Annual Qualified Persons Report for Beaver Dam Gold ... · Annual QPR for the Beaver Dam Gold Project for the Year Ended 31 March 2014 LionGold Corporation Ltd 140516_Acadian_Beaver

Annual Qualified Persons Report for Beaver Dam Gold Project, Halifax, Nova Scotia

- Year Ended 31 March 2014 -

LionGold Corporation Limited

Singapore

Effective date 31

st March 2014

Prepared in accordance with the requirements of Singapore Exchange Practice Note 6.3

Qualified Persons: Dr Simon Dominy Mr Richard Horne

Annual QPR for the Beaver Dam Gold Project for the Year Ended 31 March 2014

LionGold Corporation Ltd

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140516_Acadian_Beaver Dam_QPR 2014_FINAL i

CONTENTS

1 Executive Summary.................................................................................................................................. 1 1.1 Report Scope and Basis ................................................................................................................ 1 1.2 Project Description ......................................................................................................................... 1 1.3 Geology and Mineralisation ............................................................................................................ 1 1.4 Mine Production ............................................................................................................................. 1 1.5 Mineral Resources and Ore Reserves ........................................................................................... 1 1.6 Economic Analysis ......................................................................................................................... 2 1.7 Risk Assessment ............................................................................................................................ 2 1.8 Conclusions .................................................................................................................................... 3 1.9 Recommendations ......................................................................................................................... 3

2 Introduction ............................................................................................................................................... 5 2.1 Aim and Scope of Report ............................................................................................................... 5 2.2 Use of Report ................................................................................................................................. 5 2.3 Reporting Standard ........................................................................................................................ 5 2.4 Report Authors and Contributors ................................................................................................... 5 2.5 Qualified Persons Statement ......................................................................................................... 6 2.6 Basis of the Report ......................................................................................................................... 6

3 Project Description ................................................................................................................................... 7 3.1 Project Overview ............................................................................................................................ 7 3.2 Tenure ............................................................................................................................................ 7 3.3 Tenure Conditions ........................................................................................................................ 10 3.4 Access .......................................................................................................................................... 10 3.5 Climate ......................................................................................................................................... 10 3.6 Landforms and Soils .................................................................................................................... 13 3.7 Fauna and Flora ........................................................................................................................... 13 3.8 Hydrology ..................................................................................................................................... 13 3.9 Cultural Environment .................................................................................................................... 13

4 History .................................................................................................................................................... 14 4.1 Exploration ................................................................................................................................... 14 4.2 Mining ........................................................................................................................................... 16

5 Geological Setting .................................................................................................................................. 18 5.1 Regional Geological Setting ......................................................................................................... 18 5.2 Local Geological Setting .............................................................................................................. 21 5.3 Mineralisation ............................................................................................................................... 23 5.4 Evaluation Style of Mineralisation ................................................................................................ 24

6 Exploration Activities .............................................................................................................................. 26 6.1 Exploration Overview ................................................................................................................... 26 6.2 Exploration Methods .................................................................................................................... 26

6.2.1 Geology ................................................................................................................... 26 6.2.2 Geophysics and remote sensing ............................................................................. 26 6.2.3 Geochemistry ........................................................................................................... 26 6.2.4 Drilling ...................................................................................................................... 27

6.2.4.1 Pre-Seabright drilling (1977-1983) ........................................................... 27 6.2.4.2 Seabright drilling (1985-1988) .................................................................. 27 6.2.4.3 Acadian drilling (2005-2007) .................................................................... 27 6.2.4.4 Acadian drilling (2009) ............................................................................. 27

6.2.5 Sampling .................................................................................................................. 27 6.2.5.1 Seabright drilling (1985-1988) .................................................................. 27 6.2.5.2 Acadian drilling (2005-2007) .................................................................... 28 6.2.5.3 Acadian drilling (2009) ............................................................................. 28

6.2.6 Chemical analysis .................................................................................................... 28 6.2.6.1 Seabright drilling (1985-1988) .................................................................. 28 6.2.6.2 Acadian drilling (2005-2007) .................................................................... 29 6.2.6.3 Acadian drilling (2009) ............................................................................. 29

6.2.7 Quality assurance (QA) and quality control (QC) .................................................... 29



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6.2.7.1 Seabright drilling (1985-1988) .................................................................. 29 6.2.7.2 Acadian drilling (2005-2007) .................................................................... 29 6.2.7.3 Acadian drilling (2009) ............................................................................. 30

6.2.8 Sample security ....................................................................................................... 30 6.2.8.1 Seabright drilling (1985-1988) .................................................................. 30 6.2.8.2 Acadian drilling (2005-2007) .................................................................... 30 6.2.8.3 Acadian drilling (2009) ............................................................................. 30

6.3 Exploration Results ...................................................................................................................... 30 6.3.1 Seabright drilling (1985-1988) ................................................................................. 30 6.3.2 Acadian drilling (2005-2007) .................................................................................... 31 6.3.3 Acadian drilling (2009) ............................................................................................. 31

6.4 QA/QC Results ............................................................................................................................. 31 6.4.1 Blanks ...................................................................................................................... 31

6.4.1.1 Acadian drilling (2005-2007) .................................................................... 31 6.4.1.2 Acadian drilling (2009) ............................................................................. 31

6.4.2 Duplicates ................................................................................................................ 31 6.4.2.1 Acadian drilling (2005-2007) .................................................................... 31 6.4.2.2 Acadian drilling (2009) ............................................................................. 33

6.4.3 Certified reference materials (standards) ................................................................ 33 6.4.3.1 Acadian drilling (2009) ............................................................................. 33

6.4.4 Check analyses ....................................................................................................... 33 6.4.4.1 Seabright drilling (1985-1988) .................................................................. 33

6.5 Data Entry and Validation ............................................................................................................ 34

7 Mineral Processing and Metallurgical Testing ........................................................................................ 35 7.1 Overview ...................................................................................................................................... 35 7.2 Metallurgical Test Work ................................................................................................................ 35 7.3 Mineral Processing Design .......................................................................................................... 35

8 Mineral Resources.................................................................................................................................. 36 8.1 Summary of Mineral Resources ................................................................................................... 36 8.2 General Description of Mineral Resource Estimation Process .................................................... 36 8.3 Mineral Resource Estimate .......................................................................................................... 37

8.3.1 Mineral Resource input data .................................................................................... 37 8.3.1.1 Drill spacing .............................................................................................. 37 8.3.1.2 Topography .............................................................................................. 37 8.3.1.3 Collars ...................................................................................................... 38 8.3.1.4 Assays ...................................................................................................... 38 8.3.1.5 Unsampled intervals ................................................................................. 39 8.3.1.6 Stratigraphic intervals ............................................................................... 39 8.3.1.7 Drillhole data summary ............................................................................ 40 8.3.1.8 Wireframes ............................................................................................... 40 8.3.1.9 Exclusions ................................................................................................ 41 8.3.1.10 Density ..................................................................................................... 41

8.3.2 Geological Interpretation ......................................................................................... 41 8.3.3 Data analysis and geostatistics ............................................................................... 41 8.3.4 Domaining ................................................................................................................ 46 8.3.5 Variography ............................................................................................................. 48 8.3.6 Top-cuts ................................................................................................................... 50 8.3.7 Kriging Neighbourhood Analysis (KNA) .................................................................. 51 8.3.8 Estimation ................................................................................................................ 57

8.3.8.1 Block modelling ........................................................................................ 57 8.3.8.2 Estimation method ................................................................................... 58 8.3.8.3 Search parameters ................................................................................... 59 8.3.8.4 Estimation settings (summary) ................................................................. 59

8.3.9 Validation ................................................................................................................. 60 8.3.10 Classification ............................................................................................................ 65 8.3.11 Reported Mineral Resources ................................................................................... 66 8.3.12 Production reconciliation ......................................................................................... 66

9 Ore Reserves ......................................................................................................................................... 67



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10 Mining ..................................................................................................................................................... 68

11 Processing .............................................................................................................................................. 69

12 Infrastructure .......................................................................................................................................... 70

13 Social, Environmental, Heritage and Health and Safety Management .................................................. 71 13.1 Social Management ..................................................................................................................... 71 13.2 Environmental Management ........................................................................................................ 71 13.3 Heritage Management .................................................................................................................. 71 13.4 Health and Safety Management................................................................................................... 71

14 Market Studies and Contracts ................................................................................................................ 72

15 Financial Analysis ................................................................................................................................... 73

16 Risk Assessment .................................................................................................................................... 74

17 Interpretation and Conclusions ............................................................................................................... 76

18 Recommendations.................................................................................................................................. 77

19 References ............................................................................................................................................. 78

20 Date and Signature Pages ..................................................................................................................... 80

21 Glossary of Terms .................................................................................................................................. 81

TABLES

Table 1.1 Beaver Dam Mineral Resource summary as of 31 March 2014 reported at a 0.5 g/t Au cut-off2

Table 2.1 Staff who contributed to this QPR ............................................................................................. 5

Table 2.2 Reliance on other experts ......................................................................................................... 5

Table 3.1 Tenure details ........................................................................................................................... 7

Table 4.1 Summary of bulk sample test results (after O’Sullivan, 2003) ................................................ 17

Table 6.1 Summary of results for standard reference materials analysed during 2009 drilling programme .............................................................................................................................. 33

Table 8.1 Beaver Dam Mineral Resource summary as of 31 March 2014 reported at a 0.5 g/t Au cut-off36

Table 8.2 Summary of non-numeric assay values and how they were treated ...................................... 39

Table 8.3 Summary of rock code and corresponding stratigraphic unit ................................................. 40

Table 8.4 Summary of data provided ...................................................................................................... 40

Table 8.5 Summary of density measurements ....................................................................................... 41

Table 8.6 Raw and composite sample length statistics for the mineralised domains............................. 43

Table 8.7 Summary statistics for gold grade (g/t Au) for raw data (Raw), and composites (Comp) using the default 0.025 g/t Au for unsampled intervals .................................................................... 43

Table 8.8 Comparison of summary statistics of gold grade (g/t Au) showing composites using absent values for the unsampled intervals (Absent Comp), and composites using the default 0.025 g/t Au for unsampled intervals (Default Comp) ....................................................................... 44

Table 8.9 Summary of domain codes and stratigraphic units used for estimation ................................. 47

Table 8.10 Summary of Indicator variogram parameters for gold (g/t Au) for the combined domain 800 and Greywacke domain 500 ................................................................................................... 48

Table 8.11 Back transformed variogram parameters Crouse domain (600) ............................................ 50

Table 8.12 Summary gold statistics prior to and after top-cutting using cut of 2.5 g/t Au (four samples cut) for the Crouse domain (600) ............................................................................................ 51

Table 8.13 Areas chosen for KNA (combined domain) ............................................................................ 51

Table 8.14 Block model prototype settings small cell model .................................................................... 58

Table 8.15 Block model prototype settings parent cell model .................................................................. 58

Table 8.16 Search ellipse axis lengths and rotations for the estimate ..................................................... 59

Table 8.17 Estimation parameters ............................................................................................................ 60



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Table 8.18 Global statistics (gold grade, g/t Au) comparison between composites and model grade ..... 64

Table 8.19 Global statistics (gold grade, g/t Au) comparison between composite and model grade for search volume 1 ...................................................................................................................... 64

Table 8.20 Global statistics (gold grade, g/t Au) ...................................................................................... 64

Table 8.21 Beaver Dam Mineral Resource classification criteria ............................................................. 65

Table 8.22 Beaver Dam Mineral Resource estimate to end March 2014 reported at a 0.5 g/t Au cut-off 66

Table 16.1 Beaver Dam Mineral Resource risk profile ............................................................................. 74

FIGURES

Figure 3.1 Map showing project location .................................................................................................... 8

Figure 3.2 Detailed map of project location................................................................................................ 9

Figure 3.3 Map showing previous Beaver Dam licences ......................................................................... 11

Figure 3.4 Property ownership for the Beaver Dam area ........................................................................ 12

Figure 5.1 Geological map of the Meguma Terrane, southern Nova Scotia, showing the location of gold deposits ................................................................................................................................... 19

Figure 5.2 Geological map of the FMS Trend which hosts the Moose River, Beaver Dam and Fifteen Mile Stream gold deposits ....................................................................................................... 20

Figure 5.3 Geology of the Beaver Dam property ..................................................................................... 22

Figure 6.1 Precision plot comparing the pulp duplicate assays from 2005 to 2007................................. 32

Figure 6.2 Precision plot comparing pulp duplicate assays from 2009 .................................................... 32

Figure 8.1 Collar location plan ................................................................................................................. 37

Figure 8.2 QQ plot showing the SFA against the FA ............................................................................... 38

Figure 8.3 Log Histogram for sample length using raw data (all domains) .............................................. 42

Figure 8.4 Log Histogram for gold grade (g/t Au) for raw data (all domains) ........................................... 45

Figure 8.5 Log Histogram for gold grade (g/t Au) for composited data (all domains) .............................. 45

Figure 8.6 Histogram for density data (by each stratigraphic unit) .......................................................... 46

Figure 8.7 Histogram for density data (all domains) ................................................................................ 46

Figure 8.8 Normal scores variogram models for gold (g/t Au) for Crouse domain (600) ......................... 49

Figure 8.9 Log probability plot for Au for the Crouse domain .................................................................. 50

Figure 8.10 KNA Point location plan .......................................................................................................... 52

Figure 8.11 KNA results for block size for the well-informed point ............................................................ 53

Figure 8.12 KNA results for Number of informing samples for the well-informed point (combined domain 800) ......................................................................................................................................... 54

Figure 8.13 KNA results for Number of informing samples for the well-informed point (Crouse domain 600) ......................................................................................................................................... 55

Figure 8.14 KNA results for the search ellipse dimensions for the well-informed point (combined domain 800) ......................................................................................................................................... 56

Figure 8.15 KNA results for the search ellipse dimensions for the well-informed point (Crouse domain 600) ......................................................................................................................................... 57

Figure 8.16 Visual comparison of block grade estimates with composited drillhole data .......................... 61

Figure 8.17 North-south vertical section plot – Easting 1100 mE .............................................................. 61

Figure 8.18 North-south section swathe plot for combined domain (800), 25 m slices (search Vol 1)...... 62

Figure 8.19 Vertical section swathe plot, combined domain (800), 25 m slices (search Vol 1) ................. 62



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APPENDICES

Appendix A Checklist of assessment and reporting criteria, based on Table 1 of the 2012 JORC Code

Appendix B Summary of Diamond Drillhole Information



140516_Acadian_Beaver Dam_QPR 2014_FINAL 1

1 EXECUTIVE SUMMARY

1.1 Report Scope and Basis

LionGold Corporation Limited (“LionGold”) subsidiary Acadian Mining Corporation (“Acadian”) commissioned Snowden Mining Industry Consultants Limited (Snowden) to deliver a resource estimate for its Beaver Dam gold project located near Halifax, Nova Scotia, Canada. It was requested that the Mineral Resource be reported in accordance with The JORC Code 2012. The Mineral Resource will be publically reported by LionGold to the Singapore Stock Exchange (SGX). It is likely that the resource will be used to support a scoping study.

1.2 Project Description

The Beaver Dam property is located in Halifax County, central Nova Scotia, approximately 85 km northeast of the provincial capital of Halifax. The property covers the historical Beaver Dam gold district located on NTS map sheet 11E02/A with central coordinates of 0521319 E/4990700 N (UTM NAD 83 Zone 20). The area is uninhabited with the closest residences situated 5 km away. The property is held under a single mineral exploration licence EL05920, which comprises 36 contiguous claims which cover an area of approximately 568 hectares.

Gold was first discovered in 1869. Between that time and 1941 small underground mining was undertaken, but with no detailed production records. Between 1940 and 1985 only minor exploration was undertaken on the property. During the period 1985 to 1987 diamond core drilling, underground development and open pit mining was undertaken. Acadian took over the property in 2002, undertaking additional diamond drilling through until 2009. There is currently no infrastructure on site and the deposit can be described as being at an advanced stage of exploration. This Qualified Persons Report presents a Mineral Resource for Beaver Bam.

1.3 Geology and Mineralisation

Beaver Dam sits within the so-called Meguma gold deposits of Nova Scotia. They are classified as orogenic gold deposits, which consist of saddle reef deposits, characterised by quartz vein arrays localised in the hinge area of regional anticlines. Meguma Gold Deposits can be classified as either high-grade narrow vein deposits, amenable to underground mining, or low-grade deposits potentially amenable to open pit or bulk underground mining. Narrow vein deposits are characterised by multiple high-grade veins within narrow slate intervals in meta-sandstone dominated sequences. Potential bulk minable deposits are characterised by a mixture of high-grade vein and low-grade wall rock hosted mineralisation related to veining.

Potential bulk-minable mineralisation has been documented in several historic deposits and low-grade wall rock hosted mineralisation has been documented to occur in both meta-mudstone and meta-sandstone. Three potential bulk-minable deposits are currently being evaluated as open-pit mines in central Nova Scotia; including the Beaver Dam, Fifteen Mile Stream and Moose River (Touquoy) deposits. These deposits occur along a belt referred to as the Fifteen Mile Stream Trend that is defined by the Fifteen Mile Stream Formation exposed in the hinge of the Moose River-Fifteen Mile Stream anticline. These deposits are geologically similar and characterised by wide intervals of mineralised meta-mudstone hosting high-grade veins and associated alteration.

1.4 Mine Production

Although no commercial gold production came from the Seabright trial operation at Beaver Dam (1984-1987), several bulk samples were collected from both underground and the open pit. The material was trucked from Beaver Dam to the Gay’s River mine for milling. Seven different bulk samples were sent through the mill at Gay’s River where it was crushed, pulverised and sent through a gravity circuit followed by a floatation circuit. A total of 41,120 t of material were milled at an average grade of 1.85 g/t Au.

1.5 Mineral Resources and Ore Reserves

The total Mineral Resource reported for the Beaver Dam project is shown in Table 1.1. No Ore Reserves were estimated.




Table 1.1 Beaver Dam Mineral Resource summary as of 31 March 2014 reported at a 0.5 g/t Au cut-off

Category Mineral type

Gross attributable to licence

Net attributable to issuer

(100%) Contained ounces gold (oz Au) Tonnes

(t) Grade

(g/t Au) Tonnes

(t) Grade

(g/t Au)

Change from previous update

(%)

Indicated Resources Gold 5,595,000 1.3 5,595,000 1.3 -38% 234,000

Inferred Resources Gold 11,115,000 1.3 11,115,000 1.3 +7% 465,000

Total Resources Gold 16,710,000 1.3 16,710,000 1.3 -14% 699,000

Note: Mineral Resources which are not Ore Reserves do not have demonstrated economic viability. No Ore Reserves are defined at Beaver Dam. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. It is uncertain if further exploration will result in upgrading the Inferred Mineral Resource to an Indicated or Measured Mineral Resource and Indicated Minerals Resources to Measured Mineral Resources. Tonnage is reported in metric tonnes (t) and rounded to the nearest 1,000 t. Grade as grammes per tonne gold (g/t Au) and rounded to the nearest 0.1 g/t Au. Contained gold in troy ounces (oz Au) and rounded to the nearest 1,000 oz Au. Resource depleted for contained historical workings. Acadian is 100% held by LionGold, the net attributable to LionGold is 100%.

1.6 Economic Analysis

Beaver Dam is an advanced exploration project. No mining is currently being undertaken. No economic studies have been undertaken. The Competent Persons consider that the stated Mineral Resource has reasonable prospects for eventual economic extraction based on an open pit operation.

1.7 Risk Assessment

The current Mineral Resource at Beaver Dam carries an overall “medium” risk rating. This risk principally relates to geological and grade variability. The risk rating reflects that two-thirds of the resource is classified in the Inferred Mineral Resource category. The rest of the resource is defined by closer-space drilling and/or located around historical underground development; which poses lower risk and is classified as an Indicated Mineral Resource.

Across the deposit, in-situ sample representivity is likely to be low given the coarse-gold, high-nugget nature of the mineralisation. Samples (e.g. drillholes) may represent a low-grade fine-gold population relatively well, but in some cases may not reflect the higher grade coarse gold population. Historically different sample (mass) support, preparation and assaying methods, together with the effects of core loss impart sampling error. The coarse-gold nature of the ore exacerbates potential sampling errors, through potential precision and bias issues. Historical and recent QAQC indicates reasonable assay quality, though this does not ameliorate potential representivity issues. Sampling and QAQC issues have an overall “medium-high” risk rating.

General geological control is 25 m by 25 m to 10 m by 10 m drill sections plus historical mine development to 100 m depth. Knowledge of historical mining and recent drilling aids interpretation. There is lesser understanding of small-scale local continuity issues which control variability of tonnes and grade. Best resolution of geological continuity and ore zone complexity is only gained after development. A zone of the resource is supported by historical underground workings where grade and geological continuity are better defined, but not fully resolved. The overall geological risk is “medium-high”, reflecting the dominance of the Inferred category.

The grade estimate bears a “medium-high” risk due to the nugget effect, sampling and data uncertainties. Estimation block size is broadly appropriate to the drill spacing, but does not relate to any SMU size. The application of cut-off grades is problematic. On a block by block basis, estimation error will be relatively high. The current global estimate is reasonable, given that volume is based on a model constrained by drill data and geological interpretation.

Resource up-rating and extension will be based on further drilling and/or development, which may be cost prohibitive to achieve Ore Reserves. Further drilling may or may not increase resource classification or expand the resource (“medium” risk).

No Ore Reserves are defined and no economic studies have been undertaken. The Competent Persons believe that extraction via an open pit operation is reasonable. There is no plant at Beaver Dam. Recent




metallurgical testing has been undertaken and indicates that the ore can be processed with no specific challenges. Historical mining has indicated that gold can be recovered effectively. The presence of abundant coarse gold indicates that gravity recovery of gold will be important. Until an economic study is undertaken, the economic risk is “medium-high”, with further drilling required thereafter to increase the resource and its confidence.

The Competent Persons believes the accuracy of the grade and tonnage estimate for Indicated Mineral Resources to be within ±20-30% globally based on general experience of this style of mineralisation. Similarly, the accuracy of the grade and tonnage estimate for the Inferred Mineral Resources is considered to be within ±30-50% globally based on general experience of this style of mineralisation.

Social, legal and political risks are considered “low” risk, given the stable and well-developed nature of Canada. Permitting for mine construction is not considered to be unreasonable.

1.8 Conclusions

Gold mineralisation at Beaver Dam occurs predominantly on the steeply dipping south limb of the Moose River-Beaver Dam anticline and generally conforms to the saddle-reef style model, where veins and related alteration occur in bedding-parallel structures resulting from folding. Although no saddle veins have been identified at Beaver Dam, most veins are bedding-parallel and interpreted to represent down limb continuation of saddle veins which have been uplifted and eroded away. Vein mineralisation is characterised by dominantly coarse gold particles, which impose on sample representivity.

Drilling to date has permitted the estimation of a Mineral Resource containing 699,000 oz Au (see Table 1.1). Based on drill spacing and the presence of historical mine workings, the resource has been classified in both the Inferred and Indicated categories (Table 1.1). This reflects the higher level of confidence of the estimated blocks within 25 m of the workings. Geological continuity in the mine workings is verified through historical mapping and trial mining. The resources are classified in accordance with The JORC Code 2012.

