Gammon back drilling at Ocampo (June 11, 2004)

Gammon Lake Resources (GAM-T) continues to expand the resource on its Ocampo Gold-Silver project 235 km west southwest of Chihuahua, Chihuahua State, Mexico.

Results from 56 step-out and infill holes, some drilled from surface and some from underground in the Northeast Ocampo Underground project area, were reported in the second week of June.

Highlights of this drilling are high-grade intercepts from the Aventurero structure such as, 390 grams gold and 1,402 grams silver per tonne over one metre. Other holes in the Aventurero intersected 1-5 metres grading from 3-11 grams gold and 27-335 grams silver per tonne.

Another structure, the San Juan, was intersected in 17 holes. One hole intersected 2 metres grading 17.65 grams gold and 359 grams silver per tonne, an interval that was included in a 6-metre intercept grading 8.16 grams gold and 164 grams silver per tonne.

Of the 56 holes drilled, 47 contained intercepts grading greater than three grams gold-equivalent per tonne.

Exploration drilling is continuing and simultaneously a ramp is being developed to access the high-grade Aventurero structure. During this development, the Esperanza vein was intersected. Seven holes tested the vein, with one cutting a 7-metre intercept grading 14.82 grams gold and 161 grams silver per tonne that included a 1-metre intercept grading 90.4 grams gold and 812 grams silver. The six other holes intersected from 0.5-3.8 metres grading 0.66-15.8 grams gold and 68-399 grams silver per tonne.

Another high-grade vein was intersected while tunnelling: The Veta Chica, with assays of 8 to 91.7 grams gold and 218 to 1,395 grams silver over widths of 20-50 cm, is situated 30 metres west of La Esperanza running parallel to it. One high-grade sample assayed 55.9 grams gold and 1010 grams silver over 0.5 metres.

Eighteen deep drill holes tested below the shallow mineralization in the Ocampo proposed open pit area. This has resulted in expanding the open pit resource. Fourteen of the holes intersected grades greater than 3 grams gold-equivalent. One hole intersected 3 metres grading 15.26 grams gold and 227 grams silver.

The Ocampo property is underlain by volcanic rocks intruded by dykes and sills. There is a predominantly west-northwest striking trend that is defined by numerous faults and breccias. There are two major hosts to the mineralization; gold, silver, electrum, argentite and pyrite are present in low-sulphide quartz stockworks and breccias, and secondly, high-sulphide, enargite-bearing, vuggy breccias with sulphide-replacement in rhyolite and dacite.

The most recent Northeast Ocampo open-pit resource, dated June 2003, contained a measured and indicated 2.37 million tonnes grading 1.32 grams gold per tonne and 55 grams silver, using a 0.4-gram gold-equivalent cutoff and a 65:1 silver to gold ratio. This represented a gold price of US$300 per oz. and a silver price of $4.61 per oz.

The Northeast Ocampo underground resource was estimated to be a measured and indicated 3.5 million tonnes grading 5.9 grams gold per tonne and 302 grams silver per tonne, for a total of 1.18 million contained gold-equivalent oz. This was calculated using a 3 grams gold-equivalent per tonne cutoff.

The 35-sq.-km-Ocampo project comprises 44 mining concessions, held by Gammon Lake’s Mexican subsidiary, Gammon Lake de Mexico.