GOLDEN LAKE PROPERTY
The Gordon Lake Property consists of two Mining Leases totaling 378.4 hectares (935 acres) and seven mineral claims covering an area of 3,117 hectares (7,701 acres). The property was acquired in 1996 from Giant Bay Resources Ltd. (“Giant Bay”) who reportedly conducted approximately $5 million of historical exploration work on the property between 1983 and 1987.
Work included over 40,000 feet of diamond drilling, approximately 2,000 feet of percussion drilling and 3,380 feet of underground development work on three levels. The property is hosted by a turbidite sequence and lies within the Slave structural province, which hosts productive gold deposits in the Northwest Territories.
Mining operations in Canada are subject to extensive regulation by provincial and federal governments. The development of mines and related facilities is contingent upon government approval which must be obtained through statutory review processes. All aspects of the Company’s field operations are subject to environmental regulation and generally require approval by appropriate regulatory authorities prior to commencement. Any failure to comply could result in fines and penalties.
With all projects at the exploration stage, the financial and operational impact of environmental protection requirements is minimal. Temporary work camp, surface exploration and temporary approval of water use permits are obtained as needed when exploration programs are undertaken. Permission for exploration-stage projects is neither time consuming nor costly. All claims are in good standing. There are no environmental liabilities except as disclosed herein to which the property is subject. The following property description is taken largely from qualifying report completed on July 31, 1995 by Taiga Consultants1 in support of the acquisition of the property by Bishop. Bishop has undertaken no significant exploration on the property since that date. The Taiga report was completed prior to the coming into force of NI43-101. Parts of the report uses reserve/resource definitions which are not compliant with NI43-101. Parts of the report on geology and description of the mineralization are relevant and consistent with descriptions and style mineralization in region.
The Gordon Lake property consists of Crown leases 3248 and 2450, which cover the area of the previous LYNK ¼ and MAHE claims. The Gordon Lake property is owned 100% by Bishop, subject to a 1% royalty on production.
Location, Climate and Access
The Gordon Lake property is located approximately 50 miles north of Yellowknife, Northwest Territories, Canada. The claims are on Knight Bay on the southwest side of Gordon Lake. During the winter months the property is accessible by truck via a winter road originating at Tibbit Lake, which is connected to Yellowknife by a year-round road (total distance is 85 miles). This year-round road is called the Ingraham Trail and runs 50 miles from Yellowknife. The winter road, which is useable from December to April, traverses Gordon Lake at approximately two kilometers from the property camp, and continues north to the Salmita mine and the Lupin Mine, both in the barren lands. The property is also accessible by ski-equipped aircraft ranging in size from a Cessna 185 up to a DC-3 with a 7,000 pound payload. The property is accessible in summer, when the lakes are free of ice from late May to mid-October, by floating equipped aircraft ranging in size from a Cessna 185 with an 800 pound payload, up to a Twin Otter with a 4,000 pound payload.
Yellowknife has trucking firms with equipment to build and maintain winter roads as well as to truck major equipment and supplies to the property or ore from the property to a mill in Yellowknife.
The climate of the Gordon Lake area is severe, with temperatures ranging from about +30ºC in summer to below -40ºC for short periods during the winter. Very cold temperatures can be encountered between November and March. Annual rainfall in the area is about 36 inches.
The topography of the Gordon Lake Property is typical of the Canadian Shield, with low rolling hills and numerous lakes and a poorly integrated drainage system. Elevations range from 294m at Gordon Lake to about 320m, making a total relief of 26 m.
The Gordon Lake property lies within the Archean Slave structural province which is the premiere exploration area for gold deposits which have been productive in the Northwest Territories. Gordon Lake lies wholly within Yellowknife Supergroup turbidites which have been metamorphosed to greenschist facies. This turbidite succession has undergone several phases of intense folding and faulting. The turbidites host all of the quartz vein gold deposits and occurrences on the property.
There are approximately 135 known quartz vein gold showings hosted by turbidites within the Slave province. Historically, a total of 16 mines have produced gold from this geological environment. Four mines (Thompson Lundmark, Bullmoose, Camlaren and Ptarmigan) recorded past gold production from turbidites and account for over 85 % of production from this geological setting. According to Padgham (1986) “At the Gordon Lake deposit, auriferous quartz veins are sufficiently concentrated that open pit is being envisaged.”
