Belmira ProjectHistory

Bandera Gold is pleased to announce that Julio A. Méndez Garcia, P. Geo., has accepted the offer of the position of Project Manager for Bandera’s Belmira, Colombia Gold Project. Mr. Méndez, who has previously been working for Behre Dolbear de México, S.A. de C.V., has been consulting on the Belmira Project since its acquisition. Bandera is very pleased to have Mr. Mendez step into this important role for Bandera. His familiarity with Bandera and the project is a significant benefit to us as there literally is no time required to bring him up to speed.

Julio Méndez is a Geological engineering graduate from de Universidad Nacional Autónoma de Mexico (UNAM) in 1982, with specialized studies in exploration and evaluation of mineral resources in Nancy, France. He has twenty-eight years of experience devoted to mineral exploration, evaluation of precious epithermal, base metal and manganese deposits. In addition, he has worked on development and supervision of baseline and EIS environmental studies along with permitting of several mining projects in México. His activities as a mine geologist include evaluation, control and exploration of mineral reserves.

Since 1978, Mr. Méndez has worked in mineral exploration for several Mexican mining companies and, from 1992 to 1996 and in 2002, as a consultant for Behre Dolbear de México, S.A. de C.V. and Terra Quaestum, S.C. From 1996 to 2001, he was the exploration manager for Compañia Minera Autlán, developing different evaluation and exploration projects as well as valuation of mineral properties for acquisition / merger. From 2003 to May 2008 he worked for the Servicio Geológico Mexicano heading the Mine Exploration Department. From June 2008 to September 2009, he worked for Bandera at its Belmira gold project in Colombia. In October 2009 he joined Behre Dolbear de México as an associated geologist.

We are pleased to confirm that our drilling equipment has arrived in Colombia and was subsequently shipped to the town of Belmira, Antioquia. Our Colombian subsidiary, Nueva California SA, established an office and housing facilities at Belmira for geological and mining staff when we commenced activities in 2008. In addition, we have now rented a second property to be used primarily for drilling activities which includes core storage, logging and splitting, machine maintenance, vehicle storage and possible future housing facilities for additional personnel.

As drilling proceeds to higher elevations further from Belmira without road access we plan on establishing a fully equipped centrally located exploration camp. This will include full living accommodations for drilling personnel on site, as well as a location for stockpiling consumable supplies that will be needed as part of the drill program. There are currently 22 people working at the property including a highly qualified Health, Safety and Environmental officer.

Drilling commenced at our first drill location, La Ilusión, on September 9, 2010. Our plan is to complete up to 16 drill holes in the first round of exploration, in a program amounting to more than 4,000 metres of drilling. The first stage will consist of the advancement of 8 drill holes for a total of approximately 2,100 meters of drilling. We will be drilling the more northerly areas of the Filandia vein, one of the two main NW/SE Veins. Our drills are man portable and we plan to complete one or more drill holes from most pads to ensure the most efficient coverage of our target area with the minimum amount of disruption to the environment. There are other zones on the property with significant mineralization potential, including extensions of the two main veins which will be further explored in future drilling programs.

To date we have expended more than $2,524,846.80 in exploration in order to evaluate our property in Colombia and select optimum drill locations. Bandera Gold is fully funded to cover all expected costs related to the first stage of this phase of exploration. Bandera Gold now owns 80 percent of the project.

Colombia is currently a high profile exploration center for mineral resources and there are many other companies active in our district. The Belmira project comprises approximately 6,845 hectares (68.45 square kilometers) of property area and is entirely surrounded by claims controlled by other mining companies.

We look forward to reporting the results from our drill core assays in the weeks and months ahead. This information will contribute towards our ongoing evaluation of the property and will assist in the determination of the scope of the next phase of exploration. We are very excited to commence our first drill program in Colombia and we fully expect that we will be a part of the story in this country for many years to come.

We believe Belmira is a superb property that demonstrates exceptional potential to host a gold deposit. This property is part of a historic district for gold production in the country and lies in close proximity to projects operated by other companies that are also currently exploring for mineral resources.

