Tower Mountain Gold Property

MBK Project | Tower Mountain | Garrison Gold | Venezuela

Ownership: 100% held by ValGold Resources Ltd.
Location: Shebandowan Gold Belt about 40 km west of Thunder Bay, NW Ontario
Area: 55 claims (83 claim units) and 3 patented claims covering 3,875 acres (1568 hectares)
Mineral(s): Gold
Drill Targets: 31-Bench Zone, 04-36 Zone; 04-9 Zone, U-V Zone
Current Status: A total of 10 drill programs comprising 104 drill holes, totaling 23,388.5m of core have been completed from November 2002 to June 2011.

A Phase 3 program for 2011 is planned to include a detailed airborne survey (magnetics, radiometrics and VLF-EM), line cutting, ground geophysical surveys, mainly induced polarization and magnetics, and follow up drilling.


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2011 Drill Program

Based on the results of the Phase 1 and 2 drill programs, the Tower Mountain Property has the significant potential to host near-surface, large tonnage, low grade gold mineralization amenable to open pit, bulk mining methods. As of June 2011, Phase 1 & 2 of diamond drilling was completed for a total of 29 holes spanning over 4,680.5 meters.


Phase 1 Highlights:

In February 2011, the Phase 1 drill program consisted of 2100.5m of core drilling in 13 holes was completed. The primary focus was to target the 04-36 Zone, 04-9 Zone, U-V Zone and the 31-Bench Zone.
  • 04-36 Zone:

    • three holes (TM-11-59 to 61) with best intersection of 16.5m grading 1.136 g/t Au; these holes were based on earlier results from ValGold drilling programs
    • gold mineralization is hosted within the conglomerate unit that contains small fragments of jasper, volcanic rock and sulphide iron formation
    • conglomerate unit is traced for 1,000m along its NE-SW strike
    • located 400m southwest of the U-V Zone

Hole
Number		 From
(m)		 To
(m)		 Core
Length
(m)		 Grade
(g/t Au)		 Host Unit
TM-11-59 29.0 38.0 9.0 0.460 conglomerate
  84.5 101.0 16.5 1.136 conglomerate
  120.5 125.0 4.5 0.992 conglomerate
TM-11-60 41.0 44.0 3.0 0.620 conglomerate
  70.5 72.0 1.5 0.638 conglomerate
TM-11-61 9.5 13.4 3.9 0.880 Volcanic & conglomerate

  • 04-9 Zone:

    • one hole (TM-11-62) intersected 18.0m of 0.54 g/t Au to further define the 04-9 Zone; hole deviated and may be extended to reach target
    • previous mineralized intersection drilled in 2004 are thought to be near parallel to the NE strike of the Zone and the current hole was drilled at a NW azimuth
    • gold mineralization is within the feldspar porphyry unit
    • located (200m )off the west of the U-V Zone
Hole
Number		 From
(m)		 To
(m)		 Core
Length
(m)		 Grade
(g/t Au)		 Host Unit
TM-11-62 255.5 273.5 18.0 0.540 Porphyritic dyke

  • U-V Zone:

    • one hole (TM-11-63) with best intersection of 73.5m of 0.815 g/t Au with 0.04% Cu including 21.0m assaying 1.76 g/t Au with 0.10% Cu
    • to expand the wide, low-grade copper-gold mineralization
    • host rock is a syenite, part of the Tower Mountain Intrusive Complex
    • mineralization is open to the northeast and southeast
    • has been the primary target of the 2002 to 2007 drill programs and is the subject of a resource calculation by Caracle Creek International Consulting Inc. of Sudbury, Ontario
Hole
Number		 From
(m)		 To
(m)		 Core
Length
(m)		 Grade
(g/t Au)		 Host Unit
TM-11-63 152.0 225.5 73.5 0.815 Syenite. 0.043% Cu
Including 168.5 189.5 21.0 1.760 averaged 0.10% Cu
Including 180.5 188.0 7.5 3.440  
Including 180.5 185.0 4.5 4.930  
  228.5 239.0 10.5 0.361 Syenite
  302.0 312.5 10.5 0.411 Syenite
  323.0 341.5 18.5 0.398 Syenite
  356.0 365.0 9.0 1.750 Syenite. averaged 0.13% Cu

  • 31-Bench Zone:

