NI 43-101 Technical Report and Resource Estimate on the Lawyers Gold-Silver Project
Toodoggone Region
British Columbia, Canada
Centered at: 57.3318° N and 127.2115° W
PREPARED FOR: PPM Phoenix Precious Metals Corp. 307 - 1497 Marine Drive West Vancouver, British Columbia Canada, V7T 1B8
PREPARED BY: R.A. (Bob) Lane, M.Sc., P.Geo. Plateau Minerals Corp. 3000 18th Street, Vernon, B.C. Canada, V1T 4A6
B.K. (Barney) Bowen, P.Eng. Consulting Geologist 4014 West 13th Avenue, Vancouver, B.C. Canada, V6R 2T4
And
Gary Giroux, P.Eng. Giroux Consultants Ltd. 675 West Hastings Street, Vancouver, B.C. Canada, V6B 1N2
DATE: April 19, 2016
LAWYERS PROJECT – TECHNICAL REPORT AND RESOURCE ESTIMATE
1989 Aerial view of the Lawyers underground gold-silver mine
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Table of Contents
1 SUMMARY ...... 1 1.1 Project Description, Location and Access ...... 1 1.2 Geology and Mineralization ...... 1 1.3 Exploration And Development History ...... 2 1.4 Drilling ...... 4 1.4.1 Historical Drilling ...... 4 1.4.2 2015 Drilling ...... 4 1.5 Mineral Resource and Mineral Reserve Estimates ...... 6 1.6 Interpretation And Conclusions ...... 8 1.7 Recommendations ...... 10 2 INTRODUCTION ...... 13 2.1 Purpose of Report and Terms of Reference ...... 13 2.2 Qualified Persons and Site Visit ...... 13 2.3 Units and Currency ...... 14 3 RELIANCE ON OTHER EXPERTS ...... 14 4 PROJECT DESCRIPTION AND LOCATION ...... 15 4.1 Location ...... 15 4.2 Description ...... 15 4.2.1 Mackenzie Land and Resource Management Plan ...... 16 4.3 History of Property Acquisition ...... 23 4.4 Surface Rights ...... 23 4.5 First Nations Communications ...... 23 4.6 Permitting, Environmental Liabilities and Other Issues ...... 23 5 ACCESSIBILITY, CLIMATE, INFRASTRUCTURE, LOCAL RESOURCES AND PHYSIOGRAPHY ...... 24 5.1 Accessibility ...... 24 5.2 Climate ...... 24 5.3 Infrastructure ...... 24 5.4 Local Resources ...... 25 5.5 Physiography ...... 25 6 HISTORY ...... 26 6.1 Early History of the Toodoggone Region ...... 26
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6.2 Lawyers - Early Exploration and Development History ...... 26 6.3 Lawyers – Recent Work ...... 34 6.4 Silver Pond – Exploration History ...... 36 7 GEOLOGICAL SETTING AND MINERALIZATION ...... 39 7.1 Regional Geology ...... 39 7.1.1 Mineral Deposits ...... 43 7.2 Local Geology of The Lawyers Project ...... 46 7.2.1 Lithology ...... 46 7.2.2 Intrusive Rocks ...... 47 7.2.3 Structure ...... 51 7.2.4 Alteration and Mineralization ...... 51 8 DEPOSIT TYPES ...... 72 8.1 Deposit Type Descriptions ...... 72 8.1.1 Low Sulphidation Epithermal Deposits ...... 73 8.1.2 High Sulphidation Epithermal Deposits ...... 74 8.1.3 Porphyry Deposits ...... 75 8.2 Exploration Model ...... 76 9 EXPLORATION ...... 78 9.1 Historical Exploration ...... 78 9.2 Recent Exploration ...... 78 10 DRILLING ...... 78 10.1 Historic Drilling ...... 78 10.2 2015 Drilling ...... 79 10.3 Results - Cliff Creek North Zone ...... 83 10.4 Results – Duke’s Ridge Zone ...... 99 10.5 Drilling Summary and Interpretation ...... 104 10.5.1 Introduction ...... 104 10.5.2 Cliff Creek North Zone ...... 104 10.5.3 Duke's Ridge Zone ...... 105 11 SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 105 11.1 Drill Core Handling Procedures ...... 105 11.2 Analytical Methods ...... 106
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11.3 Quality Assurance / Quality Control Procedures ...... 107 11.4 Adequacy Of Sample Preparation, Security And Analytical Procedures ...... 117 12 DATA VERIFICATION ...... 117 12.1 Twin Drill Hole Comparisons...... 118 12.1.1 Cliff Creek North Twin Drill Holes ...... 118 12.2 Other Drilling to Verify Historical Results ...... 122 12.2.1 Duke’s Ridge Verification Drilling ...... 122 12.3 Adequacy of Data ...... 122 13 MINERAL PROCESSING AND METALLURGICAL TESTING ...... 123 13.1 Historical Mineral Processing and Metallurgical Testing ...... 123 13.1.1 Results ...... 123 13.2 Mineral Processing and Metallurgical Testing by PPM ...... 124 14 MINERAL RESOURCE ESTIMATES ...... 124 14.1 Historical Mineral Resource Estimates ...... 124 14.1.1 Introduction ...... 124 14.1.2 Silver Pond West Zone...... 124 14.1.3 Hawkins' 2003 Mineral Resource Estimates ...... 125 14.2 2015 PPM Mineral Resource Estimates ...... 126 14.2.1 Introduction ...... 126 14.2.2 Cliff Creek North Zone ...... 127 14.2.3 Duke's Ridge Zone ...... 137 15 MINERAL RESERVE ESTIMATES ...... 142 15.1 Historical Mineral Reserve Estimates ...... 142 15.1.1 Introduction ...... 142 15.1.2 AGB Zone ...... 143 15.1.3 Cliff Creek Zone ...... 144 15.1.4 Duke's Ridge Zone ...... 145 15.1.5 Phoenix Zone ...... 145 15.2 2015 PPM Mineral Reserve Estimates ...... 145 16 MINING METHOD ...... 145 17 RECOVERY METHODS ...... 145 18 PROJECT INFRASTRUCTURE ...... 145
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19 MARKETS STUDIES AND CONTRACTS ...... 146 20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ...... 146 21 CAPITAL AND OPERATING COSTS ...... 146 22 ECONOMIC ANALYSIS ...... 146 23 ADJACENT PROPERTIES ...... 146 23.1 Introduction ...... 146 23.2 Past Producers ...... 146 23.2.1 Ranch (094E 079, 091 and 099) ...... 146 23.2.2 Baker (094E 026) ...... 148 23.2.3 Shasta (094E 050) ...... 151 23.3 Developed Prospects ...... 152 23.3.1 Mets (094E 093) ...... 152 23.3.2 Golden Stranger (094E 076)...... 153 23.3.3 JD (094E 171) ...... 154 24 OTHER RELEVANT DATA AND INFORMATION...... 155 25 INTERPRETATION AND CONCLUSIONS ...... 156 26 RECOMMENDATIONS ...... 159 27 REFERENCES ...... 162 28 CERTIFICATE OF QUALIFICATIONS ...... 167
LIST OF TABLES Table 1-1: Lawyers Reserves (Wright, 1985) ...... 3 Table 4-1: List of Mineral Claims, Lawyers Project ...... 19 Table 4-2: List of MINFILE and Other Notable Mineral Occurrences, Lawyers Project ...... 21 Table 6-1: Historical Reserves used for Mine Planning, Lawyers Project...... 29 Table 6-2: Lawyers Mine Production (1989-1992) ...... 32 Table 7-1: Regional Stratigraphy of the Toodoggone Region (after Diakow et al., 1993) ...... 41 Table 7-2: Lithostratigraphic Column, Toodoggone Formation (Diakow et al., 1993) ...... 47 Table 10-1: Collar Information for 2015 Drill Holes, Lawyers Project ...... 83 Table 10-2: Select Results from 2015 Drilling, Lawyers Project ...... 86 Table 11-1: Recommended Values for Certified Reference Standards (CRS) ...... 109 Table 11-2: Comparison of Results for Duplicate Samples ...... 115
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Table 12-1: Comparison of weighted averages between original drill holes and 2015 twin drill holes ...... 119 Table 14-1: Cliff Creek North Inferred Resource ...... 131 Table 14-2: Dukes Ridge Inferred Resource ...... 139
LIST OF FIGURES Figure 4-1: Location of the Lawyers Project ...... 17 Figure 4-2: Distribution of Mineral Claims, Lawyers Project ...... 18 Figure 4-3: Locations of MINFILE and Other Notable Mineral Occurrences, Lawyers Project ...... 22 Figure 6-1: Lawyers Mine Surface Development Plan 1986 ...... 31 Figure 6-2: 3D view of Cliff Creek North Zone Underground Workings ...... 32 Figure 7-1: Regional Geology and Mineral Deposits, Toodoggone Region...... 42 Figure 7-2: Local Geology and Principle Mineralized Zones, Lawyers Project ...... 49 Figure 7-3: Legend for Figure 7.2 ...... 50 Figure 7-4: Geology and Select Mineralized Zones, Central Lawyers Project (after Diakow et al., 1993) ...... 50 Figure 7-5: Modeled Workings of the Cliff Creek North Zone ...... 55 Figure 7-6: Longitudinal Section Showing Drill Hole Intersections, Phoenix Zone, 1992 ...... 59 Figure 7-7: Geology and Chip Sample Results, 2004 M-Grid Trenches (Blann, 2005) ...... 60 Figure 7-8: Geology, Alteration and Mineralization along the Silver Pond Trend (Childe and Kaip, 2001) ...... 63 Figure 7-9: Locations of the Silver Pond Group of Prospects ...... 64 Figure 8-1: Lawyers Project - Schematic Model for Low Sulphidation and High Sulphidation Epithermal Mineralization Relative to Shallow, Sub-Volcanic Intrusions ...... 73 Figure 10-1: Distribution of 2015 Drill Holes and Historic Drill Holes, Lawyers Project ...... 82 Figure 10-2: 2015 Drill Hole Locations, Cliff Creek North Zone ...... 85 Figure 10-3: Cross-section 2225NW ...... 91 Figure 10-4: Cliff Creek North Cross-section 2300NW ...... 94 Figure 10-5: Cliff Creek North Cross-section 2400NW ...... 97 Figure 10-6: Long-section, Cliff Creek North Zone ...... 98 Figure 10-7: 2015 Drill Hole Locations, Duke’s Ridge Zone ...... 101 Figure 10-8: Cross-section 5600NW, Duke’s Ridge Zone ...... 103 Figure 11-1: Analytical Results for Gold, Blank CDN-BL-10 ...... 108 Figure 11-2: Analytical Results for Silver, Blank CDN-BL-10 ...... 108 Figure 11-3: Gold Results for Standard CDN-GS-P7H ...... 109 Figure 11-4: Gold Results for Standard CDN-GS-1P5A ...... 110
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Figure 11-5: Gold Results for Standard CDN-ME-1206 ...... 110 Figure 11-6: Gold Results for Standard CDN-GS-5H ...... 111 Figure 11-7: Gold Results for Standard CDN-GS-5C ...... 111 Figure 11-8: Gold Results for Standard CDN-GS-15A ...... 112 Figure 11-9: Gold Results for Standard CDN-GS-22 ...... 112 Figure 11-10: Gold Results for Standard CDN-GS-30A ...... 113 Figure 11-11: Silver Results for Standard CDN-GS-5H ...... 113 Figure 11-12: Gold Duplicate Pair Analysis ...... 114 Figure 11-13: Silver Duplicate Pair Analysis ...... 115 Figure 12-1: Gold grade versus drill hole depth; A) hole 84CC-14, B) hole CC15-06 ...... 119 Figure 12-2: Gold grade versus drill hole depth; A) hole 83CC-04, B) hole CC15-07 ...... 120 Figure 12-3: Gold grade versus drill hole depth; A) hole 84CC-38, B) hole CC15-08...... 121 Figure 14-1: Isometric view looking northeast showing Cliff Creek North Zone Mineralized Solids and drill hole traces ...... 128 Figure 14-2: Cliff Creek North 1550 Level showing estimated gold grades ...... 132 Figure 14-3: Cliff Creek North 1600 Level showing estimated gold grades ...... 133 Figure 14-4: Cliff Creek North 1650 Level showing estimated gold grades ...... 134 Figure 14-5: Cliff Creek North 1700 Level showing estimated gold grades ...... 135 Figure 14-6: Cliff Creek North 1750 Level showing estimated gold grades ...... 136 Figure 14-7: Isometric view looking northeast showing Duke’s Ridge Mineralized Solids, drill hole and trench traces and surface topography ...... 138 Figure 14-8: Duke’s Ridge 1810 Level showing estimated gold grades ...... 140 Figure 14-9: Duke’s Ridge 1820 Level showing estimated gold grades ...... 141 Figure 14-10: Duke’s Ridge 1830 Level showing estimated gold grades ...... 142 Figure 23-1: Locations of Adjacent Properties ...... 150
LIST OF PLATES Plate 4-1: Aerial view looking eastwards of the operating Lawyers underground gold/silver mine, 1989 ...... 20 Plate 6-1: AGB Zone (centre of aerial photo), 1983 ...... 27 Plate 6-2: Cliff Creek and Duke’s Ridge Zones (centre of aerial photo), 1983 ...... 28 Plate 6-3: Views of Dewatered Cliff Creek North Portal in 2011 ...... 36 Plate 6-4: Excavator Trenching in 1994, Silver Pond North Zone ...... 39 Plate 7-1: Example of Trachyandesite Latite Crystal Lapilli Tuff, Metsantan Member, Cliff Creek North Zone ...... 48
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Plate 7-2: Example of Cliff Creek North Zone Mineralization ...... 54 Plate 7-3: View of Cliff Creek Portal Area ...... 56 Plate 7-4: Example of Duke’s Ridge Zone Stockwork Veining ...... 57 Plate 7-5: View of Silver Pond West Zone Looking North ...... 65 Plate 10-1: Diamond Drilling on the Cliff Creek North Zone, 2015 ...... 81 Plate 10-2: Core from an upper mineralized intersection in hole CC15-12 showing typical fracture fillings, stockwork veins and breccias with silicic and potassic alteration ...... 89 Plate 10-3: Core from a lower intersection in hole CC15-12 showing typical fracture fillings, stockwork veins and breccias with argillic alteration...... 90 Plate 10-4: P2 Vein and Stockwork Zone, Hole CC15-15 ...... 92 Plate 10-5: Example of Mineralization Characteristic of the Duke’s Ridge Zone ...... 99
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1 SUMMARY
1.1 PROJECT DESCRIPTION, LOCATION AND ACCESS The Lawyers Project is located in the Toodoggone region of the Omineca Mining Division, 450 km northwest of Prince George, British Columbia. The project is situated 45 km northwest of the former Kemess South open pit copper-gold mine and 16 km southwest of Toodoggone Lake. It is centered at Latitude 57.3318° N and Longitude 127.2115° W and covers parts of BCGS mapsheets 094E.024, 094E.025, 094E.034 and 094E.035.
The Lawyers Project consists of 37 contiguous MTO mineral claims that are 100%-owned by PPM Phoenix Precious Metals Corp. ("PPM"), and are in good-standing until November 9, 2025. The claims cover 9860 hectares of land that encompass the Lawyers group of prospects, including the former Lawyers underground gold-silver mine, and the Silver Pond group of prospects that cover six gold-silver mineral occurrences with an exploration history that parallels that of the Lawyers group. Exploration in the area began in the late 1960s and blossomed in the 1980s, identifying numerous showings, prospects and deposits culminating in the development of the Lawyers gold-silver mine that operated from 1989-1992. Access to the project is provided by a series of branching gravel roads, including the Finlay Forest Service Road that begins south of the town of Mackenzie, then connects to the Omineca Resource Access Road (ORAR). The ORAR continues beyond the end of the Kemess South mine access road, past the Sturdee River gravel airstrip and through the inactive Baker mine site to the Project.
1.2 GEOLOGY AND MINERALIZATION The Toodoggone region is an area measuring approximately 1500 square kilometres that is underlain by strata of the Stikine Terrane. The Stikine Terrane is comprised of Paleozoic to Mesozoic island arc assemblages and overlying Mesozoic sedimentary sequences within the lntermontane Belt. The oldest rocks exposed in the Toodoggone region consist of crystalline limestone of the Devonian Asitka Group. They are unconformably overlain by mafic volcanic rocks of the Upper Triassic Takla Group. Takla Group volcanic rocks are in turn overlain by bimodal volcanic and sedimentary strata of the Lower Jurassic Toodoggone Formation of the Hazelton Group.
The Lawyers Project is underlain primarily by volcanic rocks of the Toodoggone Formation, a thick pile of dominantly subaerial, high potassium, calcalkaline latite and dacite volcanic strata emplaced along a north-northwest trending, elongate volcano-tectonic depression. The Project is underlain primarily by feldspar-phyric trachyandesite lavas and crystal tuffs of the Metsantan Member, rocks that are host to all known mineral deposits and prospects in the Project area. Low-sulphidation epithermal gold-silver mineralization (the Lawyers Group of prospects) and high- sulphidation epithermal gold-silver mineralization (the Silver Pond Group of prospects) have been discovered on the Lawyers Project by many past operators. They occur in association with northwest and north-northwest trending, sub-vertical to steeply west dipping normal faults that demarcate graben margins.
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The Lawyers Group of prospects consists of a combination of quartz veins, stockwork zones and chalcedony breccia bodies that developed along northwest and north-northwest trending fracture systems. Low-sulphidation epithermal gold-silver mineralization consists predominantly of pyrite, with minor chalcopyrite, sphalerite, galena, native gold, native silver, electrum and acanthite in a gangue of quartz, chalcedony, amethyst, minor calcite, and occasional barite. Veins commonly display banded and crustiform textures typical of low-sulphidation epithermal systems. Three principle zones have been discovered to date and include the Amethyst Gold Breccia (AGB) Zone, the Cliff Creek Zone with its North, Central and South sub-zones, and the Duke’s Ridge Zone. Subsidiary zones include Phoenix, M- Grid and Marmot Lake. Low-sulphidation (adularia-sericite) epithermal type alteration is characterized by core zones of intense silicification±adularia and bleaching. At higher elevations within the AGB Zone and within the Cliff Creek and Duke’s Ridge Zones, aduarlia forms narrow, pink boundaries on vein margins, and outbound of veins replaces plagioclase phenocrysts and groundmass silicate minerals, partly masking the porphyritic texture of the wallrock. At AGB, central potassic alteration grades outward to a propylitic assemblage of epidote-carbonate-chlorite-pyrite. At the Cliff Creek and Duke’s Ridge Zones, adularia on vein margins occurs with sericite flanked by an assemblage consisting primarily of kaolinite. The argillic alteration, accompanied by pyrite and chlorite, forms wide envelopes on the veins; it grades outward to a propylitic assemblage similar to that observed at the AGB Zone. The Silver Pond Group of prospects, most of which lie along the Silver Pond trend, a north-northwest trend that is sub-parallel to the Cliff Creek Zone, is centered approximately 3 km west of the AGB Zone, and about 1-2 km west of the Cliff Creek Zone. Two general styles of high-sulphidation (acid-sulphate) epithermal gold-silver mineralization occur along this trend. One consists of vein and breccia-type ore shoots and pods, such as the West and Silver Creek Zones, and the other as high-level stockwork-type mineralization as seen in the North Zone. Gold and silver are generally absent from areas of intense alteration, with pyrite and magnetite being the only visible metallic minerals. The Silver Pond Group of prospects is typically characterized by an intense central zone of quartz-dickite±pyrite±barite that obliterates original rock textures; this central alteration assemblage envelopes northwest-trending veins and/or fracture fillings of microcrystalline quartz with drusy quartz-lined cavities. The central zones grade outward to dickite-quartz±natroalunite argillic alteration and peripheral chlorite- carbonate-epidote±montmorillonite propylitic alteration.
1.3 EXPLORATION AND DEVELOPMENT HISTORY Regional geochemical surveys in the Toodoggone region were conducted by Kennco Explorations, (Western) Limited in the late 1960s. Kennco staked the first Lawyers claims and completed systematic surveying of the project during the period 1970-1975, including the initial diamond drilling on the AGB Zone in 1974 and on the Cliff Creek Zone in 1975.
In 1978, the Lawyers claims were optioned to Semco Mining Corporation, who quickly assigned the option to Serem Ltd. From 1978-1981, Serem and joint venture partners Sudbury Contact Mines, Limited and Agnico-Eagle Mines Limited, completed soil and silt geochemical surveys, trenching and diamond drilling with a focus on the AGB Zone. In 1981, a crosscut adit was developed at the 1750 m elevation and driven to intersect the AGB Zone. Following the program, the joint venture partnership was dissolved. Serem's continued assessment of the property in 1982-83 included extensive trenching on the
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Cliff Creek and Duke’s Ridge Zones and underground and surface diamond drilling on the AGB Zone. In 1984, the company released an estimate of mineable reserves for the AGB Zone of 509,528 tonnes grading 7.23 g/t Au and 243.77 g/t Ag, and an estimate of probable drill-indicated reserves for the other two zones combined of 130,155 tonnes grading 7.44 g/t Au and 294.86 g/t Ag.
In 1984, Serem completed additional trenching and surface diamond drilling on all three zones, and additional underground development and drilling on the AGB Zone. The work expanded the reserve estimate for the project to the figures shown below (Table 1.1) that formed the basis for mine development planning. Work in 1985-86 focused mainly on economic, engineering, geotechnical and environmental studies, as well as other technical evaluations to determine the feasibility of the project. A 1985 Feasibility Study, a 1986 Technical / Economic Study and a revised 1987 Mine Plan were competed for the project by Wright Engineers Limited, and a 1985 Prospectus and 1986 Stage 1 Report for the project were completed by Norecol Environmental Consultants Ltd. and submitted to provincial regulators (Mine Development Steering Committee) for review using the following reserves:
Table 1-1: Lawyers Reserves (Wright, 1985)
Zone Classification Tonnes Au (g/t) Ag (g/t)
AGB Proven 452,600 8.321 263.5
Cliff Creek Probable 420,300 5.844 260.8
Duke's Ridge Probable 68,400 7.868 226.0
Total Weighted Average 941,300 7.182 259.6
Site work completed to the end of 1986 included 22,298 m of surface and underground diamond drilling, 7000 m of trenching, 1303 m of crosscuts and drifts, and 179 m of raises.
In 1987, Serem changed its name to Cheni Gold Mines Inc. ("Cheni") and received its approval from the BC government to construct and operate the Lawyers mine. Cheni also received financial assistance from the Province to extend the ORAR to the Sturdee Valley airstrip. Exploration conducted on the property in 1987 included 10,432 m of diamond drilling in 49 holes on the Cliff Creek Zone and underground development for mining of the AGB Zone. Reserves in all categories were estimated as 1,757,766 tonnes grading 6.72 g/t Au and 243.09 g/t Ag (George Cross News Letter, 18/11/87). Construction of the 500 tonne per day mill began early in 1988.
The Lawyers mine was operated by Cheni from 1989 to 1992 with the first dore being poured on January 8, 1989. The sequence of mining saw the AGB Zone mined to exhaustion while preparations for underground development of the Cliff Creek North Zone advanced. Underground development of Cliff Creek North began in 1990 and included a 750 m access ramp, a spiral decline with five sublevels, and an incline to access two upper levels. However, limited mining of the Cliff Creek North zone occurred. The high grade Phoenix Zone was discovered in 1991 and trenched, drilled, accessed and mined by
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November 1992. Efforts to outline additional sources of high-grade ore on the property were unsuccessful and the mine was closed. During its four years of operation the mine produced a total of 171,246 ounces of gold and 3,546,400 ounces of silver from the AGB, Cliff Creek North and Phoenix deposits, and from test mining on one satellite property. During the mid-1990s, Cheni fully reclaimed the mine site and later allowed the mineral tenure covering the area to lapse. In 2000-2001, Guardsmen Resources Ltd. staked the ground covering the former mine site and adjacent areas. Exploration conducted on the Lawyers Project since closure has been limited to prospecting, sampling and minor trenching during the period 2001-2004, which led to the discovery of the M-Grid gold-silver vein showing, and small diamond drilling programs in 2005 and 2006 that targeted the Cliff Creek South and Central subzones. In 2010, the Cliff Creek portal was re-opened to assess its integrity. In 2011, Guardsmen transferred ownership of the Lawyers Project to affiliated company PPM Phoenix Precious Metals Corp. who then made an attempt to fully dewater the flooded underground workings.
1.4 DRILLING
1.4.1 Historical Drilling
Historic drilling on the Lawyers Project is briefly summarized in bullet form as follows:
During the period 1973-2006, over 68,000 m of surface diamond drilling in more than 340 drill holes has been completed on the Project, including drilling completed in the Silver Pond West and other Silver Pond prospect areas.
The surface diamond drilling sub-totals for the Project, excluding Silver Pond West and other Silver Pond prospect areas are: (i) over 15,000 m in an unknown number of holes in the AGB Zone; (ii) over 26,000 m in approximately 130 drill holes in the Cliff Creek Zone; (iii) well over 2400 m in 46 holes in the Duke's Ridge Zone; (iv) 950 m in 20 holes in the Phoenix Zone; and (v) well over 800 m in at least 12 holes on other prospect areas.
During the period 1984-88, surface diamond drilling in the Silver Pond West developed prospect area totaled approximately 9000 m in more than 55 holes; in the same time period, that completed in other Silver Pond prospect areas totaled over 13000 m in more than 77 drill holes.
Underground drilling carried out in the past is not well documented. In the AGB Zone, at least 3000 m (likely considerably more) was completed in an unknown number of drill holes. In the Cliff Creek Zone, 2500 m in 44 holes was reportedly completed in 1990 but no reliable data on additional underground drilling completed in this zone was available to the authors. In addition, 19 underground drill holes were reportedly completed in the Phoenix Zone in 1992.
1.4.2 2015 Drilling
In 2015, PPM completed 26 HQ-diameter diamond drill holes with an aggregate length of 4,001.62 m. Drilling focused on the Cliff Creek North Zone, where previous work included significant surface exploration, underground development and limited mining, and the Duke’s Ridge Zone, where previous work included trenching and surface diamond drilling.
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The intent of the 2015 program was to verify the location of historic drill holes, and trenches if possible, validate the historic data and conduct verification and infill diamond drilling in the two zones in order to provide sufficient data to support the calculation of a NI 43-101 compliant mineral resource estimates for each zone. A digital database was compiled of all available historic trench and drill hole data; it was then used to construct a ‘first-pass’ geological 'solids' model for each zone. Ground-truthing identified many old drill hole collars included in a differential GPS survey of the zones that was completed during the 2015 drilling program.
The Cliff Creek North Zone was tested with 19 drill holes (3,281.99 m), 17 of which successfully penetrated the north-northwest trending, moderately to steeply southwest-dipping vein system. The drilling showed that the zone has a minimum strike length of 225 m. It remains open along strike to the northwest (beyond Holes CC15-18 and 19) and to the southeast (beyond Hole CC15-06 which intersected 8.63 m grading 9.64 g/t Au and 307.0 g/t Ag and beyond Hole CC15-12 which intersected a 4.86 m-long upper zone grading 7.74 g/t Au and 355.1 g/t Ag, and a 4.10 m-long lower zone grading 5.98 g/t Au and 246.3 g/t Ag), and at depth, below the deepest levels of drilling and mine workings. The intersections of narrow voids by a number of drill holes are consistent with raises, stopes and/or drifts and confirm that parts of the deposit have been mined. Analysis of core recovered from the hangingwall and footwall of some of the voids showed that good grades of gold-silver mineralization remain, suggesting that past development was likely limited to narrow stoping.
A narrow precious metals-enriched semi-massive sulphide vein and associated stockwork zone (the ‘P2’ vein) intersected in Hole CC15-15 2.40 m grading 87.04 g/t Au and 2,407 g/t Ag, including 0.70 m grading 293.40 g/t Au and 7,622 g/t Ag. This high grade intercept occurs approximately 70 m into the hangingwall of the main Cliff Creek North Zone and is an exciting new exploration target. Hangingwall mineralization of note was also encountered in several other drill holes.
A wide intersection of low-grade mineralization in Hole CC15-13 (51.99 m grading 1.71 g/t Au and 41.5 g/t Ag) is a potentially bulk-mineable target that warrants follow-up. The intersection occurs in the central and deeper part of the Cliff Creek North deposit which may be structurally thickened here and therefore offers significant exploration potential.
The Duke’s Ridge Zone was tested with 7 drill holes totaling 719.63m; all holes intersected the sinuous northwest-trending sub-vertical vein and stockwork system. The majority of holes targeted the central, higher grade part of the deposit. Although this drilling did not reproduce some of the highest assay values from the past, it did confirm a near-surface deposit with low to moderate gold-silver grades. Two drill holes collared about 30 m apart in the central part of the deposit, DR15-04 (4.00 m grading 8.54 g/t Au and 171.8 g/t Ag) and DR15-05 (8.56 m grading 3.85 g/t Au and 106.5 g/t Ag), returned some of the better gold and silver grades encountered at Duke’s Ridge in 2015. The deposit in this central area remains open at depth.
Holes DR15-06 and DR15-07 evaluated the southeastern and northwestern parts of the deposit, respectively, encountering narrow low-grade intercepts within broader weakly anomalous zones. These two holes determined that the Duke's Ridge Zone has a minimum strike length of 380m.
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1.5 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES 1.5.1 Mineral Resource Estimates
A historical mineral resource estimate for the Silver Pond West Zone was done in 1987. It reported a “drill- indicated”, undiluted resource of 62,100 tonnes grading 5.85 g/t Au. The estimate was done by the long section polygon method and used a cut-off grade of 2.4 g/t Au and a specific gravity of 2.88. This mineral resource estimate was prepared before the coming into force of the NI 43-101 Standards of Disclosure for Mineral Projects. It should not be relied upon.
Giroux Consultants Ltd. was retained by PPM in 2015 to produce mineral resource estimates for the Cliff Creek North and Duke's Ridge Zones. Modeled 3D geologic 'solids' were used to constrain mineralization in the block model and grades for gold and silver were interpolated into blocks by Ordinary Kriging. Based on available data on historic underground workings in the Cliff Creek North Zone, if an estimated block contained any percentage of underground workings, the workings were assumed to be within the mineralized zone and were subtracted from the percentage of mineralized solid in that block.
At this time, the entire Cliff Creek North Zone resource is classified as inferred due to drill hole density, uncertainty of the precise locations and full extent of underground workings and a limited number of blocks estimated in Pass 1 and 2 Kriging. At a 4.0 g/t AuEQ cut-off, its inferred mineral resource is estimated to be 550,000 tonnes grading 4.51 g/t Au and 209.15 g/t Ag, which equates to a contained metal resource of 80,000 oz. Au and 3,700,000 oz. Ag.
At this time, the entire Duke's Ridge Zone resource is classified as inferred due to drill hole density and the limited number of blocks estimated in Pass 1 and 2 Kriging. At a 4.0 g/t AuEQ cut-off, its inferred mineral resource is estimated to be 58,000 tonnes grading 4.30 g/t Au and 139.13 g/t Ag, which equates to a contained metal resource of 8,000 oz. Au and 260,000 oz. Ag.
No economic evaluations have been completed by PPM on the Cliff Creek North and Duke's Ridge Zones, and as a result an economic cut-off for them is unknown. However, for the purposes of reporting mineral resources on the Project, the authors compared current gold and silver metal prices and the current US$-CDN$ exchange rate to historic metal prices (adjusted for both inflation and historic exchange rates) for the 4-year period of past production on the Lawyers Project. They found that the average gold and silver grades corresponding to cut-off grades of 4.00, 4.50 and 5.00 g/t AuEQ, after being adjusted for comparison purposes, compare favourably with historic mined grades at Lawyers.
In addition, the authors reviewed publically-reported mineral resource or reserve data and certain infrastructure-related factors at two proposed underground gold mines: IDM Mining's Red Mountain Project near Stewart, B.C.; and New Gold Inc.’s Rainy River Project in the Chapple Township of northwestern Ontario. At the former, a 3.0 g/t Au cut-off was used to estimate mineral resources; the resource area has some existing underground infrastructure but the project has no road access. At the latter, a 3.5 g/t AuEQ cut-off was used to estimate underground mineral reserves. Seven zones comprise the underground reserves: one will be accessed by its own underground ramp; the other six will be accessed through the lower benches of the proposed ultimate open pit.
The authors conclude that, based on the above information, it is reasonable to select a 4.0 g/t AuEQ cut-off for reporting purposes for the Lawyers Project.
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1.5.2 Mineral Reserve Estimates
The mineral 'reserve' estimates done by Cheni prior to production start-up and later during the 1989-92 production period on the Project, and those done by Wright Engineers in their Feasibility Studies completed during the period 1985-87, are summarized in this section. All were completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects and used categories other than those stipulated for current use. They are considered to be historical estimates only and are not relied upon by the authors of this Report or by PPM. The term 'reserve' has been qualified by parentheses in order to alert the reader that its historical use does not meet current standards.
The 'base case' starting point for a discussion of historical mineral reserve estimates on the Project is the Summary of Reserves presented in Wright Engineers' Feasibility Study: Volume 1 Report (February 1985). In it, they present 'recoverable, diluted ore reserves' for the AGB, Cliff Creek and Duke's Ridge Zones totaling 979,500 tons (941,300 tonnes) grading 0.203 oz. Au per ton (7.182 g/t Au) and 7.52 oz. Ag per ton (259.6 g/t Ag). Key parameters and procedures used by Wright Engineers in their calculations include: (i) high (erratic) gold and silver values which occur in all zones were capped at various levels; (ii) a cut-off grade of 0.15 oz. per ton (5.14 g/t) AuEQ at a conversion factor for gold equivalency of 1 oz. Au = 50 oz. Ag was used; (iii) 'reserves' were classified as 'recoverable' using a criteria of 95% ultimate recovery of reserves based on shrinkage stoping as the main method of mining; and (iv) to convert the volume of reserve blocks to tonnes, a specific gravity value of 2.7 was used.
The 'reserve' status of the individual zones, towards or at the end of Cheni's production period on the Project, was as follows:
The AGB Zone was mined out completely by mine closing. No mineral inventory remains in this zone at present. In 1990, Cheni adopted a higher cut-off grade of 0.20 oz. AuEQ per ton which, along with other factors, had the effect of considerably reducing the mineral inventories of the Cliff Creek and Duke's Ridge Zones. By year-end 1991, recalculated, diluted, 'reserves' were down to 29,614 tons grading 0.220 oz. Au per ton and 6.27 oz. Ag per ton in the Cliff Creek North Zone and 40,067 tons grading 0.229 oz. Au per ton and 7.29 oz. Ag per ton in the Cliff Creek Central Zone. The 'reserves' in both zones were classified as 'Possible' which is a term no longer in use. At Duke's Ridge, 'reserves' as of year-end 1991 were 23,991 tons grading 0.232 oz. Au per ton and 6.33 oz. Ag per ton in the 'Possible' category. No mining in the Duke's Ridge Zone was done during the Lawyers production period of 1989-92 nor has any been done since then. The initial reserve for the small but high-grade Phoenix Zone was 3,245 tons grading 1.69 oz. Au per ton and 101.7 oz. Ag per ton. By November 1992, a total of 5439 tons of ore was ultimately extracted from the zone producing 6,713 ounces of gold and 296,084 ounces of silver. Results from a 1992 underground diamond drilling program indicated that the zone remains open to depth and to the east.
In 2015, PPM and its consultants completed no mineral reserve estimates on any of the known deposits within the current limit of the Project area.
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1.6 INTERPRETATION AND CONCLUSIONS The current rendition of the Lawyers Project brings together the past-producing Lawyers gold-silver mine area and the extensive Silver Pond trend of precious metals occurrences. This large prospective land holding, under one company's ownership, presents a unique opportunity for PPM to carry out further exploration on a 'camp' scale. There remains excellent potential for the discovery of additional low and high-sulphidation epithermal deposits like those that have been discovered and explored to date. In addition, there exists the possibility for the discovery of a near-surface or buried 'bulk tonnage' deposit which may offer the advantage of economies of scale should future mine development occur.
There remains in place the historic underground development infrastructure at the Cliff Creek North Zone. Should ongoing exploration in this zone warrant further underground development leading to possible future mining, this presently flooded infrastructure would decrease considerably the pre- production development costs that would be incurred. Other existing surface infrastructure which would facilitate any future development on the Project includes its road access, its proximity to the nearby Baker mill and its relative proximity to electrical power, connected to the BC Hydro grid, which is available at the past-producing Kemess South mine site.
The Lawyers Project is not directly encumbered by any provincial or national parks, or other protected areas. Additionally, PPM and its affiliated company Guardsmen have had recent positive experiences with regional regulators, local First Nations and other stakeholders; these positive relationships will help facilitate moving the Project forward should exploration on it justify future development.
The AGB Zone may persist along strike, based on encouraging 2001 and 2003 chip sampling results at its southern end. Ground geophysical surveys in the overburden-covered valley to the south appear to indicate that the structure hosting the AGB mineralization may continue towards the valley bottom.
The mineralized, low-sulphidation, gold and silver-bearing M-Grid structures are similar in character to mineralized zones on the Project which have seen past production. They extend for a great enough distance (~400 m) along strike to host potential zones of economic interest, either at shallow, intermediate or greater depths. No drilling has been carried out on this zone. Gold soil geochemical anomalies to the northwest and southeast of the M-Grid trenches outline an additional 600 m of potential strike length that remains unexplored. There is potential here to add to the strike length of M- Grid mineralization by initial surface trenching followed by relatively shallow drill testing, if warranted.
The Silver Pond Group of prospects is more characteristic of a high-sulphidation epithermal environment. It extends for a distance of about 4.5 km along a regional northwest-trending structure which has been identified in reconnaissance airborne surveys as a prominent magnetic low. There remains considerable exploration potential to explore for both vein-type and bulk tonnage targets along this trend.
The Phoenix Zone, based on the reported results of Cheni's 19-hole underground diamond drilling program completed in 1992, remains open to depth and to the east. There may remain potential here to outline additional high-grade resources. Other minfile occurrences within the Lawyers Project area may contain untested targets which warrant further exploration.
During the 2015 diamond drilling program at the Lawyers Project, adequate care and proper procedures were used to obtain reliable gold and silver results. The Cliff Creek North Zone was tested with a total of
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19 drill holes, 17 of which successfully penetrated the north-northwest trending, moderately to steeply southwest-dipping vein system. The drilling showed that the zone has a minimum strike length of 225 m and remains open along strike to the northwest (beyond Holes CC15-18 and 19) and to the southeast (beyond Holes CC15-06 and 12), and at depth below the deepest levels of drilling and mine workings. The intersection of underground workings (voids) by a number of the drill holes confirmed that parts of the deposit have been subjected to mining. Analysis of core recovered from the immediate hangingwall and footwall of some of the voids showed that good grades of gold-silver mineralization remain and suggests that past development was likely limited to narrow stoping. The narrow precious metals- enriched massive sulphide vein and associated stockwork zone (the ‘P2’ vein) intersected in Hole CC15- 15 occurs approximately 70m into the hangingwall of the main Cliff Creek North Zone and is an important new exploration target. Mineralization of note in the hangingwall of the main Cliff Creek North Zone was also encountered in several other drill holes. The wide intersection of low-grade mineralization in Hole CC15-13 is a potentially bulk-mineable target that warrants follow-up. This central and deeper part of the Cliff Creek North deposit may be structurally thickened and therefore offers significant exploration potential.
The Duke’s Ridge Zone was tested with a total of 7 holes, all of which intersected the sinuous northwest- trending sub-vertical vein and stockwork system. The majority of holes targeted the central, higher grade part of the deposit. Although this drilling did not reproduce some of the highest assay values encountered in historic drill holes, it did confirm a near-surface deposit with low to moderate gold-silver grades. Holes DR15-04 and DR15-05 returned some of the better gold and silver grades encountered at Duke’s Ridge in 2015; the system in this area remains open at depth. Holes DR15-06 and DR15-07 evaluated the southeastern and northwestern parts of the deposit, respectively, encountering narrow low-grade intercepts within broader weakly anomalous zones. These two holes determined that the Duke's Ridge Zone has a minimum strike length of 380m.
The 2015 diamond drilling program employed twinning of selected historic holes and drilling of targeted infill, step-down and step-out holes. The program verified and integrated as much of the historic data as possible. The authors of this Report conclude that the historic drill hole data for which complete assay and location information is known is suitable for use in the calculation of a mineral resource estimate for the Cliff Creek North and Duke’s Ridge zones.
The historic metallurgical recoveries of the gold-silver ore mined at the Lawyers property during the period 1989-92, which averaged 93% for Au and 78% for Ag, are considered good and indicate that any future ores mined within the Project area, at least those that may be sourced from low-sulphidation deposits similar to those mined in the past, should present no significant problems in terms of acceptable rates of metals recovery.
At a 4.0 g/t AuEQ cut-off, the current mineral resource estimated for the Cliff Creek North Zone is 550,000 tonnes grading 4.51 g/t Au and 209.15 g/t Ag, which equates to a contained metal resource of 80,000 oz. Au and 3,700,000 oz. Ag. This known resource is of sufficient tenor and size to justify follow-up drilling as detailed in Section 26 of the Report.
At a 4.0 g/t AuEQ cut-off, the current mineral resource estimated for the Duke's Ridge Zone is 58,000 tonnes grading 4.30 g/t Au and 139.13 g/t Ag, which equates to a contained metal resource of 8,000 oz.
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Au and 260,000 oz. Ag. This known resource is considered too small to warrant infill drilling of the zone at this time. However, most of the resource is contained in the central portion of the deposit which remains open to depth. Deeper drill testing beneath the deposit's central portion is warranted in an attempt to significantly increase its size.
For both the Cliff Creek North and Duke's Ridge Zones, the authors found that the average gold and silver grades corresponding to cut-off grades of 4.00, 4.50 and 5.00 g/t AuEQ, after being adjusted for comparison purposes, compare favourably with historic mined grades at Lawyers. Additionally, their review of publically-reported mineral resource or reserve data and certain infrastructure-related factors for two proposed underground gold mines, Red Mountain near Stewart, B.C. and Rainy River in northwestern Ontario, provided relevant comparative information for the selection of a cut-off grade at the Lawyers Project. The authors conclude that it is reasonable to select a 4.0 g/t AuEQ cut-off for the purposes of reporting mineral resources on the Project.
1.7 RECOMMENDATIONS It is recommended that exploration of the Lawyers Project continues. The next phase (Phase 1) of exploration should include:
(1) Drilling:
Cliff Creek Zone: 5500 m of HQ diamond drilling, including: • shallow step-out drilling to the SSE of Hole 83CC14 and its twin CC15-06 on Section 2200NW; to test for additional near-surface high-grade mineralization similar to that intersected in these two holes; • fill-in and step-out drilling up and down-dip and to the SSE of the 4.10 m intercept grading 5.98 g/t Au and 246.3 g/t Ag in Hole CC15-12 on Section 2225NW; • close-spaced (< 25 m) step-out drilling down-dip and along strike to the SSE to follow- up on the very high grade P2 vein intercept in Hole CC15-15 on Section 2275NW; • fill-in and step-down drilling to further delineate the broad low-grade gold-silver intercept encountered in Hole CC15-13 on Section 2300NW; to determine the potential for bulk mineable mineralization in this part of the Cliff Creek North Zone; • step-down drilling below Holes CC15-18 & 19 on Section 2425NW; and • allocate some Phase 1 drill meters in this zone to carry out selected step-out drilling from the 'plums' identified in the Cliff Creek North long section (see Figure 10.6). Duke's Ridge Zone: 360 m of HQ diamond drilling: • drill two deeper holes below the central portion of the zone in an attempt to increase the current, relatively small mineral resource at Duke's Ridge. M-Grid Zone: 240 m of HQ diamond drilling: • drill two shallow holes (~120 m TD each) to test for the presence of potentially ore grade gold-silver mineralization in the M-Grid area; the holes would target areas containing the highest gold and/or silver grades identified in the 2004 surface trenching program.
