VANCOUVER, Jan. 29, 2019 /CNW/ - David H. Brett, President & CEO, EnGold
Mines Ltd., (TSX-V: EGM, "EnGold" or the "Company") provides the
following summary and review of recent exploration of the Company's
sole exploration project, the 100% owned Lac La Hache copper, gold, silver property in
the Cariboo region of BC.
2018 was a busy year for EnGold at Lac
La Hache. Based on EnGold's fiscal year which ends
September 30th,
$1,745,658 in exploration costs were
incurred on the Lac La Hache
property including 9,653 metres of drilling in 22 holes, and
$93,770 in ground geophysical
expenditures. This was down from the same period in 2017, when
$2,627,057 in exploration costs were
incurred, including 15,407 metres of drilling. Exploration
expenditures incurred up to 2017 have now been applied as
assessment work, such that the claims are now in good standing
until at least 2028, not including the 2018 work. Since resumption
of exploration at Lac La Hache in
2015, following a period of low activity, EnGold has carried out
31,995 metres of diamond drilling. This drilling has produced some
very significant, positive results.
EnGold's Emerging, Evolving Exploration Strategy
EnGold's corporate strategy is to maximize stakeholder value by
advancing the Lac La Hache Project (the "LLH Project") in a way
that adapts to an often rapidly changing array of variables that
the Company encounters, such as stock and metals market conditions,
new exploration results, and the availability of investment
capital. What follows is a review of EnGold's strategy over the
last several years and discussion of the Company's plan and outlook
for 2019.
A notable feature of the LLH Project is that it hosts multiple,
distinct prospective zones exhibiting different styles of
mineralization. These occurrences of gold, copper, silver and
magnetite are located along a 7-kilometre trend that EnGold refers
to as the "core" of the property, which is where most of the
exploration has been focused over the years. The metal
occurrences can be divided into three main types: 1)
copper-magnetite skarns (Spout & G1); 2) gold-copper
hydrothermal breccias and quartz veins (Aurizon); 3) copper-gold
porphyry mineralization (Berkey/Ann
North & new IP anomaly).
Spout Copper Versus Aurizon Gold
From 2011 to 2013, EnGold focused significant resources to
defining a mineral resource at Spout based on an open pit
configuration in part because the economics of a near surface, bulk
tonnage operation were, at that time, supported by strong demand
and high prices for the abundant magnetite that accompanies the
copper mineralization. The market for magnetite changed in
subsequent years, undermining the economics of the Spout Deposit as
an open pit target.
In 2015, with copper prices on a downtrend and the low grade
Spout deposit showing weak economics, the Company decided that the
high grade Aurizon Gold zone had the best potential to drive
shareholder value, initiating drill campaigns in 2015 and 2016, and
even changing its name to include the word gold. Drilling of the
Aurizon structure in 2015 and 2016 produced some impressive
high-grade gold intercepts, leading to a $1
million financing near the end of 2016.
Gravity Drilling
The gold focus of EnGold changed dramatically in February of
2017 when a planned single drill hole was carved out of the Aurizon
Gold budget to test a compelling gravity anomaly that had come to
light through a low-budget test survey carried out in 2015. EnGold
Vice President of Exploration Rob
Shives astutely decided to see what kind of response the
gravity method would produce over the Spout Deposit and surrounding
area. Drilling of the gravity anomaly located 1.8 km south of Spout
returned a spectacular 26.6 metre true-width intersection of
semi-massive magnetite-copper grading 1.76 % Cu, 0.27 gpt gold,
10.3 gpt silver & 35.8 % Fe, with geological characteristics
similar to Spout North Zone. This discovery radically changed
EnGold's exploration strategy.
Although additional drilling has been carried out at Aurizon
Gold since the "G1" discovery, and an Aurizon Gold inferred
resource calculation was completed and published, the bulk of
EnGold's exploration budget and energy in 2017 and 2018 has been
dedicated to the discovery and delineation of high-grade copper
resources in the G1 – Spout area.
The G1 - Spout Campaign
A remarkable feature of the G1 discovery is the consistent high
grades over significantly broader true widths than Spout. However,
given the depth of the intercepts, at roughly 350 metres below
surface, the G1 mineralization can only be developed as an
underground minable target. The magnetite-rich skarns of G1 and
Spout are very similar in minerology, with notable differences,
such as the higher gold and silver content at G1. Also, G1 is a
horizontal structure, whereas Spout consists of a near vertical
component (Spout North) and a more horizontal section (Spout
South).
