A golden Leprechaun for Mountain Lake and Marathon PGM

VANCOUVER — Central Newfoundland is proving to be a fertile gold region for Mountain Lake Resources (MOA-V) and Marathon PGM (MAR-T): the joint-venture partners are pulling significant lengths of gold-rich core from the ground at their Valentine Lake project and both are enjoying sizable share price gains from the news.

Marathon signed on to earn a 50% stake in Valentine Lake from Mountain Lake in December. Previous exploration efforts at Valentine focused on defining a high-grade, underground resource at the Leprechaun target; on February 1, the partners kicked off a 33-hole drill program to test for mineralization above and around the Leprechaun deposit, with the goal of defining an open-pittable resource.

The effort returned numerous near-surface gold hits, most of which are outside of the current resource envelope. Drills cut rocks hosting gold in quartz-tourmaline vein stockworks, as expected, but also found gold in the metasediments of the deposit footwall and hangingwall, opening up a new and underexplored host environment for gold mineralization.

The latest results included one particularly strong hole that propelled Mountain Lake’s share price up 16¢ or 54% in a day to reach 45.5¢. Hole 160 first hit gold 137 metres downhole, cutting 2 metres grading 18.63 grams gold per tonne. Just 13 metres later, the drill encountered 25 metres carrying 6.79 grams gold, including 7 metres of 19.43 grams gold and 10 metres of 3.36 grams gold.

Other results from the recent release include 22 metres of 2.78 grams gold from 33 metres down hole 159 and 8.4 metres of 1.1 grams gold from 40 metres down hole 162.

The previous set of results, released near the end of March, included five short but well-mineralized intercepts, four of which came from outside the resource envelope. Hole 150 cut 5.2 metres of 4.71 grams gold from 44 metres depth, hole 152 returned 7.2 metres grading 4.64 grams gold from 142 metres downhole, hole 154 intercepted 7.4 metres of 8.67 grams gold from 64 metres below surface, hole 155 hit 9.5 metres of 2.35 grams gold from 120 metres depth, and hole 156 pulled 20.8 metres carrying 4.43 grams gold from 18 metres downhole.

The drill program focused on an area 400 metres in length and probed to roughly 200 metres depth. The partners plan to restart drilling in the area in May.

The Valentine Lake property is more than 30 km long and covers a series of gold showings that stretch along 14 km strike. Leprechaun, which is the only defined deposit along the trend, is home to 1.3 million inferred tonnes grading 10.5 grams gold, for 443,000 contained oz. The resource estimate was completed in 2005, which means it used parameters such as a 5-gram-gold- per-tonne cutoff grade based on a gold price of US$425 per oz.

Valentine Lake is located 55km south of the town of Buchans, in central Newfoundland. Mountain Lake currently owns a 30% interest in the site but also has an exclusive option to earn the remaining 70% from Richmont Mines (RIC-T). Marathon can get 50% of the project by assisting Mountain Lake in exercising the Richmont option, through option payments totaling $3 million and exploration costs also totaling $3 million over three years. Marathon is acting as project operator during its earn-in.

Marathon’s share price rose on news of the latest Valentine Lake drill results, adding 32¢ or 24% to reach $1.65. Marathon has a 52- week trading range of 37¢ to $1.70 and 31 million shares outstanding. Mountain Lake, as stated, closed at 45.5¢ on the news but in mid-day trading reached as high as 52¢, a new 52-week high for the junior. Over the last year it had traded as low as 14¢.

Mountain Lake has 29 million shares outstanding.