Providing coverage of Alaska and Northwest Canada's mineral industry
September 2012

Vol. 17, No. 40 Week of September 30, 2012

Mining News: Junior taps high-grade gold in SE Alaska

Herbert Glacier shows parity to neighbors in the Juneau Gold Belt; Grande Portage aims to expand 245,000-ounce resource in 2012

Shane Lasley

Mining News

Grande Portage Resources Ltd. is in the midst of a 15,000-meter drill program targeting a high-grade gold deposit at Herbert Glacier, a project that is shaping up to be on par with its renowned neighbors in the Juneau Gold Belt.

Located about 20 miles (35 kilometers) northwest of the legendary Treadwell Mine and about the same distance southeast of Coeur d’Alene Mines’ Kensington operation, Herbert Glacier is situated along a 160-kilometer (100 miles) stretch of Southeast Alaska celebrated for giving up more than 7 million ounces of gold.

As the Herbert Glacier – the ice sheet for which the project derives its name – made its steady retreat from the Gulf of Alaska into the Coast Mountains, a series of six parallel high-grade gold vein systems have been revealed.

Grande Portage said this year’s drilling has significantly increased the extent of mineralization, discovered new high-grade gold within the greater mineralized envelope and revealed new exploration targets.

“In 40 years as a field geologist, the Herbert Glacier is one of the most exciting gold projects I have ever worked on in terms of its potential to become a mine, and we have thousands of meters of veins which have barely been touched,” said Carl Hale, Herbert Glacier’s project manager, during a Sept. 20 round of assay results.

With a 3.6-meter intercept averaging 117.5 grams per metric ton gold, it is easy to understand Hale’s enthusiasm.

Glacier’s pace

The revelation of a high-grade gold resource at Herbert Glacier has paced the retreat of the ice field.

Gold-bearing quartz veins were first identified here by the early Southeast Alaska gold miners that scoured the Juneau Gold Belt in the 1880s but extensive ice cover discouraged any serious investigation of the prospect.

Houston Oil and Minerals rediscovered Herbert Glacier, drilling 500 meters there in 1986. This was followed up by a 1,000-meter program carried out by Echo Bay Mines in 1987. While this exploration turned up promising results, Herbert Glacier was again largely forgotten.

Picking up Herbert Glacier in 2007, Quattera Resources Inc. did not drill the gold-bearing quartz veins at the prospect, instead the Vancouver, B.C.-based explorer carried out the mapping and sampling necessary to ready the project for future drilling.

Recognizing the potential of the parallel vein systems at the toe of the ice sheet, Grande Portage entered into joint venture agreement with Quaterra on the Herbert Glacier project in 2010.

Using the information gathered by Quattera in conjunction with the historical exploration, Grande Portage carried out 16-hole program in 2010. 10C-1, the best hole of this drilling, cut 1.6 meters averaging 12.9 g/t gold at the Main vein. The best intercept of the parallel Deep Trench vein came in 10A-4, which cut 1.5 meters averaging 4.8 g/t gold.

Following up on this success, the explorer drilled 30 holes for 5,181 meters in 2011. The best intercept of this program came from hole 11E-2, which cut 8.76 meters (true width) averaging 33.7 g/t gold at Deep Trench.

Some 7,800 meters drilled by Grande Portage through the end of 2011 earned the Vancouver B.C.-based junior a 65 percent joint venture interest in Herbert Glacier and provided enough data to calculate an inaugural resource for the gold project.

Based on 65 holes and four trenches completed along portions of the Main and Deep Trench veins, the estimate outlines an inferred resource of 245,145 ounces of gold at an average grade of 4.86 grams per metric ton in 1.57 million metric tons of ore.

The resource was calculated using a 2 g/t gold cut-off grade. Assay composites used in the resource estimate were statistically capped at 40 g/t to insure that the “nugget effect” does not over-influence the calculation.

The nugget effect potential of Herbert Glacier was observed by investment analyst Michael Berry during a 2011 visit to the Southeast Alaska project.

“In the last two decades of visiting core shacks and drill sites I have never seen so much visible gold in drill cores,” Berry noted in his investor publication, Morning Notes.

The strike extent of the resources of these two vein systems represents about 30 percent of the some 3,700 meters of vein systems mapped at Herbert Glacier.

Mesothermal veins are renowned for their continuation to depth, making the 200- to 300-meter depths drilled so far the tip of the iceberg when it comes to the down-dip potential at Herbert Glacier.

“A small portion of the Herbert Glacier vein system has produced a substantial resource which remains open in multiple directions and depth,” said Grande Portage President Ian Klassen. “This summer’s drilling program will provide an opportunity to expand the known resource and to discover additional mineralized zones.”

