Merc explores new gold zone at Damoti Lake

Vancouver – Merc International Minerals (MRK-V) has cut several good-grade near-surface gold intercepts while exploring a new zone on its property in the Northwest Territories.

The recent intercepts are from Merc’s second drill program at the Damoti Lake project, located roughly 200 km north of Yellowknife.

The company concentrated its first drill program, conducted last summer, on the previously explored Horseshoe zone. During that program the company drilled 5,700 metres in 27 exploration holes, with 26 of them hitting values of over one gram gold per tonne and 20 holes intersected multiple mineralized zones.

Merc followed up the initial drilling with ground magnetic and electromagnetic surveys on the 14 kms of iron formation on the property to identify targets for the latest drill program.

Based on the surveys, Merc concentrated the recently completed winter drill program on the BIF Island zone, 3.5 km northeast along strike from the Horseshoe zone. In the program two rigs completed 10,000 metres of drilling in 20 holes.

Hole 394 hit 15.9 metres grading 2.43 grams gold per tonne from 62 metres. Hole 394B cut 4.3 metres carrying 9.74 grams gold from 58 metres. Hole 394C cut 38.5 metres averaging 3.24 grams gold from 42 metres. The company reports that the three holes confirm strong mineralization within the keel of the folded iron formation and establish continuity between sections.

Also in the BIF Island zone, Hole 396B intersected 22.5 metres grading 5.81 grams gold from 96 metres, including 3 metres grading 25.66 grams gold. Hole 397 cut 28.2 metres carrying 4.76 grams gold from 30 metres. The two holes extended the width of the iron formation and demonstrated lateral gold continuity.

The company has yet to release the results of a further 11 drill holes drilled as part of the winter program.

In last year’s summer program the company discovered a new area of mineralization 150 metres west of the Horseshoe zone in the Red Mountain zone. Hole 390B cut 2.7 metres carrying 8.07 grams gold from 106 metres, and then another 2.7 metres carrying 7.86 grams gold from 221 metres. Roughly 90 metres north hole 392C cut 4.8 metres averaging 5.19 grams gold from 181 metres, and then 4.4 metres grading 6.36 grams gold from 194 metres.

Initial drilling last summer on the Horseshoe Zone itself yielded 23.5 metres grading 13.91 grams gold from hole 377, and 22.3 metres carrying 9.31 grams gold from hole 380.

Merc secured the property from Anaconda Mining (ANX-T) in early 2008, subject to an existing 2% net smelter return royalty, for $250,000 and 1,250,000 of Merc’s common shares. Merc now controls a 100% interest in the mining lease that holds the Horseshoe zone and an 80% interest in the balance of the Damoti Lake mining leases. The property spans 2,849 hectares.

The company has 29 million shares outstanding after raising $3.1 million from a private placement of 7.3 million shares for 43¢ in November.

Merc’s share price closed at 22¢ on the news. The company has a 52-week share price range between 17¢ and 59¢.