The resource is deemed by the Competent Persons to have reasonable prospects for eventual economic extraction. It has the potential to be an open-pit bulk-mineable deposit, though a scoping study is required to review options. The resource was reported at a cut-off grade of 0.5 g/t Au, to reflect its open pit potential.

Further evaluation and potential exploitation at Beaver Dam relates principally to geological risks that include:

the assumption that veins and/or ore shoots may continue and/or repeat at depth and/or along strike based on limited drilling and historically-based geological models;

the risk that each vein will not have the contained metal in the mineable bodies with the shapes, sizes, grades and distributions expected; and

that the boundaries and internal gold grade distribution of the extracted bodies will not be correctly assigned ahead of mining, resulting in either or both excessive dilution or misclassification of ore as waste.

All narrow high-nugget gold veins bear a level of inherent risk/uncertainty related to the nugget effect (see Section 16). Despite this, many claim a sustainable mine life over a number of years based on on-going drilling and development, and strong geological understanding and control.

1.9 Recommendations

The Competent Persons recommend that Acadian undertake a scoping study for an open pit or combined open pit/underground operation at Beaver Dam. The following items in particular should be considered;

Topographic survey should be undertaken to increase confidence in collar co-ordinates

Further drilling is required at depth to increase the confidence in the data

Where possible, drillholes with unsampled intervals should be re-sampled




Closer spaced drilling required; on the surface, in-fill drilling on areas along strike of the development areas would increase confidence for further demarcation of the Indicated Mineral Resource

Determination of the geological controls on the mineralisation would assist in domain modelling

Metallurgical test work should be undertaken




2 INTRODUCTION

2.1 Aim and Scope of Report

LionGold Corporation Limited (“LionGold”) subsidiary Acadian Mining Corporation (“Acadian”) commissioned Snowden Mining Industry Consultants Limited (“Snowden”) to deliver a resource estimate for its Beaver Dam gold project located near Halifax, Nova Scotia, Canada. The Mineral Resource is reported in accordance with The JORC Code (2012) and as such, includes consideration of all key matters (refer to Table 1 of The JORC Code, 2012; see Appendix A). This report was prepared in co-operation with Acadian staff.

2.2 Use of Report

The Mineral Resource will be publically reported by LionGold to the Singapore Exchange (SGX). It will be used by Acadian to plan further drilling and economic studies.

2.3 Reporting Standard

The Mineral Resource has been reported in accordance with The JORC Code 2012 (JORC, 2012).

The SGX Mainboard rules require that a QPR be prepared in accordance with one of three allowable international public reporting standards. For this report, Snowden has adopted The JORC Code 2012 as the reporting standard. The JORC Code requires that a public report concerning a company’s exploration targets, exploration results, Mineral Resources, or Ore Reserves must be based on, and fairly reflect, the information and supporting documentation prepared by a Competent Person (“CP”), as defined by the JORC Code. SGX Mainboard rules use the term qualified person, and provide a definition which is effectively equivalent to a Competent Person. In this report, whenever reference is made to a Competent Person as per the JORC Code, it is equivalent to a qualified person as per SGX Mainboard rules.

2.4 Report Authors and Contributors

Snowden and Acadian staff who contributed to this Qualified Persons Report (“QPR”) are listed in Table 2.1.

Table 2.1 Staff who contributed to this QPR

Name Position Employer Independent of LionGold

Date of site visit

Professional designation

Contribution to QPR

(1)Dr Simon

Dominy Executive Consultant

Snowden Group

Yes March 2011

FAusIMM(CP) FAIG(RPGeo)

FGS(CGeol)

Competent Person. Input into all QPR sections. Supervised Ms Graham.

(2)Mr Richard

Horne Chief Geologist

Acadian Mining Corporation

No Based on

site in Nova Scotia

PGeo

Competent Person. Input into all QPR sections. Specifically responsible for Sections 3, 4, 5, 6 and 13.

Ms Janice Graham

Senior Resource Geologist

Snowden Group

Yes None - Input into all QPR sections. Undertook the resource estimation.

(1)Address: Level 4, 1 Kingdom Street, Paddington Central, London W2 6BD, United Kingdom.

(2)Address: Unit 6, 10 Morris Drive, Dartmouth B3B 1K8, Nova Scotia, Canada.

Snowden drew on the expertise of other experts during the compilation of this QPR. Key other experts are listed in Table 2.2.

Table 2.2 Reliance on other experts

Name Position Employer Independent of LionGold

Date of site visit

Professional designation

Contribution to QPR

Mr Drew Pelley Project Geologist Acadian Mining

Corporation No

Based on

site in Nova

Scotia

PGeo

Assisted in provision of

data to Snowden for the

estimate. Contributed to

some sections of the

report.




2.5 Qualified Persons Statement

The Competent Persons responsible for preparation of this QPR are:

Dr Simon C Dominy - Executive Consultant with Snowden UK; and

Mr Richard Horne – Chief Geologist with Acadian.

This QPR has been jointly prepared by Snowden and Acadian.

Dr Dominy visited the Beaver Dam project during March 2011. During the site visit, Dr Dominy visited the project offices, reviewed data and discussed the project with Acadian staff, reviewed drill core and walked over the project area. The visit was hosted by Mr Richard Horne.

Dr Dominy is independent of LionGold and Acadian. Mr Horne is a full-time employee of Acadian and is thus not independent of LionGold.

Dr Dominy takes responsibility as a CP for all sections of this QPR. Ms Janice Graham undertook the resource estimate using Datamine software under the supervision of Dr Dominy.

Mr Horne is not a CP with respect of resource modelling and estimation, and this does not take responsibility for Section 8 of this QPR. He takes joint responsibility for all other sections, along with Dr Dominy.

Reliance on the QPR may only be assessed and placed after due consideration of Snowden’s scope of work. The QPR is intended to be read as a whole, and sections or parts thereof should therefore not be read or relied upon out of context.

Unless otherwise stated, information and data contained in this QPR or used in its preparation was provided to Snowden by Acadian.

The effective date of this QPR is 31st March 2014.

2.6 Basis of the Report

This QPR presents a Mineral Resource estimate undertaken by Snowden. The database and geological model used to estimate the resource was supplied to Snowden by Acadian. Snowden validated the data prior to estimation. The resource was estimated using Datamine software. Geostatistical analysis was undertaken using Supervisor software.

The CPs have reviewed all input data, models and outputs of the resource estimate and believe that it is appropriate and permits the resource to be reported in accordance with The JORC Code (2012).




3 PROJECT DESCRIPTION

3.1 Project Overview

The Beaver Dam property is located in Halifax County, central Nova Scotia, approximately 85 km northeast of the provincial capital of Halifax (Figure 3.1). The property covers the historical Beaver Dam gold district located on NTS map sheet 11E02/A with central coordinates of 0521319 E/4990700 N (UTM NAD 83 Zone 20). The area is uninhabited with the closest residences situated 5 km away.

3.2 Tenure

The property is held under a single mineral exploration licence EL05920, currently held by Annapolis Properties Corporation, a wholly owned subsidiary of Acadian. Licence 05920 is comprised of 36 contiguous claims which cover an area of approximately 568 hectares. Licence 05920 is an amalgamation of three pre-existing exploration licences; 00047, 04790 and 04516 which were acquired in 2002 by Tempus Corporation; Tempus subsequently became Acadian Gold and later Acadian. The licences were regrouped in 2003 as a single licence and reissued by the Nova Scotia Department of Natural Resources (NSDNR) in 2005. Acadian owns 100% interest in licence 05920 however portions of the licence are subject to differing agreements made prior to its acquisition by Tempus.

Previous licence 00047 was acquired from Westminer Canada and is subject to a Variable Return Net Smelter Royalty (NSR) payable to Acadia Mineral Ventures Limited. Royalty amounts are based on the average grade of mined material and range from 0.6% at average grade of 4.7 g/t Au or less, up to 3% at an average grade of 10.9 g/t Au or more. Some C$300,000 is available as credit against future royalties at a maximum of 50% per royalty payment, payable twice a year.

Tempus acquired licence 04516 from Henry Schenkels. This licence is subject to a Sliding Scale Net Smelter Royalty based on the price of gold. Royalties range from 0% at a gold price of US$265.01 oz Au or less, up to 2% at gold prices of US$320 oz Au or greater. Additional royalties exist for any other commodities produced on this licence including silver, copper, lead and zinc, although future recoveries of these metals is highly unlikely.

Table 3.1 Tenure details

Asset name/ Country

Issuer’s interest (%)

Development Status

Licence expiry date

Licence Area Type of mineral,

oil or gas deposit

Remarks

Beaver Dam, Canada, EL05920

100% Exploration March 22, 2015 569.4 hectares Gold -




Figure 3.1 Map showing project location

0.0




Figure 3.2 Detailed map of project location




3.3 Tenure Conditions

Mineral exploration licences are issued by the Nova Scotia Department of Natural Resources (NSDNR) under the Mineral Resources Act of 1990. Staking of claims is based on an NTS based map staking system and the claims have not been legally surveyed. Licence 05920 represents the amalgamation of three pre-existing licences which were combined into a single licence in 2002 (Figure 3.3). When multiple licences are combined, the staking date for the oldest licence is used as the official ‘staking date’ for the newly formed licence. In the case of 05920, the staking date is March 22, 1975.

Yearly assessment expenditures and renewal fees are required in order to maintain the claims in good standing. Required yearly expenditures increase over the lifespan of the licence to a maximum of C$800 per claim after 25 years. Since licence 05920 is in its 39

th year of issue, yearly work commitments are C$28,800

per year. Expenditures in excess of this amount can be carried forward and used to renew a licence in subsequent years however; assessment credits submitted for any particular year have a maximum lifespan of 10 years.

Acadian has confirmed via the online Nova Scotia Registry of Claims (NOVAROC) that as of March 31st, 2014 licence 05920 is in good standing and is issued in the name of Annapolis Properties Corp. As of the most recent anniversary date (March 22, 2015) the registry indicates that sufficient work credits exist to renew this licence for the next eight years.

3.4 Access

The Beaver Dam project is easily accessed by the Beaver Dam Mines Road, an unpaved secondary road branching north-eastward from provincial highway 224 (Figure 3.1, Figure 3.2). Beaver Dam mines road is a well maintained and frequently travelled road used by forestry companies actively operating in the area. During the winter snow removal on unpaved roads is infrequent and heavy snowfall may result in the property becoming inaccessible by vehicle for days at a time.

Acadian does not hold any of the surface titles for the land on which the Beaver Dam property occurs. The primary landholder in the area is Northern Pulp Nova Scotia Corporation (Figure 3.4), who owns several parcels of land comprising a large portion of the Beaver Dam property. Although no current land access agreement exists with Northern Pulp, in the past they have provided access for Acadian to carry out exploration. Furthermore, Acadian is currently in discussions with Northern Pulp to establish long term access on the property which would include first right of refusal for purchase or a purchase agreement. The remaining parcels of land which make up the Beaver Dam property are owned by the Crown. To date, Acadian has successfully gained access to crown lands to conduct exploration at Beaver Dam and several other properties. The province of Nova Scotia is generally supportive of the mining industry and there is no reason to think that an access agreement for mining cannot be arranged with the Crown if economic deposits are defined on crown land.

3.5 Climate

Eastern Nova Scotia is characterised by northern temperate zone climatic conditions moderated by proximity to the Atlantic Ocean. Seasonal variations occur, with winter conditions of freezing and/or substantial snowfall expected from late November through late March. Spring and fall seasons are cool, with frequent periods of rain. Summer conditions can be expected to prevail from late June through early September with modest rainfall and daily mean temperatures in the 15°C to 20°C range. Maximum daily summer temperatures to 30°C occur, with winter minimums in the -25°C to -30°C range. Mineral exploration programmes can efficiently be undertaken during the period of May through late November, while winter programmes can be accommodated with appropriate allowance for weather delays.




Figure 3.3 Map showing previous Beaver Dam licences




Figure 3.4 Property ownership for the Beaver Dam area




3.6 Landforms and Soils

Land forms in eastern Nova Scotia are typical of a post-glacial environment. Two periods of recent glaciation blanketed the area with thin glacial till, muting the already gently rolling bedrock topography of the area. The Beaver Dam property occurs at an average elevation of 140 m above sea level. The only significant topography is a result of the presence of several glacial drumlins, which are teardrop shaped mounds of glacially derived till up to 25 m thick. Since the last glacial retreat, soils development has been occurring on top of glacial till deposits. Both sand dominated and clay dominated soils occur resulting in both well drained and poorly drained areas.

3.7 Fauna and Flora

Nova Scotia occurs within the temperate broadleaf and mixed forest habitat and the property is characterised by spruce, fir, mixed hardwood species and wetland areas with associated shrub and grass species. Typical fauna includes deer, black bear, beaver, rodents, birds and fish.

3.8 Hydrology

The principal hydrologic features on the property are Cameron flowage and Mud lake. Cameron flowage is a broadened, slow moving section of the East Brook Killag river, which flows across the eastern portion of the property from northwest to southeast and eventually drains into Sheet harbour. Mud lake is a marshy still-water located northwest of the Main zone which drains via a small unnamed stream into the north end of Cameron flowage.

3.9 Cultural Environment

Acadian retained the Cultural Resources Management Group Limited (CRMG) to conduct a preliminary archaeological screening and reconnaissance programme on the Beaver Dam property in order to identify any potential cultural resources. Two areas were identified as having high potential for pre-European contact (aboriginal) cultural significance which consisted of flat, well drained areas along the margins of Cameron Flowage which may have been visited by early travellers of the waterway (Stewart and Beanlands, 2009). The study also outlined a number of sites which contained features of significance such as remains of buildings and other structures. These structures were likely related to historical mining activities on the property but warrant further investigation. CRMG made several recommendations related to the property including a more thorough investigation into the area once mine development plans are finalised. Also, areas identified as having potential cultural significance should be avoided during mine development. If these areas cannot be avoided, a focused investigation should be conducted prior to their alteration (Stewart and Beanlands, 2009).

In 2009, Conestoga-Rovers & Associates on behalf of Acadian retained the Environmental Services division of the Confederacy of Mainland Mi’kmaq to conduct an ecological knowledge study for the Beaver Dam area (CMM Environmental Services, 2009). The report acknowledged that Mi’kmaq lived in areas south of Beaver Dam (e.g. Sheet harbour, Spry bay and Ship harbour) and would have likely used the local waterways during hunting and fishing expeditions but no specific evidence of Mi’kmaq landing on the Beaver Dam property were mentioned. The report also outlined potential impacts that the Beaver Dam project may impose on Mi’kmaq land and resource use. The two issues outlined were; the destruction of any potential native archaeological sites on the property and the loss of several plant species within the area. If any Mi’kmaq archaeological deposits are encountered during construction or operation of the project, work should be halted and the appropriate authorities (Nova Scotia Museum and The Confederacy of Mainland Mi’kmaq) should be notified. The significant plant species which were identified within the proposed Beaver Dam area are also found in the surrounding area so the impact of the project is limited to only the specimens within the project area.




4 HISTORY

The following history of mining and exploration at the Beaver Dam deposit is based on records available from the Nova Scotia Department of Natural Resources as well as several unpublished reports which have been passed down by previous operators of the property. Although some historical records were kept, it is likely much of the production prior to Seabright went undocumented.

4.1 Exploration

The first gold discovery at Beaver Dam was in 1868, and by 1871 the property had generated some interest and a 15-stamp mill was erected and two ‘belts’ of veins were opened at surface. No production records are available for this period.

After carrying out significant prospecting at Beaver Dam, William Yeadon erected a four-stamp mill in 1886 and opened three leads (veins) at surface in what is now referred to as the Austen belt. In 1891 the property was purchased from Yeadon by the Beaver Dam Mining Company, who erected a 10-stamp mill and conducted limited exploration before leasing the property to G.M. Christie and W. Tupper in 1895. The next year the property was sold off to J.H. Austen who erected an additional 10-stamp mill. The Austen shaft was collared in 1902 on the Austen belt and developed to a depth of 98 ft (29.9 m). A crosscut was driven 62 ft (18.9 m) to the north and 39 ft (11.9 m) south at a depth of 73 ft (22.2 m) to expose the Austen belt. Although no production was recorded from this period, the average grade of the Austen belt at the 73 ft level was reported to be 0.175 oz/ton Au (6 g/t Au).

The Gladwin Mining Company took an interest in the Beaver Dam property in 1911 and subsequently sank the Redding shaft to a depth of 68 ft (20.7 m). The property changed hands several times between 1911 and 1926 with only minor production at surface recorded. In 1926, William Papke discovered a mineralised belt immediately west of the Austen belt. In 1927, the Austen shaft was pumped out and the crosscut was extended southward to a length of (294 ft) 89.6 m.

The Austen Shaft was once again dewatered in 1935 by B.F. Bellmore and Mr. Englehart and 41 tons (37.2 t) of ore were milled. The following year the property was transferred to the Beaver Dam Gold Mining Syndicate who sunk an incline from the 73 ft (22.2m) level to the 200 ft (61m) level. Development was continued the following year by Beaver Dam Gold mines Ltd. Three bulk samples totalling 277 tons (251 t) were milled however the only reports from this period indicate that results were “encouraging.” Between 1937 and 1941, John Crouse carried out extensive surface trenching on the Austen belt.

No mining activities are recorded between 1940 and 1985 however several companies conducted exploration at Beaver Dam. The Lawrence Construction Company acquired the property in 1954 and carried out surface trenching. In 1957 a 1324 lb (601 kg) sample returned a grade of 1.38 oz/t Au (47.3 g/t Au). A subsequent 103 kg sample of slate returned a grade of 0.30 oz/t Au (10.2 g/t Au). Atlantic Silica Ltd. acquired the rights to the Beaver Dam property in 1965 and attempted to reassess the project for a combined gold-silica operation. The Austen shaft was de-watered to the 73 ft (22.2 m) level and channel sampling was carried out; the results were not encouraging and the property was not renewed.

In 1977, the Beaver Dam property was acquired by MEX Explorations Ltd. and the following year, MEX entered into an agreement with Agassiz Resources allowing them to conduct exploration on the property. Agassiz conducted surface surveys and drilled nine diamond drillholes for a total of 643.9 m. The holes were drilled along an east-west trend to test the continuity of the Austen and Papke zones along strike. In 1980, Comiesa Corporation Ltd, a subsidiary of Agassiz, drilled an additional nine diamond drillholes totalling 1,003 m along a similar trend to the earlier Agassiz holes. In the same year, MEX drilled two holes to the west in the Mill shaft zone totalling 213 m and stripped a portion of the Papke Belt in order to collect a bulk sample, the results of which were inconclusive. In 1983, Acadia Mineral Ventures Ltd. funded additional exploration work to be carried out by MEX, which included geological mapping, line-cutting, geochemical and geophysical surveys as well as diamond drilling; 11 holes were completed for a total of 758 m.




Seabright Resources Inc (Seabright) optioned the Beaver Dam property from Acadia Mineral Ventures Ltd in 1985 and immediately embarked on an aggressive exploration campaign. At the same time, Coxheath Gold Holdings (Coxheath) acquired ground to the north (Northeast zone) and west (Mill shaft zone) of the Seabright property. After conducting some limited exploration, including grid cutting, a VLF-EM survey and limited geochemical sampling, Coxheath optioned the property to Seabright in order to pool their exploration efforts.

The initial phase of Seabright’s exploration was focused on defining the ore zone extents and outlining targets for diamond drilling. This began with a geochemistry survey carried out on a 50 m by 25 m grid. The results defined an elongated anomalous zone which was interpreted to represent the surface expression of the Austen and Papke belts with minor glacial dispersion in the down-ice direction. A similar anomaly was found in the Mill shaft area.

Following geochemical surveys, Seabright contracted MPH Consulting Ltd (MPH) to carry out geophysical surveys on their gold properties including Beaver Dam. The surveys carried out included total field and vertical gradient magnetics, VLF-EM, horizontal loop EM, induced polarisation and apparent resistivity. The results of the surveys defined the locations of individual lithologic units in the mine area and also outlined several zones for potential ore zone expansion.

MPH, on behalf of Seabright, also carried out reverse circulation (RC) drilling on the Beaver Dam property in order to further constrain geologic boundaries. Some 205 RC holes totalling 650 m were conducted on the Seabright portion of the Beaver Dam property with 158 holes in the Main Zone and 47 holes near the MEX pit. An additional 99 holes totalling 569 m were completed on the Coxheath properties including 35 holes over the Mill shaft zone and 64 in the Northeast zone. Rock chips returned from RC drilling were used to map the distribution of rock types on the property and till samples were logged in order to differentiate the various till facies which overlie the deposit. Assay results from RC material were not particularly helpful indicating only minor anomalies near the Austen shaft and the Mud lake fault.

In late 1985, Seabright commenced an extensive diamond drilling campaign that would go on for nearly three years. William Coates of MPH designed and supervised the programme which initially was designed to verify the existence of substantial mineralisation as indicated by previous programmes (Coates and Riddell, 1986a).

By February 1986, 60 holes had been completed totalling 8,000 m. At this time Coates, along with Howard Riddell (MPH), published the first estimate of reserves for Beaver Dam which incorporated the new diamond drilling results with the results of 29 drillholes completed by MEX (1978-1983). The positive results of the estimate encouraged Seabright to continue their drilling campaign and incorporate an underground exploration programme. A 25 m by 25 m grid was targeted for surface drilling with deeper drillholes (>100 m) drilled at 50 m intervals. As drill core assay data became available, MPH carried out three additional reserve estimates published in April 1986, September 1986 and January of 1987. The final estimate carried out in January of 1987 indicated 322,200 t at 11.6 g/t Au proven reserves and 1,203,500 t at 8.6 g/t Au probable reserves (Coates and Riddell, 1987)[note these figures are not reported in accordance with the JORC Code 2012 and are historical in nature]. Mining consultants were brought in to carry out feasibility studies and estimate ‘mineable reserves’ based on the resource estimates of Coates and Riddell. Studies by Redpath Mining Consultants and Kilborn Engineering were completed in January and February of 1987, respectively. Redpath estimated mineable reserves of 987,200 t at 10.5 g/t Au based on 85% recovery and 15% dilution at zero grade [note these figures are not reported in accordance with the JORC Code 2012 and are historical in nature]. Surface drilling at Beaver Dam continued until April of 1987. By the time drilling ceased in 1988, 193 NQ sized diamond drillholes were completed at surface.

Seabright began underground exploration by collaring a decline in August of 1986. The spiral decline graded 15% on average and reached a maximum depth of approximately 100 m below surface by June of 1987. Seven levels of development were completed branching from the decline at elevations of 1,100 m, 1,080 m, 1,075 m, 1,065 m, 1,050 m, 1,040 m and 1,025 m (mine grid, Figure 6.1). Eighteen crosscuts were completed to provide access to the mineralised zones and sixteen drifts were driven into the mineralised stratigraphy. Several vent raises were completed from various levels, and one additional raise was driven into high grade ore on the 1,040 level. In total 3,787 m of development were completed with 135,000 t mined by the time mining ceased in 1989. In addition, 34 diamond drillholes were completed from underground locations.




In order to assess open pit potential, Seabright began development of an open cut north of the decline. Between September and December of 1987, 10,055 t was removed from the Papke and Austen zones at surface.