These gold deposits have a simple mineralogy consisting mainly of quartz and free gold with local concentrations of carbonate minerals and less than 1% sulphides. Veins either cross-cut bedding or are conformable.
Gold mineralization is epigenetic and occasionally deformed. Gold mineralization tends to concentrate near the axes of major folds in open fractures or shears.
While there are a large number of gold occurrences in turbidites within this area, few have been of sufficient size and tonnage to be mined successfully.
History of Exploration
The Gordon Lake property has had a long history of exploration since its discovery by prospectors in 1937. The property is also known as the Mahe property.
Relevant work carried out from 1983 to 1987 by Giant Bay consisted of the following: During the years 1983 to 1986 a grid was cut over 2/3 of the Gordon Lake property, a magnetic geophysical survey was completed over the whole grid and a VLF geophysical survey over half of it, the property was mapped and prospected in detail, old trenches were sampled and evaluated, 35,250 feet of surface and 2,680 feet of underground diamond drilling and 1,630 feet of percussion drilling were completed, 1,600 feet of 9΄x13΄ decline, 440 feet of 8΄x5΄ drifts and over 800 feet of 5΄x7΄ in two raises were excavated.
The above-mentioned work led to the discovery of 12 gold-bearing zones, where varying amounts of work were done. The bulk of the work, though, was carried out in the No.1 Zone.
In 1987, Giant Bay completed a total of 4,248 feet of NQ-sized diamond drilling, distributed among the gold-bearing zones as follows: No.1 Zone 1,662 feet No. T-11/T-2 Zone 920 feet Salish 1,666 feet Total 4,248 feet
In addition, 440 feet of 8΄x5΄ drifts and 289 feet of 5΄x7΄ raises were excavated in 1987, all in the No.1 Zone.
Expenditures carried out by Giant Bay on the Gordon Lake property since 1983 were approximately as summarized below:
1988 to date$0.1 million
Total Expenditures $4.9 million
In addition to the above exploration expenditures, 250,000 fully paid shares of Giant Bay were issued at a deemed price of $1.85 per share (consideration of $462,500) to reduce the overriding royalty from 5% to 1%. As a result, the total of expenditures and share consideration since 1983 was approximately $5.4 million. This figure excludes any shares issued or cash expended for the Gordon Lake property prior to 1983.
Three periods of folding and two different cleavages have been recognized in the Gordon Lake property. The main structures are isoclinal folds characterized by bedding and axial-plane cleavage dipping vertically to very steeply. The sediments have been regionally metamorphosed to the upper greenschist facies.
In most cases bedding is conspicuous but, in a few localities, it is obscured to the extent that individual beds are difficult to recognize. The most typical stratum in the assemblage consists of an arenaceous base grading to a silty or muddy top and it is this gradation of grain size that permits the determination of stratigraphic tops and therefore the recognition of folds in the rocks.
The beds all dip steeply with many being overturned; the prevailing trend is northeast in the eastern part of the area and northwest in the western part.
Highly-irregular quartz veining is very common within the Gordon Lake property. Two types of quartz are recognizable macroscopically: grey quartz and white quartz.
Grey quartz varies in color from light grey to bluish grey and is, at least locally, cut and injected by white quartz veins. In most places white quartz has a more erratic distribution than the grey variety and often shows evidence of emplacement by forceful injection. The white quartz commonly occurs as isolated blow-outs in low pressure zones and in tension gashes without any discernible access conduit, strongly suggesting local remobilization and emplacement during folding.
Gold mineralization on the property is spatially associated with quartz “bodies” and in places, with black, carbonaceous, fine-grained siltstones in zones up to 110 feet wide. The gold is mostly coarse grained with common occurrences of visible gold. The gold bearing zones are located in areas of structural complexity where drag folding is often present.
The quartz “bodies” occur as tabular veins, as equidimensional “blow-outs”, and as strata-bound and sometimes stratiform (up to 100 ft wide in the No.1 Zone) siliceous zones (see Caelles, 1987)3. To date, gold-bearing quartz “bodies” have been found in thirteen different zones, namely: No.1, No.2, No.3, No.4, Bulge, VIV 8, VIV 15, T-11/2, T-15, T-32, Wooferine, Chane and Salish (Caelles, 1987)4.