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Phoenix Zone: 400 m of HQ diamond drilling: • subject to successfully completing a compilation of past data (see below), carry out close-spaced (< 25 m) step-out drilling below and along strike to the east of historic mine workings to test for additional high grade mineralization which may remain in-situ within and proximal to this zone. (2) Trenching:
Cliff Creek Zone: 1000 m of excavator trenching: • carry out trenching to the SSE of Holes 83CC14 and its twin CC15-06 to test for the surface (at bedrock) continuation of the main Cliff Creek North Zone between it and the Central subzone • carry out trenching to the NNW of Holes CC15-18 & 19 to test for the surface (at bedrock) continuation of the main Cliff Creek North Zone in this direction. M-Grid Zone: 1000 m of excavator trenching: • carry out surface trenching to test for bedrock mineralization in the areas of the gold soil anomalies which extend to the NW and SE of the 2004 trench area. (3) Data Research & Compilation:
Phoenix Zone: • complete a compilation of past surface and underground drilling data (if available) and of past underground workings (again, if available) in order to design a Phase 1 diamond drilling program which would test for additional high grade mineralization to depth and to the east of historic mine workings. AGB Zone: • further historical data research and compilation should be carried out to follow-up on the possibility that the mineralized structure hosting the historically-mined AGB Zone may persist to the south, towards the valley bottom. Silver Pond Group of Prospects: • The large St. Joe historical data base on the Silver Pond Group of prospects should be thoroughly reviewed and an initial manual compilation of geological, geochemical, geophysical, trenching and diamond drilling should be carried out with three primary objectives: (i) to identify the overall limits of the large Silver Pond North alteration/mineralization system in order to design a Phase 1, deep-penetrating induced polarization survey, the purpose of which would be to identify a possible buried porphyry-style, precious+/-base metals deposit at depth; (ii) to identify areas of economic potential within the Silver Pond trend which can be tested with Phase 2 surface trenching or diamond drilling; and (iii) to lay the groundwork for a digital compilation which will allow for more efficient data extraction, manipulation and review. Other prospects within the Lawyers Project area: • as per the prospects within the Silver Pond trend, complete a more thorough data review in an attempt to identify priority exploration targets which warrant follow-up work.
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(4) Geophysical Surveys: Silver Pond North Zone: • carry out a minimum of 25 line-km of deep-penetrating induced polarization surveys as per the purpose stated above.
Cost of the Phase 1 program is estimated to total $2.35 million, including: $1.75 million for Phase 1 diamond drilling; $0.25 million for Phase 1 trenching; $0.1 million for Phase 1 data research and compilation; and $0.25 million for Phase 1 geophysical surveys.
A comprehensive, success-contingent Phase 2 program will follow completion of Phase 1 work. The detailed work plan and budget for it will be formulated after a thorough review of all Phase 1 results.
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2 INTRODUCTION
2.1 PURPOSE OF REPORT AND TERMS OF REFERENCE PPM Phoenix Precious Metals Corp. (“PPM”) retained the authors to prepare an independent National Instrument 43-101 (NI 43-101) Technical Report and Resource Estimate (the "Report") for its 100%- owned Lawyers Gold-Silver Project (the “Project”) located in the Toodoggone region of north-central British Columbia, Canada.
None of the authors of this Report, nor their family members or associates, have a business relationship with PPM or any associated company. In addition, none of the authors have any financial interest in the outcome of any transaction involving the Project that is the subject of this Report other than payment of professional fees for the work undertaken in preparation of the Report. The discussions, conclusions and recommendations expressed in this Report are those of the authors and independent of PPM.
The purpose of this Report is to provide NI 43-101 resource estimates for two areas on the Lawyers Project and to identify areas on the Project which warrant follow-up by diamond drilling or other exploration methods. The resources are based on the evaluation of historical trenching and drilling data generated by mining exploration companies SEREM Inc. ("SEREM") and Cheni Gold Mines Inc. ("Cheni") between 1983 and 1990, and 26 diamond drill holes completed by PPM in 2015. This Report also provides a compilation of all historic exploration and development activities conducted on the Project for which information is available, a basic understanding of regional and local geology and mineralization, and recommendations for future work.
This Report was prepared in accordance with the guidelines provided in NI 43-101, Standards of Disclosure for Mineral Projects (June 24, 2011) for technical reports, Companion Policy 43-101CP, Form 43-101F1, and using industry accepted Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Best Practices and Reporting Guidelines” (CIM, 2003) for disclosing mineral exploration information, including the updated CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014).
2.2 QUALIFIED PERSONS AND SITE VISIT The authors of the report are R.A. (Bob) Lane, P.Geo. of Plateau Minerals Corp., B.K. (Barney) Bowen, P.Eng., Consulting Geologist, and Gary Giroux, P.Eng., of Giroux Consultants Ltd. who are “Qualified Persons” as defined by NI 43-101.
Co-author Lane directed the 2015 diamond drilling program on the Lawyers Project, remaining on-site from August 24th to October 1st. He is also familiar with the regional geology of the Toodoggone region having been involved in several early-stage exploration projects dating back to 1981 and having made regular visits to the region to monitor exploration activity as part of his former role as Regional Geologist (based in Prince George) with the British Columbia Ministry of Energy and Mines.
Co-author Bowen managed and reported on a drill program completed on the Project in 2006, and contributed to the design of the 2015 drill program on the Project. He is familiar with the general geological setting of the Toodoggone region having been involved with numerous other exploration projects in the area during the period 1968 to 2007.
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Co-author Giroux has not been on the Project, but has an abundance of experience completing mineral resource estimates on similar epithermal gold-silver deposits in many jurisdictions in Canada and elsewhere
2.3 UNITS AND CURRENCY All units of measurement in this Report are metric unless otherwise stated. Some historical records and figures that are disclosed in the Report are reported in Imperial measurements.
Base metal values are reported in percent (%) or parts per million (ppm). Historical gold and silver grades are reported in their original unit of oz. Au per ton or oz. Ag per ton (ounces per short ton), although in some cases metric equivalents are also given for clarity. Recent gold and silver analyses are reported in parts per billion (ppb) and parts per million (ppm) respectively, or g/t Au and g/t Ag (grams per metric tonne).
Currencies are reported in Canadian dollars unless otherwise stated.
3 RELIANCE ON OTHER EXPERTS The authors are required by NI 43-101 Standards of Disclosure for Mineral Projects to include descriptions of Project title and terms of legal or purchase agreements that are presented in this Report. No Title Opinion for the claims that comprise the Lawyers Project was provided to the authors by PPM. Title was confirmed by independently reviewing the digital tenure records listed on the Province of British Columbia's “Mineral Titles Online” website (https://www.mtonline.gov.bc.ca).
To the authors’ knowledge, PPM has not entered into any joint venture or option agreement with other entities on the Lawyers Project. PPM is the 100% owner of all of the claims that comprise the Project, free and clear of any liens, royalty obligations or other encumbrances.
The historical mineral resource and reserve estimates listed in Sections 14.1 and 15.1 respectively of this Report, including any of their underlying assumptions, parameters and classifications, are quoted “as is” from their source. The authors have not independently audited the historical resources or reserves referenced herein.
For many technical aspects of the Report, including portions of Sections 4.0 to 9.0, 13.0 to 15.0 and 23.0, the authors have relied upon information presented by Hawkins (2003) in his Technical Report Covering the Lawyers and AL (Ranch) Properties. Although much of Mr. Hawkins’ data that is incorporated into the current Report has not been independently verified by the authors, they carefully scrutinized and vetted that which was selected to form part of the Report. Historical drill hole and trench data was captured from many sources, but chief among them was the Wright Engineers Limited ("WEL") January 1986 Technical / Economic Study completed for SEREM, and several B.C. Ministry of Mines Assessment Reports. The WEL Study also includes the information on historical mineral processing and metallurgical testing presented in Section 13.1. The authors have not independently verified the metallurgical data presented herein. Geological modeling of the Cliff Creek North and Duke's Ridge deposits drilled in 2015, on which mineral resources are presented in Section 14.2, was performed by Doug Blanchflower, P.Eng. The mineral resource estimates of the two deposits were done by Gary Giroux, P.Eng.
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4 PROJECT DESCRIPTION AND LOCATION
4.1 LOCATION The Lawyers Project is located approximately 450 km north-northwest of Prince George in the Omineca Mining Division of north-central British Columbia (Figure 4.1). The Project is situated 45 km northwest of the past-producing Kemess South open pit copper-gold mine ("Kemess South") and 16 km southwest of Toodoggone Lake. It is centered at Latitude 57.3318° N and Longitude 127.2115° W or, in NAD 83 (Zone 9) UTM co-ordinates, 6355736 N and 607672E, and covers parts of four BCGS mapsheets: 094E.024, 094E.025, 094E.034 and 094E.035.
4.2 DESCRIPTION The Lawyers Project is comprised of 37 contiguous mineral claims that cover 9860 hectares or 98.6 km2 of land (Figure 4.2). All of the claims were acquired by staking and are 100%-owned by PPM. The claims are not subject to any underlying interests or royalties and there are currently no agreements with other parties that pertain to the property. Work conducted and later filed on the Project in 2015 (Lane, 2015), subject to formal acceptance by the B.C. Ministry of Mines, places all 37 mineral claims in good standing until November 9, 2025 (Table 4.1).
The current rendition of the Lawyers Project brings together the past-producing Lawyers gold-silver mine area that occupies the central part of the claim group, and the Silver Pond exploration area that occupies the western part of the claim group. Each area has its own exploration and/or development history that is described in Section 6: History. The claim group also covers the decommissioned mine access road that extends northwest from the Sturdee airstrip towards Lawyers Pass then northward towards the Toodoggone River. The road then heads east towards Attorney Creek before heading south and west to the centre of the property. The western edge of the Project coincides with Lawyers Pass. The northern limits of the Project coincide with the Toodoggone River beyond which are mineral claims held by a third party. The eastern margin of the Project is also confined by claims owned by other entities, including Sable Resources Ltd. ("Sable") who owns the Baker mine and mill (currently on care-and-maintenance) through which present road access to the Lawyers Project is provided.
The Project as a whole encompasses an area that includes twelve (12) B.C. MINFILE mineral occurrences, including the Lawyers past-producing underground gold-silver mine (Plate 4.1). The MINFILE description for the Lawyers mine identifies three separate zones of underground development and mining (AGB, Cliff Creek North and Phoenix), and three other areas of significant drilling and/or trenching (Cliff Creek Central, Cliff Creek South and Duke’s Ridge), but does not distinguish each of them as individual MINFILE entities as should be the case. The Lawyers MINFILE location is for the AGB Zone, and is referenced as such for the remainder of this Report. The other eleven (11) MINFILE occurrences are listed in Table 4.2 and are shown on Figure 4.3 along with the other notable mineral occurrences that comprise the Lawyers mine as mentioned above. Historical mineral resource estimates have been completed for the Cliff Creek (post-mining), Duke’s Ridge and Silver Pond (West) Zones. These are discussed briefly in Section 6: History and in more detail in Section 14.1 of the Report.
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4.2.1 Mackenzie Land and Resource Management Plan
The Lawyers Project is not directly encumbered by any provincial or national parks, or other protected areas. The Project lies fully within the Mackenzie Land and Resource Management Plan ("LRMP"). LRMPs provide strategic level direction for managing Crown land resources and identify ways to achieve community, economic, environmental and social objectives. The Mackenzie LRMP recognizes the importance of mineral resources and mining and, in that regard, provides the following direction:
“Minerals Objective – Maintain opportunities and access for mineral exploration, development and transportation while having due regard to impacts on other resource values. Provide opportunities for exploration and development of mineral resources within the regulatory framework and consistent with the management intent of this zone. Accommodate localized impacts of advanced exploration and development activities with existing legislation. There is no intention or direction suggested in the objectives and strategies for this zone to cause undue operational approval delays by government for development or exploration proponents.”
Specifically, the Project lies within the Toodoggone Lake/River - Special Subzone (#7B) of the Thutade - Mining and Wildlife Special Resource Management Zone (#7). The Mackenzie LRMP describes the management intent for the Thutade RMZ as:
“The intent of this zone is to manage for the conservation of non-extractive values such as wildlife and wildlife habitat, fish and fish habitat, heritage and culture, scenic areas, recreation and tourism. This zone also has a special emphasis on mineral development and related access. Opportunities are maintained for timber, mineral and oil and gas development. As this RMZ is adjacent to an existing park and a protected area, resource development should be sensitive to the intended objectives of the existing park and protected area.”
In addition, the Mackenzie LRMP provides the following descriptions for management guidelines for the Toodoggone Lake/River Special Subzone:
“In recognizing the importance of the recreational and tourism experience in the vicinity of the Toodoggone Lake/River, the intent of this subzone is to manage for scenic, recreation and tourism values as a priority." Outdoor Recreation and Tourism Objective - Manage the recreational and tourism experience along the Toodoggone Lake/River. Recognize the scenic, recreation and tourism values along the Toodoggone Lake and River. Monitor use and develop indicators to measure changes in quality of experience in consultation with stakeholders. Visual Quality Objective - Manage for visual quality in identified visually sensitive areas. Consider establishment of Toodoggone Lake and Toodoggone River to the confluence of the Finlay River as a ‘known’ scenic area. Recommend the establishment of a retention visual quality objective in the Toodoggone subzone.”
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The Project is situated 14 km southwest of Toodoggone Lake and 4 km south of Toodoggone River; there is no current road access to either of them.
Figure 4-1: Location of the Lawyers Project
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605000 610000 615000
K a k d e a h
re C
C r
e n
r e
k
ho
e
s o
o
M s e µ r ggon e oodo y k T r w e Rive a re L C
1038114 6360000 6360000
510081 510080 517527
845896
510083
506499 510084 510082 510078
Cliff Cliff 510074 Creek Creek 510185 Portal otary N 510071^_ Creek 510077 u bo 517522 389432 ri k 6355000 510072 a e 6355000 C re C 510079 389435 383411 510073 383412 510070 510075 389433 383417 383414 389436
510069 514101
510076 510068
1038113 At C to r rn ee e k y 517521 506501
517518 517525 6350000 6350000
C P r a e u e k le Chap pel Chappelle Cree k Chappelle Creek Creek
605000 610000 615000
Legend I Lawyers Project ^_ Cliff Creek Portal ^_ Lawyers Project Smithers Road !( Mineral Claims !( Prince Figure 4.2 River/Lake George
20k Mapsheets: 94E024,25,34,35 Contour Date: 3/21/2016 Vancouver Projection: NAD 1983 UTM Zone 9N !( Scale:1:75,000 Tenure Author: tkwitkoski Source: US National Park Service Last Modified By: tkwitkoski Checked By: BL Revision #: 0 0.5 1 2
Kilometers Path: C:\15PG0229 MountainSide (Bob Lane)\2400-GIS-LawyersProperty\2420-MXD\Lawyers_Claim_Fig4-2_A.mxd LAWYERS PROJECT – TECHNICAL REPORT AND RESOURCE ESTIMATE
Table 4-1: List of Mineral Claims, Lawyers Project
Claim Map Area Claim Name Owner Issue Date Good To Date No. No. (ha) 383411 WO 1 251319 (100%) 094E 2001/jan/15 2025/nov/09 25.00 383412 WO 2 251319 (100%) 094E 2001/jan/15 2025/nov/09 25.00 383414 WO 4 251319 (100%) 094E 2001/jan/15 2025/nov/09 25.00 383417 WO 7 251319 (100%) 094E 2001/jan/15 2025/nov/09 25.00 389432 SHOTGUN 4 251319 (100%) 094E 2001/aug/24 2025/nov/09 25.00 389433 SHOTGUN 5 251319 (100%) 094E 2001/aug/30 2025/nov/09 25.00 389435 SHOTGUN 7 251319 (100%) 094E 2001/aug/31 2025/nov/09 25.00 389436 SHOTGUN 8 251319 (100%) 094E 2001/aug/31 2025/nov/09 25.00 506499 Law 1 251319 (100%) 094E 2005/feb/09 2025/nov/09 419.15 506501 Law 2 251319 (100%) 094E 2005/feb/09 2025/nov/09 437.07 510068 251319 (100%) 094E 2005/apr/02 2025/nov/09 69.93
510069 251319 (100%) 094E 2005/apr/02 2025/nov/09 69.91
510070 251319 (100%) 094E 2005/apr/02 2025/nov/09 52.42
510071 251319 (100%) 094E 2005/apr/02 2025/nov/09 419.26
510072 251319 (100%) 094E 2005/apr/02 2025/nov/09 87.37
510073 251319 (100%) 094E 2005/apr/02 2025/nov/09 69.89
510074 251319 (100%) 094E 2005/apr/02 2025/nov/09 366.78
510075 251319 (100%) 094E 2005/apr/02 2025/nov/09 104.85
510076 251319 (100%) 094E 2005/apr/02 2025/nov/09 769.17
510077 251319 (100%) 094E 2005/apr/02 2025/nov/09 436.72
510078 251319 (100%) 094E 2005/apr/02 2025/nov/09 541.39
510079 251319 (100%) 094E 2005/apr/02 2025/nov/09 419.38
510080 251319 (100%) 094E 2005/apr/02 2025/nov/09 698.20
510081 251319 (100%) 094E 2005/apr/02 2025/nov/09 523.60
510082 251319 (100%) 094E 2005/apr/02 2025/nov/09 122.24
510083 251319 (100%) 094E 2005/apr/02 2025/nov/09 244.44
510084 251319 (100%) 094E 2005/apr/02 2025/nov/09 69.86
510185 251319 (100%) 094E 2005/apr/04 2025/nov/09 69.87
514101 251319 (100%) 094E 2005/jun/07 2025/nov/09 489.45
517518 WO FRACTION 251319 (100%) 094E 2005/jul/12 2025/nov/09 244.82 517521 BISHOP FRACTION 251319 (100%) 094E 2005/jul/12 2025/nov/09 174.86 517522 ATTORNEY CREEK 251319 (100%) 094E 2005/jul/12 2025/nov/09 296.99 517525 FRACTION 251319 (100%) 094E 2005/jul/12 2025/nov/09 17.49 517527 STEALTH FRACTION 251319 (100%) 094E 2005/jul/12 2025/nov/09 244.36 845896 SILVER POND EXTENSION 251319 (100%) 094E 2011/feb/09 2025/nov/09 384.05 1038113 MARMOT LAKE 251319 (100%) 094E 2015/aug/22 2025/nov/09 839.32 1038114 ACCESS ROAD 251319 (100%) 094E 2015/aug/22 2025/nov/09 977.16
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Plate 4-1: Aerial view looking eastwards of the operating Lawyers underground gold/silver mine, 1989
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Table 4-2: List of MINFILE and Other Notable Mineral Occurrences, Lawyers Project
MINFILE NO. NAME STATUS ZONE NORTHING EASTING 094E 066 LAWYERS (AGB) Past Producer 9 6356513 609531 LAWYERS (CLIFF CREEK - Past Producer 9 6355650 607600 NORTH) Developed - LAWYERS (CLIFF CREEK MID) 9 6355100 607900 Prospect LAWYERS (CLIFF CREEK Developed - 9 6354800 607830 SOUTH) Prospect Developed - LAWYERS (DUKE'S RIDGE) 9 6355280 608300 Prospect - LAWYERS (PHOENIX) Past Producer 9 6354969 608600 - LAWYERS (M-GRID) Showing 9 6354700 607600 094E 068 KODAH Showing 9 6360174 604002 094E 069 SILVER POND (NORTH) Prospect 9 6356530 605466 094E 073 MARMOT LAKE (LAW 1) Showing 9 6352430 609540 094E 075 SILVER POND (SILVER CREEK) Prospect 9 6353235 607242 094E 158 ROUND MOUNTAIN EAST Showing 9 6359473 605624 094E 159 ROUND MOUNTAIN WEST Showing 9 6359584 605120 094E 160 SILVER POND (AMETHYST) Prospect 9 6354471 608364 094E 161 SILVER POND (SOUTH) Prospect 9 6354335 607899 094E 162 SILVER POND (RIDGE) Prospect 9 6352736 607104 Developed 094E 163 SILVER POND (WEST) 9 6354036 607104 Prospect 094E 191 DREAM (PIPE) Showing 9 6352390 605690
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605000 610000 615000 µ
KODAH !(
6360000 ROUND MOUNTAIN WEST 6360000 ROUND MOUNTAIN EAST !( !(
!(
!(
AGB SILVER POND (NORTH) !( !( !( !( CLIFF CREEK NORTH !( !( DUKE'S RIDGE CLIFF CREEK CENTRAL !( !( PHOENIX
6355000 M GRID!( !( CLIFF CREEK SOUTH 6355000 !( SILVER POND (SOUTH) !( SILVER POND (AMETHYST) SILVER POND (WEST) !(
SILVER POND (SILVER CREEK) !(
!( SILVER POND (RIDGE) DREAM MARMOT LAKE !( !(
BAKER !(
CASTLE MOUNTAIN 6350000 !( 6350000 PAU !(
605000 610000 615000
Legend I Lawyers Project !( MINFILE Occurrence ^_ Lawyers Project Smithers MINFILE or Other Road !( !( Prince Notable Occurrences George Figure 4.3 Tenure
20k Mapsheets: 94E024,25,34,35 Date: 3/17/2016 Vancouver Projection: NAD 1983 UTM Zone 9N !( Scale:1:75,000 Author: tkwitkoski Sources: Esri, HERE, DeLorme, Last Modified By: tkwitkoski Checked By: BL Revision #: 0 0.5 1 2
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4.3 HISTORY OF PROPERTY ACQUISITION Guardsmen Resources Ltd. ("Guardsmen"), sister company to PPM, acquired the majority of the claims that comprise the Lawyers Project by ground staking in 2000 and 2001. Many of the early claims were converted to Mineral Titles Online ("MTO") mineral claims in 2005 following the adoption of “online staking”, an internet-based mineral titles administration system that permits acquisition and maintenance of mineral titles by selecting an area of interest on a seamless digital GIS map of British Columbia. In 2011, Guardsmen transferred all of the claims that comprise the Project to PPM, which added more claims to it by online staking in 2011 and 2015.
4.4 SURFACE RIGHTS No surface rights on the Project are held by PPM or, to the authors’ knowledge, by any other parties. PPM and/or other parties (whether future optionors or joint venture partners) will be required to obtain all necessary surface rights by way of filing an application for mining leases for the construction and operation of a mine on the Project. A complete land title review of surface ownership has not been conducted at this time, but PPM is aware that the mineral claims comprising the Project consist of Crown Land for which surface access and rights of use for mineral development can be obtained.
4.5 FIRST NATIONS COMMUNICATIONS Maintaining good relations with the local First Nations people will have to continue to be a high priority to ensure success in any future development within the Project area.
4.6 PERMITTING, ENVIRONMENTAL LIABILITIES AND OTHER ISSUES To date, no permits have been issued to PPM to conduct the work proposed in the Phase 1 Exploration Program described in Section 26: Recommendations of the Report. The authors’ do not anticipate that PPM will encounter any problems obtaining the required permits because of the company’s recent positive experiences with regional regulators, local First Nations and stakeholders. They do, however, advise that sufficient lead time be allowed government agencies to process permit applications well in advance of the start-up date for planned work. Regarding reclamation bonds, $35,500 has been posted by PPM and is being held by the British Columbia Minister of Finance. Some of these monies may be available to cover reclamation of any new disturbances. An additional bond may have to be posted to cover reclamation of proposed Phase 1 exploration activities as presented in Section 26.
PPM is not responsible for any earthworks or related impacts from exploration, mine development, mining or reclamation conducted by other companies prior to PPM’s ownership of the claims.
The authors are not aware of any other known significant factors or risks related to the Project that may affect access, title or the right or ability to perform work on the property.
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5 ACCESSIBILITY, CLIMATE, INFRASTRUCTURE, LOCAL RESOURCES AND PHYSIOGRAPHY
5.1 ACCESSIBILITY Access to the Project is provided by a series of branching gravel roads, including the Finlay Forest Service Road ("Finlay FSR"), that begin south of Mackenzie, a small forestry town located about 180 km north of, and about a two-hour drive from, Prince George. The Finlay FSR forms the southern part of the Omineca Resource Access Road ("ORAR"), an industrial road that provides access to and beyond the Kemess South mine. The ORAR used to provide access all the way to the Project area, but in the mid-1990s was decommissioned just north of the Sturdee gravel airstrip. Current seasonal road access to the Project is through the inactive Baker mine site and ‘Tiger Notch’ Pass along rugged, exploration roads passable only during the late spring, summer and early fall seasons when they are snow-free.
Total driving distance from Prince George to the Project is 550 km, and total driving time is about 10 hours. There are no fueling stations once one leaves paved Highway 97; therefore fuel for the return trip to the Project area must be carried, along with two robust spare tires. At the Project, numerous mine and exploration roads remain in good condition and provide access to many of the previously drilled areas.
Year round helicopter access is via Smithers, a distance of 300 km south of the Project. Alternative helicopter access during summer months may be from the Kemess South mine site if it is under active exploration, and if fixed-wing air service from Smithers or Prince George to it can be contracted. Driving time from the Kemess South turn-off on the ORAR to the Project is about 75 minutes.
5.2 CLIMATE The climate of the Project can be described as cool continental with cool summers and cold winters. The summer field season typically extends from the beginning of June to late September. The temperatures and weather can be quite erratic during this period and sporadic rain and snow showers can occur at any time. Approximate temperatures range from a minimum of -32°C in January to a maximum of +26°C in June. Snowfall accumulations can reach up to two metres over the winter months.
A detailed review of the climate of the area is provided in the Lawyers Project Stage 1 Report (Norecol, 1986).
5.3 INFRASTRUCTURE The closest major infrastructure facility is the Kemess South mine which is currently on care-and- maintenance while owner Aurico Metals Inc. ("Aurico"), carries out seasonal exploration and evaluates options for development of its Kemess Underground and Kemess East copper-gold deposits. Existing facilities include: electrical power connected to the B.C. Hydro grid via a 340 km powerline extending from Mackenzie; a 1,424 m gravel airstrip now serviced periodically by flights from Smithers and Prince George; a large mine camp that provides room and board to the AuRico workforce; and an all-weather road that connects to major supply centres to the south.
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Limited infrastructure is located at Sable's Baker mine and mill site, which is located 11 road km southeast of the Project and is also currently on care-and-maintenance. The Baker mill has intermittently processed gold-silver ore from underground and small open pits developed on the Baker and nearby Shasta deposits. The site includes: diesel-generated power; a 200 ton per day mill; an Atco trailer camp; and several pieces of mobile mining and earth-moving machinery.
5.4 LOCAL RESOURCES The closest major supply centre by air is Smithers, a distance of about 300 km to the south. Smithers has a population of about 6,000 and services roughly 15,000 people living in the Bulkley Valley region. It is a major service centre along the Yellowhead Highway ("Highway 16") and along the Canadian National Railway ("CNR") line midway between Prince George and the port city of Prince Rupert.
Smithers has an extensive history of supporting mineral exploration and mining development in north- central and northwest B.C., including major past-producing mines such as Bell and Granisle in the Babine Lake area, Equity Silver near Houston, Kemess South in the Toodoggone region, and Eskay Creek and Snip in the Iskut River area. Smithers has an available and skilled workforce for exploration and mining, and is the operational base for many companies that provide a range of services, such as contract diamond drilling, to mining exploration companies. It also has an active exploration fraternity whose foundation is the Smithers Exploration Group ("SEG") which has been serving and promoting the mineral industry in the region since 1971.
The closest supply centre by road is Mackenzie, a driving distance of about 400 km to the southeast of the Project. Mackenzie has a population of about 4,500 and provides services to a primarily forestry- based economy (logging, softwood lumber and pulp manufacturing facilities). Active logging includes areas serviced by the Findlay FSR and the ORAR corridors several hundred kilometres northwest of the town. Mackenzie also provides services to the Mt. Milligan copper-gold mine, a major open-pit operation owned and operated by Thompson Creek Metals Company Inc., located approximately 95 km to the west. CNR operates a 37 km spur line that connects Mackenzie to its mainline, providing rail service to the ports of Vancouver and Prince Rupert. Mackenzie is supported by the larger industrial hub city of Prince George, population 71,000, located 180 km to the south.
The only other industry in the Toodoggone region is adventure tourism, including guided big game hunting and sports fishing.
5.5 PHYSIOGRAPHY The Project is situated in moderate terrain with elevations ranging from about 1,200 metres along Attorney Creek in the northeastern part of the property to about 1,900 metres in the central part of the property. Most of the property is above tree line which is at an elevation of about 1,630 metres. Below tree line, sparse cover consists of birch and willow shrubs and scattered groves of white spruce and sub- alpine fir. In alpine areas, dwarf shrubs, grassy meadows, lichens and rocky tundra are common. Bedrock exposures are relatively scarce and are primarily limited to ridges and steeper creek gullies. A number of creeks are present on the property; these have been used for a water source into October before freezing. Most appear groundwater fed.
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The Project's size, its mostly relatively gentle terrain and its local sources of water are sufficient to accommodate mining facilities, potential mill processing sites, tailings storage areas and waste disposal areas. The local water supply could easily support any major resource definition drill programs that may be required, should future exploration programs prove successful.
A more comprehensive description of the physiography of the Project area is described in the Lawyers Project Stage 1 Report written by Norecol (1986).
6 HISTORY The exploration history of the Project has been well documented in assessment reports by Pegg (2003), Blann (2004), Jacob and Nordin (2006) and Bowen (2007), and in Hawkins (2003).
As previously mentioned, the current rendition of the Project brings together the past-producing Lawyers gold-silver mine area that occupies the central part of the claim group, and the Silver Pond exploration area that occupies the western part of the claim group. Each area has its own exploration and/or development history; descriptions of previous activity are provided in separate sub-sections below and locations are shown previously in Figure 4.3. Additional details regarding the extensive past drilling programs that have been completed on the property are discussed in Section 10.1 of the Report.
6.1 EARLY HISTORY OF THE TOODOGGONE REGION In 1824, explorer Samuel Black diarized many unusually colourful gossans in the headwaters of the Findlay River system. In 1915, prospector Charles McClair mined alluvial gold from the gravels of a creek north of Toodoggone Lake that would later bear his name. In 1929, Cominco explored several base metals showings in the region. In 1933, the McClair Creek placer diggings were re-evaluated.
6.2 LAWYERS - EARLY EXPLORATION AND DEVELOPMENT HISTORY Kennco Explorations (Western) Ltd. ("Kennco") carried out reconnaissance work in the area of the Project through the 1960s and discovered gold and silver mineralization by following up a regional geochemical sampling program completed in 1968. Kennco staked the original claims and recorded the earliest, focused exploration on the Lawyers property in 1970; it is credited with the discovery of the AGB deposit in 1973 (Gower and Grace, 1973). Kennco completed the first drilling on the AGB Zone in 1974 intersecting 10 feet (3.05 m) grading 1.26 oz/ton (43.20 g/t) Au and 14.20 oz/ton (487 g/t) Ag (Ryback- Hardy, 1974).
Kennco optioned the Lawyers property to Semco Mining Corporation ("Semco") on May 15, 1979, subject to a retained 20% carried interest. On July 25, 1979, Semco assigned the agreement to SEREM for $12,000 and the reservation of a 5% net profits interest. Effective June 25, 1979, SEREM entered into a joint venture agreement with Agnico-Eagle Mines, Limited ("Agnico-Eagle") and Sudbury Contact Mines, Limited ("Sudbury Contact") with SEREM as operator. From 1979-1981 the joint venture conducted prospecting, geological mapping, trenching, diamond drilling, and the driving of 2,243 feet (684 m) of underground drifting and cross-cutting on the 1750m Level of the AGB Zone. Following the 1981 program, Agnico-Eagle and Sudbury Contact chose not participate in future work on the property and
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their respective interests were diluted. SEREM continued to explore the property on its own from 1982 onward.
In 1982, SEREM continued with its assessment of the AGB zone completing underground development and drilling a total of 3597 m of surface and underground holes on the zone (Schroeter, 1983).
In 1983, SEREM completed a total 3054 m of surface diamond drilling in 17 holes on the AGB, Cliff Creek and Duke’s Ridge Zones, and 1800 m of trenching on the Cliff Creek and Duke’s Ridge Zones (B.C. Geological Survey, 1984). Colour aerial photographs taken of the Project area in 1983 clearly show access roads, a concentration of drill sites and two portal dumps at the AGB Zone and linear rows of trenches on the Cliff Creek and Duke’s Ridge Zones (Plates 6.1 and 6.2).
AGB Zone
Plate 6-1: AGB Zone (centre of aerial photo), 1983
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Cliff Creek Zone
Duke’s Ridge Zone
Plate 6-2: Cliff Creek and Duke’s Ridge Zones (centre of aerial photo), 1983
In 1984, SEREM completed a total of 7010 m of surface and underground diamond drilling in 45 holes on the Lawyers property, including 13 underground holes on the AGB Zone, 19 surface holes on the Cliff Creek Zone and 13 surface holes on the Dukes Ridge Zone (B.C. Geological Survey, 1985). Based on encouraging results, SEREM contracted Wright Engineers Limited "WEL" to conduct a Feasibility Study for the Lawyers property, including an estimate of ore reserves, which was completed in February, 1985. A year later, a Technical/Economic Study was completed by WEL (Wright, 1986), and a Stage 1 Environmental Assessment was completed by Norecol Environmental Consultants, Ltd. ("Norecol"), in February, 1986. A Mine Plan for the property was completed by WEL and submitted to the B.C. Ministry of Energy, Mines and Petroleum Resources, in June, 1987.
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In 1985, activity on the Lawyers property was limited to underground development on the AGB Zone, including two new crosscuts and drifting followed by a substantial program of systematic sampling on three levels; environmental and road design studies were also completed (B.C. Geological Survey, 1986). By the end of 1985, a total of 22,300 m of drilling and 7,000 m of trenching had been completed on the AGB, Cliff Creek and Duke’s Ridge Zones, and underground development work on the AGB Zone totaled 1,380m of drifting and cross-cutting and 175m of raising.
In 1986, no exploration was recorded and limited underground development took place. As the property was being advanced towards a production decision, SEREM changed its name to Cheni Gold Mines Inc. ("Cheni"). At that time, “Cut and Diluted” Mineable Ore Reserves were reported by WEL (Wright, 1985; Wright, 1986; and Wright, 1987) using 95% of the proven and probable geological ore reserves, a conventional shrinkage stoping mining method, a specific gravity of 2.7 and an “approximate cut-off grade" of 5.15 g/t Au equivalent at a conversion factor for gold equivalency of 1 oz. Au = 50 oz. Ag (Table 6.1).
Table 6-1: Historical Reserves used for Mine Planning, Lawyers Project.
Zone Classification Tonnes Au (g/t) Ag (g/t)
AGB Proven 452,600 8.321 263.5
Cliff Creek Probable 420,300 5.844 260.8
Duke's Ridge Probable 68,400 7.868 226.0
Total Weighted Average 941,300 7.182 259.6
Reserves were later revised following comprehensive underground sampling on all underground levels of the AGB Zone and following extensive 1987 drilling on the Cliff Creek and Duke’s Ridge Zones. In 1988, the Cliff Creek deposit reserves were revised to 838,900 tons (761,037 tonnes) grading 0.183 oz/ton (6.274 g/t) Au and 7.12 oz/ton (244.1 g/t) Ag in the Probable category and 524,500 tons (475,818 tonnes) grading 0.170 oz/ton (5.828 g/t) Au and 6.57 oz/ton (225.3 g/t) Ag in the Possible category. Note that all of the figures listed above were estimates made prior to the implementation of National Instrument 43-101 Standards of Disclosure for Mineral Projects and are considered to be historical estimates only and are not relied upon by the authors or by PPM.
Exploration activities at the Lawyers property were suspended during 1988-89 while development took place. Cheni brought the Lawyers mine into production in early 1989 as a 550 ton (500 tonne) per day milling and underground mining operation at a total cost of C$57.4 million (George Cross News Letter, April 3, 1989). The first gold/silver bullion was poured on January 8, 1989, and commercial production began on March 1, 1989 (George Cross News Letter, No. 11, January 16, 1990). Mine-life at start-up was 7 years using the historical reserves shown above.
Initial development began on the AGB Zone with flat adit entry on three levels (1800, 1750 and 1700 m levels) that were interconnected by raises extending to surface (Preliminary Prospectus, March 30, 1987).
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The addition of the main haulage 1650 m level, which provided access to the mill’s coarse ore bin via rail using a battery locomotive and seven-ton Granby cars, was completed prior to the onset of commercial production. The mine site arrangement is shown in Figure 6.1. A combination of shrinkage mining and blast-hole stoping methods were employed. Ore processing consisted of two-stage crushing, single- stage grinding, conventional cyanidation and a Merrill-Crowe precipitation circuit for gold and silver recovery. Residue from the cyanide circuit was treated by flotation to recover unleached silver minerals and was followed by a small cyanidation circuit to extract the silver and any remaining gold (Wright, 1987). Precipitated gold and silver were refined onsite to produce ore. Overall recoveries were projected to be 95% of gold and 82% of silver (WEL, 1986).
Limited pre-production work to access the Cliff Creek deposit began in August, 1989 (George Cross News Letter, September 7, 1989); a combination open pit / underground mine was studied, but fell in preference to an underground-only operation. Through the remainder of 1989 and 1990-91 Cheni developed extensive underground workings on the North Zone of the Cliff Creek deposit, including a 750 m, -15° ramp, a spiral decline with 5 levels, and an incline with 2 levels (Figure 6.2) The workings cover a vertical distance of more than 200 m and are limited to the northern two-thirds of the Cliff Creek North Zone. No near-surface follow-up work is known to have been completed on the wide stockwork zone in the southern portion of the Cliff Creek structure. Production data specifically for the Cliff Creek Zone is incomplete, but mining of the North Zone commenced in 1991, and mill records obtained by PPM list only 48,317 tons (43,832 tonnes) as being milled in 1992. The exact size of the remaining mineral resource at Cliff Creek is unknown.
Over the life of the operation, from 1989 and 1992, Cheni mined the AGB, Cliff Creek and Phoenix deposits from multi-level underground developments. Cheni mined out the reserves on the AGB Zone and the small Phoenix Zone; the reserves on the Cliff Creek and the Duke’s Ridge Zones were written off as uneconomic in 1992. Production totals by year are presented in Table 6.2.
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Figure 6-1: Lawyers Mine Surface Development Plan 1986
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Figure 6-2: 3D view of Cliff Creek North Zone Underground Workings
Table 6-2: Lawyers Mine Production (1989-1992)
Au Ag Tons Year (period) Information Source (ounces) (ounces) Milled Pre-Production (to George Cross News Letter, No.47 3,045 37,467 11,220 Feb.28/89) (March 8, 1989) 1989 (Mar.1 - Cheni Gold Mines Inc. 1989 Annual 45,524 878,474 154,960 Dec.31) Report (February 1990) Cheni Gold Mines Inc. 1990 Annual 1990 52,630 1,160,426 203,097 Report (February 1991) Cheni Gold Mines Inc. 1992 Annual 1991 38,530 720,706 193,086 Report (February, 1993) Cheni Gold Mines Inc. 1992 Annual 1992 31,517 749,327 119,990 Report (February, 1993) Totals* 171,246 3,546,400 682,353
* The totals include an estimated 10,000 ounces of gold that was recovered from an estimated 45,400 tons that Cheni mined from the nearby Al property and milled at Lawyers in 1991 and 1992 (Hawkins, 2003).
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In 1990, a total of 13,764 m in 61 surface diamond drill holes were completed on the AGB, Cliff Creek and Duke’s Ridge Zones and 1,082 m in 13 underground holes were drilled on the AGB Zone. Results from 1990 and earlier diamond drilling on the Central and South zones at Cliff Creek produced a range of variable results (Lennan and Frostad, 1990), suggesting that the zones were more complex than originally thought (Hitchens, 1990). Some of the narrow high-grade intersections reported include 2.0 m averaging 1.20 oz/ton Au and 1.09 oz/ton Ag in Hole 87CC76 (Central Zone) and 1.0 m averaging 1.170 oz/ton Au and 16.33 oz/ton Ag in Hole 87CC42 (South Zone). Also encountered were several broad, lower-grade intersections including 11.0 m averaging 0.204 oz/ton Au and 15.22 oz/ton Ag in Hole 87CC71 (South Zone). Shallow drilling on the North Zone (above the 1700m level) in 1990 also produced encouraging intersections, including 6.4 m averaging 0.245 oz/ton Au and 7.13 oz/ton Ag in Hole 90CC110.
The infill surface drilling, underground development and early stage mining led to downward revisions of the Cliff Creek reserves. Coupled with high mining costs, declining metal prices and a declining US$-C$ exchange rate, these factors compelled the company to “write-off” the remaining mineral inventory as uneconomic at that time.
The Phoenix deposit was discovered in 1991 by following up high-grade float samples collected from the crest of Duke’s Ridge in 1980 (Cheni, 1992b) that coincided with a 1991 ‘E-Scan’ resistivity anomaly. In 1992, trenching and 950 m of surface diamond drilling in 20 closely-spaced holes outlined an upper mineable zone, measuring 25 m in length by 35 m in depth that could be mined to a minimum width of 1.2 m. The initial reserve for the Phoenix zone was 3,245 tons grading 1.69 oz/t Au and 101.7 oz/ton Ag. The deposit was accessed by a -16.5% gradient, 93 m decline and developed by 73 m of ancillary workings; ore was stoped from the 1830 m level through to the surface. Phoenix ore was milled in separately from any other material in November, 1992. A total of 5439 tons (4934 tonnes) of ore was ultimately processed from the zone and produced 6713 ounces of gold and 296,084 ounces of silver (Cheni, 1992). A 19 hole underground drilling program confirmed that the zone remains open to depth and to the east; assay results from the underground program also produced a range of results including highs of 3.646 oz/ton Au and 104.7 oz/ton Ag over 1.02 m in hole PX92-10, and 5.390 oz/ton Au and 208.2 oz/ton Ag over 0.79 m in hole PX92-14 (George Cross News Letter, December 14, 1992). The narrow, deeper drill intersections were not pursued by Cheni, and the Phoenix workings were backfilled and reclaimed later in the mid-1990s.
In 1993, drilling in the Duke’s Ridge Zone targeted additional high-grade gold-silver mineralization similar to that of the Phoenix deposit. The work produced ‘mixed results’: infill drilling on the Duke’s Ridge Zone and in a new area between the Duke’s Ridge Zone and the Phoenix Zone intersected additional mineralization, but it was of insufficient size and grade to make either zone economically viable at the weak gold and silver prices of the day (George Cross News Letter, July 26, 1993). Cheni did not conduct any more exploration on the Lawyers property and in parallel with the Cliff Creek Zone, wrote-off the remaining mineral inventory at Duke’s Ridge as uneconomic. The Lawyers mine was formally closed in 1994 following the failure to locate any additional economic mineral deposits. The reasons cited for mine closure were low metal prices coupled with high mining costs.
In 1996 the mill site was decommissioned and the mill equipment was sold. In 1997 AGC Americas Gold Corp. ("AGC") optioned the property, formed a joint venture with Antares Mining and Exploration Corp.
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("Antares") and together AGC and Antares carried out a large, regional airborne EM-Mag-Radiometric survey, which included coverage of the Lawyers property. Limited surface work was also undertaken (Hawkins, 2003). In 1999 Antares sold its interest in the property back to AGC. The claims and the mining lease were later allowed to lapse.
Guardsmen Resources Inc. ("Guardsmen") acquired the former Cheni mining lease and enclosing Lawyers mineral claims by ground staking in 2000-2001. Small exploration programs were conducted on the property from 2001 through 2007 (including the drilling of ten core holes on the Cliff Creek Zone by optionor Bishop Gold Inc. in 2005-2006) by several different operators, but the claims remained wholly- owned by Guardsmen.
6.3 LAWYERS – RECENT WORK Since Guardsmen acquired the Lawyers Project in 2000 and 2001, five modest exploration programs have been conducted. Summaries of these programs are listed below.
In 2001, Guardsmen carried out a small exploration program on the Lawyers Project. This work included 49 line-kilometres of grid construction, 43.5 line-kilometres of ground geophysics (VLF and magnetometer), prospecting, geological mapping and the collection of 34 rock samples for analyses (Kaip and Childe, 2001). Chip sampling of a zone of pervasive silicification and chalcedonic breccia veining more than 10 m wide was identified as a possible southern strike extension of the AGB Zone and returned 12.14 g/t Au and 97.5 g/t Ag over 2 m (Kaip and Childe, 2001).
