Ulu
In addition to the Lupin mine and facilities, Elgin Mining also secured ownership of the prospective Ulu gold project located 155 km north of the Lupin Gold Mine. The property consists of a renewable 21 year mineral lease with an area of 947 hectares. Ulu represents an advanced exploration project that has been subjected to extensive exploration expenditures between 1989 and 2006, including approximately 1.7 kilometres of underground development and approximately 135,713 meters of diamond drilling.
The purchase of Ulu includes a fully equipped exploration camp incorporating a 60-man Weather-haven camp with sleeping, dining and recreation quarters, a vehicle repair shop, power house, warehouse, cold storage, office and change rooms. Also at the site are a fuel storage tank farm, fresh water and sewage systems, garbage incinerator and an ore storage area. The property is accessible by fixed wing and rotary aircraft from Yellowknife, a distance of 530 kilometers to the south. Both wheel and float equipped aircraft can land near the site. A 1,200 meter long gravel airstrip suitable for Hercules size aircraft is situated 3.5 kilometers south of the camp.
History
BHP Minerals Ltd. discovered gold mineralization on the Ulu gold property in 1989, and from discovery to 1994 delineated the extent of mineralization through a campaign of mapping, drilling, geophysical, geochemical and environmental surveys. In total, BHP completed 76,668 metres of drilling on the project between 1989 and 1995. In 1995, Echo Bay Mines acquired the Project and by 1997 had completed an underground ramp extending to the 155 metre level and 40,476 meters of underground and surface drilling. In 1996 and 1997, 1,762 meters of development were excavated and mineralized zones were crosscut by drifting. In 1997, the project was shut down due to low gold prices.
Metallurgical testwork conducted in the 1990s by BHP-Utah Minerals Laboratory ("BHP-Utah") on 120 assay pulp samples from ten different diamond drill holes indicated that 95 per cent of the gold was recovered by floatation and over 90 per cent of the gold was recovered in the cyanidation process. Further testwork on seven composited samples prepared from 16 blended drill hole samples indicated gold recovery exceeding 90% and that a clean concentrate could be obtained in a single stage floatation process at grinds of nominal 200 mesh or finer.
Kinross Gold Corporation acquired the Ulu property through a corporate merger with Echo Bay in 2002 and subsequently sold the Project to Wolfden Resources Inc. in February 2004 for approximately $19 million. During 2004, Wolfden completed 44 drill holes totalling 18,569 meters. No exploration work has been completed on the project since 2006 as Wolfden was acquired by Zinifex of Australia, which subsequently merged with Oxiana Ltd. to become Oz Minerals, which was acquired by MMG in 2009.
Resources
The bulk of the mineral resource estimate (94 per cent) occurs from surface down to the 300 meter
Level, where drilling activity was normally focused. However, Elgin believes that the potential to increase the mineral resource estimate at depth is high and this view is also supported by several, deep, high grade intercepts, many outside of the current resource. Additionally, there are several additional known gold occurrences on the property which the company plans to map sample and drill starting in 2011.
The table below summarizes the Ulu resource as stated in the June 2011 NI 43-101 Technical Report, which has been filed on SEDAR (www.sedar.com).
Geology
The Ulu property is situated in the southern part of the High Lake Greenstone Belt in the Archean age Slave Structural Province. The High Lake Greenstone Belt comprises three north trending geological/metallogenic domains of volcanic and sedimentary rocks, with obscure boundaries. The Ulu property lies within the Central Domain, which contains intermixed clastic sedimentary and volcanic rocks dated from about 2616 to 2612 Ma, and is characterized by gold-arsenic mineralization controlled by secondary structures. The other two domains are older than the Central Domain and contain significant quantities of felsic volcanic rocks and volcanogenic base metal massive sulphide deposits.
The Ulu property covers a 2-km- to 3-km-wide lobe of greenschist to amphibolite facies mafic volcanic and sedimentary rocks, surrounded on three sides by granitic stocks. The supracrustal rocks consist of a sequence of basalts, graywackes, and gabbroic sills, all folded into a 5-km-long anticlinal structure. Late-stage feldspar porphyry, quartz diorite, and diabase dikes intrude this sequence.
Exploration
Strategy: Prior owners of the Ulu property were generally focussed on developing sufficient resources based on the viability of transporting ore from Ulu to the mill at Lupin. However, Elgin management is of the view that Ulu should be explored on the basis of defining sufficient resources for a standalone operation, necessitating a significant expansion in the known resource base. Based on the fact that Ulu is wide open along strike and at depth and that there are several additional number of historic gold showings that have been identified historically, indicative of the wide extent of gold mineralization present on the Ulu Gold Property, the Companys geologists and consultants believe the project has the potential to significantly grow the current resource base. A good indication of the growth potential is the limited results from deep drilling and the discovery of a new Vein #5 during the2005/06 exploration program by Wolfden.
Targets and Planned 2011 and 2012 programs: While the focus for the balance of 2011 will be on launching the new exploration program at Lupin, compilation of the extensive Ulu database and the development of targets will commence in Q4 2011 with exploration planned for early 2012. It is currently planned that two drill rigs will be mobilized to Ulu and drilling will commence during the second quarter of 2012.