Gammon Lake responds to false rumours
Gammon Lake Resources Inc GAM
Shares issued 17,646,003 Oct 11 close $3.95
Wed 11 Oct 2000 News Release
Mr. Terence Donahoe reports
Management of Gammon Lake Resources confirms that its shareholders have
been negatively impacted as a result of a false rumour, now identified as
having originated approximately four weeks ago. The origin of the rumour
has been traced to a national brokerage firm, in which two brokers, on
different occasions, are known to have shared untrue information with their
clients, who are shareholders of Gammon Lake Resources.
The rumour referred to the effect that Gammon Lake Resources is or was
under some form of investigation by the Toronto Stock Exchange.
"We have been in correspondence with both our legal counsel and the
brokerage firm itself, and have received an acknowledgement in writing from
the brokerage firm apologizing for the mistake made by the broker and
stating that all of the investment advisers at that firm were to be
informed that the rumour is untrue and that they are not to convey this
sort of information to investors under any circumstances," said Terence
Donahoe, QC, chairman of the board and senior vice-president of inquiries
and investor relations.
"In addition, the brokerage firm provided us with a further letter stating
that the TSE has confirmed that there is no investigation of Gammon Lake,"
he said. The brokerage firm has not responded to various other demands made
of it by Gammon Lake and Gammon Lake is pursuing the legal and procedural
remedies available to it in relation to the brokerage firm and its brokers.
Gammon Lake continues to reassure all shareholders that the rumours, which
were spread by the brokers, are untrue and the TSE has confirmed that
Gammon Lake is in full compliance with the rules and regulations,
directives and reporting requirements of the TSE.
Drill results and current activities
Gammon Lake Resources has drilled in excess of 26,600 in 290 drill holes on
its 25-square-kilometre Ocampo gold and silver property in Mexico.
Work is continuing with five drill rigs in operation and the program has
been expanded to begin the testing of new targets, each with the potential
to significantly add to the present resource. Gammon Lake is well financed
with in excess of $6-million available to continue the exploration and
development drilling.
Major Drilling, a worldwide drilling company headquartered in Moncton, N.B,
is doing core drilling. Dateline Drilling is contracted for the reverse
circulation drilling. ALS Chemex of Vancouver has completed all of the
analytical work on the samples employing conventional fire assay
techniques. Gammon Lake uses standard accepted industry practices in all
phases of its sample collection.
Preliminary drill holes in Conico have exceeded expectations. UGD 5 to 7
are the first holes to intersect mineralization in the Persico structure at
the BW (Brenda) target. The result shows that this structure contains
excellent gold and silver mineralization over potentially bulk minable
widths. Persico's close proximity to the Brenda wedge further enhances that
targets economic potential. The drilling was done at the 30-metre level.
PR 24-2002 TABLE
From To Interval Au Ag
m m m g/t g/t
UGD-8
35.0 55.0 20.0 0.75 46
incl.
43.0 47.0 4.0 2.34 159
UGD-7
17.0 30.0 13.0 2.72 165
incl.
25.0 30.0 5.0 6.29 373
UGD-6
31.0 42.0 11.0 1.17 72
UGD-5
12.0 24.0 12.0 3.50 118
incl.
15.0 19.0 4.0 8.03 210
77.0 82.0 5.0 0.78 55
ODH-151
0.0 20.4 20.4 2.79 158
incl.
0.0 11.3 11.3 4.13 218
ODH-150
0.0 19.8 19.8 0.82 35
ODH-149
67.7 73.8 6.1 0.30 33
ODH-148
In progress, to be completed with core
ODH-147
52.4 63.1 10.7 0.69 43
ODH-146
122.5 165.2 42.7 0.54 34
incl.
156.1 165.2 9.1 1.04 58
ODH-145
128.6 151.5 22.9 0.31 8
ODH-144
117.3 137.2 19.8 0.46 34
incl.
125.0 131.1 6.1 1.16 59
ODH-143
118.0 153.0 35.1 0.37 18
ODH-142
110.3 114.9 4.6 0.31 43
125.6 133.2 7.6 0.41 12
ODH-141
132.6 157.0 24.4 0.72 18
ODH-140
38.7 60.0 21.3 1.05 63
Incl.
38.7 50.9 12.2 2.92 172
ODH-135
142.3 166.7 24.4 0.27 15
DH-135
142.3 166.7 24.4 0.27 15
Gold and silver are of equal economic importance at the Ocampo project.
Gammon Lake released conclusions of a report from Millennium Mining
Associates of Clancy Montana (announced in Stockwatch Aug. 31, 2000) which
said of the Gammon Lake property: "The Ocampo district has reportedly
produced approximately 3.5 million ounces of gold and approximately 50
million ounces of silver from several particularly high grade ore shoots.
