Prime has filed a deed in Mexico with the Public Registry of Property and Commerce to record the transfer of the 37 Los Reyes mining concessions to Prime’s local subsidiary company. In several days, the mining concessions will also be registered with the Mines General Directorate’s mining public registry.

Daniel Kunz, chief executive officer of Prime Mining, commented, “With the completion of the transaction, Prime now owns 100 per cent of Los Reyes, an oxide open-pit project that already has a high-quality gold-silver mineral resource with exceptional growth potential.”

Vice-president, investor relations, appointment

Prime has appointed Alex Tsakumis as vice-president, investor relations. Mr. Tsakumis has over 25 years of capital market experience representing mining companies listed on major stock exchanges (including Toronto Stock Exchange and New York Stock Exchange). His responsibilities have included corporate governance, corporate communications, and maintaining active engagement and strong relationships with institutional investors. Mr. Tsakumis holds a BA in economics.

Alain Bureau, president, commented: “Results are constantly showing the impressive high-grade nature of the La Plata project as well as the thickness of the mineralization. We are also very pleased to see positive results in our efforts to expand the mineralized footprint by reporting mineralization outside of the existing envelope.”

Infill drilling program:

• CMLP-20-104 was drilled outside of the known mineralized envelope and reported additional mineralization to the south of La Plata. The intercept starts with eight metres of massive and semi-massive sulphides composed of sphalerite and finishes in a mineralized stockwork zone.
• CMLP-20-105 was drilled to test the edge of the existing envelope at the bottom of the south block, reporting a massive sulphide with spectacular intercepts of zinc within sphalerite, which deeper transitioned to end in chalcopyrite.
• CMLP-20-106 is positioned within the south body for infill purposes. The intercept starts with eight metres of massive sulphide mineralization and continues into a stockwork zone. It cut mostly highly mineralized chalcopyrite and finished in sphalerite and pyrite.

The 2020 La Plata exploration program includes 11,000 metres of diamond drilling and is intended to infill the south and north blocks of the La Mina area, while upgrading the known mineralized resources from the inferred category. This program is also designed to increase the known resources at the main La Mina VMS lenses, while providing the necessary samples to further metallurgical testing, along with geotechnical investigations. When completed, these new findings and results will then be included in the upcoming feasibility study, which is planned for 2021.

Drill holes are planned to continue testing mineralization, mainly at depth and along strike of the La Mina area, while also stepping out 275 metres north to further test the Guatuza target area. The previous operator of the property reported high-grade values from its earlier trenching program at the Guatuza target. These results included a surface trench cutting 2.5 metres of 5.36 grams per tonne gold, 71.18 grams per tonne silver, 2.14 per cent copper, 3.22 per cent lead and 10.86 per cent zinc, as reported in Toachi Mining Inc.’s press release dated Jan. 16, 2019.

La Plata project

Gold-bearing sulphide mineralization at La Plata occurs as compositional banding composed of chalcopyrite, sphalerite and pyrite laminae, with barite occurring as clasts and also as layers. The mineralized lenses have also been dislocated by a few faults and dolerite dikes cutting the body.

The La Plata project is amongst the highest-grade gold-copper VMS deposits in which base metal and precious metal mineralization is interpreted to have formed as part of multiple volcanic episodes that created a stacked volcanic-exhalative hydrothermal sequence considered favourable for hosting additional VMS lenses. The recent drilling results in the southern portion of the deposit have encountered deeper mineralization, and an extension of mineralization to the north has been discovered by recent trenching results.

The independent La Plata preliminary economic assessment dated March 30, 2019, was prepared pursuant to National Instrument 43-101 and reports the La Plata inferred resources at 1.9 million tonnes at an average grade of 4.1 g/t gold, 49.4 g/t silver, 3.3 per cent copper, 4.5 per cent zinc and 0.6 per cent lead, as available on SEDAR.

The La Plata project consists of two concessions covering a total area of 2,300 hectares along the nine-kilometre length, which contains known mineralization in two VMS lenses and nine priority exploration targets.

The company has a binding option agreement with a private Ecuadorean company to earn up to 75 per cent in the La Plata project, of which the first option to acquire the initial 60-per-cent ownership interest has been exercised. Please refer to the management’s discussion and analysis for the year ended Dec. 31, 2019, for further details.

The net proceeds of the offering will be used to finance continuing exploration and development at the company’s core Beartrack-Arnett gold project located in Lemhi county, Idaho, and for general corporate purposes.

The units will be offered by way of a short-form prospectus in all provinces of Canada, excluding Quebec, and may also be offered by way of private placement in the United States.

The Company will host a conference call to review the Bankable Feasibility Study results at 10:00 am EST on Tuesday, July 21, 2020. The dial-in numbers for the conference call are as follows:

North America (toll free): 1-877-703-1560

Overseas or local (Toronto):1-647-689-5569

Quotes from the Company:

“The Bayan Khundii BFS results confirm the high-return nature of this project in its base case, with significant potential upside due to ongoing district-wide exploration and exposure to rising gold prices. The shallow, high grade, open-pit Bayan Khundii deposit lends itself to conventional mining and processing techniques, reducing the execution risk in bringing the project into production in an accelerated timeframe,” said Peter Akerley, President and CEO. “As a low-capex, low-opex project with a less than two-year payback and significant growth potential, Bayan Khundii offers investors and stakeholders exposure and leverage to gold as we move towards first production in early 2022.”

“Recent exploration results, including intersections of high-grade gold in the Midfield SE and Striker SW zones of the Bayan Khundii deposit, currently classified as sub-grade material, are expected to add to the Project’s robust economics,” continued Mr. Akerley. “The Bayan Khundii development is the foundation for growth in our underexplored Khundii Gold District and we see significant potential to expand resources, extending the mine life and creating value for all stakeholders. We will follow up on recent exploration success with additional drilling in Q3 2020.”

“We have recently engaged HCF International Advisers Limited (“HCF”) to secure debt financing for the project,” concluded Mr. Akerley. “Their expertise, combined with the support of the European Bank for Reconstruction and Development (“EBRD”) position us well to secure the funding to commence construction later this year.”

NI 43-101 Technical Report Overview

The Technical Report incorporates an updated reserve estimate for Bayan Khundii. The BFS includes 3.4 million mineable tonnes from the Bayan Khundii resource at an average diluted head grade of 3.7 g/t gold, all of which are Proven and Probable Reserves.

The Technical Report envisions a high-grade, open-pit mine, beginning at surface in the southern portion of the Bayan Khundii deposit (Striker and Gold Hill), and expanding northward into adjacent zones at Midfield and Midfield NE. The development incorporates conventional crushing and grinding, leach and a Carbon in Pulp (“CIP”) plant with processing capacity of 1,800 tonnes per day.

The base case assumes a gold price of US$1,400/oz. All references to dollars within this release are US Dollars (US$), unless stated otherwise. The Technical Report, pursuant to NI 43-101 guidelines for the Bayan Khundii BFS will be filed on SEDAR within 45 days. Key metrics from the Technical Report are presented in Table 1 below.

                 Khundii Gold Project Key Metrics
 
BK BFS
Gold Price                                         US$/oz   1,400  
Production Profile                                                 
Average Head Grade Over Life of Mine1             g/t gold   3.7   
Project Life2                                      years      8    
Operating Life                                     years      6    
Target Plant Feed Rate Per Day3                     tpd     1,800  
Average Annual Saleable Gold                         oz    63,500  
Peak Annual Saleable Gold                            oz    79,100  
Average Gold Recovery Rate Over Life of Mine         %       93%   
Strip Ratio                                         t:t      9.1   
Operating Costs                                           ? BK BFS 
Life of Mine ("LOM") Average Cash Cost4            US$/oz    731   
LOM Cash Cost plus Sustaining Cost (AISC)4         US$/oz    733   
Pre-Tax Net Present Value                                          
5% discount rate                                    US$M     145   
7.5% discount rate                                  US$M     126   
10% discount rate                                   US$M     109   
Pre-Tax Internal Rate of Return                      %       55%   
After-Tax Net Present Value                                        
5% discount rate                                    US$M     100   
7.5% discount rate                                  US$M     86    
10% discount rate                                   US$M     73    
After-Tax Internal Rate of Return                    %       42%   
Payback Period (After tax)                         years     1.9   
Capital Requirements                                               
Pre-production Capital Cost, including contingency  US$M     59    
Life of mine ("LOM") Remaining Capital Cost         US$M      5    

Notes:

Average diluted head grade of mineralized rock fed to process plant.

