Otis Reports Additional Positive Metallurgy Results from Kilgore

June 5, 2012

Vancouver, B.C. – Otis Gold Corp. (“Otis” or the “Company”) is pleased to announce the receipt of additional positive column leach gold recoveries from coarse-crush bulk samples. Tests were conducted on ore from the Company’s flagship Kilgore Gold Project (“Kilgore”), located in Clark County, Idaho. In conjunction with prior column leach testing performed by Echo Bay Mines and Otis Gold (see Otis News Release dated April 11, 2011), these results provide continuing evidence that the Kilgore Mine Ridge deposit is readily amenable to standard heap-leach process technology and suggest that the gold ore is not particularly sensitive to crush size.

The column leach tests were performed by McClelland Labs of Reno, Nevada on three samples comprising oxidized and non-oxidized dike (both thought to be responsible for the mineralizing hydrothermal fluids supplying gold to the host rock) and oxidized lithic tuff (the dominant host rock at Kilgore). Both dike samples and the lithic tuff samples were composited from drilled PQ-diameter core (85 mm) that was stage crushed to a nominal 80% passing a 38 mm (1.5 inch) screen. Each sample was divided and one split was further crushed to 80% -12.5 mm (0.5 inch) to directly compare the difference in gold recovery between the two crush sizes. Recovery of gold from the rock types at two crush sizes are given in Table 1 below and illustrated graphically in a chart on the Company’s website at http://otisgold.com/_resources/kilgore/Column_Leach_Profiles.pdf

Column leach tests show that the three samples are amenable to simulated heap leach cyanidation treatment. Further, there was not a substantial decrease of gold recovery in the coarser crush material suggesting that the ore may not require processing by a tertiary crusher, thereby enhancing the overall economics of the deposit. The tests further imply that yet coarser crush material should be tested to determine if part of the deposit might be processed by run-of-mine material that would result in a great cost savings for Otis.

Table 1: Results from Otis Gold’s 2011 Column Leach Tests on 38 mm (1.5”) and 12.5 mm (0.5”) crushed material

Rock Type
Crush Size
Leach Time
% Au Recovery
CN Consumption (lbs/ton)
Lime Consumption (lbs/ton)
Oxidized Felsic Dike
12.5 mm/0.5”
78 days
83.3 %
0.76
1.0
38.0 mm/1.5”
78 days
71.2%
0.69
1.0
Unoxidized Felsic Dike
12.5 mm/0.5”
91 days
74.5%
0.82
1.8
38.0 mm/1.5”
91 days
78.5%
1.00
1.1
Oxidized Lithic Tuff
12.5 mm/0.5”
91 days
85.5%
0.87
1.8
38.0 mm/1.5”
91 days
84.9%
0.60
1.8

Overall, the tests revealed that the gold came out quickly in all samples from both size fractions, with 85 to 90% of the recovered gold leaching in just 30 days. Both cyanide and lime consumption were relatively low and the ore charges did not require agglomeration pretreatment.

The results show that the unoxidized felsic dike and the oxidized tuff leach at about the same rate for 80% -12.5 mm and 80% -38 mm. The tuff, which makes up an estimated 65% of the deposit by volume, leaches at the same rate for both crush sizes as the tuff is poorly welded, lightly compacted and has very good porosity and permeability characteristics. Likely the cyanide solutions had excellent percolation and residence rates throughout the sample and the gold was recovered from both sample-sizes with about an 85% recovery rate. The unoxidized dike showed a similar recovery rate of approximately 75%, with the coarser crushed material having an even better recovery percentage at 78%. Only the oxidized dike showed feed size sensitivity in regard to gold recovery in column leach tests, possibly due to the shorter residence time of 78 days. However, the oxidized dike represents only an estimated 14% of the deposit by volume.

During the tests, the Company conducted tail screen analysis on both crush sizes for the three samples. Residual gold values were generally evenly distributed throughout the various size fractions and that it is doubtful, considering the low grade nature of the samples tested, that any improvement in recovery obtained by finer grinding would be sufficient to offset the associated higher processing costs.

Craig Lindsay, the Company’s President & CEO, commented: “The results from column leach testing continue to be impressive, even for relatively coarsely crushed material. The Kilgore Mine Ridge deposit continues to have excellent recovery rates that will positively impact the economics of developing a potential mine. In the future, we plan to acquire coarse enough material for a run-of-mine test to help Otis make decisions as we move this deposit towards potential commercial production.”

John R. Carden, Ph.D., Lic. Geo., a Qualified Person as defined by National Instrument Policy 43-101, is responsible for the collection and preparation of the bulk samples tested and the technical information contained in this News Release.

About the Company

Otis is a resource company focused on the acquisition, exploration, and development of precious metal deposits in Idaho, USA. Otis is currently developing its flagship property, the Kilgore Gold Project, located in Clark County, Idaho.

ON BEHALF OF THE BOARD

“Craig T. Lindsay”

President and CEO

For additional information, please contact:

Craig Lindsay
Tel: 604.683.2507
E-mail: craig@otisgold.com

THE TSX VENTURE EXCHANGE HAS NEITHER APPROVED OR DISAPPROVED OF THE CONTENTS HEREIN.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.