Project

Resource

The 2017 PEA has established mineral resources within a constraining pit using an economic cut-off of 0.15 g/t Au (based on assumptions of operating costs for a potential pit operation) as follows:

ClassificationTonnageGradeContained Metal
 ktAu (g/t)Ag (g/t)Oz. AuOz. Ag
Measured Resource  44,1300.530.65752,055922,331
Indicated Resource226,0100.380.672,761,5374,869,026
Measured plus Indicated Resources270,1400.400.673,513,5925,791,357
Inferred Resource181,3520.310.651,807,6893,790,315

 

Cautionary Statement Regarding Mineral Resource

This Mineral Resource Estimate was prepared by Gary Giroux, P.Eng. in accordance with CIM Definition Standards and NI 43-101, with an effective date of October 3, 2016.

 

A Mineral Resource is a concentration or occurrence of solid material of economic interest in the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

 

Mineral Resources are reported within a Lerchs-Grossman Constraining Pit Shell at a cut-off grade of 0.15 g/t Au.  The cut-off grade includes the following considerations: gold price of US$1,100/oz, exchange rate of 0.77 US$:C$; Payable gold % of 99.5%, Offsite refining costs of US$8/oz, royalties of 1.5%, mining costs of C$2.10/t, process costs (including General and Administration cost) of C$6.07/t, and a 90% process recovery. Silver value is not considered in the cut-off grade estimation.

 

A Measured Mineral Resource is that part of the Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation.

 

An Indicated Mineral Resource is that part of the Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.

 

An Inferred Mineral Resource is that part of the Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

 

Factors that may affect the estimates include: metal price assumptions, changes in interpretations of mineralization geometry and continuity of mineralization zones, changes to kriging assumptions, metallurgical recovery assumptions, operating cost assumptions, confidence in the modifying factors, including assumptions that surface rights to allow mining infrastructure to be constructed will be forthcoming, delays or other issues in reaching agreements with local or regulatory authorities and stakeholders, and changes in land tenure requirements or in permitting requirement.

 

Cautionary Statement Regarding Preliminary Economic Assessment

Preliminary Economic Assessment is preliminary in nature and may include measured and indicated mineral resources as well as inferred mineral resource.  A measured or indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling.  Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. Mineral resources are not mineral reserves do not have demonstrated economic viability.  There is no certainty that the PEA will be realized.

 

The 2017 PEA was prepared by Moose Mountain Technical Services (MMTS) under the direction of Marc Schulte, P. Eng., a Qualified Person (as defined under National Instrument 43-101) who is independent of the Company. The technical report presenting the results of the PEA was filed on April 10, 2017.

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