Most work including the underground development was focused on the No. 1 Zone at Kidney Pond that contains an auriferous quartz vein and breccia system hosted in Precambrian Yellowknife Supergroup turbidites. The No. 1 Zone has a known strike length of 1,000 feet and its width varies between 20 and 100 feet, averaging about 100 feet. The zone has been explored to the –600 foot level. Mineral Resource Estimates for the No. 1 Zone have been calculated by various professionals over the years. These historical mineral inventory estimates were calculated before the coming into affect of NI 43-101. None of these estimates complies with NI 43-101 reserve / resources reporting definitions.
The No.2 Zone extends intermittently for over 800 feet along strike, of which about 700 feet are on a ridge with continuous outcrop. It has been tested with 8 diamond drill holes and 21 percussion holes, with some excellent results as listed below:
Drill Hole # Interval (ft) (ft) Length Assay (ounces/ton gold)
4 0 ft. to 5 ft. 5 feet 0.37
5 0 ft. to 10ft 10 feet 0.50
12 5 ft. to 15 ft. 10 0 feet 0.55
18 15 ft. to 20.5 5 5 feet 0.55
This zone appears to contain short lenses or shoots, some of which could provide small tonnages of high-grade ore
The T11/2 Zone is 800 feet long as indicated by previous trenching, grab sampling and diamond drilling. However, it appears that the zone pinches and swells, and may therefore only contain shoots of ore grade material. Two previous diamond drill holes both intersected approximately 8 feet averaging 0.40 ounces of gold/ton.
Although the Wooferine quartz veining zone has been proven to be continuous for 300 feet between the existing drill holes, it appears to be highly irregular and “poddy”. One drill hole intersected 1.69 ounces of gold per ton over 4.4 feet at a depth of approximately 50 feet.
The Salish No.1 Zone is exposed for 100 feet along the strike by three trenches. The largest trench extends for 50 feet, of which the three trench samples of the southern half averaged 1.58 ounces of gold per ton (assays cut to 3 ounces/ton) over a width of 3.1 feet.
The Salish No.2 Zone is adjacent and parallel to the No.1 Zone in the same quartz zone. Six diamond drill holes were drilled in the No.1/No.2 Zone in 1987, totaling approximately 1,500 feet. Three of the better intersections are shown below:
Drill Hole # Interval Length Grade (feet) (feet) (oz of gold/ton)
S87S111 25.3΄ to 31.1΄ 5.8΄ 0.47
S87S113 47.0΄ to 52.2΄ 5.2΄ 0.91
S87S114 199.4΄ to 204.4΄ 5.0΄ 0.23
The quartz-rich Salish No.3 Zone, which is located 1,450 feet southeast of the No.1 Zone, outcrops for a length of 180 feet. At the northwest end it disappears under muskeg, and at the southeast end the zone is covered by water of a small bay of Gordon Lake. Some of the better assay results from trenching and diamond drill holes are shown below:
Single Assay Width Gold Assay (ounces/ton)
Trench 1 5.3΄ 0.28
Trench 2 5.0΄ 1.97
Trench 3 5.2΄ 0.28
Trench 4 6.6΄ 0.48
Trench 5 7.0΄ 1.32
Drill hole 4 1.5΄ 1.58
Summary of Mineral Resources
There are no Mineral Reserves present on the property. Previous historical estimates were completed before the coming into force of NI43-101. None of these estimates complies with NI 43-101 reserve / resources reporting definitions. No up to date Mineral Reserve / Mineral Resource estimates are available for the property.
As noted earlier in this report, Bishop believes there is potential for establishing a mineral inventory in the No.1 Zone. There are many areas with drill intersections of greater than 0.50 ounces of gold per ton that remain untested.
In addition to the No.1 Zone, there is a good chance of expanding the mineral inventory on the other zones present on property. Exploration work at the Gordon Lake property has found gold-bearing mineralization in over 15 separate areas, of which only seven have been examined in any detail. Competition
The main competitive areas in mineral exploration and development are competition in acquiring prospective lands for exploration and development projects, and competition for investment capital with which to fund such projects.
Bishop’s management has extensive experience in mineral exploration in Western Canada and as a result, has been more than competitive in acquiring quality ground for exploration and development projects.
The nature of competition for investment capital has changed in recent years. Despite this increased competition, Bishop has been successful in raising sufficient funds over the years to continue to advance its core exploration projects.