Mountain Lake Resources: Aggressive Development Program Underway for Newfoundland Projects
by Richard Badauskas
proactiveinvestors.com
Mountain Lake Resources (TSX-V:MOA) is a Canadian based junior exploration company with a focus on developing high potential, gold and other resource projects, located on the island of Newfoundland. The current list of projects include Glover Island, Little River, Bobby’s Pond and Valentine Lake, which hosts the Leprechaun Deposit and is currently under an aggressive development program financed jointly with venture partner Marathon Gold (TSX:MOZ).
Mountain Lake and Marathon entered into an option and joint venture agreement on the Valentine Lake Gold Property in December of 2009. Marathon spent $3 million on exploration expenditures in 2010 and will earn a 50% interest in the Project by funding the $3 million balance of vendor consideration owing to Richmont Mines (TSX:RIC, AMEX:RIC). Mountain Lake and Marathon will then be 50/50 partners in the Project and have agreed to a jointly funded budget of $ 6 million for 2011.
A 25,000 metre drilling campaign is planned for the Valentine Lake Project this year. The first drill rig began resource expansion drilling last week on the Leprechaun Deposit and the first 3 drill holes intersecting multiple quartz veins with visible gold mineralization. A second rig is scheduled to begin exploration drilling along strike at the Valentine East Gold Zone this week.
The Valentine Lake Property is 30 kilometers (”km”) long with the Leprechaun Gold Deposit situated at the south-western end and the Valentine East Gold Zone located 13 km along strike running in a north-easterly direction. These gold deposits form part of a 23 km long, highly prospective gold-bearing mineralized corridor that straddles the faulted contact between the older Valentine Lake Intrusive and younger Rogerson Lake sedimentary rocks in the Valentine Lake Property.
Over the course of 2010 the joint venture partners drilled 95 holes for 10,938 meters, focused on near surface, potentially open pitable mineralization, located over and alongside the previously defined Leprechaun Deposit. This program was highly successful in proving up the continuity of gold mineralization over a 750 meter strike length, identified in multiple stacked lenses of shallow gold in both sub-horizontal and sub-vertical veins.
In December, an updated NI 43-101 compliant resource was completed on the Leprechaun Deposit at a 0.5 g/t cut off that resulted in Measured Resource of 2,104,000 tonnes at 2.768 g/t for 187,000 ounces of gold, and an Indicated Resource of 1,180,000 tonnes at 2.363 g/t for 90,000 ounces of gold, for a total of 3,284,000 tonnes at 2.622 g/t for 277,000 ounces of gold. Plus an Inferred Resource of 4,409,000 tonnes at 2.007 g/t for 285,000 ounces. Approximately 2,400,000 tonnes of the Measured and Indicated resource (74%), containing 205,000 ounces of gold, is located within 150 meters of the surface and is potential open pit material.
This gold resource is primarily associated with both shallowly and steeply plunging quartz tourmaline veins that are hosted in sheared granite. Mountain Lake had previously explored the system to determine if it could be suitable for underground mining but with a rising gold price the focus turned to the potential to develop the prospect as an open pit operation.
Plans for 2011 at Valentine Lake also include: further metallurgical testing; additional IP surveying along strike of both the Leprechaun Deposit and Valentine East Gold Zone; and geotechnical drilling to test slope stabilities for pit wall design at the Leprechaun Deposit for inclusion in the preliminary economic assessment currently planned for completion by the 1st quarter of 2012.
Glover Island is a recently acquired project (100% owned) that contains over 20 mineralized prospects located on an 11 kilometer long strike length. Some of these prospects contain historical and non compliant resources that will be drilled and bought into compliance within NI 43-101 standards. These include Kettle Pond South with 450,000 tonnes at 2.3 g/t gold, Lunch Pond South with 2,730,000 tonnes at 2.1 g/t gold, and Lunch Pond South West Zone for 900,000 tonnes at 1.6 g/t gold. Mountain Lake has acquired a 100% interest in the property, with consideration calculated at $7 per historic in-ground ounce of gold.
Mountain Lake has an option for a 100% interest in the Little River Project, which carries antimony bearing veins along sections of a 20 kilometer strike length. The company recently completed drilling 5 holes on the Pouvoir Zone, where earlier pitting had partially exposed a stibnite and gold vein over a distance of 40 meters, with grab samples assaying 27.6% to 50% Sb (antimony), and gold values up to 24.1 g/t. Several drill holes recorded values ranging from 0.11% to 30.6% Sb, and gold values up to 0.25 g/t, over shallow depths ranging from 18 to 33 meters. A second zone located 21 kilometers to the southwest, known as the Southern Zone retuned antimony values ranging from 0.44% to 6.3% and gold values of 0.4 g/t to 2.58 g/t at shallow depths.
Mountain Lake management compare these antimony occurrences to the resources that are mined at the Beaver Brook Antimony Mine, located 80 kilometers to the north, which hosts one of the largest antimony deposits in the world. Exploration programs will continue this quarter at Little River. Notably, while gold had a stellar year last year, antimony has just reached an all-time high above US$13,000 a tonne (~$ 6 per/lb) and has doubled its price levels of a year ago,
The Bobby’s Pond Project contains a NI 43-101 compliant Indicated Resource of 1,095,000 tonnes at 0.86% copper, 4.61% zinc, 0.44% lead, 16.6 g/t silver and 0.2 g/t gold, and an Inferred Resource of 1,177,000 tonnes at 0.95% copper, 3.75% zinc, 0.27% lead, 16.6 g/t silver and 0.06 g/t gold, with mineralization open at depth. The deposit may be suitable for development as part of a regional consolidation of base metal assets. Teck Cominco (NYSE:TCK, TSX:TCK.A, TCK.B) also operates the Duck Pond Mine and Mill Complex for processing base metals, which is located 45 kilometers to the west.
Mountain Lake is currently well funded and is aggressively developing its Newfoundland resource assets. The continuous flow of exploration and drilling news throughout 2011, should underpin its market valuation. |