Our analysis has confirmed the presence of gold mineralization widely distributed across the property area, and we then committed our efforts towards identifying the best possible target zones to focus on. Selective trenching work has exposed gold and silver-bearing structures that are of great interest for further exploration. These veins extend for several kilometres through our property holdings and thus have the potential to yield a significant tonnage of mineralized material.

All of this work has contributed to allow us to move forward to the drilling stage with confidence, ensuring that our exploration funding has the highest potential for success. We have since purchased two man-portable drilling rigs, and this equipment is currently en route to Colombia, along with other critical supplies to enable our program to commence. We anticipate that our drills will be turning in August 2010.

We are mindful of the need to participate in the exploration of Colombia as a responsible partner for the preservation of the environment. This was a driving factor in the decision to utilize portable drills, ensuring that our efforts will generate the minimum disruption to the ecology of the region. We have secured all necessary environmental permitting before launching our program, including surface property access permissions. We are now constructing drill pads to be ready when the drills arrive in the country and our plan is to drill a fan of holes from each pad to test a wider area with fewer access points. We have invited the environmental regulatory agents in Colombia to scrutinize the program as we move forward.

We have engaged in exploration work to maintain our ownership interest in good standing, and have completed soil sampling and trenching to expose numerous high grade gold showings on the property. This ongoing work program has enabled our geologists to define drill targets to allow us to advance to the next phase of exploration work. In preparation for this, Bandera Gold has purchased two portable drills and we are in the process to ship them to Colombia in order to commence a summer drilling program.

Our objective is to ensure minimal environmental disruption during this program, and to keep costs as low as possible. Therefore we have chosen “man portable” equipment that is easily transported in remote areas where no road construction is required.

We are pleased to announce the hiring of Rafael Guillermo Silva, Senior Geologist, on a full time basis to supervise the drill program and further exploration. Rafael has over 15 years experience working in Colombia for Canadian mining companies, over 10 years with Greystar Resources Ltd.

All exploration activities will be carried out within the environmental regulations of Colombia and will follow strict international standards. An update to our shareholders will be issued once the drilling is underway.

Bandera Gold Ltd. (“Bandera”) has entered into an agreement dated April 14, 2010 with Geotech Drilling Alberta Ltd. to acquire two man portable drills and related equipment for its Belmira project. Bandera will acquire the drills and equipment for a purchase price of $358,344 to be satisfied by a cash payment of $187,704 including GST of $17,064 and the issuance of 832,390 common shares at a deemed price of $0.205 per common share.

Bandera Gold Ltd. (“Bandera”) is doing their due diligence and preparing to start the Belmira Project 2010 drill program in Colombia. This includes the purchase of man portable drill rigs. Management is looking at a few different rigs at this time and will purchase the drill rigs that are best for the type of drilling and topography of the Belmira property.

In order to verify this exploration potential and define mineral resources, a 4,000 m diamond drilling program, distributed in 16 holes, was recommended. The areas to be drilled are Filandia, Reventón and Buenaventura. One “wildcat” drill hole was programmed at the La Ilusión area, susceptible to contain a low grade-high tonnage deposit for a potential open pit operation.

The drill program could be completed in two phases as recommended by senior geologist, Sr. Julio Mendez – Garcia. After receiving drill permits for the upcoming 2010 program, Bandera will announce Phase 1 of the 2010 exploration program.

Bandera is pleased to announce that the company has received a final report entitled ‘Geological Assessment, Belmira Project’, dated June 30, 2009 authored by Project Manager and senior geologist, Sr. Julio Mendez - Garcia. This report was reviewed in detail by Sr. Baltazar Solano - Rico, President of Behre Dolbear de Mexico, S.A. de C.V. who is responsible for review of all geological exploration reports completed at Belmira and is a Qualified Person as defined by NI 43-101.

The Report details the surficial geological mapping, sampling, trenching, assaying, soil sampling (through auger drill holes), stream sediment sampling, old artisan excavation, mapping and sampling etc that was conducted throughout the claims optioned by Nueva California. These studies allowed our geologists to create a Mineralization Zoning Model, which is being used to best site the next stage of exploration drilling.