EnGold's initial outlook was that the G1 zone could be connected
to the Spout Deposit 1.8 km to the northwest, but as the drill
campaign rapidly advanced with two drills and new funding in place,
it became apparent that G1 was not uniformly thick, and discreet
boundaries to the zone emerged based on a 50-metre drill pattern.
Another challenge that emerged was the interpretation of the
gravity data, which was augmented by a large amount of additional
surveying. While the discovery hole was extraordinarily well
correlated with the centre of the gravity anomaly, drilling of
subsequent even stronger gravity anomalies often produced
disappointing results.
An important feature of both the Spout and G1
copper-magnetite-gold-silver skarns is that they both occur within
a carbonate-rich volcaniclastic layer that is pervasive in the
area, a layer dipping gently to the southeast at approximately 15
degrees, coming to surface at Spout. Skarn-style mineralization
typically occurs where intrusive rocks such as granites of varying
kinds, are proximal to carbonate-rich sedimentary host rocks such
as limestones, where the extreme heat of the intrusive magma causes
minerals to remobilize and seep into the chemically receptive host
rocks, which act somewhat like a sponge. At the LLH Project, the
layer that is receptive to metal deposition through this
"skarnification" or replacement process, is a submarine unit
comprised of pieces of angular volcanic and sedimentary rock
("clasts") with abundant carbonate and other minerals. EnGold
geologists often call this layer "the container." Sometimes the
container is full, such as at G1, but it also occurs as an "empty"
sedimentary layer.
Geophysical Surveys
The pervasiveness of "the container" in the Spout – G1 area adds
strong exploration potential to the LLH Project, and the very high
magnetite content of the skarns and extreme density of the better
mineralized zones enhance the utility of magnetic and gravity
geophysical surveys. For this reason, in 2017 EnGold increased its
geophysical budget to include a very closely spaced airborne mag
and gravity survey over the Spout-G1 corridor. Additional, closely
spaced surface gravity surveys were also added.
The additional mag and gravity surveying outlined several high
priority anomalies over a 7 km trend. Initial drill tests at two of
these large anomalies in 2017 had inconclusive results. To add
another targeting layer to aid exploration, EnGold added new
Induced Polarization ("IP") surveys in 2017 and 2018. IP is a
proven exploration tool used and refined over numerous decades of
work around the world and involves sending electrical charges into
the bedrock and measuring the responses along surveyed lines that
measure the affects of the electricity, with certain patterns being
well known to indicate potential for mineral deposits.
A challenge at the LLH Project is the depth of the G1
mineralization, which reduces the detectability of the zone using
any geophysical method. However, in spite of these challenges,
geological, geophysical and assay results provide a compelling case
for persistent drilling to test "the container" along the entire
prospective trend.
Notwithstanding the Company's exploration efforts directed at G1
and hoped for extensions and/or duplications of it along trend, the
much better-known Spout Deposit became the focus of renewed
attention for EnGold in 2018. Given the success at G1 and its
potential to develop into an underground copper mine, the Company
decided to revisit the Spout Deposit as a high-grade underground
target. As a result, EnGold planned a series of 6 "deep" holes to
extend the higher-grade portions of the steeply dipping Spout North
zone to depth, as a way to expand the resource in advance of a
planned recalculation of the resource using an underground,
high-grade deposit model. The six-hole Spout North deep drilling
effort, comprising a total of 2,961 metres, successfully extended
the known mineralization from an average of 100 m depth to more than 400 m depth, along a 550
m strike length. Hole SL18-181 intersected
8.8 m core length (true width not
determined) below 400 m, grading 3.3
% Cu, 0.83 gpt gold, 16.9 gpt silver and 26.7 % Fe. These
grades at depth remain open and will add significantly to the depth
potential of the copper-magnetite (+ gold + silver) Spout
Deposit.
Porphyry Potential
The 2018 IP survey was designed to improve resolution of earlier
IP results, with emphasis on the weaker anomaly recently defined at
G1 and its relationship to a much stronger, but poorly defined IP
response to the east. The work showed a large and high intensity IP
anomaly to the east of G1 that has many of the characteristics of
anomalies associated with large porphyry copper deposits. The
anomaly had appeared on the edges of a prior IP survey, but the new
work completed the picture. A "porphyry" deposit is characterized
by mineralization that is distributed relatively uniformly in
granitic rocks, which, because of their consistency and size,
comprise many of the largest mineral deposits in the world, and are
especially economically attractive if they are close to surface and
can be mined by bulk, open-pit methods. Porphyry deposits, if they
are large enough, can be mined profitably at much lower grades than
skarn or other kinds of smaller, high-grade copper deposits.