In 2003, Guardsmen carried out a program of preliminary evaluation of two previously identified targets and some limited reconnaissance prospecting and geological mapping. These evaluations included grid construction, blasted and hand dug trenches, geophysical surveying, geological mapping, and soil geochemical sampling of selected areas. Trenching and channel sampling of the possible southern extension of the AGB zone identified in 2001 returned an average grade of 5.09 g/t Au and 20.8 g/t Ag over a 27.03 m sample length (true width of the zone is unknown; Pegg, 2003). Ground geophysical surveys in the overburden-covered valley to the south appear to indicate that the structure hosting the AGB zone may persist along strike.
In 2004, work on the Lawyers Project included collection of 514 soil geochemical samples on three grids, limited prospecting and 2,700 m of excavator trenching on the M-Grid Zone, a new area centered approximately 450 m west, and in the hanging wall, of the Cliff Creek Central Zone (Blann, 2005). The trenching traced a series of 2 to 10 m wide altered and mineralized zones for 400 m along their northwest-trending strike. The mineralized zones consist of brecciated and silicified volcanic rocks and low temperature quartz veins, veinlets and stockworks with trace to 5% pyrite, and traces of sulphosalt minerals. Grab samples from the zones returned assays of up to 9.91 g/t Au and 562.0 g/t Ag. Petrographic studies and PIMA (portable infrared mineral analyzer) analyses of M-Grid mineralization were carried out. In addition, waste dump sampling at the Cliff Creek portal and test pitting of the tailings pond were also performed.
In October 2005, Bishop Gold Inc. ("Bishop") completed five NQ diamond drill holes totaling 860.4 m to test for bulk tonnage and higher-grade gold-silver potential in the southern part of the Cliff Creek deposit. Four of five holes intersected 12 to 81 m-wide zones of quartz breccia and stockwork veining
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which crosscut altered andesitic volcanic rocks. Although the overall gold-silver grades of the wider stockwork zones were generally low, two holes intersected narrower, higher-grade intervals of economic interest. Hole 05-CC-03 returned 3.0 m grading 12.34 g/t Au and 71.9 g/t Ag and Hole 05-CC-05 returned 2.03 m grading 6.69 g/t Au and 37.93 g/t Ag (Jacob and Nordin, 2006).
Bishop's 2006 drill program targeted the central part of the Cliff Creek deposit. Five NQ2 diamond drill holes totaling 647.7 m were completed over about 400 m of strike length. All of the holes cut wide intervals of quartz stockwork, each of which assayed less than 1.0 g/t Au. Within the wider stockworks, one or more intervals of intense silicification and brecciation with fine-grained disseminated sulphides were encountered. Although the latter zones were similar in appearance to the higher grade zones intersected in 2005, their precious metals content was lower. Two of the better 2006 intersections include 4 m grading 2.65 g/t Au and 69.9 g/t Ag in Hole 06-CC-08 and 2.65 m grading 3.79 g/t Au and 97.3 g/t Ag in Hole 06-CC-10 (Bowen, 2007).
In 2010, Guardsmen conducted limited exploration and physical work programs focused primarily on the Cliff Creek portal area. The portal, which had been back-filled with muck when the site was reclaimed in the mid-1990s, was cleared of rock and debris using a large excavator and a crew of four workers. Once exposed, it was apparent that the decline was flooded and no further advancement could be conducted without dewatering the workings. Representative samples of mineralized material and host rock were collected from the floor of the adit and from the platform/dump; these returned high gold and silver values (Lane, 2011).
On June 8, 2011, Guardsmen transferred ownership of the Lawyers Project to affiliated company PPM Phoenix Precious Metals Corp. ("PPM"). Later in year, PPM attempted to fully dewater the mine’s considerable underground workings, but was unsuccessful primarily because of permit restrictions and equipment limitations. An inspection of the portal (Plate 6.3) and dewatered section of the decline concluded that the upper part of the workings were structurally sound. The Cliff Creek portal was re- sealed upon termination of the 2011 field program.
In 2015, PPM completed a surface diamond drilling program on the Cliff Creek North Zone and the central portion of the Duke’s Ridge Zone in an effort to verify historic exploration data and to provide sufficient information to support the first NI 43-101 compliant mineral resource estimates for the Project. The 2015 drilling program is discussed in Sections 10.2 to 10.5 of the Report. Details of the mineral resource estimates are presented in Section 14.2: 2015 PPM Mineral Resource Estimates.
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Plate 6-3: Views of Dewatered Cliff Creek North Portal in 2011
6.4 SILVER POND – EXPLORATION HISTORY The Silver Pond area occurs on claims west of, but contiguous with, those that cover the Lawyers area. Zones of alteration and mineralization discovered on Silver Pond are aligned from southeast to northwest along structures that appear to be subparallel to the Lawyers’ Cliff Creek zone. Claim staking and subsequent exploration did target the possible southern extension of the Cliff Creek Zone, but most of the work assessed zones located further west of it that had initially been explored by Kennco. The zones discussed below include the more significant prospects, including Silver Pond Ridge, Silver Creek, Silver Pond West, Cliff Creek Extension (Silver Pond South), Amethyst and Silver Pond North.
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The Silver Pond property was originally staked by prospector Chuck Kowall in 1979 and 1980 to cover two gold-silver occurrences and associated geochemical anomalies identified by Kennco in the 1970s (Kowall, 1980). In 1981, Great Western Petroleum Corporation ("GWP") optioned the Silver Pond claims from Kowall and later that year completed detailed soil and rock chip sampling and geological mapping (Caira, 1982; Eccles, 1982). In 1983, St. Joe Canada Inc. ("St. Joe") optioned the Silver Pond claims from GWP and formed an 80:20 joint venture partnership with Imperial Metals Corp. ("Imperial Metals") to explore the ground, with St. Joe acting as project operator (Kennedy and Weston, 1985).
The Silver Pond West Zone was discovered by St. Joe in 1984 when quartz-bearing talus was noted on the east side of Cloud Creek. Samples of the mineralization graded up to 17.8 g/t Au and 252.0 g/t Ag. Follow-up geochemical and geophysical surveys conducted later that year defined a 600 m long, northwest-trending gold soil anomaly (with values up to 740 ppb) that is coincident with a magnetic low, and partly coincident with a resistivity high (Kennedy et al., 1984; Weston, 1984). Trenching of the resistivity high uncovered a zone of quartz breccia that averaged 9.0 g/t Au and 24.2 g/t Ag over a width of 5.0 m.
The Silver Creek Zone was discovered by Kennco in the 1970s during which time the company drilled two holes that did not intersect mineralization. Grab samples of siliceous rock collected from the zone by St. Joe in 1984 returned values as high as 45.35 g/t Au and 3,610 g/t Ag. Outcrop panel samples and six trenches, covering a 180 m strike length, returned values ranging from 0.5 m grading 1.99 g/t Au and 41.4 g/t Ag to 5.0 m averaging 6.26 g/t Au and 287.9 g/t Ag (Kennedy and Weston, 1984).
Also in 1984, soil geochemical sampling was completed over the Silver Pond North Zone, an area marked by a broad conspicuous colour anomaly (gossan) consisting of pale yellow, orange and off-white tones. It outlined an 800 m north-northwest trending gold soil anomaly with individual values as high as 250 ppb Au (Kennedy and Weston, 1984). The anomaly is coincident with the margin of a silica cap, the strongest alteration observed at the zone (Kennedy, 1988). Gold mineralization is most commonly associated with multistage silica stringers and veinlets and not associated with disseminated pyrite. Locally, gold mineralization is spatially associated with rhyolite dykes.
In 1985, St. Joe completed a multi-disciplinary exploration program which included trenching and drilling of 29 holes with an aggregate length of 3,003 m (Kennedy and Weston, 1985). Nineteen of the holes (SP-85-01 to -17 and SP-85-24 to -25) were drilled on the Silver Creek Zone with all but six holes encountering at least 1.0 m of anomalous gold-silver mineralization. The highest grades were encountered in Hole SP-85-08 which graded 5.38 g/t Au and 255.0 g/t Ag over 2.0 m (Kennedy and Weston, 1985). Four of the holes were drilled on the West Zone covering a strike length of 125 m. Although the holes were drilled 200 m northwest of the high-grade trench, each encountered multiple zones of silicification. The best intersection came from Hole SP-85-26 which cut 2.0 m averaging 8.07 g/t Au and 9.9 g/t Ag (Kennedy, 1985).
Three of the 1985 holes drilled on the Silver Pond South (formerly the Cliff Creek Extension) Zone, an 800 m long north-northwest trending gold soil geochemical anomaly with values up to 250 ppb, encountered siliceous alteration that was barren to weakly anomalous (Hole SP-85-22 returned 1.0 m grading 0.89 g/t Au and 3.9 g/t Ag). The remaining two holes of the program were drilled on the Amethyst Zone,
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regarded to be the southern extension of the Cliff Creek Zone. Each hole intersected weakly anomalous chalcedonic breccia similar in appearance to that of the Cliff Creek Zone.
In 1987, joint venture partners Bond Gold Inc. (formerly St. Joe) and Nexus Resources Corp. ("Nexus") completed 98 NQ diamond drill holes totaling 12,936 m. At the time, the property consisted of 128 contiguous claim units covering 3200 hectares of land immediately west of and adjoining the Lawyers claims. The Silver Pond West Zone was evaluated with 62 of the drill holes, many of which helped characterized a 30 to 40 m wide zone of pervasive silicification and lesser argillic alteration with a strike length of 400 m and vertical dimension of 200 m. Drill intersections ranged up to 12.3 g/t Au and 324.4 g/t Ag over a true width of 2.12 m (Kennedy and Vogt, 1987). A 'Drill-Indicated' Resource for the zone was calculated to be 68,452 tons (62,100 tonnes) grading 0.171 oz/ton (5.86 g/t) Au using a cut-off grade of 2.4 g/t Au and a specific gravity of 2.88 (Kennedy and Vogt, 1987). The mineral resource estimate does not include allowance for dilution. It was prepared before the coming into force of the NI 43- 101 Standards of Disclosure for Mineral Projects and is not relied upon by the authors of this Report nor by PPM. Other zones drilled in 1987 included Silver Pond South, Amethyst and Silver Creek.
The 1987 program also included about 3000 m of backhoe trenching on the North Zone that evaluated coincident gold soil geochemical and resistivity high anomalies. It revealed the presence of widespread low-grade gold mineralization, including a 38 m interval in trench TR 18.75 N that averaged 1.20 g/t Au, and local high-grades ranging up to 28.8 g/t Au over 1 m (Kennedy and Vogt, 1987). Trenching that year also tested several IP chargeability anomalies encountering wide zones of strong argillic alteration with abundant disseminated pyrite, but no gold-silver mineralization. Follow-up drilling that year (2860 m in 19 holes) outlined an area of widespread, low-grade quartz stockwork mineralization. Gold values ranged up to 2.05 g/t Au over a true width of 3.0 m (Hole SP87-88) including 5.98 g/t Au over a true width of 0.5 m (Kennedy and Vogt, 1987). Silver to gold ratios in mineralized zones range from < 1 to about 20, but are typically 0.5 to 3. The 1987 drilling encountered weak grades of mineralization and alteration to vertical depths of about 200 m.
In 1988, the Bond-Nexus joint venture conducted a program consisting mainly of diamond drilling on four zones (Amethyst, Silver Creek, West and North) totaling 3729 m in 17 holes (Kennedy, 1988). The work confirmed "presently sub-economic" gold and silver values at the Amethyst Zone; successfully traced the Silver Creek Zone to greater depths intersecting a mineralized felsic dyke grading 28.75 g/t Au over 1.0 m; tried unsuccessfully to extend the West Zone further to the northwest, and; attempted a deep test on the North Zone. Hole SP-88-145 was drilled to assess the roots of the alteration system and reached a depth of 405 m before being terminated because of technical difficulties. It encountered strong silicification and argillic alteration throughout, but with only weakly anomalous gold and silver values.
A total of 19,669 m of diamond drilling was completed on the Silver Pond property from 1984 -1988.
In 1992, Even Resources Ltd. optioned the property and explored the northeast portion of the North Zone grid. The work mainly included excavator trenching and local blasting of alteration and quartz vein float trains. The work identified two north-northwest trending, barren quartz veins within quartz-sericite- pyrite and intensely clay-altered volcanic rock (Smith, 1993).
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In 1994, Ocean Crystal Resources Ltd. evaluated an area located southeast of the North Zone and northwest of the West Zone. The program included grid rehabilitation, an Induced Polarization survey, mapping, excavator trenching (Plate 6.4), and nine holes totaling 522.8 m. Trenching encountered 12 quartz veins in areas of intense argillic alteration. Drilling intersected only three such structures, and none carried anomalous gold values (Demczuk, 1994; Symonds, 1997). Eventually the claims were returned to Kowall and later were allowed to lapse.
Plate 6-4: Excavator Trenching in 1994, Silver Pond North Zone
7 GEOLOGICAL SETTING AND MINERALIZATION The main source of information for the regional geology description presented in Section 7.1 is Diakow et al. (1993). Sources of information for the regional mineral deposit descriptions and local geology descriptions, Section 7.1.2 and 7.2 respectively, include Diakow et al. (1991), Hawkins (2003), Duuring et al. (2009), and Bowen (2014) and numerous mineral exploration assessment reports that are referenced individually where appropriate.
7.1 REGIONAL GEOLOGY The Toodoggone region, in which the Lawyers Project is situated, is an area measuring approximately 1500 square kilometres that extends from the Kemess South mine area northwestwards to the
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Chuckachida River. The region occurs within the Intermontane Belt and is underlain by strata of the Stikine Terrane (Figure 7.1) which consists of Paleozoic to Mesozoic island arc assemblages and overlying Mesozoic sedimentary sequences (Table 7.1). The oldest rocks exposed in the region consist of crystalline limestone of the Devonian Asitka Group. They are unconformably overlain by mafic volcanic rocks of the Upper Triassic Takla Group. Takla Group volcanic rocks are in turn overlain by bimodal volcanic and sedimentary strata of the Lower Jurassic Toodoggone Formation of the Hazelton Group.
Toodoggone Formation pyroclastic and epiclastic volcanic rocks are a predominantly calcalkaline andesitic to dacitic subaerial succession. The region as a whole resembles a synclinorium in section from northwest to southeast. Toodoggone volcanic rocks display broad open folds with attitudes generally less than 25 degrees dipping predominantly to the west.
Potassium-argon dating of hornblende and biotite indicate that the age of Toodoggone volcanism ranges from 204 to 182 Ma. This age range appears to be divisible into two main groups: an older, lower stage of volcanism dominated by andesitic pyroclastics and flows characterized by widespread propylitic and zeolitic alteration; and a younger, upper stage of volcanism dominated by andesitic ash-flow tuffs which generally lack significant epithermal alteration (Diakow et al., 1993). All the known epithermal gold-silver deposits and occurrences are restricted to the lower Toodoggone Formation volcanics and underlying units (Godwin et al., 1999).
Unconformably overlying volcanic strata of the Toodoggone Formation are sedimentary strata of Cretaceous age, including fine-grained clastics of the Skeena Group and chert pebble conglomerates and finer grained clastics of the Sustut Group. These sediments are structurally unaffected and are horizontal, forming cap rocks to high-standing plateaus primarily on the western edge of the Toodoggone region.
Late Triassic to Middle Cretaceous intrusions are exposed throughout the Toodoggone region. The most significant of these in terms of precious metal and porphyry mineralization are Early Jurassic granodioritic to quartz monzonitic bodies known as the Black Lake Suite of Intrusions. These intrusions host porphyry copper-gold mineralization in several localities, including the former Kemess South mine and several other deposits on the Kemess property in the southeastern part of the Toodoggone region.
A northwest-trending set of younger, steeply dipping faults and half-grabens are the principle structures found in the region. Major structural breaks are postulated to have been caused by, or be the result of, a northwest-trending line of volcanic centres (Diakow et al., 1993). Small stocks are also aligned northwesterly, suggesting they were also influenced by the same structural trend. Subsequent to volcanism and intrusion, younger faults are recognizable as northwest-trending lineaments. Major north- northwest fault systems in the region are, from west to east: Attorney; Moosehorn-McClair; and Saunders-Jock. Most prominent gossans are aligned along this configuration of faults. The Attorney fault system passes through the Lawyers Project.
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Table 7-1: Regional Stratigraphy of the Toodoggone Region (after Diakow et al., 1993)
Period Group Formation Lithology Upper and Sustut Brothers Peak Nonmarine conglomerate, siltstone, shale, sandstone; Lower Tango Creek minor ash-turf Cretaceous
Cassiar Intrusions: Quartz, monzonite and granodiorite Major Unconformity Lower Cretaceous Marine and nonmarine shale, siltstone and to Bowser Lake conglomerate Middle Jurassic Comfortable Contact Middle and Spatsizi Marine equivalent of the Hazelton Group; shale Lower siltstone and conglomerate, subordinate fine tuffs Jurassic Hazelton Toodoggone Subaerial andesite to dacite flow and tuffs, rare basalt and rhyolite flows; subordinate volcanic siltstone to conglomerate; rare limestone lenses
Black Lake Intrusive Suite: Granodiorite and quartz monzonite Unconformity Upper Submarine basalt to andesite flows and tuffs, minor Takla Triassic limestone and argillite Unconformity Lower Asikta Limestone, chert, argillite Permian Major Terrane Boundary Fault Cambrian Siltstone, shale, sandstone, limestone; regionally and metamorphosed to greenschist and amphibolite grade Proterozoic
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580000 590000 600000 610000 620000 630000 640000 650000 660000 µ
6390000 6390000
# #
# #
#
#
# #
6380000 6380000 #
# #
BONANZA # ? THESIS II/III # ? # BV ? METS # JD 6370000 ? ? 6370000
Lawyers Project GOLDEN STRANGER ?
6360000 LAWYERS 6360000 ? SILVER POND (WEST) ?
BAKER
# ?# SHASTA 6350000 ? 6350000 # # # #
# # #
#
# # # #
6340000 # 6340000 # # # #
# # # # # # # # # ##
# # #
# # # #
# # # # # # # 6330000 6330000
KEMESS EAST #
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# ? # # ? KEMESS NORTH/UNDERGROUND # #
## # # # #
# # # # # KEMESS SOUTH## MINE
# #
# # Ç ## #
#
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6320000 # 6320000 # #
# # #
# # # # # ## # #
# # #
# # # 6310000 6310000
# # #
# # # # # # # # # # # # # # # # # # # # # # 580000 590000 600000 # 610000 620000 630000 640000 650000 660000 # # #
# #
# Legend # # Lawyers I # # Developed Prospect Project ? # Stratified Unit # # # # Past Producer ? # Upper Cretaceous Sustut Group ## ^_ Prince LAWYERS PROJECT Ç Kemess South Mine # Low to Mid Jurassic Hazleton Group-Undifferentiated Smithers # Rupert !( Regional Geology & # # !( Lower Jurassic Hazleton Group-Toodoggone Formation !( Prince # Mineral Deposits Fault George # # # Figure 7.1 ## #Upper# Triassic Stuhini & Takla Groups Thrust Fault # Devonian# to Permian Asitka Group # 20k Mapsheets: 94E043,44, 53,54 Road Date: 3/7/2016 Upper Proterozoic Ingenika Group Vancouver Projection: NAD 1983 UTM Zone 9N Stream !( Scale:1:500,000 Author: tkwitkoski Intrusive Unit Source: US National Park Service Last Modified By: tkwitkoski Lake Checked By: BL Early Cretaceous Granite Revision #: Wetland 0 2.5 5 10 15 Early Jurassic Granite Tenure Kilometers Path: C:\15PG0229 MountainSide (Bob Lane)\2400-GIS-LawyersProperty\2420-MXD\Lawyers_RegionalGeology&MineralDeposits-Fig7-1_A.mxd LAWYERS PROJECT – TECHNICAL REPORT AND RESOURCE ESTIMATE
7.1.1 Mineral Deposits
The Toodoggone region is host to a number of mineral deposit types including high and low sulphidation epithermal gold-silver mineralization, calc-alkalic porphyry copper-gold mineralization, and occasional iron or copper (+/- gold-silver) skarn mineralization. All of these styles of mineralization are genetically related to Early Jurassic volcanic and intrusive activity in an extensional setting (Diakow et al, 1993). Epithermal gold-silver mineralization is hosted primarily by strata of the Toodoggone Formation, to a lesser degree by coeval intrusions, and locally within strata of the Takla Group. Epithermal mineralization is structurally controlled, and both vertical and lateral zoning in mineralization and alteration are common (Panteleyev, 1986). Porphyry copper-gold mineralization at Kemess is spatially and genetically associated with Black Lake Suite intrusions which have intruded Takla Group volcanic and sedimentary rocks. High-sulphidation epithermal mineralization systems formed at ca. 201 – 182 Ma and coincide with district wide plutonism and porphyry copper-gold±molybdenum mineralization, whereas low-sulphidation systems formed later at ca. 192 – 162 Ma, commonly coinciding with the emplacement of felsic dykes and Toodoggone Formation volcanism (Duuring et al., 2009).
A number of past producing mines and developed prospects plot within the map area of Figure 7.1. Those discussed below include the Kemess South past-producing mine and the Kemess North and Kemess East developed prospects. The Lawyers past-producing mine and the Silver Pond developed prospect are discussed in Section 7.2.4, under alteration and mineralization of the Lawyers Project. Three past-producing properties, Ranch, Baker and Shasta, and three developed prospects, Mets, Golden Stranger and JD, are described in Section 23.0 (Adjacent Properties) of the Report.
The following descriptions are presented in order to provide the reader with background information on the sizes, styles and modes of occurrence of the porphyry copper-gold deposits on the Kemess property, located in the southeastern part of the Toodoggone region. The information on the Kemess deposits is not necessarily indicative of mineralization that may be present within the Lawyers Project area.
Kemess South
Discovered in 1983, extensive diamond drilling by El Condor Resources Ltd. from 1990 to 1991 outlined the now mined out Kemess South deposit. Royal Oak Mines Inc. acquired the property from El Condor in 1995.
The Kemess South porphyry copper-gold deposit had historical mineable reserves in 1996 of 221,000,000 tons grading 0.018 oz. Au per ton and 0.224 % Cu (Royal Oak, 1997). Royal Oak’s mineable reserves included allowances for mining losses and dilution. This historical estimate was completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects and used categories other than those stipulated for current use. This historical resource estimate would now likely be classified as probable mineral reserves.
The operation was a low-grade bulk tonnage operation based on the economics of scale, which enabled the mining of low-grade material. The mine was planned as a large open pit operation at a rate of 40,000 tons of ore per day, with a fifteen year mine life. The average stripping ratio for the project over its mine life was estimated to be about 1.18 to 1. Gold-copper concentrate was trucked along the ORAR to the
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rail-head at Mackenzie, B.C., where it was loaded into covered rail cars for shipment to the Horne Smelter in Rouyn-Noranda, Quebec, Canada.
The mine development had an original capital cost estimate of $350 million. A further $50 million came from the Province of B.C. as grants for infrastructure improvements. The final capital cost for the project was about $650 million, which significantly exceeded the original estimate. This capital cost overrun caused serious financial problems for Royal Oak, which eventually relinquished ownership of the property, via several creditor transactions, to Northgate Exploration Limited ("Northgate").
Production commenced in April 1998 and continued without interruption until March 2011. Total production statistics include 473,376,688 tonnes mined and 228,732,478 tonnes milled, yielding 91,903,400 grams (2,954,763 oz.) gold, 4,871,000 grams (156,606 oz.) silver and 355,450,336 kg (783,633,852 lb.) copper.
The Kemess South deposit is hosted by the Early Jurassic Maple Leaf intrusion, a gently inclined sill-like body of quartz monzodiorite which intrudes Takla Group volcanic and sedimentary rocks. The ore body measures 1,700 m long by 650 m wide and ranges from 100 m to over 290 m thick. A blanket of copper- enriched supergene mineralization containing native copper overlies hypogene ore and comprises 20% of the deposit.
The highest grades of gold and copper in the deposit correlate with zones of intense quartz stockwork development, accompanied by intense potassium feldspar selvages and local magnetite stringers and disseminations. The potassic alteration is strongly developed in the western two-thirds of the deposit where it overprints earlier sericite and calcite alteration. Sericitization does not show a consistent association with gold or copper mineralization.
Pyrite, the dominant sulphide in the deposit, occurs as veins and fracture coatings accompanying quartz stringers. Chalcopyrite occurs as disseminated grains and in quartz stockwork veins. Native gold is included within or is peripheral to grains of chalcopyrite, and higher gold grades correlate closely with higher copper grades in the hypogene zone.
The above information on the Kemess South deposit, and its past production data, is not necessarily indicative of the mineralization on the Lawyers Project. This information provides contrast between large bulk tonnage, low-grade gold-copper deposits and high-grade gold deposits with modest tonnages. The historical data is relevant to the bulk tonnage mineral potential of the Toodoggone region.
Kemess North (Underground)
Kemess North is located about 6 km north of Kemess South. Mining companies were first attracted to the area by a large gossan that is the surface expression of the Kemess North porphyry copper-gold deposit. Exploration programs were carried out by Kennco from 1966-71, Getty Mines Ltd. from 1975-76 and El Condor Resources Ltd. from 1986-93. By the end of 1993, a total of 15,039 m of diamond drilling in 78 holes had partially delineated the Kemess North deposit over a strike length of 1,200 m, a true thickness of about 300 m and to 400 m down-dip.
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In 2000, Northgate completed 12 diamond drill holes totaling 4,100 m at Kemess North. Their results and those from earlier drilling programs defined a total of 360 million tonnes grading 0.299 g/t Au and 0.154% Cu (Northgate Exploration Ltd., News Release - January 22, 2000). The following year, Northgate completed 16 holes totaling 8,200 m. This drilling defined a significantly larger and higher grade inferred mineral resource which was estimated to be 442 million tonnes grading 0.4 g/t Au and 0.23% Cu, using a gold equivalent cut-off grade of 0.6 g/t (Stockwatch - November 14, 2001).
In a news release dated August 2, 2011, Northgate announced positive results for a Preliminary Assessment on its Kemess North Underground Project, in which Northgate proposed to develop an underground block cave operation. The Kemess Underground deposit is located at depths of 300 to 500 m below surface within the larger Kemess North deposit. The envisaged block cave operation would leverage the existing infrastructure and mill facilities at the Kemess South mine, including a permitted area for tailings storage in the Kemess South open pit.
On October 26, 2011, Toronto, Ontario-based AuRico Gold ("AuRico") announced it had completed the acquisition of Northgate by way of a plan of arrangement. Under the terms of the acquisition, AuRico, among other things, acquired all of the issued and outstanding common shares of Northgate on the basis of 0.365 of an AuRico common share for each common share of Northgate.
In a news release dated April 15, 2013, AuRico announced results from its 2013 Kemess Underground Feasibility Study that outlined the proposed development of an underground block cave operation with average annual production of 105,000 ounces of gold and 44 million pounds of copper at cash costs of $213 per ounce of gold, net of by-product credits, over a mine-life of approximately 12 years. The Feasibility Study was based on a probable mineral reserve, as of December 31, 2012, of 100.4 million tonnes grading 0.28% Cu and 0.56 g/t Au, containing 619.2 million pounds of copper and 1.8 million ounces of gold. Base case commodity prices used for the reserve estimate were US$3.00 per pound for copper and US$1,300 per ounce for gold. AuRico is currently updating the Feasibility Study to reflect current metal prices and exchange rate assumptions as well as to reflect internally engineered optimizations. As of the effective date of this Report, to the authors' knowledge, AuRico has not made a positive decision to proceed with the proposed underground development.
At Kemess North, a sub-volcanic quartz monzonite stock and related dykes have intruded Takla Group volcanic rocks. Porphyry-style copper-gold mineralization is hosted in potassically-altered zones developed both within the monzonite and adjacent country rock. Higher grade copper-gold mineralization is associated with stockworks, veins and disseminations of pyrite, chalcopyrite and magnetite that form as replacements of earlier ferromagnesian silicate minerals. Outward from the potassically-altered zone, the onset of a propylitic alteration assemblage of chlorite, carbonate, pyrite, pink zeolite and minor epidote is marked by a pronounced decrease in copper and gold concentrations.
Kemess East
The Kemess East deposit is located one kilometre east of the Kemess Underground deposit. Exploration drilling carried out by AuRico in 2013-14 was guided in part by the results of a deep-penetrating induced polarization survey completed in 2006 by Quantec Geoscience. The drilling outlined a deep copper-gold mineral resource which, as of December 31, 2014, totaled 55.9 million indicated tonnes grading 0.41% Cu and 0.52 g/t Au, containing 503.7 million pounds of copper and 939,000 ounces of gold, and an
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additional 117.2 million inferred tonnes grading 0.34% Cu and 0.38 g/t Au, containing 871.4 million pounds of copper and 3.4 million ounces of gold. Base case commodity prices used for the resource estimate were US$3.00 per pound for copper and US$1,300 per ounce for gold. As the Kemess East deposit is proximal to Kemess Underground, any proposed development of the former will potentially share infrastructure with the latter.
Kemess East is typical of calc-alkaline porphyry copper-gold deposits in the western cordillera. The deposit is deeply buried; mineralization starts at an average depth of 900 m below surface and extends to 1500 m below surface. Unlike Kemess Underground, there is no significant low grade mineralization associated with Kemess East. The deposit is mainly hosted by a potassically-altered porphyritic diorite pluton which is part of the Black Lake intrusive suite. In its eastern portion, it is hosted within potassically- altered Takla volcanic rocks. The host diorite body appears to be nearly flat lying, dipping gently to the south. Higher grade copper-gold mineralization is characterized by strong secondary biotite alteration in the plutonic rocks. Better copper and gold grades within Takla volcanic rocks are associated with potassic (biotitic) alteration assemblages. Toodoggone volcanic rocks in the Kemess East area are relatively fresh to weakly propylitically-altered, generally lack significant sulphides and contain no ore grade mineralization.
The above information on the Kemess North, Kemess Underground and Kemess East deposits, and the proposed underground development of Kemess Underground, is not necessarily indicative of the mineralization on, or the development potential of, the Lawyers Project. This information demonstrates the potential for the mining of porphyry-type deposits, by bulk underground methods, in the Toodoggone region. The reader is reminded, however, that in the case of Kemess Underground and Kemess East, their operational synergies with Kemess South have enhanced their possible economic viability.
7.2 LOCAL GEOLOGY OF THE LAWYERS PROJECT The descriptions that follow in Sections 7.2.1 to 7.2.4 are compiled from numerous reports that have evaluated the Project area, including: assessment reports downloaded from the B.C. Ministry of Energy and Mines’ ARIS (Assessment Report Indexing System) website; publications of the B.C. Geological Survey (B.C. Ministry of Energy and Mines); hard copy private and public reports assembled by PPM including certain volumes of the WEL 1985 Feasibility Study, 1986 Technical / Economic Study and 1987 Mine Plan; and a Technical Report Covering the Lawyers and Al (Ranch) Properties written in 2003 by Paul Hawkins, P.Eng.
A map depicting the local geology and the principal mineralized zones of the Project area is shown in Figure 7.2 and its accompanying legend (Figure 7.3). The geology of the central part of the Lawyers Project (Vulimiri et al., 1986; Diakow et al., 1993) is shown in Figure 7.4.
7.2.1 Lithology
The Lawyers Project is underlain primarily by volcanic rocks of the Lower Jurassic Toodoggone Formation. The Toodoggone Formation is a compositionally uniform subaerial volcanic succession that consists of six lithostratigraphic members divided into Lower and Upper Eruptive Cycles (Table 7.2). The members
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are comprised of high potassium, calcalkaline latite and dacite volcanic strata emplaced along a north- northwest trending, elongate volcano-tectonic depression (Diakow et al., 1993).
Volcanic strata of the Lower Eruptive Cycle underlie most of the Lawyers Project area. In general these consist of two distinctive mappable units (Vulimiri et al, 1986): a lower quartz andesite which is overlain by a sequence of trachyandesites. A thick package of basaltic rocks, which correlates to the mafic volcanic activity in the Upper Eruptive Cycle, overlies the trachyandesites. West of the AGB Zone is a thick sequence of andesite to trachyandesite. Welded tuffs of this sequence overlie the ash tuffs of the Adoogacho Member. Trachyandesite tuffs, which locally contain block-sized clasts of trachyte porphyry, overlie the welded tuffs. These grade vertically into lapilli tuffs with epiclastic greywacke interbeds.
In the eastern half of the Project the top of the Metsantan Member is exposed. It consists of a thick sequence of trachytic, k-feldspar megacrystic ash fall and flows that are well-exposed along the cliffs north of Duke's Ridge. Overlying these strata are hornblende-bearing andesite crystal tuffs which contain flattened chlorite-altered fragments (Vulimiri et al, 1986).
All known mineralization on the Lawyers Project occurs within porphyritic trachyandesite flows, breccias and crystal tuffs of the Metsantan Member (Plate 7.1).
The southern portion of the Lawyers Project is capped by younger, horizontal Sustut Group conglomerates in slight angular unconformity with the underlying Toodoggone volcanics.
Table 7-2: Lithostratigraphic Column, Toodoggone Formation (Diakow et al., 1993)
7.2.2 Intrusive Rocks
Intrusive rocks are not well-represented on the Project. Locally, mafic dykes, which typically strike northwest with sub-vertical dips, are unaltered and cut mineralization (Vulimiri et al, 1986). They may be feeder dykes to pyroxene basalts of the Attycelley Member located east of the Attorney Fault (Diakow et al, 1993). In the western part of the Project, a series of northwest striking rhyolite dykes occur along the same structures that host mineralization at the M-Grid Zone (Blann, 2005) and at some of the Silver Pond zones (Caira, 1982; Kennedy and Weston, 1985).
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Less than two km southeast of the Project area, Black Lake Intrusive Suite rocks are present over a wide area.
Plate 7-1: Example of Trachyandesite Latite Crystal Lapilli Tuff, Metsantan Member, Cliff Creek North Zone
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ª ª ª
ªª ªªª ªª ªª
600000 605000 610000 615000
lJToAd lJToMva
6365000 lJToMc µ 6365000 EJg
lJToS EJg
lJToS lJToMva
KODAH !( lJToMva ROUND MOUNTAIN WEST lJToAvc 6360000 !( ROUND MOUNTAIN EAST 6360000 !(
lJToAvc
lJToAvc
lJTo lJToS SILVER POND (NORTH) !( !( AGB lJToMva
CLIFF CREEK NORTH !( lJToS DUKE'S RIDGE !( lJToS CLIFF CREEK MIDDLE !( PHOENIX lJToAvc M GRID !( lJToMcg
6355000 !( 6355000 CLIFF CREEK SOUTH !( !( SILVER POND (AMETHYST) lJToAvc SILVER POND (WEST) !( SILVER POND (SOUTH)
lJToAvc SILVER POND (SILVER CREEK) !( lJToS !( SILVER POND (RIDGE) lJToAvc DREAM MARMOT LAKE !( !(
uTrSsv lJToAva uTrSsv lJToS luKSu luKSusc lJToAvc
EJg DPAls
lJToAcg DPAls
ª
ª lJToS DPAlsª
6350000 ª 6350000 ª DPAls uTrSsv lJToAvc uTrSsv EJg DPAls
600000 605000 610000 615000
Legend Lawyers I Project Principle Mineralized !( Zone and/or MINFILE ^_ LAWYERS PROJECT Occurrence Smithers Local Geology & !( !( Prince Mineralized Zones Fault George Figure 7.2 ªªª Thrust fault 20k Mapsheets: 94E043,44, 53,54 Date: 3/17/2016 Vancouver Projection: NAD 1983 UTM Zone 9N !( Scale:1:95,000 Lawyers Project Outline Author: tkwitkoski Sources: Esri, HERE, DeLorme, Last Modified By: tkwitkoski Checked By: BL Revision #: 0 0.5 1 2 3 - See Figure 7.2b for Geology Legend Kilometers Path: C:\15PG0229 MountainSide (Bob Lane)\2400-GIS-LawyersProperty\2420-MXD\Lawyers_PropertyGeology&MineralizedZones-Fig7-2_A.mxd LAWYERS PROJECT – TECHNICAL REPORT AND RESOURCE ESTIMATE
Figure 7-3: Legend for Figure 7.2
Figure 7-4: Geology and Select Mineralized Zones, Central Lawyers Project (after Diakow et al., 1993)
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7.2.3 Structure
Detailed mapping on the Lawyers Project (Kennedy et al., 1985; Vulimiri et al., 1986; Diakow, et al., 1993) and elsewhere in the Toodoggone region have identified a series of steeply dipping, northwest to north- northwest striking normal faults that are interpreted to be extensional faults related to graben development during the formation of the Toodoggone depression. Volcanic strata within the fault blocks generally dip shallowly to the west. On the Project, the principle graben faults are:
The Attorney fault, which dips steeply to the northeast, and the related D1 fault that dips steeply to the southwest and controlled emplacement of mineralization at the AGB Zone; The Cliff Creek and Footwall faults, which dip steeply to the southwest and acted as the conduits for emplacement of the Cliff Creek and Duke’s Ridge Zones; The Silver Pond fault, a sub-vertical structure that hosts the Silver Pond West and Silver Creek Zones and coincides with the Silver Pond North Zone. Post mineral re-activation of some of the graben structures, and younger northwest-trending faults with left-lateral movement, locally offset stratigraphy and disrupt the continuity of the mineralized zones, the most pronounced of which is the D1 fault which has affected the distribution of AGB Zone mineralization (see Figure 7.4). Younger northeast-trending structures cut and locally offset the northwest to north- northwest trending structures.
7.2.4 Alteration and Mineralization
Alteration and associated mineralization on the Lawyers Project include both low and high sulphidation epithermal systems (Diakow et al., 1993; Forster, 1984; Kennedy, 1988). Low sulphidation systems appear restricted to the central and eastern parts of the Project area, referred to here as the Lawyers Group of prospects, while high-sulphidation epithermal systems occur in the western part of the Project area, and are referred to here as the Silver Pond Group of prospects. Figures 7.5 through 7.8 depict the location of most of the prospects; some of the images are dated and therefore mineral claim boundaries are not current.
The age of epithermal mineralization on the Project is constrained by Ar-Ar and K-Ar age dating techniques. The age of potassic alteration at the AGB Zone, determined by Ar-Ar dating of adularia, is 188.0±2.3 Ma, and the age of potassic alteration at the Cliff Creek North Zone, also determined by Ar-Ar dating of adularia, is 189.7±2.6 Ma (Clark and Williams-Jones, 1991). A K-Ar age on adularia collected from Stage 2 vein envelopes exposed in the 0+75N crosscut on the 1750 m level of the AGB Zone is 180±6 Ma (Diakow et al., 1993). None of the Silver Pond Group of prospects have been dated.
7.2.4.1 Lawyers Group
Low-sulphidation (adularia-sericite) epithermal type alteration is characterized by core zones of intense silicification±adularia and bleaching. At higher elevations within the AGB Zone and within the Cliff Creek and Duke’s Ridge Zones, adularia forms narrow, pink boundaries on vein margins, and outbound of veins it replaces plagioclase phenocrysts and groundmass silicate minerals, resulting in partial masking of the porphyritic texture of the wallrock. At AGB, this central potassic alteration grades outward to a propylitic assemblage of epidote-carbonate-chlorite-pyrite.
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At the Cliff Creek and Duke’s Ridge Zones, adularia on vein margins occurs with sericite flanked by an assemblage consisting primarily of kaolinite. The argillic alteration, accompanied by pyrite and chlorite, forms wide envelopes on the veins; it grades outward to a propylitic assemblage similar to that observed at the AGB Zone.
Low-sulphidation epithermal gold-silver mineralization occurs in quartz veins, stockwork zones and chalcedony breccia bodies that developed along northwest and north-northwest trending fracture systems. Three principle zones of this type have been discovered to date and include the mined-out Amethyst Gold Breccia (AGB) Zone, the Cliff Creek Zone with its North, Central and South sub-zones, and the Duke’s Ridge Zone. Subsidiary zones include the small but high-grade Phoenix deposit that was mined in late 1992 prior to mine closure, M-Grid, and a number of minor prospects and showings.
Precious metals mineralization typically consists of fine-grained native gold, native silver, electrum and acanthite, with minor amounts of chalcopyrite, sphalerite and galena. Pyrite is ubiquitous, but rarely exceeds 2% by volume. The main gangue minerals include quartz, chalcedony, and amethyst with minor calcite and hematite, and occasional barite. Crystalline to comb quartz is typically white to colourless, while chalcedony ranges from white to beige, pale green, pale grey to dark grey and brown. Veins commonly display banded and crustiform textures that are typical of low-sulphidation epithermal vein systems. Amethyst, pale grey chalcedony, white sparry calcite and barite occupy the centres of veins and/or form late veinlets that cross-cut earlier phases of mineralized quartz-chalcedony. At least four pulses of chalcedony and quartz vein deposition have been recognized demonstrating the repeated and episodic nature of mineralization at the Lawyers Project, and at the AGB Zone in particular (Vulimiri et al., 1986). Breccias locally contain angular clasts of earlier banded veins.
Two precious metals-rich, massive sulphide veins have been identified to date: the Phoenix Zone (Phoenix vein) near and to the south of the Duke's Ridge Zone, and the P2 vein discovered in the hangingwall of the main Cliff Creek North Zone in 2015. Little detail is known regarding mineralogy of the narrow Phoenix vein, but it is reported to carry electrum, native silver and acanthite that explain the very high gold-silver values encountered there. The P2 vein consists of massive black sphalerite, with minor amounts of disseminated to intergrown pyrite, chalcopyrite, galena, electrum and acanthite.
Gold-silver mineralization is known to occur over a vertical range in excess of 225 m at both the AGB and Cliff Creek North Zones. At AGB, it extends from a surface elevation of 1860 m to depths below the lowest underground workings. At Cliff Creek North, mineralization extends from a surface elevation of 1810 m to below the 1585 m level, the deepest level of mine development.
Amethyst Gold Breccia (AGB) Zone (094E 066)
The AGB deposit is a north-northwest striking, steeply west-dipping zone that occupies a topographic high located in the approximate centre of the Project, and is situated immediately west of the Attorney fault (see Figure 7.4). The zone has been traced for more than 500 m along strike, greater than 225 m vertically, and is up to 75 m wide. To the north, the AGB Zone appears to be terminated by the Attorney fault, but reconnaissance mapping conducted beyond the fault in 2001 identified chalcedonic quartz veining in outcrop and float (Kaip and Childe, 2001). The zone has been traced to the south of the mine downward to Cliff Creek and across the valley towards Duke’s Ridge. Detailed surface and underground mapping and sampling by SEREM / Cheni determined that the AGB Zone forms a discrete vein system at
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depth that flares upwards forming distinct hangingwall and footwall zones (Vulimiri et al., 1986). The hanginwall zone, which dips steeply to the east, is regarded to be a splay from the footwall zone. Approximately 100m below surface, the two zones coalesce to form an ore shoot 20 m wide.
The deposit is enveloped by a 25 m wide potassic alteration zone; the age of the potassic alteration, constrained by an Ar-Ar adularia date, was determined to be 188.0±1.8 Ma (Clark and Williams-Jones, 1991).
The deposit consists of fracture-controlled, elongate breccia bodies and stockwork veins. The principle economic minerals are fine-grained electrum, acanthite (‘argentite’), native gold and native silver. They are accompanied by minor pyrite, chalcopyrite, sphalerite and galena. Silver to gold ratios average 20:1. The highest ore grades are associated with chalcedony and hematite which, along with crystalline quartz, are the main gangue minerals. Minor, and late stage, gangue minerals include amethyst, calcite and barite. Alteration assemblages display vertical zonation, with argillic at higher elevations, silica-adularia- sericite at intermediate levels and silica-adularia at lower elevations. These alteration assemblages are enveloped laterally by zones of propylitic alteration which consist of chlorite and minor epidote, calcite and hematite.
The AGB Zone is cut by a number of post-mineral faults thought to be related to the Attorney fault system. Principle among them is the D1 fault, a northwest trending 60° southwest-dipping structure with demonstrated left lateral and normal displacement. Where the fault cuts the AGB Zone, mineralization is re-brecciated, containing angular clasts of vein material in a matrix of limonite and hematite.
The AGB Zone was tested by over 15000 m of surface diamond drilling and at least 3000 m (likely considerably more) of underground drilling and as well, it was explored by 1,481 m of underground workings (REF). AGB was the first deposit to be discovered, drilled, developed and mined at Lawyers, ultimately contributing approximately 75% of the ore milled. Underground and surface drilling in 1990 failed to expand the ore zone and reserves were exhausted in 1991.
