American Bonanza Gold Corp


The high-grade gold mineralization at Fenelon occurs in silicified, sub-parallel, east-southeast-trending, near-vertical shear zones, which range in thickness from approximately one-half metre to six metres. In the high-grade zones discovered to date, gold occurs as free grains with pyrrhotite, chalcopyrite and pyrite. Host rocks are basaltic volcanic flows and mafic to felsic intrusive rocks. The entire group of host rocks has been altered to the greenstone-facies mineral suite of sericite, chlorite, biotite, carbonate and quartz. There are no natural rock outcrops in the area of the deposit and geological interpretation relies on drilling, the Taurus bedrock exposure, underground development and bulk sampling. After removal of four to eight metres of glacial till, the mineralized zones have been exposed at the bedrock surface over an area measuring about 200 metres by 65 metres.

The Fenelon deposit lies about two kilometres north of the east-west trending "Detour Break". The deposit structure is sub-parallel to, and probably a splay off this major regional fracture system. The Detour Lake mine and the Fenelon deposit are in similar structural relationships with the Detour Break. The three Abitibi structural "Breaks" (Detour Lake, Casa Berardi, and Cadillac) have spawned many mines in the region. The Detour Lake mine produced 1.7 million ounces of gold and was mined to a depth of more than two kilometres below the surface. The deepest drilling at Fenelon extends to about 250 metres and shows that the deposit is open to continuation at depth. Many of the existing operations in the region have discovered new ore bodies at deeper extensions below existing workings. Fenelon has additionally identified potential along strike and down dip, both in the Discovery Area and elsewhere on the property.

The near-vertical, competent high-grade mineralization at Fenelon can be easily mined using established underground mining methods. The gold is easily recovered with conventional extraction methods (recoveries of over 97 percent were attained with the 14,000-tonne bulk sample). Suitable custom milling facilities are available in the area to reduce the capital costs of start-up production.

Environmental concerns are limited and all permits have been obtained for the proposed feasibility study and mining test. Fenelon ore will not generate acid mine drainage. Also, very little waste will be mined or stored above ground. If ore is custom milled off site, environmental permitting and liability will be further reduced.