Anaconda dives into Damoti Lake (May 28, 2003)

Doublestar Resources (DSR-V) and Anaconda Gold (ANX-V) have inked a deal that could see the latter earn a 55% stake in the Damoti Lake gold project, 200 km north of Yellowknife.

To do so, Anaconda must spend $2.5 million on exploration and development over four years. The company must also fork over $170,000 in option payments and issue Doublestar 100,000 shares over the option period.

Drilling on the project by a previous operator in the mid-1990s outlined resources of 455,685 tonnes grading 15.97 grams gold per tonne in the Horseshoe zone. Anaconda notes that the reserve figure is not in line with Canadian standards under National Instrument 43-101, but does believe the results are reliable.

Based on more than 40,800 metres of drilling and 430 metres of underground development, Damoti Lake is home to a geological resource estimate of 1.9 million tonnes running 10.2 grams gold.

In 1996, limited underground work via a decline ramp to the 40-metre level delineated a high-grade gold lens. The lens yielded a stockpile of about 4,000 tonnes running 0.45 oz gold per tonne.

Anaconda plans an in-fill drill program on the Horseshoe zone, which is characterized by high-grade gold mineralization hosted by the fold closure of a banded iron formation.

Anaconda says that the favourable banded iron formations strike for more than 12 km across the property. At least 13 prospective areas on the 47-sq.-km property will be targeted by exploration.

In early 2003, after spending more than $14 million, Canadian Zinc (CZN-T) dropped its option on the project.