Hawthorne Hitting Gold In BC

VANCOUVER — With a resource boost at Frasergold, a low-grade gold deposit near Williams Lake joint-ventured with Eureka Resources( EUK-V, ERKAF-O), and drills showing new zones at Taurus, a high-grade gold project in the province’s north, British Columbia is showing its promise for Hawthorne Gold (HGC-V, HWTHF-O).

Hawthorne completed two drill programs at Frasergold since signing its earn-in agreement in late 2006 and now the data from those programs has informed a new resource estimate. The first National Instrument 43-101-compliant estimate for Frasergold, it is based on 160 diamond-drill holes and 242 reverse-circulation holes totalling almost 50,000 metres.

The open-pittable deposit is now home to 34.1 million measured and indicated tonnes grading 0.56 gram gold per tonne as well as 75.3 million inferred tonnes averaging 0.51 gram gold. All together, the resources contain 1.8 million oz. gold.

The resource is located in a 1.5- km-long portion of the Frasergold trend, which has been traced for 10 km through drilling, soil sampling, induced-polarization surveying, and surface mapping. The joint-venture partners are now developing an action plan for the deposit and for the surrounding exploration camp.

Gold at Frasergold is hosted in a combination of quartz veins and knotted phyllites, existing both as coarse free gold and finer-grained sulphide-bearing gold.

Hawthorne is working on earning a 51% interest in Frasergold, for which it has to spend $3.5 million on exploration, complete a feasibility study by April 2010, and pay Eureka $175,000. The exploration spending is complete and Hawthorne has $50,000 left on the cash payment.

Frasergold is located roughly 100 km east of Williams Lake, in central B. C. Hawthorne’s other gold project, Taurus, is at the province’s north end. Hawthorne and its predecessors at Taurus have already delineated an inferred gold deposit at the property totalling 33 million tonnes grading 1 gram gold, for just over 1 million oz. gold.

Now Hawthorne’s drilling efforts are focused on defining small, near-surface gold zones with grades better than 3 grams gold. Provided the process is metallurgically feasible and receives permitting, the company would like to mix material from these higher-grade zones with ore from Taurus in a mining operation. The property is already home to a permitted gravity-flotation mill capable of processing 270 tonnes of ore daily.

In its second-phase program at Taurus, Hawthorne infill-drilled the Taurus deposit, looking for higher-grade zones. The effort was successful — in an area north of the Sable zone, drills hit high-grade mineralization and showed depth continuity to 85 metres.

The best result came from hole 14, which intersected 4.3 metres grading 36.3 grams gold from 60 metres depth. In addition, hole 13 hit 1.1 metres averaging 12.6 grams gold followed by 11 metres of 2.5 grams gold and hole 9 cut 2.7 metres grading 11.4 grams gold from 19 metres down-hole.

Hawthorne is currently extracting a 10,000-tonne bulk sample from the Sable zone. Some of the sample will be used in metallurgical test work while the rest will be stockpiled next to the mill to be processed upon startup.

And in its more recent third phase of drilling at Taurus, Hawthorne probed the 88 Hill zone, which is the far western portion of the defined deposit. Initial results indicate the presence of additional high-grade, near-surface targets. Hole 24, for example, intersected 1.7 metres grading 19.7 grams gold at 27 metres depth and hole 30 hit 2 metres at 14.3 grams gold from 29 metres down-hole. And hole 31 cut 1 metre of 9.4 grams gold from 69 metres, while hole 34 returned 2 metres of 8.6 grams gold from 68 metres depth.

Access to Taurus is straightforward — the highway that runs north through B. C. and into the Yukon runs through the property. And there is already significant underground development in place, including 13 adits and 25 km of workings.

Hawthorne recently arranged two private placements, one brokered and one non-brokered, that will together bring in $4.5 million. In the non-brokered placement, the company is selling 5.6 million units at 45¢ apiece, with each unit comprising a share and half a warrant. Each whole warrant will be exercisable at 55¢ for 12 months. In the brokered deal, Hawthorne is selling 3.7 million flow-through shares at 54¢ each.

Hawthorne shares are currently trading near 40¢. The company has a 52-week trading range of 12-55¢ and 75 million shares outstanding.