Houston Lake Reports 3rd Quarter Results
Houston Lake Mining Inc. (TSX VENTURE:HLM), is an advanced exploration company which has prospected and strategically acquired contiguous gold properties in Northwestern Ontario with the objective of transitioning into production. HLM also seeks platinum group and rare metal deposits in Northwestern Ontario. Today, HLM filed its report for the third quarter, and nine months ended December 31, 2010.
Third Quarter Highlights:
HOUSTON SECURES $10 MILLION FINANCING COMMITMENT AND FILES ANNUAL INFORMATION FORM AS A FIRST PRE-REQUISITE OF THREE
On September 22, 2010 Houston entered into an agreement providing for an Equity Line Facility ("ELF") with Dutchess Opportunity Cayman Fund Ltd., a fund managed by Dutchess Capital Management, II LLC. Under the terms of the ELF, Dutchess has committed to provide up to $10 million of capital during the next three years, at HLM’s discretion, through the issue of common shares. HLM will file an annual information form (“AIF”) and short form prospectus in Canada, which will be subject to the required corporate and regulatory approvals, including that of the TSX Venture Exchange and the Ontario Securities Commission. An AIF was filed with SEDAR on November 22, 2010 and can be viewed at www.houstonlakemining.com.
On November 22, 2010 Houston submitted an Annual Information Form (AIF) to the exchange. The AIF is a prerequisite of the Equity Line Facility (“ELF”), Houston is currently working on an exemptive relief form and when/if approved by authorities HLM will then be required to file a short form prospectus.
HOUSTON DISCOVERS NEW GOLD ZONE AND INTERSECTS FURTHER MINERALIZATION
In August, HLM reported the results of 100 channel samples taken from 22 lines of surface exploration work which identified a potential new Robertson gold mineralized zone. The best sample result was 2.97 g/t Au over a length of 0.43 meters from Line 14. This interval was from a longer sample of 1.22 meters averaging 2.13 grams per tonne.
In September, HLM commenced a Phase I, 1000 meter, 8 hole Robertson Prospect Exploration drill program.
Drill hole WC10-05 intersected 22.60 Metres of 2.047g/t Gold Including 4.30 Metres of 4.740 g/t. Further drilling is independently recommended and will commence in Q4 March 2011.
EXPLORATION EFFORTS ON WEST CEDARTREE
A strategic grab sampling program commenced IN Q3 and was designed to test some known geophysical anomalies that have never been investigated on the West Cedartree Gold Project (WCGP). The target areas for the sampling were a number of untested positive chargeability anomalies similar to the anomaly that defines the Robertson Gold Zone, a shear zone that hosts the historical Gold Sun adits, and historical trenches on the McLennan Property.
Prospecting samples encountering trace to 7.030 g/t gold in the vicinity of the Robertson Gold Zone indicates the possibility that the chargeability anomaly that defines the zone may continue northward and southward and are offset approximately 200 meters by lateral faulting to the east. Anomalous results have been obtained from an indicated strike length of at least 200 meters and suggest the possibility of a 400 meter length at surface.
A prospecting sample encountered on the Gold Sun Property encountered a 10.794 g/t gold sample. The location of the sample is near the volcanic/gabbro contact similar to the McLennan Gold Zone setting to the northeast. This grab sample suggests a potential strike length of 3.3km. It has been independently recommended that follow up geophysics and drilling from the historic McLennan Gold Zone be conducted.
FINANCE
Houston issued 3,125,000 Flow-Through Units priced at $0.16 per unit for gross proceeds of $500,000 through a non-brokered private placement.
“We have taken logical steps in our corporate affairs and in our exploration efforts, specifically on the West Cedartree Gold Project during this period. With the $10 Million financial commitment from Dutchess, HLM continues to work towards being positioned with exceptional access to funds, numerous exploration targets built from historic and NI 43-101 resources, and experienced management in order to properly guide HLM’s growth initiatives.” said Trevor Walker, President of Houston. “The current goal on the West Cedartree Gold Project is to identify the resource potential based from six known gold zones as fast as possible with the goal of then building economic ounces through guided drilling. Further attention is being brought to our project as Northwestern Ontario’s gold exploration is quickly being an exploration focus due to other corporate consolidation and exploration successes of many gold exploration companies as of late.”
The current program on the West Cedartree Gold Project is aimed at outlining and gaining an understanding of mineralizing controls and features to realize the resource potential by working out from the known historical and NI 43-101 compliant gold zones. To date almost all drilling on the project has been near surface and all resources remain open.
Exploration outlays, salaries and other outlays were funded from treasury. During the nine months ended December 31, 2010 Houston invested $566,901 in the mining properties. A total of $413,569 was spent in acquisition and exploration costs for the Dubenski property. A total of $141,565 was spent on exploration for the West Cedartree property (specifically on the newly discovered Robertson Gold Zone) and $6,740 was incurred on the Pakeagama Lake Rare Metals Project.
Expenses for the nine months ended December, 2010 were $347,609 compared to $442,237 for the same period of the previous year.
For the nine months ended December 31, 2010 Houston incurred a net loss of $508,806 ($0.012/share) compared to a net loss of $446,239 ($0.013/share) for the same period ending in 2009.
The Company’s current rate of cash consumption, excluding expenditures on work programs, is approximately $40,000 per month.
OUTLOOK
Houston will continue to focus on exploration and development of the WCGP.
During the nine months ending December 31, 2010, 1500 meters has been drilled on the Dubenski Property and 1000 metres has been drilled on the newly discovered Robertson Gold Zone.
We have initiated investigation of surface targets at Dogpaw and along the Angel Hill gold trend especially in the vicinity of the Robertson Gold Zone. More specifically we have discovered geophysical analysis and grab sampling that the offset extensions of the Robertson Gold Zone provide for a potential 250m of strike length. Diamond drilling is currently being planned for March 2011 in order to further define the potential size and controls of the mineralized zone.
The company expects to commence drilling on the historic McLennan Gold Zone in order to duplicate and confirm historical drilling and trenching done there. In addition to the confirmation of the historic mineralized zone, Houston will test the potential strike extensions of the Gold Zone as they appear to be open.
Houston Lake’s overall goal is to become a producing company.
About Houston Lake Mining Inc.
Houston Lake is an advanced, vertically integrated resource exploration company. The Company is actively exploring for gold, platinum group metal and rare metal deposits in Northwestern Ontario with a strategic focus on the West Cedartree Gold Project. Houston Lake’s objective is to become a gold producer by surface mining its West Cedartree Gold Project and developing its 100% owned and optioned properties. The Company has a total of 49,532,637 common shares issued and outstanding exclusive of the announced financing. For additional information, please visit us at www.houstonlakemining.com.
Forward-looking Statements
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This release includes certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company’s registered filings what are available at www.sedar.com.
