Why I'm Buying Queenston Mining

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Queenston Mining is a deal I’ve followed for years. It's seen its ups and downs, but it is, in my opinion, about to permanently transform itself into a gold mining force to be reckoned with. The reason for that conviction is its emerging ability to do deals that are accretive for it and its shareholders. The cornerstone area of focus is the increasingly prolific Kirkland Lake mining camp in northern Ontario, Canada, which is Canada’s second largest gold camp with historical production of 37 million ounces of gold.

Queenston Mining (TSX:QMI) is a deal I’ve followed for years. It's seen its ups and downs, but it is, in my opinion, about to permanently transform itself into a gold mining force to be reckoned with. The reason for that conviction is its emerging ability to do deals that are accretive for it and its shareholders. The cornerstone area of focus is the increasingly prolific Kirkland Lake mining camp in northern Ontario, Canada, which is Canada’s second largest gold camp with historical production of 37 million ounces of gold.

Queenston is a past producing mining company with a 2.7 million ounce combined historic and recently defined NI 43-101 compliant gold resources. Its property portfolio in Kirkland Lake includes 17 properties covering 14,000 hectares, making it the largest mineral claim holder in the camp. 90 percent of the holdings are owned 100%, and there are 5 joint venture properties with Kirkland Lake Gold (TSX:KGI). Its six deposits cover some 900 hectares and have produced over 3.4 million ounces of gold historically.

Besides these assets, the company has a 50-50 joint venture with Globex Mining Enterprises (TSX.V:GMX) on the Wood-Pandora project in the Cadillac Township of Quebec. Recent drill results include high grade numbers including last year’s intercept of 14.75 metres grading 7.55 grams per tonne gold as part of a NI 43-101 high-grade gold resource of 243,200 tonnes grading 17.3 grams per tonne.

But the big story, and the nearest window to production, is in Kirkland Lake.

Recent drill results from its 100%-owned McBean deposit include 13.6 metres grading 6.8 grams per tonne of gold, 14.3 metres grading 5.2 grams per tonne gold, and 5.1 metres grading 9.8 grams per tonne gold.

Charles Page, CEO and President of Queenston, said:

"The second phase of drilling continues the success achieved in phase one. We are particularly encouraged with the positive results encountered in the mineralized corridor, especially in the new, C-19 Zone where drilling has intersected significant grades over good widths including hole MB08-75 returning 15.4 grams per tonne of gold over 5.2 metres. This zone remains open down dip and plunge to the east.”.

Queenston and joint venture partner Inco Ltd. operated the McBean mine (1984-1987) producing approximately 50,000 ounces (“oz”) of gold from an open pit. Due to prevailing gold prices, the underground exploitation of the remainder of the deposit below the pit was postponed and in 1996 Queenston purchased Inco’s interest in the mine. There remain at McBean historic resources of 835,000 t grading 5.1 g/t Au (measured and indicated) and 1,835,200 t grading 6.5 g/t (inferred). The historic resources should technically not be relied upon as they are not compliant to NI 43-101, but its not like technology has advanced much since 1996 or that Inco was a fly-by-night mining company.

The recent drill results prove that there is still lots of gold left at McBean.

Queenston’s 100% owned “AK” property, contiguous to its joint ventured South Claims with Kirkland Lake Gold Inc. (“KGI”) have been demonstrating some even higher grade hits as announced in the company’s press release of this week. A 2.3 metre intercept grading 31.8 grams per tonne was assayed, as well as a 3.85 metre intercept from a separate hole grading 13.7 grams per tonne gold.

Both of these intercepts contained bonanza grade segments of 59.4 grams per tonne gold over 0.9 metres and 96.5 grams per tonne over a half metre respectively and the Company believes that this mineralization represents the down-dip projection of the South Mine Complex that is currently being developed and mined by KGI at the adjoining Macassa mine.

On Queenston’s Upper Beaver project, drilling intersected a thick high-grade zone that returned a 20 metre intercept grading 30.3 grams per tonne gold That’s close to an ounce per tonne of gold over 65 feet!. Within that core was 3.8 metre section assaying 69.5 grams per tonne gold and a 7 metre piece grading 51.5 grams per tonne gold. Other noteworthy holes include 53.7 metres grading 1.2 grams per tonne and 7.5 metres grading 3 grams per tonne gold These holes also contain copper values ranging up to 2.6% copper.

These intercepts are in addition to the NI 43-101 compliant mineral resource published in September last year that estimated total indicated resources of 1,373,500 tonnes grading 8.5 g/t Au (375,000 oz.) (9.7 g/t Au uncapped (427,900 oz.)) with 0.43% Cu and total inferred resources of 1,061,300 t grading 7.7 g/t Au (262,800 oz.) (8.5 g/t Au uncapped (291,300 oz.)) with 0.39% Cu.

The South Claims were purchased by KL Gold and Queenston in April of 2007 to cover the potential down-dip extension of the SMC.

To date, the SMC has been outlined over a strike length 2500 feet on the property holdings of KGI to the north and west of the South Claims (see KGI and Queenston press releases dated April 17, 2007). A joint venture was formed between KGI and Queenston in 2007 and an underground diamond drilling program commenced on the South Claims. In February 08, the joint venture drilling intersected the down-dip extension of the SMC on the property (see news release dated February 13, 2008) and in July 08 the joint venture announced an indicated mineral resource of 43,000 tons grading 1.11 opt and an inferred mineral resource of 73,000 tons grading 1.24 opt (see KGI and Queenston joint news release dated July 16, 2008).

“From a Kirkland Lake Gold view point, we are pleased to see the mineralization expand on the joint venture claims while maintaining high-grade intersections consistent with the South Mine Complex.” said Stewart Carmichael, Chief Exploration Geologist. He added “We’re also seeing a new hanging wall system developing in addition to the New South and New South Hanging Wall zones.”

Charles Page of Queenston commented:

“Results from the recent drilling have intersected quality gold mineralization deeper into the joint venture property where the South Mine Complex remains open. The advanced underground drilling program continues with the goal of expanding the existing high-grade mineral resource further east and to the south.”

Queenston’s commitment to a rapid development program across multiple deposits make it one of the real contenders for putting high grade gold assets into production sooner rather than later. This is the kind of dynamicism that will make Queenston and Kirkland Lake Gold magnets for investment from both individual and institutional investors who will be looking to capitalize on the rapid rise in gold prices now underway.

Queenston’s issued capital is 52.6 million shares and has working capital of approximately C$16 million, sufficient to meet its aggressive exploration requirements for 2009.

DISCLOSURE: It is my intention to accumulate shares from time to time in Queenston Mining and Kirkland Lake Gold in the open market over the next several months.

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