Elmtree Gold Property, New Brunswick

 

The Elmtree Gold deposits lie within an 85-claim (1,360 hectares) property situated 19 kilometres northwest of Bathurst. Gold was discovered on this ground by Lacana Mining in the 1980s, and a resource of about 70,000 ounces was outlined with drilling on the West Gabbro Zone (WGZ). Stratabound acquired the property in 2003, and with continued exploration and drilling tripled the resource before optioning it to another company for further development in 2009.

 

Review

 

Following a number of geochemical, geophysical, trenching and drilling programs by Stratabound, a National Instrument 43-101 resource estimate was completed in 2008 by Mercator Geological Services (Elmtree Technical Report).

 

Three zones of gold mineralization have been defined to date on the property:

 

  • The West Gabbro Zone (WGZ) resource consists of an Indicated Resource of 525,000 tonnes grading 2.45 g/t gold plus an additional Inferred Resource of 1,556,000 tonnes grading 2.01 g/t gold.

 

  • The South Gold Zone (SGZ) resource consists of an Indicated Resource of 2,367,000 tonnes grading 0.74 g/t gold.

 

  • The Discovery Zone (DZ) contains 583,000 Inferred tonnes (gold only) grading 1.15 g/t gold, plus 158,000 Inferred tonnes of polymetallic mineralization grading 1.31 g/t gold, 39.54 g/t silver, 0.69% lead and 2.00% zinc.

 

This amounts to 185,500 oz gold in the Inferred resource category plus 41,000 oz gold in the Indicated resource category plus Inferred amounts of 201,000 oz silver, 7.0 million lbs zinc and 2.4 million lbs lead.

 

Additional exploration drilling, notably along the SGZ and DZ, could increase the overall Elmtree gold resource at some future date.

 

Status

 

In June 2009 Stratabound entered into an option agreement with Castle Resources Inc. whereby Castle can earn up to a 70% interest by spending $2.5 million on exploration over a three-year period and paying Stratabound $1.2 million plus 200,000 of its shares. Castle has fulfilled its commitments with regard to its first and second year work expenditures and option payments.

 

Castle drilled an additional 26 holes in 2009, and commissioned Micon International Consultants to perform a Preliminary Economic Assessment (PEA) on the possibility of open pit mining and toll-milling of a 1,117,000 tonne portion of the WGZ having an average grade of 2.41 g/t gold.

 

The PEA results were announced on March 5, 2010, and indicated a pre-tax IRR of 25% at $900/oz gold, and a pre-tax IRR of 63% at $1,100/oz gold, using a stripping ratio of 6.3 (W/O) and assuming 90% gold and 60% silver recoveries into a concentrate for sale to a nearby smelter.

 

In June 2010 Castle commissioned Micon International to initiate a feasibility study on the WGZ, and Stantec Consulting to undertake an environmental review as part of the permitting process towards mining the WGZ.

 

As part of the feasibility study, a 4,000 metre infill drilling program was undertaken in 2010, with the objective of upgrading the resource estimate from Indicated and Inferred to Measured and Indicated categories. Results of Castle’s drilling were reported verbatim in Stratabound’s news release dated December 22, 2010. An updated resource estimate has not yet been reported but the results will likely show an increased gold resource estimate for the WGZ .

 

In a December 20, 2010 news release Castle reported that Stantec was engaged in a comprehensive environmental assessment and permitting process, addressing wildlife and aquatic environments, water resources and wetlands, atmospheric considerations, traditional and local use and effects, and archaeological and heritage aspects, as well as public and stakeholder involvement, input and aboriginal engagement. First Nations meetings and local community information sessions have been held.

 

In its Management Discussion and Analysis dated May 26, 2011, Castle reports that the feasibility study is ongoing, and that due to unforeseen requirements of the federal government for additional environmental studies, the environmental assessment has been postponed until the full impact of such studies are understood and the feasibility study is completed.

Last Updated on Wednesday, 03 August 2011 18:43