The road accessible Virgin Arm gold property, covering 1,047 hectares of prospective geology, is located 65 kilometers north of Gander, Newfoundland. The Property encompasses a 4.2 kilometer by up to 800 meters gold mineralized corridor defined by trenching and diamond drilling. The Virgin Arm gold property is an excellent target for significant new gold resources with high grade gold values to 10.07 g/t found within zones of lower grade gold mineralization. The Company has demonstrated that a widespread, previously unrecognized, gold system is present at the Virgin Arm property and that there is potential for the discovery of a large, bulk tonnage style gold mineralized system.
Newfoundland has exciting unrealized discovery potential as there has been essentially no gold focused exploration in the province prior to the 1980’s! The 2011 diamond drill program targeted gold mineralization in the Hank and Homer zones. The seven hole, 1,085 meter, drill program was completed along 400 meters of gold mineralization. Noteworthy gold values were returned on drill holes 03, 04, 05 and 06. Drill hole 2011-Ho-05, targeting the western extension of the Homer Zone, returned assays of 5.75 g/t gold and 3.39 g/t gold over 1.0 m and 1.2 m respectively.
The initial 2011 Virgin Arm drill program results demonstrated the high variability of the gold grades in the mineralized lithologies. It is believed that this is due in part to the nuggety nature of the gold present on the property. Metallic screen analysis has proven to be effective in determining a representative grade for samples tested which contain nuggety coarse free gold. A 30 sample test group of previously fire assayed core samples was selected for re-assay using the metallic screen analysis.
The representative drill core samples were re-assayed utilizing metallic screen methods and returned overall average increase of 47.2% in gold grades!
The selected samples (from drill holes 2011-Ho 04, 2011-Ho 05 and 2011-Ha 07) are generally adjacent to previously announced intervals of 1.0 g/t gold to greater than 5 g/t gold. The re-assayed intervals are lithologically identical to the higher grade intervals and have the same style and degree of alteration but the fire assay gold values appeared anomalously low by contrast.
The results of the re-assay averaged an overall increase of 47.2% in gold grades, specifically, 21 of the 30 samples returned an 88.9% increase in gold grades with the remaining 9 samples returning a decrease of 50.2% in gold grades. Along with the increase in gold grades a number of significantly mineralized intervals begin to emerge.
One example of the increase is seen in 2011-Ho 05 where the updated gold assays have increased to 1.66 g/t gold from 1.46 g/t gold over the same 3.5 m interval and a significantly extended interval has emerged which averages 1.30 g/t gold over 5.5 m. Drill hole 2011-Ho 04 increased from 0.52 g/t gold to 0.77 g/t gold over 3 m. New assay values now show a 9.0 m interval of 1.04 g/t gold in hole 2011-Ho 04. The Company is greatly encouraged by the recent results with subsequent increase in gold grades and is pleased with the progression of the Virgin Arm project to date, from initial mineralized gold outcrop work to the identification of a large gold mineralized system.
Other work completed in 2011 included the spring trenching program that uncovered 5 mineralized zones, primarily in the Discovery Ridge area, located approximately 150 to 500 meters to the west of the Hank Zone. The gold mineralized Hank and Homer Zones are bordered by zones of broad low grade gold mineralization that was exposed in the course of the spring trenching along 825 meters of strike length along Discovery Ridge. Significant results included 1.0 meter grading 0.83 g/t gold contained within a broader zone of 9.6 meters grading 0.26 g/t gold. Minor trenching was completed on the Hank and Homer Zones during the preparation of drill pads for the current drilling. The GBY South trench, located 30 meters to the west of the Homer Zone returned significant gold assays of 1.37 g/t gold in a 1.0 meter interval hosted within 3.0 meters assaying 0.72 g/t gold.
Early 2011 soil sampling results outlined broad, highly significant gold and arsenic anomalies over hundreds of meters of strike length along the Discovery Ridge area, which indicates that the zone is significantly larger than the area tested by the spring trenching.
Background
Gold was first revealed in region in 1987 with the discovery of gold mineralization over a three kilometer long, northeast – southwest trending structural corridor on the Virgin Arm claim block. A compilation of known gold occurrences and anomalous gold in soil/silt anomalies shows mineralization is present over five kilometers along this structural trend.
Work in 2011 has included a detailed 18.6 line-kilometer soil sampling program, mechanized trenching of arsenic and gold in soil anomalies, primarily in the Discovery Ridge Zone that is peripheral to the Hank and Homer Zones. Gold mineralized zones uncovered by the trenching were geologically mapped in detail and continuous channel sampling was completed on prospective geology. A seven hole, 1,085 meter diamond drill program was completed in late summer.
The 2010 work completed on the Hank and Homer zones resulted in the discovery of a new gold bearing system extending for over 400 meters before zone disappears under the overburden. Significant gold assays, ranging from 0.50 g/t to 10.07 g/t gold, were received from continuous channel samples through the zones.
The Barney showing, located 3.7 kilometers to the southeast of the Hank and Homer zones, has seen relatively little historic work with the recent trenching program outlining broad zones of low grade mineralization of 0.10 g/t to 0.13 g/t gold over widths of 7.55 meters and 4.35 meters respectively. This distal zone demonstrates the widespread nature of the gold mineralization present on the property.
Detailed geological work has outlined several styles of gold mineralization on the property. The gold mineralized felsic dykes in the Hank and Homer zones are hosted within the structurally complex Badger Group sedimentary rocks with the felsic dykes cross cutting the stratigraphy and structure. The felsic dykes are strongly silicified with strong pervasive sericite alteration and local strong iron carbonate alteration. Gold appears to be present as free gold within the felsic dyke matrix and is also present in the pervasive quartz veins and quartz stockwork.
