A Competent Person's Report on the Assets of Aex Gold
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A COMPETENT PERSON’S REPORT ON THE ASSETS OF AEX GOLD, SOUTH GREENLAND Prepared for AEX Gold Inc Report prepared by SRK Exploration Services Ltd ES 7863 June 2020 Head Office 12 St Andrew’s Crescent UK: +44 (0) 2920 233 233 Cardiff Russia: +7 (0) 4955 454 413 CF10 3DD South Africa: +27 (0) 11 441 1111 United Kingdom Email: [email protected] Web: www.srkexploration.com AEX CPR SRK ES Legal Entity: SRK Exploration Services Ltd SRK ES Registered Address 21 Gold Tops Newport NP20 4PG SRK ES Office Address: 12 St Andrew’s Crescent Cardiff CF10 3DD Date: 26/06/2020 Project Number: ES 7863 SRK ES Project Manager: James Gilbertson, Managing Director Client Legal Entity: AEX Gold Inc 123 Front Street W, Suite 905. Toronto, M5J 2M2, Canada Client Nominated Adviser Stifel Nicolaus Europe Limited, 150 Cheapside, London, EC2V 6ET, United Kingdom COPYRIGHT AND DISCLAIMER Copyright (and any other applicable intellectual property rights) in this document and any accompanying data or models is reserved by SRK Exploration Services Limited (SRK ES) and is protected by international copyright and other laws. The use of this document is strictly subject to terms licensed by SRK ES to its client as the recipient of this Report and unless otherwise agreed by SRK ES, this does not grant rights to any third party. This document may not be reproduced or circulated in the public domain (in whole or in part) or in any edited, abridged or otherwise amended form unless expressly agreed by SRK ES. This document may not be utilised or relied upon for any purpose other than that for which it is stated within and SRK ES shall not be liable for any loss or damage caused by such use or reliance. SRK ES respects the general confidentiality of its clients’ confidential information whether formally agreed with clients or not. See the attached Terms and Conditions as included in the Commercial Appendices contain mutual confidentiality obligations upon SRK ES and the Client. The contents of this Report should be treated as confidential by the Client. The Client may not release the technical and pricing information contained in this Report or any other documents submitted by SRK ES to the Client, or otherwise make it available to any third party without the express written consent of SRK ES. Client Feedback We merit all comments received from our clients, take pride in providing an excellent service and place value on our ability to correct error. Should you wish to comment on any aspect of the service that an individual staff member has provided, or else the company as a whole, please send an email to [email protected], or otherwise write in confidence to our Managing Director at the address above. © SRK Exploration Services Ltd 2020 AEX-CPR_2020_v9-2_Clean.docx June 2020 Page i of ii AEX CPR Important Notice This report was prepared as a competent person’s report for AEX Gold Inc. (AEX) by SRK Exploration Services Ltd (SRK ES) in connection with AEX’s proposed listing on the London Stock Exchange’s AIM market. The quality of information, conclusions, and estimates contained herein is dependent upon: i) information available at the time of preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by AEX subject to the terms and conditions of its contract with SRK ES and relevant securities legislation. The contract permits AEX to include this report in the admission document to be prepared by AEX in connection with its proposed listing on the London Stock Exchange’s AIM market. Without prejudice to our responsibility for this CPR and except for the purposes legislated under provincial securities law, any other uses of this report by any third party is at that party’s sole risk. The responsibility for this disclosure remains with AEX. The user of this document should ensure that this is the most recent Technical Report for the property as it is not valid if a new Technical Report has been issued. AEX-CPR_2020_v9-2_Clean.docx June 2020 Page ii of ii AEX CPR For and on behalf of SRK Exploration Services Ltd Principally authored by: Patrick Johnson Jon Russill Senior Exploration Geologist Principal Exploration Geologist SRK Exploration Services Ltd SRK Exploration Services Ltd Date: 03/02/2020 Date: 26/06/2020 Peer reviewed by: James Gilbertson Principal Exploration Geologist Managing Director SRK Exploration Services Ltd Date: 26/06/2020 AEX-CPR_2020_v9-2_Clean.docx June 2020 Page i of xviii AEX CPR The Directors AEX Gold Inc. 123 Front Street W, Suite 905. Toronto, M5J 2M2, Canada Stifel Nicolaus Europe Limited 150 Cheapside London EC2V 6ET A COMPETENT PERSON’S REPORT ON THE ASSETS OF AEX GOLD, SOUTH GREENLAND EXECUTIVE SUMMARY