    • eight holes (TM-11-64 to 71) with best intersection of 28.5m of 0.80 g/t Au; 87.0m of 0.70 g/t Au; 84.0m of 0.53 g/t Au
    • mineralization is hosted within an altered, pyritic trachy-andesite fragmental rock unit and syenodiorite intrusive
    • comprises the former B-,C-, and D-Zones located 800m SE of UV Zone
    • previous drilling by ValGold and earlier operators confirmed wide intersections of low grade gold mineralization over a large area but the holes were widely spaced and at diverse azimuths; the current eight holes were drilled in parallel sections at approximately 60m spacings
Phase 2 Highlights:

A subsequent Phase 2 commenced in May 2011 and was completed in June consisted of 2,580m in 16 holes. The program was designed to provide additional data and to better determine the dimensions of the wide intersection of low-grade gold mineralization encountered on the 31-Bench Zone, in Phase 1 of the 2011 drill program.

The Phase 2 included 2 core holes targeting the near-surface and down-dip extension of the wide, low-grade gold mineralization beneath drill hole TM-11-64. Additional holes are then targeted the south-westerly extension of this wide gold zone outlined in Phase 1 (TM-11-64 to 71).
  • sixteen holes (TM-11-72 to 87) with best intercept assaying 115.5m at 0.70g/t Au including 27.0m of 2.00 g/t Au; 195.0m at 0.35 g/t Au including 45.0m of 1.01 g/t Au
  • drill holes are on section with phase 1 holes and are set back 30 meters with 2 holes on each site with a -45 degree undercut and -90 vertical hole
  • the gold zone extends from surface to a depth of 150m with a strike length of more than 300m and width of 120-180m
  • assay results confirmed the presence of wide intersections of low-grade, near-surface gold mineralization which remains open for expansion in all directions

31-Bench Zone

Preliminary definition of the 31-Bench Zone used the overall average value for each hole when assaying the entire hole and not applying a cut-off grade. For Phase 1 and 2 the average grade of each hole ranged from 0.2g/t to 0.4g/t Au over widths of 100-200m. Within this mineralized envelope there are better grading sections over significant widths such as the following:
Section 1: 0.96g/t Au over 10.5m
Section 2: 2.00g/t Au over 27.0m
Section 3: 0.93g/t Au over 19.5m
Section 4: 0.70g/t Au over 87.0m
Section 5: 0.57g/t Au over 24.0m
Section 6: 0.53g/t Au over 84.0m
The Sections were planned to be 60m apart and with 3-5 holes per section to define the 31-Bench Zone. For a complete listing of the results refer to the Drill Hole Location Database, Drill Hole Intersections from 31-Bench Zone, Drill Hole Location Map (High Res) and Drill 31-Bench Zone Section 4 with significant assays (High Res). Some Sections are composed of multiple intersections of significant gold values and more drilling is required to fully delineate the potential size of the Zone.

The mineralized intersections are reported as core lengths because, as yet, insufficient data is available to calculate true widths. A program of quality control and quality assurance of the sampling was undertaken with the insertion of blanks and standards in the regular stream of assay samples submitted for analysis. A check of the values did not find any irregularities in the Certificate of Analysis from Accurassay Laboratories.

On a property-wide scale the drilling has tested only a small portion of the peripheral extent of the Tower Mountain Intrusive Complex where previous operators discovered up to 25 occurrences with grab sample assays of greater than a gram. Detailed AEM results and ground geophysical surveys should help in targeting new prospective gold zones as one of the key factors in the 31-Bench Zone mineralization is pyrite running 3-10%.

Drill Hole Assay Results
Drill Hole Location Map

Future Work Program

A Phase 3 program for 2011 is planned to include a detailed airborne survey (magnetics, radiometrics and VLF-EM), line cutting, ground geophysical surveys, mainly induced polarization and magnetics, and follow up drilling, all to be completed by year-end.


Exploration History

Exploration work by ValGold on the Tower Mountain Gold Property began in November 2002 and focused on diamond drilling. A total of eight drill programs comprising 75 drill holes, totalling 18,708m, have been completed to August 2007. The majority of drilling was conducted in the vicinity of the U and V Trench areas (U-V Zone) and this work defined several mineralized structures. The most continuous of these structures is designated the Main Vein which dips moderately northeast and can be traced along strike for a minimum 400m. The Main Vein mineralized zone measures from 0.6m to 20.0m true width plunging steeply to the southeast. Drill intercepts from this zone returned assays ranging from 304.00 g/t Au over 3.0m in drill hole TM04-3 to 2.58 g/t Au over 55.5m in TM04-9.

