The Stog’er Tight Deposit is a development stage project that forms a significant part of the Company’s strategy for continued and expanded gold production at its Point Rousse Project. Stog’er Tight is located 3.0 kilometres east of the Pine Cove Mine and Mill Complex near the community of Ming’s Bight, Newfoundland and Labrador.

Development activities have commenced at the Stog'er Tight deposit, including the dewatering of the nearby Fox Pond, the construction of a settling pond, and pre-stripping of the West Pit. Mining from the West Pit is expected to start in the first quarter of 2018 with ore being transported to the Pine Cove Mill for processing.

History

The Stog’er Tight Deposit was discovered by Noranda Exploration Company Ltd. who explored the Stog’er Tight property from 1987 to 1989. In 1996, Ming Minerals Inc. extracted a 30,735 tonne bulk sample from the Stog’er Tight deposit, but due to dilution and poor mill recoveries, no further work was continued. In 2006, Tenacity Gold Mining Company Ltd. mined a 29,695 tonne bulk sample with an estimated average grade of 4.8 g/t Au and processed the material at the nearby Nugget Pond mill. The resulting 1.92 g/t Au head grade was also attributed to dilution. No further work was undertaken and the Stog’er Tight Mining Lease was subsequently acquired by Anaconda in 2012.

Since the Stog’er Tight Deposit was discovered in 1988 a total of 18,073.73 m (282 holes) have been completed in four drilling campaigns: 1988-1990 – Noranda, 8,631 m (78 holes); 1996 & 1999 – Ming, 1,931.3 m (30 holes); 2010 – Tenacity, 1,772.7 m (77 holes); and 2014-2016 – Anaconda, 5,738.73 m (97 holes).

Geology

The Stog’er Tight area is host to several gold prospects including the; Stog’er Tight Deposit and its East and West extensions, the Gabbro, Gabbro East, Gabbro West, South and Cliff zones . The geological setting of the Stog’er Tight area is characterized by volcaniclastic, sedimentary and intrusive rocks, which form part of the cover sequence of Snooks Arm Group. At the property scale the mafic volcanic/volcaniclastic sequence is intruded by northwest-southeast-trending, north-dipping layered gabbroic sills up to 40 m thick, which are the primary host to gold mineralization.

The alteration system at Stog’er Tight is zoned and consists of four general alteration assemblages. These include from more distal to more ore proximal; i) a chlorite-calcite zone, ii) an ankerite-sericite zone, iii) a chlorite-magnetite zone, and iv) a red albite-pyrite (+gold) zone. The fourth zone of albitization is readily observed in outcrop even from a distance and results in the rocks having a general pink appearance that is readily mapped.  Locally leucoxene is observed as part of the alteration assemblage. Gold mineralization is typically hosted within a zone of albite+pyrite alteration and microscope and metallurgical studies have established a strong correlation between pyrite and gold.

Mineral Resources and Reserves

During 2017 AdiuvareGE, on behalf of Anaconda completed an NI43-101 compliant resource on the Stog’er Tight Deposit (Cullen et al., 2018). Drilling data used in the resource estimate included a total of 216 holes, with samples composited to 1m lengths. The estimation method intended to define the trend of the mineralization based on cross sections. In addition to the trend, an indicator model was created using a cut-off grade of 0.5 g/t gold. Block model grades for the Stog’er Tight Deposit were estimated using ordinary kriging.

The deposit is estimated to contain Indicated Mineral Resources of 204,100 tonnes grading 3.59 g/t gold for a total of 23,540 ounces and Inferred Mineral Resources of 252,100 tonnes grading 3.27 g/t gold for a total of 26,460 ounces, both using a cut-off grade of 0.8 g/t Au.

 Indicated Resource for Range of Cut-Off Values at Stog’er Tight as at October 22, 2015.

*numbers are rounded

Inferred Resource for Range of Cut-Off Values at Stog’er Tight as at October 22, 2015.

*numbers are rounded

An internal cut-off grade of 1.00 g/t gold was established for determination of Probable Mineral Reserves for Stog’er Tight using the company’s existing cost structure.

This internal cut-off grade is the minimum ore grade required to economically break-even including all site costs per tonne of ore processed. Ore and waste mining costs are not included in determining the internal cut-off grade, however, these costs are included when calculating the external pit costs.

