International Lima Gears Up For Drilling At The Heart of Canada's Latest Gold Rush

By Marc Davis, Managing Editor

International Lima Resource Corp. (TSX.V: LMG) is a Vancouver-based junior gold exploration company that is strategically located in the heart of Newfoundland's Botwood Basin. This emerging gold district has been one of the most actively explored areas of Canada during the last two years.

All told, the company has several projects in different geologically prospective areas of Newfoundland, including two newly staked properties. However, International Lima's near-term focus is the centrally located Botwood Basin where it has three jointly ventured properties which we will discuss in a moment.

But first, let's look at what makes Newfoundland one of Canada's last, largely-untapped frontiers for high-grade gold discoveries. Historically, central Newfoundland is only really known for its base metals deposits. They include the high-grade Buchans Mine, which became one of Canada's richest base metals mines during its prolific 52 years of production until its closure in the early 1980s. However, the complex geology of much of Newfoundland has until recently made the discovery of harder-to-find gold deposits more problematic, particularly prior to the advent of modern exploration technologies. This is a key reason why Newfoundland did not experience any systematic exploration for gold until the 1980s.

Now gold exploration in Canada is back with a vengeance. With a "rising tide" gold market and a government-supported resurgence in Canadian mineral exploration, Newfoundland is attracting a "new wave" of Canadian gold hunters. And they're finding that Newfoundland's hinterland is very accessible with good infrastructure. There are even government-compiled exploration databases at their disposal. For many of these intrepid geologists, who are more accustomed to slugging through inhospitable foreign jungle terrains or frozen tundra, the odds of finding gold on Canada's island province seem far less daunting. Furthermore, in recent years a new geological model of the mineral-rich Botwood Basin has been developed which many believe to be comparable to the renowned Carlin trend in Nevada. In fact, several styles of gold mineralization have recently been encountered over a widespread area within the Botwood Basin, primarily within three structural-stratigraphic trends.

These developments have precipitated a flurry of exploration activity by several major mining companies and more than a dozen juniors in the region within the last couple of years. The area is now seeing world-renowned mining companies like Placer Dome Inc., Agnico-Eagle Mines Ltd., Goldcorp Inc. and Meridian Gold Inc. vying for a headline-grabbing gold discovery. Typically, these majors are teaming up with astute junior exploration companies that are doggedly committed to making a name for themselves in this (until-recently) largely overlooked mineral belt.

They include International Lima's joint venture partner, Rubicon Minerals Corporation (TSX.V: RMX) This well-known junior mining company already has a reputation for identifying major gold systems of regional extent - ones that contain economically significant grades in district-scale targets. In this regard, the company boasts ownership of the prolific McFinley gold deposit in Red Lake, Ontario.

Now Rubicon is striving to duplicate this initial major gold find -- this time around in Newfoundland. The company has established a large land position at the Golden Promise Property in response to the discovery in June 2002 of gold-bearing quartz boulders, which were subsequently traced back to their local source. Diamond drilling led to the discovery of a gold-bearing vein system named the Jaclyn Zone. Of the 17 holes testing the zone to date, 15 have intersected visible gold-bearing quartz vein, including some high-grade intercepts. Indeed, additional exploration results suggest that a number of other high-grade gold veins also exist on the property, according to David Adamson, Rubicon's president and CEO.

Giving the Jaclyn Zone discovery some serious credibility is the involvement in this project of mining heavyweight Placer Dome Canada Ltd. Placer can earn up to a 55 per cent interest in the Golden Promise gold project by spending up to Cdn. $5 million on exploration over four years. This includes a commitment to an aggressive $750,000 work program over the next four months (ending in late February), including diamond drilling. And that could go a long way towards determining the economic potential of this new vein system discovery.

So what's the significance for International Lima of the Golden Promise's glitter? Well, the company has entered into joint venture option agreements with Rubicon Minerals to acquire up to a 60 per cent interest in a total of 2,515 mineral claims in the Botwood Basin. And this includes the Southern Golden Promise Property. The southernmost of the three land packages optioned from Rubicon Minerals, these claim blocks are situated within the same mineral belt as the Jaclyn gold discovery. The discovery zone is located only 25 kilometers to the northeast of the joint venture's nearest claim blocks.

In total, this highly prospective property covers 23,000 hectares and stretches over nearly 100 kilometres of this very prospective mineral belt. Moreover, each claim block hosts a cluster of anomalous till samples which were reported by the Newfoundland government in surveys conducted during the late 1990s. Significantly, gold particles in glacial till samples can be a direct indication that there is a gold source in bedrock which may be covered by the veneer of till. Moreover, there has been no systematic exploration of this part of the belt. In fact, anomalous gold values in these tills has never been investigated.

Additionally, the favourable geology of the Golden Promise discovery area also extends southwestwards along the belt and onto Lima's property, thereby offering some key advantages to Rubicon and International Lima in their efforts to zero-in on one or more gold vein systems. By employing the same exploration techniques that have yielded encouraging early-stage results on the Golden Promise Property, Rubicon and International Lima firmly believe in the odds of making similar discoveries to the Jaclyn gold find.

To this end, the joint venture partnership completed an aggressive $350,000 summer exploration program of prospecting, mapping and till sampling to locate gold-bearing boulder trains. Notably, the location and investigation of such telltale boulder trains was key to the discovery of the Jaclyn gold mineralized structure. Rubicon and International Lima are now planning to drill the targets that they identified by way of this proven methodology. Drilling is expected to begin this winter.

