Overview

Mountain Lake Resources Inc. (TSXV:MOA) is a growth oriented company focused on gold exploration on the mining-friendly island of Newfoundland on Canada’s east coast. The Company boasts a diversified portfolio of projects ranging from discovery stage exploration to advanced stage exploration and resource development.

Its active projects include: a 50% interest in the Valentine Lake Property (advanced exploration & resource development – Newfoundland); a 100% interest in the Glover Island Property (gold exploration & resource development – Newfoundland); and an option to earn a 100% interest in the Little River Property (discovery stage antimony-gold exploration – Newfoundland).

Investment Highlights

• Working capital – ~$ 3 million
• Low share float – 50.4 million shares issued
• Diversity – three projects with large scale potential
• Institutional ownership ~40% - Sprott Funds hold ~13%
• Currently drilling two properties - over 45,000m planned for 2012
• Management – accomplished in project exploration and development
• Political stability – Newfoundland’s mining policy encourages investment

Action Plan 

In 2012, the Company’s focus remains gold exploration on the island of Newfoundland, Canada.  The mining sector is a major contributor to the provincial economy of Newfoundland & Labrador, representing ~9% of GDP.  And while risk for mining companies seems to be increasing in many jurisdictions around the world, the Department of Natural Resources is in the midst of a comprehensive review of the provincial mineral industry to define a new minerals strategy.

Most Advanced Project

Valentine Lake Gold Property

Located in central Newfoundland, the Valentine Lake Property is 30 kilometers (”km”) long with the Leprechaun Gold Deposit situated at the south-western end and the Sprite Zone and Valentine East Zone located 700 m and 13 km respectively along strike running in a north-easterly direction.  These gold deposits form part of a 23 km long, highly prospective gold-bearing mineralized corridor.

Valentine Lake Geology Map

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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).

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, is expected in the later part of Q1 of 2012.

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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).

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On Jan 25, 2011, Marathon Gold Corp. (TSX: MOZ) (“Marathon”) completed its earn-in obligation under the sub-option and joint venture agreement (“OJVA”) 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 companies have agreed to jointly fund a $7.1 million budget in 2011 that will include 25,000m of drilling.  Results from the 2011 drilling campaign are expected to add significantly to the current (Dec 2010) resource.

For more information on the Project and to see a summary of highlights from both the 2011 and 2010 drilling campaigns visit the Valentine Lake page of the Mountain Lake website.

Glover Island Gold Property

Mountain Lake commenced a 7,000m drill program in August 2011 to upgrade and expand the historical gold resource on the Glover Island Property.  This is the Company’s first drill program since acquiring 100% of the Property in October 2010.

The Property is located on the south-central portion of Glover Island in west-central Newfoundland.  More than 20 prospects have been identified on the Property to date over a strike length of approximately 7.5 km and excellent potential exists for further discoveries and the development of high tonnage, bulk-mineable gold deposit(s) over an 11 km long structural corridor.  Several of the prospects represent high priority, near surface, targets that are undrilled.

A review of historic drilling results indicates that all areas, including those with historic resources, are open in all directions and that significant upside exists for adding additional resources.

Historical Resources

Historic resources have been reported for three prospects on the Property as follows:

• Kettle Pond South – 450,000 tonnes at 2.3 g/t Au for 33,276 ozs
• Lunch Pond South Main Zone – 2,730,000 tonnes at 2.1 g/t Au for 184,321 ozs
• Lunch Pond South West Zone – 900,000 tonnes at 1.6 g/t Au for 46,297 oz s

Dave Barbour P.Geo., Dave Barbour, P.Geo., an independent geological consultant and Qualified Person in compliance with National Instrument 43-101 who was involved with the Valentine Lake Gold Project going back to the discovery phase, recently commented, “In addition to working on the Glover Island Property the gold mineralization formed the basis of my Master of Science studies and in my opinion it’s the most overlooked project on the island of Newfoundland and second only to the Valentine Lake Property for its gold exploration potential.”

