TECHNICAL REPORT AND MINERAL RESOURCE ESTIMATE UPDATE
on the
COLOMAC PROPERTY OF THE INDIN LAKE PROJECT INDIN LAKE BELT NORTHWEST TERRITORIES, CANADA
for
NIGHTHAWK GOLD CORP.
Report No. 972
A.C.A. Howe International Limited Toronto, Ontario, Canada
Ian D. Trinder, M.Sc., P.Geo.
Signing Date: June 17, 2013
TABLE OF CONTENTS
1 EXECUTIVE SUMMARY ...... 1
2 INTRODUCTION AND TERMS OF REFERENCE ...... 9
2.1 GENERAL ...... 9 2.2 SCOPE AND CONDUCT/DISCLAIMER ...... 10 2.3 SOURCES OF INFORMATION ...... 11 2.4 UNITS AND CURRENCY ...... 12
3 RELIANCE ON OTHER EXPERTS ...... 14
4 PROPERTY DESCRIPTION AND LOCATION ...... 15
4.1 LOCATION ...... 15 4.2 DESCRIPTION AND OWNERSHIP ...... 15 4.2.1 INDIN LAKE PROJECT OVERVIEW ...... 15 4.2.2 COLOMAC PROPERTY ...... 18 4.2.3 INDIN LAKE PROJECT NIGHTHAWK STAKED CLAIMS ...... 19 4.2.4 DAMOTI PROPERTY ...... 21 4.2.5 TREASURE ISLAND, LAURIE LAKE, BARKER-VIDIE AND LETA ARM PROPERTIES ...... 21 4.2.6 INDIN LAKE PROJECT AND COLOMAC PROPERTY CLAIM STATUS ...... 23 4.2.7 COLOMAC PROPERTY OWNERSHIP HISTORY ...... 27
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 33
5.1 ACCESSIBILITY ...... 33 5.2 CLIMATE ...... 33 5.3 LOCAL RESOURCES AND INFRASTRUCTURE ...... 34 5.3.1 LOCAL COMMUNITIES ...... 36
5.4 PHYSIOGRAPHY ...... 37 6 HISTORY ...... 39
6.1 1938-1947 EXPLORATION PERIOD ...... 39 6.1.1 COLOMAC SILL EXPLORATION ...... 39 6.1.2 GOLDCREST SILL EXPLORATION ...... 40
6.2 1947 - 1967 INACTIVE EXPLORATION PERIOD AND AMALGAMATION OF CLAIMS ...... 41 6.3 1968 - DISCOVERY MINES OPTION ...... 41 6.4 1969 – 1973 INACTIVE EXPLORATION PERIOD AND AMALGAMATION OF CLAIMS ...... 41 6.5 1974 COMINCO LTD. OPTION ...... 41 6.6 1975 - 1985 PROPERTY REVIEWS ...... 42 6.7 1985-1987 WOLLEX EXPLORATION ...... 42 6.8 1986 NORANDA EXPLORATION LIMITED ...... 42 6.9 1987 ECHO BAY MINES LTD...... 42 6.10 1987 TRIPLE CROWN RESOURCES CORP...... 42 6.11 1986 -1991 NEPTUNE RESOURCES CORP. EXPLORATION AND PRODUCTION ...... 42 6.11.1 MINE AND MILL OPERATIONS 1990-1991 ...... 44
6.12 1993-1997 ROYAL OAK MINES INC. EXPLORATION AND PRODUCTION ...... 45
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
6.12.1 MINE AND MILL OPERATIONS 1994-1997 ...... 47
6.13 1998-1999 ROYAL OAK ACTIVITIES AND RECEIVERSHIP ...... 48 6.14 2000 – 2011 DIAND (NOW AANDC) ACTIVITIES ...... 48 6.15 HISTORIC MINERAL RESOURCES AND RESERVES ...... 49 6.15.1 HISTORIC RESERVE ESTIMATES ...... 50 6.15.2 2012 HOWE MINERAL RESOURCE ESTIMATE ...... 52
7 GEOLOGICAL SETTING AND MINERALIZATION ...... 54
7.1 REGIONAL INDIN LAKE PROJECT GEOLOGY AND MINERALIZATION ...... 54 7.1.1 INDIN LAKE PROJECT MINERALIZATION ...... 56
7.2 COLOMAC PROPERTY GEOLOGY AND MINERALIZATION ...... 59 7.2.1 COLOMAC PROPERTY GEOLOGY ...... 59 7.2.2 COLOMAC PROPERTY MINERALIZATION AND ALTERATION ...... 63 7.2.3 COLOMAC PROPERTY EXPLORATION AT DEPTH ...... 71
8 DEPOSIT TYPES ...... 74
8.1 GREENSTONE-HOSTED QUARTZ-CARBONATE VEIN DEPOSITS ...... 74 8.2 BANDED IRON FORMATION-HOSTED GOLD DEPOSITS ...... 75 9 EXPLORATION ...... 76
9.1 2012 COLOMAC PROPERTY DIAMOND DRILL EXPLORATION ...... 76 9.2 2012 COLOMAC IP GEOPHYSICAL SURVEY...... 77 9.3 2012 INDIN LAKE PROJECT SUMMER PROSPECTING PROGRAM ...... 79 9.4 2011 FIXED-WING AIRBORNE GEOPHYSICAL SURVEY ...... 81 9.5 2011 TREASURE ISLAND AND LETA ARM SURFACE EXPLORATION ...... 83 9.6 2011 INDIN LAKE PROJECT SUMMER PROSPECTING PROGRAM ...... 84 9.6.1 ECHO-INDIN GOLD PROPERTY ...... 84 9.6.2 LETA ARM FAULT ZONE (LAFZ) ...... 84 9.6.3 JPK GOLD PROPERTY ...... 87
9.7 2009 AND 2010 DAMOTI LAKE EXPLORATION ...... 87 9.7.1 2010 DAMOTI SURFACE EXPLORATION ...... 87 9.7.2 2009 DAMOTI SURFACE EXPLORATION ...... 88 10 DRILLING ...... 89
10.1 GENERAL STATEMENTS - 2009, 2010, 2011 AND 2012 NIGHTHAWK DIAMOND DRILL PROGRAMS 89 10.2 2012 COLOMAC DIAMOND DRILL EXPLORATION ...... 90 10.3 2012 RELOGGING AND RESAMPLING OF ROYAL OAK 1997 DRILL CORE...... 97 10.4 2011 TREASURE ISLAND DIAMOND DRILL EXPLORATION ...... 98 10.5 2011 LETA ARM DIAMOND DRILL EXPLORATION ...... 101 10.6 2010 DAMOTI DIAMOND DRILL EXPLORATION ...... 108 10.7 2009 DAMOTI DIAMOND DRILL PROGRAM ...... 117 10.8 SAMPLING APPROACH AND METHODOLOGY OF DIAMOND DRILL PROGRAMS ...... 122
11 SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 125
11.1 HISTORIC SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 125 11.2 NIGHTHAWK SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 125
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
11.2.1 SAMPLE SECURITY ...... 125 11.2.2 CORE SAMPLE PREPARATION AND ANALYSIS ...... 125 11.2.3 PROSPECTING FIELD SAMPLE PREPARATION AND ANALYSIS ...... 127
11.3 2012 QUALITY ASSURANCE AND QUALITY CONTROL PROGRAM ...... 128 11.3.1 BLANK SAMPLES ...... 128 11.3.2 STANDARD GOLD REFERENCE MATERIALS ...... 128 11.3.3 CHECK SAMPLES ...... 129 11.3.4 QAQC CONCLUSIONS ...... 131
12 DATA VERIFICATION ...... 136
12.1 ACA HOWE SITE VISITS ...... 136 12.2 ACA HOWE 2011 VERIFICATION SAMPLING ...... 137 12.3 VERIFICATION OF HISTORIC DATA ...... 138 12.4 VERIFICATION OF NIGHTHAWK 2012 DATA ...... 139
13 MINERAL PROCESSING AND METALLURGICAL TESTING ...... 140
14 MINERAL RESOURCE ESTIMATES ...... 141
14.1 DATA SUMMARY ...... 141 14.2 DATA VALIDATION ...... 142 14.2.1 DATA EDITING ...... 143
14.3 DOMAIN INTERPRETATION...... 145 14.3.1 GEOLOGY ...... 145 14.3.2 MINERALISATION ...... 150
14.4 CLASSICAL STATISTICS ...... 152 14.5 TOP CUTS ...... 153 14.6 COMPOSITES ...... 153 14.7 GEOSTATISTICS ...... 154 14.8 RESOURCE ESTIMATION METHOD ...... 156 14.9 GRADE INTERPOLATION...... 157 14.9.1 SEARCH ELLIPSE PARAMETERS ...... 157
14.10 BLOCK MODELLING ...... 158 14.10.1 EMPTY CELL BLOCK MODEL ...... 158
14.11 RESOURCE CLASSIFICATION ...... 159 14.12 MODEL VALIDATION ...... 161 14.12.1 GLOBAL VALIDATION ...... 161 14.12.2 LOCAL VALIDATION ...... 162 14.12.3 SECTIONAL VALIDATION PLOTS ...... 165
14.13 RESOURCE ESTIMATE REPORTING ...... 165 14.13.1 REASONABLE PROSPECTS FOR ECONOMIC EXTRACTION ...... 165 14.13.2 RESOURCE ESTIMATE REPORT ...... 166
14.14 CHANGE RELATIVE TO THE 2012 HOWE RESOURCE ESTIMATE ...... 168 14.15 COLOMAC GRADE-TONNAGE RELATIONSHIP ...... 171
15 ADJACENT PROPERTIES ...... 173
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
16 OTHER RELEVANT DATA AND INFORMATION ...... 173
17 INTERPRETATION AND CONCLUSIONS ...... 174 18 RECOMMENDATIONS ...... 176
18.1 BUDGET ...... 176 19 REFERENCES...... 177
20 DATE AND SIGNATURE PAGE ...... 180
21 CERTIFICATE ...... 181
LIST OF TABLES
TABLE 4-1: LIST OF MINING LEASES WITHIN THE COLOMAC PROPERTY ...... 18 TABLE 4-2: LIST OF MINERAL CLAIMS WITHIN THE COLOMAC PROPERTY ...... 19 TABLE 4-3: LIST OF MINING LEASES WITHIN THE DAMOTI PROPERTY ...... 21 TABLE 4-4: LIST OF MINING LEASES WITHIN THE LETA ARM PROPERTY ...... 22 TABLE 4-5: LIST OF MINERAL CLAIMS WITHIN THE TREASURE ISLAND, LAURIE LAKE AND BARKER-VIDIE PROPERTIES ...... 23 TABLE 4-6: OWNERSHIP HISTORY OF THE COLOMAC PROPERTY MINING LEASES...... 28 TABLE 4-7: OWNERSHIP HISTORY OF THE COLOMAC PROPERTY MINERAL CLAIMS ...... 29 TABLE 6-1: SUMMARY OF 1945-1946 DIAMOND DRILLING ON THE COLOMAC SILL ...... 40 TABLE 6-2: NEPTUNE/NORTHWEST DIAMOND DRILLING 1987 TO 1991...... 44 TABLE 6-3: ROYAL OAK DIAMOND DRILLING 1993 TO 1997 ...... 47 TABLE 6-4: CHANGES IN ZONE 2.0, 2.5 AND 3.0 OPEN PIT HISTORIC RESERVE ESTIMATES THROUGH TIME .... 51 TABLE 6-5: 2012 COLOMAC INFERRED MINERAL RESOURCES BY ZONE ...... 53 TABLE 7-1: SIGNIFICANT GOLD DEPOSITS AND SHOWINGS WITHIN NIGHTHAWK’S INDIN LAKE PROJECT AREA ...... 57 TABLE 9-1: SUMMARY OF THE 2012 COLOMAC DRILL PROGRAM ...... 76 TABLE 9-2: 2DIP AND 3DIP SURVEY OPERATING PARAMETERS ...... 78 TABLE 9-3: SPECIFICATIONS OF THE 2011 INDIN LAKE PROJECT AIRBORNE GEOPHYSICAL SURVEY...... 82 TABLE 9-4: SUMMARY OF THE 2011 TREASURE ISLAND DRILL PROGRAM ...... 83 TABLE 9-5: SUMMARY OF THE 2011 LETA ARM DRILL PROGRAM ...... 84 TABLE 9-6 SUMMARY OF THE 2010 DAMOTI LAKE DRILL EXPLORATION PROGRAM ...... 87 TABLE 9-7 SUMMARY OF THE 2009 DRILL EXPLORATION PROGRAM ...... 88 TABLE 10-1: COLLAR DETAILS FOR COLOMAC 2012 DDHS ...... 92 TABLE 10-2: EXAMPLES OF 2012 GOLD INTERSECTIONS FROM COLOMAC ...... 94 TABLE 10-3: COLLAR DETAILS FOR TREASURE ISLAND 2011 DDHS ...... 99 TABLE 10-4: EXAMPLES OF GOLD INTERSECTIONS FROM TREASURE ISLAND ...... 101 TABLE 10-5: COLLAR DETAILS FOR LETA ARM 2011 DDHS ...... 102 TABLE 10-6: EXAMPLES OF GOLD INTERSECTIONS FROM LETA ARM...... 107 TABLE 10-7 COLLAR DETAILS OF THE 2010 DAMOTI DDHS ...... 109 TABLE 10-8: EXAMPLES OF GOLD INTERSECTIONS FROM DAMOTI LAKE 2010 ...... 116 TABLE 10-9 COLLAR DETAILS OF THE 2009 DAMOTI DDHS ...... 119
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
TABLE 10-10: EXAMPLES OF GOLD INTERSECTIONS FROM DAMOTI LAKE 2009 ...... 121 TABLE 11-1: NIGHTHAWK GOLD STANDARD REFERENCE MATERIALS, VALUES AND PERFORMANCE GATES . 129 TABLE 12-1: ACA HOWE VERIFICATION SAMPLES – SGS ANALYTICAL METHOD ...... 137 TABLE 12-2: ACA HOWE VERIFICATION SAMPLES ...... 138 TABLE 14-1: COLOMAC MICROMINE INPUT DATA FILES...... 143 TABLE 14-2: ROCK CODES IN THE COLOMAC GOLD PROJECT BLOCK MODEL ...... 151 TABLE 14-3: COLOMAC DOMAIN WIREFRAMES ...... 152 TABLE 14-4: STATISTICS FOR RAW GOLD ASSAYS FOR ALL RESOURCE DOMAINS ...... 153 TABLE 14-5: STATISTICS FOR CAPPED GOLD COMPOSITES FOR ALL RESOURCE DOMAINS ...... 154 TABLE 14-6 MODELED VARIOGRAM PARAMETERS FOR GOLD GRADE INTERPOLATION ...... 156 TABLE 14-7: BLOCK MODEL INTERPOLATION PARAMETERS ...... 158 TABLE 14-8: COMPARISON OF MEANS ...... 162 TABLE 14-9: COLOMAC INFERRED MINERAL RESOURCES BY ZONE (0.6 G/TONNE BLOCK MODEL CUT-OFF) ...... 167 TABLE 14-10: RELATIVE CHANGE IN REPORTED RESOURCES FROM THE 2012 TO CURRENT 2013 BLOCK MODEL...... 169 TABLE 14-11: COLOMAC BLOCK GRADE-TONNAGE RELATIONSHIP...... 171 TABLE 18-1: NIGHTHAWK COLOMAC PROPERTY PROPOSED 2013-14 EXPLORATION PROGRAM AND BUDGET ...... 176
LIST OF FIGURES
FIGURE 4-1: NIGHTHAWK’S INDIN LAKE PROJECT AND COLOMAC PROPERTY LOCATION MAP ...... 16 FIGURE 4-2: MAP OF NIGHTHAWK’S INDIN LAKE PROJECT AND COLOMAC PROPERTY MINING LEASES AND MINERAL CLAIMS ...... 17 FIGURE 4-3: MAP OF COLOMAC PROPERTY MINING LEASES AND MINERAL CLAIMS ...... 20 FIGURE 5-1: NIGHTHAWK'S 2012 COLOMAC CAMP LOOKING SOUTH ...... 35 FIGURE 5-2: TYPICAL LOCAL PHYSIOGRAPHY ...... 38 FIGURE 7-1: REGIONAL GEOLOGY, INDIN LAKE PROJECT AREA ...... 55 FIGURE 7-2: SIGNIFICANT GOLD DEPOSITS AND SHOWINGS - NIGHTHAWK'S INDIN LAKE PROJECT ...... 58 FIGURE 7-3: COLOMAC PROPERTY GEOLOGY WITH LOCATION OF GOLD SHOWINGS/DEPOSITS ...... 62 FIGURE 7-4: TYPICAL GEOLOGICAL SECTION THROUGH THE COLOMAC SILL – ZONE 3 ...... 64 FIGURE 7-5: TYPICAL GEOLOGICAL SECTION THROUGH THE GOLDCREST NORTH ZONE ...... 67 FIGURE 7-6: TYPICAL GEOLOGICAL SECTION THROUGH THE GRIZZLY BEAR ZONE ...... 68 FIGURE 7-7: LONGITUDINAL SECTION OF ZONE 24/27 ...... 70 FIGURE 7-8: LONGITUDINAL SECTION OF ZONE 3.5 SHOWING ROYAL OAK 1997 DEEP DRILL HOLE INTERCEPTS...... 72 FIGURE 7-9: EXAMPLE DRILL HOLE CROSS SECTION –1997 ZONE 3.5 DEEP DRILLING PROGRAM ...... 73 FIGURE 9-1: 2012 PROSPECTING RESULTS - INDIN LAKE PROJECT ...... 80 FIGURE 9-2: 2011 PROSPECTING ZONES WITHIN THE LETA ARM FAULT ZONE ...... 86 FIGURE 10-1: COLOMAC – 2012 DRILL COLLARS ...... 93 FIGURE 10-2: TREASURE ISLAND - DRILL COLLARS, CLAIMS, AND GEOLOGY (INCLUDING AU SHOWINGS) .. 100 FIGURE 10-3: LETA ARM AREA- DRILL COLLARS, CLAIMS, AND GEOLOGY ...... 104
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
FIGURE 10-4 LETA ARM MAP A - NORTH INCA DRILL COLLARS, CLAIMS, AND GEOLOGY ...... 105 FIGURE 10-5 LETA ARM MAP B - DIVERSIFIED DRILL COLLARS, CLAIMS, AND GEOLOGY ...... 106 FIGURE 10-6 BIF ISLAND AREA 2010 DRILL COLLAR PLAN ...... 112 FIGURE 10-7: GRANITE SHOWING AREA 2010 DRILL COLLAR PLAN ...... 113 FIGURE 10-8: HORSESHOE & AREA 2010 DRILL COLLAR PLAN ...... 115 FIGURE 10-9: LOCATION OF HISTORIC SHOWINGS IN DAMOTI SOUTH PENINSULA AREA ...... 118 FIGURE 10-10: 2009 PLAN OF DAMOTI DRILL HOLE COLLAR LOCATIONS ...... 122 FIGURE 11-1: FA-AA VS FA-GRAV REPEAT ANALYSES – 2012 DRILL CORE ...... 133 FIGURE 11-2: ALS FINE FRACTION (AU-SCR21) VS FA-ICP PULP CHECK ANALYSES – 2012 DRILL CORE . 134 FIGURE 11-3: ROYAL OAK 1997 ASSAYS VS ALS NIGHTHAWK 2012 DUPLICATE CORE ASSAYS ...... 135 FIGURE 14-1. NAD83 UTM GRID ROTATIONS ...... 144 FIGURE 14-2 LEAPFROG MODEL OF THE COLOMAC SILL ...... 147 FIGURE 14-3: GEOLOGICAL MODEL ZONE 2.0 – SECTION 7142900 LOOKING NNE ...... 148 FIGURE 14-4: GEOLOGICAL MODEL ZONE 3.5 – SECTION 7140980 LOOKING NNE ...... 149 FIGURE 14-5: BLOCK MODEL VALIDATION ZONE 2.0 – SECTION 7142900 LOOKING NNE ...... 163 FIGURE 14-6: BLOCK MODEL VALIDATION –ZONE 3.5 – SECTION 7140980 LOOKING NNE ...... 164 FIGURE 14-7 COMPOSITE ASSAYS VS. BLOCK MODEL GRADE VARIATION WITH DEPTH ...... 165 FIGURE 14-8 COLOMAC CENTRAL AND SOUTHERN ZONES AND EXTENT OF THE 2012 AND 2013 RESOURCE ESTIMATES ...... 170 FIGURE 14-9 COLOMAC GRADE TONNAGE CURVE ...... 172
LIST OF APPENDICES
APPENDIX I. INDIN LAKE PROJECT - MINERAL CLAIMS AND MINING LEASES
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
1 EXECUTIVE SUMMARY
This technical report (“Report”) is prepared by A.C.A. Howe International Limited (“Howe”) at the request of Dr. Michael Byron, Chief Geologist and Director, Nighthawk Gold Corp. (“Nighthawk”). This report is specific to the standards dictated by National Instrument 43-101(NI 43-101), companion policy NI43-101CP and Form 43-101F1 (Standards of Disclosure for Mineral Projects) in respect to the Colomac Property (“Property”) and the encompassing Indin Lake Project and focuses on an update of Howe’s 2012 independent mineral resource estimate including the historic Colomac, Goldcrest and Goldcrest North (Dyke Lake) zones. Howe’s 2012 mineral resource estimate of the Grizzly Bear, 24 and 27 Zones has not been updated and is restated herein. The mineral resource estimate update is prepared in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards for Mineral Resources and Mineral Reserves (November 27, 2010) as per NI 43- 101 requirements. Only mineral Resources are estimated – no mineral Reserves are defined.
The Colomac Property consists of nine leases (4,842.70 ha or 11,966.6 acres) and two staked claims (128.00 ha or 316.3 acres) totaling 4,970.70 hectares (12,282.9 acres). The Property forms part of and is situated in the central portion of Nighthawk’s larger Indin Lake Project (89,922.46 hectares or 222,203.23 acres) in the Indin Lake area of the Northwest Territories at latitude 64o24'N, longitude 115o05'W (UTM Zone 11N 592,000E 7,143,000N NAD83 datum), approximately 220 km northwest of Yellowknife.
Nighthawk holds or has the option to acquire a 100% interest in the Indin Lake Project. Between 2009 and 2011, Nighthawk staked a 100% undivided interest in 115 claims totaling 79,812.41 hectares (197,220.70 acres). Nighthawk has also acquired or has the option to acquire a 100% interest in 30 leases (9,020.14 hectares or 22,289.29 acres) and 5 staked claims (1,089.91 hectares or 2,693.24 acres) within the historic Colomac, Treasure Island, Laurie Lake, Barker-Vidie, Leta Arm (North Inca, Diversified and Lexindin) and Damoti Properties.
The Colomac Property can be accessed by helicopter, by ski- or float-equipped fixed-wing aircraft to Baton Lake and Steeves Lake, by ski- or wheel-equipped fixed-wing aircraft to an unmaintained 1,525 metre (5,000 foot) gravel airstrip on the Property which is capable of handling aircraft up to the size of a Hercules transport. Land access to the property is possible via an approximately 245 km winter road that starts west of Yellowknife from the No. 3 Highway at the Tåîchô community of Behchokö.
The Indin Lake Project and Colomac Property lie in the Indin Lake Supracrustal Belt, a 2,000 km2, NNE-trending elongate area of volcanic and sedimentary rocks which are Archean in age and belong to the Yellowknife Supergroup (Frith, 1986). The belt lies in the southwestem part of the Slave Structural Province, 30 km east of the boundary with the Bear Province (Morgan, 1992). Volcanic rocks of the belt are comprised of mafic to intermediate flows, synvolcanic intrusive dykes and sills and felsic pyroclastic units and underlie roughly 30% of the Indin Lake area (Morgan, 1992). The volcanics form generally NNE-trending, elongate units ranging up to 5 km wide and 30 km long generally surrounded by metasediments (Morgan, 1992). The volcanic sequence is bimodal (intermediate compositions are rarer than felsic or mafic) and is 80% to 85% mafic and 15% to 20%
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 1 of 181 June 17, 2013
felsic. Ultramafic rocks, metamorphosed to talc-chlorite-carbonate schist, underlie a few hectares of the Colomac property.
The volcanics are overlain by and interfingered with sedimentary rocks, predominantly turbidite sequences of argillites, greywackes and siltstones; Narrow lenses or discontinuous layers of sulphide (pyrite-pyrrhotite) iron formation, sulphide-bearing argillite, and graphitic argillite are common in the sediments where they interfinger with felsic volcanics (Morgan, 1992).
The Indin Lake Supracrustal belt has been metamorphosed to lower greenschist facies with local amphibolitic facies.
Nighthawk’s Indin lake Project area includes more than 20 known gold deposits and showings:
SIGNIFICANT GOLD DEPOSITS AND SHOWINGS WITHIN NIGHTHAWK’S INDIN LAKE PROJECT AREA
Deposit/Showing Style of Mineralization
1 Colomac Auriferous stacked, quartz veins/stockworks/silicified zones 2 Goldcrest hosted by intermediate intrusive 3 Goldcrest North / Dyke Lake
4 Grizzly Bear 5 Laurie Lake Auriferous stacked, silicified zones, often spatially associated 6 Treasure Island with felsic units Chalco Zone - West Shore & Face 7 Peninsula showings
8 24/27 Zones 9 Chalco Zone - Northeast showing 10 Chalco Zone – North End showing Auriferous quartz veins or silicified zones in mafic volcanics 11 North Inca Mine often within or near graphitic argillites and fault/shear zone 12 Diversified Mine along contacts of mafic volcanic–sedimentary belts 13 #3 Zone 14 Lexindin Zone 15 Barker-Vidie
16 Echo-Indin Gold associated with sulfides (in particular, arsenopyrite and 17 Goose Lake loellingite) and quartz-carbonate veins or silicified zones 18 Lucky Lake within mafic volcanic units or intrusive equivalents. Possible 19 Albatross showings extensions of the Kim and Cass zones.
20 Fishhook 21 Damoti Lake BIF-hosted gold 22 BIF Island 23 JPK
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 2 of 181 June 17, 2013
The Colomac Property is underlain by a 4 km thick belt of lower greenschist-grade intercalated mafic- intermediate flows, intermediate-felsic volcanics and intermediate intrusives, bounded by metasediments both to the east and to the west.
A multiphase, synvolcanic intrusive complex (about 2x10 km in area) intrudes the volcanics on the west of Baton Lake, within 800 m of the western volcanic/sedimentary contact. Based on its conformable orientation with the volcanic stratigraphy, the complex is generally considered to be a sill intruded in a horizontal position and later rotated or folded together with the surrounding volcanic rock rocks into its present, steeply-dipping orientation.
The Colomac Sill (also historically referred to as the Colomac Dyke because of its present steeply dipping orientation), which hosts the Colomac deposits, occurs near the east side of the intrusive complex in contact with, or nearby, andesitic volcanics. It is composed mainly of a medium-grained quartz diorite/quartz gabbro (dioritic to trondhjemitic). Where tested along its strike, the Colomac Sill ranges from 40 to 200 m in width (averaging 100 m). The quartz diorite (historic QFP) portion of the Colomac Sill ranges from 9-60 m in width (averaging 30 m). The sill has a drill tested strike length of about 6 kilometres. It does not have a strong tectonic fabric. The Sill is oriented 010/80 in the north, and 023/80 in the south. The Sill has been brittly deformed to produce fracture stockworks and auriferous quartz-vein zones that are highly altered and carbonatized.
The Colomac Property contains several gold deposits and showings, the most significant of which including the Colomac zones (Zones 1.0, 1.5, 2.0, 2.5, 3.0 and 3.5), Goldcrest Zone, Gold Crest North Zone (Dyke Lake), Grizzly Zone (Airport Showing), Zone 24, and Zone 27 (Cohoon et al., 1991).
Gold mineralization has been identified along an approximate 5 km strike length of the Colomac Sill and has been divided into a number of somewhat arbitrary zones based on: spatial position along the Sill; location with respect to historic claim boundaries and; grade of mineralization. The zones have been identified from north to south as Zones 1.0, 1.5, 2.0, 2.5, 3.0, 3.5, 4.0 and 5.0. Within the Colomac Sill, gold is found in association with parallel sets of glassy, tensional quartz veins that consist of lenses of smoky grey quartz within white quartz (NWT Geoscience Office, 2012a). The quartz veins generally terminate at the Sill margins but a few small, barren quartz-carbonate veins occur locally in the andesite. A late set of white, barren quartz veins is also present.
The Goldcrest Zone is hosted by the Goldcrest Sill, a medium-grained, quartz diorite/quartz gabbro intrusion (dioritic to trondhjemitic) (also historically referred to as the Goldcrest Dyke because of its present steeply dipping orientation). The Goldcrest (South) Zone has a width of 100 metres and a drill tested strike length of 1 kilometre. The Goldcrest North Zone has a drill tested width of 100 metres and a strike length of 300 metres. The Goldcrest mineralized zone is very similar to the Colomac Sill deposits where quartz veins intrude competent, fractured, quartz diorite but the mineralization and veining is more erratic at the Goldcrest Zone.
The Goldcrest North (or Dyke Lake Zone), about 210 metres west of the north end of the Goldcrest
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 3 of 181 June 17, 2013
sill, consists of a fine-grained, massive, siliceous, sericitized quartz or dacite porphyry dyke/sill associated with a narrow band of rhyolite. The dyke/sill is up to 18 metres wide. Abundant glassy grey quartz veins cut the porphyry, and pyrrhotite and arsenopyrite are present.
The Grizzly Bear Zone (previously referred to as the Airport Zone by Neptune) is located on Mining leases 3529 and 2662, about 3 kilometres west and 2 kilometres south of the Colomac Zone 2 deposit.
The Grizzly Bear Zone is underlain by greenschist-grade mafic metavolcanics and metasediments, containing a felsic lapilli tuffaceous horizon. The tuff is strongly foliated, rhyolite clast-supported, pervasively sericitized, contains thin wisps of pyrrhotite parallel to the foliation, and may have local biotitization and carbonatization. The mineralized zone is subparallel to the strata, trending NE, and contains anomalous hydrothermal alteration, sulphide mineralization and gold (NWT Geoscience Office, 2012c). The mineralization consists of quartz-veins and veinlets with disseminated sulphides and native gold over widths up to 15 metres.
Zone 24 is marked by areas of intense quartz flooding within interbedded andesite and greywacke siltstone. Quartz flooding occurs as parallel "veins". The quartz flooding trends at azimuth 175 and dips 80 to 85 to the southwest.
Nighthawk’s 2012 Colomac drill program of 30 holes totaling 11,235 metres focused on a 2.5 kilometre section of the Colomac Sill between Zones 2.0 and 3.5. Sectional drilling tested depths up to 200 metres below the 2012 resource. Three drill sections (6 holes) were completed over a strike length of 200 metres testing beneath the historic Zone 2.0 open pit and the extension of the 2012 resource model at depth and to the north Two drill sections (4 holes) were completed over a strike length of 100 metres testing immediately north of the historic Zone 2.5 open pit and the extension of the 2012 resource model at depth. Three drill sections (6 holes) were completed over a strike length of 100 metres testing beneath the south end of the historic Zone 3.0 open pit, the northern lateral limits of the plunging mineralized shoot within Zone 3.5 and the extension of the 2012 resource model at depth. A fourth and fifth drill section tested beneath the historic Zone 3.0 open pit approximately 100 and 200 metres north of the other three sections. Nine holes were drilled on four sections spaced 50 metres apart to intersect the plunging mineralized shoot within Zone 3.5 discovered by Royal Oak Mines in 1997 to better define its geometry, and extend it along strike and at depth. The 2012 drilling confirmed the presence of higher grade gold shoots (beneath Zones 2.0, 2.5, 3.0, and 3.5), all of which remain open to depth and laterally within broader envelopes of mineralization hosted by the Colomac Sill.
Howe has reviewed the Colomac Property data provided by Nighthawk including the current and historic drilling database. Howe visited the site in 2011 prior to the 2012 drill program. Howe attempted to visit the Property in the fall of 2012 but was unable to access the site by helicopter on two days due to poor weather conditions. Howe intends to revisit the site when Nighthawk personnel are on site and weather conditions permit. Howe believes that the data presented by the Company are generally an accurate and reasonable representation of the Colomac Property mineralisation. Howe concludes that the database for the Colomac Property is of sufficient quality to provide the basis for the conclusions and recommendations reached in this Report.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 4 of 181 June 17, 2013
The acquisition of drill data from 20 historic 1997 Royal Oak holes completed at zones 3.5 and the completion 30 new Nighthawk drill holes in 2012 has increased the total assayed metreage by 8% from 45,120 m to 48,790 m.
Of the 30 new Nighthawk holes, 9 were designed to infill the 20 historic Royal Oak holes focused on the mineralised shoot at Zone 3.5. The remainder are step-out holes to test the continuation at depth of higher grade intervals at Zones 2 and 3. All but one 2012 hole was successful in intersecting mineralised portions of the Colomac Sill allowing the delineation of new resource blocks at depths described in Table 14-10.
Nighthawk's 2012 drill database and the historic drilling database and historic corporate reports provide sufficient detail on the nature of the mineralised zones to permit Howe’s completion of a Mineral Resource Estimate.
Using a block cut-off grade of 0.6 g/tonne gold for its mineral resource estimate, Howe outlined a series of north trending, steeply dipping mineralised zones including three contiguous zones hosted by the Colomac Dyke (North, Central and South zones) and 5 other zones including the Goldcrest North (Dyke Lake), Goldcrest, Grizzly Bear, 24 and 27 Zones. The reported mineralized zones generally extend to a vertical depth of less than 300 metres except Colomac Central and South zones which extend to a maximum vertical depth of less than 500 metres along portions of their strike lengths. The modeled mineralized zones are open to depth and generally along strike.
It is ACA Howe’s opinion that resources estimated as part of its 2013 update meet with the CIM “Inferred” category. Classifications are based upon consideration of the quality of input data, modeling and estimation methodology, interpolation criteria based on sample density, search and interpolation parameters, understanding and robustness of the geological model, and density.
For the defined and modelled zones developed using the quartz diorite domain, a 0.5 g/t Au envelope within the quartz diorite domain and a 0.1 g/t Au envelope within the quartz gabbro domain, total “Inferred” resources are estimated to be 38.09 Mt at 1.67 g/t Au for approximately 2,042,000 oz Au at a cut-off grade of 0.6 g/t Au. The updated resource estimate also incorporates the unchanged 2012 estimates of the Grizzly Bear and 24/27 satellite deposits equal to 1.725 Mt at 1.06 g/t Au for approximately 59,000 oz Au at a cut-off grade of 0.6 g/t Au.
The total updated estimate is 39.815 Mt at 1.64 g/t Au for approximately 2,101,000 oz Au at a cut-off grade of 0.6 g/t Au and predicts a 7 % decrease in total resource tonnes, a 56 % increase in gold grade compared to the preliminary mineral resource estimate undertaken by ACA Howe in January 2012 and a 45 % increase in estimated ounces of gold.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 5 of 181 June 17, 2013
COLOMAC INFERRED MINERAL RESOURCES BY ZONE (0.6 G/TONNE BLOCK MODEL CUT-OFF)
Zone Tonnes g/t Au Oz Au
Colomac North 6,963,000 1.24 276,900 Colomac Central 19,170,000 1.63 1,002,000 Colomac South 10,840,000 1.96 684,500 Goldcrest North 678,500 2.23 48,650 Goldcrest South 434,900 2.14 29,880 Sub Total 38,090,000 1.67 2,042,000 Grizzly Bear (Not Updated, No Change) 807,000 1.04 27,000 27 (Not Updated, No Change) 528,000 1.21 20,000 24 (Not Updated, No Change) 390,000 0.96 12,000 Sub Total 1,725,000 1.06 59,000 Total 39,815,000 1.64 2,101,000 Notes: 1. A block cut-off value of 0.6 g/t Au was applied to all resource blocks. 2. Tonnes and ounces have been rounded to reflect the relative accuracy of the mineral resource estimate; therefore numbers may not total correctly. 3. Mineral Resources were calculated with commercial mining software. 4. For 2013 updated Colomac and Goldcrest block models: Drill holes traces showing lithology and gold grade were reviewed in plan and cross section. Geological domains were created using Leapfrog Implicit Geological Modeling Software. Assays with each domain were top cut to 31 g/t and then composited to regular 5ft intervals. Block model grade interpolation was undertaken using Ordinary Kriging (OK). 5. For 2012 Grizzly Bear, 24 and 27 block models: Drill holes traces showing lithology and gold grade were reviewed in plan and cross section to generate mineralised domains. Assays with each domain were top cut to 31 g/t and then composited to regular 5ft intervals. Block model grade interpolation was undertaken using Multiple Indicator Kriging (MIK). Refer to Lee and Trinder (2012). 6. The resource estimate was prepared by Leon McGarry, B.Sc., Geologist, ACA Howe and supervised by Ian Trinder, M.Sc., P.Geo., ACA Howe. 7. Gold price is US$1500 per ounce. 8. A default average specific gravity (SG) value of 2.7 has been used. 9. Mineral Resource tonnes quoted are not diluted. 10. No Measured or Indicated Resources or Mineral Reserves of any category are identified. 11. Mineral resources are not mineral reserves and by definition do not demonstrate economic viability. This mineral resource estimate includes Inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these Inferred mineral resources will be converted to the measured and indicated resource categories through further drilling, or into mineral reserves, once economic considerations are applied. 12. 1 troy ounce equals 31.10348 grams.
Howe is not aware of any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant issues that could potentially affect this estimate of mineral resources. The mineral resources may be affected by potential future conceptual study assessments of mining, processing, environmental, permitting, taxation, socio-economic and other factors. There is insufficient information at this early stage of study to assess the extent to which the resources might be affected by these factors.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 6 of 181 June 17, 2013
At the current drill spacing over the deposit (i.e. 15 to 120 m), the current geological model at Colomac is considered robust enough to allow for the extrapolation of mineralised shoots at depth and along strike for resource class upgrade through additional infill drilling at the central and southern portions of the Colomac Sill.
The Goldcrest South and North deposits may represent a parallel sill of mineralized quartz diorite. Exploratory step out drilling along strike and between the two deposits may intersect additional mineralised.
The Colomac Property is centred on the historic Colomac mine site; now decommissioned, dismantled and rehabilitated. Most of Neptune’s and Royal Oak’s historic activity on the property was focused on delineating and defining mineralization amenable to mining and processing with the Colomac open pit mining fleet and 10,000 ton per day mill. Very little work was focused on exploring for targets that would be suitable for underground mining methods or for small open pit mineable zones with processing at a lower rate. It is interesting to note that Royal Oak’s surface drilling statistics from 1993 to 1997 show an average drill hole length of only approximately 100 metres.
Howe concludes that the Colomac Property warrants additional exploration expenditures to investigate the various mineralized zones at the Colomac Property below the relatively shallow historically drilled depths and along strike where mineralization is open.
Howe recommends that work be conducted on the Colomac Property as follows:
1. Additional diamond drilling should be completed at the Colomac Central Zone (historic Zones 1.0, 1.5, 2.0, 2.5, 3.0 and 3.5) to: (a) follow up on recent drill results and expand Inferred mineral resources at depth and along strike (b) continue to explore and delineate possible higher grade mineralized shoots along the sill and (c) possibly upgrade Inferred resources to Indicated resources. 2. Additional diamond drilling should be completed elsewhere on the Colomac Sill and other zones/targets on the Property; in particular Goldcrest, Goldcrest North and Grizzly Bear, in an attempt to: (a) confirm historic drill results (b) expand Inferred mineral resources along strike and at depth and (c) possibly upgrade Inferred resources to Indicated resources.
In line with Howe's recommendations, Nighthawk has proposed a budget totaling $5,000,000 for exploration work in 2013-14. The proposed program and budget as shown in Table 26-1 is to be completed as a single phase starting with winter on-ice drilling and continuing with land-based drilling in the summer after ice breakup. The program will permit Nighthawk to complete 10,000 m of drilling to continue upgrading and expanding the Colomac Property mineral resource.
Howe considers Nighthawk’s proposed budget reasonable and recommends that the Company proceed with the proposed work program.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 7 of 181 June 17, 2013
NIGHTHAWK COLOMAC PROPERTY PROPOSED 2013-14 EXPLORATION PROGRAM AND BUDGET
Total
Exploration Camp Open exploration camp at Colomac $100,000
Summer in-fill and step-out drilling of Central Colomac Sill resource area to approximately 450m vertical depth (historic 7,000m Colomac Zones 1.0, 1.5, 2.0, 2.5, 3.0 and 3.5) Exploration Drilling all inclusive (drill, support, assays, personnel and camp Winter drilling at Goldcrest, Goldcrest North and Grizzly Bear operating costs) resource areas to approximately 250m vertical depth 3,000m
Total Exploration Drilling x $500/metre 10,000m $5,000,000
Total Budget $5,100,000
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 8 of 181 June 17, 2013
2 INTRODUCTION AND TERMS OF REFERENCE
2.1 GENERAL
This technical report (“Report”) was prepared by A.C.A. Howe International Limited (“Howe”) at the request of Dr. Michael Byron, Chief Geologist and Director, Nighthawk Gold Corp. (“Nighthawk”). This report is specific to the standards dictated by National Instrument 43-101 (NI 43-101), companion policy NI43-101CP and Form 43-101F1 (Standards of Disclosure for Mineral Projects) in respect to the Colomac Property (“Property”) and the encompassing Indin Lake Project and focuses on an update of Howe’s 2012 independent mineral resource estimate including the historic Colomac, Goldcrest and Goldcrest North (Dyke Lake) zones. Howe’s 2012 mineral resource estimate of the Grizzly Bear, 24 and 27 Zones has not been updated and is restated herein. The mineral resource estimate is prepared in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards for Mineral Resources and Mineral Reserves (November 27, 2010) as per NI 43-101 requirements. Only mineral Resources are estimated – no mineral Reserves are defined.
The Colomac Property consists of nine leases (4,842.70 ha or 11,966.6 acres) and two staked claims (128.00 ha or 316.3 acres) totaling 4,970.70 hectares (2,282.9 acres). The Property forms part of and is situated in the central portion of Nighthawk’s larger Indin Lake Project (89,958.91 hectares or 222,293.31 acres) in the Indin Lake area of the Northwest Territories at latitude 64o24'N, longitude 115o05'W (UTM Zone 11N 592,000E 7,143,000N NAD83 datum), approximately 220 kilometres northwest of Yellowknife.
Nighthawk is a Canadian-based public exploration company incorporated in the province of Ontario, Canada. It is focused on acquiring and developing gold mineral properties in the Northwest Territories. The corporate head office is located at Exchange Tower, 130 King Street West, Suite 2120, Toronto, Ontario, M5X 1C8. On April 30, 2012, Nighthawk announced its name change from Merc International Minerals Inc. (Merc). All work conducted by Nighthawk on the Indin Lake Project and the Colomac Property prior to that date was done so under the name of Merc.
Howe is an international geological and mining consulting firm that was incorporated in the province of Ontario in 1966 and has continuously operated under a “Certificate of Authorization” to practice as Professional Engineers (Ontario) since 1970 and Professional Geoscientists (Ontario) since 2006. Howe provides a wide range of geological and mining consulting services to the international mining industry, including geological evaluation and valuation reports on mineral properties. The firm’s services are provided through offices in Toronto and Halifax, Canada and London, U.K.
Neither Howe nor the authors of this Report (nor family members or associates) have a business relationship with Nighthawk or any associated company, or with any company mentioned in this Report that is likely to materially influence the impartiality or create a perception that the credibility of this Report could be compromised or biased in any way. The views expressed herein are genuinely held and deemed independent of Nighthawk.
Moreover, neither Howe nor the authors of this Report (nor family members or associates) have any
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 9 of 181 June 17, 2013
financial interest in the outcome of any transaction involving the property considered in this Report other than the payment of normal professional fees for the work undertaken in the preparation of this Report (which is based upon hourly charge-out rates and reimbursement of expenses). The payment of such fees is not dependent upon the content or conclusions of either this Report or consequences of any proposed transaction.
2.2 SCOPE AND CONDUCT/DISCLAIMER
In spring 2013, Nighthawk commissioned Howe to complete an update of its previous 2012 mineral resource estimate on the Colomac Property. This technical report is prepared on behalf of Nighthawk and reports on the Indin Lake Project’s Colomac Property and Howe’s independent mineral resource estimate update for the Colomac, Goldcrest and Goldcrest North (Dyke Lake) zones. Howe’s 2012 mineral resource estimate of the Grizzly Bear, 24 and 27 Zones has not been updated and is restated herein. The report includes recommendations to allow Nighthawk and current or potential partners to reach informed decisions. This Report is prepared by Howe (Canada) personnel. The mineral resource estimate was prepared by Mr. Leon McGarry, B.Sc., Geologist. Mr Ian Trinder, M.Sc., P.Geo., Senior Geologist with Howe and Qualified Person (QP), supervised the resource estimate and is responsible for the preparation of this report. Mr. Trinder has a Master of Science degree in geology and is a registered Professional Geoscientist (P.Geo.) in good standing registered in the Provinces of Ontario and Manitoba (APGO no. 0452, APEGM no. 22924). Mr. Trinder has over 25 years’ experience in the mining industry with a background in international precious and base metals mineral exploration including project evaluation and management. Mr. McGarry has over 5 years’ experience in the mining industry including a background in international mineral exploration and project management for gold and base metal deposits.
On October 12th, 2011, Ian Trinder, ACA Howe Senior Geologist and Dave Orava, ACA Howe Associate Mining Engineer, completed a site visit to the Colomac Property via helicopter accompanied by Malcolm Robb, Manager, Mineral Development Division, Mineral and Petroleum Resources, NWT Region, Aboriginal Affairs and Northern Development Canada (AANDC). Mr. Robb formerly was Royal Oak’s Western Canada Exploration Manager when it was operating the Colomac Mine in the 1990’s. Howe personnel confirmed the condition of reported work sites and historic Royal Oak exploration activities, methodologies, quality assurance and quality control procedures, security, findings and interpretations etc. were discussed with Mr. Robb. The Colomac Property and Damoti Lake exploration camp were as reported by the Company. Several verification samples were collected.