Project life comprising one-year pre-production period, approximately six-year operating life and one-year mine closure period.

Assumes process plant operates for 8,000 hours per annum to achieve the target production rate of 600 ktpa.

Operating costs reported in terms of saleable gold ounces for Bayan Khundii; costs include Royalty and Charges of US$86/oz.

Technical Report Sensitivities

The following tables shows changes in the after-tax NPV and IRR over a range of gold prices and discount rates, demonstrating the impact of higher gold prices and the Project’s resiliency to lower prices.

Technical Report Sensitivities -- After-Tax Gold Price Sensitivity Analysis 
 
Gold Price Sensitivity Analysis      Units      US$1,200US        $1,400      US$1,600      US$1,800      US$2,000
NPV (5% discount rate)                US$M              43           100           158           216           274
NPV (7.5% discount rate)              US$M              33            86           138           190           242
NPV (10% discount rate)               US$M              25            73           120           168           215
IRR                                      %             22%           42%           60%           77%           93%

Bayan Khundii Mineral Resource and Reserve Estimate

The Bayan Khundii Mineral Resource Estimate (“Mineral Resource”) was prepared in accordance with NI 43-101 and CIM standards by Tetra Tech with an effective date of October 1, 2019. The details of the Mineral Resource are included in the “Khundii Gold Project NI 43-101 Technical Report” dated December 4, 2019 and authored by M. Phifer, C. Norton, Clark, A. Kelly, H. Ghaffari, M. Horan and M Fawcett (“KGP 2019 Technical Report”). The report is available on Edene’s SEDAR page ( link here ) and incorporated herein by reference. The Mineral Resource has been constrained to a conceptual pit shell and is reported at a cut-off grade of 0.55 g/t gold. The assumptions and parameters utilized to establish the cut-off grade and pit shell are reported below in notes to Table 3. Tetra Tech recommends reporting the Bayan Khundii Mineral Resource at a 0.55 g/t gold cut-off, however a sensitivity analysis of the grade and tonnage relationships at different cut-off grades is shown for reference in Table 3.

  Bayan Khundii Gold Deposit -- Mineral Resource Estimate Summary, October 1, 2019
 
Cut-off Grade(1)       Resource Classification      Quantity (Mt)        Grade (Au g/t)         Gold (Koz)
0.4                    Measured                               1.7                  3.15                176
                       Indicated                              4.6                  2.45                364
                       Measured and Indicated                 6.4                  2.64                540
                       Inferred                               1.1                  3.10                106
0.55                   Measured                               1.4                  3.77                171
                       Indicated                              3.7                  2.93                350
                       Measured and Indicated                 5.1                  3.16                521
                       Inferred                               0.9                  3.68                103
1.0                    Measured                               0.7                  7.31                153
                       Indicated                              1.7                  5.56                304
                       Measured and Indicated                 2.3                  6.05                457
                       Inferred                               0.4                  6.83                 93
1.4                    Measured                               0.5                  9.09                148
                       Indicated                              1.4                  6.40                294
                       Measured and Indicated                 1.9                  7.10                441
                       Inferred                               0.4                  7.61                 91

Notes:

The Statement of Estimates of Mineral Resources has been compiled under the supervision of Mr. Cameron Norton who is a full-time employee of Tetra Tech and a P. Geo. Mr. Norton has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity that he has undertaken to qualify as a Qualified Person as defined in the CIM Standards of Disclosure.

All Mineral Resource figures reported in the table above represent estimates based on drilling completed up to April 22, 2019. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies.

Mineral Resources are reported on a dry in-situ basis.

The Mineral Resources is reported at a 0.55 g/t Au cut-off. Cut-off parameters were selected based on Tetra Tech’s internal cut-off calculator, which indicated that a break-even cut-off grade of 0.55 g/t Au, assuming an open cut mining method, a gold price of USD $1,350 per ounce, an open pit mining cost of USD $2 per tonne, a processing cost of USD $16 per tonne milled, a G&A cost of $5 per tonne, and a gold recovery of 95%.

The mineral resource estimate has been constrained to a preliminary optimized pit shell which assumed a gold price of USD $2,000 and the economic potential tested using the above parameters.

The mineral resource estimate assumes an average density of 2.66 t/m3 for the mineralized domains.

Mineral Resources referred to above, have not been subject to detailed economic analysis and therefore, have not been demonstrated to have actual economic viability.

Measured and Indicated mineral resources do not have demonstrated economic viability. Inferred mineral resources have a greater amount of uncertainty as to their existence and potential economic and legal feasibility, do not have demonstrated economic viability, and are exclusive of mineral reserves.

BK Reserve Estimate

The Bayan Khundii, BFS Mineral Reserve has been estimated by Qualified Person, Mr. Anthony Keers, Director, Auralia Mining Consulting, using the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves to conform to the Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects. The total Mineral Reserve for the Bayan Khundii deposit is shown in Table 4. The Mineral Reserve is based on the October 1, 2019, Mineral Resource, reported herein. The Mineral Reserve includes both Proven and Probable Mineral Reserves that were converted from Measured and Indicated Mineral Resources. Tonnes and grades were calculated for the mining blocks, and allowances for dilution and mining recovery were applied to the estimate for the Mineral Reserve Statement. The effective date of the Mineral Reserve statement is July 1, 2020.

  Bayan Khundii Gold Deposit -- Mineral Reserve Statement,
  July 1, 2020
 
                             Tonnage (Mt) Grade (g/t Au)  Contained Au (Koz)
Proven Mineral Reserves      1.2          4.2             166        
Probable Mineral Reserves    2.2          3.5             244        
Mineral Reserve              3.4          3.7             409        

Notes:

The effective date of the Mineral Reserve estimate is July 1, 2020. The QP for the estimate is Mr. Anthony Keers of Auralia Mining Consulting

The Mineral Reserve estimates were prepared with reference to the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards (2014 CIM Definition Standards) and the 2003 CIM Best Practice Guidelines.

Reserves estimated assuming open pit mining methods.

Waste to ore cut-offs were determined using a NSR for each block in the model. NSR is calculated using prices and process recoveries for each metal accounting for all off-site losses, transportation, smelting and refining charges.

Reserves are based on a gold price of $1,400/oz.

Mineral Reserves were calculated from a diluted “mining” block model which included average dilution of 9% and losses of 1%.

Mining

The BK BFS is based on an open-pit mining operation targeting 600,000 tonnes per year of feed material for the processing plant. The total mineable mineralized plant feed is 3.4 million tonnes at an average diluted head grade of 3.7 g/t gold and average strip ratio of 9.1:1 (waste tonne: plant feed tonne). Mineralization starts at surface, with the majority of the deposit contained within the top 100 metres. The deposit structure, grades and depth suggest selective open cut mining will be utilized. Mining will use hydraulic excavators in backhoe configuration. Drilled and blasted material will be loaded into haul trucks, with waste rock deposited in an engineered Integrated Waste Facility (“IWF”) adjacent to the pit, and ore hauled to a crusher or run-of-mine (“ROM”) pad adjacent to the processing plant.

The BK BFS has assumed contract mining based on methodology and costing contained in proposals received from contractors with suitable experience in Mongolia in similar open-pit mining environments. In this scenario the contractor provides the full fleet and personnel to operate the project on a schedule of rates (US$/tonne material moved) basis. The contractor is proposing a total of 4 x excavators (2 x ore, 2 x waste), 10 x 55t payload trucks, 3 x blasthole drills and a fleet of ancillary and support equipment to deliver the required material movement. The contractor’s workforce peaks at approximately 190 personnel to deliver the required schedule of production.

Processing

The BFS assumes processing of ROM material via a conventional crush and grind circuit and a carbon in pulp plant. Plant design by 360-Global has been based on testing at Blue Coast Research which has established optimal processing parameters, including; grind size of 80% passing 60 microns; design inputs for comminution circuit, low cyanide concentration in leach circuit (0.5 g/litre sodium cyanide); 36 hour retention time; carbon adsorption parameters and detoxification reagent dosages. The process circuit has been designed to maximize water recovery with the most efficient dewatering process (ceramic disc filters) to achieve targeted 15% moisture in tailings, minimize chemical and reagent usage and minimize environmental impact.

