The Cape Spencer Project

The Cape Spencer Project is an exploration stage project that has a history of past-production and the potential for near-term resource growth and discovery.

The Cape Spencer Project comprises 106 claims covering more than 2,400 hectares and is located 15 kilometres east of the City of Saint John, New Brunswick.

Highlights of the Cape Spencer Project

The Cape Spencer Deposit has an Inferred Mineral Resource Estimate of 1,720,000 tonnes at an average grade of 2.72 g/t gold for 151,000 contained ounces in the Northeast and Pit Zones;
- Inferred Mineral Resource of 740,000 tonnes at an average grade of 4.07 g/t gold, for 96,000 contained ounces at a cut-off grade of 2.5 g/t gold in a conceptual underground development at the Northeast Zone; and
- Inferred Mineral Resource of 990,000 tonnes at an average grade of 1.71 g/t gold, for 54,000 contained ounces at a cut-off grade of 0.5 g/t gold in a conceptual open-pit at the Pit Zone.
Hosted within similar Proterozoic-aged rocks of the Avalon Zone that host the Haile (5.0 Moz), Ridgeway (1.5 Moz) and Hope Brook (2.0 Moz) gold deposits. These rocks are deformed, and mineralization is localized along relatively shallow dipping fault and shear zones.
Past production (1985-1989) of 194,224 tonnes producing 4,832 ounces @~50% recovery through heap leach;
8 kilometres of exploration potential with 10 known gold occurrences;
Excellent infrastructure with road access to the key areas of interest.

Cape Spencer Project Mineral Resource Estimate

The Inferred Mineral Resource Estimate for the Cape Spencer Deposit is 1,720,000 tonnes at an average grade of 2.72 g/t gold for 151,000 contained ounces at cut-off grade of 0.5 g/t gold and 2.5 g/t gold in two mineralized zones; the Pit Zone and the Northeast Zone with an effective date of January 23, 2019 (Table 1). The Northeast Zone contains a conceptual underground inferred mineral resource estimate of 740,000 tonnes at an average grade of 4.07 g/t gold for 96,000 contained ounces at a cut-off grade of 2.5 g/t gold and the Pit Zone contains a conceptual open-pit inferred mineral resource estimate of 990,000 tonnes at an average grade of 1.71 g/t gold for 54,000 contained ounces at a cut-off grade of 0.5 g/t gold. A sensitivity report for the Cape Spencer Project Northeast Zone and Pit Zone is presented in Table 2.

Table 1: Cape Spencer Project Mineral Resource Estimate – Effective Date: January 23, 2018

Zone	Cut-Off (Au g/t)	Category	Rounded Tonnes	Au (g/t)	Rounded Ounces
Northeast	2.5	Inferred	740,000	4.07	96,000
Pit	0.5	Inferred	990,000	1.71	54,000
Total	0.5 and 2.5	Inferred	1,720,000	2.72	151,000

This Mineral Resources Estimate was prepared in accordance with NI 43-101 and the CIM Standards (2014)
Mineral Resource tonnages have been rounded to the nearest 10,000 and ounces have been rounded to the nearest 1,000. Total may not sum due to rounding.
A cut-off of 2.50 g/t gold was used to estimate Mineral Resources for the Northeast Zone.
A cut-off of 0.50 g/t gold was used to estimate Mineral Resources for the Pit Zone.
Mineral Resources were interpolated using Ordinary Kriging from 1.5 metre assay composites capped at 15 g/t gold.
An average bulk density of 2.74 g/cm3 has been applied.
Northeast Zone Mineral Resources extend to a maximum depth of 225m below surface and are considered to reflect reasonable prospects for economic extraction in the foreseeable future using conventional underground mining methods at a gold price of CAD $1,550 per ounce.
Pit Zone Mineral Resources extend to a maximum depth of 100m below surface and are considered to reflect reasonable prospects for economic extraction in the foreseeable future using conventional open-pit mining methods at a gold price of CAD $1,550 per ounce.
Mineral Resources do not have demonstrated economic viability.
This estimate of Mineral Resources may be materially affected by environmental, permitting, legal title, taxation, sociopolitical, marketing, or other relevant issues.