This report is written to NI 43-101 standards. Following are the highlights:

1. Rock sampling, soils geochemical survey and stream sediments survey (pan concentrates) results, demonstrate that gold mineralization is distributed widely at the Project area.
2. At Filandia vein (Filandia, Reventón and Buenaventura areas) the exploration potential has been estimated in the order of 1.0 M tonnes that would allow for the planning of a small underground mine operation. According to economical parameters and preliminary estimates made, mineral resources to be defined should have a grade in the order of 10 gpt Au to be of economic interest.
3. In order to verify this exploration potential and define mineral resources, a 4,000 m diamond drilling program, distributed in 16 holes, was elaborated. The areas to be drilled are Filandia, Reventón and Buenaventura. One wildcat drill hole was programmed at the La Ilusión area, susceptible to contain a low grade-high tonnage deposit for a potential open pit operation. The budget cost for this Exploration Phase is estimated to be approximately US$1.2 million.
4. The earlier identified major NW-SE structure Veta Filandia has been identified over a strike length of 10 kilometers and where out cropping, varies from 0.75 to 4.25 meters. A Second semi parallel structure known as the Veta Atalaya was identified to the north east of the Filandia vein and from soils sampling over its buried trace would appear to have a similar strike length. A significant number of cross structures were identified and explored with some returning 7 to 22 g/t over narrow widths.

The following two photographs show a Pan Concentrate sample and Panned gold from the project site.

The Board of Corantioquia, the environmental regulator for Belmira, Colombia and the surrounding areas has reviewed Bandera’s drill plans and has given its authorization subject to notification of a start date.

Management is very pleased with the exploration activities undertaken thus far and are encouraged by the extent of the gold bearing structures identified. To date our exploration team has identified two main vein systems and seven additional zones with multiple veinlets. The two main vein systems Filandia and Atalaya run parallel in a NW & SE trend for distances of 10 and 8 kilometers respectively and are open ended in both directions. The Filandia vein varies in width from 2.07m (3.48m including altered wall rock) at Filandia, 1.53m at Reventon 3km to the southeast and 1.38m at Buenaventura an additional 2km to the southeast. Surface sampling and mapping was undertaken at Filandia to identify potential mineralized zones along strike and get an indication of true width of the vein. Work continues on the Atalaya vein system.

Gold values are apparent at all areas, generally indicative in the massive quartz vein material (0.46, 0.99 and 0.04 g/t averages) and as free visible gold that can be panned in soft, iron-rich gougy materials predominantly in the hanging wall contact.

At Belmira, Colombia, BGL’s subsidiary company, Nueva California S.A., has commenced its exploration program on our properties on the edge of the Antioquian Batholith, west northwest of Medellin. These properties host three reasonably well-defined veins of gold and silver each of which has been traced over strike distances of seven to ten kilometers.

Earlier this year, BGL had contracted Mr. Baltazar Solano Rico, President of Behre Dolbear de Mexico to visit the Belmira Property and determine an appropriate initial Exploration Program for the site. Mr. Solano Rico reported back to us in June with a two-phase program that was designed to identify and correlate all information on the property, to remap where necessary, to accurately plot vein outcrops and sample points from previous authors and to commence a new mapping and sampling program designed to verify previous data and to increase knowledge of the area. This part of the program, called Phase One, would include hand trenching and sampling, would identify reasonable access route to the site and is planned to procure all necessary environmental and other government permits for the Site. This would enable us to proceed to Phase Two which essentially would entail the drilling of some 4,100 metres in eighteen drill holes sited in areas identified from Phase One.

BGL has employed a senior Mexican Geologist, Mr. Julio Mendez, to manage the exploration under the control of Mr. Solano Rico. BGL also met and contracted Mr. Arturo Calle, a highly experienced Environmental Engineer (and Lawyer) to guide us through the environmental permitting stages.

The total program as foreseen, will cost BGL about two million US dollars.

Channel samples taken in 2004 at several sites along this zone, in quartz veins and in the surrounding wallrock have returned precious metals values of 0.02 to 35.59 g/tonne gold and <0.3 to 29.7 g/tonne silver. Higher grade values occur in the quartz veins. Many who have visited the site have experienced success when trying their own hand at panning gold from the mixture of wallrock and quartz vein material. Several samples were taken for independent analysis in August 2004. Those samples assayed between 0.1 and 42.6 g/t gold.