Evolving Gold, Has Taken a Licking But It Keeps on Ticking

Peter Grandich
September 8, 2010 at 4:33 PM

It’s fair to say that Evolving Gold (TSX:EVG.V; OTC:EVOGF) has been frustrating at times. Past hiccups have left some shareholders tired and looking for the exit while new ones (like a major gold company) saw the cup half full and entered recently.

Evolving Gold Corp., as we know it today, began with a series of land acquisitions in late 2007 in Nevada, some by staking and some by an agreement with subsidiaries of Newmont Mining. The first drill holes undertaken by Evolving Gold were initiated that winter on two of the properties covered by the Newmont agreement.

At the same time as the company was acquiring properties in Nevada, Evolving Gold was negotiating to acquire the Rattlesnake Hills property in Wyoming. By January 2008 the required agreements were executed, and Evolving Gold gained control of the Rattlesnake Hills property. Evolving Gold initiated core drilling on the property later that summer.

The private placement by Goldcorp Inc. in July, 2010, was a major vote of confidence in the quality of Evolving Gold’s exploration properties and corporate leadership. It also ensured that Evolving Gold has the ability to continue its drill intensive style of exploration.

Evolving Gold’s leadership and exploration team, supported by a Board of Directors that has grown much stronger in 2010, believes in the power of sound geology and aggressive drilling in large scale gold systems. EVG focus its efforts in politically stable areas that have a history of supporting mine development. They’re discovering gold in places where the discovery can be efficiently moved to development and production. The Evolving Gold approach to exploration has produced results, two gold discoveries in three years.

The Focus Today:

Today Evolving Gold has 100% ownership of the Rattlesnake Hills property, about 5,600 hectares (13,338 acres) of Federal lode mining claims and State of Wyoming leases. Drilling started in 2008 and continues into 2010. It has demonstrated the large size of this gold system. Deep testing of a porphyry gold target has shown that the gold system is still strongly developed at depths of 1,000 meters or more.

In Nevada, in a major property acquisition effort, the company has acquired approximately 145 square kilometers (56 square miles) of mining claims and fee lands in the south end of the Carlin Trend in Nevada. Due diligence on several major land agreements in the Carlin/Humboldt projects was completed in August, 2010. Approximately one third of this major land holding in the Carlin Trend is tied to the Carlin Project and an agreement with Newmont, but it is important to recognize that two thirds of this land holding is 100% controlled by Evolving Gold in the Humboldt project. The company has also completed agreements for surface use and access on the fee lands. Drilling has demonstrated the presence of thick, high grade gold zones on this untested portion of the highly productive Carlin Trend.

The company also holds several other properties in Nevada and an early stage exploration property in southern Nunavut, but the major percentage of its exploration efforts are focused on these two properties, Rattlesnake Hills in Wyoming and Carlin/Humboldt in Nevada.

Results – Rattlesnake Hills:

Evolving Gold drilled 15 core holes at Rattlesnake Hills in 2008 and 78 core holes in 2009. These drill programs defined significant zones of gold mineralization at both North Stock and at Antelope Basin to the south. Some of the more interesting intersections included 146.3 meters at 2.92 gpt Au and 67.1 meters at 10.8 gpt Au at North Stock, along with 163.1 meters at 1.25 gpt Au and 76.2 meters at 1.77 gpt Au at Antelope Basin.

However, perhaps the most important exploration result from 2009 is from drill hole RSC-027, which intersected 30.5 meters at 1.89 gpt Au in a porphyry dike. This intersection included 15.2 meters at 3.11 gpt Au. Drill hole RSC-027 clearly demonstrated the potential for a well mineralized gold porphyry system at depth at the Rattlesnake Hills project. It suggested that the main zone of mineralization at North Stock, and perhaps at Antelope Basin as well, might be peripheral to the primary target on the property.

Much of the drilling in 2010 is designed to test outlying surface exploration targets and to provide infill and extension drilling of the known gold zones. However, a number of deep core holes, in excess of 1,000 meters, have been drilled or are still in progress to test the potential of the porphyry target first identified in 2009. These drill holes have intersected numerous zones of highly altered and mineralized porphyry as well as zones of stockwork veining and mineralized breccias. Assays for all these deep drill holes are still pending. Similar stockwork mineralization at the bottom of drill hole RSH-006 returned gold values of 14.3 meters at 2.21 gpt Au, with an individual 1.5 meter interval returning a gold value of 8.2 gpt Au. These gold values compare very favorably with developments such as Newcrest’s Cadia East copper-gold panel caving development in Australia, which has gold equivalent grades averaging approximately 0.9 gpt Au. The results they’re seeing from drilling the porphyry target at Rattlesnake Hills are encouraging, and they expect new assay results from this drilling shortly.

At this time, the company has four core rigs on the Rattlesnake Hills project. The drilling program has completed 32 drill holes, with four in progress and about 25-30 additional holes planned for the remainder of the summer. Drilling is expected to continue into early October.

Results – Carlin/Humboldt:

The first deep core hole, CAR-002, was drilled on the Carlin project to test a blind, geophysical target approximately half way between Newmont’s Gold Quarry mine and the Rain Mine to the south. The company had four main objectives for this drill hole, to determine if rock units favorable for gold mineralization were within drillable depths, to identify alteration typical of Carlin gold systems, to intersect favorable trace elements such as arsenic and antimony, and to identify the presence of anomalous gold. This drill hole was a major success in that it achieved all four objectives. This drill hole was the first to identify the presence of a strong, gold-bearing hydrothermal system in a neglected portion of the Carlin Trend. The gold mineralization was generally low grade, with the best interval being 35.1 meters at 1.21 gpt Au, but the thicknesses were encouraging. The fact that one 1.5 meter interval ran 11.9 gpt Au also indicated that the system had potential for higher grades.

The second deep core hole, CAR-007, intersected a thick, high grade gold zone, 18.3 meters at 11.7 gpt Au, with the highest gold grade in this drill hole being 1.5 meters at 57.9 gpt Au. This drill hole has confirmed the presence of what are potentially mineable thicknesses of ore grade gold mineralization in this under explored portion of the Carlin Trend. Additional wide spaced core holes have confirmed the presence of a large gold-bearing hydrothermal system.

The company has conducted additional geophysical surveys to refine targeting, and has defined over 24 targets on the Carlin/Humboldt projects. Of these, 16 are on land controlled 100% by Evolving Gold and are not subject to the Newmont agreement. The company has completed rotary pre-collars on both the Carlin and Humboldt project lands, and currently has two core rigs working on the combined projects. The first hole on the 100% Evolving Gold lands in the Humboldt project was initiated in June, 2010 immediately after executing one of the land acquisition agreements. This is an important step for the company in exploring its extensive Carlin/Humboldt land position. The company expects to continue drilling on the Carlin and Humboldt projects through the winter.

Summary:

Evolving Gold has made two gold discoveries in three years, both in large gold systems and each with the potential to grow into large scale gold deposits. Though the company has completed a large number of drill holes at Rattlesnake Hills, the true scale and potential of this system is just now starting to emerge. The company has initiated core drilling on its major land holding in the southern Carlin Trend in Nevada. This early stage drilling on the Carlin and Humboldt projects has identified gold mineralization of a thickness and grade that compares favorably with underground operations elsewhere on the Carlin Trend. Now with a strong Board of Directors, experienced and proven exploration leadership, and a strong treasury, Evolving Gold appears to have the ingredients needed for success.

http://www.grandich.com/2010/09/grandich-client-update-evolving-gold-has-taken-a-licking-but-it-keeps-on-ticking/

Dan