ORE HORIZONS The Egerton-McLean deposit

The Egerton-McLean gold deposit on Pan East Resources’ Fifteen Mile Stream property is in Halifax Cty., N.S., about 62 miles northeast of the city of Halifax. The deposit is estimated to contain drill-indicated probable and possible reserves of 595,000 tons of material averaging 0.23 oz of gold per ton in several zones over a strike length of 1,148 ft to a depth of 656 ft. The mineralization is open to depth and along strike. The deposit is part of one of a series of districts forming the Nova Scotia Gold Field, lying along the south shore of the province’s mainland. About 1.1 million oz were produced in the Nova Scotia Gold Fields from discovery in the 1860s until the mid-1940s. Numerous districts contributed to this production, the largest of which was Goldenville with 600,000 tons grading 0.35 oz gold per ton. The region is seeing substantial renewed exploration, with many of the past producing properties being re-examined. Reserves have been developed on a number of properties, including the Beaver Dam deposit of Seabright Resources (three million tons at 0.27 oz per ton), that company’s Forest Hill deposit (300,000 tons of 0.55 oz per ton) and the Cochrane Hill deposit of Northumberland Mines (one million tons of 0.32 oz per ton).

Gold was first reported in the Fifteen Mile Stream district in 1867. Since then, the district has been extensively explored and has seen sporadic, small-scale production. This peaked in 1896 when 3,324 oz of gold were obtained from 6,059 tons of hand-sorted ore. Total recorded production for the district is 20,329 oz of gold recovered from 48,896 tons of crushed material, primarily mined in the upper reaches of the Egerton- McLean deposit to a depth of 200 ft.

Pan East Resources acquired the mineral rights to the Fifteen Mile Stream property from the Fifteen Mile Stream Mining Co. in 1982. By 1985 Pan East had completed geological mapping, a geochemical survey and 15 diamond drill holes. Greenstrike Gold Corp. funded an exploration program in 1986 in return for a 17% equity interest in Pan East. This program consisted of 17 drill holes as well as geophysical surveys, relogging and additional assaying of previous drill core. Greenstrike may increase its interest to a total of 28% by additional expenditures. Petromet Resources has been granted the option to earn up to a 50% interest in the property by arranging financing for a commercial operation.

The property lies within a tectonic subdivision of the Northern Appalacians called the Meguma Terrain. This comprises Lower Paleozoic turbiditic metasediments — the Meguma Group — and granitoid plutons ranging in age from middle Devonian to early Carboniferous. The Meguma Group consists of two formations: the 3.5-mile-thick Goldenville Formation, dominated by graywacke beds, and the conformably overlying 2.7-mile- thick Halifax Formation, which is mainly argillaceous.

During the Acadian Orogeny, the turbidite sequence was deformed, metamorphosed and intruded by granitic plutons. The main feature of the deformation is a series of major east- west-trending, upright, symmetric to slightly reclined, asymmetric folds. Regional metamorphism is of greenschist to upper amphibolite facies.

The Fifteen Mile Stream Gold district lies on a major regional anticlinal structure which also passes through the Beaver Dam and Moose River gold districts. The known gold mineralized areas mainly lie along domal features on this regional structure.

The Egerton-McLean area is underlain by sediments of the Goldenville Formation. The interbedded graywacke and argillite which host the gold mineralization (informally known as the Fifteen Mile Stream Sequence) is more than 490 ft thick. In the known mineralized areas these sediments have an unusually high content of argillaceous beds compared with the typical, graywacke-dominated Goldenville Formation.

Five argillite units with thicknesses of about 50 ft or more have been recognized. These are separated by four units, each about 33 ft thick, composed of thin-bedded graywacke with minor argillite. Individual graywacke and argillite couplets are interpreted at turbidites representing Bouma A, D and E units with lateral and vertical variations of the argillite to graywacke ratios.

These strata were deformed into a series of upright to slightly reclined fold structures during the Acadian Orogeny. In the Egerton-McLean area, two anticlinal axes located about 30 m apart are well defined, separated by a shallow, complex, synclinal trough. The north limb of the double anticlinal structure in the Egerton-McLean area dips from 50 degrees to 60 degrees to the north while the south, overturned limb dips from 70 degrees to the north to vertical. Here the fold structures plunge between 20 degrees and 30 degrees to the east. About a kilometre to the west, in the Hudson Mine area, fold plunges are reversed to about 5 degrees to the west while, 1.2 miles to the west in the Free Claim area, the plunge is about 25 degrees to the west. The over-all structure in the Fifteen Mile Stream gold district is interpreted as a narrow, elongate, complex dome.

A steep, northerly dipping shear zone trending sub-parallel to the axial plane of the folding was recognized in the Egerton-McLean area. This zone has a spatial association with the most productive gold zones in the district, known as the Mother Seigel and Non- Pareil belts.

The gold mineralization is developed in, and adjacent to, quartz veins and vein swarms which are preferentially developed in the argillite units of the Fifteen Mile Stream Sequence. Other types of veins are widespread but only locally auriferous. The auriferous veins are nearly conformable to bedding and often show a distinctly laminated or brecciated appearance due to wispy inclusions of dark, chloritic argillite. The main structural control on these veins is the cleavage which developed parallel or sub- parallel to bedding during the concentric folding. Since the veins themselves may be folded — many are saddle veins wrapped around the major anticlines — they are interpreted as being emplaced during the period of tectonic activity which produced the main folding.

Gold is found in, and adjacent to, the quartz veins, both as free gold and possibly in sulphide assemblages. Carbonate is often associated with the quartz vein material as well as minor amounts of pyrrhotite and arsenopyrite together with traces of pyrite, chalcopyrite and galena.

Hydrothermal alteration accompanying the mineralization is indicated by silicification, chloritization and sericitization as well as by the development of carbonate and carbonaceous minerals or graphite. These alteration features are widespread but not intense nor specifically related to the mineralized veins and structures.

An exploration program operated by mph Consulting is now under way on the Fifteen Mile Stream property. Outline diamond drilling is in progress in the Egerton-McLean area. In-fill drilling to firm up the reserve picture is planned for the near future, preparatory to making an underground exploration/development decision by year-end. Exploration drilling is scheduled to assess the area’s over-all resource potential to test known target areas elsewhere on the property and on a contiguous block to the east held through a joint-venture agreement with Novamin Resources. Howard Coates is a senior geophysicist with MPH Consulting Ltd. in Toronto.