Return to Deep Trench

Grande Portage kicked off its 2012 drill program at Herbert Glacier in June. The largest portion of this 60-to-65-hole program is focused on upgrading and extending the resources at Deep Trench and Main.

Following the recommendation of a technical report completed on Herbert Glacier early in 2012, a large portion of this year’s drilling is aimed at elevating the resource areas to the higher confidence indicated category by drilling the high-grade veins at around a 25-meter spacing.

The Deep Trench vein, which hosts the larger half of the resource, was the initial and primary focus of this infill drilling.

The 124,721-ounce gold resource at Deep Trench extends for 410 meters along strike and 300 meters down dip, enclosing 15 mineralized intersections. Grande Portage said this vein system has been traced for some 1,000 meters on surface.

The explorer announced the first round of results from the 2012 program in early September. The majority of these results were returned from holes that were fan-drilled from three pads (E, F and G) positioned to test the Deep Trench resource area.

The best intercept from pad E (the center platform) came in hole 12E-1, which cut 2.47 meters (true thickness) averaging 17.79 grams per metric ton gold. Hole 12E-4, which is more typical of the nine initial intercepts from drill pad E, cut 1.09 meters (true width) averaging 3.99 g/t gold.

Holes 12G-3 and 12G-5, drilled at the eastern edge of the Deep Vein resource area, encountered a new high-grade zone beginning at the surface and plunging steeply east to a depth of at least 150 meters.

Hole 12G-3 cut 2.05 meters (true thickness) averaging 15.6 g/t gold and hole 12G-5 intersected 3.55 meters (true thickness) averaging 20.3 g/t gold. 12G-1 – more typical of the nine initial intercepts of from pad G – cut 3.13 meters (true thickness) averaging 4.69 g/t gold.

Hole 309B – drilled from the easternmost of a series of five pads positioned to tap the Deep Trench vein closer to the surface – cut 4.07 meters (true thickness 2.60 meters) averaging 11.3 g/t gold. Hole 312B – drilled from another of these platforms situated closer to where the vein surfaces – cut 1.56 meters (true thickness) averaging 8.2 g/t gold.

“We are very encouraged by the initial results from our 2012 drilling program,” Klassen said. “Not only have we discovered a new zone of high-grade gold mineralization east of our original discovery on the Deep Trench vein, but have also confirmed continuity of mineralization between our more widely spaced holes drilled last year.”

While the initial results were encouraging, the assay returns from a hole that cut significant visible gold elevated the second batch to exciting.

DDH 311A, drilled toward the eastern end of the Deep Trench resource area, cut 8.08 meters, 5.66 meters (true thickness), averaging 59.91 g/t gold, starting at a depth of 36.06 meters and including 3.58 meters of 117.54 g/t gold.

Klassan told Mining News that the high-grade discovery has prompted Grande Portage to focus on building another pad targeting the eastern extension of the Deep Trench resource.

Eastward is not the only direction in which Deep Trench is growing. Drilling from the F platform has extended gold mineralization encountered at Deep Trench some 40 meters westward. Results from the five holes reported from F platform include 4.64 meters averaging 5.35 g/t gold from hole 12F-3.

Tapping the Main vein

While Deep Trench is receiving the bulk of the explorer’s attention in 2012, Main Vein is also getting an appreciable amount of infill drilling.

The 120,423-ounce gold resource at the Main vein extends for 680 meters along strike and 200 meters down dip, enclosing 27 mineralized intersections in both the Main vein and a sub-parallel hanging wall vein. The undrilled surface exposure of the Main vein continues for another 280 meters along strike.

“We are testing the Main vein on a good number of holes, but most of the focus thus far has been on the Deep Trench vein,” Klassen explained.

The second batch of assay results includes the first 2012 intercept from the Main vein. DDH 12O-1, a 50-meter eastward step-out on Main, cut 13.85 g/t gold over 3.12 meters.

The Goat Creek vein, which runs parallel to the north of the Main vein, is another target Grande Portage is excited to drill in 2012.

During the 2011 drill season, the company tapped Goat Creek with one hole. This hole, 11J-1, cut three meters of sheared, hydrothermally altered and mineralized rock, including 0.84 meters averaging 7.29 g/t gold.

Though the Goat Creek vein system – covered by sediment left behind by the retreating Herbert Glacier – does not have any surface exposure, geologists have reason to believe the structure tapped in hole 11J-1 extends for some 1,000 meters along strike.

Grande Portage said all of the first five holes drilled at Goat Creek in 2012 have cut well mineralized structures, adding to the promise of this vein system.

“I have every belief that, in terms of the five parallel mesothermal veins, Goat will not disappoint,” Klassen said.

Though the Goat Creek assay results are still pending, Klassen’s confidence in the vein system is founded on two sections of visible gold cut in one of the holes drilled here.

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