Augen Gold explores Swayze greenstone belt

Jerome, Ont. – Michael Fowler hopes to make a gold and molybdenum discovery here in the Swayze greenstone belt, a part of the Abitibi greenstone belt between Sudbury and Timmins in northern Ontario. Fowler, CEO of Augen Gold (AUJ-V), says that where there is smoke, there is probably fire. In the case of Augen Gold, the smoke is gold mineralization, a favourable geological setting, a large land package, the past-producing Jerome gold mine on the property, and the Young-Shannon deposit nearby (which Augen does not own). “We have all the ingredients, and now it’s a question of solving the jigsaw puzzle,” Fowler says.

Fowler’s strategy is two-pronged. The more obvious one involves investigating the mineralized veins in and around the past-producing Jerome mine, which Augen says are open along strike and at depth. The second prong is more intriguing: investigate the company’s land package in light of the geological similarities to the Abitibi greenstone belt, as well as the possibility that the major structural zones which host the mesothermal gold deposits of the Timmins and Kirkland Lake areas extend into the Swayze belt. Fowler is searching for three types of deposits: quartz carbonate archean lode gold; iron formation hosted gold; and volcanogenic massive sulphides (VMS), which are prospective for base metals.

Augen believes that the geological setting is prospective. The Swayze greenstone belt is the western extension of the Abitibi greenstone belt. The Abitibi and Swayze belts are separated by the Kenogamissi batholith, a large granitic body, but studies correlate similar rock sequences of the same age in the two belts.

Furthermore, the major structural zones which host the mesothermal gold deposits of the Timmins and Kirkland Lake areas have been indicated to wrap around the northern and southern margins respectively of the batholith and extend into the Swayze belt. Augen’s claims straddle the Ridout deformation zone, which is inferred to be the western continuation of the Cadillac-Larder Lake deformation zone. Fowler says that the geologists believe that the extension of the Kirkland Lake break, or the Larder Lake break, goes through the property. A series of felsic porphyritic intrusions occur along the southern Swayze belt, and Augen hopes that they are associated with gold mineralization, so it plans to explore them.

Christopher Marmont, senior vice-president of exploration, says: “It has been pretty well-established that the Swayze greenstone belt is the western extension of the Abitibi greenstone belt. The southern Swayze belt is on a major deformation zone or a major fault zone…The general consensus is that the Cadillac-Larder fault…sweeps down (to the Swayze belt).” He adds that the structures are similar to those in the prolific gold camps to the north: “We are in a structural situation that is identical to that of Kirkland Lake, and the rock types are basically very similar…There are mafic vocanic rocks…intermediate volcanic rocks, sedimentary rocks, and they are intruded by younger porphyry rocks.”

Two resource calculations were completed for the Jerome mine in the eighties, so they are not compliant with National Instrument 43-101. One calculation, from 1983, estimates 583,000 short tons grading 0.203 oz. per short ton (equivalent to 529,000 metric tonnes grading 6.96 grams gold per metric tonne), totaling about 118,000 oz. at a cutoff grade of 0.1 oz. per short ton (about 3.4 grams per metric tonne). The second calculation, from 1989, estimates 577,000 short tons grading 0.2 oz. per short ton (equivalent to 523,000 metric tonnes grading 6.86 grams per metric tonne), totaling about 115,000 oz. (Because the calculations are historic, there is some uncertainty regarding the use of short tons. If metric tonnes were used, the gram-per-tonne grades above should be lowered by about 9%. However the total number of oz. remains unchanged.)

Nestled on a peninsula on the picture-postcard Opeepeesway Lake, the past-producing Jerome gold mine operated between 1941 and 1943, and milled 335,000 short tons with a head-grade of 0.182-0.189 oz. gold per short ton, equivalent to 304,000 metric tonnes grading 6.24-6.48 grams per metric tonne. Recoveries were about 90%-92.4%, and the mine produced a total of 57,000 oz. gold and 15,000 oz. silver. After 65 years, all that is left is a capped shaft and the remains of a headframe and a mill. The underground workings are flooded, but based on the fact that another company, Muscocho Explorations, used them for underground exploration, Fowler hopes that the condition of the underground workings is good, in case Augen discovers an economic deposit and decides to use the shaft for production.

The capped shaft is 347 metres deep, and there are about 7,500 metres of drifts and cross-cuts on five levels. The ore body that was mined was known as the main zone, and it had a strike length of 900 metres. Augen is exploring for extensions of the mineralization in the main zone at depth and along strike. Another vein being explored is known as the south zone, about 120 metres south of the main zone. Fowler says that there are a number of other mineralized veins on the property, for example, the south zone 2, which is 80 metres south of the main zone. The two south zones were not mined.

After the mine closed, a number of companies, in particular Muscocho Explorations and Osprey Gold, drilled the property. Muscocho explored here in 1984 and between 1987 and 1989, and also explored underground, and Osprey Gold drilled in 2004. Fowler estimates that the two companies completed between 60,000 and 70,000 metres of diamond drilling. Augen owns the core, which is kept at Gilla Camp, located near Gogama, off highway 144, the main Sudbury-Timmins road, about 150 km north of Sudbury and 140 km south of Timmins. Augen rents space at the camp, which has utilities, a core shack, living quarters and a dining room.

