Geology

The Red Mountain Gold Deposit is hosted within multi-phase Jurassic age diorite that intruded Triassic sediments of the Stuhini group. Mineralized zones consist of crudely tabular, northwesterly trending and moderately to steeply southwesterly dipping gold and silver bearing iron sulphide stockworks. Pyrite is the predominant sulphide; however, locally pyrrhotite is important. The stockworks zones are developed primarily within the Hillside porphyry and to a lesser extent in rafts of sedimentary and volcaniclastic rocks. The stockwork zones consist of pyrite micro-veins, coarse-grained pyrite veins, irregular coarse-grained pyrite masses and breccia matrix pyrite hosted in a pale, strongly sericite-altered porphyry. Vein widths vary from 0.1 cm to approximately 80 cm but widths of 1 to 3 cm are most common. The veins are variably spaced and average 2 to 10 per metre. The veins are very often heavily fractured or brecciated with infillings of fibrous quartz and calcite. Orientations of veins in the stockworks are variable; however, sets with northwesterly trends and moderate to steep northeasterly and southwesterly dips have been identified in underground workings. The pyrite veins typically carry gold grades ranging from 3 g/t to greater than 100 g/t. Gold occurs in grains of native gold, electrum, petzite and a variety of gold tellurides and sulphosalts. The stockwork zones are surrounded by more widespread zone of disseminated pyrite and pyrrhotite alteration.

Additional highlights of the project include:

• The Red Mountain Gold Project has excellent exploration potential in areas of glacial retreat adjacent to known high-grade showings;
• Ongoing surface work identified multiple prospects and discoveries at Lost Valley, 400 metes south of the current resource;
• Resources are open for expansion in three directions;
• Majority of resources are in the Measured and Indicated categories;
• Prospective trend with mineralized showings over 16km; and,
• Epithermal gold mineralization similar to Brucejack and Premier/Big Missouri.

MINERAL RESOURCE ESTIMATE (2018)

The updated mineral resources for the Red Mountain Project are reported at a 3.0 g/t Au
cut-off with an effective date of June 15, 2018.

The resource update incorporates information from previous drilling, plus results from 29,312 meters of drilling completed during 2017 (104 additional underground, eight surface and three geotechnical core holes), and local trenching/channel sampling.  Mineralization was primarily modelled at approximately 2.5 g/t gold grade based on the underground, bulk-mineable nature of the orebody, primarily amendable to long hole stoping for main mineralized areas including: Marc, AV, JW and peripheral zones, with consideration for sulphide mineralization (primarily pyrite, with local pyrrhotite and sphalerite) and alteration zonation (primarily sericite and silica).  Mineralized zones generally follow brecciated contacts between host intrusive (Hillside porphyry) with sediments and volcanic rocks.  The mineralized horizon folded by large amplitude (>150 meter) folds and separated into different blocks and zones by post-mineralization faults.  

The current mineral resource estimate, effective date June 15th 2018, was prepared by Dr. Gilles Arseneau, P.Geo, and Andrew Hamilton, P.Geo, using 3D GEMS block modeling software.  Resources were estimated from 415 surface and underground core holes with 622 intercepts within 20 different solids into 4 x 4 x 4 meter blocks.  Interpolation was by ordinary kriging, or inverse-distance squared methods on smaller or dispersed data sets, with anisotropic search ellipsoids designed to fit the strike and dips of the zones.  An extensive quality control and quality assurance (“QA/QC”) review was completed on all 2017 and previous exploration work and a comparative analysis was performed on drill hole data, underground bulk sampling and geology. Bulk density was interpolated using inverse-distance squared method where there was sufficient data populations.  For zones with sparse data, average values from the data available for a given zone were applied. Comprehensive metallurgical studies have indicated gold recoveries for the main resource zones (Marc, AV, JW, 141) range from 88.1% to 92.8% and average 90.9% (tonnage weighted).