NSGold to revive Nova Scotia gold camp

Newly listed NSGold (nsx-v) is determined to make a name for itself in the historic gold camps of Nova Scotia.
The junior recently wrapped up a $750,000-exploration drilling campaign on the Mooseland gold project, 110 km by paved highway northeast of Halifax. A total of 26 diamond drill holes comprising 6,500 metres tested both the East and West zones.
The objective of the program is to verify the historical resources and compile a new National Instrument 43-101 compliant resource estimate.
Mooseland is the site of the first recorded gold discovery in Nova Scotia, dating back to 1858. Since then, the property has been explored and exploited by many individuals and companies. Both the East and West zone areas of the property are riddled with near-surface workings, including historic shafts and trenches. Old stamp mill tailings are widely scattered.
Recorded production from the Mooseland district totaled 3,865 oz. between 1863 and 1934. Glenn Holmes, chief financial officer of NSGold, says that the Mooseland site received very little historic work before prospectors moved onto Goldenville, which became a very rich mine that produced over 200,000 oz. gold.
Historic gold production in Nova Scotia has typically come from high-grade shoots in steeply dipping, narrow quartz veins in the Meguma terrain. A recorded 1.2 million oz. were mined sporadically through to the 1940s from more than 60 small-scale operations scattered across the southern half of the province.
The Meguma terrain underlies much of southern and western Nova Scotia, and is separated from the Avalon group rocks in the northern part of the province by the major east-west striking Cobequid-Chedabucto fault boundary.
Gold mineralization in the Meguma group has been found ­primarily in narrow mesothermal quartz-vein systems hosted in a Cambrian-to-Ordovician turbidite sequence of metasedimentary rocks.
These rocks were subjected to intense compressional and regional greenschist facies metamorphism during the Acadian Orogeny, forming a series of upright, isoclinals, northeasterly striking folds. Late in the folding sequence, a complex array of quartz veins – many of them gold-bearing – were emplaced into the Meguma.
These narrow veins, coarse-grained, nuggety gold deposits are associated with flexural folding and occur in the hinges or along the limbs of steeply dipping, tight, anticlinal structures.
Hecla Mining of Canada and Acadia Mineral Ventures carried out a comprehensive exploration program at Mooseland during the late 1980s. Acadia completed 135 core holes totaling 31,700 metres between 1986 and 1988. Eighty-five of the holes were drilled on the West zone and 50 holes were put into the East zone.
The Mooseland project is centred on a major, regional east-west trending anticlinal structure that is host to the gold-bearing quartz veins. A post-mineralized northwest trending fault zone disrupts the anticlinal structure and splits the property into the West and East zones, which are separated by the Tangier River.
The West zone extends in an east-west direction over a strike length of 900 metres. At least 11 separate quartz veins have been defined on both limbs of the anticline fold. The individual veins range from 5 cm to 1 metre in width.
Described as more structurally complex, the East zone has been explored over a strike length of 240 metres and to a depth of 300 metres.
Historical resource estimates were prepared in-house by Hecla and externally by MPH Consulting, which showed the potential for as much as 300,000 contained oz. using uncut drill assays.
“Determining the location, size, shape, rake and grade of minable ore shoots is a major difficulty in planning underground development on a narrow-vein gold deposit in the Meguma. Since the gold is not distributed evenly within the quartz veins, it is not possible to accurately define ore shoots by diamond drilling alone,” states a 2010 technical report prepared by MineTech International.  
In 1988, Hecla began to sink a shaft in the West zone to explore and bulk sample mineralized quartz veins that had been identified from drilling. The three-compartment shaft was sunk to a depth of 125 metres, well short of the planned depth, by the time the project was suspended in May 1989 due to a lack of funds. The planned program of lateral development and bulk sampling was never carried out.
Azure Resources (azu-v) optioned the Mooseland project from 2003-04. The junior completed six holes – four holes in the West zone and two holes in the East zone – in spring 2003, prior to beginning an underground bulk sampling program. A decline was collared in the West zone, with a plan to connect it to the Hecla shaft at a depth of more than 100 metres and collect upwards of 10,000 tonnes of sample.
The decline was 218 metres long and at a depth of 46 metres when it was shut down, well short of the target area due to financial constraints. Azure intersected five separate veins and collected a 2,000-tonne bulk sample from drifts on the Little North and Cummings veins. The bulk sample was processed at the nearby Dufferin Mines mill, which Azure controlled at the time.
“No published reports on the bulk sample processing are available, but interviews with people involved indicate the recovery was very poor,” the MineTech report says. “Two principal reasons were given for this. First, time constraints forced Azure to take the bulk sample early, before the decline had reached the planned target area. Second, this material had little coarse gold and was unsuited to the gravity circuit used to process it.”  
NSGold can acquire a 100% interest in the Mooseland project and five other grassroots gold properties in Nova Scotia by making a final payment of $250,000 to Globex Mining Enterprises (gmx-t), due September 2011. Globex retains a 4% gross metal royalty covering the properties and will have the right to receive a 5% interest in NSGold should any of the properties go into production.
NSGold added to its holdings in the Mooseland district by staking additional ground and now controls an 18.6-sq.-km package in Halifax County.
“The Mooseland property is the most advanced and highly prospective, and one which we think has the potential to be put into production in a couple of years,” says Holmes. “Nova Scotia, in general, is well-known for gold occurrences, but having said that, most of the work was carried out back at the turn of the century.
“Mooseland is reflective of many of the Nova Scotia properties, in that they have had what I would describe as very half-hearted efforts to exploit them,” Holmes adds.
NSGold drilled 13 holes apiece into the West and East zones last year. So far, initial assay results are available for only the first three holes of the program. Assays are pending for the remainder. “We have a large backlog of samples at the lab right now,” explains Holmes.
Initial highlights from the drilling include: a 0.9-metre section of 15.6 grams gold per tonne at 98 metres downhole, followed by a 0.5-metre interval grading 20.9 grams, starting from 229 metres depth in hole 1; 0.5 metre of 11.6 grams gold at 73.5 metres downhole, followed by a 0.5-metre section of 33.2 grams at 95 metres depth and a 0.4-metre-long interval of 10 grams at 113 metres depth in hole 2; while hole 3 intersected 0.5 metre of 39.5 grams at 60 metres.
“The results obtained to date are consistent with those of the earlier drilling programs,” the company reports.
“We already knew that we had a great deposit because of the extensive work of our predecessors, however, the additional data being gained in the current drilling phase shows we are definitely on the right track towards establishing a case for future gold production at Mooseland,” said NSGold’s chairman Hans van Hoof in a prepared statement.
Once final results are in hand for the first round of exploration drilling, NSGold will begin planning the next phase, which according to Holmes will most likely include dewatering the ex
isting shaft and extending the decline to the targeted veins in order to take some sort of bulk sample. This would serve to support a new reserve estimation and an eventual development decision.
With drilling now finished at Mooseland, NSGold has moved the rig to the historic producing Leipsigate property in Lunenburg Cty., 120 km west of Halifax. At least two holes are planned to test the potential of known gold-bearing structures that cut across the property.
The company recently added to its holdings by optioning the Ecum Secum and Moosehead properties, situated along the coast, east of Sheet Harbour. The junior can acquire a 100% interest in the two properties by making option payments of $120,000, payable in instalments based on project milestones over three years.
NSGold was formed in June 2010 after completing a reverse takeover and amalgamation with Kermode Capital. The company has 30.5 million shares outstanding and $2.1 million in cash. Its shares are trading around 32¢ in a 52-week range of 8¢-48¢.