The ore-processing plant will be located adjacent to the Bayan Khundii open pit and throughput will target 600,000 ore-tonnes per year, nominally 1,800 tonnes per day. Total mineralized material from BK, processed in the plant over the course of the mine life, is 3.4 million tonnes at an average diluted head grade of 3.7 g/t gold. Using an estimated mill recovery of 93.1%, total recovered gold over the life of the Bayan Khundii deposit is 381,700 ounces.

Operating Costs

Operating costs are based on the mining and processing scenarios outlined above and assumes contract mining. Power for operations will be generated through a hybrid diesel and solar generation solution, provided under a power purchase agreement for the duration of the Project. All other activities are assumed to be owner-operated. The AISC for Bayan Khundii is estimated at $733/oz.

  Operating Costs 
 
                                            LOM ($ millions)                 US$/oz              US$/tonne
Mine Operating Cost                                      133                    350                     39
Processing Cost                                           96                    252                     28
G A                                                       13                     33                      4
Total Site Operating Costs                               242                    635                     71
Royalty and Charges                                       32                     86                     10
Sustaining Capital and Closure Costs                       5                     12                      1
All-In Sustaining Cost                                   279                    733                     82

Capital Costs

Construction costs (Year 0), primarily comprising the process plant and supporting infrastructure, accommodation village, and associated engineering and indirect costs is estimated at US$46 million. Pre-production costs, including construction readiness, mobile site equipment and pre-strip total $8M. The capital cost estimate includes a 10% contingency. Sustaining capital of US$4 million has been included in the mine plan and net mine closure costs are estimated at US$1 million, including salvage values. Total life of mine capital expenditures for the Bayan Khundii Gold Project are estimated at US$64 million.

            Capital Costs
 
 Item                             $ millions
Process Plant                        24    
Non-Process Infrastructure           10    
Accommodation Village                2     
Construction Indirects               6     
Engineering & Support                4     
Construction Costs                   46    
Pre-Production Costs                 8     
Contingency                          5     
Subtotal Plant and Infrastructure    59    
Sustaining Capital                   4     
Reclamation and Mine Closure         3     
Salvage                             (2)    
Total                                64    

Note: Rounding may cause some computational discrepancies

Opportunities to Enhance Project Value

The Company sees the following opportunities to enhance value at the Khundii Gold Project:

Additional Resources at Bayan Khundii:

The Bayan Khundii Resource includes measured and indicated resources of 521,000 ounces at an average grade of 3.16 g/t gold, and Inferred Resources of 103,000 ounces of gold at a grade of 3.68 g/t gold which could potentially be added to open-pit reserves through both additional drilling and rising gold prices.

Recent drilling at the Midfield SE and Striker SW zones of the Project area intersected exceptionally high-grade gold, including one metre of 582 g/t gold within an intersection of 5.5 metres grading 126 g/t at Midfield SE, in areas of the resource currently classified as waste or sub-grade material. The areas are expected to provide additional high-grade feed in the early phases of development.

Additionally, very high gold grades observed in drilling in the Striker West portion of the deposit have the potential to provide additional high-grade resources should closer spaced drilling improve continuity.

The reported resource is pit constrained based on multiple parameters (Table 1, note 4) including a US$1350 gold price. Multiple high-grade intersections outside the pit provide expansion targets requiring additional drilling in a rising gold price environment.

Further drilling is planned for Q3 2020 to confirm the existence of high-grade material within the Bayan Khundii project area.

Exploration: The Bayan Khundii deposit is situated in a highly prospective region that has received minimal historical exploration. On the Bayan Khundii property, multiple high-grade targets have been established through limited shallow drilling and surface sampling within 4 kilometres of the deposit, including the Khar Mori (Dark Horse) prospect identified in late 2019.

Erdene recently trenched new gold zones at Dark Horse, with assays returning 6 metres grading 8.8 g/t gold, including 1 metre of 50.8 g/t gold, and 4 metres of 14 g/t gold, including 1 metre of 45.3 g/t gold. As a large untested prospect, Dark Horse provides significant discovery potential along strike with a well-defined and continuous gold-in-soil anomaly along a NE trending structure for 1.3 kilometres. In addition, there are several isolated but intense gold-in-soil anomalies at or near NE-NW structural intersections. Drilling is planned for Q3 2020.

Recoveries: Although a 93% gold recovery has been utilized for the BFS, testing of a recent master composite sample, representative of the BK ore, with a head grade of 3.6 g/t gold, returned recoveries averaging 95% indicating an opportunity for increased recoveries in the plant.

Higher Grade Upside: The very high-grade nature of the Bayan Khundii deposit provides upside should continuity of the ultra high-grade zones (greater than 20 g/t gold) be established during mining.

Underground Potential: Further underground mining potential has been identified in conceptual studies for Midfield North and Striker West which, if proven economical through further studies, could lead to a further increase in the economic reserve of the Bayan Khundii Project.

Additional Resources at Altan Nar: Erdene’s Altan Nar deposit, located approximately 16km north of Bayan Khundii, has an established Indicated Resource of 5.0 Mt grading 2.0 g/t gold (318,000 ounces of contained gold) and an Inferred Resource of 3.4 Mt grading 1.7 g/t gold (186,000 ounces of contained gold). Approximately 250,000 ounces of the current Altan Nar resource could potentially be processed by the Bayan Khundii Project processing facility at modest incremental capital cost (see “KGP 2019 Technical Report”). A number of development options for Altan Nar are under consideration.

Environmental and Permitting

In June 2020, Erdene completed an independent Environmental and Social Impact Assessment in accordance with the Performance Requirements of the European Bank for Reconstruction and Development (“EBRD”). The study was led by Sustainability East Asia LLC, in consortium with Eco Trade LLC and Ramboll Australia Pty Ltd. Concurrently, the Mongolian statutory Detailed Environmental Impact Assessment (“DEIA”) for the Project has been prepared by Eco Trade LLC in accordance with the applicable national standards. Local stakeholder consultations on the DEIA are planned for Q3 2020. Following the consultations, the company will submit its statutory DEIA to the Ministry of Environment and Tourism of Mongolia for approval.

Erdene has obtained many of the key permits required to construct the Bayan Khundii Gold Project over the past year. In August 2019, the company received the Bayan Khundii Mining License, securing the site for 30 years, with the option to extend for 70 years. Additionally, the Company’s Statutory Technical and Economic Assessment (“Mongolian Feasibility Study”) was approved by the Mineral Resource and Petroleum Authority in early 2020. The Mongolian Ministry of Environment and Tourism approved a water reserve and flow rate to be utilized for the planned processing plant and infrastructure of the Khundii Gold Project. Additionally, the Project’s Land Arrangement Plan has been approved by the local community, granting access to the 100-hectare area required to construct the BK open-pit and associated surface infrastructure. Permission to construct is expected to be received following approval of the Mongolian DEIA.

Project Finance and Next Steps

The Company has engaged HCF to act as Project Finance advisor, with primary responsibility for securing debt. HCF is a leading independent corporate finance advisory boutique based in London, focused on the global natural resources and infrastructure sectors. HCF provides strategic and financial advice to companies and financial institutions across the complete life cycle of a project, including structuring of debt finance. HCF possess significant Mongolian experience, having acted as an advisor on the financing of Oyu Tolgoi, Mongolia’s largest mining project, and has strong relationships with the EBRD, a strategic investor in Erdene and one of Mongolia’s largest foreign investors. HCF is working with Erdene to secure the full financing package by the end of 2020. It is anticipated that senior debt financing could comprise as much as 70% of the total financing package given the Project’s strong cashflows.

In addition to project financing, over the coming months, project development work will be focused on:

Securing approval of Erdene’s Board of Directors to begin construction;

Completing the DEIA and obtaining necessary permits to commence construction;

Drilling at Bayan Khundii to incorporate recent discoveries into an updated resource

Optimization of the project execution schedule, including procurement and permitting;

Ongoing documentation to support the update and filing of existing permits and filing for additional permits that may be required; and

Completion of detailed engineering and design.

