Description and Ownership

The Beaver Dam Gold Project, located approximately 37 km by road from the Touquoy project, is an earlier stage high grade open pittable deposit, 100% owned by Atlantic.

The area was previously mined as an underground deposit at various times from 1895 until 1939. There have been various stages of exploration with in excess of 20,000 metres of drilling completed to date.

Beaver Dam is being developed as a satellite deposit to the planned Touquoy operation with haulage of ore 37km by road to the Touquoy processing plant following completion of mining at Touquoy in Year 5.  The combined operation that includes milling ore from Touquoy and Beaver Dam is entitled the Moose River Consolidated project.  Beaver Dam lies along the same geological trend as the Company’s other related deposits – Touquoy, Fifteen Mile Stream and Cochrane Hill – and all are hosted within the same essential stratigraphy and structure, over a strike length of 80km.

Project Status

On February 18, 2015, the Company announced an updated Mineral Resource estimate for Beaver Dam prepared by Mr. Neil Schofield, a principal of FSSI Consultants (Australia) Pty Ltd.  This resource estimate builds on the resource estimate disclosed in the Company’s PEA dated October 14, 2014, and incorporates the results from the Company’s recently completed resource delineation drilling program comprising 38 holes for 7,810m.

The additional drilling recently completed at Beaver Dam resulted in an approximate 50% increase in contained gold from the 287,000 ounces (5.85mt @ 1.53g/t) previously estimated at 0.5g/t cut-off in the Measured + Indicated Resource categories to 426,600 ounces (9.27mt @ 1.43g/t). Inferred Resources have been reduced by upgrade to Measured and Indicated Resources from 120,000 ounces (2.62mt @ 1.43g/t) to 81,300 ounces (1.84mt @ 1.37g/t) at the same cut-off grade. Bulk density applied for both sets of estimates is 2.73g/cc and the estimation methodology is consistent.

The updated resource estimate at Beaver Dam provided the basis for a feasibility study which was completed in July, 2015. The gathering of data to facilitate the environmental permitting process in respect of the project has already commenced.

Since the completion of the feasibility study, the results of which were disclosed on July 2, 2015, the Company has also been in negotiations with various lenders in respect of procuring project financing on the MRC Project.

Permitting and Environmental Approvals

Discussions on permitting at Beaver Dam are underway with the relevant authorities. The Company made its formal submission of the Company's Beaver Dam Project Description to CEAA, which is now under CEAA's 45 day review period for determination of the Company's environmental assessment process. The full project description and the summaries of the project description (in English and French) can be accessed by clicking on the links below.

Mineral Resource Estimate

The table below illustrates the current resource estimate prepared in accordance with NI 43-101  for a range of cut-off grades with the base case (0.5g/t) shown in bold font:

BEAVER DAM RESOURCE ESTIMATES – 24 February 2015
Measured Resource Estimates
Cut-off grade (g/t)
Tonnes (millions)
Grade (g/t)
Contained gold (oz)
0.3
5.34
1.27
218,200
0.4
4.65
1.41
210,600
0.5
4.07
1.55
202,200
0.6
3.65
1.66
194,800
0.7
3.30
1.77
187,500
0.8
2.97
1.88
179,600
Indicated Resource Estimates
Cut-off grade (g/t)
Tonnes (millions)
Grade (g/t)
Contained gold (oz)
0.3
6.75
1.13
244,200
0.4
5.94
1.23
235,100
0.5
5.20
1.34
224,400
0.6
4.60
1.45
213,900
0.7
4.09
1.55
203,200
0.8
3.62
1.65
191,800
Measured + Indicated Resource Estimates
Cut-off grade (g/t)
Tonnes (millions)
Grade (g/t)
Contained gold (oz)
0.3
12.09
1.19
462,400
0.4
10.59
1.31
445,700
0.5
9.27
1.43
426,600
0.6
8.25
1.54
408,600
0.7
7.39
1.65
390,600
0.8
6.59
1.75
371,400
Inferred Resource Estimates
Cut-off grade (g/t)
Tonnes (millions)
Grade (g/t)
Contained gold (oz)
0.3
2.65
1.08
91,800
0.4
2.26
1.20
87,400
0.5
1.84
1.37
81,300
0.6
1.52
1.55
75,600
0.7
1.28
1.72
70,600
0.8
1.08
1.90
65,700

Technical Disclosure
The table above presents the current resource estimates for Beaver Dam that comply with the current Canadian Institute of Mining, Metallurgy and Petroleum Resources (CIM) Definition Standards on Mineral Resources and Mineral Reserves as required by NI 43-101 - Standards of Disclosure for Mineral Projects.  A Qualified Person has done sufficient work to classify these resources estimates to current Mineral Resources prepared in accordance with NI 43-101.

The basis of the estimation of the Mineral Resources includes the following;

  1. The drill hole sampling has provided a reasonably representative set of samples of the gold mineralization in each case.
  2. The drill hole sample data have been verified by reviewing the core from a number of drill holes and checking assay results against observed mineralization during the qualified person’s site visit. The quality control data made available from the resource database generated by Acadian Mining, the previous operator, has also been re-analyzed and the results checked against earlier analysis undertaken by Acadian Mining. Verification of assay logs against lab certificates has not been done for the current resource estimates but has been undertaken for Acadian Mining’s previous resource estimates.
  3. The estimation method used is a standard implementation of multiple indicator kriging with block support correction for the estimation of recoverable resources based on a specified approach to standard selective mining. This methodology is appropriate given that the composite samples show some high grade values resulting in statistical characteristics similar to other gold deposits with higher coefficients of variation.
  4. Any known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resource are detailed below in the section entitled “Forward-Looking Statements”.

Geology

The Beaver Dam property is centered on the Moose River-Beaver Dam Anticline as do the Touquoy and Fifteen Mile Stream properties.  The mineralization is contained within the overturned southern limb of the anticline which dips to the north at between 75 and 90 degrees.  The anticline and host stratigraphy are sinistrally off-set by two northwest trending faults – the Mud Lake Fault and the Cameron Flowage Fault – at the eastern end of the orebody.  The mineralization has largely been defined in the Main Zone within a stratigraphic package comprising alternating argillite and greywacke units.  As a result of the folding, a well-developed axial planar cleavage is present in both rock types.  At Beaver Dam, the highest gold grades are typically associated with bedding-parallel tabular quartz veins.  However, the host rock material between quartz veins also carries significant gold grades.  Quartz vein hosted gold mineralization augmented by disseminated style mineralization forms the basis of the geological model which underpins the on-going exploration and development of the Beaver Dam gold deposit.