization potential”.

El Colomo Property

El Colomo is a highly prospective, 187 km2 property with district-scale gold-silver potential located within the ‘Golden Corridor’ in Sierra Madre, Mexico. High-grade and bulk tonnage targets have already been identified through prior exploration and there are strong indications of continuity between La Higuerita, La Nueva Victoria and El Arrayan (at least 2 km in strike length).

97% of this 18,766-hectare project has not been explored using modern concepts & technology. All 21 mineralized zones identified to date are located in the central portion of the property and within a 1.5 km radius of each other.

Qualified Person

David Hladky, P. Geo. is the Qualified Person with respect to NI 43-101 at El Colomo.

La Nueva Victoria Drilling and Assay QA/QC

All drill core from this release is drilled at HQ diameter and is split into equal halves near site. All samples are assayed using standard 33 element ICP and 50 gram fire assay with atomic absorption finish by ALS in Vancouver, Canada.

QA/QC programs using internal standard samples, field and lab duplicates and blanks, indicate good accuracy and precision in a large majority of standards assayed. As the mapped mineralized corridors strike N-S, the drill holes were designed to have azimuths perpendicular or as close to perpendicular to the strike as the permitted pad would allow. As this is the first drill program by Gainey at El Colomo, the dip of the main structure is not entirely known but is believed to dip steeply to the west based on mapping and historical work, and thus the intercept is estimated to represent 50-60% of the true width.  No intercept was reported that averaged less than 0.4 g/t Au and/or 10.0 g/t Ag and no intercept had more than five consecutive meters of less than 0.2 g/t Au and/or 10 g/t Ag, or began or ended with values less than 0.2 g/t Au and/or 10 g/t Ag.