Drilling delineated additional zones of high-grade mineralization. The 04-31 Zone, located 800m southeast of the U-V Zone, appears similar to the U-V Main Vein. ValGold tested this target with two holes, with the best drill intercept returning 21.14 g/t Au over 1.5m. A hole drilled in 1996 by Avalon Ventures Limited in the vicinity of the 04-31 Zone was orientated sub-parallel to the zone and returned an average grade of approximately 0.3 g/t Au over its entire 739m length.

The third high-grade zone identified is the 04-36 Zone and is located 400m southwest of the U-V Zone. Unlike the U-V and 04-31 Zones, the 04-36 strikes north-northeast. Two drill holes have intersected this zone. One hole documented 41.35 g/t Au over 1.5m and the second hole returned an assay of 5.31 g/t over 1.5m.

The following table summarized drill programs and presents highlights of each of the eight drilling campaigns conducted by ValGold Resources from 2002 to 2007.

Highlights of Tower Mountain Gold Zones Drill Intersections

Program Holes Drilled Total Meters Best High Grade Gold Intersection Best Low Grade Gold Intersection
2002 (Fall) DDH02-01-05 1042 23.17g/tAu /1.5m in DDHTM02-02 1.05g/tAu /73.5m in DDHTM02-03
2003 (Spring) DDH03-01-05 1085 11.77g/tAu /3.0m in DDHTM03-02 1.01g/tAu /22.5m in DDHTM03-03
2003 (Fall) DDH03-06-12 1499 19.76g/tAu /1.5m in DDHTM03-11 0.62g/tAu /12.0m in DDHTM03-12
2004 (Winter) DDH04-01-10 2601 304.0g/tAu /3.0m in DDHTM04-03 2.40g/tAu /61.5m in DDHTM04-09
2004 (Summer) DDH04-11-23 3450 68.91g/tAu /0.2m in DDHTM04-19 1.93g/tAu /37.5m in DDHTM04-15
2004 (Fall) DDH04-24-36 3418 41.35g/tAu /1.5m in DDHTM04-36 0.94g/tAu /106.5m in DDHTM04-31
2005 (Winter) DDH05-37-50 3523 16.00g/tAu /1.5m in DDHTM05-38 0.77g/tAu /21.0m in DDHTM05-44
2007 (Summer) TM07-51 to 58 2090 58.20g/tAu /1.5m in DDHTM07-56 0.59g/tAu /21.0m in DDHTM07-56
Total 75 DDH    18,708    

A NI 43-101 compliant resource estimate for the U-V Zone was compiled by Caracle Creek International Consulting Inc. of Sudbury, Ontario. The report dated February 9, 2006, is filed on SEDAR. The resource for the U-V estimated to consist of 150,000 ounces within a bulk mineable volume. The zone is open to expansion on strike to the SE and at depth.


Geology

The regional geology of the property is analogous in many respects to the setting of world class gold deposits found in the Timmins and Kirkland Lake Camps in northeastern Ontario. The property is underlain by Timiskaming-like clastic sediments and felsic to intermediate alkali volcanics which are, in turn, intruded by felsic to intermediate stocks and sills. Numerous gold occurrences, spatially related to felsic intrusions, large zones of alteration and sulphide mineralization, and the presence of several small and large-scale faults indicate characteristics favorable for both bulk tonnage, disseminated and high-grade vein styles of gold mineralization. Exploration by previous property owners identified numerous gold occurrences proximal to the contact of the Tower Mountain Intrusive Complex ("TMIC") and along the contacts of dykes radiating out from the TMIC. Broad zones of disseminated gold mineralization, often containing discrete high-grade vein material, are accompanied by up to 25% pyrite. Gold mineralized zones commonly are altered by quartz, ankerite, tourmaline, hematite, chlorite, epidote and sericite. Several gold occurrences are also hosted by pyritic breccias containing up to 20% tourmaline. Grab and channel samples collected by previous workers returned gold values ranging from 1.0 to 28.0 g/t. Historical drilling identified several broad zones of anomalous gold mineralization including high grade zones documenting up to 5.9 g/t Au over 11.0 meters.

