EXPLORATION POTENTIAL OF THE TIB LAKE PALLADIUM PROPERTY OF HOUSTON LAKE MINING INC. (HLM-ASE), DECEMBER 1, 1998.
Introduction
Houston Lake Mining Inc. ("Houston Lake") has the option to earn a 100% interest in the Tib Lake Palladium Property which is located in the Thunder Bay Mining District of Ontario. Drilling has previously encountered a significant palladium intersection at shallow depths. The mineralizing structure is open along strike and to depth.
This report summarizes characteristics of Platinum Group Element (PGE) Deposits and describes the general geology of the Tib Lake intrusion. Geological similarities between portions of the Lower Zone of the Tib Lake intrusion and the Roby palladium deposit at the nearby Lac des Iles palladium mine of North American Palladium Ltd. are noted by government geologists.
The exploration potential of the Tib Lake Palladium Property evolves from a synthesis formed from the generalized PGE ore deposit model, observations of the Tib Lake gabbro geology, and results of previous exploration on Houston Lake's Tib Lake Palladium Property.
PGE Deposits (Summary from 'Ore Deposit Models, Geoscience Canada')
Geochemistry
Platinum Group Elements (PGE's) are strongly associated with nickel-copper sulphides. Most researchers suggest that the formation of an economically significant deposit is dependent upon the segregation of immiscible sulphides (liquid sulphide droplets in magma similar to oil droplets in water). The precipitation of sulphide droplets is a critical step in the formation of a PGE deposit and may result from:
. Magma ingestion of sulphur or silica (i.e. quartz) from an external source.
. Rapid cooling of the magma.
. Blending of two different magma types.
Class 1: Orthomagmatic
Over 90% of current world production is derived from deposits formed solely within the magmatic environment. This class includes magma mixing, magma contamination, and deuteric (volatile or gas rich) fluids derived from magma crystallization.
Class 1a. Magma Mixing
The major world deposits, the Merensky and UG2 reefs of the Bushveldt Complex in South Africa and the J-M Reef of the Stillwater Complex in Colorado, are included in this subclass. Mixing of magmas of different temperatures and/or compositions may give rise to sulphide liquid droplets and subsequent formation of PGE deposits. Studies have attributed ore formation in these major deposits to a combination of both magmatic mixing and deuteric processes.
At the Lac des Iles palladium mine several sulphide zones are attributed to magma mixing of a gabbroic magma and a felsic magma which was presumably derived from the melting of the surrounding wall rock. Higher grades of PGE mineralization are related to the intrusion of an ultramafic (high iron-magnesium) magma into a more evolved anorthositic gabbro. Considerable remobilization of the PGE's in the deposit was caused by late stage deuteric fluids which concentrated PGE's into gabbro pegmatites.
Tib Lake Gabbro (Excerpts from 'Geology of the Tib Lake Gabbro' Ontario Geological Survey Open File Report 5780)
The Tib Lake gabbro is a well preserved layered mafic intrusion of similar age to and located 15 km from the Lac des Iles Intrusion, the host to the Lac des Iles palladium mine. The two intrusions are the largest such intrusions in the Thunder Bay Mining District. Shared characteristics of age, proximal location, and intrusion size with a known producer make the Tib Lake gabbro a prime exploration target.
The Tib Lake gabbro is a funnel-shaped intrusion covering approximately 25 square kilometres. The Tib gabbro can be divided into four zones on the basis of rock type:
. The Border Zone is 50 to 150 metres thick and is continuous around the northwestern, western and southern borders of the intrusion. Rock types are dominated by coarse grained gabbros and gabbronorite. Sulphide mineralization (up to 1%) is common.
. The Lower Zone is up to 1.5 km thick and extends 7.4 km along the southern and southwestern portions of the intrusion. Weakly to well layered gabbronorite and gabbro with ultramafic layers also contain pegmatitic lenses.
. The 1.6 km wide Middle Zone has a strike length of 7 km. The dominant rock types are gabbronorite and leucogabbro.
. The circular Upper Zone is approximately 2 km in diameter and is weakly layered. Gabbronorite is the dominant rock type.
All known palladium occurrences in the Tib Lake gabbro are confined to the Border and Lower Zones where the presence of cumulate layering, ultramafic compositions, and deuteric alteration is most prevalent. Magma mixing and sulphide precipitation, both critical components of ore formation in other orthomagmatic deposits, are documented in the Border and Lower Zones. Geological similarities are noted between portions of the Lower Zone of the Tib Lake gabbro and that of the Roby deposit at the Lac des Iles palladium mine.
Tib Lake Exploration
Houston Lake conducted mineral economic studies in November of 1997 and anticipated a looming shortfall in palladium supply. The Company moved in advance of most other companies to solidify its property position in this strategic commodity sector. Houston Lake has the opportunity to earn a 100% interest on the Tib Lake Palladium Property. The Company's 1700 hectare land position is focussed on the prospective Lower and Border Zones of the Tib Lake gabbro and covers all known palladium occurrences. Subsequent staking by North American Palladium Ltd. (Lac des Iles palladium mine) has surrounded Houston Lake's land holdings in the Tib Lake area (see Figure 1).
The culmination of previous work on the Tib Lake Palladium Property was the intersection of an estimated true width of 13 metres of 1.68 g/t combined precious metals (PGE's+gold) which included 1.5 metres of 4.53 g/t combined precious metals in drill hole TL-95-09 at a shallow depth of 30 metres. This intercept represents a substantial increase in grade and in width from surface showings. Independent consulting geologists, Oval Bay Geological Services Inc., note that the mineralization intersected in drill hole TL-95-09 is open both to depth and along strike.
Summary
In summary Houston Lake has anticipated a buoyant palladium market and assembled an extensive land position targeting the Border and Lower Zones of the Tib Lake layered intrusion. Processes of magma mixing, deuteric fluidization, and sulphide precipitation are critical steps in the formation of PGE deposits found elsewhere in the world and are in evidence on Houston Lake's Tib Lake Palladium Property. Geologically sound parallels have been drawn between the producing Roby deposit at the nearby Lac des Iles palladium mine and portions of the Lower Zone of the Tib Lake intrusion. A drill hole from a previous program has intercepted significant palladium mineralization. This intersection in light of other geological attributes serves to provide an economical exploration focus for the upcoming program.
The Tib Lake Palladium Property represents a unique opportunity to enhance shareholder value. Houston Lake is currently raising funds to test the continuity of the palladium mineralization encountered in drill hole TL-95-09.
E. Grayme Anthony B.Sc. (Hons.), P.Geo., F.G.A.C., M.B.A.
On Behalf of the Board of Directors
__________
Comment: The map that accompanies the above is a must see, North American Palladium has staked all around Houston's Tib Lake property. The Kuhner Occurrence (TL-95-09) falls within the Lower Zone, not to mention most of the Middle and Lower zones are within Houston's claims.
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