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Message: HRT..2010 Letter to Shareholders and Current Exploration Objectives
Houston Lake Mining -

Jun. 1, 2011 (Business Wire) -- Houston Lake Mining Inc.:


With another year of successful exploration behind us I believe we made fair progress towards achieving our corporate goals of refocus and change for Houston Lake Mining (HLM) in 2010 while building a solid foundation for 2011. We've added technical direction to our board of directors with the addition of Marian (Mike) Koziol, P.Geo. We have been decisive with exploration on our West Cedartree Gold Project, where we have recently adjusted our exploration targeting while also realizing the new discovery of the Robertson Gold Zone. We have also added to our land position and are taking steps to advance exploration on our Pakeagama Rare Metals Project.


For our new shareholders, our West Cedartree property is situated in the heart of the Kenora region which we believe has the potential to become the next gold mining district in northwestern Ontario. Over the past seven years, we accumulated a large land position and staked some of the most prospective properties in the region. While it has taken the company many years to assemble this land package we believe we have pulled together a property unmatched by anyone in the area. We have done this while keeping one overriding principal in mind-minimize shareholder dilution.

Since 2002, Houston Lake has been a mainstay in Kenora and has been building its land position to form its present day 100% owned and optioned West Cedartree Gold Project. Where others saw risk, we saw potential. West Cedartree consists of eight contiguous properties that comprise over 1,600 hectares and over six kilometres of key geology.

To view the map associated with this release, please click on the following link: http://www.usetdas.com/images/houston/houstonmap06012011.pdf


Looking internally to the large gabbro body that underlies a significant portion of the West Cedartree Gold Project had been the focus for exploration under previous management. The change in exploration management in 2010 has fostered a shift in the focus from looking internally at the gabbro body towards the contacts between the gabbro and the volcanics that lay to the east and the west. With renewed focus to the historical and limited exploration of the McLennan Gold Zone to the west, the Dogpaw and newly discovered Robertson Gold Zones near the eastern contact, HLM is confident in stepping out with exploration in order to assess the larger envelope in seeking the overall ounce potential of the West Cedartree Gold Project.

The Robertson Gold Zone was discovered first with prospecting, then with washing and channel sampling last summer. Later our suspicion was confirmed in the fall of 2010 with a Phase I, eight hole drill program which identified over 100m of strike length near surface. In early 2011 we tested the extensions of this zone through a Phase II, 7 hole program which extended the strike length to 200 meters and with hole R11-15 intersected 1.41 g/t gold over 38.7m including 8.8 g/t over 3m near surface. The results indicate that the Robertson Gold Zone not only extends for 200 meters along strike near surface, but is also and is open in all directions to the east, west and depth. Furthermore, the Robertson is intersected by a north-south shear that is also open in all directions and is to be followed up on. It is a very positive indicator that the multi-sheared contact area contains several siliceous zones as well as a pyritic and fuchsitic felsic porphyry from multiple holes where intercepts measured from 2 to 20 meters in length.

Currently, a prospecting program is being conducted on the West Cedartree Gold Project; we are striving to provide possible indications of further strike potential of all known gold zones and their relationship with each other on the project.

HLM has recently revisited the historic McLennan Gold Zone in early 2011. The mineralization at the McLennan Gold Zone is hosted in an altered shear zone near the contact between mafic to intermediate volcanic rocks, quartz-feldspar porphyries and the large gabbro body that underlies parts of the West Cedartree Gold Project. Historically, this mineralized zone was followed for 260 meters but exploration was terminated due to the low gold prices at the time leaving the zone open to the north, south and depth. Surface work by HLM in 2010 resulted in the discovery of a 10.79 g/t gold grab sample. The surface sample was taken 2.5 km southwest of the McLennan Gold Zone in an unexplored area near the same mafic-gabbro contact as the McLennan Gold Zone. This is a very positive indicator that this sheared contact area is a favourable target for gold and there is an impressive 6.6 km of geology to explore on strike to the north and south of the present-day McLennan Gold Zone. We have confirmed the historical drilling and have further encountered several silicious zones with some being mineralized. The mineralization occurs near surface and has been delineated by drilling for a strike length of 450 meters that is open in all directions. We are currently extending our grids and expanding our geophysical coverage of our new target and plan on covering this target by further prospecting in the very near future as a part of current operations on the project.

HLM has recently been making progress on the Dogpaw Lake Gold Zone by compiling and reviewing the data from previous management on the known gold-bearing veins. Of note, approximately 75% of drilling conducted by HLM has intersected values of 3 g/t or higher including the best drilled intercept yielded from drill hole DP07-42 with 7.5 meters of 29.9 g/t gold. High grades, and close proximity to the underexplored contact between the large gabbro body and volcanics provide an impressive 4.6 km of geology to explore on to the north and south of the present-day Dogpaw Gold Zone and makes it another key exploration target. In 2010 HLM reported up to 105 g/t gold from channel sampling in vein No. 5 on the Dogpaw Lake Gold Zone. The Dogpaw Vein No. 5 occurs 470 meters north-northeast of Vein No. 1, and occurs in the same gabbroic host rocks as the Vein No. 1, No. 2, No. 4 and No. 6 gold mineralizing system. Currently we are prospecting the Dogpaw with the intent of quickly conducting a trenching program to reveal the surficial relationship between the various known high grade veins on the property. Dependent on results, we will be quick to follow up with washing and channel sampling with the objective of a delineation program to at least continue with the existing targets based on past drilling on veins No. 1 and No. 2 and the immediate attention of vein No. 4 and others that may arise from our current work.

