British Columbia, Canada
The Phoenix Zone was first discovered by the Company in December 2011 following an exploration program throughout the property. This zone is currently outlined over a strike extent of at least 1,000 metres and is located in an area that is approximately two kilometres west of the Main Zone within the Company's Spanish Mountain Gold Project. In July 2012, the Company completed the acquisition of the Acrex property which lies contiguous to the north of the Phoenix Zone. Following the acquisition, the Company evaluated the geological potential for the entire area. The analysis of the results from the 2011 and 2012 drilling program at the Phoenix Zone as well as the historical data on the Acrex property suggests that there is a broad trend of gold mineralization that is not primarily associated with an argillite layer (as is the case in the Main Zone) extending through this area and that the gold mineralization may be structurally controlled.
While the compilation and further interpretation of the data continue, the Company is encouraged that work thus far has confirmed the additional exploration potential for the Phoenix Zone area. Further drilling results obtained to the northwest of the most recent Phoenix holes are being evaluated in order to establish whether there is continuity between the areas drilled to date which span a strike length of just over 2.5 kilometers.
Preliminary metallurgical testwork has been carried out on samples from several of the Phoenix drill holes. The test results indicate that the Phoenix material is amenable to processing using the same flowsheet as has been developed for the Main Zone under the PEA.
The highlights of the results for the 2011 and the 2012 drill holes are as follows:
• 92.46 metres (m) grading 0.58 gram per tonne (g/t) gold including 7.50m grading 4.12 g/t gold in Hole 11-CCR-030.
• 55.40 m grading 0.82 g/t gold and a second interval of 47.50 m grading 0.35 g/t gold in Hole 11-CCR-023.
• 56.71 m grading 0.50 g/t gold in Hole 11-CCR-021.
• 15.75 m grading 0.48 g/t gold at bottom of hole in Hole 11-CCR-003.
• 9.1m grading .67 g/t gold including 2.87m grading 1.62 g/t gold in Hole 12-CCR-036
• 60m grading .48 g/t gold in Hole 12-CCR-037
• 34.8m grading .35 g/t gold in Hole 12-CCR-038
There is 50 to 100 meters of glacial overburden in the Phoenix area so that for several of the drill holes, grades from the rock interface down are above the PEA cut-off grade of 0.2 g/t gold. A table showing more details of the holes and a map showing the locations of drill holes are available below. Certain observations were made in several drill holes: For Hole 11-CCR-003, drilling was stopped at 102.72 meters at which point it was still in material above 0.2 g/t Au. For hole 11-CCR-023 the bottom 10 meters of the hole averaged 2.7 g/t Au. Similarly, holes 12-CCR-037 and 12-CCR-038 ended in gold mineralization. All holes to date are relatively widely spaced with 100 to 200 meters between drill holes.
Caution: Note that no Resource has been established for the Phoenix Zone and there is no assurance that further exploration work in this area will result in a Resource being defined.