Cliff Creek Zone
The Cliff Creek Zone, a north-northwest trending zone located 1930 m west of the AGB Zone, has a strike length of at least 1600 m, has been explored to a depth of greater than 300 m and has widths ranging from 9 – 30 m. It is comprised of the Cliff Creek North, Cliff Creek Central and Cliff Creek South sub- zones that form a continuous band of alteration and mineralization primarily contained in dilational structures along the West fault, located between the northwest-trending Cliff Creek fault and the Ptarmigan fault.
Mineralization at the Cliff Creek Zone, in contrast to the AGB Zone, consists primarily of discrete banded quartz-chalcedony±amethyst veins, fracture-fillings and vein stockworks, and minor silicified breccia bodies with narrow mineralized clay gouge zones (Plate 7.2). Adularia occurs adjacent to the veins and is commonly accompanied by sericite. Argillically-altered wall rock, comprising kaolinite and minor illite, forms symmetrical envelopes that extend for up to 10 m from vein margins beyond which propylitic alteration, consisting of chlorite, epidote, calcite and hematite, prevails. A supergene alteration assemblage of clays and limonite is superimposed on the zone and penetrates to depths of up to 30 m from surface
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The P2 vein, a massive sulphide, precious metals-bearing vein and stockwork zone located in the hangingwall of the main Cliff Creek North Zone, is not typical of mineralization on the Project. It appears to have been emplaced in a single mineralizing event and sealed from later episodes. The vein was intersected in only one drill hole, therefore its orientation is uncertain. It yielded spectacular grades of 293.4 g/t Au and 7,622 g/t Ag over 0.7m, and is reminiscent of the high-grade vein mined at the Phoenix Zone. Silver to gold ratios in Cliff Creek mineralized material are extremely variable, ranging from < 1 to more than 100, but are typically in the 25 - 40 range.
Of the three sub-zones, Cliff Creek North received most of the early exploration (up to 1984), including extensive surface trenching and 5515 m of surface diamond drilling over 207 m of strike length. The work provided sufficient data for calculation of reserves in 1985 that were included in feasibility studies and mine planning.
Plate 7-2: Example of Cliff Creek North Zone Mineralization
An extensive 1987 surface drilling program totaling 10432 m in 49 drill holes covered the three sub- zones and resulted in more than doubling the zones’ reserves. Development of a 750 m ramp to access the Cliff Creek North Zone began in 1990 and was followed with development of a spiral decline and an incline in preparation for underground mining (Figure 7.5). In 1990, additional surface exploration drilling, completed mainly on the Central and South sub-zones, totaled 8921 m in 32 holes. The program
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determined that precious metal values in the Central Zone were erratic and hosted by a relatively tight structure (Lennan, 1990). This resulted in a downgrading of overall reserves for the Cliff Creek Zone.
Underground development continued in 1990-1991 with advancement on seven levels in the footwall of the Cliff Creek North Zone. It became apparent that mineralization there was also erratic and discontinuous, and that repeated episodes of late-stage brecciation, silica flooding and veining resulted in the overall dilution of precious metal grades locally. However, drifting on the 1700, 1633 and 1616 levels encountered encouraging grades and thicknesses (e.g. 5.0 m averaging 0.324 oz/ton Au and 8.02 oz/ton Ag on the 1700 Level; 10.0 m averaging 0.317 oz/ton Au and 8.22 oz/ton Ag on the 1633 Level; and 7.5 m averaging 0.217 oz/ton Au and 10.20 oz/ton Ag on the 1616 Level). Also, 2500 m of underground drilling (44 holes on sections spaced at 15 m intervals) in a proposed stope development block indicated that mineable grades would improve by 20-25% (GCNL, Jan.11, 1991).
Ultimately, reserves for the entire zone were recalculated using the new data and a much higher cut-off grade than that previously used. The necessity of using a higher cut-off grade was in part as a consequence of falling precious metal prices. The revised reserves were dramatically reduced and by the end of 1991 Cheni concluded that most of the zone, given the weak metal prices and high mining costs at the time, was uneconomic. Only limited development continued targeting select areas in the upper levels of the Cliff Creek North Zone. In 1992, Cheni extracted the remaining broken ore from several stopes, and determined that most of the previously reported reserves were uneconomic. Low grade surface stockpiles were also written off. The mine entrance and vent raise were sealed in 1993 and 1994 during early phases of site reclamation. Evidence of past exploration at the Cliff Creek Zone consists of access roads, marked drill sites, reclaimed trenches, local areas stripped to bedrock, a capped vent raise and a gated portal with dump platform and settlement pond (Plate 7.3).
Figure 7-5: Modeled Workings of the Cliff Creek North Zone
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Plate 7-3: View of Cliff Creek Portal Area
Duke’s Ridge Zone
The Duke’s Ridge Zone is located just southeast of the Cliff Creek Zone on the east side of the Cliff Creek fault. The zone was discovered in 1982 and explored by extensive trenching and surface diamond drilling in 1983-1984 that defined a 1200 m long, northwest-trending zone. The zone is sub-vertical to steeply west-dipping and typically 2-4 m wide.
Mineralization consists mainly of banded quartz-chalcedony-amethyst stockwork veining (Plate 7.4) and breccias with traces of pyrite, base metal sulphides and local, fine-grained electrum and acanthite. The bulk of the exploration work targeted a 430 m long central segment of the zone where better grades and widths encountered in trenching and shallow drilling were encouraging. The zone’s reserve was also located in the central area of the structure where narrow zones of higher grade gold-silver mineralization are flanked by broad lower-grade zones, suggesting bulk tonnage potential. Several splays from the main Duke’s Ridge trend have been recognized, one of which may be the high-grade Phoenix Zone discussed below.
In 1990, six trenches and sixteen drill holes tested the north extension of the Duke’s Ridge Zone, an area between Duke’s Ridge ‘proper’ and the Cliff Creek Central subzone, and where the Cliff Creek decline (ramp) is located. One of the trenches, TR-90-DR-4 discovered an east-trending fault, thought to be a splay of the Cliff Creek fault, along which a 1 to 2 m thick chalcedony vein and vein breccia zone occurs.
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The fault is exposed in the decline, but is not associated with any mineralization. Trench chip samples across the zone ranged up to 1.07 oz/ton Au and > 15 oz/ton Ag over 1.0 m (Lennan, 1990). Follow-up drilling included hole 90-DR-35A that intersected the vein at a position approximately 75 m above the decline and returned 2.0 m grading 0.264 oz/ton Au and 12.85 oz/ton Ag. In 1993, in-fill drilling (number of holes, meterage and locations unknown) on the Duke’s Ridge Zone confirmed additional mineralization, but not of sufficient size and grade to warrant development.
Unfortunately, data from several programs conducted on the Duke’s Ridge Zone is incomplete or lacking altogether. Therefore the total amount of work completed on the zone is unknown. Encouraging grades encountered in surface trenching and drilling in several areas of the Duke’s Ridge Zone and a lack of deep drill testing provide exploration targets worthy of consideration.
Plate 7-4: Example of Duke’s Ridge Zone Stockwork Veining
Phoenix Zone
The Phoenix Zone is located approximately 75 m south of the east end of the Duke’s Ridge Zone at an elevation of 1865 m on the crest of Duke’s Ridge itself. The northwest trending, near vertical zone has a strike length of approximately 60 m and extends from surface to a depth of at least 80 m. The zone consists of a precious metals-bearing quartz±chalcedony vein hosted by siliceous orthoclase megacrystic tuffs. Pervasive hematite with abundant sulphides form an alteration envelope 0.5 to 2.0 m wide; it gives way to epidote-dominated, propylitically altered wallrock. Large feldspars are typically altered to
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kaolinite and calcite, and late calcite stringers cut the vein and altered wallrock. The ore-bearing zone is narrow, ranging up to 0.5 m in true width and averaging 0.3 m. The principle economic minerals are acanthite (argentite), electrum, and leaf and wire silver (Cheni, 1992b).
In 1992, a 20 hole, 950 m grid drilling program was conducted on a 1991 'E-Scan' resistivity anomaly in an area of high-grade float. The program encountered weakly anomalous to locally spectacular grades of mineralization including a 1.75 m interval in Hole DR-92-47 that averaged 78.5 oz/ton Au and 1,330 oz/ton Ag.
The drilling outlined an upper mineable zone, measuring 25 m in length and 35 m in depth, that could be mined to a minimum width of 1.2 m. The initial reserve for the Phoenix Zone was 3,245 tons grading 1.69 oz/t Au and 101.7 oz/ton Ag. It was accessed by a 90 m decline, and mined to a depth of 30 m below surface in several stopes. The ore was milled in November, 1992, prior to shutdown of the operations. A total of 5439 tons (4934 tonnes) of ore was ultimately extracted from the zone and milled to produce 6713 ounces of gold and 296,084 ounces of silver. A 19 hole underground diamond drilling program, completed in 1992, indicated that the zone remains open to depth and to the east. The distribution of drill hole pierce points is shown on the longitudinal section presented in Figure 7.6. The Phoenix workings were backfilled and reclaimed later in the mid-1990s.
M-Grid Zone
The M-Grid Zone lies west, and in the hangingwall of the Cliff Creek Central subzone. It is 300-400 m northwest and along strike from the original Silver Pond South Zone of similar description, and 400-500 m northeast of the heavily drilled Silver Pond West Zone. The M-Grid Zone consists of four principal zones of clear to white, massive, comb and druse quartz, quartz-chalcedony veining, brecciation and silicification with local mm-scale vein selvages of pale pink adularia, trace to 5% pyrite, and local traces of fine-grained acanthite. The zones, exposed by trenching in 2004, are from 1-10 m wide and have been traced for 400 m along their northwest strike (Figure 7.7). Just 50 m to the northeast of the trenches is the collar for Hole 90-CC-107; it encountered multiple vein intersections including 0.5 m grading 0.184 oz/ton Au and 23.85 oz/ton Ag from 37.2 m (Lennan, 1990). Enveloping the mineralization are zones of argillic alteration that consist of kaolinite, smectite and illite with locally abundant, partly oxidized pyrite, and iron and manganese oxides. A northwest-trending 2-3 m wide pink-orange feldspar porphyry dyke was also encountered in a number of the trenches, but did not appear to have a genetic relationship to mineralization. Results from channel sampling in Trench 11 include: 4.02 g/t Au and 291.0 g/t Ag over 1.0 m; 7.06 g/t Au and 66.0 g/t Ag over 1.5 m; 0.79 g/t Au and 131.7 g/t Ag over 4.0 m; 1.47 g/t Au and 20.2 g/t Ag over 5.0 m; 0.11 g/t Au and 3.4 g/t Ag over 12.0 m, and 1.82 g/t Au and 241.0 g/t Ag over 3.0 m (Blann, 2005). Gold soil geochemical anomalies to the northwest and southeast of the M-Grid trenches outline an additional 600 m of potential strike length that remain unexplored. The M-Grid has not been drilled.
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Figure 7-6: Longitudinal Section Showing Drill Hole Intersections, Phoenix Zone, 1992
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Figure 7-7: Geology and Chip Sample Results, 2004 M-Grid Trenches (Blann, 2005)
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7.2.4.2 Silver Pond Group
Most of the Silver Pond Group of prospects is underlain by a sequence of gently northwest-dipping green porphyritic trachyandesite lavas and tuffs of the Metsantan Member. The southern part of the Silver Pond trend is capped by horizontal conglomerates of the Cretaceous Sustut Group. Steeply dipping, quartz-bearing rhyolite to rhyodacite dykes cut the volcanic rocks and occur in association with regional north-northwest trending, steeply dipping faults that are locally offset by younger east trending faults. The north-northwest trending faults are believed to be the conduits along which mineralizing fluids were channeled and coincide with the Silver Pond North (North), Silver Pond West (West), Silver Creek, Heavy Mineral and Amethyst Zones (Kennedy, 1988) that comprise the Silver Pond trend. The North, West, Silver Creek and Heavy Mineral Zones are more or less aligned along a north-northwest trending structure that has been traced for about 6.8 km. It is centered about 1.3 km southwest of the Cliff Creek fault, while the Amethyst Zone is likely the southern continuation of the Cliff Creek Zone; the Silver Pond South (South) Zone lies in the hangingwall of the Cliff Creek Zone. The Silver Pond trend is cut by an east-northeast striking fault between the West and Silver Creek Zones (Figure 7.8). Figure 7.9 shows the locations of the individual Silver Pond prospects relative to the Cliff Creek and Duke’s Ridge Zones and to historical claim boundaries.
Two general styles of high-sulphidation (acid-sulphate) epithermal gold-silver mineralization characterize the Silver Pond Group of prospects. These consist of vein and breccia-type ore shoots and pods, such as the West and Silver Creek Zones, and high-level stockwork-type mineralization such as the North Zone. Gold and silver are generally absent from areas of intense alteration, with pyrite and magnetite being the only visible metallic minerals (Forster, 1984). Low-sulphidation epithermal mineralization is represented by the Amethyst Zone.
Silver Pond West (094E 163)
The West Zone is located on relatively steep west-facing slopes on the east side of Cloud Creek (Plate 7- 6). The zone was discovered as the result of prospecting by St. Joe in 1984 and is outlined by a 600 m northwest-trending gold soil geochemical anomaly that is coincident with linear magnetic lows and a 700 m long resistivity high anomaly.
Two main styles of mineralization and alteration were recorded: 1) stockwork zones consisting of a dense network of narrow multi-stage stringers composed of silica, calcite, epidote, chlorite, pyrite, laumontite, rare amethystine quartz, and traces of galena, chalcopyrite, sphalerite, electrum, native silver and acanthite; and 2) zones of intense to pervasive silicification typically associated with hydrothermal brecciation and intense veining that form a complex system of gold-silver bearing subzones separated by barren, weakly propylitically-altered andesite. Mineralization was found to be erratic both vertically and horizontally.
In 1984, trenching of the resistivity high anomaly discovered a zone of hydrothermally altered volcanic rocks that averaged 9.0 g/t Au and 24.2 g/t Ag over 5.0 m. In 1985, an initial four-hole drill program evaluated the zone and returned encouraging results including 8.07 g/t Au and 9.9 g/t Ag over 2.0 m in Hole SP85-26. The holes were drilled 200 m southeast and along strike from the above-mentioned high- grade trench suggesting that the zone may have a meaningful strike length. In 1987, the West Zone was
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systematically drilled to test its continuity along strike and at depth, and to provide sufficient data for the calculation of a resource. That year a total of 6011 m in 55 holes evaluated the zone over 400 m of strike length and to a 200 m vertical depth below surface (Kennedy and Vogt, 1987).
A total of 6565 m of drilling in 59 holes tested the West Zone during the period 1984-1987. The mineralized body is characterized by a 30 – 40 m wide alteration zone that envelopes at least three 1 – 3 m wide tabular bodies (named A, B and C) of intense silicification, stockwork veining and brecciation that carry minor amounts of sulphides, and erratic gold and silver grades. The three bodies are separated by 10 – 20 m of altered wall rock, are sub-parallel, trend 320°, and have sub-vertical dips. The alteration and mineralization occur in both the hangingwall and footwall of a rhyolitic dyke that has the same orientation as the mineralization. The dyke is weakly altered at its contacts and is in places cut by stockwork veining. The significance of the dyke and its possible genetic relationship to gold-silver mineralization in the West Zone is uncertain.
Each of the A, B and C zones, with an average true width of 1.34 m, contributed tonnage to the overall drill indicated reserve for the West Zone of 62,100 tonnes grading 5.86 g/t Au using a cut-off grade of 2.4 g/t Au (Kennedy and Vogt, 1987). Silver values rarely exceed 100 g/t; most values are in the 3 – 10 g/t Ag range. The cut-off grade used excluded a number of wider, lower grade intersections including 9.0 m grading 1.57 g/t Au and 6.60 g/t Ag in Hole SP87-80.
The deposit remains open along strike and at depth, and additional well-mineralized tabular bodies have also been identified. A gold soil geochemical anomaly located along strike to the northwest of the West Zone has not been thoroughly tested.
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Figure 7-8: Geology, Alteration and Mineralization along the Silver Pond Trend (Childe and Kaip, 2001)
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Figure 7-9: Locations of the Silver Pond Group of Prospects
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Plate 7-5: View of Silver Pond West Zone Looking North
Silver Pond North (094E 069)
The North Zone is located 2.4 km north-northwest of the West Zone and occurs along the same regional structure. The zone is marked by a pronounced wide-spread gossan and silicic-argillic hydrothermal alteration more than 2 km wide. The central part of the zone consists of pervasive silicification grading outward into weaker silicic, sericitic, argillic and propylitic alteration. Quartz, alunite, kaolinite, montmorillonite, dickite, illite, sericite, and minor amounts of barite, fluorite, limonite and pyrite comprise secondary minerals in intermediate to advanced argillic alteration zones (Forster, 1984). Peripheral propylitic alteration consists of calcite-epidote-chlorite-pyrite (-hematite). Mineralization is sporadic. It consists of multistage silica stockwork veining with variable amounts of pyrite, epidote, chlorite, barite and laumontite, and occasional traces of chalcopyrite and galena.
An 800 m-long, north-northwest trending gold soil geochemical anomaly, with values up to 250 ppb, was outlined in 1984 (Kennedy and Weston, 1984). It is coincident with the margin of a silica cap, the strongest area of alteration observed at the North Zone (Kennedy, 1988). Gold mineralization is most commonly associated with multistage silica stringers and veinlets and not associated with disseminated pyrite. Locally, gold mineralization is spatially associated with rhyolite dykes, suggesting a possible genetic relationship between the two.
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About 3000 m of backhoe trenching was excavated on the North Zone in 1987. Trenching of coincident gold soil geochemical / resistivity high anomaly revealed the presence of widespread low-grade gold mineralization, including a 38 m interval averaging 1.20 g/t Au in TR 18.75 N, as well as sporadic high- grades ranging up to 28.8 g/t Au over 1 m (Kennedy and Vogt, 1987). Trenching of several IP chargeability anomalies encountered wide zones of strong argillic alteration with abundant disseminated pyrite, but no gold-silver mineralization.
Follow-up drilling in 1987 (2860 m in 19 holes) outlined an area of widespread, low-grade quartz stockwork mineralization. A total of 23 holes with an aggregate length of 3460 m have been drilled on the North Zone (Kennedy, 1988). Gold values range up to 2.05 g/t Au over a true width of 3.0 m (Hole SP87-88), including 5.98 g/t Au over a true width of 0.5 m (Kennedy and Vogt, 1987). Silver to gold ratios range from < 1 to about 20, but are typically in the 0.5 to 3 range. The 1987 drilling program encountered weak grades of mineralization and alteration to vertical depths of about 200 m. Hole SP- 88-145, drilled to assess the roots of the alteration system, reached a depth of 405 m before being terminated because of technical difficulties. It encountered strong silicification and argillic alteration throughout, but gold and silver values were only weakly anomalous.
The depth potential of the North Zone has not been adequately tested. Its large surface alteration footprint and its high-sulphidation epithermal style of mineralization warrant further studies and follow- up work, particularly in light of the deep drilling successes at Kemess Underground and Kemess East and also in light of the fact that world-wide, many high sulphidation epithermal districts have associated with them porphyry-style mineralization.
Silver Creek Zone (094E 075)
The Silver Creek Zone is located 450 m southeast of the West Zone and is interpreted to be the southern extension of a splay off of the West Zone (Demczuk, 1994). Mineralization consists of hydrothermal breccias, and banded and stockwork veins within intensely altered andesite consisting mainly of quartz, calcite, epidote and pyrite.
The zone has been tested by a total of 31 drill holes with an aggregate length of 3123 m. The holes tested the zone for 350 m along its northwesterly strike length and to a vertical depth of 166 m (Kennedy, 1988). Drilling mainly targeted the down-plunge extension of mineralization; the best grades encountered were in well-developed breccias and include 3.90 g/t Au and 189.1 g/t Ag over 3.0 m in Hole SP-85-8 (Kennedy and Weston, 1986). Anomalous gold and silver values were encountered in 13 of 19 holes drilled in 1985.
Silver Pond Amethyst (094E 160)
The Amethyst Zone is regarded to be the southern extension of the Cliff Creek South subzone. It is described as a siliceous multi-phase, weakly pyritic, hydrothermal breccia emplaced along the footwall contact of the Cliff Creek fault. The hydrothermal breccia consists of angular to subrounded clasts of andesite and vein or stockwork silica in a gangue comprising quartz, chalcedony, amethyst and calcite, with up to 3% disseminated pyrite. Stockwork veining with the same mineralogy occurs in both the hangingwall and footwall of the breccia (Kennedy, 1988).
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Twelve holes totaling 3231 m have been drilled on the zone to a maximum vertical depth of 290 m; eleven of the holes intersected hydrothermal breccia, its associated fault, and hangingwall and footwall stockwork mineralization. Several holes drilled within 200 m of the former Lawyers-Silver Pond claim boundary produced interesting results including Hole SP-88-129 that returned a hangingwall stockwork zone grading 4.46 g/t Au and 10.30 g/t Ag over 2.0 m and two intervals of hydrothermal breccia grading 0.778 g/t Au and 6.08 g/t Ag over 5.0 m and 0.460 g/t Au and 8.64 g/t Ag over 15.0 m. The Amethyst Zone may add significantly to the strike length of the Cliff Creek Zone. It and any untested ground between it and the Cliff Creek South subzone warrant further investigation.
Silver Pond South (094E 161)
The South Zone is located southwest of the Cliff Creek South subzone and occurs on a structure subparallel to the Cliff Creek fault. The zone was identified by a northwest-trending magnetic low, a coincident VLF conductor and an 850 m long gold soil geochemical anomaly (Kennedy and Vogt, 1987). The area was trenched in 1984 with only one trench reaching bedrock. Chip sampling of it returned two 1.0 m-long gold intervals, the first grading 2.40 g/t Au and the second grading 1.37 g/t Au (Kennedy and Weston, 1986). A total of 10 holes with an aggregate length of 2139 m were drilled in 1985 and 1987. They determined that gold mineralization is confined to mm to cm-scale silica veins. The veins were commonly subparallel to the core axis; intersections were typically < 1 m in length and carried grades of 1 to 5 g/t Au. A re-evaluation of the zone is warranted.
Heavy Mineral Zone
The Heavy Mineral Zone is located south of the West Zone at the headwaters of Cloud (Silver) Creek where heavy mineral stream sediment geochemical sampling returned a number of high gold values up to 71,000 ppb. A resistivity high anomaly is present in the target area which is underlain by weakly altered to unaltered volcanics of the Metsantan Member. Topographically, the area is characterized by a relatively flat plateau.
Two 1987 drill holes which tested the resistivity high anomaly encountered no significant silicification and only narrow zones containing weakly anomalous gold values, including a 0.57 m interval in Hole SP87-55 grading 0.62 g/t Au. A satisfactory explanation of the geochemical anomalies and the resistivity high anomaly has not been determined from the historic drill results.
7.2.4.3 Other MINFILE Occurrences, Lawyers Project
Ridge Zone (094E 162)
The Ridge Zone is located 800 m southwest of the Silver Creek Zone. The zone was identified by prospecting where sampling of mineralized float returned encouraging gold values. It is characterized by a linear resistivity high, the occurrence of gold-mineralized float and a partially coincident gold soil anomaly. These surveys were carried out to follow-up prospecting that discovered siliceous float assaying 5.28 g/t Au and 5.34 g/t Au (Kennedy et al., 1984). Mineralized float collected 125 m along strike returned 2.40 g/t Ag and 3.40 g/t Au (Kennedy and Weston, 1986). The zone as currently outlined is 220 m long by 20 m wide and consists of mm to cm scale quartz veinlets, and a stockwork of quartz stringers. Three drill holes tested the zone in 1987. The highest grades encountered were 1.29 g/t Au over a true
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width of 0.71 m in Hole SP-87-57 and 3.96 g/t Au over 0.34 m in Hole SP-87-59 (Kennedy and Vogt, 1987).
Kodah (094E 068)
The Kodah gold-silver prospect is located about 6 km northwest of the Cliff Creek North deposit area. It is underlain by Toodoggone Formation volcanic rocks assigned to the Metsantan Member.
Intermittent past work during the period 1971 to 2006 by various operators identified a coincident, northwest-trending gold-silver soil anomaly within which three rock grab samples collected in 1982 returned significant values of 27.73 g/t Au and 2134.3 g/t Ag, 19.72 g/t Au and 1241.1 g/t Ag, and 1.78 g/t Au and 1426.3 g/t Ag. These specimens reportedly contained re-brecciated grey chalcedony, in contrast to the white quartz veinlets and "bleached" pyritic and altered pale-green tuffs in the area which yielded only low precious metals values.
A trenching program completed in 1990 partially exposed bedrock over a distance of about 250 m along a fault zone, in a north-northwesterly direction coincident with the gold-silver soil anomaly. The highest assay from trench samples was 2.22 g/t Au and 4.6 g/t Ag over a 1.0 m-long chip sample taken from grey, pyritic quartz vein material within fault gouge.
Only one shallow drill hole is reported to have been completed in the Kodah prospect area. It was drilled by Kennco in 1973 and tested a massive white quartz vein 0.5 m thick. Results of this drill hole are not known.
Round Mountain East (094E 158) and West (094E 159)
The Round Mountain East and West prospects are located about 4.5 km northwest of the Cliff Creek North deposit area, on the east and west slopes of a locally-named topographic high, Round Mountain. They are underlain by Toodoggone Formation volcanic rocks assigned to the Metsantan Member. Host rocks are cut by the assumed projection of, or splays off of, the Cliff Creek fault, along which the showings areas lie.
At Round Mountain East, an area of advanced argillic alteration with minor quartz veining strikes north- northwesterly and is exposed over a length of about 200 m and a width of about 150 m. Within the alteration zone, one to two metre-long chip samples, collected in 1987, returned generally low gold and silver values. One sample taken within an area of quartz veining returned values of 2.59 g/t Au and 2.0 g/t Ag. Also in 1987, approximately 10 km of IP surveys were completed in the prospect area. The survey identified several zones of high resistivity 100-200 m in length; it was concluded that all resistivity anomalies warranted further investigation. To the authors' knowledge, no drilling has been carried out in the Round Mountain East area.
At Round Mountain West, the showing consists of a northerly-trending zone of quartz-chalcedony veins, stockworks and replacement masses exposed intermittently over a 500 m length and over irregular widths, from a few to 50 metres. The zone of silicification follows a possible splay off of the assumed projection of the Cliff Creek fault which passes through the nearby Round Mountain East showings area a few hundred metres to the east. Several rock samples taken from this zone in 1986 yielded mostly
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background or weakly anomalous gold and silver values. One sample taken from the northern end of the silicified zone returned values of 0.80 g/t Au and 6.8 g/t Ag.
Dream (094E 191)
The Dream silver prospect is located about 4 km southwest of the Cliff Creek North deposit area. It is underlain by Toodoggone Formation volcanic rocks assigned to the Metsantan Member. An outlier of Sustut Group sedimentary rocks crops out less than one kilometre to the east of the prospect area.
At Dream, a northwest-trending zone of intense pervasive silicification +/- quartz veining is enveloped by a zone of kaolinite alteration outwards from which propylitic (carbonate-epidote) alteration is present. The silicified zone is 150 m long and a few centimetres to about one metre wide.
A total of eight rock samples were taken from this showing in 1983; all consisted of quartz-veined and/or intensely silicified country rocks. Assay results from these samples were weakly to moderately anomalous in silver. Two samples taken about 75 m apart along the strike of the silicified zone returned values of 8.1 g/t Ag and 0.03 g/t Au and 8.9 g/t Ag and 0.30 g/t Au.
Marmot Lake (094E 073)
The Marmot Lake gold-silver prospect is located about 4 km southeast of the Cliff Creek North deposit area. It is underlain by Toodoggone Formation volcanic and interbedded epiclastic rocks assigned to both the Attycelley and Metsantan Members. An outlier of Sustut Group sedimentary rocks crops out less than one kilometre to the southwest of the prospect area.
Several major structures disrupt the moderately-dipping volcanic strata which underlie the occurrence. These structures are thought to be the southeastward extensions of major faults related to epithermal gold-silver mineralization in the Silver Pond and Cliff Creek Zones.
In 2007, Christopher James Gold Corp. carried out a prospecting and rock geochemical sampling program in and around the Marmot Lake showings area, which had been hand trenched and drilled by earlier operators in the 1960's to early 1970's. A series of east-southeast oriented trenches were excavated at an oblique angle to a zone of narrow, en echelon mineralized structures containing quartz stringers and silicified andesite breccia over a northerly distance of about 200 m. The altered and mineralized structures contain minor amounts of pyrite, tetrahedrite, chalcocite, chalcopyrite and malachite.
A Christopher James' sample location plan of the showings area (Assessment Report 29529) shows 5 historic drill hole collars immediately to the west of the trenched area. It's likely that the historic drill holes were inclined easterly to test the mineralized structures at depth. No results from the historic drilling are available.
Four of Christopher James' 2007 rock samples returned significant gold and silver values from samples collected in the northern half of the historically trenched area. These samples were taken from variably altered (silica +/- clay +/- carbonate) and brecciated rhyodacite; they returned values ranging from 2.87 to 50.6 ppm Au and 24.8 to 1020 ppm Ag. The 50.6 ppm Au value, accompanied by a value of 24.8 ppm Ag, was from a 1.0 m x 1.0 m panel-chip sample of brecciated rhyodacite exhibiting intense argillic alteration. The 1020 ppm Ag value, accompanied by a value of 8.88 ppm Au, was from a 1.0 m chip
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sample of brecciated rhyodacite containing argillically-altered fragments. Tetrahedrite rims the fragments and is also present as disseminations.
7.2.4.4 Petrographic Studies
Historic Petrographic Studies
Limited, available data from two historic petrographic studies is presented in the paragraphs that follow. This data incorporates studies of 13 M-Grid rock samples, included as Appendix 2 in Assessment Report 27633 (Blann, 2005), and a representative suite of 7 higher grade samples collected from the Cliff Creek portal site, included as Appendix B in Assessment Report 32055 (Lane, 2011).
M-Grid Zone
Alteration and mineralization of the low sulphidation gold-silver bearing zones exposed in 2004 surface trenches in the M-Grid area are described in Section 7.2.4.1 of the Report.
A suite of 13 rock samples was submitted to PetraScience Consultants Inc. of Vancouver B.C. who were tasked with defining the characteristics of the alteration, mineralization and ore associations in the M- Grid trench area. The samples were prepared as polished thin sections for petrographic analysis. The work included basic transmitted and reflected light observations, covering descriptions of lithologies (where possible), alteration and mineralization, as well as a study of vein quartz textures.
Most samples are breccias with altered wallrock fragments in-filled or cut by vein quartz. Primary wallrock lithologies are partly obscured by selective, pervasive alteration. However, compositions appear to favor feldspar porphyry and, in two samples, an aphanitic rhyolite. Feldspar porphyry fragments typically contain plagioclase and/or K-feldspar and locally quartz phenocrysts in a fine-grained quartz and K- feldspar dominated matrix. In one of the rhyolite samples, its aphanitic groundmass incorporates fragments of feldspar porphyry and vein quartz which indicates that it may be younger than the feldspar porphyry and quartz veining.
The alteration appears typical of low-sulphidation epithermal environments and is dominated by K- feldspar and sericite. K-feldspar occurs as very fine-grained, brown cloudy aggregates or as rhombic adularia both of which can occur in respective samples as pervasive replacement of wallrock fragment groundmass or as selective replacement of plagioclase phenocrysts. Vein quartz with traces of adularia was observed in two samples. A weak progression from this orthoclase alteration to a more sericitic alteration, including calcite, was observed. Tourmaline occurs with adularia replacement in two samples. A late phase of weathering affects most of the samples, leading to formation of clay, goethite and hematite.
Sulphide mineralization is weak, consisting mostly of pyrite. In most of the samples, pyrite is rimmed to completely replaced by Fe-oxides; numerous anhedral vugs and cavities suggest complete leaching of the original pyrite. Trace chalcopyrite is observed in some samples. Trace galena(?), sphalerite and possibly acanthite were noted in one sample; trace gold was observed in another.
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Cliff Creek Portal Area
In 2010, the Cliff Creek portal, which had been back-filled with muck when the site was reclaimed in the mid-1990's, was cleared of rock and debris using a large excavator. As part of the work program, 7 higher grade samples collected from the floor of the adit near the portal and the dump were submitted to Vancouver Petrographics Ltd. of Langley, B.C. Petrographic studies were carried out in order to determine metallic mineralogy and confirm phases of alteration.
The samples represent a range of textures, styles of alteration and mineralization that are consistent with a low-sulphidation epithermal environment. The sample suite displays quartz-adularia alteration with over-printing argillic and propylitic alteration. The protolith is a suite of volcanic rocks ranging from K- feldspar phyric andesites or dacites to volcaniclastics or volcanic breccias. Gold, silver and sulphide minerals are related to silicification and development of quartz veins, stockwork zones and breccias. The breccias exhibit multiple episodes of fracturing, silicification, mineralization and healing. Silica veins are cut by later calcite veins that are commonly barren of sulphides and gold.
Pyrite occurs in all samples in at least trace amounts, and where gold and silver grades increase, it is sometimes accompanied by lesser amounts of sphalerite, chalcopyrite, galena, bornite and covellite.
Native gold was identified in five samples, native silver was identified in one sample and acanthite (Ag2S) was identified in four samples. The common occurrence of gold and silver minerals in the samples explains the high grade assay results.
2015 PPM Petrographic Studies
One drill core sample, collected from the extremely high grade P2 Vein intersected in the hangingwall of the main Cliff Creek North Zone (for details, refer to Section 10.3 of the Report), was submitted to Dr. Fabrizio Colombo, PhD., of Vancouver, B.C. for a petrographic study.
The vein sample is a gold-bearing, sphalerite-pyrite-K-feldspar-galena alteration / mineralization assemblage in which irregular fragments of K-feldspar-rich aggregates are immersed within a xenomorphic aggregate of sphalerite, pyrite and galena. Very rare gold has precipitated within the interstices between pyrite and galena. The modal concentrations vary from moderate to strong for sphalerite, moderate for pyrite, K-feldspar and galena, and weak for chalcopyrite.
Sphalerite forms xenomorphic crystals (up to 8 × 8 mm), which in most cases are finely intergrown with granular amoeboid crystals (up to 0.6 mm) of galena.
Pyrite forms xenomorphic and fractured crystals (up to 4 × 8 mm) immersed within the sphalerite. In some cases the fractures are filled in by sphalerite, galena and chalcopyrite, thus indicating that the pyrite pre-dated the precipitation of the other sulphides.
K-feldspar forms irregularly-shaped to angular replacement aggregate fragments which are overprinted and crosscut by sulphide-rich (mostly chalcopyrite) aggregates. Subordinate quartz and probable clay(?) are associated with the K-feldspar.
Chalcopyrite is heterogeneously dispersed and forms amoeboid to interstitial crystals which are spatially associated with pyrite. Chalcopyrite has filled in the fractures of some of the K-feldspar-rich fragments;
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these microstructures indicate that chalcopyrite deposition post-dated the K-feldspar alteration. Very rare covellite is dispersed within the chalcopyrite.
8 DEPOSIT TYPES A synthesis of mineral deposit types in the Toodoggone region is well-described by Bowen (2014), Duuring et al. (2009), Diakow et al. (1993) and Diakow et al. (1991).
8.1 DEPOSIT TYPE DESCRIPTIONS The descriptions of deposit types in this section are based, in large measure, on Deposit Types presented by Paul Hawkins in Sections 3.1.0 to 3.3.0 of his June 2003 "Technical Report Covering the Lawyers and AL (Ranch) Properties". His comments are supplemented by observations made by Bowen during his onsite core logging and supervision of diamond drilling programs on the Lawyers Project in July 2006 and the Ranch Project in September 2006 and during portions of May, June and September 2007, and by Lane during his onsite core logging and supervision of a diamond drilling program on the Lawyers Project in August and September 2015. Also referenced in this section is the B.C. Geological Survey’s Bulletin 86, titled “Geology of the Early Jurassic Toodoggone Formation and Gold-Silver Deposits in the Toodoggone River Map Area, Northern British Columbia” (Diakow et al., 1993).
The Toodoggone region is host to a number of mineral deposits and prospects, several of which are described in Sections 7.1.1 and 7.2.4 of this Report. Deposit types include both high- and low- sulphidation epithermal gold-silver mineralization and porphyry copper-gold mineralization. All are genetically related to Early Jurassic volcanic and intrusive activity in an extensional setting (Diakow et al, 1993). A schematic cross-section of the deposit types and their zonal relationships is shown in Figure 8.1.
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Figure 8-1: Lawyers Project - Schematic Model for Low Sulphidation and High Sulphidation Epithermal Mineralization Relative to Shallow, Sub-Volcanic Intrusions
8.1.1 Low Sulphidation Epithermal Deposits
Low sulphidation epithermal gold-silver deposits are also called adularia-sericite or quartz-adularia types which form in high-level (epizonal) to near-surface environments. They consist of quartz veins, stockworks and breccias commonly exhibiting open-space filling textures and are associated with volcanic-related hydrothermal or geothermal systems. The deposits occur within volcanic island and continent-margin magmatic arcs and/or continental volcanic fields in an extensional structural setting.
The depth of formation of these high-level deposits is from surface (in hot springs systems) to about 1 km below surface along regional-scale fracture zones related to grabens, resurgent calderas, flow-dome complexes and rarely, maar diatremes. Settings also include extensional structures (normal and splay faults, ladder veins and cymoid loops, etc.) in volcanic fields; locally graben or caldera-fill clastic rocks are present. High-level, subvolcanic stocks and/or dykes and pebble breccia diatremes occur in some areas. Locally resurgent or domal structures are present and are related to underlying intrusive bodies.
The age of this type of epithermal mineralization varies. Tertiary deposits are most abundant world-wide but in B.C. Jurassic deposits are important. Mineralization appears closely related in time to the host volcanic rocks but invariably it is slightly younger in age.
Ore zones are typically localized in fault or fracture systems, but also may occur in permeable lithologies. Upward-flaring ore zones centered on structurally controlled hydrothermal conduits are typical. Large (>1 m wide and hundreds of meters in strike length) to small veins and stockworks are common with
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lesser disseminations and replacements. Vein systems can be laterally extensive but ore shoots have relatively restricted vertical extents. Ore bodies form where dilational openings and cymoid loops develop, typically where the strike or dip of veins change. Hangingwall fractures adjacent to mineralized structures are particularly favourable for the development of high-grade ore shoots.
Textural features associated with mineralization include open-space filling, symmetrical layering, crustification, comb structures, colloform banding and multi-phase breccias. Ore minerals present include pyrite, electrum, gold, silver, acanthite (argentite) and lesser amounts of chalcopyrite, sphalerite, galena, tetrahedrite, silver sulphosalts and/or selenide minerals. Gangue minerals include quartz, amethyst, chalcedony, quartz pseudomorphs after calcite, with lesser amounts of adularia, sericite, barite, fluorite, Ca-Mg-Mn-Fe carbonate minerals (such as rhodochrosite), hematite and chlorite. Epithermal silver deposits generally have higher base metals contents than do gold or gold-silver types.
Deposits can be strongly zoned horizontally and vertically. Downward vertical zonation occurs over a 250 to 350 m interval, from a base metals poor, gold and silver-rich top to a relatively silver-rich base metals intermediate zone, to an underlying base metals-rich zone grading at depth into a sparse base metals- bearing pyritic zone. At depth, deposits can be postulated to occur above or peripheral to porphyry and possibly skarn-type mineralization.
Silicification of host rocks is extensive, occurring as multiple generations of quartz and chalcedony commonly accompanied by adularia and calcite. Pervasive silicification in vein envelopes is flanked by sericite-illite-kaolinite assemblages. Intermediate argillic alteration (kaolinite-illite-montmorillonite [smectite]) forms adjacent to some veins and advanced argillic alteration (kaolinite-alunite) may form at the tops of mineralized zones. Propylitic alteration dominates at depth and peripherally. Weathered outcrops are often characterized by resistant quartz +/- alunite 'ledges' flanked by extensive bleached, clay-altered zones with supergene alunite, jarosite and limonite.
8.1.2 High Sulphidation Epithermal Deposits
High sulphidation epithermal deposits are also called acid-sulphate, quartz-alunite, alunite-kaolinite- pyrophyllite or advanced argillic types. They occur as veins, vuggy breccias and sulphide-silica replacement pods to massive lenses within volcanic host rocks associated with high level hydrothermal systems marked by acid-leached, advanced argillic and silicic alteration. Their setting is usually within extensional and trans-tensional environments, commonly in volcano-plutonic continent-margin and oceanic arc and back-arc settings. They occur in zones with high-level magmatic emplacements where strato-volcanoes and other volcanic edifices are constructed above plutons.
Deposits are commonly irregular in shape, controlled in part by host rock permeability and the geometry of ore-controlling structures. Multiple, cross-cutting composite veins are common; texturally the mineralization is characterized by vuggy, porous silica derived as a residual product of acid leaching. Hydrothermal breccias and massive wallrock replacements associated with fine-grained quartz are also common features associated with high sulphidation deposits.
Mineralization consists of pyrite, enargite/luzonite, chalcocite, covellite, bornite, gold, electrum, and less commonly chalcopyrite, sphalerite, tetrahedrite/tennantite, galena, marcasite, arsenopyrite, silver
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sulphosalts and tellurides including goldfieldite. Two types of ore are commonly present: (i) massive enargite-pyrite and/or (ii) quartz-alunite-gold. Gangue mineralogy consists principally of quartz-pyrite or quartz-barite; carbonate minerals are absent.
Alteration minerals consist principally of: quartz, kaolinite/dickite, alunite, barite, hematite, sericite/illite, amorphous clays, pyrophyllite, andalusite, diaspore, corundum, tourmaline and native sulphur with subordinate amounts of dumortierite, topaz, zunyite and jarosite. Advanced argillic alteration is a common alteration type and can be aerially extensive and visually prominent. Quartz occurs as fine- grained replacements and as vuggy, residual silica in acid-leached rocks. Weathered rocks may contain abundant limonite, jarosite, goethite and/or hematite, generally in a groundmass of kaolinite and quartz. Fine-grained supergene alunite veins and nodules are common.
Ore controls in volcanic edifices are commonly caldera ring and radial fractures, (particularly at their intersections), fracture sets in resurgent domes and flow-dome complexes, and hydrothermal breccia pipes and diatremes. Faults and breccias in and around intrusive centers appear to be important controls. Permeable lithologies can also be favourable host rocks, capped in some deposits by less permeable, hydrothermally altered silica, clay and alunite-bearing ‘lithocaps’. The deposits can occur over considerable depths, ranging from high-temperature solfataras (sulfurous fumaroles) at the paleosurface down into cupolas of intrusive bodies at depth.
Recent research into the high sulphidation genetic model, mainly in the southwest Pacific and in the Andes of South America, has shown that these deposits are commonly genetically related to high-level intrusions and at several locales, they tend to overlie and flank porphyry copper-gold deposits. Multiple stages of mineralization are common, presumably related to periodic tectonism with associated intrusive activity and magmatic hydrothermal fluid generation.
The high sulphidation deposit type has become a focus for exploration throughout the circum-Pacific region because of the economically important gold and copper grades in some deposits.
8.1.3 Porphyry Deposits
The porphyry deposit type consists of bulk tonnage-style copper-molybdenum-gold mineralization commonly related to feldspar porphyritic intrusions. Core areas consist of intrusive-hosted, disseminated copper sulphides, largely chalcopyrite and bornite, commonly with accessory molybdenum and gold. Mineralization is spatially associated with the core intrusion, but not necessarily confined to it. Stocks are typified by concentric zones of potassic, phyllic (sericitic) and propylitic alteration, commonly with argillic (clay) alteration and overlying zones of advanced argillic alteration. Some secondary (supergene) mineralization commonly occurs near-surface, marked by oxidation of sulphide minerals and enrichment of economic minerals. Deposit boundaries are determined by economic factors that outline ore zones within larger areas of low-grade, concentrically zoned mineralization.
The Kemess South and North copper-gold deposits belong to the calc-alkaline variety of the porphyry deposit type. Both are described in Section 7.1.1 of this Report. Pyrite, chalcopyrite and magnetite are associated with well-developed quartz stockwork veins and veinlets within potassically-altered zones hosted by porphyritic quartz monzonite intrusions and adjacent wall rocks. The Jurassic age
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mineralization is spatially, temporally and genetically associated with the intrusions. Alkaline porphyry copper-gold deposits are associated with syenitic and other alkalic rocks and are considered to be a distinct deposit type.
