Navaho Gold Ltd : 29 January 2013 - ASX Announcement - NavGas and Utah Clipper Drilling

ASX Announcement

29 January 2013

NAVGAS SHALE GAS PROJECT, SOUTH AUSTALIA AND

UTAH CLIPPER DRILL HOLE NEVADA, USA

NAVGAS SHALE GAS PROJECT SOUTH AUSTRALIA

In response to the substantial levels of interest shown by the market last week in relation to the South Australian shale oil and gas potential in general, and the Company's NavGas project in particular, the Directors of Navaho Gold Limited (Navaho Gold, ASX: NVG) wish to reiterate the following information in respect of the shale gas project held within its subsidiary NavGas Pty Ltd (NavGas) in the Flinders Ranges in South Australia covering 50,000km2 of petroleum exploration licence applications.

The Project covers Proterozoic aged (12 million years old) organic rich shales and carbonate rocks. These rocks are similar in age and characteristics to shales in Armour Energy's Northern Australian Project in the McArthur Basin, where it has made a recent discovery which flowed up to 3.3 million cubic feet per day.

The NavGas Project areas is considered to be located in rocks older and more brittle than the nearby Arckaringa Basin. Navaho expects these rocks to be amenable to lateral drilling and fracturing to facilitate gas exploration and appraisal. The previous gas shows and small flows from the Blinman-2 drill hole in 1991 are considered to underscore the gas prospectivity of the Proterozoic organic shale package within the tenement area. The target shales are expected to be up 400 metres thick. A full presentation on the project was originally released to the ASX on 29 October 2012.

The NavGas Project is favourably located adjacent to gas pipeline infrastructure, and is positioned to take advantage of the expected local demand for gas in Eastern Australia in the next five (5) years.

The Directors of Navaho Gold are currently undertaking a strategic review of the NavGas Project, and may engage experts to conduct an independent desktop study of the Project's resource potential.

Navaho Gold Ltd ACN 068 958 752

Level 27, 111 Eagle Street GPO Box 5261 Brisbane QLD 4001

p [phone] f + 61 7 3303 0681 e [e-mail] w www.navahogold.com

Figure 1: NavGas Project area within the Arrowie Basin, neighbouring the Arckaringa Basin, and adjacent to existing pipeline infrastructure.

Navaho Gold Ltd ACN 068 958 752

Level 27, 111 Eagle Street GPO Box 5261 Brisbane QLD 4001

p [phone] f + 61 7 3303 0681 e [e-mail] w www.navahogold.com

UTAH CLIPPER PROJECT PROGRESS, NEVADA, USA

Due to the remoteness of the site, communications from the drilling site have been sporadic, however an update is expected in the next 48 hours. On Saturday (26 January 2013) UTC12-02 was reported to be at a depth of approximately 2,600 feet, and potentially within the lower sequences of the upper plate rocks. Drilling was halted at that time to change the drill bit, before drilling ahead on Sunday (27 January 2013).

The Board will continue to provide updates in relation to drilling activity at UTC12-02. The Company is targeting Carlin Style gold mineralisation which hosts resources in excess of 40Moz at Cortez- pipeline and Barrick's Gold Acres deposits to the south3.

Figure 2: Utah Clipper claim block adjacent Barrick's Gold Acres/Pipeline operations, showing location of current drill hole (UTC12-02, "proposed second hole").

On behalf of the Board

Ben Harrison | Executive Director

Navaho Gold Ltd ACN 068 958 752

Level 27, 111 Eagle Street GPO Box 5261 Brisbane QLD 4001

p [phone] f + 61 7 3303 0681 e [e-mail] w www.navahogold.com

About Navaho Gold

Carlin Style Mineralisation
Navaho Gold is clearly focused on the exploration for and ultimate development of "Carlin Style" gold mineralisation. "Carlin" gold mineralisation was recognised near the town of Carlin in Nevada USA in the
1960's. Carlin deposits occur as the result of low temperature solutions precipitating gold, silver and sulphide
minerals in limey, magnesian and carbonaceous sediments, which have first been made a porous and receptive host by the effect of acid solutions emanating from nearby intrusions and fragmentation from fault activity. Carlin ore bodies are typically both large and high-grade, ranging up to 40Moz gold (eg. Barrick Gold Corporation's Post-Betze deposit)1. Nevada has 20 major mining operations producing in excess of 100,000 oz gold per annum2.
Projects in Nevada and Queensland
Navaho Gold has various agreements to earn majority interests in, or acquire, at its election, five projects in Nevada, together with an additional project owned 100%. Four of these projects are located on or adjacent to the prolific gold-producing Carlin and Battle Mountain Trends, and holds exploration licences over three potential new "Carlin" style regions in Queensland.
From the period 1981 to 2009, in excess of 156Moz gold has been produced in Nevada, making it one of the most strongly endowed gold provinces in the World2. The Carlin Trend alone has produced more gold than any other mining district in the USA3.
Importantly, Navaho Gold's Carlin East project in Nevada lies approximately 5km east of Barrick Gold Corporation's 40Moz gold Post-Betze deposit, and the Utah Clipper project in Nevada is located immediately along trend from Barrick's Cortez and Pipeline-Gold Acres deposits which contain more than 30Moz gold3.
NavGas Project

During 2012, Navaho Gold formed an energy subsidiary (NavGas Pty Ltd) which currently holds five (5) petroleum exploration licence applications in the Flinders Ranges in South Australia covering 50,000km2, adjacent to existing pipeline infrastructure, and considered to be prospective for shale oil and gas.
References:
1. Nevada Bureau of Mines and Geology - Update on Minerals Production & Exploration (2009)
2. Nevada Bureau of Mines and Geology - Minerals Industry Report (2009)
3. Minnelex Pty Ltd - Independent Geologists Report (10 February 2011) for the Navaho Gold Prospectus
Navaho Gold currently has 204,367,579 shares on issue.
Email: [e-mail]
Electronic copies and more information are available on the Company website: www.navahogold.com

For further information contact:

Mr Ben Harrison Karl Schlobohm
Executive Director, Navaho Gold Ltd Company Secretary, Navaho Gold Ltd
Ph: 07 3212 9200 Ph: 07 3303 0650

Navaho Gold Ltd ACN 068 958 752

Level 27, 111 Eagle Street GPO Box 5261 Brisbane QLD 4001

p [phone] f + 61 7 3303 0681 e [e-mail] w www.navahogold.com