On October 13th, 2011, a brief visit was made to the NWT Geoscience Office in Yellowknife at 4601- B 52nd Ave where Malcolm Robb introduced Howe personnel to Scott Cairns, Chief Geologist. Howe personnel spent several hours reviewing the available archived hardcopy Colomac data stored in the Geoscience Office’s warehouse. Mr. Trinder returned to Yellowknife from November 7th to 9th, 2011 to conduct further searches for archived Colomac data stored in the NWT Geoscience Office’s warehouse and the old Royal Oak exploration and engineering office at the Giant mine site. Mr. Trinder was accompanied by Nighthawk personnel including Mr. David Wiley, President, Mr. Tom Elkin, Vice President, Dr. Michael Byron, Chief Geologist and Dr. Robert Whitehead, Senior Staff
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 10 of 181 June 17, 2013
Geologist.
On October 17th and 18th, 2012, Ian Trinder, ACA Howe Senior Geologist attempted to conduct a site visit to the Colomac Property via helicopter accompanied by Mr. Andy Young of Discovery Mining Services, Yellowknife, NT. Both attempts were abandoned approximately halfway between Yellowknife and Colomac due rain, fog and icing conditions. On October 19th 2012, Mr Trinder conducted a visit to the ALS sample preparation facility, #3 Coronation Drive, Yellowknife NT. On May 4, 2013, Mr. Trinder conducted a visual inspection of select intervals of 2012 Colomac drill core stored at Nighthawk’s Sudbury ON office.
Howe intends to complete a site visit to the Colomac Property when Nighthawk next has personnel onsite and weather conditions permit access.
The effective date of this report is June 17th, 2013 and is based on data known to Howe at that date. Howe reserves the right, but will not be obligated to revise this Report and conclusions if additional information becomes known to Howe subsequent to the date of this Report.
Nighthawk reviewed draft copies of this Report for factual errors. Any changes made as a result of these reviews did not include alterations to the conclusions made. Therefore the statement and opinions expressed in this document are given in good faith and in the belief that such statements and opinions are not false and misleading at the date of this Report.
Nighthawk has accepted that the qualifications, expertise, experience, competence and professional reputation of Howe’s Principals and Associate Geologists and Engineers are appropriate and relevant for the preparation of this Report. Nighthawk has also accepted that Howe’s Principals and Associates are members of professional bodies that are appropriate and relevant for the preparation of this Report.
Nighthawk has warranted that full disclosure of all material information in its possession or control at the time of writing has been made to Howe, and that it is complete, accurate, true and not misleading. Nighthawk has also provided Howe with an indemnity in relation to the information provided by it. Nighthawk has agreed that neither it nor its associates or affiliates will make any claim against Howe to recover any loss or damage suffered. Nighthawk has also indemnified Howe against any claim arising out of the assignment to prepare this Report, except where the claim arises out of any proven willful misconduct or negligence on the part of Howe. This indemnity is also applied to any consequential extension of work through queries, questions, public hearings or additional work required arising out of the engagement.
2.3 SOURCES OF INFORMATION
In preparing this report, Howe reviewed geological reports, maps, exploration data, geological interpretation, assays from original assay records and reports, digital data including diamond drilling and miscellaneous technical papers, company letters and memoranda as made available by Nighthawk and Aboriginal Affairs and Northern Development Canada (AANDC) and other public and private
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 11 of 181 June 17, 2013
information as listed in Section 19 of this Report, “References.
Both 2012 Nighthawk drill hole data and historic exploration drill hole data were used in the estimation of mineral resources for the Colomac project. Historic hard copy records and a historic Medsystem drill hole database were obtained and compiled by Nighthawk. Drill hole and trench collar, assay, survey and geology data were provided to ACA Howe in Microsoft Excel format. A random selection of records in each of the Excel files provided by Nighthawk was checked against scanned copies of the hardcopy logs. Following this process, a resource development database was created utilising Micromine software.
Howe has not independently conducted any legal title or other searches, but has relied upon AANDC mining lease and mineral claim history reports provided by Nighthawk (Evans, 2013) and online web- based land records from AANDC (http://ntgeoviewer.aandc.gc.ca/geoviewer/Default.aspx?Map=NTMINTEN – June 17, 2013) regarding land tenure title and status, underlying agreements and technical information not in the public domain.
Howe is not aware of and has not investigated in detail any environmental or other issues that could conceivably affect the Colomac Property and Indin Lake Project.
The author believes that the information and data presented to Howe by Nighthawk are a reasonable and accurate representation of the Colomac Property and Indin Lake Project and are of sufficient quality to provide the basis for the conclusions and recommendations reached in this report.
2.4 UNITS AND CURRENCY
The Metric System or SI System is the primary system of measure and length used in this Report and is generally expressed in kilometres, metres and centimetres; volume is expressed as cubic metres, mass expressed as metric tonnes, area as hectares, and zinc, copper and lead grades as percent or parts per million. The precious metal grades are generally expressed as grams/tonne but may also be in parts per billion or parts per million. Conversions from the SI or Metric System to the Imperial System are provided below and quoted where practical. Many of the geologic publications and more recent work assessment files now use the SI system but older work assessment files almost exclusively refer to the Imperial System. Metals and minerals acronyms in this report conform to mineral industry accepted usage and the Reader is directed to an online source at www.maden.hacettepe.edu.tr/dmmrt/index.html.
Conversion factors utilized in this report include:
1 troy ounce/ton = 34.2857 grams/tonne 1 gram/tonne = 0.0292 troy ounces/ton 1 troy ounce = 31.1035 grams 1 gram = 0.0322 troy ounces 1 pound = 0.4536 kilograms
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 12 of 181 June 17, 2013
1 foot = 0.3048 metres 1 mile = 1.609 kilometres 1 acre = 0.4046856 hectares 1 square mile = 2.590 square kilometres
The term gram/tonne or g/t is expressed as “gram per tonne” where 1 gram/tonne = 1 ppm (part per million) = 1,000 ppb (part per billion). Other abbreviations include ppb = parts per billion; ppm = parts per million; oz/t = ounce per short ton; Moz = million ounces; Mt = million tonne; t = tonne (1,000 kilograms); SG = specific gravity; lb/t = pound/ton; and, st = short ton (2,000 pounds).
Dollars are expressed in Canadian currency (Cdn$) unless otherwise noted.
Unless otherwise noted, Universal Transverse Mercator (“UTM”) coordinates are provided in the datum of NAD83 UTM Zone 11 North.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 13 of 181 June 17, 2013
3 RELIANCE ON OTHER EXPERTS
Howe has relied on information including Aboriginal Affairs and Northern Development Canada (AANDC) mining lease and mineral claim history reports provided by Nighthawk (Evans, 2013) and online web-based land records from Aboriginal Affairs and Northern Development Canada (http://ntgeoviewer.aandc.gc.ca/geoviewer/Default.aspx?Map=NTMINTEN – June 17, 2013) regarding land tenure title and status, underlying agreements and technical information not in the public domain. While Howe has not independently verified the legal status or ownership of the property or any of the underlying agreements, all of the information appears to be of sound quality.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 14 of 181 June 17, 2013
4 PROPERTY DESCRIPTION AND LOCATION
4.1 LOCATION
The Colomac Property is situated in the central portion of Nighthawk’s Indin Lake Project in the Indin Lake area of the Northwest Territories at latitude 64o24'N, longitude 115o05'W (UTM Zone 11N 592,000E 7,143,000N NAD83 datum, N.T.S. sheet 86B/06), approximately 220 kilometres northwest of Yellowknife (Figure 4-1). The property can be accessed by ski- or float-equipped fixed-wing aircraft to Baton Lake, or an airstrip on the property, or by a winter ice road from Behchokö (formerly Rae-Edzo) to Colomac.
4.2 DESCRIPTION AND OWNERSHIP
4.2.1 INDIN LAKE PROJECT OVERVIEW
Nighthawk’s Indin Lake Project is a land package that comprises both owned and optioned mining leases and staked claims within a continuous, north-trending area approximately 60 kilometres in length by 6 to 22 kilometres in width (Figure 4-1).
The Indin Lake Project totals 89,922.46 hectares (222,203.23 acres) (Figure 4-2, Appendix I). Between 2009 and 2011, Nighthawk staked a 100% undivided interest in 115 claims totaling 79,812.41 hectares (197,220.70 acres). Nighthawk has also acquired or has the option to acquire a 100% interest in 30 leases (9,020.14 hectares or 22,289.29 acres) and 5 staked claims (1,089.91 hectares or 2,693.24 acres) within the historic Treasure Island, Laurie Lake, Barker-Vidie, Leta Arm (North Inca, Diversified and Lexindin), Damoti and Colomac Properties as detailed in Sections 4.2.2, 4.2.4 and 4.2.5 subject to encumbrances detailed in Section 4.2.6
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 15 of 181 June 17, 2013
Source: Nighthawk, 2012
FIGURE 4-1: NIGHTHAWK’S INDIN LAKE PROJECT AND COLOMAC PROPERTY LOCATION MAP
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 16 of 181 June 17, 2013
Source: Nighthawk, 2012 FIGURE 4-2: MAP OF NIGHTHAWK’S INDIN LAKE PROJECT AND COLOMAC PROPERTY MINING LEASES AND MINERAL CLAIMS
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 17 of 181 June 17, 2013
4.2.2 COLOMAC PROPERTY
The Colomac Property consists of nine leases (4,842.70 ha or 11,966.6 acres) and two staked claims (128.00 ha or 316.3 acres) totaling 4,970.70 hectares (2,282.9 acres) (Figure 4-3, Table 4-1 and Table 4-2). The Property surface and mineral rights are held 100% by Nighthawk subject to an agreement whereby Nighthawk acquired the mineral claims and leases of the former producing Colomac Gold Mine from Aboriginal Affairs and Northern Development Canada ("AANDC") in consideration of Nighthawk’s commitment to reclaim three disturbed historic exploration sites near the Colomac mine within Nighthawk's surrounding Indin Lake land package (see following Section 4.2.7.1). Reclamation will be carried out on behalf of AANDC to a maximum of $5,000,000.
TABLE 4-1: LIST OF MINING LEASES WITHIN THE COLOMAC PROPERTY
First Quad or Lease # Issued Expiry 1 Survey Lot Acres Hectares Rental Rent Due Renewal Group
2661 1974-02-28 2028-03-13 1995-03-23 57262 9 1114 597.60 241.84 $1195.20 2014-02-28
2662 1974-02-28 2028-03-13 1995-03-23 57262 8 1114 628.50 254.34 $1257.00 2014-02-28
3211 1986-03-06 2022-03-20 - 70692 1002 086B06 1,032.50 417.84 $1032.50 2014-03-06
3288 1989-02-08 2022-02-22 - 72125 1003 086B06 1,138.00 460.53 $1,138.00 2014-02-08
3524 1994-12-01 2027-12-15 - 78578 1013 086B06 1,112.00 450.01 $1,112.00 2014-12-01
3526 1994-12-01 2027-12-15 - 78578 1015 086B06 2,088.00 844.98 $2,088.00 2014-12-01
3527 1994-12-01 2027-12-15 - 78578 1012 086B06 1,236.00 500.19 $1,236.00 2014-12-01
3528 1994-12-01 2027-12-15 - 78578 1018 086B06 2,431.00 983.79 $2,431.00 2014-12-01
3529 1994-12-01 2027-12-15 - 78640 1011 086B06 1,703.00 689.18 $1,703.00 2014-12-01
Total 11,966.60 4,842.70 $13,192.70
1) As per paragraph 62.1(2)(b) of the Northwest Territories and Nunavut Mining Regulations, the term of the lease is extended by the period during which the lease is held by Her Majesty and as per subsection 62.1(3) of the Northwest Territories and Nunavut Mining Regulations, no rent is payable on the lease for the period during which the lease is held by Her Majesty. The expiry dates listed represent an extension of 12 years 14 days, the period during which the leases were held by Her Majesty.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 18 of 181 June 17, 2013
TABLE 4-2: LIST OF MINERAL CLAIMS WITHIN THE COLOMAC PROPERTY
10 Year Claim Recording 1 Representation Name Ann. Date NTS Acres Ha Work Due 1 1 # Date Date Work
F15708 RO 12 1994-05-13 2016-07-01 2016-06-01 086B06 6.40 2.59 $12.80 9 yrs filed
2 2 F19111 NWG #1 1991-02-07 2013-02-07 2013-02-21 086B06 309.90 125.41 $619.80 9 yrs filed
No further Total 316.30 128.00 $632.60 work required. 1) As per paragraph 62.1(2)(a) of the Northwest Territories and Nunavut Mining Regulations, the requirements for the payment of fees and for representation work are suspended for the period during which the claim is held by Her Majesty and as per paragraph 62.1(2)(b) of the Northwest Territories and Nunavut Mining Regulations, the period within which the claim must be taken to lease is extended by the period during which the claim is held by Her Majesty. 2) Nighthawk informs Howe that it is in the process of completing a boundary survey and filing documentation to bring claim F19111 – NWG #1 to lease.
4.2.3 INDIN LAKE PROJECT NIGHTHAWK STAKED CLAIMS
Between 2009 and 2011, Nighthawk staked a 100% undivided interest in 115 claims totaling 79,812.41 hectares (197,220.70 acres) (Figure 4-2). The list of staked claims and their current status is presented in Appendix I.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 19 of 181 June 17, 2013
Source: Nighthawk, 2012 FIGURE 4-3: MAP OF COLOMAC PROPERTY MINING LEASES AND MINERAL CLAIMS
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 20 of 181 June 17, 2013
4.2.4 DAMOTI PROPERTY
The six (6) contiguous surveyed mining leases of the Damoti Property total 2,848.98 hectares (7,040.00 acres) (see Table 4-3, Figure 4-2, Appendix I).
In September 2008 Nighthawk (then Merc) purchased a 100% interest in Damoti mining lease 3617 and an 80% interest in Damoti mining leases 4574, 4572, 4663, 4573 and 3616 from Anaconda Mining Inc. for $250,000 and 1,250,000 Merc common shares. Selkirk Metals Corp. (Selkirk), a wholly owned subsidiary of Imperial Metals Corporation held the remaining 20% interest in the latter five leases. Nighthawk’s interest subsequently increased to 100% and Selkirk’s interest was diluted to a 1% NSR royalty on leases 4574, 4572, 4663, 4573 and 3616 when Selkirk elected not to participate in an exploration budget dated May 10, 2010.
TABLE 4-3: LIST OF MINING LEASES WITHIN THE DAMOTI PROPERTY
First Quad or Lease # Issued Expiry* Survey Lot Acres Hectares Rental Rent Due Renewal Group
1,2 3616 1997-07-11 2018-07-11 - 79775 1004 086B03 1,211.00 490.07 $1,211.00 2014-07-11 1 3617 1997-07-11 2018-07-11 - 79775 1005 086B03 2,530.00 1,023.85 $2,530.00 2014-07-11 1,2 4572 2003-05-21 2024-05-21 - 88855 1006 086B03 952.00 385.26 $952.00 2014-05-21 1,2 4573 2003-05-21 2024-05-21 - 88856 1008 086B03 1,404.00 568.18 $1,404.00 2014-05-21 1,2 4574 2003-05-21 2024-05-21 - 88855 1007 086B03 467.00 188.99 $467.00 2014-05-21 1,2 4663 2003-05-21 2024-05-21 - 89931 1009 086B03 476.00 192.63 $476.00 2014-05-21
Total 7,040.00 2,848.98 $7,040.00 Notes: 1. Lease subject to an underlying 2 percent NSR royalty held by Covello Bryan & Associates Ltd. 2. Lease subject to a 1 percent NSR royalty held by Selkirk Metals Corp.
4.2.5 TREASURE ISLAND, LAURIE LAKE, BARKER-VIDIE AND LETA ARM PROPERTIES
On January 7th, 2011, Nighthawk (then Merc) optioned from Ursa Polaris Developments Corporation (“Ursa”), the Treasure Island Laurie Lake, and Barker-Vidie claims, and the Leta Arm Mining Leases (Byron, 2011, Nighthawk Press Release dated January 10th, 2011). The option payment schedule was amended on April 4th, 2013. The Properties comprise fifteen (15) leases (1,328.46 hectares or 3,382.69 acres) and three staked claims (961.91 hectares or 2,376.94 acres) totaling 2290.37 hectares (5,659.63 acres) (Figure 4-2, Table 4-4 and Table 4-5). Ursa is the legal and beneficial owner of 100% undivided interest in the claims and leases other than encumbrances detailed in Section 4.2.5. Mr. George Stephenson is the recorded holder as base trustee only.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 21 of 181 June 17, 2013
TABLE 4-4: LIST OF MINING LEASES WITHIN THE LETA ARM PROPERTY
First Quad or Lease # Issued Expiry Survey Lot Acres Hectares Rental Rent Due Renewal Group
1 1967, 3226 1946-11-04 2030-11-04 1 22440 086B06 148.90 60.26 $297.8 2014-11-04 1988, 2009
1 1967, 3227 1946-11-04 2030-11-04 2 22440 086B06 55.98 22.65 $111.96 2014-11-04 1988, 2009 1 2486 1971-10-19 2013-10-19 1992 12 23017 086B06 57.07 23.1 $114.14 2014-10-19 1 2487 1971-10-19 2013-10-19 1992 11 23017 086B06 75.41 30.52 $150.82 2014-10-19 1 2488 1971-10-19 2013-10-19 1992 13 23017 086B06 44.65 18.07 $89.3 2014-10-19 1 2489 1971-10-19 2013-10-19 1992 14 23017 086B06 59.55 24.1 $119.1 2014-10-19 1 2490 1971-10-19 2013-10-19 1992 15 23016 086B06 55.87 22.61 $111.74 2014-10-19 1 2491 1971-10-19 2013-10-19 1992 16 23016 086B06 76.60 31 $153.2 2014-10-19 1 2492 1971-10-19 2013-10-19 1992 17 23016 086B06 55.96 22.65 $111.92 2014-10-19 1 3214 1985-04-19 2027-04-19 2006 1000 70018 086B06 117.00 47.35 $234.00 2014-04-19 1 3215 1986-01-30 2028-01-30 2007 1001 70019 086B06 124.00 50.18 $248.00 2014-01-30 1 3216 1986-01-30 2028-01-30 2007 1001 70020 086B06 839.00 339.53 $1,678.00 2014-01-30 1 3217 1985-04-19 2027-04-19 2006 1000 70018 086B06 641.00 259.4 $1,282.00 2014-04-19 2,3,4 3328 1988-01-12 2030-01-12 2009 1003 72125 086B06 378.70 153.25 $757.40 2014-01-12 1 3732 1998-07-10 2019-07-10 1030 81826 086B06 553.00 223.79 $553.00 2014-07-10
Total 3,282.69 1,328.46 $6,012.38 Notes: 1. Lease subject to an underlying 3 percent NSR royalty held by 224613 Alberta Ltd. 2. Lease subject to an underlying 3 percent NSR royalty held by V.M. Paulson, E. Meyers, and J. Kruszewski 3. Lease subject to an underlying 1.5 percent NSR royalty held by Adamus Resources Limited 4. Lease subject to an underlying 0.5 percent NSR royalty held by Durga Resources Ltd. 5. An internal fractional claim, number K 14978, staked by Nighthawk, occurs within the Leta Arm Property.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 22 of 181 June 17, 2013
TABLE 4-5: LIST OF MINERAL CLAIMS WITHIN THE TREASURE ISLAND, LAURIE LAKE AND BARKER-VIDIE PROPERTIES
Recording Anniversary 10 Year Representation Claim # Name NTS Acres Ha. Date Date Date* Work
1 Treasure Isl. K01343 2009-04-29 2017-04-29 2019-04-29 086B06 1,033.06 418.06 $2,066.12 “Geordie 1”
Laurie Lake K01344 1 2009-04-29 2016-04-29 2019-04-29 086B06 619.83 250.84 $1,239.66 “Geordie 2”
1 Barker- Vidie K01327 2009-04-29 2019-04-29 2,3 2019-04-29 086B06 724.05 293.01 $1,448.10 “Dayna”
Total 2,376.94 961.91 $4,753.88 Notes: 1) Mineral claim subject to an underlying 2 percent NSR royalty held by Ursa Polaris Developments Corporation 2) Nine years work filed – no further work required 3) Date is based on Representation Work filed – pending Mining Recorder’s approval as of June 17, 2013
Under the 2011 option agreement with Ursa and as amended April 4th, 2013, Nighthawk has the right to earn a 100% undivided interest in the properties other than encumbrances detailed in Section 4.2.5 subject to the following payments:
Due Date Cash Payment
1 On execution of LOI $25,000 (paid) 2 On effective date (Jan. 7, 2011) $125,000 (paid) 3 On or before July 31, 2012 $100,000 (paid) 4 On or before April 12, 2013 $225,000 (paid) 5 On or before July 31, 2014 $250,000
Option payments are payable in cash or common shares of Merc (now Nighthawk). If Nighthawk fails to exercise the option by duly making the above tabled payments, it shall not be entitled to any partial interest in the properties.
4.2.6 INDIN LAKE PROJECT AND COLOMAC PROPERTY CLAIM STATUS
Indin Lake Project lands are all subject to annual mining lease rentals and mineral claim assessment requirements (representation work) as described in Appendix I. Nighthawk informs Howe that all annual mining lease rentals and mineral claim assessment requirements have been or will be submitted (in the cases of due dates post the effective date of this report) for 2013 and the leases and claims are in good standing.
On the Damoti Lake Property, Lease 3617 is also subject to a 1 percent NSR royalty held by Selkirk
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 23 of 181 June 17, 2013
Metals Corp. The remaining five (5) leases are subject to the 1 percent NSR royalty held by Selkirk Metals Corp. in addition to an underlying 2 percent NSR royalty payable to Covello Bryan & Associates Ltd.
Nighthawk has one remaining option payment of Cdn $250,000 payable to Ursa on or before July 31, 2014 to earn a 100% interest in the Treasure Island, Laurie Lake, and Barker-Vidie claims, and the Leta Arm Mining Leases.
On the Leta Arm Property, Lease 3328 is subject to: an underlying 3 percent NSR royalty held by V.M. Paulson, E. Meyers, and J. Kruszewski, pursuant to an agreement with Durga Resources Ltd dated May 19th, 1988; an underlying 1.5 percent NSR royalty held by Adamus Resources Limited, pursuant to an agreement with George Stephenson dated November 19th, 2007; and an underlying 0.5 percent NSR royalty held by Durga Resources Ltd., pursuant to an agreement with Leader Mining Corporation and Ursa Polaris Developments Corporation dated December 30th, 1993. The remaining 14 leases on the Leta Arm Property are subject to an underlying 3 percent NSR royalty held by 224613 Alberta Ltd., pursuant to an agreement with Norvan Group and Orval Gillespie and Stanley M. Paulson dated February 5th, 1980.
The three staked mineral claims making up the Treasure Island, Laurie Lake and Barker-Vidie Properties are subject to an underlying 2% NSR royalty in favour of Ursa Polaris Developments Corporation pursuant to an agreement with George Stephenson dated December 20th, 2010.
With exception to annual mining lease rentals and mineral claim assessment requirements (representation work), the Colomac Property is not subject to any current encumbrances, liens or royalties (see Section 4.2.7.1 for details of the transfer of all right, title and interest of Royal Oak and the Interim Receiver to AANDC). Table 4-1 and Table 4-2 detail the 2013 holding costs for the mining leases and mineral claims at the Colomac Property. Nighthawk informs Howe that it is in the process of completing a boundary survey and filing documentation to bring claim F19111 – NWG #1 to lease. Total annual holding costs for all Indin Lake Project mineral claims and leases are documented in Appendix I. Note that many mineral claims have banked representation work as reflected by the advanced anniversary dates.
To Howe’s knowledge there are no current or pending challenges to ownership of the Indin Lake Project and particularly the Colomac Property lands. Nighthawk warrants that it has not received from any government authority any notice of, or communication relating to, any actual or alleged breach of any environmental laws, regulations, policies or permits.
4.2.6.1 Permit Requirements
4.2.6.1.1 Water Licence
Licences for the use of water and deposit of waste in waters flowing through or overlying lands within the Mackenzie Valley are issued by the respective Land and Water Board (Board) operating under the
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 24 of 181 June 17, 2013
Mackenzie Valley Resource Management Act (MVRMA).
Some of the activities that require a Water Licence are:
100 m3 or more of direct water use per day; A municipality or camp that uses more than 50 m3 of water per day; Construction of a structure across a water course five or more metres wide at ordinary high water mark; Channel and bank alterations, erosion control, diversion of water, alteration of flow or storage of water (dam or storage reservoir); Draining or infilling of a water course; Any deposit of waste (solid waste, sewage, oil drilling etc.); and Industrial or mining and milling activities that use more than 100 m3 of water per day.
The fee for application, renewal, or amendment for a water licence is $30.00.
4.2.6.1.2 Land Use Permits
Details on the types of land use activities that require a land use permit are set out in sections 4 and 5 of the Mackenzie Valley Land Use Regulations (MVLUR). Land use activities within the Mackenzie Valley that may require a land use permit include:
Use of explosives; Use of vehicles; Drilling; Hydraulic prospecting; Earth moving and clearing; Campsites; Fuel caches; and, Preparation of lines, trails, or rights-of-way
The Mackenzie Valley Resource Management Act and the MVLUR set out the following general requirements relating to land use permits:
All lands within the Mackenzie Valley—Crown lands, municipal lands, private lands— (except for Wood Buffalo National Park) are subject to the MVLUR and to the application process for land use permits administered by the Land and Water Boards. Interest holders in lands within the Mackenzie Valley, including holders of mineral claims, leases, rights-of-way, quarry permits, timber permits, and licences, etc. are subject to the MVLUR and may require a land use permit or permits to undertake land use activities in relation to their interest(s). Projects are subject to a preliminary screening, unless specifically exempted, to determine if they might have significant adverse environmental impacts or be a source of public concern;
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 25 of 181 June 17, 2013
The LWB may issue either a type A or a type B land use permit, depending on the scope and magnitude of the land use activities being proposed; A Land and Water Board (LWB) may apply terms and conditions to any land use permit that it issues. After receiving an application, the Board will, within 42 days, make a decision whether to issue a permit, request further information, or refer to environmental assessment or deny if the application is not in conformity with an approved land use plan. Land use permits may be issued for up to five years and may be extended once for up to two years for a maximum period of seven years. Land use fees are payable to the Receiver General of Canada on actual lands used to complete the land use operations including existing lines, cleared areas, campsites, access routes, drill sites, etc. Fees for the first two hectares are included in the application fee of $150.00, and for each additional hectare or portion of a hectare the land use fee is $50.00 per hectare. Any adjustment of fees for actual hectares used for an operation will be done once an applicant submits a final plan and its verification is completed. Aboriginal organizations, governments, and communities are key participants in the land use permitting process. Applicants must make efforts to inform and obtain feedback on their proposed land use activities from these Aboriginal organizations, governments, and communities. This must be done before they submit their applications to the LWB and is expected throughout the life of a permit.
4.2.6.1.3 Nighthawk's Permit Status
Nighthawk holds a valid Land Use Permit, Number W2012C0002 - Class A (formerly, in part, W2006C0001 and W2010C0008), and a Water Use Permit, License Number W2012L1-0002 - Type B (formerly, in part, W2006L2-0001 and W2010L2-0001 - Type B), for advanced exploration work on the Damoti Lake and Colomac Property areas of the Indin Lake Project. The permits are issued under the authority of the Wek’èezhìi Land and Water Board (a regional panel of the Mackenzie Valley Land and Water Board) and are valid through to February 27th, 2017 and February 28th, 2019 respectively. The water permit entitles Nighthawk to use of up to 299 m3 (approximately 66,000 imperial gallons) of water per day from Baton Lake and up to 100 m3 of water per day from any other water body. The current water license (W2012L1-0002) became effective August 16th, 2012. Prior to that date during 2012, Nighthawk was allowed use of up to 100 m3 of water per day under the earlier water license. Nighthawk has complied with the terms and conditions of both permits, including continuing restoration and cleanup of the land and water previously utilized under the Licenses. Nighthawk also holds a valid Prospector’s License (# 33742).
AANDC has designated certain sites and areas within the Colomac Property as Surface Reserves and Nighthawk will be required to operate in accordance with limitations set out in the Land Use Permit. Site Restrictions include among others:
No alteration or disturbance of the engineered tailings cap within the Tailings Containment Area, Dam 1/Dam 1 B structures, Dyke 7 and spillway, Dam 2 discharge channel, Spruce
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 26 of 181 June 17, 2013
Lake Disposal Cell, landfill cap in Zone 2.5 Pit, Primary Crusher cap, Steeves Lake Shoreline remediation area, or Hydrocarbon Soil Remediation area. No alteration or disturbance of the tailings water repository in Zone 2.0 Pit or in the historic Duck Lake tailings remediation area. No alteration, blocking or other disturbance of the caribou barriers or pathways in Colomac area. No impedence or obstruction of the Crown's access to the site for monitoring or inspection purposes.
4.2.6.2 Social, Political or Environmental Liabilities and Risks
Nighthawk is in ongoing and continuing discussions and communications with the Tåîchô Government and North Slave Métis Alliance to inform them and obtain feedback on its proposed exploration activities.
In consideration for the conveyance of the Colomac claims and leases Nighthawk committed to reclaim three disturbed historic exploration sites near the outside the Colomac Property but within Nighthawk's surrounding Indin Lake land package. Reclamation will be carried out on behalf of AANDC to a maximum of $5,000,000. At closing, Nighthawk posted a security of $5,000,000 in favour of AANDC to secure Nighthawk's obligation to perform the required reclamation. Nighthawk will not assume the reclamation liabilities directly. The Security will be returned to Nighthawk upon the completion of remediation activities to the satisfaction of an independent third party engineer. On March 21st 2013, Nighthawk announced that as the result of the successful reclamation of one of the three historical sites, $1,000,000 from the Security posted in favour of AANDC was released to Nighthawk and added back into treasury.
AANDC has substantially completed the reclamation of Colomac, with only adaptive management and monitoring phases of the project remaining. Nighthawk is not responsible for any historical environmental liabilities associated with Colomac.
To Howe’s knowledge, with exception to above Security in favour of AANDC and restrictions set out in the Land Use and Water Use permits, there are no current social, political or environmental liabilities and risks associated with the Property area that may affect access, title or the right or ability to perform the work recommended in this report within the Property area.
4.2.7 COLOMAC PROPERTY OWNERSHIP HISTORY
Table 4-6 and Table 4-7 present the ownership history of the current and active mining claims and mineral claims of the Colomac Property.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 27 of 181 June 17, 2013
TABLE 4-6: OWNERSHIP HISTORY OF THE COLOMAC PROPERTY MINING LEASES
Ownership Lease # Issued Expiry 1 Ownership from 2 Ownership to 3,4 Change
2012-01-26 AANDC Nighthawk Gold Corp. 2000-01-12 Royal Oak Mines Inc. DIAND 2661 1974-02-28 2028-03-13 1993-04-05 Neptune Resources Corp. Royal Oak Mines Inc. 1989-05-04 Johnsby Mines Limited Neptune Resources Corp. 1974-02-28 - Johnsby Mines Limited
2012-01-26 AANDC Nighthawk Gold Corp. 2000-01-12 Royal Oak Mines Inc. DIAND 2662 1974-02-28 2028-03-13 1993-04-05 Neptune Resources Corp. Royal Oak Mines Inc. 1989-05-04 Johnsby Mines Limited Neptune Resources Corp. 1974-02-28 - Johnsby Mines Limited
2012-01-26 AANDC Nighthawk Gold Corp. 2000-01-12 Royal Oak Mines Inc. DIAND 3211 1986-03-06 2022-03-20 1993-04-05 Neptune Resources Corp. Royal Oak Mines Inc. 1989-05-04 Johnsby Mines Limited Neptune Resources Corp. 1986-03-06 - Johnsby Mines Limited
2012-01-26 AANDC Nighthawk Gold Corp. 2000-01-12 Royal Oak Mines Inc. DIAND 3288 1989-02-08 2022-02-22 1993-04-05 Neptune Resources Corp. Royal Oak Mines Inc. 1989-05-04 Johnsby Mines Limited Neptune Resources Corp. 1989-02-08 - Johnsby Mines Limited
2012-01-26 AANDC Nighthawk Gold Corp. 3524 1994-12-01 2027-12-15 2000-01-12 Royal Oak Mines Inc. DIAND 1994-12-01 - Royal Oak Mines Inc.
2012-01-26 AANDC Nighthawk Gold Corp. 3526 1994-12-01 2027-12-15 2000-01-12 Royal Oak Mines Inc. DIAND 1994-12-01 - Royal Oak Mines Inc.
2012-01-26 AANDC Nighthawk Gold Corp. 3527 1994-12-01 2027-12-15 2000-01-12 Royal Oak Mines Inc. DIAND 1994-12-01 - Royal Oak Mines Inc.
2012-01-26 AANDC Nighthawk Gold Corp. 3528 1994-12-01 2027-12-15 2000-01-12 Royal Oak Mines Inc. DIAND 1994-12-01 - Royal Oak Mines Inc.
2012-01-26 AANDC Nighthawk Gold Corp. 3529 1994-12-01 2027-12-15 2000-01-12 Royal Oak Mines Inc. DIAND 1994-12-01 - Royal Oak Mines Inc. 1) As per paragraph 62.1(2)(b) of the Northwest Territories and Nunavut Mining Regulations, the term of the lease is extended by the period during which the lease is held by Her Majesty and as per subsection 62.1(3) of the Northwest Territories and Nunavut Mining Regulations, no rent is payable on the lease for the period during which the lease is held by Her Majesty. 2) AANDC: Aboriginal Affairs and Northern Development Canada 3) On April 30, 2012, Nighthawk announced its name change from Merc International Minerals Inc. (Merc). All work conducted and agreements made by Nighthawk on the Indin Lake Project and the Colomac Property prior to that date was done so under the name of Merc. 4) DIAND: Department of Indian Affairs & Northern Development.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 28 of 181 June 17, 2013
TABLE 4-7: OWNERSHIP HISTORY OF THE COLOMAC PROPERTY MINERAL CLAIMS
Claim Recording Anniversary Ownership Name Ownership from 2 Ownership to 3, 4 # Date Date 1 Change
2012-01-26 AANDC Nighthawk Gold Corp. F15708 RO 12 1994-05-13 2014-05-13 2000-01-12 Royal Oak Mines Inc. DIAND 1994-05-13 - Royal Oak Mines Inc. 2012-01-26 AANDC Nighthawk Gold Corp. F19111 NWG #1 1991-02-07 2013-02-07 5 2000-01-12 Royal Oak Mines Inc. DIAND 1991-02-07 - Royal Oak Mines Inc. 1) As per paragraph 62.1(2)(b) of the Northwest Territories and Nunavut Mining Regulations, the term of the lease is extended by the period during which the lease is held by Her Majesty and as per subsection 62.1(3) of the Northwest Territories and Nunavut Mining Regulations, no rent is payable on the lease for the period during which the lease is held by Her Majesty. 2) AANDC: Aboriginal Affairs and Northern Development Canada 3) On April 30, 2012, Nighthawk announced its name change from Merc International Minerals Inc. (Merc). All work conducted and agreements made by Nighthawk on the Indin Lake Project and the Colomac Property prior to that date was done so under the name of Merc. 4) DIAND: Department of Indian Affairs & Northern Development. 5) Nighthawk informs Howe that it is in the process of completing a boundary survey and filing documentation to bring claim F19111 – NWG #1 to lease.
Five mining companies, Goldcrest Mines, Colomac Yellowknife Mines, Indian Lake Gold Mines, Indyke Gold Mines and Nareco Gold Mines, staked claim blocks within the current Property area during the spring of 1945. The Colomac Dyke quickly became the focus of gold exploration following the discovery of gold recovered from quartz veins in a northeast trending quartz-diorite intrusion.
Goldcrest Mines conducted exploration on the Goldcrest property (18 claims) from 1945 to 1947. No further activity occurred following the collapse of gold prices in the late 1940's. The claims were allowed to lapse.
The properties of Indyke Gold Mines (20 claims), Indian Lake Gold Mines (20 claims; GI 1 to 16 and GI 25 to 28), Colomac Yellowknife Mines (24 claims; IF 1 to 12 and DID 1 to 12) and Nareco Gold Mines, situated along the length of the Colomac Dyke, and the eastern peripheral properties of Hearne Gold Mines and Dyke Lake Gold Mines were jointly developed (a total of 141 claims) under the direction and management of Central Mining Services of Toronto from the winter of 1945 into 1947.
The Colomac area properties, like the Goldcrest property were considered uneconomic for development at 1947 gold prices and the state of technology of the time. The properties lay dormant and little activity was recorded from 1947 to 1967. Hydra Explorations Limited acquired the properties of Colomac Yellowknife Mines and Indian Lake Mines in 1959. The properties of Nareco Gold Mines, Indyke Gold Mines, Hearne Gold Mines and Dyke Lake Gold Mines were allowed to lapse.
In 1968, with an increase in the price of gold, Discovery Mines optioned the property from Hydra under a 5-year agreement and staked 24 adjoining claims (Bob 13 to 24 covering parts of the former Goldcrest block and Bob 1 to 12 covering part of the former northern Nareco block) to cover the
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 29 of 181 June 17, 2013
extents of the Colomac and Goldcrest sills. Only the southernmost portion of the Colomac sill (old Indyke Gold Mines property) was not picked up.
A second hiatus of relative inactivity occurred during the period 1969 - 1973.
In 1971, Hydra Explorations and Discovery Mines amalgamated their claims into one group of 68 claims. This property was turned over to Johnsby Mines, a private company owned jointly by Hydra and Discovery Mines. Discovery Mines staked three additional claims (part of the former southern Nareco property) in 1972 which completed the coverage of the Colomac and Go1dcrest sills and created the core of the current Colomac Property.
In 1974, Johnsby Mines brought to lease the 24 claims and 3 claims staked by Discovery Mines in 1968 and 1971 respectively (Leases 2661 and 2662)
Cominco optioned the Colomac property from Johnsby Mines in April 1974 and cancelled its option in 1976.
Mineral claims ED-1 (F12675), BAT 1 (F12695) and SPAN 1 (F12700) were staked and recorded on December 3rd, 1984. Mineral claims FRE #2 (F12078) and AGE #2 (F12076) were recorded by on January 8th, 1985.
In 1986, Johnsby Mines brought to lease the 20 claim Indian Lake Mines block (Lease 3211).
Neptune Resources Corp. ("Neptune") optioned the Colomac and Goldcrest properties from Johnsby Mines in 1986. Neptune performed extensive work on the Property, particularly Zone 2, as part of an economic mining feasibility study.
Neptune optioned the FRE #2 (F12078) and AGE #2 (F12076) from Anglo-Celtic and Covello-Bryan in 1986. The AGE 2 claim covers the Grizzly Bear mineralized zone while FRE 2 covers the SE strike extension of numerous auriferous iron formations outlined by prospecting around Spider Lake to the north.
Neptune optioned the ED-1 (F12675), BAT 1 (F12695), SPAN 1 (F12700) from Petromet-Comaplex in 1986. Any production from these claims was subject to a 1% gross production royalty.
On December 7th, 1987, Neptune announced a decision to bring the Zone 2 ore body into production based on the positive results of the feasibility study.
In 1989, Johnsby Mines brought to lease the 24 claim Colomac Yellowknife Mines block (Lease 3288).
In 1990, Neptune Resources Corp. put the property into production, but shut down in 1991 due to unfavourable gold prices after producing approximately 139,000 ounces.
In April 1993, Royal Oak Mines Inc. (Royal Oak) acquired the Colomac Mine and surrounding
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 30 of 181 June 17, 2013
properties from Neptune in exchange for the Royal Oak’s Common Shares valued at $7,875,000. In a simultaneous transaction, the Royal Oak acquired the gross production royalty on the Colomac property in exchange for the Company’s Common Shares valued at $4,000,000. Royal Oak held a 100% interest in the leases (Royal Oak, 1998 and 1999).
Royal Oak recommenced stripping operations in March 1994, with first gold production in July 1994.
In 1994, Royal Oak brought to lease the Petromet-Comaplex Agreement claims ED-1 (F12675), BAT 1 (F12695), SPAN 1 (F12700), (Leases 3524, 3526, and 3528 respectively) and the Anglo-Celtic Agreement mineral claims FRE #2 (F12078), and AGE #2 (F12076) (Leases 3527 and 3529 respectively). Royal Oak also staked mineral claims F15708 and F19111 on the west side of the Property in 1994.
In 1995, Royal Oak Mines earned a 70% interest in the AGE#2 and FRE#2 leases/claims under the Anglo-Celtic Agreement. Royal Oak completed its earn in on the Petromet-Comaplex Agreement leases/claims. Any production from these leases was subject to a 1% gross production royalty.
In September 1997, Royal Oak discontinued mining operations at the Colomac Mine because of the low gold price and the resultant depletion of economic open pit ore reserves. The Colomac Mine was closed in December 1997 after processing stockpiled ore and was to be placed on care and maintenance for a minimum of two years while underground ore reserves and potential use of the milling facility to treat nearby deposits were evaluated (Royal Oak, 1998 and 1999).
In early 1999, Royal Oak was notified by certain debenture holders and note holders that it had defaulted under certain covenants of debt agreements and all amounts outstanding were immediately due and payable. On February 15th, 1999, Royal Oak obtained an Order from the Ontario Court of Justice (“the Court”) under the Companies’ Creditors Arrangement Act (CCAA) which stayed all legal proceedings against the Company until March 12, 1999. The Order was extended to March 24th, 1999 and then further extended to April 1st, 1999.
Attempts at restructuring, finding new permanent capital and negotiating with the debt holders were unsuccessful and the Company applied to the Court for the appointment of an Interim Receiver. Commencing with the appointment of PricewaterhouseCoopers LLP as the interim receiver on April 16th, 1999, the Royal Oak began winding-down its exploration activities and under order of the Court, the interim receiver was directed to sell the Company’s assets and distribute the proceeds to its creditors.
The Department of Indian Affairs and Northern Development (DIAND, now AANDC) became the owner of Colomac on January 12, 2000 by way of Ontario Superior Court of Justice Court Order dated December 13th, 1999 following the receivership of Royal Oak and its related companies.
As per the court order, the Interim Receiver conveyed to DIAND (now AANDC) all right, title and interest of Royal Oak and the Interim Receiver in and to the Colomac Transferred Assets free and clear of any and all claims, estates, rights, title and interest of all persons holding, or who were the
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 31 of 181 June 17, 2013
beneficiaries of, encumbrances, mortgages, orders, charges, liens, security interests, pledges and writs of execution. Also no person, firm or corporation could be entitled to any royalty or other payment in the nature of rent or royalty on any minerals produced or removed from the Colomac Transferred Assets.
AANDC subsequently completed the required remediation for the site including the removal of all mining and milling facilities.
On December 15, 2011 Merc International Minerals Inc. (now Nighthawk Gold Corp.) announced that it had entered into an agreement to acquire the Colomac mineral claims and leases from Aboriginal Affairs and Northern Development Canada (AANDC) (see Section 4.2.6.1).
4.2.7.1 Colomac Property AANDC- Nighthawk (then Merc) Transaction
On December 15th, 2011 Nighthawk announced that it had entered into an agreement to acquire the mineral claims and leases of the former producing Colomac Gold Mine from AANDC. The transaction closed on January 26th, 2012 and Nighthawk acquired 100% interest in the Colomac property.
In consideration for the conveyance of the Colomac claims and leases Nighthawk committed to reclaim three disturbed historic exploration sites near the outside the Colomac Property but within Nighthawk's surrounding Indin Lake land package. Reclamation will be carried out on behalf of AANDC to a maximum of $5,000,000. At closing, Nighthawk posted a security of $5,000,000 in favour of AANDC to secure Nighthawk's obligation to perform the required reclamation. Nighthawk will not assume the reclamation liabilities directly. The Security will be returned to Nighthawk upon the completion of remediation activities to the satisfaction of an independent third party engineer. On March 21st 2013, Nighthawk announced that as the result of the successful reclamation of one of the three historical sites, $1,000,000 from the Security posted in favour of AANDC was released to Nighthawk and added back into treasury.
AANDC has substantially completed the reclamation of Colomac, with only adaptive management and monitoring phases of the project remaining. Nighthawk is not responsible for any historical environmental liabilities associated with Colomac.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 32 of 181 June 17, 2013
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 ACCESSIBILITY
The Colomac Property is located approximately 220 air kilometres northwest of Yellowknife, NT, and can be accessed by helicopter, by ski- or float-equipped fixed-wing aircraft to Baton Lake and Steeves Lake, by ski- or wheel-equipped fixed-wing aircraft to an 1,525 metre (5,000 foot) gravel airstrip on the Property which is capable of handling aircraft up to the size of a Hercules transport or Boeing 727 jet. At the time of Howe’s site visit in October 2011, the airstrip appeared to be in good condition but it is no longer maintained and is designated as such with white X’s at each end of the runway as per NAV Canada regulations.
Land access to the property is possible via an approximately 245 kilometre winter road (Robb, 1997) that starts west of Yellowknife from the No. 3 Highway at the Tåîchô community of Behchokö (formerly Rae-Edzo). The winter road follows the Emile River north to Basler Lake and Matteberry Lake. From Matteberry Lake, the road goes east across country to Indin Lake and along Indin Lake and then north to the Baton Lake area. The winter road when in use by Royal Oak in the mid-1990’s was suitable for "B-train" style tractor trailers (Robb, 1997). This route provides seasonal access to the NWT/Alberta/BC highway systems and the railhead at Hay River. Total distance winter road/highway distance from the Property to Yellowknife is approximately 340 kilometres via Behchokö. Total road distance to Edmonton, Alberta is about 1,650 kilometres.
The spring break-up on the property typically occurs on the small lakes in late May with the larger lakes becoming ice-free in mid-June. Lake freeze-up generally occurs in mid-October with snow covering the entire ground surface by early November.
The presence of an airstrip on the property permits year-round exploration activities at the property however winter road access for the delivery of heavy equipment and bulk supplies is possible only during a limited period which is dependent on weather conditions, usually extending from the last week of January to the first week of April. Diamond drilling may be conducted from lake ice during the winter months of February to late April. Winter drilling may begin earlier than February but light conditions are less than optimal.