Porphyry deposits occur in orogenic belts at convergent plate boundaries and are commonly linked to subduction-related magmatism. They also occur in association with the emplacement of high-level stocks during extensional tectonism related to strike-slip faulting and back-arc spreading following continent margin accretion. The geological setting of these deposits is a high-level (epizonal) stock emplacement in volcano-plutonic arcs. Virtually any type of country rock can host mineralization, but commonly the high- level stocks and related dykes intrude their coeval volcanic piles.
Pyrite is the predominant sulphide mineral in porphyry deposits. Magnetite and rarely hematite are abundant in some deposits. Ore minerals include chalcopyrite, molybdenite, lesser bornite and rare (primary) chalcocite. Subordinate minerals are tetrahedrite/tennantite, enargite and minor gold, electrum and arsenopyrite. In many deposits late veins commonly contain galena and sphalerite in a gangue of quartz, calcite and barite. Gangue minerals in mineralized veins are mainly quartz with lesser biotite, sericite, K-feldspar, magnetite, chlorite, calcite, epidote, anhydrite and tourmaline. Many of these minerals are also pervasive alteration products of primary igneous mineral grains.
Alteration mineralogy consists of quartz, sericite, biotite, K-feldspar, albite, anhydrite/gypsum, magnetite, actinolite, chlorite, epidote, calcite, clay minerals and tourmaline. Early formed alteration can be overprinted by younger assemblages. Central and early formed potassic zones (K-feldspar and biotite) commonly coincide with ore. This alteration can be flanked in volcanic host rocks by biotite-rich rocks (biotite ‘hornfels’) that grade outward into propylitically-altered rocks. The older alteration assemblages in copper-bearing zones can be partially to completely overprinted by later potassic, phyllic and less commonly argillic alteration assemblages. Rarely, in the uppermost parts of some porphyry deposits, advanced argillic (kaolinite-pyrophyllite) alteration is present.
Weathering results in secondary (supergene) zones carrying chalcocite, covellite and other Cu2S minerals (digenite, djurleite, etc.), chrysocolla, native copper and copper oxides, carbonates and sulphate minerals. Oxidized and leached zones at surface are marked by ferruginous 'cappings' with supergene clay minerals, limonite, goethite, hematite, jarosite and residual quartz.
Ore zones, particularly those with higher gold content, can be associated with magnetite-rich rocks and thus are indicated by magnetic highs in magnetic surveys. Alternatively, the more intensely hydrothermally altered rocks, particularly those with quartz-sericite-pyrite (phyllic) alteration produce magnetic and resistivity lows. Pyritic haloes surrounding copper zones respond well to induced polarization (IP) surveys but in sulphide-poor systems the ore itself provides the only significant IP response.
8.2 EXPLORATION MODEL The primary exploration target on the Lawyers Project is a structurally-controlled vein, stockwork or breccia-style low sulphidation epithermal gold-silver deposit similar to those of the Lawyers Group of prospects that have seen past production, or high sulphidation epithermal gold+/-silver silica
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replacement or breccia bodies similar to the tabular zones present at the Silver Pond West developed prospect.
A secondary, but no less important target type is a bulk-tonnage style of mineralization as exemplified by the long mineralized intercepts in both historic and 2015 drill holes in the central and deeper parts of the Cliff Creek North Zone, where structural thickening appears to have occurred along the Cliff Creek fault. In the Silver Creek North prospect area, low grade gold-bearing quartz stockwork mineralization has been encountered in surface trenches and in diamond drill holes over intercept lengths of several tens of metres. This too represents a bulk-tonnage style of mineralization that potentially could offer economies of scale in any possible future mining scenario.
A suitable, descriptive geological model, from Hedenquist and Lowenstern (1994), has been provided above in Figure 8.1. In it, one could place the Lawyers Group of prospects in the upper left hand side of the figure, where the highlighted text "Low sulfidation Au, Ag" is circled in orange. The Silver Pond Group of prospects could be placed in the upper right side of the figure where the highlighted text "High sulfidation Au, Cu" is shown. It's known that at the Silver Pond Group of prospects, gold+/-silver mineralization is present; however, in the historic data base, there is a paucity of copper analyses, thus preventing one from stating with any certainty whether or not a gold-copper metallic assemblage is present at any location within the Silver Pond trend.
Worth mentioning is the fact that along the Silver Pond trend, notably at the West and North prospects, there is often a close spatial relationship between rhyolite dykes and gold mineralization. In Figure 8.1, the area of "High sulfidation Au, Cu" mineralization is placed vertically above a cluster of high-level, subvolcanic intrusions which are thought to represent the 'heat engine' driving the metalliferous hydrothermal systems depicted in the figure. The rhyolite dykes within the Silver Pond trend may be emanating from such a cluster of intrusions.
The depth potential of the Silver Pond trend remains under-tested; its large surface alteration footprint, particularly at the North prospect, and its high-sulphidation epithermal style of mineralization warrant further studies and follow-up work, especially in light of the deep drilling successes at Kemess Underground and Kemess East and also in light of the fact that world-wide, many high sulphidation epithermal districts have associated with them porphyry-style mineralization.
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9 EXPLORATION
9.1 HISTORICAL EXPLORATION Historical exploration on the Lawyers Project together with key results of past work has been described in Section 6 of this Report
9.2 RECENT EXPLORATION Recent exploration conducted by PPM consists of the 2015 diamond drilling program completed on the Cliff Creek North and Duke’s Ridge Zones. This work is detailed in Sections 10.2 to 10.5 of this Report.
Prior to 2015, the company’s only other activity consisted of an attempt in 2011 to dewater the Cliff Creek portal. As mentioned earlier in Section 6.3, the dewatering program was unsuccessful primarily because of permit restrictions and equipment limitations.
10 DRILLING
10.1 HISTORIC DRILLING The historic drilling information presented in this section was gathered from several sources including: (i) descriptions for all minfile occurrences which fall within the current claims boundary of the Project; (ii) selected B.C. Ministry of Energy and Mines assessment reports; (iii) available information sheets for B.C. Mineral Exploration Annual Reviews; (iv) Hawkins' 2003 Technical Report; and (v) a 2015 compilation of past drilling, prepared by PPM, in a Gemcom software data base. The total number of drill holes and the total meters given below are approximate estimates only, based upon the various historic drill data that the authors were able to compile. They are presented in this section of the Report so that the reader can appreciate the overall scope of historic surface and underground diamond drilling on the past-producing Lawyers mine.
Historic drilling on the Lawyers Project is briefly summarized in bullet form as follows:
During the period 1973-2006, over 68,000 m of surface diamond drilling in more than 340 drill holes was completed on the Project, including drilling completed in the Silver Pond West and other Silver Pond prospect areas. The surface diamond drilling sub-totals for the Project, excluding Silver Pond West and other Silver Pond prospect areas are: (i) over 15,000 m in an unknown number of holes in the AGB Zone; (ii) over 26,000 m in approximately 130 drill holes in the Cliff Creek Zone; (iii) well over 2400 m in 46 holes in the Duke's Ridge Zone; (iv) 950 m in 20 holes in the Phoenix Zone; and (v) well over 800 m in at least 12 holes on other prospect areas. During the period 1984-88, surface diamond drilling in the Silver Pond West developed prospect area totaled approximately 9000 m in more than 55 holes; in the same time period, that completed in other Silver Pond prospect areas totaled over 13,000 m in more than 77 drill holes. Underground drilling carried out in the past is not well documented. In the AGB Zone, at least 3000 m (likely considerably more) was completed in an unknown number of drill holes. In the Cliff Creek Zone, 2500 m in 44 holes was reportedly completed in 1990 but no reliable data on additional
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underground drilling completed in this zone was available to the authors. In addition, 19 underground drill holes were reportedly completed in the Phoenix Zone in 1992. PPM's Gemcom compilation of the historic drilling in the Cliff Creek Zone includes 'header' and gold- silver assay data for 65 holes; the authors' review of drilling in this zone suggests that approximately 130 holes were drilled. The Gemcom deficiency is mainly accounted for in the drilling completed in 1987. In that year, it is reported that 49 holes totaling 10,432 m were drilled in the Cliff Creek Zone. In PPM's Gemcom data base for this zone, only two holes totaling 517 m are compiled. Additionally, for the year 1990, it is reported that 32 holes totaling 8921 m were drilled in the Cliff Creek Zone. In Gemcom's data base for this zone, only 16 holes totaling 5505 m are compiled.
PPM's Gemcom compilation of the historic drilling in the Duke's Ridge Zone includes 'header' and gold- silver assay data for 30 holes. An unknown number of metres in 16 holes was drilled in 1990 in this zone; partial results, but not collar information was reported in Lennan and Frostad (1990). This information is not included in PPM's Gemcom data base.
The degree to which the missing historic drill hole and accompanying assay data for both the Cliff Creek Zone (more specifically, the Cliff Creek North Zone) and the Duke's Ridge Zone might impact upon the current mineral resource estimates completed by Giroux (2016) is discussed in Section 14.2 of the Report. Similarly, the impact that these information deficiencies might have upon the authors' Interpretation and Conclusions and their Recommendations are discussed later in Sections 25 and 26 respectively of the Report.
A historical, hard-copy long-section for the Cliff Creek North Zone shows a number of 1987 and 1990 mineralized drill intersections for which supporting data has not otherwise been recovered. Nevertheless, this partially-documented drill information may provide some additional guidance during future exploration planning.
10.2 2015 DRILLING During the period August 25 to September 30, 2015, PPM completed 26 HQ diamond drill holes totaling 4,001.62 m on the Lawyers Project (Plate 10.1). Diamond drilling was performed by Radius Drilling Corporation, a private company based in Prince George, B.C. The drill provided for the job was a proprietary R5000, a powerful skid-mounted exploration diamond coring machine capable of drilling HQ core to a depth of 3000 feet. The drill and sloop were unloaded at the nearby Baker mine, currently on care-and-maintenance, and skidded to the Lawyers Project along pre-existing mine access roads.
The drilling focused on two closely-spaced zones: (i) the Cliff Creek North Zone where previous work included substantial trenching and surface diamond drilling, underground development and limited mining; and (ii) the Duke’s Ridge Zone where previous work included trenching and surface diamond drilling. The earlier work on the two zones took place primarily between 1982 and 1990.
The purpose of the 2015 drilling program was to: (i) verify the location of historic drill holes and trenches, if possible; (ii) validate the historic data; and (iii) conduct verification and infill diamond drilling within the two zones in order to provide sufficient new data to support the calculation of a NI 43-101 compliant mineral resource estimate for each zone.
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To assist in the planning of the 2015 drill program, a digital database was compiled of all available historic trench and drill hole data. The complied data was used to construct a simple 'solids' geological model for the Cliff Creek North and Duke’s Ridge Zones.
Drill hole collar locations and elevations were later constrained in the field by a differential GPS survey completed by McElhanney Consulting Services Ltd. of Vancouver, B.C. on August 31, 2015. The survey included all previously located historic drill hole collars (44 at the Cliff Creek North and Central Zones, and 5 at the Duke’s Ridge Zone), 4 completed 2015 drill hole collars (in the Cliff Creek North Zone) and most of the remaining proposed 2015 drill hole collar locations in both zones. Importantly, the survey also confirmed an approximate 2 m horizontal accuracy of the handheld Garmin MAP 64s GPS that was being used for survey control on a daily basis. Following the differential GPS survey, an additional 5 drill hole collars were positively located at the Cliff Creek Central Zone and 20 drill hole collars were positively located at Duke’s Ridge and the surrounding area.
The drilling areas are underlain by a pyroclastic volcanic sequence of the Metsantan Member. It consists of andesite feldspar porphyry (trachyandesite latite) flows, ash and lapilli tuff, tuff breccia and pyroclastic breccia mapped locally and regionally by Vulimiri (Vulimiri et al, 1986), Diakow (Diakow et al, 1993) and others.
The 2015 drilling encountered quartz+/-chalcedony+/-amethyst stringers, veins, stockwork zones and hydrothermal breccias with locally well-developed banded, comb and crustiform textures. One semi- massive sulphide-precious metals vein and associated stockwork zone was also intersected. Narrow hematitc, chloritic or pyritic clay gouge zones were very common as internal and footwall features to mineralization. Putty-coloured chalcedony and white sparry calcite veinlets commonly fill late fractures. Mineralized intervals covered core lengths from less than 1 m to approximately 52 m.
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Plate 10-1: Diamond Drilling on the Cliff Creek North Zone, 2015
The locations of all drill holes for which collar information is known are shown in Figure 10.1. Down-hole surveys were completed on all 2015 drill holes using a Reflex EZ-Shot instrument.
The 2015 drill hole coordinates, collar orientations and total depths are listed in Table 10.1. Locations of 2015 Cliff Creek North drill holes are shown on Figure 10.2, selected Cliff Creek North Zone cross- sections are shown in Figures 10.3, 10.4 and 10.5, and a long-section for the Cliff Creek North Zone is shown in Figure 10.6. Locations for 2015 Duke’s Ridge drill holes are shown on Figure 10.7, and a cross- section through the central part of the zone is shown in Figure 10.8.
Select 2015 diamond drilling results are presented in Table 10.2.
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607000 607500 608000 608500 609000
1820 510082 510078 1640 1800
1660 1820 Lawy e rsPrope rty 1680 µ
1700
1720 2015Drillhole Locations Figure5 1740
1760 1840 Legend
!( 2015 Drillholes
6356000 6356000 !( Historical Drillholes
1820 1820 Cliff Creek Portal CliffCree kNorth Zone ^_ Road CC15-18 1800 510074 CC15-19 CC15-08 !( 1780 River/Lake !( CC15-09 !( !( CC15-07 !( !( !( !( 1760 !( !( Contour !( !( !( CC15-04 !( CC15-03!( !( !( !( !( !( !( !( !( !( CC15-10 !( CC15-02 Cliff 1660 Tenure CC15-14 !( !( !( !( CC15-16!( Cree k CC15-13 !( !( !( Cliff Creek !( CC15-17 !( CC15-01 Portal CC15-05 !( !( !( !( !( CC15-11!( !( CC15-06 1760 1680 CC15-15 !( 1780 ^_ CC15-12 1800 510071 6355500 6355500
1700 !( !(DR15-07 1720 !(!( !( !( !( !( !( !( !( !( !( !( !( !( DR15-01 1740 !( !( !( !( DR15-03 !( !( !( !( !(!( !( DR15-04!( DR15-02 1760 !( !( !(!( !( !( !( !( DR15-05 !( 1780 !( !( !(!( DR15-06 20k Mapsheets: 94E024,25,34,35 1800 !( Date: 1/11/2016 Projection: NAD 1983 UTM Zone 9N 1820 !( !( Scale: 1:10,000 1840 !( !( 1820 Duk eRidge ’s Zone 1780 !( Author: tkwitkoski 1840 !( !( Last Modified By: tkwitkoski 1800
1760 1740 !( Checked By: BL 1720 1700 1680 !( Revision #: 0 125 250 !( 1860 Metres 1860 !( !(
6355000 !( 6355000 I !( !( !( 1860 ^_ Prince Prince !( Rupe rt !( George !( !( !( !( 510072 !(
!( 1880 1840 Vancouve r 1900 !( 1820 1800 Source: US National Park 1780 !( 1860 1840 1820 1760 383412 383411
607000 607500 608000 608500 609000 Path:C:\15PG0229 MountainSide (Bob Lane )\2400-GIS-Lawy e rsPrope rty\2420-MX D\Lawy e rs2015DrillHole s_A.mxd LAWYERS PROJECT – TECHNICAL REPORT AND RESOURCE ESTIMATE
Table 10-1: Collar Information for 2015 Drill Holes, Lawyers Project
Drill Hole ID Easting Northing Elev(m) Start(m) TD(m) Dip Azimuth
CC15-01 607765 6355597 1831 0 61.87 -50 257 CC15-02 607749 6355652 1823 0 78.64 -49 260 CC15-03 607526 6355668 1808 0 164.94 -60 75 CC15-04 607406 6355669 1798 0 395.73 -60 75 CC15-05 607430 6355597 1802 0 279.88 -50 74 CC15-06 607702 6355571 1831 0 60.37 -50 260 CC15-07 607671 6355739 1806 0 60.20 -50 260 CC15-08 607558 6355739 1802 0 124.36 -50 70 CC15-09 607558 6355739 1802 0 126.80 -69 75 CC15-10 607597 6355653 1817 0 118.26 -65 75 CC15-11 607479 6355576 1811 0 224.33 -50 75 CC15-12 607492 6355539 1816 0 225.61 -50 75 CC15-13 607430 6355597 1802 0 322.56 -58 75 CC15-14 607407 6355637 1797 0 316.38 -58 75 CC15-15 607444 6355563 1809 0 327.05 -61 75 CC15-16 607537 6355604 1817 0 146.91 -50 70 CC15-17 607587 6355576 1819 0 118.26 -50 75 CC15-18 607614 6355775 1792 0 60.35 -50 77 CC15-19 607614 6355774 1792 0 69.49 -65 81 DR15-01 608343 6355298 1821 0 134.72 -51 210 DR15-02 608360 6355259 1822 0 112.17 -50 200 DR15-03 608303 6355275 1829 0 127.41 -50 200 DR15-04 608303 6355276 1829 0 63.40 -65 200 DR15-05 608329 6355261 1835 0 69.49 -50 200 DR15-06 608482 6355237 1825 0 158.19 -50 225 DR15-07 608121 6355348 1842 0 54.25 -50 20
10.3 RESULTS - CLIFF CREEK NORTH ZONE A total of 19 diamond drill holes with an aggregate length of 3281.99 m was completed on the Cliff Creek North Zone. The holes tested the north-northwest trending zone over a strike length of 225 m and over a vertical range of 380 m. Most holes were drilled from the hangingwall (southwest) side of the moderately to steeply west-dipping vein system; these ranged in azimuth from 070° to 081° with inclinations at the collar ranging from -50° to -69°. The four longest holes, (CC15-04, 13, 14 and 15), with total depths ranging from about 316 m to 396 m, were designed to test the main Cliff Creek North Zone
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beneath the lowest levels of underground workings and previous drilling. Four relatively shallow holes were drilled from the footwall (northeast) side of the vein system. Their azimuths and collar inclinations ranged from 257° to 260° and -49° to -50° respectively.
Six of the shallow to medium depth holes (CC15-03, 05, 07, 09, 10 and 16) encountered generally narrow voids (less than 3 m down-hole lengths) consistent with openings (drifts, raises and stopes) that form part of the historic underground workings. In most cases where this occurred, drill crews were able to ‘traverse’ the intersected void and continue coring on the opposite side of the opening. Downhole surveys provided some control on changes to azimuth and dip from one side of the void to the other. In some cases after drilling through a void, the rod string would begin to bind, resulting in the hole being shut down.
Better grades of mineralization within the main Cliff Creek North Zone typically consist of banded quartz- chalcedony+/-amethyst veins, stockworks and breccias, accompanied by very fine-grained pyrite, minor chalcopyrite and galena, argentite and rare electrum. The mineralized zones occur within narrow to broad zones of argillically to phyllically-altered and locally silicified feldspar porphyritic andesite with common narrow zones of ground rock and clay gouge. A narrow, precious metals-rich semi-massive sulphide vein was intersected in Hole CC15-15; it occurs well up in the hangingwall of the main Cliff Creek North Zone and represents a new target which warrants follow-up.
A brief description of each 2015 drill hole is provided below. The order in which they are described is not by consecutive hole number but rather by the cross-section reference lines to which the holes project, starting at Section 2200NW and progressing north-northwesterly to Section 2425NW. Along each cross- section, the shallower holes (those to the northeast) are discussed first and the progressively deeper holes (those to the southwest) are discussed last. The prefix 'historic' has been excluded from the text below with the understanding that any pre-2015 drill hole is considered historic.
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Figure 10-2: 2015 Drill Hole Locations, Cliff Creek North Zone
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Table 10-2: Select Results from 2015 Drilling, Lawyers Project
Length Drillhole ID From (m) To (m) Au (g/t) Ag (g/t) Zone: Section (m) CC15-01 - no significant results Cliff Creek North: 2225NW
CC15-02 - no significant results Cliff Creek North: 2275NW CC15-03 - no significant results Cliff Creek North: 2350NW CC15-04 244.07 299.00 54.93 1.00 27.8 Cliff Creek North: 2375NW including 244.07 250.00 5.93 3.35 21.4 including 283.00 287.00 4.00 3.76 316.0 CC15-05 2.50 23.00 20.50 0.65 72.6 Cliff Creek North: 2300NW including 9.50 19.30 9.80 1.10 137.1 and 215.00 223.00 8.00 2.87 19.5 and 258.00 271.00 13.00 2.34 44.2 including 261.60 265.00 3.40 5.63 89.5 CC15-06 10.37 19.00 8.63 9.64 307.0 Cliff Creek North: 2200NW including 10.37 14.55 4.18 17.75 557.0 CC15-07 59.44 60.20 0.76 15.70 622.0 Cliff Creek North: 2375NW CC15-08 89.00 109.65 20.65 1.81 62.8 Cliff Creek North: 2400NW including 89.00 93.50 4.50 5.23 164.5 CC15-09 111.00 126.80 15.80 1.01 24.6 Cliff Creek North: 2400NW including 115.00 117.00 2.00 4.49 49.8 CC15-10 83.00 98.45 15.45 2.95 110.9 Cliff Creek North: 2325NW including 93.60 98.45 5.45 5.29 231.9 including 94.71 98.45 0.74 12.80 654.0 and 101.80 103.12 1.32 10.40 272.0 and 109.00 110.00 1.00 6.21 58.8 CC15-11 31.60 32.50 0.90 1.12 332.0 Cliff Creek North: 2275NW CC15-12 70.00 75.86 5.86 5.12 252.3 Cliff Creek North: 2225NW including 71.00 75.86 4.86 7.74 355.1 and 198.90 203.00 4.10 5.98 246.3 including 200.00 202.00 2.00 10.83 445.8 CC15-13 133.54 140.80 5.65 2.60 21.2 Cliff Creek North: 2300NW and 246.01 298.00 51.99 1.71 42.3 including 246.01 248.00 1.99 6.08 49.6 including 262.50 265.10 2.60 5.50 164.1 including 280.79 282.93 2.14 6.86 154.9 CC15-14 264.00 302.60 38.60 1.20 59.9 Cliff Creek North: 2350NW including 266.20 269.20 3.00 3.45 136.1 including 300.00 302.60 2.60 5.96 182.4 CC15-15 87.00 89.00 2.00 6.63 191.0 Cliff Creek North: 2275NW and 125.20 126.20 1.00 2.76 173.4 and 141.15 142.65 1.50 2.31 424.0
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Length Drillhole ID From (m) To (m) Au (g/t) Ag (g/t) Zone: Section (m) and 169.80 172.20 2.40 87.04 2,407 including 171.50 172.20 0.70 293.40 7,622 and 218.40 296.50 78.10 0.68 18.2 including 238.00 242.00 4.00 2.60 116.9 including 287.00 289.00 2.00 6.08 25.3 CC15-16 - anomalous, but sub-economic gold and silver grades Cliff Creek North: 2275NW CC15-17 - anomalous, but sub-economic gold and silver grades Cliff Creek North: 2275NW CC15-18 38.49 45.20 6.71 2.73 152.7 Cliff Creek North: 2425NW CC15-19 14.38 15.28 0.90 20.00 229.0 Cliff Creek North: 2425NW and 49.70 54.25 4.55 3.84 166.2 DR15-01 98.45 104.35 5.86 1.56 57.7 Duke's Ridge: 5625NW DR15-02 72.70 85.05 12.35 0.63 24.0 Duke's Ridge: 5575NW including 72.70 74.98 2.28 1.51 49.7 including 84.73 85.05 0.32 9.15 278.0 and 97.47 98.76 1.29 1.76 119.1 DR15-03 1.21 23.50 22.29 0.72 24.8 Duke's Ridge: 5625NW including 19.00 21.00 2.00 3.09 34.4 and 119.52 119.77 0.25 2.37 103.7 DR15-04 2.10 38.00 35.90 2.09 51.2 Duke's Ridge: 5625NW including 24.00 36.00 12.00 5.30 112.7 including 27.00 31.00 4.00 8.54 171.8 DR15-05 1.25 52.00 50.75 1.41 42.3 Duke's Ridge: 5600NW including 7.00 8.53 1.53 8.22 11.2 including 33.50 42.06 8.56 3.85 106.5 including 37.75 39.25 1.50 6.14 127.3 DR15-06 70.58 72.48 1.90 2.10 17.7 Duke's Ridge: 5500NW DR15-07 24.77 25.27 0.50 7.59 33.0 Duke's Ridge: 5825NW and 34.02 39.10 5.08 1.24 21.9
Section 2200NW
Hole CC15-06 (Azimuth 260°; Dip -50°; TD 60.37 m) was drilled to twin and verify the strong gold-silver interval of Hole 84CC14 located at the currently known southeast limit of the Cliff Creek North Zone. Hole CC15-06 intersected a shallow, earthy hematite-stained zone grading 17.75 g/t Au and 557.0 g/t Ag over 4.18 m within a broader mineralized interval that correlates well with historic results. The zone remains open to the south-southeast towards the Cliff Creek Central Zone.
Section 2225NW
Hole CC15-01 (Azimuth 257°; Dip -50°; TD 61.87 m) was originally intended to twin Hole 83CC01. However, because the collar location for the latter hole could not be confirmed, the location used for the ‘twin’ hole was estimated. Subsequently (following completion of Hole CC15-01 and of McElhanney's
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differential GPS survey) it was realized that the estimated 2015 collar location was positioned too far east of the historic collar and therefore the new data collected could not be used to verify the historic drill hole data. In addition, because the hole was drilled to a depth consistent with the historic hole that it was meant to twin, it was stopped short of the targeted vein system. Hole CC15-01 intersected only sparsely distributed, poorly mineralized quartz stringers with weakly anomalous gold and silver values in the footwall of the main vein system.
Hole CC15-12 (Azimuth 075°; Dip -50°; TD 225.61 m) was collared approximately 10m southwest of Hole 84CC26. It encountered two zones of strong gold-silver mineralization separated by more than 100 m of weakly mineralized rock in the hangingwall of the main Cliff Creek North Zone. The upper zone, from 71.00-75.86 m, graded 7.75 g/t Au and 355.1 g/t Ag over 4.86m; it remains open down-dip and to the south-southeast (Plate 10.2). The lower zone, from 198.90-203.00 m, graded 5.98 g/t Au and 246.3 g/t Ag over 4.10 m (Plate 10.3). It appears to correlate with a nearby, 8 m-long intercept in Hole 84CC26 which graded 4.25 g/t Au and 119.1 g/t Ag (see Cross-Section 2225NW, Figure 10.4). The lower mineralized zone cut in these two holes remains open down-dip and to the south-southeast. Additionally, Hole 84CC26 cut a 5 m-long interval, in the immediate hangingwall of the lower zone, which graded 6.82 g/t Au and 313.1 g/t Ag. It would appear to represent a parallel mineralized zone which remains open down- dip and to the south-southeast.
Section 2250NW
Hole CC15-17 (Azimuth 075°; Dip -50°; TD 118.26 m) was drilled 30m south of Hole 84CC18 to test for a possible southern extension of the shallower mineralization approximately 30 m below Hole 84CC17. CC15-17 intersected a zone of anomalous gold-silver values from 98.78 – 111.00 m (with a highest assay of 0.688 g/t Au and 16.5 g/t Ag over 1.25m) .
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Plate 10-2: Core from an upper mineralized intersection in hole CC15-12 showing typical fracture fillings, stockwork veins and breccias with silicic and potassic alteration
Section 2275NW
Hole CC15-02 (Azimuth 260°; Dip -49°; TD 78.64 m) was originally intended to twin Hole 83CC03. Similar to Hole CC15-01, it too was positioned too far east of the historic hole it was meant to twin and the new data collected could not be used to verify the historic drill hole data. Hole CC15-02, like Hole CC15-01, intersected only sparsely distributed, poorly mineralized quartz stringers with weakly anomalous gold and silver values in the footwall of the main vein system.
Hole CC15-16 (Azimuth 070°; Dip -50°; TD 146.91 m) was drilled to test the area between Holes 84CC18 and 84CC19 at a deeper level. The hole intersected a 15.91 m interval of anomalous gold-silver mineralization (with a highest assay of 0.910 g/t Au and 16.6 g/t Ag over 2.00 m) approximately 44m below a similar low-grade zone intersected in 84CC18. At a down-hole depth of 146.91 m, it entered a void which resulted in termination of the hole.
Hole CC15-11 (Azimuth 075°; Dip -50°; TD 224.23 m) was an infill hole drilled approximately 40 m east of and on section with Hole 84CC56. It intersected a shallow silver-rich zone grading 1.12 g/t Au and 332.0 g/t Ag over 0.90 m, from 31.60-32.50 m, and a deeper, 25.4 m-long anomalous zone (with individual values up to 0.91 g/t Au and 21 g/t Ag) of quartz stringers, stockworks and breccias that corresponds
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with the main Cliff Creek North Zone. The lower intercept is about 54 m up-dip from a 17.0 m-long intercept in Hole 84CC56 which assayed 1.94 g/t Au and 60.12 g/t Ag.
Plate 10-3: Core from a lower intersection in hole CC15-12 showing typical fracture fillings, stockwork veins and breccias with argillic alteration
Hole CC15-15 (Azimuth 075°; Dip -61°; TD 327.05 m), one of four holes designed to test the Cliff Creek North Zone beneath levels tested by historic drilling, was collared approximately at, and drilled beneath, Hole 87CC56. It intersected a number of narrow, discrete veins and stockwork zones from a depth of 87.00 m to 298.00 m. Of particular note was a massive sulphide, precious metals-bearing vein and stockwork zone (Plate 10.4) located well up in the hangingwall of the main Cliff Creek North Zone. It yielded spectacular grades of 293.4 g/t Au and 7,622 g/t Ag over 0.7 m, from 171.50-172.20 m, and is reminiscent of the vein mined at the nearby Phoenix Zone. The new so-called ‘P2’ vein remains open down-dip and along strike to the south-southeast. A deeper, lower grade zone correlates well with the main Cliff Creek North Zone intercept in Hole 84CC56 and other main zone intercepts encountered in deep holes CC15-13 and CC15-14 drilled further to the northwest. In the footwall of the main zone, from 287.00-289.00 m, a 2 m-long zone of higher grade gold mineralization (6.08 g/t) accompanied by lower grade silver (25.3 g/t) was encountered.
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Figure 10-3: Cross-section 2225NW
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Plate 10-4: P2 Vein and Stockwork Zone, Hole CC15-15
Section 2300NW
Hole CC15-05 (Azimuth 074°; Dip -50°; TD 279.88 m) was drilled beneath Holes 84CC19, 84CC29 and 84CC30 (see Cross-Section 2300NW, Figure 10.4). The hole intersected one near-surface interval grading 1.10 g/t Au and 137.1 g/t Ag over 9.80 m, from 9.50-19.30 m, and two deeper intervals of low-grade gold-silver mineralization (2.87 g/t Au and 19.5 g/t Ag over 8.00 m, from 215.00-223.00 m, and 2.34 g/t Au and 44.2 g/t Ag over 13.00 m from 258.00-271.00 m). The hole successfully traced the projection of the main Cliff Creek North Zone a modest 14 m down-dip from the main zone intersection in the lower portion of Hole 84CC30.
Hole CC15-13 (Azimuth 075°; Dip -58°; TD 322.56 m), another of the four holes designed to test the Cliff Creek North Zone beneath levels of historic drilling, was drilled from the same collar location as Hole CC15-05. It intersected an upper, hangingwall zone of low gold-silver grades (2.18 g/t Au and 23.0 g/t Ag over 5.54 m), from 135.26-140.80 m, and a wide, lower zone that coincides with the main Cliff Creek North Zone. The lower intercept grades 1.71 g/t Au and 41.5 g/t Ag over 51.99 m from 246.01-298.00 m. The lower zone includes three narrow, higher grade intervals including 1.99 m @ 6.08 g/t Au and 49.6 g/t Ag, 2.60 m @ 5.50 g/t Au and 164.1 g/t Ag and 2.14 m @ 6.86 g/t Au & 154.9 g/t Ag. It remains open down-dip.
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Section 2325NW
Hole CC15-10 (Azimuth 075°; Dip -65°; TD 118.26 m) was drilled in the central part of the Cliff Creek North Zone from the location of, and at the same azimuth but at a 15° steeper dip than Hole 90CC110 (for which partial data exists). CC15-10 intersected an upper zone of low to moderate grade gold-silver mineralization grading 2.95 g/t Au and 110.9 g/t Ag over 15.45 m from 83.00-98.45 m. This zone correlates with the projection of the main Cliff Creek North Zone intersected in Hole CC90-110 (6.4 m from 78.5-84.9 m that graded 8.39 g/t Au and 244.5 g/t Ag), and includes a higher grade footwall interval grading 5.29 g/t Au and 231.9 g/t Ag over 5.45 m immediately above a 2.13 m-long void. Mineralization continues below the void and includes two narrow intervals of 1.32 m grading 10.4 g/t Au and 272.0 g/t Ag and 1.00 m grading 6.21 g /t Au and 58.8 g/t Ag within an 11.42 m intersection averaging 0.48 g/t Au and 14.1 g/t Ag from 100.58-112.00 m.
Section 2350NW
Hole CC15-03 (Azimuth 075°; Dip -60°; TD 164.94 m) was collared between Holes 84CC20 and 84CC21 and was drilled easterly from the hangingwall side of the main vein system. It encountered weakly anomalous gold values throughout its length and spotty, weakly anomalous silver grades. Upon approaching its target depth, the hole successfully penetrated three narrow voids before being terminated prematurely. The core recovered adjacent to the voids consisted of quartz stockwork in argillically-altered feldspar porphyritc andesite. Gold and silver grades increase slightly with depth, with the highest values in the hole being 0.93 g/t Au and 24.4 g/t Ag across 0.92 m, immediately below the last void encountered.
Hole CC15-14 (Azimuth 075°; Dip -58°; TD 316.38 m), one of four holes designed to test the Cliff Creek North Zone beneath the levels of historic drilling, was collared approximately 50 m north of CC15-13 and near the collar location for Hole 84CC36. It encountered three deep intervals of low to moderate gold- silver grades. The two lower intersections of 7.00 m grading 1.65 g/t Au and 157.3 g/t Ag from 279.00- 286.00 m and 2.60 m grading 5.96 g/t Au and 182.4 g/t Ag from 300.00-302.00 m coincide with the projection of the main Cliff Creek North Zone, whereas the upper 3.0 m-long intersection grading 3.45 g/t Au and 136.1 g/t Ag from 266.20-269.20 m is in its hangingwall. The two lower intersections in Hole CC15-14 are narrower and lower in grade than the long intercepts encountered in historic Holes 84CC-36 and 84CC32 which lie approximately 21 m and 70 m respectively up-dip from Hole CC15-14.
Section 2375NW
Hole CC15-07 (Azimuth 260°; Dip -50°; TD 60.20 m), collared in the footwall of the main Cliff Creek North Zone, was drilled to twin and verify the excellent gold-silver grades encountered in Hole 84CC04. A void (a suspected raise that correlates with the location of high-grade mineralization) was encountered between 54.86-59.44 m. A short 0.76 m-long section of core recovered beyond the void, prior to the hole being shut down, assayed 15.70 g/t Au and 622.0 g/t Ag. These gold-silver grades fall within the range of the high assay values in the approximate corresponding depth interval of Hole 83CC04, thus validating the historic assay data. Higher up in Hole 83CC04, from 20.0-22.0 m, a 2.00 m interval assayed 11.66 g/t Au and 1.05 g/t Ag. The corresponding interval in Hole CC15-07 assayed 0.042 g/t Au and 5.4 g/t Ag. The large variance in gold values between the two holes for this interval remains unexplained.
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Figure 10-4: Cliff Creek North Cross-section 2300NW
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Hole CC15-04 (Azimuth 075°; Dip -60°; TD 395.73 m), the first of four holes designed to test the Cliff Creek North Zone beneath the levels of historic drilling, is located at the collar of historic Hole 84CC37 and was drilled beneath Hole 84CC35 to intersect the main zone down-dip from 84CC35. Hole CC15-04 intersected a broad zone of alteration and mineralization which averaged 1.00 g/t Au and 27.8 g/t Ag over 54.93 m. It includes two intervals of low to moderate grade gold-silver mineralization: an upper hangingwall intercept which assayed 3.35 g/t Au and 21.4 g/t Ag over 5.93 m, from 244.07-250.00 m; and a lower 4 m-long intercept, from 283.00-287.00 m, which assayed 3.76 g/t Au and 228.9 g/t Ag. The lower main zone intercept is located approximately 95 m down-dip from an intercept in Hole 84CC35 which assayed 6.13 g/t Au and 391.26 g/t Ag over 13.00 m.
Section 2400NW
Hole CC15-08 (Azimuth 070°; Dip -50°; TD 124.36 m) was drilled from the same location as Hole 84CC38 and was designed to twin and verify the results of the historic hole. Results included a 20.65 m interval, from 89.00-109.65 m, averaging 1.81 g/t Au and 62.8 g/t Ag that roughly coincides spatially with a 15.0 m interval of higher grades (4.71 g/t Au and 217.4 g/t Ag) in the twinned hole. In plan view, Hole CC15- 08 is shown to deviate to the north. It encountered several intervals of (post-mineral and dilutive?) fault breccia and gouge which may explain the lower grades in the hole relative to those in Hole 84CC38.
Hole CC15-09 (Azimuth 075°; Dip -69°; TD 126.80 m) was drilled at a steeper angle to intersect the Cliff Creek North Zone approximately 40 m down-dip from the intercepts in CC15-08 and 84CC38 (see Cross- Section 2400NW, Figure 10.5). It intersected a 15.80 m zone of mineralization from 111.00 m to the bottom of the hole at 126.80 m that included a 2.00 m interval from 115.00-117.00 m which assayed 4.49 g/t Au and 49.8 g/t Ag followed by a 1.83 m void from 117.96-119.79 m. Below the void, from 119.79- 126.80 m, a 7.01 m interval returned lower grades averaging 0.742 g/t Au and 35.4 g/t Ag.
Section 2425NW
Holes CC15-18 (Azimuth 077°; Dip -50°; TD 60.35 m) and CC15-19 (Azimuth 081°; Dip -65°; TD 69.49 m) are step-out holes drilled 25 m northwest of Section 2400NW. The holes were designed to test the northwest projection of the main Cliff Creek North Zone beneath a stripped area that exposes quartz stringers, stockwork zones and discrete veins within silicified to argillically-altered andesite feldspar porphyry. Each hole intersected modest gold-silver grades at shallow depths within the projection of the Cliff Creek North Zone. Hole CC15-18 intersected 6.71 m grading 2.73 g/t Au & 152.7 g/t Ag from 38.49- 45.20 m and Hole CC15-19 intersected 4.55 m grading 3.84 g/t Au and 166.2 g/t Ag from 49.70-54.25 m. These intersections demonstrate that the main Cliff Creek North Zone remains open to the northwest. Hole CC15-19 also intersected a narrow, high-grade gold-silver hangingwall zone which assayed 20.00 g/t Au and 229.0 g/t Ag over 0.90 m from 14.38-15.28 m.
Inclined Long Section
A long section for the Cliff Creek North Zone is shown in Figure 10.6. In it, for both historic and 2015 drill holes, the weighted average gold and silver grades per mineralized intercept, each multiplied by the estimated true width of the intercept, are shown as separate data entries at the intercepts' pierce points with the long section. Also shown at 10 unit intervals are contour lines which represent the interpolated
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ppm Au x estimated true width values (in metres) throughout the long section, where drilling information is available.
Several pertinent observations can be made from a review of the long section, including:
There is no obvious principal 'ore shoot' for which an overall plunge orientation can be defined. Rather, there appears to be several discreet 'plums' of higher grade and/or thicker mineralized portions of the Cliff Creek North Zone. The 'plums', at > 50 ppm-m Au, include: Holes 83CC04 and 84CC38 in the northern part of the zone (at shallower depths); Hole 84CC20 in the central part of the zone (at shallower depths); Holes 84CC32 and 84CC35 in the central part of the zone (at greater depths); and 84CC26 in the southern part of the zone (at moderate depths). Infill or step-out drilling within or adjacent to some of these plums would likely give a greater contained gold and silver ounces return (or increase) per unit volume and per metre drilled. Holes 84CC14 and its twin CC15-06, located at the south-southeast end of the Cliff Creek North Zone, are not shown on the long section. If they had been, they would likely show another 'plum' (not necessarily > 50 ppm-m Au), indicating the need for step-out drilling initially targeting shallow depth projections of the zone to the south-southeast of these two holes. In the northern part of the zone, Hole CC15-08 and its low ppm-m Au value may be an outlier (relative to Holes 83CC04 and 84CC38) due to several (post-mineral and dilutive?) fault breccia and gouge zones intercepted in the hole. If so, there is a reasonable expectation that deeper drilling below Holes CC15-18 and 19 may yield favourable results.
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Figure 10-5: Cliff Creek North Cross-section 2400NW
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Figure 10-6: Long-section, Cliff Creek North Zone
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10.4 RESULTS – DUKE’S RIDGE ZONE A total of seven diamond drill holes with an aggregate length of 719.63 m were completed on the Duke’s Ridge Zone (Figure 10.7). The holes tested the sinuous, locally complex, northwest-trending zone over a strike length of about 380 m and to generally shallow depths. Six holes were drilled from the northeast side of the steeply southwest to northeast-dipping vein system; these ranged in azimuth from 200° to 225° with dips that ranged from 50° to 65°. The final hole of the program was drilled from the southwest side of the vein system at an azimuth of 020° and a dip of -50°. Most of the holes targeted the central part of the zone where previous work had identified strong gold-silver values within quartz-chalcedony- amethyst veins, stockworks and breccias with locally well-developed comb, crustiform and colloform textures (Plate 10.5).
Plate 10-5: Example of Mineralization Characteristic of the Duke’s Ridge Zone
The intent of the Duke’s Ridge drilling was to validate the historical data base by drilling a series of new holes within the set of closely-spaced historic holes, and use the new data to compare with and verify the historic results.
A brief description of each 2015 drill hole is provided below. Similar to the discussion of drilling results for the Cliff Creek North Zone in Section 10.3, the order in which they are described is not by consecutive hole number but rather by the cross-section reference lines to which the holes project, starting at Section 5450NW and progressing northwesterly to Section 5825NW. Along each cross-section, the shallower
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holes (those to the northeast) are discussed first and the progressively deeper holes (those to the southwest) are discussed last. The prefix 'historic' has been excluded from the text below with the understanding that any pre-2015 drill hole is considered historic.
Section 5450NW
Hole DR15-06 (Azimuth 225°; Dip -50°; TD 158.19 m) was drilled near the southeast end of the Duke's Ridge Zone where little data exists. It was drilled 25° off-section to test beneath Trenches 82DT50 and 82DT51. The drill hole encountered only localized zones of weak quartz-chalcedony veining and was sampled intermittently between 53.94-147.49 m where these altered zones occur. All of the samples taken returned anomalous to low-grade gold-silver values; the highest value is 2.10 g/t Au and 17.7 g/t Ag over 1.90 m from 70.58-72.48 m. The low gold-silver values in Hole DR15-06 compare with the generally low grades in Trench 82DT50 in which the highest 1.0 m sample assayed 3.737 g/t Au and 11.0 g/t Ag. This trench occurs approximately 70 m above the mineralization intersected in the drill hole. No data exists for Trench 82DT51.
Section 5575NW
Hole DR15-02 (Azimuth 200°; Dip -50°; TD 112.17 m) was collared approximately 30 m south-southwest of 84DS17 and was designed to test an area between Holes 83DS04 and 84DS14. It intersected a 12.35 m interval averaging 0.63 g/t Au and 24.0 g/t Ag from 72.70-85.05 m, including a 0.32 m-long high-grade interval which assayed 9.15 g/t Au and 278.0 g/t Ag. The high grade interval may correlate with the projection of a mineralized interval in Hole 83DS04 which assayed 2.16 g/t Au and 278.6 g/t Ag over 3.00 m. Hole DR15-02 appears not to have been drilled deep enough to traverse the down-dip projection of a high-grade intersection in Hole 84DS14 which assayed 22.66 g/t Au and 2,249.79 g/t Ag over 1.00 m. No data exists for Hole 84DS17 which undercuts Hole DR15-02.
