Mountain Lake Resources - Valentine Lake Gold Project

Claim boundary map - 21725 contiguos hectares

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Valentine Lake Project

Glover Island Project

Little River Project

Bobby's Pond Project

Valentine Lake

The Valentine Lake Gold Property is located in central Newfoundland, ~45 kilometres (km) south of the town of Buchans. The Property consists of 12 contiguous mineral licenses covering a total area of 21,725 hectares.

Starting from the southern end of the Property the J. Frank Zone, Leprechaun Gold Deposit, Sprite Zone and Valentine East Zone are located ~1.5, 3, 4 and 13km, respectively, along a north-easterly strike. These gold occurrences form part of a 23km long, highly prospective gold-bearing mineralized corridor.

Projects

Project Status

The 2012 drilling campaign commenced in early January and 40,000 metres (m) are planned. Resource expansion remains the objective this year with drilling starting in the Leprechaun Deposit area and working southwest to the J. Frank Zone and northeast toward the Sprite Zone (see map bottom right).

Later this Quarter we also expect the release of the first open pit resource estimate for the Leprechaun Deposit, which will incorporate the results from ~20,000m of resource expansion drilling (130 holes) completed in 2011.

The 2011 step-out and infill drilling results met the two key objectives of (1) expanding the gold resource and (2) increasing the confidence in the gold resource of the Leprechaun Deposit with intersections of both high-grade and wide intervals of gold mineralization confirming the continuity of the Main Zone and demonstrating the resource potential along strike and down dip.

Results in 2011 also continued to deliver wide high-grade gold intercepts that include: the best intersection to date with 13.95 grams per tonne (g/t) gold (Au) over a true width of 26.1m in hole VL-11-352; and 16.15 g/t Au over a true width of 13.3m in step-out hole VL-11-306. Significantly, hole 306 is situated 50m down dip from the intersection encountered last year in drill hole VL-10-165 (38.32 g/t or 1.12 oz/ton Au over 9.0m) and it continues the expansion of the Heart of Gold high-grade zone, which lies within the 750m Leprechaun Deposit and now extends for over 200 metres along strike to the northeast and is open down-dip as well as towards the southwest.

Additionally, the 2011 exploration effort demonstrated the Property's blue-sky potential along strike to the northeast and most recently to the southwest with the discovery of a new gold-bearing quartz structure called the J. Frank Zone, 1.5km southwest of the current southern boundary of the Leprechaun Deposit. Trenching and bedrock sampling of the J. Frank Zone (photo bottom right) returned gold values up to 581.88 g/t Au and initial drill testing of the area resulted in 9 of 12 shallow holes returned promising results (see map above right).

Highlights from both the 2011 and 2010 drilling campaigns are listed below.

Project Ownership

On January 25, Marathon Gold Corp. (TSX: MOZ) (“Marathon”) completed its earn-in obligation under the sub-option and joint venture agreement announced December 23, 2009, and Mountain Lake and Marathon now own 100% of the Valentine Lake Property on a 50/50 joint venture basis. Marathon is the operator of the project, and the partners have agreed to jointly fund a $11.5 million budget in 2012.

Resource Estimate

An updated National Instrument (NI) 43-101 compliant resource estimate for the Leprechaun Deposit was announced on December 16, 2010. The estimate includes the first Measured and Indicated resource that has been developed within the Property and is a major advance for the Project. Approximately 74% (2,400,000 tonnes) of the Measured and Indicated resource, containing 205,000 ounces (ozs) of gold, is located within 150m of the surface and is potential open pit material.

The NI 43-101 compliant gold resource on the Leprechaun Deposit includes:

Measured (M) Resource of 2,104,000 tonnes at 2.768 g/t for 187,000 Au ozs;

Indicated (I) Resource of 1,180,000 tonnes at 2.363 g/t for 90,000 Au ozs;

M & I combined total of 3,284,000 tonnes at 2.622 g/t for 277,000 Au ozs

Inferred Resource of 4,409,000 tonnes at 2.007 g/t for 285,000 Au ozs

The above mineral resource estimate was prepared by Sam Shoemaker, MAusIMM, of Micon International, the independent qualified person (QP) for the mineral resource estimate and is based on a 0.5 g/t gold minimum cut-off. For more detailed information see the associated NI 43-101 Technical Report on the Resource Estimate (link at bottom of page).