5.2 CLIMATE
The climate in the Property area is subarctic (boreal) characterized by long, very cold winters, and short, cool to mild summers. It corresponds to the Köppen climate classification Dfc. Yellowknife is the closest centre representative of the Property area for which climatic records are available (1971- 2000; Environment Canada, 2012). The Property area is at higher latitude therefore somewhat lower average temperatures can be expected. The warmest temperatures are recorded in July and the coldest temperatures occur in January. Mean summer temperature is approximately 14 degrees Celsius. Average summer daily maximum and minimum in July are 21.1 and 12.4 degrees Celsius, however extreme daily summer temperatures can reach in excess of 32 degrees Celsius. Mean winter
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 33 of 181 June 17, 2013
temperature is approximately -24 degrees Celsius. Average winter daily maximum and minimum in January are -22.7 and -30.9 degrees Celsius, however extreme daily winter temperatures can reach to below -50 degrees Celsius. Mean number of days with a minimum temperature of less than -20 degrees Celsius is 110. Average annual precipitation is approximately 280.7 millimetres, of which 164.5 millimetres is rainfall. Summer has the greatest amount of precipitation at mean of greater than 100 millimetres. Mean winter snowfall is in excess of 50 centimetres and mean total annual snowfall is 151.8 centimetres. Lakes in the immediate area typically are frozen from November to June.
5.3 LOCAL RESOURCES AND INFRASTRUCTURE
The Indin Lake Project area is remote and undeveloped. No power lines, gas lines, or settlements exist on or near the Project area. AANDC has completed remediation for the Colomac mine site including the removal of all mining and milling facilities. One large uninsulated blue metal butler storage building (aka “Big Blue”) remains on the Colomac Property and is the property of the Tåîchô government. A currently unmaintained, 1,525 metre airstrip is present on the Colomac Property and is capable of landing Hercules cargo aircraft. The airstrip appeared to be in good condition at the time of Howe’s visit to the Property in October 2011. Approximately 20 kilometres of mine access roads remain on the Property; culverts have been removed but the roads still provide ATV access.
During May 2012, Nighthawk moved its active camp location to a newly constructed camp located on the Colomac Property at the historic millsite area, approximately 7143150N and 0591425E (UTM NAD 83 Zone 11N). The camp is contained within an electrified bear fence located on the east shore of Steeves Lake, approximately 2 kilometres north of the Colomac airstrip and immediately northeast of the “Big Blue" building. The new Colomac Camp consists of 10 sleepers comprising 4.3 x 4.9 metre (14 x 16 foot) insulated WeatherPort tents complete with Toyo diesel stoves. An 11th similar tent serves as an office/communications tent and sleeping quarters for the camp manager. The WeatherPort tents are identifiable by their orange and white exteriors (see Figure 5-1). Similar-sized WeatherPort tents are also employed at Colomac for the two drys and the kitchen, while the dining room comprises a larger 4.3 x 9.8 metre (14 x 32 foot) insulated WeatherPort tent. A hard-shell building connects both the kitchen and dining room and serves as a storage area. The insulated hard-shell buildings at Colomac are identifiable in photos by their roofs with black shingles or with blue tarps coverings. The latter include a storage building (in front of the kitchen/dining complex), a building for the geologists and another for the drill foreman & assistant, a lavatory building with four propane-fired, Storburn Incinerating Toilets, a dry for drillers (to dry work clothing), a 29.3 metre (96 foot) long coreshack, an adjacent a cutting room equipped with two rock saw to cut core, and a pump house building located behind the kitchen/dining complex. The pump shack building contains four 3,410 litre (750 gallon) water tanks and two separate filtrations and UV water treatment systems as well as two propane fired hot water tanks. The pump house feeds both hot and cold water to the kitchen and the two drys via an insulated wooden enclosed structure. The two drys each contain two showers and a laundry wash tub, two clothes washers, and clothes drier. A 12.2 metre (40 foot) long seacan (for storage of equipment) is located approximately 20 metres to the south of the main camp (see Figure 5-1). A nearby hard-shell building serves as a generator building while a separate hard-shell building containing the camp incinerator is located to the east and well removed from the camp. When camp was operative in 2012,
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 34 of 181 June 17, 2013
a rented 35kw Kubota generator was operated within the generator shack and provided the electrical power for the camp. Portable gas-operated 15Kw generators provide power for the rock saws and serve as an emergency backup system for the camp.
FIGURE 5-1: NIGHTHAWK'S 2012 COLOMAC CAMP LOOKING SOUTH
All Nighthawk 2012 drill core drilled during and after May 2012 is stored on the Colomac property. Most of the core is flat-stacked in a flat area south of the “Big Blue” building.
Elsewhere on the Indin Lake Project area, Nighthawk maintains the Damoti Horseshoe Camp, which is located at approximately 7114530N and 0591290E (UTM NAD 83 Zone 11N), 28.5 kilometres south of the historic Colomac mine site. The camp contains several tents, small buildings, and related equipment on site and underwent a major renovation during the fall of 2009. The changes included the addition of a large insulated plywood core shack, two hard shell sleeping buildings, hard shell washroom facilities, a new generator building, and double cook tent. A further renovation/upgrade was conducted at the Damoti camp during the summer of 2011. This included the addition of several tents to accommodate additional prospecting staff that conducted work on Nighthawk’s entire claim holdings, including the Leta Arm area. A separate hard shell building was also added adjacent the core shack during 2011 to separate the core cutting from the logging facilities. The Damoti camp was cleaned and mothballed after the new camp at Colomac was established in 2012. All fuel, stoves, and equipment have been removed from the Damoti Camp. Tent "skins" have also been removed from most tents and only left in place when their condition would not provide for reasonable re-use elsewhere. Several wooden core racks were also removed and re-established at Colomac. The tent frames and floors, and especially the recently constructed hard-shell buildings, including the core shack and cutting rooms, remain and are considered a valuable asset for Nighthawk's ongoing
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 35 of 181 June 17, 2013
exploration program at the Indin Lake Project.
In addition, three, double-walled, Environmental Protection Tanks (EPT), having a capacity of 75,000 litres each, are located near the Horseshoe underground ramp area near the Damoti camp. As of late 2011, two of these tanks are empty while the third contains a minor amount of legacy diesel (circa 1996). Two sea can containers are located along an ATV trail connecting the Damoti camp and underground ramp areas, and provide secured storage for equipment.
Drill core from the 2009 though 2011 diamond drill campaigns and the Colomac core drilled during March and April 2012 are “flat-stack” stored at the Damoti camp
The Colomac Property is located approximately 110 kilometres north-northeast from the northern-most dam (Snare Rapids) of the Northwest Territories Power Corporation’s Snare River hydro power complex which produces approximately 29.3MW from four plants.
The City of Yellowknife, located approximately 220 kilometres south-southeast of the Property, is home to 19,430 people, which comprises approximately 45% of the territory’s entire population. Yellowknife is the territorial centre for the mining industry, transportation, communications, education, health, tourism, commerce and government. Yellowknife’s airport (YZF) is the main airport in the NWT and Air Canada, First Air and Canadian North, provide several daily scheduled flights between Yellowknife and Edmonton or Calgary.
At this time it appears that Nighthawk holds sufficient surface rights necessary for any potential future mining operations including tailings storage areas, waste disposal areas and a processing plant.
5.3.1 LOCAL COMMUNITIES
The Indin Lake Project and Colomac Property lie peripheral to the Tåîchô Comprehensive Land Claim and Self-Government Agreement area which includes several Tåîchô communities:
The community of Wekweètì (population approximately 145; formally known as Snare Lake) is located on the Snare River approximately 50 kilometres east-southeast of the Colomac Property. Founded in the 1960’s, Wekweètì is accessible by scheduled flights to Yellowknife or by a winter ice road from January through March. There is a small hotel, and the development corporation offers outfitting services.
The community of Gamètì (population approximately 310; formally known as Rae Lakes) is midway between Great Slave and Great Bear Lakes and approximately 114 kilometres west-southwest of the Colomac Property. Permanently settled in the 1970’s, Gamètì has a community store, hotel and restaurant, fire station, health centre and a four classroom school. Gamètì is accessible year-round on scheduled flights from Yellowknife to the local airstrip or during winter via a 213 kilometre winter ice road from Highway 3 near Behchokö (January to March). Many residents are employed in Tåîchô companies, in local government and business, or work on rotation at the diamond mines.
The community of Whatì (population approximately 500; formally known as Lac La Martre) is located
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 36 of 181 June 17, 2013
approximately 176 kilometres southwest of the Property. Services in the community include: youth center, culture center, Mezi Community School, a Catholic Church, RCMP, grocery store, bed & breakfast, and convenience store. The community is serviced by daily scheduled flights from Yellowknife to the local airstrip. In the winter, the community is accessible by a 125 kilometre winter road from Highway 3 near Behchokö.
Behchokö (population approximately 1,950; formally known as Rae-Edzo) is the largest Tåîchô community and is located close to the North Arm of Great Slave Lake approximately 95 kilometres west-northwest of Yellowknife and approximately 181 kilometres south-southwest of the Property. Behchokö houses the central offices for the Tåîchô Government and the Tåîchô Community Services Agency and Tåîchô Investment Corporation. It is also home to the Chief Jimmy Bruneau Regional High School. Many younger residents are employed in Tåîchô companies, in local government and business, or work on rotation at the diamond mines, some 300 kilometres north of the community.
5.4 PHYSIOGRAPHY
The Property is located below the tree line and lies within the Level III Taiga Shield Low Subarctic (LS) Ecoregion, more specifically, the Level IV Calder Upland LS Ecoregion (Ecosystem Classification Group, 2008). The dominant landform in the Ecoregion is rolling, hummocky or hilly exposed Precambrian intrusive, volcanic and sedimentary bedrock. Discontinuous boulder till veneer deposits in fractures and on lower slopes and depressions between exposed rock outcrops are common throughout the Ecoregion, as are small sandy to gravelly outwash deposits and eskers.
Forest cover is highly variable in the Ecoregion because of topographically diverse bedrock exposures, till deposits and outwash materials together with a history of burning, and a transitional climatic regime (Ecosystem Classification Group, 2008). Rock lichen communities cover many bedrock exposures. Small black and white spruce stands with ericaceous shrubs, dwarf birch and lichens and mosses occur on thin till deposits. In the Property area, ridges of sparsely tree covered bedrock are separated by a multitude of small lakes (Figure 5-2).
Relief on the Property is approximately 80 metres. Maximum elevation is approximately 400 metres on ridge tops in the north portions of the property and minimum elevation is approximately 320 metres at Steeves and Grizzly Lakes. Drainage on the Property area is south to Chalco and Indin Lakes then into the south flowing Snare River.
The Property area is characterized by a north-south structural grain in the bedrock that makes east-west land movement challenging. Locally the relief can be a problem for mobile land equipment (Robb, 1997).
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 37 of 181 June 17, 2013
FIGURE 5-2: TYPICAL LOCAL PHYSIOGRAPHY
5.4.1.1 Permafrost
Colomac lies within the boundary of continuous permafrost (Jeness, 1949). Permafrost does not present operational problems based on historic drilling and operations at the Colomac Mine, (Robb, 1997). Robb (1997) reported that no brine solutions or other additives were required to drill in either summer or winter at Colomac. However, it is known that drill rods froze in when left immobile for less than 18 hours. Two diamond drill holes, drilled during the late summer of 1987, were reamed out to perform hydrostatic and permeability testing in late October of the same year. Hole 87-107 encountered ice to a depth of 407 feet and hole 87-108 to a depth of 450 feet. Hole 87-108 froze again in less than 20 hours. Ambient temperatures at the time were -18oC.
Diamond drill holes drilled by Nighthawk from 2009 to 2012, including the Damoti, Leta Arm, Treasure Island and Colomac holes, were often deeper than those of previous workers in those areas and discovered a permafrost area to exist at depth beyond a core depth of 150m. To resolve and adapt to the permafrost conditions, drilling was conducted with heated water and no EZ shot downhole survey tests were taken during the course of drilling beyond a core depth of 150m. After the holes were completed, the holes were salted with calcium chloride and tests were taken for the depths beyond 150m as the drill rod string was retreated. Calcium chloride was also used to prevent freezing of rods if the drill bit required changing beyond a core depth of 150m. After the bit change, drilling continued with hot water until the hole terminated and the rods were to be removed.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 38 of 181 June 17, 2013
6 HISTORY
The history of the Nighthawk’s Indin Lake Project’s Colomac Property is summarized in this section.
Throughout the historic exploration and development of the Colomac Property, work has been completed in the Imperial system of measurement. For the purposes of Section 6 of this report the historic data units have been retained and are presented in that format.
6.1 1938-1947 EXPLORATION PERIOD
Gold was discovered in the Indin Lake area in 1938 by prospectors of the Territories Exploration Company. Results of prospecting released by Leta Explorations in January 1945, indicated gold was to be found in the Baton Lake area just north of Indin Lake (Davison and Tyler, 1988).
Five mining companies, Goldcrest Mines, Colomac Yellowknife Mines, Indian Lake Gold Mines, Indyke Gold Mines and Nareco Gold Mines, staked claim blocks within the current Property area during the spring of 1945. Initial exploration centered on the 18 claim Goldcrest property which was staked in January 1945 and where a quartz diorite dyke of at least 4800 feet in length was discovered in July 1945. This unit parallels the strike of the gold-bearing Colomac Sill (historically referred to as the Colomac Dyke). Forty claims were then staked along the eastern boundary of the Goldcrest property in February. The northern block of 20 claims became the property of Indian Lake Gold Mines and the southern block of 20 claims became the property of Indyke Gold Mines. In May, 24 claims were staked north of Indian Lake’s property for Colomac Yellowknife Mines following the discovery of gold in quartz veins within a north-east trending quartz-diorite porphyry sill (the Colomac Sill), historically referred to as a dyke (the Colomac Dyke). The Colomac Sill, extending along the Indyke, Indian Lake, Colomac-Yellowknife properties, quickly became the focus of gold exploration. Nareco Mines subsequently staked the north and south extensions of Colomac Sill.
6.1.1 COLOMAC SILL EXPLORATION
The properties of Indyke Gold Mines (20 claims), Indian Lake Gold Mines (20 claims; GI 1 to 16 and GI 25 to 28), Colomac Yellowknife Mines (24 claims; IF 1 to 12 and DID 1 to 12) and Nareco Gold Mines, situated along the length of the Colomac Sill, and the eastern peripheral properties of Hearne Gold Mines and Dyke Lake Gold Mines were jointly developed (a total of 141 claims) under the direction and management of Central Mining Services of Toronto from the winter of 1945 into 1947.
One hundred and thirty six diamond drill holes were drilled along and adjacent to the Colomac Sill for a strike length of approximately 4 1/2 miles over the winter of 1945/1946. The 111 EX and 25 X-ray holes totaled 41,301.2 feet (Table 6-1). The drilling was planned at 500 foot intervals with more detailed drilling performed where higher grade zones (1, 2 and 3) were encountered.
Extensive geological mapping of the Baton Lake area was performed during the summer of 1946 and covered the properties managed by the Central Mining Services.
Mineralogical and further metallurgical investigations were carried out at the University of Alberta
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 39 of 181 June 17, 2013
during the winter of 1946-1947.
TABLE 6-1: SUMMARY OF 1945-1946 DIAMOND DRILLING ON THE COLOMAC SILL
Year Company Zone No. of DDH DDH Diameter Footage Metres 1946 5 EX 1,049.0 319.7 Nareco North 1 8 X-Ray 881.0 268.5
1946 43 EX 17,071.5 5,203.4 Colomac-Yellowknife 1 & 2 15 X-Ray 1,477.0 450.2
1946 40 EX 14,005.2 4,268.8 Indian Lake 2 & 3 2 X-Ray 309.0 94.2
1946 Indyke 12 EX 4,496.0 1,370.4
1946 Nareco South 11 EX 2012.5 613.4 Total 136 41,301.2 12,588.6
6.1.2 GOLDCREST SILL EXPLORATION
Goldcrest Mines conducted exploration on the Goldcrest property (18 claims) from 1945 to 1947.
6.1.2.1 East Zone
Prospecting recovered favourable gold pannings from gossan over a shear zone on the Goldcrest property along the eastern volcanic/intrusive contact (East Zone). In August 1945, Goldcrest Mines drilled 5 holes totaling 1,915 feet into this shear zone. Results were disappointing with only one hole returning 0.285 oz/ton Au over 2 feet.
Drilling was later resumed in the East Zone area of the Goldcrest Sill. Eleven diamond drill holes totaling 4,919 feet were put down along the length of the Goldcrest Sill. Drilling was located on the eastern contact of the sill following the drilling strategy of Indian Lake and Colomac Yellowknife Mines on the northerly-trending, easterly-dipping Colomac Sill. Favourable results in several of the drill holes allowed the delineation of three zones of higher grade gold mineralization, labeled A, B and C.
6.1.2.2 West Zone
Prospecting in September 1945 located gold in a mineralized shear within an altered rhyolite tuff/sericite schist to the northwest of the dyke showing. This new area became known as the West Zone. Seven rock trenches were opened with mineralization located in trenches 1 through 4. Chip samples from Trench 6 assayed 1.54 oz/ton Au; pannings yielded gold and arsenopyrite.
Four 5 foot bulk samples assayed 0.07, 0.06, 0.10 and 0.08 oz/ton Au. In October, nine holes drilled across the West Zone yielded poor results; only GC-l0 returned 0.42 oz/ton Au in a 7 foot sludge assay
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 40 of 181 June 17, 2013
drilled through a quartz vein in sericite schist.
6.2 1947 - 1967 INACTIVE EXPLORATION PERIOD AND AMALGAMATION OF CLAIMS
No further activity occurred on the Goldcrest Property following the collapse of gold prices in the late 1940's and the claims were allowed to lapse.
The Colomac area properties, like the Goldcrest property were considered uneconomic for development at 1947 gold prices and the state of technology of the time. The properties lay dormant and little activity was recorded from 1947 to 1967. Hydra Explorations Limited acquired the properties of Colomac Yellowknife Mines and Indian Lake Mines in 1959. The properties of Nareco Gold Mines, Indyke Gold Mines, Hearne Gold Mines and Dyke Lake Gold Mines were allowed to lapse.
6.3 1968 - DISCOVERY MINES OPTION
In 1968, with an increase in the price of gold, Discovery Mines optioned the Colomac-Yellowknife and Indian Lake properties from Hydra under a 5-year agreement and staked 24 adjoining claims (parts of old Goldcrest and northern Nareco properties) to cover the extents of the Colomac and Goldcrest sills. Only the southernmost portion of the Colomac sill (the old Indyke Gold Mines property) was not picked up.
Discovery Mines objectives during the field season of 1968 were to study the control of gold mineralization within quartz veins along the Colomac & Goldcrest sills, and to map their northern limits which were previously undefined.
6.4 1969 – 1973 INACTIVE EXPLORATION PERIOD AND AMALGAMATION OF CLAIMS
A second hiatus in exploration activity occurred during the period 1969 - 1973.
In 1971, Hydra Explorations and Discovery Mines amalgamated their claims into one group of 68 claims. This property was transferred to Johnsby Mines, a private company owned jointly by Hydra and Discovery Mines. Discovery Mines staked three additional claims (part of the former Indyke property) in 1972 which completed the coverage of the Colomac and Goldcrest sills.
6.5 1974 COMINCO LTD. OPTION
Cominco optioned the Colomac property from Johnsby Mines in April 1974. During the field season, Cominco drilled 20 holes, totaling 9,443 feet of BQ core, at intervals of 150 to 200 feet for a distance of 1,200 feet along the Colomac Sill. They concentrated on the high grade zone (termed Zone 2) where the bulk sampling program had taken place. Assay values from Cominco core compared favourably with those of the 1946 drilling program, allowing Cominco to re-assess ore reserve figures quoted in 1946 and 1968.
Detailed core logging and observations of the type and orientation of quartz veins within the Colomac Sill demonstrated the association of gold mineralization with a set of flatly dipping quartz veins. A
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 41 of 181 June 17, 2013
geochemical survey was performed over the property in June 1974 to test for possible geochemical markers associated with gold mineralization. None were identified.
A 2,000 lb sample of ore-bearing sill rock was taken from a trench 50 feet west of DDH 74-2 and sent for metallurgical testing. Core samples were also sent for heap leaching, flotation and grindability tests. Cominco concluded at the end of this program that the Colomac property was uneconomic at 1974 gold prices and cancelled its option in 1976 (Davison and Tyler, 1988).
6.6 1975 - 1985 PROPERTY REVIEWS
Shell Canada and Prospection Mines briefly reviewed the Colomac property in 1976 and 1979 respectively. Newmont performed various metallurgical tests on Colomac mineralisation in 1980.
6.7 1985-1987 WOLLEX EXPLORATION
Wollex Exploration carried out very brief prospecting programmes on the ED-1 claim near the Indin River in 1985 and 1987. Two areas of mineralization were discovered: the main Wollex showing and a zone further to the north which may represent part of the "Zone 24". No other work is recorded for these claims. (Dickson, 1985 and 1988)
6.8 1986 NORANDA EXPLORATION LIMITED
The BAT-1 claims were the subject of reconnaissance mapping and prospecting programmes by Noranda Exploration Limited (Powers et al., 1986). Although they reported some weakly anomalous gold values from lithogeochemical sampling and resampling of some existing trenches, nothing of significance was discovered.
6.9 1987 ECHO BAY MINES LTD.
Echo Bay Mines Ltd. conducted widely spaced prospecting traverses on the SPAN-l claim (MacMahon and Sarjeant, 1987). No significant results were returned.
6.10 1987 TRIPLE CROWN RESOURCES CORP.
In 1987, a Dighem III airborne VLF-EM and magnetic survey was flow over both the AGE2 andFRE2 claims. The surveyed area was part of a larger airborne survey by Triple Crown Resources Corp. which held an option on the Petromet-Comaplex claims which would later be optioned by Neptune.
6.11 1986 -1991 NEPTUNE RESOURCES CORP. EXPLORATION AND PRODUCTION
Neptune Resources Corp. optioned the Colomac and Goldcrest properties from Johnsby Mines in the fall of 1986. Neptune performed extensive diamond drilling to establish ore reserves and a successful demonstration open pit and test vat leach on the Colomac Zone 2 ore body as part of a mining economic feasibility study. In addition, geological mapping, surveying, airborne geophysics and
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 42 of 181 June 17, 2013
topography, and some additional drilling were performed over the rest of the property.
On December 7th, 1987, Neptune announced a decision to bring the Colomac Zone 2 ore body into production based on the positive results of the feasibility study (Davison and Tyler, 1988).
From 1987 to 1991 Neptune completed approximately 197,500 feet (60,200 metres) of diamond drilling in 705 holes. Most holes were completed on Zones 1 to 5 of the Colomac Sill but drilling was also completed at the Goldcrest, Goldcrest North, Grizzly Bear, 24/27 and other targets on the Property. The various Neptune diamond drill programs are presented in Table 6-2.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 43 of 181 June 17, 2013
TABLE 6-2: NEPTUNE/NORTHWEST DIAMOND DRILLING 1987 TO 1991
Company Drill Program Zone / Area No. of DDH Footage Metres
Neptune 1987 Phase 1 Zone 2.0 84 8,096.6 2,467.8 Zone 2.0 33 21,331.0 6,501.7 Neptune 1987 Phase 2 GoldCrest 8 2,423.0 738.5 SubTotal 1987 125 31,850.6 9,708.1 Zone 2.0 7 2,636.0 803.5 Neptune 1987-1988 Zone 3.0 30 10,669.0 3,251.9 SubTotal 1987-1988 37 13,305.0 4,055.4 Zone 1.0 41 18,330.0 5,587.0 Zone 2.0 6 3,770.0 1,149.1 Neptune 1988 Summer-Fall Zone 2.5 31 11,879.0 3,620.7 Zone 3.0 20 8,836.0 2,693.2 Subtotal 1988 Summer-Fall 98 42,815.0 13,050.0 Neptune 1989 Winter Zone 2.0 72 15,056.6 4,589.3 Subtotal 1989 Winter 72 15,056.6 4,589.3 Neptune 1989 Summer Zone 2.0 33 8,966.0 2,732.8 Subtotal 1989 Summer 33 8,966.0 2,732.8 GoldCrest 37 11,819.0 3,602.4 GoldCrest North (Dyke Lake) 19 7,599.4 2,316.3 Zone 1.5 31 11,081.1 3,377.5 Zone 3.0 2 674.0 205.4 Northwest 1989-1990 Zone 3.5 16 5,631.0 1,716.3 Zone 4.0 - Petromet 9 3,423.0 1,043.3 Zone 5.0 5 2,698.0 822.4 East of Baton Lk 1 197.0 60.0 Subtotal 1989-1990 120 43,122.5 13,143.7 Northwest 1990 -1991 GoldCrest North (Dyke Lake) 8 3,791.0 1,155.5 Grizzly Bear 4 1,488.0 453.5
Colomac Lease area 21 8,325.0 2,537.5
Petromet Option area 68 25,293.7 7,709.5
Subtotal 1990-1991 101 38,897.7 11,856.0 Neptune 1991 Mine Expl Zone 2.0 119 3,504.0 1,068.0 Subtotal 1991 Mine Expl. 119 3,504.0 1,068.0 Total Neptune/Northwest 705 197,517.4 60,203.3
6.11.1 MINE AND MILL OPERATIONS 1990-1991
Following a positive feasibility by Wright Engineers in February 1988, Neptune Resources began
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 44 of 181 June 17, 2013
construction of a $200 million mining and milling facility (Royal Oak, 1993).
Pre-production stripping began at Zone 2 on August 23rd, 1989 (Johnson, 1994). The mill was started in late April 1990 and the first gold poured on May 29th, 1990.
The Colomac Zone 2 deposit was mined as a conventional open-pit operating on two 12 hour shifts per day and a scheduled 350 day operating year. The cut-off grade used was 0.03 oz/ton, and 15% tonnage dilution factor was applied to arrive at the mill feed grade.
The relatively narrow pit, approximately 3,200 feet x 900 feet at surface, was mined sequentially downward, stripping to the final pit limits in one pass on each bench. Mine bench heights were 30 feet.
Mine production averaged 30,700 tons per day peaking at 35,000 tons per day in September and October 1990 which was far below the 45,000 tons per day needed in order to meet the mill’s designed capacity of 10,000 tons per day at its design strip ratio of 2.5:1 (Royal Oak, 1993).
During its 8 month pre-production phase (September 1989 to April 1990) and 13 months of operation (May 1990 to June 1991), the Zone 2 pit produced 3,214,000 tons of ore and 8,356,000 tons of waste at a strip ratio of 2.60:1 (Royal Oak, 1993, Johnson, 1994).
The milling circuit was a conventional whole ore cyanide leach with a carbon in pulp (CIP) gold recovery circuit (Royal Oak, 1993).
A total of 146,400 ounces of gold were produced at an average mill head of 0.057 opt and 92.3% recovery.
All electrical power was generated by six on-site 2,500 kilowatt diesel fueled generators. Up to 5 generators were required at anyone time to supply the operations' needs with the sixth acting as a backup.
A permanent camp accommodated operating personnel on single status basis and provided room and board and recreational facilities.
Neptune experienced cash flow difficulties in 1990 due to unanticipated production difficulties, low ounces production, and low gold prices. The mine required $15 million working capital to finance the purchase of operating supplies for 1991. Because of Neptune's inability to raise the necessary funds, the waste stripping was cut back on a close down program and the mine eventually ceased operation on June 29th, 1991 (Royal Oak, 1993).
6.12 1993-1997 ROYAL OAK MINES INC. EXPLORATION AND PRODUCTION
In April 1993, the Colomac assets were purchased by Royal Oak Mines from Neptune Resources Corp. for 3.5 million Royal Oak shares or $7.875 million. In a simultaneous transaction, Royal Oak acquired the gross production royalty on the Colomac property in exchange for the Royal Oak’s Common
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 45 of 181 June 17, 2013
Shares valued at $4,000,000. Royal Oak held a 100% interest in the leases (Royal Oak, 1999).
After acquiring Colomac, Royal Oak steadily increased its land position around the Colomac Mill site by staking and two acquisitions (Kim Claims and Cath 1). The aim was to control most of the known showings in the belt north of Indin Lake and west of the Indin River (Robb, 1997). The Colomac processing plant site and tailings area was centrally located within this property position.
Physical exploration work on the ground from 1993 to 1997 was largely focused on delineating and defining resources mineable by open pit methods. This, and the associated engineering and environmental work for permitting and mine design, consumed most of Royal Oak’s exploration personnel and financial resources (Robb, 1997). These efforts resulted in the definition of mineable reserves (non NI 43-101 compliant) on Zones 2.5 and 3.0 which were subsequently mined within the current Property area. Other advanced projects which included the Goldcrest and Grizzly Bear were considered uneconomic as open pit operations at that time (Robb, 1997).
In addition to diamond drilling, Royal Oak conducted linecutting, geological mapping, surveying, ground and airborne geophysics and topographic surveying over the property area.
From 1993 to 1997 Royal Oak completed approximately 87,600 feet (26,700 metres) of diamond drilling in 265 holes. Most holes were completed on Zones 1 to 5 of the Colomac Sill but drilling was also completed at the Goldcrest, Goldcrest North, Grizzly Bear, 24/27 and other targets on the Property. The various Royal Oak diamond drill programs are presented in Table 6-3.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 46 of 181 June 17, 2013
TABLE 6-3: ROYAL OAK DIAMOND DRILLING 1993 TO 1997
Company Drill Program Zone / Area No. of DDH Footage Metres
Zone 2.0 5 6,545.0 1,994.9 Royal Oak 1993 Zone 2.5 18 2,302.0 701.6 Zone 3.0 25 6,047.0 1,843.1 Subtotal 1993 48 14,894.0 4,539.7 Zone 2.0 18 2,383.0 726.3 Royal Oak 1994 Zone 3.0 26 2,711.0 826.3 Subtotal 1994 44 5,094.0 1,552.7 Zone 2.0 3 3,961.0 1,207.3 Royal Oak 1995 Zone 3.5 21 5,929.0 1,807.2 Subtotal 1995 24 9,890.0 3,014.5 GoldCrest 15 4,247.1 1,294.5 Grizzly Bear 58 17,437.8 5,315.0 Royal Oak 1996 Zone 2.0 13 5,805.0 1,769.4 Zone 3.0 23 6,459.0 1,968.7 Subtotal 1996 109 33,948.9 10,347.6 Grizzly Bear 16 6,289.5 1,917.0 Mosquito Ridge 1 827.0 252.1 Royal Oak 1997 Zone 2.0 2 1,431.0 436.2 Zone 3.5 21 15,246.3 4,647.1 Subtotal 1997 40 23,793.8 7,252.4 Total Royal Oak 265 87,620.7 26,706.8
6.12.1 MINE AND MILL OPERATIONS 1994-1997
Stripping operations at the Colomac Mine were recommenced by Royal Oak in March 1994 however a fire in the rubber liners of the SAG mill in March delayed the first gold production to July 1994.
Royal Oak utilized conventional open pit mining techniques similar to those used by Neptune Resources. The Neptune mill circuitry was modified, including the installation of a pebble crusher bypass in 1996, to overcome operating difficulties and to facilitate the processing of 10,000 tpd of ore (Royal Oak, 1999).
In September 1997, Royal Oak discontinued mining operations at the Colomac Mine because of the
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 47 of 181 June 17, 2013
low gold price and the resultant depletion of economic open pit ore reserves. The Colomac Mine was closed in December 1997 after processing stockpiled ore and was placed on care and maintenance for a minimum of two years while underground ore reserves and potential use of the milling facility to treat nearby deposits were evaluated. (Royal Oak, 1998 and 1999).
During its operation from 1994 to 1997 the Colomac Mine (Zones 2, 2.5 and 3.0) produced 9,629,716 tons of ore. A total of 389,308 ounces gold were produced at an average mill head of 0.046 opt and 88.1% recovery (Randall, 1997).
6.13 1998-1999 ROYAL OAK ACTIVITIES AND RECEIVERSHIP
In 1998 the open pit mine was cleared of all man-made material and a protective rock berm was installed to prevent inadvertent access. The mill equipment was cleaned of all slurry and chemical agents and mechanically "mothballed". A small number of personnel were retained at the Colomac site to keep the plant in a secure condition, to operate seepage recycle pumps associated with the tailings impoundment and to carry out the work associated with the environmental monitoring program. The power plant was sold and a number of pumps and ancillary equipment from the mill were moved to the Royal Oak’s Kemess South Mine (Royal Oak, 1999).
In early 1999, Royal Oak was notified by certain debenture holders and note holders that it had defaulted under certain covenants of debt agreements and all amounts outstanding were immediately due and payable. On February 15th, 1999, Royal Oak obtained an Order from the Ontario Court of Justice (“the Court”) under the Companies’ Creditors Arrangement Act (CCAA) which stayed all legal proceedings against the Company until March 12th, 1999. The Order was extended to March 24th, 1999 and then further extended to April 1st, 1999.
Attempts at restructuring, finding new permanent capital and negotiating with the debt holders were unsuccessful and the Company applied to the Court for the appointment of an Interim Receiver. Commencing with the appointment of PricewaterhouseCoopers LLP as the interim receiver on April 16th, 1999, Royal Oak began winding-down its exploration activities and under order of the Court, the interim receiver was directed to sell the Company’s assets and distribute the proceeds to its creditors.
6.14 2000 – 2011 DIAND (NOW AANDC) ACTIVITIES
The Department of Indian Affairs and Northern Development (DIAND, now AANDC) became the owner of Colomac on January 12th, 2000 by way of Ontario Superior Court of Justice Court Order dated December 13th, 1999 following the receivership of Royal Oak and its related companies.
As per the court order, the Interim Receiver conveyed to DIAND all right, title and interest of Royal Oak and the Interim Receiver in and to the Colomac Transferred Assets free and clear of any and all claims, estates, rights, title and interest of all persons holding, or who were the beneficiaries of, encumbrances, mortgages, orders, charges, liens, security interests, pledges and writs of execution. Also no person, firm or corporation should be entitled to any royalty or other payment in the nature of
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 48 of 181 June 17, 2013
rent or royalty on any minerals produced or removed from the Colomac Transferred Assets.
DIAND assumed control of the property through the creation of the Royal Oak Project Team (ROPT). The Contaminated Sites Office (CSO) took control of the site from the ROPT on September 6th, 2000. In 2004, the CSO was renamed the “Contaminants and Remediation Directorate” (CARD), the division of AANDC which now oversees the remediation, care and maintenance of the Colomac Mine site.
In 2005 AANDC began remediation of the Colomac mine site including: tailings containment area (TCA) management; construction of tailings Dam1b, tailings covers in the TCA, and Dam 2 discharge channel; restoration activities including contouring of the Dam 1 valley, restoration of diversion ditches and sumps, quarry remediation, construction of caribou berms; hydrocarbon remediation; removal of mining and milling assets and; demolition of facilities and site cleanup with disposal in a non-hazardous landfill in Pit 2.5. Remediation work was completed in 2011 and long-term monitoring has been initiated.
On December 15th, 2011 Nighthawk (then Merc) announced that it had entered into an agreement to acquire the mineral claims and leases of the former producing Colomac Gold Mine from Aboriginal Affairs and Northern Development Canada (AANDC). The transaction closed on January 26th, 2012 and Nighthawk acquired 100% interest in the Colomac property.
6.15 HISTORIC MINERAL RESOURCES AND RESERVES
The historic resource and reserve estimates noted in Section 6.15.1 of this Report are ‘historical’ in nature and not in compliance with NI 43-101. A qualified person has not done the work necessary to verify the historical estimates as current estimates under NI 43-101 and as such they should not be relied upon. Howe and Nighthawk are not treating the historical estimates as current mineral resources or mineral reserves; they are presented for informational purposes only.
Nighthawk retained Howe in 2012 to undertake the work necessary to establish a current mineral resource for the Colomac Property. On April 12, 2012 Howe reported an independent mineral resource estimate encompassing the historic Colomac, Goldcrest, Dyke Lake (Goldcrest North), Grizzly Bear, 24 and 27 Zones (see Section 6.15.2). The mineral resource estimate was prepared in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards for Mineral Resources and Mineral Reserves (November 27, 2010) as per NI 43-101 requirements. Only mineral Resources were estimated – no mineral Reserves were defined.
Nighthawk subsequently retained Howe in 2013 to undertake the work necessary to update its 2012 independent mineral resource estimate encompassing the historic Colomac Goldcrest and Dyke Lake (Goldcrest North) zones. Howe’s 2012 mineral resource estimate of the Grizzly Bear, 24 and 27 Zones has not been updated and is restated herein. This mineral resource estimate update is reported in Section 14 of this report.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 49 of 181 June 17, 2013
6.15.1 HISTORIC RESERVE ESTIMATES
Prior to its production decision in 1988, Neptune retained Behr Dolbear to complete a mineral reserve estimate on the Zone 2.0 deposit. Subsequently, a number of reserve estimates were completed by Neptune and Royal Oak during open pit mine operations at the Zone 2.0, 2.5 and 3.0 deposits. These reserves estimates are summarized in Table 6-4.
Howe notes that the various historic reserve estimates presented in Table 6-4 were completed prior to and during the two periods of mine operations at Colomac. The change and overall decline in reserves over time are the result of open pit mining, extraction and processing of the gold mineralization from the mineral reserve and to a lesser extent, the application of differing economic factors, resource/reserve modeling methods and pit optimisation parameters through time. There can be no assurance that any remaining historic resources/reserves, in whole or in part, will ever become economically viable.
Using original terminology, the historical estimates were referred to as reserves and as such were deemed to be economically viable at the time. This historic category of “reserve” does not conform to current CIM definitions as set out in sections 1.2 and 1.3 of NI 43-101. As noted in Table 6-4 only four of the historic estimates are supported by available technical reports.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 50 of 181 June 17, 2013
TABLE 6-4: CHANGES IN ZONE 2.0, 2.5 AND 3.0 OPEN PIT HISTORIC RESERVE ESTIMATES THROUGH TIME
Diluti Company/ Ore Waste Grade Contained Cutoff Bench Benche Strip Tech. on Model Date (tons) (tons) oz/ton Gold (oz) oz/ton Ht (ft) s (ft) Ratio Report (%)
Zone 2.0 Behr- Behr- Dolbear 1275 - 16,027,000 53,139,000 0.064 1,025,728 15 0.030 30 3.3 Poly Dolbear For Neptune 660 Dec-87 1987 Neptune
Jan-89 18,387,000 55,869,000 0.062 1,139,994 15 0.030 30 3.0 Poly n/a
Neptune Mid- 12,146,000 39,601,000 0.056 680,176 15 0.030 20/40 3.3 n/a Jun-91 Trend
Royal Oak 1230 - 11,359,297 35,876,993 0.053 602,043 ? 0.030 20/40 3.2 ID2 n/a May-93 510
RoyalOak 1040 - Thon, 6,600,000 0.046 306,674 ? 0.030 20 OK Apr-96 520 1996a
Royal Oak 820 - 603,000 688,000 0.043 25,929 6 0.030 40 1.1 OK n/a Jul-97 700
Total Mined 11,821,340 0.049 579,246 Zone 2.5 Neptune Jan-89 1,940,000 12,801,000 0.051 98,940 15 0.030 30 ? 6.6 Poly n/a Royal Oak *Dec-93 1230 - 2.5 & 3.0 1,931,686 4,250,601 0.051 98,516 ? 0.030 30 2.2 ID2 n/a Zones 990 Combined
RoyalOak 1180 - Thon, 544,789 0.043 23,426 ? 0.030 40 OK Jul-96 1020 1996b
Royal Oak 1140- 359,204 326,843 0.042 15,087 0 0.030 40 0.9 OK n/a May-97 1020
Total Mined 343,354 0.046 15,794 Zone 3.0 Neptune Jan-89 3,891,000 24,743,000 0.055 214,005 15 0.030 30 ? 6.4 Poly n/a
RoyalOak 1220 - Thon, 774,769 0.047 ? 0.030 40 OK Jul-96 980 1996b
Royal Oak 1100 - 34,000 48,000 0.045 1,530 15 0.030 40 1.4 OK n/a Jul-97 1060
Total Mined 351,608 0.047 16,526
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 51 of 181 June 17, 2013
Notes: 1. Data sourced from Randall, 1997 and Johnson, 1994 2. Resource/Reserve Model Methods: Poly=Polygonal; Mid=Mid-Trend; ID2=Inverse Distance Squared; OK=Ordinary Kriging 3. These historic resource and reserve estimates are ‘historical’ in nature and not in compliance with NI 43-101. A qualified person has not done the work necessary to verify the historical estimates as current estimates under NI 43-101 and as such they should not be relied upon. Howe and Nighthawk are not treating the historical estimates as current mineral resources or mineral reserves.
6.15.2 2012 HOWE MINERAL RESOURCE ESTIMATE
On April 12, 2012 Howe reported an independent mineral resource estimate encompassing the historic Colomac, Goldcrest, Dyke Lake (Goldcrest North), Grizzly Bear, 24 and 27 Zones (see Section 6.1.5.2). The report was specific to the standards dictated by National Instrument 43-101(NI 43-101), companion policy NI43-101CP and Form 43-101F1 (Standards of Disclosure for Mineral Projects). The mineral resource estimate was prepared in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards for Mineral Resources and Mineral Reserves (November 27, 2010) as per NI 43-101 requirements. Only mineral Resources were estimated – no mineral Reserves were defined.
Using a block cut-off grade of 0.6 g/tonne gold for its mineral resource estimate, Howe outlined a series of north trending, steeply dipping mineralised zones including three contiguous zones hosted by the Colomac Dyke (North, Central and South zones) and 5 other zones including the Goldcrest North (Dyke Lake), Goldcrest, Grizzly Bear, 24 and 27 Zones. The reported mineralized zones generally extend to a vertical depth of less than 300 metres except Colomac Central and South zones which extend to a maximum vertical depth of less than 500 metres along portions of their strike lengths. The modeled mineralized zones are open to depth and generally along strike.
2012 global Inferred mineral resources totaled 42.65 million tonnes with an average gold grade of 1.05 g/tonne, for 1,446,000 ounces gold using a 0.6 g/tonne cut-off grade (Table 6-5). Howe's 2012 mineral resource estimate is now superceded by its 2013 mineral resource estimate update presented in Section 14 of this report.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 52 of 181 June 17, 2013
TABLE 6-5: 2012 COLOMAC INFERRED MINERAL RESOURCES BY ZONE
Zone Tonnes g/t Au Oz Au
Colomac Dyke North 8,127,000 0.95 248,000 Colomac Dyke Central 21,896,000 1.10 771,000 Colomac Dyke South 8,830,000 1.01 287,000 Goldcrest Dyke North 998,000 1.03 33,000 Goldcrest Dyke 1,075,000 1.32 46,000 Grizzly Bear 807,000 1.04 27,000 27 528,000 1.21 20,000 24 390,000 0.96 12,000 Total 42,650,000 1.05 1,446,000 Notes:
A block cut-off value of 0.6 g/t Au was applied to all resource blocks. Tonnes and ounces have been rounded to reflect the relative accuracy of the mineral resource estimate; therefore numbers may not total correctly. Mineral Resources were calculated with commercial mining software. Drill holes traces showing lithology and gold grade were reviewed in plan and cross section to generate 16 mineralised domains. Assays with each domain were top cut to 31 g/t and then composited to regular 5ft intervals. Block model grade interpolation was undertaken using Multiple Indicator Kriging (MIK). The resource estimate was prepared by Leon McGarry, B.Sc., Geologist, ACA Howe and supervised by Felix N. Lee, B.Sc., P.Geo., ACA Howe. Gold price was US$1400 per ounce. A default average specific gravity (SG) value of 2.7 was used. Mineral Resource tonnes quoted are not diluted. No Measured or Indicated Resources or Mineral Reserves of any category are identified. Historically mined volumes of the Colomac Sill mineralization have been deleted from the resource model. Mineral resources are not mineral reserves and by definition do not demonstrate economic viability. This mineral resource estimate includes Inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these Inferred mineral resources will be converted to the measured and indicated resource categories through further drilling, or into mineral reserves, once economic considerations are applied. 1 troy ounce equals 31.10348 grams.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 53 of 181 June 17, 2013
7 GEOLOGICAL SETTING AND MINERALIZATION
7.1 REGIONAL INDIN LAKE PROJECT GEOLOGY AND MINERALIZATION
The Indin Lake Project and Colomac Property lie in the Indin Lake Supracrustal Belt, a 2000 km2, NNE-trending elongate area of volcanic and sedimentary rocks which are Archean in age and belong to the Yellowknife Supergroup (Frith, 1986). For the purposes of this report, all supracrustal rock terms, whether or not prefixed by "meta" denote metamorphosed rocks. The belt lies in the southwestem part of the Slave Structural Province, 30 km east of the boundary with the Bear Province (Morgan, 1992). The Indin Lake Supracrustal Belt is bounded to the west by Archean granitoid plutons and migmatites of the Slave Structural Province while gneissic complexes flank the eastern side and are thought to be basement rocks to the belt. The granites are, in large part, intrusive into the supracrustal rocks (Frith, 1986).
The rock types and metamorphic zones form a series of broad, NNE-trending belts that extend from the south side of Truce Lake to the southern portion of the Snare River. Volcanic rocks of the belt are comprised of mafic to intermediate flows, synvolcanic intrusive dykes and sills and felsic pyroclastic units and underlie roughly 30% of the Indin Lake area (Morgan, 1992). The volcanics form generally NNE-trending, elongate units ranging up to 5 km wide and 30 km long generally surrounded by metasediments (Morgan, 1992). The volcanic sequence is bimodal (intermediate compositions are rarer than felsic or mafic) and is 80% to 85% mafic and 15% to 20% felsic. Ultramafic rocks, metamorphosed to talc-chlorite-carbonate schist, underlie a few hectares of the Colomac property.
The volcanics are overlain by and interfingered with sedimentary rocks, predominantly turbidite sequences of argillites, greywackes and siltstones; Narrow lenses or discontinuous layers of sulphide (pyrite-pyrrhotite) iron formation, sulphide-bearing argillite, and graphitic argillite are common in the sediments where they interfinger with felsic volcanics (Morgan, 1992).
