Pursuant to an Option Agreement dated August 19, 2007 the Company has an option to acquire up to a 60% interest in the Needle Lake Property from Kaminak Gold Corporation (TSX-V: KAM).
The Needle Lake Property comprises two contiguous claims with a total area of 2090.21 hectares located approximately 460 km northeast of Yellowknife, 200 km southeast of the Lupin Mine owned by Wolfden Resources Inc., and 70 km south of the George and Goose Lake deposits owned by Dundee Precious Metals Inc. Gold exploration in the area has been largely driven by significant discoveries of iron formation-hosted gold at the Lupin Mine, which produced 3.37 million ounces of gold from 1982-2005.
The Needle property has had limited previous exploration, the last major phase of which occurred in 1990 when drilling yielded mineralized intersections in three holes, including 9.46 g/t Au over 3.43 m in one hole and 11.58 g/t Au over 2.02 m in another. These intersections appear to be on the same northerly trending structure, which is untested along strike in both directions and down dip. Furthermore, during field work in 2007, TerraX collected a grab sample which ran 14.8 g/t Au on the surface projection of the structure.
An independent technical report dated November 27, 2007 entitled, "Technical Report on the Gold and Diamond Potential of the Needle Lake Property, western Nunavut, Canada" (the "Needle Lake Report") was prepared for the Company by Robert B. L'Heureux, M.Sc., P.Geol. The Needle Lake Report has been filed with the Securities Commissions and is available for review on the SEDAR database at www.sedar.com.
In the Needle Lake Report, Mr. L'Heureux recommended a two-phase exploration program in which some drilling will be dependent on results from phase I work. The first phase would include the construction of an all-weather camp on the Needle 1 and 2 claims followed by drilling, ground geophysics and field work. Based on presently available data, a series of several west-trending drill holes across the north-trending mineralized structure to the north and south of previous intersections would be justified in Phase I. Ground geophysical surveys conducted during Phase I will help refine the location of potential additional drill holes for the second phase of exploration. Consideration should also be given to more rock and mudboil sampling and surficial geology mapping to be conducted during both phases. The Phase I program was budgeted at $663,480.
On August 16, 2008 TerraX began drilling at the Needle Gold Property. The 2008 exploration program was comprised of a five hole drill program that tested extensions from the main Needle Gold Zone, which was drilled by previous workers in 1990. Data examination revealed evidence that the three mineralized intercepts from the 1990 drill program occur on the same structure, which remained untested along strike or down dip. Drill results from 1990 at the Needle Zone include 9.46 g/t Au over 3.43m of core length and 11.58 g/t Au over a 2.02m core length.
In addition, the current drill program tested a new vein structure identified during fieldwork conducted by TerraX in 2007 (486 g/t Au assay from a large (> 1 cubic m), angular boulder/subcrop), located within 100 metres of the mineralized structure described above. No previous drilling had been completed over this target.
Finally, the drill program tested a new style of mineralization that was discovered on the property and consists of zinc and lead-rich precious metal occurrences. An outcropping surface grab sample from one such discovery yielded 24 g/t Au, 70 g/t Ag, 1.7% Zn and 0.5% Pb. This occurrence is coincident with a geophysical conductor which has yet to be fully defined. Previous prospecting along this conductor has resulted in seven anomalous Au samples (3.0 g/t to 41.7 g/t). A GPS controlled VLF survey was completed over this target area to help determine drill collar locations and orientation. No previous drilling had been completed over this target, and one hole was drilled to test this area during the 2008 drill campaign.
Drill holes were designed to intersect zones at right angles and reported drill intercepts are approximately true widths. Holes TXR08-001, 002 and 004 were drilled on extensions to the main zone drilled in 1990. All holes intersected the mineralized zones where they had been projected from previous drilling. Although these holes confirmed strike and dip extensions to the main mineralized zone on the property, none of the results were as high grade as previous drilling. TerraX's best intersection in TXR008-004 (2.47 g/t Au over 3.25 m) is the most southerly drill hole on the zone and indicates that the zone remains open along a 2 km magnetic trend. The northern extension of the zone goes under Needle Lake and would require winter drilling off the ice. TerraX will continue to assess the extensions of this zone.
Hole TXR08-003 tested the vein structure discovered by surface prospecting. The hole intersected two narrow zones of quartz veining with results of 1.17 g/t Au over 0.65 m and 1.03 g/t Au over 1.27 m.
No significant mineralization was encountered in TXR08-005 which was designed to test the zinc and lead precious metal occurrence. TerraX will review the work done to date on this target to ascertain why it was missed in the drilling, and to better target future exploration.
2008 Needle Gold Assay Results
Hole No. |
From (m) |
To (m) |
Interval (m) |
Au Grade (g/t) |
TXR08-001 |
40.15 |
48.62 |
8.47 |
0.44 |
TRX08-002 |
80.35 |
83.05 |
2.70 |
0.80 |
TXR08-003 |
22.00 |
22.65 |
0.65 |
1.17 |
and |
29.53 |
30.80 |
1.27 |
1.03 |
TXRO8-004 |
34.60 |
37.85 |
3.25 |
2.47 |
and |
71.40 |
74.35 |
2.95 |
1.09 |
TXR08-005 |
No significant values |
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The Needle property is considered to have significant merit. The mineralized structures in the area of the Needle showing are open to the south and to the north, and none of the other linear structures or apparent fold noses have been tested by drilling. Ground magnetic and electromagnetic surveying as well as geochemical surveys should be completed followed by drilling of any targets generated.
TerraX's exploration program was supervised by Joseph Campbell, P.Geo., TerraX's President and CEO, who serves as a Qualified Person under the definition of National Instrument 43-101 for the purpose of this disclosure. Drilling assays were completed at TSL Laboratories in Saskatoon, Saskatchewan. Reference standards were inserted into the sample streams as part of a comprehensive QA/QC program to ensure accurate results.
Under the terms of the Option Agreement with Kaminak, the Company can acquire a 51% interest in the Needle Lake Property by issuing an aggregate of 400,000 Common Shares to Kaminak and incurring an aggregate of $1,000,000 in exploration expenditures on the Needle Lake Property as follows:
Share Issuances
- 100,000 Common Share upon completion of the Offering (issued);
- a further 100,000 Common Shares on or before August 19, 2008 (issued);
- a further 100,000 Common Shares on or before August 19, 2010; and
- a further 100,000 Common Shares on or before August 19, 2011.
- $100,000 on or before December 31, 2007 (incurred);
- a further $250,000 on or before December 31, 2008 (incurred);
- a further $300,000 on or before December 31, 2009 (incurred); and
- a further $350,000 on or before December 31, 2010.