INTRODUCTION SRK Exploration Services Ltd (SRK ES) was requested by AEX Gold Inc ((AEX) hereinafter also referred to as the Company or the Client) to prepare a Competent Persons Report (CPR or the Report) on the Mineral Assets of the Company comprising its key projects in Southern Greenland. SRK ES is part of the global SRK Consulting Group (the SRK Group). This CPR is addressed to the Company’s proposed Nominated Adviser, Stifel Nicolaus Europe Ltd. (Stifel), and the Directors of AEX. SRK ES understands that this CPR will be published by AEX on its website and as part of an admission document to be published in connection with the Company’s proposed admission to trading on the AIM Market of the London Stock Exchange. Successful admission will result in a dual-listing of the Company which is currently listed on the TSX Venture Exchange, part of the Toronto Stock Exchange (TSX), under the ticker code TSX:AEX.V. The material assets described herein include four mineral exploration licences in south and southeast Greenland that cover several early-stage gold prospects and one exploitation licence that covers AEX’s principal asset, the former Nalunaq gold mine. All of the mineral licences are held by Nalunaq A/S which is a wholly-owned subsidiary of AEX. Nalunaq A/S also owns two exploration licences on the southwest coast of Greenland which are also prospective for gold mineralisation but are not considered material for the purposes of this CPR. Furthermore, Nalunaq A/S owns two non-exclusive prospecting licences that cover eastern and western Greenland apart from the far northern parts of the country. Again, these are not considered to be material assets. This CPR contains the outcomes of SRK ES’ review of historical and recent data for the assets, discussions with AEX’s technical staff and visits to some of the properties. It also includes a Mineral Resource Estimate (MRE) for the Nalunaq project. This MRE was first described in a 2016 report that was prepared following the guidelines of the Canadian Securities Administrators’ National Instrument 43-101 and Form 43-101F1 before AEX listed on the TSX. The Mineral Resource statement was prepared in conformity with generally accepted CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines. This CPR includes an updated MRE that includes data and new interpretations from AEX’s exploration AEX-CPR_2020_v9-2_Clean.docx June 2020 Page ii of xviii AEX CPR work since 2016 that was prepared following the same guidelines. MINERAL ASSETS AEX’s mineral licences cover most of the best-known gold occurrences in Southern Greenland. The locations of their licences are shown in Figure 1. Figure 1: Locations of AEX Gold Inc’s mineral licences in southern Greenland Exploitation Licence 2003-05 – Nalunaq The Nalunaq property is located in South Greenland in the Municipality of Kujalleq. The property includes a former underground gold mine (closed in 2013) and is situated about 6 km inland in the Kirkespirdalen valley, about 33 km northeast of the town of Nanortalik. The licence covers an area of 22 km2 and was first granted to Crew Gold Corporation in April 2003 and is valid until April 24, 2033. Angel Mining PLC purchased the project in 2009 and operated until closure of the mine in 2013. Despite closure, the licence remained in force and its transfer to Nalunaq A/S was approved, with amendments, by the Government of Greenland in March 2016. The Exploitation Licence grants Nalunaq A/S the exclusive right to undertake mineral exploration and exploitation within the licence area, subject to approval by the Government. The current terms of the licence under Addendum 5 dictate that Nalunaq A/S must commence exploitation by 1 January 2023. In this regard, a Social Impact Assessment and Environmental Impact Assessment must be submitted by 31 December 2022 and that an Impact Benefit Agreement shall be negotiated and concluded by 31 December 2022. All surface infrastructure was removed when the mine closed, apart from a jetty at the coast and the gravel road between this and the mine. The area is in mountainous terrain and has a sub-Arctic climate. The fjords in the area remain unfrozen all year. Mining History Following surface exploration and development of exploration drives and raises on the AEX-CPR_2020_v9-2_Clean.docx June 2020 Page iii of xviii AEX CPR mineralised structure, Crew Gold commenced mining at Nalunaq in 2004 using longhole open stoping methods. Broken ore was shipped offshore to existing processing plants, firstly in Spain and then in Newfoundland. Between these two plants, 352,307 oz of gold (10,957 kg) were produced from 654,755 t of milled ore in the period from 2004 to 2009 when the mine was sold, indicating a recovered gold grade of 16.7 g/t Au.