Initiation of early works in support of full construction

Study Consultants

The BFS and associated Front-End Engineering and Design (“FEED”) work has been completed by a consortium of International and Mongolian firms with significant experience operating in Mongolia:

Roma Group Ltd. (“Roma”), a leading company in the region in engineering, business and asset valuations, risk advisory, corporate and M&A advisory services led the BFS preparation is responsible for coordinating all Qualified Persons to produce the final NI 43-101 BFS Technical Report. Roma also led the hydrology-hydrogeological and geotechnical studies, cost estimation and financial modelling study workstreams. Roma is listed on the Hong Kong Stock Exchange and has extensive experience working with major regional mining and financial firms leading technical studies and valuation projects for mining projects in Asia, including Mongolia.

Several Mongolian companies provided in-country services and support for the BFS and FEED Study, including: Soil Trade LLC (“Soil Trade”), a geotechnical engineering firm; LOBO Erdene LLC (“LOBO”), an engineering and construction firm, Project Mining LLC (“Project Mining”), a mining engineering consulting firm; and Eco Trade LLC (“Eco Trade”), an environmental consulting firm. Erdene works closely with local specialists to ensure compliance with Mongolian regulations.

O2 Mining Ltd. (“O2”) assisted with the BFS mine design and planning (including closure) and co-led the FEED Study non-process infrastructure and Mongolian construction permitting workstreams. O2 is a Hong Kong-based engineering firm with principals who have over 13 years of Mongolian mining experience and a team with significant experience in mine development in Australasia, including the design, construction, commissioning and operation of gold, coal, base metals and industrial mineral mines and processing facilities.

Auralia Mining Consulting (“Auralia”), confirmed mineral reserve modelling and mine design optimization. Auralia, are a Perth, Australia-based consulting firm with expertise in mine engineering and resource modelling and extensive experience with gold projects with companies such as Barrick and Gold Road Resources.

360-Global Inc. (“360-Global”) carried out process plant design and engineering for the BFS and FEED Studies. 360-Global is a consulting firm based in the Philippines, specialized in full cycle design services and experienced with gold processing infrastructure globally, including Mongolia, China, Canada, Australia and Africa.

ATC Williams Pty Ltd, (“ATCW”) undertook mineral waste and tailings facility design and management and mine closure planning. ATCW is based in Melbourne, Australia and has extensive experience in mineral waste and tailings transport, storage, closure and water management, including at the Oyu Tolgoi project in Mongolia.

Blue Coast Research Ltd (“BCR”) continued to provide metallurgical testing support for the Khundii Gold Project. BCR have extensive experience with gold deposits and have carried out all of the Bayan Khundii and Altan Nar metallurgical test work to date. Sustainability East Asia, Ramboll, and Eco Trade LLC delivered the Environmental and Social Impact Assessment announced on June 4, 2020 (see full press release here ).

Qualified Person and Sample Protocol

The information in this press release that relates to the financial models for the Bayan Khundii Feasibility Study is based on information compiled and reviewed by Kenny Li, CFA, who is an employee of ROMA Group Ltd. The information in this press release that relates to the capital and operating cost estimation for the Bayan Khundii Feasibility Study is based on information compiled and reviewed by Julien Lawrence, who is a FAusIMM and the Director of O2 Mining Ltd. The information in this press release that relates to the process design and recovery methods for the Bayan Khundii Feasibility Study is based on information compiled and reviewed by Jeffrey Jardine, who is a FAusIMM. and is engaged through O2 Mining Ltd. The information in this press release that relates to the Bayan Khundii resource estimate is based on information compiled and reviewed by Mr. Cam Norton, who is a P.Geo, and is an employee of Tetra Tech Inc. The information in this press release that relates to the Bayan Khundii reserve estimate is based on information compiled and reviewed by Mr. Anthony Keers, who is an MAusIMM (CP Mining) and a Director, Auralia Mining Consulting. Each of Mr. Li, Mr. Lawrence, Mr. Jardine, Mr. Norton and Mr. Keers has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activity which they have undertaken to qualify as a Qualified Person, as that term is defined by National Instrument 43-101. Each of Mr. Li, Mr. Lawrence, Mr. Jardine, Mr. Norton and Mr. Keers is not aware of any potential for a conflict of interest in relation to this work with Erdene.

Peter Dalton, P.Geo. (Nova Scotia), Senior Geologist for Erdene, is the Qualified Person as that term is defined in National Instrument 43-101 and has reviewed and approved the non-BFS information and the non-Bayan Khundii Mineral Resource and Reserves estimate technical information contained in this news release on behalf of Erdene. All samples have been assayed at SGS Laboratory in Ulaanbaatar, Mongolia. In addition to internal checks by SGS Laboratory, the Company incorporates a QA/QC sample protocol utilizing prepared standards and blanks. All samples undergo standard fire assay analysis for gold and ICP-OES (Inductively Coupled Plasma Optical Emission Spectroscopy) analysis for 33 additional elements. For samples that initially return a grade greater than 5 g/t gold, additional screen-metallic gold analysis is carried out which provides a weighted average gold grade from fire assay analysis of the entire +75 micron fraction and three 30-gram samples of the -75 micron fraction from a 500 gram sample.

Erdene’s drill core sampling protocol consisted of collection of samples over 1 or 2 m intervals (depending on the lithology and style of mineralization) over the entire length of the drill hole, excluding minor post-mineral lithologies and un-mineralized granitoids. Sample intervals were based on meterage, not geological controls or mineralization. All drill core was cut in half with a diamond saw, with half of the core placed in sample bags and the remaining half securely retained in core boxes at Erdene’s Bayan Khundii exploration camp. All samples were organized into batches of 30 including a commercially prepared standard, blank and either a field duplicate, consisting of two quarter-core intervals, or a laboratory duplicate. Sample batches were periodically shipped directly to SGS in Ulaanbaatar via Erdene’s logistical contractor, Monrud Co. Ltd.

Khundii Gold District

Erdene’s deposits are located in the Edren Terrane, within the Central Asian Orogenic Belt, host to some of the world’s largest gold and copper-gold deposits. The Company has been the leader in exploration in southwest Mongolia over the past decade and is responsible for the discovery of the Khundii Gold District comprised of multiple high-grade gold and gold/base metal prospects, two of which are being considered for development: the 100%-owned Bayan Khundii and Altan Nar projects. Together, these deposits comprise the Khundii Gold Project.

The Bayan Khundii Gold Resource includes 521,000 ounces of 3.16 g/t gold Measured and Indicated (“M&I”) and 103,000 ounces of Inferred resources at 3.68 g/t gold. Within the M&I resource, a proven and probable open-pit reserve totals 409,000 ounces at 3.7 g/t, providing possible significant growth of reserves with the potential development of the remaining M&I and Inferred resources.

The company recently completed drilling the four-hole program announced on June 02, 2020, and expects initial assay results in early August, at which stage the Company will provide an update.

John Miniotis, President and CEO of the Company, stated “We are very pleased to announce a significant increase to our fully-funded exploration program at Diablillos. The expansion of the drill program allows us to continue to test the extension of high-grade gold mineralization beneath the current mineral resources and along strike. With assay results pending from recently drilled holes and drilling activities expected to continue for the next four months, we now eagerly anticipate steady news flow from the exploration program throughout the remainder of the year.”

Planned 5,000 Metre Drill Program Objectives

The additional 5,000 metres (approximately 10 holes) of diamond drilling will utilize a single drill from August to approximately November 2020. The main objective of the exploration program is to further expand known resources of the lower gold dominant zone located close to the andesite/basement unconformity at Oculto, which is a high sulphidation epithermal system. The planned program will consist of:

• – Several holes targeting a broadly horizontal zone of higher-grade gold mineralization which occurs at or near the contact of the Tertiary volcanic rocks and the Ordovician basement assemblage. The gold mineralization along this contact zone is approximately 30 meters thick and is one of the key targets for the upcoming drill program, as are the steeply-dipping hydrothermal breccias that extend into the basement below the contact zone (see block diagram in Figure 1).
• – As the sulphide related gold/silver/copper mineralization occurs immediately beneath the oxide gold mineralization, the drilling is designed to target the host breccia zones (feeders), while also intersecting the shallowly dipping oxide gold zone above them (Figure 1).
• – Drilling is also designed to expand the deeper gold zone to the east and relate drill intercepts to detailed outcrop mapping of silica breccia zones, as silver and gold mineralization at Oculto is associated with these breccias.
• – Selected deeper holes are planned to test the Laderas siliceous breccia zone immediately to the north of Oculto. In addition, these holes will test for new siliceous breccias between Laderas and Oculto.
• – One deeper hole is planned at Oculto to test for depth extensions of the Main Breccia on section 8225E where hole DDH 20-001 intersected 15m of 658g/t Ag, 2.35g/t Au and 5.1% Cu from 275 to 290m depth.
• – A ground magnetic survey is also planned in the next month to identify potential mineralizing structures under the colluvial covered plain between Oculto and Fantasma/Alpaca that may result in additional drill targets.

