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Dalradian Resources Inc DALRADIAN RESOURCES INC. AN UPDATED PRELIMINARY ECONOMIC ASSESSMENT OF THE CURRAGHINALT GOLD DEPOSIT, TYRONE PROJECT, NORTHERN IRELAND SIGNATURE DATE: October 30, 2014 EFFECTIVE DATE (RESOURCE): January 20, 2014 EFFECTIVE DATE (PEA): October 30, 2014 T. MAUNULA, P.GEO. B. FOO, P.ENG. R. GOWANS, P.ENG. A. VILLENEUVE, P.ENG. C. JACOBS, CEng MIMMM SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2 Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763 Table of Contents Page 1.0 SUMMARY .................................................................................................................... 1 1.1 SCOPE OF WORK ........................................................................................................... 1 1.2 LOCATION AND DESCRIPTION ....................................................................................... 1 1.3 GEOLOGY AND MINERALIZATION ................................................................................. 2 1.4 HISTORY ....................................................................................................................... 3 1.5 EXPLORATION ............................................................................................................... 4 1.6 MINERAL RESOURCES ................................................................................................... 4 1.6.1 Current Mineral Resource .................................................................................... 4 1.6.2 Previous Mineral Resource .................................................................................. 5 1.7 MINING ......................................................................................................................... 5 1.8 METALLURGY AND PROCESSING ................................................................................... 9 1.8.1 Mineralogy and Metallurgical Testing ................................................................. 9 1.8.2 Process Flowsheet ................................................................................................ 9 1.8.3 Process Description ............................................................................................ 10 1.9 INFRASTRUCTURE ....................................................................................................... 10 1.9.1 Access and Site Roads ....................................................................................... 10 1.9.2 Power Supply ..................................................................................................... 10 1.9.3 Water Supply ...................................................................................................... 11 1.9.4 Tailings Storage Facility .................................................................................... 11 1.10 ENVIRONMENTAL, PERMITTING AND SOCIAL .............................................................. 11 1.10.1 Studies and Issues .............................................................................................. 11 1.10.2 Waste and Water Management .......................................................................... 12 1.10.3 Social Management ............................................................................................ 13 1.10.4 Permits ............................................................................................................... 14 1.10.5 Closure ............................................................................................................... 14 1.11 CAPITAL AND OPERATING COST ESTIMATES ............................................................... 15 1.11.1 Capital Costs ...................................................................................................... 15 1.11.2 Operating Costs .................................................................................................. 16 1.12 ECONOMIC ANALYSIS AND SENSITIVITY STUDIES ....................................................... 16 1.12.1 Basis of Evaluation ............................................................................................ 16 1.12.2 Technical Assumptions ...................................................................................... 17 1.12.3 Sensitivity Study ................................................................................................ 24 1.13 CONCLUSIONS ............................................................................................................. 26 1.14 RECOMMENDATIONS ................................................................................................... 27 2.0 INTRODUCTION ........................................................................................................ 30 3.0 RELIANCE ON OTHER EXPERTS ......................................................................... 31 4.0 PROPERTY DESCRIPTION AND LOCATION .................................................... 32 4.1 LOCATION ................................................................................................................... 32 ii 4.2 DESCRIPTION .............................................................................................................. 32 4.3 LOCATION OF MINERALIZED ZONES ........................................................................... 36 4.4 ENVIRONMENTAL LIABILITIES .................................................................................... 37 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ....................................................... 38 6.0 HISTORY ..................................................................................................................... 40 6.1 ACQUISITION HISTORY................................................................................................ 40 6.2 EXPLORATION HISTORY .............................................................................................. 41 6.3 HISTORICAL MINERAL RESOURCE ESTIMATES ............................................................ 45 6.4 HISTORICAL PRODUCTION ........................................................................................... 45 7.0 GEOLOGICAL SETTING ......................................................................................... 46 7.1 REGIONAL GEOLOGY .................................................................................................. 46 7.2 PROPERTY GEOLOGY .................................................................................................. 47 7.2.1 Dalradian Supergroup – Licences DG1, DG3, and DG4 ................................... 47 7.2.2 Tyrone Igneous Complex – Licence DG2 ......................................................... 49 7.2.3 Carboniferous ..................................................................................................... 53 7.3 MINERALIZATION ........................................................................................................ 53 7.3.1 The Curraghinalt Deposit ................................................................................... 53 7.3.2 Tyrone Volcanic Group...................................................................................... 56 8.0 DEPOSIT TYPES ........................................................................................................ 57 8.1 OROGENIC GOLD DEPOSIT MODEL ............................................................................. 57 8.2 VOLCANIC MASSIVE SULPHIDE DEPOSIT MODEL ....................................................... 58 9.0 EXPLORATION .......................................................................................................... 60 9.1 2010–2011 .................................................................................................................. 60 9.2 2012–2013 .................................................................................................................. 64 10.0 DRILLING ................................................................................................................... 67 10.1 HISTORICAL DRILLING ................................................................................................ 67 10.1.1 Curraghinalt........................................................................................................ 67 10.1.2 Golan Burn ......................................................................................................... 67 10.1.3 Glenlark .............................................................................................................. 68 10.1.4 Tyrone Volcanic Group (DG2) – Cashel Rock Area ......................................... 68 10.2 DALRADIAN RESOURCES DRILLING ............................................................................ 68 10.2.1 Curraghinalt........................................................................................................ 68 10.2.2 Regional Drilling ................................................................................................ 74 10.3 CORE LOGGING ........................................................................................................... 74 11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY .................................. 77 11.1 2010 TO MID-2012 ...................................................................................................... 77 11.2 MID-2012 TO 2013 ...................................................................................................... 78 iii 11.3 QUALITY CONTROL/QUALITY ASSURANCE ................................................................
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