Ely Gold entered into a letter agreement with Balmoral Resources Ltd. whereby Ely Gold will acquire 100% of all rights and interests in the 1% (one percent) net smelter royalty on the Fenelon Mine Property, operated by Wallbridge Mining Company Limited, located in west-central, Quebec.
Wallbridge’s Fenelon Gold property is located in northwestern Quebec
proximal to the Sunday Lake Deformation Zone (SDLZ) which hosts the
Detour Gold Mine in Ontario, and Balmoral Resources’ gold deposits at
Martiniere. The 1,052 hectare Fenelon Gold property hosts the Discovery
Zone gold deposit and surrounding four km strike length of a
gold-hosting secondary splay of the SDLZ. . A total of over 50,000
metres of drilling have been completed and, very significantly, two
bulk samples have been mined and processed from the deposit. In 2001, a
13,835 tonne bulk sample mined from a small open pit at the Discovery
Zone returned a reconciled grade of 9.84 g/t gold. A second 8,169 tonne
bulk sample, mined from underground in 2004 returned a reconciled
grade of 10.7 g/t gold. Both bulk samples were processed at the Camflo
mill in Malartic yielding 97% gold recoveries and similar recoveries
were achieved in recent metallurgical test work initiated by Wallbridge
(see pre-feasibility technical report:
The 2016 resource estimate is comprised of Measured and Indicated
resources of 38,000 ounces gold contained within 91,100 tonnes grading
12.97 g/t gold and Inferred resources of 1,900 ounces gold contained
within 6,500 tonnes grading 9.15 g/t gold and is limited to close
proximity to the existing mine workings.
The PFS estimates a Pre-tax Net Cash Flow of $6.62M and a Project
pre-tax Internal Rate of Return ("IRR") of 92% for the initial
approximate 18 month mine life for the known reserves located above 100
meters depth and in close proximity to the existing ramp.
In 2017 and since acquisition, Wallbridge has completed 33 drill
holes totalling 6,348 metres in three surface exploration drilling
campaigns at Fenelon (see
Wallbridge Press Release dated December 13, 2017).
Results from this initial year's exploration drilling program have
exceeded expectations and resulted in an expanded exploration target
for the area near existing infrastructure and above 150 metres depth.
Drilling significantly extended existing zones and discovered several new parallel zones. Highlights include:
FA-17-07 which intersected three zones including 141.16 g/t gold over 7.06 metres in the Viper Zone;
FA-17-17 which intersected four zones including 311.08 g/t gold over 3.06 metres, also in the Viper Zone;
FA-17-26 which intersected two zones including 260.44 g/t gold over 7.02 metres, also in the Viper Zone; and
FA-17-27 which intersected 80.42 g/t gold over 4.73 metres in the Habanero Zone.
The results of the 2017 drilling, along with geological and
structural modelling and reinterpretation of the deposit, have led to
an expanded exploration target of an additional 70,000-120,000 ounces
gold within 150,000 to 375,000 tonnes grading between 10-15 g/t gold
immediately adjacent to the existing infrastructure and in the top 150
metres from surface. This exploration target is in addition to the 2016
Very little drilling has been carried out below this depth and the
mineralization remains open to depth and along strike. In addition,
drill intersections along the four kilometre strike length of the
mineralized structure demonstrate potential for new discoveries on the
Additional surface and underground exploration drilling as well as a
35,000 tonne underground bulk sample are planned for 2018. All permits
for the 35,000 tonne bulk sample have been received (see
Wallbridge Press Release dated January 16, 2018) and mobilisation for the bulk sample program has begun in January, 2018.