Several Archean plutonic bodies intrude the volcanic-sedimentary rocks. Diabase dykes of the Paleoproterozoic (ca. 2200 Ma) Indin Lake dyke swarm are numerous and cut all units throughout the Indin Lake area (Pehrsson, 2002 and Frith, 1986). The dykes are predominantly northwest- to north- northwest -trending; a conjugate set trends northeasterly. Northwest-trending dykes of the younger Mesoproterozoic (1270 Ma) Mackenzie dyke swarm are present in small numbers; they are generally distinguished from those of the Indin Lake swarm by their prominent aeromagnetic signature and "fresh" appearance (Pehrsson, 2002); although less altered Indin Lake dykes may be difficult to distinguish from the Mackenzie dykes (Pehrsson, 2002 and Frith, 1986).
The Indin Lake Supracrustal belt has been metamorphosed to lower greenschist facies with local amphibolitic facies.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 54 of 181 June 17, 2013
Adapted from Pehrsson and Kerswill, 1997
FIGURE 7-1: REGIONAL GEOLOGY, INDIN LAKE PROJECT AREA
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 55 of 181 June 17, 2013
Rocks are complexly folded and there is a complicated deformation history associated with the area.
At least 3 recognizable periods of deformation have occurred in the Indin Lake Supracrustal belt:
1. Archean isoclinal folds parallel to the trend of the stratigraphy (F1), 2. a north-closing antiform of the greenstone belt (F2), and 3. refolding of F2 in a NW-SE direction, as manifested in the curve of Hewitt Lake (F3).
Several faults offset lithologic contacts by 10's to 100's of metres; N-NNE (generally coinciding with lithologic contacts and displaying horizontal movement), E-ENE, or NW-trending (sinistral) sets. The latter two sets have small horizontal components to movement. Three east-trending faults offset the mineralized Colomac Sill.
7.1.1 INDIN LAKE PROJECT MINERALIZATION
Nighthawk’s Indin lake Project area includes more than 20 known gold deposits and showings (Table 7-1 and Figure 7-2).
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 56 of 181 June 17, 2013
TABLE 7-1: SIGNIFICANT GOLD DEPOSITS AND SHOWINGS WITHIN NIGHTHAWK’S INDIN LAKE PROJECT AREA
Deposit/Showing Style of Mineralization
1 Colomac Auriferous stacked, quartz veins/stockworks/silicified zones 2 Goldcrest hosted by intermediate intrusive 3 Goldcrest North / Dyke Lake
4 Grizzly Bear 5 Laurie Lake Auriferous stacked, silicified zones, often spatially associated 6 Treasure Island with felsic units Chalco Zone - West Shore & Face 7 Peninsula showings
8 24/27 Zones 9 Chalco Zone - Northeast showing 10 Chalco Zone – North End showing Auriferous quartz veins or silicified zones in mafic volcanics 11 North Inca Mine often within or near graphitic argillites and fault/shear zone 12 Diversified Mine along contacts of mafic volcanic–sedimentary belts 13 #3 Zone 14 Lexindin Zone 15 Barker-Vidie
16 Echo-Indin Gold associated with sulfides (in particular, arsenopyrite and 17 Goose Lake loellingite) and quartz-carbonate veins or silicified zones 18 Lucky Lake within mafic volcanic units or intrusive equivalents. Possible 19 Albatross showings extensions of the Kim and Cass zones.
20 Fishhook 21 Damoti Lake BIF-hosted gold 22 BIF Island 23 JPK
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 57 of 181 June 17, 2013
(after Morgan 1992) (Colomac Property outlined in red)
FIGURE 7-2: SIGNIFICANT GOLD DEPOSITS AND SHOWINGS - NIGHTHAWK'S INDIN LAKE PROJECT
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 58 of 181 June 17, 2013
7.2 COLOMAC PROPERTY GEOLOGY AND MINERALIZATION
7.2.1 COLOMAC PROPERTY GEOLOGY
The Colomac Property is underlain by a 4 km thick belt of lower greenschist-grade intercalated mafic- intermediate flows, intermediate-felsic volcanics and intermediate intrusives, bounded by metasediments both to the east and to the west (Figure 7-3).
The volcanic/sedimentary contact to the west, along Steeves Lake, is not well exposed. Sediments observed in outcrop are slatey argillites and did not appear particularly deformed. However, the contact to the east in the Indin River area shows the more classical Archean contact with evidence of strong and repeated folding and faulting and accompanying hydrothermal alteration. Sediments vary from graphitic argillites and siltstones to arkoses and sandstones (Cohoon et al. et al,, 1991).
A multiphase, synvolcanic intrusive complex (about 2x10 km in area) intrudes the volcanics on the west of Baton Lake, within 800 m of the western volcanic/sedimentary contact. Based on its conformable orientation with the volcanic stratigraphy, the complex is generally considered to be a sill intruded in a horizontal position and later rotated or folded together with the surrounding volcanic rock rocks into its present, steeply-dipping orientation.
The host strata and synvolcanic, intrusive complex are strongly deformed, and mafic units have a steeply-dipping foliation and a steeply-plunging lineation. The sill complex strikes NNE and dips steeply east subparallel to the host strata. It consists of a series of multiphase, medium-grained diorite to quartz-diorite (small blue quartz phenocrysts; up to 15% magnetite) and gabbroic sills, with about 15% of the complex occupied by elongate, andesitic enclaves (10's x 100's of metres in size) (NWT Geoscience Office, 2012a).
The Colomac Sill (2671 +/- 10 Ma; Morgan, 1992), which hosts the Colomac deposits, occurs near the east side of the intrusive sill complex in contact with, or nearby, andesitic volcanics. The NWT showing report describes the Colomac Sill as being composed mainly of a medium-grained quartz- albite porphyry (dioritic to trondhjemitic), with some chlorite, biotite, epidote, carbonate, amphibole, magnetite, up to 2% pyrite, and pyrrhotite (NWT Geoscience Office, 2012a). Historic drill logs describe the Colomac intrusion as multiphase, having a quartz-feldspar-porphyry (QFP) component enclosed by a quartz diorite and or diorite/gabbro phase. Detailed historical surface outcrop mapping shows an unrestricted distribution of the rock types. 2012 Nighthawk logging of drill core recognises quartz diorite and diorite as the main intrusive units with QFP and gabbro rarely identified. To provide some clarification, Nighthawk completed detailed sampling and XRF and ICP lithogeochemical analysis of several holes from the 2012 drill program to better understand the intrusion, gold distribution, and possible alteration.
Nighthawk reports that the lithogeochemical results indicate the Colomac intrusion is a differentiated sill of intermediate to mafic composition (tonalite–trondhjemite) with a fine to medium grained felsic to intermediate upper portion and a medium to coarse grained mafic base. The sill has been rotated post emplacement, steeply dipping and topping to the east. This geometry indicates that all winter
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 59 of 181 June 17, 2013
2012 holes were drilled from the top of the sill to its base and westward terminating in underlying mafic volcanic rocks. Trace element analyses on samples taken throughout the sill show progressive increases and decreases in abundance, suggesting a fractionation process occurred as evidenced by the highly constrained slopes of trace element profiles throughout the transition from top to base within the sill, with abrupt breaks across major lithological contacts. Nighthawk interprets that the trace element distributions are best explained by a fractionation process that gave rise to a differentiated sill.
As noted, Nighthawk has elected to refer to the Colomac intrusion as the Colomac Sill and it will be referred to as such in this Report. Historically the Colomac intrusion has generally been referred to as a dyke because of its steeply-dipping orientation, however many previous authors have interpreted that the Colomac intrusion is a subvolcanic sill that was intruded in a horizontal position and later rotated or folded together with the surrounding intrusive and volcanic rocks into its present, steeply-dipping orientation.
Stanton et al. (1954) interpreted the steeply east-dipping, tabular body as a sill within mafic volcanic rocks and associated sill-like bodies of metadiorite and metagabbro, but they were not certain whether the sill was synvolcanic or much younger than the mafic volcanic and intrusive rocks. Helmstaedt (1990) reported that with the exception of Byrne (1946), no previous authors considered the possibility that the Colomac and Goldcrest quartz-albite porphyry intrusions post-date at least some of the folding and are unrelated to the mafic volcanic and main intrusive complex host-rocks. From field relationship similarities to other mafic sequences in the Slave Province, Helmstaedt (1990) concluded that is likely that the diorite complex hosting the Colomac intrusion represents a synvolcanic mafic sill, but that the Colomac quartz diorite and quartz-albite porphyry are separate, later intrusions. Morgan (1992) reports an age date of 2671 +/- 10 Ma for the Colomac dyke, therefore it appears that it was emplaced at a relatively similar time as the mafic volcanic and intrusive complex that it intrudes and it is not later as questioned by Byrne (1946, Stanton (1954) and Helmstaedt (1990). Morgan (1992) refers to the Colomac Sill as subvolcanic, tonalitic intrusive sheet, but he considers it a separate intrusion from the quartz-dioritic Goldcrest dyke. Helmstaedt (1990) recommended detailed petrographic and petrochemical studies and possibly radiometric age measurements to determine the petrogenetic relationships between the various intrusive phases at Colomac. Howe agrees that additional work is required to conclusively determine the petrogenic and paragenetic relationships between the various intrusive phases at Colomac.
Where tested along its strike, the Colomac Sill ranges from 40 to 200 m in width (averaging 100 m). The quartz diorite (historic QFP) portion of the Colomac Sill ranges from 9-60 m in width (averaging 30 m). The sill has a drill tested strike length of about 6 kilometres. It does not have a strong tectonic fabric. The sill is oriented 010o/80o in the north, and 023o/80o in the south. The sill has been brittly deformed to produce fracture stockworks and auriferous quartz-vein zones that are highly altered and carbonatized. Otherwise the sill shows only slight tectonic fabrics, in contrast to the less competent surrounding country rocks. Overall, alteration zoning in the sill consists of potassically altered cores, accompanied by weak silicification and massive clots of hematite-magnetite in quartz, enveloped by chloritization and epidotization (NWT Geoscience Office, 2012a).
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 60 of 181 June 17, 2013
Goldcrest Mines Ltd. located three showings in 1945 on the former AE claims (the Goldcrest Dyke; the Goldcrest North or Dyke Lake Zone and the Goldcrest East Zone (NWT Geoscience Office, 2012b). The showings consist of felsic porphyries intruded by tensional quartz veins, within a large, multiphase, synvolcanic sill/dyke complex that ranges in composition from diorite to quartz-diorite, with gabbroic sills and large andesitic enclaves. The complex is situated near the base of a sequence of greenschist-grade andesitic flows (pillows) and intermediate-felsic volcanics.
Several north-south striking quartz feldspar intrusions, similar to the Colomac Sill, were located in the Duck Lake area. These were mapped and sampled in detail and although they were locally very pyritic and hydrothermally altered, gold values from both lithogeochemical samples and diamond drilling were uniformly low (Cohoon et al., 1991).
A fairly thick sequence of quartz feldspar porphyry, rhyolite porphyry, and sericitic rhyolite occurs in the approximate centre of the property in the Nice Lake area. These commonly are quite pyritic (1 to 5%), and give rise to strong IP anomalies. These are probably all associated with a high level intrusion. Many of the units contain 10 to 15% free silica (Cohoon et al, 1991).
A prominent aeromagnetic anomaly just east of the Colomac 2.0 open pit reflects an ultramafic intrusion under Baton Lake. This ultramafic unit is very schistose and ankeritic quartz veining is present at its south boundary where the enclosing basalts are more competent. A unit of variolitic basalt was observed due east of the pit near the lakeshore, possibly the only occurrence of komatiites on the property (Cohoon et al., 1991).
Several crosscutting faults were evident from both the geological and geophysical results, but none appear to be significant with respect to mineralization.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 61 of 181 June 17, 2013
Adapted from Burns, 1987
FIGURE 7-3: COLOMAC PROPERTY GEOLOGY WITH LOCATION OF GOLD SHOWINGS/DEPOSITS
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 62 of 181 June 17, 2013
7.2.2 COLOMAC PROPERTY MINERALIZATION AND ALTERATION
Gold mineralization in the Property area is thought to have taken place after the formation of isoclinal folds, and before the end of the formation of the north-closing antiform along which several significant deposits are found, including the Colomac deposit on the east limb, Treasure Island on the fold nose, and the Kim/Cass deposits on the west limb (NWT Geoscience Office, 2012a). Brittle deformation of the mineralized quartz-albite porphyries relative to the more ductile gabbro and diorite units of the intrusive complex at Colomac provided conduits for fluids that produce quartz stockworks and veins.
The Colomac Property contains several gold deposits and showings, the most significant of which including the Colomac zones (Zones 1.0, 1.5, 2.0, 2.5, 3.0 and 3.5), Goldcrest Zone, Gold Crest North Zone (Dyke Lake), Grizzly Zone (Airport Showing), Zone 24, and Zone 27 (Cohoon et al., 1991). A discussion of these zones follows:
7.2.2.1 Colomac Zones
Gold mineralization has been identified along an approximate 5 kilometre strike length of the Colomac Sill and has been divided into a number of somewhat arbitrary zones based on: spatial position along the Sill; location with respect to historic claim boundaries and; grade of mineralization. The zones have been identified from north to south as Zones 1.0, 1.5, 2.0, 2.5, 3.0, 3.5, 4.0 and 5.0.
Zone 2.0 was mined from 1990-1991 and 1994-1997 to a depth of approximately 163 metres (535 feet) below surface (bench 1275 to 740). Zones 2.5 and 3.0 were mined 1995-1997 to respective depths of 51.8 and 48.8 metres (170 and 160 feet) below surface (bench 1230 to 1060 and bench 1220 to 1060 respectively). All three pits were mined near to their lower reserve limits at the time of operation however mineralization is open to depth.
Gold is found in several zones within the Colomac Sill, in association with parallel sets of glassy, tensional quartz veins that consist of lenses of smoky grey quartz within white quartz (NWT Geoscience Office, 2012a). The veins are up to 1.0 m wide but average from 1.25-5.0 cm thick and they commonly contain up to 15% carbonate. They are generally co-planar, trend SSW and dip 20 degrees west, but also tend to undulate irregularly over short intervals. Shallow-dipping veins will become steep-dipping when they enter sheared zones. Vein margins tend to be ribboned by crack-seal textures and may be sheared. Contacts between veins and the host porphyry are sharp but may also appear gradational due to silicified halos. The quartz veins generally terminate at the dyke margins but a few small, barren quartz-carbonate veins occur locally in the andesite. A late set of white, barren quartz veins is also present.
Gold occurs as fine grains along contact margins, in fractures, and in quartz vein selvages/halos, but not commonly in the quartz veins themselves. Since the vein selvages are auriferous, grade is controlled by the quantity of veins, not the absolute volume of quartz. Gold is spatially associated with pyrite (in quartz veins and vein selvages), chlorite, pyrrhotite, tourmaline, arsenopyrite, and magnetite. Sericitic alteration is found in the immediate vicinity of mineralization, accompanied by silicified and chloritized selvages containing the above minerals. Alteration halos also contain albite, quartz, sericite-
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 63 of 181 June 17, 2013
muscovite, various carbonates, Ti-oxides, and epidote-group minerals, and are enriched with minor chalcopyrite, marcasite, galena, and sphalerite (NWT Geoscience Office, 2012a).
Zone 2, consists of the thickest and coarsest-grained portion of the Colomac Sill. Veins form up to 10% of Zone 2, are subparallel to each other, and dip 30 degrees east, with steeper dips at the east margin (about 40 degrees but some are vertical). In Zones 2 and 3, veins are oriented 345/35NE, on average. True widths of the mineralized zones 2.0, 2.5, 3.0 and 3.5 vary from less than 20 metres to locally 80 metres.
The deepest holes drilled on the Colomac zones (Royal Oak, 1997) intersected mineralization at a depth of approximately 670 metres (2200 feet) vertically below the Zone 2 pit and 792 metres (2600 feet) below surface at Zone 3.5. The majority of drill holes in the Zone 2 to 3.5 areas were to a vertical depth of less than 300 metres (1000 feet).
(Mine Grid – Imperial – Looking North)
FIGURE 7-4: TYPICAL GEOLOGICAL SECTION THROUGH THE COLOMAC SILL – ZONE 3
Nighthawk notes that gold is preferentially located within the upper two thirds of the Colomac Sill and restricted to domains enriched in silica. The same association was observed in all of Nighthawk’s
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 64 of 181 June 17, 2013
2012 holes. The silica rich upper portion of the sill behaved in a brittle manner during regional structural deformation providing depositional sites for gold. This is in contrast to the ductile behavior of the lower portion of the sill and the surrounding mafic volcanic rocks.
The Colomac gold mineralisation is spatially associated with what has historically been referred to as a Quartz Feldspar Porphyry (QFP) or Quartz-Albite dyke. Howe notes a change in Colomac Sill rock type terminology in 2012 drill logs compared to historic logs. It is apparent that:
‘Quartz Diorite’ intervals in 2012 logs correspond spatially to ‘QFP’ intervals in historic logs. ‘Quartz Gabbro’ intervals in 2012 logs correspond spatially to ‘Diorite’ intervals in historic logs.
To account for the change in terminology, apparently corresponding logged lithologies in historic and 2012 drilling are grouped together using current (2012) lithological codes in Howe’s 2013 mineral resource update.
7.2.2.2 Goldcrest Zone
The Goldcrest Zone is hosted by the Goldcrest Sill, a medium-grained, quartz-albite intrusion (dioritic to trondhjemitic). Like the Colomac Sill, the Goldcrest intrusion has historically been referred to as a dyke because of its steeply dipping orientation. The mineralized zone is very similar to the Colomac Sill deposits where quartz veins intrude competent, fractured, felsic porphyry but the mineralization and veining is more erratic at the Goldcrest Zone. The Goldcrest Sill trends 025, dips steeply east, strikes over 1000 metres, ranges from 20-70 metres wide, and is located near the west shores of Fly and Ridge lakes (NWT Geoscience Office, 2012b). The Goldcrest Zone is located approximately 1 kilometre west and 2.25 kilometres south of the Colomac Zone 2 deposit. The Sill is 350 metres to the west of the south portion of the Colomac Sill (NWT Geoscience Office, 2012b).
A second showing, about 122 metres east of the central portion of the Goldcrest Sill lies between Ridge and Fly lakes, and consists of a 24.4-metre wide, fine-grained, siliceous quartz-(albite) porphyry within andesitic flows (NWT Geoscience Office, 2012b). The porphyry has been fractures and contains glassy white quartz veins, with some local pyrite.
7.2.2.3 Goldcrest North Zone (Dyke Lake Zone)
The Goldcrest North Zone (previously referred to as the Dyke Lake Zone by Northgate), about 210 metres west of the north end of the Goldcrest dyke, historically has been described as consisting of a fine-grained, massive, siliceous, sericitized quartz or dacite porphyry dyke/sill associated with a narrow band of rhyolite. The dyke/sill is herein referred to as quartz diorite using Nighthawk’s current terminology. The dyke is up to 18 metres wide and may be the northern end of a unit explored by 1945 drilling on the Nareco SW Property (NWT Geoscience Office, 2012b). Abundant glassy grey quartz veins cut the intrusion, and pyrrhotite and arsenopyrite are present. Three areas were trenched over a length of 305 metres, and 7 drill holes have intersected up to 0.42 oz over 2.1 metres (NWT
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 65 of 181 June 17, 2013
Geoscience Office, 2012b).
The Goldcrest North Zone was (re)discovered by diamond drilling in November 1989. The mineralization is hosted by quartz feldspar porphyry similar to the Colomac Sill and is roughly on strike with the Goldcrest Sill, although no continuity has been established between the two zones.
The main zone of mineralization is steeply dipping to the east and is parallel, and spatially related to, the hanging wall of the quartz diorite. Mineralized intersections (with the exception noted above) correlate well both horizontally and vertically. There is some evidence, however that, similar to the Colomac Zone 2 deposit, the quartz veins associated with the gold are flat lying (Cohoon et al, 1991).
The gold mineralization is associated with an alteration assemblage that includes silicification, feldspathization and sulphidization with minor chlorite, tourmaline and carbonate. Sulphides include pyrite, pyrrhotite and arsenopyrite disseminated in both quartz veins and in the wall rock. However, the sulphides occur more often as in fillings in hairline fractures. Although gold is always associated with quartz veins and sulphides there is no direct correlation between the quantity of veins or sulphides and gold values.
Mineralization has been intersected over a strike length of approximately 122 metres (400 feet) and has been tested to 61 metres (200 feet) below surface. Mineralization averages 12 to 15 metres (40 to 50 feet) in width appears to be continuous near the hanging wall (eastern contact) of the quartz diorite.
Drilling to the north indicates that the favourable quartz diorite pinches out. The quartz diorite has not been closed off to the south but no gold significant gold mineralization was located in the southernmost section of holes.
The zone remains poorly defined and open at depth.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 66 of 181 June 17, 2013
(Mine Grid – Imperial – Looking North)
FIGURE 7-5: TYPICAL GEOLOGICAL SECTION THROUGH THE GOLDCREST NORTH ZONE
7.2.2.4 Grizzly Bear Zone (aka Grizzly Zone and Airport Zone)
The Grizzly Bear Zone (previously referred to as the Airport Zone by Neptune Resources) is located on Mining leases 3529 and 2662, about 3 kilometres west and 2 kilometres south of the Colomac Zone 2 deposit.
The Grizzly Bear showing was (re)discovered on the AGE 2 claim by Neptune in 1990, when a long, linear magnetic high, at the contact of mafic volcanics and turbiditic sediments, was identified by airborne magnetic and ground Max-Min HLEM surveys. Soil and rock sampling and 4 diamond drill holes (454 metres) were completed the same year on 2 targets: a group of three historic trenches (1945 vintage) on sericited dacites and rhyodacites at a volcanic-sediment contact; and an isolated EM conductor. In one drill hole near the old trenches up to 0.247 oz/ton was intersected over 1.4 metres, and 0.202 oz/ton Au over 1.3 metres, (NWT Geoscience Office, 2012c).
Neptune extended the mineralization both in the mafic volcanic and the felsic horizon over a length of
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 67 of 181 June 17, 2013
580 metres and a width of 24 to 61 metres wide (Cohoon et al., 1991). In 1996 Royal Oak extended the zone of hydrothermal alteration and mineralization to a total length of 1000 m and a vertical depth of 100 metres at 30 metre drill hole spacings. Visible gold was encountered in 22 out of 39 drill holes put down in the central part of the zone, with best assays of 9 g/tonne Au over 6.06 metres., 6.96 g/tonne Au over 4.87 metres, and 2.60 g/tonne Au over 16.76 metres.
The Grizzly Bear Zone is underlain by greenschist-grade mafic metavolcanics and metasediments, containing a felsic lapilli tuffaceous horizon. The tuff is strongly foliated, rhyolite clast-supported, pervasively sericitized, contains thin wisps of pyrrhotite parallel to the foliation, and may have local biotitization and carbonatization. The mineralized zone is subparallel to the strata, trending NE, and contains anomalous hydrothermal alteration, sulphide mineralization and gold (NWT Geoscience Office, 2012c). The mineralization consists of quartz-veins and veinlets with disseminated sulphides and native gold over widths up to 15 metres.
The zone remains poorly defined and open at depth.
(Mine Grid – Imperial – Looking North)
FIGURE 7-6: TYPICAL GEOLOGICAL SECTION THROUGH THE GRIZZLY BEAR ZONE
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 68 of 181 June 17, 2013
7.2.2.5 Zone 24
The Zone 24 showing is located along a northerly contact between metavolcanic rocks to the east and metasedimentary rocks to the west on the west bank of the Indin River. Volcanic rocks range from mafic to intermediate massive flows with some irregular diorite intrusions. Sedimentary rocks are predominantly greywacke turbidites but graphitic argillites/mudstone horizons also occur (NWT Geoscience Office, 2012d).
Zone 24 is marked by areas of intense quartz flooding within interbedded andesite and greywacke siltstone. Quartz flooding occurs as parallel "veins" with a strike length varying from 1.5 to 7.5 metres (5.0 to 25.0 feet) and widths from 0.15 to 3.0 metres (0.5 to 10 feet). The quartz flooding trends at azimuth 175 and dips 80 to 85 to the southwest. The quartz flooded zones vary in colour from greyish- white to smokey black, highly strained and commonly contain carbonatized, sericitized wall rock inclusions. Adjacent to the zones, the volcanics are commonly altered to carbonatized and chloritized schist, while the sediments are locally altered to sericitic schist. Neptune grab samples of sulphide bearing quartz and country rock returned values varying from 3 ppb Au to 3.185 ounces per ton Au (Cohoon et al., 1991).
Northwest/Neptune completed eighteen (18) diamond drillholes (2129 metres - 6,986 feet) to test the zone which is up to 9 metres (30 feet) in width. Quartz flooding was intersected in the holes over 100 metres (325 feet) of strike length. Two distinct mineralized zones were intersected which contain up to 10% pyrite, pyrrhotite and arsenopyrite, along with minor chalcopyrite and occasionally galena and sphalerite. Visible gold was found in some holes. Alteration included chlorite, sericite and carbonate and garnet growth appeared adjacent to some of the better mineralized intersections. Small magnetite- rich syenite dykes were also present in the altered rocks (NWT Geoscience Office, 2012d).
Significant but erratic gold mineralization was intersected (Cohoon et al., 1991). Trench sampling later in 1991 returned values up to 5.9 oz/ton Au over 5 feet in Trench 91-03 although there is no details about trench locations or sampling completed (NWT Geoscience Office, 2012d).
The zone remains open along strike and at depth.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 69 of 181 June 17, 2013
From Robb, 1997
FIGURE 7-7: LONGITUDINAL SECTION OF ZONE 24/27
7.2.2.6 Zone 27
The area referred to as Zone 27 is approximately 550 metres (1800 feet) south of Zone 24 along the volcanic/sedimentary contact. DDH 1671-027 was drilled to test a surface showing that consisted of quartz veins in andesite with gold values of up to 2 ounces per ton.
The hole intersected 4% narrow (less than one half inch) quartz veins, trending at 10 to 30 degrees to the core axis, and returned an average grade of 0.069 oz/ton gold over 23.5 metres (77 feet). Although Zone 27 occurs in proximity to the volcanic/sedimentary contact as does Zone 24, the style of mineralization differs from Zone 24 (Cohoon et al., 1991).
Ten holes totaling 1329 metres (4,359 feet) were drilled on this zone. Nine holes were drilled from east to west, targeted the mineralized zone over a strike length of 174 metres (570 feet). These holes were collared east of the target due to topographical restrictions. As a result, these holes necessarily penetrated long intersections of sediments and a diabase dyke east of the andesite-hosted mineralization. After accessing the top of the escarpment the last hole (DDH 1671-065) was drilled obliquely (azimuth 121 degrees) as a test of both crosscutting structures and the mineralization encountered in 1671-027 (Cohoon et al., 1991).
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 70 of 181 June 17, 2013
Although visible gold was seen in five holes, many samples returned very low values (generally less than 0.029 oz/ ton Au). Hole 1671-065 intersected a wide zone (40 metres - 131.2 feet) with five percent quartz carbonate veining and numerous occurrences of visible gold over 25.4 metres (83.4 feet). Assay results averaged 0.085 oz/ ton Au over 27.4 metres (90 feet). Most of these veinlets were at good angles, 65 to 90 degrees, to the core axis. The mineralization consists of free gold in narrow (average 0.3 inches) quartz veins (Cohoon et al., 1991). Three percent pyrrhotite is very finely disseminated in the wallrock throughout the zone, locally concentrated in short altered sections.
The zone remains open along strike to the north and at depth.
7.2.3 COLOMAC PROPERTY EXPLORATION AT DEPTH
Historical exploration has intersected gold mineralization in shallow drill holes over a 5 km (16,000 foot) strike extent within the Colomac Sill horizon that hosts the Colomac deposits. 95% of the historic drilling on all showings at the Colomac Property has been within 300 metres of surface, the majority extend less than 200 metres vertically below surface.
In 1997, the last year of production at Colomac, Royal Oak conducted a deep drilling program at its Zone 3.5 area to investigate for potential higher grades at depth in an area that had no previous drilling greater than 100 metres (300 feet) below surface. Drill hole Z3.5-97-01 was drilled to obtain geological and assay information at approximately 213 metres (700 feet) below the surface prior to committing to further deep drilling. It intersected two broad zones of mineralization, including an interval of 0.353 oz/ton Au over a 40.2 metre (132 foot) core length (true thickness unknown). This interval was re-assayed for an average combined grade of 0.262 oz/ton Au. After this initial "discovery hole" an additional 20 follow up holes were drilled in the vicinity of Z3.5-97-01 (Figure 7-8 and Figure 7-9). The deepest drill hole in this area (Z3.5-97-08), intersected two intervals of 0.223 oz/ton Au over a 4.6 metre (15 foot) core length and 0.192 oz/ton Au over a 4.3 metre (14 foot) core length (true thicknesses unknown) at a vertical depth of approximately 792 metres (2600 feet) below surface (Figure 7-8). This drilling appears to define a steep NE plunging shoot of mineralization which has a higher grade than the average grade of mineralization at Colomac.
The 1997 Royal Oak holes were not included in Howe’s 2012 mineral resource estimate because of the lack of backup data such as geological logs and complete assay records. Subsequently, in summer 2012, Nighthawk relogged Royal Oak's archived 1997 drill core, re-established 1997 sample intervals and assays and conducted check sampling. Howe has included the 1997 drill holes in the 2013 mineral resource estimate database.
In 1997 Royal Oak also completed drill hole Z2.0-97-02 in the Zone 2.0 open pit area which intersected 0.037 oz/ton Au over a mineralized core interval of 396 feet (true thickness unknown) at a vertical distance of approximately 670 metres (2,200) feet below the surface. This is similar grade mineralization to that was being mined in the Zone 2 pit at elevations of only 300 feet below the surface.
Nighthawk has completed preliminary follow-up diamond drill exploration in these areas as described
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 71 of 181 June 17, 2013
in Section 10.2.
Source: Royal Oak – Mercer 1997 (Imperial Mine Grid – Looking West – Core lengths only true thicknesses unknown)
FIGURE 7-8: LONGITUDINAL SECTION OF ZONE 3.5 SHOWING ROYAL OAK 1997 DEEP DRILL HOLE INTERCEPTS
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 72 of 181 June 17, 2013
Source: Royal Oak – Mercer 1997 (Mineralized intervals are core lengths only true thicknesses unknown)
FIGURE 7-9: EXAMPLE DRILL HOLE CROSS SECTION –1997 ZONE 3.5 DEEP DRILLING PROGRAM
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 73 of 181 June 17, 2013
8 DEPOSIT TYPES
Two main gold deposit models are relevant to the Indin Lake Project: greenstone-hosted quartz- carbonate vein deposits and banded iron formation-hosted gold deposits.
8.1 GREENSTONE-HOSTED QUARTZ-CARBONATE VEIN DEPOSITS
Greenstone-hosted quartz-carbonate vein deposits are structurally controlled, complex epigenetic deposits that are hosted in deformed and metamorphosed terranes. They consist of simple to complex networks of gold-bearing, laminated quartz-carbonate fault-fill veins in moderately to steeply dipping, compressional brittle-ductile shear zones and faults, with locally associated extensional veins and hydrothermal breccias. They are dominantly hosted by mafic metamorphic rocks of greenschist to locally lower amphibolite facies and formed at intermediate depths (5-10 km). Greenstone-hosted quartz-carbonate vein deposits are typically associated with iron-carbonate alteration. Gold is mainly confined to the quartz-carbonate vein networks but may also be present in significant amounts within iron-rich sulphidized wall rock. Greenstone-hosted quartz-carbonate vein deposits are distributed along major compressional to transpressional crustal-scale fault zones in deformed greenstone terranes of all ages, but are more abundant and significant, in terms of total gold content, in Archean terranes (Dubé and Gosselin, 2007).
In the Indin Lake Project area, greenstone-hosted quartz-carbonate vein deposits can be subdivided into several different styles:
Auriferous stacked, quartz veins/stockworks/silicified zones hosted by felsic porphyritic intrusive; eg. Colomac, Goldcrest and Goldcrest North / Dyke Lake.
Auriferous stacked, silicified zones, often spatially associated with felsic units; eg. Grizzly Bear, Laurie Lake, Treasure Island, and Chalco Zone - West Shore & Face Peninsula showings.
Auriferous quartz veins or silicified zones in mafic volcanics often within or near graphitic argillites and fault/shear zone along contacts of mafic volcanic–sedimentary belts; eg. 24/27 Zones, Chalco Zone - Northeast and North End showings, North Inca Mine, Diversified Mine, #3 Zone, Lexindin Zone and Barker-Vidie showing.
Gold associated with sulfides (in particular, arsenopyrite and loellingite) and quartz- carbonate veins or silicified zones within mafic volcanic units or intrusive equivalents; eg. Echo-Indin, Goose Lake, Lucky Lake and Albatross showings (possible extensions of the Kim and Cass Zones which lie outside of the Indin Lake Project area).
All greenstone-hosted quartz-carbonate vein styles except the latter are known to be present within the Colomac Property area.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 74 of 181 June 17, 2013
8.2 BANDED IRON FORMATION-HOSTED GOLD DEPOSITS
Banded iron formation-hosted gold deposits mainly occur within Archean-aged greenstone belts, typical of the shield areas of northern Ontario, Quebec, the Northwest Territories and Nunavut. Generally, banded iron formation (BIF) host rocks are thinly banded sedimentary rocks with alternating iron-rich and cherty (siliceous) layers.
Gold mineralization is commonly associated with quartz and iron-carbonate veining and zones of hydrothermal alteration with iron sulphides (mainly pyrite, pyrrhotite and/or arsenopyrite). Gold mineralization is mainly located along shear zones associated with tightly folded and structurally complex BIF horizons that provide favourable chemical and structural traps.
The Damoti Lake, BIF Island, Fishook and JPK deposits and showings are examples banded iron formation-hosted gold deposits within the Indin Lake Project area. Lease 3527 on the Colomac Property covers the possible SE strike extension of the auriferous banded iron formations outlined by prospecting around Spider Lake to the northwest including the JPK showing.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 75 of 181 June 17, 2013
9 EXPLORATION
Nighthawk completed a fixed-wing geophysical survey of the Indin Lake Project including the Colomac Property area in the summer of 2011 (see Section 9.1). Following acquisition of the Colomac Property in January 2012, Nighthawk conducted diamond drilling and a test Induced Polarization (IP) geophysical survey on the Property in 2012 (see Sections 9.1, 9.2 and 10.2).
Nighthawk has also conducted ground exploration elsewhere in its Indin Lake Project area including Damoti Lake, Leta Arm and Treasure Island. While not the focus of this Report, the exploration work and results in these areas are briefly described in this section for completeness (see Sections 9.3 to 9.7).
9.1 2012 COLOMAC PROPERTY DIAMOND DRILL EXPLORATION
During February through early March 2012, in preparation for the 2012 Colomac drill program and the Indin Lake summer prospecting exploration program, Nighthawk mobilized fuel and supplies to a staging area at the turn off to Damoti Lake on the 300 km long Behchokö - Wekweeti ice road. A helicopter subsequently moved the equipment and materials the last 14 kilometres to the Damoti Property. Nighthawk initiated an approximately 20 kilometre ice road connection from the Behchokö - Wekweeti ice road to Colomac and a fuel and equipment cache and was established at the historic Colomac minesite. Two mobile LD250 diamond drills and ancillary supplies, fuel, and core boxes were re-located by helicopter from their winter storage at the Damoti camp to Colomac.
During the winter drill program a second camp was constructed at the historic Colomac minesite. In May 2012 personnel transferred to the Colomac camp and the Damoti camp was cleaned and mothballed.
Drilling commenced March 19, 2012. Eight NQ drill holes totaling 3,690 metres were completed during the winter phase of the drill program, ending on April 19, 2012. The summer drill phase started May 16, 2012 and through to August 21, 2012, a total of 22 NQ-sized diamond drill holes, for a total 7,545 metres, were completed (Table 9-1). The 2012 Colomac drill program is detailed in Section 10.
TABLE 9-1: SUMMARY OF THE 2012 COLOMAC DRILL PROGRAM
Number of Period Location Work Completed Meters Holes 2012 (Winter) Colomac C12-01-2.0 through C12-05-3.5 8 3,690 2012 (Summer) Colomac C12-03B-2.0 through C12-15-3.0 22 7,545 TOTAL 30 11,235
Nighthawk also conducted a program of selective re-sampling and analyses of historical drill holes Z3.5-97-04, Z3.5-97-10, Z3.5-97-13, Z3.5-97-14, Z3.5-97-15, Z3.5-97-16, Z3.5-97-18 and Z3.5-97-
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 76 of 181 June 17, 2013
20. A total of 117 samples were collected and analysed to validate original gold assays obtained by Royal Oak, and to test the mineralization for a “gold nugget-effect.” Results of the resampling program are discussed in Section 10.3 of this Report.
9.2 2012 COLOMAC IP GEOPHYSICAL SURVEY
Nighthawk contracted SJ Geophysics Ltd. of 11966-95A Avenue, Delta, BC to conduct a test geophysical survey to determine the capability of selected Induced Polarization (IP) methods to detect the plunging higher grade mineralized shoot at Colomac Zone 3.5. The Colomac grid consisted of 6 lines centred at 7141050N 591650E; NAD83 Zone 11 (100 metres to 800 metres length). A total of 4.10 kilometres of 3D Induced Polarization (3DIP) and 2.39 kilometres of 2D Induced Polarization (2DIP) surveying were completed between April 13 and April 28, 2012. Lines were oriented 000/180 at 50 metre spacings and 25 metre stations.
A second grid (centred at 7143869N 592043E; NAD83 Zone 11) was established at Spot Lake approximately 2.8 kilometres north of the Colomac Zone 3.5 geophysical grid. The Spot Lake grid consisted of 0.40 kilometres of 2D Induced Polarization (2DIP) surveying on one line (400 metres length), completed on April 29, 2012. The line was oriented 135/315 with stations flagged at 25 metre intervals.
The geophysical instrumentation used to acquire the 2DIP and 3DIP data consisted of a SJ-24 full waveform receiver and a GDD Tx II transmitter. The equipment’s’ operating parameters are summarized in Table 9-2.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 77 of 181 June 17, 2013
TABLE 9-2: 2DIP AND 3DIP SURVEY OPERATING PARAMETERS
Colomac: 2DIP and 3DIP Array Type Spot Lake: 2DIP Colomac: Up to 15 Number of Dipoles (per receiver) Spot Lake: 14 Dipole Length 50 m Colomac: Up to 800 m Array Length (per receiver) Spot Lake: 400 m Current Interval 25 m IP Transmitter GDD TxII (Serial #439, 436) Duty Cycle 50% Waveform Square Cycle and Period 2 sec on / 2 sec off; 8 second IP Receiver SJ-24 Full Waveform Digital Receiver Reading Length 93 seconds Vp Delay, Vp Integration 1200 ms, 600 ms Mx Delay, # of Windows 200 ms, 20 36, 39, 42, 45, 48, 52, 56, 60, 65, 70, 75, 81, 87, 94, 101, 109,118, 128, Width (Mx Integration) 140, 154 (200 ms – 1800 ms) Properties Calculated Vp, Mx, Sp, Apparent Res
The survey crew encountered difficulties finding good ground contact. The ground was frozen solid and the soil layer was shallow and very rocky. Contact was even more difficult in the areas of the grid that covered the old Colomac Mine workings. In these areas ground penetration with the rods was often impossible. In order to improve ground contact, six current rods and salt water were used at each station instead of the usual two.
Given the highly resistive ground conditions, once the crew managed to find a good current injection site, the Vp measured by the receiver dipoles were very strong (up to 7 V for the closest dipoles to the injection sites). The SJ-24 receiver cannot record Vp signals over 10V therefore in the 2DIP surveys (where the current injection site is particularly close to the receiver dipoles) the dipole closest to the current injection was disabled to protect the receiver instrumentation. For similar reasons, dipoles with at least one receiver pole in the same body of water as current injection also were disabled.
The IP data collected was inverted to show 2D and 3D models of resistivity and chargeability properties.
Given the difficulties in establishing good ground contact and the highly resistive ground conditions, Nighthawk deemed the IP survey ineffective for the area tested and the data generated of limited value.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 78 of 181 June 17, 2013
9.3 2012 INDIN LAKE PROJECT SUMMER PROSPECTING PROGRAM
In 2012 Nighthawk initiated a regional prospecting, sampling, and mapping program with the objective of investigating all known gold showings at its Indin Lake property including the regional mineralized volcanic/sedimentary rock contact and targets derived from Nighthawk’s 2011 airborne magnetic survey. The Colomac Sill’s distinctly strong magnetic signature has been modeled and used to identify other potential “Colomac-like” targets elsewhere within the regional stratigraphy. Geological evaluation and prospecting of the Indin Lake Project was conducted by four prospecting teams from GeoMinEx Consultants Inc. of Vancouver, B.C. between June 16th, 2012 and September 11th, 2012. Geological mapping, prospecting and a total of 1,523 rock samples were collected during this period.
Fieldwork comprised detailed and regional-scale geological mapping, prospecting, and sampling. This work was supported by helicopter and based out of Nighthawk's Colomac camp. Traverses were made along ridge tops, across valleys, and along shorelines. Where outcrop exposure is poor, fieldwork was supplemented with existing geological maps , relevant publications (e.g., Pehrsson and Villeneuve, 1999; Bleeker et al., 1998a and 1998b), and results of the 2011 airborne geophysical survey.
Figure 9-1 summarizes the results of Nighthawk’s 2012 Indin Lake prospecting program.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 79 of 181 June 17, 2013
FIGURE 9-1: 2012 PROSPECTING RESULTS - INDIN LAKE PROJECT
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 80 of 181 June 17, 2013
9.4 2011 FIXED-WING AIRBORNE GEOPHYSICAL SURVEY
A high sensitivity aeromagnetic tri-axial gradiometer and VLF-EM fixed-wing airborne survey was carried out over the Indin Lake Project area by Goldak Airborne Surveys (Goldak) of 2 Hangar Rd. Saskatoon, Saskatchewan for Nighthawk between July 2nd and August 2nd, 2011 (Pelletier, 2011).
Aircraft equipment operated included four cesium vapour magnetometers, a VLF EM receiver, a GPS real-time and post-corrected differential positioning system, a flight path recovery camera, digital video titling and recording system, as well as radar and barometric altimeters. All data was recorded digitally in GEDAS binary file format.
Reference ground equipment included two GEM Systems GSM-19W Overhauser magnetometers and a Novatel 12 channel GPS base station, which was set up at the base of operations for differential post- flight corrections.
One calibration flight and twenty production flights were required to complete the survey block. A total of 16,245 line kilometres of high resolution magnetic gradiometer data was collected, processed and plotted. VLF-EM data, collected on a best effort basis, covers the entire survey block however the data quality varies throughout. The traverse lines were flown on a spacing of 75 metres over the claim. Control lines flown at a separation of 750 metres. Nominal terrain clearance was specified at 80 metres above ground.
The Arnica Inn in Yellowknife, NT was used as the base of operations for the survey.
Survey specifications are summarized in Table 9-3.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 81 of 181 June 17, 2013
TABLE 9-3: SPECIFICATIONS OF THE 2011 INDIN LAKE PROJECT AIRBORNE GEOPHYSICAL SURVEY.
Item Specification Company Nighthawk Gold Corp. (then Merc International Minerals Inc.) Project Colomac Survey - MCSA 001 Block Survey Type Fixed-wing Magnetics and VLF-EM Platform Multi Sensor 4 Geometrics G-822A optically pumped cesium vapor magnetometers with Instruments sensitivity of 0.005 nT Herz Totem-2A dual channel VLF receiver Flown By Goldak Airborne Surveys Aircraft Piper PA-31 Navajo, registration C-GJBB Date 2011/07/02 - 2011/08/02 Total Distance: 16,245 km Line km Traverse Lines: 14,690 km Control Lines: 1,555 km Position Method GPS - Novatel OEM4 Propak 12 channel dual-frequency differential unit Altitude Method Radar Altimeter Aircraft/Sensor Height 80 m Sample Rate Magnetics: 10Hz Projection UTM Zone 11N – NAD83 Datum Line Spacing 75 m Line Direction 090-270 Control line Spacing 750 m Control line Direction 000-180
The aircraft used on this survey was a Piper PA-31 Navajo, registration C-GJBB, owned and operated by Goldak Airborne Surveys. The aircraft is fitted with a 3-meter stinger attached to the rear fuselage on the centerline of the aircraft. Two magnetic sensors are mounted on a vertical boom on the aft end of the tail stinger. The attitude sensing fluxgate magnetometer is positioned at the midpoint of the stinger. The aircraft also has magnetometers installed in composite pods on each wingtip. The pods mount the sensors 1.2 metres outboard of the aircraft wingtip. The four magnetometers form a two-axis gradiometer with following dimensions:
Lateral separation: 14.865 m Longitudinal separation: 8.56 m Vertical separation: 2.29 m
The VLF-EM system used is a Herz Totem-2A dual channel VLF receiver. The receiver records the total field and quadrature component of two VLF frequencies simultaneously. The sensor is located in the tail stinger approximately 1 meter aft of the aircraft. The transmitter stations used for this survey were Cutler, Maine (NAA) at 24.0 KHz for the line channel and either Jim Creek, Washington (NLK)
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 82 of 181 June 17, 2013
on 24.8 KHz or Lamour, North Dakota (NML) at 25.2 KHz for the orthogonal channel.
Magnetic vertical gradient, total field and horizontal gradient data and VLF-EM data were processed and gridded.
Raw and processed digital data was provided on DVD-ROM in Geosoft .GDB format. All latitude/longitude positions in the databases are represented in the original WGS84 datum. All projected positions are expressed in the NAD83 datum. UTM coordinates are calculated in Zone 11N.
Four map products were delivered at 1:25,000 scale on hard copy and digitally in both Geosoft .Map and .PDF format:
GVT Gradient Enhanced Total Magnetic Field, Colour Shaded grid with Contours CVG Calculated Vertical Gradient , Colour Shaded Grid VLFL Line VLF (Total Field and Quadrature) Profiles VLFO Orthogonal VLF (Total Field and Quadrature) Profiles
Nighthawk’s interpretation of the airborne geophysical survey results is continues as of the date of this report.
