COCHRANE HILL

Location

The Cochrane Hill Gold deposit is located approximately 80 km from the central milling facility at Touquoy and is readily accessible by highway.

History

Gold was discovered at Cochrane Hill in the 1860’s with production of about 1,353 oz. between 1868 and 1929. Ore was won by underground mining from three shafts. During 1974-1989 a total of 96 holes for 13,946m was drilled by Massval Mines Ltd (1973-74), Northumberland Mines Ltd (1979-81) and Scominex (1984-87) and, in addition, underground development and exploration was undertaken by Scominex (1986-87) and Novagold Resources Inc (1988), with 56 underground holes for 2,873m drilled.

Mineral Resource Estimate

The drill database underpinning the current resource estimate for Cochrane Hill comprises 216 diamond drill holes from which a dataset of 11,329 two-metre composites have been created. The recent resource definition drilling evidences a halo of disseminated lower grade mineralization which has been incorporated into the estimate which is one of the drivers of the lower average grade of the resource in the measured and indicated category.

The composite dataset incorporates drilling along an 800m segment of the Cochrane Hill Anticline, a north-east trending tight to isoclinal fold which, in the vicinity of the Cochrane Hill deposit, is overturned with both limbs dipping to the north at 70°. Gold mineralization occurs within the southern limb of the anticline in a sequence of interbedded biotite schists representing well-bedded, though metamorphosed, argillites and greywackes. The mineralized zone is recognizable as a fairly discrete, tabular zone of about 2% disseminated sulphides (pyrrhotite and arsenopyrite) having a true width of 15-25m.

These resource estimates for Cochrane Hill have an effective date of July 20, 2017 and were prepared by Mr. Neil Schofield, a principal of FSSI Consultants (Australia) Pty Ltd.  The tables below illustrate the current resource estimate prepared in accordance with NI 43-101. The Mineral Resources below are also based on Touquoy operating costs where the Company has been actively pre-production mining since July 2016. At a selected cut-off grade of 0.35 g/t Au the optimized pit shell for Cochrane Hill contains Measured and Indicated Resources of 10.66 Mt at an average grade of 1.16 g/t Au and 1.63 Mt of Inferred material at 1.32 g/t Au with a 3.1:1 strip ratio.

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Description: CH_locationMap

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*Resources that are not reserves do not have demonstrated economic viability*

Based on further review and modelling of the new drill data, as shown in the plan view map ( http://files.newswire.ca/1485/CochraneHillDrill.pdf), further drilling will be undertaken over the next 12 months at depth to extend the pit design and also to the east where there appears to be potential for extensions to the known mineralization.

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Technical Disclosure

This mineral resource estimate is in accordance 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.
The basis of the estimation of the Mineral Resources includes the following:

  • The drill hole sampling has provided a reasonably representative set of samples of the gold mineralization in each case.
  • The drill hole sample data have been verified by the qualified person 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 from sampling and assaying of the drill core has also been reviewed and found to be sufficient to justify the resource classification.
  • 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.
  • The Measured, Indicated and Inferred classification used for these resource estimates reflects the number and spatial pattern of drill-hole composites informing the estimation of each panel in the resource model, as well as the QA/QC protocols applied in relation to the drilling conducted during 2016-17.
  • 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”.
  • These new resource estimates assume conventional open pit mining and have been constrained by pit shells assuming detailed parameters disclosed below:

    Gold Price = $1,300 US/oz.
    Exchange Rate = 0.80 $US: $CDN
    Mining Cost = $3.25/tonne
    Process Costs (including general and administrative (G&A) cost) = $11.73/tonne
    Process Recovery = 95%
    Over-all pit slope angle:  45º

Metallurgical testwork for Cochrane Hill is ongoing. The often visible gold is expected to be free milling, as it is at the Company's Touquoy, and Beaver Dam deposits.

Technical Reports, prepared in accordance with NI 43-101, on the resource estimate at Cochrane will be filed on SEDAR within 45 days from the date of this news release.

Neil Schofield MS – Applied Earth Sciences, MAusIMM, MAIG, an independent consultant to the Company, and a Qualified Person as defined by NI 43-101 has reviewed and approved the scientific and technical information contained in this news release.