Eagle Hill Exploration Corporation
TSX VENTURE : EAG

Eagle Hill Exploration Corporation

November 03, 2011 11:24 ET

Initial Mineral Estimate for Eagle Hill's Windfall Lake Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 3, 2011) - Eagle Hill Exploration Corporation ("Eagle Hill" or the "Company") (TSX VENTURE:EAG) is pleased to announce the completion of the first independent gold mineral resource estimate at the Windfall Lake Property (the "Windfall Lake Property" or the "Property") compiled in accordance with Canadian Securities Administrators National Instrument 43-101, by SRK Consulting (Canada) Inc. ("SRK").

Highlights

The gold resource estimation results indicate:

  • Higher grade mineral resource than the Company anticipated;
  • 48 percent of the Gold Resource is in the Indicated category;
  • Resource reported at a cut off of 3.0 grams of gold per tonne ("g/t of Gold"):
    • Indicated resource of 1.144 million tonnes at 9.10 g/t of Gold (344,000 Gold ounces)
    • Inferred Resource of 1.690 million tonnes at 6.70 g/t of Gold (364,000 Gold ounces)
  • Over 90 percent of the mineral resource lies within an area of 600 meters by 900 meters and within the first 450 meters from surface; and
  • Several of the zones remain open along strike.

The Mineral Resource Statement for the four areas of gold mineralization delineated on the Windfall Lake Gold Project is presented below:

Classification/Zone Quantity
(000 tonnes)
Gold Grade
(g/t)
Contained Gold
(000 ounces)
Indicated
Main Zone 1,144 9.10 335
East Extension Zone - - -
F17 Zone - - -
Outside Zones - - -
Total Indicated 1,144 9.10 335
Inferred
Main Zone 644 6.68 138
East Extension Zone 316 8.70 88
F17 Zone 188 7.51 45
Outside Zones 542 5.29 92
Total Inferred 1,690 6.70 364
* Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates. Reported at a cut-off grade of 3.0 g/t gold assuming an underground extraction scenario, a gold price of US$1,200 per ounce and metallurgical recoveries of ninety seven percent.

Commentary

"This is a good start," stated Brad Kitchen, President and C.E.O. of Eagle Hill, "it demonstrates that the Windfall Lake Property deposit has strong gold grades and immediate potential for growth. The strong grade gold resource, in broad mineralized zones that extend horizontally by up to 25 meters, was a surprise that will require future investigation of potential mining methods while the Company continues to expand the deposit."

The Windfall Lake Property is located in Quebec, ranked by the Fraser Institute as one of the most favorable jurisdictions in the world for new mine development. Also favorable to mine development, is the Property's significant infrastructure including: year round road access, a 58 person camp, a recently constructed 1,450 meter underground ramp that is 5 meters in diameter, two power lines traversing the Property and close access to skilled contractors.

The Company is currently drilling a 25,000 meter program that will test the extensions of the known zones of gold mineralization and several drill targets located on strike of the gold zones along the Property's 7.5 km long gold-bearing structure. Most of the zones are open along strike and, based on the Company's geological interpretation that incorporates SRK's extensive work, the Company has identified zones where drilling can rapidly expand on this gold resource. Based on this resource statement, Eagle Hill's current discovery cost per ounce of gold is approximately $11.00 per ounce.

Technical Description

The reporting cut-off grade is based on the assumption that that the Windfall Lake Property gold deposit is an underground narrow vein deposit and that the potential ore would have to be hauled over 110 km to be processed. The mineral resources at the Windfall Lake Property are sensitive to the selection of reporting cut-off grade and the following global block model sensitivity table illustrates this:

Cut-Off Grade Global Block Model
Gold
(g/t)
Gold Ounces
('000 ounces)
Quantity
('000 tonnes)
Gold Grade
(g/t)
1.4 998 7,454 4.17
2.0 867 5,015 5.38
2.5 766 3,603 6.61
3.0 699 2,833 7.67
4.0 604 1,987 9.49
*The figures presented in this table should not be misconstrued as a mineral resource statement. The reported quantities and grades are only presented as a sensitivity of the deposit model to the selection of cut-off grade.

The gold mineralization occurs within a low pressure zone along a high strain deformation corridor trending northeast and characterized by variable hydrothermal alteration with pyrite stockwork and disseminated pyrite mineralization. Based on current exploration knowledge, the deposit was sub-divided into four areas for resource modelling. The bulk of the gold mineralization occurs in the Main Zone that was sampled by drilling on sections spaced at twenty-five to fifty metres. This zone of gold mineralization exhibits good lateral continuity and can potentially be traced along strike to the northeast (East Extension Zone), which is currently drilled on more widely spaced sections. The F17 Zone is a separate zone of gold mineralization characterized by well-developed shearing but located in a separate, sub-parallel deformation zone north of the Main Zone. Finally, other zones of gold mineralization surround the Main and East Extensions Zones, but present ill-defined lateral continuity at the current drill spacing. These Outside Zones exhibit similar features to the Main Zone gold mineralization and there is sufficient confidence in their lateral continuity to support resource evaluation.