Section 5600NW
Hole DR15-01 (Azimuth 210°; Dip -51°; TD 134.72 m) was initially intended to twin Hole 84DS18, however the old collar location was deemed unsafe because of its proximity to the top of a rocky, precipitous slope. DR15-01 was instead drilled from a position upslope near the collar of Hole 84DS-15; it was steepened somewhat to intersect the projection of a zone of mineralization cut in Holes 84DS15 and 84DS18 (see Cross-Section 5600NW, Figure 10.8). The new hole intersected a 5.86 m-long zone grading 1.56 g/t Au and 57.7 g/t Ag from 98.49-104.35 m that correlates spatially with the projected zone, but is of a lower tenor than the intersections reported for the historic holes (10.69 g/t Au and 73.57 g/t Ag over 5.00 m in Hole 84DS15 and 5.13 g/t Au and 286.21 g/t Ag in Hole 84DS18).
Hole DR15-05 (Azimuth 200°; Dip -50°; TD 69.49 m) was collared about 40 m south-southwest of DR15- 01 on-section and between Holes 84DS13 and 83DS05, and on-section with Holes 83DS03, 84DS15 and DR15-01 (see Figure 10.7). The new hole was drilled to verify the mineralized intervals encountered in the adjacent historic holes. DR15-05 encountered a 50.75 m interval from surface to 52.00 m averaging 1.41 g/t Au and 42.3 g/t Ag that included an 8.56 m intersection grading 3.85 g/t Au and 106.5 g/t Ag from 33.50-42.06 m. The latter intersection correlates well with the position and tenor of a likely correlative interval in 83DS05 (12.0 m grading 4.37 g/t Au and 218.5 g/t Ag from 13.00-25.00 m).
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Figure 10-7: 2015 Drill Hole Locations, Duke’s Ridge Zone
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Section 5625NW
Hole DR15-03 (Azimuth 200°; Dip -50°; TD 127.41 m) was collared approximately 10 m southeast of 83DS07 to verify the high-grade intersections encountered in the historic hole, and to test the depth potential in the central part of the Duke’s Ridge Zone. Although not an exact ‘twin’ of 83DS07, DR15-03 did intersect a 22.29 m mineralized interval from 1.21-23.50 m grading 0.72 g/t Au and 24.8 g/t Ag, including a 2.00 m interval from 19.00-21.00 m grading 3.09 g/t Au and 34.4 g/t Ag. The longer interval in Hole DR15-03 correlates well with a 19.0 m near-surface intersection encountered in Hole 83DS07. However, the new hole did not replicate the high-grade gold-silver values (23.73, 206.91 and 66.69 g/t Au, and 672.0, 2040.0 and 894.8 g/t Ag) in three 1.00 m samples taken between 15.00-20.00 m in the old hole. Near the bottom of Hole DR15-03, a narrow, 0.25 m-long interval from 119.52-119.77 m grades 2.37 g/t Au and 103.7 g/t Ag.
Hole DR15-04 (Azimuth 200°; Dip -65°; TD 63.40 m) was drilled beneath DR15-03 and intersected anomalous gold-silver values from 2.10-24.00 m followed by a much stronger mineralized interval from 24.00-38.00 m grading 5.30 g/t Au and 112.7 g/t Ag. This higher grade interval may be the down-dip extension of the high grade mineralization intersected from 15.00-20.00 m in hole 83DS07 and the lower grade mineralization intersected from 19.00-21.00 m in Hole DR15-03.
Section 5825NW
Hole DR15-07 (Azimuth 020°; Dip -50°; TD 54.25 m) was drilled in the northwestern part of the Duke's Ridge Zone between Holes 84DS19 and 84DS21. It was designed to confirm the mineralized intervals intersected in Hole 84DS19 (no data exists for Hole 84DS21). DR15-07 intersected two mineralized intervals: an upper 0.50 m interval from 24.77-25.27 m grading 7.59 g/t Au and 33.0 g/t Ag; and a lower 5.08 m interval from 34.02-39.10 m grading 1.24 g/t Au and 21.9 g/t Ag. The latter intersection is in reasonable agreement with the location and tenor of an intersection cut in 84DS19 (8.0 m grading 3.34 g/t Au and 113.0 g/t Ag from 37.00-45.00 m) and also an intersection cut at a deeper level in nearby Hole 84DS25 (6.0 m grading 2.40 g/t Au and 30.7 g/t Ag from 78.00-84.00 m).
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Figure 10-8: Cross-section 5600NW, Duke’s Ridge Zone
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10.5 DRILLING SUMMARY AND I NTERPRETATION
10.5.1 Introduction
Overall, the 2015 diamond drilling program, completed on portions of the Cliff Creek North and Duke’s Ridge Zones, validated and verified the historic results generated by earlier operators.
The 2015 diamond drilling program employed twinning of selected historic drill holes and drilling of targeted infill, step-down and step-out holes. The program produced a modern data set that was compared with, and used to verify, the historic results. In addition, the 2015 program made an important new discovery, the ‘P2’ Vein, in the hangingwall of the main Cliff Creek North Zone. It is one of several priority targets identified for follow-up exploration and diamond drilling. Recommendations for future work on the Project are summarized in Section 26.
The ‘nugget effect’ commonly observed in epithermal gold-silver vein deposits, where high-grade mineralization is erratically distributed within mineralized shoots, can make it challenging to reproduce high gold-silver grades. Consequently, even drill holes designed to ‘twin’ high-grade intersections in historic holes may produce varying results, as was the case at both the Cliff Creek North and Duke’s Ridge Zones. Nevertheless, this does not diminish the significance of the consistent success of PPM's 2015 drilling program in intersecting mineralization about where expected in the two zones.
10.5.2 Cliff Creek North Zone
The Cliff Creek North Zone was tested with a total of 19 drill holes, 17 of which successfully penetrated the north-northwest trending, moderately to steeply southwest-dipping vein system. The drilling showed that the main zone has a minimum strike length of 225 m and remains open along strike to the northwest (beyond Holes CC15-18 and 19) and to the southeast (beyond Holes CC15-06 and 12), and at depth on some sections below the deepest levels of drilling and mine workings. The intersection of underground workings by a number of the 2015 drill holes confirmed that parts of the deposit have been subjected to mining. Analysis of core recovered from the immediate hangingwall and footwall of some of the voids shows that good grades of gold-silver mineralization remain and suggests that past underground development was likely limited to narrow stoping.
The narrow precious metals-enriched, semi-massive sulphide vein and associated stockwork zone (the ‘P2’ Vein) intersected in Hole CC15-15 occurs approximately 70 m into the hangingwall of the main Cliff Creek North Zone. It is an important new exploration target that merits follow-up close-spaced diamond drilling. Hangingwall mineralization of note was also encountered in several other 2015 and earlier drill holes.
The 52.0 m-long intersection of low grade mineralization in Hole CC15-13 (on Section 2300NW) and the 39.0 and 36.0 m-long intersections of higher grade mineralization in Holes 84CS32 and 84CS36 respectively (on Section 2350NW) suggest that locally, in the central and deeper parts of the Cliff Creek North Zone, there may be zones of structural thickening which offer the potential of a bulk tonnage target.
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10.5.3 Duke's Ridge Zone
The Duke’s Ridge Zone was tested with a total of 7 drill holes, all of which intersected the sinuous northwest-trending sub-vertical vein and stockwork system. The majority of holes targeted the central, higher grade part of the deposit. Although this drilling did not reproduce some of the highest assay values encountered in historic drill holes, it did confirm a near-surface zone of mineralization with low to moderate gold-silver grades. Intercepts in Holes DR15-04 and 05 returned some of the better gold and silver grades encountered in the 2015 drilling program at Duke’s Ridge. The mineralized vein system in the central part of the zone remains open at depth.
Holes DR15-06 and 07 evaluated the southeastern and northwestern parts of the deposit, respectively, and encountered narrow, low-grade intercepts within broader weakly anomalous zones. These two holes determined that the Duke's Ridge Zone has a minimum strike length of 380m.
11 SAMPLE PREPARATION, ANALYSES AND SECURITY All 2015 drill core was transported from the drill site by one of the drillers or by a representative of PPM and securely stacked outside of the core logging facility until being brought inside for logging. Onsite core sample security was not a concern because of the remote location of the project.
11.1 DRILL CORE HANDLING PROCEDURES Drill core handling procedures from drill to laboratory consisted of the following:
HQ core was transferred from the core tube to four foot long wooden core boxes by a member of the drill crew; The drillers labelled the core boxes with drill hole number and box number, and placed a wooden block marked with the depth in feet at the end of each run of core; At the end of each drill shift, filled core boxes were transported to the core logging facility; At the core logging facility, core boxes were laid out in order to ensure all boxes were present and to ensure markers were correctly located and labelled; A PPM technician or geologist then converted block measurements from feet to metres and core recovery measurements were determined and recorded for each run; Core was geologically logged using hard copy forms designed for the Project; data was later entered into an electronic database; The geologist determined the core to be sampled by marking it with bright coloured wax crayons to indicate the start and end of each sample interval. Each sample interval was tagged with a unique identification number, and the data was recorded on a Sample Record form. Each sample interval was also marked with a centre-line; The geologist marked samples for density measurements approximately every 10 metres; measurements were taken onsite and recorded; and Core was photographed sequentially from collar to ‘End of Hole’ in wet conditions prior to being moved to an adjacent core cutting shack for halving using a water-cooled diamond saw. Drill core sampling procedures were as follows:
Core boxes to be sampled were laid out in numerical order and lids removed;
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Sections of competent core were halved using a diamond saw, with half of the core for each sample placed in its own pre-numbered bag with matching pre-numbered sample tag; the other half of the core was returned to the core box; Sections of badly fractured core and gouge were carefully halved using a square-nosed cement trowel, and bagged as per the procedure listed above; All bagged samples were closed tightly with zip ties and packed together with QA/QC samples (that were inserted into the core sample stream at a prescribed frequency) into large rice bags at a rate of 3-7 per rice bag; each rice bag was labelled with the project name, drill hole ID and sample number range and then sealed with a zip tie; Once sampling was complete, core boxes were carefully stacked on wooden pallets, covered with plywood lids, shrink wrapped and secured with steel banding. Sample Shipping:
Each shipment consisted of: a) multiple packed rice bags representing one or more drill hole's worth of core samples, b) a Sample Record form, and c) a laboratory requisition form; Core sample shipments were made from site to a private secure location in Prince George by staff, and subsequently delivered directly to Bureau Veritas Minerals Laboratories ("BV") in Vancouver, British Columbia, by a bonded commercial carrier; and BV’s receiver logged receipt of the rice bags into the company’s tracking system.
11.2 ANALYTICAL METHODS PPM selected Bureau Veritas Minerals Laboratories ("BV") in Vancouver, British Columbia, to conduct its analysis of core from the 2015 drill program. BV maintains ISO 9001:2015 accreditation for quality management system certification.
The Quality Assurance/Quality Control (QA/QC) program described in the following sections was designed to allow for verification of the analytical results from historical exploration conducted on the Cliff Creek North and Duke’s Ridge Zones for which there were tabulated analytical data for gold and silver in the WEL reports, but no laboratory analytical certificates.
Sample Preparation
Each sample received by BV lab staff was dried and individually crushed and pulverized following preparation procedure PRP70-250 whereby samples are jaw crushed until 80% of the sample material passes through a 10 mesh screen. From this material a 250 g riffle split sample is collected and then pulverized in a mild steel ring- and-puck mill until 85% passes through a 200 mesh screen. A 0.25 g split of each milled sample is collected for multi-element analysis and a 30 g split of each milled sample is collected for gold assay. Sample Analytical Procedures
The following laboratory procedures were used to analyze 2015 drill core samples and associated QA/QC samples. There were no third-party lab analyses performed on the 2015 samples. Laboratory certificates of analysis for all of the analyses completed in 2015 are in the possession of PPM and its geological consultants, and are provided in an appendix in Lane (2016).
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Multi-element and Silver Analyses
A 0.25 g split of each milled sample was evaluated for 45 elements, including silver, by a four acid digestion in which the sample split is heated in HNO3-HClO4-HF to fuming and then taken to dryness. The residue is dissolved in HCl and analyzed using ICP-ES/MS analysis (method MA200). Samples returning more than 200 ppm Ag were re-analyzed using a 1g/100mL aqua regia digestion by AAS (method AR401). Gold Analysis
A 30 g split of each milled sample was evaluated for gold by lead collection fire assay fusion with an AAS finish (method FA430). Samples returning more than 10 ppm Au were re-analyzed utilizing lead collection fire assay with a gravimetric finish on a 30 g sample (method FA530).
11.3 QUALITY ASSURANCE / QUALITY CONTROL PROCEDURES A systematic QA/QC program was instituted by PPM that included the insertion of blanks, standards and duplicate core samples into the regular core sample stream. A total of 757 core interval samples (excluding duplicates) were collected and a total of 114 quality control samples (41 blanks, 42 standards and 31 core duplicates) were inserted into the sample stream at a rate of at least one blank, one standard and one duplicate for every 24 core interval samples.
Blank Analysis
A total of 40 blanks were submitted to BV as part of the project’s total sample shipment. The blank material used was a commercially available pulp (CDN-BL-10) purchased from CDN Resource Laboratories Ltd. ("CDN"). For gold, 24 of the blanks assayed at or below the detection limit (0.005 g/t Au) and for plotting purposes have been assigned a value of 0.0025 ppm Au, 12 assayed from 0.006 – 0.008 g/t Au and 4 assayed 0.01 – 0.012 g/t Au (Figure 11.1). The 4 highest values may indicate that the lab was enduring some level of procedural inadequacy, but because the values are still considered to be very low, it is more likely that there was some minor variability in the blank material itself. For silver, 32 of 40 blanks returned a value of 0.2 – 0.3 ppm Ag, 4 blanks returned values of 0.1 ppm Ag or less, and 4 blanks returned values of 0.4 – 0.5 ppm Ag (Figure 11.2). The results form a tight cluster just above detection in the 0.2 – 0.3 ppm Ag range. Overall, the results indicate acceptable sample preparation at BV.
Standards Analysis
A total of 42 gold or multi-element certified reference standards ("CRS"), also purchased from CDN, were submitted to BV as part of the project’s total sample shipment. There were eight different CRS used during the program; they cover a range of gold values from 0.799 - 35.25 ppm Au. Two of the CRS provide reference values for silver; however CRS pulps were not analyzed for over-limit silver values, and therefore only one of the silver CRS was of use. Recommended values for each CRS used in the program are listed in Table 11.1.
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Figure 11-1: Analytical Results for Gold, Blank CDN-BL-10
Figure 11-2: Analytical Results for Silver, Blank CDN-BL-10
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Table 11-1: Recommended Values for Certified Reference Standards (CRS)
Recommended CRS Value +/- "Between Lab" Two Standard Deviations
Standard ID Au (ppm) Ag (ppm) No. Used CDN-GS-P7H 0.799 +/- 0.05 4
CDN-GS-1P5A 1.37 +/- 0.12 3
CDN-ME-1206 2.61 +/- 0.20 274 +/- 14 4 CDN-GS-5H 3.88 +/- 0.28 50.4 +/- 2.7 14 CDN-GS-5C 4.74 +/- 0.28 6
CDN-GS-15A 14.83 +/- 0.61 5
CDN-GS-22 22.94 +/- 1.12 2
CDN-GS-30A 35.25 +/- 1.21 4
The gold values for the CRS listed in Table 11.1 typically plot within (or very close to within) the “between lab” 2 standard deviations (Figures 11.3 through 11.10) indicating that adequate care and proper procedures were implemented during sample preparation and analysis.
Figure 11-3: Gold Results for Standard CDN-GS-P7H
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Figure 11-4: Gold Results for Standard CDN-GS-1P5A
Figure 11-5: Gold Results for Standard CDN-ME-1206
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Figure 11-6: Gold Results for Standard CDN-GS-5H
Figure 11-7: Gold Results for Standard CDN-GS-5C
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Figure 11-8: Gold Results for Standard CDN-GS-15A
Figure 11-9: Gold Results for Standard CDN-GS-22
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Figure 11-10: Gold Results for Standard CDN-GS-30A
The silver values for standard CDN-GS-5H show a slight positive bias; most results plot above the certified reference value and four results plot higher than the “between lab” 2 standard deviations (Figure 11.11).
Figure 11-11: Silver Results for Standard CDN-GS-5H
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Drill Core Sample Duplicates Comparison
Drill core duplicates are used to monitor sample submissions for switched samples, data variability due to laboratory error, homogeneity of sample preparation and/or natural inhomogeneity of sampled mineralization. A total of 31 core sample duplicate pairs were made by quarter-splitting the second half of the core. Duplicate samples were analyzed at the same time as the original sample. A comparison of results for the core sample duplicate pairs is provided in Table 11.2 and is shown graphically for gold and silver in Figures 11.12 and 11.13, respectively. For gold, two-thirds (21 of 31) of the duplicate pairs have a difference of >25% between the original and the duplicate assay. These samples have a range of gold values from just above detection limit to about 6 g/t Au. The results indicate that there is significant variance in gold at all grades. This is most likely due to the irregular distribution of gold in epithermal systems, and the difficulty in taking duplicate samples in vein and breccia mineralization that inherently has an erratic distribution of values. For silver, however, this appears not to be the case, especially when the highest grade result is removed (resulting in a very strong correlation of the remaining duplicate pairs). This suggests that silver values are more evenly distributed, at least at lower concentrations, and that there may be more than one mineral species controlling the distribution of silver.
Figure 11-12: Gold Duplicate Pair Analysis
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Figure 11-13: Silver Duplicate Pair Analysis
Table 11-2: Comparison of Results for Duplicate Samples
Drill From To Sample Sample Au Ag Cu Pb Zn Hole ID (m) (m) # Type (ppm) (ppm) (ppm) (ppm) (ppm) CC15-02 27.00 29.00 20540 Core <0.005 0.2 6.5 9.1 67 CC15-02 27.00 29.00 20541 Duplicate <0.005 0.3 5.5 9.0 70 CC15-04 107.00 109.00 20593 Core 0.181 2.5 13.3 13.4 69 CC15-04 107.00 109.00 20594 Duplicate 0.216 2.7 16.1 13.2 76 CC15-04 262.00 264.00 20615 Core 0.208 3.3 10.5 58.4 141 CC15-04 262.00 264.00 20616 Duplicate 0.120 3.0 10.9 66.4 151 CC15-04 306.03 308.00 20637 Core 0.124 7.2 35.2 126.6 203 CC15-04 306.03 308.00 20638 Duplicate 0.082 5.6 25.7 126.2 209 CC15-05 23.00 25.00 20664 Core 0.075 8.7 23.2 30.1 92 CC15-05 23.00 25.00 20665 Duplicate 0.033 5.7 28.8 26.1 98 CC15-05 225.00 227.00 20686 Core 0.263 14.2 22.1 26.7 76 CC15-05 225.00 227.00 20687 Duplicate 0.446 14.0 19.8 24.6 82
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Drill From To Sample Sample Au Ag Cu Pb Zn Hole ID (m) (m) # Type (ppm) (ppm) (ppm) (ppm) (ppm) CC15-05 265.00 266.00 20708 Core 0.907 17.2 21.8 50.3 103 CC15-05 265.00 266.00 20709 Duplicate 2.323 40.7 20.2 76.3 156 CC15-06 54.00 55.50 20730 Core 0.022 4.6 12.0 15.2 70 CC15-06 54.00 55.50 20731 Duplicate 0.023 4.0 11.3 13.8 66 CC15-07 50.00 52.00 20747 Core 0.196 14.7 50.1 24.5 104 CC15-07 50.00 52.00 20748 Duplicate 0.249 15.5 52.5 22.9 97 CC15-08 98.00 99.50 20766 Core 0.286 11.3 58.3 16.7 61 CC15-08 98.00 99.50 20767 Duplicate 0.474 15.7 53.1 17.2 63 CC15-10 95.85 97.41 20812 Core 3.203 68.6 28.7 64.4 96 CC15-10 95.85 97.41 20813 Duplicate 1.551 56.7 34.6 62.8 102 CC15-11 218.00 220.70 20842 Core 0.305 3.7 9 25.1 72 CC15-11 218.00 220.70 20843 Duplicate 0.25 3.7 6.4 26 67 CC15-12 70.00 71.00 20856 Core 1.383 133.8 119.9 135.6 152 CC15-12 70.00 71.00 20860 Duplicate 1.619 125.5 149.1 149.9 192 CC15-13 251.00 252.00 20904 Core 2.22 39.8 75.6 274.8 428 CC15-13 251.00 252.00 20905 Duplicate 5.361 63.4 75 374.8 575 CC15-13 271.00 273.00 20917 Core 0.208 6.3 14.4 25.4 57 CC15-13 271.00 273.00 20918 Duplicate 0.257 5.2 13.4 25.4 59 CC15-14 107.00 108.62 20955 Core 0.658 16.2 38.9 188 92 CC15-14 107.00 108.62 20956 Duplicate 0.427 23.5 36 172.4 122 CC15-14 280.00 281.00 20977 Core 3.877 247 308.2 1257.6 1804 CC15-14 280.00 281.00 20978 Duplicate 1.683 124 163.2 779.7 1138 CC15-14 297.00 298.00 20997 Core 0.371 8.6 17.4 24.7 60 CC15-14 297.00 298.00 20998 Duplicate 0.585 4.5 17.8 24.7 65 CC15-15 112.45 113.80 828018 Core 0.098 18.6 19.8 128.1 622 CC15-15 112.45 113.80 828019 Duplicate 0.088 7.2 18.7 104.3 437 CC15-15 218.40 220.40 828039 Core 2.165 84.9 56.5 28.3 73 CC15-15 218.40 220.40 828040 Duplicate 2.003 81.7 59.7 26.1 81 CC15-15 254.00 256.00 828061 Core 0.523 8.1 54.5 185.7 352 CC15-15 254.00 256.00 828062 Duplicate 0.37 9.3 100.4 318 589 CC15-15 291.00 293.25 828083 Core 0.174 6 8.7 29 76 CC15-15 291.00 293.25 828084 Duplicate 0.249 7.5 8 31.3 69 CC15-19 54.65 56.35 828142 Core 0.01 1 7 11.4 106 CC15-19 54.65 56.35 828143 Duplicate 0.005 0.9 7.7 12.9 115 DR15-01 70.00 71.00 828158 Core 0.235 5.4 44.4 15.9 61 DR15-01 70.00 71.00 828159 Duplicate 0.191 4.7 41.3 16.3 61 DR15-01 92.00 93.00 828183 Core 1.285 25.9 86.2 28 99
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Drill From To Sample Sample Au Ag Cu Pb Zn Hole ID (m) (m) # Type (ppm) (ppm) (ppm) (ppm) (ppm) DR15-01 92.00 93.00 828184 Duplicate 0.773 22.6 81.5 29.4 92 DR15-02 87.30 88.30 828213 Core 0.19 8.2 8.8 30.4 189 DR15-02 87.30 88.30 828214 Duplicate 0.245 9.9 9.6 29.5 191 DR15-03 21.00 22.00 828241 Core 0.494 14.4 35.6 29.7 104 DR15-03 21.00 22.00 828242 Duplicate 1.218 22.5 50.4 29.3 93 DR15-04 21.00 22.00 828272 Core 0.166 7.1 42.6 18.7 82 DR15-04 21.00 22.00 828273 Duplicate 0.154 7.7 52.5 20 89 DR15-04 33.00 34.00 828288 Core 6.059 42.6 121.7 79.8 139 DR15-04 33.00 34.00 828289 Duplicate 5.829 54.9 117.8 82 144 DR15-05 23.50 24.00 828313 Core 0.065 9.3 38.3 11.5 86 DR15-05 23.50 24.00 828314 Duplicate 0.058 8.6 35.8 11 84 DR15-06 128.41 129.79 828361 Core 0.279 3.7 27 19.1 62 DR15-06 128.41 129.79 828362 Duplicate 0.208 3.5 22.9 19 65
11.4 ADEQUACY OF SAMPLE PREPARATION, SECURITY AND ANALYTICAL PROCEDURES The authors conclude that security, sample collection, sample preparation and analytical procedures employed during the 2015 drill program meet or exceed current best management practices. Continued use of a comprehensive QA/QC program is recommended to insure that all analytical data can be confirmed to be reliable. There were eight certified reference standards used in 2015; in future programs the number of certified reference standards should be reduced to 3 or 4 and cover a range of gold and silver values that coincide with the range of grades typically observed at the Lawyers Project.
Overall, adequate care and proper procedures were used to obtain reliable gold and silver results in the 2015 diamond drilling program at the Lawyers Project.
12 DATA VERIFICATION PPM’s 2015 exploration program of infill, step-out and step-down drilling and twinning of selected historic holes was designed to provide a modern data set that could be compared with, and used to verify, the historic drilling results. In order to provide a resource estimate for the Lawyers Project, it was necessary to verify and integrate as much of the historic data as possible.
Unfortunately, drill core, sample rejects and pulps from past work on the Cliff Creek North and Duke’s Ridge Zones are no longer available; reclamation of the mine site, completed during the mid-1990s, included the burying of all pre-2005 drill core. Original or copies of historical trench and drill logs also are rare, as are original or copies of laboratory certificates. Fortunately, exploration conducted by SEREM, up to and including 1984, was captured and systematically described in several key WEL reports (Wright, 1985; Wright, 1986). Incomplete data exists for drilling conducted by Cheni in 1987, 1990 and 1992; it is available in several private reports and in assessment reports required by the B.C. government to
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maintain the company’s mineral claims. No hard data exists for drilling conducted by Cheni in 1993 in the Duke’s Ridge area (including the high-grade Phoenix Zone).
An audit of the historic exploration data, captured from extensive files assembled by PPM, was completed. This included a review of all available information provided in the form of electronic scans of historic records, and hard copy reports and documents that provide trench and drill hole locations in mine or exploration grid coordinates, geological descriptions and analytical results for trenches, and drill hole logs with analytical results. Also reviewed were large format drafted mine plans for all levels of the Cliff Creek North underground workings, as well as several cross-sections and long-sections of the zone, and surface plans and cross-sections for the Phoenix Zone.
In order to verify the historical drill hole data, select original drill holes were ‘twinned’ on the Cliff Creek North and Duke’s Ridge Zones. The holes selected for ‘twinning’ were those for which drill hole collars were positively located and for which complete assay data exists.
12.1 TWIN DRILL HOLE COMPARISONS
12.1.1 Cliff Creek North Twin Drill Holes
Three historic holes on the Cliff Creek North Zone for which complete data exists were twinned in 2015. A comparison of weighted averages for mineralized intervals of similar length was made for each original hole-twin hole pair (Table 12.1).
Twin Hole CC15-06 was drilled from the same collar location and with the same azimuth and dip as original Hole 84CC-14. Both holes intersected a well-mineralized interval of about the same length and at approximately the same shallow depth, although gold grades in the twin hole are 42% higher than those reported for the original hole. This difference is likely due to the erratic distribution of gold and silver mineralization that is typical of epithermal systems and not due to sampling or analytical errors. Twin Hole CC15-06 is an adequate representation of original Hole 84CC-14. A comparison of gold grade with depth for the two holes is shown graphically in Figure 12.1. Note that sample lengths of an even 1.0 m or 2.0 m were used in the original hole while variable sample lengths were used in the twin hole as a result of poor to moderate core recovery.
Twin Hole CC15-07 was drilled from the same collar location and with the same azimuth and dip as original Hole 83CC-04. The original hole intersected one shallow, well-mineralized interval and one deeper well-mineralized interval. The twin hole did not repeat the upper mineralized interval (although it did intersect stockwork veining and weakly anomalous gold grades) and encountered a void where part of the deeper interval has been removed by mining development. The twin hole ‘traversed’ the void and cored 0.76 m of mineralization in its footwall before being shut down because of binding rods; the grades in the short footwall section of core compare favourably with that of the original hole and indicate that the footwall portion of the lower mineralized interval is likely still intact. A comparison of gold grade with depth for the two holes is shown graphically in Figure 12.2. Despite the removed (mined) mineralized section, twin Hole CC15-07 provides a good correlation of grades and core length for the lower mineralized interval.
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Table 12-1: Comparison of weighted averages between original drill holes and 2015 twin drill holes
From To Interval Drillhole ID Au (g/t) Ag (g/t ) Comment (m) (m) (m) Original 84CC-14 9.00 15.00 6.00 7.19 298.3 Footwall Hole
Twin CC15-06 10.37 16.75 6.38 12.56 400.0 Footwall Hole
Original 83CC-04 20.00 22.00 2.00 11.66 1.0 Footwall Hole
and 56.00 70.00 14.00 14.62 779.0 Footwall Hole
Twin CC15-07 20.00 22.00 2.00 < 1.00 5.4 Footwall Hole
and 54.86 59.44 4.58 void - no core recovered Footwall Hole
and 59.44 60.20 0.76 15.70 622.00 Footwall Hole
Original 84CC-38 90.00 105.00 15.00 4.63 215.4 Hangingwall Hole
Twin CC15-08 89.00 105.00 16.00 2.06 69.6 Hangingwall Hole
Figure 12-1: Gold grade versus drill hole depth; A) hole 84CC-14, B) hole CC15-06
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Figure 12-2: Gold grade versus drill hole depth; A) hole 83CC-04, B) hole CC15-07
Twin Hole CC15-08 was drilled from the same collar location and with the same dip as original Hole 84CC-38, but on a slightly different azimuth (see Table 12.1). The original hole intersected a 15.0 m interval of fairly consistent, moderate grade mineralization, whereas the twin hole cut a 16.0 m interval at similar depths, but at a gold grade which is less than half that of the original hole. The significantly lower average grade in the twin hole may be as a result of its deviation relative to the original hole. Both holes also intersected one or more deeper, narrow zones of low to moderate gold grades. Although
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there is a difference in grades between the main mineralized intervals encountered in the two holes, their intercept lengths, and the presence of footwall veins are consistent from hole to hole. A comparison of gold grade with depth for the two holes differs primarily in the middle of the mineralized interval; they are shown graphically in Figure 12.3.
Figure 12-3: Gold grade versus drill hole depth; A) hole 84CC-38, B) hole CC15-08.
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12.2 OTHER DRILLING TO VERIFY HISTORICAL RESULTS
12.2.1 Duke’s Ridge Verification Drilling
There were no twin holes drilled at the Duke’s Ridge Zone, but a total of five holes were drilled to intercept and confirm previously identified intersections in the central portion of the Duke’s Ridge Zone. These holes are described more fully in Section 10.4. Two holes in particular served to validate past results from the core area of the Duke’s Ridge Zone.
Hole DR15-05 was collared between Holes 84DS13 and 83DS05 to verify the mineralized intervals in the historic holes. DR15-05 encountered a 50.75 m interval from surface to 52.00 m averaging 1.41 g/t Au and 42.3 g/t Ag that included an 8.56 m intersection grading 3.85 g/t Au and 106.5 g/t Ag from 33.50- 42.06 m. The latter intersection correlates well with the position and tenor of a similar intersection in 83DS05 (12.0 m grading 4.37 g/t Au and 218.5 g/t Ag from 13.00-25.00 m).
Hole DR15-03 was collared near Hole 83DS07 to verify the high-grade intersections encountered in the historic hole, and to test the depth potential in the central part of the Duke’s Ridge Zone. DR15-03 intersected a 22.29 m low-grade interval from 1.21-23.50 m grading 0.72 g/t Au and 24.8 g/t Ag, including a 2.00 m interval from 19.00-21.00 m grading 3.09 g/t Au and 34.4 g/t Ag. The longer interval in Hole DR15-03 correlates well with a 19.0 m near-surface intersection encountered in Hole 83DS07. However, the new hole did not replicate the high-grade gold-silver values (23.73, 206.91 and 66.69 g/t Au, and 672.0, 2040.0 and 894.8 g/t Ag) in three 1.00 m samples taken between 15.00-20.00 m in the old hole.
12.3 ADEQUACY OF DATA The verification program determined that the historical data captured from hard-copy reports, drill hole logs, cross-sections and maps is valid and generally representative of the Cliff Creek North and Duke’s Ridge Zones. Results from 2015 drilling, despite encountering narrow underground workings (raises or stopes) in six Cliff Creek North holes, correlated reasonably well with the historic data. Core from past exploration drilling programs is not available for either of the zones drilled in 2015, so no re-analysis of old core could be performed.
The drill hole twinning program, consisting of three twin pairs of holes at the Cliff Creek North Zone, the verification drilling at the Duke’s Ridge Zone, and infill, step-out and step-down drilling on both zones contributed to the validation of the integrity of the historic drill hole data set.
Higher gold and silver grades were found to generally occur within narrow discrete veins, zones of dense stockwork veining and brecciation accompanied by moderate to intense potassic and silicic alteration. They occur within broad low grade gold-silver zones characterized by argillic alteration and stockwork veining. Higher grades are typically inconsistent to erratic along strike and down-dip, a feature typical of many epithermal precious metals systems.
The authors of this Report conclude that the historic drill hole data for which complete assay and location information is known is suitable for use in the calculation of a mineral resource estimate for the Cliff Creek North and Duke’s Ridge Zones.
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13 MINERAL PROCESSING AND METALLURGICAL TESTING
13.1 HISTORICAL MINERAL PROCESSING AND METALLURGICAL TESTING Cyanidation testing of mineralized material from the Lawyers property was conducted periodically by Lakefield Research from September 1982 to January 1986 (WEL, 1986; Norecol, 1986). All but one sample (from the Cliff Creek Zone) were from the AGB Zone. The AGB samples were collected from various areas and levels of the underground workings; the exact location of the Cliff Creek sample is unknown, but because the testing on it occurred in December 1984, it probably came from a Cliff Creek North Zone trench or surface diamond drill hole. The information summarized below is from WEL (1986) and Norecol (1986).
13.1.1 Results
Much of the discussion in available metallurgical reports or summaries of work does not distinguish between AGB and Cliff Creek samples, and the information presented is assumed to be on the AGB samples unless otherwise indicated.
The results of the test work indicate that an optimum grind is 70% -200 mesh (80% -90 microns). Optimum leaching time for gold is about 48 hours; optimum leaching time for silver is considerably longer. Overall silver recovery was dramatically improved by flotation of the primary leached residue and re-cyanidation of the flotation cleaner concentrate. The expected metallurgical recoveries were:
Recovery Product Au (%) Ag (%) Cyanidation of ore 93.4 46.6 Cyanidation of Flotation Concentrate 1.6 35.4 Total 95 82
The work index of the mineralized material was dependent on its gangue mineralogy and zone as shown below:
Zone kWH/tonne
AGB (15) 16.7 - 19.2
Cliff Creek 19.2
A review of metallurgical data was performed by Robertson and Associates (1986) who commented that most of the samples being tested were too rich in gold and silver to be considered representative of AGB zone. They recommended that additional testing be performed on representative samples from both the AGB and Cliff Creek Zones, but the authors are not aware of any such test work being completed.
Any future metallurgical studies should also include mineralized material that is representative of the Duke’s Ridge and P2 Vein Zones. In the case of the P2 Vein, any testing of it would be conditional on
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whether or not follow-up diamond drilling is successful in defining a potentially mineable mineral resource.
13.2 MINERAL PROCESSING AND METALLURGICAL TESTING BY PPM To date, there has been no mineral processing or metallurgical testing completed on the Project by PPM.
14 MINERAL RESOURCE ESTIMATES
14.1 HISTORICAL MINERAL RESOURCE ESTIMATES
14.1.1 Introduction
Four historical mineral resource estimates carried out by past workers on the Lawyers Project and defined as such in this Report, include one completed by joint venture partners Bond Gold Canada Inc. and Nexus Resources Corp. on the Silver Pond West deposit in 1987, and one each completed by Hawkins in 2003 on the Cliff Creek, Duke's Ridge and Silver Pond West Zones.
The mineral 'reserve' estimates done by Cheni prior to production start-up and later during the 1989-92 production period on the property, and those done by Wright Engineers in their Feasibility Studies conducted during the period 1985-87, were completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects. They use categories other than those stipulated for current use. Using today's mineral resource and mineral reserve classification as adopted by CIM Council on May 10, 2014 and incorporated, by reference, into National Instrument 43-101, many, if not all of these historical mineral 'reserve' estimates might now be considered mineral resource estimates. Nevertheless, given that both Cheni and Wright Engineers completed their 'reserve' estimates after applying certain Modifying Factors with the reasonable expectation for economic extraction of such 'reserves', the authors of this Report have chosen to present the results of these 'reserve' estimates in Section 15.1 (Historical Mineral Reserve Estimates).
14.1.2 Silver Pond West Zone
A preliminary mineral inventory estimate for the Silver Pond West Zone was done by Kennedy and Vogt (1987). They reported a “drill-indicated” resource for combined Subzones A, B and C of 62,100 tonnes @ 5.85 g/t Au using the following parameters and procedures:
Reserves for this zone were calculated by computer, using Geostat software, by the polygon method in long section. Polygons were determined by the mid-point between holes. A cut-off grade of 2.4 g/t Au and a specific gravity of 2.88 were used. The mineral resource estimate does not include allowance for dilution. Chemical analyses for Au and Ag were conducted onsite using AA methods. Analyses were checked by duplicates at Min-En laboratories using standard FA/AA techniques. Data appears to have been derived to within Industry standards of the day.
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The above Kennedy & Vogt mineral resource estimate was prepared before the coming into force of the NI 43-101 Standards of Disclosure for Mineral Projects and as such, in the authors' opinion, should not be relied upon.
14.1.3 Hawkins' 2003 Mineral Resource Estimates
In his June 2003 Technical Report covering the Lawyers Project and (AL) Ranch property, Hawkins presents inferred mineral resource estimates for the Cliff Creek, Duke’s Ridge and Silver Pond West Zones. Each of these estimates is dated March 28, 2003. They are briefly discussed under separate sub- headings below.
It should be noted that, in each case below, Hawkins' resource estimates differ only in the classification of resources or reserves as categorized by earlier workers. The tons (or tonnes) and grades presented in his 2003 Technical Report are identical to the historical data for the respective zones. The details of his estimation methods are not fully available to the authors of this Report and therefore it is advised that some caution be exercised by the reader when reviewing the 2003 resource data.
Cliff Creek Zone
For the Cliff Creek North and Middle (referred to as Central in this Report) subzones, Hawkins estimated an inferred mineral resource of 69,981 tons at 0.225 oz. Au per ton and 6.91 oz. Ag per ton (63,500 tonnes at 7.71 g/t gold and 237 g/t silver) using a gold-equivalent (AuEQ) cut-off grade of 0.20 oz. per ton (6.86 g/t) and the conversion factor for gold equivalency of 1 oz. Au = 93 oz. Ag.
Hawkins' inferred mineral resource for these two subzones is identical to that reported by Cheni as of December 31, 1991 and classified by Cheni as 'possible mineral inventories' using the same AuEQ cut-off grade and the same gold-silver price conversion factor.
Duke's Ridge Zone
For the Duke's Ridge Zone, Hawkins estimated an inferred mineral resource of 23,991 tons at 0.232 oz. Au per ton and 6.33 oz. Ag per ton (21,764 tonnes at 7.95 g/t gold and 217 g/t silver) using a gold- equivalent (AuEQ) cut-off grade of 0.20 oz. per ton (6.86 g/t) and the price conversion factor of 1 oz. Au = 93 oz. Ag.
Hawkins' inferred mineral resource for the Duke's Ridge Zone is identical to that reported by Cheni as of December 31, 1991 and classified by Cheni as a 'possible reserve' using the same AuEQ cut-off grade and the same gold-silver price conversion factor.
Silver Pond West Zone
For the combined subzones A, B and C which comprise the Silver Pond West Zone, Hawkins estimated an undiluted, inferred mineral resource of 68,452 tons at 0.171 oz. Au per ton (62,100 tonnes at 5.86 g/t Au) using a cut-off of 2.4 g/t Au (0.07 oz. Au per ton) and a specific gravity of 2.88.
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14.2 2015 PPM MINERAL RESOURCE ESTIMATES
14.2.1 Introduction
Giroux Consultants Ltd. (“GCL”) of Vancouver, B.C. was retained by PPM to produce mineral resource estimates for the Cliff Creek North and Duke’s Ridge Zones on the Lawyers Project. The effective date for these estimates is January 20, 2016, the day the data was received by GCL.
G.H. Giroux, P. Eng., is the qualified person responsible for the resource estimate. Mr. Giroux is a qualified person by virtue of education, experience and membership in a professional association. He is independent of the company applying all of the tests in section 1.5 of National Instrument 43-101. Mr. Giroux has not visited the Project.
There appear to be no issues or factors that could materially affect the mineral resource estimates. This includes no issue involved with environmental permitting, legal, title, taxation, socio-economic, marketing, political, mining, metallurgy or infrastructure.
The data was supplied by Doug Blanchflower, P.Geo., of Langley, B.C., in the form of CSV files for drill hole collars, surveys and assays and trench collars, surveys and assays. A total of 80 drill holes and 9 trenches were provided for the Cliff Creek Zones (North, Central and South) of which 48 drill holes and 4 trenches were within the North Zone. A total of 37 drill holes and 22 surface trenches were within the Duke’s Ridge Zone.
An undetermined number of historic surface and underground diamond drill holes, in or proximal to the Cliff Creek North resource area, were drilled by Cheni in 1987 and 1990. Incomplete location and assay data is available for this drilling. For these historic holes, only one 1987 surface diamond drill hole was made available to, and used by, GCL in its resource estimate of the Cliff Creek North Zone.
In the Duke's Ridge Zone, in 1990, six trenches and sixteen drill holes tested the northwest extension of the Duke’s Ridge Zone, in an area between Duke’s Ridge ‘proper’ and the Cliff Creek Central subzone. Location and assay data from this work does not form part of the information base provided to GCL for the purpose of resource estimation. Later, in 1993, Cheni reportedly carried out infill drilling in the Duke's Ridge Zone. The number, total metres and locations of these infill holes are unknown and no assay data from them is available.
The procedures and parameters used to estimate the mineral resources for both zones is presented in Sections 14.2.2 and 14.2.3 below, along with summaries of the respective inferred mineral resources calculated at various g/t AuEQ cut-off grades. Given that the methods used to estimate the mineral resources for both zones were similar, most of the details on this subject are presented in Section 14.2.2. Any significant differences in the parameters or procedures used for the Duke's Ridge Zone are more briefly discussed in Section 14.2.3.
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14.2.2 Cliff Creek North Zone
Resource Estimation Methodologies
A mineral resource estimate for the Cliff Creek North Zone was done using the following parameters and procedures:
Using cross sections and level plans, Doug Blanchflower developed geologic 3D solids to constrain mineralization. A rough AuEQ value of > 1.0 g/t was used to define the solids where gold equivalent was defined as follows:
AuEQ = Au g/t + (Ag g/t x 0.45)/35.3658, using a gold price of US$1,100 per oz. and a silver price of US$14 per oz.
The 3D solids for the Cliff Creek North Zone are shown in Figure 14-1.
Gold assays reported as < 0.005 g/t were converted to 0.0025 g/t while those reported as 0.0 were set to 0.001 g/t. Silver assays reported as < 0.1 g/t were set to 0.05 g/t while those reported as 0.0 were set to 0.01 g/t.
Drill holes were compared to the mineralized solids and individual assays were tagged if inside or outside these solids. A total of 46 drill holes penetrated the Cliff Creek North solids.
Assay statistics for gold and silver sorted by Domain show that: (i) for 597 gold assays, the mean and maximum values within Mineralized Solids are 3.83 g/t and 293.4 g/t respectively; and (ii) for 597 silver assays, the mean and maximum values within Mineralized Solids are 161.56 g/t and 7,622.0 g/t respectively.
Statistics for the Waste Domain show that: (i) for 1084 gold assays, the mean and maximum values are 0.32 g/t and 25.4 g/t respectively; and (ii) for 1084 silver assays, the mean and maximum values are 14.74 g/t and 2,811.4 g/t respectively.
The grade distributions for gold and silver were evaluated for both domains to determine if capping was required. Lognormal cumulative frequency plots were used to establish capping levels. For Mineralized Solids, the cap levels were determined to be 38.0 g/t Au and 1,450 g/t Ag; 6 assays for each were capped. For Waste, the cap levels were determined to be 5.0 g/t Au and 100 g/t Ag; 6 gold assays and 16 silver assays were capped. The results of capping a relatively few samples show that while mean grades have been slightly reduced for both domains, the standard deviations and as a result the coefficients of variation have been significantly reduced.
