Angel Hill Bulk Sample

The West Cedartree gold project is the company’s primary focus. Located near Kenora, Ontario, the project area is comprised of 1,674 hectares (4,134 acres) and covers a 6 km, strike length of the key geology.

The project is located in a prolific gold region that produced over half of Ontario’s gold in the early 1900s. Current activities are focused on upgrading two historic gold resources and preparing applications for mine permits. The goal is to bring West Cedartree into production in the near term through surface mining.

The project consists of eight contiguous properties: McLennan, Dogpaw Lake, Dogpaw West, Dubenski, Jesse (North), Gold Sun, West Cedartree and North Block.

Three gold-bearing zones have been identified:

• Angel Hill Zone, on the McLennan property

• Dogpaw Lake Vein No. 1 Zone, on the Dogpaw Lake property

• Dubenski Shaft Zone, on the Dubenski property

Houston Lake’s properties and gold zones are detailed below.

1. McLennan Property

• Land position: 140 hectares (345 acres).

• Ownership: 100% ownership interest; comprised of seven patented claims, subject to 2.25% Net Smelter Royalty.

• Property geology: consists of basaltic lavas and pyroclastics intruded by a large gabbro sill and quartz feldspar porphyries. Gold mineralization on the property associated with north-south trending shear zones near the contact of or internal to the large gabbro sill. Shear zones are possibly related to the Pipestone Lake-Cameron Lake Fault Zone, a major conduit for gold deposits in the region.

McLennan Gold Zone (MGZ)

• 1944 – 45: Drilling by Noranda Mines encountered significant gold-bearing intersections over strike length of 280 m (918 ft).

• 2006: IP geophysics survey traced gold indication for over 800 m southward to where the zone appears to merge with the Angel Hill Gold Zone.

• 2006: Drill program encountered significant gold values over substantial widths in both holes.

• 2007: Significant gold values encountered in two more drill holes as well as surface stripping.

Angel Hill Gold Zone (AHGZ)

• Strike length is more than 200 m, open at both ends and to depth. Zone has been traced over 2.8 km by IP geophysics & can possibly extend to over 6.0 km in the property.

• NI 43-101 (Oct. 2005) estimated inferred mineral resource of 106,400 mt @ 2.97 g/mt Au.

• Minable by open pit from surface to depth.

• Houston Lake is in the process of applying for a permit to surface mine the AHGZ. A 10,000 tonne bulk sample is the next recommended step in the economic evaluation of the zone.

• AHGZ exploration history:
  

  • 2002 – Gold zone identified in a road cut by Houston Lake geologists; followed up with an exploration program. Preliminary trenching and stripping traced sulphidized, carbonatized & silicified shear zone for at least 100 m (328 ft).

  • 2003 – Strike length extended to 225 m (738 ft) as a result of exploration that consisted of project-wide line-cutting & geophysical (magnetic & VLF-EM) surveys. Mechanized stripping, washing, channel sampling & detailed mapping were also carried out. Zone was stripped and washed for 130 m (426 ft) of that strike length. Channel sampling was carried out systematically every 20 m (66ft) producing a weighted average of 4.04 g/mt Au.

  • 2004 – Diamond drilling program returned significant gold values in 12 of 18 holes and 5 drill holes intersected in excess of 1 oz/st Au;

  • 2005 – Phase 2 drill program returned 5.895 g/mt gold over 4.65 m (.172 oz/st gold over 15.25 ft) in drill hole No.25. Preliminary bench tests indicated high recoveries averaging 93.4% in a standard mill circuit. Inferred mineral resource estimate calculated for AHGZ of 106,400 tonnes grading 2.97 g/mt Au at a cutoff of 2 g/mt or 49,700 tonnes grading 4.77 g/mt Au at a cutoff of 4g/mt.

  • 2006 – Bulk sample totaling 1,042 tonnes was taken from AHGZ. It produced 5,490.4 gm (176.52 oz) gold for gross revenues of $131,893 & net profit of $51,848. Drilling extended AHGZ to a depth of 100 m. IP traced zone for 1.4 km on property.

  • 2007 – Stripping and channel sampling extended AHGZ to over 200 m with best sample result returning 7.02 g/mt over 1.54 m.

2. Dogpaw Lake Property

• Land position: 226 hectares (566 acres).

• Ownership: 100% interest, consisting of 13 patented mining claims, one License of Occupation.

• Extensive exploration history dates to 1940s; historic drill cores were recovered totaling 6,656 m.

• Four main gold zones & 10 documented gold occurrences have been discovered to date.

Dogpaw Lake Vein No. 1 Gold Zone

• Historic resource estimate: 53,741 tonnes @ 15.43 g/mt gold.

• 2006 – Magnetic surveys and geological mapping confirmed extension of favorable geology that hosts AHGZ onto and across property.

• 2007 – 14 of 17 drill holes intersected 3.31 g/mt or higher. Gold mineralization continuity was extended to 210 m (open along strike and depth). Stripping of Vein No. 2 returned channel samples assaying 12.32 g/mt Au over 4.2 m and averaging 5.00 g/mt Au over a 2.93 m width along a 72 m strike length. Vein No. 4 averaged 3.58 g/mt Au over a 2.80 m width for 32 m along strike.

• 2008 – A 3000 m diamond drilling program is planned to upgrade Vein No. 1 to an NI 43-101 compliant resource.