About Diablillos

The 80 km 2 Diablillos property is located in the Argentine Puna region – the southern extension of the Altiplano of southern Peru, Bolivia, and northern Chile – and was acquired from SSR Mining Inc. by the Company in 2016. There are several known mineral zones on the Diablillos property, with the Oculto zone being the most advanced with approximately 85,000 metres drilled in 306 RC and diamond drill holes. Oculto is a high-sulphidation epithermal silver-gold deposit derived from remnant hot springs activity following Tertiarty-age local magmatic and volcanic activity. Comparatively nearby examples of high sulphidation epithermal deposits include: El Indio, Chile; Veladero, Argentina; and Pascua Lama, on the Chile-Argentine border.

Qualified Persons

David O’Connor P.Geo., Chief Geologist for Abraplata, is the qualified person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects, has reviewed and approved the scientific and technical information in this news release.

Granada Gold and Canada Silver are non-arm’s-length parties under exchange policies due to common directors and officers.

For further information, refer to the companies’ news releases dated July 2, 2020, and July 13, 2020, and to their respective material change reports dated July 15, 2020, which are available under their respective SEDAR profiles.

Prior to acquisition of common shares and warrants by Treasury, the company held one million common shares, representing approximately 1 per cent of the then issued and outstanding shares of Platinex. Following the acquisition by Treasury of common shares and warrants of Platinex on July 15, 2020, Treasury owns an aggregate of 13.5 million common shares and five million warrants, representing approximately 10.633 per cent of the issued and outstanding shares of Platinex, and assuming exercise of its five million warrants, Treasury would hold 18.5 million common shares, representing approximately 14.019 per cent of the issued and outstanding shares of Platinex.

This news release is issued pursuant to National Instrument 62-103 (the Early Warning System). A copy of the early warning report will appear on the SEDAR website.

Comparisons are made to the prior Mineral Reserve and Mineral Resource estimates as described in the previously filed National Instrument 43-101 (NI 43-101) report dated July 30, 2019.

Highlights of the 2019 Mineral Reserve and Resource Estimates:

29% increase in Total Measured and Indicated Resources to 1.59 million ounces gold

55% increase in Total Inferred Resources to 2.82 million ounces gold

Chris Bradbrook, President and CEO of Superior Gold stated: “We are extremely pleased to be able to provide this updated Mineral Reserve and Mineral Resource estimate, which continues to deliver on our stated goal of increasing resources, extending the mine life and maximizing the potential of the Plutonic Gold Operations.

As announced in our Press Release dated May 12, 2020, because of the progress made with the comprehensive Mineral Resource estimate for the Plutonic Gold Operations (“Plutonic”), we decided to include it as part of our annual Reserve and Resource estimate. The comprehensive Mineral Resource estimate incorporates historic intersections encountered outside of the main underground working areas which have not previously been interpreted and included in a Resource statement. We believe it is this comprehensive Mineral Resource estimate which is the best indicator for the future of Plutonic and is continued evidence that Plutonic is a large mineralized system with long term potential.

This comprehensive Mineral Resource estimate was part of a larger program of re-examining the geological modelling of the gold mineralization at Plutonic. Historically, the Plutonic underground mine has not mined to reserve grade, and one of the primary goals of this latest Reserve and Resource estimation was to allow for more predictive planning and improved production forecasts.

Prior Mineral Reserve and Resource estimations utilized open block models and the Company inherited Reserve and Resource models and estimates that required further evaluation and definition. Our experience with the Plutonic mine has demonstrated that open block models are not the most accurate method to identify the distribution of mineralization, and tend to overestimate grade.

We continue to refine and improve our Mineral Reserve and Resource estimation for Plutonic. This year’s Reserve and Resource estimates have utilized additional geologically constrained wire-framed models which we believe better predict the grade and distribution of the mineralization. As a result, whilst our Reserve and Resource grades have declined, our confidence in the distribution of the mineralization, and our expected ability to mine to reserve grade, and therefore improved profitability, has increased. Since we acquired Plutonic, our focus has been on better understanding the mineralization through the upgrading of pre-existing Inferred Mineral Resources to Measured and Indicated and by adding Inferred Mineral Resources outside of that to demonstrate that the Plutonic underground deposit remains open in multiple directions including at depth. We are very pleased with our progress in this respect.

We will continue our aggressive program of underground drilling to both further upgrade Inferred Mineral Resources to Measured and Indicated and outline new areas of mineralization. In particular, we will focus on better defining and expanding the new high grade mineralization which was announced in our Press Releases dated December 10, 2019, February 10, 2020, June 17, 2020 and June 24, 2020 for the Baltic, Baltic Deeps and Indian Zones with intersections of up to 56.3 g Au/t over 15.10 metres (as announced on June 17, 2020 in the Press Release titled “Superior Gold Inc. Announces Best Underground Exploration Intersection to Date Outside of Existing Resources”).

Additionally, given the substantial increase in Mineral Resources, we will be examining the potential to increase the rate of underground production.”

Mineral Reserves as at December 31, 2019 were estimated using a long term gold price of A$1,925 per ounce ($1,348 per ounce). Cut off grades for the Mineral Reserves for Plutonic underground were 2-3 g Au/t (depending on stoping area), and 0.4 g Au/t for the open pit areas. Dilution of 15% was factored into the estimation of underground Mineral Reserves. Mineral Resources as at December 31, 2019 were estimated using a long term gold price of A$2,150 per ounce ($1,505 per ounce). Cut off grades for the Mineral Resource estimates were 1.50 g Au/t for underground and 0.40 g Au/t for open pit.

Mineral Reserve Estimates

Table 1: Proven and Probable Mineral Reserves1 2
   
  
  
   December 31, 2018                           December 31, 2019              
           Tonnes (millions)Grade (g Au/t)Oz Au (000's)Tonnes (millions)Grade (g Au/t)Oz Au (000's)
Underground                                                                                        
Proven           1.23            4.82          191           1.07            4.40          150     
Probable         1.03            4.61          152           1.51            3.70          180     
Total            2.26            4.73          343           2.58            4.00          330     
                                                                                                   
Open Pit                                                                                           
Probable         1.51            1.32          64            1.35            1.10          50      
                                                                                                   
Stockpiles                                                                                         
Proven           0.23            0.94           7              -              -             -      
                                                                                                   
Grand Total      4.00            3.22          414           3.93            3.00          380     

1 Mineral Reserves are included within the Mineral Resources.
2 All figures are rounded and use significant figures. Subtotals, totals, and weighted 
averages are calculated from quantities before rounding.


  

The underground grade declined relative to the year end 2018 Mineral Reserves as a result of the change from the prior use of open block models to those based on geologically controlled wire-framed models. Additionally the increase in the allowance for underground dilution to 15% (compared to 10% used for the December 31, 2018 reserve estimate) negatively impacted the reserve grade compared to the prior year.

Mineral Resource Estimates

Table 2: Measured and Indicated Mineral Resources1 2
   
  
  
   December 31, 2018                           December 31, 2019              
           Tonnes (millions)Grade (g Au/t)Oz Au (000's)Tonnes (millions)Grade (g Au/t)Oz Au (000's)
Underground                                                                                        
Measured         1.78            7.66          437           3.69            5.50          650     
Indicated        2.95            5.94          564           5.54            4.60          820     
Total            4.73            6.59         1,001          9.23            5.00         1,470    
                                                                                                   
Open Pit                                                                                           
Measured                                                                                           
Indicated        4.70            1.46          221           2.69            1.40          120     
Total            4.70            1.46          221           2.69            1.40          120     
                                                                                                   
Stockpiles                                                                                         
Measured         0.23            0.94           7              -              -             -      
                                                                                                   
Grand Total      9.65            3.96         1,229          11.92           4.20         1,590    

1 Mineral Resources are inclusive of Mineral Reserves.
2 All figures are rounded and use significant figures. Subtotals, totals, and weighted averages 
are calculated from quantities before rounding.


