Athabaska Gold resumes drilling at Nicholas Lake

Encouraged by recent drill results that included intervals of 77.8 ft of 0.388 oz gold and 30.7 ft of 0.32 oz gold, operator Athabaska Gold Resources (VSE) has resumed diamond drilling on the Nicholas Lake property in the Northwest Territories. The company is earning a 60% interest from Chevron Minerals.

Three holes have been completed to date and the company expects to continue drilling until the Christmas break, with a second drill to be moved to the property when drilling is resumed early in January. The present program is testing the continuity and downdip extensions of mineralization encountered in the previous drill program.

According to James Kermeen, president, the new holes penetrated the mineralized zone at intervals varying from 100-200 ft beneath the high grade intersections previously reported. Assays are expected shortly. Kermeen said the zones were intersected where expected and “appear similar” to those previously reported. In addition, he noted that a number of intersections of brecciated diorite containing sphalerite mineralization were intersecte d outside of previously identified zones. To date sphalerite has been an indicator of good gold values on the property.

“This interesting new development further strengthens our contention that the zone has a high potential for bulk tonnages of gold mineralization in addition to high grade veins,” Kermeen said.

The company completed a geophysical survey across the Main zone and reported that additional strong responses “similar to those returned over the established zone of gold mineralization” were identified. The company also noted that the survey indicated a major extension of the favorable leucodiorite body to the northeast of the exposed mass under a thin cover of metasediments. If this interpretation is confirmed by drilling, the company said the area with a potential for additional gold zones would be “effectively tripled.”

The Nicholas Lake property is located 60 miles north of Yellowknife and is readily accessible by a winter road connecting the property with Yellowknife via the Discovery mine. Discovery was a profitable former producer which yielded one million oz of gold from one million tons of ore. Athabaska Gold said the Nicholas Lake property lies within the same geological horizon as the Discovery mine.

The property was staked by Cominco Ltd. in 1941 to cover a gold showing (the Main zone) that was subsequently trenched and drilled before the company abandoned the property in 1952. Ten short x-ray diamond drill holes were completed with results considered uneconomic. In 1987 Chevron carried out geological mapping and surface trenching, stripping and continuous chip sampling on a portion of the Main showing. Samples ranged from about 0.047 oz to 0.84 oz gold, with the best section averaging 0.51 oz gold across 12.7 ft.

According to Athabaska, the 13 best intersections of its recent drill program averaged 0.70 oz gold per ton over an average true width of 5.7 ft. Most of the intersections to date are said to occur in three steeply-dipping quartz-sulphide veins which lie within or near the highly altered border phase of the mineralized leucodiorite plug. The company said the entire contact area of the plug is a potential host for gold mineralization; to date, only one quarter of the periphery of the plug has been tested to a limited depth.

Kermeen said there is a “marked improvement in the grade and thickness of the mineralization at depth” and good potential for additional high grade gold both laterally around the plug and to depth.