Coincident with work in the Main zone, Seabright carried out work on the Northeast and Mill shaft zones hoping to develop additional reserves adjacent to the Main zone. Seabright drilled a number of RC drillholes followed by 26 diamond drillholes including 15 in the Northeast zone (Ducan, 1986) and 11 in the Mill shaft zone (Duncan et al., 1987). Although the results of this programme did not result in the definition of resources in these areas, favourable stratigraphy was encountered (dark arsenopyrite bearing argillite) and numerous samples returned significant gold grades.

In February of 1988, Westminer Canada Limited (Westminer) took over Seabright and their portfolio of properties including Beaver Dam. Westminer was an owner of several active mines and was interested in bringing Beaver Dam into full production. Problems arose when the new owners were unable to reproduce reserve estimates presented by MPH (Coates and Riddell, 1987). Westminer conducted their own estimate using differing parameters which included incorporation of bulk sampling results and reducing the maximum area of influence for samples during polygonal grade estimation from 25 m to 10 m. The results were considerably less than reserves estimated by MPH, at just 15,300 t at 5.6 g/t Au proven and 25,600 t at 5.4 g/t Au probable reserves (Campbell and Daniels, 1988) [note these figures are not reported in accordance with the JORC Code 2012 and are historical in nature]. The disappointing results of the estimate triggered Westminer to file a civil action suit against the directors of Seabright for fraud which was ultimately unsuccessful. During the proceedings Westminer contracted Pearson, Hoffman and Associates of Toronto, Ontario to review the MPH estimates. They found the database was accurate but the consultants had significantly overestimated the grade and tonnage of the deposit due to the highly difficult nature of estimating deposits of this type. The issue was the result of a number of parameters used by MPH in their estimates including the lack of top-cutting of high grade samples and the large area of influence for individual high grade samples.

The Beaver Dam property was acquired in 2002 by Tempus Corporation, which subsequently became Acadian Gold Corporation, and finally Acadian Mining Corporation. Acadian’s focus is on developing resources for their open pit gold projects which include Beaver Dam and Fifteen Mile Stream. Acadian contracted Mercator Geological Services to conduct exploration on its gold properties, including Beaver Dam. After carrying out preliminary work, which included compilation and digitisation of all historic drilling data, Mercator commenced a drill programme at Beaver Dam in 2005. Drilling continued until 2007 with a total of 139 NQ drillholes and three large diameter PQ drillholes drilled at Beaver Dam. During this time, Mercator carried out several resource estimates as new drill core assays became available. The results of the estimates are published in technical reports dated 2005, 2006 and 2007. Since 2007 Acadian has carried out on-going exploration at Beaver Dam including the drilling of 14 NQ sized diamond drillholes in 2009 and metallurgical testing on the PQ drillholes drilled in 2007 (see Section 7.0).

4.2 Mining

Although no commercial gold production came from Seabright’s mining activities at Beaver Dam, several bulk samples were collected from both underground development and the open pit. The material was trucked from Beaver Dam to the Gay’s River mine, an inactive lead-zinc mine which was also owned by Seabright, for milling. Seven different bulk samples were sent through the mill at Gay’s River where it was crushed, pulverised and sent through a gravity circuit followed by a floatation circuit. Table 4.1 contains a summary of the results from each bulk sample test including the location(s) from where each sample originated. Most of the tests were collected from multiple headings on several different levels so it is impossible to assign grades to individual headings. Bulk test #6 was comprised of material from two high grade ore shoots. The grade estimated from sampling (cut) was 10.6 g/t Au and the recovered grade was 11.1 g/t Au. Bulk test #7 contained materials, which was estimated at 4.2 g/t Au however the recovered grade was 2.1 g/t Au. Tests #2 to #5 contained a mixture of ore-grade and sub-ore grade material and thus had lower grades. A total of 41,119 t of material (ore and sub-ore) was milled at an average grade of 1.8 g/t Au.




Table 4.1 Summary of bulk sample test results (after O’Sullivan, 2003)

Test number

Date Ore location

Rod mill discharge

grade

Tonnes milled

Contained gold (g)

Grade milled

(g/t Au)

1 Dec-86 1100 1.2 1,828 2,236 1.2

2 Nov - Dec 1987 1100, 1090, 1080, 1065, 1050, 1040, 1025 1.3 5,795 - -

3 Dec 1987 - Jan 1988 Austen Open Pit 2.5 8,732 - -

3a Jan - Feb 1988 1100, 1080, 1065, 1050, 1040 1.4 2,634 - -

Subtotal

1.9 17,162 25,399 1.5

4 May - June 1988 1100, 1065, 1050, 1040, 1025, Austen Open Pit

1.1 15,738 26,754 1.7

5 Aug - Sept 1988 1100, 1065, 1050, 1040 1.2 2,795 4,695 1.7

6 Oct-88 1100, 1080 8.0 732 8,151 11.1

7 Mar-89 1100, 1065, 1040 1.5 2,865 6,075 2.1

Subtotal

1.6 41,119 73,309 1.8

Mill Clean up

2,733

Total

41,119 76,043 1.8




5 GEOLOGICAL SETTING

5.1 Regional Geological Setting

The Meguma Terrane of southern mainland Nova Scotia is the most outboard terrane of the Appalachian Orogen and was accreted during the Mid-Devonian Acadian Orogeny. It is underlain by folded Cambrian-Ordovician age meta-sedimentary sequences of the Meguma Supergroup and in some areas, extensive Late Devonian granitoid (Figure 5.1). The Meguma Supergroup has been subdivided into two groups, namely the meta-sandstone dominated Goldenville Group and the overlying meta-mudstone dominated Halifax Group, each of which has been subdivided into Formations (e.g. White et al., 2008; Horne and Pelley, 2007).

The Meguma Supergroup was deformed during the Mid-Devonian Acadian Orogeny resulting in east to northeast-trending regional folds and associated axial planar cleavage. Regional folds typically show upright to overturned geometry and are frequently doubly plunging at shallow angles, resulting in elongated dome structures.

Metamorphism associated with the Acadian Orogeny varies across the Meguma Terrane, from local amphibolite facies in the extreme northeast and southwest areas to mid- or lower- greenschist facies assemblages throughout most of the central area. Large volumes of granite and granodiorite intruded into the folded and metamorphosed Meguma Supergroup during Late Devonian to Early Carboniferous time resulted in development of well-defined contact aureoles. Lower Carboniferous and younger strata unconformably overlie the eroded Meguma surface and have been affected by folding and shearing. Regional-scale northwest trending faults typically showing sinistral strike-slip separation are common throughout the Meguma Terrane.

The Halifax Group forms the upper part of the Meguma Supergroup and is generally comprised of thinly-bedded slates and minor meta-siltstone and meta-sandstone. The Halifax Group has been locally subdivided into formations. The Cunard Formation is regionally map-able and defines a stratigraphic marker within the Halifax Group. The Cunard Formation consists of fine-grained dark slates and interbedded meta-sandstone beds and hosts significant sulphide mineralisation; mainly pyrite and pyrrhotite. The Cunard Formation is locally underlain by the Beaverbank Formation which is characterised by carbonate and manganese-rich slates and meta-siltstone which locally manifest as coticule layers (Horne and Pelley, 2007). The stratigraphically highest unit of the Halifax Group generally consists of grey-green meta-siltstone and minor meta-sandstone and in the eastern Meguma Terrane this unit is referred to as the Glen Brook Formation (Horne and Pelley, 2007).

The Goldenville Group, which is the lowest exposed unit of the Meguma Supergroup, is host to most of the known gold deposits in the province (Figure 5.1). This group generally consists of inter-bedded meta-sandstone and meta-siltstone. Formations are locally recognised within the Goldenville Group and in the Eastern Meguma Terrane, three formations have been established, including from stratigraphic lowest, the Moose River Formation, Tangier Formation and Taylors Head Formation (Horne and Pelley, 2007).

The Moose River Formation, herein referred to as the Fifteen Mile Stream Formation, is characterised by thick intervals (10 m to 100 m) of meta-mudstone dominated intervals intercalated with meta-sandstone (Horne and Pelley, 2007). The Fifteen Mile Stream Formation is recognisable by a slightly elevated response on regional aeromagnetic maps, interpreted to reflect the common to abundant presence of pyrrhotite within the meta-mudstone. The aeromagnetic response of the Fifteen Mile Stream Formation can be traced through the Moose River, Beaver Dam and Fifteen Mile Stream deposits (Figure 5.2) where thick meta-mudstone intervals have been documented.

The Taylors Head and Tangier formations are dominated by meta-sandstone with minor meta-siltstone and slate intervals. These units are typically difficult to distinguish in the field due to their similar and monotonous lithologic character, however these units are easily distinguished on regional aeromagnetic maps. The Taylors Head unit is characterised by alternating bands of relatively high and low magnetic response whereas the Tangier unit is characterised by a general uniform and low magnetic response (Horne and Pelley, 2007). Distinction of the Taylors Head and Tangier formations can be made on the basis of the fine-grained lithologies, with the Tangier Formation characterised by dark, thinly laminated slate and the Taylors Head Formation characterised by thinly bedded green meta-siltstone (Horne and Pelley, 2007).




Figure 5.1 Geological map of the Meguma Terrane, southern Nova Scotia, showing the location of gold deposits




Figure 5.2 Geological map of the FMS Trend which hosts the Moose River, Beaver Dam and Fifteen Mile Stream gold deposits




5.2 Local Geological Setting

The Beaver Dam area is underlain by folded metasedimentary rocks of the Fifteen Mile Stream Formation which is distinguished from other formations within the Goldenville Group by the presence of thick meta-mudstone intervals and lesser meta-sandstone. To the west, the property has been intruded by a Devonian aged granitoid pluton (Figure 5.2).

The primary structural feature within the Beaver Dam property is the Moose River-Beaver Dam anticline. This regional scale fold can be traced for 10s of km along strike to the east and west. Within the Beaver Dam deposit, the fold strikes at approximately 100 degrees and its axial plane dips north. On the north limb of the fold, bedding dips moderately while the south limb is overturned dipping north between 75 and 90 degrees. As a result of folding, a well-developed axial planar cleavage occurs at Beaver Dam defined by a fine continuous cleavage in meta-mudstone and a spaced pressure solution cleavage in meta-sandstone.

Several parallel, northwest trending faults occur on the Property, including the Mud lake and Killag river faults at the eastern margin of the deposit (Figure 5.3). These faults are generally described as strike-slip faults as the strike-slip component of offset is easily visible on aeromagnetic images; however the amount of dip-slip movement, if any, is largely unknown. The Mud lake fault is important because it forms the eastern boundary of the Main zone. Duncan (1987) described the Mud lake fault underground and in drill core as 2 m to 3 m of gouge within a brecciated interval 10 m to 20 m wide. Seabright drilled several diamond drillholes in the Northeast zone between the Mud lake and Killag river faults in an attempt to locate the offset continuance of the Main zone. Although assay results were disappointing, lithologic logs of the holes describe ‘arsenopyrite-bearing’ and ‘striped’ argillite which resembles the Papke Mudstone. Acadian drilled several reverse circulation holes in the area in 2013. Several of the drillholes intersected intervals of quartz veins hosted by arsenic bearing black slate. Assay results from this programme indicated low grade mineralisation in several of the holes. A number of drillholes were also been drilled in the area east of the Killag river fault. The results indicate minor mineralisation continues across the fault.

In general, all of the rocks that underlie the Beaver Dam property can be described as either meta-sandstone or meta-mudstone. However, during the extensive exploration work by Seabright in the 1980s, Duncan (1987) and other Seabright geologists (Adams and Hogg, 1987) established a well-defined stratigraphy within the Beaver Dam deposit. Although the stratigraphy described by Seabright was easily recognised underground, it was not applied by Seabright during diamond drill core logging. An attempt was made to interpret the stratigraphy on cross sections using drill logs, however, the unusual shape of some of the units seen on sections (Duncan, 1987) suggest that correlation was largely unsuccessful. As a result, the Seabright stratigraphy was not applied when core was logged during the 2005-2007 drilling campaign. During the 2009 drill programme, Acadian noted that the units described by Seabright could easily be recognised, particularly the ore-bearing units. In 2012, Acadian re-logged 66 drillholes from the 2005 to 2007. In ten drillholes from 2009, Acadian was able to successfully identify the units described by Seabright. Re-logging focused on the principal ore-bearing units including; the Crouse, Hanging Wall, Papke, Millet Seed and Austen units. These units were defined on cross sections spaced at 25 m intervals from 600E to 1400E (mine grid). The following is a description of each of the units which make up the ore bearing stratigraphy as defined by Acadian. The distribution of the units can be seen on Figure 5.3.

The Austen Argillite: a dark grey to black meta-mudstone unit with minor interbeds of light grey meta-sandstone. On average the Austen unit is 50 m thick but ranges from 45 m to 70 m. Quartz veins are abundant in the unit and are frequently auriferous with bedding parallel veins being most common. This unit forms the boundary between the ore bearing stratigraphy and the stratigraphically underlying units. The Austen unit is underlain by another meta-mudstone dominated unit, which is distinguished by the presence of abundant light/dark colour banding and a lack of auriferous veins.

The Millet Seed Sandstone: is a 10 m to 20 m thick unit which is dominated by thick intervals of medium grained meta-sandstone (~80%) with minor intervals of dark coloured meta-mudstone. This unit is distinguished by the presence of a distinct meta-sandstone bed containing abundant 0.5 mm to 1 mm quartz grains that resemble millet seeds. This bed is easily identified throughout the Beaver Dam deposit making it a valuable stratigraphic marker. In addition to being easily identified in the ore-bearing stratigraphy, the Millet Seed Sandstone is identified on numerous underground plans and face maps generated by Seabright (Duncan, 1987).




Figure 5.3 Geology of the Beaver Dam property




The Papke Argillite: is a graphitic black slate with only a few thin interbeds of meta-sandstone. The unit contains abundant euhedral arsenopyrite porphyroblasts which vary in size from <1 mm to 2 cm. Pyrrhotite is also common and occurs as lenses elongated parallel to cleavage planes. Sulphides concentrations often occur as bands parallel to bedding. The Papke unit contains abundant quartz veins which are commonly auriferous with bedding parallel veins being the most common.

The Hanging Wall Greywacke: is comprised of light grey, fine grained meta-sandstone interbedded with up to 40% dark grey meta-mudstone. This unit is between 10 m and 25 m thick with an average thickness of 15 m. Quartz veins are common within the Hanging Wall Greywacke but are generally not auriferous. Because of the high percentage of meta-mudstone within this unit it is often difficult to distinguish this unit from the overlying Crouse Argillite.

The Crouse Argillite: defines the boundary between the ore bearing stratigraphy and the undivided hanging wall turbidites. It is a dark grey meta-mudstone unit interbedded with meta-sandstone which forms up to 40% of the unit. On average, the Crouse unit is 13 m thick but may range from a minimum of 5 m to as much as 20 m. Auriferous quartz veins and sulphide (e.g. arsenopyrite, pyrrhotite and pyrite) porphyroblasts up to 2 mm in size are common throughout the unit.

5.3 Mineralisation

Gold mineralisation at Beaver Dam occurs predominantly on the steeply dipping south limb of the Moose River-Beaver Dam anticline and generally conforms to the saddle-reef style model where veins and related alteration occur in bedding-parallel structures resulting from folding. Although no saddle veins have been identified at Beaver Dam, most veins are parallel to bedding and are interpreted to represent down limb continuation of saddle veins which have been uplifted and eroded away. Strain related to folding is focused in less competent material so veining is concentrated in meta-mudstone units. Veins also occur in more competent meta-sandstone beds however they are less common.

Mineralisation in the Main zone occurs within the Austen, Millet Seed, Papke, Hanging wall and Crouse units (Figure 5.3) which at surface form an area roughly 800 m in length and 100 m in width. To the east, mineralisation stops where the mineralised stratigraphy is truncated by the Mud lake fault. Attempts have been made to locate the offset portion of the deposit east of the fault, in the so-called Northeast Zone and small pockets of mineralised material have been identified (Duncan, 1987). West of 600E (mine grid), ore grade mineralisation fades rapidly despite the fact that the stratigraphic units trend westward uninterrupted. The reason why mineralisation disappears in this area is unclear however several hundred metres west the Mill shaft zone a small zone of well mineralised material has been discovered. The mineralised units dip steeply north at 70

o in the Main zone and mineralisation has been encountered in drillholes which intersect

the ore-bearing stratigraphy at depths of more than 400 m below surface. To date exploration at Beaver Dam has not defined a depth below which mineralisation does not occur.

Several types of veins occur within the deposit, the most common being laminated bedding parallel veins. These veins are generally 0.5 cm to 20 cm thick and are comprised of milky to smokey quartz with inclusions of wall-rock which suggest that the veins formed through multiple crack-seal episodes. While generally concordant, reports from underground development suggest that these veins can vary in thickness and appearance rapidly along strike. Granular clusters of chlorite are common in laminated veins. Sulphide minerals also commonly occur in these veins including arsenopyrite, pyrite, and pyrrhotite. Less common are occurrences of galena, chalcopyrite and sphalerite.

Bull veins and angular veins also occur within the deposit, but these veins are generally unimportant to gold mineralisation. Bull veins are thick, barren, opaque quartz veins which may be bedding parallel or discordant and contain very little, if any sulphide. Angular veins are massive, discordant veins of opaque to glassy quartz which frequently cross-cut one another and in some cases form a stockwork pattern. Bull veins and angular veins are typically unmineralised by may contain gold where they intersect bedding parallel veins.




Gold occurs commonly within quartz veins as coarse (>1 mm) grains with local occurrences of finer (<1 mm) grains. Coarse grains are commonly found at vein-wall rock boundaries and are often spatially associated with sulphide minerals. In rare cases, fine visible gold grains have been observed within wallrock. Anomalous gold values in the 0.1 g/t Au to 4 g/t Au range were frequently returned for intervals without any quartz veins or visible gold. The nature of this mineralisation is not well understood, however high gravity recovery factors suggest that the gold occurs as free-gold, possibly associated with sulphide minerals. More work is required in order to fully understand the distribution of gold within the deposit.

5.4 Evaluation Style of Mineralisation

The gold-quartz veins at Beaver Dam are characterised by a high-nugget effect and the presence of coarse and often visible gold particles (>100 microns in size). This is typical of most of the Meguma area gold deposits and other similar styles such as the Central Victorian gold deposits of Australia. They rank amongst the most difficult of ore deposits types, in terms of producing an accurate and precise resource estimate (Dominy, 2014). Their effective sampling is generally difficult because of the relatively low concentrations involved and the erratic and dispersed nature of the gold particles. Resource risk in these systems comprises (1) grade, (2) geological and (3) estimation risk. Significant risk relates to tonnage (“geological risk”) and grade (“grade risk”).

Grade risk is often greater than geological risk in high nugget systems, though the effect of the latter should not be understated. Grade risk is related to information that should be based on quality sampling and assaying data from drilling and/or underground development. In coarse gold systems, this may be difficult without specialised protocols.

Geological risk is related to the identification of economic volumes from both geological and grade data (i.e. drilling and/or underground development) and must consider continuity of both geology and grade at various scales. Challenges relate to the presence of the host structure with no mineralisation through to barren zones within mineralisation.

Estimation risk includes additional factors such as database quality, survey data, data density, bulk density and estimation methods.

In high-nugget gold veins, the following resource evaluation characteristics are often observed (Dominy, 2014):

relatively long geostatistical range and low-moderate nugget effect for the background gold

mineralisation population;

short geostatistical range and high-extreme nugget effect for the high-grade (coarse-gold)

mineralisation population;

relatively wide-spaced drilling (>30 m) likely to understate grade whereas dense close-spaced

sample data (<15 m) may approximate grade;

grade estimates are highly sensitive to grade distribution, sample support and type (e.g. volume-

variance effect); data density (e.g. information effect) and estimation approach (e.g. sensitivity to top-

cuts, etc.);

it may only be possible to define a global grade for each zone of mineralisation dependent upon data

spacing: and

confidence in tonnage is usually higher than confidence in the grade estimate.

These lead to challenges such as (Dominy, 2014):

a vein and/or ore shoot may not have the contained gold in the mineable bodies with the shapes,

sizes, grades and distributions expected; and

the boundaries and internal grade distribution of the defined bodies may not be correctly assigned

ahead of mining, resulting in either/or excessive dilution and/or misclassification of ore as waste.

Within the high-nugget environment, surface diamond drilling alone is generally only able to define global Inferred Mineral Resources unless drill spacing is unrealistically tight. Underground development, closely spaced in-fill drilling (<15 m) and/or bulk sampling are potentially needed to define local Indicated Mineral




Resources. The definition of Measured Mineral Resources and Proved Ore Reserves is effectively impossible, though ultimately dependent upon the nature of the deposit, and data quality and density.




6 EXPLORATION ACTIVITIES

6.1 Exploration Overview

Beaver Dam has been subject to several periods of active exploration over the last century. Until recently companies were focused on delineating underground resources. In light of the recent upswing in global gold prices, Acadian realised the open-pit potential of the project and exploration efforts were altered accordingly.

6.2 Exploration Methods

In general exploration techniques used for Meguma gold exploration can be broadly classified into early and late stage exploration. Early stage exploration generally involves collecting geological information and confirming the presence of gold mineralisation. Techniques used include geological mapping, prospecting, geophysics and geochemistry. Late stage techniques are used to delineate resources and reserves and include trenching, diamond drilling and to a lesser extent reverse circulation drilling.

6.2.1 Geology

The geology of the Beaver Dam area has been well known since it was first mapped by Faribault (1899) who mapped much of Eastern Nova Scotia’s gold districts at a scale of one inch to one mile. He also mapped the property in detail in 1902 at a scale of one inch to 200 ft (Faribault, 1928). Although mapping programmes were undertaken by other explorers of the Beaver Dam property, few improvements were made until Seabright carried out their major diamond drilling and underground exploration programme where Duncan (1985) and other Seabright geologists (Adams and Hogg, 1987) established stratigraphy within the deposit.

6.2.2 Geophysics and remote sensing

MEX Exploration carried out ground based magnetometer and VLF-EM surveys at Beaver Dam in 1983. Data was collected every 12.5 m along lines set 50 m apart. The results of the survey showed some low amplitude anomalies generally parallel to strike of the deposit.

MPH Consulting carried out a number of ground based geophysical surveys on behalf of Seabright Resources during the 1980s including total field and vertical gradient magnetics, VLF-EM, horizontal loop EM, IP and resistivity. The objective of the surveys was to outline potential targets for Seabright’s forthcoming drilling programme. In some cases differing response was even able to determine the locations of individual lithological units in the area of the mine.

In 2010, Acadian contracted CMG Airborne of Ottawa, Ontario to fly a high resolution aeromagnetic survey over many of its holdings, including Beaver Dam. The helicopter-borne survey was flown with lines spaced at 100 m in most areas and 50 m over the Beaver Dam and Fifteen Mile Stream deposits. Although Beaver Dam was in the later stages of exploration, Acadian felt that high resolution data might provide useful information in areas like the Mill shaft and Northeast zones where drilling data is limited.

6.2.3 Geochemistry

In the 1980s, Seabright carried out a soil geochemistry survey on a 25 m by 50 m grid prior to commencing diamond drilling. The results defined an elongated anomalous zone which was interpreted to represent the surface expression of the Austen and Papke belts. An additional anomaly was noted in the mill shaft area.

