Targeting multi-million high-grade oz. in Quebec
Windfall Lake Property, located near Val d'Or, Quebec: Indicated 538,000 oz. (10.05 gpt) / Inferred 822,000 oz. (8.76 gpt) (July 2012)
Message: Investor Q&A
| Posted by:
Shareholder |
Answered by:
Rhylin Bailie |
| Posted date: March 14, 2014 |
If or when Eagle Hill goes into production, where is the nearest processing ore plant or will they build their own?
There is a mill about 100km away that uses the same flow sheet that Eagle Hill would use to process its ore. One of the things we'll look at when we start the economic assessment is whether it's more cost effective to build our own mill or truck the ore to the nearby mill. At this point, however, it's too early to say for sure.
Eagle Hill's updated resource estimate considered 57,000 metres of additional drilling, with some very high-grade results, yet the grade went down and the overall resource didn't increase as much as expected. Why? We know that we have a very exciting, high-grade gold deposit at Windfall Lake. The objective of the Fall 2013 drill program was partly to expand and upgrade the resource, but mostly to see "just how big the elephant can be." We wanted to see if we could identify mineralization in new areas, opening the deposit up for further expansion. What we are most excited about from the Fall 2013 drill program is confirmation that the resource is indeed open for expansion, both at depth below the Red Dog intrusion and also to the southwest of the Main Zone. The Fall drill program confirmed that mineralization extends at least 500 metres to the southwest of the Main Zone, but the drill holes were too widely spaced to allow those data to be included in the resource estimate. Eagle Hill will infill to the southwest of the Main Zone in 2014 with the objective of identifying a mineral resource in this area. We also plan to drill additional holes below Red Dog with the objective of further expanding the mineral resource at depth. The existing mineral resource includes 455,000 tonnes at 8.21 g/t gold for 120,000 contained ounces of gold in the inferred category below Red Dog . If you had a chance to stop by Eagle Hill's booth in the core shack at PDAC to look at the core samples, you'd have noticed that the core from Zone 27 above Red Dog looks pretty much identical to core taken from below Red Dog. The Fall drill program confirmed that Zone 27 mineralization continues below Red Dog. The hole-to-hole IP survey corroborated this evidence and also identifed additional drilling targets below Red Dog. Resource estimation is a complicated science, involving analysing and interpreting drill results to model the geometry of the deposit and infer what the mineralization looks like between drill holes. The more drilling we do the better we understand the geometry of the deposit, and the more confidence we have in the gold resource that has been identified. New drilling can prove that mineralization continues in areas previously unidentified, but it can also demonstrate that mineralization does not continue. When SRK updated the Windfall Lake mineral resource in February 2014, they upgraded the resource from inferred to indicated in some areas, they increased the number of ounces in certain areas, and decreased the ounces in other areas. All told, we started with a resource of 538,000 ounces of indicated and 822,000 ounces of inferred, and the new resource totals 744,000 ounces of indicated and 731,000 ounces of inferred, for a 38% increase in the indicated category and an overall increase in the size of the mineral resource. We won't know the details of the new geometry of the resource and where the ounces are located until we get SRK's detailed technical report, but we certainly feel that the updated resource was a step in the right direction, increasing the size of the deposit and increasing our confidence in the mineralization. The grade decreased slightly from 10.01 g/t to 9.75 g/t in the indicated category, which was not unexpected. With an average grade of 9.75 g/t gold in the indicated category, Windfall Lake is in the top 10% worldwide (by grade) among resource-stage gold projects. We've got a high-grade property, in one of the world's best mining jurisdictions, and the deposit is open for expansion. It doesn't get much better than that.
Another thing to consider is that we've drill tested only a fraction of the property. On March 13 Eagle Hill announced that it has entered into an agreement to purchase mining claims adjacent to the Windfall Lake Gold Project, which would give us 100% ownership over the entire 12,400 hectare Windfall Lake property. Historical drilling and surface exploration has identified high-grade gold in other areas of the property, giving us additional exploration upside and expansion potential.
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