Mountain Lake Resources - Valentine Lake

Valentine Lake Project
Little River Project
Etruscan Diamonds
Bobby's Pond Project

Valentine Lake

The Valentine Lake Gold Property is located in Central Newfoundland, ~55 kilometres(km) south of the town of Buchans. The Property consists of four (4) mineral licenses covering a total area of 13,475 hectares.

The Leprechaun Gold Deposit, the largest undeveloped gold deposit in Newfoundland (see resource estimate details below), is situated at ~kilometre (km) 3 of the Property's overall geological structure that has been delineated by soil geochemical surveys to extend for ~30 km in a north-easterly strike.

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Project Status

Marathon PGM Corp. (TSX: MAR) (“Marathon”) is currently earning a 50% interest in the Property and is the the operator of the Project during the period of the sub-option and joint venture agreement (“OJVA”) announced December 23, 2009.

”Our team is eager to delineate what could be Newfoundland’s next gold mine”, Marathon’s Project Manager, Sherry Dunsworth.

As reported August 16, 2010, the latest results from the current drill program confirm the Leprechaun Deposit (the "Deposit") has a high grade heart of gold with hole VL-10-205 further defining a 200 metre (m) zone of continuous high grade mineralization (greater than 15 grams per tonne (g/t) gold in 15 drill holes - see highlights below) that dips from near surface to a depth of 175m. Over 4,600 m of the 8,000 m summer drill program have been completed and barge based drilling is in progress on Leprechaun Pond to drill test the Deposit's structure updip from the area of best known mineralization at depth (see photos right). Assay results are pending for samples taken for more than a dozen holes.

Results continue to expand the boundaries of gold mineralization on-strike to the southwest and northeast, with the Deposit having now been drillied over a strike length of 750 m and results from grab samples (ranging from 49 to 79 g/t) confirming a greater than 300 m corridor of minerailzation extends the strike to the southwest (see map lower right). Drilling will continue through the summer with results being released as avalaible into the fall.

Winter 2010 drilling consisted of 33 drill holes for a total of 3,998 m of NQ core. A total of 29 of the 33 drill holes reported with visible gold noted in most holes. The majority of holes intersecting gold mineralization on the margin or outside the current NI 43-101 compliant resource envelope, which confirms the down dip and along strike extensions of the gold mineralization. Many intersections are near surface where no gold was indicated before and will add to the next resource estimate.

A new resource estimate is on track to be completed in Q4 2010 and adding significantly to the contained gold (Au) in the next resource estimate will be the conversion of the current underground resource to an open pit resource. The Jan 2005 underground resource estimate was based on a 5 g/t Au minimum cut-off (when Au was US$425 per/oz) and a 3 m minimum mining width. The open pit resource estimate (expected in Q3 2010) will use a cut-off of ~0.5 g/t Au (based on the current Au price) and no minimum mining width. This will result in the inclusion of Au ounces associated with intersections grading between 0.5 g/t to 5.0 g/t Au that were ignored in the previous estimate.

Highlights from the 2010 drilling results to date:

hole VL-10-165 intersected 38.32 g/t or 1.12 ounces per short ton (oz/ton) Au over a true width of 9 m from a starting depth of 164 m 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 a true width of 0.8 m, including 506.15 g/t (14.76 oz/t) Au over a true width of 0.4 m (see photo above right)

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

VL-10-205, drilled between VL-10-160 and -165, returned 23.98 g/t Au over 4 m within a broader interval of 3.92 g/t Au over 27.2 m from depth of 162m

VL-10-193 intersected 9.43 g/t Au over 7.8 m from depth of 42 m which represents an extension to the lens of high grade mineralization on strike to the northeast

VL-10-164, 50 m southwest of VL-10-160, intersected 9.35 g/t Au over 5.6 m from depth of 126 m

VL-10-170 intersected 47.19 g/t (1.38 oz/t) Au over 2.5 m from depth of 9.5 m below surface

VL-10-190 intersected 33.54 g/t or 0.98 oz/ton Au over 2.65 m within a 4 m interval of 22.75 g/t from a depth of 77 m

VL-10-186 intesected 9.61 g/t over 2m from depth of 2 m, 2.57 g/t over 6 m from depth of 18 m, and 1.53 g/t over 5 m from depth of 39 m

VL-10-169 intersected 2.27 g/t Au over 10 m from depth of 12 m

VL-10-159 intersected 2.78 g/t Au over 22 m from depth of 32.7 m

VL-10-156 intersected 4.43 g/t Au over 20.8 m from depth of 17.5 m

VL-10-154 intersected 8.67 g/t* Au over 7.4 m from depth of 63.8 m

VL-10-147 intersected 3.57 g/t Au over 12 m starting at a depth of 105m and 8.27 g/t Au over 4.9m starting at a depth of 114.3 m

VL-10-139 intersected 3.94 g/t Au over 9.0 m starting at a depth of 45 m

VL-10-138 intersected 2.97 g/t Au over 9.38 m starting at a depth of 64 m

2010 drilling confirmed the Leprechaun Deposit is open at depth to the SW, and to the NE where historical drilling encountered mineralization over 2 km

Note: Duplicate check assays were done on all assays above 30 g/t; and all core intercepts referenced above are true widths

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 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 upcoming resource estimate.

Project Access

The Property can be accessed by way of a 75 km gravel road from Millertown via the Buchans Highway and the Company completed 20 km of road work in the Fall of 2008 to connect the area of the Leprechaun Deposit to the gravel road.

Ownership

On December 23, 2009, Mountian Lake and Marathon PGM Corporation (TSX: MAR) announced an option and joint venture agreement granting Marathon a sub-option to earn a 50% interest in the Valentine Lake Property. Mountain Lake currently owns a 30% interest in the Property and has an exclusive option (see news release of February 11, 2009) to purchase the remaining 70% interest (the “Richmont Option”) from Richmont Mines Inc. (TSX: RIC) and consolidate 100% ownership in the Property. Marathon can earn the 50% interest by assisting Mountain Lake in exercising the Richmont Option, through total option payments of $3,000,000 in installments over the next three years and incurring a total of $3,000,000 in exploration and development expenditures on the Property over the next three years.

Current Resource Estimate

According to the latest resource estimate (Jan 12, 2005 when the spot Au price was US$425 per/oz), the Property's Leprechaun Deposit hosts a NI 43-101 compliant inferred mineral resource of 1,314,780 tonnes grading 10.5 g/t Au using a 5 g/t Au minimum cut-off and a 3 metre minimum width for a total estimated mineral resource of 443,000 ounces of Au. Cutting individual assays to 58 g/t Au, the average grade is 8.51 g/t Au, for a total estimated mineral resource of 359,000 ounces Au at the cut grade.

Potential

“We are extremely pleased to have the opportunity to join forces with an aggressive partner at Valentine Lake and welcome the expertise and enthusiasm Marathon brings to the project. Examining the project’s open pit potential, particularly with the improving gold price, brings a new dimension to the property’s existing resource and other bedrock prospects over a 30 kilometre strike length,” Gary Woods, Mountain Lake’s President and CEO of Mountain Lake.

"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."

NI 43-101 Technical Report - Exploration Summary March 2009

NI 43-101 Technical Report - Resource Estimate January 2005