Mega Precious Metals working to prove Red Lake theories

Vancouver – Mega Precious Metals (MGP-V) has released another round of gold hits from its North Madsen project as it works to establish an open-pitable resource near Red Lake.

The most recent results are from the Buffalo Extension, a peninsula of property at the south end of its 2.3-sq.-km North Madsen project that sits less than 2 km from the town of Red Lake.

Hole 36 hit 21 metres grading 4.40 grams gold per tonne from 53 metres downhole, hole 44 cut 7.5 metres grading 2.15 grams gold from 99 metres and then 15.9 metres grading 1.65 grams gold from 124 meters, and hole 38 returned 21.3 metres carrying 0.94 gram gold from 240 metres depth. The company estimates true widths at 65% of intersected widths.

Results from earlier this year at Buffalo include 61.2 metres grading 1.58 grams gold, 33.5 metres averaging 1.94 grams gold and 31.4 metres grading 1.02 grams gold, all starting under 100 metres downhole.

Mega Precious plans to combine the results from the Buffalo Extension with several other targets on its property including the Laverty Dyke and Main zones into an upgraded resource expected in September. James Rogers, president and CEO of Mega Precious, said in a phone interview that four of the seven targets identified on the project will likely be included, with the others requiring more winter drilling.

Rogers, who was formerly the regional exploration manager for Goldcorp (G-T, GG-N) and chief mine geologist at what was then the Dickenson Mine, sees the potential for open-pit mining at the North Madsen property and all along the Madsen mine trend. At Mega, he is working to build up a resource to take that idea to the next stage and get the neighbours involved.

“What I’d really like to do,” said Rogers, “is work with Goldcorp, and Claude and Sabina, Premier and work out some way to optimize this whole area and make a mine out of it…ultimately I’m a guy that believes in partnerships.”

Mega is finding gold mineralization both in a near surface, northwest striking diabase Dyke zone, and an east-west trending sheared granodiorite.  

“There are two types of mineralization we’re finding there,” said Rogers. “Neither are the high grade you get at Goldcorp, but both of them can make open-pitable-type resources… It’s a matter of putting together sufficient bulk that the property owners around us step up and take notice.”

While Mega Precious has been working on the Red Lake targets for two years, it only took on its Monument Bay project in Manitoba in late 2010 after taking over Rolling Rock Resources.

Using about 116,000 metres of core, some from recent drilling as well as some from as far back as 1990, Mega complied an upgraded resource that significantly added ounces to the project. Monument Bay now hosts an estimated 2.4 million measured and indicated tonnes grading 7.61 grams gold for 592,000 contained oz. gold, plus 6.2 million inferred tonnes grading 6.01 grams gold for a further 1.19 million contained oz, both using a 3 grams gold cutoff.

The resource was based on underground mining, consisting of a number of veined deposits that largely sit under a lake, but Rogers is excited by recent results coming out of the Burn zone on the western end of the trend that shows the possibility of an open pit.

The 67-sq.-km project, sitting 570 km northeast of Winnipeg and 340 km southeast of Thompson, is currently fly-in only, but Rogers sees the potential for the Manitoban government to help out with road access as well as with linking to the grid 60 km away, as it looks to increase exploration and development in the province.

“In all honesty, they’ve been the worst province for exploration over the past few years and I think they’re really politically motivated to change that,” said Rogers.

Back in Red Lake, Mega continues to work on what Rogers once described as the lottery ticket on Mega’s stock, a nearly 3 km deep drill hole at its Headway property. The project sits 2 km southwest of the High Grade zone at Goldcorp’s Red Lake Mine, and Mega is betting that the high grade mineralization at the mine continues deep underground on to the Headway property.

To prove its theory, Mega launched a technically challenging drill program almost two years ago to intersect the gold mineralization. They have yet to actually test the theory.

“My credibility on timing is zero,” joked Rogers, having originally projected a 6 to 9 month turnaround, not more than 20 months. One hole was supposed to be drilled in a long arc but it turned sharply instead, while a second hole was lost at a tantalizing 2,600 metres after the drillers jammed the rods and dropped a cable in the hole. A third hole is finally approaching the 2,600-metre mark, with results expected in weeks, not months.

Asked if he would do it again, Rogers said yes, but differently. He still hopes to confirm the model they’ve establish.  

“I believe we’re right on the edge of an ultramafic,” said Rogers, “In terms of stratigraphy the model fits very very well, we just need to see some gold.”

Mega Precious’ share price closed up 9¢ at 73¢ with 3.2 million shares traded after the latest results were released. The company has a 52-week share price range between 34¢ and $1.04 and 76.5 million shares outstanding.