Based on work in similar structural settings such as Guanajuato, Gto., and
Cinco Minas, Jal., in Mexiso; Bonanza, and Cerro Majon I Nicaragua; San
Andres, Honduras; and Creede, CO, Lake City, CO, and Rochester, NV in the
USA, this district potentially contains an additional 3.5 million ounces
(or more) of gold and 50 million ounces of silver. The authors also believe
there is a high potential for the discovery of additional deposit(s) (in
addition to the current resource) amenable to the economy of a large-scale
bulk mining."
Results were provided in Stockwatch Sept. 18, 2000, for hole ODH-136 that
returned exceptional results of 21.3 metres grading 5.50 grams per tonne of
gold and 299 grams per tonne of silver while hole ODH-132 returned 48
metres of 1.6 grams per tonne of gold and 81 grams per tonne of silver.
All results of the on going drilling program are being provided to Computer
Aided Geoscience (CAG) of Australia as they are received and that company
is completing a resource study. The planned grid definition drilling
program has now been completed at the Plaza de Gallos-Refugio deposit and
will be the focus of CAG's near term efforts. Resource calculation for
additional targets will be finalized once sufficient definition drilling
has been completed on each one. Experience has shown that each hole drilled
has the potential to modify a resource model and resource calculation and
management feels this approach will result in a more efficient use of the
shareholder's investment dollars as it avoids costly delays and repetition
of effort.
Currently, CAG has completed database verification and preliminary modeling
of the Plaza de Gallos-Refugio deposit is under way. Other aspects of the
study currently in progress include a detailed check assay program. Once
geostatistical evaluations are completed the model will be finalized and a
resource calculation completed. The Plaza de Gallos-Refugio portion of the
study should be completed by December. Other areas will follow with the
Brenda mine area currently being the most advanced.
A new metallurgical test program has been started. Bulk sampling, obtained
by core drilling, is nearly complete and Kappes Cassiday and Associates
(KCA), of Reno, Nev., has been contracted to evaluate the possibility of
using heap leach recovery techniques on ores from Plaza de Gallos-Refugio.
Previous bottle roll studies (announced in Stockwatch, Dec. 15, 1999) have
demonstrated exceptional silver and gold recoveries may be achievable using
standard milling and cyanide leaching techniques. Average bottle roll tests
result, at a negative 200 grind size, have produced an average gold
recovery which exceeded 95 per cent, while silver recovery has averaged 84
per cent. The current test work is designed to determine if heap leach
recovery techniques are economically feasible on lower grade material.
Positive results could significantly affect project economics.
In addition to metallurgical work, KCA will perform tests to determine the
specific gravity of ore and waste samples, crusher and grind ability tests
completed. The specific gravity tests will be used in the resource
calculation and the crushing and grinding tests, which will better define
the costs of processing ore at Ocampo.
In the short time Gammon Lake has been in the Ocampo district it has fast
tracked the project and has performed its work in an efficient and cost
effective manner. These accomplishments are as follows:
Gammon Lake established an initial land position in Ocampo, a major
historic mining district with significant past production in 1999;
in less than two years Gammon Lake has consolidated the Ocampo district.
Gammon Lake currently either owns or has an option to purchase a
100-per-cent interest in all of its properties and currently has the right
to negotiate a sale or joint venture on the basis of a 100-per-cent
interest in all its properties;
in year 2000 Gammon Lake acquired an option on a previously defined gold
and silver resource of 448,000 ounces of gold and nearly 20 million ounces
of silver, as seen in Stockwatch March 1, 2000; and
Gammon Lake's drill program has produced a success ratio based on holes
completed, to holes intersecting economically interesting gold and/or
silver mineralization in excess of 90 per cent.
Terence Donahoe, QC, chairman of the board and senior vice-president of
inquiries and investor relations, said: "We are pleased with the steady
progress we are making toward confirming the extent of our gold and silver
holdings. We are determined to gather the best data and the most
comprehensive picture that we can. We are using some of the best
consultants and we are confident that we are within months of having
sufficient data to allow for a development decision to be made."
All sampling, mapping and drill data, together with all the work of
consultants, is being shared with major mining companies, which have
expressed an interest in Ocampo project. These companies are continuing
their due diligence on Gammon Lake's property.
Gammon Lake has an agreement for 100-per-cent ownership of the Ocampo
claims.
Gammon Lake shareholders' information meeting
Gammon Lake Resources will hold a meeting at the Westin Hotel for
shareholders, analysts and other interested parties on Nov. 9 in Halifax.
At the meeting company officials, consultants and various subcontractors
will provide updates on their work-to-date and their work plans for the
next several weeks.
WARNING: The company relies on litigation protection for "forward-looking"
statements.
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