Porphyry deposits often display a "pyritic halo" around them.
Iron pyrite is not itself an economically attractive mineral, but
it typically responds well to IP surveys. In the fall of 2018,
EnGold's drill hole 18-44 targeted the middle of the IP anomaly and
encountered highly pyritized granitic rocks but only minor copper
mineralization. A second hole located within the southern part of
the IP anomaly ended due to bad ground short of the target depth,
but also failed to intersect much copper enrichment. However, hole
GP18-42, drilled prior to definition of the larger IP anomaly,
encountered 58 m of porphyry style
copper mineralization suggesting the large IP anomaly remains a
compelling, ongoing exploration target for EnGold.
High Grade Gold Quartz Veins
Near the end of EnGold's 2016 drill program, a narrow but very
high-grade gold-bearing quartz vein was encountered high up in hole
AZS16-56 which was targeting the much larger Aurizon Gold
hydrothermal breccia structure deeper down. The quarts vein was
traced to surface and identified over 150
m strike length. Due to the discovery of the G1 Zone in
February of 2017, no follow up work in the area of the high-grade
quartz vein was done until the summer of 2018, when a relatively
small but closely spaced soil sampling program was undertaken to
see if more gold bearing quartz mineralization could be discovered.
This survey indicated numerous gold anomalies which when
investigated on surface turned up a number of new high-grade gold
occurrences, some with visible gold.
In the fall of 2018, a limited series of short drill holes
tested the surface occurrences with very encouraging results. The
upshot of this work is that a new exploration front has been opened
up at the LLH Project, a front of potential we hope to follow up on
in 2019.
Outlook for 2019
Subject to additional financing management is aiming to secure
in Q1 of 2019, EnGold's 2019 exploration plan will entail a budget
of approximately $2 million deployed
as outlined below.
Spout G1 Gap
One outcome of EnGold's 2018 "Gap" drilling was that the high
potential stratigraphy and geophysical signature was actually
extended to the southeast of G1, where the best hole of 2018 was
drilled. Planned 2018 drilling of the Gap area was not fully
carried out due to the program not being fully funded, and as such,
EnGold's 2019 plan entails the drilling of many of the undrilled
2018 Gap holes, but this time with significantly enhanced data that
came by way of the 2018 expansion of the IP survey.
As described above, the skarn-style mineralization at Spout and
G1 is caused by "intrusive" activity (magma that rises from deeper
in the earth, cooling slowly and producing the "chunky" larger
crystal textures of granitic rocks), giving rise to heat and
mineralizing fluid flow into the receptive, sedimentary "container"
unit. Understanding the location of the intrusive "heat source"
helps in building a robust exploration model, and it is possible
that the intrusive body identified by the 2018 IP survey is
"genetically" linked to the copper-magnetite rich skarn
occurrences. This new clue is the subject of current study and
EnGold hopes this will assist with high quality drill targeting in
2019.
A total of 5,000 metres of drilling in 10 holes is planned for
the Spout – G1 Corridor.
Aurizon Gold Area
The encouraging high-grade gold results in soils, surface
showing and in drilling in the area just west of the main Aurizon
structure will be followed up by a significantly expanded soil
sample grid, trenching of existing showings, and approximately
2,000 metres of additional drilling. EnGold believes the new
area of interest not only represents potential for discreet,
underground minable high-grade quartz veins, but also exhibits
potential for bulk tonnage gold targets, if it can be shown that
the gold mineralization is hosted in broader quartz stockwork zones
or sheeted veins. Detailed geological mapping is also planned to
better understand the newly discovered occurrences.
IP Zone
Additional modeling of all data in the G1 – IP Zone area will be
completed to support best targeting in the area, testing both skarn
(G1-style) and porphyry copper models, using 3,000 m drilling.
Additional work plans for 2019 include initial metallurgy of G1
mineralization, petrographic studies, and continued community
engagement. All-in, EnGold has budgeted $2M for 2019 Program, subject to funding.
Rob Shives P.Geo., VP Exploration
and a Qualified Person as defined under National Instrument 43-101,
has reviewed and approved the technical content of this
release.
EnGold Mines Ltd.
David Brett
President & CEO
This news release may contain
"forward‐looking statements". Readers are cautioned
that any such statements are not guarantees of future performance
and that actual development or results may vary materially from
those in these "forward looking statements." Neither the TSX
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is defined in the policies of the TSX Venture Exchange) accepts
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SOURCE Engold Mines Ltd.