North American Gem Inc. is Considering Offers to Sell or Joint Venture the Louise Lake Copper Deposit and Focus Exclusively on C
August 18 2010 - 9:23AM
Marketwired Canada
North American Gem Inc. (NAG) (TSX VENTURE:NAG) reports that it is considering
offers on its Louise Lake Copper Deposit, located 35 kilometers west of
Smithers, British Columbia, Canada. The road-accessible property is near a
full-service community with excellent access to highway, rail and electrical
infrastructure. In total, 96 holes have been drilled at the Louise Lake property
and approximately 3.5 million dollars in exploration expenditures has been
completed by NAG.
Louise Lake Concentrate Shows Copper Recoverability of 98%
NAG evaluated an environmentally friendly leaching process known as Galvanox
(research carried out at the University of British Columbia), which has the
potential to improve the economic viability and recoverability of the metals
contained in the Louise Lake Copper Deposit. The Galvanox process enables copper
producers to significantly reduce sulfur dioxide gas emissions, eliminate the
cost of transportation to the smelter and treat certain copper ores high in
arsenic (penalty element) content that other smelters charge significant fees to
process. Galvanox, in general, is able to produce a virtually complete copper
recovery (98% or higher) and eliminate all of the arsenic into an inert compound
under atmospheric conditions (without using excessive heat (80 degrees C), a
very fine grind or chemical additives).
Inventor and UBC researcher Dr. David Dixon, along with co-inventor Dr. Alain
Tshilombo (UBC PhD recipient) at the Material Engineering Department
successfully carried out Galvanox leach tests on concentrate produced by G&T
Metallurgical of Kamloops, from a representative composite sample of diamond
drill core from the Company's Louise Lake copper-gold-molybdenum-silver deposit.
The deposit hosts copper in roughly equal quantities of chalcopyrite (CuFeS2)
and enargite (Cu3AsS4). The Galvanox process had previously only been used to
extract copper from chalcopyrite successfully. This was the first time the
Galvanox process attempted to extract copper from concentrate containing
enargite.
The tests on the Louise Lake concentrate were very encouraging, indicating that
more than 99% of the copper in the flotation concentrate can be recovered.
Electro winning can then produce copper with high purity. Gold can be recovered
from the leach solution and any impurities such as arsenic can be precipitated
out and safely disposed of.
The economics of the process together with electro winning on site were assessed
by Bateman Engineering of Australia and it appears to have substantial savings
and other advantages compared to conventional smelting and other known leaching
processes.
Louise Lake Resource Estimate as determined by SRK Consulting
The resource estimate released by the Company May 30, 2006 meets the
requirements of National Instrument 43-101 and is the Company's current
disclosed Louise Lake resource estimate. The estimates are included in the
Company's July 14, 2006 technical report prepared by SRK Consulting entitled
"Independent Technical Report and Resource Estimate for the Louise Lake
Property, Omenica Mining Division". This report is filed on SEDAR.
Table 1 lists indicated and inferred resources calculated in 2006 by SRK
Consulting for the Main Zone, calculated at a copper equivalent (CuEq) cut-off
of 0.25% Cu:
Table 1 - SRK Classified Mineral Resources for the Louise Lake Deposit, B.C.,
Canada
---------------------------------------------------------------------------
Mineral
Resources(i) Tonnes CuEq(ii)(%) Cu (%) Mo (%) Au (g/t) Ag (g/t)
---------------------------------------------------------------------------
Indicated 6,000,000 0.369 0.214 0.006 0.20 0.98
---------------------------------------------------------------------------
Inferred 141,000,000 0.426 0.234 0.009 0.23 0.94
---------------------------------------------------------------------------
(i) All resources quoted at a 0.25% CuEq cut-off.
(ii) CuEq values calculated using the following metal prices: Cu $1.20/lb.
Mo $8/lb, Au $450/oz, Ag $7/oz.
(iii) The CuEq calculation does not take into account recoveries of
individual metals.