Recently, Acadian collected several till samples in the Northeast zone and east of Cameron flowage in order to assess potential mineralisation in those areas. The results indicated several areas that warrant further investigation. Anomalous till results in the northeast zone were followed up with RC drilling which intersected intervals of meta-mudstone which hosted arsenopyrite mineralisation and quartz veins. The assay results also indicate low grade mineralisation that warrants follow up.




6.2.4 Drilling

Several different companies have carried out significant drilling campaigns at Beaver Dam. Since data from historical drilling programmes make up a significant part of the database used in the estimate of resources presented in Section 8 of this report it is helpful to document the drilling, sampling and analytical procedures used in previous drilling campaigns.

6.2.4.1 Pre-Seabright drilling (1977-1983)

As discussed in Section 4.1, several extensive drilling campaigns have been undertaken at Beaver Dam. Drilling campaign completed by contractors on behalf of MEX. Between 1977 and 1983, 29 diamond drillholes were completed (27 in the Main zone and two in the Mill shaft zone) totalling 2,690 m. Although this programme was met with some success, Acadian elected to omit this data from the resource estimate presented in this report due to a number of factors, all of which affected the reliability of the data. Firstly, collar co-ordinates were not surveyed or reported during this period. Collar locations were mostly digitised from maps in assessment reports describing the work. Analytical precision was poor because the results were reported in ounces per ton Au for which the smallest increment was 0.01 oz/t Au or 0.34 g/t Au. Furthermore, the Caledonia assay office used the terms ‘Nil’ and ‘Trace’ on certificates and it was unclear what values they were used to represent. Because of these factors and the relatively small percentage of samples this dataset represents to the overall database, it was felt that these samples provided more impairment than benefit.

6.2.4.2 Seabright drilling (1985-1988)

After acquiring the Beaver Dam property in 1985, Seabright conducted continuous drilling for nearly four years in order to establish minable reserves. Drilling from this era forms a large part of the Beaver Dam drilling database used resource estimation. By the time Seabright ceased drilling in 1988 they had completed 182 drillholes for approximately 41,104 m of drilling at surface and an additional 34 underground drillholes for a total of 2,289 m. Seabright’s drilling was focused in the Main zone, along a strike length of 1,200 m with a high density of drilling between gridlines 700E and 1200E.

6.2.4.3 Acadian drilling (2005-2007)

In July of 2005, Mercator Geological Services initiated a drill programme at Beaver Dam, on behalf of Acadian, aimed at delineating open pit reserves. Drilling went on until 2007 with a total of 133 holes drilled in the Main zone, three drilled in the Mill shaft zone and three drilled in the Northeast zone. By the end of 2007, 19,659 m of NQ core was drilled at Beaver Dam. In addition, during 2006 three large diameter PQ sized holes were drilled into the Main zone in order to provide a large sample volume for metallurgical testing. According to Webster and Harrington (2007): “the drilling programme focused on 1) validation of past drilling results, 2) infilling in areas where insufficient information exists to define near surface indicated and measured resources 3) re-drilling holes where sampling and assay procedures did not meet current reporting standards and 4) to extend the mineralised zone beyond the previously defined boundaries”.

6.2.4.4 Acadian drilling (2009)

In 2009, Acadian conducted a drill programme on the Beaver Dam property which involved drilling 14 diamond drillholes for a total of 2,360 m. Thirteen holes were drilled in the Main zone and one in the Mill shaft zone in order to increase the confidence level in some areas and to explore potential ore zone extension along strike and at depth.

6.2.5 Sampling


Sampling from the Seabright era (1985 to 1987) was focused on selective underground mining and thus sampling was restricted to quartz veins and adjacent intervals of altered wall-rock. During this extensive programme whole core samples were designated by experienced geologists, and were subsequently collected by technicians. By the time drilling ceased, more than 18,000 samples were collected.





From 2005 to 2007, all Beaver Dam drill core was half-sampled at a nominal sample interval of 1 m. Shallow holes were completely sampled from the first interval of bedrock to end of the hole. For deeper drillholes which intersected long intervals of the hanging wall stratigraphy, the upper unmineralised sections of core were not sampled. During the first two years of core processing (BD05-001 to BD06-133), drill core was split using a mechanical core splitter. Half of the material was collected and bagged; the other half was placed back into the core box. This process works well for sandstone dominated intervals however, in fissile, slatey sections of core; the tendency was to break along cleavage planes. Often the result of splitting slate intervals was a series of ‘poker-chip’ shaped slate discs which were alternately sampled or retained. In 2007 (BD07-134 to BD07-139) Mercator utilised a diamond blade core saw to saw core in half. The core was sawn along a plane parallel to the core box and the top half was collected with the bottom remaining as archive. One tag showing corresponding downhole sample interval information was placed in the sampled core boxes at the appropriate location, one tag lacking interval information is placed in the sampled bag for shipment to the laboratory, and the third tag with sample interval information is retained in the master sample book for future reference and database entry purposes. The bags were sealed with a wire tie then placed in buckets and sealed with one-use, gasket lids. The buckets were then shipped by commercial trucking transport to the ALS lab in Val D’Or.


During the 2009 drill programme, core from each drillhole was cut in half using a Vancon core saw equipped with a diamond blade. Drillholes from known mineralised zones were completely sampled whereas holes outside of known mineralised zones were sampled over selected intervals. In general, samples were 1 m in length. Half of the core from each sample interval was bagged, labelled and sealed for shipping. Samples were labelled according to tag numbers from a three tag sample book. The samples were then sealed with wire ties and sealed in buckets. The buckets were transported by Acadian to Armour Transportation Systems where they were handed over for transport to the ALS lab in Val D’Or.

6.2.6 Chemical analysis


Initially, all of Seabright’s diamond drill core samples were analysed by Atlantic Analytical Services Limited in St John, New Brunswick, with some overflow analysed by Chemlab Inc, also located in St John. As of July of 1986, Chemlab became the primary laboratory used by Seabright.

Seabright utilised two analytical procedures on their whole core samples, a standard 30 g fire assay procedure and special treatment assay. Samples containing visible gold were immediately processed using the special treatment procedure while all remaining samples were analysed by standard fire assay. Any samples which returned assays of 1 g/t Au or greater were re-analysed using the special treatment procedure.

Standard fire assay involves drying, crushing and pulverising the sample until 90% of the material passes a 100 mesh [150 microns] screen. The sample is then rolled and split until 500 g to 1,000 g remains. The sample is again rolled and five to six cuts of five to six grammes are taken in order to obtain 30 g of pulp for assay. The analysis is carried out by fire assay and atomic absorption.

The special treatment procedure begins with drying, crushing and pulverising however after pulverisation; the entire sample is screened at 80 mesh [180 microns]. The oversize fraction is weighed and divided into 35 g (or less) lots which are analysed for gold using the fire assay and atomic absorption technique. The undersize (-80 mesh) portion of the sample is weighed and treated as normal fire assay pulp, with duplicate analyses by fire assay and atomic absorption. The reported result represents a weighted average of grades determined from the oversize and undersize fractions.





All drill core samples from the 2005-2007 drilling campaign were independently analysed by ALS Chemex using their full metallic screen procedure. ALS is a full service laboratory facility with ISO17025 accreditation. When samples arrive at ALS, they are weighed entered into an internal sample logging system. The samples are first dried then crushed and pulverised to 85% passing 75 microns. The material is then dry screened at 105 microns to produce plus and minus fractions. The oversize fraction is weighed and the grade is determined, using one or more 30 g fire assays with gravimetric finish. The undersize fraction is weighed and homogenised before two 30 g sub-samples are analysed by fire assay with AAS finish. The average grade of the two sub-samples is taken and reported as the grade of the undersize fraction. The final grade reported for the sample is a weighted average of the oversize and undersize fractions.

The metallics procedure was used because of the nuggety character of gold observed at Beaver Dam. Due to the malleable nature of gold, when rock containing large nuggets of gold is crushed and pulverised the nuggets tend to become flattened or reshaped rather than crushed. These modified gold particles result in a heterogeneous sample pulp which can lead to vast overestimation and/or underestimation of the actual grade of the sample depending on whether or not a gold particle is contained in the 30 g split used in a standard fire assay. Screening the pulp and completely analysing the oversize fraction ensures that any coarse gold particles in the sample are measured. Any fine gold particles will pass through the screen and can easily be homogenised within the undersize fraction of the sample.


During the 2009 drilling programme, all core samples were analysed by ALS Chemex using the procedure outlined in Section 6.2.6.2, however the procedure has been renamed screen metallics gold-double minus.

6.2.7 Quality assurance (QA) and quality control (QC)


There is little documentation about quality assurance and/or quality control procedures utilised during Seabright’s drilling campaign. No blanks, field duplicates or certified reference materials (CRM) were analysed during this period. The only documented attempt to assess laboratory accuracy consisted of 99 check samples. The samples consisted of unused pulverised (-180 microns) material left over from the original analysis by Atlantic Analytical. Splits of the pulverised material were sent to one of two outside laboratories, Bourlamaque Assay Laboratories Ltd (Quebec) or Terramin Research Labs Ltd (Alberta).


During the 2005-2007 drilling campaign, Mercator was responsible for assessing laboratory accuracy and precision. In an attempt to do this unmarked samples of ‘blank’ material were submitted to ALS Chemex for assay along with regular core samples. No field duplicates or CRMs were submitted during this period. Mercator chose to rely on ALS internal QA/QC protocols, which involved the insertion of CRMs, blanks and duplicates into each batch of samples. ALS staff review the results of each of the QA/QC samples in order to assess precision and accuracy of each batch.

Samples of blank material were inserted into the sample stream after every 20th sample. In this case, the

blank samples consisted of unmineralised Meguma greywacke sourced from an unknown location. During the drilling campaign a total of 838 blanks were submitted to ALS Chemex and analysed.





In an attempt to improve upon the QA/QC procedures of Mercator, Acadian instituted protocols for the 2009 programme which included the regular insertion of blind blanks and CRMs. In addition, ALS continued their internal QA/QC protocols which consisted of regular analysis of blanks, CRMS, duplicates and triplicates with each batch. Blanks were inserted into the sample stream at a rate of one blank in every 50 regular core samples. The blank samples consisted of massive anhydrite core from the Windsor Group. A total of 27 blanks were submitted to ALS for analysis during the programme. CRMs were inserted into the sample stream in order to test laboratory accuracy. Seven different CRMs were acquired from Rocklabs (Australia) and WCM Minerals (Burnaby, BC) covering a range of gold grades from 0.29 g/t Au to 10.4 g/t Au. The samples were prepared by Acadian staff and consisted of at least 30 g of CRM in plastic ‘whirl-paks.’ Although these CRMs were visually distinct from the regular core samples, the expected results and standard identity was never provided to the laboratory. CRMs were chosen randomly and inserted at a rate of one CRM for every 50 core samples. In total, 27 CRMs were submitted and analysed during the 2009 drill programme.

6.2.8 Sample security


During the extensive drill programme carried out by Seabright, drilling was monitored by company staff and core was taken directly from the drill to an on-site core logging facility for processing. Unsampled core was stored on site for the duration of the drilling campaign while samples were transported by Seabright staff in batches of 500 to the laboratory facility (Coates and Riddell, 1986a).


From 2005 to 2007, Mercator staff supervised all drilling and core processing related to Beaver Dam. Mercator geologists transported core from the drill to the logging facility at the Gay’s River mine which was fenced and access was controlled by 24 hour security personnel. The core was then split or sawn and the half core samples were collected, bagged and sealed in one use self-sealing plastic buckets and shipped to ALS Chemex in Val d’Or, Quebec by courier (Webster and Harrington, 2007).


During the 2009 drilling programme drilling, core storage and transport was supervised by Acadian staff. Core was taken directly from the drill site to Acadian’s core logging facility which was located at the Gay’s River mine site. The core was stored in a locked shed during logging and sampling and the site was monitored by security 24 hours a day. Once samples were collected, the samples were placed in plastic pails with one use self-sealing lids. The buckets were then transported to ALS Chemex (Val d’Or, Quebec) by courier with the pails integrity verified by laboratory staff.

6.3 Exploration Results

6.3.1 Seabright drilling (1985-1988)

The drilling campaign of 1985 to 1988 resulted in 217 diamond drillholes from surface and underground locations. The drill core logs were used in an attempt to correlate the stratigraphy of the deposit on cross sections. This was ultimately unsuccessful as the shapes of various stratigraphic units interpreted on the cross sections are highly unrealistic. The programme also produced more than 18,000 assays with an average grade of 1.2 g/t Au which were used in several resource estimates (Coates and Riddell, 1986a, 1986b, 1987).




6.3.2 Acadian drilling (2005-2007)

This drilling campaign resulted in 139 NQ sized diamond drillholes (19,659 m) drilled at surface with three PQ sized diamond drillholes for metallurgical testing. Cross sections with drill core logging data were plotted however reasonable correlation between drillholes was not possible due to the poor quality of the logs. 16,045 assays were generated from drill core samples during this period. The average grade of the assays was 0.47 g/t Au, however this number should not be compared with the results from the Seabright era drilling because of the change in sampling techniques. Seabright samples were collected from quartz veins and adjacent wallrock whereas during this programme the entire hole was sampled which inevitably leads to dilution of the average grade. The results of the programme were incorporated into several resource estimates by Mercator (Webster et al., 2004, Webster and Harrington, 2005, 2007).

6.3.3 Acadian drilling (2009)

The 2009 drilling campaign resulted in the completion of 14 diamond drillholes totalling 2,351 m. The drill logs generated in this programme were incorporated into the new geological model presented in Section 8. Some 1,277 samples were collected from core and assayed and returned an average grade of 0.38 g/t Au, 19% lower than the average grade of the samples from 2005-2007. This is not surprising considering this was a limited drilling programme which had a high percentage of drillholes located at the margins of known mineralisation and areas with poor drilling density.

6.4 QA/QC Results

6.4.1 Blanks


Acadian submitted a total of 838 blanks to ALS Chemex between 2005 and 2007. Of the 838 submitted blanks, 89% returned gold assay values below the detection limit (0.05 g/t Au). Of the remaining 11%, all but three samples contained less than 0.4 g/t Au. Since the blank material was not certified to contain no gold, it is unclear whether these results suggest contamination issues at the laboratory or that some of the blanks did in fact contain some small amount of gold. One blank returned an assay value of 0.99 g/t Au, and was preceded by a sample containing 2.34 g/t Au suggesting that some cross-contamination may occur. Although standard laboratory procedures include the cleaning of crushing and pulverising equipment, this is not done after every sample and as a result some ‘carry-over’ is expected, especially when samples contain coarse gold.


In 2009, Acadian submitted a total of 27 blanks to ALS for analysis; all 27 returned gold assay values below the detection limit.

6.4.2 Duplicates


As discussed in Section 6.2.6.2, two 30 g sub-samples (AA25 and AA25D) of the undersize (-106 microns) material are analysed for each analysis carried out by screen fire assay. As a result, pulp duplicate assays are available for each of the 16,028 screen fire assays carried out during this period. The prepared pulps have had coarse gold removed prior to being assayed as part of SFA procedure; however, the pulp duplicates still give a sense of laboratory precision. The statistics comparing the samples show good correlation with correlation coefficient above 90%. A precision plot of the data is shown below in Figure 6.1. A precision plot is shown below in Figure 6.1 and indicates that just 51% of the samples pairs returned values within ±10%. This number is poor when compared with other types of deposits where it is generally expected that 90% of duplicate pairs should be within ±10% however, given the coarse nature of gold, even within the -150 fraction of the sample these results are not unexpected. These




Figure 6.1 Precision plot comparing the pulp duplicate assays from 2005 to 2007

*Note assay pairs with at least 1 sample below the analytical detection limit were removed for comparison.

Figure 6.2 Precision plot comparing pulp duplicate assays from 2009

*Note assay pairs with at least 1 sample below the analytical detection limit were removed for comparison.

0.001

0.01

0.1

1

0.001 0.01 0.1 1 10 100

ha

lf a

bs

olu

te d

iffe

ren

ce o

f th

e p

air

ed

valu

es

mean of paired values (ppm)

Precision Pairs Plot Pulp Assay (Au) vs Duplicate Pulp Assay (Au)

Sample Pairs 5% 10% 20% Line of Significance Graph Limit

Number of sample pairs 0-5% 1290 5-10% 1073 10-20% 1233 20-100% 1025

Total 4621

0.001

0.01

0.1

1

0.001 0.01 0.1 1 10

ha

lf a

bs

olu

te d

iffe

ren

ce o

f th

e p

air

ed

valu

es

mean of paired values (ppm)

Precision Pairs Plot Pulp Assay (Au) vs Duplicate Pulp Assay (Au)

Sample Pairs 5% 10% 20% Line of Significance Graph Limit

Number of sample pairs 0-5% 128 5-10% 111 10-20% 117

20-100% 172 Total 528




values are relatively good when compared with the nearby Fifteen Mile Stream deposit where a pulp duplicate population of 1,355 only 36% of pairs were within ±10%.


Some 1,316 pulp duplicates are available from the 2009 drilling campaign. The basic statistics indicate a strong positive correlation between the pairs of samples with a correlation coefficient of 82%. A precision plot is provided in Figure 6.2 which indicates that 45% of the samples pairs returned which were values within ±10%. This again testifies to the coarse gold content of the mineralisation.

6.4.3 Certified reference materials (standards)


Acadian inserted CRMs into the sample stream in order to test laboratory accuracy. Seven different CRMs were acquired from Rocklabs (Australia) and WCM Minerals (Burnaby, BC) covering a range of gold grades from 0.29 g/t Au to 10.4 g/t Au. Samples of reference material were prepared by Acadian staff and consisted of at least 30 g of reference material in plastic ‘whirl-paks.’ Although these CRMs were visually distinct from the regular core samples, the expected results and standard ID was never provided to the laboratory. CRMs were chosen randomly and inserted at a rate of one CRM for every 50 regular core samples. In total, 27 standard samples were submitted and analyzed during the 2009 drill programme. Some 26 of the 27 standards returned values within two standard deviations from the expected value indicating good laboratory precision. A single sample of ‘PM427’ (expected result: 3.57 g/t Au) returned a gold assay value of 0.73 g/t Au. Given that other QA/QC samples from this batch did not indicate any analytical inaccuracy, a likely explanation is that this sample was mislabelled as PM427 and actually contained material from PM410 (expected result: 0.73 g/t Au). A summary of the standard results is provided below in Table 6.1.

Table 6.1 Summary of results for standard reference materials analysed during 2009 drilling programme

Reference Material

Count Mean (g/t Au)

Standard Deviation

Expected Grade (g/t Au)

Lower Limit (g/t Au)

Upper Limit (g/t Au)

(1)COV (%)

OxG70 6 1.022 0.035 1.007 0.94 1.08 3.4%

PM914 6 10.417 0.145 10.4 10.11 10.69 1.4%

PM403 1 0.2 0.008 0.17 0.154 0.186 -

PM405 5 0.296 0.008 0.29 0.27 0.31 2.7%

PM410 2 0.73 0.018 0.73 0.694 0.766 2.5%

PM413 3 2.047 0.057 2.05 1.936 2.164 2.8%

PM427 4 2.773 0.164 3.57 3.242 3.898 5.9%

(1)Coefficient of variation (precision); where values below 20% indicate acceptable precision. Note that these figures are based on very

small data populations (<6) where >20 would be optimal.

6.4.4 Check analyses


The results of the 99 check assays which were requested by Seabright show erratic results when compared with the original assay results. These results are not unexpected considering the presence of coarse gold within the samples. Since none of the labs produced consistently high or low values there is no reason to believe that any of the results are biased.




6.5 Data Entry and Validation

The database used for estimating resources, presented in Section 8, was a modified version of the database provided to Acadian by Mercator Geological Services. In 2004, Mercator, who carried out work on behalf of Acadian, conducted an extensive compilation project aimed at compiling historic drilling data to be used in estimates of resources for Beaver Dam. Mercator staff reviewed all available government assessment reports, technical reports and unpublished reports passed down from previous operators of the Beaver Dam property. Collar data, downhole survey info and assay results were manually entered into a Microsoft Access database. The resultant database contained data describing:

237 historic surface diamond drillholes

34 historic underground diamond drillholes

111 historic reverse circulation drillholes

457 historic underground chip (face) samples

Historical chip samples from underground sampling were represented in the database as horizontal drillholes, with locations established from level plans of underground workings. Following data entry, the drillhole locations and sample records were double-checked for accuracy.

In 2005, Mercator began drilling on the Beaver Dam property which continued until late 2007 and resulted in a total of 139 diamond drillholes. As drilling data became available it was input directly to the database via logging software which flagged any overlaps or duplicated entries.

Data from drilling carried out by Acadian in 2009 (14 diamond drillholes) was kept in a Microsoft Excel workbook until such time when the data was to be incorporated with the Mercator data.

In 2013, Acadian began work on an updated resource estimate and undertook a review of the Mercator database. It was noted that the Mercator database contained little metadata (i.e. year of drilling, assay certificate numbers, assay method), especially with regards to the historic drilling data. This triggered Acadian to review all available reports in order to add supplementary information to the database. As a result of this two month process, every record in the database was verified against the original reports, where available. This represents approximately 95% verification of the database. Most of the data in the database was found to be accurate with the exception of the assay data from Seabright-era drilling, which accounts for a large percentage of the assays used in previous resource estimates. This dataset was mostly accurate but did contain 1% to 3% erroneous values which distinguished it from the other datasets. The errors which were noted were likely a result of manual data entry, with the most common errors related to screen fire assay data. The database compiled by Mercator contained only one field for gold assay results yet in many cases, a sample would have assay values from both the fire assay and screen fire assay methods. In these cases, the person(s) entering the data would have to choose the most appropriate value to store. Since there was no clear convention used, it appears that multiple users were entering data and dealing with multiple assay values differently. Also, according to Seabright’s sampling protocol, whenever a sample contained visib le gold, the sample was designated “ST” (special treatment), on the regular fire assay certificates, and sent directly for screen fire assay. In a number of cases it seems that screen fire assay results were never entered and thus samples with ST designation were given no value in the database. All of the encountered errors were corrected by Acadian staff at the time the metadata was added. Furthermore the newest iteration of the database contains separate fields in order to record both the screen fire assay and regular fire assay results.

The database compiled by Acadian was provided to Snowden in order to complete the estimate of resources reported in Section 8. Prior to analysing the data, Snowden carried out their own database verification and determined the data was free of any sample overlaps and obvious errors.

Based on the extensive verification measures undertaken to ensure the accuracy of this database, the CPs responsible for this report considers the data to be acceptable for use in resource estimation.




7 MINERAL PROCESSING AND METALLURGICAL TESTING

7.1 Overview

During the 2005-2007 drill programme carried out by Mercator, three PQ (85 mm diameter) diamond drillholes were completed for the purpose of carrying out metallurgical testing. The three holes provided 1,403 kg of sample which were sent to SGS Lakefield for testing. Test work was focused on establishing recovery factors from several gold extraction methods as well as size fraction analysis and grindability testing.