A NI 43-101 resource estimate is forthcoming that will combine the 2011 drill results with the historical resources from the Lunch Pond South East Prospect (LPSE) area.

Drilling is also underway in 2012 with an initial 2,500 metre winter program in the LPSE area to follow-up the 7,227 metre program completed in December, which returned thick intervals of gold mineralization near surface and undercut holes demonstrated that gold mineralization continues and remains open at depth.

2011 drill program highlights include the following intervals (all core widths):

• Step-out drill hole LPSE-11-44 intersected 0.7 grams per tonne (g/t) gold (Au) over 130.9 metres (m) from a vertical depth of 135m and in an area outside of the historical LPSE Prospect resource boundary
• Step-out hole LPSE-11-48, adjacent to and 40m west of hole LPSE-11-44, intersected 1.34 g/t Au over 99.3m from a vertical depth of 131m
• Step out hole LPSE-11-49, drilled 50m west of LPSE-11-48, intersected 0.54 g/t Au over 40.7m from a vertical depth of 160m, in addition to a deeper interval of 1.53 g/t Au over 7.5m from a vertical depth of 215m
• Step-out hole LPSE-11-50, drilled 80m updip from LPSE-11-49, intersected 1.76 g/t Au over 26.6m from a vertical depth of 115m
• Hole LPSE-11-53 intersected 1.27 g/t Au over 16.0m, and is located 100m below LPSE-11-41 that contained 11.3m of 1.54 g/t Au, plus 3.5m of 1.49 g/t Au and 5.8m of 2.2 g/t Au over a 32m interval
• Hole LPSE-11-55 intersected 1.74 g/t Au over 53.5 m, and is situated 50m updip from LPSE-11-41
• Drill hole LPSE-11-57, the deepest hole on the section and situated 100m below the above mentioned LPSE-11-53, intersected a 44.7m zone of 1.67 g/t Au as well as a 3.2m zone of 2.06 g/t Au

Mountain Lake’s plan includes a twofold approach to the Property:

• upgrade and expand the historical resources to NI 43-101 compliance, which will bring about an upward revaluation of the in-ground gold asset to multiples of the ~$7 per ounce project acquisition cost;
• drill testing of several highly prospective, undrilled targets where near surface mineralization has been identified.

For more information visit the Glover Island Project page on the Mountain Lake website.

Discovery Stage Project

Little River Antimony+/-Gold Property

Originally optioned in 2008 for its numerous gold occurrences, Mountain Lake continues to encounter interesting antimony (“Sb”) values on the Little River Property and antimony bearing veins having now been identified intermittently over a 20 km strike length.  Grab samples from a vein exposed in shallow pits during the 2010 prospecting campaign returned values from 27.6 % to 50 % Sb with gold (“Au”) values up to 24.1 grams per tonne (“g/t”).

On August 18, 2011, Mountain Lake announced results from the latest drilling program on the Little River Property, which focused on the South Zone (SW area) and the Le Pouvoir Zone (NE area).  Gary Woods, president and CEO of Mountain Lake, summed up the program as follows:

“Results from the South Zone are encouraging as the length of the antimony zone indicates that a significant mineralizing system has been active in the area.  It will take more drilling to determine the extent of the mineralization and whether there is a high-grade plum nearby. Our deepest hole is currently only 90 metres vertical so there’s a lot of potential both along strike and at depth.”

“Although the Le Pouvoir drilling did not encounter any additional high grade antimony intercepts such as the 1.0 metre zone of 30.1% Sb intersected in drill hole LR-10-16 last year, these results are preliminary and in no way diminish the potential to source a significant antimony deposit on the Property.  The northern end of the Property is 80 km from the Beaver Brook Mine, one of the most significant antimony deposits in the world, and we now have numerous antimony showings over a 21 kilometre distance.  All we need to do is find a more permissive structure suitable for deposition of antimony from the far travelled hydrothermal fluids that we know are capable of depositing massive stibnite in the area.  While the Le Pouvoir massive stibnite vein turned out to be limited in size, it is situated at the southernmost portion of an antimony soil anomaly that extends for 1.1 kilometers to the northeast.”

