Overview Eastgate Gold Project -- High-Grade Epithermal Gold-Silver System in Nevada
The Eastgate Gold Project is located approximately 25 miles (40.2 km) northeast of the Rawhide Mine, 55 miles(88.5 km) east of Fallon in Churchill, County, Nevada. The property sits less than 5 miles (8 km) south of U.S Hwy 50, and is accessible year round via dirt road. Eastgate features a well-developed hydrothermal system, and the company's target is to define a high-grade, low sulphidation epithermal gold-silver deposit. There are multiple sub-parallel quartz-adularia veins throughout the property. Small-scale historic production, as well as work carried out by various groups over the past 30 years, has established that gold and silver are present in the system. Several historic mines exist on the property including: Gold Ledge, Double Eagle, Eastgate, Sunny Jim, and Central. The main Eastgate Vein has been traced for over 2000 feet (610 m) along strike and 29 selected historic surface grab samples over the southern 1,100 feet (335 metres)of strike range from 0.03 to 3.19 opt ( 1 to 109 gpt) Au and average 0.584 opt ( 20.02 gpt) Au. A chip sample at shallow depth in the Gold Ledge Mine is reported to assay 0.876 opt Au over 4.5 feet (29.73 gpt Au over 1.37 metres). A limited number of RC drill holes resulted in notable, high-grade intersections. Highlights from historic RC Drilling include: 15 feet of 0.34 opt (4.75m of 11.66g/t) Au, 10 feet of 0.22 opt (3.05m of 7.54g/t) Au, 15 feet of 0.30 opt (4.75m of 10.30g/t) Au, 10 feet of 0.25 opt (3.05m of 8.57g/t) Au. The majority of work on Eastgate had taken place in times of low gold prices and tough market conditions. Furthermore, Eastgate has been privately held and not been available for option during the recent (last 10 years) buoyant gold markets. As a result, the target has never been fully and systematically tested at depth or along strike, the northern extent of the vein system has never been tested, and core drilling has never been carried out on the project.
The Eastgate property is situated just a short distance from the Middlegate US Pony Express Station, along the US Pony Express Line. Prospectors scouring a west spur of the Desatoya Mountains discovered the Eastgate Vein in the late 1800's and small scale mining at Eastgate began roughly around the turn of the20th century. Small scale mining at Eastgate resulted in the discovery of a number of mines including the Gold Ledge, Double Eagle, Eastgate, Sunny Jim, and Central. The main Eastgate Vein was partially opened up and intermittently mined at shallow depths for approximately 1500 feet (457 m) along strike and vertically for 300 feet (91.4 m). By the time production ceased around 1920, miners had reportedly extracted roughly 20,000 oz of gold from workings on two main levels. A small amount of production was carried out between 1935 and 1957, and according to a 1998 report, 3247 oz of gold and 38,152 oz of silver were produced during that time. The property then lay dormant for many years until interest in exploring the region increased again in the late 1980's.
In 1987 the property was acquired by Freeport McMoran. Freeport explored the property with a goal of finding a large "Carlin Style" low grade, bulk tonnage deposit. Freeport drilled 7 RC Holes with varied results. In 1988 Eastgate was acquired by US Borax whose exploration was also focused on a low grade, bulk tonnage model with exploration concentrated near the vein system. US Borax drilled 10 RC Holes in 1988 and results included EG-4 -- a 15 foot intersection of 0.34 opt (4.75 m of 11.66g/t) Au. Around this time US Borax reduced their focus on exploration projects, and the Eastgate Property was acquired by Cabot Resources. Cabot Resources was created by an ex-US Borax Geologist in order to continue to pursue the potential of Eastgate. In 1989-90 Cabot drilled a fan of RC Holes above and below US Borax's EG-4 -- 15 feet of 0.34 opt (4.75 m of 11.66g/t) Au. Highlights from Cabot's RC program included CG-5 -- 10 feet of 0.25 opt (3.05 m of 8.57g/t) Au, CG-3 - 10 feet of 0.11 opt (3.05 m of 3.77g/t) Au, CG-2 - 15 feet of 0.30 opt (4.75 m of 10.3g/t) Au and CG-1 --10 feet of 0.22 opt (3.05 m of 7.54 g/t) Au (not true thicknesses). Though Cabot was intent on carrying out a core-drilling campaign to follow up these results, they were unable to secure the necessary funding to do so. The property was held by Cabot for nearly 10 additional years, however the claims were eventually allowed to lapse near the bottom of the gold market, without any further drilling being carried out.
After a lengthy period of inactivity, local prospectors staked the Eastgate ground in 1998. Franco Nevada overstaked the ground at that time, however the property ended up in the hands of a Vancouver based company called Fairmile Gold, the eventual result being that Franco Nevada retreated. Fairmile then joint ventured the project with Echo Bay Mines in 1999. Echo Bay were part owners of the "Round Mountain" gold deposit; a very large, low grade gold deposit also located in Nevada, under which very high grade epithermal gold veins were discovered. Echo Bay applied their low grade, bulk tonnage model to Eastgate and as a result 4 RC holes were drilled off the vein system. Once again, the property eventually ended up back in private hands, where it had stayed until Kermode Resources and Blueridge Gold reached an agreement to option the property.
The Eastgate project has high surface gold values with a large area of intense alteration surrounding multiple veins thought to be of Miocene age. The known deposits are quartz-adularia-sericite type veins hosted in a Tertiary volcanic ashflow tuff. This vein system has important geologic similarities to multi-million ounce, high-grade gold deposits of the northwestern Great Basin that contain bonanza-grade veins, notably Midas (Ken Snyder mine; approx. 3.7 million mineable oz @ 1.3 ounces per ton (44.57 gpt) Au. There has been no significant work at Eastgate since 1990, and historic drilling was limited in scope. Eastgate exposes the upper parts of a volcanic-hosted low sulphidation epithermal vein system. Eastgate offers the potential for discovery of high-grade vein mineralization similar to Midas.
Faulting (northeast trending) has resulted in at least 3 subparallel shear zones in the main mining area, and has provided avenues for subsequent mineralization and alteration of the interbedded lithic tuffs and ash flows. Later faulting along north-west and east-west trends have offset the main alteration zones. Observed (surface/subsurface) cross-cutting structures (shears and faults), quartz veining and silicification in the Double Eagle Mine area indicate that mineralization continues to the east and west.
Drillhole data, surface and underground work indicates a relatively well-developed hydrothermal system. There is potential to finding additional ore-grade mineralization in the altered lithic tuffs extending to the north, south and to the east of the main alteration area.
Historic information includes drilling summaries, assay laboratory reports, surface sampling and mapping. Details of the sampling methods, handling, and quality control methods are unknown, and the historic drilling results being disclosed cannot be verified for the purposes of NI 43-101. Therefore this information is not NI 43-101 compliant and should not be relied upon for investment purposes. This information, however, is a useful guide for current exploration by the Company's geologists.
Don White, P.Geo, is the qualified person who has reviewed the technical information contained in this news release on behalf of the Company.