Table 2: Cape Spencer Project Sensitivity Report

Zone	Cut-Off (Au g/t)	Category	Rounded Tonnes	Au (g/t)	Rounded Ounces
Northeast	1.5	Inferred	1,480,000	2.98	142,000
	2.5	Inferred	740,000	4.07	96,000
	3.5	Inferred	400,000	5.04	64,000
Pit	0.5	Inferred	990,000	1.71	54,000
Pit	1.0	Inferred	830,000	1.88	50,000

Geology and Mineralization

The Cape Spencer Project is centered along the Millican Lake Fault, a regional splay of the Caledonia and Cobequid Fault Zones. The Property is underlain by Precambrian Millican Lake granite, and Coldbrook Group volcanic and sedimentary rocks. The Precambrian stratigraphy is unconformably overlain by and in fault contact with younger Carboniferous sedimentary rocks of the Cape Spencer and Lancaster Formations.

Gold mineralization at Cape Spencer is generally hosted within Precambrian Millican Lake granite or bounding Coldbrook Group volcanic and sedimentary rocks, with mineralization and alteration focussed along strongly faulted and sheared contacts between the two lithologies. Orogenic gold mineralization is currently interpreted to have formed during Siluro-Devonian deformation and thrust faulting. A second phase of mineralization is interpreted to have formed during Carboniferous deformation along the Cobequid Fault Zone.

Alteration consists of mesothermal style pervasive and patchy illite + pyrite + quartz ± iron carbonate ± sulfide veins and stockworks with 2-5% total sulfides consisting of pyrite, galena, chalcopyrite or sphalerite, and locally show trace amounts of visible gold.

There are several gold prospects that warrant additional exploration over an 8-kilometre strike. Drill Highlights from previous exploration work from 1982 to 2004 include:

Cape Spencer Mine (Pit Zone) – Past Producing (1985-1986) Mine. Highlight assays include:

13.89 g/t gold over 2.46 metres within a zone grading 4.76 g/t gold over 9.45 metres (GX-86-09);
6.22 g/t gold over 1.52 metres within a zone grading 2.13 g/t gold over 21.0 metres (GX-82-18);
27.08 g/t gold over 1.08 metres within a zone grading 5.10 g/t gold over 9.15 metres (GX-86-29); and
18.00 g/t gold over 1.50 metres within a zone grading 5.18 g/t gold over 8.25 metres (AB-04-10).

Northeast Zone - Located 400 metres northeast of the Cape Spencer Mine. Interpreted to be continuous with the Road Zone. Highlight assays include:

41.96 g/t gold over 2.45 metres within a zone grading 7.72 g/t gold over 16.2 metres (CS-87-06);
16.20 g/t gold over 1.5 metres within a zone grading 4.45 g/t gold over 19.0 metres (CS-87-08);
11.52 g/t gold over 3.0 metres within a zone grading 4.85 g/t gold over 10.5 metres (CS-87-13); and
12.54 g/t gold over 4.0 metres within a zone grading 4.26 g/t gold over 18.5 metres (CS-87-17).

Road Zone – 400-metre-long zone of gold-bearing alteration zone with an average width of 20 metres. This zone is interpreted to be the along strike continuation of the Northeast Zone. Highlight assays include:

16.28 g/t gold over 2.5 metres within a zone grading 1.81 g/t gold over 55.0 metres (MR-087);
10.35 g/t gold over 1.0 metres within a zone grading 1.49 g/t gold over 20.7 metres (MR-147); and
13.06 g/t gold over 2.0 metres within a zone grading 1.28 g/t gold over 18.0 metres (MR-105).

Birches Zone – 300-metre-long gold-bearing alteration zone south of the Road Zone. Highlight assays include:

17.85 g/t gold over 1.0 metre within a zone grading 5.23 g/t gold over 4.0 metres (MR-150);
9.48 g/t gold over 1.0 metre within a zone grading 4.01 g/t gold over 4.0 metres (MR-149); and
3.60 g/t gold over 5.0 metres (AB-04-08).

12.00 g/t gold over 1.4 metres (chip) and 2.77 g/t gold over 3.0 metres (chip); and
Surface grab samples up to 168.00 g/t gold

Zone A – Grab samples up to 53.50, 41.10, 37.70, 20.60 and 12.90 g/t gold.

Zone C – Grab samples up to 8.92, 8.12 g/t gold and chip sample of 2.77 g/t gold over 3.0 m.

Zone D – Five occurrences of visible gold with grad samples up to 7.12 g/t gold.

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