7.2 Metallurgical Test Work

A composite sample containing material from all three holes was prepared and 600 kg of material was tested for direct gravity separation. Five batches of material were processed utilising a Knelson concentrator followed by a Mosley mineral separator. Gold recoveries from the procedure ranged between 72% and 85% with an average of 82% for all of the material. Cyanidation of the gravity tailings reduced the average grade from 0.25 g/t Au to 0.04 g/t Au after 48 hours with relatively low sodium cyanide (NaCN) and lime consumption. Leaching resulted in gold recovery of between 83% and 93% with an average of 88%. The total gold recovery for the gravity-gravity tailings cyanidation process was calculated to be 98%. A single sample of gravity tailings was also tested using a floatation circuit which resulted in 86% gold recovery, yielding a total gold recovery for gravity-gravity tailings floatation of 97.5%.

Whole ore cyanidation testing was also carried out on several samples indicating that gold recoveries between 94% and 99% could be expected after 48 hours at a grind size of 25µm. Sodium cyanide consumption was higher than in the gravity tailings testing while lime consumption remained relatively low.

Heap leach amenability testing was carried out at several different crush sizes including -1/2”, -1/4” and -1/8”. The samples were leached for 14 days and resultant gold recoveries were good, ranging from 59% to 86%. The results also indicated that leaching of -1/2” and -1/4” material would take significantly longer than the -1/8” material. Column heap leaching tests were also carried out. Three 50kg samples of -1/2”, -1/4” and -1/8” material were leached for 94 days resulting in recovery factors of 81.1%, 87.2% and 92.4% respectively. Once again leaching of the -1/2” and -1/4” material was incomplete suggesting longer leach times would be required for material crushed to these sizes. A fourth 200 kg sample of -1/2” material was leached in a larger column for 83 days, after which the recovery was estimated at 64%.

Additional testing performed on the PQ drillholes included ball mill grindability testing, size fraction analysis and grade determination. The ball mill grindability test indicated a BWI (Bond Work Index) of 13.4 kWh/t.

To perform size fraction analysis, a 1 kg sample of -1/2” material was sieved through 18 screens, with the fraction from each sieve assayed. The results show typical distribution associated with nuggety gold deposits.

Approximately 900 kg of material was analysed during test work, which represented approximately 62% of the entire sample received by SGS. The average grade of all the analysed material was 1.4 g/t Au.

7.3 Mineral Processing Design

The metallurgical test work carried out assessed the recovery factors of several processes. A total gold recovery of 98% for the gravity-gravity tailings cyanidation process was calculated, indicating that a gravity-leach circuit may be appropriate. However, in order to design an appropriate facility further test work should be carried out using a series of larger samples - potentially >100 kg to support the nugget effect.




8 MINERAL RESOURCES

8.1 Summary of Mineral Resources

The total Mineral Resource reported for the Beaver Dam project is shown in Table 8.1. No Ore Reserves were estimated.

Table 8.1 Beaver Dam Mineral Resource summary as of 31 March 2014 reported at a 0.5 g/t Au cut-off




(100%) Contained ounces gold (oz Au) Tonnes

(t) Grade

(g/t Au) Tonnes

(t) Grade

(g/t Au)


(%)





8.2 General Description of Mineral Resource Estimation Process

The mineralised wireframes representing the Beaver Dam deposit depict the southern limb of an overturned, northwest-southeast trending anticline, known as the Beaver Dam anticline. This deposit is made up of five mineralised stratigraphic units. Local mine grid co-ordinates have been used, showing the mineralised wireframes trending east-west. The units are bounded to the North-east by the Mud lake fault.

The gold is hosted within a sedimentary package consisting of a turbiditic sequence of interbedded argillites and greywackes. The gold mineralisation is located in high grade, bedding concordant veins with lower grade, disseminated gold hosted in the wall rock. The controls on the mineralisation are not fully understood at this stage. A geological model based on the stratigraphic units was created by Acadian and these wireframes were utilised for the initial domain analysis and the final model. A 1 m composite file was used in a geostatistical study (variography and kriging neighbourhood analysis - KNA) that indicated the most appropriate interpolation method for the combined and the greywacke domains to be multiple indicator kriging (MIK). For the Crouse domain it was concluded that ordinary kriging (OK) was a more suitable interpolation method. The results of the variography and the KNA were utilised to determine the most appropriate search parameters and sample numbers for each domain.

The model was estimated using MIK for the combined domain (Austen, Millet Seed and Papke) and the Greywacke domain and OK was used to estimate the Crouse domain. The domains estimated by MIK were estimated into small cell blocks (2.5 mE by 3 mN by 2.5 mRL) which were then regularised to the final model parent cell size 12.5 mE by 6 mN by 12.5 mRL. The domain using OK was estimated directly into the parent cell model 12.5 mE by 6 mN by 12.5 mRL. The models were combined. The exploration and underground development samples (not the face samples) were used for the estimation and the gold value is stored in the field AU.

The model was classified as Indicated and Inferred Mineral Resources according to the definitions in the JORC Code (2012) guidelines. After all items specified within the JORC Code guidelines were considered, the Mineral Resources were classified according to drillhole density and spacing, support from underground drilling, face samples and development as well as taking into account the number of samples and search ranges used to inform block estimates. The interpolated block model was validated through visual checks, a comparison of the mean composite and block grades, and through the generation of vertical and north-south section validation slices (swathe plots).




8.3 Mineral Resource Estimate

8.3.1 Mineral Resource input data

The database used to generate the resource estimate was provided to Snowden by Acadian in the form of Microsoft Excel spreadsheets and represents a combination of new data and data generated during previous drilling programmes by Seabright and Mercator. The sources and validation of this database are discussed in Section 6.5.

8.3.1.1 Drill spacing

Drill spacing was predominantly on a 25 m by 25 m grid with some areas with more closely spaced drilling to less than 10 m by 10 m separation. Drilling was separated into three areas; Main zone, Mill shaft zone and Northeast zone. This resource estimate is only for the Main zone area. Figure 8.1 shows the location of the collars. Blue represents the collars that have no samples within the domain wireframe used in the estimation or holes that have been excluded and orange represents all the holes that had samples used in the estimation.

Figure 8.1 Collar location plan

8.3.1.2 Topography

The topography provided was created using Laplace gridding of the collar elevations. For that reason, a collar to topographic surface comparison was not completed as the topography was derived from the collars. A topographic survey should be undertaken.




8.3.1.3 Collars

Acadian confirmed that all the collar co-ordinates from 1985 to 1987 were surveyed by Seabright using traditional survey methods and using local mine grid co-ordinates. The 2005 to 2007 holes were surveyed using traditional methods using the same mine grid system and the holes drilled in the 2009 programme were surveyed using a Trimble field computer, again on the mine grid co-ordinate system.

Thirty-four collars were underground. A visual comparison was made using the development wireframes and collars, and the collar locations were considered acceptable.

8.3.1.4 Assays

All overlaps and duplicates identified were reported to Acadian and were resolved. Final validation checks showed there were no assay overlaps and no duplicate data reported.

The assay data provided contained gold assays reported in g/t but contained a mixture of two different assay methods, fire assay (FA) and screen fire assay (SFA). All 1985-1987 holes were whole core samples and in general were analysed by regular fire assay, unless containing visible gold then screen fire assay was used. Where a FA assay result greater than 1 g/t Au was returned, the sample was subsequently re-analysed using the SFA method. There are 1,721 samples that have both FA and SFA results. All 2005-2009 holes were half core, sampled at 1 m intervals and analysed using SFA method.

A comparison analysis was undertaken on the 1,721 samples with both SFA and FA to determine whether both assay types could be used. Results showed that whilst the datasets did show some scattering, overall the correlation was good. Figure 8.2 shows the QQ plot of the SFA against the FA.

SFA is the preferable assay method for coarse gold mineralisation, since a larger sample size is used. Thus making it more likely that coarse gold will be captured in the sample. This generally results in higher assay values. The FA method may miss coarse gold thus lowering the assay result. The assaying of samples via SFA at a nominal trigger grade of 1 g/t Au is not recommended. The mixing of different assay types leads to bias. For the final assay dataset, where an SFA was available this was used, if no SFA then FA was used. These were combined into a column called AU_PPMC.

Figure 8.2 QQ plot showing the SFA against the FA




Table 8.2 summarises the non-numeric values in the FA and SFA assay database and how they were dealt with. All samples returning a result below the detection limit were assigned a value of half the detection limit.

Table 8.2 Summary of non-numeric assay values and how they were treated

Assay Method

Value

(g/t Au) No. assays Comments How treated

SFA <0.01 128 Below detection limit Set to half detection limit – 0.005

<0.05 12,057 Below detection limit Set to half detection limit – 0.025

Nil 8 All from Caledonian assay office

Set to absent "-" All 1983 - pre 1985 (to be excluded)

NS 14 Lab did not receive. Set to absent “-“

NSS 2 Non-sufficient samples

Set to absent “-“ - pre 1985 (to be excluded)

Trace 4

All from Caledonian assay office (1983)


absent values

16,391

FA Nil 116 All from Caledonian assay office Set to absent “-“ - pre 1985 (to be

excluded)

NS 34

Various reasons, e.g. not received/destroyed.

Set to absent “-“

Trace 20 All from Caledonian assay office


<0.01 6,075 Below detection limit Set to half detection limit – 0.005

absent values

17,913

8.3.1.5 Unsampled intervals

There were however, a large number of unsampled intervals within the mineralised domains. These unsampled intervals occur in the historic data, where selective sampling of veins has taken place. For the purposes of this resource estimation, the unsampled intervals have been set to a default value, 0.025 g/t Au (half the default detection limit of the historic data) as it was found that over-smearing of grade occurred when the value was left as absent. This is a conservative approach. To prevent this introducing a bias into the variography, a filter was applied; more detail is provided in the variography section.

8.3.1.6 Stratigraphic intervals

Stratigraphic drillhole intercepts were provided to Snowden, based on geological logs. A complete geological log was not provided, just the stratigraphic intervals. This data included a ROCKCODE and ROCKNAME for each interval. Validation checks showed there were no overlaps or duplicates in this data. The ROCKCODE is summarised in Table 8.3 below.




Table 8.3 Summary of rock code and corresponding stratigraphic unit

ROCKCODE Rock Unit name

200 Austen

300 Millet Seed

400 Papke

500 Greywacke

600 Crouse

8.3.1.7 Drillhole data summary

All drillhole data provided was from diamond drill core.

Drillholes were desurveyed using the DATAMINE process HOLES3D. Input files were “bd_collar”, “bd_survey”, “bd_assay” and “bd_strat”. These were the collars, surveys, assays and stratigraphic domains respectively. The resulting drillhole file was “bd_holes”. Table 8.4 provides a summary of the data records used to desurvey the drillholes.

Table 8.4 Summary of data provided

Hole Type No. collars No. assays No. strat intercepts No. surveys

1977 2 29 6 2

1978 7 90 16 7

1980 11 169 37 26

1983 9 241 23 13

1985 90 6,371 363 358

1986 64 5,934 159 454

1987 49 4,407 183 195

1988 14 1,470 49 55

2005 46 4,476 170 158

2006 86 10,858 205 275

2007 7 711 27 20

2009 14 1,277 46 60

Total 399 36,033 1,284 1,623

8.3.1.8 Wireframes

Wireframes for each of the mineralised stratigraphic units were provided by Acadian in dxf format, ‘Austen Mudstone Solid.DXF’, ‘Millet Seed Sandstone Solid.DXF’, ‘Papke Mudstone Solid.DXF’, ‘Greywacke Solid.DXF’ and ‘Crouse Mudstone Solid.DXF’.

A topographic surface, a solid wireframe representing the overburden and a fault wireframe were also provided; ‘BD Topography Surface.DXF’, Overburden Solid.DXF’ and ’Mud Lake Fault Solid.DXF’ respectively.

Wireframes representing the historic underground development were provided; BD UG Working.DXF and Historic Austen Workings.DXF.




8.3.1.9 Exclusions

All holes drilled between 1977 and 1983 (29 in total) have been excluded from the data set used for the Mineral Resource estimation. The reasons for exclusion are; uncertainty in the collar location, no downhole survey and poor precision in the analytical results in holes drilled throughout that period. The collars were not surveyed at the time and the hole locations were digitised from old maps and reports. All the samples from this period were whole core samples with selective sampling, limited to quartz veins. The samples had been sent to several laboratories and had employed a mixture of SFA and 30 g FA for analysis. All logs and assay certificates were located and checked, however the analytical precision of the results was poor. The results were given in oz/ton. The smallest numerical value being 0.01 oz/ton, which is approximately 0.3 g/t Au. It was concluded that these should be excluded.

8.3.1.10 Density

Acadian geologists took 157 specific gravity measurements from nine holes with samples distributed through the five different stratigraphic units. The method used to measure the specific gravity was the weight in air – weight in water method which is considered acceptable. For further detail refer to Pelley and Horne (2013). A summary of the specific gravity results is given in Table 8.5.

Table 8.5 Summary of density measurements

Stratigraphic Unit No. of Samples

Specific Gravity

(t/m3)

Min Max Mean

Crouse Mudstone 19 2.6 2.9 2.7

Hanging Wall Greywacke 31 2.6 2.9 2.7

Papke Mudstone 34 2.7 2.9 2.8

Millet Seed Sandstone 37 2.7 2.8 2.7

Austen Mudstone 36 2.7 2.8 2.8

8.3.2 Geological Interpretation

During the 2009 drilling programme, Acadian staff was able to recognise the Seabright stratigraphy in drill core. As a result, Acadian staff re-logged 76 holes from the 2005-2007 era of drilling in order to gather enough data to interpret the stratigraphy on a section by section basis. The interpretations on each cross section were then digitised into GEMS as polylines and linked together in order to create 3D wireframes representing the overburden, which overlies bedrock, and the ore bearing stratigraphy including the Austen mudstone, the Millet Seed sandstone, the Papke mudstone, the Hanging wall greywacke and the Crouse mudstone. One additional wireframe was constructed which represented the Mud lake fault. The wireframes were exported as .dxf files and provided to Snowden along with the diamond drillhole database. The wireframes were converted to Datamine format; with the resulting files austenpt/tr, milletseedpt/tr, papkept/tr, greywackept/tr and crousept/tr for the mineralised domains and topopt/tr, overburdenpt/tr and faultpt/tr for the remaining wireframes.

The mineralised wireframes representing the Beaver Dam deposit depict the southern limb of an overturned, northwest-southeast trending anticline, known as the Beaver Dam anticline. Local mine grid co-ordinates have been used, showing the mineralised wireframes trending east-west. The units are bounded to the northeast by the Mud lake fault.

8.3.3 Data analysis and geostatistics

Sample compositing

A histogram was created using the raw drillhole data, to determine what composite length should be used; refer to Figure 8.3. Almost 55% of the sample lengths were 1 m intervals. Approximately 12% of the samples were 0.5 m lengths. There were a number of samples 3 m in length and a few up to 5 m, all samples 3 m and above were validated by Acadian. A composite length of 1 m was selected as the most appropriate sample




length. The drillhole data was composited downhole using a 1 m sample interval to minimise any bias due to sample length.

The compositing was run within the domain field to ensure that no composite intervals crossed the domain boundaries. To allow for uneven sample lengths within each of the domains, the DATAMINE composite process (COMPDH) was run using the variable sample length method (@MODE=1). This adjusts the sample intervals, where necessary, to ensure all samples are included in the composite file (i.e. no residuals) while keeping the sample interval as close to the desired length as possible. A keyfield, DOMAIN was used to ensure that samples were composited within the domain and not across domains.

The compositing process was checked by:

Comparing the lists of attribute field values in the raw and composite files. All numeric attribute fields

should be present in the composite file. Alphanumeric fields are removed during the compositing

process as it is not possible to composite these.

Comparing the sample length statistics in the raw and composite files. The two total length values

should match and the mean composite interval should be one. A comparison between the raw and

composite sample length statistics is shown in Table 8.6.

All expected attribute fields were present in the composite file; eight alphanumeric fields were

removed in the process.

There was no difference in the total length of the samples within the mineralised domain (Table 8.6).

Figure 8.3 Log Histogram for sample length using raw data (all domains)




Table 8.6 Raw and composite sample length statistics for the mineralised domains

Statistic Raw Raw (unsampled

intervals set to 0.025 g/t Au)

Composite

Domain All All All

Number of intervals 24,731 26,544 28,173

Minimum Interval (m) 0.01 0.01 0.26

Maximum Interval (m) 5.01 61.89 1.37

Mean Interval (m) 0.83 1.06 1.00

Variance 0.093 2.829 0

Total length within domain (m) 20,488.27 28,149.45 28,149.45

A summary of the statistics for the raw data and the composited data using the default 0.025 g/t Au for unsampled intervals for each domain is provided in Table 8.7.

The statistics show the mean, variance and standard deviation of the Au grade has reduced through compositing. This was expected as the process of compositing averages the data.

Table 8.7 Summary statistics for gold grade (g/t Au) for raw data (Raw), and composites (Comp) using the default 0.025 g/t Au for unsampled intervals

Statistic Raw Comp Raw Comp Raw Comp

(g/t Au) (g/t Au) (g/t Au)

Domain 800 500 600

Samples 21,979 23,092 3,790 4,203 775 878

Minimum 0.01 0.01 0.01 0.01 0.01 0.01

Maximum 2,683 448.01 823 299.49 395 330.61

Mean 1.19 0.70 0.59 0.35 0.69 0.58

Standard deviation 21.32 6.54 13.52 5.04 14.28 11.65

CV (%) 1,790 931 2,300 1,455 2,061 1,994

Variance 454.5 42.73 182.7 25.43 203.9 135.6

Skewness 96.53 40.78 59.52 51.82 27.3 26.69

10% 0.01 0.02 0.01 0.01 0.01 0.01

20% 0.03 0.03 0.01 0.02 0.01 0.03

30% 0.03 0.03 0.03 0.03 0.03 0.03

40% 0.03 0.03 0.03 0.03 0.03 0.03

50% 0.05 0.03 0.03 0.03 0.03 0.03

60% 0.09 0.06 0.03 0.03 0.03 0.03

70% 0.19 0.15 0.05 0.04 0.03 0.03

80% 0.40 0.33 0.11 0.08 0.04 0.03

90% 1.03 0.93 0.37 0.29 0.13 0.10

95% 2.59 2.06 1.17 0.94 0.45 0.38

97.50% 5.82 4.44 3.38 2.07 1.14 0.86

99% 17.6 10.68 8.12 5.45 2.58 2.01




Table 8.8 is a comparison of the composite values with the unsampled intervals set as absent values and setting the unsampled intervals to a default value of 0.025 g/t Au. As expected, using the default 0.025 g/t Au value for the unsampled intervals has lowered the mean grade in each domain. This will give a more conservative estimate and will control grade smearing.

The log histograms for the raw and composited samples display the effect of compositing for each domain (Figure 8.4 and Figure 8.5).

Table 8.8 Comparison of summary statistics of gold grade (g/t Au) showing composites using absent values for the unsampled intervals (Absent Comp), and composites using the default 0.025 g/t Au for unsampled intervals (Default Comp)

Statistic

Absent Comp

Default Comp

Absent Comp

Default Comp

Absent Comp

Default Comp

(g/t Au) (g/t Au) (g/t Au)

Domain 800 500 600

Samples 18,079 23,092 3,107 4,203 568 878

Minimum 0.01 0.01 0.01 0.01 0.01 0.01

Maximum 448.01 448.01 299.49 299.49 330.61 330.61

Mean 0.93 0.70 0.49 0.35 0.90 0.58

Standard deviation

7.44 6.54 6.04 5.04 14.48 11.65

CV (%) 801 930 1,223 1,455 1,617 1,994

Variance 55.35 42.73 36.47 25.43 209.5 135.6

Skewness 35.36 40.78 42.23 51.82 21.46 26.69

10% 0.01 0.02 0.01 0.01 0.01 0.01

20% 0.03 0.03 0.01 0.02 0.01 0.03

30% 0.03 0.03 0.03 0.03 0.03 0.03

40% 0.04 0.03 0.03 0.03 0.03 0.03

50% 0.08 0.03 0.03 0.03 0.03 0.03

60% 0.14 0.06 0.04 0.03 0.03 0.03

70% 0.27 0.15 0.08 0.04 0.03 0.03

80% 0.52 0.33 0.16 0.08 0.07 0.03

90% 1.31 0.93 0.56 0.29 0.26 0.10

95% 2.87 2.06 1.50 0.94 0.56 0.38

97.50% 6.03 4.44 3.41 2.07 1.28 0.86

99% 14.03 10.68 6.90 5.45 2.30 2.01




Figure 8.4 Log Histogram for gold grade (g/t Au) for raw data (all domains)

Figure 8.5 Log Histogram for gold grade (g/t Au) for composited data (all domains)

Density data

Some 157 density measurements were analysed by domain and unit (Figure 8.6). The combined domain (800) had a mean density of 2.76 t/m

3, greywacke domain (500) a mean of 2.7 t/m

3 and the Crouse domain

(600) a mean of 2.75 t/m3. All domains combined had a mean of 2.75 t/m

3 (Figure 8.7).

There was not a definitive density value for each unit and there was not enough density data to estimate the density into the model. It was decided that the average density (2.75 t/m

3) would be assigned to all domains.




Figure 8.6 Histogram for density data (by each stratigraphic unit)

Figure 8.7 Histogram for density data (all domains)

8.3.4 Domaining

A domain comparison was undertaken to determine whether any of the domains could be combined or whether they should be modelled separately. The comparison study was completed by analysing statistics, box and whisker plots, QQ plots and variography.

The raw data and composited data was analysed in the Main zone for each of the individual domains and a combined domain consisting of Austen, Millet Seed and Papke. The stratigraphic sequence is as follows; Crouse (oldest), Greywacke, Papke, Millet Seed and Austen (youngest). Crouse, Papke and Austen are




Argillites and Greywacke and Millet Seed are Greywackes, all part of a turbidite sequence. A comparison of the domains concludes:

Based on the similarities in the percentile statistics, the box and whisker plot, QQ plots, continuity fans and variograms, it was considered acceptable to combine the Austen, Millet Seed and Papke units for the estimation.

The statistics show that the Greywacke and Crouse domains contain much lower grades than the Austen, Millet Seed and Papke, in particular over 70% of the assays in the Crouse domain are at 0.03 g/t Au. The three upper domains had similar grades when comparing the percentiles, but the two lower domains (Greywacke and Crouse) were considerably lower so it was not appropriate to combine these domains.

The Greywacke domain should be treated separately as there was little evidence to show the mineralisation behaves in the same way. There was a lot of data for this domain, but it was low grade. Due to the amount of data it would be possible to model this domain using MIK.

For the final model, Austen, Millet Seed and Papke domains were combined to form one domain, coded 800. The Greywacke domain was coded domain 500 and the Crouse domain coded domain 600; summarised in Table 8.9. The five stratigraphic wireframes were combined into one file and a domain code assigned to each of the units (Table 8.9), the final wireframe file is all_domtr/pt. The drillholes were then coded using the wireframe all_domtr/pt to select the samples and code the domain (DOMAIN) based on the wireframe.

Table 8.9 Summary of domain codes and stratigraphic units used for estimation

Domain code Unit

800 Austen, Millet Seed, Papke

500 Greywacke

600 Crouse

Selection of method of estimation for each domain

Assay populations from gold deposits are generally skewed and contain high or ‘extreme’ grades that can introduce bias into estimates. All domains exhibit extremely skewed grade populations.