  

Table 3: Inferred Mineral Resources1
   
  
  
   December 31, 2018                           December 31, 2019              
           Tonnes (millions)Grade (g Au/t)Oz Au (000's)Tonnes (millions)Grade (g Au/t)Oz Au (000's)
Underground                                                                                        
Inferred         10.45           4.90         1,645          19.45           4.20         2,640    
                                                                                                   
Open Pit                                                                                           
Inferred         4.00            1.40          180           4.73            1.20          180     
                                                                                                   
Grand Total      14.45           3.93         1,825          24.19           3.60         2,820    


1 All figures are rounded and use significant figures. Subtotals, totals, and weighted 
averages are calculated from quantities before rounding.


  

Open Pit Mineral Reserves and Resources

The open pit Reserves and Resources are for Hermes, Hermes South and Plutonic East only. The estimations for the Workshop, Salmon and Trout pits are ongoing.

Technical Reports

An updated NI 43-101 Technical Report effective December 31, 2019 will be available on the Company’s SEDAR profile at http://www.sedar.com within 45 days of this press release.

Qualified Persons

Stephen Hyland is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM) and a member of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) and a “qualified person” within the meaning of NI 43-101, and has approved disclosure of the ‘Mineral Resource estimates’ and related technical information and data. Mr. Hyland is employed by Hyland Geological and Mining Consultants (HGMC) and has been engaged on the basis of professional association between client and independent consultant. He is independent of the Company within the meaning of NI 43-101.

Matthew Keenan (BEng BCom MSc) is a member of the AusIMM (CP) and a “qualified person” within the meaning of NI 43-101, has approved disclosure of the underground Mineral Reserve estimates’ technical information and data. Mr. Keenan is an employee of Entech Pty Ltd who were engaged by the Company to assist in the estimate and design of the Mineral Reserves for the underground Plutonic Gold Mine based on the Mineral Resource estimates as of December 31, 2019. He is independent of the Company within the meaning of NI 43-101.

Ashutosh Srivastava B. Tech. (Mining Engineering), is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM) and a “qualified person” within the meaning of NI 43-101, has approved disclosure of the open pit Mineral Reserve estimates’ technical information and data. Mr. Srivastava is an employee of Superior Gold Inc. as Alternate Quarry Manager who was tasked by the Company to assist in the estimate and design of the Mineral Reserves for the open-pit Plutonic Gold Mine based on the Mineral Resource estimates as of December 31, 2019. He is not independent of the Company within the meaning of NI 43-101.

As detailed above, with the exception of the open pit Mineral Reserve estimates, The Qualified Persons who have approved the disclosure of the sections of the Technical Report referred to above and the scientific and technical information elsewhere in this press release are independent of the Company within the meaning of NI 43-101.

Reliability of Reserve and Resource Estimates

The Technical Report does not form the basis of a feasibility study or a pre-feasibility study under the Canadian Institute of Mining, Metallurgy and Petroleum’s “CIM Definition Standards for Mineral Reserves and Mineral Resources” incorporated by reference into NI 43-101. As an operating mine, the Plutonic Gold Mine is supported by information that exceeds the accuracy expected from a feasibility study.

Statements relating to Mineral Reserves or Mineral Resources are deemed to be forward-looking information as they involve the implied assessment, based on certain estimates and assumptions that the Mineral Reserves and Mineral Resources described can be profitably mined in the future. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Company’s Mineral Resources and Mineral Reserves estimates described in this press release are only estimates and no assurance can be given that the anticipated tonnages and grades will be achieved, that the indicated level of recovery will be realized or that Mineral Reserves will be mined or processed profitably. Mineral Reserve and mineral Resource estimates may require downward adjustments or revisions based on gold price fluctuations, grades, further development activity, increased production costs or reduced recovery rates, new information or modelling adjustments, changes to laws and regulations affecting operating costs and the fiscal environment. If actual Mineral Reserves and Mineral Resources are less than current estimates, the Company’s results of operations or financial condition may be materially and adversely affected.

Troilus Adds 422 Claims in Frotet-Evans Greenstone Belt:

Troilus has entered into a definitive agreement with Globex Mining Enterprises Inc. (GMX: TSX, GLBXF: OTCQX International, G1MN: Frankfurt) (“Globex”), pursuant to which it has acquired 91 claims to the south of the existing Troilus Project (the “Globex Claims”). As consideration for the acquisition of the Globex Claims (the “Globex Acquisition”), the Company has issued 350,000 common shares (the “Consideration Shares”) and granted a 2% Gross Metals Royalty (“GMR”) to Globex on the Globex Claims. Troilus will have the right to repurchase a 1% GMR on the Globex Claims at any time for CAD$1,000,000. The Globex Claims cover an area of approximately 4,960 hectares,including the Rosario, Lac Testard Ouest, Pyrox, Claudette Zone, Boulder Lake, Boulder Gold, and Lac Chix properties. The claims cover a number of copper and gold showings, geophysical anomalies and structures and horizons worthy of more detailed work applying the Troilus geological model, including historical grab samples previously reported by Globex as follows:

11% Cu and 50 g/t Ag; 3.46% Cu and 13.4 g/t Ag and, up to 5.79 g/t Au and 12.55% Cu at Lac De Maures Est; 4.96 g/t Au and 1.00 g/t Ag at Boulder Lake; 1.79% Cu and 5.50 g/t Ag; 1.25% Cu and 2.40 g/t Ag at Claudette; 41.14 g/t Au, 378.42 g/t Ag and 0.38% Cu at Lac Testard Ouest; and, 1.2 g/t Au and 1.9 g/t Au at Lac Chix

Troilus has also entered into a definitive agreement with 9219-8845 Qc. Inc. dba Canadian Mining House (“CMH”), pursuant to which it has acquired 21 claims to the south of the existing Troilus Project (the “CMH Claims”). As consideration for the acquisition of the CMH Claims (the “CMH Acquisition”), the Company has paid cash consideration of CAD$69,000 (the “Consideration Payment”) and granted a 1% Net Smelter Royalty (“NSR”) to CMH on the CMH Claims. Troilus will have the right to repurchase a 0.5% NSR on the CMH Claims at any time for CAD$500,000 and to purchase the remaining 0.5% NSR on at any time for CAD$1,500,000. The CMH Claims cover an area of approximately 1,140 hectares.

Finally, Troilus has staked 310 new claims (“Staked Claims”) covering an area of approximately 16,905 hectares. Combined with Troilus’s existing 84,600 hectare property, these new claims brings the Company’s total land package to 107,326 hectares or 1,076 square kilometres, further consolidating Troilus as the largest mineral claims holder in the highly prospective Frotet-Evans Greenstone Belt.

Troilus Completes Royalty Buyback:

Troilus also announces that it has bought back from Greg Exploration Inc. and certain individuals (the “Vendors”) the 1.5% Net Smelter Royalty (the “Greg NSR”) relating to the 209 claims (11,308.8 hectares) known as Troilus North, which were previously acquired from EmGold Mining Corp. (see press release dated December 5, 2018), thereby cancelling the Greg NSR. In consideration for the Greg NSR, the Vendors were issued 150,000 common shares (the “NSR Consideration Shares”).

Closing of the Globex Acquisition and the Greg Royalty Buyback remain subject to final approval of the TSX. The Globex Consideration Shares and NSR Consideration Shares are subject to a four-month statutory hold period.

“As a result of the recently announced $5.51-million private placement, we are immediately and aggressively executing on our goal of discovering a high-grade deposit at our prospective Tilt Cove gold project. With the success of previous fieldwork, all within sight of a past producing high-grade gold mine, we are confident that Tilt Cove has more high-grade gold to offer. We have commenced a 35-line-kilometre ground magnetic and IP (induced polarization) geophysical survey with crews now mobilized in the field. Furthermore, we will be testing at least five priority targets over the next six months with 10,000 metres of diamond drilling. The recent financing and the ability to accelerate our work at Tilt Cove makes this an exciting time for Anaconda and is consistent with our strategy to leverage the Pine Cove mill and permitted tailings facility, fast-tracking the period from discovery to production and realizing full shareholder value from new discoveries,” said Kevin Bullock, president and chief executive officer, Anaconda Mining.