Following a helicopter-borne geophysical survey, conducted at treetop level, Augen has completed 10,500 metres of diamond drilling in 21 holes to test mineralization down-dip and along strike. The first two holes were intended to confirm historical grades. Hole 2 returned 8.35 metres (true width 5.9 metres) of about 15 grams gold per tonne and 0.08% molybdenum from a depth of 134 metres, including 3.6 metres grading about 31 grams gold per tonne and 0.14% molybdenum. The same hole also returned 4 metres (true width about 2.8 metres) of about 7.9 grams gold per tonne and 0.076% molydbenum from a depth of 165 metres, including 1 metre of about 23 grams gold per tonne and 0.078% molybdenum from a depth of 168 metres. Hole 1 returned 0.42 metre of about 71 grams gold per tonne and 0.17% molybdenum from a depth of 165 metres.

Assays from 16 holes drilled to confirm mineralization at depth and along strike were also released, and Augen has drawn a number of conclusions. Firstly, mineralization does continue at depth at both the main and south zones; however, grades are lower at depth. Secondly, the mineralized main zone has been intersected in two holes (holes 14 and 17) 1 km west of the Jerome mine shaft. A new gold-bearing sulphide-rich zone has been discovered south of the south zone. Finally, gold mineralization has been intersected in hole 21 along strike, 700 metres east of the main zone.

Augen concludes that gold and molybdenum mineralization extends to a depth of 600 metres, with a strike length of 2,500 metres. Notable assays include hole 5, which returned an intersection from a depth of 373 metres, with a true width of 5.7 metres grading about 1.7 gram gold per tonne and 0.013% moly; and hole 14, which returned an intersection from a depth of 146 metres, with a true width of about 1.7 metres grading about 1.7 gram gold per tonne and 0.047% moly. Most holes returned some gold and moly mineralization. Assays from the remaining 3 holes, as well as five historic holes drilled by Osprey Gold, are pending.

The company will probably conduct a limited drilling campaign in the fall, and is planning to compile an NI 43-101 resource estimate in 2008 base
d on the combined 70,000-80,000 metres of core from about 220 holes drilled by Muscocho, Osprey and Augen itself. Once the estimate is complete, a scoping study can be done in 2009. The company is also digitizing all the historic and current assays in order to compile a 3D model of the mineralized zones.

Augen’s claims total about 49,000 acres on a block measuring about 45 km by 5 km and are 100% owned. The patented claims, consisting of the Jerome property, are subject to a 2% net smelter return (NSR) royalty, while the unpatented claims have no third party royalty interest. In July Augen signed an option agreement to earn a 100% interest in six additional claims, measuring about 6.5 km by 1.5 to 2 km in total, subject to a 2.5% NSR royalty, for $100,000 and 120,000 shares. The claims are 3 km south of the Jerome mine.

The Jerome mine is underlain by meta-arkose and meta-conglomerate that have been intruded by the “Jerome porphyry.” The porphyry includes trondhjemite, granodiorite and syenite varieties, with quartz and/or feldspar phenocrysts. The contact between the Jerome Porphyry and the metasediments is strongly sheared and altered over a width of some 120 metres. The two mineralized veins, the main zone and the south zone, occur along the edges of the shear zone and are separated by it.

Gold mineralization at Jerome mine is hosted by blue-grey to black cherty quartz, which also contains the fine-grained sulphide minerals pyrite, chalcopyrite, tetrahedrite, galena, sphalerite and molybdenite, and one historical report found an average grade of about 0.09% molybdenum in the main zone. The association of gold mineralization with the presence of molybdenite is not common, but not much attention has been paid to molybdenum mineralization in the past. Since the market for molybdenum is firm, Augen pays close attention to molybdenite mineralization.

Erratic values of gold also occur in a glassy quartz associated with white carbonate, with chalcopyrite and tourmaline. The gold-bearing cherty blue-grey quartz bodies commonly occur as breccias or disaggregated ribbons and thumbnail-sized fragments, and are cut by glassy quartz veins.

Since it is possible that mineralization continues underneath Opeepeesway Lake, Augen may decide to drill in the lake. This can be done in winter when the lake is frozen, or in summer from a barge.

The Jerome property has good road infrastructure. To get to the site from Sudbury, one travels north 150 km on highway 144, turning west on highway 560, known as the Sultan Road, which is a well-maintained, unpaved logging road. Proceeding past Gilla Camp, located near the turnoff, one travels west 35 km to a junction which leads to the Jerome site via an 11-km bush road. There is no electrical power on site, and if power is needed for the exploration program, Augen can use a diesel generator or connect to the power line on Sultan Road. If Augen is successful and a mine is built, a longer connection to a heavy-duty power line will probably be required.

Since Augen’s claim block is 45 km long, road and electricity infrastructure for any particular site varies, depending on location. However, the area has many logging roads, so chances are that there is a logging road in the vicinity of most potential drill sites. There are also two railway lines in the region, one of which has a station at Gogama.

In July, Augen concluded an exploration agreement with the three First Nations in the area: Mattagami, Brunswick House and Flying Post, an astute move at this early stage. First Nations representatives were also present on-site on the day of T.N.M.‘s visit. Evidently, management is aware of the significance of maintaining good working relations with the project’s aboriginal neighbours.

Currently there are about $2 million in the treasury, and the company has about 26.5 million shares fully diluted, of which there are about 2 million warrants outstanding. No options have been issued yet.