Queenston releases Upper Canada drill results

Vancouver – Apparently there is still gold waiting to be dug up around Kirkland Lake, Ontario. Queenston Mining (QMI-T) has pulled some promising drill core from the ground at its Upper Canada project in the Kirkland area, which first saw gold mining back in 1910, and the wide widths of near surface gold mineralization above and along old mine workings indicate the wholly-owned site in Gauthier Township might host an open pittable resource.

Highlights of the latest 21 drill holes include 1.93 grams gold per tonne over 32 metres starting at 91 metres, 1.02 grams gold over 41.2 metres starting at 40 metres, and 1.12 grams gold over 71.3 metres and 4.58 grams silver over 11 metres starting at 106 metres.

At Upper Canada gold is hosted in veins and disseminations contained within a 300 to 400-metre wide deformation corridor that runs east-west. Veins are concentrated along the north side of the corridor, known as the North Branch, and along the south side, known as the South Branch. Past production at Upper Canada all come from the South Branch of the break, which is serviced by shafts developed to 1,930 metres and 884 metres. The Brock Shaft, located on the North Branch, is 190 metres deep with limited underground development and was used for exploration purposes only.

The new drill holes extend mineralization 450 metres east along the un-mined North Branch and 380 metres east along the South Branch, increasing the length of the gold system to 1.3 km and the depth to 250 metres. Mineralization is still open to the east and west along both branches.

The Upper Canada mine was first in operation between 1936 and 1972. By the time it closed due to low gold prices, the mine had produced 1.5 million oz. gold from narrow, steeply dipping veins carrying an average grade of 11 grams gold. There remains an historic resource of 1.9 million tonnes grading 6.9 grams gold, which was reviewed in 1995, but is not compliant with National Instrument 43-101.

The Upper Canada mine sits within Queenston’s eastern Gauthier Township properties, which comprise just part of its full Kirkland Lake gold project. The total project area is a sizeable 15.7 sq. km, composed of 23 continuous properties and 967 mineral claims. Queenston is advancing the four gold deposits in the eastern Gauthier Township towards production; the company also has five joint ventures with Kirkland Lake Gold (KGI-T) in the western Teck Township and a new joint venture with Newstrike Resources (NR-V) in the central Lebel Township. The area has already seen 3.4 million oz. gold produced from past mines, while historic mineral resources stand at 7 deposits totaling 2.1 million oz.

Queenston’s goal is to outline a collective mineral resource of 2 million oz. gold amongst its wholly-owned Upper Beaver, McBean, Anoki and Upper Canada deposits, which are all within the eastern Gauthier Township portion of the Kirkland property. The plan is to then process ore from all four deposits at a mill on the Upper Canada site, which is at most 6 km distant and accessible though existing road networks. The company is currently working through a $15-million exploration budget on eight separate properties with up to 12 diamond drill rigs.

The company wants to return to producer status with these properties. In the mid-eighties Queenston actively mined the upper portion of the McBean deposit as an open pit mine in a joint venture with Inco, now part of Vale (VALE-N). The mine was shut when gold prices dropped below US$400 per oz., before the partners could exploit the deposit below the pit. Queenston bought out Inco’s interest in the mine in 1996.

In late 2009 the company released an initial resource estimate for McBean and updated the resource at Anoki. McBean hosts measured and indicated resources totaling 706,000 tonnes grading 4.64 grams gold and inferred resources of 1.2 million tonnes grading 4.71 grams gold. Anoki is home to 730,000 measured and indicated tonnes grading 4.74 grams gold and 337,000 inferred tonnes grading 4.8 grams gold.

Mineralization in the area consists of disseminated gold-pyrite in albite-sericite-quartz altered sedimentary, volcanic and intrusive rocks. Narrower, higher grade mineralization is hosted in silicified zones within volcanic and sedimentary rocks.

The town of Kirkland Lake has about 10,000 residents and is located about 500 km north of Toronto, accessible by paved highways and roads. From 1910 to 1999 the area produced 37.3 million oz. of gold from 25 mines, making it second only to Timmins in terms of total ounces of gold produced in a camp in North America.

Queenston also holds two properties on an old mine site in Quebec called the Cadillac gold camp. A 2008 resource estimate pegged the high-grade Ironwood deposit at 243,200 inferred tonnes grading 17.3 grams gold.

The company’s share price dropped 15¢ on the day, closing at $5.10. Queenston has a 52-week share price range between $3.05 and $6.70, with 60 million shares outstanding.