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Mountain Lake outlines heart of gold at Leprechaun deposit

Mountain Lake Resources (CVE:MOA, PINK:MLKRF) is concentrating its exploration efforts within Newfoundland, where it is actively exploring three  projects with large scale potential at Glover Island, Little River and Valentine Lake. 

A major drilling and resource development program is currently underway at Valentine Lake, which hosts the largest undeveloped gold resource in Newfoundland. A second exploration effort has also been launched at Glover Island, where historic non-compliant resources of 263,894 ounces of gold were outlined by previous exploration efforts and the property hosts some of the most prospective gold exploration ground in Newfoundland.

Valentine Lake covers 20,900 hectares and includes a highly prospective gold bearing mineralized corridor that extends for 23 kilometres, and is being developed by a 50/50 Joint Venture with Marathon Gold (TSE:MOZ) who serves as operator. The exploration and development budget for 2011 is $7.1 million, and that includes a 25,000 metre drilling program that is aimed at increasing resources at the Leprechaun Deposit and evaluating mineralization along strike.

Leprechaun contains a NI 43-101 compliant Measured and Indicated Resource of 3,284,000 tonnes grading 2.62 g/t Au for a total of 277,000 ounces of gold; and an Inferred resource of 4,409,000 tonnes grading 2.01 g/t Au for 285,000 ounces of gold, at a cut-off grade of 0.5 g/t Au and over a minimum width of 3 metres. 

This mineralization is contained within a hanging wall, footwall and main zone, and is open at depth and along strike, with 74% of the current measured and indicated resource occurring within 150 metres of the surface.

High grade mineralization within the Main Zone of the Leprechaun Deposit is currently contained within a 750 metre strike length that carries three high grade lenses known as the Heart of Gold (located in the southwest portion of the deposit), Central High Grade Zone, and North East Zone. 

Recent drilling within the Central High Zone contains the richest hole that has been drilled into Leprechaun at Hole VL-11-352, which intersected 13.95 g/t Au, over 26.1 metres at a vertical depth of 96 metres, and includes 37.01 g/t Au over 4.5 metres. Other highlights include , VL-11-339 with 2.42 g/t Au over 18.0 m including 12.35 g/t Au over 2.7 m, and VL-11-348 with 33.42 g/t Au over 3.4 m

Substantial thicknesses of shallow hanging wall mineralization, located above the sloping Main Zone,  is also reported in many holes and includes VL-11-338, which intersected 1.80 g/t Au over 5 metres at a vertical depth of 16 metres, and VL-11-332 intersecting 0.92 g/t Au over 24.0 metres and 0.90 g/t Au over 14 metres, with these zones remaining open along strike and at depth.  

This drilling demonstrates the potential for the delineation of significant quantities of lower grade, shallow mineralization within the hanging wall zone, and the addition of high grade shoots within the Main Zone of the deposit, and will have a very positive effect on the estimation of open pit resources. 

At the beginning of October the venture partners had completed 23,372 metres of drilling in 135 drill holes, with the balance of drilling scheduled for completion within the month. They have already commenced metallurgical testing, baseline environmental studies, and expect to release an updated resource estimate for Leprechaun by the end of the current year. Preparations have commenced for a Preliminary Economic Assessment expected in the second quarter of 2012.

Trenching continues to uncover gold bearing hanging wall quartz veins displaying coarse visible gold located 1500 metres  southwest of Leprechaun. This greatly increases the gold potential at depth well beyond the current limits of the Leprechaun deposit and beyond the newly trenched area. 

A total of 103 bedrock grab samples were extracted from trenches along the hanging wall, with 34 samples returning assays that exceeded 1 g/t Au, with highlights of 581.88 g/t Au, 287.95 g/t Au, 152.75 g/t Au, and 88.60 g/t Au.   

These gold bearing veins are located 500 metres southwest of the trenched area that was reported in August and forms part of a larger gold mineralized alteration zone that has been named the J. Frank Zone. This zone currently extends over a strike of 800 metres and width of 250 metres.. The venture partners continue to trench and expose additional quartz veining along the strike line and into the hanging wall. Drilling of this newly exposed mineralization will start very shortly. 

Mountain Lake owns a 100% interest in the Glover Island Project that covers 1,500 hectares, and includes a number of significant gold prospects over a 11 kilometer strike length. Historical non-compliant gold resources at Glover Island include Kettle Pond South with 450,000 tonnes at 2.3 g/t Au, for 33,276 ounces, Lunch Pond South Main Zone with 2,730,000 tonnes at 2.1 g/t Au for 184,321 ounces; and Lunch Pond South West with 900,000 tonnes at 1.6 g/t Au, for 46,297 ounces of gold.

The Company has established a field camp on the property, as the first step in a multi-year drilling and exploration effort. A first phase drilling program of 7,000 metres is underway and is aimed at upgrading and increasing historical resources to comply with NI 43-101 status.   

A shallow scout drilling program was also completed at the Little River Antimony Project, with 20 holes over 1,714 metres testing two antimony zones and one gold in soil anomaly. Little River hosts numerous antimony showings over 31 kilometres of strike, and is located 80 kilometres from the Beaver Brook Mine, one of the world’s most significant antimony deposits. 

Minor amounts of stibnite were encountered along the Le Pouvoir Zone, along with richer stibnite mineralization over a 500 metre section of the South Zone reported from all 9 drill holes. This indicates that a significant mineralizing system has been active in the area and will require a substantial exploration effort to evaluate the source of the mineralization. The company is on plan to earn 100% interest in the property next year, subject to a final option payment, and may consider joint venture funding to drive the next exploration phase on the property.

Mountain Lake has also attracted the attention of Sprott Asset Management, who recently provided private placement funding of $2.015 million, with the Company issuing 3.1 million common share units priced at 65 cents.