International Lima is also joint ventured with Rubicon on the Glenwood Break Property which is also at the heart of the Botwood Basin gold play. This expansive project comprising 1,477 claims over 36,925 hectares that occupy a central position in the mineralized belt that is referred to as the Mustang Trend. Regional till sampling and lake sediment sampling conducted by the Newfoundland government several years ago detected a large number of gold anomalies of significant size and grade in the locality of the property. They appear to cluster in three broad zones around and along the prominent linears on the property. Visible gold grains have been encountered in till samples that are associated with these anomalies.

A $350,000 summer exploration program was conducted to better investigate these anomalies. Two gold showings were encountered that were considered very encouraging. One such discovery involved gold-bearing angular boulders and outcrop with values running as high as 1.10 g/tonne gold in boulders and values as high as 2.10 g/tonne in outcroppings. The other discovery area returned a grab sample that was assays at 13.5 g/tonne gold. Meanwhile, an airborne geophysical program was also used to identify specific structural targets and associated gabbro bodies that are prime gold exploration targets for ground follow-up work. This work program is expected to begin shortly in order to prioritize drill targets for a winter drill program.

The third of the three joint ventured properties with Rubicon is the Wings Point-Titan Property which is composed of three smaller blocks of claims that lie to the northeast of the Glenwood Break and host a number of promising gold occurrences along the extension of a promising mineral belt. The three claim blocks that span over 2,950 hectares have good road access, like all of Lima's other properties. In terms of regional geology, the Wings Point-Titan area is an extension of the Glenwood Break/Mustang Trend which is being extensively explored by a number of other companies to the southwest.

In 2002, Rubicon Minerals trenched an extensive new mineralized zone on the property. Gold values of 47.0 g/tonne over 0.4 metres and 8.2 g/tonne over one metre were returned from chip samples, along with a 16.4 g/tonne value in one particular grab sample. The joint venture partners conducted an aggressive summer work program on this property to delineate gold vein system targets and small gabbro intrusions. Importantly, the location of gold-bearing boulders on surface and gold grains in glacial till are strong indications that gold veins are likely hidden by overburden. The identification of high-priority targets will allow the company to embark upon a near-term winter drill program.

Elsewhere in northeastern Newfoundland, International Lima also recently inked an option agreement to acquire a 100 per cent interest in the North Paul's Pond gold property. This property consists of 1,375 hectares and also benefits from good infrastructure. Previous drilling on an adjacent prospect by Noranda Inc. obtained values of up to 3.14 g/tonne gold over 2.5 metres and 7.54 g/tonne gold over one metre. These results, in conjunction with International Lima's North Paul's Pond assays, which include samples of boulders ranging from 4.2 g/tonne gold up to 10.8 g/tonne gold, indicate a large but poorly-explored regional zone of gold mineralization. The company plans an aggressive program of geophysics, soil sampling and float prospecting to prepare the North Paul's Pond prospects for drill readiness.

On a corporate note, the company has a strong management team. International Lima is presided over by Mark Morabito, a seasoned securities lawyer who has 10 years of experience in the public markets. He is also well versed in the mining business. Mr. Morabito is also involved in a number of successful private businesses and he is an independent director of several other public companies. The company also benefits from the involvement of Jack Marr, Senior Vice President of Exploration. A geologist with more than 30 years of experience in the financing, administration and management of natural resources companies, Mr. Marr is a well-respected figure in mining circles. Previously, he spent 13 years in various roles with Esso Minerals Canada and was the Regional Exploration Manager for Kennecott Canada Inc., He is also presently the Vice President of Exploration for Geodex Minerals Ltd.

Another key director is Robert Weicker, a geologist with 25 years of exploration and mining experience. He was previously the Manager of Exploration for Newhawk Gold Mines Ltd. and the President of Alto Minerals Inc. In the 1980s, Mr. Weicker was Chief Geologist at Lac Minerals Ltd. during which time he managed what was at the time the largest gold mine in Canada, the William's Mine. He has also served as Manager of Exploration for Newhawk Gold Mines Ltd. and as President of Alto Minerals Inc. Mr. Weicker has been instrumental in the development of several North American mines.

Rounding out the company's core management team is fellow director, Stewart Wallis. A geologist with over three decades of experience, he has been involved in a number of major discoveries, including the Black Pine gold deposit in Idaho, the New World gold deposit in Montana and the Nixon Fork Gold Mine in Alaska, as well as several gold deposits in Canada. He has also held senior positions with such mining heavyweights as Noranda Exploration Inc., Cominco Ltd., and Consolidated Nevada Goldfields Corporation.

International Lima is also fortunate to benefit from the consulting services of Garfield MacVeigh. The Chairman of Rubicon Minerals, Mr. MacVeigh has been the driving force behind Rubicon's development of the potentially world-class McFinley gold deposit in Red Lake, Ontario. He is also a strong advocate of Newfoundland's potential for rich gold discoveries. He currently resides in Newfoundland and plays a key role in directing International Lima's exploration program. On this note, it should also be reiterated that the Newfoundland government has created a very positive climate for mining, offering generous incentives to exploration and development-oriented companies. The province also offers excellent infrastructure in the form of modern ports, low cost power, an excellent highway system and a skilled labour force.

On a technical note, International Lima is a tightly-held stock that has yet to show up on the radar screens of most investors and stockbrokers, alike. The company has 10.17 million shares outstanding (15.27 fully diluted). Such a situation, matched with positive news flow, typically acts as a catalyst to higher share price valuations. However, since late August, the share price has been marking time in a Cdn. $0.30 to $0.40 price band on light volume. SmallCapMedia believes that the advent of near-term drilling this winter on its three key properties will provide a steady flow of positive exploration results in the coming months to fuel the share price's upwards trajectory in 2004.