Lake Douglas Project

100% Paragon (earning in)

Target:  Volcanogenic Massive Sulphide (VMS) deposit (Cu, Pb, Zn, Ag, Au)

Highlights:

• Strong geological and geochemical similarities to world class VMS districts such as the Bathurst Mining Camp in northern New Brunswick.
• Large land position in under-explored volcanic belt in a proven mining district; seven drillholes on the property.
• Road accessible, excellent infrastructure nearby including Teck's Duck Pond Cu-Zn mine.
• Precious metal-rich massive sulphides discovered at the Lake Douglas Prospect
  • Grab samples up to 0.50% Cu, 32.4% Zn, 13.6% Pb, 180.0 g/t Ag, 0.74 g/t gold.
  • Trench samples of 0.49% Cu, 4.40% Zn, 5.40% Pb, 65.10 g/t Ag over 0.55 metres
  • Drilling intercepts of 0.39% Cu, 6.30% Zn, 4.19% Pb, 82.86 g/t Ag over 6.45 metres    
• Drill ready targets; numerous, untested “short-strike length” EM conductors with associated anomalous soils/till geochemistry and favourable rock alteration signatures. 

Property Information

The Lake Douglas property is located in central Newfoundland, 40 kilometres south-southwest of the town of Millertown.  Access to the property is by well maintained gravel road.  The property consists of 3 mineral licenses (298 claims) covering an area of 7450 ha (74.5 sq. km). The property is under option whereby Paragon can earn a 100% interest in the property by making cash and share payments over 5 years. The property is subject to a 2% NSR to the vendors of which 50% is purchasable. 

History

Previous exploration on the property was completed by Falconbridge and Noranda in the late 1980's and early 1990's. Noranda and Falconbridge completed geological mapping, prospecting, soil sampling and ground geophysical surveys. The work led to the discovery of the nearby Haven Steady prospect and zones of hydrothermally altered felsic volcanic rocks at the “Lake of the Woods” and along the “Haven Steady” trend.  Since 2006, Paragon completed airborne geophysics, geological mapping and prospecting, limited trenching and drilling (7 holes, 2062 metres) which led to the massive sulphide discovery at the Lake Douglas prospect.

Geology and Mineralization

The Lake Douglas property is located in the south-eastern most volcanic belt that makes up the Central Volcanic Belt in central Newfoundland.  The property is underlain by volcanic and sedimentary rocks of the Mid-Ordovician Red Cross Group that compare closely with sediment-rich VMS settings like the world-class Bathurst Mining Camp and Iberian Pyrite Belt.  The massive sulphide mineralization discovered at the Lake Douglas prospect appears to be closely associated with a regional scale argillite horizon that can be traced for a considerable distance to the southwest.  This argillite marker horizon may represent a depositional hiatus on top of a hydrothermally active volcanic substrate.

Lake Douglas Prospect – the area is underlain by a thick, steep to locally overturned sequence of moderately to strongly altered mafic and felsic volcanic and sedimentary rocks. The volcanic-sediment package is locally intruded by mafic dykes and is overlain by a thick sequence of variably altered, siliciclastic and tuffaceous sediments intruded by felsic dykes. Base metal mineralization within the felsic volcanic and sedimentary rocks consists of variable intervals of disseminated to stringer sulphide mineralization with local semi-massive to massive sulphide mineralized intervals.  Trenching in 2006 exposed massive sulphides at surface over a strike length of 60 metres with the following assay results: 0.49% Cu, 4.40% Zn, 5.40% Pb, 65.10 g/t Ag over 0.55 metres and 0.05 % Cu, 5.80% Zn, 10.80% Pb, and 106.20 g/t Ag over 0.60 metres.

Drilling in 2007 intersected semi-massive to massive sulphide mineralization grading 0.39% Cu, 6.30% Zn, 4.19% Pb and 82.86 g/t Ag over 6.45 metres in drillhole LD07-04.  The sulphide mineralization is hosted within the sedimentary-volcanic sequence and is similar to the massive sulphides exposed in trenching, but structurally higher in the stratigraphy.  Six other drillholes were completed along strike and down dip of drillhole LD07-04 and intersected zones of disseminated, stringer and local semi-massive to massive base metal sulphides with elevated to anomalous copper-zinc-lead-silver-gold mineralization over widths of up to 23 metres. The drill program tested the Lake Douglas prospect stratigraphy over a 600-metre strike length and to a depth of 290 metres.  The mineralization is open along strike and to depth.

Flexure / LOTW Prospect - the argillite horizon associated with the Lake Douglas Prospect can be traced for a considerable distance to the south-southwest.  Local, strong alteration signatures found along the horizon suggest that hydrothermal activity has been ongoing and there is potential for some significant sulphide pooling in these areas.  Geophysically, it is a challenge to differentiate between argillite and sulphide as both have similar conductivities.  However, there are some considerable variations in airborne EM conductivity along the horizon (ie. the Flexure Prospect and LOTW area) where the conductivity increases sharply for short intervals.  These represent priority target areas for follow-up.

LOTW North Prospect - A new EM anomaly (~ 200 metres in length) was detected by the 2007 airborne survey.  The anomaly occurs at a felsic / mafic contact and is associated with altered rhyolite anomalous in copper and zinc.  Historically, Noranda has focused some effort here because of anomalous rock, soil and lake sediment samples; however, no drilling was conducted as no EM target had been detected at that time.

Lake Douglas East Prospect - along the east side of Lake Douglas is a felsic volcanic belt that has been explored in the past by Falconbridge (eastern part of the project area - Haven Steady trend). The belt is known to contain voluminous felsic fragmental rocks that are variably hydrothermally altered.  The airborne EM survey has outlined a number of short strike length anomalies that have not been tested.  Many of these have been assumed to be graphite-related; however, most have interesting alteration zones associated with them.  As we see elsewhere, isolated graphitic horizons can quickly turn into massive sulphides as they may represent isolated basins where sulphides can pool. No drilling has been completed in this area.

Drill Results

2007 Lake Douglas Drill Results