The operating costs and parameters for the GEOVIA Whittle 4.5 optimization were selected by Anaconda based on the operating experience of their personnel at the nearby Pine Cove Mine. The operating costs and parameters displayed below were entered into GEOVIA Whittle 4.5 for the pit optimization runs. Stog’er Tight Pit slopes were optimized at overall ultimate pit angles of 45˚. This provided a buffer for the increase in waste quantities once the pit shells were transformed into an open pit design after adding access roads, bench berms, and safety berms to its ultimate configuration.  Based on a 26,000 tonne bulk sample in 2016 an internal dilution of 7% and grade loss of 35% were applied to in-pit resources in order to estimate Probable Mineral Reserves.

Stog’er Tight Operating Costs and Cut-off grade calculation.

The ultimate in-pit mineral reserves are estimated to be 191,500 tonnes at a grade of 2.39 g/t gold using a cut-off grade of 1.0 g/t gold. Stog’er Tight Mineral Reserves are inclusive of Mineral Resources.

Metallurgy

Metallurgical work by Anaconda on the Stog’er Tight Deposit consists of bench scale tests as well as a total of 26,557 tonnes of bulk sample material processed at the Pine Cove mill during 2016.  Bench scale samples were tested by RPC Science and Engineering of New Brunswick, Canada (“RPC”) for grind, liberation and flotation characteristics. Grinding studies indicated that the Stog’er Tight material (Malvem sizing analysis indicated 80% passing 74 um and 95% passing 150 um) appears to be much softer then the Pine Cove ore (80% passing 150 um). The RPC study also reported that when the Stog’er Tight material was subjected to the same flotation conditions as used in the Pine Cove mill a low grade final product was obtained (13.32 g/t gold at an Au recovery of 96.9% in 25.8% of the mass). Optimum results were obtained when slimes depressants/dispersants were employed.

The February 2016 bulk sample produced 638 ounces of gold from 15,167 tonnes at an average recovered grade of 1.66 g/t gold, resulting in a recovery of 79%. There were issues with organic material in the mill feed due to overburden present with the sample. The May 2016 bulk sample was much more successful, with 824 ounces of gold being produced from 9,991 tonnes at an average grade of 3.08 g/t gold, resulting in a recovery of 86%. The throughput was comparatively higher than when processing Pine Cove ore, confirming the work done by RPC in 2015. The December 2016 bulk sample comprised producing 64 ounces of gold from 1,404 tonnes at an average grade of 1.64 g/t gold, resulting in a recovery of 86%.

Exploration and Drilling

Since 2015 Anaconda has completed 3,526.2 m of diamond drilling at Stog’er Tight in 62 drill holes. Drilling was focussed on exploration outside of the current resource area in the Gabbro, West, 278 and East Zones with the goal of expanding the current resource along strike to the east and west.

Highlight assays from drilling at Stog’er Tight include:

• 1.81 g/t gold over 6.0 metres from 22.0 – 28.0 metres in hole BN-16-227
• 2.28 g/t gold over 4.0 metres from 9.0 – 13.0 metres in hole BN-16-228
• 2.46 g/t gold over 3.0 metres from 35.5 – 38.5 metres in hole BN-16-230
• 6.70 g/t gold over 4.0 metres from 16.0 – 20.0 metres in hole BN-16-235
• 1.28 g/t gold over 8.8 metres from 21.0 - 29.8 metres in hole BN-16-278

Assay Highlights from the 2014 to 2016 Diamond-Drill Programs, Stog’er Tight Deposit

^NI 43-101 TECHNICAL REPORT, MINERAL RESOURCE AND MINERAL RESERVE UPDATE ON THE POINT ROUSSE PROJECT BAIE VERTE, NEWFOUNDLAND AND LABRADOR, CANADA. Prepared By: Michael Cullen, P.Geo. and Catherine Pitman, P.Geo.  (Independent Qualified Persons); and David Copeland, P.Geo., Paul McNeill, P.Geo., and Gordana Slepcev, P.Eng. (Qualified Persons). Effective Date: December 31, 2017. Published: February 22, 2018.

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