Using resource estimates provided by SRK in Table 1, North American Gem has
calculated the following contained metal figures:
Table 2: Contained Metal Amounts Calculated from Resource Estimates at 0.25%
Copper Equivalent Cut-Off
---------------------------------------------------------------------------
Resource Category Tonnes Grade Contained Metal(i)
---------------------------------------------------------------------------
Indicated 6,000,000 0.214% Cu 28,300,000 lbs Cu
---------------------------------------------------------------------------
6,000,000 0.006% Mo 780,000 lbs Mo
---------------------------------------------------------------------------
6,000,000 0.20 g/tonne Au 39,000 oz Au
---------------------------------------------------------------------------
6,000,000 0.98 g/tonne Ag 189,000 oz Ag
---------------------------------------------------------------------------
Inferred 141,000,000 0.234% Cu 727,600,000 lbs Cu
---------------------------------------------------------------------------
141,000,000 0.009% Mo 27,900,000 lbs Mo
---------------------------------------------------------------------------
141,000,000 0.23 g/tonne Au 1,040,000 oz Au
---------------------------------------------------------------------------
141,000,000 0.94 g/tonne Ag 4,260,000 oz Ag
---------------------------------------------------------------------------
(i) Actual yields may be lower than the numbers reported based on
recoverability percentages.
The resource base reported in Table 1 was estimated by ordinary kriging methods
from 37 drill holes located within a mineralized envelope designed by SRK
Consulting. The resource is based on a global bulk density of 2.75 tonnes/m3.
Block classification was applied using a combination of the average distance and
number of drill holes contributing composites to the local estimate.
The Indicated Resource classification was applied to blocks with a minimum of
two drill holes and an average distance to composites of less than 50 meters.
Additionally, blocks assigned to the indicated resource classification were
limited to areas where bulk density samples were taken. The indicated blocks
form a contiguous cluster with overall dimensions of 100 by 300 by 170m,
extending from surface to a depth of 175m. The formula used for Cu equivalent
calculations is provided at the base of Table 1 (please note that the metal
prices used and set by SRK Consulting to determine the 0.25 CuEq cut-off are
significantly lower than current market prices); no provisions were made for
metallurgical recoveries.
General Information
The Louise Lake property hosts the "Main Zone" deposit, containing an unusual
mineral assemblage, with copper occurring as an equal mixture of enargite and
chalcopyrite. The 2004 through 2007 programs extended the known dimensions of
the east-west striking, moderately north-dipping tabular Main Zone to a length
of 970 meters, with widths of up to 170 meters. The zone extends to a depth of
about 270 meters, where it is abruptly truncated by the flat-lying "Terminator"
fault.
A total of 5,042.8 meters of drilling in 16 holes was completed in 2008 (not
included in the Table 1 Resource Estimate), focusing on two main target
settings. The first consists of higher grade gold values, as well as higher
gold: copper ratios, identified in northeastern portions of the Main Zone,
particularly from Hole LL-07-18B. Here, a value of 0.769 g/t gold with 0.48%
copper was returned from a 26.1-metre intercept at a depth of 288.8 to 314.9
meters, within a 40.0-metre interval grading 0.625 g/t gold and 0.41% copper
(NAG News Release, May 9, 2007).
The other main setting consisted of mineralization beneath the flat-lying
"Terminator" fault. Year-2007 results from Hole LL-07-15, collared northwest of
the Main Zone, revealed "low-grade sub-Terminator" mineralization having a
similar fabric and geochemical signature to the Main Zone. This was the first
intercept of sub-Terminator mineralization, suggesting that faulted off
extensions of the Main Zone deposit occurs further northwest.
The 2008 program successfully identified the direction of movement of the rafted
block hosting the Main Zone, and that additional sub-Terminator mineralization
likely may occur west of the western limit of 2008 drilling.
Mike Magrum, P.Eng., a qualified person under National Instrument 43-101, has
approved the technical content of this news release.
North American Gem Inc. (TSX VENTURE:NAG) is a junior resource company in
Western Canada. The company's major focus is expanding its coal mining
operations at its flagship properties in Kentucky. In addition, the company has
interests in coal, copper, molybdenum, and other base metal properties in
Canada.
On Behalf of the Board of Directors
NORTH AMERICAN GEM INC.
Charles Desjardins, President and Director
Cautionary note:
This report contains forward looking statements. Resource estimates, unless
specifically noted, are considered speculative. Any and all other resource or
reserve estimates are historical in nature, and should not be relied upon. The
production rate and mine-life projections have been made without support of a
feasibility study, there is no certainty the proposed operations will be
economically viable. By their nature, forward looking statements involve risk
and uncertainties because they relate to events and depend on factors that will
or may occur in the future. Actual results may vary depending upon exploration
activities, industry production, commodity demand and pricing, currency exchange
rates, and, but not limited to, general economic factors. Cautionary Note to US
investors: The U.S. Securities and Exchange Commission specifically prohibits
the use of certain terms, such as "reserves" unless such figures are based upon
actual production or formation tests and can be shown to be economically and
legally producible under existing economic and operating conditions.
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