9.5 2011 TREASURE ISLAND AND LETA ARM SURFACE EXPLORATION
During February 2011, in preparation for the upcoming drill program and the Indin Lake summer prospecting exploration program, Nighthawk mobilized fuel, drill equipment, and supplies to a staging area at the turn off to Wekweeti located along the 300 km long Rae-Edzo - Colomac Mine ice road. A helicopter subsequently moved the equipment and materials the last 14 kilometres to the Damoti Property. A fuel cache was also established near the Diversified Mine.
Personnel commenced mobilization February 19, 2011 and arrived at the Damoti Camp on February 22. Crews commenced drilling March 6, 2011 at Treasure Island and subsequently moved to the Leta Arm area. Through to early April 2011, Nighthawk completed five NQ-sized diamond drill holes on the Treasure Island Property for a total 1,393.05 metres (Table 9-4). From April to August 2011, Nighthawk completed 39 NQ-sized diamond drill holes in the Leta Arm Area for a total 10,586.08 metres (Table 9-5). The 2010 Treasure Island and Leta Arm drill programs are detailed in Section 10.
TABLE 9-4: SUMMARY OF THE 2011 TREASURE ISLAND DRILL PROGRAM
Period Location Work Completed Number of Meters Holes 2011 Treasure Island T11-01 through T11-03B 5 1,393.05
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 83 of 181 June 17, 2013
TABLE 9-5: SUMMARY OF THE 2011 LETA ARM DRILL PROGRAM
Number of Period Location Work Completed Meters Holes 2011 North Inca N11-01 through N11-10B 22 5,769.56 2011 Diversified DV11-01 through DV11-09B 16 4,579.51 2011 Lexindin LX11-01 1 237.01 TOTAL Leta Arm 39 10,586.08
9.6 2011 INDIN LAKE PROJECT SUMMER PROSPECTING PROGRAM
9.6.1 ECHO-INDIN GOLD PROPERTY
Historic exploration (circa 1940) at Echo-Indin (Figure 7-2) included surface sampling and diamond drilling. Drilling targeted quartz stock-works in gold mineralized shear zones that extend for several hundred metres in metavolcanic rocks. Nighthawk’s 2011 field activities focused on locating historical drill setups, surface trenches, and confirming (and extending) reported gold mineralized shear zones.
Showings up to 1.5 kilometres north of Echo-Indin at Goose Lake and Lucky Lake appear to represent the extension of the Echo-Indin mineralized shear zone (Figure 7-2). Known occurrences are within a 1.0 metre to 8.0 metre wide shear zone containing quartz-carbonate veins and veinlets with pyrrhotite, arsenopyrite, stibnite, and pyrite within silicified basalts. Cross-fractures of flat lying quartz veins were also noted.
Surface sampling at Echo-Indin returned three assays greater than 30.0 g/t Au, thirteen assays greater than 4.0 g/t Au, and twenty-two assays greater than 1.0 g/t Au. These results indicate Echo-Indin as a target warranting follow-up exploration work.
9.6.2 LETA ARM FAULT ZONE (LAFZ)
The LAFZ lies within, and parallel to, the northern extension of the West Bay - Indin Lake Fault Zone; a major regional structure hosting the former producing Giant and Con gold mines to the south (13 million ounces of historic gold production). The LAFZ is a broad structure that transects the central portion of the Indin Lake Belt, and hosts four historic gold deposits (Diversified, North Inca, Lexindin, Number 3) and several gold showings (Figure 7-2).
Prospecting activities were concentrated within 14 zones in the LAFZ as defined by historical gold showings and geological constraints (Figure 9-2).
9.6.2.1 Zone 4
Zone 4 is a 250 metre long shear zone located on the west shore of LAFZ across from the Lexindin gold deposit. Mineralization consists of quartz-carbonate veins with minor pyrite and pyrrhotite. Grab
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 84 of 181 June 17, 2013
samples assayed up to 8.81 g/t Au.
9.6.2.2 Zone 8 (North Inca West Vein extension)
Prospecting in Zone 8 has outlined gold mineralization along strike to the north of the North Inca West veins. Visible gold was observed in silicified basalts with assays up to 35.40 g/t Au.
9.6.2.3 Johnson Island
Sampling identified two priority areas on Johnson Island that returned substantial results. In particular, Zone 9 samples that assayed up to 13.85 g/t Au. Significant assays (up to 7.93 g/t Au) are also reported for Zone 12, located further to the south. Samples were taken from quartz-carbonate veins in mineralized shear zones. Two historical holes drilled just north of the island intersected quartz stringers in a contact related sericite-carbonate, pyrite, pyrrhotite alteration. These occurrences suggest that the North Inca and Diversified mineralization extends at least 1.5 kilometres further south, and thus represents a prospective exploration target.
9.6.2.4 Leta Arm Regional
Anomalous assay results of 0.55 to 2.33 g/tonne Au are also reported for surface samples taken from Zones 1, 2, 6 and 10.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 85 of 181 June 17, 2013
FIGURE 9-2: 2011 PROSPECTING ZONES WITHIN THE LETA ARM FAULT ZONE
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 86 of 181 June 17, 2013
9.6.3 JPK GOLD PROPERTY
JPK lies 500 metres east of Treasure Island (Figure 7-2). It consists of iron formation hosted gold mineralization, geologically similar to Nighthawk's Damoti Lake Gold Property, and the Lupin Gold Mine. Surface sampling along a 3.0 kilometre section of the iron formation assayed up to 12.10 g/t Au confirming historic sampling reported up to 15.63 g/t Au. No drilling has been reported for this area, and as such, JPK represents an underexplored target with significant exploration potential.
9.7 2009 AND 2010 DAMOTI LAKE EXPLORATION
9.7.1 2010 DAMOTI SURFACE EXPLORATION
Between January and early March 2010, Nighthawk conducted a ground geophysical program at its Damoti Lake Gold Project. Work consisted of detailed ground magnetic, electromagnetic, and localized induced polarization surveys. Initial orientation surveys focused on gold mineralized zones previously drilled by Nighthawk in order to determine their physical responses and characteristics and create a geophysical “footprint” of the known mineralized areas. Subsequent work was then broadened to trace mineralization along strike and down plunge within the host structures and identify potential drill targets with similar geophysical “footprints” throughout the property’s 14 kilometre strike length of gold mineralized iron formation. During February through early March 2010, Nighthawk also initiated a 14 km ice road connection to the 300 km long Rae-Edzo - Colomac Mine ice road. Drill crews and field personnel arrived March 9, 2010 and commenced preparations for the drill program. Fuel, a second helicopter-mobile drill and ancillary equipment, and supplies were subsequently mobilized along the ice road to the Damoti Camp in preparation for the winter drill program.
Drilling commenced March 19, 2010 with the second drill starting on March 27, 2010. Through to early June 2010, a total of 42 NQ-sized diamond drill holes, for a total 7,977.22 metres, were completed (Table 9-6). The 2010 Damoti Lake drill program is detailed in Section 10.
TABLE 9-6 SUMMARY OF THE 2010 DAMOTI LAKE DRILL EXPLORATION PROGRAM
Number of Period Location Work Completed Meters Holes D10-394 through 404, & -D10- March-April BIF Island area 19 3,153.14 424 April Granite showing D10-410, -411, -413 3 361.78 Red Mountain April -May (Lookout & Causeway D10-416 through 423 15 3,228.25 showings ) May-June Horseshoe North D10-427 3 834.03 May-June Runway & Lardass D10-430 2 400.02 2010 Totals D10-394 to D10-430 42 7,977.22
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 87 of 181 June 17, 2013
9.7.2 2009 DAMOTI SURFACE EXPLORATION
During March 2009, in preparation for a summer drill program, Nighthawk mobilized fuel and a helicopter-mobile drill and ancillary equipment to a staging area on the 300 km ice road between Rae- Edzo and the Colomac Mine site. A helicopter was used to move the equipment and materials the last 14 kilometres to a final staging area near the ramp located on the Damoti Property.
Personnel arrived at the Damoti Camp on June 25 and commenced drilling July 1, 2009. Through to early October 2009, Nighthawk completed 27 NQ-sized diamond drill holes for a total 5,669.73 metres (Table 9-7). The 2009 Damoti Lake drill program is detailed in Section 10.
TABLE 9-7 SUMMARY OF THE 2009 DRILL EXPLORATION PROGRAM
Number of Period Location Work Completed Meters Holes July-Aug D04-376 to 389, and Horseshoe syncline 19 3,580.45 2009 D09-393 Aug-Sept Red Mountain syncline D09-390 to 392C 8 2,089.28 2009 2009 Totals D09-376 to D09-393 27 5,669.73
Nighthawk also conducted a program of selective re-sampling and analyses of historical drill holes D97-278, D97-282 and D97-311. This was conducted to validate original gold assays by confirming the high Au grades at Damoti, and to test the mineralization for a “gold nugget-effect.”
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 88 of 181 June 17, 2013
10 DRILLING
Nighthawk conducted an 11,235 metre diamond drill program at the Colomac Property in 2012. Historical drilling conducted by previous operators on the Colomac Property is discussed in Section 6 (History).
Nighthawk has previously (2009-2011) conducted diamond drill exploration elsewhere at its Indin Lake Project area including the Damoti Lake, Leta Arm and Treasure Island Properties. While not the focus of this Report, the diamond drill programs and results in these areas are briefly described in this section for completeness.
10.1 GENERAL STATEMENTS - 2009, 2010, 2011 AND 2012 NIGHTHAWK DIAMOND DRILL PROGRAMS
The 2009, 2010 and 2011 diamond drilling programs were conducted by contract driller, Bradley Brothers Ltd. of Rouyn-Noranda, Quebec (Canada). Bradley Brothers Ltd. was acquired by Major Drilling Group of Moncton, New Brunswick (Canada) in late 2011. The 2012 Colomac drill program was conducted by Major. Donald LaFrance was the principal drill foreman for all programs. Bradley/Major utilized one to two helicopter mobile LD250 diamond drills and accessory equipment; one drill for the 2009 Damoti program, two drills for the 2010 Damoti program, one drill for the 2011 Treasure Island program, two drills for the 2011 Leta Arm program and two drills for the 2012 Colomac program.
Helicopter support for the drill programs was provided by Great Slave Helicopters of Yellowknife, NWT with either an Astar AS350BA or Astar AS350B2 during 2009 and either an Astar AS350B2 or Astar AS350B3 during 2010, 2011 and 2012. Both a pilot and an engineer were based at the Damoti camp during the 2009 to 2012 field programs and at the Colomac camp during the 2012 Colomac summer drill program.
The drilling and field activities were supervised by William Waychison, M.Sc.A., P.Geo, P.O. Box 466, Timmins, Ontario, 4N 7E3. Mr. Waychison acted as the Qualified Person for the drilling programs. Mr. Waychison logged most of the core from the 2009 diamond drill holes, selective core from the 2010 holes and relogged most of the 2011 drill core. David E. Beilhartz, P.Geo., 49 Airport Road, R.R. #1 , Whitefish, ON, Canada, P0M 3E0, assisted with the logging and supervision during the period August 10 through 17, 2009.
Aurora Geosciences Ltd., Yellowknife, NT, provided geologists and geotechnical assistance for the 2010 and 2011 logging activities. Aurora geologists who logged holes during 2010 Damoti Lake program included: Gabriel Fortin, B.Sc., GIT; Gerald Nadeau, B.Sc.; and Troy Piercy, B.Sc. Aurora geologists who logged holes during the 2011 Treasure Island program were Stephan Ruest, B.Sc., and Gerald Nadeau, B.Sc. Aurora geologists who logged holes during the 2011 Leta Arm program were Stephan Ruest, B.Sc., and Gabriel Fortin, GIT.
GeoMinEx Consultants Inc., Vancouver, BC, provided geologists and geotechnical assistance for the
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 89 of 181 June 17, 2013
2012 drill core logging activities. GeoMinEx geologists who logged holes during 2012 Colomac program included: John Walther, B.Sc. P.Geo and Jacob Prince, B.Sc.
Sub-Arctic Surveys, 226 Utsingi Drive, Kam Lake Industrial Area, Yellowknife, NT, provided a land surveyor with GPS base station and related equipment to survey drill collar locations and azimuths for all drill programs. The proposed 2009 drill collar locations and azimuths were surveyed on June 26 and 27, 2009. The company returned to survey the final collar locations on September 30 and October 1, 2009 after the program was completed. Proposed 2010 drill collar locations and azimuths were surveyed on March 11 to 13, 2010 and again on May 7 and 8, 2010. Proposed 2011 Treasure Island and Leta Arm drill hole locations and azimuths were surveyed on February 22 to 24, 2011 and April 18, 2011 respectively. Proposed 2012 Colomac drill hole locations and azimuths were surveyed in February, March, May and June 2012. In a few cases, where the collars needed to be re-positioned to accommodate local topography, the locations were recalculated with elevations re-measured with a GPS if necessary.
Field assistance for the Damoti and Colomac camps was provided by personnel supplied by Discovery Mining Services Ltd., Yellowknife, NT.
Dr. Robert Whitehead, Professor Emeritus Exploration Geochemistry, Laurentian University, along with Nighthawk’s Chief Geologist, Dr. Michael Byron, Ph.D., P.Geo., Sudbury, ON provided the digital compilation of the historic drill hole database, an ongoing review of data verification, and input to the lithological and analytical modeling and drill planning and review. Lorraine H. Dupuis, M.Sc. P.Geo., Geo-Cad Services, Azilda, ON provided graphics and prepared 3D models.
10.2 2012 COLOMAC DIAMOND DRILL EXPLORATION
Nighthawk commenced mobilization in late February 2012 and arrived at the Damoti Camp on March 12, 2012 with the first drill hole at Colomac commencing March 19, 2012. Eight NQ drill holes totaling 3,690 metres were completed during the winter phase of the drill program, ending on April 19, 2012. The summer drill phase started May 16, 2012 and through to August 21, 2012, a total of 22 NQ- sized diamond drill holes, for a total 7,545 metres, were completed (includes hole C12-14B-3.0 which was abandoned at 63 metres and then redrilled as C12-14C-3.0).
During February through early March 2012, prior to commencement of field activities, Nighthawk mobilized fuel and supplies to a staging area at the turn off to Damoti Lake on the 300 km long Behchokö - Wekweeti ice road. A helicopter subsequently moved the equipment and materials the last 14 kilometres to the Damoti Property. Nighthawk initiated an approximately 20 kilometre ice road connection from the Behchokö - Wekweeti ice road to Colomac and a fuel and equipment cache and was established at the historic Colomac minesite. Two mobile LD250 diamond drills and ancillary supplies, fuel, and core boxes were re-located by helicopter from their winter storage at the Damoti camp to Colomac. A fully equipped survival tent was also constructed in place near the drill collars.
During the winter drill program a second camp was constructed at the historic Colomac minesite. In May 2012 personnel transferred to the Colomac camp and the Damoti camp was cleaned and
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 90 of 181 June 17, 2013
mothballed.
Nighthawk's 2012 exploration drill program at Colomac was designed to confirm historical higher- grade intercepts reported by Royal Oak in 1997 within Zone 3.5 and to explore for possible higher grade mineralized shoots in Zones 2.0, 2.5 and 3.0. Colomac 2012 drill hole collar details are summarized Table 10-1.
During the course of the 2012 drill program, a Relex EZ-Shot instrument was used to measure downhole changes in the drill hole azimuth and dip. The electronic single shot instrument was used to take measurements every 30 metres and results are reported within the drill logs.
Where the azimuth reading was dismissed because it was considered affected by the magnetics of the lithologies, etc., an average of the change in azimuth was calculated for the station, where possible, as a weighted average for distance from assumed valid azimuth readings located uphole and downhole of the station.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 91 of 181 June 17, 2013
TABLE 10-1: COLLAR DETAILS FOR COLOMAC 2012 DDHS
UTM UTM Hole Easting Northing Collar1 Collar2 Description Elevation Depth Area Azimuth DIP (NAD 83 Zone 11N) (metres) C12-01-2.0 592,417 7,142,950 336 290 -45 465 Zone 2.0 C12-01B-2.0 592,417 7,142,950 336 290 -60 459 Zone 2.0 C12-02-2.0 592,431 7,142,785 337 286 -45 501 Zone 2.0 C12-02B-2.0 592,431 7,142,785 337 286 -60 558 Zone 2.0 C12-03-2.0 592,440 7,142,870 337 290 -45 429 Zone 2.0 C12-04-3.5 591,784 7,140,746 336 290 -45 438 Zone 3.5 C12-04B-3.5 591,783 7,140,746 336 290 -60 459 Zone 3.5 C12-05-3.5 591,806 7,140,790 337 290 -50 381 Zone 3.5 C12-03B-2.0 592,440 7,142,870 337 290 -55 558 Zone 2.0 C12-05B-3.5 591,807 7,140,790 337 290 -60 360 Zone 3.5 C12-06-3.5 591,713 7,140,718 342 290 -45 264 Zone 3.5 C12-06B-3.5 591,713 7,140,718 342 290 -60 270 Zone 3.5 C12-07-2.5 592,131 7,142,052 349 290 -50 381 Zone 2.5 C12-07B-2.5 592,131 7,142,052 349 290 -60 414 Zone 2.5 C12-08-3.5 591,817 7,140,841 337 296 -48 291 Zone 3.5 C12-08B-3.5 591,818 7,140,841 337 290 -60 390 Zone 3.5 C12-09-3.0 591,839 7,140,939 340 295 -50 327 Zone 3.0 C12-09B-3.0 591,839 7,140,939 340 295 -65 327 Zone 3.0 C12-10-2.5 592,132 7,141,947 350 290 -50 378 Zone 2.5 C12-10B-2.5 592,132 7,141,946 350 290 -60 324 Zone 2.5 C12-11-3.0 591,874 7,141,035 339 290 -50 327 Zone 3.0 C12-11B-3.0 591,874 7,141,035 339 290 -65 375 Zone 3.0 C12-12-3.0 591,914 7,141,237 336 290 -50 324 Zone 3.0 C12-12B-3.0 591,914 7,141,237 336 293 -65 417 Zone 3.0 C12-13-3.0 591,855 7,140,996 342 290 -50 315 Zone 3.0 C12-13B-3.0 591,855 7,140,996 342 290 -60 333 Zone 3.0 C12-14-3.0 591,890 7,141,135 340 290 -50 318 Zone 3.0 C12-14B-3.0 591,891 7,141,135 340 290 -65 63 Zone 3.0 Failed hole C12-14C-3.0 591,890 7,141,135 339 290 -65 396 Zone 3.0 C12-15-3.0 591,680 7,140,803 345 4 -80 393 Zone 3.0
30 Holes TOTAL 11,235 Colomac Notes: 1) Collar azimuths (degrees), as well as locations and elevations, were established by Sub-Arctic Surveys of Yellowknife, during their surveys of February, March, May and June, 2012. In a few cases, where the collar needed to be repositioned to accommodate local topography, the locations were recalculated with elevations re-measured with a GPS if necessary. 2) Collar Dip of drill collars in degrees were established with a Brunton hand transit at time of drilling.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 92 of 181 June 17, 2013
FIGURE 10-1: COLOMAC – 2012 DRILL COLLARS
Nighthawk’s 2012 Colomac drill program focused on a 2.5 kilometre section of the Colomac Sill between Zones 2.0 and 3.5. Sectional drilling tested depths up to 200 metres below the 2012 resource. Three drill sections (6 holes) were completed over a strike length of 200 metres testing beneath the historic Zone 2.0 open pit and the extension of the 2012 resource model at depth and to the north (Figure 10-1, Table 10-1). Two drill sections (4 holes) were completed over a strike length of 100 metres testing immediately north of the historic Zone 2.5 open pit and the extension of the 2012 resource model at depth (Figure 10-1, Table 10-1). Three drill sections (6 holes) were completed over a strike length of 100 metres testing beneath the south end of the historic Zone 3.0 open pit, the northern lateral limits of the plunging mineralized shoot within Zone 3.5 and the extension of the 2012 resource model at depth. A fourth and fifth drill section (four holes) tested beneath the historic Zone 3.0 open pit approximately 100 and 200 metres north of the other three sections (Figure 10-1, Table 10-1). Nine holes were drilled on four sections spaced 50 metres apart to intersect the plunging mineralized shoot within Zone 3.5 discovered by Royal Oak Mines in 1997 to better define its geometry, and extend it along strike and at depth (Figure 10-1, Table 10-1).
Drilling confirmed the presence of higher grade gold shoots (beneath Zones 2.0, 2.5, 3.0, and 3.5), all
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 93 of 181 June 17, 2013
of which remain open to depth and laterally within broader envelopes of mineralization hosted by the Colomac Sill. Table 10-2 presents examples of composite mineralized intersections from selected drill holes completed at Colomac in 2012; not all holes and intersection results are listed.
TABLE 10-2: EXAMPLES OF 2012 GOLD INTERSECTIONS FROM COLOMAC
Zone Hole ID From (m) To (m) Core Length (m) g/t Au
C12-001 237.65 308.25 70.6 0.64 Including 237.65 255.75 18.1 1.34 Including 249.85 251.35 1.5 8.65 Including 291.9 297.25 5.35 1.43 C12-001B 293 421 128 1.36 Including 315.6 361.75 46.15 2.81 Including 315.6 318.3 2.7 16.43 Including 358.25 361.75 3.5 13.13 C12-002 359.05 364.3 5.25 0.59 378.55 390.8 12.25 0.35 406.8 410.8 4 0.71 422.8 438.8 16 0.77 including 430.8 438.8 8 1.18 C12-002B 431.95 455.4 23.45 1.58 Including 434.4 435.15 0.75 20.5
Including 449.4 451.65 2.25 6.52 506.95 548.35 41.4 0.52 C12-003 286.5 399.85 113.35 0.7 Zone2.0 Including 286.5 292 5.5 1.29 Including 327.75 331.5 3.75 2.34 Including 375.5 399.85 24.35 1.5 C12-004 27.6 30 2.4 31.2 Including 27.6 28.05 0.45 164.5 173.5 193.35 19.85 0.5 Including 172.75 175 2.25 1.34 210.4 215.25 4.85 1.54 Including 214.1 215.25 1.15 5.9 C12-004B 204 235.75 31.75 0.69 Including 209.5 213.25 3.75 2.4 249.25 259.75 10.5 0.58 Including 249.25 250.75 1.5 1.9 346 347 1 2.6 C12-005 197.5 253.75 56.25 1.67 Including 197.5 214 16.5 3.37
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 94 of 181 June 17, 2013
Zone Hole ID From (m) To (m) Core Length (m) g/t Au
Including 204.25 211.75 7.5 5.25 Including 230.5 232.75 2.25 6.1 C12-03B 340 466.75 125.75 1.08 including 355.75 362.5 6.75 3.09 including 356.5 358.75 2.25 7.13 including 356.5 357.25 0.75 14.8 including 402.25 422.25 20 2.02 including 405.25 406.75 1.5 5.63 including 409.6 410.35 0.75 8.99 including 454.5 458.25 3.75 6.13
C12-07 273 291 18 1.68 including 273 273.75 0.75 25.7 including 282 282.75 0.75 6.57 C12-07B 228.9 229.9 1 6.11 327.75 330.75 3 0.9 including 327.75 328.5 0.75 2
Zone2.5 C12-10 243.75 252.75 9 8.86 including 243.75 246 2.25 33.28 C12-10B 268.7 303.75 35.05 0.8 including 276.75 280.5 3.75 2.57 including 302.25 303.75 1.5 3.12
C12-09 203.45 246 42.55 1.18 including 228.35 237.9 9.65 3.12 264.9 267.6 2.7 1.12 C12-09B 230.5 281 50.5 0.56 including 279.5 281 1.5 2.81 288 296 8 0.81 C12-11 206.9 207.45 0.55 8.48
220.25 248.5 28.25 0.84 including 228.4 229.4 1 7.5 including 244.75 247 2.25 2.65 Zone3.0 287.02 287.75 0.73 11.25 C12-11B 271.6 280.75 9.15 0.74 including 275.95 278.55 2.6 1.93 296.25 299.25 3 0.79 337.55 338.35 0.8 11.35 C12-14 201 203 2 1.17 213.55 235 21.45 1.16 including 217.3 222 5.2 2.66
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 95 of 181 June 17, 2013
Zone Hole ID From (m) To (m) Core Length (m) g/t Au
C12-14C 254.6 255.45 0.85 2.89 273.2 275.45 2.25 0.67 284.25 288 3.75 0.78 299.25 306 6.75 13.24 including 301.9 302.4 0.5 174 378.25 379 0.75 21.4 C12-05B 218.6 273.35 54.75 1.66 including 220 241 21 2.82 including 220 222.25 2.25 8.15 including 234.78 237.5 2.47 6.93 including 253.75 255.25 1.5 3.43 including 268 268.75 0.75 6.6 including 272.5 273.35 0.85 4.19 C12-06 90.45 91 0.55 3.68 128.75 132 3.75 2.87 including 129.75 132 2.25 4.59 156 156.75 0.75 1 C12-06B 146.58 165.25 18.67 1.6 including 148.85 151.85 3 4.5 169.45 170.1 0.65 2.92 194.25 195.25 1 2.93 261 261.8 0.8 34.2 C12-08 195.85 233.75 37.9 0.87 including 199.25 200 0.75 3.61
Zone3.5 including 224.25 228.65 4.4 2.15 C12-08B 238.65 259.15 20.5 1.65 including 244.5 253.3 8.8 2.69 including 250.5 251 0.5 15.2 269 285 16 1.51 including 272.28 273.1 0.82 12.9 including 281.55 282 0.45 6.39 C12-12 237.25 282.45 45.2 1.47 including 240 260.25 20.25 2.66 including 240 243 3 13.05 including 255 257.25 2.25 3.15 278.9 282.45 3.55 2.69 C12-12B 318.65 320.5 1.85 0.72 358.25 364.8 6.55 16.65 including 358.25 358.9 0.65 155 C12-13 195.1 247.4 52.3 1.12 including 202.75 234.25 31.5 1.5
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 96 of 181 June 17, 2013
Zone Hole ID From (m) To (m) Core Length (m) g/t Au
including 202.75 208.85 6.1 4.64 including 203.5 204.35 0.85 24.2 including 245.1 246.4 1.3 2.63 C12-13B 227.1 277.25 50.15 1.87 including 254.5 277.25 22.75 3.43 including 258.75 268.95 10.2 6.25 including 264.1 264.9 0.8 28.3 C12-15 121.5 122.25 0.75 6.24 131.6 335 203.4 2.49 including 133.15 202.5 69.35 4.12 including 156.5 158.75 2.25 8.65 including 176.75 202.5 25.75 7.78 including 178.25 179 0.75 14.75 including 186.25 187.75 1.5 8.21 including 189.25 202.5 13.25 11.48 including 190.75 192.25 1.5 51.31 including 201.75 202.5 0.75 70.7 including 231 231.75 0.75 9.27 including 260 262.25 2.25 11.67 including 266.15 266.9 0.75 7.26 including 302.75 305 2.25 7.17 including 308.75 314 5.25 6.69 including 312.5 313.25 0.75 18.5 including 322.4 324.65 2.25 9.47 368.75 374.45 5.7 1.21 * Lengths are reported as core lengths. True widths are unknown at this time
10.3 2012 RELOGGING AND RESAMPLING OF ROYAL OAK 1997 DRILL CORE
In 1997, the last year of production at Colomac, Royal Oak conducted a deep drilling program at Zone 3.5 area to investigate for potential higher grades at depth in an area that had no previous drilling greater than 100 metres (300 feet) below surface. A total of 21 drill holes were completed, intersecting mineralization between vertical depths of 700 to 2600 feet below surface. This drilling appears to define a steep NE plunging shoot of mineralization which has a higher grade than the average grade of mineralization at Colomac.
In 1997 Royal Oak also completed drill hole Z2.0-97-02 in the Zone 2.0 open pit area which intersected mineralization at a vertical distance of approximately 2,200 feet below the surface. The mineralization was a similar grade mineralization to that mined in the Zone 2 pit at elevations of only 300 feet below the surface.
The 1997 Royal Oak drill holes were not included in Howe’s 2012 mineral resource estimate database
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 97 of 181 June 17, 2013
because of the lack of backup data such as geological logs and incomplete assay interval records. Subsequently, in summer 2012, Nighthawk relogged Royal Oak's archived 1997 drill core, re- established 1997 sample intervals and corresponding 1997 assays and conducted a program of selective re-sampling and analyses of core from holes Z3.5-97-04, Z3.5-97-10, Z3.5-97-13, Z3.5-97- 14, Z3.5-97-15, Z3.5-97-16, Z3.5-97-18 and Z3.5-97-20. A total of 117 samples were collected and analysed to validate original gold assays obtained by Royal Oak, and to test the mineralization for a “gold nugget-effect.” Results of the resampling program are discussed in Section 11.3.3.3 of this Report. Howe has included the 1997 drill holes in the 2013 mineral resource estimate database.
10.4 2011 TREASURE ISLAND DIAMOND DRILL EXPLORATION
Nighthawk commenced mobilization February 19, 2011 and arrived at the Damoti Camp on February 22, 2011 with the first drill hole at Treasure Island commencing March 6, 2011. Through to early April 2011, Nighthawk completed five NQ-sized diamond drill holes on the Treasure Island Property for a total 1,393.05 metres.
Prior to commencement of field activities, Nighthawk mobilized fuel, drill equipment, and supplies to a staging area at the turn off to Wekweeti located along the 300 km long Rae-Edzo - Colomac Mine ice road. A helicopter subsequently moved the equipment and materials the last 14 kilometres to the Damoti Property. A fuel cache was also established near the Diversified Mine. In addition, a mobile LD250 Diamond Drill and ancillary supplies, fuel, and core boxes were re-located from their winter storage at the Damoti camp to Treasure Island. A fully equipped survival tent was also constructed in place near the drill collars. A helicopter was used to move the equipment and materials to Treasure Island.
Nighthawk's 2011 exploration drill program for Treasure Island was designed to confirm historical high-grade intercepts, stacked zone morphology, potential for expansion of zones along strike and to depth, and for the discovery of new zones (Figure 10-2). 2011 Treasure Island drill hole collar details are summarized Table 10-3.
During the course of the 2011 drill program, a Relex EZ-Shot instrument was used to measure downhole changes in the drill hole azimuth and dip. The electronic single shot instrument was used to take measurements every 30 metres and results are reported within the drill logs.
Where the azimuth reading was dismissed because it was considered affected by the magnetics of the lithologies, etc., an average of the change in azimuth was calculated for the station, where possible, as a weighted average for distance from assumed valid azimuth readings located uphole and downhole of the station.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 98 of 181 June 17, 2013
TABLE 10-3: COLLAR DETAILS FOR TREASURE ISLAND 2011 DDHS
UTM UTM Hole Northing Easting Collar Collar Description Elevation Depth Area Azimuth1 DIP2 (metres) (NAD 83 Zone 11N)
T11-01 589778 7153406 379.05 165 -45 287.01 Treasure Isl T11-01B 589778 7153406 379.05 165 -80 359.01 Treasure Isl T11-02 589728 7153385 371.4 165 -45 243.01 Treasure Isl T11-03 589640 7153370 370.0 165 -45 228.01 Treasure Isl T11-03B 589640 7153370 370.0 165 -70 276.01 Treasure Isl 5 Holes TOTAL 1393.05 Treasure Isl Notes: 1) Collar azimuths (degrees), as well as locations and elevations, were established by Sub-Arctic Surveys of Yellowknife, during their survey of February 22 to 24, 2011. In a few cases, where the collar needed to be repositioned to accommodate local topography, the locations were recalculated with elevations re-measured with a GPS if necessary. 2) Collar Dip of drill collars in degrees were established with a Brunton hand transit at time of drilling.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 99 of 181 June 17, 2013
FIGURE 10-2: TREASURE ISLAND - DRILL COLLARS, CLAIMS, AND GEOLOGY (INCLUDING AU SHOWINGS)
Nighthawk’s 2011 Treasure Island drill program confirmed the historic stacked gold mineralization along and near the volcanic rock-sedimentary rock contact within a zone of up to 200 metres width over a 200 metre strike length, and to depths of as much as 250 metres. Visible gold was also encountered within each of the five Treasure Island holes; often multiple locations of VG occurred within a hole and contributed to several high grade intersections traceable from hole to hole. Drilling established this gold system to be open both along strike and at depth. New zones were also discovered near surface and at depth, including several high-grade gold intercepts.
Table 10-4 presents examples of composite mineralized intersections from selected drill holes completed at Treasure Island in 2011; not all holes and intersection results are listed. The 2011 gold intersections define stacked mineralized zones within a 200 metre wide anomalous gold envelope.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 100 of 181 June 17, 2013
TABLE 10-4: EXAMPLES OF GOLD INTERSECTIONS FROM TREASURE ISLAND
From To Core Length* Drill Hole Gold ( g/t ) (metres) (metres) (metres)
T11-01B 15.00 17.00 2.00 4.91 71.00 75.00 4.00 2.80 84.00 87.00 3.00 4.12 including 85.00 86.00 1.00 8.61 133.25 143.60 10.35 2.72 including 134.50 136.00 1.50 10.25 including 141.50 143.00 1.50 2.79 206.00 235.00 29.00 2.45 including 210.00 224.00 14.00 4.81 including 220.00 224.00 4.00 14.43 including 223.50 224.00 0.50 98.60 284.00 286.00 2.00 3.20 T11-03B 27.00 82.00 55.00 1.16 including 28.00 31.00 3.00 4.48 and 45.50 48.50 3.00 2.50 and 68.33 75.25 6.92 3.23 92.00 92.74 0.74 4.35 166.50 169.00 2.50 2.62 197.50 198.12 0.62 1.87 208.00 208.90 0.90 2.14 231.00 235.00 4.00 2.91 264.00 265.43 1.43 44.95 including 264.56 265.43 0.87 72.90 * Lengths are reported as core lengths. True widths are unknown at this time
10.5 2011 LETA ARM DIAMOND DRILL EXPLORATION
Nighthawk commenced field exploration activities on February 22, 2011 with the first drill hole at Leta Arm commencing on March 27 at the former Diversified Mine following an initial drill program at Treasure Island which commenced March 6, 2011. Through to August 2011, Nighthawk completed 39 NQ-sized diamond drill holes in the Leta Arm Area for a total 10,586.08 metres.
Prior to commencement of field activities, Nighthawk mobilized fuel, drill equipment, and supplies to a staging area at the turn off to Wekweeti located along the 300km ice road between Rae-Edzo and the Colomac Mine site. A helicopter subsequently moved the equipment and materials the last 14
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 101 of 181 June 17, 2013
kilometres to the Damoti Property. A fuel cache was also established near the Diversified Mine.
Nighthawk's 2011 exploration drill program for Leta Arm was designed to confirm historical high- grade intercepts, stacked zone morphology, potential for expansion of zones along strike and to depth, and for the discovery of new zones. 2011 Leta Arm hole collar details are summarized in Table 10-5 and shown in Figure 10-3, Figure 10-4 and Figure 10-5.
TABLE 10-5: COLLAR DETAILS FOR LETA ARM 2011 DDHS
UTM UTM Hole Collar Collar Description Northing Easting Elevation Depth Area Azimuth1 DIP2 (metres) (NAD 83 Zone 11N) NI11-01 586187 7127654 274 112 -60 177.01 North Inca NI11-01B 586187 7127654 274 112 -45 102.26 North Inca NI11-02 586202 7127702 274 112 -60 190.86 North Inca NI11-02B3 586202 7127702 274 112 -45 31.71 North Inca NI11-02C 586202 7127702 274 112 -50 154.01 North Inca NI11-03 586202 7127753 274 112 -60 216.01 North Inca NI11-04 586132 7127727 282.5 270 -45 266.01 North Inca NI11-04B 586132 7127727 282.5 270 -55 413.75 North Inca NI11-04C 586132 7127727 282.5 270 -70 483.01 North Inca NI11-05 586127 7127687 281 270 -45 336.01 North Inca NI11-05B 586127 7127687 281 270 -55 306.01 North Inca NI11-05C 586127 7127687 281 270 -70 326.01 North Inca NI11-06 586124 7127766 290 260 -55 302.01 North Inca NI11-06B 586124 7127766 290 260 -70 244.01 North Inca NI11-07 586130 7127792 290 270 -55 258.01 North Inca NI11-07B 586130 7127792 290 270 -70 308.01 North Inca NI11-08 586125 7127841 312 270 -50 247.41 North Inca NI11-08B 586125 7127841 312 270 -65 303.41 North Inca NI11-09 586130 7127892 307 270 -50 234.01 North Inca NI11-09B 586130 7127892 307 270 -65 342.01 North Inca NI11-10 586130 7127990 310 270 -45 213.01 North Inca NI11-10B 586130 7127990 310 270 -60 315.01 North Inca 22 holes Subtotal 5,769.56 North Inca
DV11-01 586514 7129080 274 100 -45 206.01 Diversified DV11-01B 586514 7129080 274 100 -72 261.01 Diversified
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 102 of 181 June 17, 2013
DV11-01C 586514 7129080 274 100 -59 405.01 Diversified DV11-02 586505 7129113 274 100 -50 162.01 Diversified DV11-02B 586505 7129113 274 100 -57 333.01 Diversified DV11-02C 586505 7129113 274 100 -70 318.01 Diversified DV11-03 586495 7129024 274 100 -57 369.01 Diversified DV11-04 586373 7128588 279 90 -45 356.01 Diversified DV11-04B 586373 7128588 279 90 -60 338.01 Diversified DV11-05 586480 7128907 275 100 -44 263.01 Diversified DV11-05B 586480 7128907 275 100 -65 258.01 Diversified DV11-06 586369 7128628 278 90 -57 358.01 Diversified DV11-07 586378 7128549 275 90 -57 358.01 Diversified DV11-08 586373 7128588 279 270 -55 246.01 Diversified DV11-09 586575 7128522 285 285 -45 147.01 Diversified DV11-09B 586575 7128522 285 280 -65 151.36 Diversified 16 holes Subtotal 4,579.51 Diversified
LX11-01 586699 7130147 285 300 -45 237.01 Lexindin 1 hole Subtotal 237.01 Lexindin
39 Holes TOTAL 10,586.08 Leta Arm
Notes: 1) Collar azimuths (degrees), as well as locations and elevations, were established by Sub-Arctic Surveys of Yellowknife, during their survey of February 22 to 24, 2011. In a few cases, where the collar needed to be repositioned to accommodate local topography, the locations were recalculated with elevations re-measured with a GPS if necessary. 2) Collar Dip of drill collars in degrees were established with a Brunton hand transit at time of drilling. 3) Abandoned
During the course of the 2011 drill program, a Reflex EZ-Shot instrument was used to measure downhole changes in the drill hole azimuth and dip. The electronic single shot instrument was used to take measurements every 30 metres and results are reported within the drill logs.
Where the azimuth reading was dismissed because it was considered affected by the magnetics of the lithologies, etc., an average of the change in azimuth was calculated for the station, where possible, as a weighted average for distance from assumed valid azimuth readings located uphole and downhole of the station. The minor deviations of the hole with depth may be attributed to use of a six-metre hexagonal core barrel during the drilling program.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 103 of 181 June 17, 2013
FIGURE 10-3: LETA ARM AREA- DRILL COLLARS, CLAIMS, AND GEOLOGY
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 104 of 181 June 17, 2013
FIGURE 10-4 LETA ARM MAP A - NORTH INCA DRILL COLLARS, CLAIMS, AND GEOLOGY
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 105 of 181 June 17, 2013
FIGURE 10-5 LETA ARM MAP B - DIVERSIFIED DRILL COLLARS, CLAIMS, AND GEOLOGY
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 106 of 181 June 17, 2013
Nighthawk’s 2011 Leta Arm drill program confirmed historic reports of gold along and near the volcanic rock-sedimentary rock contact, tested and extended existing zones in all dimensions, and confirmed new zones at depth. Table 10-4 presents examples of composite mineralized intersections from selected drill holes completed at Treasure Island in 2011; not all holes and intersection results are listed.
The better gold sections appear to define stacked, en echelon, mineralized quartz vein areas within the mafic volcanic or appear to be associated with gold bearing quartz veins defining wide gold envelopes within the sediments. The latter are spatially associated with fault/shear structures and/or graphitic argillites.
The difficulty in tracing the zones within the volcanic units of this area may be in part due to the variety of orientations for the minor quartz veinlets within the volcanic gold zones. Prospecting of the North Inca peninsula also revealed gold bearing quartz veins, at times, display a lozenge or podiform shape with the vein narrowing from a width of greater than one metre to less than a 5 cm veinlet at surface.
TABLE 10-6: EXAMPLES OF GOLD INTERSECTIONS FROM LETA ARM
From Core Length* Drill Hole To (metres) Gold (g/t) (metres) (metres) NI11-01 32.00 32.50 0.50 7.72 101.00 124.00 23.00 1.82
including 101.00 102.93 1.93 4.73 including 102.43 102.93 0.50 9.30 including 114.14 114.65 0.51 21.70 NI11-01B 79.65 99.00 19.85 1.60 including 81.65 84.80 3.15 5.26 including 83.80 84.30 0.50 28.70 including 88.50 89.50 1.00 7.52 including 89.00 89.50 0.50 13.85 96.00 97.00 1.00 3.18
NI11-02 96.75 123.00 26.00 6.86 including 100.30 103.75 3.45 44.34 including 100.80 102.75 1.95 78.30 including 101.25 102.25 1.00 151.82 including 101.25 101.75 0.50 294.00 including 113.75 122.25 8.50 2.64 including 117.25 118.00 0.75 11.90 NI11-04 49.60 66.50 16.90 6.08 including 49.60 53.04 3.44 22.07 including 50.10 50.60 0.50 103.50 including 62.50 63.00 0.50 31.70
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 107 of 181 June 17, 2013
81.50 82.00 0.50 3.21
104.50 106.00 1.50 3.96
N11-04B 51.50 88.50 37.00 2.29 including 51.50 68.00 16.50 4.20 including 51.50 52.70 1.20 15.58 including 63.00 65.00 2.00 15.72 including 64.00 64.50 0.50 41.40 85.00 88.50 3.50 2.15
133.71 140.15 6.44 5.31
N11-05C 75.65 76.32 0.67 49.60 158.00 159.50 1.50 4.78
Nl11-06 61.57 95.34 33.77 1.14 including 76.00 78.50 2.50 4.00 including 76.00 77.00 1.00 8.53 including 93.68 94.18 0.50 11.60 161.56 164.00 2.44 18.20
DV11-01 65.50 67.00 1.50 2.79 92.00 92.50 0.50 1.97
100.00 107.79 7.79 3.25
DV11-01B 164.50 172.00 7.50 1.03 including 165.00 167.00 2.00 2.77 including 166.60 167.00 0.40 5.73 DV11-02B 149.00 152.50 3.50 1.17 including 150.50 151.00 0.50 4.55 DV11-02C 115.00 116.00 1.00 1.66 205.00 216.75 11.75 7.23
including 211.75 212.40 0.65 100.50 DV11-03 148.00 164.17 16.17 1.15 DV11-04 101.00 102.50 1.50 1.19 DV11-04B 265.00 268.20 3.20 14.03 including 266.10 266.60 0.50 40.90 DV11-05B 24.50 25.00 0.50 3.98 128.50 129.50 1.00 4.35
DV11-09 46.50 47.50 1.00 193.75 including 46.50 47.00 0.50 260.00 68.75 69.15 0.40 138.50
LX11-01 138.20 144.25 6.05 1.27 * Lengths are reported as core lengths True widths are unknown at this time
10.6 2010 DAMOTI DIAMOND DRILL EXPLORATION
During February through early March 2010, Nighthawk initiated a 14 km ice road connection to the
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 108 of 181 June 17, 2013
300 km long Rae-Edzo - Colomac Mine ice road. Drill crews and field personnel arrived March 9, 2010 and commenced preparations for the drill program. Fuel, a second helicopter-mobile drill and ancillary equipment, and supplies were subsequently mobilized along the ice road to the Damoti Camp in preparation for the winter drill program. Drilling commenced March 19, 2010 with the second drill starting on March 27, 2010. Through to early June 2010, a total of 42 NQ-sized diamond drill holes, for a total 7,977.22 metres, were completed.
The 2010 drill campaign tested drill targets in open areas recognized within the 3D digital geological and gold mineralization models. Holes commenced in the BIF Island area to take advantage of the ice. These holes were drilled to confirm values and the character of mineralization as well as infill areas between holes and extend mineralization. Subsequent holes were completed south of Damoti Lake, and in particular within the Red Mountain area, where the 3D model had been modified subsequent to integration of the results from the 2009 drill campaign. Additional target areas that received limited testing of only two to three holes each included: the Granite showing area; Horseshoe North area where the east limb of the BIF takes a dogleg to the northeast; and the Runway syncline – Lardass anticline area where historic gold values are reported at surface and in drill core. 2010 Damoti Lake drill hole collar details are summarized in Table 10-7.
