Project poses questions for Lenora and Mary Ellen

The erratic gold distribution in northern Saskatchewan’s Beaver Lodge area is posing some major questions to a joint venture group including Lenora Explorations (TSE), Mary Ellen Resources (VSE) and Cominco Ltd. (TSE) With a feasibility at the Box mine project currently in progress, they are attempting to find out why grades weren’t higher when previous operator Cominco extracted about 1 1/2 million tons of grade 0.048 oz gold per ton in the 1930s and 40s. “It may have been that they were mining in a barren area that separates two lenses on the property,” said consulting geologist Ian Mason who thinks that the coarse nature of the gold deposits may also have been a factor.

Using a geostatistics procedure, Mason is attempting to determine tonnage and grade in two large open pit zones — the Box and Anthona. According to Mason, 15 to 20 million tons of grade 0.05 would be enough to justify an economic mining operation.

Lenora and Mary Ellen hold a 60% interest in the Box zone while Cominco retains 40%. The smaller Anthona zone is held 50-50% by Lenora and Mary Ellen.

But Mason said the joint venture may have to spend an additional $1 million to complete the feasibility study. Total estimated cost of bringing the project to production is $70 million.

Meanwhile, Mason says he is encouraged by some high grade intersections encountered during a an 11-hole program conducted on the Box zone. Results from the program are as follows: Hole No. Length (ft) Gold oz/ton BX 88-1 45 0.24 BX 88-2 14 0.068 BX 88-3 101.4 0.30 BX 88-4 95.1 0.02

13.1 0.118 BX 88-5 23.0 0.597 BX 88-6 61.0 0.336

17.7 1.090 BX 88-7 47.9 0.060

9.84 0.186 BX 88.8 29.5 0.027 BX 88-9 18.0 0.051 BX 88-10 13.0 1.95 BX 88-11 105.0 0.219

All holes are within 150 ft of surface except for BX-9 and BX-10 which intersect the ore zone approximately 300 ft vertically below surface. They are all true widths with the exception of BX-11 which was drilled diagonally across the zone.

The drill has been moved to test an area two miles north east of the Box mine where the joint venturers encountered 13.1 ft of 0.61 oz gold per ton in the upper zone and 5.3 ft of 2.56 oz in the lower zone.

A small 3-ton per hour mill has also been set up on the property to bulk sample additional drill holes and muck from 10-m trenches. Additional results are scheduled to be available soon.