3. Dubenski Property

• Land position: 364 hectares (899 acres).

• Most recent acquisition (May 2007).

• Ownership: option agreement (May 2007) gives Houston Lake the right to purchase 100% interest in the property; consists of 22 leased claims.

• Property geology: gold occurs as fine grained free gold, concentrated along foliation planes concentrated within 300-ft-wide zone of quartz-sericite-pyrite schist in the Flint Lake Shear. This shear forms an east-west splay off the Cameron-Pipestone Fault. Cameron Lake gold deposit occurs in similar structural setting on splay off Cameron-Pipestone Fault, five km to southeast of Dubenski property.

• Gold first discovered in 1935. Approx. 145 historic shallow holes drilled, defining a steeply dipping, gold-bearing structure over 914 m (3,000 ft) strike length, to maximum depth of 122 m (400 ft).

• Three gold zones occur along 300 m (1,000 ft) strike length of the east-west trending Flint Lake Shear.

Dubenski Shaft Gold Zone

• Zone has 132-ft exploration shaft and 60-ft cross-cut developed on one level in 1945.

• Zone estimated to average 7.6 m (25 ft) in true width; appears to be open down plunge.

• Historic Results:

  • Estimated Inferred Mineral Resource (1998) of 355,286 tonnes averaging 6.32 g/mt gold (322,310 short tons averaging 0.184 oz/st gold) to depth of 150 m (492 ft).

  • Best historic drilling results:

• 2008 Winter Drill Program:

  • 17-hole, 1,798.6 m drill program and IP geophysics survey planned to upgrade resource to modern standards.

  • Best Results:

4. Jesse North Property

• Land position: 144 hectares (356 acres).

• Ownership: 100% interest; consists of unpatented mining claim of 11 claim units, subject to 2.5% Net Smelter Royalty.

• Property geology: consists of basaltic lavas and pyroclastics intruded by gabbro & quartz feldspar porphyry sills. Gold mineralization is associated with north-south trending shear zones at the contact of or internal to the gabbro sills. Shear zones are related to Pipestone Lake-Cameron Lake Fault Zone (major conduit for gold deposits in region).

• Property covers possible extension of McLennan Shear Zone (see McLennan Property).

5. West Cedartree Property

• Land position: 320 hectares (790 acres).

• 100% ownership interest; no Net Smelter Royalty.

• Property geology: consists of basaltic lavas and pyroclastics intruded by gabbro and quartz feldspar porphyry sills. Gold mineralization is associated with north-south trending shear zones at the contact of or internal to the gabbro sills. Shear zones are related to Pipestone Lake-Cameron Lake Fault Zone (major conduit for gold deposits in region). Property covers possible extension of AHGZ (see McLennan Gold Property).

• Magnetic high is traceable southward from the vicinity of exposed AHGZ to several gold-in-soil anomalies; passes near a gold showing in southern portions of the property for total possible strike length of 2.1 km. (6,888 ft).

6. North Block Property

• Land position: 32 hectares (80 acres).

• Ownership: 100% interest; subject to a 2% Net Smelter Royalty. Consists of one unpatented claim adjoining northeastern corner of Dogpaw Lake property.

• Property geology: consists of basaltic lavas and pyroclastics intruded by gabbro and quartz feldspar porphyry sills. Gold mineralization may be associated with northward extension of north-south trending shear zones from McLennan & Dogpaw Lake properties. Shear zones are related to the Pipestone Lake-Cameron Lake Fault Zone, a major conduit for gold deposits in the region. Pipestone Lake-Cameron Lake Fault Zone crosses northern portion of North Block Gold Property.

• Line-cutting & geophysical surveys completed in 2003.

7. Dogpaw West Property

• Land position: 80 hectares (198 acres); consists of five claim units.

• A 100% ownership interest (Jan. 2007); subject to a 2.5% Net Smelter Royalty. Houston Lake can purchase up to 1.5% of the NSR for $500,000 per 0.5%.

• Property may contain the northward extension of the MGZ & AHGZ.

• Property geology: Gold-bearing quartz veinlets occur in porphyry dike located in northwest portion of the property, according to 1970 Ontario government geological report.

• Exploration:

• 1997 – IP survey indicates major IP chargeability anomaly crossing southeastern corner of property.

• 2007 – Surface exploration program; drilling program aims to provide data for NI 43-101 compliant resource estimate.

8. Gold Sun Property

• Land position: 368 hectares (909 acres); property consists of 23 claim units.

• 100% ownership interest (Jan. 2007); subject to 2.5% Net Smelter Royalty (NSR). Houston Lake can purchase up to 1.5% of the NSR for $500,000 per 0.5%.

• Property history: In 1900 Gold Sun Mine had two adits 600 ft. apart with tunnels of 45 ft & 70 ft respectively, followed by drilling in 1944. Management aims to locate assay reports of work performed by Inco in 1982 that included ground geophysics, sampling & drilling. Proteus Resources Inc. conducted drilling in 1986; reported visible gold in hole J-86-3, which assayed 2.68 opt gold over one ft. Landis Mining Corp. reported gold values of 4.7 g/mt gold in trenching in 1997-98.

• Property may contain possible southwestward extension of AHGZ.

LINKS

Gold Zone map
2006 IP Map
2007 IP Map
West Cedartree Geological Map
43-101 Resource
2009 43-101 Resource