We currently have two NI 43-101 compliant resources on two of our gold zones (Angel Hill and Dubenski) and a historical resource on a third (Dogpaw Lake). In 2010 we focused a good portion of our drilling on the Dubenski Gold Zone. We initiated and completed phases IV and V of drilling which was aimed at expanding the resource along strike and at depth. Our drilling confirmed the extension of the Dubenski Mineralized Zone and proving that the Shaft, Central and East Zones form a continuous gold mineralizing system. The drilling also extended the gold mineralization to 465 meters of strike length. We have encountered some mineralization at a depth of 450m vertical, this is encouraging, despite encountering some cross faulting on the western extension of the zone. We have accomplished approximately 6000m of drilling since our last resource calculation, and are working on 3D modelling to aid in the next exploration holes to test the strike potential towards the Peninsula Zone to the east, rather than expensive, deep drilling before we look at updating the resource there.

To view an image in reference to this news release, please click on the following link: http://www.usetdas.com/images/houston/houston06012011.pdf

Dubenski Mineralized Zone Resource Estimate Utilizing Optimized Pit Shell
Indicated Inferred
Cut-Off Au g/t Tonnes Au g/t Au oz. Tonnes Au g/t Au oz.
Pit 0.65 g/t 524,000 3.55 59,800 12,000 1.96 800
UG 2.5 g/t 27,000 3.26 2,900 10,000 3.32 1,000
TOTAL 551,000 3.53 62,700 22,000 2.57 1,800

B.J. McKay Ltd., P&E Mining Consultants Inc., Technical Report and Updated Resource Estimate on the Dubenski Gold Property Kenora, Ontario; 2009: 37


All three gold zones (Angel Hill, Dogpaw Lake and Dubenski) are open along strike and to depth. Of notes, HLM has not predominately drilled below a depth of 100 metres on the West Cedartree Gold Project. The geology of gold mineralization in Northern Ontario is typically high-grade deep veins. Deposits that have gone on to become prolific producing gold mines tend to be deep deposits. We have confirmed this predominately on the Dogpaw Gold Zone however deeper drilling increases both risk level and cost. To date, we have concentrated on building resources at shallow depths, which has also been tightly spaced on each known gold zone. This strategy has shifted and 2011 drilling efforts will be done with exploration holes set out to define the larger envelope of mineralization in order to attain the ounce potential on the project. This strategy will display the project's production potential in a quicker fashion and define the relationships between known gold zones that will effectively minimize financial risk and share dilution to the company. HLM will be conducting drilling in the late summer/fall of 2011 and meterage and holes will be based on current modelling/analyzing of known zones, as well as surface work currently being conducted on the project.


Recent consolidation has enabled a 100 percent interest in 1,024 hectares (2,530 acres) of mining claims at its Pakeagama Rare Metals Project. This land position covers all known exposures of the Pakeagama rare metal pegmatite. Strong market interest in rare metals has made our Pakeagama Rare Metals Project the chief focus of a staking rush north of Red Lake. We believe that we hold the key ground identified by the Ontario Geological Survey (OGS) in their 1998-1999 rare metals evaluation of the region and are happy to have optioned grounds that strongly suggest the extension of the known mineralized pegmatite. High grade cesium, tantalum, rubidium and lithium oxide values have been reported in the Core Zone of the exposed pegmatite which is open in all directions on our project.

Exploration Plans for 2011 include a summer Mobile Metal Ion (MMI) geochemical survey. The objective of this program is to aid in the targeting and planning of a Phase I winter diamond drill program. Upon completion of the MMI survey and the Phase I diamond drill program, the knowledge gained should allow us to have a rare and exclusive geochemical survey tool we can use in the exploration for rare-metal pegmatites in northern Ontario. In order to significantly reduce the costs associated with a helicopter supported summer drill program, HLM is planning on drilling Phase I in the winter months of 2012 and accessing the project utilizing the winter road network that runs within 6 kilometres of the project.


With the addition of Mike Koziol (P.Geo) as director, HLM's board has the expertise to see projects from grassroots exploration to production. Mike has been instrumental with current changes and approaches to exploration on HLM's gold and rare-metal assets. Our approach to stepping out from our known gold zones on the West Cedartree in particular should advance exploration on the project while keeping in mind our goal of preserving a tight share structure. During 2010, we issued 4,791,666 common shares for gross proceeds of $750,000 to finance our activities during our year of transition. In addition, in September of 2010 we announced a $10 million equity line facility that will provide HLM with a flexible and inexpensive access to capital to support our exploration initiatives. Currently, we are in the application process with the Ontario Securities Commission (OSC) regarding the facility and remain optimistic. We have taken a prudent approach to financing the company to date and we will continue to do so in the future. We will likely require additional exploration dollars later in the year as well. As gold trades around $1500 an ounce mark, the market fundamentals look strong for gold and rare-metals to remain at elevated prices in the future. This bodes well for exploration companies that are more leveraged to commodity prices.

With another season of exploration just underway, a refined exploration strategy for both the West Cedartree Gold Project and Pakeagama Rare Metals Project, and a newly energized and refocused board and management team which will continue to evolve, I am confident that HLM will be playing a more critical role in both Kenora's rise as the next gold mining district in Canada and addressing the supply constraints of Rare Metals in the world.

On a personal note, I would like to thank our highly valued shareholders for your support and patience over this past year of refocus and change.

Trevor R. Walker

To view this news release as a web page, please click on the following link: http://www.usetdas.com/pr/houston06012011.htm

Houston Lake Mining

Trevor R. Walker, MBA


Tel: 705-897-7622

Fax: 705-897-7618

Source: Business Wire (June 1, 2011 - 9:08 AM EDT)
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