TABLE 10-7 COLLAR DETAILS OF THE 2010 DAMOTI DDHS
UTM UTM Hole Northing Easting Original Measured Description Elevation2 Depth Area Azimuth DIP3 (NAD 83 Zone 11N)1 (metres)
D10-394 7117014.99 593132.01 271.30 120 -77 150.01 BIF Island D10-394B 7117014.99 593132.01 271.30 120 -60 155.36 BIF Island D10-394C 7117014.99 593132.01 271.30 120 -68 123.01 BIF Island D10-395 7117037.01 593132.99 271.30 120 -63 135.01 BIF Island D10-396 7117040.00 593155.00 271.30 120 -57 179.01 BIF Island D10-396B 7117040.00 593155.00 271.30 120 -68 157.01 BIF Island D10-396C 7117040.00 593155.00 271.30 120 -78 129.01 BIF Island D10-397 7116988.99 593115.01 271.30 120 -62 102.01 BIF Island D10-399 7116997.98 593282.02 271.30 300 -50 201.01 BIF Island D10-399B 7116997.98 593282.02 271.30 300 -72 210.01 BIF Island D10-400 7117093.99 593170.99 271.30 120 -53 294.01 BIF Island D10-400B 7117093.99 593170.99 271.30 120 -63 229.61 BIF Island D10-401 7117049.03 593322.02 271.30 300 -60 210.01 BIF Island D10-402 7116960.26 593167.15 271.30 300 -55 99.01 BIF Island D10-402B 7116960.26 593167.15 271.30 300 -70 81.01 BIF Island D10-403 7116985.00 593225.00 280.10 300 -45 153.01 BIF Island D10-403B 7116985.00 593225.00 280.10 300 -53 149.01 BIF Island
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 109 of 181 June 17, 2013
D10-404 7116949.97 593209.99 271.88 300 -45 132.01 BIF Island D10-410 7115150.02 592645.04 280.01 300 -50 105.01 Granite D10-411 7115124.98 592700.00 272.50 300 -45 186.01 Granite D10-413 7115320.02 592650.01 284.61 300 -50 70.76 Granite D10-416 7113990.01 591669.99 307.85 300 -60 219.01 Red Mtn D10-416B 7113990.01 591669.99 307.85 300 -67 222.01 Red Mtn D10-416c 7113990.01 591669.99 307.85 300 -52 195.01 Red Mtn D10-417 7113849.99 591680.01 303.50 300 -60 398.11 Red Mtn D10-417B 7113849.99 591680.01 303.50 300 -68 279.01 Red Mtn D10-418 7113885.01 591675.00 313.49 300 -66 333.01 Red Mtn D10-419 7113913.40 591667.80 315.70 300 -73 246.01 Red Mtn D10-420 7114154.00 591659.00 296.00 300 -65 147.01 Red Mtn D10-420B 7114154.00 591659.00 295.00 300 -75 135.01 Red Mtn D10-421 7114188.00 591658.00 296.00 300 -85 132.01 Red Mtn D10-421B 7114188.00 591658.00 296.00 300 -70 147.01 Red Mtn D10-422 7114218.00 591669.30 296.00 300 -65 165.01 Red Mtn D10-422B 7114218.00 591669.30 296.00 300 -75 191.01 Red Mtn D10-423 7113825.02 591715.00 302.33 270 -45 197.01 Red Mtn D10-423B 7113825.02 591715.00 302.33 270 -52 222.01 Red Mtn D10-424 7117100.00 593370.02 271.30 300 -58 264.01 BIF Island Horseshoe D10-427 7114081.00 591883.00 299.84 300 -50 300.01 N Horseshoe D10-427B 7114081.00 591883.00 299.84 300 -61 270.01 N Horseshoe D10-427C 7114081.00 591883.00 299.84 300 -56 264.01 N D10-430 7113618.01 591595.01 299.96 260 -75 171.01 Lardass D10-430B 7113618.01 591595.01 299.96 260 -69 229.01 Lardass 42 Holes 7,977.22
Notes: 1) Data for "Survey Points", "UTM Eastings", "UTM Northings" and "Elevations" obtained by Sub-Arctic Surveys of Yellowknife during surveys of March 11-13, 2010 and May 7 & 8, 2010 and modified to meet local drill conditions. The collars were not surveyed after drilling. The March survey covered holes between D10-394 and D10-424. The May survey covered all holes with labels great than D10-424 and re-surveyed holes D10-420, D10-421. 2) Ice holes generally set at uniform elevation of 271.3m 3) "Measured Dip" of drill collar in degrees were obtained with Brunton hand transit when drill heads were set at time of drilling.
As with the 2009 drill program, several drill sites during 2010 had holes were fanned from the same location (e.g. D10-394, D10-394B, and D10-394C). In addition, several of the drill sites were picketed and surveyed prior to drilling but were not drilled due to deteriorating ice conditions or lack of time. As a result, several proposed holes that are numbered between D10-394 and D10-430 do not exist.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 110 of 181 June 17, 2013
Drilling commenced in the BIF Island area to take advantage of the ice (Figure 10-6). Although this area saw the initial discovery of gold in 1993, no drilling had been conducted here since 1997. Unfortunately, due to warming weather and deteriorating ice conditions, a number of scheduled holes were not drilled and at least one hole was terminated early, D10-400B.
The drilling in the BIF Island area has confirmed a number of previous gold values and has shown the BIF to be tightly folded and faulted and to describe a northeast plunging syncline which approaches near surface and is exposed near BIF Island. Where tested near BIF Island, the structure generally describes a closely-spaced main western syncline and a shallower, parasitic, east syncline defining a “W-fold” trending northeast in plan. The parasitic eastern syncline appears to be locally faulted from the western main syncline and may not extend very far to the northeast other than as a roll on the east limb of the main fold. Table 10-8 presents examples of composite mineralized intersections from selected drill holes completed at Damoti Lake in 2010; not all holes and intersection results are listed.
The Granite showing, located near the south end of Damoti Lake and northeast of the Horseshoe camp (Figure 10-7), was drilled during 2010 with three short holes for a total length of 361.78m.
These holes were positioned relative to the magnetic anomalies and the reported positions of surface showings and the odd historical hole.
Although no significant or anomalous gold values were detected within the 2010 drilling of the Granite showing, the area remains somewhat inadequately tested. The first hole of the three holes drilled, D10- 411, undershot a shallow BIF syncline and remained within underlying turbidite for its 186.01m length. As evidence, at approximately 120 to 150m, D10-411 encountered the turbidite containing biotite porphyroblasts of increased size and percentage abundance relative to the remainder of the encountered turbidite. This biotite alteration is witnessed within turbidite near the contact with BIF and supported the belief during drilling of hole D10-411 that the meta-turbidite was in close proximity to the BIF unit and believed to be vertically above this interval. Hole D10-410 was subsequently drilled and confirmed this model. D10-410 encountered the lower keel of a syncline defined by basal hornblende-chlorite BIF and central grunerite BIF. No upper BIF was encountered and confirms that the entire syncline was not tested by the hole. In addition, the west limb of the BIF fold was cut off by a porphyritic diabase dyke that probably occupies a fault structure.
Hole D10-413 was the final 2010 hole drilled in the Granite showing area and was collared to the north of the two previous holes. D10-413 did not encounter a complete fold and only returned a slice of the lower hornblende-chlorite BIF followed by underlying turbidite. No gold values were encountered within the BIF sections encountered in either D10-410 or D10-413.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 111 of 181 June 17, 2013
FIGURE 10-6 BIF ISLAND AREA 2010 DRILL COLLAR PLAN
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 112 of 181 June 17, 2013
FIGURE 10-7: GRANITE SHOWING AREA 2010 DRILL COLLAR PLAN
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 113 of 181 June 17, 2013
Of the remaining holes completed during 2010, 15 holes were drilled to test the Red Mountain syncline area (Figure 10-8), either: 1) where previous workers detected gold values towards its the north end near the Causeway historic showing, or, 2) to infill holes drilled during 2009 near the southern end of the Red Mountain syncline (Lookout showing area) and where the updated 3D Model indicated a gold zone.
Two additional drill sites, each with fanned holes for a total of five holes, were directed at two areas south of Damoti Lake. The first drill setup (D10-427, 427B and 427C; Figure 10-8) was at the North Horseshoe east limb area, northeast of holes D09-388 and D09-389, where the structure takes a dog- leg to the northeast. The second drill setup (D10-430 and D10-430B; Figure 10-8) examined the Runway syncline and Lardass antiform where historic gold values were reported on surface and in drill core. Table 10-8 presents examples of composite mineralized intersections from selected drill holes completed at Damoti Lake in 2010; not all holes and intersection results are listed.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 114 of 181 June 17, 2013
FIGURE 10-8: HORSESHOE & AREA 2010 DRILL COLLAR PLAN
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 115 of 181 June 17, 2013
TABLE 10-8: EXAMPLES OF GOLD INTERSECTIONS FROM DAMOTI LAKE 2010
Core Length* Drill Hole From (m) To (m) Au (g/t) (m) D10-394 62.00 77.90 15.90 2.43 D10-394B 58.00 62.25 4.25 9.74 D10-394C 41.50 80.00 38.50 3.24 D10-402 53.95 61.50 7.55 4.89 63.75 64.65 0.90 2.22
D10-403 43.00 43.50 0.50 2.26 78.00 78.50 0.50 12.5
86.50 87.50 1.00 2.14
119.25 119.75 0.50 2.89
D10-403B 24.25 25.75 1.50 2.13 64.00 81.50 17.50 1.45
113.50 115.00 1.50 3.98
125.75 126.50 0.75 6.97
D10-416 30.00 47.00 17.00 1.11 89.75 90.50 0.75 5.49
D10-416B 49.00 56.50 7.50 2.5 87.50 95.50 8.00 16.12
144.00 150.50 6.50 3.02
162.00 166.00 4.00 8.5
168.00 168.50 0.50 4.26
177.00 184.00 7.00 4.11
D10-418 5.00 8.00 3.00 7.93 20.75 21.75 1.00 3.56
42.50 43.00 0.50 3.86
49.75 66.00 16.25 2.6
143.50 150.50 7.00 4.38
D10-420 11.00 11.50 0.50 1.59 24.50 38.00 13.50 1.42
68.00 69.00 1.00 1.35
76.50 85.50 9.00 1.81
100.00 100.50 0.50 1.47
D10-420B 4.00 5.00 1.00 2 21.50 41.50 20.00 5.6
D10-427 62.50 66.00 3.50 5.03 72.00 73.50 1.50 8.17
100.75 104.00 3.25 3.89
129.75 131.50 1.75 4.56
243.50 245.00 1.50 2.09
D10-427C 109.00 111.50 2.50 6.56 109.50 110.00 0.50 22.9
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 116 of 181 June 17, 2013
176.50 178.75 2.25 1.84
D10-430 76.20 77.00 0.80 4.01 83.00 84.00 1.00 1.71
D10-430B 74.00 75.00 1.00 4.24 124.00 127.50 3.50 3.49
* Lengths are reported as core lengths. True widths are unknown at this time
10.7 2009 DAMOTI DIAMOND DRILL PROGRAM
Nighthawk commenced field exploration activities on June 25, 2009 with arrival of personnel and commenced drilling July 1, 2009. By the end of the drill program on October 2, 2009, Nighthawk completed 27 NQ-sized diamond drill holes for a total 5,669.73 metres. Prior to commencement of field activities, Nighthawk had arranged for a mobile LD250 Diamond Drill and ancillary supplies, fuel, and core boxes to be delivered during March 2009 via the ice road. A helicopter was used to move the equipment and materials the last 14 kilometres to a staging area near the ramp located on the Damoti Property.
Nighthawk's 2009 exploration program comprised 27 NQ-sized holes totaling 5,669.73 metres and was designed to expand upon the historic resource by infilling priority target areas, extending mineralized zones along strike and to depth within the Horseshoe and Pyrite zones, i.e. east side of southern fold nose and east limb of Horseshoe syncline, respectively, and to test similar mineralized structures 150 metres west of the Horseshoe Zone within the Red Mountain, Pink Antler and Lookout Zones located along the east side of the Red Mountain syncline and generally north of the northeast trending Horseshoe Fault (see Figure 10-9 for locations of old showing names). The 2009 Damoti Lake drill hole collar details are summarized in Table 10-9.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 117 of 181 June 17, 2013
FIGURE 10-9: LOCATION OF HISTORIC SHOWINGS IN DAMOTI SOUTH PENINSULA AREA
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 118 of 181 June 17, 2013
TABLE 10-9 COLLAR DETAILS OF THE 2009 DAMOTI DDHS
UTM Northing UTM Easting Collar Hole Depth Description Elevation Collar DIP2 Area Azimuth1 (metres) (NAD 83 Zone 11N)3
D09-376 7113902.699 591769.393 298.108 90 -59 51.01 Horseshoe D09-377 7113903.66 591769.263 297.924 90 -67 81.01 Horseshoe D09-378 7113903.711 591768.658 298.114 90 -75 98.01 Horseshoe D09-378B 7113903.741 591768.409 298.18 90 -85 133.51 Horseshoe D09-379 7113911.246 591766.278 298.165 90 -53 87.01 Horseshoe D09-380 7113911.22 591765.745 298.272 90 -63 87.01 Horseshoe D09-381 7113914.925 591752.255 300.492 90 -50 76.31 Horseshoe D09-382 7113910.642 591818.716 293.719 293 -55 240.01 Horseshoe D09-383 7113930.011 591804.035 296.113 295 -66 250.07 Horseshoe D09-384 7113953.97 591793.662 299.401 301 -68 288.01 Horseshoe D09-385 7113953.915 591793.788 299.371 301 -73 243.01 Horseshoe D09-386 7113973.28 591799.459 298.671 306 -70 258.01 Horseshoe D09-386B 7113973.498 591799.111 298.531 306 -60 309.01 Horseshoe D09-387 7113983.234 591795.446 299.412 306 -55 249.01 Horseshoe D09-388 7114040.138 591824.26 298.736 290 -63 303.01 Horseshoe D09-389 7114040.671 591824.148 298.529 305 -60 41.41 Horseshoe D09-389B 7114040.698 591824.094 298.649 305 -58 278.01 Horseshoe D09-389C 7114041.015 591823.733 298.63 305 -50 255.01 Horseshoe D09-390 7113881.124 591673.664 313.326 300 -60 258.01 Red Mtn D09-390B 7113880.938 591673.982 313.362 300 -72 265.01 Red Mtn D09-390C 7113881.365 591673.287 313.38 300 -47 239.21 Red Mtn D09-3914 7113932.45 591669.56 316.442 300 -57 312.01 Red Mtn D09-391B 7113932.251 591669.981 316.442 300 -69 243.01 Red Mtn D09-392 7113966.428 591674.467 312.599 300 -60 414.01 Red Mtn D09-392B 7113966.225 591674.787 312.637 300 -69 129.01 Red Mtn D09-392C 7113966.284 591674.698 312.771 300 -65 229.01 Red Mtn D09-393 7113963.445 591692.379 313.468 -90 252.01 Horseshoe 27 Holes 5,669.73 1) Collar Azimuths (degrees) were established by Sub-Arctic Surveys on June 26-27, 2009. 2) Collar Dip of drill collar in degrees were established with a Brunton hand transit at time of drilling 3) Data for "UTM Eastings", "UTM Northings", and "Elevations" were obtained by Sub-Arctic Surveys of Yellowknife during their survey of September 30-October 1, 2009 4) The re-establishment of the drill floor and equipment (for winter storage) over the site of D09-391 did not permit the surveyor access to the capped casing for D090-391 on September30. The UTM location shown is an estimation based upon the location of D09-391B.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 119 of 181 June 17, 2013
Nineteen (19) of the holes were drilled in the Damoti Lake Horseshoe Zone (Figure 10-10) in order to confirm earlier drilling results and to test the nose of the fold and the lower portion of the west limb of the Horseshoe syncline. These holes also provided definition detail for near surface and moderately deep zones that had previously been identified. Drill targets were identified using the 3D geological model generated by Data Mine software.
Drill hole D09-382 intersected a high-grade zone of 30.55 g/t over 3.45m near surface as well as a 5.05m intersection of 4.58 g/t at the base of the fold opening up opportunities into the lower portion of the west limb of the fold. Subsequent drilling north of drill hole D09-382 (D09-383 to 389) confirmed and extended near surface mineralized zones and the newly discovered potential in the lower part of the west limb of the syncline. Table 10-10 presents examples of composite mineralized intersections from selected drill holes completed at Damoti Lake in 2009; not all holes and intersection results are listed.
Eight holes drilled in the east limb of the Red Mountain Syncline (D09-390 to 392C) established the continuity of near-surface mineralized gold zones that had been identified during the 1995 drill program without further testing (Figure 10-10). The 1995 and 2009 drilling confirmed these mineralized zones over a distance of 180m and to a depth of 40m.
At the same time, drill holes D09-390B and D09-392C identified a new gold zone in the keel of the Red Mountain syncline. Hole D09-390B returned 7.86 grams gold over 2.65 m in the keel with hole D09-392C intersecting 5.19 grams gold per tonne over 4.80 m in what appears to be the same zone.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 120 of 181 June 17, 2013
TABLE 10-10: EXAMPLES OF GOLD INTERSECTIONS FROM DAMOTI LAKE 2009
Core Length* Drill Hole From (m) To (m) Au (g/t) (m) D09-377 43.00 66.50 23.50 13.91 D09-378 53.90 55.35 1.45 3.5 69.00 72.00 3.00 16.97
D09-382 56.00 61.00 5.00 21.35 83.50 87.00 3.50 4.12
167.50 169.20 1.70 7.67
228.00 237.25 9.25 3.42 D09-384 67.00 73.00 6.00 4.46 82.00 84.35 2.33 3.29
105.60 110.00 4.40 3.73
199.00 200.75 1.75 4.83
205.40 207.00 1.60 9.95
245.00 263.00 18.00 2.86
D09-389B 28.50 34.50 6.00 3.95 35.75 40.00 4.25 7.81
44.00 49.00 5.00 3.63
68.60 70.80 2.20 5.74
110.50 111.25 0.75 9.26
203.20 204.80 1.60 4.85
227.50 228.65 1.15 3.1
* Lengths are reported as core lengths. True widths are unknown at this time
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 121 of 181 June 17, 2013
FIGURE 10-10: 2009 PLAN OF DAMOTI DRILL HOLE COLLAR LOCATIONS
10.8 SAMPLING APPROACH AND METHODOLOGY OF DIAMOND DRILL PROGRAMS
Samples of the 2009 Damoti Lake drill core selected for analyses were identified and marked during the logging process by William Waychison, M.Sc.A., P.Geo., who also conducted the logging of the
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 122 of 181 June 17, 2013
drill holes.
Samples of the 2010 Damoti Lake drill core selected for analyses were identified and marked during the logging process by the geologist responsible for logging the respective hole. Geologists involved with the 2010 logging program included Gabriel Fortin, G.I.T., Gerald Nadeau, Troy Piercy, and William Waychison, P.Geo. Waychison supervised the drill hole logging conducted by the other persons.
Samples of the 2011 drill core selected for analyses were identified and marked during the logging process by the geologist responsible for logging the respective hole. Geologists involved with the 2011 Treasure Island logging program included Stephan Ruest, B.Sc., Gerald Nadeau, B.Sc. and William Waychison, P.Geo. Geologists involved with the 2011 Leta Arm logging program included Stephan Ruest, Gabriel Fortin, G.I.T., and William Waychison, P.Geo. Waychison supervised the drill hole logging conducted by the other persons.
Samples of the 2012 Colomac drill core selected for analyses were identified and marked during the logging process by the geologist responsible for logging the respective hole. Geologists involved with the 2012 Colomac logging program included John Walther, P.Geo. and Jacob Prince of GeoMinEx and Nighthawk's William Waychison, P.Geo. Waychison supervised the drill hole logging conducted by the other persons.
For both the 2009 and 2010 Damoti Lake drill programs, all drill core from the iron formation was sampled and analyzed for gold. In addition any drill core that was veined, mineralized, and any possibly relevant sections within other lithologies, were sampled and analyzed for gold. For the 2011 drill programs at Treasure Island and Leta Arm, all drill core was sampled and analyzed for gold except for select unmineralized intervals of diabase dykes and sediments. For the 2012 drill program at Colomac, all drill core from the mineralized envelope within the Colomac Sill was sampled and analyzed for gold. In addition any drill core that was veined, mineralized, and any possibly relevant sections within other lithologies, were sampled and analyzed for gold. Individual samples lengths and locations were determined based upon geological data such as contacts, amount of veining, the presence of mineralization including sulphide content, and degree and amount of alteration or mineralogical content. In all cases shoulders were sampled to any items of interest. All such sample data, along with the header and survey data (i.e. hole collar data and down hole surveys), description of the major and minor lithologies, as well as a text description of the sample and style of any sulfides within the samples, were recorded in a digital excel file. The Rock Quality Designation (RQD) was calculated for all core on a metre length basis and recorded as a paper file document. The RQD for the core is generally very good and in excess of 80-90 percent. Exceptions are within six metres of the surface where the bedrock is frost fractured and locally blocky, or near faults, especially with the turbidites.
NQ-size drill core was sampled in standard intervals not exceeding 1.5 metres in length while core from the main mineralized horizons when identifiable, or core displaying visible gold or significant sulphides, were sampled in greater detail, generally not exceeding 1 metre in length. The remaining half of the cores from the 2009, 2010 and 2012 drill programs are stored at the Damoti Lake camp.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 123 of 181 June 17, 2013
Core from the 2012 winter Colomac drill program is also stored at the Damoti Lake camp; the core from the 2012 Colomac summer drill program is stored south of the "Big Blue" building at the Colomac camp.
In a few cases when considered relevant and where recovery was high, samples were also collected from the casing core. These samples were obtained from bedrock or fractured bedrock. This was the case as there was both little overburden present at most collar locations and given the fact that most holes were drilled to a depth of six metres within bedrock to assure the casing was anchored in solid, unfractured rock.
A total of 3,549 samples of core, including blanks and standards were analysed as part of the 2009 Damoti Lake drill program. In addition, 162 samples of core including blanks and standards were analysed as part of the resampling of historic archived diamond drill core.
A total of 6,742 samples of core, including blanks and standards were analyzed as part of the 2010 Damoti Lake drill program.
A total of 1,190 samples of core, including blanks and standards, were analyzed as part of the 2011 Treasure Island drill program.
A total of 8,913 samples of core, including blanks and standards were analysed as part of the 2011 Leta Arm drill program.
A total of 7,602 samples of core, including blanks and standards were analysed as part of the 2012 Colomac drill program. In addition, 130 samples of 1997 core, including blanks and standards were analysed.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 124 of 181 June 17, 2013
11 SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 HISTORIC SAMPLE PREPARATION, ANALYSES AND SECURITY
The majority of historical drill core samples collected by Neptune and Royal Oak from the Colomac Sill was whole core and analysed by standard fire assay and metallics assay procedures at the Colomac Mine lab. Some assays, particularly those from exploration drill holes peripheral to the Colomac were apparently submitted to independent labs. There is no archived core for the majority of the Colomac deposit drill holes. Archived core is available for select Grizzly Bear, Goldcrest, 24/27 and Colomac Zone 1.5 and 3.5 drill holes. Assay certificates are incomplete. No quality assurance and quality control data is available for the historic assays.
Despite this, it is Howe’s opinion that the historic sample preparation and analyses would have been carried using industry standard procedures for that time. There is no reason to suspect that assays contained in the Colomac database are not representative of in situ mineralisation and Howe considers the data adequate for the estimation of an Inferred resource.
11.2 NIGHTHAWK SAMPLE PREPARATION, ANALYSES AND SECURITY
The following is a description of sample preparation, analyses and security protocols and procedures utilized for Nighthawk’s 2012 Colomac drill program and its 2009, 2010 and 2011 diamond drill programs elsewhere within the Indin Lake Project area.
11.2.1 SAMPLE SECURITY
Security of samples prior to dispatch to the analytical laboratory was maintained by limiting access of un-authorized persons. Core samples submitted for analysis were split with a rock saw and one half placed in labeled and secured sample bags. The samples bags were packed in security-sealed, polypropylene rice bags for delivery to the assay laboratory. Samples remained under the supervision of Nighthawk personnel at the drill camp until transferred to Air Tindi Ltd or Arctic Sunwest Charters (171817 Canada Inc.) for air transport and Discovery Mining Services Ltd for ground delivery of the security-sealed rice bags to the ALS Global Laboratory in Yellowknife, NT. The Yellowknife laboratory completes sample preparation operations and employs bar coding and scanning technologies that provide complete chain of custody records for every sample. Prepared samples are bar coded and delivered via bonded commercial couriers to the ALS Global Assay Laboratory in North Vancouver, BC for analysis.
Howe is of the opinion that the security and integrity of the Nighthawk samples submitted for analyses is un-compromised, given the adequate record keeping, storage locations, sample transport methods, and the analytical laboratories’ chain of custody procedures.
11.2.2 CORE SAMPLE PREPARATION AND ANALYSIS
Nighthawk has implemented a quality-control program to ensure best practice in the sampling and analysis of the drill core. Samples of NQ-size drill core are saw-cut; half the drill core is sampled in
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 125 of 181 June 17, 2013
standard intervals and placed in labeled and secured sample bags while the remaining half of the core is stored in a secure location. During this process, gold standard and blank standard samples were inserted in the sample group (see Section 11.2.4 below). Samples were then placed into rice bags that were security-sealed and air freighted to Yellowknife for preparation at ALS Global's Yellowknife preparation facility. The rice bags were carefully labeled listing the samples enclosed and a complete list of the all samples was added to the first bag of the shipment order. Sample cutting and preparation was conducted under the supervision of William Waychison, M.Sc.A., P.Geo by contract personnel provided by Aurora Geosciences Ltd. during 2009 to 2011 and by GeoMinEx Consultants Inc. in 2012.
Core samples were prepared at ALS Global’s sample receiving and preparation laboratory in Yellowknife; prepared samples are then delivered via bonded commercial couriers to the ALS Global Analytical Laboratory in North Vancouver, BC for analysis. The Yellowknife branch laboratory is individually certified to standards within ISO 9001:2008. The North Vancouver analytical facility is individually certified to standards within ISO 9001:2008 and has received accreditation to ISO/IEC 17025:2005 from the Standards Council of Canada (SCC) for methods including: Fire Assay Au by Atomic Absorption (AA); Fire Assay Au and Ag by Gravimetric finish; Aqua Regia Ag, Cu, Pb, Zn and Mo by AA and; Aqua Regia Multi-element by ICP and MS. Sample preparation follows industry best practices and procedures. The analytical methods used are routine and provide robust data associated with a high degree of analytical precision.
ALS Global crushed the entire sample to 270% passing 2mm (-10 mesh) and depending upon the instructions provided by Nighthawk, either a 1000-gram split or the entire sample was pulverized to 285% passing 75µm (-200 mesh) using a matched bowl and saucer pulverizer.
Gold analysis was done by a fire assay - atomic absorption spectrometry (“FA-AAS”) method on a 30- gram charge of a 1000 gram pulp. The FA-AAS package chosen by Nighthawk (i.e. AU-AA25) has a detection limit of 0.01 g/t Au and upper limit of 100 g/t Au. Samples returning values exceeding 3 g/t gold were re-assayed by fire assay with a gravimetric finish method (“FAGRAV”) on a 30-gram charge of the pulp. The FA-GRAV method selected by Nighthawk (i.e. AuGRA21) has a detection limit of 0.05 g/t Au and upper limit of 1,000 g/t Au. ALS Global FAAAS and FA-GRAV methods selected by Nighthawk have a precision tolerance of 10% for duplicates and 7% for standards.
Pulp and Metallics assaying for gold was conducted for all samples within the main mineralized horizons and those samples with visible gold or significant sulphides. At the request of Nighthawk, the Pulp and Metallic procedure chosen (i.e. Au-SCR21) was conducted with the entire sample pulverized and screened.
ALS Global’s Au-SCR21 method has the pulp pulverized to 85% passing 75µm (-200 mesh and then dry screened through a 100µm (Tyler 150 mesh) stainless steel screen. Any material remaining on the screen (>100µm) is retained and analyzed in its entirety by fire assay with gravimetric finish (i.e. Au- GRAV) and reported as the Au (+) fraction. The material passing through the screen (<100µm) is homogenized and two sub-samples (30g nominal sample weight) are analyzed by fire assay with AAS finish by methods Au-AA25 and Au-AA25D (for duplicate). The average of the two AAS results is taken and reported as the Au (-) fraction result. All three values are used in a weighted average
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 126 of 181 June 17, 2013
calculation to combine the gold content of the plus and minus fractions. The gold values for both the (+) 100 and (-) 100 µm fractions are reported together with the weight of each fraction as well as the calculated total gold content of the sample. The detection limit of this procedure is 0.05gpt and the upper limit is 1,000 g/t gold.
ALS Global and its employees are independent from Nighthawk. Other than initial sample collection and bagging, Nighthawk personnel and its consultants and contractors are not involved in the core sample preparation and analysis.
It is Howe’s opinion that security, sample collection, preparation and analytical procedures undertaken on the Indin Lake Project during the 2009, 2010, 2011 and 2012 diamond drill programs are appropriate for the sample media and mineralization type and conform to industry standards.
11.2.3 PROSPECTING FIELD SAMPLE PREPARATION AND ANALYSIS
Nighthawk has implemented a quality-control program to ensure best practice in the sampling and analysis of the prospecting samples. In the field, approximately 0.5-1.0 kg samples were selected from outcrops, sub-crops, and/or float. Sample site locations were marked by metal tags inscribed with the sample number and affixed to a nearby tree and/or bush by a metal wire or the metal tag bent around a rock and wrapped in flagging tape and placed on the ground adjacent to the sample location. In addition, a metre long flagging tape ribbon was attached to a tree or bush immediate to sample location in order to facilitate locating the site in the future. These sites were assigned a location by marking an averaged waypoint on a global positioning system (GPS) device. The GPS instrument was only used when accuracy was less than or equal to 10 metres of northing and easting coordinate error. Each sample was described and then placed in a clear polyethylene sample bag with an assay tag taken from the assay tag sample books provided by Nighthawk. The sample bag was labeled with the number of the assay tag and secured.
In camp, these samples were re-checked for the above information and the bags were then stapled shut. During this process, gold standard and blank standard samples were inserted in the sample group (see Section 11.2.4 below). Approximately 20-25 samples were then placed into rice bags that were security-sealed and air freighted to Yellowknife for preparation at ALS Global's Yellowknife preparation facility. The rice bags were carefully labeled listing the samples enclosed and a complete list of the all samples was added to the first bag of the shipment order.
ALS sample preparation and analysis were as described in Section 11.2.2 above. ALS Global and its employees are independent from Nighthawk. Other than initial sample collection and bagging, Nighthawk personnel and its consultants and contractors are not involved in the field sample preparation and analysis.
It is Howe’s opinion that security, sample collection, preparation and analytical procedures undertaken on the Indin Lake Project during the 2011 and 2012 prospecting programs are appropriate for the sample media and mineralization type and conform to industry standards.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 127 of 181 June 17, 2013
11.3 2012 QUALITY ASSURANCE AND QUALITY CONTROL PROGRAM
As part of its QA/QC program, Nighthawk inserted two control samples for every 20 samples submitted for analysis. The control samples comprise one of nine (9) external gold standards (low to high grade) and a blank (i.e. sterile) sample. Samples for blanks were obtained from drill core of diabase obtained during the previous programs at Damoti Lake (2009-2010). These control samples are in addition to the use of FA-GRAV analyses as rechecks on samples returning greater than 3 g/t gold and the application of Pulp and Metallics assaying for samples from the main mineralized zones or core displaying visible gold or significant sulphides.
In addition to the Nighthawk control samples, ALS Global routinely inserts two of their own gold standards, three pulp duplicates, and a blank within every 84-sample rack.
11.3.1 BLANK SAMPLES
Routinely as part of Nighthawk’s QA/QC program, where blank samples returned trace gold values exceeding an arbitrarily selected value of 0.12 g/t Au, the context of the results were reviewed, and if considered required, ALS was contacted to review their QA/QC procedures, and if deemed required and feasible, requested to repeat the oven load or parts thereof as required, and issue a corrected assay report. These situations were very rare, and nearly all results of blank control samples were returned as acceptable.
Very rarely a blank sample returned a trace value approaching or weakly exceeding the arbitrary threshold of 0.12 g/t. Where this occurred after a string of negligible gold values, it was assumed that the blank sample may have been contaminated and that the diabase used contained a fragment of mineralized country rock.
Pulp metallic analysis of three blank samples entered within a mineralized interval in hole C12-10B- 2.5 returned three anomalous values at 0.12, 0.25 and 0.38 g/t Au. The 0.38 g/t blank sample was immediately preceded by 4.33 and 3.86 g/t Au samples indicating that the anomalous gold values from blank samples may be associated with contamination at the crushing/pulverization stage of sample preparation.
11.3.2 STANDARD GOLD REFERENCE MATERIALS
Samples of the gold standard reference materials used for the QA/QC program were obtained through Analytical Solutions Ltd (“ASL”), Toronto Ontario. Table 11-1 identifies the gold standards employed by Nighthawk and their certified gold values and +/- 2 standard deviation performance gates of the ALS Global analyses.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 128 of 181 June 17, 2013
TABLE 11-1: NIGHTHAWK GOLD STANDARD REFERENCE MATERIALS, VALUES AND PERFORMANCE GATES
Standard Rock Type Count Certified Mean of Average Standard Two Standard Grade ALS % Diff Dev Deviation (g/tonne) Analyses (g/tonne) Gate (g/tonne) OREAS 6Pc Greywacke 72 1.52 1.53 1% 0.04 1.44 to 1.6 OREAS 10c Basalt 5 6.60 6.52 -1% 0.04 6.53 to 6.67 OREAS 15h Basalt 48 1.02 1.01 -1% 0.03 0.96 to 1.08 OREAS 15Pb Basalt 42 1.06 1.06 0% 0.02 1.02 to 1.1 OREAS 16a Basalt 50 1.81 1.79 -1% 0.04 1.73 to 1.89 OREAS 18c Basalt 67 3.52 3.92 11% 0.81 1.9 to 5.14 OREAS 19a Basalt 35 5.49 5.54 1% 0.13 5.22 to 5.76 OREAS 60b Meta-andesite 20 2.57 2.53 -2% 0.05 2.47 to 2.67 OREAS 62d Meta-andesite 36 10.50 10.45 -1% 0.65 9.19 to 11.81
Analysis results show no significant negative or positive bias at the CRM grades evaluated. Across all CRM grades, 69% and 93% of assay values were within +/- 1 and 2 standard deviations respectively.
Rarely, the standard sample failed to pass the 2 standard deviation gates shown in Table 11-1. No CRM had more than two samples greater than two standard deviations from the expected grade. One outlier was identified for CRM OREAS 19a, sample N931797 returned a sample of 4.22, 23% less than the expected grade of 5.49.
All CRMs show a degree of cyclical analytical drift. It is particularly apparent in the control plots for higher grade standard OREAS 19a and OREAS 60b. Over the observation period there is a gradual oscillation in returned CRM grades relative to the expected grade. Analytical drift does not appear to correlate with outlying values. There is no occasion where two successive CRM assay values are greater than 2 standard deviations from the expected value.
Howe notes that overall, the CRMs performed well. There is no indication of periodicity in analytical bias or poor precision. Results demonstrate that assay values are sufficiently accurate to be used in resource estimation.
11.3.3 CHECK SAMPLES
11.3.3.1 2012 Drilling ALS Gravimetric Resamples
Samples returning values exceeding 3 g/t gold were re-assayed by fire assay with a gravimetric finish method (“FA-GRAV”) on a 30-gram charge of the pulp. The FA-GRAV method selected by
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 129 of 181 June 17, 2013
Nighthawk (i.e. FAG303) has a detection limit of 0.05 g/t Au and upper limit of 1,000 g/t Au.
Of the 48 samples repeat assayed by FA-GRAV, 26 are standard reference materials. Standard reference material and pulp reject samples both perform well with respective correlation coefficient of 0.99 and 0.98 between ICP and fire assay methods. There is no relative bias to under or over reporting associated with either method (Figure 11-1).
The mean absolute difference between assay values and the mean of the pair (or "HARD" value) is 3.26%. Ninety eight percent of duplicate pairs have a HARD value within 20% of the mean demonstrating good precision of ALS FA-AAS analyses above 3 g/t Au. There is no apparent relative bias in reported gold grades associated with the ALS FA-AAS or FA-GRAV methods.
11.3.3.2 2012 Drilling SGS Check Samples
At Nighthawk's request, a portion of pulp from samples selected by Nighthawk were collected by ALS Global and shipped to Nighthawk’s Sudbury office for submittal to a second independent laboratory for comparison purposes (approximately 10% of the 2012 samples collected from within the mineralized zones). Nighthawk’s personnel hand delivered these pulps to SGS Mineral Services in Garson, Ontario for delivery to their Toronto facility for analysis.
SGS Mineral Services, a unit of SGS Canada Inc., is an ISO 9001 registered company which has provided quality analytical services to the mining, exploration and research sectors for over 40 years and has been a leader in the introduction of new technologies. SGS Canada Inc. is a member of the Société Générale de Surveillance Group (“SGS”), the world's largest inspection and testing organization with head office based in Geneva, Switzerland. SGS operates with over 53,000 employees at a network of more than 1,000 offices worldwide.
SGS and its employees are independent from Nighthawk. Other than initial sample collection and bagging, and delivery of the ALS pulps to SGS, Nighthawk personnel and its consultants and contractors are not involved in the core sample preparation and analysis.
Nighthawk requested SGS to analyze the check pulps for gold by a fire assay - Inductively Coupled Plasma - Optical Emission Spectroscopy (“ICP-OES”) finish on a 30 gram charge of pulp (SCS code FAI323). This fire assay ICP-OES package has a detection limit of 0.005 g/t Au and upper limit of 100 g/t Au.
Of the 197 samples selected, 181 were derived from ALS Global’s Screen Metallics method (ALS code Au-SCR21 see Section 11.2.2) where the whole sample is pulverized and passed through a stainless steel screen. The coarse fraction retained on the screen is assayed in its entirety. A sub sample of the fine fraction that passed through the screen is therefore sent for repeat analysis at SGS.
The gold grade of the ALS screen metallic fine fraction only is compared SGS repeat assay. Good repeatability of grades indicated by a Pearson correlation coefficient of 0.84. The mean HARD is 10% and 88% of duplicate pairs have a HARD value within 20% of the mean demonstrating good
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 130 of 181 June 17, 2013
repeatability. There is no clear relationship between mean grade of the pair and the relative difference between sample grades (Figure 11-2).
The three ALS FA-AAS pulps reassayed by SGS do not provide a statistically meaningful comparison and were not reviewed.
11.3.3.3 1997 Drilling ALS Duplicate Samples
Nighthawk located archived Royal Oak 1997 drill core at the Colomac airport and historic millsite. In 2012, 117 intervals of mineralized core were resampled (approximately 8% of all Royal Oak 1997 series drill samples). Resampled historic core (remaining half core) was submitted for duplicate analysis at the ALS Global’s laboratory using the Au-SCR21 method.
Quality control samples were submitted with duplicate samples at a ratio of 1 to 10 and included 6 blank and 7 standard samples. All blank samples returned assay values at or just above the lower limit of detection ranging from 0.05 to 0.07 g/t Au. Standards returned grades within the two standard deviations gates described in Table 11-1. Quality control samples indicate that the ALS assay values are reliable.
Original Royal Oak assay values and 2012 Nighthawk samples have a low Pearson correlation coefficient of 0.34. The mean HARD is 39%. Only 33 % of duplicate pairs have a HARD value within 20% of the mean demonstrating poor repeatability of Royal Oak grades in 1997 series holes. Thomson and Howarth precision plot shows that poor repeatability is seen across a range of grades (Figure 11-3).
The good precision shown by the CRM analysis indicates that this lack of repeatability is probably due more to a strong nugget [coarse free gold] effect or inaccurate historic assays. In his 1996 study, Pitard noted a large gold heterogeneity with assay grades showing poisson skewness associated with a high nugget effect. This likely nugget effect is supported by the observed presence of native gold grains in core. It is recommended that Nighthawk undertake a field duplicate programme of repeat analysis of quarter core splits and coarse reject samples to quantify gold heterogeneity. This will allow a more meaningful interpretation of historic assay precision.
On average, original sample grades are 17.33 % greater than mean of the duplicate pair. A string of eight sequential samples selected from hole Z3.5 97-10 had a 4 g/t historic average grade returned assay values below the detection limit. The preceding three samples had a reasonable coincidence with the Royal Oak values indicating that the 2012 sampling was done over the correct samples. It is possible that the original Royal Oak half core samples had veins with a shallow core angle that were not contained within the 2012 remaining half core samples.
Howe considers the historic assays suitable for the generation of Inferred category resources.
11.3.4 QAQC CONCLUSIONS
It is Howe’s opinion Nighthawk’s independent Quality Assurance and Quality Control (QA/QC)
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 131 of 181 June 17, 2013
program undertaken on the during the Colomac 2012 drill program is appropriate and conform to industry standards.
In future drill programs Howe recommends that Nighthawk add to its QA-QC program by inserting ¼ core duplicate samples or FA-AAS coarse reject sample splits into each sample batch submitted to the analytical laboratory. The results of these analyses will help to quantify gold heterogeneity within drill core.
In addition to the repeat assaying of ALS screen metallic ("Au-SCR21") fine fraction pulp rejects, FA- AAS pulp sample splits should be regularly submitted for repeat analysis the primary assay laboratory (ALS) and the secondary laboratory (SGS).
It is Howe’s opinion that the 2012 Nighthawk blank, CRM and duplicate sample results provide sufficient confidence in the 2012 drill core assay values for their use in the estimation of CIM compliant Inferred and Indicated resources.
The limited 2012 duplicate core QAQC program undertaken on Royal Oak 1997 series archived drill core from Zone 3.5 indicates that the 1997 Royal Oak historic assays are suitable for the generation of Inferred category resources. No quality assurance and quality control data is available for the remaining historic assays. However, as discussed in Section 11.1, Howe considers the data adequate for the estimation of an Inferred resource.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 132 of 181 June 17, 2013
FIGURE 11-1: FA-AA VS FA-GRAV REPEAT ANALYSES – 2012 DRILL CORE
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 133 of 181 June 17, 2013
FIGURE 11-2: ALS FINE FRACTION (AU-SCR21) VS FA-ICP PULP CHECK ANALYSES – 2012 DRILL CORE
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 134 of 181 June 17, 2013
FIGURE 11-3: ROYAL OAK 1997 ASSAYS VS ALS NIGHTHAWK 2012 DUPLICATE CORE ASSAYS
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 135 of 181 June 17, 2013
12 DATA VERIFICATION
12.1 ACA HOWE SITE VISITS
On October 12th, 2011, Ian Trinder, ACA Howe Senior Geologist and Dave Orava, ACA Howe Associate Mining Engineer, completed a site visit to the Colomac Property via helicopter accompanied by Malcolm Robb, Manager, Mineral Development Division, Mineral and Petroleum Resources, NWT Region, Aboriginal Affairs and Northern Development Canada (AANDC). Mr. Robb formerly was Royal Oak’s Western Canada Exploration Manager when it was operating the Colomac Mine in the 1990’s. Howe personnel confirmed the condition of reported work sites and historic Royal Oak exploration activities, methodologies, quality assurance and quality control procedures, security, findings and interpretations etc. were discussed with Mr. Robb. The Colomac Property and Damoti Lake exploration camp were as reported by the Company.
Both racked and palletized (bundled) historic diamond drill core is stored immediately south of the blue storage building at the former millsite area (UTM NAD83 591,380E 7,142,960N) and near the north end of the airstrip (UTM NAD83 590,875E 7,141,675N). Mr. Robb indicated that a catalogue of the archived drill core is available at the NWT Geoscience office.
Core stored at the millsite area included 1980’s and 1990’s vintage core from the following zones: Colomac Zone 1.5, Grizzly Bear, Goldcrest and the 1670 and 1671 series drill holes which includes the 24/27 Zone. The 1980’s drill core was labeled using plastic Dymo tape which is disintegrating. Approximately 20% of the boxes remain labeled. Racked 1980’s core could be recovered since it has been archived in order. The bundled and palleted core may be more difficult to recover but each hole has been separately bundled. The 1990’s drill core is readily recoverable as it was labeled using aluminum Dymo tape. Royal Oak’s sample tags are often still present but illegible.
Core stored at the airstrip includes racked core from the Grizzly Bear Zone (1997) and Colomac Zone 3.5 (1997). The racks were improperly setup on an uneven surface which has resulted in some racks leaning and pinching the core boxes. The 1997 drill core is readily recoverable as it was labeled using aluminum Dymo tape. In the Colomac Zone 3.5 core boxes, Royal Oak’s sample tags are often still present and legible.
Howe collected four half core verification samples from the archived core.
On October 13th, 2011, a brief visit was made to the NWT Geoscience Office in Yellowknife at 4601- B 52nd Ave. Malcolm Robb introduced Howe personnel to Scott Cairns, Chief Geologist. Howe personnel spent several hours reviewing the available archived hardcopy Colomac data stored in the Geoscience Office’s warehouse.
Mr. Trinder returned to Yellowknife from November 7th to 9th, 2011 to conduct further searches for archived Colomac data stored in the NWT Geoscience Office’s warehouse and the old Royal Oak exploration and engineering office at the Giant mine site. Mr. Trinder was accompanied by Nighthawk personnel including Mr. David Wiley, President, Mr. Tom Elkin, Vice President, Dr. Michael Byron,
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 136 of 181 June 17, 2013
Chief Geologist and Dr. Robert Whitehead, Senior Staff Geologist.
On October 17th and 18th, 2012, Mr. Trinder attempted to conduct a site visit to the Colomac Property via helicopter accompanied by Mr. Andy Young of Discovery Mining Services, Yellowknife, NT. Both attempts were abandoned approximately halfway between Yellowknife and Colomac due rain, fog and icing conditions. On October 19th 2012, Mr Trinder conducted a visit to the ALS Global sample preparation facility, #3 Coronation Drive, Yellowknife NT. On May 4, 2013, Mr. Trinder conducted a visual inspection of select intervals of 2012 Colomac drill core stored at Nighthawk’s Sudbury ON office.
Howe intends to complete a site visit to the Colomac Property when Nighthawk next has personnel onsite and weather conditions permit access.
12.2 ACA HOWE 2011 VERIFICATION SAMPLING
Howe conducted limited verification sampling of archived diamond drill core during its October 2011 site visit. Mr. Trinder personally collected the samples and sealed the sample bags with ladder lock ties. Mr. Trinder maintained possession of the bagged samples and personally delivered the samples to SGS Canada’s geochemistry lab at 1885 Leslie Street, Toronto, Ontario. SGS-Toronto is an independant, reputable, ISO/IEC17025 accredited laboratory qualified for the material analysed. SGS quality control procedures are method specific and include duplicate samples, blanks, replicates, reagent / instrument blanks for the individual methods.
The samples were prepared using SGS sample preparation package PRP89, which consists of conventional drying if required, in 105oC ovens; crushing; splitting and; pulverizing. After drying, the sample was passed through a primary oscillating jaw crusher producing material of 75% passing a 2mm screen. A 250-gram sub-sample was split from the crushed material using a stainless steel riffle splitter. This split was then ground to 85% passing 75 microns or better using a ring pulveriser.
The verification samples were analysed for gold using SGS analytical code FAI323 and multi-elements using SGS analytical code ICP40B (Table 12-1).