Sample lengths within the Mineralized Domain varied from 0.4 m to 3.14 m with 72% of mineralized assays from samples 1.0 m in length. A two metre composite length was selected to approximate a possible mining height. Uniform down-hole composites were formed honouring domain boundaries. Small intervals at the domain boundary less than 1.0 m in length were combined with adjoining samples while those more than 1.0 m were left intact forming a uniform support of 2 ± 1 m.
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Brief discussions of variography, the block model, bulk density, grade interpolation, the mineral resource and block model verification are presented under the separate sub-headings that follow.
Variography
Pairwise relative semivariograms were used to model gold and silver in both domains. Within the Mineralized Domain, both gold and silver were modeled along strike (Azimuth 347o, Dip 0o), down-dip (Azimuth 257o, Dip -65o) and across dip (Azimuth 077o, Dip -25o). In all cases nested spherical models were fit to the data. The along strike direction was then modeled to determine if a plunge to the mineralization existed and the direction of most continuity was along Azimuth 347o Dip -60o.
In the Mineralized Solids, the longest continuity (with a long range of 100 m) for both gold and silver was found along Azimuth 347o, Dip -60o. For both down-dip and across dip, very short ranges of 10 m were found for both gold and silver. While this makes perfect sense in the across dip direction where the mineralized structures are narrow, it points to poor grade continuity down-dip. The nugget to sill ratios of 63% for gold and 53% for silver are also high, showing high grade variability.
Figure 14-1: Isometric view looking northeast showing Cliff Creek North Zone Mineralized Solids and drill hole traces
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Additionally, gold and silver were modeled in waste; isotropy was assumed and nested spherical models were produced.
Block Model
A block model with blocks dimensioned 5 x 5 x 5 m was created and fit to the geologic solids. For the block model, the percentage below surface topography, percentage below bedrock and the percentage within the mineralized solids were recorded, for each block. The percentage of waste within a block was then calculated by subtracting the percentage of mineralized solid from the percentage below bedrock.
The underground workings in the Cliff Creek North Zone were digitized and plotted. While the exact locations of these workings are not well known, they have been positioned based on available underground survey information and on voids encountered during 2015 drilling. The percentage of underground workings within each block was recorded; the volume of rock removed within the mineralized zones has been subtracted from the resource estimate.
The origin for the Cliff Creek North Block Model is as follows:
Lower left corner of model 607350 E Column size = 5 m 90 columns 6355500 N Row size = 5 m 70 rows Top of model 1850 Elevation Level size = 5 m 90 levels No Rotation
Bulk Density
During the 2015 drill campaign a total of 155 specific gravity measurements were taken on drill core from the Cliff Creek North Zone. Of these, 5 assay intervals were tested twice; the two values were averaged in each case, leaving an adjusted total of 150 measurements.
All measurements were done in the field using the Archimedes methodology where:
SG = (Sample Dry Wt.) / (Sample Dry Wt. – Sample Wet Wt.)
The average specific gravities for the Cliff Creek North mineralized and waste zones were determined to be 2.63 and 2.62 respectively. There appears to be no clear relationship between gold grades and specific gravity. Therefore, a specific gravity of 2.63 was used to convert volume to tonnage for blocks within the mineralized zones; waste portions of blocks used the average specific gravity of 2.62.
Grade Interpolation
Grades for gold and silver were interpolated into blocks by Ordinary Kriging. The search ellipsoid dimensions and orientation were based on the grade continuity as measured by the semivariograms. For the Cliff Creek North block model, the kriging was completed in a series of four passes with expanding search ellipsoids. Blocks with some percentage inside the mineralized solids were estimated using composites from within the mineralized solids.
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For Pass 1 the dimensions of the ellipsoid were set to ¼ of the semivariogram range (i.e. to 25.0 m along strike and 2.5 m down and across dip, for both gold and silver). A minimum 4 composites with a maximum of 3 from any given drill hole were required to estimate a block. For blocks not estimated in Pass 1 a second pass, with search ellipsoid dimensions set to ½ the semivariogram range (i.e. to 50.0 m along strike and 5.0 m down and across dip, for both gold and silver), was completed. A third pass using the full range and a fourth pass using twice the range completed the kriging. In all passes the maximum number of composites was set to 12. If more than 12 composites were found in the search the closest 12 were used.
Estimated blocks containing some percentage of material outside the mineralized solids were estimated for waste using composites from outside the mineralized solids. These waste grades are contained in the block model and could be used by mining engineers to determine a dilution grade.
If an estimated block contained any percentage of underground workings the underground workings were assumed to be within the mineralized zone and were subtracted from the percentage of mineralized solid in that block.
Mineral Resource
Based on the 2015 study reported by GCL, delineated mineralization of the Cliff Creek North Zone is classified as a resource according to the definitions as adopted by CIM Council on May 10, 2014 and incorporated, by reference, into National Instrument 43-101. At this time the entire resource is classified as inferred due to drill hole density, uncertainty of the precise locations and full extent of underground workings and a limited number of blocks estimated in Pass 1 and 2.
At Cliff Creek North, there are 26,000 tonnes averaging 3.95 g/t Au and 182.7 g/t Ag estimated inside the mineralized zone and within the known extent of underground development. This likely represents a minimum amount of mined out material.
No economic evaluations have been completed by PPM on the Cliff Creek North Zone and as a result an economic cut-off for it is unknown. However, for the purposes of reporting mineral resources on the Project, the authors compared current gold and silver metal prices and the current US$-CDN$ exchange rate to historic metal prices (adjusted for both inflation and historic exchange rates) for the 4-year period of past production on the Lawyers Project. They found that the average gold and silver grades corresponding to cut-off grades of 4.00, 4.50 and 5.00 g/t AuEQ in Table 14.1 below, after being adjusted for comparison purposes, compare favourably with historic mined grades at Lawyers.
In addition, the authors reviewed publically-reported mineral resource or reserve data and certain infrastructure-related factors at two proposed underground gold mines:
At IDM Mining's Red Mountain Project near Stewart, B.C., reported measured and indicated resources total 1.642 million tonnes grading 8.36 g/t Au and 26 g/t Ag, using a 3.0 g/t Au cut-off and metal prices of US$1,250 per oz. for gold and US$20 per oz. for silver. The resource area has some existing underground infrastructure but no road access. At New Gold Inc.’s Rainy River Project in the Chapple Township of northwestern Ontario, reported underground reserves total 3.29 million tonnes grading 5.58 g/t Au and 10.72 g/t Ag, using a 3.5 g/t AuEQ cut-off and metal prices of US$1,250 per oz. for gold and US$20 per oz. for silver, with projected recoveries of 88% and 75% for gold and silver respectively. Seven zones comprise the
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underground reserves: one will be accessed by its own underground ramp; the other six will be accessed through the lower benches of the proposed ultimate open pit. The authors conclude that, based on the above information, it is reasonable to select a 4.0 g/t AuEQ cut- off for reporting purposes for the Lawyers Project.
The Cliff Creek North Inferred Resource, estimated using a number of different AuEQ cut-off grades, is presented in Table 14-1.
A gold equivalent (AuEQ) grade was determined for each estimated block using the following assumptions:
US$ 1200 / oz gold price 95% recovery for gold
US 14.50 / oz silver price 82% recovery for silver
AuEQ = (Au g/t * 1200 * 0.95 / 31.1035 g/oz) + ( Ag g/t * 14.50 * 0.82 /31.1035 g/oz) (1200 * 0.95 / 31.1035)
Table 14-1: Cliff Creek North Inferred Resource
AuEQ Cut-off Tonnes > Cut-off Grade>Cut-off Contained Metal (g/t) (tonnes) Au (g/t) Ag (g/t) AuEQ (g/t) Au (ozs) Ag (ozs) 1.00 1,460,000 2.89 121.70 4.16 136,000 5,710,000 2.00 1,260,000 3.16 134.94 4.57 128,000 5,470,000 3.00 840,000 3.79 171.54 5.58 102,000 4,630,000 3.50 690,000 4.12 190.08 6.10 91,000 4,220,000 4.00 550,000 4.51 209.15 6.69 80,000 3,700,000 4.50 440,000 4.90 230.48 7.30 69,000 3,260,000 5.00 350,000 5.30 253.88 7.94 60,000 2,860,000 6.00 260,000 5.88 290.09 8.91 49,000 2,420,000 7.00 200,000 6.27 318.42 9.59 40,000 2,050,000 8.00 150,000 6.78 344.18 10.37 33,000 1,660,000
Block Model Verification
As a verification tool for the block model, level plans were produced for the Cliff Creek North mineralized zones showing both estimated gold grades in blocks and in 2 m drill hole composites from 10 m above the level to 10 m below. Block grades matched the composite grades with no bias indicated. Examples of these level plans are shown for Cliff Creek in Figures 14-2 to 14-6.
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607500E 607600E 6355900N 6355900N
LEGEND
6355800N Au > 0.0 < 1.00 g/t 6355800N Au >= 1.00 <2.00 g/t Au >= 2.00 <3.00 g/t Au >= 3.00 < 4.00 g/t Au >= 4.00 < 5.00 g/t Au >= 5.00 g/t
1.974 1.974
Au in 2 m Composites 2.021 1.984 1.836 1.629 2.401
2.871 3.075 3.076 3.272 1.978 2.172 2.252 2.187 1.285 0.995 1.158 1.209
3.075 1.884 2.233 2.426 1.529 1.246 1.064 1.480 2.406
1.880 1.888 2.466 1.951 1.329 1.213 1.413 0.969 1.199 3.678
2.035 2.346 2.125 1.526 1.328 1.248 2.397 4.986
2.380 2.170 2.117 2.010 1.431 3.914 3.696
1.668 2.172 2.227 1.766 1.719 1.511 3.335 3.426 6355700N 6355700N 2.610 2.614 1.718 2.112 1.238 3.500 3.493
1.975 1.716 1.279 2.146 1.086 3.670 3.557 3.445
1.272 1.382 1.362 1.352 1.603 3.173 3.267 4.175
0.471 1.537 0.846 2.399 2.524 3.449 4.267
1.459 1.768 2.282 1.774 3.084 5.160
2.209 2.867 2.002 2.563 3.492 4.202
2.657 1.261 1.996 3.094 4.396
2.370 2.238 2.384 3.623 3.288
2.105 1.944 2.108 1.382 1.437 3.431 1.741
1.448 1.918 2.125 1.375 2.704 2.365 1.633 1.910
1.913 1.665 1.539 2.357 2.434 1.408 1.889
2.189 2.201 1.621 1.641 1.758 1.662
1.657 1.575 2.156 1.702 1.370 2.209
2.171 2.168 1.691 1.341
2.143 2.051 1.590
2.074 2.324
2.268 2.451
2.325 2.325 2.354
2.325 2.325 2.325
2.607 6355600N 6355600N
CLIFF CREEK NORTH 1550 LEVEL SHOWING GOLD (g/t)
607500E 607600E
6355500N 6355500N
Figure 14-2: Cliff Creek North 1550 Level showing estimated gold grades
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607500E 607600E 6355900N 6355900N
LEGEND Au > 0.0 < 1.00 g/t 6355800N Au >= 1.00 <2.00 g/t 6355800N Au >= 2.00 <3.00 g/t Au >= 3.00 < 4.00 g/t Au >= 4.00 < 5.00 g/t Au >= 5.00 g/t
6.914 5.469
6.582 5.467 5.457
6.914 6.269 6.310 Au in 2 m Composites 5.650 6.341 7.813 6.210 6.203 6.283 5.164
2.871 5.704 5.662 5.511 4.530 9.544
2.819 2.736 7.662 5.539 5.138 4.789 5.459
2.603 2.715 2.471 7.662 6.912 5.733 8.536 2.483 2.107 1.598
2.864 1.557 2.056 2.052 5.794 6.625 3.929 1.137 1.466 6.643 6.372
3.175 1.415 2.097 2.238 5.293 5.581 3.632 1.112 1.234 8.320 8.213
1.878 0.791 1.059 2.249 6.402 3.947 2.695 1.958 1.778 7.977 6355700N 6355700N 1.903 1.203 1.490 6.452 4.054 2.664 1.853 5.077 7.894
1.877 1.844 1.563 3.888 3.799 2.661 1.806 4.646 5.896
1.883 2.681 2.554 3.890 3.686 2.678 2.738 4.400 6.110
2.265 3.821 3.677 3.358 2.088 3.448
3.820 3.912 3.359 2.160 3.527
3.933 3.574 2.017 2.698 2.969
3.774 3.523 1.955 2.227 2.595 2.899
2.743 3.108 3.160 3.227 2.186 2.983 3.386
1.330 1.214 2.397 2.892 3.154 5.669 4.503 3.034 3.220 3.042
0.860 1.524 2.267 2.662 3.244 5.115 4.388 2.995
0.339 0.440 3.219 2.508 2.828 3.531 3.591 3.181 3.245
0.324 2.263 2.684 2.360 3.394 3.116 3.592 3.733
0.774 2.770 2.779 2.324 1.995 1.270 2.619 2.932 3.009
2.043 1.977 2.321 2.369 2.261 2.567 2.163
1.937 1.903 2.371 2.137 3.115 3.009 1.450
1.912 1.458 2.073 1.907 1.270 2.358 1.970 1.499
1.783 2.235 1.927 1.573 2.680 1.614 1.593
1.790 1.948 1.785 2.200 1.042 1.395
1.796 1.834 1.755 2.255 2.030 1.323 1.494 2.086
1.797 1.466 2.171 2.061 1.277 1.773 2.155 6355600N 6355600N 2.170 2.211 2.147 2.370
1.924 2.267 2.260 2.447
2.323 2.375
CLIFF CREEK NORTH 1600 LEVEL SHOWING GOLD (g/t)
607500E 607600E
6355500N 6355500N
Figure 14-3: Cliff Creek North 1600 Level showing estimated gold grades
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607500E 607600E 6355900N 6355900N
LEGEND
1.059 6355800N 6355800N Au > 0.0 < 1.00 g/t 1.057 Au >= 1.00 <2.00 g/t 1.062 1.103 1.060 1.433 Au >= 2.00 <3.00 g/t 1.060 2.455 2.432 0.649 2.497 2.496
Au >= 3.00 < 4.00 g/t 2.497 Au >= 4.00 < 5.00 g/t 1.142 2.574 1.281 1.176 2.574 2.574 Au >= 5.00 g/t 1.677 2.014 2.448 1.467 1.378 2.102
1.426 1.298 1.251 1.766 2.335
1.434 1.186 2.224 2.928 1.726
1.444 2.480 1.762 2.608 2.118 3.609 Au in 2 m Composites 3.939 2.266 1.680 2.997 2.023 1.436 4.126 3.128 2.509 5.788 4.454 3.277
5.795 3.202 2.782 5.533 1.855 4.252
2.925 3.155 5.409 4.857 1.440
3.214 3.134 4.456 4.968 2.536
6.631 3.842 2.538
4.631 2.545 4.211 6355700N 6355700N 4.643 2.639
2.896 3.686 6.652 2.899
2.258 1.705
1.380 1.883 10.058
1.203 6.415 10.058
1.216 1.628 4.990
0.912 1.995 3.683 6.189
1.485 0.754 0.955 2.090 4.936 6.969 3.940
1.984 1.746 1.199 1.934 3.524 3.538 3.797
1.922 1.078 1.314 1.998 3.454
2.578 1.337 1.206 2.243 3.332
2.378 1.795 2.691 3.456
1.863 2.690 3.330
1.953 2.162 3.043 3.898
2.267 2.405 3.071 3.661
2.336 6.702 3.332 3.517
5.431 1.183 3.270 4.868 1.881 3.096
4.518 5.334 5.182 1.671 2.628 5.079 4.782 3.599 2.797
1.594 4.714 6.212 5.758 5.942 4.666 1.820 3.471 2.754
5.486 5.128 2.585 3.074 1.581 2.748 2.846 6355600N 6355600N 5.143 2.018 2.834 0.914 3.182 2.626
1.261 2.754 2.859 2.511 3.717
2.335 2.694
CLIFF CREEK NORTH 1650 LEVEL SHOWING GOLD (g/t)
607500E 607600E
6355500N 6355500N
Figure 14-4: Cliff Creek North 1650 Level showing estimated gold grades
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607500E 607600E 6355900N 6355900N
LEGEND 3.117
Au > 0.0 < 1.00 g/t 2.836 3.164 2.976 6355800N 6355800N 3.611 3.164 3.380 2.704
Au >= 1.00 <2.00 g/t 3.164 3.183 2.983 Au >= 2.00 <3.00 g/t 2.920 2.922 3.031 2.777 4.529 2.626 2.747 3.956 3.617 3.760 Au >= 3.00 < 4.00 g/t 2.000 3.386 3.650 2.797 4.441 4.511 2.335 3.908 4.886 6.121 4.407
Au >= 4.00 < 5.00 g/t 2.685 2.941 2.697 3.235
2.027 2.328 2.175 1.954 2.709
Au >= 5.00 g/t 2.328 1.656 2.279 1.196
1.679 2.794 0.790
3.453 3.352
3.653 4.405
3.691 3.619
Au in 2 m Composites 2.801 2.343 4.307
2.761 2.635
2.889 2.614
1.905 1.632
2.212 2.148 3.996
2.139 2.309 3.746
2.381 1.629 4.552 6355700N 6355700N 2.096 1.688 4.776 5.936
2.652 1.707 1.622 4.007 0.763
1.894 5.190 2.629
4.103 5.864
4.404 2.774
4.316 4.284
6.704 2.909
1.280
1.135
1.534 0.967
0.885 4.565 5.076
1.310 2.089 5.205
1.362 1.249 1.870 2.121
1.362 2.232 3.145 2.555
2.232 2.227 3.747
2.899 3.552 2.219 2.292 2.655 4.317 3.650 2.277
3.131 2.176 2.195 3.054 4.330 4.317 3.233 2.325 2.325
2.207 2.154 2.590 4.263 4.306 2.959 3.463 2.325
1.734 1.672 2.214 2.452 3.893 4.203 2.708 3.395 6355600N 6355600N 1.748 1.606 1.446 3.655 4.733 5.175 2.909 3.475 3.671
1.566 1.342 5.225 2.403
1.583 2.728
CLIFF CREEK NORTH 1700 LEVEL SHOWING GOLD (g/t)
607500E 607600E
6355500N 6355500N
Figure 14-5: Cliff Creek North 1700 Level showing estimated gold grades
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607500E 607600E 6355900N 6355900N
8.383
5.845
2.654 2.680
LEGEND 2.481 2.569
8.507 5.754 2.550 2.591
6355800N Au > 0.0 < 1.00 g/t 6355800N 8.108 5.055 2.428 2.514 2.751 Au >= 1.00 <2.00 g/t 6.854 2.740 2.004 2.065 2.812 2.536 2.211 1.767 2.716 2.661 2.451
Au >= 2.00 <3.00 g/t 2.211 1.771 1.884 2.509 2.114
2.564 1.125 1.742 1.572 1.489
Au >= 3.00 < 4.00 g/t 1.071 0.914 0.575 1.305 2.321 2.467 Au >= 4.00 < 5.00 g/t 2.603 5.170 4.099 2.522 1.642 1.962 5.770 6.119 12.941 4.485 1.260 1.138
Au >= 5.00 g/t 3.380 7.794 15.648 1.465 1.518
3.712 7.111 8.798 1.188 1.390
4.243 7.247 6.237
5.826 6.180
2.314 2.241 1.719 Au in 2 m Composites 1.192 1.162 0.911 1.239 1.152
1.426 0.701 1.234
1.045 0.853 0.687
1.630 2.693 0.715
2.260 2.135 1.178
1.632 1.044 3.787 6355700N 6355700N 1.967 1.743 3.469
2.318 2.299 4.355
1.660 2.849 2.503 2.361
2.258 4.349 3.537
2.194 2.059 5.207
2.324 3.985 4.777
2.759 4.869
3.100 4.369
2.884 3.402
5.205
3.435 3.936
4.074
2.758
1.158
1.032 1.349
1.916 2.935 6355600N 6355600N 2.020 2.245
2.947
3.023
2.121 3.014
2.280 2.424 2.740
2.367 2.216 1.106 2.701 4.710
1.464 1.944 1.811 3.039 4.346
1.575 1.944 3.041 5.296
4.337
CLIFF CREEK NORTH 1750 LEVEL SHOWING GOLD (g/t)
607500E 607600E
6355500N 6355500N
Figure 14-6: Cliff Creek North 1750 Level showing estimated gold grades
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14.2.3 Duke's Ridge Zone
Resource Estimation Methodologies
A mineral resource estimate for the Duke's Ridge Zone was done using the following parameters and procedures (note - only those that differ from those described in Section 14.2.2 above are presented):
The methods used by Doug Blanchflower to develop geologic 3D solids to constrain mineralization are identical to those used for the Cliff Creek North Zone. The 3D solids for the Duke's Ridge Zone are shown in Figure 14-7. Drill holes were compared to the mineralized solids and individual assays were tagged if inside or outside these solids. A total of 46 drill holes penetrated the Duke's Ridge solids. Assay statistics for gold and silver sorted by Domain show that: (i) for 321 gold assays, the mean and maximum values within Mineralized Solids are 3.07 g/t and 206.9 g/t respectively; and (ii) for 321 silver assays, the mean and maximum values within Mineralized Solids are 99.17 g/t and 2,249.8 g/t respectively. Statistics for the Waste Domain show that: (i) for 589 gold assays, the mean and maximum values are 0.22 g/t and 3.9 g/t respectively; and (ii) for 589 silver assays, the mean and maximum values are 10.32 g/t and 103.7 g/t respectively. For Mineralized Solids, the cap levels were determined to be 34.0 g/t Au and 1,462 g/t Ag; 3 gold assays and 2 silver assays were capped. For Waste, the cap levels were determined to be 1.0 g/t Au and 55 g/t Ag; 9 gold assays and 5 silver assays were capped. The results of capping a relatively few samples show that while mean grades have been slightly reduced for both domains, the standard deviations and as a result the coefficients of variation have been significantly reduced. At Dukes Ridge, 86% of assays were taken at 1.0 m sample lengths. Similar to the Cliff Creek North Zone, a two metre composite length was selected to approximate a possible mining height. Brief discussions of variography, the block model, bulk density, grade interpolation, the mineral resource and block model verification are presented under the separate sub-headings that follow.
Variography
Pairwise relative semivariograms were used to model gold and silver in both domains. Within the Mineralized Domain, both gold and silver were modeled along strike (Azimuth 308o, Dip 0o), perpendicular to strike (Azimuth 218o, Dip 0o) and in the vertical direction (Azimuth 0o, Dip -90o). In all cases nested spherical models were fit to the data.
In the Mineralized Solids, the longest continuity (with a long range of 60 m) for gold was found in the vertical direction; for silver, the longest continuity (with a long range of 70 m) was found both along strike and in the vertical direction. The long range perpendicular to strike is 36 m. The nugget to sill ratios at Duke's Ridge of 50% for gold and 42% for silver are relatively high.
Additionally, gold and silver were modeled in waste; isotropy was assumed and nested spherical models were produced.
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Figure 14-7: Isometric view looking northeast showing Duke’s Ridge Mineralized Solids, drill hole and trench traces and surface topography
Block Model
The methodology for creating the block model at Duke's Ridge was identical to that used for creating the Cliff Creek North block model.
The origin for the Dukes Ridge Block Model is as follows:
Lower left corner of model 607950 E Column size = 5 m 150 columns 6355075 N Row size = 5 m 105 rows Top of model 1900 Elevation Level size = 5 m 50 levels No Rotation
Bulk Density
During the 2015 drill campaign a total of 50 specific gravity measurements were taken on drill core from the Duke's Ridge Zone. One assay interval had two measurements and one value indicating a negative specific gravity was deleted, leaving an adjusted total of 48 measurements. All were done in the field using the Archimedes methodology.
The average specific gravities for the Duke's Ridge mineralized and waste zones were determined to be 2.58 and 2.60 respectively. The former value was used to convert volume to tonnage for blocks within the mineralized zones; waste portions of blocks used the latter specific gravity value.
Grade Interpolation
Similar to Cliff Creek North, grades for gold and silver at Duke's Ridge were interpolated into blocks by Ordinary Kriging using the same methodologies described in Section 14.2.2.
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For Pass 1 at Duke's Ridge, the dimensions of the ellipsoid were set to ¼ of the semivariogram range (i.e. to 12.5 m along strike, 7.5 m across strike and 15.0 m in the vertical direction for gold, and to 17.5 m along strike, 9.0 m across strike and 17.5 m in the vertical direction for silver). A minimum 4 composites with a maximum of 3 from any given drill hole were required to estimate a block. For blocks not estimated in Pass 1 a second pass, with search ellipsoid dimensions set to ½ the semivariogram range (i.e. to 25.0 m along strike, 15.0 m across strike and 30.0 m in the vertical direction for gold, and to 35.0 m along strike, 18.0 m across strike and 35.0 m in the vertical direction for silver), was completed. A third pass using the full range and a fourth pass using twice the range completed the kriging. In all passes the maximum number of composites was set to 12. If more than 12 composites were found in the search the closest 12 were used.
Mineral Resource
Based on the 2015 study reported by GCL, delineated mineralization of the Duke's Ridge Zone is classified as a resource according to the definitions as adopted by CIM Council on May 10, 2014 and incorporated, by reference, into National Instrument 43-101. At this time the entire resource is classified as inferred due to drill hole density and the limited number of blocks estimated in Pass 1 and 2.
No economic evaluations have been completed by PPM on the Duke's Ridge Zone and as a result an economic cut-off for it is unknown.
The Duke's Ridge Resource, estimated using a number of different AuEQ cut-off grades, is presented in Table 14-2. The assumptions and formula for gold equivalent are the same as shown in Section 14.2.2.
Block Model Verification
The tool(s) used for the verification of the Duke's Ridge block model were the same as those described for the verification of the Cliff Creek North block model. Examples of level plans are shown in Figures 14- 8 to 14-10. Again the results were reasonable with no bias indicated.
Table 14-2: Dukes Ridge Inferred Resource
AuEQ Cut-off Tonnes > Cut-off Grade>Cut-off Contained Metal (g/t) (tonnes) Au (g/t) Ag (g/t) AuEQ (g/t) Au (ozs) Ag (ozs) 1.00 403,000 2.07 76.88 2.87 27,000 1,000,000 2.00 282,000 2.45 89.00 3.38 22,000 810,000 3.00 133,000 3.25 113.38 4.43 14,000 480,000 3.50 85,000 3.78 125.53 5.08 10,000 340,000 4.00 58,000 4.30 139.13 5.75 8,000 260,000 4.50 43,000 4.65 155.00 6.26 6,000 210,000 5.00 33,000 4.96 171.20 6.74 5,000 180,000 6.00 18,000 5.59 208.99 7.77 3,200 121,000 7.00 10,000 6.03 273.70 8.88 1,900 88,000 8.00 7,000 6.41 308.85 9.63 1,400 70,000
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608000E 608100E 608200E 608300E 608400E 608500E 608600E
1.154 1.162
1.158 1.174
1.046 1.101 1.147 1.162 1.179 6355600N 1.111 1.148 1.161
0.821 0.833 1.036 1.063 1.113 1.146 1.150 1.157
0.824 0.840 1.016 1.095
0.813 0.825 1.020 1.036
0.816 6355500N 6355600N
1.303 1.303
1.570 1.274 1.309 2.081 6355400N 6355500N 1.266 1.259 1.291 1.586 2.438 2.924
3.344 3.051 1.249 1.594 1.676 2.283 2.339 2.318
1.719 1.356 2.002 2.180 1.789
3.480 2.658 1.346 1.337 1.775 1.745 2.385
1.307 1.315 2.828
1.295 1.300 3.406 2.860 2.706 2.536
3.678 3.850 4.439 2.240 1.819 1.711 1.574
4.287 4.576 3.877 1.466 1.334 1.238
4.325 4.320 4.219 3.535 1.582 1.589
1.450 1.375 1.279 1.329 3.791 2.355 1.480 1.212 1.161
1.860 1.367 1.321 1.358 2.036 1.619 1.181 0.980 0.958
1.799 1.713 1.587 1.773 1.093 1.024
1.750 1.622 1.663 1.865 1.024 0.847
1.722 1.361 1.189 1.194 1.313 0.785 0.829 0.862
1.315 1.319 1.332 1.240 0.826 0.848 0.822 0.744 1.472 0.939 0.899 0.966 1.420 1.844 LEGEND 1.829 2.704 10.144 Au > 0.0 < 0.50 g/t
2.995 4.852 5.771 3.098 1.257 1.017
4.006 4.588 8.454 6.187 2.074 0.881 1.310 Au >= 0.50 <1.00 g/t 6355300N 6355400N 4.885 5.928 5.632 1.294 0.855 2.396 2.946 Au >=1.00 <2.00 g/t 3.711 4.073 1.742 1.643 3.023 2.897 3.844 2.268 2.823 2.412 2.823 3.522 3.264 3.422 Au >=2.00 < 3.00 g/t
2.847 2.218 2.492 Au >=3.00 < 4.00 g/t
4.096 2.469 2.725 2.672
2.144 5.330 2.635 2.562 Au >= 4.00 g/t
0.927 1.878 3.121 2.352
2.354 0.972 1.290 1.247 1.300 1.704 1.373
2.341 2.481 2.084 1.322 1.310 0.934 0.964 1.027 1.331 1.351 0.917 1.262 0.822
2.440 2.678 2.176 1.374 1.676 1.104 1.114 0.987 0.881 1.329 1.080 1.397 1.137 1.190
1.302 1.301 1.207 1.147 1.196 1.155 1.136 1.535 Au in 2 m Composites
1.146 1.111 1.414 1.700 1.709
1.235 1.443 1.667 6355200N 6355300N
2.181 1.978 1.962 2.072 2.262 2.386 2.457 2.399 1.744 1.734 1.547 1.559 1.235 1.007 1.025 1.110 1.359 1.071 1.064 1.056 1.049 1.246 1.259 1.271 1.280 1.236 1.237 1.237 1.237
1.298 1.786 1.761 1.718 1.570 1.636 1.249 0.899 1.041 1.408 1.362 1.346 1.083 1.064 1.052 1.046 1.042 1.039
2.491 2.204 2.045 2.523 2.373 2.374 2.334 2.393 2.445 2.483 2.399 2.316 2.380
2.496 2.163 6355100N 6355200N
DUKES RIDGE 1810 LEVEL SHOWING GOLD (g/t)
608000E 608100E 608200E 608300E 608400E 608500E 608600E
6355000N 6355000N 6355100N
Figure 14-8: Duke’s Ridge 1810 Level showing estimated gold grades
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608000E 608100E 608200E 608300E 608400E 608500E 608600E
1.182
1.187 1.185
1.065 1.196 1.186 1.187 6355600N 0.826 1.029 1.089 1.195 1.188
0.818 0.838 1.030 1.058 1.093 1.063 1.197
0.817 0.850 0.872 1.057
0.801 0.821 0.846 1.033
0.809
0.815 6355500N 6355600N
1.312 1.315 1.317 1.317
1.306 1.307 1.850
1.210 1.313 1.610 1.744 6355400N 6355500N 3.458 3.298 1.654 1.697 1.753 1.828 2.338
4.391 4.363 3.578 1.736 1.786 1.729 1.645 2.184
3.109 1.701 1.606 1.543 1.257 1.696 1.653
3.065 2.822 3.020 1.588 1.561 1.251 1.258 1.688 1.640
2.359 1.354 1.259 1.254 1.257 1.271
1.268 3.222 3.426
3.573 4.337 4.059
3.920 3.666
2.484 3.918 3.552
1.440 1.350 1.304
1.360 1.412 1.924 1.738
1.809 1.949
1.803 1.808 2.136 1.844 0.925 0.922
1.379 1.388 1.466 1.467 0.906 0.931 0.840
1.231 1.321 1.537 1.493 1.305 0.848 0.764 0.733 1.310 0.913 0.768 0.845 LEGEND Au > 0.0 < 0.50 g/t 3.490 5.179 3.119 0.925 0.975
3.813 8.484 7.133 3.220 0.930 0.943 0.901 Au >= 0.50 <1.00 g/t 6355300N 6355400N 4.975 7.018 2.270 0.799
7.549 5.951 0.663 2.361 2.605 3.339 Au >=1.00 <2.00 g/t 3.269 2.823 3.039 4.065 4.463 Au >=2.00 < 3.00 g/t 4.215 Au >=3.00 < 4.00 g/t
2.311 2.933 2.802
4.144 2.136 2.960 2.354 Au >= 4.00 g/t
1.417 1.181 3.660 1.321 1.438
1.454 1.338 1.295 1.260 1.135 2.057 1.061
2.184 2.236 1.473 1.345 1.307 1.281 1.002 0.910 1.760 0.959 1.024 1.172 0.618
2.261 2.074 1.354 1.315 1.140 1.684 1.071 1.118 1.285 1.171 1.714 0.797 1.472 1.377 1.173
1.283 1.361 1.144 1.453 1.173 1.151 1.145 Au in 2 m Composites
1.657 1.142 1.118 1.416 1.811
1.434 1.741 6355200N 6355300N
2.394 2.341 2.362 2.359 2.460 2.540 2.510 2.448 1.640 1.642 1.510 1.456 1.469 1.379 1.061 1.025 1.048 1.037 1.035 1.185 1.213 1.234 1.250 1.265 1.277
1.581 1.724 1.691 1.709 1.547 1.479 1.620 1.239 1.027 1.106 1.063 1.060 1.058 1.054 1.238 1.251 1.263 1.274 1.282 1.236 1.237 1.237 1.236 1.236
2.575 2.503 2.427 2.384 2.596
2.626 2.545 2.502 6355100N 6355200N
DUKES RIDGE 1820 LEVEL SHOWING GOLD (g/t)
608000E 608100E 608200E 608300E 608400E 608500E 608600E
6355000N 6355000N 6355100N
Figure 14-9: Duke’s Ridge 1820 Level showing estimated gold grades
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608000E 608100E 608200E 608300E 608400E 608500E 608600E 6355600N
0.816 0.828 1.026
0.814 0.832 0.844
0.805 0.816 0.835
0.810 6355500N 6355600N
1.560 1.546 1.521 1.533 1.722 LEGEND 1.332 1.333 1.753 Au > 0.0 < 0.50 g/t
2.981 1.758 1.776 1.877 6355400N 6355500N 3.883 3.480 2.839 2.039 2.188 2.231 1.881 Au >= 0.50 <1.00 g/t 3.953 2.741 2.230 1.997 1.773 1.774 Au >=1.00 <2.00 g/t 3.865 1.709 1.652 1.322
2.872 2.784 3.169 1.636 1.577 1.176 Au >=2.00 < 3.00 g/t 2.342 1.730 1.277 Au >=3.00 < 4.00 g/t Au >= 4.00 g/t
2.674
1.516 1.454 1.352
1.456 2.037 Au in 2 m Composites 2.045 2.174
1.071 1.062 6355300N 6355400N 2.638 0.877 0.922
4.445 1.953 2.457 2.874 3.822
3.436 3.143 3.584 4.294 4.948
4.717 4.348
1.148 1.133 3.234 2.965
1.416 1.404 1.944 1.239 1.224 1.936 2.207 2.317 2.850 2.595 2.915
1.444 1.427 1.260 1.265 1.247 1.188 0.950 1.076 1.142 1.658 2.005 2.244 1.975 2.318
1.434 1.297 1.320 1.118 1.640 1.703 2.196 1.759 1.742 1.664 2.051
1.294 1.311 1.784 1.174 1.166 1.820
1.777 1.868 2.056 2.152
2.425 2.514 2.456
2.356 6355200N 6355300N
2.617 2.584 2.688 2.758 2.629 2.598 2.535 1.366 1.379 1.458 1.466 1.480 1.532 0.980 0.980 1.057 1.054 1.198 1.203 1.215
1.837 1.639 1.675 1.637 1.554 1.497 1.441 1.397 1.067 0.965 1.061 1.060 1.059 1.223 1.233 1.245 1.259 1.271 1.280 1.235 1.237 1.237 1.236 1.233 1.229 1.225 1.101 1.264
1.932 6355100N 6355200N
DUKES RIDGE 1830 LEVEL SHOWING GOLD (g/t)
608000E 608100E 608200E 608300E 608400E 608500E 608600E
6355000N 6355000N 6355100N
Figure 14-10: Duke’s Ridge 1830 Level showing estimated gold grades
15 MINERAL RESERVE ESTIMATES
15.1 HISTORICAL MINERAL RESERVE ESTIMATES
15.1.1 Introduction
The mineral 'reserve' estimates done by Cheni prior to production start-up and later during the 1989-92 production period on the property, and those done by Wright Engineers in their Feasibility Studies completed during the period 1985-87, are discussed in this section. All were completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects and used categories other than those stipulated for current use (as previously discussed in Section 14.1). They are considered to be historical estimates only and are not relied upon by the authors of this Report or by PPM. In the discussions that follow, the term 'reserve' has been qualified by parentheses in order to alert the reader that its historical use does not meet current standards.
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The 'base case' starting point for a discussion of historical mineral reserve estimates on the Project is the Summary of Reserves presented in Wright Engineers' Feasibility Study: Volume 1 Report (February 1985). In it, they present 'recoverable ore reserves' for the AGB, Cliff Creek and Duke's Ridge Zones totaling 979,500 tons grading 0.203 oz. Au per ton and 7.52 oz. Ag per ton using the following parameters and procedures:
Calculations were carried out using basic drill hole and trench data provided by SEREM. No check sampling was undertaken and assay results as reported were accepted as valid. High (erratic) gold and silver values occur in drill core at scattered points in all three deposits. These were cut or capped using the following cut limits: (i) 100 g/t (2.9 oz. per ton) Au and 2750 g/t (80 oz. per ton) Ag for the AGB Zone; (ii) 73 g/t (2.1 oz. per ton) Au and 1200 g/t (35 oz. per ton) Ag for the Cliff Creek Zone; and (iii) 73 g/t (2.1 oz. per ton) Au and 1000 g/t (29 oz. per ton) Ag for the Duke's Ridge Zone. All reserves were diluted. A minimum horizontal undiluted block width of 2.0 m was generally used. The grade of diluting blocks was determined from drill log assays on the boundaries of individual blocks. Reserves were estimated using a cut-off grade of 0.15 oz. per ton (5.14 g/t) AuEQ at a conversion factor for gold equivalency of 1 oz. Au = 50 oz. Ag. Reserves were classified as 'recoverable' using a criteria of 95% ultimate recovery of reserves based on shrinkage stoping as the essential method of mining. Hawkins, in his 2003 Technical Report, comments that he thought that this recovery factor was perhaps "too optimistic". Regarding reserve blocks, they were extended half-way to the adjacent section in rectangular form, as shown on longitudinal sections. In their report, Wright Engineers commented that they felt it "important to establish continuity of the ore as projected, by further direct development in selected areas, in order to raise the confidence level of reserves". To convert the volume of reserve blocks to tonnes, a specific gravity value of 2.7 was used. After completion of the above estimates, Wright Engineers concluded "There are strong indications of additional ore being found".
In the sub-sections that follow, additional 'reserve' data for the above three deposits and the small but high grade Phoenix deposit is presented. In those cases where there was an increase or decrease in 'reserves', or where there was a change in the disposition of 'reserves' from an earlier to later period, such information is presented in chronological order.
15.1.2 AGB Zone
The Lawyers property reached commercial production on March 1, 1989, with initial production coming exclusively from the AGB Zone. At the start of production, the updated 'reserve' in this zone, estimated by Cheni as of December 31, 1988 and disclosed in Cheni's 1988 Annual Report, was 498,900 tons grading 0.243 oz. Au per ton and 7.69 oz. Ag per ton. This 'reserve' was diluted and the cut-off grade used to calculate it was 0.15 oz. per ton AuEQ at a conversion factor for gold equivalency of 1 oz. Au = 50 oz. Ag.
During the period 1989-92, a total of 682,353 tons were milled at the on-site processing facility. About 75% of the production tons come from the AGB Zone which was mined out completely by mine closing. No mineral inventory remains in this zone at present.
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15.1.3 Cliff Creek Zone
In the Cliff Creek Zone, 'recoverable ore reserves', as estimated by Wright Engineers in February 1985 and which partly comprise the 'reserve' total presented in Section 15.1.1, were 464,900 tons grading 0.164 oz. Au per ton and 7.76 oz. Ag per ton.
The zone's 'reserves' were later revised upwards following extensive diamond drilling completed on the zone in 1987. As disclosed in Cheni's 1988 Annual Report, 'reserves' as of December 31, 1988 were reported to be 838,900 tons grading 0.183 oz. Au per ton and 7.12 oz. Ag per ton in the Probable category and 524,500 tons grading 0.170 oz. Au per ton and 6.57 oz. Ag per ton in the Possible category. Both 'reserve' categories were calculated using a cut-off grade of 0.15 oz. per ton AuEQ at a conversion factor for gold equivalency of 1 oz. Au = 50 oz. Ag. Hawkins (2003) states that 'reserves' in the Probable category were diluted while those in the Possible category were undiluted.
The higher cut-off grade of 0.20 oz. AuEQ per ton adopted by Cheni in 1990, combined with results from a 1990 surface and underground diamond drilling program on the Cliff Creek Zone, reduced its mineral inventory considerably. As disclosed in Cheni's 1990 Annual Report, 'reserves' as of December 31, 1990 were 124,134 tons grading 0.264 oz. Au per ton and 8.28 oz. Ag per ton in the Proven category, 233,519 tons grading 0.133 oz. Au per ton and 8.40 oz. Ag per ton in the Probable category and 102,236 tons grading 0.263 oz. Au per ton and 9.88 oz. Ag per ton in the 'Possible' category. In the current CIM classification of mineral reserves, there is no such category as 'Possible' reserves.
Hawkins (2003) reported that the above Proven 'reserve' of 124,134 tons came from a developed block in the Cliff Creek North Zone; he also reported that this tonnage was subsequently mined in 1991. The original source data to confirm these findings was unavailable to the authors.
In 1991, corporately, Cheni faced a challenging financial situation which prevented them from fully- developing 'reserves' identified in the North and Central Zones. By year-end 1991, recalculated, diluted, 'reserves' reported in Cheni's 1991 Annual Report were down to 29,614 tons grading 0.220 oz. Au per ton and 6.27 oz. Ag per ton in the Cliff Creek North Zone and 40,067 tons grading 0.229 oz. Au per ton and 7.29 oz. Ag per ton in the Cliff Creek Central Zone. The 'reserves' in both zones were classified as 'Possible' which, as noted above, is a term no longer in use. They were calculated using a cut-off of 0.20 oz. AuEQ per ton at a conversion factor for gold equivalency of 1 oz. Au = 93 oz. Ag.
The above year-end 1991 'reserves' were 'written-off' by Cheni in 1992. Hawkins (2003) was of the opinion that the writing-off of these 'reserves' was an accounting exercise ("reserve revision") based on the higher 0.20 AuEQ per ton cut-off grade and lack of capital to develop reserves. He stated that "If one was to lower the cut-off grade back to a gold equivalent of 0.15 oz. Au/ton the additional tonnages reappear". The authors of this report agree with this statement and appreciate the fact that arbitrarily writing-off mineral reserves or resources at any given point in time, based on a myriad of economic factors, does not eliminate the existence of an 'in-situ' mineral resource.
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15.1.4 Duke's Ridge Zone
In the Duke's Ridge Zone, 'recoverable ore reserves', as estimated by Wright Engineers in February 1985 and which partly comprise the 'reserve' total presented in Section 15.1.1, were 64,600 tons grading 0.255 oz. Au per ton and 7.53 oz. Ag per ton.
The higher cut-off grade of 0.20 oz. AuEQ per ton adopted by Cheni in 1990, combined with results from a 1990 16-hole surface diamond drilling program on the Duke's Ridge Zone, reduced its mineral inventory considerably. As disclosed in Cheni's 1991 Annual Report, 'reserves' as of December 31, 1991 were 23,991 tons grading 0.232 oz. Au per ton and 6.33 oz. Ag per ton in the 'Possible' category.
The above year-end 1991 'reserves' were 'written-off' by Cheni in 1992. No mining in the Duke's Ridge Zone was done during the Lawyers production period of 1989-92 nor has any been done since then.
