Update of Preliminary Economic Assessment
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NI 43-101 TECHNICAL REPORT: Update of Preliminary Economic Assessment For the Cape Ray Property; 04, 41, 51 and Windowglass Hill Deposits Isle aux Morts Area, Newfoundland and Labrador, CANADA Located at: 58° 55’ 47” W Longitude 47° 45’ 03” N Latitude PREPARED BY: Mr. Marc Jutras, P.Eng. Mr. Mike Petrina, P.Eng. Mr. John Folinsbee P.Eng. Effective Date : February 09, 2017 Signing Date : March 25, 2017 NORDMIN ENGINEERING LTD. 160 Logan Avenue Thunder Bay, ON, Canada P7A 6R1 T: 807.683.1730 F: 807.683.1744 www.nordmin.com TABLE OF CONTENTS List of Units and Abbreviations ............................................................................................................. xv 1. Summary ....................................................................................................................................... 1 1.1 Mineral Resource Estimate ................................................................................................ 3 1.2 Preliminary Economic Assessment ..................................................................................... 4 1.3 Capital and Operating Costs ............................................................................................... 4 1.4 Production and Processing ................................................................................................. 5 1.5 Conclusions ....................................................................................................................... 6 1.6 Recommendations ............................................................................................................. 6 2. Introduction .................................................................................................................................. 9 2.1 Terms of Reference............................................................................................................ 9 2.2 Sources of Information ...................................................................................................... 9 2.3 Site Visits ......................................................................................................................... 10 2.4 Units and Currency .......................................................................................................... 10 3. Reliance on Other Experts........................................................................................................... 11 4. Property Description and Location.............................................................................................. 12 4.1 Property Description and Location ................................................................................... 12 4.2 Alternatives to the Project ............................................................................................... 17 4.3 Land Tenure..................................................................................................................... 18 4.4 Nordmin Benton Joint Venture Agreement ...................................................................... 20 4.5 Environmental Liabilities and Other Risks to Development ............................................... 20 4.6 Permits Required ............................................................................................................. 21 4.7 Other Risks to Development ............................................................................................ 23 5. Accessibility, Climate, Local Resources and Infrastructure .......................................................... 24 5.1 Accessibility ..................................................................................................................... 24 5.2 Climate ............................................................................................................................ 28 5.3 Local Resources and Infrastructure .................................................................................. 30 5.4 Physiography ................................................................................................................... 31 6. History ........................................................................................................................................ 33 6.1 Academic and Government Studies (Ténière & Hilchey, 2012) ......................................... 33 6.2 Mineral Exploration Summary.......................................................................................... 34 7. Geological Settings and Mineralisation ....................................................................................... 37 7.1 Regional Geology and Tectonic Setting ............................................................................ 37 7.2 Structural Geology of the CRFZ ........................................................................................ 41 7.3 Geology of the Cape Ray Gold Deposits ........................................................................... 44 7.4 Geology of the Windowglass Hill Deposit ......................................................................... 45 7.5 Mineralisation ................................................................................................................. 48 8. Deposit Types ............................................................................................................................. 52 8.1 Style of Mineralisation ..................................................................................................... 52 8.2 Analogy with Archean and younger gold deposits ............................................................ 53 Project # 14200-11 NORDMIN ENGINEERING LTD. Page ii of xvi Cape Ray Technical Report February 08, 2017 NORDMIN ENGINEERING LTD. 160 Logan Avenue Thunder Bay, ON, Canada P7A 6R1 T: 807.683.1730 F: 807.683.1744 www.nordmin.com 8.3 Tectonic-metallogenic model for CRFZ ............................................................................. 54 9. Exploration ................................................................................................................................. 55 9.1 2013 Exploration Program ............................................................................................... 55 9.2 2014 Exploration Program ............................................................................................... 60 9.3 2015 Exploration Program ............................................................................................... 60 10. Drilling ........................................................................................................................................ 65 10.1 Rio Tinto Canada Exploration Ltd. (“Riocanex”) ................................................................ 67 10.2 International Corona Resources Ltd and Dolphin Explorations Ltd. (“Corona Dolphin”) .... 67 10.3 Royal Oak Mines Ltd. ....................................................................................................... 67 10.4 Terra Nova Gold Corporation ........................................................................................... 68 10.5 Cornerstone..................................................................................................................... 68 10.6 Benton (2014) .................................................................................................................. 69 10.7 Benton / Nordmin Joint Venture (2016) ........................................................................... 74 11. Sample Preparation, Analyses and Security ................................................................................ 84 11.1 Historic Drilling Programs (pre-Benton 2014) ................................................................... 84 11.2 2014 to 2016 Benton and Nordmin Drilling Programs ...................................................... 85 12. Data Verification ......................................................................................................................... 86 12.1 Historic Drilling Programs (pre-Benton 2014) ................................................................... 86 12.2 2014 Diamond Drilling Program ....................................................................................... 87 12.3 2016 Diamond Drilling Program ....................................................................................... 88 13. Mineral Processing and Metallurgical Testing ............................................................................. 90 13.1 Metallurgical Testing ....................................................................................................... 90 13.2 1981, Lakefield Research for Rio Algom ........................................................................... 90 13.3 1989, Lakefield Research for Corona Resources Ltd.......................................................... 91 13.4 2013, Met-Solve Laboratories for Benton Resources ........................................................ 91 13.5 ALS Laboratories for Benton/Nordmin Partnership .......................................................... 93 13.6 ALS Cyanide Leach Summary ............................................................................................ 94 13.7 Comminution ................................................................................................................... 96 13.8 Mineralogical Analysis ..................................................................................................... 96 13.9 Discussion