Damoti Lake results prove deflating for venture partners

Results from the first seven holes of winter drilling at the Damoti Lake joint venture in the Northwest Territories fell short of expectations for the three owners.

Partners Athabaska Gold Resources (TSE), Consolidated Ramrod Gold (TSE) and Gitennes Exploration (ASE) are testing a gold-mineralized iron formation discovered last summer on BIF Island.

Consolidated Ramrod can earn a 51% interest directly from Athabaska by spending $2.4 million; Gitennes holds 25%.

The recent drilling includes a 23-ft. intersection grading 0.028 oz. gold per ton in Hole D-20 and a 14.6-ft. intersection grading 0.11 oz. in Hole D-21. D-20 was drilled west to east on Section 2116 North in order to “scissor” Holes D-6 (9.2 ft. grading 0.06 oz. gold), D-7 (8.5 ft. at 0.68 oz. gold) and D-9 (no significant results), all of which were drilled on the same section from east to west. Section 2116 North is about 220 ft. north of Discovery Hole D-2 (0.4 oz. gold over 31.2 ft.).

Holes D-17 and D-18 were drilled below and south of D-2, but both encountered faulting and failed to intersect iron formation.

A re-interpretation of the structure, with the aid of further detailed geophysics, indicates the zone is displaced about 160 ft. to the west, just south of BIF Island. Further drilling is planned to test the targeted displacement.

Hole D-21 was drilled on North Island, about 1,600 ft. north of BIF Island, to test the east band of iron formation.

D-19, which tested the west band about 330 ft. north of BIF Island, returned a 130-ft.-wide band of iron formation with no significant gold values. The east band of iron formation remains to be tested on that section. D-22 and D-23 were drilled north of North Island to test both the east and west bands, but major faulting and barren dyke rocks were encountered. Additional drilling is planned to test for offsets following the completion of detailed, structural re-interpretation.

Drilling is to resume shortly and will include a test of a strong coincident magnetic and electromagnetic anomaly on the mainland, about a mile south of BIF Island. The anomaly extends for 2,300 ft. to the south under overburden from a plug of exposed grano-diorite.

Despite the disappointing results, the joint venture remains hopeful that an economic gold deposit will be discovered within the 7.5-mile-long belt of prospective iron formation.

Results from the two significant holes are as follows:

Hole Interval Width Gold

(ft.) (ft.) (oz./ton)

D-20 271.3-294.3 23.0 0.028

incl. 273.1-279.2 6.1 0.037

incl. 289.9-292.0 2.1 0.092

D-21 48.2-62.8 14.6 0.11

incl. 52.2-59.6 7.4 0.19

incl. 55.4-59.6 4.2 0.28