VANCOUVER, Oct. 16, 2012 /CNW/ - Calico Resources Corp. (TSX-V: CKB, OTCQX: CVXHF)

(The "Company" or "Calico") is pleased to report an updated mineral resource estimate for the Grassy Mountain Deposit. This updated mineral resource estimate demonstrates: (1) a substantial improvement in the quality level (that is, an increase in the mineral resource category), (2) an increase in the size of the total mineral resource and (3) a significant upgrade in the higher-grade portion of the mineral resource at the Grassy Mountain Gold Deposit.

The updated resource contains 1,416,700 ounces of gold averaging 1.30 g/t (0.038 opt) in the Measured category and 183,700 ounces averaging 0.56 g/t (0.016 opt) Indicated at a 0.4 g/t (0.012 opt) cutoff. Total Measured plus Indicated is 1,600,400 ounces at a weighted average grade of 1.13 g/t (0.033 opt) at a 0.4 g/t (0.012 opt) cutoff.

Contained within this mineral resource is a higher-grade portion of the deposit, potentially extractable by underground mining methods, of 713,400 ounces gold in the Measured category averaging 9.48 g/t (0.276 opt) and 26,700 ounces of gold Indicated averaging 8.75 g/t (0.255 opt) at a 2.7 g/t (0.079 opt) cutoff. Total Measured plus Indicated in the higher-grade portion is 740,200 ounces gold at a weighted average grade of 9.45 g/t (0.276 opt) at a 2.7 g/t (0.079 opt) cutoff.

This current mineral resource estimate incorporates the use of a detailed 3D geologic model. Utilization of this model allows for a substantial portion of the resource to be upgraded to the measured category. The increased understanding of the style of mineralization and geologic controls supported by the geologic model allowed Gustavson & Associates, LLC to expand the size of the block model and to support the continuity of the mineral resource. The 3D geologic model utilizes drill hole information, field geologic maps, and geophysical data. Lithologic contacts, alteration boundaries, and structural zones were modeled to better understand the geologic controls on the mineralization at Grassy Mountain. The geologic interpretation is supported by exploration drilling on a 100-foot by 50-foot grid through the center of the resource.

The table below shows the measured, indicated and inferred mineral resources estimated within the Grassy Mountain Deposit (effective date of September 26, 2012). Mineral resources are reported using a 0.4 g/t (0.012 opt) gold cut-off-grade. There are discrete higher-grade zones contained within the resource that can be represented by using a 2.7 g/t (0.079 opt) gold cut-off-grade.

Grassy Mountain Mineral Resource Estimate

g/t = grams per metric tonne; opt = ounces per short (imperial) ton

Mineral Resources are not Mineral Reserves and do not demonstrate economic viability. There is no certainty that all or any part of the Mineral Resource will be converted to Mineral Reserves. Quantity and grade are estimates and are rounded to reflect the fact that the resource estimate is an approximation.

This updated resource estimation was completed by Gustavson Associates, LLC ("Gustavson") of Lakewood, Colorado USA (which is independent of Calico as that term is defined in National Instrument 43-101 ("NI 43-101"). An updated NI 43-101 Technical Report incorporating the updated mineral resource estimates will be posted on SEDAR and the Company's website within 45 days of this release.

Gustavson visually evaluated relevant assay data in cross-section, and found that mineralization occurs across several lithologies in a gradational manner and also as smaller, higher-grade occurrences. To best accommodate this mineralization style and the lithologic domains, Gustavson used a multiple indicator Kriging (MIK) algorithm for resource estimation. The variography was based on the mean indicator of the gold grade. Gustavson performed variogram analysis on the data to define the direction, dip, and range of longest grade continuity. Gustavson classified the resource based on multiples of the variogram distance and minimum number of drill holes and samples required. Measured resources were within 1 variogram distance (135ft) and required a minimum of 5 samples from at least 3 different drill holes for classification. Indicated resources were within 2 variogram distances (270ft) and required a minimum of 5 samples from at least 3 different drill holes for classification. Inferred resources were within 3 variogram distances (405ft) and required a minimum of 5 samples from at least 3 different drill holes for classification. The interpretation of the structure and geophysical data was supported by diamond drilling on 50ft centers in the center of the deposit to permit the measured classification. The close drill hole spacing allowed the use of a 3 drill hole minimum criteria to support this classification.

"We are now able to report gold resources in the measured category. This is a major step forward toward our goal of production at Grassy Mountain. The increase of the higher grade material offers Calico the opportunity to further enhance the economics of the project. The new resource estimate, combined with the excellent exploration upside adjoining the proposed mine site, and within the greater property position at Grassy Mountain is consistent with Calico's stated business plan. With the acceptance of the restated NI 43-101, Calico plans to prepare a Preliminary Economic Assessment under NI 43-101 standards." stated Buck Morrow, CEO of Calico.

Permitting Status Update:
Calico is currently in the permitting process with the State of Oregon for an underground mine and mill facility at Grassy Mountain. The Company's "Notice of Intent" was deemed complete on June 12, 2012 by the Oregon State's Department of Geology and Mineral Industries ("DOGAMI") and the "Draft Baseline Study Work Plans" were accepted for review on September 21, 2012 by DOGAMI. Calico is pleased with the cooperation of State, Federal and Local Agencies and the progress that has been made thus far in the permitting process.

Qualified Persons:
Each of Donald E. Hulse, P.E., Gustavson's Vice President of Mining and Latin American Business Development and Zachary J. Black, E.I.T. a Gustavson Senior Geologist, is a Qualified Person as defined in National Instrument 43-101, is independent of Calico, as that term is defined in NI 43-101, and each has reviewed and approved the disclosure concerning the updated mineral resource estimate in this news release.

Michael F. McGinnis, Calico's Project Manager/Exploration, is a Qualified Person as defined by National Instrument 43-101 is not independent of Calico, as that term is defined in NI 43-101, and has reviewed and approved the technical contents of this news release.

On behalf of the Board,

Arden (Buck) Morrow
President and CEO

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release"

SOURCE: Calico Resources Corporation