Drilling Highlights - 2011/2010 (Note: all estimated true widths and down hole depths)

A total of 23,372m of drilling have been complete over 135 holes to date in 2011:

hole VL-11-232 intersected 8.15 g/t Au over 20m from a starting down hole depth of 45m

VL-11-236 intersected 3.73 g/t Au over 14m from depth of 63m

VL-11-246 intersected 3.75 g/t Au over 37.5m from depth of 79m

VL-11-250 intersected 3.15 g/t Au over 21.5m, the centre of which is located 60m below and 13m south of the zone reported in hole -246

VL-11-253 intersected 4.27 g/t Au over 16.5m from depth of 147m

VL-11-258 intersected 2.80 g/t Au over 34.8m from depth of 107m

VL-11-261 intersected 9.68 g/t Au over 12.8m from depth of 167m

VL-11-264 intersected 1.85 g/t over 20m at ~surface in the Sprite Zone, 700m long strike from the current north-eastern boundary of the Leprechaun Deposit

VL-11-282 intersected 2.57 g/t over 20.25m within 25m of surface

VL-11-288 intersected 2.09 g/t over 65.6m from depth of 155m

VL-11-291 intersected 3.53 g/t over 14.4m from depth of 182m

VL-11-294 intersected 5.40 g/t over 7m from depth of 307m

VL-11-296 intersected 2.18 g/t over 32.2m from depth of 107m, which filled a 40m down dip gap in the northeast portion of the current resource

VL-11-301 intersected 3.96 g/t over 13.5m from depth of 36m, confirming the continuity of near surface main zone mineralization in section as well as along strike on the adjacent section

VL-11-306 intersected 16.15 g/t over 13.3m from depth of 196m, which is situated 50m down dip from the high-grade intersection in VL-10-165 (below)

VL-11-310 intersected 1.88 g/t over 32.3m from depth of 38m

VL-11-337 intersected 3.46 g/t over 13.3m from depth of 196m, a down dip extension of section 10250 in the main zone

VL-11-345 intersected 5.99 g/t over 10.8m from depth of 187m, in the Heart of Gold area of the main zone

VL-11-352 intersected 13.95 g/t over 26.1m from depth of 136m, part of one of the high-grade shoots that occurs within the broader main zone envelope

A total of 10,938m of drilling was completed over 95 holes in 2010:

hole VL-10-165 intersected 38.32 g/t or 1.12 ounces per short ton (oz/t) Au over 9m from depth of 164m below surface

VL-10-165 returned the highest grade intersection ever recorded at Valentine Lake with 321.05 g/t (9.36 oz/t) Au over 0.8m, including 506.15 g/t (14.76 oz/t) Au over of 0.4m

VL-10-160, 75m southwest of VL-10-165, returned a broad interval with 6.79 g/t Au over 25m from depth of 152m and includes 19.43 g/t Au over 7m and two high grade intersections of >105 g/t (3 oz/t) Au over 0.5m

VL-10-225, drilled in the main zone from the barge on Leprechaun Pond (below right), returned 6.53 g/t Au over 19m from depth of 64m

VL-10-226 returned 6.94 g/t Au over 17m from depth of 78m

Metallurgical Work

Metallurgical recovery rates are typically one of the largest risks facing the development of a mining project and addressing these risks early can help establish the economic viability of a mining project. In the case of the Leprechaun Deposit, results from initial metallurgical test work undertaken in 2010 demonstrate gold recoveries exceeding 90% overall with at least 45% recoverable by low cost gravity circuit. These results are very encouraging and will be used in the preliminary economic assessment.

Mineralization and Deposit Type

Gold occurrences at the Valentine Lake Property are classified as structurally controlled mesothermal auriferous quartz vein type deposits where gold occurs within extensional or shear fracture veins, often associated with pyrite or arsenopyrite. The quartz veins and veinlets are typically pyrite-tourmaline rich. The veins also contain very minor scheelite tungstite, pyrrhotite, arsenopyrite, galena, chalcopyrite, sphalerite bornite and a telluride phase.

The Leprechaun gold resource is primarily associated with quartz-tourmaline veins hosted in sheared granite. Other lithologies (metasediments and volcanics) known to host gold mineralization have not undergone detailed exploration to date. The high grade lenses and the overall mineralized enveloped at Leprechaun occur along a 3km long deformation/alteration zone striking north-eastward from the J. Frank Zone, through the Leprechaun Deposit and beyond the Sprite Zone to the northeast.

Project Access and Infrastructure

The Property is accessible year-round by dirt and gravel road, and is 90km from the Trans Canada Highway. The all-season camp has just been expanded and now includes a water well and septic field. Power is currently provided by generator, but hydro generation is available nearby.

History

Gold was discovered on the Valentine Lake Property by BP Canada Inc. in 1986 as a result of a soil geochemistry survey. Since that time a multi-disciplinary approach involving soil geochemistry, ground geophysics and geological mapping and prospecting has been successfully employed by the various operators culminating in further gold discoveries. Prior to 2010, gold mineralization and the Leprechaun Deposit had been defined by ~24,000m of widely spaced drilling. Drilling in 2010 & 2011 saw ~31,000m of closely spaced drilling completed in the Leprechaun Deposit area alone.

Potential

"Since I joined the gold mining sector in 1980, I have personally been involved with the development of several gold mines. From the first time I viewed the property, I felt that Valentine Lake had the potential to host a significant gold deposit. Everything we’ve achieved to date confirms this view," Phillip Walford, President and CEO of Marathon Gold, Mountain Lake's Joint Venture Partner.

NI 43-101 Technical Report - Resource Estimate January 31, 2011