McKenzie Gray Gold / Silver Deposit

Background
The McKenzie Gray project is located within six Crown Leases and 23 mining claims totaling 1,143 acres near Mine Centre, Ontario. The property contains two important known gold occurrences, the McKenzie Gray and Jolly Roger Veins, as well as 1,500 m of intensively sheared zones up to 100 m wide that are associated with the large cross-cutting Finger Lake Fault. 

Exploratory drilling by the previous property owner in 1988 revealed gold-sulfide mineralization in a lense plunging to the 100 metre level, with the vein remaining “open” at depth. A reserve estimate made by Ovalbay Geological Services Inc. in a report dated December 31, 1992 (not compliant with NI 43-101), reported 98,702 tons grading 0.30 gold equivalent ounces per ton in all ore categories (totaling 29,611 gold equivalent ounces). 

Q-Gold Resources Ltd. completed a 12-hole diamond drilling program in 2009 and an 18-hole program in 2010. These drilling programs resulted in the extension of the mineralized zone both at depth and over its strike length. The structure remains open in all directions.

Geology
The property is underlain by northwest and northeast trending shear zones that intrude both tonalite-trondhjemite rocks of the Bad Vermilion felsic intrusion as well as occupy a lithological contact between the felsic rocks mentioned above and layered gabbro-anorthosite rocks of the Bad Vermilion mafic intrusion. The McKenzie-Gray shear zone is a significant northwest trending structure that comprises the McKenzie-Gray Vein and the closely related East Vein. The East Vein is situated on the structural footwall of the McKenzie-Gray Vein. The shear zone trends 315° and dips 65° to 75° to the southwest. It continues for about 200 metres along strike where it intersects the prominent northeast trending Finger Lake – Island Bay shear zone and associated Jolly Roger Vein. The intersection of these two major structures defines an excellent target for the concentration of mineralizing hydrothermal fluids.

The Jolly Roger Vein is 2-3 metres in width and is hosted by a mafic dike within a highly sheared, altered and folded zone accompanying the Finger Lake Fault. Both this large fault and the northwest/southeast cross-cutting West Bad Vermilion Shear, converge on the McKenzie Gray property. This confluence provides widespread (up to 100 metres in width) shearing, sulfidization and silicification zones on the property, indicating the passage of altering hydrothermal fluids through the zones, many of which are gold-bearing. 

Recent Activity
The Phase I program (2009) consisted of 12 “fan” holes drilled from 5 closely spaced (15m) locations. The program evaluated and confirmed the northwest extension of the McKenzie-Gray quartz veined shear zone and related gold, silver and base metal mineralization between 15 and 60 metres northwest of an historic open cut. The McKenzie-Gray vein had been the subject of a 27-ton bulk sample taken in 1984 and diamond drilling in 1992 by the previous owners (see Q-Gold press release dated August 18, 2009). Phase I results successfully confirmed and extended the mineralized zone indicated by previous drilling.

All 12 holes in Phase I encountered significant sulfide mineralization, with eleven of the 12 encountering significant gold values.

Highlights of the Phase I drilling program include the following:

  • Hole QMG09-04 yielded 11.39 g/t Au and 43.69 g/t Ag over a core width of 5.5 metres;
  • Hole QMG09-05 intersected the McKenzie-Gray Vein which returned 16.68 g/t Au, 20.80 g/t Ag and 2.06% Zn over a core width of 9.32 metres at a vertical depth of 55 metres. [The hole was drilled in the vicinity of Hole NG92-04 (Nipigon Gold) that reported intersecting 2.92 metres grading 10.94 g/t Au, 90.17 g/t Ag and 2.68% Zn (this intersection is non-compliant with the requirements of NI 43-101 and therefore is not to be relied on for any purpose).];
  • Hole QMG09-09 returned 11.37 g/t Au, 68.0 g/t Ag and 16.96% Zn over a core width 0.62 metres at a vertical depth of 30 metres;
  • Hole QMG09-12 returned 1.57 g/t Au, 15.45 g/t Ag and 1.09% Zn over a core width of 6.28 metres including 8.09 g/t Au, 50.27 g/t Ag and 2.88% Zn over a core width of 0.86 metres at a vertical depth of 75 metres.

In 2010, Q-Gold completed Phase II of the McKenzie Gray Exploration Program. This Phase consisted of a 3+ km IP survey and an 18-hole diamond drilling program.

In the fall of 2010, Q-Gold completed a Phase II diamond-drilling program on the McKenzie Gray property consisting of 18 drill holes totaling 2,612 metres. Results from 12 of the 18 holes have been received. 

Highlights from the first twelve drill holes of the Phase II drilling program include the following:

  • Hole QMG10-03 include 9.25 metres of 179.79 g/t Ag, including 5.4 metres of 293.93 g/t Ag;
  • Hole QMG10-04 intersected 152.72 g/t Ag over 2.9 metres;
  • Hole QMG10-07 yielded 82.82 g/t Au over a core width of 0.15 metres;
  • Hole QMG10-10 returned 112.49 g/t Ag over 3.45 metres, including 1.1 metres of 295.69 g/t Ag; and
  • Hole QMG10-12 returned 10.41 g/t Au, 156.15 g/t Ag and 4.46% Zn over a 0.85 metre interval.

Assay results for the remaining drill holes are forthcoming.

Q-Gold is very pleased with its recent achievements on McKenzie Gray and is looking forward to further exploration and the possible extension of this high-grade gold and silver system in Phase III, later this year.

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