Tilt Cove project advancements to date

To date, Anaconda has made the following advances at Tilt Cove:

• Discovered the new Growler showing with channel samples that include 2.75 grams per tonne gold over 5.2 metres and 1.78 g/t gold over 5.0 metres;
• Discovered an additional two kilometres of prospective strike in the Growler area that includes the NPH, which is host to two significant showings: the Growler showing and the Betts Big Pond showing which has historic grab samples up to 60.66 g/t gold and chip samples of 8.19 g/t gold over 2.3 metres. These Nugget Pond-style showings are within 400 metres of each other and are broadly considered part of the new Growler target area;
• Discovered a new prospective iron-rich horizon, the Red Cliff horizon, in the footwall of the Nugget Pond horizon with a six-kilometre strike, establishing two potential host rocks for Nugget Pond-style gold mineralization in this area;
• Developed multiple drill targets associated with coincident structures that cross the Nugget Pond and Red Cliff horizons, with coincident magnetic lows and gold-in-soil anomalies located along the southeast trend of historic glacial movement (down ice);
• Identified a broad gold-in-soil anomaly down ice from the Red Cliff Pond target;
• Found 154 rock grab and float samples with anomalous gold (82 samples greater than 0.50 g/t gold, 31 greater than 3.00 g/t gold and 14 high-grade samples ranging from 5.16 g/t gold to 216.10 g/t gold) and two visible gold occurrences (previously announced; see press release dated Nov. 27, 2019);
• Conducted a lidar survey over the entire property and a detailed drone magnetic survey (453 line kilometres) covering the NPH;
• Conducted 2,975 metres of diamond drilling in 18 drill holes at the Red Cliff Pond, East Pond, West Pond and Growler targets and intersected prospective host rocks, anomalous gold, geological structures and quartz veins with associated sulfides, all typically associated with Nugget Pond-style gold mineralization.

Geophysical crews are now mobilized at Tilt Cove to conduct a combined 35-line-kilometre ground magnetic and IP geophysical survey. This work will be coincident with a mapping and prospecting program, which will be followed by a 10,000-metre diamond drill program at highly prospective targets including the Scarp, West Pond, Growler, East Pond and Betts Cove targets.

The 2020 Tilt Cove program

The 2020 Tilt Cove program will test the top five priority targets on the Tilt Cove project as well as collect data from other targets to advance them to the drill stage. The top five priority targets include the Scarp zone, West Pond, Betts Cove, Growler and East Pond. Thirty-five line kilometres of ground geophysics (magnetics and IP) and 10,000 metres of diamond drilling will test the priority targets as follows:

The Scarp zone

This target is characterized by more than a kilometre of exposed NPH coincident with a similar strike length consisting of 107 gold-bearing rock grab and float samples over 0.5 g/t gold. The area is also characterized by a strong deformation zone adjacent to the Nugget Pond horizon, which dips shallowly northwest beneath younger Silurian rocks. This target will be tested with 6.2 kilometres of ground magnetic and IP geophysics as well as 2,500 metres of diamond drilling and 500 metres of percussion drilling.

West Pond target

This target is characterized by a 1.3-kilometre-long zone beneath West Pond that is up ice from a very strong gold-in-soil anomaly very similar in character and dimension to the gold-in-soil anomaly associated with the discovery of the high-grade Nugget Pond deposit as well as a coincident break in magnetic intensity where a northwesterly trending lineament intersects the NPH. West Pond will be tested using 2,000 metres of diamond drilling that will be drilled either from shore or from a barge.

Betts Cove target

At the Betts Cove mine disseminated to massive pyrite and chalcopyrite plus/minus gold mineralization is hosted at the contact between gabbroic sills and pillow basalts, particularly within a chlorite schist unit that may represent a sheared alteration zone; a similar setting to the Tilt Cove mine 20 kilometres to the northeast along strike. Historic drilling at the Betts Cove mine has returned significant gold intercepts that include: 4.48 g/t gold over 4.0 metres (from 52.0 to 56.0 metres), including 11.20 g/t gold over 1.1 metres in hole BC-89-01; 6.77 g/t gold over 5.0 metres (from 63.1 to 68.1 metres) in hole BC-89-02; 1.87 g/t gold over 13.0 metres (from 63.5 to 76.5 metres) including 7.50 g/t gold over 0.5 metre and 8.82 g/t gold over 1.0 metre in hole NBC-96-01; and 4.59 g/t gold over 1.5 metres (from 63.5 to 65.0 metres) in hole NBC-96-02. IP geophysics of 17.6 line kilometres and up to 1,500 metres of diamond drilling will test this area.

Growler target

The Growler target is a newly recognized zone of prospectivity with a strike of two kilometres underlain by the NPH and associated with two large shear zones adjacent to the NPH contact. The area also includes recently discovered surface mineralization with channel samples at the Growler showing assaying 2.75 g/t gold over 5.2 metres and 1.78 g/t gold over 5.0 metres as well as historic chip samples at the Betts Big Pond showing assaying 8.19 g/t gold over 2.3 metres. IP geophysics of 11.1 line kilometres and up to 2,500 metres of diamond drilling will test this area.

East Pond

East Pond is characterized by an 800-metre strike length of the NPH coincident with reduction in magnetic intensity and crosscutting lineaments. The target also includes historic drilling, which intersected footwall mineralization similar to the Nugget Pond mine including 5.74 g/t gold over 0.5 metre (RCP-97-01); 10.30 g/t gold over 0.5 metre (RCP-97-02); 1.16 g/t gold over 3.4 metres (RCP-97-02); and 4.90 g/t gold over 0.5 metre (RCP-98-01). One thousand five hundred metres of drilling is designed to test the East Pond target.

The winter program

On Nov. 27, 2019, and Feb. 27, 2020, the company announced an exploration program at Tilt Cove that intended to include 4,000 metres of diamond drilling in addition to a trenching program at Growler. A large portion of the winter program was not completed due to concerns over ice conditions required for drilling on the ponds and other factors related to the COVID-19 pandemic. The company was able to complete the trenching at Growler and 2,975 metres of diamond drilling in 18 holes across four targets at Tilt Cove.

Growler exploration

During late fall 2019, the company completed a short trenching program exposing the Growler showing based on results of grab sampling earlier that summer. Trenching exposed an area of altered and pyrite mineralized sediments that the company interprets to be a thrust repeated section of the NPH. A total of 47 channel samples averaging 1.0 metre in length were cut in various orientations across the Growler exposure. The best channel sample results include 2.75 g/t gold over 5.2 metres and 1.78 g/t gold over 5.0 metres.

  SELECT COMPOSITED CHANNEL SAMPLE RESULTS FROM THE GROWLER SHOWING

Channel ID                     Interval*                           Au
                                     (m)                        (g/t)

1                                   5.00                         1.78
including                           2.00                         2.86
2                                   5.20                         2.75
including                           2.00                         6.05
3                                   6.00                         1.38
including                           1.00                         3.71
5                                   2.00                         2.17
including                           2.00                         3.62

* True thickness unknown.

In December, 2019, a total of 375 metres of diamond drilling in five shallow holes (GR-19-01 to 05) were completed to test the mineralization exposed in trenching at the Growler showing. The drill holes were designed to test the downdip projection of mineralization and the trend of major host structures within the trench area. Although drilling failed to intersect the grades and thicknesses observed in the trench, the company intends on fully testing the Growler area as it represents a structural repeat of the NPH, and along with the Betts Big Pond showing, represents an area of excellent exploration potential. Weakly anomalous gold was returned from drill hole GR-19-01.

Red Cliff Pond drilling

A total of 843 metres of diamond drilling were completed in three holes (RCP-20-01 to 03) to test priority geophysical signatures (coincident IP chargeability highs and magnetic lows) at the Red Cliff Pond target. Drilling successfully intersected the NPH sediments with alteration, quartz veining, pyrite mineralization and structures (faults and shear zones) that are amenable to hosting gold mineralization. Assays included 5.10 g/t gold over 0.5 metre (97.8 to 98.3 metres) in hole RCP-20-01.

East Pond drilling

A total of 763 metres of diamond drilling were completed in four holes (EP-20-01 to 04) to test priority geophysical signatures (coincident IP chargeability highs and magnetic lows) at the East Pond target. Drilling successfully intersected the NPH sediments with quartz veining, multiple generations of pyrite mineralization and structures (brecciation, faults and shear zones) that are amenable to hosting gold mineralization. Weakly anomalous zones of gold mineralization hosted in quartz-veined gabbro sills associated with the NPH were encountered in holes EP-20-01 and 02.