An appropriate technique for estimation within skewed populations is MIK, which is commonly applied despite the relative difficulty in its use. MIK does not rely on the assumption of a particular statistical distribution model for their results. In theory it is suited to gold deposits with complex (mixed and skewed) grade distributions. MIK involves modelling variograms at a series of grade thresholds which allows the range of continuity to be reduced at the higher grades. A mathematical model was then used to define the top end of the grade distribution. The result of this estimation method is that while no top cut is used to limit the higher grades, the higher grades are limited in their influence using a mathematical model based on the higher grade data to estimate grades based on probability rather than using the individual extreme grades in the dataset for grade estimation. However, there are a number of well documented pitfalls related to the method, which include inadequate representation of the grade histogram, poor representation of the high-grade indicator bin and order relational issues.

One of the key advantages of indicator kriging is that it allows the determination of recoverable resources, which correct for changes in support between samples and blocks. This is particularly important in highly skewed gold deposits, where the variance of samples will be substantially higher than that of blocks (e.g. selective mining units).

MIK was selected for estimation of the Austen, Millet Seed and Papke domain (domain 800) to control the skewness of the data.

The Greywacke domain (domain 500) is different to the above domains, with lower grades, however, still displayed the skewness. MIK was selected for estimating the Greywacke domain.




A relatively low skewness and presence of only a few samples with extreme grades in the Crouse domain (domain 600) allowed for the estimation of grades using ordinary kriging (OK) with a top-cut. It is considered that it would be inappropriate to model the Crouse domain using MIK due to the low grades and the lack of data. The spatial location of the grade was checked in this domain, with a filter of 0.03 g/t Au (above detection limit) applied and removed. The data below detection limit was clustered in areas. It is considered the most appropriate method to estimate this domain is OK.

8.3.5 Variography

Variograms were generated to assess the grade continuity of the gold and derive the kriging algorithm to interpolate grades.

Indicator variograms for gold were calculated and modelled for the combined and Greywacke domains. Indicator variograms were modelled using the following approach:

The drillholes composites were selected by domain

A filter was applied at 0.03 g/t Au, to remove all samples with grade set at half the detection limit

Thresholds were selected from the combined domain (20, 30, 40, 50, 60, 70, 80, 90, 95 and 97.5th

percentiles), and the corresponding Au grades applied as the thresholds on the unfiltered data (0.0703, 0.107, 0.157, 0.233, 0.35, 0.547, 0.958, 2.13, 4.517, 8.974 g/t Au respectively)

Thresholds were selected from the Greywacke domain (20, 30, 40, 50, 60, 70, 80, 90, 95 and 97.5th

percentiles) and the corresponding Au grades applied as the thresholds on the unfiltered data (0.0516, 0.0696, 0.0873, 0.123, 0.183, 0.316, 0.658, 1.6, 3.576, 6.486 g/t Au respectively)

Variograms were modelled for the 30, 40, 50, 60, 70, 80th percentiles of the distribution for each domain.

The 80th percentile model was applied to the 90, 95, 97.5

th percentiles with the ranges reduced and the

30th percentile model applied to the 20

th percentile.

The nugget effect (C0) was modelled from the downhole variogram

Variograms were modelled using three nested structures, all spherical models

A summary of the Indicator variogram parameters is provided Table 8.10.

Table 8.10 Summary of Indicator variogram parameters for gold (g/t Au) for the combined domain 800 and Greywacke domain 500

Domain Direction 1 Direction 2 Direction 3

Percent Cut-off Vangle1 Vangle2 Vangle3 Nugget Sill 1 Sill 2 Sill 3 Range 1 Range 2 Range 3 Range 1 Range 2 Range 3 Range 1 Range 2 Range 3

500 77.47 0.0696 10 80 -60 0.4 0.04 0.24 0.32 2.5 12 110 2.5 40 50 24 28 32

500 80.68 0.0873 10 80 -60 0.34 0.08 0.37 0.21 2.5 12 100 2.5 40 50 14 18 24

500 83.89 0.123 10 80 -60 0.32 0.07 0.39 0.22 2.5 12 100 2.5 35 50 2 13 18

500 87.13 0.183 10 80 -60 0.28 0.08 0.47 0.17 2.5 7 45 2.5 16 50 2 2 3

500 90.34 0.316 10 80 -60 0.25 0.11 0.42 0.22 2.5 7 45 2.5 5 35 2 2 2

500 93.55 0.658 10 80 -60 0.25 0.15 0.36 0.24 2.5 7 45 2.5 5 29 2 2 2

500 96.76 1.6 10 80 -60 0.25 0.15 0.36 0.24 2.5 7 35 2.5 5 25 2 2 2

500 98.38 3.576 10 80 -60 0.25 0.15 0.36 0.24 2.5 7 30 2.5 5 20 2 2 2

500 99.19 6.486 10 80 -60 0.25 0.15 0.36 0.24 2.5 7 25 2.5 5 15 2 2 2

800 65.98 0.107 10 70 -10 0.43 0.17 0.25 0.15 2.5 42 245 2.5 11 240 2 6 20

800 70.82 0.157 10 70 -10 0.43 0.21 0.23 0.13 2.5 40 180 2.5 13 235 2 6 15

800 75.65 0.233 10 70 -10 0.42 0.17 0.28 0.13 2.5 33 120 2.5 16 190 2 5 15

800 80.6 0.35 10 70 -10 0.41 0.19 0.25 0.15 2.5 24 85 2 16 100 2 4 15

800 85.4 0.547 10 70 -10 0.41 0.17 0.24 0.18 2.5 10 50 2.5 16 60 2 4 14

800 90.27 0.958 10 70 -10 0.41 0.17 0.24 0.18 2.5 10 13 2.5 16 40 2 4 10

800 95.14 2.13 10 70 -10 0.41 0.17 0.24 0.18 2.5 10 12 2.5 16 35 2 4 8

800 97.57 4.517 10 70 -10 0.41 0.17 0.24 0.18 2.5 10 10 2.5 16 30 2 4 6

800 98.79 8.974 10 70 -10 0.41 0.17 0.24 0.18 2.5 10 7 2.5 16 20 2 4 5




Normal score variograms were judged appropriate for the gold grade (AUPPM_C) for the Crouse domain. Variograms were modelled using the following approach:

The drillholes were composited to 1 m samples

The samples were filtered to only include those with grades >0.03 g/t Au – half the detection limit

All variograms were standardised to a sill of one

The nugget effect (C0) was modelled from the true downhole variogram

Variograms were modelled using three nested structures, all spherical model

Normal scores variograms rather than traditional variograms were seen to produce a smoother expression of continuity in the skewed data sets. The nugget and sill values were back-transformed to traditional variograms using the discrete Gaussian polynomials technique (Guibal et al., 1987) to obtain parameters for estimation.

The maximum and intermediate directions of continuity for the grades were generally aligned with the overall strike and down dip directions. The minor direction of continuity was aligned in the true thickness direction.

Plots of the Au normal scores variogram models are displayed in Figure 8.8 and subsequent back-transformed variogram model parameters are presented in Table 8.11.

Figure 8.8 Normal scores variogram models for gold (g/t Au) for Crouse domain (600)




Table 8.11 Back transformed variogram parameters Crouse domain (600)

Element

Rotation angles

Nugget

1st Spherical variogram

structure 2

nd Spherical variogram

structure 3

rd Spherical variogram

structure

3 1 3 Sill Range Range Range Sill Range Range Range Sill Range Range Range

Au 0 70 0 0.18 0.48 4 4 3 0.27 85 85 4 0.07 250 100 7

8.3.6 Top-cuts

For the Austen, Millet Seed, Papke and Greywacke domains (domains 500 and 800), the application of MIK negated the use of top-cuts.

For the Crouse domain (600), due to the high coefficient of variation (CV) for gold, top-cuts were applied to prevent overestimation and smearing of the relatively high values (when compared to the majority of the composites). The sample data was sorted and ranked based on gold grade. The difference between the ranked sample and the previous ranked sample, greater than 15%, was determined to define the sample disintegration. The major disintegration point was at 2.5 g/t Au (approximately 99.1 percentile).

The log-probability plot (

Figure 8.9) shows that around 0.025, 2.5 and 100 g/t Au there are sharp increases in the grade. The increase at 0.025 g/t Au is due to this being the value applied to unsampled assay intervals (half the detection limit of 0.05 g/t Au). The top-cut grade selected was 2.5 g/t Au.

A top-cut of 2.5 g/t Au cuts four samples. The mean gold grade prior to top-cutting was 0.58 g/t Au with a CV of 1,994%, after top-cutting the mean grade was 0.09 g/t Au with a CV of 330% (Table 8.12).

Figure 8.9 Log probability plot for Au for the Crouse domain




Table 8.12 Summary gold statistics prior to and after top-cutting using cut of 2.5 g/t Au (four samples cut) for the Crouse domain (600)

Statistics Composite Top-cut

Domain 600 600

Number of Samples 878 878

Minimum (g/t Au) 0.01 0.01

Maximum (g/t Au) 330.61 2.50

Mean (g/t Au) 0.58 0.09

Standard deviation 11.65 0.29

CV (%) 1,994 330

Variance 135.6 0.083

Skewness 26.69 6.307

Top-cut count - 4

8.3.7 Kriging Neighbourhood Analysis (KNA)

KNA was carried out on the Au assay data for the mineralised domain in order to assess the kriging efficiency and to minimise conditional bias during estimation. The areas selected were from the combined domain as this had the most data samples. The variogram model used was the 50

th percentile for the

combined domain as this should most closely represent the average variogram for that domain. A separate analysis was completed on the Crouse domain as a different method of estimation was used and the number of samples available significantly less than the other domains.

Three areas were selected for analysis based on the level of drillhole information (i.e. well-informed, reasonably-informed and poorly-informed), an approach documented in Vann, Jackson and Bertoli (2003).

Table 8.13 tabulates the co-ordinates of the sample areas. The well informed point was selected in an area where drill spacing was less than 10 m by 10 m and is supported by underground drilling, the reasonably informed point was in an area with 25 m by 25 m spacing and poorly informed was 25 m by 25 m at depth. Refer to Figure 8.10 for location of points with respect to drilling.

Table 8.13 Areas chosen for KNA (combined domain)

Informing Level Easting (mE) Northing (mN) RL (mRL)

Well informed 925 1,005 1,095

Reasonably informed 1,290 980 995

Poorly informed 1,210 1,060 825




Figure 8.10 KNA Point location plan

A series of analyses were run for each area using varying parameters, the kriging efficiency and slope of regression calculated for each and graphed. The variographic parameters defined previously were used for the tests.

Block size based on combined domain (800)

The first set of tests investigated the optimum parent block size. Block sizes from 3 mE by 3 mN by 3 mRL up to 50 mE by 50 mN by 50 mRL were tested, each approximate multiples of the drill spacing. The search ellipse was set to 250 m by 250 m by 250 m and the number of samples set to a minimum of two and maximum of 100. The results of the analysis showed that the block size 12.5 mE by 6 mN by 12.5 mRL had the highest kriging efficiency and slope of regression for the well-informed points, the high kriging efficiency and slope of regression was also reflected in the moderately informed analysis although not the optimal (Figure 8.11). The optimal block size in the reasonably informed analysis was at 25 mE by 12.5 mN by 12.5 mRL, so all further analyses was completed on both block sizes.




Figure 8.11 KNA results for block size for the well-informed point

From this study and the drillhole sample spacing, a block size 12.5 mE by 6 mN by 12.5 mRL was selected as being an appropriate block size for estimation.

Number of informing samples based on combined domain (800)

The second set of tests investigated the optimum number of informing samples. For these tests the block size was set to 12.5 mE by 6 mN by 12.5 mRL, the search ellipse was set to 250 m by 250 m by 250 m and the number of samples was varied from two to 50 in steps of two.

The results show that there was no significant increase in the kriging efficiencies after reaching 30 samples as a maximum number of samples (Figure 8.12). A minimum of 12 samples was selected. Due to the continuity identified from the variograms, negative samples will be included into the estimate if 30 samples are used.




Figure 8.12 KNA results for Number of informing samples for the well-informed point (combined domain 800)

The Crouse domain was analysed separately, the results show that there was no significant increase in the kriging efficiencies after reaching a maximum of 30 samples (Figure 8.13). A minimum of 10 samples was selected. Due to the continuity identified from the variograms, negative samples will be included into the estimate if 30 samples are used.




Figure 8.13 KNA results for Number of informing samples for the well-informed point (Crouse domain 600)

Search Ellipse

The third set of tests investigated the optimum search ellipse. For these tests the block size was set to 12.5 mE by 6 mN by 12.5 mRL, the number of samples was set to 12 to 30 and the was search ellipse was varied based on drill spacing and variogram ranges (Figure 8.14). A search ellipse of 30 m by 30 m by 10 m was selected, based on the KNA and also the drill spacing. A distance of 30 m allows samples from the sections either side to be utilised in the estimation.




Figure 8.14 KNA results for the search ellipse dimensions for the well-informed point (combined domain 800)

For the Crouse domain the block size was set to 12.5 mE by 6 mN by 12.5 mRL, the number of samples was set to 10 to 30 and the was search ellipse was varied based on drill spacing and variogram ranges (Figure 8.15). It was clear that a larger search ellipse was required for this domain as the Kriging efficiency was considerably lower with the smaller search, indicating that not enough samples were able to be selected using the small ellipse. A search ellipse of 60 m by 60 m by 20 m was selected, based on the KNA and also the drill spacing. A distance of 60 m allows samples from two sections either side to be utilised in the estimation.




Figure 8.15 KNA results for the search ellipse dimensions for the well-informed point (Crouse domain 600)

Number of samples per drillhole

The number of samples per drillhole (maxkey) was selected as eight. Using a minimum of 12 and a maximum of 30 samples, a maxkey of eight ensures that a minimum of two holes are used and at least four are used for the estimate to get the maximum number of samples.

8.3.8 Estimation

8.3.8.1 Block modelling

A small cell model was generated for the MIK estimate using the wireframes provided by Acadian. This was

done to create a point estimate which would reflect local grade variability of the gold contained in the veins

and the disseminated gold in the wall rock. This model was subsequently re-blocked to the parent cell size

and the grade averaged to give a representative block grade at a block size more reasonable for mining.

Small cell model prototype parameters are summarised in Table 8.14.

.




Table 8.14 Block model prototype settings small cell model

Model Setting Value

X Origin 300

Y Origin 800

Z Origin 600

Maximum Easting 1,600

Maximum Northing 1,400

Maximum Elevation (RL) 1,225

Parent cell size – X 2.5

Parent cell size – Y 3.0

Parent cell size - Z 2.5

Minimum cell size - X 2.5

Minimum cell size -Y 1.5

Minimum cell size - Z 2.5

The final model parent cell prototype was generated using the wireframes provided by Acadian. Model prototype parameters are summarised in Table 8.15.

Table 8.15 Block model prototype settings parent cell model

Model Setting Value

X Origin 300

Y Origin 800

Z Origin 600

Maximum Easting 1,600

Maximum Northing 1,400

Maximum Elevation (RL) 1,225

Parent cell size – X 12.5

Parent cell size – Y 6.0

Parent cell size - Z 12.5

Minimum cell size - X 1.5625

Minimum cell size -Y 1.5

Minimum cell size - Z 1.5625

8.3.8.2 Estimation method

For all the domains estimated using MIK, each domain was estimated into the small cell model separately, using hard boundaries between domains. The domains were then combined into one model (MIKMODSC) and validated by domain.

The model for the Crouse domain was estimated directly into the parent cell model using OK. This was then spliced onto the small cell model prototype and added to the MIKMODSC model.




The small cell model was then re-blocked to the parent cell size, averaging the grade for the blocks. The re-blocking was completed across domains, to get the average grade for each block. The original domain model was then added, overprinting the domain field. This ensured that blocks were correctly coded by domain, and had the average grade applied for the parent cell. The output model was GRADEMOD.

The depletion model was created by filling the wireframe hist_develtr/pt with cells using the parent model prototype, setting the DOMAIN value to 99 and coding the MINED field to value 1. This model was then added to GRADEMOD (which had MINED field set to 0), overprinting the original grade model. The depleted output model was called DEPMOD.

Further detail on search criteria is given in Section 8.3.8.3, just the process of coding the model is defined here. An iso-surface wireframe was generated around the small celled model, MIKMODSC, based on the search volume (SVOL) field. The surface enclosed all the small celled blocks which had the SVOL value as 1, wireframe is allsvol_1tr/pt. This wireframe was used to code the depleted parent cell model, DEPMOD, with the SVOL field. It was done this way as the re-blocking and averaging of the small cell model meant that an average value was assigned to the SVOL field, which did not represent anything meaningful. The output model from this process is SVMOD.

Further detail on classification is given in Section 8.3.10. The input model to this process was SVMOD. The RESCAT field was set to a default value of 3 (Inferred), the blocks inside the wireframe INDtr/pt were selected and the RESCAT field for these blocks set to 2 (Indicated), this model was then overprinted on the original model. The final output model was called RESCATMOD.

8.3.8.3 Search parameters

The search ellipse parameters were derived from the variograms, KNA analysis and with consideration given to the drill spacing (Table 8.16). The first search uses 12 samples as a minimum and 30 as a maximum. A second search ellipse was used, increasing all ranges by a factor of two using six samples as a minimum and 30 as a maximum. The same search ellipse parameters were used for all the domains estimated using MIK (800 and 500), a larger search ellipse was used for the Crouse domain (600) with a minimum of 10 samples and a maximum of 30 (Table 8.16). SVOL field is added to the model, showing what search volume was used to estimate each of the blocks (small blocks for indicator model), the 1

st search is SVOL=1 and 2

nd

search SVOL=2.

Table 8.16 Search ellipse axis lengths and rotations for the estimate

Domain Rotation about Z

Rotation about X

Rotation about Z

Axis lengths 1st

search Axis lengths 2nd

search

X Y Z X Y Z

800 & 500 10 70 -10 30 30 10 60 60 20

600 0 70 0 60 60 20 120 120 40

8.3.8.4 Estimation settings (summary)

The key search ellipse and estimation parameters are summarised in Table 8.17.




Table 8.17 Estimation parameters

Estimation setting Combined domain (800) & Greywacke domain

(500) settings Crouse domain (600) settings

Final model name rescatmod rescatmod

Drillholes bd_holes_c.dm (coded drilling data in Datamine

format) estsamp.dm (coded drilling data in

Datamine format with top cuts

Boundary conditions Hard domain boundaries Hard domain boundaries

Top-cuts None applied (not required for MIK) Top-cut at 2.5 g/t (4 samples cut)

Search ellipsoid 30 m by 30 m by 10 60 m by 60 m by 20

Method Multiple Indicator Kriging Ordinary Kriging (parent cell

estimation)

Variograms See Table 8.10 See

Table 8.11

Dynamic search volumes Yes factor of 2 (60 m by 60 m by 20 m) Yes factor of 2 (120 m by 120 m by

40 m)

Minimum number of samples

12 (1st) 6 (2nd search) 10 (1st) 6 (2nd search)

Maximum number of samples

30 (1st & 2nd search) 30 (1st & 2nd search)

Maximum number of samples per drillhole

8 6

Octant searching Not used Not used

Block discretisation (XYZ) Small cells used for estimation 1 by 1 by 1. For

parent regularised cells 5 by 2 by 5 3 by 3 by 3

8.3.9 Validation

The estimates were validated using:

A visual comparison of the block grade estimates and the drillhole composite data (Figure 8.16) for both the small cell model and parent cell model.

Generation of vertical section plots displaying the block model and composite samples for north-south sections every 25 m, both small cell model and parent cell model. An example is provided in

Figure 8.17.

Visual validation of channel/face samples against the model.

Generation of swath plots through north-south and vertical sections for the block estimates (composite

grades), and point sample composites (Figure 8.18 and Figure 8.19 respectively) both small cell model and parent cell model and by search volume.

Comparison of global statistics of model grade and composited drillhole grade, for each domain,

combined domains and by search volume (Table 8.18).




Figure 8.16 Visual comparison of block grade estimates with composited drillhole data

Figure 8.17 North-south vertical section plot – Easting 1100 mE




Figure 8.18 North-south section swathe plot for combined domain (800), 25 m slices (search Vol 1)

Figure 8.19 Vertical section swathe plot, combined domain (800), 25 m slices (search Vol 1)




The conclusions from the model validation work are:

Visual comparison of the model grades and corresponding drillhole grades show a good correlation for all domains, particularly where the data density is high. The small cell model (point estimate), replicates the drillhole grades well. The parent cell model is an average of the small cell blocks so does not reproduce each composite value, however the overall grade of the parent blocks look reasonable compared to the drillhole grades. There are no high-grade blocks where there are no high-grade composites.

Vertical section plots also support the good correlation for all domains as per the visual comparison.

Combined domain 800. Analysis of the swathe plots for the parent cell model shows that there is smoothing in the Au block grade in the vertical slice giving an overall lower grade however, the model

grade for this domain follows the drillhole grade trend well (Figure 8.19).

Combined domain 800. The north-south swathe plot shows the Au block grade is smoothed and appears to be slightly lower than the point grade, particularly in the west of the deposit. The parent cell

model using search volume 1 follows the trend of the grade much better (Figure 8.18). This suggests that where there are strict controls on the estimate, it reproduces the grade better. For the combined domain there are many blocks with very low/background grade in the model to the south and at depth, it is believed these are lowering the overall grade.

Greywacke domain 500. Analysis of the swathe plots for the parent cell model shows that there is smoothing in the Au block grade in the vertical slice giving an overall higher grade. The swathe using search volume 1 model, gives a slightly higher overall grade but follows the trend well. The increased grade may be higher due to the re-blocking of the small cell blocks to the parent cell size across this domain and the combined domain resulting in the averaging of the gold grade.

Greywacke domain 500. The north-south swathe plot shows the gold block grade is smoothed and appears to be slightly lower than the point grade, again this is particularly present in the west of the deposit. The parent cell model using search volume 1 follows the trend of the grade better, recreating similar grades in the west of the deposit. Again this supports where there are strict controls on the estimate, and more data, it reproduces the grade.

Crouse domain 600. This domain has a significantly lower grade than the other domains. Analysis of the swathe plots for the parent cell model shows that there is smoothing in the gold block grade in the vertical slice giving an overall significantly higher grade. The swathe using search volume 1 model, also gives a slightly higher overall grade. A separate validation of the original Crouse model was completed to test whether the higher grade is due to the regularisation across this domain and the other domains. The original parent cell Crouse model follows the trend of the grade well and so the higher overall grade in the final model is due to the regularisation across domains, which is acceptable.

Crouse domain 600. The north-south swathe plot shows the gold block grade is smoothed and is higher than the point grade. This is due to the regularisation across the domains. The original parent cell model was analysed and the model grade was still slightly higher than the point grade but not significantly, and it below the cut-off grade.

The smoothing in all swathe plots is to be expected to some extent because of the volume-variance effect between the blocks and the samples. The blocks cover a larger area and there are fewer data points for the same area within the slice.

Global statistics show the mean grade of the model to be 0.3 g/t Au less than the uncut composited drillhole grades. The difference decreases when comparing the mean composite grades to the mean model grades estimated using search volume 1 to 0.19 g/t Au.




