Mega Precious Metals working to prove Red Lake theories

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

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, less than 2 km from the town of Red Lake.

At the property, hole 36 hit 21 metres at 4.40 grams gold per tonne from 53 metres downhole; hole 44 cut 8 metres at 2.15 grams gold from 99 metres, and 16 metres at 1.65 grams gold from 124 metres; and hole 38 returned 21 metres carrying 0.94 gram gold from 240 metres. The company estimates true widths at 65% of intersected widths.

Results from earlier this year at Buffalo include 61 metres at 1.58 grams gold, 34 metres at 1.94 grams gold and 31 metres at 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 take that idea to the next stage, and get the neighbours involved.

“What I’d really like to do,” Rogers said, “is work with Goldcorp, Claude and Sabina, and 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 in a near surface, northwest-striking diabase Dyke zone, and an east-to-west-trending sheared granodiorite.  

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

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

Using 116,000 metres of core – some from recent drilling, and some from as far back as 1990 – Mega compiled an upgraded resource that added significant ounces to the latter project. Monument Bay now hosts an estimated 2.4 million measured and indicated tonnes at 7.61 grams gold for 592,000 contained oz. gold, plus 6.2 million inferred tonnes at 6.01 grams gold for a further 1.19 million contained oz., both using a 3 grams gold cut-off.

The resource was based on conceptual underground mining 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 show the possibility of an open pit.

Sitting 570 km northeast of Winnipeg and 340 km southeast of Thompson, the 67-sq.-km project is fly-in only. Rogers sees
potential for the Manitoban government to aid road access and 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,” Rogers said.

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 test the theory.

“My credibility on timing is zero,” Rogers joked, having originally projected a six-to-nine-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 have established.  

“I believe we’re right on the edge of an ultramafic,” Rogers said. “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.