15.1.5 Phoenix Zone
The initial reserve for the Phoenix Zone, discovered by surface diamond drilling in 1992, was 3,245 tons grading 1.69 oz/t Au and 101.7 oz/ton Ag. No information is available as to the methods and parameters used by Cheni to estimate 'reserves' for this small but high grade deposit.
It was accessed by a 90 m decline, and mined to a depth of 30 m below surface in several stopes; the ore was milled in November, 1992, prior to shutdown of the operations. A total of 5439 tons of ore was ultimately extracted from the zone producing 6,713 ounces of gold and 296,084 ounces of silver.
A 19 hole underground diamond drilling program, completed in 1992, indicated that the zone remains open to depth and to the east. There may exist the potential here to develop additional mineral resources with further surface and/or underground diamond drilling.
15.2 2015 PPM MINERAL RESERVE ESTIMATES In 2015, PPM and its consultants completed no mineral reserve estimates on any of the known deposits within the current limit of the Project area.
16 MINING METHOD The Lawyers Project is not an ‘advanced property’ as defined by NI 43-101; therefore this section is not applicable.
17 RECOVERY METHODS The Lawyers Project is not an ‘advanced property’ as defined by NI 43-101; therefore this section is not applicable.
18 PROJECT INFRASTRUCTURE The Lawyers Project is not an ‘advanced property’ as defined by NI 43-101; therefore this section is not applicable.
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19 MARKETS STUDIES AND CONTRACTS The Lawyers Project is not an ‘advanced property’ as defined by NI 43-101; therefore this section is not applicable.
20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT The Lawyers Project is not an ‘advanced property’ as defined by NI 43-101; therefore this section is not applicable.
21 CAPITAL AND OPERATING COSTS The Lawyers Project is not an ‘advanced property’ as defined by NI 43-101; therefore this section is not applicable.
22 ECONOMIC ANALYSIS The Lawyers Project is not an ‘advanced property’ as defined by NI 43-101; therefore this section is not applicable.
23 ADJACENT PROPERTIES
23.1 INTRODUCTION In preparing this section of the report, the writers relied mainly upon public domain minfile descriptions and assessment reports for three past-producing properties and two developed prospects, all of which are covered by adjacent or nearby external competitors’ claims and by definition, are considered Adjacent Properties. Supplementary sources of information for this section were Hawkins’ 2006 and Bowen's 2014 Technical Reports on the Ranch Property and some publically-traded companies' websites and news releases. All references and sources of information are listed in Section 27 of the Report; property locations are shown on Figure 23.1. Readers are cautioned, however, that other than the Ranch property (the subject of Bowen's 2014 Technical Report), the authors of this Report have not verified the presented information and all information, including that related to the Ranch property, is not necessarily representative or indicative of mineralization found or that may be found on the Lawyers Project.
23.2 PAST PRODUCERS
23.2.1 Ranch (094E 079, 091 and 099)
The Ranch property is located about 19 km northwest of the Lawyers Project. It is currently covered by claims which are 100% owned by Guardsmen Resources Ltd. of Burnaby, B.C., an affiliated company to PPM.
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Past work on the Ranch property has identified 19 zones of gold mineralization over a 25 km2 area. In 1991, Cheni Gold Mines Inc. surface-mined an aggregate of 59,000 tonnes from three small pits in the Bonanza (094E 079), Thesis III (094E 091) and BV Zones (094E 099). Approximately 41,000 tonnes of ore were treated at the Lawyers mill and about 10,000 ounces of gold were recovered. During August 1986, Energex Mines Ltd. operated a 6 tonnes per day (tpd) pilot plant on the property; a total of 209 tonnes of high-grade surface ore from the Thesis III A Zone was processed.
The property is underlain mainly by trachyandesite ash-flows to lapilli tuffs of the Adoogacho and Metsantan Members of the Lower Jurassic Toodoggone Formation. The volcanic sequence is intruded locally by dykes which are compositionally similar to the volcanic units and may represent feeder systems to them. Felsic dykes and irregular bodies of dacitic, rhyo-dacitic and rhyolitic composition have been encountered in a number of drill holes. These intrusive rocks may be genetically linked to late-stage ore- forming fluids.
Alteration on the Ranch property is of the high-sulphidation (acid-sulphate) epithermal type, characterized by widespread argillization and silicification of andesite-dacite hosts rocks. Important alteration assemblages include alunite-quartz, hematite-illite-quartz, dickite-quartz, quartz-barite and quartz-pyrite, working inwards and downwards in a typical, zoned epithermal alteration system. Principal ore minerals include argentite, electrum, native gold and silver and lesser chalcopyrite, galena and sphalerite. Also present in the area but not confirmed on the property is porphyry-style mineralization.
As currently known, all significant gold mineralization on the Ranch property is hosted by silica-sulphate and silica-sulphide bodies flanked by argillically altered zones. They are controlled by moderately to steeply-dipping fault zones with north-northwesterly, northwesterly and northeasterly orientations. The gold-bearing zones have a crudely elliptical shape and are discontinuous along the controlling fault systems. In the Bonanza deposit, some of the gold-bearing zones are thought to have formed by selective replacement of more permeable tuff units within the volcanic strata. Across and adjacent to the property, gold mineralization is known to occur over a vertical range of about 300 m.
Historical resource estimates have been done on 8 mineralized zones, including the past-producing Bonanza, Thesis III and BV Zones. Post-mining resource estimates for these three deposits include: (i) at the Bonanza Zone, using a 5 g/t Au cut-off, from 69,225 tonnes grading 14.06 g/t Au (Cheni, 1992) to 130,490 tonnes grading 9.80 g/t Au (Micromine, 2007); (ii) at the Thesis III Zone, using a 3.5 g/t Au cut- off, from 13,012 tonnes grading 16.75 g/t Au (Cheni, 1992) to 49,170 tonnes grading 8.03 g/t Au (Micromine, 2007); and (iii) at the BV Zone, also using a 3.5 g/t Au cut-off, 33,870 tonnes grading 9.53 g/t Au (Micromine, 2007). The Cheni estimates were prepared before the coming into force of the NI 43-101 Standards of Disclosure for Mineral Projects. While Micromine's resource estimates were done after the coming into force of the NI 43-101 Standards of Disclosure for Mineral Projects, Micromine states in the Executive Summary of their report that "the purpose of the resource modeling was to estimate the magnitude of the property; therefore, the reported resources are not compliant with the NI 43-101, JORC or any equivalent Code". In Bowen's opinion, none of the aforementioned resource estimates should be relied upon.
Considerable exploration potential remains on the Ranch Project. Future discovery of overburden covered near-surface gold deposits, or "blind" deposits at depth, will have to rely more on the drill-
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testing of geophysical targets such as coincident 3D-IP resistivity-chargeability anomalies. The primary exploration target at Ranch will remain as structurally-controlled or replacement-style high sulphidation epithermal gold deposits similar to those previously discovered on the property. A secondary, but no less important target type is a buried porphyry copper-gold deposit for which earlier magnetic and IP surveys have partially delineated coincident geophysical anomalies possibly indicative of this deposit type.
A multi-ounce gold assay (267.4 g/t Au or 7.80 oz. Au per ton) of a 2013 verification rock sample, taken from a 0.6 meter-long channel sample collected on the east wall of the BV pit, indicates that there may be potential for delineating a small tonnage of high grade material amenable to selective open cut extraction.
23.2.2 Baker (094E 026)
The Baker Mine, the first operating lode gold mine in the Toodoggone District, is located about 7 km southeast of the Lawyers Project. It is currently covered by Mining Lease # 243451 which is 100% owned by Multinational Mining Inc. of Vancouver, B.C. The property is currently on care and maintenance.
Gold was discovered in quartz veins on the Baker (Chappelle) property in 1969. In 1981, the property was placed into production by DuPont of Canada as a 110 tpd high-grade underground operation on the “A” Vein. Operations ceased in 1983 as reserves were exhausted.
In 1989, with newly developed road access, Sable Resources Ltd. acquired DuPont’s Baker Mill and with improvements, increased production capacity from 110 to 245 tpd and carried out production on the “B” Vein during the period 1991 to 2001. True widths of the A and B vein structures vary from 2.4 to 7.6 m, with typical grades of 0.5 oz. per ton Au, 5 oz. per ton Ag and 1% Cu.
Production statistics available in the minfile data base for the period 1981-97 show that totals of approximately 41,300 ounces of gold, 766,000 ounces of silver and 13,000 kilograms of copper were recovered from the A and B veins. Although additional, small-scale production on the Baker property has been carried out on an intermittent, seasonal basis since 1997, no reliable production totals are available in the public domain.
At the Baker Mine property, seven quartz vein systems occur within Takla Group host rocks; two (the A and B Veins) have been mined. All veins occur within an uplifted block of brightly iron-stained basalt and andesite flows. The veins occupy two principal trends, northeast and east-southeast. Wallrocks are variably silicified and altered to sericite, clay minerals and carbonate with intensity of alteration increasing towards vein structures.
Gold-silver values are generally associated with highly fractured and occasionally brecciated white to grey, vuggy quartz veins containing 1 to 10 per cent pyrite, and to a lesser extent, occur in silicified wallrock. Higher grade mineralization is associated with grey quartz, which occasionally contains visible argentite. The latter is commonly associated with disseminated grains of pyrite, chalcopyrite and very minor sphalerite. High grade gold-silver values occasionally occur in narrow, 1-5 cm wide, crosscutting silicified shears. Visible gold is rare. Significant precious metals were found to be contained in a flat-lying shoot 200 m in length by 3 m wide and extending to a depth of 40 m below surface.
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The small tonnage gold-silver deposits around the Baker Mine are very high grade, typical of epithermal type deposits. Although many of these deposits are currently without established mineral reserves, they have good potential for the discovery of additional mineralization. The Baker property’s past production is indicative of the mineral potential for this type of deposit in the Toodoggone District.
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590000 600000 610000 620000 630000 640000
Claw Mountain (! (! Tseehee Creek
Harmon Creek
Moosehorn Creek (! (! Harmon Peak Metsantan Range Adoogacho Creek Hiamadam Creek Pulpit Lake Midas Creek Peak Range μ 6380000 6380000 FINLAY ! ( Junkers Creek RUSSEL Breccia Peak PARK Ranch FINLAY Property (! (! Midas Lake RUSSEL
(! PARK Moyez Creek (!
Lower Belle Lake
Dedeeya Creek Belle Creek (! Contact Peak Peak Range
METSANTAN Katharine Creek LAKE ! Abesti Creek (!(! (! ^_( Upper Belle Lake (! McClair Creek Tuff Peak (! (!
GULLEY Oxide Creek (! Mulvaney Creek (! SPATSIZI ^_ BONANZA RIDGE (! PLATEAU (! (! Oxide Peak Jack Lee Creek Alberts Hump (! (! WILDERNESS PARK Ç ^_ Gordonia Gulch ALBERTS BBX GOLDEN (! The MacGregors (! BINGO ^_ SADDLE FURLONG (! HUMP ^_ ^_(! (! Mount Gordonia Creek ^_ ERIC (! SOUTH^_(! ^_ ^_ (! (! THESIS I (! Ç (! PORPHYRY PEARL Belle Creek HUMP THESIS II/III ^_ ^_JK ^_(! (! Ç(! BV BLOSS SURPRISE (! (! RING (!
6370000 ^_ ! 6370000 ^_ ^_ ( ^_ MANDUSA (! BV SOUTH ^_ STEVE'S (! LEXIM ^_(! Antoine Louis Creek (! ^_(! PATTI (! (! (! (! (! Metsantan Creek Alberts Hump Creek ^_ Mount Hartley METS JD Toodoggone Peak (! (! ^_(! (!^_ Mount Estabrook Bronlund Peak Metsantan Creek Mount Katharine (! (! (! Katharine Creek (!
Metsantan Lake (! Mulvaney Creek (!
(! (! SPATSIZI PLATEAU McClair Creek Toodoggone Lake Jack Lee Creek WILDERNESS PARK Moosehorn Creek DUKE Metsantan Pass Kadah Lake ^_(! Toodoggone River MCCLAIR CREEK PLACER (! Kadah Creek Ç(! (! (!
(! Bend Mountain Bronlund Creek Mount Graves(! Lawyers Creek (! (! KODAH Lawyers !( (! ^_ (! (! GOLDEN STRANGER Property Saunders Creek (! (! (!
6360000 (! ^_ (! 6360000 ROUND ^_^_ROUND MOUNTAIN (! NEW LAW MOUNTAIN EAST Edozadelly Mountain ^_(! WEST Jock Creek SPATSIZI PLATEAU (! (! WILDERNESS PARK (! SILVER POND (! (! NORTH AGB ^_(! Ç(! (! (! (! CLIFF CREEK (! (! (! Ç (! ^_(! DUKE'S RIDGE (! GOLDEN NEIGHBOR 1 Ç (! PHOENIX (! (! (! ^_ (! ^_(! ^_SILVER POND AMETHYST (! SILVER POND WEST^_(! SILVER POND SOUTH (!
(! (! ^_ (! The Pillar SILVER POND SILVER CREEK^_ (! (! (! MARMOT DREAM ^_SILVER POND (! LAKE PIL (! ^_(! RIDGE ^_ (! (! (! (!
Samuel Black Range (!
BAKER ! Ç(! ( Lawyers Pass (! (! (! ") Sable Mill (! (! (! (! 6350000 6350000
(! (! Chappelle Creek (! Bu Omineca Mountains (! BRENDA (! (! SHASTA ^_ Ç(! (! (! Jock Creek (! Chappelle Creek (! (!
(!
(! Black Lake
(! Pau Creek (! (! (!
(!
Jellicoe Creek PINE ^_(! (! (! MEX ^_(! Sturdee (! (! (! Airstrip Drybrough Peak (! Jellicoe Creek (! (! (! Giegeric (! (! (! (! (! (! Brothers Lake (! 6340000 6340000
(!
(!
(! (! (!
(! (! Sturdee River (!
(! (! (! (! (! (! Sturdee River (!
Brothers Peaks Red Crag
Firesteel River Attycelley Creek (!
Cascadero Falls (!
6330000 (! 6330000 (! Stalk Creek (! (! (! (! (! Attycelley Creek
Finlay River (!
Stalk Creek (! Bar Butte (! Thomas Peak (! KEMESS UNDERGROUND (! (! Duncan Lake ^_
(! (! Mount Rognaas Kemess Creek (! Kitchener Lake (!
(!
(! (! Trygve Creek ui Range (!
Bicknell Lake
Rognaas Creek KEMESS SOUTH ! Dennis Peak Ç( Kemess Creek Trygve Creek (!
6320000 Thutade Lake 6320000 (!
Trygve Lake
TATLATUI Attichika Creek PARK
Tatlatui Lake
Mount Jorgensen
6310000 Thorne Creek 6310000
Tabletop Creek
Melanistic Peak
Niven River Mount Forrest
590000 600000 610000 620000 630000 640000
I ") Selected Minfile Occurrences Sable Mill Provincial Park Ranch & Lawyers Toodoggone - Properties^_ Kemess Region Ç Mine Road Sturdee Airstrip Smithers !( Prince Adjacent Properties George ^_ Developed Prospect Stream Ranch Property - Guardsmen Resources Inc. (100%) !( Figure 23.1 ^_ Prospect Lake Lawyers Property - PPM Phoenix Precious Metals Corp. (100%)
50k Mapsheets: 94D,E Vancouver Date: 4/8/2016 ^_ !( Projection: NAD 1983 UTM Zone 9N Showing Wetland Mineral Tenure - Other Scale:1:100,000 (! Author: tkwitkoski Sources: Esri, HERE, DeLorme, Last Modified By: tkwitkoski Other Minfile Occurrences Checked By: BL Revision #:
0123450.5
Kilometres Path: C:\15PG0229 MountainSide (Bob Lane)\2400-GIS-LawyersProperty\2420-MXD\Lawyers_AdjacentProperties_Fig23-1_D.mxd LAWYERS PROJECT – TECHNICAL REPORT AND RESOURCE ESTIMATE
23.2.3 Shasta (094E 050)
The Shasta property is located about 15 km southeast of the Lawyers Project and is currently covered by Mining Lease #243454 which is 100% owned by Multinational Mining Inc. of Vancouver, B.C.
The gold-silver deposit on it was discovered in the 1970’s by Newmont Mining, and in the 1980’s it was explored by Homestake Mining and Esso Minerals Canada Limited. In 1989, Esso reported possible reserves of 1,020,000 tonnes @ 5.7 g/t Au, including 537,000 tonnes @ 8.7 g/t Au (Holbek, 1989). These historical estimates were completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects and use categories other than those stipulated for current use. They would now likely be classified as inferred mineral resources.
Since 1989, extensive exploration has been conducted on the Shasta property. Some 257 surface diamond drill holes have identified 11 mineralized zones. Three of these, the Creek, JM and D Zones, have been developed and at least partially exploited. Under an arrangement with International Shasta Resources and Homestake Mining, Sable Resources mined and processed (at the Baker mill) 117,000 tons of ore from the JM and D Zones. The initial 1989 open-pit operation shifted to an underground operation in 1990 and production from the JM and D deposits averaged 50,000 tons each with ore grades of 0.25 oz. Au per ton and 17 oz. Ag per ton. In 2004-05, Sable mined an additional 15,000 tons of ore from an open pit at the Creek Zone. Current plans for the Creek Zone now involve underground development (Sable, 2007).
In total, Sable has extracted over 20,000 ounces of gold and 1.1 million ounces of silver from the Shasta property (Sable, 2007). Similar production totals are shown in the minfile data base for the years 1989-91 and 2000. Although additional, small-scale production on the Shasta property has been carried out on an intermittent, seasonal basis since 2000, no reliable production totals are available in the public domain. In 2013, Sable Resources Ltd. placed their seasonal underground Shasta Mine on care and maintenance.
The Shasta deposit is an epithermal multiphase quartz-carbonate stockwork vein/breccia deposit containing significant silver and gold mineralization. It is spatially related to a dacitic dome of Lower to Middle Jurassic age. Mineralized zones are hosted by pyroclastic rocks that were deposited on the flank of the coeval dacite dome. The pyroclastic rocks, which unconformably overlie Stuhini Group volcanic rocks, belong to the Attycelley Member of the Upper Volcanic Cycle of the Toodoggone Formation.
The Shasta deposits consist of multiple overlapping quartz-calcite stockwork vein/breccias zones that occur as narrow (<1 m) curviplanar breccias that pinch and swell within wider (>10 m), variably altered and veined sections over strike lengths of up to 500 m. Quartz and calcite gangue occur individually in single-stage veins, as multistage banded veins and breccias, and also are intimately mixed in single stage veins. Both gangue minerals display open-space filling textures in banded veins and rare drusy vugs.
Native gold and silver, electrum and acanthite mineralization occurs erratically within quartz and calcite stockwork veins and breccias. Grades of mineralization appear to be independent of the intensity of alteration or brecciation. However, some of the highest silver values occur in late-stage calcite breccia zones. Gold to silver ratios throughout the deposit vary considerably, from 1:10 to 1:100, with a deposit average of about 1:45. Native gold and silver, electrum and acanthite mineralization is associated with
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finely disseminated grey sulphides and coarser grained pyrite. The main sulphide minerals are pyrite, sphalerite, galena and minor chalcopyrite, in decreasing order of abundance.
23.3 DEVELOPED PROSPECTS
23.3.1 Mets (094E 093)
The Mets deposit, situated on Metsantan Mountain, is located about 16 km northwest of the Lawyers Project. It was discovered by Golden Rule Resources Ltd. in 1980 and is currently covered by Mining Lease # 314708 which is 100% owned by Rupert Allen of Victoria, B.C. The property hosts several quartz- barite breccia zones for which Golden Rule, from surface diamond drilling and trenching, defined a historical “measured geological resource” of 143,321 tonnes @ 11.31 g/t Au on the “A” Zone (Evans, 1988). This historical estimate was completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects and uses categories other than those stipulated for current use.
Cheni Gold Mines optioned the property in July 1992. From the above historical resource estimate, Cheni estimated a “probable geological reserve” of 75,000 tons grading 0.384 oz. Au per ton (Cheni, 1992). This revised historical estimate was completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects. It uses categories other than those stipulated for current use. The “probable geological reserve” would now likely be classified as indicated mineral resources.
By September 1992, Cheni had developed the property (using trackless equipment) with a 60 m decline to cross-cut the A Zone and a 120 m-long exploration drift along the zone, mining about 2,300 tonnes of ore and 3,700 tonnes of waste. After the underground program, Cheni estimated diluted reserves of 53,357 tonnes @ 12.0 g/t Au (Cheni, 1992). These historical diluted reserves would likely be comparable to the current CIMM classification for probable reserves. Later in 1992, with additional data, Cheni recalculated mineable reserves to be 48,564 tonnes @ 11.62 g/t Au. These historical mineable reserves would be comparable to the current classification for proven reserves but would have likely been subsequently downgraded to inferred mineral resources. The reduction of reserves was in part due to a grade reduction based on underground sampling of the zone.
The above historical estimates are relevant to other mineral deposits of the area, including those on Lawyers, as they illustrate the application and impact of underground development, detailed underground sampling, dilution and mining recovery on preliminary resource/reserve estimates, as work progresses on developing a deposit.
Cheni’s program also determined there were acid rock drainage issues with the ore; during site reclamation, Cheni put all of the ore and most of the waste back underground. The property was subsequently returned to Golden Rule because of low gold prices.
The Mets developed prospect consists of a tabular core of silicified rock in three separate but genetically linked zones: the A Zone (and its extension), the Footwall Zone and the 400 South Zone. The A zone has a strike length of 140 m, a true thickness of 6 to 10 m and a vertical extent of up to 75 m; it strikes 340° and dips 70°-85° to the west. A mineralized shoot within the A Zone has a gentle northwest plunge.
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The A Zone is hosted by a quartz-barite breccia zone which occurs near the vertical contact between a footwall andesite and a hangingwall dacite unit. Steeply-dipping, thin breccias generally are higher in grade; when the breccia orientation flattens, as it does at depth, grades drop off rapidly. Native gold is the primary ore mineral present with rare occurrences of electrum, argentite, tetrahedrite, pyrite and galena. Gold occurs as free grains and flakes 0.005-2 mm in diameter, adjacent to fragments of quartz and barite within the breccia system. Sulphide mineralization is practically nonexistent in the A Zone.
At its northern end, the A Zone is truncated by the N75 fault, a vertical graben structure striking 050° and dipping 80° south. The block of rock north of the fault is down-dropped, with up to 110 m of vertical displacement. In 1987, deep drilling north of the fault intersected a 4 m wide quartz breccia body (the N75 or A Extension Zone) from which intercepts yielded values ranging from 0.85 g/t Au across 4 m to 22.83 g/t Au across 7.1 m.
The Footwall Zone is a quartz-carbonate breccia body situated within the footwall andesite unit. It has been exposed over a 260 m strike length and is interpreted to strike 340°, with an indeterminate dip. It pinches and swells with a maximum width on surface of 4 m. Its Ag:Au ratio is 2:1 or greater contrasting with a Au:Ag ratio of 10:1 or greater for the A Zone. A one-metre channel sample across it assayed 19.81 g/t Au and 127.86 g/t Ag; a drill intersection in it assayed 19.29 g/t Au over 0.7 m.
Drilling in 1987 also intersected the 400 South Zone, a narrow auriferous quartz breccia body at the same andesite-dacite contact along which the A Zone occurs. Drill intercepts through this zone include 4.11 g/t Au over 1.6 m and 8.03 g/t Au over 1.0 m.
Alteration at the Mets deposit consists of an extensive outer propylitic zone (epidote, chlorite, rare pyrite) and a proximal advanced argillic zone (sericite, kaolinite, dickite) enveloping inner silicic (quartz +/- barite) zones, in both the hangingwall and footwall rocks to the silicic zones. Argillic alteration is primarily developed within the footwall side of the deposit where the alteration envelope can range up to 40 m in thickness.
23.3.2 Golden Stranger (094E 076)
The Golden Stranger developed prospect is located about 11 km west-northwest of the Lawyers Project on claims now owned by Steven Lawes of Princeton, B.C. The original gold-silver showings on the property were discovered by Western Horizons Resources Ltd. in 1983.
The prospect hosts low sulphidation, adularia-sericite type epithermal mineralization hosted by Metsantan Member trachyandesite flows of the Lower Volcanic Cycle of the Toodoggone Formation. The volcanic wall rocks are cut by a series of north to northwesterly-trending fracture/fault systems, along which aplitic dyke-like bodies are present. Multistage quartz veining and silicified breccias crosscut both the altered volcanics and the aplitic rocks.
Two divergent breccia zones comprise the Main and West Zones. The Main Zone consists of a quartz vein/breccia system striking northerly with a near-vertical dip. The zone is 50 m wide and extends for 450 m in length. Pyrite, galena, sphalerite, chalcopyrite, chalcocite and covellite are hosted in a quartz- amethyst breccia zone developed at the contact of a trachyandesite unit and an aplite dyke. A 1986 trench in the northern part of the Main Zone yielded an interval of 3.9 m grading 14.4 g/t Au; the most
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southerly trench on the zone, located 390 m along strike, yielded 1.37 g/t Au over 4.0 m. In 1988, drilling on the Main Zone returned several significant intercepts, including 11.55 g/t Au and 6.20 g/t Ag over 3.05 m and 5.99 g/t Au and 12.35 g/t Ag over 3.05 m. True widths of these intercepts are not known.
The West Zone vein-breccia system is not as well-developed as the Main Zone. Drill-testing of it in 1988 returned some low-grade values, including 0.03 g/t Au and 3.1 g/t Ag over 3.1 m and 2.07 g/t Au over 15.0 m. True widths of these intercepts are not known.
Preliminary data on the Main Zone indicates a mineral resource of 498,905 tonnes grading 2.74 g/t Au (Sutton Resources Ltd. report to shareholders, March 30, 1989). This historical estimate was completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects. It uses categories that are not well defined and do not conform to those stipulated for current use.
23.3.3 JD (094E 171)
The JD developed prospect is located about 11 km north-northeast of the Lawyers Project on claims now owned by Cameron Scott of Alberni, B.C. Attention first focused on the area in 1931 when a prospector was reported to have taken several thousand dollars’ worth of gold from placer workings. Much later, in 1971, Sumac Mines Ltd. staked claims in the area to cover lead and zinc showings hosted in quartz veins. Subsequent soil geochemical surveys nearby outlined a 1,500 m-long zone with anomalous silver, lead, zinc and copper values.
Claims covering the JD prospect were optioned by AGC Americas Gold Corp. in 1994. From 1994-98, AGC carried out a substantial amount of diamond drilling and ancillary geochemical and geophysical surveys and discovered two main zones of interest, named Finn and Creek. The Finn Zone is a high sulphidation epithermal-type gold deposit with important values in silver, copper, lead and zinc. It is a structurally- controlled, 600 m long by 400 m wide, east-west trending zone consisting of a tabular, shallowly-dipping, 15 m thick body of gold-bearing brecciated and silicified rock, enveloped by a large quartz-carbonate vein stockwork with disseminated and massive base metal sulphides. AGC concluded that the mineralized setting of the Finn Zone should perhaps be viewed as a large high-sulphidation epithermal system overlapping with porphyry-style mineralization at depth.
The high-grade polymetallic Creek Zone was discovered by drilling in 1997 and became the focus of exploration in 1998. Hole 97-08 intersected 103.3 g/t Au, 92.2 g/t Ag, 1.34% Cu, 0.46% Pb and 11.7% Zn over 4 m. The true width of this intercept is not known. In 1998, eleven holes were drilled to follow-up the high-grade intersection; results confirmed the presence of stockwork mineralization but overall grades were lower.
A possible mineral resource on the Finn Zone was estimated to be 147,889 tonnes grading 4.40 g/t Au (George Cross News Letter, No. 9, January 13, 1995). This historical estimate was completed before the coming into force of NI 43-101 Standards of Disclosure for Mineral Projects. It uses categories other than those stipulated for current use.
In September 2011, the JD property was optioned by Tower Energy (now Tower Resources Ltd.). Tower believes there is potential on the JD property to discover a lower grade, bulk-tonnage gold and silver deposit. In a news release dated August 29, 2012, Tower reported results of its first three confirmation
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drill holes in the Finn Zone, including a near-surface intersection of 12.6 m grading 10.82 g/t Au and 65.70 g/t Ag. In a later news release dated September 19, 2012, Tower reported the discovery of gold mineralization in the footwall of the Finn Zone. Hole JD-12-009, collared in the footwall, intersected 18.0 m grading 1.74 g/t Au and 4.23 g/t Ag from 3.1-21.0 m, followed by 11.0 m grading 2.48 g/t Au and 5.49 g/t Ag from 29.0-40.0 m.
Tower's 2013 exploration drilling in the eastern part of the JD project area discovered porphyry-style alteration and associated anomalous copper mineralization coincident with a Cu-Au-Ag-Te soil geochemical anomaly, an 800 m by 800 m aeromagnetic high anomaly and a large IP chargeability anomaly (Tower news release dated October 4, 2013). The chargeability anomaly, which measures about 1.400 m north-south by 400-600 m east-west and remains open to the east, was tested by three diamond drill holes.
Hole JD13-025 tested the northern part of the chargeability anomaly. It transitioned from propylitically- altered volcanic rocks near surface, through strong phyllic alteration and bottomed in altered rocks exhibiting early potassic alteration assemblages. Copper-silver mineralization of note in the hole includes 3 m grading 0.94% Cu and 14 g/t Ag at a depth of 66 m, and 1.4 m grading 4665 ppm Cu and 3.4 g/t Ag at the bottom of the hole at 230.1 m. Hole JD13-028 tested the central part of the anomaly. It intersected variably phyllically-altered rock with local zones exhibiting earlier potassic alteration. The hole contained a wide interval of anomalous copper mineralization averaging 333 ppm Cu over 321 m from surface. Hole JD13-026 tested the southern part of the anomaly. It encountered nearly continuous, intensely phyllically-altered volcanic rocks throughout its entire length but no copper mineralization of note is reported. A 2.0 m interval of higher grade gold mineralization grading 6.03 g/t Au was cut at a depth of 310 m.
Tower concluded that a program including deep penetrating IP surveys followed by diamond drilling are warranted to fully test the porphyry potential in the eastern part of the JD project area. To date, no further work, past that reported above, has been carried out by Tower Resources on the JD property.
24 OTHER RELEVANT DATA AND INFORMATION The Toodoggone District has a long history of successful exploration and development. However, until recently, the principal focus of past workers has been to explore for nearer-surface, low and high- sulphidation epithermal gold-silver deposits and, to a lesser extent, for open-pitable, porphyry-style copper-gold deposits.
In Section 7.1.1 of the Report, AuRico's recent success at its Kemess Underground and Kemess East deposits is described in some detail. Both deposits are potentially mineable by underground block caving methods; their discovery by deep drilling was guided in part by deep-penetrating induced polarization surveys. This information demonstrates the potential for the mining of porphyry-type deposits, by bulk underground methods, in the Toodoggone District. It has prompted recent explorers elsewhere in the district, including PPM, to re-evaluate historic results in order to better assess the potential of discovering a buried, porphyry-type deposit on their properties.
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Other information relevant to ongoing exploration and any possible future development on the Lawyers Project includes:
the fact that Lawyers is a 'brown-fields' project which offers certain advantages relating to future exploration, development and reclamation costs; the fact that the price of gold has seen an approximate US$600 correction since July 2011. Any price rebound for it (and for silver too), although by no means certain, would help to reduce the cut-off grade at Lawyers, thus capturing more contained ounces of gold and silver in any mineral resource estimation carried out; and the current US$-CDN$ exchange rate, with 1.0 US$ = 1.27 CDN$ as of the Effective Date of the Report, which could have a positive impact on project economics, assuming that similar, favourable exchange rates persist into the future.
25 INTERPRETATION AND CONCLUSIONS It is concluded that:
(1) The current rendition of the Lawyers Project brings together the past-producing Lawyers gold-silver mine area and the extensive Silver Pond trend of precious metals occurrences. This large prospective land holding, under one company's ownership, presents a unique opportunity for PPM to carry out further exploration on a 'camp' scale. There remains excellent potential for the discovery of additional low and high-sulphidation epithermal deposits like those that have been discovered and explored to date. In addition, there exists the possibility for the discovery of a near-surface or buried 'bulk tonnage' deposit which may offer the advantage of economies of scale should future mine development occur.
(2) There remains in place the historic underground development infrastructure at the Cliff Creek North Zone. Should ongoing exploration in this zone warrant further underground development leading to possible future mining, this in-place infrastructure would decrease considerably the pre-production development costs that would be incurred.
Other existing surface infrastructure which would facilitate any future development on the Project includes its road access, its proximity to the nearby Baker mill and its relative proximity to electrical power, connected to the BC Hydro grid, which is available at the past-producing Kemess South mine site.
(3) The Lawyers Project is not directly encumbered by any provincial or national parks, or other protected areas. Additionally, PPM and its affiliated company Guardsmen have had recent positive experiences with regional regulators, local First Nations and other stakeholders; these positive relationships will help facilitate moving the Project forward should continued exploration on it justify future development.
(4) The AGB Zone may persist along strike, based on encouraging 2001 and 2003 chip sampling results at its southern end. Ground geophysical surveys in the overburden-covered valley to the south appear to indicate that the structure hosting the AGB mineralization may continue towards the valley bottom.
(5) The mineralized, low sulphidation, gold and silver-bearing M-Grid structures are similar in character to mineralized zones on the Project which have seen past production. They extend for a great enough distance (~400 m) along strike to host potential zones of economic interest, either at shallow, intermediate or greater depths. No drilling has been carried out on this zone.
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Gold soil geochemical anomalies to the northwest and southeast of the M-Grid trenches outline an additional 600 m of potential strike length that remains unexplored. There is potential here to add to the strike length of M-Grid mineralization by initial surface trenching followed by relatively shallow drill testing, if warranted.
(6) The Silver Pond Group of prospects is more characteristic of a high-sulphidation epithermal environment. It extends for a distance of about 4.5 km along a regional northwest-trending structure which has been identified in reconnaissance airborne surveys as a prominent magnetic low. There remains considerable exploration potential to explore for both vein-type and bulk tonnage targets along this trend.
(7) Based on the reported results of Cheni's 19-hole underground diamond drilling program completed in 1992, the Phoenix Zone remains open to depth and to the east. There may remain potential here to outline additional high-grade resources.
(8) Regarding other minfile occurrences within the Lawyers Project area, there may remain untested targets that warrant further exploration work.
(9) Additional target areas within the Cliff Creek North Zone warrant further drill testing in an effort to increase the contained gold-silver resource of this zone.
(10) Overall, adequate care and proper procedures were used to obtain reliable gold and silver results in the 2015 diamond drilling program at the Lawyers Project. Onsite core sample security was not a concern because of the remote location of the Project.
(11) The 2015 diamond drilling program completed on the Cliff Creek North and Duke’s Ridge Zones successfully validated and verified the earlier work that had been completed. The ‘nugget effect’ commonly observed in epithermal vein deposits, where high-grade mineralization is inconsistently or randomly distributed, can make it challenging to reproduce high gold-silver grades. Consequently, even drill holes designed to ‘twin’ high-grade intersections in historical holes produce varying results. This was in part the case at both Cliff Creek North and Duke’s Ridge, but importantly it does not diminish the significance of consistent success in intersecting mineralization where expected.
The Cliff Creek North Zone was tested with a total of 19 drill holes, 17 of which successfully penetrated the north-northwest trending, moderately to steeply southwest-dipping vein system. The drilling showed that the zone has a minimum strike length of 225 m and remains open along strike to the northwest (beyond Holes CC15-18 and 19) and to the southeast (beyond Holes CC15-06 and 12), and at depth below the deepest levels of drilling and mine workings. The intersection of underground workings by a number of the drill holes confirmed that parts of the deposit have been subjected to mining. Analysis of core recovered from the immediate hangingwall and footwall of some of the voids showed that good grades of gold-silver mineralization remain and suggests that past development was likely limited to narrow stoping.
The narrow precious metals-enriched massive sulphide vein and associated stockwork zone (the ‘P2’ vein) intersected in Hole CC15-15 occurs approximately 70m into the hangingwall of the main Cliff Creek North Zone and is an important new exploration target. Mineralization of note in the hangingwall of the main Cliff Creek North Zone was also encountered in several other drill holes.
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The wide intersection of low-grade mineralization in Hole CC15-13 is a potentially bulk-mineable target that warrants follow-up. This central and deeper part of the Cliff Creek North deposit may be structurally thickened and therefore offers significant exploration potential.
The Duke’s Ridge Zone was tested with a total of 7 drill holes, all of which intersected the sinuous northwest-trending sub-vertical vein and stockwork system. The majority of holes targeted the central, higher grade part of the deposit. Although this drilling did not reproduce some of the highest assay values encountered in historic drill holes, it did confirm a near-surface deposit with low to moderate gold-silver grades. Holes DR15-04 and DR15-05 returned some of the better gold and silver grades encountered at Duke’s Ridge in 2015; the system in this area remains open at depth.
Holes DR15-06 and DR15-07 evaluated the southern and northern parts of the deposit, respectively, encountering narrow low-grade intercepts within broader weakly anomalous zones. These two holes determined that the Duke's Ridge Zone has a minimum strike length of 380m.
The 2015 diamond drilling program employed twinning of selected historic drill holes and drilling of targeted infill, step-down and step-out holes. The program produced a modern data set that can be compared with, and used to verify, the historic results.
(12) In order to provide mineral resource estimates for two zones on the Lawyers Project, it was necessary to verify and integrate as much of the historic data as possible. The authors of this Report conclude that the historic drill hole data for which complete assay and location information is known is suitable for use in the calculation of a mineral resource estimate for the Cliff Creek North and Duke’s Ridge Zones.
(13) The historic metallurgical recoveries of the gold-silver ore mined at the Lawyers property during the period 1989-92, which averaged 93% for Au and 78% for Ag, are considered good and indicate that any future ores mined within the Project area, at least those that may be sourced from low-sulphidation deposits similar to those mined in the past, should present no significant problems in terms of acceptable rates of metals recovery.
(14) At a 4.0 g/t AuEQ cut-off, the current mineral resource estimated for the Cliff Creek North Zone is 550,000 tonnes grading 4.51 g/t Au and 209.15 g/t Ag, which equates to a contained metal resource of 80,000 oz. Au and 3,700,000 oz. Ag. This known resource is of sufficient tenor and size to justify follow-up drilling as detailed in Section 26 of the Report.
(15) At a 4.0 g/t AuEQ cut-off, the current mineral resource estimated for the Duke's Ridge Zone is 58,000 tonnes grading 4.30 g/t Au and 139.13 g/t Ag, which equates to a contained metal resource of 8,000 oz. Au and 260,000 oz. Ag. This known resource is considered too small to warrant infill drilling of the zone at this time. However, most of the resource is contained in the central portion of the deposit which remains open to depth. Deeper drill testing beneath the deposit's central portion is warranted in an attempt to significantly increase its size.
(16) For both the Cliff Creek North and Duke's Ridge Zones, the authors found that the average gold and silver grades corresponding to cut-off grades of 4.00, 4.50 and 5.00 g/t AuEQ, after being adjusted for comparison purposes, compare favourably with historic mined grades at Lawyers. Additionally, their review of publically-reported mineral resource or reserve data and certain infrastructure-related factors for two proposed underground gold mines, Red Mountain near Stewart, B.C. and Rainy River in
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northwestern Ontario, provided relevant comparative information for the selection of a cut-off grade at the Lawyers Project. The authors conclude that it is reasonable to select a 4.0 g/t AuEQ cut-off for the purposes of reporting mineral resources on the Project.
Recommendations for future work on the Project are summarized below in Section 26 of the Report.
26 RECOMMENDATIONS It is recommended that:
(1) Drilling:
Cliff Creek Zone: 5500 m of NQ diamond drilling, including:
- shallow step-out drilling to the SSE of Hole 83CC14 and its twin CC15-06 on Section 2200NW; to test for additional near-surface high-grade mineralization similar to that intersected in these two holes;
- fill-in and step-out drilling up and down-dip and to the SSE of the 4.10 m intercept grading 5.98 g/t Au and 246.3 g/t Ag in Hole CC15-12 on Section 2225NW;
- close-spaced (< 25 m) step-out drilling down-dip and along strike to the SSE to follow-up on the very high grade P2 vein intercept in Hole CC15-15 on Section 2275NW;
- fill-in and step-down drilling to further delineate the broad low-grade gold-silver intercept encountered in Hole CC15-13 on Section 2300NW; to determine the potential for bulk mineable mineralization in this part of the Cliff Creek North Zone;
- step-down drilling below Holes CC15-18 and 19 on Section 2425NW; and
- allocate some Phase 1 drill meters in this zone to carry out selected step-out drilling from the 'plums' identified in the Cliff Creek North long section (see Figure 10.6).
Duke's Ridge Zone: 360 m of NQ diamond drilling:
- drill two deeper holes (~180 m TD each) below the central portion of the zone in an attempt to increase the current, relatively small mineral resource at Duke's Ridge.
M-Grid Zone: 240 m of NQ diamond drilling:
- drill two shallow holes (~120 m TD each) to test for the presence of potentially ore grade gold-silver mineralization in the M-Grid area; the holes would target areas containing the highest gold and/or silver grades identified in the 2004 surface trenching program.
Phoenix Zone: 400 m of NQ diamond drilling:
- subject to successfully completing a compilation of past data (see below), carry out close-spaced (< 25 m) step-out drilling below and along strike to the east of historic mine workings to test for additional high grade mineralization which may remain in-situ within and proximal to this zone.
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(2) Trenching:
Cliff Creek Zone: 1000 m of excavator trenching:
- carry out trenching to the SSE of Holes 83CC14 and its twin CC15-06 to test for the surface (at bedrock) continuation of the main Cliff Creek North Zone between it and the Central subzone; and
- carry out trenching to the NNW of Holes CC15-18 and 19 to test for the surface (at bedrock) continuation of the main Cliff Creek North Zone in this direction.
- M-Grid Zone: 1000 m of excavator trenching:
- carry out surface trenching to test for bedrock mineralization in the areas of the gold soil anomalies which extend to the NW and SE of the 2004 trench area.
(3) Data Research & Compilation:
Phoenix Zone:
- complete a compilation of past surface and underground drilling data (if available) and of past underground workings (again, if available) in order to design a Phase 1 diamond drilling program which would test for additional high grade mineralization to depth and to the east of historic mine workings.
AGB Zone:
- further historical data research and compilation should be carried out to follow-up on the possibility that the mineralized structure hosting the historically-mined AGB Zone may persist to the south, towards the valley bottom.
Silver Pond Group of Prospects:
- The large St. Joe historical data base on the Silver Pond Group of prospects should be thoroughly reviewed and an initial manual compilation of geological, geochemical, geophysical, trenching and diamond drilling should be carried out with three primary objectives: (i) to identify the overall limits of the large Silver Pond North alteration/mineralization system in order to design a Phase 1, deep- penetrating induced polarization survey, the purpose of which would be to identify a possible buried porphyry-style, precious+/-base metals deposit at depth; (ii) to identify areas of economic potential within the Silver Pond trend which can be tested with Phase 2 surface trenching or diamond drilling; and (iii) to lay the groundwork for a digital compilation which will allow for more efficient data extraction, manipulation and review.
Other prospects within the Lawyers Project area:
- as per the prospects within the Silver Pond trend, complete a more thorough data review in an attempt to identify priority exploration targets which warrant follow-up work.
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(4) Geophysical Surveys:
Silver Pond North Zone:
- carry out a minimum of 25 line-km of deep-penetrating induced polarization surveys as per the purpose stated above
Cost of the Phase 1 program is estimated to total $2.35 million, including: $1.75 million for Phase 1 diamond drilling; $0.25 million for Phase 1 trenching; $0.1 million for Phase 1 data research and compilation; and $0.25 million for Phase 1 geophysical surveys.
A comprehensive, success-contingent Phase 2 program will follow completion of Phase 1 work. The detailed work plan and budget for it will be formulated after a thorough review of all Phase 1 results.
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Diakow, L.J., Panteleyev, A, and Schroeter, T.G. (1991): Jurassic Epithermal Prospects in the Toodoggone River area, northern British Columbia: Examples of Well Preserved, Volcanic Hosted, Precious Metal Mineralization; Economic Geology 86, pages 529-554
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Hawkins, P.A. (2003): A Technical Report Covering the Lawyers and Al (Ranch) Properties for Bishop Resources Inc., 136 pages.
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