The Windfall Lake Property database contains 467 diamond drill holes, 358 of which are located within the resource estimation area. Analytical data for the Property is primarily sourced from drilling completed between 2004 and 2011 by Murgor Resources Inc., Noront Resources Inc. and Eagle Hill. The drillhole data includes collar location, down-hole survey data, lithology codes and 48,230 sample intervals assayed for gold. The mineral resource statement is informed by a total of 88,374 metres of diamond drilling.

The mineral resources reported herein have been estimated using a geostatistical block modelling approach informed from borehole data. Gold grades were estimated by ordinary Kriging and compared with an inverse distance algorithm (power of two). To overcome the misbalance in drilling data between the various zones of gold mineralization, three approaches were used for the definition of resource domains considered to constrain tonnage and grade estimation. The bulk of the Main Zone and the F17 Zone were estimated using a traditional wireframe interpretation constructed from a sectional interpretation of drilling data. For the East Extension Zone and parts of the Main Zone that are sampled at wider drill spacing, extruded wireframes were modelled around drilling data to limit the lateral extent of the zones of gold mineralization and provide more conservative volume estimates. Finally, other areas of gold mineralization sampled by drilling and located outside the modelled wireframes for the Main, F17 and East Extension Zones were estimated using a conservative unconstrained approach, but subdivided based on the host lithotype.

The block model was created to cover the entire area of gold mineralization at the Windfall Lake Property. The block model was set on a grid of five by five by five metres. Two estimation runs were used to populate the block model with gold grades for zones constrained by hard mineralization wireframes, whereas only one pass was use for the other zones not constrained by hard mineralization wireframes. The first and second estimation passes considered full and twice variogram ranges.

Generally, for mineralization exhibiting good geological continuity investigated at an adequate spacing with reliable sampling information accurately located, SRK considers that blocks estimated during the first estimation run considering full variogram ranges can be classified in the Indicated category within the meaning of the CIM Definition Standards for Mineral Resources and Mineral Reserves. For those blocks, SRK considers that the level of confidence is sufficient to allow appropriate application of technical and economic parameters to support mine planning and to allow evaluation of the economic viability of the deposit. Those blocks located in the Main Zone can be appropriately classified as Indicated. Conversely, blocks estimated during the second pass considering search neighbourhoods set at twice the variogram ranges and all those blocks located in domains where the geological continuity can only be inferred should be classified in the Inferred category because the confidence in the estimates is insufficient to allow for the meaningful application of technical and economic parameters or to enable an evaluation of economic viability.

The mineral resource estimate was completed by Dorota El-Rassi, P. Eng. (APEO #100012348) and Glen Cole, P. Geo. (APGO #1416), of SRK, both "independent qualified persons" as that term is defined in National Instrument 43-101. SRK's Technical Report will be filed on SEDAR within the prescribed 45 days following the date of issuance of this news release.

Eagle Hill's Chief Geologist is Jean-Philippe Desrochers, Ph.D., P.Geo., a Qualified Person registered as defined by National Instrument 43-101 who has reviewed the technical information that this press release contains.

About the Windfall Lake Property

The Windfall Lake Property is comprised of 362 contiguous claims (over 12,000 hectares) in the Abitibi mineralized belt of northern Quebec. This area between Val-d'Or and Chibougamau is known for its gold and copper production and excellent infrastructure for exploration and mining. Historically, the Windfall Lake Property has had extensive historic grassroots exploration work. Along with it's independently acquired claims at the Windfall Lake Property. Eagle Hill has also signed options with Murgor Resources Inc., Cliffs Natural Resources Inc. (formerly, Freewest Resources Canada Inc.), and Noront Resources Inc. to acquire the Windfall Lake Property.

About Eagle Hill Exploration Corporation

Eagle Hill Exploration Corporation is a Canadian mineral exploration company focused on the exploration and development of gold and precious metal prospects. The Company is set to become an advanced stage gold exploration company with its acquisition of the Windfall Lake high grade gold project, located in Urban Township, Quebec, between Val-d'Or and Chibougamau. Eagle Hill seeks projects that contain or have potential to have large resource potential. The Company's website at www.eaglehillexploration.com and public filings at www.sedar.com provide additional information on its properties and other information with respect to its management and operations.

ON BEHALF OF THE BOARD,

P. Bradley Kitchen, President

FORWARD LOOKING STATEMENTS

This release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation, including predictions, projections and forecasts. Forward-looking statements include, but are not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion, growth of the Company's businesses, operations, plans and with respect to exploration results, the timing and success of exploration activities generally, permitting time lines, government regulation of exploration and mining operations, environmental risks, title disputes or claims, limitations on insurance coverage, timing and possible outcome of any pending litigation and timing and results of future resource estimates or future economic studies.

Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "planning", "planned", "expects" or "looking forward", "does not expect", "continues", "scheduled", "estimates", "forecasts", "intends", "potential", "anticipates", "does not anticipate", or "belief", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements are based on a number of material factors and assumptions, including, the result of drilling and exploration activities, that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for exploration is available as scheduled and does not incur unforeseen break downs, that no labour shortages or delays are incurred, that plant and equipment function as specified, that no unusual geological or technical problems occur, and that laboratory and other related services are available and perform as contracted. Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of gold; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in the company's publicly filed documents. Although both companies have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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