Drill Hole Assay Results


Table 1: Drill Hole Locations (NAD 83, Zone 16)

Hole UTM E UTM N ELEV Length (M) AZIMUTH DIP
TM-11-59 299903 5377944 380 125 135 -47
TM-11-60 299963 5377891 384 122 315 -47
TM-11-61 299920 5377966 382 125 135 -47
TM-11-62 300356 5378323 380 274 300 -57
TM-11-63 300417 5378352 380 371 153 -57
TM-11-64 300792 5377612 460 167.5 62 -45
TM-11-65 300817 5377573 462 107 62 -45
TM-11-66 300828 5377526 469 170 62 -45
TM-11-67 300873 5377451 499 107 62 -45
TM-11-68 300886 5377382 497 190 62 -45
TM-11-69 300914 5377341 494 122 62 -45
TM-11-70 300975 5377276 517 110 62 -45
TM-11-71 301000 5377243 526 110 62 -45
TM-11-72 300732 5377597 462 152 62 -45
TM-11-73 300732 5377597 462 122 62 -90
TM-11-74 300750 5377548 467 152 62 -45
TM-11-75 300750 5377548 467 122 62 -90
TM-11-76 300786 5377486 473 152 62 -45
TM-11-77 300786 5377486 473 122 62 -90
TM-11-78 300805 5377418 482 200 62 -45
TM-11-79 300805 5377418 482 155 62 -90
TM-11-80 300822 5377348 491 200 62 -45
TM-11-81 300822 5377348 491 152 62 -90
TM-11-82 300848 5377313 490 200 62 -45
TM-11-83 300848 5377313 490 152 62 -90
TM-11-84 300936 5377483 496 200 62 -45
TM-11-85 300885 5377556 470 200 62 -45
TM-11-86 300765 5377404 490 147 62 -70
TM-11-87 300823 5377355 491 152 242 -70


Table 2: Significant assay results for Phase 1 &2 from 31-Bench Zone (TM-11-64 to 87)

