Mengold Resources Inc.

Mengold Resources Inc.

May 16, 2006 09:27 ET

VTEM Survey Reveals Over 20 Massive Sulphide Targets At Mengold's Goldcreek Property More Ground Acquired

MONTREAL, QUEBEC--(CCNMatthews - May 16, 2006) - Mengold Resources Inc. (TSX VENTURE:MNI) reports that over twenty conductive zones indicative of massive sulphide targets were identified from a recent 520 line-km, high resolution, time domain, electromagnetic and magnetic survey using Geotech's helicopter-borne VTEM System, also known as the Dream Catcher. Based on the positive results of the airborne geophysical survey, additional claims covering 2,994 hectares were recently staked and the Property expanded to a total of 8,722 hectares (21,551 acres).

The VTEM survey is a time domain system used for locating conductive anomalies and mapping earth resistivities. Geotech has also provided Mengold with Electromagnetic (EM) anomaly maps, total magnetic and second derivative vertical gradient maps, and digital terrain color maps derived from the radar altimeter and GPS height.

Some highly conductive zones were revealed in three clusters in the Central, Eastern and Northwestern parts of the Goldcreek Property. Magnetic features are also found throughout the property giving some insight into the underlying geology and structure. The entire central and eastern part of the property are assumed to be underlain by felsic metavolcanic rocks which are an excellent host for base metal (copper, lead, zinc, molybdenum) Volcanogenic Massive Sulphide (VMS) deposits, but which could also host gold mineralization as previously demonstrated at the North, South, Ternowesky (T) and Creek Zones which are located just west of the Central Zone (see Press Release dated February 6, 2006). The northwestern part of the property, where the I-Zone is located, is primarily a gold target, however some very strong conductors indicative of base metals, are found northeast and east of the I-Zone, just north and parallel to the Crayfish Fault.

A total of 187 claim units were recently acquired through staking, based on the VTEM survey that revealed two electromagnetic conductive zones outside of the Property's original boundary.

In the Central Zone, which is approximately 5-km long and takes the form of a crescent, seven different conductive zones were identified. Approximately 70% of this 5-km strike length is conductive and some of it is highly conductive for the occurrence of base metal mineralization.

In Eastern Zone, the VTEM survey identified a highly conductive zone measuring 1-km in length. This target, which was originally outside the Property boundary, was subsequently acquired by staking.

In Northwest Zone, a total of eleven different conductive zones, all east-west trending, can be found within an area of approximately 21 sq km. It appears that the Crayfish Fault cuts through this part of the property. The Crayfish Fault is the main Break that traverses the Shebandowan Camp and cuts through the former Inco Shebandowan Nickel Mine, located 14-km to the west-northwest. The mine produced 2.6 million tones of 2.5% nickel, 1.0% copper, and 2.28 gpt platinum group elements. The Crayfish Fault and splays off the main fault may have played a metallogenic structural role in having concentrated mineralization in the area. One of the zones measures 2.3 km long and has some moderate conductors in it. A very strong conductor was also identified just north outside of the Property boundary, so additional claims were staked to include this conductive zone.

The I-Zone, which is located in the most western-northwestern extremity of the Goldcreek Property, displayed only one isolated EM anomaly located about 200m to the west. This represents a prospective target area since the I-Zone is characterized by a syenitic dyke with quartz-healed ladder veins. One grab sample from surface contained 3% - 5% pyrite and returned an assay of 6.46 gpt gold. A diamond drill hole in 1995 was collared to intersect this gold-bearing dyke and 134.5ft of core (true width of around 12ft - 15ft) assayed 0.126 opt gold. This EM target may be indicative of a higher concentration of pyrite and hence may be an extension of the I-Zone.

A field crew is now being assembled and the exploration program for the upcoming field season is being planned. Since the property is so large, the initial plans will be to conduct prospecting and mapping in the areas where there are good geophysical targets. Selective grids will be cut in the most prospective areas followed by Induced Polarization (IP) and Beep Mat surveys. Mechanical striping and channel sampling will then be undertaken which will give the exploration team an opportunity to better understand the structural features and mineralization on surface. These activities will be followed by a diamond drilling program.

The Qualified Person supervising the work being carried out on the Burchell Lake and Goldcreek Properties is Joel Scodnick,P.Geo., a consultant to Mengold Resources Inc. and the President & CEO of Helm Exploration Ltd.

Mengold entered into an agreement with Helm Exploration Ltd. on April 3, 2006, to earn up to a 100% interest in the 1,700-hectare (4,200-acre) Burchell Lake Property and the 5,700-hectare (14,100-acre) Goldcreek Property which are both located in the Shebandowan area west of Thunder Bay, Ontario. Each of the properties are subject to a 4-phase earn in over 3 years and a 3% net smelter royalty. The properties are prospective for gold and Volcanogenic Massive Sulphide ("VMS") style base metal (copper, lead, zinc, and molybdenum) mineralization. Both properties are qualified by independent NI-43-101 Reports conducted by Geologica Consulting Group and the Reports are available on SEDAR.

Mengold Resources Inc. is engaged in mineral exploration, primarily in eastern Canada. The Company is exploring the copper-zinc prospective Mountain River Property, near Sainte-Anne-du-Lac, where a drilling program was recently completed and the PGM-chrome prospective Thetford Property in the Eastern Townships of Quebec. Mengold recently acquired the Burchell Lake and Goldcreek Properties in the Shebandowan area of Ontario. Mengold has 15,609,037 common shares outstanding (21,119,487 shares fully diluted), not including the shares issuable under the Helm transaction.

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Contact Information

  • Mengold Resources Inc. - In Canada
    Douglas G. Reeson
    C.F.O. and Director
    (416) 533-0323
    (416) 533-2890 (FAX)
    Helm Exploration Ltd. - In Canada
    Joel Scodnick
    President and Chief Executive Officer
    (705) 522-4439
    (705) 522-8694 (FAX)
    Mengold Resources Inc. - In Europe
    W. Ian L. Forrest
    President and Director
    011 41 22 809 9511
    011 41 22 899 9501 (FAX)