Brokers' Picks
Gallery Resources Ltd.
by Dorothy Hoffert
February 3, 2005
Gallery Resources Ltd. [GYR-TSXV] [website]
recently announced assay results from its 2004 preliminary drilling
program completed on the company's Evening Lake property in Labrador.
All four drill holes encountered heavily disseminated, magmatic
sulphides across a 108-metre (354-foot) section of the priority
target at a depth of 60 metres (197 feet) below surface. The
assays highlight a core interval in each hole of between 2.5
to 4.6 metres (8 to 15 feet) with enrichments of up to 0.33%
nickel, 0.26% copper and 0.043% cobalt. Throughout the zone nickel
is enriched relative to copper and cobalt as in Hole E1W which
contains 3.6 metres (12 feet) of 0.23% nickel and Hole E1W3 with
a 4.6-metre (15-foot) section of 0.15% nickel. These drill holes
are significant in that they confirm the first discovery of a
magmatic sulphide mineralized system in a new exploration district
in Labrador similar to the nickel-copper-cobalt sulphide mineralization
at Voisey's Bay. Also of significance is that the four holes
were drilled to test only the west end of a 1,500-metre (4,920-foot)
long airborne anomaly which also contains a second, as yet untested
target located at the east end of the airborne anomaly.
The Evening Lake property is part of the company's Shabogamo
Project, which is situated in western Labrador in the Province
of Newfoundland and Labrador, Canada and lies approximately 75
km northeast of the community of Labrador City-Wabush, a major
iron ore producing area, and 55 km west of Churchill Falls. The
community of Labrador City-Wabush constitutes the major population,
supply and service centre in Labrador and is serviced regularly
by commercial aircraft. Churchill Falls is the site of a major
hydroelectric plant. Gallery, which has been working in Labrador
for the past 10 years on other prospective projects, entered
into an earn-in option agreement with BHP Billiton Diamonds Inc.
[BHP-NY, London] on the Shabogamo Project in June 2002. Gallery
is the operator of the exploration program and can earn a 50%
interest in the project by incurring $1 million in exploration
expenditures by December 2006. After Gallery completes its earn-in,
exploration expenses on the claims are to be split 50/50 by the
two companies.
An initial exploration program completed by BHP in 2000 and 2001
confirmed the Shabogamo Gabbro to be a large mafic intrusion
considered to be a favourable host for Voisey's Bay type deposits.
The Shabogamo Gabbro consists of olivine gabbro and troctolite
phases, which are also the important rock types that host the
nickel-copper-cobalt, PGE-bearing magmatic sulphide ores at the
Voisey's Bay deposit in eastern Labrador. In 2002, the companies
staked 2,197 claims covering the mafic intrusion. Exploration
included mapping, sampling and a reconnaissance GeoTEM airborne
survey. An AeroTEM II survey flown at 75-metre spaced lines over
the property in July 2004 singled out an extensive electromagnetic
conductor with a strike length of 1,500 metres. A 400-metre segment
of this conductor, coincident with nickel sulphide mineralization
in surface boulders on the Evening Lake target, was selected
as the top priority drill target. An additional 2,113 new claims
were staked in November 2004 to cover previously un-staked sections
of the Shabogamo Gabbro Intrusion. This new staking brings the
total number of claims to 4,310 covering 270,500 acres along
a 90-km (55-mile) section of the intrusion constituting the largest
mineral property held in Newfoundland and Labrador.
The partners are very encouraged by the initial drill results
and are planning an extensive, second-phase of diamond drilling
to further test the discovery zone and additional AeroTEM airborne
surveys to identify potential new drill targets over the areas
recently staked.
Gallery Resources was taken over in 1990 by the existing management
headed by Bruce Costerd who has acted as Chief Executive Officer,
President and Director of the company. He and his directors have
focused their exploration activities in Labrador which has resulted
in the acquisition of several other projects during that time:
1) the Black Bart-Katie property is a volcanogenic massive sulphide
(VMS) target located in the southern portion of the Botwood Basin,
central Newfoundland; 2) the Cabot Lake property is located in
northern Labrador and has geological features similar to Voisey's
Bay which is located 12 km away; and 3) the Okak Bay Project
also located in northern Labrador, but has mineralization that
resembles an IOCG prospect (Iron Oxide Copper Gold) such as the
Olympic Dam Deposit in south Australia. Victor French, M.Sc.,
P.Geo., who is based in Newfoundland, is Gallery's exploration
manager for these projects.
The company's exploration programs for 2005 will focus on the
important discovery made on the Shabogomo Project. The marketplace
will be watching the progress on the project closely since the
last discovery of nickel-copper-cobalt in Labrador resulted in
a huge staking rush and the development of the Voisey's Bay mine.
The 2005 drilling program will not begin until early spring,
giving aggressive investors ample time over the next few months
to accumulate Gallery stock.
February 3, 2005
Dorothy Hoffert
 Dorothy Hoffert has been an Investment Advisor
for 20 years with a focus on the Mining Sector.
She can be reached at Wolverton Securities at 604-662-5271.
Dorothy Hoffert, her clients and/or Wolverton directors, employees
or clients may own shares in any of the companies discussed.
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