TABLE 12-1: ACA HOWE VERIFICATION SAMPLES – SGS ANALYTICAL METHOD
Method code Description Lower Detection Limit FAI323 Au fire assay; ICP finish, 30 g nominal sample weight. 5 ppb Au ICP40B 32 elements by four-acid digestion; ICP-AES finish
The duplicate core samples provide an independent confirmation of the presence of significant gold mineralisation at the Colomac Property (Table 12-2). Data are too limited however, to make a meaningful comparison of Howe’s duplicate sample analytical results with historic original analytical results. Howe notes that the variation between the original and Howe duplicate assay results are
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 137 of 181 June 17, 2013
reasonable and are typical for gold exploration projects with a gold nugget effect.
TABLE 12-2: ACA HOWE VERIFICATION SAMPLES
ACA Hist Hist Hist Au From Howe Au Zone Drill Hole To (ft) Sample Au Au Metallics (ft) g/tonne # (oz/t) g/tonne Sample (g/tonne) # Grizzly ACA GB-96-23 301.0 305.0 23402 0.001 0.03 0.97 Bear 23402 ACA Gold Crest GC-90-16 341.4 343.9 117700 1.249 42.82 48.30 42.9 117700 Colomac Z3.5-97- ACA 939.0 943.0 26039 0.030 1.03 0.18 3.5 03 26039 Colomac Z3.5-97- ACA 1170.0 1172.0 27231 0.040 1.37 4.07 3.5 13 27231 CRM CDN-GS- Rec. 5.06 g/t ACA 5.36 (Standard) 5D Value: Au 2000
12.3 VERIFICATION OF HISTORIC DATA
Historic exploration data has been used in the estimation of mineral resources for the Colomac Property. Hard copy records and a historic Medsystem drill hole database were obtained and compiled by Nighthawk. Drill hole and trench collar, assay, survey and geology data were provided to ACA Howe in Microsoft Excel format. Raw data incorporated into this resource estimate consists of historic drill data collected at the Colomac project up to 1997.
A random selection of records in each of the Excel files provided by Nighthawk was checked against scanned copies of the hardcopy logs. Following this process, a resource development database was created utilising Micromine software.
Data files were checked and interrogated via Micromine validation functions prior to constructing a drill hole database for the deposit. The resulting database contains all available historic drilling and sampling data for the project. Key fields within these critical drill hole database data files was validated for potential numeric and alpha-numeric errors. Data validation cross referencing collar, survey, assay and geology files was performed to confirm drill hole depths, inconsistent or missing sample/logging intervals and survey data.
Many holes have missing or inaccurate down hole survey data. Despite the lack of survey data for IL, CKY and 1991 series holes, it was decided to retain drill hole information in the database. A number of holes demonstrate high levels of deviation.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 138 of 181 June 17, 2013
ACA Howe has reviewed the sample collection methodologies adopted by the historic operators and is of the opinion that data collection methodologies are of a standard that allows a meaningful investigation of gold mineralisation at Colomac for the generation of Inferred resources under CIM guidelines and provide the basis for the conclusions and recommendations reached in this Report.
12.4 VERIFICATION OF NIGHTHAWK 2012 DATA
In addition to historic exploration data drill hole data from Nighthawk’s 2012 diamond drill program has been used in Howe’s 2013 estimation of mineral resources for the Colomac Property. Drill hole collar, assay, survey and geology data from the 2012 program were provided to ACA Howe in Microsoft Excel format.
A random selection of records in each of the 2012 Excel files provided by Nighthawk was checked against the digital logs. Following this process, a resource development database combining historic and current data was created utilising Micromine software.
Data files were checked and interrogated via Micromine validation functions prior to constructing a drill hole database for the deposit. The resulting database contains all available historic and current drilling and sampling data for the project. Key fields within these critical drill hole database data files was validated for potential numeric and alpha-numeric errors. Data validation cross referencing collar, survey, assay and geology files was performed to confirm and correct drill hole depths, inconsistent or missing sample/logging intervals and survey data.
ACA Howe has reviewed Nighthawk’s sample collection methodologies and is of the opinion that data collection methodologies are to current industry standards and permit a meaningful investigation of gold mineralisation at Colomac for the purpose of resource estimation under CIM guidelines and provide the basis for the conclusions and recommendations reached in this Report.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 139 of 181 June 17, 2013
13 MINERAL PROCESSING AND METALLURGICAL TESTING
As of the date of this report, Nighthawk has conducted no mineral processing or metallurgical test work on mineralization from the Colomac Property.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 140 of 181 June 17, 2013
14 MINERAL RESOURCE ESTIMATES
Howe was commissioned by Nighthawk to prepare an update of Howe’s 2012 mineral resource estimate focusing on the historic Colomac, Goldcrest and Goldcrest North (Dyke Lake) zones. Howe’s 2012 mineral resource estimate of the Grizzly Bear, 24 and 27 Zones has not been updated and is restated herein (for details the Reader is referred to Lee and Trinder, 2012).
This updated study incorporates additional historic data from 1997 drill holes acquired in 2012 and the results of Nighthawk's 2012 drill campaign. Since Howe’s 2012 report, the Company has revised the geological interpretation at Colomac. The updated interpretation is described in Section 7.2 and is incorporated into this resource model. Resource estimate update methodologies, results, validations are presented in this section of the report.
The resource estimate presented in the following section has an effective date of June 17, 2013. The estimate was prepared in accordance with CIM Standards on Mineral Resources and Reserves (adopted November 27, 2010 and is reported in accordance with the Canadian Securities Administrators’ NI 43- 101. Classification, or assigning a level of confidence to Mineral Resources, has been undertaken with strict adherence to the CIM Standards on Mineral Resources and Reserves. In the opinion of Howe, the resource evaluation reported herein is a reasonable representation of the global gold mineral resources found in the Colomac Property gold deposits at the current level of sampling.
The mineral estimate was prepared by Leon McGarry, B.Sc., ACA Howe Geologist – Resources and supervised by Ian Trinder, M.Sc., P.Geo. (APGO, No. 452), ACA Howe Senior Geologist, an independent “qualified person” as defined in NI 43-101. Micromine® software (Version 12) was used to facilitate the resource estimation process.
Only mineral resources are identified in this report. No economic work that would enable the identification of mineral reserves has been carried out and no mineral reserves are defined. Mineral resources that are not mineral reserves do not account for mineability, selectivity, mining loss and dilution and do not have demonstrated economic viability. These mineral resource estimates include Inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these Inferred mineral resources will be converted to the measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.
14.1 DATA SUMMARY
Exploration data was validated and where appropriate used to estimate resources. Raw data incorporated into this resource estimate consists of historic drill data collected at the Colomac project up to 1997 and the results of 30 drill holes completed by Nighthawk in 2012. A review of findings pertaining to input data are presented in the report sections below and the suitability of this data for inclusion in current and future resource estimates is discussed in Section 14.11 Resource Classification.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 141 of 181 June 17, 2013
Howe’s previous February 2012 mineral resource estimate relied upon 1,120 historic drill holes. Historic hard copy records and a Royal Oak Medsystem drill hole database were obtained and complied by Nighthawk. Historic drill hole collar, assay, survey and geology data were provided to ACA Howe in .CSV format.
The updated drill database used in this resource update also incorporates the following additional holes that focus on deeper portions of Colomac zones 2 and 3:
Thirty diamond drill holes completed by Nighthawk in 2012 totaling 11,235 meters (C12-01 to C12-15). Some 6,843 assays were completed for 7,011 metres of sampling
Twenty historic Royal Oak diamond drill holes completed at Zone 3.5 in 1997. Hardcopy assay records for 1,874 samples totaling 1,950 meters were obtained by Nighthawk after the completion of the February 2012 Estimate.
The majority of the Colomac resource database is comprised of historic exploration data. New drilling accounts for 3% of holes and 5 % of core samples.
ACA Howe has reviewed sample collection methodologies adopted by previous operators and is satisfied that data collection methodologies are of a standard that allows a meaningful investigation of gold mineralization at Colomac for the generation of Inferred resources under CIM guidelines.
The sample collection methodologies employed by Nighthawk gold are in accordance with industry best practice.
14.2 DATA VALIDATION
As part Howe’s previous February 2012 estimate, a random selection of records in each of the Excel files provided by Nighthawk was checked against scanned copies of the hardcopy logs. This process was repeated for data acquired since the February 2012 estimate. New drill hole collar, assay, survey and geology data was appended to an updated resource development database utilizing Micromine software.
Data files were checked and interrogated via Micromine validation functions prior to constructing a drill hole database for the deposit. The resulting database contains all available historic drilling and sampling data for the project. Key fields within these critical drill hole database data files were validated for potential numeric and alpha-numeric errors. Data validation cross referencing collar, survey, assay and geology files was performed to confirm drill hole depths, inconsistent or missing sample/logging intervals and survey data.
Many holes have missing or inaccurate down hole survey data. Despite the lack of survey data for IL, CKY and 1991 series holes, it was decided to retain drill hole information in the database. A number of surveyed holes demonstrate high levels of deviation.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 142 of 181 June 17, 2013
Input data for estimation are outlined in Table 14-1.
TABLE 14-1: COLOMAC MICROMINE INPUT DATA FILES
Number of Number of MM Data Type Comment Records Holes MM Database DH Collar 1,126 1,126 DH Geology 5,181 802 DH Assay 49,465 1,109 DH Down Hole Survey 2,643 8,84
Additional Input Data Topographic contour files for the Colomac and Goldcrest zones. Topographic contour files for the Zone 2 and 3 pits.
14.2.1 DATA EDITING
14.2.1.1 Exploration Grid
Historic drill holes were surveyed in a local Mine Grid for which there is no current description, tie points or baselines available. Nighthawk 2012 series holes were surveyed using the NAD83 UTM projection. To enable the correct relative positioning of recent and historic drilling, mine grid coordinates were converted to UTM.
Howe notes that when georeferenced, the Colomac Mine Grid plan is undistorted when projected in the North West Territory Lambert conformal conic projection ("NWT Lambert"). The Northwest Gold Corp report (Cohoon et al., 1991a) on the Colomac 1989-1991 exploration programmes states that the Mine Grid North is orientated at 357.5 True North. This is in accordance with NWT Lambert Grid North. Howe considers it likely that the base map used to generate the local mine grid was in NWT Lambert projection and therefore NWT Lambert is used in the conversion of the Mine Grid to NAD83 UTM.
As part of the Nighthawk 2012 exploration campaign a selection of historic collars were located and surveyed in NAD83 UTM. These UTM coordinates are reprojected into the Lambert coordinate system using GIS Software. Converted coordinates are compared to Mine Grid coordinates to derive a conversion regression equation.
Once established, the regression equation is applied to Mine Grid coordinates to generate NWT Lambert coordinates that can be reprojected to NAD83 UTM using GIS Software.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 143 of 181 June 17, 2013
14.2.1.2 Historic Downhole Surveys
The diagram below shows the changes to drill hole azimuths that must be applied to a drill hole oriented at 270° true north when plotted in the mine grid (+2.5°) and NAD83 UTM (-2°).
To account for grid rotation and accurately plot holes in NAD83 UTM, 4.5° is subtracted from historic drill hole survey azimuths, 2.0° is subtracted from new drill hole survey azimuths.
FIGURE 14-1. NAD83 UTM GRID ROTATIONS
Historic downhole survey data used in the February 2012 estimate was derived from the Royal Oak Medsystem program database. The program uses mid-point tangential averaging to generate downhole survey points. Points are positioned halfway between real survey points, strike and dip values are averaged from neighboring, real, observations.
The discrepancy between real and Medsystem downhole survey values was identified following a review of hardcopy records in October 2012. The current database is corrected. Corrected drill hole traces differ slightly from those used to generate the February 2012 estimate. However, the correction of downhole survey values does not generate a significant change in mineralization model volumes.
14.2.1.3 Problematic Intervals
The Royal Oak 1996 report on the Geostatistical Re-evaluation of Ore Reserves within the Zone 2.0 Pit, states that Hole 2.0-93-002 was removed from the resource estimation database because of a possible survey error or problems with analysis. Accordingly, this hole has been removed from the current dataset.
All UG and UGS series underground samples were removed from the resource dataset. It was considered that the limited distribution of these samples within mined portions of the deposit would hinder the generation of meaningful variograms for the remainder of the deposit.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 144 of 181 June 17, 2013
A number of minor edits were made to make uniform drill hole depths, downhole survey depths and depth of assay samples and geological observations.
14.2.1.4 Lithology
The April 1996 Royal Oak report “Geostatistical Re-evaluation of Ore Reserves within the Zone 2.0 Pit” (Thon, 1996a) states that gold mineralisation strike with the Quartz Feldspar Porphyry (QFP) dyke and dip steeply with the dyke (now referred to as Quartz Diorite Colomac Sill).
A change in terminology is identified in 2012 drill logs. It is apparent that:
‘Quartz Diorite’ intervals in 2012 logs correspond spatially to ‘QFP’ intervals in historic logs. ‘Quartz Gabbro’ intervals in 2012 logs correspond spatially to ‘Diorite’ intervals in historic logs. The historic Colomac Dyke is now considered by Nighthawk to be the quartz diorite portion of a larger fractionated quartz-diorite – quartz gabbro sill (the Colomac Sill).
To account for the change in terminology, apparently corresponding logged lithologies in historic and 2012 drilling are grouped together using current lithological codes.
14.3 DOMAIN INTERPRETATION
14.3.1 GEOLOGY
14.3.1.1 Lithology
Geological modeling is undertaken using Leapfrog™ Software. Leapfrog™ is algorithm-based solid modeling software that uses mathematic best-fit (implicit) computations to rapidly generate geologic solids and grade shells from point data.
Points are extracted at the first and last occurrences of lithology intervals associated with mineralization down hole. Wireframe models are generated for the ‘Quartz Diorite’ and ‘Quartz Gabbro’ lithologies. All other lithologies are considered barren ‘Country Rock’.
The quartz diorite/quartz gabbro portion of the Colomac Sill is in sharp contact with andesite units to the east; the western contact of quartz diorite with quartz gabbro and quartz gabbro with volcanics is gradational and visually difficult to establish. The quartz diorite portion of the Colomac Sill is modeled as the primary host of mineralization.
Depth of overburden points are used to generate an overburden wireframe DTM. A topography model is interpolated from historic contour data. Wireframe Boolean functions are used to honor correct cross cutting relationships. Geological domain wireframes are shown in.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 145 of 181 June 17, 2013
14.3.1.2 Colomac Sill
Historic surface mapping and diamond drilling indicate dominant east-west offsets and cross faulting although evidence of cross faulting in core such as breccia, gouge or brittle failure is rare (Burns, 1987). It is suggested that sudden changes in the orientation, width and continuity of the Quartz Gabbro are associated with fault displacement (Budinski, 1989).
Based on geological observations, Howe has interpreted three Colomac deposit areas that include 5 domains:
The northern limb of the sill, termed Colomac North in this study, includes a thin discontinuous and weakly mineralized quartz diorite domain.
The domain has two breaks that result in three separate wireframe sets. In the February 2012 resource these were modeled separately. For efficiency in the current study they are grouped as one domain entitled 1.00
The central portion of the sill, termed Colomac Central is bound by a northwest trending fault to the north and a southwest trending fault to the south. The 1996 Royal Oak resource study identified one major fault offset that is incorporated into the Leapfrog model dividing the Colomac Central zone into domains 2.0 and 2.1 A cross section through Zone 2 is shown in Figure 14-3.
The 1996 Royal Oak resource study also identified a cross cutting intrusion. In the February 2012 resource domains either side of the intrusion were modeled separately. The intrusion is included in Leapfrog model domain 2.0 however there is no subdivision of domain 2.0.
The southern limb of the sill encompassing the Zone 3 pit is termed Colomac South in this study and includes two domains, 3.0 and 3.5, which are separated by a cross cutting fault orientated to the southwest. A cross section through Zone 3.5 is shown in Figure 14-4.
14.3.1.3 Goldcrest Sill
The Goldcrest Sill is an interpreted second sill lower in geological sequence at Colomac. It is the focus of historic drilling in two areas, Goldcrest North and Goldcrest South.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 146 of 181 June 17, 2013
FIGURE 14-2 LEAPFROG MODEL OF THE COLOMAC SILL
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 147 of 181 June 17, 2013
FIGURE 14-3: GEOLOGICAL MODEL ZONE 2.0 – SECTION 7142900 LOOKING NNE
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 148 of 181 June 17, 2013
FIGURE 14-4: GEOLOGICAL MODEL ZONE 3.5 – SECTION 7140980 LOOKING NNE
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 149 of 181 June 17, 2013
14.3.1.4 Satellite deposits
Grizzly Bear Zone and 24/27 Zones were not remodeled and were not updated in the resource estimation update study. In 2012, the Grizzly Bear and 27/24 zones, domains were defined by a 0.2ppm Au grade envelope constructed on cross sections in the plane of drill fences. The Grizzly Bear zone includes three small wireframe grade envelopes based on a 0.2ppm Au modelling cut off. These domains are called GB.1, GB.2 and GB.3. 24/27 Zone consists of two mineralised domains based on a 0.2ppm Au modelling cut off. The domains are called 24 and 27. The Reader is referred to Section 6.15 of this Report and Howe’s 2012 report (Lee and Trinder, 2012)
14.3.1.5 Overburden Boundary
Drill hole lithological logging was used to model the barren overburden. At the base of overburden material, as logged in drill holes, string points were created for each hole and joined to produce an overburden DTM. After modeling the block model was constrained by this DTM and all blocks situated above the DTM were deleted.
Drill data for use in interpreting the base of oxidation are not available at the time of this study. Therefore the base of oxidation and base of transitional weathering boundaries (if present) were not modeled for the purpose of domaining the block model for interpolation, assigning bulk densities and reporting. Based on Howe’s site visit and visual inspection of the historic open pits, there does not appear to be any significant oxidation/weathering horizon present at Colomac.
14.3.1.6 Density
In 2012 Nighthawk submitted 15 bulk density samples for analysis at SGS Mineral Services in Garson, Ontario. Density samples were selected from mineralised intervals. Thirteen quartz diorite samples returned a mean bulk density of 2.70 t/m3 and two quartz gabbro samples returned values of 2.71 and 2.50 t/m3. The limited number of quartz gabbro samples prevents the application of lithology specific densities.
The 2012 results support the default bulk density value of 2.69 t/m3 (0.076 metric tonnes per cubic foot) used in the Royal Oak 1996 resource update report.
For Howe’s resource estimate a default bulk density value of 2.7 t/m3 is utilized.
14.3.2 MINERALISATION
The 2013 estimate update utilizes geological domaining to develop mineralization wireframes. The quartz diorite and surrounding quartz gabbro are modeled as separate mineralization domains.
The quartz diorite portion of the intrusion is the primary host of mineralization. The fractionation of the sill results in distinct high grade and low grade domains. There are no logged lithological features that define the higher grade horizon within the sill. A 0.5 g/t Au minimum modeling cutoff grade is
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 150 of 181 June 17, 2013
used to define the higher grade portion of the sill in each portion of the deposit (Table 14-2).
High grade mineralized domains are extended along strike by a distance equal to the drill hole spacing. - Domains are extended to a depth approximately 50 metres below deepest mineralized interval in that domain unless limited by a barren hole.
The remaining quartz diorite defines a low grade zone in each portion of the deposit.
Within the quartz gabbro, mineralization is discontinuous and 'spotty'. A 0.1 g/t Au minimum modeling cutoff grade is used to develop quartz gabbro grade shells.
Leapfrog™ boundaries were used to define the three dimensional geometry of each interpreted feature. Mineralized domains are hard boundaries for the purposes of resource estimation. Samples that are located in one domain will not inform the grade of a block within another. The extent of each domain is presented in Table 14-3.
TABLE 14-2: ROCK CODES IN THE COLOMAC GOLD PROJECT BLOCK MODEL
Zone Lithology Grade Domain Domain Code Low grade (below 0.5 g/t Au gold) 1.0_ DIO _LG Colomac Quartz Diorite Higher grade (above 0.5 g/t Au) 1.0_ DIO _HG North Quartz Gabbro Low grade (above 0.2 g/t Au gold) 1.0_QGB 2.0_DIO_LG Low grade (below 0.5 g/t Au gold) 2.1_DIO_LG Quartz Diorite Colomac 2.0_DIO_HG Higher grade (above 0.5 g/t Au) Central 2.1_DIO_HG 2.0_ QGB Quartz Gabbro Low grade (above 0.2 g/t Au gold) 2.1_ QGB 3.0_DIO_LG Low grade (below 0.5 g/t Au gold) 3.1_DIO_LG Quartz Diorite Colomac 3.0_DIO_HG Higher grade (above 0.5 g/t Au) South 3.1_DIO_HG 3.0_ QGB Quartz Gabbro Low grade (above 0.2 g/t Au gold) 3.1_ QGB Goldcrest Low grade (below 0.5 g/t Au gold) GCN_DIO_LG Quartz Diorite North Higher grade (above 0.5 g/t Au) GCN_DIO_HG Low grade (below 0.5 g/t Au gold) GCS_DIO_LG Goldcrest Quartz Diorite Higher grade (above 0.5 g/t Au) GCS_DIO_HG South Quartz Gabbro Low grade (above 0.2 g/t Au gold) GCS_ QGB
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 151 of 181 June 17, 2013
TABLE 14-3: COLOMAC DOMAIN WIREFRAMES
Accum Depth Thick- Drill Deposit Modelled Strike n n Strike Extent ness Sample Area Domain (deg) Holes Samples (m) (m) (m) Density (m) 30 x 30 to 1,000 500 3 25 1.0_DIO_HG 120 x 120 41 447 Colomac 30 x 30 to North 2,600 630 3 30 1.0_DIO_LG 120 x 120 79 2228
30 x 30 to 1,000 360 3 10 1.0_QGB 120 x 120 30 113 2.0_DIO_HG 750 650 17 25 15 x15 347 7593 2.0_DIO_LG 840 1000 17 75 15 x15 185 2950 Colomac 2.0_QGB 700 450 17 15 15 x15 43 244 Central 2.1_DIO_HG 550 200 13 25 15 x15 110 1513
2.1_DIO_LG 680 530 13 60 15 x15 125 2049 2.1_QGB 750 300 13 15 15 x15 58 287 3.0_DIO_HG 375 200 15 25 30 x 30 44 552 3.0_DIO_LG 450 500 15 30 30 x 30 59 648 Colomac 3.0_QGB 430 350 15 10 30 x 30 40 154 South 3.5_DIO_HG 675 900 15 30 15 x15 122 2092
3.5_DIO_LG 675 1000 15 30 15 x15 146 2696 3.5_QGB 450 900 15 15 15 x15 97 622 Goldcrest GCN_DIO_HG 400 750 15 25 30 x 30 23 187 North GCN_DIO_LG 250 400 15 20 30 x 30 18 1103 30 x 30 to 400 300 20 25 GCS_DIO_HG 60 x 60 60 267 Goldcrest 30 x 30 to 250 100 20 5 South GCS_DIO_LG 60 x 60 37 1339 30 x 30 to 300 180 20 10 GCS_QGB 60 x 60 34 159
14.4 CLASSICAL STATISTICS
Descriptive statistical analysis of assay data is undertaken for the identification of assay populations, which may represent separate styles of gold mineralization. Specifically this analysis is undertaken to estimate the natural gold cut-off grade that defines mineralized envelopes, and to determine the distribution parameters for gold.
Table 14-4 contains raw descriptive statistics generated for each mineralization domain within the Colomac gold deposit extents shown in Figure 14-2.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 152 of 181 June 17, 2013
TABLE 14-4: STATISTICS FOR RAW GOLD ASSAYS FOR ALL RESOURCE DOMAINS
Zone Domain Code Count Min Max Mean St Dev Var
1.0_DIO_HG 447 0.00 20.57 1.216 2.27 5.17 Colomac 1.0_DIO_LG 2228 0.00 11.48 0.195 0.44 0.20 North 1.0_QGB 113 0.03 8.57 0.669 1.16 1.35 2.0_DIO_HG 7593 0.00 382.36 2.523 8.07 65.09 2.0_DIO_LG 2950 0.00 29.48 0.397 1.15 1.32 Colomac 2.0_QGB 244 0.03 27.42 1.084 2.73 7.45 Central 2.1_DIO_HG 1513 0.00 169.52 2.144 6.64 44.05 2.1_DIO_LG 2049 0.00 128.21 0.478 3.09 9.56 2.1_QGB 287 0.00 67.53 1.072 4.60 21.19 3.0_DIO_HG 552 0.00 85.94 1.849 5.13 26.37 3.0_DIO_LG 648 0.00 10.76 0.341 0.69 0.47 Colomac 3.0_QGB 154 0.00 3.26 0.573 0.61 0.37 South 3.5_DIO_HG 2092 0.00 174.00 2.303 7.13 50.78 3.5_DIO_LG 2696 0.00 11.66 0.302 0.67 0.44 3.5_QGB 622 0.00 114.53 1.499 5.87 34.50 Goldcrest GCN_DIO_HG 187 0.034 36.58 2.345 4.20 17.65 North GCN_DIO_LG 1103 0 10.353 0.239 0.65 0.42 GCS_DIO_HG 267 0.00 46.45 3.766 6.82 46.52 Goldcrest GCS_DIO_LG 1339 0.00 30.96 0.238 1.11 1.23 South GCS_QGB 159 0.00 17.17 0.988 2.05 4.21
14.5 TOP CUTS
Top cut analysis was performed on all raw gold assay data for the Colomac Project prior to block model grade interpolation. Whilst extreme grades are real, high grade outliers are not usually statistically representative of assay populations and may overstate the block grades in some parts of the deposit if left uncut.
A top cut of 31.104 ppm Au was selected to prevent the undue influence of higher grade assays during grade interpolation. Top cutting at this grade affects 88 samples (0.18% of the total).
14.6 COMPOSITES
Most of the historic core assay samples were 3 feet in length. Nighthawk 2012 drilling was sampled at 1.5 meter lengths.
Prior to estimation, samples that fell within mineralized domain wireframes were composited to a standard length of 1.5 m to reduce bias for geostatistical analysis and interpolation. The composite
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 153 of 181 June 17, 2013
length was determined by considering the histogram for raw sample intervals from the drill hole database.
A composite assay file was created for samples within the domain wireframes for use as input for block model interpolation. Composite statistics for each domain are presented in Table 14-5.
TABLE 14-5: STATISTICS FOR CAPPED GOLD COMPOSITES FOR ALL RESOURCE DOMAINS
Zone Domain Code Count Min Max Mean St Dev Var 1.0_DIO _HG 445 0 19.3 1.192 1.912 3.657 Colomac 1.0_DIO _LG 2348 0 4.899 0.178 0.320 0.103 North 1.0_QGB 116 0.034 6.009 0.593 0.857 0.734 2.0_DIO_HG 6781 0 31.104 2.045 2.408 5.799 2.0_DIO_LG 2781 0 21.268 0.335 0.773 0.598 Colomac 2.0_QGB 255 0 17.796 0.911 1.895 3.591 Central 2.1_DIO_HG 1536 0 30.911 1.874 2.567 6.590 2.1_DIO_LG 2070 0 28.671 0.454 1.192 1.421 2.1_QGB 289 0 26.398 0.931 2.667 7.114 3.0_DIO_HG 561 0.123 31.104 1.656 2.233 4.985 3.0_DIO_LG 773 0 10.076 0.312 0.632 0.400 Colomac 3.0_QGB 169 0 2.175 0.523 0.469 0.220 North 3.1_DIO_HG 1623 0 27.583 1.99 2.656 7.057 3.1_DIO_LG 2233 0 8.479 0.278 0.504 0.254 3.1_QGB 616 0 30.074 1.134 2.589 6.703 Goldcrest GCN_DIO_HG 161 0.157 31.104 2.452 3.544 12.561 North GCN_DIO_LG 1108 0 4.436 0.207 0.375 0.141 GCS_DIO_HG 230 0.066 27.358 2.979 3.592 12.899 Goldcrest GCS_DIO_LG 1413 0 13.224 0.181 0.572 0.327 South GCS_QGB 150 0 11.678 0.861 1.435 2.059
14.7 GEOSTATISTICS
Spatial data analysis was considered prior to block model grade estimation in an attempt to generate a series of semi-variograms that would define the directions of anisotropy and spatial continuity of gold grades within each lithology population, such that these variogram parameters could be used as inputs to the Ordinary Kriging ("OK") grade estimation technique.
Variography was initially undertaken to:
Estimate the presence of directional anisotropy of gold mineralization within the deposit. There is directional anisotropy if semi-variograms reach the total sill at different distances in
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 154 of 181 June 17, 2013
different directions.
Estimate the spatial continuity of gold grades in the main directions of anisotropy in each deposit domain. The continuity of gold grades can be estimated using the semi-variogram ranges, i.e. the distance at which the semi-variogram reaches the total sill (where the variance trend reaches a plateau or disintegrates).
Accordingly, grades cannot be estimated reliably if the search radius for grade interpolation is greater than the semi-variogram range. When the semi-variogram reaches the sill, there is no correlation between pairs of samples at that sample distance.
Obtain semi-variogram parameters to be input into the interpolation process.
Variography was performed on 1.5 m composite assay data flagged within each domain envelope.
To ensure sufficient sample pairs were available to create of meaningful variograms, domains that contained the largest number of samples were taken to be representative of their portion of the deposit. To that end variography was undertaken for domains 1.0, 2.1, 3.0, Goldcrest North and Goldcrest South.
Down hole experimental variograms were generated for each domain to estimate the nugget effect for the mineralised zone. Horizontal variograms and directional semi-variogram model maps were generated to identify the direction of maximum continuity of gold grade distribution.
Interpreted anisotropy directions correspond well with the modeled geology and overall geometry of the interpreted domains. Details of variogram models generated for each resource zone is presented in Table 14-6.
The trend of low grade mineralisation in the quartz diorite domain of the Colomac Sill is between 015° in the south and 010° in the north. The along strike (major axis) range is estimated to be 115 m for high grade samples and 70 m for the lower grade portion. Down dip (semi-major) axis plunge ranges from vertical 80° to 90 ° (vertical). Down dip range in the quartz diorite domain is from 70 m for the higher grade portion to 140 m in the low grade portion. The across strike (minor) axis range is 20m for both the high grade and low grade portions of the quartz diorite domain of the Sill respectively.
Variography in the discontinuous quartz gabbro domain was poorly behaved.
Mineralization in the Goldcrest South and Goldcrest North zones have a shorter continuity ranges, and show limited anisotropy.
At the Grizzly Bear and 24/27 domains, spatial data analysis was undertaken in an attempt to generate a series of semi-variograms that would define the directions of anisotropy and spatial continuity of gold grades within each indicator population, such that these variogram parameters could be used as inputs to MIK grade estimation. The Reader is referred to Section 6.15and Howe’s 2012 report (Lee
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 155 of 181 June 17, 2013
and Trinder, 2012).
TABLE 14-6 MODELED VARIOGRAM PARAMETERS FOR GOLD GRADE INTERPOLATION
Ellipse Rotation* Range (m) Nugget Zone Model P Sill Semi- z y x (Co) Major Minor Major Colomac North DIO_HG 10 0.00 80.00 0.9 (61%) Spherical 0.57 115 115 20 DIO_LG 10 0.00 80.00 0.9 (46%) Spherical 1.07 70 140 20 QGB 10 0.00 80.00 0.9 (46%) Spherical 1.07 70 140 20 Colomac Central DIO_HG 15 0.00 80.00 0.45(46%) Spherical 0.53 115 115 20 DIO_LG 15 0.00 80.00 0.7 (41%) Spherical 0.99 70 140 20 QGB 15 0.00 80.00 0.7 (41%) Spherical 0.99 70 140 20 Colomac South DIO_HG 15 0.00 80.00 0.5 (55%) Spherical 0.415 115 115 20 DIO_LG 15 0.00 80.00 0.8 (40%) Spherical 1.187 70 140 20 QGB 15 0.00 80.00 0.8 (40%) Spherical 1.187 70 140 20 Goldcrest North DIO_HG 15 0.00 80.00 0.45 (46%) Spherical 0.53 80 80 20 DIO_LG 15 0.00 80.00 0.7 (41%) Spherical 0.99 50 50 20 Goldcrest South DIO_HG 15 0.00 80.00 0.5 (55%) Spherical 0.415 80 80 20 DIO_LG 15 0.00 80.00 0.8 (40%) Spherical 1.187 50 50 20 QGB 15 0.00 80.00 0.8 (40%) Spherical 1.187 50 50 20
14.8 RESOURCE ESTIMATION METHOD
The following historic observations were considered when identifying the most appropriate resource estimation method at Colomac.
Gold occurs in disseminated stock works within the Colomac Sill. Gold mineralization occurs in well-defined "zones" that trend sub parallel to the sill. Zones are interpreted to result from brittle fracturing of an upper quartz-rich part of the sill.
- Gold grades were interpolated into the block models on a domain by domain basis. For interpolation both the block model and composite assay file was filtered by domain and blocks within each domain assigned an interpolated grade using only
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 156 of 181 June 17, 2013
composite data falling within each domain (i.e. wireframe restricted or closed interpolation).
Mineralization at Colomac exhibits a large degree of variation. In many domains, higher grade (>1 g/t) populations are intermixed with low grade samples.
- Pitard (1996) noted a large gold heterogeneity with assay grades showing Poisson skewness associated with a high nugget effect. It was also noted that because of the relatively low overall grade of the deposit, erratically high assays can have a very profound effect on average resource grades. - Wireframe defined grade shells are used to define mineralized zones within each geological domain and limit the spatial influence of higher grade samples.
14.9 GRADE INTERPOLATION
Gold grade interpolation is undertaken using top cut and composited drill. For each domain, the Ordinary Kriging ("OK") interpolation technique is used to interpolate block grades at increasing search radii, until all blocks within each domain receive an interpolated grade or are assigned a null value.
The Ordinary Kriging (OK) interpolation method is a linear geostatistical method that uses the measured anisotropy of the deposit to weight composite assay values in the three orientation axes of mineralization within the deposit.
Satellite deposits at Grizzly Bear and the 24/27 Zones were not included in the 2013 resource estimation update study. In 2012, the Multiple Indicator Kriging Method (MIK) of grade interpolation was used to interpolate block model grades. The Reader is referred to Section 6.15and Howe’s 2012 report (Lee and Trinder, 2012).
14.9.1 SEARCH ELLIPSE PARAMETERS
Three search ellipse parameters are determined by means of the evaluation of the geological model, exploration data spacing and by analysis of the variogram parameters for the Colomac Sill as described in Section 14.7.
The first search radii are equal to half the variogram model. The second search radii are equal to two thirds of the range in the strike, dip and across dip directions of the variogram model. The third search radii are equal to the variogram model.
Model blocks that did not receive a grade estimate from the first interpolation run are used in the next interpolation run.
Data used to interpolate grade into the Colomac block model contains locally clustered drill hole
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 157 of 181 June 17, 2013
sample data that has the potential to introduce local bias. Domains containing clustered data may overstate block grades compared to, in some areas, relatively sparse drilling data. To address this issue the interpolations include a restriction on the maximum number of samples that can be used in block estimation. The search ellipse is divided into four sectors and a constraint of a maximum of 10 samples per sector applied, essentially de-clustering the data.
To honor the sub vertical geometry of interpreted mineralized domains, a maximum of 10, 1.5 m composite samples are permitted per hole. The limited 10 m vertical extent of samples in angled holes is comparable to block vertical dimension.
Run one and Run two block estimates are informed by a minimum of two drill holes. Run three block estimates are informed by one or more drill holes. Run 1 block estimates require a minimum of 2 samples per hole and 4 samples in total. Run 2 and 3 block estimates require a minimum of 2 samples per hole. Detailed definition of the interpolation parameters used in the estimation of updated resources is contained in Table 14-7.
TABLE 14-7: BLOCK MODEL INTERPOLATION PARAMETERS
Interpolation Method Ordinary Kriging Interpolation Run # 1 (Inferred) 2 (Inferred) 3 (Inferred) or 1/2 range* in 2/3 to the range in main Equal to the range in Search Radii main directions directions main directions Number of Sectors 4 4 4 Max no of Samples per Sector 10 10 10 Min Number of Drill Holes 2 2 1 Min Number of Samples per Hole 2 2 2 Max Number of Samples per Hole 10 10 10 Min number of Samples (Total) 4 4 2 Max number of Samples (Total) 40 40 40 Discretisation 2*2*2 2*2*2 2*2*2
14.10 BLOCK MODELING
14.10.1 EMPTY CELL BLOCK MODEL
An empty block model was created to cover the extents of mineralized wireframes at Colomac. A parent block size of 5 m × 10 m × 10 m was selected after considering the extent of geological model, drill data spacing, composite size, and potential mining methods
Domain wireframes were assigned to the block model, such that blocks falling inside any given domain were assigned to that domain. All blocks outside the wireframe model were then deleted
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 158 of 181 June 17, 2013
during the assigning of wireframes
A DTM surface derived from contour string files of unknown age were used to constrain the block model. Blocks situated above the DTM surface were removed from the resource model.
Historic mined pit shells were generated from contour string files contained in the Royal Oak MEDSystem database, the shells extend to the 250 m (820 ft) level. The October 1997 Summary Documentation on Closure of Mining Operations states that mining had progressed to the 225 m (740 ft) level at Zone 2 and the 323 m (1060 ft) level at Zone 3. Accordingly, pits were manually projected to incorporate mining losses since the generation of the original shell. Blocks situated above the pit surfaces were removed from the resource model.
The block cell size approximates the current drill hole spacing for the bulk of the deposit, with some areas of the deposit drilled to closer sample spacing. The size of the resource model blocks reflects the philosophy that accurate estimation of the grade of small blocks from assays in wide spaced drill-holes is impossible, and that large blocks will lead to more robust resource estimates, which will more closely resemble the resources achieved during mining.
In 2012, an empty block model was created for the Grizzly Bear and 27/27 Zone satellite deposits in the Mine Grid with a parent block size of 12.5 ft × 25 ft × 20 ft.
14.11 RESOURCE CLASSIFICATION
The CIM Definition Standards on Mineral Resources and Mineral Reserves, prepared by the CIM Standing Committee on Resource Definitions and adopted by the CIM council on November 27, 2010 provide standards for the classification of Mineral Resources and Mineral Reserve estimates into various categories. The category to which a resource or reserve estimate is assigned depends on the level of confidence in the geological information available on the mineral deposit, the quality and quantity of data available, the level of detail of the technical and economic information which has been generated about the deposit and the interpretation of that data and information. Under CIM Standards:
Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.
A Measured Mineral Resource, as defined by the CIM Standing Committee is “that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 159 of 181 June 17, 2013
holes that are spaced closely enough to confirm both geological and grade continuity.”
An Indicated Mineral Resource as defined by the CIM Standing Committee is “that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonable assumed.” And,
An Inferred Mineral Resource as defined by the CIM Standing Committee is “that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, working and drill holes.”
Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.
Classification, or assigning a level of confidence to Mineral Resources, has been undertaken with strict adherence to the CIM Standards on Mineral Resources and Reserves.
Only mineral resources are identified in this report. No economic work that would enable the identification of mineral reserves has been carried out - no mineral reserves are defined. Mineral resources that are not mineral reserves do not account for mineability, selectivity, mining loss and dilution and do not have demonstrated economic viability. These mineral resource estimates include Inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these Inferred mineral resources will be converted to the measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.
The resource classification methodology follows ACA Howe Resource Modeling Standard Procedures (2006). The classification of interpolated blocks was undertaken by considering the following criteria:
Interpolation criteria based on sample density, search and interpolation parameters. Assessment of the reliability of geological, sample, survey and bulk density data. Robustness of the geological model.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 160 of 181 June 17, 2013
Grade continuity confidence
All blocks captured in the search range have been classified as “Inferred” resources.
The current drill data spacing over the project is adequate to define grade continuity in three dimensions at the required level of confidence to define Indicated resources in all domains in the Colomac central and south domains. However there are a number of points that preclude the generation of such resources:
Only limited validation sampling has been undertaken by ACA Howe.
Only limited quality assurance and quality control data is available for historic assays. Despite this, there is no reason to suspect that assays contained in the Colomac database are not representative of in situ mineralisation.
There is no digital record of core recovery or geotechnical data. It is not possible to determine the quality of core samples and the assay values derived from them.
The quality of drill collar location data and down-the-hole survey data is unknown. A number of holes demonstrate high levels of deviation
Digital geological logs are over simplified. It is not possible accurately reconcile grade with geology at a resolution necessary for indicated and measured category resources. Structural data has not been utilized in the preparation of this resource estimate.
A universal density value is used.
With additional work, these issues can be addressed to enable rapid resource classification upgrades.
14.12 MODEL VALIDATION
Resource model validation was undertaken on the Colomac block model prior to resource reporting.
14.12.1 GLOBAL VALIDATION
For each domain, mean composite grades and mean block grades are compared to assess the potential over or under estimation of block grades during interpolation relative to the composites. Results are presented in Table 14-8.
A degree of smoothing of grade is inevitable when estimating block grades. However, at the current data spacing of the deposit, input composite grades used compare favorably to mean block grades
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 161 of 181 June 17, 2013
TABLE 14-8: COMPARISON OF MEANS
Domain Comp Mean BM Mean Diff in Means 1.0_DIO_HG 1.192 1.17 -2% 1.0_DIO_LG 0.178 0.15 -16% 1.0_QGB 0.593 0.68 14% 2.0_DIO_HG 2.045 1.75 -15% 2.0_DIO_LG 0.335 0.28 -17% 2.0_QGB 0.911 0.76 -17% 2.2_DIO_HG 1.874 1.71 -9% 2.2_DIO_LG 0.454 0.29 -37% 2.2_QGB 0.931 1.08 16% 3.0_DIO_HG 1.656 1.69 2% 3.0_DIO_LG 0.312 0.26 -16% 3.0_QGB 0.523 0.46 -13% 3.5_DIO_HG 1.990 2.09 5% 3.5_DIO_LG 0.278 0.15 -44% 3.5_QGB 1.134 1.32 16% GCN_DIO_HG 2.452 2.47 1% GCN_DIO_LG 0.207 0.19 -8% GCS_DIO_HG 2.979 3.09 4% GCS_DIO_LG 0.181 0.06 -67% GCS_QGB 0.861 0.56 -36%
14.12.2 LOCAL VALIDATION
Once grade interpolation is complete the block model is displayed in 2D Slices along with composite drill hole data in order to assess whether block grades honor the general sense of composite drill hole grades, that is to say that high grade blocks are located around high sample grades, and vice versa.
A degree of local smoothing is apparent but on the whole block grades correlate very well with input composite sample grades. Example sections through Domains 2.0 and 3.5 are presented in Figure 14-5 and Figure 14-5.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 162 of 181 June 17, 2013
FIGURE 14-5: BLOCK MODEL VALIDATION ZONE 2.0 – SECTION 7142900 LOOKING NNE
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 163 of 181 June 17, 2013
FIGURE 14-6: BLOCK MODEL VALIDATION –ZONE 3.5 – SECTION 7140980 LOOKING NNE
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 164 of 181 June 17, 2013
14.12.3 SECTIONAL VALIDATION PLOTS
In all domains mean block grades are generally lower than the mean composite grade because, during the interpolation process, extrapolation of the upper grade population data is limited so as not to overestimate the grade of blocks. The mean in situ grade of these domains is considered to have been reliably estimated.
FIGURE 14-7 COMPOSITE ASSAYS VS. BLOCK MODEL GRADE VARIATION WITH DEPTH
2.500 2500
2.000 2000
1.500 1500
1.000 1000
NumberSamples of GoldGrade (ppmAu) 0.500 500
0.000 0
60 20
-20 -60
380 340 300 260 220 180 140 100 -100 RL Interval (metres)
Mean Block Grade Mean Comp Grade Number of samples
14.13 RESOURCE ESTIMATE REPORTING
14.13.1 REASONABLE PROSPECTS FOR ECONOMIC EXTRACTION
CIM Definition Standards for Mineral Resources and Mineral Reserves (November 27, 2010) defines a mineral resource as: “a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge”.
CIM Definition Standards for Mineral Resources and Mineral Reserves (December 2005) requirement
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 165 of 181 June 17, 2013
that resources have “reasonable prospects for economic extraction” generally implies that the quantity and grade estimates meet certain economic thresholds and that the mineral resources are reported at an appropriate cut-off grade taking into account extraction scenarios and processing recoveries. Howe considers that portions of the Colomac Property gold mineralization are amenable for open pit extraction. Deeper drill indicated mineralization that could possibly be extracted using an underground mining method has not been considered in this resource estimate.
Howe’s chosen “block cut-off”1 grade for defining mineral resources is 0.6 g/tonne gold. Considering a mining recovery of 100%, an overall processing recovery of 90%, and a 3 year average gold price of $US 1500 per troy ounce gold (June 17, 2013), mineralized rock with this grade would have a value of approximately $US 26. Howe considers this a reasonable value for conventional surface mining – the most likely mining method that would be applied to the currently outlined mineralized bodies. Approximately 70% of mineral resource is within 300 metres of surface and the maximum extent of the mineral resource wireframe is locally approximately 500 metres below surface which is within the limits of modern open pit mining methods. It is Howe’s opinion that the mineral resource meets the criteria of “reasonable prospects for economic extraction” given the early stage of the mineral resource assessment and the Inferred classification of the entire mineral resource.
14.13.2 RESOURCE ESTIMATE REPORT
It is ACA Howe’s opinion that resources estimated as part of this study meet with the CIM “Inferred” category. Classifications are based upon consideration of the quality of input data, modeling and estimation methodology, interpolation criteria based on sample density, search and interpolation parameters, understanding and robustness of the geological model, and density.
For the defined and modeled zones which honor the current geological and structural model for the deposit, total CIM compliant “Inferred” resources at a block model cut off of 0.6 g/t Au are estimated to be 39.8 million tonnes at 1.64 g/t Au for approximately 2,101,000 ounces of gold. Table 14-9 presents a summary of total Inferred resources attributable to Nighthawk’s Colomac Property.
Howe is not aware of any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant issues that could potentially affect this estimate of mineral resources. The mineral resources may be affected by potential future conceptual study assessments of mining, processing, environmental, permitting, taxation, socio-economic and other factors. There is insufficient information at this early stage of study to assess the extent to which the resources might be affected by these factors.
