Landore Resources to raise £2.575m for Junior Lake exploration

Landore Resources (LON:LND) is set to raise £2.575m through a share-subscription for approximately 35.5m new shares at a price of 7.25p each. The company intends to use the proceeds to finance working capital and exploration expenditure.

The company highlighted that the principal focus of exploration for the second half of 2010, will be on the gold, nickel and iron projects at the Junior Lake property in Ontario.

Landore chairman and director William H. Humphries participated in the subscription, buying 1.4m shares to take his total shareholding to just over 18.5m shares, representing 7.84% of the company.  The subscription shares represent 15% of the enlarged issued share capital.
Earlier this month, in its FY09 results, Landore described 2009 as a year of significant progress in the development of Junior Lake. In 2009, the company discovered the Lamaune gold prospect at Junior Lake, where drilling has delineated a wide gold mineralised zone over 500 metres of strike length and up to 200 metres depth. The results highlight from the southern zone cut 25.50 metres at 0.93 g/t (grams per tonne) gold. Drilling at the Northern vein returned an intersection of 0.5 metres at 46.08 g/t gold. Metallurgical studies have commenced to determine if the mineralisation is amenable to low cost heap leach processing. As a result of the discovery, Landore staked a large area of highly prospective land to the north and contiguous with Junior Lake. The property now extends over 31 km (kilometres) and covers 31,953 ha (hectares).
Independent studies have confirmed that the Lamaune iron deposit has a potential size of a minimum half a billion tonnes of iron ore and, coupled with positive metallurgical studies, showed that the deposit had the potential to be economically viable. In March, Landore identified a 545 Mt (million tonnes) iron ore target at Lamaune.
Exploration work and metallurgical studies carried out at the VW and B4-7 deposits at Junior Lake were “attractive enough” together with the improved nickel price to move to scoping and pre-feasibility studies. Landore added that there was “substantial exploration potential” to increase the area of nickel resource.
Drilling recommenced in January, with over 40 drill-holes completed on the Lamaune prospect in the first five months. In May Landore told investors that the exploration work was confirmed the presence of gold mineralization, and identified two distinct zones.
The first of the two distinct zones, the southern zone, is characterised as a southern broad zone of gold low grade mineralization, which has frequent outcropping at the surface. The results highlight from the southern zone cut 25.50 metres at 0.93 grams per tonne (gpt) gold, in drill-hole 1110-94.

The company said that the southern zone mineralization has now been intersected over a 500 metres strike length, and has been drilled to a depth of 200 metres. Furthermore the gold mineralization is open to depth and along strike to the east and west, Landore stated.
The second zone, the northern vein, is described by Landore as a narrow high-grade quartz vein with simple mineralogy, which occurs as 'native gold'. From the Northern vein, the drilling highlight returned 0.5 metres at 46.08gpt gold.
Drilling is still ongoing at Junior Lake.