Queenston cuts new gold at Kirkland Lake

Two of the first three holes in Queenston Mining‘s (QMI-T) 22-hole, 12,000-metre diamond drilling program have cut a new zone of gold mineralization on the company’s Kirkland Lake gold project in northeastern Ontario.

Dubbed Anoki South, the new zone lies 250 metres south, and runs parallel with the Anoki deposit, which hosts measured and indicated resources of 1.1 million tonnes averaging 4.1 grams per tonne gold. The new zone is also 1 km southwest of the McBean deposit and its measured and indicated resources totalling 835,520 tonnes of 5.1 grams gold. Inferred resources there amount to 1.8 million tonnes averaging 6.5 grams.

The ASZ noki South zone (ASZ) represents a 20-metre thick, gold-bearing unit of altered inter-flow sediments and mafic volcanic flows. The lower 5 metres of the unit contain elevated gold values adjacent to a shear zone.

Hole AN02-20 cut 4.48 metres (beginning at 300 metres below surface) running 6.7 grams gold, including a 0.95-metre section of 23.86 grams.

Hole AN02-21, collared 60 metres to the south, was designed to test beneath the discovery hole. It cut the zone at 350 metres below surface and returned 3.03 metres grading 18.92 grams gold, including 0.52 metre of 103.85 grams.

The intervals represent an approximate true thickness. The ASZ remains open to surface, at depth and 600 metres along strike. Queenston plans to add a second drill at Kirkland to help delineate the new zone with at least six holes. Drilling will then move on to test nine other targets on the property.

Earlier this summer, Queenston assumed full ownership of the Kirkland Lake property after paying Newmont Mining (NEM-N) $3 million in cash and issuing 1 million Queenston shares and warrants for a further 543,000 shares exercisable at 95 per share over 18 months.

Newmont retains a sliding-scale net smelter return royalty that varies from 1% at gold prices below or equal to US$300 per oz., up to 2% when prices are above US$400 per oz.

The property hosts five gold deposits with measured and indicated resources of 4.1 million tonnes grading 5.6 grams gold per tonne, plus inferred resources of 4.5 million tonnes averaging 5.3 grams gold, for a total of 1.5 million contained ounces.

At the nearby Lake Abitibi property, Queenston recently completed ten holes for 3,635 metres. The holes encountered three altered structural corridors in favourable geology, but failed to return any significant mineralization. Queenston plans further geophysical and soil geochemical surveys in anticipation of a second phase of drilling next year.

Queenston has $12 million in working capital, with an exploration budget of $2.6 million through 2003.