1 The grade at which it is possible to mine and process an exposed block (i.e.: stripping not included).
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 166 of 181 June 17, 2013
TABLE 14-9: COLOMAC INFERRED MINERAL RESOURCES BY ZONE (0.6 G/TONNE BLOCK MODEL CUT-OFF)
Zone Tonnes g/t Au Oz Au
Colomac North 6,963,000 1.24 276,900 Colomac Central 19,170,000 1.63 1,002,000 Colomac South 10,840,000 1.96 684,500 Goldcrest North 678,500 2.23 48,650 Goldcrest South 434,900 2.14 29,880 Sub Total 38,090,000 1.67 2,042,000 Grizzly Bear (Not Updated, No Change) 807,000 1.04 27,000 27 (Not Updated, No Change) 528,000 1.21 20,000 24 (Not Updated, No Change) 390,000 0.96 12,000 Sub Total 1,725,000 1.06 59,000 Total 39,815,000 1.64 2,101,000 Notes: 1. A block cut-off value of 0.6 g/t Au was applied to all resource blocks. 2. Tonnes and ounces have been rounded to reflect the relative accuracy of the mineral resource estimate; therefore numbers may not total correctly. 3. Mineral Resources were calculated with commercial mining software. 4. For 2013 updated Colomac and Goldcrest block models: Drill holes traces showing lithology and gold grade were reviewed in plan and cross section. Geological domains were created using Leapfrog Implicit Geological Modeling Software. Assays with each domain were top cut to 31 g/t and then composited to regular 5ft intervals. Block model grade interpolation was undertaken using Ordinary Kriging (OK). 5. For 2012 Grizzly Bear, 24 and 27 block models: Drill holes traces showing lithology and gold grade were reviewed in plan and cross section to generate mineralised domains. Assays with each domain were top cut to 31 g/t and then composited to regular 5ft intervals. Block model grade interpolation was undertaken using Multiple Indicator Kriging (MIK). Refer to Lee and Trinder (2012). 6. The resource estimate was prepared by Leon McGarry, B.Sc., Geologist, ACA Howe and supervised by Ian Trinder, M.Sc., P.Geo., ACA Howe. 7. Gold price is US$1500 per ounce. 8. A default average specific gravity (SG) value of 2.7 has been used. 9. Mineral Resource tonnes quoted are not diluted. 10. No Measured or Indicated Resources or Mineral Reserves of any category are identified. 11. Mineral resources are not mineral reserves and by definition do not demonstrate economic viability. This mineral resource estimate includes Inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these Inferred mineral resources will be converted to the measured and indicated resource categories through further drilling, or into mineral reserves, once economic considerations are applied. 12. 1 troy ounce equals 31.10348 grams.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 167 of 181 June 17, 2013
14.14 CHANGE RELATIVE TO THE 2012 HOWE RESOURCE ESTIMATE
Between 2012 and 2013 there is a limited change in the aerial and depth extent of wireframes at Colomac North, and the Goldcrest domains. Additional drill data obtained since the February 2012 estimate extends the resource model in three areas shown in Figure 14-8.
The February 2012 resource estimate relied on Multiple Indicator Kriging (“MIK”) to limit the influence of higher grade samples to steeply plunging shoots. The June 2013 estimate utilizes a 0.5 g/t Au grade shell to constrain the influence of high grade samples.
The change in approach prevents the diluting influence of low grade domain samples on high grade domain blocks and vice-versa. The change in modeling technique results in improved grades but lower tonnages at a 0.6 g/t block cut off. This is particularly apparent at the Goldcrest Sill.
Within the foot print of the 2012 resource, at a 0.6 g/t block cut off, there is a decrease of 11.74 million tonnes and an increase in mean grade from 1.05 g/t Au to 1.54 g/t Au and a 2% increase in contained gold ounces from 1.385 to 1.446 million ounces.
Nighthawk 2012 drilling tests the Colomac Sill below zones 2 and 3:
At Zone 2, holes C12-01B to 3B extend the deeper portion of the resource 225 m to the north. At the southern end of Zone 2 and the central portion of Zone 3 the resource model depth is extended by 225 m to a depth of 350m. To the south of Zone 3, 1997 Royal Oak and 2012 Nighthawk C12 series holes intersect a possible mineralised shoot. The 250 m wide shoot extends the modeled mineralization depth by 500m to 650 m below surface.
Recently delineated deeper blocks at Zone 2 and 3.5 have a higher mean grade than shallower material within 150m of surface. Within the new 2013 resource zones, at a 0.6 g/t block cut off there are an additional 8.89 Mt at a grade of 2.08 g/t Au for an additional 0.596 million ounces of gold.
The addition of 4.31 million tonnes at a grade of 2.22 g/t Au at the southern portion of the sill brings the total resource attributable to the steeply plunging higher grade shoot at Zone 3.5 up to 7.638 million tonnes at a grade of 2.15 g/t Au for 0.528 million ounces gold.
As shown in the total row of Table 2-10, with the addition of mineralised material in the newly defined areas in the 2013 block model, there is a decrease of 2.84 million tonnes and a mean grade increase of 0.62 g/t Au for an additional 0.656 million ounces of gold relative to the 2012 block model.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 168 of 181 June 17, 2013
TABLE 14-10: RELATIVE CHANGE IN REPORTED RESOURCES FROM THE 2012 TO CURRENT 2013 BLOCK MODEL.
June 2013 Block Model Feb. 2012 Block Model Relative Difference
Tonnes Au Tonnes Au Tonnes Ounces Ounces Au g/t Ounces Mt g/t Mt g/t Mt Colomac North Total 6.963 1.24 276,900 8.13 0.95 248,000 -14% 31% 12% Zone 2 Feb 2012 Ext 15.87 1.59 809,200 21.90 1.10 771,000 -28% 44% 5% Zone 2 New 3.30 1.87 192,800 New Resources Colomac Central Total 19.17 1.63 1,002,000 21.90 1.10 771,000 -12% 48% 30% Zone 3 Feb 2012 Ext 5.25 1.67 281,100 8.83 1.01 287,000 -41% 65% -2%
Zone 3 and 3.5 New 1.28 2.29 94,500 New Resources Zone 3.5 Shoot New 4.31 2.22 308,900 New Resources Colomac South Total 10.84 1.96 684,500 8.83 1.01 287,000 23% 94% 139% Goldcrest Sill N Total 0.679 2.23 48,650 1.00 1.03 33,000 -32% 117% 47% Goldcrest Sill S Total 0.435 2.14 29,880 1.08 1.32 46,000 -60% 62% -35% Grand Total 38.09 1.67 2,041,930 40.93 1.05 1,385,000 -7% 58% 47% Note: Tonnes, ounces and relative differences have been rounded therefore numbers may not total correctly.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 169 of 181 June 17, 2013
FIGURE 14-8 COLOMAC CENTRAL AND SOUTHERN ZONES AND EXTENT OF THE 2012 AND 2013 RESOURCE ESTIMATES
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 170 of 181 June 17, 2013
14.15 COLOMAC GRADE-TONNAGE RELATIONSHIP
For information purposes, grade tonnage values are presented in Table 14-11. The Reader is cautioned that the values in this table are not a Mineral Resource Statement. The values are only presented to show the sensitivity of the block model estimate to the selection of cut-off grade.
The grade tonnage table supports the choice of 0.6 g/t Au resource cut-off grade and generates an average grade of 1.67 g/t Au. A grade tonnage chart is presented in Figure 14-9 that shows the relative grade profile of the block model. Generally, the distribution of input assay values shown in the input data is retained in block model resulting in a gradual decrease in tonnage with increasing grade.
TABLE 14-11: COLOMAC BLOCK GRADE-TONNAGE RELATIONSHIP
Block Model Cut Block Model Tonnage Block Model Avg. Grade Contained Ounces Value (Mtonnes) (Au g/t) (Au) (Au g/t)
2.00 9,587,000 3.00 925,400 1.50 17,048,000 2.44 1,340,000 1.00 29,415,000 1.94 1,835,000 0.80 34,469,000 1.79 1,982,000 0.60 39,815,000 1.64 2,101,000 0.50 43,562,000 1.55 2,169,000 0.40 51,351,000 1.38 2,281,000 0.30 70,234,000 1.10 2,493,000 0.20 99,572,000 0.85 2,731,000 0.10 132,479,000 0.68 2,894,000 Note: The reader is cautioned that the figures in this table are not a Mineral Resource Statement. The figures are only presented to show the sensitivity of the block model estimates to the selection of cut-off grade.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 171 of 181 June 17, 2013
FIGURE 14-9 COLOMAC GRADE TONNAGE CURVE
Colomac Sensitivity Grade Tonnage Curve June 2013
6.00 140
5.00 120 100 4.00 80 3.00 60 2.00 40
1.00 20
Block Block Model Tonnage(Mt) Block Block Model Avg. Grade Au g/t - 0 4.00 2.00 1.50 1.00 0.80 0.60 0.50 0.40 0.30 0.20 0.10 Block Model Cut Value Au g/t
Block Model Tonnage Block Model Grade g/t Au
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 172 of 181 June 17, 2013
15 ADJACENT PROPERTIES
Howe is unaware of any significant exploration activity or results on immediately adjacent third-party mineral properties.
The Colomac Property is located approximately 127 kilometres northeast of the Nico gold-cobalt- bismuth-copper deposit. The latter is 100 percent owned by Fortune Minerals Limited. Nico is Canada’s largest known IOCG (Olympic Dam style) deposit. Howe has not been able to verify the Nico information and the information is not necessarily indicative of mineralization on Nighthawk’s Colomac Property and Indin Lake Project that are the subject of this report.
16 OTHER RELEVANT DATA AND INFORMATION
There is no other relevant information on the Colomac Property and the Indin Lake Project known to Howe that would make this Report more understandable or if undisclosed would make this Report misleading.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 173 of 181 June 17, 2013
17 INTERPRETATION AND CONCLUSIONS
Howe has reviewed the Colomac Property data provided by Nighthawk including its 2012 and historic drilling database and visited the site in 2011. Howe believes that the data presented by the Company are generally an accurate and reasonable representation of the Colomac Property mineralisation. Howe concludes that the database for the Colomac Property is of sufficient quality to provide the basis for the conclusions and recommendations reached in this Report.
The acquisition of drill data from 20 historic 1997 Royal Oak holes completed at zones 3.5 and the completion 30 new Nighthawk drill holes in 2012 has increased the total assayed metreage by 8 % from 45,120 m to 48,790 m
Of the 30 new holes, 9 were designed to infill the 20 historic Royal Oak holes focused on the mineralised shoot at Zone 3.5. The remainder are step-out holes to test the continuation at depth of higher grade intervals at Zones 2 and 3. All but one 2012 hole was successful in intersecting mineralised portions of the Colomac Sill allowing the delineation of new resource blocks at depth described in Table 14-10.
The 2012 and historic drilling database and current and historic corporate reports provided sufficient detail on the nature of the mineralised zones to permit Howe’s completion of a Mineral Resource Estimate.
Using a block cut-off grade of 0.6 g/tonne gold for its mineral resource estimate, Howe outlined a series of north trending, steeply dipping mineralised zones including three contiguous zones hosted by the Colomac Dyke (North, Central and South zones) and 5 other zones including the Goldcrest North (Dyke Lake), Goldcrest, Grizzly Bear, 24 and 27 Zones. The reported mineralized zones generally extend to a vertical depth of less than 300 metres except Colomac Central and South zones which extend to a vertical depth of less than 500 metres along portions of their strike lengths. The modeled mineralized zones are open to depth and generally along strike.
It is ACA Howe’s opinion that resources estimated as part of its 2013 update meet with the CIM “Inferred” category. Classifications are based upon consideration of the quality of input data, modeling and estimation methodology, interpolation criteria based on sample density, search and interpolation parameters, understanding and robustness of the geological model, and density.
For the defined and modelled zones developed using the quartz diorite domain, a 0.5 g/t Au envelope within the quartz diorite domain and a 0.1 g/t Au envelope within the quartz gabbro domain, total “Inferred” resources are estimated to be 38.09 Mt at 1.67 g/t Au for approximately 2,042,000 oz Au at a cut-off grade of 0.6 g/t Au. The updated resource estimate also incorporates the unchanged 2012 estimates of the Grizzly Bear and 24/27 satellite deposits equal to1.725 Mt at 1.06 g/t Au for approximately 59,000 oz Au at a cut-off grade of 0.6 g/t Au
The total updated estimate is 39.815 Mt at 1.64 g/t Au for approximately 2,101,000 oz Au at a cut-off grade of 0.6 g/t Au and predicts a 7 % decrease in total resource tonnes, a 56 % increase in gold grade
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 174 of 181 June 17, 2013
compared to the preliminary mineral resource estimate undertaken by ACA Howe in January 2012 and a 45 % increase in estimated ounces of gold.
At the current drill spacing over the deposit (i.e. 15 to 120 m), the current geological model at Colomac is considered robust enough to allow for the extrapolation of mineralised shoots at depth and along strike for resource class upgrade through additional infill drilling at the central and southern portions of the Colomac Sill.
The Goldcrest South and North deposits may represent a parallel sill of mineralized quartz diorite. Exploratory step out drilling along strike and between the two deposits may intersect additional mineralised.
The Colomac Property is centred on the historic Colomac mine site; now decommissioned, dismantled and rehabilitated. Most of Neptune’s and Royal Oak’s historic activity on the property was focused on delineating and defining mineralization amenable to mining and processing with the historic Colomac open pit mining fleet and 10,000 ton per day mill. Very little work was focused on exploring for targets that would be suitable for underground mining methods or for small open pit mineable zones with processing at a lower rate. It is interesting to note that Royal Oak’s surface drilling statistics from 1993 to 1997 show an average drill hole length of only approximately 100 metres.
Howe concludes that the Colomac Property warrants additional exploration expenditures to investigate the various mineralized zones at the Colomac Property below the relatively shallow historically drilled depths and along strike where mineralization is open.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 175 of 181 June 17, 2013
18 RECOMMENDATIONS
Howe recommends that work be conducted on the Colomac Property as follows:
1. Additional diamond drilling should be completed at the Colomac Central Zone (historic Zones 1.0, 1.5, 2.0, 2.5, 3.0 and 3.5) to: (a) follow up on recent drill results and expand Inferred mineral resources at depth and along strike (b) continue to explore and delineate possible higher grade mineralized shoots along the sill and (c) possibly upgrade Inferred resources to Indicated resources. 2. Additional diamond drilling should be completed elsewhere on the Colomac Sill and other zones/targets on the Property; in particular Goldcrest, Goldcrest North and Grizzly Bear, in an attempt to: (a) confirm historic drill results (b) expand Inferred mineral resources along strike and at depth and (c) possibly upgrade Inferred resources to Indicated resources.
18.1 BUDGET
In line with Howe's recommendations, Nighthawk has proposed a budget totaling $5,000,000 for exploration work in 2013-14. The proposed program and budget as shown in Table 26-1 is to be completed as a single phase starting with winter on-ice drilling and continuing with land-based drilling in the summer after ice breakup. The program will permit Nighthawk to complete 10,000 m of drilling to continue upgrading and expanding the Colomac Property mineral resource.
Howe considers Nighthawk’s proposed budget reasonable and recommends that the Company proceed with the proposed work program.
TABLE 18-1: NIGHTHAWK COLOMAC PROPERTY PROPOSED 2013-14 EXPLORATION PROGRAM AND BUDGET
Total
Exploration Camp Open exploration camp at Colomac $100,000
Winter in-fill and step-out drilling of Central Colomac Sill resource area to approximately 450m vertical depth (historic Colomac Zones 7,000m 1.0, 1.5, 2.0, 2.5, 3.0 and 3.5) Exploration Drilling all inclusive (drill, support, assays, personnel and camp Summer drilling at Goldcrest, Goldcrest North and Grizzly Bear operating costs) resource areas to approximately 250m vertical depth 3,000m
Total Exploration Drilling x $500/metre 10,000m $5,000,000
Total Budget $5,100,000
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 176 of 181 June 17, 2013
19 REFERENCES
Budinski, D.R, 1989. Summary Report on the Study of Geological Factors Controlling Ore Deposition at Colomac Gold Project, Northwest Territories, for ABM Gold Corp.
Burns, RF., et al., 1987, 1987 Geology Report on the Colomac Zone 2 Deposit. Neptune Resources Corp.
Byrne, N.W., 1946. Report on the AE group of Claims, Indin Lake Area, Goldcrest Mines Ltd., Yellowknife, Northwest Territories.
Cohoon, G.A., Kerr, W., Ali, A., Gowdy, Wm. and Curry, G., 1991a, Draft Report to Northwest Gold Corp. on Colomac Exploration Programme, Indin River Area - Northwest Territories NTS 86B-6, September 1989 - February 1991
Cohoon, G.A., Kerr, W., Ali, A., Gowdy, Wm. and Curry, G., 1991b, Report to Petromet Resources Limited and Comaplex Resources International Ltd. on Exploration Programme, Claims: Span 1, Ed 1, CDC 1, Bat 1, Bat 5 And Bat 6, Indin River Area - Northwest Territories NTS 86B-6, September 1989 - February 1991
Davison and Tyler, 1988, Exploration History of Colomac Property 1938 – 1987, Neptune Resources Corp. Internal Corporate Report
Dickson, G., 1985. Report on CDC-l and ED-1 Claims, Indin Lake, Northwest Territories, for Wollex Exploration.
Dickson, G., 1988. Report on CDC-l and ED-1 Claims, Indin Lake, Northwest Territories, for Wollex Exploration.
Dubé, B., and Gosselin, P., 2007, Greenstone-hosted quartz-carbonate vein deposits, in Goodfellow, W.D., ed., Mineral Deposits of Canada: A Synthesis of Major Deposit-Types, District Metallogeny, the Evolution of Geological Provinces, and Exploration Methods: Geological Association of Canada, Mineral Deposits Division, Special Publication No. 5, p. 49-73.
Ecosystem Classification Group. 2008. Ecological Regions of the Northwest Territories – Taiga Shield. Department of Environment and Natural Resources, Government of the Northwest Territories, Yellowknife, NT, Canada. viii + 146 pp. + insert map.
Environment Canada, 2012, Canadian Climate Normals, 1971-2000, Yellowknife A, website: http://climate.weatheroffice.gc.ca/climate_normals/results_e.html?stnID=1706
Evans, B., 2013, Nighthawk Gold Claims List Update, a Nighthawk Letter Memo to ACA Howe, June 13, 2013
Frith, R.A., 1986, Precambrian Geology of the Indin Lake Map Area, NTS 86B, District of Mackenzie,
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 177 of 181 June 17, 2013
Northwest Territories, Geological Survey of Canada, Open File 1243; 87 pages
Helmstaedt, H., 1990. Geological and Structural Observations on Neptune Resources Claim Groups Surrounding the Colomac Deposit, Indin Lake Volcanic Belt, Northwest Territories.
Johnson, S., 1994, Colomac Gold Mine, Steeves Lake, N.W.T, Medsystem Projects, Royal Oak Mines Inc., Internal Corporate Report
Lee, F.N. and Trinder, I., 2012, Technical Report and Mineral Resource Estimate on the Colomac Property of the Indin Lake Project, Indin Lake Belt, Northwest Territories, Canada for Merc International Minerals Inc.
MacMahon, M. and Sargaent P., 1987. Geological Evaluation, Span 1-5 Claims, District of Mackenzie, Northwest Territories for Echo Bay Mines Ltd.
Mercer, B., 1997, Zone 3.5, Colomac, Indin Lake Belt: A Brief Discussion of the 1997 Diamond Drill Results. Royal Oak Mines
Morgan, J., 1990. Gold Deposits in the Indin Lake Supracrustal Belt. GNWT-DIAND Geoscience Projects, Canada-Northwest Territories Mineral Development Agreement, Annual Report 1990, p. 29-46.
Morgan, J., 1992, Gold in the Indin Lake Supracrustal Belt, part of 86B, EGS 1992-11, NWT Geology Division – NAP, Indian and Northern Affairs Canada
NWT Geoscience Office, 2012a, Detailed Showing Report - Showing ID 086BSW0004 - Colomac
NWT Geoscience Office, 2012b, Detailed Showing Report - Showing ID 086BSW0039 – Goldcrest
NWT Geoscience Office, 2012c, Detailed Showing Report - Showing ID 086BSW0102 – Grizzly Bear
NWT Geoscience Office, 2012d, Detailed Showing Report - Showing ID 086BSW0154 – Zone 24
Pehrsson, S.J. and Kerswill, J.A., 1997, Geology, Chalco-Strachan lakes and parts of Origin-Truce lakes, District of Mackenzie, Northwest Territories; (NTS 86B/7,8 and parts of 86B/10,11), Geological Survey of Canada, Open File 3395, scale 1:50,000.
Pehrsson, S.J., 2002, Geology, Indin Lake, Northwest Territories; Geological Survey of Canada, Open File 4268, scale 1:125,000
Pelletier, M., 2011, Technical Report on a Fixed Wing Gradiometer Survey of the Colomac Block, Northwest Territories, Canada for Merc International Minerals Inc. by Goldak Airborne Surveys, September, 2011
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 178 of 181 June 17, 2013
Pitard, F., 1996. Study of the Heterogeneity of Gold in the Colomac Ore. Francis Pitard Sampling Consultants for Royal Oak Mines.
Powers, D.H.R. and Poirier, D., 1986. Report of Work on the Bat and Steal Claim Groups, District of Mackenzie, Northwest Territories, for Noranda Exploration Company, Limited.
Randall, A.W., 1997, Colomac Mine, Summary Documentation on Closure of Mining Operations, Royal Oak Mines Inc., Internal Corporate Report
Robb, M.E., 1997, Colomac Mine - Indin Lake Belt Area 1997 Report, Royal Oak Mines Inc. Western Canada - Exploration
Royal Oak, 1993, Colomac Mine, Royal Oak Mines Inc., Internal Corporate Memo
Royal Oak, 1998, Annual Report For the Fiscal Year Ended December 31, 1997, United States Securities and Exchange Commission Form 10-K.
Royal Oak, 1999, Annual Report For the Fiscal Year Ended December 31, 1998, United States Securities and Exchange Commission Form 10-K.
Stanton, M.S., et al., 1954. Chalco Lake, Geological Survey of Canada Map 1023A
Thon, M., 1996a, Geostatistical Re-evaluation of Ore Reserves within the Zone 2.0 Pit, April 1996, for Royal Oak Mines
Thon, M., 1996b, Zone 2.5 & 3.0 - Geostatistical Re-evaluation of Ore Reserves - July, 1996, for Royal Oak Mines
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 Page 179 of 181 June 17, 2013
APPENDIX I. INDIN LAKE PROJECT - MINERAL CLAIMS AND MINING LEASES
Northwest Territories Mineral Claim and Mining Lease Maintenance Requirements
As per Northwest Territories and Nunavut Mining Regulations (C.R.C., c. 1516):
The holder of a recorded claim is entitled to hold it for a period of 10 years from the date the claim is recorded, if:
during the two-year period immediately following the date the claim is recorded, he does or causes to be done representation work to the value of at least $4 per acre or part thereof contained in the claim; and during each subsequent one-year period, he does or causes to be done representation work to the value of at least $2 per acre or part thereof contained in the claim.
The following undertakings in respect of a recorded claim are considered representation work:
work done in stripping, drilling, trenching, sinking shafts and driving adits or drifts; geological, geochemical and geophysical investigations of a claim made on the ground or from an aircraft; exploratory work other than that described in paragraph (a) or (b), of a kind and to the extent approved by an engineer of mines; a survey of the claim approved by the Surveyor General; and work done in constructing roads or airstrips to provide access to the claim.
A recorded mineral claim will expire at the end of 10 years if the holder does not apply for a lease and the holder will not be able to re-stake the area for a period of one year.
The holder of a recorded claim may apply for a lease of the claim not later than 30 days after the 10th anniversary of the recording of the claim; provided:
his title to the claim is not disputed; he has - recorded representation work on the claim to a value of at least $10 per acre, or - undertaken to commence production on his claim; a survey of the claim has been recorded with the Mining Recorder;
A mining lease is for a term of 21 years from the effective date stated on the lease. On the expiry of the term of the lease, including a lease that has previously been renewed, the lessee may apply to the Minister for a renewal of the lease for a further term of 21 years.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
The annual payment for mining lease rentals is due on the date of signing of the lease and on every anniversary of the effective date thereafter. Thirty (30) days after the date on which the rent is due, a notice is sent to each lessee who has not paid his rent for the year, stating the amount of rent due for the year. Where the rent due under a lease of a recorded claim is not paid within 60 days from the date indicated on the notice sent, the lease may be cancelled.
Lease rental cost is $1.00 per acre per year during the initial 21 year lease period. The rental cost increases to $2.00 per acre per year for each 21 year lease renewal period. Where representation work has been done on a recorded claim for which a lease has been granted, there shall be deducted from the rent for that lease for the year in which the work was done and for any leases granted for adjacent recorded claims not exceeding five held by the same lessee, an amount equal to:
the amount expended on approved work in that year, or 50 per cent of the rent owing on the lease or leases for that year, whichever is the lesser.
The holder of a recorded claim may apply for a lease of the claim not later than 30 days after the 10th anniversary of the recording of the claim; provided:
his title to the claim is not disputed; he has - recorded representation work on the claim to a value of at least $10 per acre, or - undertaken to commence production on his claim; a survey of the claim has been recorded with the Mining Recorder;
If mineral production is achieved, each fiscal year, the owner or operator of a mine shall pay to Her Majesty royalties on the value of the mine’s output during that fiscal year in an amount equal to the lesser of:
13% of the value of the output of the mine; and the amount calculated from a variable royalty (0 to 14%) on set intervals of the value of the mine’s output.
The royalties payable to the Receiver General accrue during a fiscal year as the output of a mine is produced and are to be remitted not later than the last day of the fourth month after the end of that fiscal year.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
Table A-1: List of Mining Leases within the Colomac Property First Quad or Lease # Issued Expiry* Survey Lot Acres Hectares Rental Rent Due Renewal Group 2661 1974-02-28 2028-03-13 1995-03-23 57262 9 1114 597.60 241.84 $1195.20 2014-02-28 2662 1974-02-28 2028-03-13 1995-03-23 57262 8 1114 628.50 254.34 $1257.00 2014-02-28 3211 1986-03-06 2022-03-20 - 70692 1002 086B06 1,032.50 417.84 $1032.50 2014-03-06 3288 1989-02-08 2022-02-22 - 72125 1003 086B06 1,138.00 460.53 $1,138.00 2014-02-08 3524 1994-12-01 2027-12-15 - 78578 1013 086B06 1,112.00 450.01 $1,112.00 2014-12-01 3526 1994-12-01 2027-12-15 - 78578 1015 086B06 2,088.00 844.98 $2,088.00 2014-12-01 3527 1994-12-01 2027-12-15 - 78578 1012 086B06 1,236.00 500.19 $1,236.00 2014-12-01 3528 1994-12-01 2027-12-15 - 78578 1018 086B06 2,431.00 983.79 $2,431.00 2014-12-01 3529 1994-12-01 2027-12-15 - 78640 1011 086B06 1,703.00 689.18 $1,703.00 2014-12-01 Total 11,966.60 4,842.70 $13,192.70 * As per paragraph 62.1(2)(b) of the Northwest Territories and Nunavut Mining Regulations, the term of the lease is extended by the period during which the lease is held by Her Majesty and as per subsection 62.1(3) of the Northwest Territories and Nunavut Mining Regulations, no rent is payable on the lease for the period during which the lease is held by Her Majesty. The expiry dates listed represent an extension of 12 years 14 days, the period during which the leases were held by Her Majesty.
Table A-2: List of Mineral Claims within the Colomac Property Recording Anniversary 10 Year Representation Claim # Name 1 1 1 NTS Acres Hectares Date Date Date Work F15708 RO 12 1994-05-13 2016-07-01 2016-06-01 086B06 6.40 2.59 $12.80 9 years filed 2 F19111 NWG #1 1991-02-07 2013-02-07 2013-02-21 086B06 309.90 125.41 $619.80 9 years filed No further Total 316.30 128.00 $632.60 work required. 1) As per paragraph 62.1(2)(a) of the Northwest Territories and Nunavut Mining Regulations, the requirements for the payment of fees and for representation work are suspended for the period during which the claim is held by Her Majesty and as per paragraph 62.1(2)(b) of the Northwest Territories and Nunavut Mining Regulations, the period within which the claim must be taken to lease is extended by the period during which the claim is held by Her Majesty. 2) Nighthawk informs Howe that it is in the process of completing a boundary survey and filing documentation to bring claim F19111 – NWG #1 to lease.
Table A-3: List of Mining Leases within the Damoti Property First Quad or Lease # Issued Expiry Survey Lot Acres Hectares Rental Rent Due Renewal Group 3616 1,2 1997-07-11 2018-07-11 - 79775 1004 086B03 1,211.00 490.07 $1,211.00 2014-07-11 3617 1 1997-07-11 2018-07-11 - 79775 1005 086B03 2,530.00 1,023.85 $2,530.00 2014-07-11 4572 1,2 2003-05-21 2024-05-21 - 88855 1006 086B03 952.00 385.26 $952.00 2014-05-21 4573 1,2 2003-05-21 2024-05-21 - 88856 1008 086B03 1,404.00 568.18 $1,404.00 2014-05-21 4574 1,2 2003-05-21 2024-05-21 - 88855 1007 086B03 467.00 188.99 $467.00 2014-05-21 4663 1,2 2003-05-21 2024-05-21 - 89931 1009 086B03 476.00 192.63 $476.00 2014-05-21 Total 7,040.00 2,848.98 $7,040.00 Notes: 1) Lease subject to an underlying 2 percent NSR royalty held by Covello Bryan & Associates Ltd. 2) Lease subject to a 1 percent NSR royalty held by Selkirk Metals Corp.
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
Table A-4: List of Mining Leases within the Leta Arm Property First Quad or Lease # Issued Expiry Survey Lot Acres Hectares Rental Rent Due Renewal Group 1967, 3226 1 1946-11-04 2030-11-04 1 22440 086B06 148.90 60.26 $297.8 2014-11-04 1988, 2009 1967, 3227 1 1946-11-04 2030-11-04 2 22440 086B06 55.98 22.65 $111.96 2014-11-04 1988, 2009 2486 1 1971-10-19 2013-10-19 1992 12 23017 086B06 57.07 23.1 $114.14 2014-10-19 2487 1 1971-10-19 2013-10-19 1992 11 23017 086B06 75.41 30.52 $150.82 2014-10-19 2488 1 1971-10-19 2013-10-19 1992 13 23017 086B06 44.65 18.07 $89.3 2014-10-19 2489 1 1971-10-19 2013-10-19 1992 14 23017 086B06 59.55 24.1 $119.1 2014-10-19 2490 1 1971-10-19 2013-10-19 1992 15 23016 086B06 55.87 22.61 $111.74 2014-10-19 2491 1 1971-10-19 2013-10-19 1992 16 23016 086B06 76.60 31 $153.2 2014-10-19 2492 1 1971-10-19 2013-10-19 1992 17 23016 086B06 55.96 22.65 $111.92 2014-10-19 3214 1 1985-04-19 2027-04-19 2006 1000 70018 086B06 117.00 47.35 $234.00 2014-04-19 3215 1 1986-01-30 2028-01-30 2007 1001 70019 086B06 124.00 50.18 $248.00 2014-01-30 3216 1 1986-01-30 2028-01-30 2007 1001 70020 086B06 839.00 339.53 $1,678.00 2014-01-30 3217 1 1985-04-19 2027-04-19 2006 1000 70018 086B06 641.00 259.4 $1,282.00 2014-04-19 3328 2,3,4 1988-01-12 2030-01-12 2009 1003 72125 086B06 378.70 153.25 $757.40 2014-01-12 3732 1 1998-07-10 2019-07-10 1030 81826 086B06 553.00 223.79 $553.00 2014-07-10 Total 3,282.69 1,328.46 $6,012.38 Notes: 1) Lease subject to an underlying 3 percent NSR royalty held by 224613 Alberta Ltd. 2) Lease subject to an underlying 3 percent NSR royalty held by V.M. Paulson, E. Meyers, and J. Kruszewski 3) Lease subject to an underlying 1.5 percent NSR royalty held by Adamus Resources Limited 4) Lease subject to an underlying 0.5 percent NSR royalty held by Durga Resources Ltd.
Table A-5: List of Mineral Claims within the Treasure Island, Laurie Lake and Barker-Vidie Properties Recording Anniversary 10 Year Representation Claim # Name NTS Acres Hectares Date Date Date Work 1 Treasure Isl. 2009-04-29 2017-04-29 2019-04-29 086B06 1,033.06 418.06 $2,066.12 K01343 “Geordie 1” 1 Laurie Lake 2009-04-29 2016-04-29 2019-04-29 086B06 619.83 250.84 $1,239.66 K01344 “Geordie 2” 1 Barker- Vidie 2009-04-29 2,3 2019-04-29 086B06 724.05 293.01 $1,448.10 K01327 “Dayna” 2019-04-29 Total 2,376.94 961.91 $4,753.88 Notes: 1) Mineral claim subject to an underlying 2 percent NSR royalty held by Ursa Polaris Developments Corporation. 2) Nine years work filed – no further work required 3) Date is based on Representation Work filed – pending Mining Recorder’s approval as of June 17, 2013
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
Table A-6: List of Nighthawk Staked Mineral Claims within the Indin Lake Project Claim Claim Recording Anniversary Note 10 Year Representation NTS Acres Hectares No. Name Date Date Below Date Work K01209 MI 3 5/4/2009 5/4/2016 5/4/2019 086B 1,007.50 407.72 $ 2,015.00 K01207 MI 1 5/4/2009 5/4/2019 5/4/2019 086B 452.00 182.92 $ 904.00 K01208 MI 2 5/4/2009 5/4/2017 5/4/2019 086B 130.00 52.61 $ 260.00 K01210 MI 4 5/4/2009 5/4/2016 5/4/2019 086B 775.25 313.73 $ 1,550.50 K01211 MI 5 5/4/2009 5/4/2016 5/4/2019 086B 1,446.20 585.26 $ 2,892.40 K13469 MI 8/23/2010 8/23/2015 8/23/2020 086B 1,807.70 731.55 $ 7,230.80 K14706 SL 26 12/17/2010 12/17/2013 12/17/2020 086B 645.60 261.27 $ 2,582.40 K14705 SL 25 12/17/2010 12/17/2013 12/17/2020 086B 2,375.90 961.49 $ 9,503.60 K14704 SL 24 12/17/2010 12/17/2013 12/17/2020 086B 116.20 47.02 $ 464.80 K14708 SL 23 12/17/2010 12/17/2013 12/17/2020 086B 671.50 271.75 $ 2,686.00 K14707 SL 27 12/17/2010 12/17/2015 12/17/2020 086B 64.50 26.10 $ 258.00 K14702 SL 22 12/17/2010 12/17/2015 12/17/2020 086B 2,402.00 972.05 $ 9,608.00 K14694 SL 14 12/17/2010 12/17/2013 1 12/17/2020 086B 1,007.00 407.52 $ 4,028.00 K14693 SL 13 12/17/2010 12/17/2015 12/17/2020 086B 2,324.20 940.57 $ 9,296.80 K14681 SL 1 12/17/2010 12/17/2014 12/17/2020 086B 1,859.40 752.47 $ 7,437.60 K14697 SL 17 12/17/2010 12/17/2018 2 12/17/2020 086B 2,375.90 961.49 $ 9,503.60 K14684 SL 4 12/17/2010 12/17/2015 12/17/2020 086B 1,859.40 752.47 $ 7,437.60 K14686 SL 6 12/17/2010 12/17/2014 12/17/2020 086B 193.69 78.38 $ 774.76 K14700 SL 20 12/17/2010 12/17/2016 2 12/17/2020 086B 2,479.20 1,003.30 $ 9,916.80 K14682 SL 2 12/17/2010 12/17/2015 12/17/2020 086B 2,324.20 940.57 $ 9,296.80 K14692 SL 12 12/17/2010 12/17/2015 2 12/17/2020 086B 2,066.00 836.08 $ 8,264.00 K14691 SL 11 12/17/2010 12/17/2017 2 12/17/2020 086B 2,479.20 1,003.30 $ 9,916.80 K14701 SL 21 12/17/2010 12/17/2019 2 12/17/2020 086B 1,097.60 444.18 $ 4,390.40 K14698 SL 18 12/17/2010 12/17/2018 2 12/17/2020 086B 2,169.30 877.88 $ 8,677.20 K14690 SL 10 12/17/2010 12/17/2018 2 12/17/2020 086B 2,169.30 877.88 $ 8,677.20 K14689 SL 9 12/17/2010 12/17/2018 2 12/17/2020 086B 826.40 334.43 $ 3,305.60 K14695 SL 15 12/17/2010 12/17/2018 2 12/17/2020 086B 2,169.30 877.88 $ 8,677.20 K14696 SL 16 12/17/2010 12/17/2019 2 12/17/2020 086B 1,446.20 585.26 $ 5,784.80 K14687 SL 7 12/17/2010 12/17/2017 12/17/2020 086B 2,530.80 1,024.18 $ 10,123.20 K14683 SL 3 12/17/2010 12/17/2015 12/17/2020 086B 929.70 376.24 $ 3,718.80 K14699 SL 19 12/17/2010 12/17/2019 2 12/17/2020 086B 671.45 271.73 $ 3,254.00 K14688 SL 8 12/17/2010 12/17/2017 12/17/2020 086B 1,201.00 486.03 $ 4,804.00 K14685 SL 5 12/17/2010 12/17/2015 12/17/2020 086B 2,530.90 1,024.22 $ 10,123.60 K14901 TM 1 4/20/2011 4/20/2015 4/20/2021 086B 1,270.00 513.95 $ 5,080.00 K14902 TM 2 4/20/2011 4/20/2015 2 4/20/2021 086B 1,446.20 585.26 $ 5,784.80 K14903 TM 3 4/20/2011 4/20/2014 2 4/20/2021 086B 2,582.50 1,045.10 $ 10,330.00 K14904 TM 4 4/20/2011 4/20/2015 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14905 TM 5 4/20/2011 4/20/2015 4/20/2021 086B 2,453.30 992.84 $ 9,916.80 K14906 TM 6 4/20/2011 4/20/2015 4/20/2021 086B 516.50 209.02 $ 2,066.00
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
Claim Claim Recording Anniversary Note 10 Year Representation NTS Acres Hectares No. Name Date Date Below Date Work K14907 TM 7 4/20/2011 4/20/2016 4/20/2021 086B 2,427.50 982.37 $ 9,710.00 K14908 TM 8 4/20/2011 4/20/2016 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14909 TM 9 4/20/2011 4/20/2016 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14910 TM 10 4/20/2011 4/20/2016 2 4/20/2021 086B 2,479.20 1,003.30 $ 9,916.80 K14911 TM 11 4/20/2011 4/20/2018 2 4/20/2021 086B 1,270.00 513.95 $ 5,080.00 K14912 TM 12 4/20/2011 4/20/2017 2 4/20/2021 086B 2,427.50 982.37 $ 9,710.00 K14913 TM 13 4/20/2011 4/20/2017 2 4/20/2021 086B 905.00 366.24 $ 3,620.00 K14914 TM 14 4/20/2011 4/20/2020 2 4/20/2021 086B 1,756.00 710.63 $ 7,024.00 K14915 TM 15 4/20/2011 4/20/2020 2 4/20/2021 086B 1,136.30 459.84 $ 4,545.20 K14916 TM 16 4/20/2011 4/20/2019 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14917 TM 17 4/20/2011 4/20/2018 2 4/20/2021 086B 2,272.60 919.69 $ 9,090.40 K14918 TM 18 4/20/2011 4/20/2017 2 4/20/2021 086B 970.00 392.55 $ 3,880.00 K14919 TM 19 4/20/2011 4/20/2018 2 4/20/2021 086B 225.00 91.05 $ 900.00 K14920 TM 20 4/20/2011 4/20/2017 2 4/20/2021 086B 903.87 365.80 $ 3,304.00 K14921 TM 21 4/20/2011 4/20/2017 2 4/20/2021 086B 1,291.20 522.53 $ 5,164.80 K14922 TM 22 4/20/2011 4/20/2020 2 4/20/2021 086B 2,272.60 919.69 $ 9,090.40 K14923 TM 23 4/20/2011 4/20/2019 2 4/20/2021 086B 1,291.20 522.53 $ 5,164.80 K14924 TM 24 4/20/2011 4/20/2020 2 4/20/2021 086B 929.70 376.24 $ 3,718.80 K14925 TM 25 4/20/2011 4/20/2019 2 4/20/2021 086B 1,740.00 704.15 $ 6,960.00 K14926 TM 26 4/20/2011 4/20/2020 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14927 TM 27 4/20/2011 4/20/2017 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14928 TM 28 4/20/2011 4/20/2018 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14929 TM 29 4/20/2011 4/20/2017 2 4/20/2021 086B 1,060.00 428.97 $ 4,240.00 K14930 TM 30 4/20/2011 4/20/2015 4/20/2021 086B 1,394.50 564.33 $ 5,578.00 K14931 TM 31 4/20/2011 4/20/2016 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14932 TM 32 4/20/2011 4/20/2014 4/20/2021 086B 1,446.20 585.26 $ 5,784.80 K14933 TM 33 4/20/2011 4/20/2019 2 4/20/2021 086B 2,350.00 951.01 $ 9,400.00 K14934 TM 34 4/20/2011 4/20/2019 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14935 TM 35 4/20/2011 4/20/2018 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14936 TM 36 4/20/2011 4/20/2017 2 4/20/2021 086B 929.70 376.24 $ 3,718.80 K14937 TM 37 4/20/2011 4/20/2017 2 4/20/2021 086B 929.70 376.24 $ 3,718.80 K14938 TM 38 4/20/2011 4/20/2018 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14939 TM 39 4/20/2011 4/20/2019 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14940 TM 40 4/20/2011 4/20/2018 2 4/20/2021 086B 2,582.50 1,045.10 $ 10,330.00 K14941 TM 41 4/20/2011 4/20/2015 2 4/20/2021 086B 2,582.50 1,045.10 $ 10,330.00 K14942 TM 42 4/20/2011 4/20/2019 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14943 TM 43 4/20/2011 4/20/2019 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14944 TM 44 4/20/2011 4/20/2017 2 4/20/2021 086B 929.70 376.24 $ 3,718.80 K14945 TM 45 4/20/2011 4/20/2017 2 4/20/2021 086B 1,239.60 501.65 $ 4,958.40 K14946 TM 46 4/20/2011 4/20/2018 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013
Claim Claim Recording Anniversary Note 10 Year Representation NTS Acres Hectares No. Name Date Date Below Date Work K14947 TM 47 4/20/2011 4/20/2019 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14948 TM 48 4/20/2011 4/20/2015 2 4/20/2021 086B 2,479.20 1,003.30 $ 9,916.80 K14949 TM 49 4/20/2011 4/20/2016 2 4/20/2021 086B 1,497.80 606.14 $ 5,991.20 K14950 TM 50 4/20/2011 4/20/2018 2 4/20/2021 086B 1,549.50 627.06 $ 6,198.00 K14951 TM 51 4/20/2011 4/20/2016 2 4/20/2021 086B 1,239.60 501.65 $ 4,958.40 K14952 TM 52 4/20/2011 4/20/2016 2 4/20/2021 086B 1,239.60 501.65 $ 4,958.40 K14953 TM 53 4/20/2011 4/20/2017 2 4/20/2021 086B 981.35 397.14 $ 3,925.40 K14954 TM 54 4/20/2011 4/20/2020 2 4/20/2021 086B 260.00 105.22 $ 1,040.00 K14955 TM 55 4/20/2011 4/20/2020 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14956 TM 56 4/20/2011 4/20/2020 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14957 TM 57 4/20/2011 4/20/2014 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14958 TM 58 4/20/2011 4/20/2019 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14959 TM 59 4/20/2011 4/20/2019 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14960 TM 60 4/20/2011 4/20/2015 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14962 TM 62 4/20/2011 4/20/2018 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14963 TM 63 4/20/2011 4/20/2018 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14964 TM 64 4/20/2011 4/20/2016 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14965 TM 65 4/20/2011 4/20/2016 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14966 TM 66 4/20/2011 4/20/2018 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14967 TM 67 4/20/2011 4/20/2016 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14968 TM 68 4/20/2011 4/20/2016 2 4/20/2021 086B 2,582.50 1,045.10 $ 10,330.00 K14969 TM 69 4/20/2011 4/20/2016 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14970 TM 70 4/20/2011 4/20/2017 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 K14971 TM 71 4/20/2011 4/20/2017 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14972 TM 72 4/20/2011 4/20/2016 2 4/20/2021 086B 2,169.30 877.88 $ 8,677.20 K14973 TM 73 4/20/2011 4/20/2015 4/20/2021 086B 2,221.00 898.81 $ 8,884.00 K14974 TM 74 4/20/2011 4/20/2015 4/20/2021 086B 1,807.70 731.55 $ 7,230.80 K14975 TM 75 4/20/2011 4/20/2016 2 4/20/2021 086B 2,582.50 1,045.10 $ 10,330.00 K14976 TM 76 4/20/2011 4/20/2016 2 4/20/2021 086B 2,582.50 1,045.10 $ 10,330.00 K14977 TM 77 4/20/2011 4/20/2015 4/20/2021 086B 516.50 209.02 $ 2,066.00 K14978 TMBIT 4/20/2011 4/20/2020 2 4/20/2021 086B 1.50 0.61 $ 6.00 K14980 TM 61 4/20/2011 4/20/2018 2 4/20/2021 086B 2,530.80 1,024.18 $ 10,123.20 F95760 TMBIT 5 10/7/2011 10/7/2019 2 10/7/2021 086B 96.85 39.19 $ 387.40 F95551 TMBIT 4 10/7/2011 10/7/2020 2 10/7/2021 086B 64.56 26.13 $ 258.24 K12259 TMBIT 2 10/7/2011 10/7/2018 2 10/7/2021 086B 51.65 20.90 $ 206.60 K12260 TMBIT 3 10/7/2011 10/7/2020 2 10/7/2021 086B 34.43 13.93 $ 137.72
115 Claims Total 197,220.70 79,812.41 $ 781,621.22
Note: 1) Extension requested – Mining Recorder’s decision pending as of June 17, 2013 2) Date is based on Representation Work filed – pending Mining Recorder’s approval as of June 17, 2013
A.C.A. HOWE INTERNATIONAL LIMITED Report No. 972 June 17, 2013