The best intercept to date occurred in drill hole LR-10-16, which contained a 0.92 m interval (true width) of 30.6% Sb at a vertical depth of 18m.  The intervals of high grade antimony are significant and are typical of the material being mined at the Beaver Brook Mine situated 80 km to the north of the Property.  Beaver Brook is one of the world’s largest antimony deposits outside China, and the only primary antimony mine in North America.

The Little River Property consists of 382 mining claims comprising 9,550 hectares over a strike length of ~31 km in the Baie D’Espoir area of southern Newfoundland, where infrastructure is excellent.  Mountain Lake is on plan to earn a 100% interest in the Property in Sep 2012 and is considering joint venture opportunities to fast track the exploration effort on the Property.

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For more information, visit the Little River Project page on the Mountain Lake website.

Bobby’s Pond Deposit (base metals) – Central Newfoundland

Mountain Lake has entered into a definitive agreement with SG Spirit Gold Inc. (TSXV:SG) to sell its 100% interest in its Bobby’s Pond base metals project (“Bobby’s Pond”) in exchange for common shares of SG, a cash payment of $100,000 and a 0.5% Net Smelter Royalty, pursuant to certain terms and conditions as outlined in the news release of January 26, 2012.  The transaction will see Bobby’s Pond and other significant base metals assets in the Buchans Area consolidated into one publicly traded company.

Based on the latest NI  43-101 compliant mineral resource estimate was completed on the Bobby’s Pond deposit in July 2008, by Scott Wilson Roscoe Postle Associates.  The deposit contains:

• an indicated resource of 1,095,000 tonnes of 0.86% Cu, 4.61% Zn, 0.44% Pb, 16.6 g/t Ag, and 0.2 g/t Au; and,
• an inferred resource of 1,177,000 tonnes of 0.95% Cu, 3.75% Zn, 0.27% Pb, 10.95 g/t Ag and 0.06 g/t Au

For more information visit the Bobby’s Pond page on the Mountain Lake website.

Management 

Gary Woods – President & Chief Executive Officer, Director
Gary, a geologist who has been actively involved in mineral exploration for over 30 years, became President and CEO of Mountain Lake in May 2007. Prior to joining the Company, Gary was based in Hermosillo, Mexico for 4½ years as country manager for Falconbridge/Noranda.

Prior to Mexico, he was the exploration manager for Noranda in both New Brunswick and Newfoundland, and was actively involved in exploring the volcanic belts of northern New Brunswick and central Newfoundland where Mountain Lake is primarily focused today.

Allen Sheito – Chairman, Director
Allen, a geologist with over 40 years of experience in mineral exploration, was responsible for the acquisition of the Company’s key mineral assets. He was President of Mountain Lake from Nov 1994 through May 2007. Allen’s prior experience includes a 30 year career (1966 to 1996) with Inco.

Paul Smith – Exploration Manager

Paul brings to the Company a unique skill set that stems from both public and private sector experience.  He spent over 30 years with the Nova Scotia Department of Natural Resources as a senior research Gold Geologist for the Mineral Resources Section and finally as Liaison Geologist for the Mineral Resources Branch before retiring from the department in 2008.  He is currently President of the Mining Association of Nova Scotia, Vice President District 1 of the Canadian Institute of Mining and past President of the Mining Society of Nova Scotia.

William Rogers – Director
Bill is a mining engineer who brings 35 years of operational, project and mine management experience to the Company. His career began in the mid-1970s and has included positions with: Inco, Potash Company of America, Hudson Bay Mining & Smelting, and Noranda / Falconbridge / Xstrata; and most recently as mines manager responsible for the operation and maintenance of Xstrata’s underground Ni-Cu mines located near Sudbury, Ontario.

For more information visit the Management page on the Mountain Lake website.