Drill Hole     Length (m) From (m) To (m) Assay
Au (g/t)
SECTION 1            
TM-11-64 1   161.0 6.5 167.5 0.26
    includes 4.5 33.5 38.0 0.54
    includes 4.5 42.5 47.0 0.45
    includes 15.0 51.5 66.5 0.39
    includes 10.5 69.5 80.0 0.27
    includes 6.0 87.5 93.5 0.53
    includes 1.5 104.0 105.5 1.20
    includes 10.5 114.5 125.0 0.96
TM-11-72 2   144.0 8.0 152.0 0.30
    includes 3.0 14.0 17.0 0.40
    includes 4.5 26.0 30.5 0.40
    includes 9.0 36.5 45.5 1.50
    includes 16.5 135.5 152.0 0.80
TM-11-73 2   114.0 8.0 122.0 0.28
    includes 36.0 27.5 63.5 0.50
    includes 10.5 72.5 83.0 0.26
    includes 7.5 114.5 122.0 0.46
SECTION 2            
TM-11-65 1   102.0 5.0 107.0 0.33
    includes 4.5 5.0 9.5 0.48
    includes 9.0 14.0 23.0 0.40
    includes 16.5 26.0 42.5 0.45
    includes 9.0 48.5 57.5 0.73
    includes 1.5 63.5 65.0 0.63
    includes 1.5 74.0 75.5 0.58
    includes 10.5 90.5 101.0 0.51
TM-11-74 2   145.5 6.5 152.0 0.34
    includes 40.5 6.5 47.0 0.60
    includes 4.5 65.0 69.5 0.40
    includes 25.5 89.0 114.5 0.47
    includes 1.5 150.5 152.0 1.00
TM-11-75 2   115.5 6.5 122.0 0.70
    includes 10.5 20.0 30.5 0.58
    includes 27.0 38.0 65.0 2.00
    includes 13.5 80.0 93.5 0.56
    includes 10.5 104.0 114.5 0.32
SECTION 3            
TM-11-66 1   165.5 4.5 170.0 0.40
    includes 27.5 4.5 32.0 0.48
    includes 22.5 42.5 65.0 0.50
    includes 1.5 83.0 84.5 0.50
    includes 1.5 90.5 92.0 0.55
    includes 3.0 102.5 105.5 0.68
  includes 12.0 110.0 122.0 0.33
    includes 7.5 128.0 135.5 0.33
    includes 28.5 141.5 170.0 0.80
TM-11-76 2   148.5 3.5 152.0 0.40
    includes 6.0 17.0 23.0 1.10
    includes 21.0 68.0 89.0 0.60
    includes 40.5 98.0 138.5 0.80
    and 7.5 98.0 108.5 1.00
    and 13.5 116.0 129.5 1.30
TM-11-77 2   120.0 2.0 122.0 0.33
    includes 19.5 2.0 21.5 0.93
    includes 4.5 42.5 47.0 0.43
    includes 3.0 59.0 62.0 1.15
    includes 13.5 108.5 122.0 0.50
TM-11-85 3   195.0 5.0 200.0 0.20
    includes 6.0 12.5 18.5 0.44
    includes 1.5 29.0 30.5 1.50
    includes 12.0 38.0 50.0 1.10
    includes 3.0 56.0 59.0 0.58
    includes 4.5 105.5 110.0 0.46
SECTION 4            
TM-11-67 1   102.0 5.0 107.0 0.62
    includes 87.0 14.0 101.0 0.70
    and 19.5 42.5 62.0 0.70
    and 37.5 63.5 101.0 1.00
    and 4.5 95.0 99.5 3.80
TM-11-78 3   195.0 5.0 200.0 0.34
    includes 9.0 62.0 71.0 0.90
    and 6.0 65.0 71.0 1.25
    includes 39.0 86.0 125.0 0.65
    and 13.5 95.0 108.5 0.99
    includes 1.5 132.5 134.0 1.26
    includes 37.5 150.5 188.0 0.57
    and 1.5 165.5 167.0 3.82
TM-11-79 3   151.5 3.5 155.0 0.36
    includes 6.0 11.0 17.0 0.64
    includes 28.5 81.5 110.0 0.60
    and 10.5 81.5 92.0 0.92
    includes 34.5 117.5 152.0 0.70
    and 13.5 120.5 134.0 1.00
TM-11-84 3   195.0 5.0 200.0 0.35
    includes 15.0 6.5 21.5 0.44
    includes 1.5 63.5 65.0 1.10
    includes 45.0 71.0 116.0 1.01
    and 7.5 71.0 78.5 2.43
    and 13.5 81.5 95.0 0.85
    and 6.0 104.0 110.0 1.93
TM-11-86 3   142.5 3.5 146.0 0.30
    includes 3.0 23.0 26.0 0.48
    includes 4.5 30.5 35.0 0.45
    includes 33.0 95.0 128.0 0.72
    and 15.0 113.0 128.0 1.02
    includes 6.0 131.0 137.0 0.36
    includes 1.5 144.5 146.0 0.94
SECTION 5            
TM-11-68 1   188.0 3.0 191.0 0.27
    includes 10.5 3.0 12.5 0.40
    includes 4.5 27.5 32.0 0.40
    includes 3.0 39.5 42.5 0.60
    includes 58.5 62.0 120.5 0.45
    and 24.0 95.0 119.0 0.57
  includes 7.5 168.5 176.0 0.79
TM-11-80 3   189.0 11.0 200.0 0.16
    includes 19.5 92.0 111.5 0.50
TM-11-81 3   145.5 6.5 152.0 0.20
    includes 27.0 71.0 98.0 0.30
    includes 22.5 111.5 134.0 0.50
    includes 3.0 140.0 143.0 0.37
TM-11-87 3   147.0 5.0 152.0 0.14
    includes 4.5 5.0 9.5 0.34
    includes 6.0 95.0 101.0 0.33
    includes 3.0 138.5 141.5 1.35
    includes 1.5 150.5 152.0 0.89
SECTION 6            
TM-11-69 1   118.5 4.0 122.0 0.43
    includes 1.5 6.5 8.0 0.58
    includes 84.0 24.5 108.5 0.53
    and 25.5 51.5 77.0 0.85
    and 9.0 60.5 69.5 1.20
TM-11-82 3   195.5 3.5 200.0 0.28
    includes 7.5 27.5 35.0 0.46
    includes 85.5 110.0 195.5 0.44
    and 36.0 150.5 186.5 0.63
    and 7.5 164.0 171.5 0.90
    and 12.0 174.5 186.5 0.68
TM-11-83 3   148.5 3.5 152.0 0.10
    includes 18.0 80.0 98.0 0.19

Notes:
  • 1 Phase 1 Drill hole results announced in news release dated May 11, 2011
  • 2 Phase 2 Drill hole results announced in news release dated June 22, 2011
  • 3 Phase 2 Drill hole results announced in news release dated July 25, 2011