Description and Ownership

The Touquoy Gold Project is located at the former village of Moose River Gold Mines about 70 minutes’ drive via 110 km of sealed roads north-east of Halifax. The Touquoy Property covers an area of approximately 1,760 ha. Atlantic has an effective ownership interest of 63.5% in the Touquoy Gold Project, is the project operator and manager, and would recover all operational overhead, financing and sunk costs prior to any partner distributions.

Touquoy Project Site

Touquoy Property looking northward

Project Status

Commissioning of the Touquoy Gold Mine is underway with first gold pour in the coming weeks. All major environmental permitting is in place including Environmental Assessment and Industrial Approval and granted Mineral Lease.

Title is now held and possession secured of all 63 private properties required for the development of the Touquoy Gold Project, following lengthy legal proceedings.  Details relating to compensation in respect of 11 expropriated properties on the basis of independent valuations previously conducted remain under discussion with legal representatives of the estates of, or directly with, former landowners.

In relation to the seven parcels of Crown land required within the footprint of the Touquoy Gold Project, the Nova Scotia Department of Natural Resources has now received Cabinet approval to issue the lease and has prepared the requisite documentation.

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

Property Plan of the Touquoy Project

Property Plan of the Touquoy Project

On 24 May 2014, Atlantic announced that a Memorandum of Understanding (“MOU”) between DDV Gold, a wholly owned subsidiary of Atlantic, and the Assembly of Nova Scotia Mi'kmaq Chiefs had been concluded. The MOU establishes the mutual recognition and respect of each party's perspective in relation to the development of the Touquoy Gold Project and DDV Gold's other potential resource developments elsewhere within Nova Scotia including Cochrane Hill (discussed below). In particular the MOU contemplates the negotiation and conclusion of a Mutual Benefits Agreement between the parties to engage further and specifically in terms of employment, training, provision of services and other opportunities and undertakings to the benefit of both parties.  The Company is now in the process of negotiating a binding mutual benefits agreement.

Mineral Resource Estimate

The Touquoy Gold Project hosts Mineral Resources prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and JORC (2012) as disclosed in the table  below.  The table sets out the global recoverable Measured and Indicated, and Inferred Resource estimates for the Touquoy Gold Project at a cut-off of 0.50 g/t Au, which has been highlighted in the NI 43-101 Report as a possible cut-off for open pit mining. The resource is relatively well drilled out at a drill hole spacing of 25 metres by 20 metres and much of the Inferred Resource that remains lies peripheral to the main concentrations of gold mineralization.

Touquoy Mineral Resource Estimate (0.5 g/t cut-off) – Effective August 1, 2014*

Category
Tonnes (Mt)
Grade (g/t Au)
Au Ounces (oz)
Measured Resources
2.8
1.5
130,000
Indicated Resources
7.3
1.5
350,000
Resources (M + I)
10.1
1.5
480,000
Inferred Resources
1.6
1.5
77,000

* Key assumptions used to estimate the Mineral Resources include the following:

  1. There are two main styles of gold mineralization, which are reflected in the geological domaining used in the resource modeling
  2. Drill hole sampling has provided a reasonably representative set of samples of the gold mineralization
  3. Multiple Indicator Kriging (MIK), the resource estimation methodology applied,  is an appropriate method for estimating the Mineral Resources in these deposits

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Touquoy Mineral Resources are based on a National Instrument 43-101 technical report entitled "Mineral Resource Estimate for The Touquoy Gold Project, Halifax County, Nova Scotia, Canada" dated August 1, 2014 which was prepared in respect of the Touquoy Gold Project by FSS International Consultants (Aust) Pty. Ltd. (“FSSI”) of Beecroft, NSW, Australia [link to technical report].

Geology

The Touquoy Gold Deposit is a shale hosted, disseminated gold deposit, located in the Meguma Group, a sequence of Cambro-Ordovician sandstones and mudstones which underlies about half of the province of Nova Scotia. Since the mid-1800s about 60 underground gold deposits within the Meguma Group have been mined, for an aggregate documented production of about 1.4 million ounces. These deposits evidence the substantial gold potential of the Meguma Group. The Touquoy Gold Deposit however is different from most of these deposits in that the gold is disseminated throughout the host sediments and is essentially unrelated to quartz veining.

The very wide drill intersections of gold mineralisation at Touquoy, some in excess of 100 m, therefore set this deposit apart from the typical Meguma Group gold deposits as a substantial, open-pit, bulk mining proposition.

Metallurgy

Final comprehensive metallurgical testwork has been undertaken under the guidance of Peter Lewis and Associates. The ore has excellent metallurgical characteristics:

  • Very high total recoveries (93%)
  • Very high gravity recoveries (65%)
  • Permissible coarse grind (150 microns)
  • Low reagent consumption
  • Very short residence time (16-24 hours)

Grindability

The master composite of material to be milled gave a bond ball mill work index at Touquoy of approximately 8.8-10.2 kWh/t depending on the specific rock type, which means the rock is relatively easy to grind.