FIFTEEN MILE STREAM

Location

Fifteen Mile Stream is located approximately 57km northeast of the central milling facility at Touquoy and is readily accessible by highway. The project lies along the same geological trend as the Company’s other related deposits – Touquoy, Beaver Dam and Cochrane Hill – and all are hosted within the same critical stratigraphy and structure, over a strike length of 80 km.

History

Gold was discovered at Fifteen Mile Stream in 1867 with production of about 19,400oz documented during 1883-1911. During 1985-88 Pan East Resources drilled 134 diamond drillholes (26,612m) with a further 29 holes (3,741m) drilled in 2011 by Acadian Mining Corporation, now a wholly-owned subsidiary of Atlantic.  

Mineral Resource Estimate

The drill database underpinning the current resource estimate in relation to Fifteen Mile Stream comprises 335 diamond drill holes from which a dataset of 17,310 two-metre composites have been created.

The composite dataset incorporates drilling from the Egerton-MacLean, Hudson and Plenty Zones, which are located at the eastern and western ends of an anticlinal dome and approximately 300m south of the dome respectively. At Egerton-MacLean and Hudson, mineralization is localized within a north-dipping sequence of sediments around and within the hinge zone of the anticline with mudstones bearing thin layer-parallel quartz veins being the preferred host. At Plenty, mineralization is localized in similar host rocks in what is interpreted to be an up-faulted limb of the same anticline.

These resource estimates for Fifteen Mile Stream 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 provide the current resource estimate prepared in accordance with NI 43-101 for a range of cut-off grades.  The cut-off grades for the Mineral Resources below are based on Touquoy operating costs where the Company has been actively pre-production mining since July 2016. Other technical parameters and cost assumptions are listed in the Technical Disclosure section of this release. At a selected cut-off grade of 0.35 g/t Au the optimized pit shell for Fifteen Mile Stream contains Measured and Indicated Resources of 10.58 Mt at an average grade of 1.33 g/t Au and 6.64 Mt of material at 1.12 g/t Au in the Inferred category with a 2.2:1 strip ratio.

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

Phase 3 Resource Expansion Drilling Program

The objectives of the Phase 3 Resource Expansion drilling program are (i) to identify additional gold resources immediately peripheral to those resources previously defined at Fifteen Mile Stream and Cochrane Hill, (ii) at Cochrane Hill and at Fifteen Mile Stream – particularly at the Hudson and Plenty zones, to upgrade previously defined inferred resources to measured and indicated categories, and (iii) to seek additional new resources within the 350m gap between the Plenty and Egerton MacLean zones at Fifteen Mile Stream.  

The Phase 3 Resource Expansion diamond drilling program at Fifteen Mile Stream was completed at the end of February with a total of 221 holes for 24,325m having been drilled. Holes were generally drilled on 25m x 20m centres, although for the first-pass drilling along the 350m gap between Plenty and Egerton MacLean holes were drilled on 50m-spaced sections.

At Plenty, further infill and step-out drilling westwards from earlier drilling on 25m-spaced sections continues to outline a steep, northerly dipping, tabular zone of gold mineralization over more than 400m strike length, frequently represented by wide intervals of moderate grade material enhanced by high grade, single sample (1m) mineralization (eg. the three highlighted intervals above). At this time mineralization appears to be more vein-hosted than that along the hinge of the Fifteen Mile Stream anticline at Hudson and Egerton MacLean just to the north and it’s possible that plunging high grade shoots are present.

Assays reported from Egerton MacLean and Hudson, the eastern and western deposits respectively along the Fifteen Mile Stream anticline, are from widely distributed positions on 25m-spaced sections infilling laterally and up-dip and testing the peripheries of these deposits as presently known. While fairly well defined mineralized zones continue to persist, drill information appears to be approaching the lateral limits of these two deposits, as presently understood. Please refer to news release on March 15, 2018 (Wally Bucknell, Director of Exploration to the Company and a Qualified Person as defined by National Instrument 43-101 ("NI 43-101") has reviewed and approved the contents of this news release.)

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Technical Disclosure

The tables above contain the combined Mineral Resource estimates for the Egerton-MacLean, Hudson and Plenty Zones at Fifteen Mile Stream as of July 20, 2017.  These are current resource estimates that are 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. In the Egerton-Maclean zone, grade capping was used on four very high grade composites to mitigate the risk of overestimation of resource grade.
  • 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

No detailed metallurgical investigations have been completed yet for the gold mineralization at Fifteen Mile Stream.  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 Fifteen Mile Stream and 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.