Table 8.18 Global statistics (gold grade, g/t Au) comparison between composites and model grade

Statistics Composite Model Composite Model Composite (uncut) Top-cut Model Grade

Domain 800 500 600

Number of Samples 23,092 207,540 4,203 47,988 878 878 25,610

Minimum (g/t Au) 0.01 0 0.01 0 0.01 0.01 0

Maximum (g/t Au) 448.01 6.84 299.49 6.01 330.61 2.50 4.38

Mean (g/t Au) 0.70 0.35 0.35 0.40 0.58 0.09 0.23

Standard deviation 6.54 0.66 5.04 0.67 11.65 0.29 0.40

CV (%) 931 187 1,455 167 1,994 330 171

Variance 42.73 0.433 25.43 0.452 135.6 0.083 0.159

Skewness 40.78 3.242 51.82 2.867 26.69 6.307 4.089

Table 8.19 Global statistics (gold grade, g/t Au) comparison between composite and model grade for search volume 1

Statistics Composite Model Composite Model Composite (uncut) Top-cut Model Grade

Domain 800 500 600

Number of Samples 23,092 75,279 4,203 17,331 878 878 17,050

Minimum (g/t Au) 0.01 0.02 0.01 0.02 0.01 0.01 0.02

Maximum (g/t Au) 448.01 6.76 299.49 6.01 330.61 2.50 3.08

Mean (g/t Au) 0.70 0.56 0.35 0.28 0.58 0.09 0.21

Standard deviation 6.54 0.72 5.04 0.44 11.65 0.29 0.29

CV (%) 931 127 1,455 156 1,994 330 141

Variance 42.73 0.512 25.43 0.197 135.6 0.083 0.086

Skewness 40.78 2.157 51.82 3.416 26.69 6.307 3.401

Table 8.20 Global statistics (gold grade, g/t Au)

Statistics Composite Model Grade SVOL1 Model Grade

Domain All domains

Number of Samples 28,173 109,678 281,138

Minimum (g/t Au) 0.01 0.02 0

Maximum (g/t Au) 448.01 6.76 6.84

Mean (g/t Au) 0.65 0.46 0.35

Standard deviation 6.56 0.65 0.64

CV (%) 1,016 140 184

Variance 43.06 0.418 0.413

Skewness 41.19 2.508 3.253




8.3.10 Classification

Snowden classified the Beaver Dam resource to include Indicated and Inferred Mineral Resources. This takes into consideration the following;

Geological characteristics of the deposit.

Sample recovery.

QAQC.

Quality of continuity established in the variography.

Domaining.

Drillhole spacing.

Underground drilling from development.

Support from face samples.

Kriging efficiency for Au.

Slope of regression for Au.

Criteria for Indicated Mineral Resources includes the block being estimated in the first search pass and being in the proximity of the existing underground development. A wireframe box was created around the existing development expanded 20 m beneath the lowest development level, and 20 m either side of the extents of the development, INDtr/pt. This defines the area deemed proximate to the development. There were some blocks inside the wireframe around the edges above cut-off that were estimated in search pass 2, a total of just under 100,000 t at a grade of 0.67 g/t Au. Given the proximity to the drilling and other blocks these were included in the Indicated Mineral Resource category.

Criteria for Inferred Mineral Resources classification are given in Table 8.21.

Table 8.21 Beaver Dam Mineral Resource classification criteria

Criteria Indicated Inferred

Collar positions surveyed Yes Yes

Downhole survey provided Yes Yes

Samples within the geological wireframe model Yes Yes

Samples for each domain used for domain estimate Yes Yes

Search ellipse Strike 100°, Dip 70° Strike 100°, Dip 70°

Search ellipse dimensions 30 m by 30 m

by 10 m

60 m by 60 m

by 20 m

Maximum number of samples per hole 8 8

Minimum number of holes used 2 1

Minimum number of samples used 12 6

Maximum number of samples used 30 30

Estimated with diamond drillholes Yes Yes

Supported by face samples Yes No

Supported by underground drilling Yes No

Supported by consideration of historical underground mapping data to provide confidence in geological and grade continuity

Yes No




8.3.11 Reported Mineral Resources

The tonnes and grade were reported using the process TONGRAD in CAE Datamine Studio.

Table 8.22 shows the results for gold grade (g/t Au) reported by resource category. The resource has been depleted for historic underground development. The classified and depleted Mineral Resources are reported at 0.5 g/t Au cut-off grade.

Table 8.22 Beaver Dam Mineral Resource estimate to end March 2014 reported at a 0.5 g/t Au cut-off




(100%) Contained ounces gold

(oz Au) Tonnes (t)

Grade (g/t Au)

Tonnes (t)

Grade (g/t Au)


(%)





Reporting in accordance with The JORC Code (2012) requires the CP (Qualified person in context of SGX reporting) to state that the Mineral Resources have “reasonable prospects for eventual economic extraction”. Mineral Resources which are not Ore Reserves do not have demonstrated economic viability. No Ore Reserves are defined at Beaver dam and no economic studies have been completed as of 31

st March 2014.

The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. It is uncertain if further exploration will result in upgrading the Mineral Resources to higher categories or Ore Reserves. The CPs believe that the Beaver dam resource has “reasonable prospects for eventual economic extraction” via open pit methods. The resources are reported to appropriate nominal cut-off grades, based on the CPs experience of other open pit operations.

The CPs believes the accuracy of the grade and tonnage estimate for Indicated Mineral Resources to be within ±20-30% globally based on general experience of this style of mineralisation. Similarly, the accuracy of the grade and tonnage estimate for the Inferred Mineral Resources is considered to be within ±30-50% globally based on general experience of this style of mineralisation (Dominy and Edgar, 2012).

8.3.12 Production reconciliation

Although no commercial gold production came from the Seabright trial operation at Beaver Dam (1984-1987), several bulk samples were collected from both underground and the open pit. The material was trucked from Beaver Dam to the Gay’s River mine for milling. A total of 41,120 t of material were milled at an average grade of 1.85 g/t Au.




9 ORE RESERVES

No ore reserves have been established for the Beaver Dam project.




10 MINING

No pre-feasibility or feasibility studies have been completed for the Beaver Dam project and therefore mining considerations are not relevant at this point.




11 PROCESSING

No pre-feasibility or feasibility studies have been completed for the Beaver Dam project and therefore processing considerations are not relevant at this point.




12 INFRASTRUCTURE

No pre-feasibility or feasibility studies have been completed for the Beaver Dam project and therefore infrastructure considerations are not relevant at this point. Local access infrastructure exists, refer to Section 3.4.




13 SOCIAL, ENVIRONMENTAL, HERITAGE AND HEALTH AND SAFETY MANAGEMENT

13.1 Social Management

Nova Scotia is a diverse community with numerous land use stakeholders. Community consultation is a requirement of the environmental assessment to consider and mitigate community concerns. Acadian is committed to social responsibility and would implement a Community Liaison Committee headed by key management personnel if and when operations were to commence.

13.2 Environmental Management

Environmental regulations regarding proposed mining sites are governed by Nova Scotia Environment and Labour. An environmental assessment that provides for appropriate evaluation and satisfactory mitigation of environment concerns is required prior to the issuance of an Industrial Approval allowing site construction and operation. On-going environment monitoring with regular submission to Nova Scotia Environment and Labour are required. Acadian is committed to upholding or exceeding environmental standards and would implement an environmental policy administered by a qualified Environmental Management Team if and when an environmental assessment is undertaken.

13.3 Heritage Management

Strict regulations regarding the assessment and preservation of Heritage Sites at proposed mining sites in Nova Scotia are governed by Nova Scotia Environment and the Office of Aboriginal Affairs. Archaeological screening and reconnaissance reporting is required to assess potential archaeological site on the property and a Mi’Kmaq Ecological Knowledge Study is required as part of the duty of the Nova Scotia government to consult with aboriginal groups regarding proposed development on crown lands.

13.4 Health and Safety Management

Stringent regulations for workplace health and safety in Nova Scotia are governed by the provincial government through ‘Nova Scotia Environment and Labour’. Acadian is committed to ensuring a high standard of health and safety in the workplace and would implement a Health and Safety Policy administered by a qualified Health and Safety Management Team if and when operations were to commence.




14 MARKET STUDIES AND CONTRACTS

There is no mine operation at Beaver Dam. No financial analysis is appropriate.




15 FINANCIAL ANALYSIS

There is no mine operation at Beaver Dam. No financial analysis is appropriate.




16 RISK ASSESSMENT

The CPs have undertaken a semi-quantitative risk assessment of risks identified for the Beaver Dam Mineral Resource estimate (Table 16.1).

Table 16.1 Beaver Dam Mineral Resource risk profile

Factor Risk Comment

Bulk density Low The current values are reasonable and based on core measurements. Some local bias may exist where the proportions of host rock versus quartz change and minor effects of sulphides. Variability is unlikely to be greater than ±5%. On-going testing is required with any new drilling programmes.

Sample representivity High In-situ sample representivity is likely to be low given the coarse-gold high-nugget nature of the mineralisation. Samples (e.g. drillholes) may represent a low-grade fine-gold population relatively well, though may understate the coarse gold population.

Sample collection, preparation and assaying

Medium-High Historically different sample (mass) support, preparation and assaying methods, together with the effects of core loss impart sampling error. Core loss is minimal. The coarse-gold nature of the ore exacerbates potential sampling error. Sample security appears to be appropriate.

QAQC Medium Historical and recent QAQC indicates reasonable assay quality, though this does not ameliorate potential representivity issues.

Geological data and model Medium-High General geological control is reasonable on a 25 m by 25 m to 10 m by 10 m spacing above 150 m depth, with 50 m by 50 m at depth, supported by historical development above 150 m depth. Knowledge of historical and recent development aids interpretation. There is lesser understanding of small-scale local continuity issues which control variability of tonnes and grade.

Grade estimate Medium-High The grade estimate bears some uncertainty due to a potentially higher nugget effect than currently evaluated by variography. There are some sampling and data uncertainties. Estimation block size is appropriate to the drill spacing, but does not relate to a SMU size. The application of cut-off grades is problematic. On a block by block basis, estimation error will be relatively high.

Tonnage estimate Medium The current global estimate is reasonable; given that volume is based on a model constrained by geological interpretation of both drilling and development data.

Resource up-rating and addition Medium Resource up-rating will be based on further drilling and/or underground development.

Economic factors/reasonable prospects for economic extraction

Medium-High No Ore Reserves are defined. No economic studies have been undertaken. The CPs believe that extraction via an open pit operation is reasonable. A scoping study is recommended.

Metallurgy/mineral processing Medium There is no plant at Beaver Dam. During 2005-2007 composite samples were tested for both gravity and leach gold recovery. A gravity recoverable gold value of 84% was achieved. Gravity combined with tails leaching achieved a total recovery of 98%. Based on limited testing, the likelihood for extracting gold at Beaver Dam is good. However, further metallurgical testing is required across the entire deposit.

Accuracy of the resource estimate Medium-High The CPs believes the accuracy of the grade and tonnage estimate for Indicated Mineral Resources to be within ±20-30% globally based on general experience of this style of mineralisation. Similarly, the accuracy of the grade and tonnage estimate for the Inferred Mineral Resources is considered to be within ±30-50% globally based on general experience of this style of mineralisation.




Social, legal, political and environmental Low Risks are considered “low”, given the stable and well-developed and mining friendly nature of Canada.

Overall rating Medium The current resource estimate carries “medium” risk. This risk is principally related to geological and grade variability. This rating is reflected by the use of both the Indicated and Inferred Mineral Resource categories.




17 INTERPRETATION AND CONCLUSIONS

Gold mineralisation at Beaver Dam occurs predominantly on the steeply dipping south limb of the Moose River-Beaver Dam anticline and generally conforms to the saddle-reef style model, where veins and related alteration occur in bedding-parallel structures resulting from folding. Although no saddle veins have been identified at Beaver Dam, most veins are bedding-parallel and interpreted to represent down limb continuation of saddle veins which have been uplifted and eroded away. Vein mineralisation is characterised by dominantly coarse gold particles, which impose challenges on sample representivity.

Gold occurs commonly within quartz veins as coarse (>1 mm) grains with local occurrences of finer (<1 mm) grains. Coarse grains are commonly found at vein-wall rock boundaries and are often spatially associated with sulphide minerals. In rare cases, fine visible gold grains have been observed within wallrock. Anomalous gold values in the 0.1 g/t Au to 4 g/t Au range were frequently returned for intervals without any quartz veins or visible gold. The nature of this mineralisation is not well understood, however high gravity recovery factors suggest that the gold occurs as free-gold, possibly associated with sulphide minerals. More work is required in order to fully understand the distribution of gold within the deposit.

Drilling to date has permitted the estimation of a Mineral Resource containing 699,000 oz Au (see Table 1.1). Based on statistical and spatial analysis, three domains were defined. These included Austen, Millet Seed and Papke units as domain 800, Greywacke unit as domain 500 and Crouse unit as domain 600. Domains 500 and 800 were estimated using multiple indicator kriging, and domain 600 ordinary kriging with a top-cut.

Based on drill spacing and the presence of historical mine workings, the resource has been classified in both the Inferred and Indicated categories (Table 1.1). This reflects the higher level of confidence of the estimated blocks within 20 m of the workings. Geological continuity in the mine workings is verified through historical mapping and trial mining. The resources are classified in accordance with The JORC Code 2012. Overall resource risk is defined as “medium” and reflects the need for further drilling and an economic study to be undertaken.

The resource is deemed by the CPs to have reasonable prospects for eventual economic extraction. It has the potential to be an open-pit bulk-mineable deposit, though a scoping study is required to review options. The resource was reported at a cut-off grade of 0.5 g/t Au, to reflect its open pit potential.




18 RECOMMENDATIONS

The CPs recommend that Acadian undertake a scoping study for an open pit or combined open pit/underground operation at Beaver Dam. The following items should be considered;

Topographic survey should be undertaken to increase confidence in collar co-ordinates

Further drilling is required at depth to increase the confidence in the data

Where possible, drillholes with unsampled intervals should be re-sampled

Closer spaced drilling required; on the surface, in-fill drilling on areas along strike of the development areas would increase confidence for further demarcation of the Indicated Mineral Resource

Determination of the geological controls on the mineralisation would assist in domain modelling

Metallurgical test work should be undertaken




19 REFERENCES

Adams, P. and Hogg, D. 1987. Report on the Stratigraphy and Mineralisation of the Beaver Dam Property. Unpublished Report dated March 20, 1987.

Campbell, J. and Daniels, A. 1988. Reserve Calculations, June 30th, 1988, Beaver Dam Gold Deposit, Nova

Scotia, Canada. Seabright Operations (Westminer Canada Limited). Unpublished Company Report dated August 15, 1988.

Coates, H.J., 1986. Beaver Dam Gold Deposit, Nova Scotia, Reserve Calculation for Seabright Resources

Inc. Unpublished Company Report dated September 10, 1986. Coates, H.J., and Riddell, W.J., 1987. Beaver Dam Gold Deposit, Nova Scotia, Reserve Calculation for

Seabright Resources Inc. Unpublished Company Report dated January 21, 1987. Coates, H.J., and Riddell, W.J., 1986a. Report on the Beaver Dam Property, Nova Scotia for Seabright

Resources Inc. Unpublished Company Report dated February 25, 1986. Coates, H.J., and Riddell, W.J., 1986b. Supplementary Report on the Beaver Dam Property, Nova Scotia for

Seabright Resources Inc. Unpublished Company Report dated April 4, 1986. CMM Environmental Services. 2009. Mi’Kmaq Ecological Knowledge Study, Beaver Dam Gold Project.

Prepared for Conestoga-Rovers & Associates. Unpublished Report dated June 2009. Dominy, S. C. 2014: Predicting the unpredictable: evaluating high-nugget effect gold deposits, Mineral

resource and ore reserve estimation – The AusIMM guide to good practice, Monograph #30, 659-678, Melbourne, Australasian Institute of Mining and Metallurgy.

Dominy, S. C. and Edgar, W. B. 2012: Approaches to reporting grade uncertainty in high nugget gold veins,

Applied Earth Sciences, 121: 29-42. Duncan, D.R. 1986. Assessment Report on 1986 Exploration Programme, General Exploration License

8711, Halifax County, Nova Scotia, NTS 11E/2. Nova Scotia Department of Natural Resources Assessment Report AR ME 1986-129.

Duncan, D.R. 1987. Assessment Report on 1987 Exploration Programme on Development License 0078

Halifax County, Nova Scotia, NTS 11E/2. Nova Scotia Department of Natural Resources Assessment Report AR ME 1987-117.

Duncan, D.R., Campbell, J.W. and Lawyer, J.I. 1987. Coxheath North – Stage II 1986 Diamond Drilling

Programme, Exploration License 8711, Halifax County, Nova Scotia, NTS 11E/2. Nova Scotia Department of Natural Resources Assessment Report AR ME 1987-165.

Horne, R.J. and Pelley, D.E. 2007. Geological Transect of the Meguma Terrane from Centre Musquodoboit

to Tangier. In Mineral Resources Branch, Report of Activities 2007; Report ME 2007-01, p.71-89. Jacques Whitford & Associates and Lane & Associates, 1986. Report to Nova Scotia Department of Mines

and Energy and Nova Scotia Department of Environment on Environmental Assessment of Gold Mine Development, Beaver Dam, Nova Scotia.

JORC, 2012. Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves,

“The JORC Code”. Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia, December 2012, pp 44.

Redpath Mining Consultants Limited. 1987. Beaver Dam Project, Mine Feasibility Study, prepared for

Seabright Resources. Unpublished Company report dated January 19, 1987. O’Sullivan, J. 2003. A Review of the Beaver Dam Gold Project with Recommendations for Further

Exploration and Development. Nova Scotia Department of Natural Resources Assessment Report AR ME 2003-012.




Pearson, W.N., 1991. Report on the Underground Exploration and Development Programme, Beaver Dam

Project. Unpublished report prepared for Fasken Campbell Godfrey, counsel for Westminer Canada Limited.

Pelley, D.E. and Horne, R.J., 2013. Determination of Specific Gravity using drill core samples, Beaver Dam

Property, Nova Scotia. Unpublished company report dated May, 2013. Ryan, R.J. and Smith, P.K. 1998. Gold Mineralisation in Nova Scotia. In Ore Geology Reviews, v13, p.153-

183. Stewart, B.W. and Beanlands, S. 2009. Beaver Dam Development Archaeological Screening &

Reconnaissance, Halifax Regional Municipality, Nova Scotia. Prepared for Acadian Mining Corporation and the Special Places Programme – Heritage Division by Cultural Resource Management Group Limited.

Webster, P.C. and Harrington, M. 2007. Technical Report on the Updated Mineral Resource Estimate,

Acadian Mining Corporation, Beaver Dam Property, Halifax County, Nova Scotia, Canada. 43-101 Technical Report.

Webster, P.C. and Harrington, M. 2005. Technical Report on the Updated Mineral Resource Estimate,

Acadian Mining Corporation, Beaver Dam Property, Halifax County, Nova Scotia, Canada. 43-101 Technical Report.

Webster, P.C., Kennedy, C. and Levy, D. 2004. Technical Report on Mineral Resource Estimate, Acadian

Mining Corporation, Beaver Dam Property, Halifax County, Nova Scotia, Canada. 43-101 Technical Report.

Vann, J, Jackson, S and Bertoli, O, 2003. Quantitative Kriging neighbourhood analysis for the mining

geologist - a description of the method with worked case examples, In Proceedings of the 5th

International Mining Geology Conference. pp. 215-223.




20 DATE AND SIGNATURE PAGES

I, Dr Simon C Dominy, do hereby consent to the public reporting of the Beaver Dam Mineral Resource and release of the Qualified Persons Report entitled “Annual QPR for the Beaver Dam Gold Project for the Year Ended 31 March 2014”. I have given and have not withdrawn prior to lodgement, my written consent to be named in any Announcement as a person responsible for this Mineral Resources statement and to the inclusion of this statement in the form and context in which it appears.

I certify that I have read the Qualified Persons Report and that it fairly and accurately represents the work for which I am responsible. Based on the requirements of the Singapore Exchange Practice Note #6.3, I am a Qualified Person. I am also a Competent Person as defined by the JORC Code (2012), having five years of experience that is relevant to the style of mineralisation and type of deposit described in the report, and to the activity for which I am accepting responsibility. Dated: 16

th May 2014

Simon C Dominy. ________________________________ Dr Simon C Dominy FAusIMM(CP), FAIG(RPGeo), FGS(CGeol)

I, Richard J Horne, do hereby consent to the public reporting of the Beaver Dam Mineral Resource and release of the Qualified Persons Report entitled “Annual QPR for the Beaver Dam Gold Project for the Year Ended 31 March 2014”. I have given and have not withdrawn prior to lodgement, my written consent to be named in any Announcement as a person responsible for this Mineral Resources statement and to the inclusion of this statement in the form and context in which it appears.

I certify that I have read the Qualified Persons Report and that it fairly and accurately represents the work for which I am responsible. Based on the requirements of the Singapore Exchange Practice Note #6.3, I am a Qualified Person. I am also a Competent Person as defined by the JORC Code (2012), having five years of experience that is relevant to the style of mineralisation and type of deposit described in the report, and to the activity for which I am accepting responsibility. Dated: 16

th May 2014

Richard J Horne. ________________________________ Richard J Horne PGeo




21 GLOSSARY OF TERMS

Alteration A change in mineralogical composition of a rock commonly brought about by reactions with hydrothermal solutions or by pressure changes.

Au The chemical element gold

Breccia A rock mass composed of large, angular fragments of pre-existing rocks

Cambrian Period of geological time between 542 Ma and 488 Ma

Carbonates Any carbonate mineral, compound composed of carbonate ions and metal such as calcium, magnesium or iron

Carboniferous Period of geological time between 359 Ma and 299 Ma

Chalcopyrite The mineral copper iron sulphide

Cleavage A regular parting in rock formed as a result of compression. Typically seen in slate

Development Underground activity to access an orebody (vein) for evaluation and mining

Devonian Period of geological time between 416 Ma and 359 Ma

Diamond (core) drilling Method of obtaining a cylindrical core of rock by drilling with a diamond impregnated bit. Produces a high quality sample

Dip/dipping Angle and direction of steepest slope on a planar surface

Fault A fracture plane in rocks showing significant movement between the two sides

Galena The mineral lead sulphide

Grade The relative quantity or percentage of mineral content. Gold grade is commonly expressed in the terms: g/t - grammes per tonne, ppb – parts per billion, ppm – parts per million

Group A major sequence of sedimentary rocks forming a distinctive unit by virtue of rocks and/or fossils present

g/t Grammes per tonne, used to express concentration of rare metals in rock. 1 g/t is equivalent to 1 ppm and 1,000 ppb

Indicated Mineral Resource

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which tonnage, densities, shape, physical, characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. The locations are too widely or inappropriately spaced to confirm geological and or grade continuity but are spaced closely




enough for continuity to be assumed

Inferred Mineral Resource An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered though appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes which may be limited or of uncertain quality and reliability

JORC / the JORC Code The Reporting Code of the Joint Ore Reserves Committee (of the Australian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and the Minerals Council of Australia). The JORC Code 2012.