West Pond drilling

A total of 998 metres of diamond drilling were completed in six holes (WP-20-01 to 06) from the ice to test priority geophysical signatures (magnetic lows), structural and geochemical anomalies (soil, rocks and tills down ice to the southeast) at the West Pond target. Drilling successfully intersected the NPH sediments with quartz veining, multiple generations of pyrite mineralization and structures (brecciation, faults and shear zones) that are amenable to hosting gold mineralization. Geological interpretation of drill results suggests tight to isoclinal folding of the NPH in this area, increasing the thickness of the potential target. Deteriorating ice conditions in early March and the onset of the COVID-19 pandemic prevented the company from fully testing targets beneath and adjacent to West Pond. No significant assays were returned from initial drilling at West Pond.

  ASSAY HIGHLIGHT TABLE FROM THE WINTER PROGRAM AT THE TILT COVE PROJECT

Drill hole             From              To       Interval*              Au
                        (m)             (m)             (m)           (g/t)

GR-19-01               24.0            25.0             1.0            0.59
RCP-20-01              97.8            98.3             0.5            5.10
EP-20-01              120.7           121.7             1.0            0.63
EP-20-01              159.5           160.0             0.5            1.00
EP-20-02              154.0           155.0             1.0            1.28
  
* True thickness unknown.

This news release has been reviewed and approved by Paul McNeill, PGeo, vice-president, exploration with Anaconda Mining, a qualified person, under National Instrument 43-101 Standard for Disclosure for Mineral Projects.

All samples and the resultant composites referred to in this release were collected using quality assurance/quality control protocols including the regular insertion of certified standards and blanks within each sample batch sent for analysis and completion of check assays of select samples. Diamond drill core and channel samples were analyzed for Au at Eastern Analytical Ltd. in Springdale, Nfld., using standard fire assay (30 g) preconcentration and atomic absorption finish methods. Eastern is a fully accredited firm within the meaning of NI 43-101 for provision of this service.

Mineralized intervals referred to in this press release are reported as drill and channel intersections and are apparent widths only. Not enough drilling has been completed to fully interpret true width at this time.

Composited assays from historical drill core are compiled from historic reports and data filed with the Department of Natural Resources, Newfoundland and Labrador. Sufficient work has not been completed by Anaconda geologists and qualified persons to validate these composited assays. Rock grab and float samples are selected samples and are not necessarily indicative of mineralization that may be hosted on the property.

The original agreement allowed only for buyback of 1 per cent of the royalty for $500,000 for each 0.5 per cent. Galway was able to negotiate with the royalty holder to purchase the royalty in its entirety. Under terms of the Agreement, Galway Metals will pay a total purchase price of $3-million in six equal annual instalments of $500,000, with each partial payment representing the purchase of one-sixth of the royalty. Pursuant to the agreement, on closing Galway will issue 434,783 common shares in the capital of the company to the royalty holder, which shall represent the first partial payment of $500,000 at a deemed price equal to $1.15 per share. Each subsequent $500,000 partial payment shall be paid as follows: (i) $125,000 in cash; and, (ii) the remaining $375,000, at the sole election of the company, shall be paid either in cash, through the issuance of shares or a combination thereof as shall equal $375,000 with the shares valued at a deemed price equal to the higher of: (A) the closing price of the shares on the TSX Venture Exchange on the day that is two business days prior to the date of the respective share issuance, and (B) the lowest price of shares that shall be acceptable to the TSX-V. The shares will be subject to the statutory hold periods of four months and one day.

Robert Hinchcliffe, president, chief executive officer and director, commented: “We are extremely pleased to have come to an agreement with the royalty holder to buy back this significant NSR, which covers the entirety of all gold resources at Clarence Stream, plus the entirety of at least one additional zone discovered by Galway after the resource was released. We see the removal of this royalty as a significant transaction for Galway Metals shareholders as it will contribute meaningfully to further unlocking value of the Clarence Stream land package beyond what we have already accomplished. The royalty holder prospected and staked the claims on the property, and his willingness to receive the majority of payment as shares in Galway demonstrates his continued belief in the property and in our company’s future.”

High grade mineralization was encountered in all of the holes drilled.

Highlights of Hole HH20-07 and HH20-05 Main Mine Area

Drill hole HH20-07 intersected a broad 82.00m zone of sulphide mineralization for 67.09 g/t Ag, 0.73 g/t Au, 0.23% Cu (62.78m-144.78m) which includes the following:

o 45.27m of 77.30 g/t Ag, 1.27 g/t Au, 0.41% Cu

o 6.89m of 117.23 g/t Ag, 1.94 g/t Au, 0.28% Cu

o 0.97m of 1,885.00 g/t Ag, 4.68 g/t Au, 15.20% Cu

Drill hole HH20-05 intersected a broad 161.43m zone of sulphide mineralization for 28.59 g/t Ag, 0.27 g/t Au (99.63-261.06) which includes the following:

o 12.30m of 159.04 g/t Ag, 0.49 g/t Au

o 0.82m of 1,285.00 g/t Ag, 2.24 g/t Au, 2.47 % Cu

Chairman and CEO of Brixton, Gary R. Thompson stated, “It’s great to see these very high-grades within the broad zones of sulphide mineralization. These results conclude our maiden drill program and has validated the great potential of the project. Based on the excellent results of our maiden drill program we are excited about the opportunity to expand sulphide mineralization at the Main Mine with further drilling along strike and at depth. In addition, we look forward to drill testing other high priority targets including the WF-Ole Hill and Martin Mine areas, later this season.”

  
 
 Table 1. Drill Hole HH20-07 of Mineralized Intervals as Composite Weighted Average Assays.
 HH20-07            Remarks          From  (m)To (m)Total  (m) Ag g/t  Au g/tCu % 
                Sulphide Zone- Breccia  62.78  144.78  82.00     67.09   0.73 0.23 
 including      Sulphide  Breccia       85.64  130.91  45.27     77.30   1.27 0.41 
 containing   Semi-massive  sulphide    93.63  100.52   6.89    117.23   1.94 0.28 
 containing  Vuggy  massive  sulphide  112.23  113.20   0.97    1,885.00 4.68 15.20

The assay intervals reported are uncut weighted averages and true widths cannot be determined at this time.

: Massive Sulphide from 112.23 {&#A A ; –} 113.20m depth (0.97m of 1,885 g/t Ag, 4.68 gt/ Au, 15.20% Cu). Box includes 111.41-114.00m

 Table 2. Hole HH20-05 of Mineralized Intervals as Composite Weighted Average Assays.
 HH20-05            Remarks        From  (m)To (m)Total  (m)Ag g/t Au g/tCu %
        Sulphide Zone- Latite Porphyry  99.63  261.06  161.43   28.59  0.27 0.03
   including       Latite Porphyry     102.91  115.21  12.30   159.04  0.49 0.22
   containing      Massive Sulphide    112.27  113.09   0.82   1285.00 2.24 2.47

 Table 3. Hole HH20-04 of Mineralized Intervals as Composite Weighted Average Assays.
 HH20-04 RemarksFrom (m)To (m)Total (m)Ag g/tPb %Zn %
   Oxide Zone    112.17 136.11  23.94  50.56 1.740.24
including        123.74 136.11  12.37  82.38 1.980.37
including        131.36 136.11  4.75   125.121.400.35

Brixton recognizes the potential for the Hog Heaven Project to host a cluster of mineralized systems like the Main Mine area. At least four primary target areas have been identified for further drilling: Main Mine, WF, Ole Hill and Martin Mine. The project hosts strata-bound Cu-Ag, high-sulphidation Ag-Au-Cu and porphyry targets.

Drill hole HH20-06 encountered an underground working and was abandoned at 14.63m depth.

Quality Assurance and Quality Control

As a matter of procedure, the drill core were split in the field using an electric-powered core saw, bagged, and delivered to ALS Chemex Laboratories in Vancouver for analysis. In addition to the laboratory’s quality control program, a rigorous on-site quality assurance and quality control program was implemented, which involved the insertion of blanks, standards and splits to ensure reliable assay results. The standards, blanks and duplicate assays were found to fall within acceptable limits, supporting the precision and accuracy of the reported results. The QAQC was conducted by an independent third-party, Mr. Scott Close, P.Geo., Principal of Ethos Geological Inc., who is a qualified person as defined by National Instrument 43-101, and who reviewed and approved the information in this press release.