Ma Millions of years

Measured Mineral Resource

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. The locations are spaces closely enough to confirm geological and grade continuity

Metamorphism The process of recrystallisation of rock as result of increased temperature and pressure

Micron (µm) A measurement of distance – 1,000 µm is equivalent to 1 mm. A µm is 1 x 10

-6 of a m

Mineral Resource A technical term which is controlled in its use by the 2012 JORC Code. A ‘Mineral Resource’ is a concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are subdivided, in order of increasing confidence, into Inferred, Indicated and Measured categories. The words ‘ore’ and ‘reserves’ must not be used in describing Mineral Resources as the terms imply technical feasibility and economic viability and are only appropriate when all relevant Modifying factors have been considered

Nugget effect A term that describes grade variability for samples at small distances apart (less than a few cm). A low nugget effect (<20%) indicates minimal grade variation, whereas a high nugget effect (>70%) indicates that grade is highly variable and potentially relatively unpredictable. Pure nugget effect (100%) indicates an almost random grade distribution.

Ordovician Period of geological time between 488 Ma and 443 Ma

Ore Reserve A technical term which is controlled in its use by the 2012 JORC Code. An ‘Ore Reserve’ is the economically mineable




part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could be reasonably justified. Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves

Ore shoot / shoot A high grade zone within a mineral vein

Pyrite The mineral iron disulphide

QA/QC (for sampling and assaying) There are two components to a QA/QC system – quality

assurance and quality control. Quality assurance (QA) refers to the protocols and procedures, which ensure that sampling and assaying is completed to the required quality. Quality control (QC), however, is the use of control samples and statistical analysis to ensure that the assay results are reliable

Quartz The mineral silicon dioxide

Strike Trend of an horizontal line on any geological plane

Strike slip Movement parallel to the strike of a fault plane

Sulphides Minerals composed of metals combined with sulphur

Variogram A graphic representation of spatial correlation between samples in a given orebody. The variogram allows the calculation of the nugget effect and the sphere of influence of samples (the range)

Vein A relative thin (millimetres to 10 m scale) sheet of quartz or other minerals cutting across pre-existing rocks



140516_Acadian_Beaver Dam_QPR 2014_FINAL Appendix A - 1

Appendix A Checklist of assessment and reporting criteria, based on Table 1 of the 2012 JORC Code



140516_Acadian_Beaver Dam_QPR 2014_FINAL Appendix - 2

Section 1 Sampling techniques and data

(Criteria in this section apply to all succeeding sections)

Criteria JORC Code explanation Commentary

Sampling techniques

Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Aspects of the determination of mineralisation that are Material to the Public Report.

In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

All samples represented in the resource estimate are from diamond drill core. The Acadian 2005-2009 drill program sampled drill core continuously throughout the mineralized zone at regular 1 m intervals, with half core sampling submitted for assay. For historic drilling between 1986-1988 sampling was selective and whole core was submitted for assay; samples focused on quartz veins and alteration resulting in variable un-sampled intervals. Gold mineralisation is characterised by coarse gold and primarily NQ drill core was drilled for all drilling programmes to maximize sample size.

Drilling techniques Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

Diamond drilling was contracted by local drillers (Logan Drilling Group). NQ drill core was the dominant drill core size drilled.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Drill core recovery estimates are based on continuity of matched core segments which indicated generally excellent recovery in excess of 90%.

Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

The total length and percentage of the relevant intersections logged.

Logging is considered both qualitative (lithology, alteration, mineralisation) and quantitative (structure, boundaries) in character. For the Acadian programs (2005-2009) all core was logged and photographed, with details captured using hand-held electronic logging computers; 100% of the core was logged. Historic drill logs are detailed in nature and recorded lithology, structure, mineralisation and alteration. None of the historic core is available for verification; however general results of Acadian logging are consistent with historic logs. Logging is considered to be of sufficient detail to support a resource estimate.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Whether sample sizes are appropriate to the grain size of the material being sampled.

Historic core was whole core sampled whereas the Acadian sampling consisted of half core sampling using a core splitter or diamond saw. Acadian sample intervals were typically regular 1 m samples throughout the potentially mineralized zone; reflecting the evaluation for bulk minable mineralisation. Historic sampling was selective and focused on quartz veins and alteration. Un-sampled intervals were assigned below detection grade to prevent smearing of high grade samples. Samples are recorded using a three tag sample system, with one tag included with the sample, one remains in the core box and one remains in the tag book.





Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

Gold assays for the Acadian drill programme were determined by ALS Chemex in Sudbury and Val D’Or, Ontario, using the “Screen Metallics Gold Double Minus” procedure which is designed for coarse gold deposits like Beaver Dam. Historic analysis included a combination of regular fire assay and Screen Metallics analysis; Samples with visible gold were assayed by Screen Fire Assay with the remaining samples assayed by Fire Assay, with samples returning greater than 1 g/t Au being re-assayed by Screen Fire Assay. Quality control procedures for historic drill programmes are undocumented. Quality control for Acadian’s 2005-2007 sampling included insertion of blanks and review of laboratory QA/QC results whereas for the 2009 drill programme Standard Reference Material, blanks and field duplicates were inserted into the sample stream in addition to laboratory procedures for evaluating quality control.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

The use of twinned holes.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Discuss any adjustment to assay data.

No twinned holes have been drilled, although this will be part of future diamond drill plans. Data is stored as paper copies and electronically in Datashed software. Recent data is imported into Datashed from compatible laboratory files to reduce potential errors. QA/QC data from the laboratory are also imported into the database. Greater than 95% of the data has been validated to the original assay certificates with corrections made when necessary. No adjustments have been made to the assay data.

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Specification of the grid system used.

Quality and adequacy of topographic control.

All collar locations are based on a local grid and all holes up to and including 2007 were surveyed using conventional surveying methods. The local grid was re-established using coordinates for located historic drill collars using a Trimble differential GPS unit and the 2009 drillhole collars were established in local grid using the Trimble unit. Down hole surveys for Acadian drilled holes were captured using a Reflex tool and for historic drillholes using one of Sperry Sun, Tropari or Acid etch method.

Data spacing and distribution

Data spacing for reporting of Exploration Results.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Whether sample compositing has been applied.

Shallow (approximately 150 m from surface) drillhole spacing is approximately 25 m by 25 m with local in-fill drilling resulting in approximately 10 m by 10 m spacing. Deeper drilling to approximately 250 m below surface is generally drilled on 50 m by 50 m grid spacing.

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

Drilling has been conducted perpendicular to the trend of mineralisation and at a high angle to the dip of the mineralised zone. The mineralised zone is tabular in shape and drilling intersected drilling and a high to moderate angle to mineralisation depending on the dip of the drillhole. The orientation of drilling is considered to be as appropriate as possible given the orientation of the mineralisation and does not impose any bias on sampling.

Sample security The measures taken to ensure sample security. Acadian drilled core and core samples were either in possession of the drill contractor or Acadian personnel throughout the drilling and sampling programmes and drill core is securely stored in a warehouse. Similar security is assumed for historic drill core.

Audits or reviews The results of any audits or reviews of sampling techniques and data. No external audits have been conducted.




Section 2 Reporting of exploration results

(Criteria listed in the preceding section also apply to this section)


Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Beaver Dam project (100% Acadian Mining Corp) comprises one Exploration Licence (EL 05920) covering a surface area of approximately 568 hectares. Licence 05920 is in good standing and has sufficient assessment credits to be renewed without conducting any exploration over the next 8 years.

Surface property rights are mainly held by Northern Pulp Nova Scotia Ltd, with minor areas of the licence controlled by the crown. No land access agreements exist with the property owners, however access has been made available in the past and Acadian is currently discussing long term land access options with Northern Pulp.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties. Extensive diamond drilling by Seabright Resources between 1986 and 1988 has provided important information regarding the geology of the property and provides a significant amount of the assay data used for resource evaluation.

Geology Deposit type, geological setting and style of mineralisation. The Beaver Dam deposit is an orogenic gold deposit that fits the saddle reef, mesothermal lode gold style of deposit. Mineralisation occurs as coarse gold in quartz veins and in vein free mudstone adjacent veins. Gravity and or cyanide leach recovery is excellent.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

easting and northing of the drill hole collar

elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar

dip and azimuth of the hole

down hole length and interception depth

hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

See Appendix B

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

For estimation purposes all assays were composited to 1 m lengths. A top cut of 2.5 g/t Au was applied to the Crouse estimation domain, no top-cutting was necessary for the other domains as they were estimated using MIK. Resources were reported at a cut-off of 0.5 g/t Au assuming open pit mining.

Individual sample lengths range from 0.01 m to 5 m with an average interval of 0.83 m. Only a small percentage of samples represented more than 2 m or less than 10 cm of core. 55% of all the core samples represent 1 m of core.

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

Mineralisation is stratabound and occurs on the south, overturned limb of an anticline. Mineralisation is largely stratabound, resulting in a planner mineralised zone, so drilling intersects at a consistent angle. Accounting for true mineralised widths is straight forward, with only minor adjustments to the intersected widths.





Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

A plan map showing the location of the drillholes and representative cross sections of the mineralised zone are provided in Figure 5.3 in the body of the report.

Balanced reporting Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

The results of all significant exploration on the Beaver Dam property carried out since 1985 have been reported herein.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

There are no additional material data or observations that are not discussed in the text.

Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Planned future work is conditional on budgets and will include; minor in-fill drilling towards improving classification of inferred resources to indicated; metallurgical testing; conduct a scoping study that addresses mining and environmental concerns; further assessment of the Northeast and Mill shaft areas for potential additional mineralisation.

Section 3 Estimation and reporting of Mineral Resources

(Criteria listed in Section 1, and where relevant in Section 2, also apply to this section)


Database integrity Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

Data validation procedures used.

Snowden carried out the following basic validation checks on the data supplied by

Acadian prior to resource estimation:

Drillholes with overlapping sample intervals

Sample intervals with no assay data

Duplicate records

Assay grade ranges

Collar co-ordinate ranges

Valid hole orientation data.

There are no significant issues with the data. There were some samples with no assay data, due to historic selective sampling, all “missing” assays were set to half the detection limit to avoid over smearing.

Site visits Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

If no site visits have been undertaken indicate why this is the case.

A site visit was conducted in March 2011 by Snowden (Dr Simon Dominy) to review drill

core, the database, current drilling, logging and sampling practices. Snowden was

happy with procedures undertaken. General discussions were help pertaining to general

coarse gold sampling and assaying, and advancing a resource estimate at Beaver Dam.

Geological interpretation

Confidence in (or conversely, the uncertainty of ) the geological interpretation of the mineral deposit.

The interpretation of the mineralised stratigraphic units was completed by Acadian





Nature of the data used and of any assumptions made.

The effect, if any, of alternative interpretations on Mineral Resource estimation.

The use of geology in guiding and controlling Mineral Resource estimation.

The factors affecting continuity both of grade and geology.

Geologists.

The mineralisation broadly conforms to saddle-reef style with the gold largely hosted by

bedding-parallel quartz veins with disseminated gold hosted in the wall rock.

The geological control on mineralization is not fully understood at this stage.

Exploration and underground diamond drillholes were used to update the geological

interpretation.

The topography used was provided by Acadian, however this was based on collar co-

ordinates, a topographic survey is recommended.

Confidence in the geological interpretation of the mineral deposit is considered to be

good.

Dimensions The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

The orebody extends approximately 800 m along strike (east-west) and ranges up to 50 m in width.

Estimation and modelling techniques

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

The assumptions made regarding recovery of by-products.

Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

Any assumptions behind modelling of selective mining units.

Any assumptions about correlation between variables.

Description of how the geological interpretation was used to control the resource estimates.

Discussion of basis for using or not using grade cutting or capping.

The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

Drillhole data was coded using the wireframe interpretations representing the

stratigraphic units. Samples were composited to 1 m downhole, with the composite

lengths adjusted to include all intervals and avoid the loss of residual samples.

Statistical analysis of the mineralised domains was completed to determine whether it

would be appropriate to combine any of the mineralised units. It was concluded that

three units could be combined. A further statistical analysis indicated that there were

extreme outliers in a highly positively skewed dataset with mixed populations for the

combined doman (800) and the greywacke domain (500). As a result of this

distribution, multiple indicator kriging (MIK) was used to estimate Au. No top-cuts were

applied as the MIK process controls outlier grades and top cutting is not necessary.

The Crouse domain (600) had considerably less data and was consistently low grade,

quite different from the other domains. It was decided that Ordinary Kriging (OK) was

the most appropriate estimation method to estimate the Au for this domain. A top-cut

analysis was undertaken, and top-cut was applied at 2.5 g/t Au.

Datamine software was used to estimate grades for Au using MIK block kriging into

2.5 mE by 3 mN by 2.5 mRL parent blocks with sub-celling to 2.5 m by 1.5 m by 2.5 m

which was subsequently reblocked to a final parent cell size of 12.5 mE by 6 mN by

12.5 mRL. The Crouse domain was estimated using OK directly into the final parent

cell size (12.5 mE by 6 mN by 12.5 mRL). The block size was determined using the

Kriging Neighbourhood Analysis (KNA) and considering the drill spacing.

A block discretisation of 3 by 3 by 3 was used in the easting, northing and elevations

directions respectively.

Domain boundaries were treated as hard boundaries for estimation, but the reblocking

was completed across domains to give a better result. .





The search ranges and orientations were based on the variogram models, the ranges

and KNA.

For the combined domain and greywacke domain (800, 500), a minimum of 12 and

maximum of 30 samples were used for estimation with a maximum of 8 samples per

drillhole. A second search was used, with the ranges at a factor of 2, with a minimum of

6 and max of 30 samples. For the Crouse domain (500), a minimum of 10 and

maximum of 30 samples were used for estimation with a maximum of 6 samples per

drillhole. A second search was used, with the ranges at a factor of 2, with a minimum of

6 and max of 30 samples.

The estimates were validated using:

A visual comparison of the block grade estimates and the drillhole composite data for both the small cell model and parent cell model.

Generation of vertical section plots displaying the block model and composite samples for north-south sections every 25 m, both small cell model and parent cell model.

Visual validation of channel/face samples against the model.

Generation of swath plots through north-south and vertical sections for the block estimates (composite grades), and point sample composites, both small cell model and parent cell model and by search volume.

Comparison of global statistics of model grade and composited drillhole grade, for each domain, combined domains and by search volume.

The conclusions from the model validation work are:

Visual comparison of the model grades and corresponding drillhole grades show a good correlation for all domains, particularly where the data density is high. The small cell model, (point estimate), replicates the drillhole grades well. The parent cell model is an average of the small cell blocks so does not reproduce each composite value, however, overall the grade of the parent blocks look reasonable compared to the drillhole grades. There are no high grade blocks where there are no high grade composites.

Vertical section plots also support the good correlation for all domains as per the visual comparison.

Combined domain 800. Analysis of the swathe plots for the parent cell model shows that there is smoothing in the Au block grade in the vertical slice giving an overall lower grade however, the model grade for this domain follows the drillhole grade trend well.





Combined domain 800. The north-south swathe plot shows the Au block grade is smoothed and appears to be slightly lower than the point grade, particularly in the west of the deposit. The parent cell model using search volume 1 follows the trend of the grade much better. This suggests that where there are strict controls on the estimate, it reproduces the grade better. For the combined domain there are many blocks with very low/background grade in the model to the south and at depth, it is believed these are lowering the overall grade.

Greywacke domain 500. Analysis of the swathe plots for the parent cell model shows that there is smoothing in the Au block grade in the vertical slice giving an overall higher grade. The swathe using search volume 1 model, gives a slightly higher overall grade but follows the trend well. The increased grade may be higher due to the re-blocking of the small cell blocks to the parent cell size across this domain and the combined domain resulting in the averaging of the gold grade.

Greywacke domain 500. The north-south swathe plot shows the Au block grade is smoothed and appears to be slightly lower than the point grade, again this is particularly present in the west of the deposit. The parent cell model using search volume 1 follows the trend of the grade better, recreating similar grades in the west of the deposit. Again this supports where there are strict controls on the estimate, and more data, it reproduces the grade.

Crouse domain 600. This domain has a significantly lower grade than the other domains. Analysis of the swathe plots for the parent cell model shows that there is smoothing in the Au block grade in the vertical slice giving an overall significantly higher grade. The swathe using search volume 1 model, also gives a slightly higher overall grade. A separate validation of the original Crouse model was completed to test whether the higher grade is due to the regularisation across this domain and the other domains. The original parent cell Crouse model follows the trend of the grade well and so the higher overall grade in the final model is due to the regularisation across domains, which is acceptable.

Crouse domain 600. The north-south swathe plot shows the Au block grade is smoothed and is higher than the point grade. This is due to the regularisation across the domains. The original parent cell model was analysed and the model grade was still slightly higher than the point grade but not significantly, and it below the cut-off grade.

The smoothing in all swathe plots is to be expected to some extent because of the volume-variance effect between the blocks and the samples. The blocks cover a larger area and there are fewer data points for the same area within the slice.

Global statistics show the mean grade of the model to be 0.3 g/t Au less than the uncut composited drillhole grades. The difference decreases when comparing the mean composite grades to the mean model grades estimated using search volume 1 to 0.19 g/t Au.

A previous estimate was completed in 2007 by Mercator. The results are quite different





based on a number of factors related to geological model, application of variography and QKNA by Snowden and estimation approach (e.g. kriging).

Moisture Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

All tonnages are estimated on a dry basis.

Cut-off parameters The basis of the adopted cut-off grade(s) or quality parameters applied. Mineral Resource is reported at a 0.5 g/t Au grade cut-off. This cut-off was applied to reflect its open pit potential. No other mining assumptions have been applied in this resource estimate. These will be reviewed in any planned economic studies.

Mining factors or assumptions

Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

Mining is assumed to be by open cut methods. No other mining assumptions have been applied in this resource calculation. These will be reviewed in any planned economic studies.

Metallurgical factors or assumptions

The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

There is no plant at Beaver Dam. During 2005-2007 composite samples were tested for both gravity and leach gold recovery. A gravity recoverable gold value of 84% was achieved. Gravity combined with tails leaching achieved a total recovery of 98%. Based on limited testing, the likelihood for extracting gold at Beaver Dam is good. Further metallurgical testing is required.

Environmen-tal factors or assumptions

Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

No detailed studies undertaken. No reason to believe that there are any fatal issues with respect of environment al factors. Full studies will be required as part of any mine permitting programme.

Bulk density Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

Some 157 density measurements were analysed by domain and unit. The combined domain (800) had a mean density of 2.76 t/m

3, greywacke domain (500) a mean of 2.7

t/m3 and the Crouse domain (600) a mean of 2.75 t/m

3. All domains combined had a

mean of 2.75 t/m3/

There was not a definitive density value for each unit and there was not enough density data to estimate the density into the model. It was decided that the average density (2.75 t/m

3) would be assigned to all domains.

Classification The basis for the classification of the Mineral Resources into varying confidence categories.

Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

Snowden classified the Beaver Dam resource to include Indicated and Inferred Mineral Resources. This takes into consideration the following;





Whether the result appropriately reflects the Competent Person’s view of the deposit. Geological characteristics of the deposit

Sample recovery

QAQC

Quality of continuity established in the variography

Domaining

Drillhole spacing

Underground drilling from development

Support from face samples

Kriging efficiency for Au

Slope of regression for Au.

Criteria for Indicated Mineral Resources includes the block being estimated in the first search pass and being in the proximity of the existing underground development. A wireframe box was created around the existing development expanded 20 m beneath the lowest development level, and 20 m either side of the extents of the development.

Audits or reviews The results of any audits or reviews of Mineral Resource estimates. Snowden has completed an internal peer review of the estimate which concluded that the procedures used to estimate and classify the Mineral Resource are appropriate.

Discussion of relative accuracy/ confidence

Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

The relative accuracy and confidence in the Mineral Resource estimate is reflected in the reporting of the Mineral Resource as set out in the JORC code (2012 Edition).




Appendix B Summary of Diamond Drillhole Information

Drill Year Hole ID Zone Hole Location Easting

(Minegrid) Northing

(Minegrid) Elevation (Minegrid)

Max Depth (m) Company Depth (m) Azimuth

(Minegrid) Dip

2005 BD05-001 Main Zone Surface 775.2 1081.4 1133.5 82.0 ACADIAN 0.00 189.50 -45.00








































































2006 BD06-067 Mill Shaft Zone Surface -90.8 1009.7 1136.0 151.0 ACADIAN 0.00 181.00 -45.00






2006 BD06-073 NE Zone Surface 1055.0 1691.0 1135.0 150.0 ACADIAN 0.00 160.00 -47.90


























































































1987 BD-110-01 Main Zone underground 807.1 1013.0 1101.0 111.9 SEABRIGHT 0.00 344.00 -46.00





1977 BD77-001 Main Zone Surface 964.0 1045.0 1131.4 94.5 AGASSIZ 0.00 190.00 -47.00









1980 BD80-001 Main Zone Surface 638.2 1095.3 1133.8 91.4 COMISA 0.00 188.00 -50.00












1980 BD80-010 Mill Shaft Zone Surface -119.5 1127.4 1132.0 108.0 COMISA 0.00 182.00 -50.00

1980 BD80-011 Mill Shaft Zone Surface -125.8 1104.3 1132.0 178.0 COMISA 0.00 182.00 -51.00

1983 BD83-001 Main Zone Surface 1162.2 1036.9 1129.2 92.1 M.E.X. 0.00 182.50 -50.00









1985 BD85-001 Main Zone Surface 926.0 1024.0 1132.2 80.0 SEABRIGHT 0.00 182.00 -45.00






























































































1985 BD85-088 Main Zone Surface 820.6 1067.6 1133.1 83.8 REDRILLED 0.00 176.00 -49.50































































1986 BD86-053A Main Zone Surface 1224.0 1455.3 1131.7 714.8 SEABRIGHT 0.00 187.00 -83.00

1986 BD86-053B Main Zone Surface 1224.6 1455.3 1131.7 638.6 SEABRIGHT 0.00 190.00 -72.00

1986 BD86-053C Main Zone Surface 1224.6 1455.3 1131.7 617.2 SEABRIGHT 0.00 180.00 -65.00










1987 BD87-001 NE Zone Surface 999.8 1585.8 1127.8 699.8 SEABRIGHT 0.00 180.00 -62.00





1987 BD87-066 NE Zone Surface 1000.0 1585.0 1126.0 725.7 SEABRIGHT 0.00 180.00 -69.00




1987 BD87-1012.5B Main Zone Surface 1011.2 1098.3 1129.8 98.0 SEABRIGHT 0.00 180.00 -45.00

1987 BD87-1012.5C Main Zone Surface 1011.6 1116.1 1130.2 118.0 SEABRIGHT 0.00 180.00 -45.00



1987 BD87-1037.5A Main Zone Surface 1037.1 1076.3 1129.5 123.4 SEABRIGHT 0.00 180.00 -45.00



















1988 BD-88-11U Main Zone underground 950.2 1051.6 1044.2 57.3 SEABRIGHT 0.00 180.00 -16.00



1988 BD-88-14U Main Zone underground 808.9 1007.1 1102.4 55.5 SEABRIGHT 0.00 353.00 8.50











1987 BD-R1 Main Zone underground 837.5 1013.1 1097.8 54.9 SEABRIGHT 0.00 355.00 -19.00







1987 BD-R13A Main Zone underground 836.3 1010.8 1071.0 76.2 SEABRIGHT 0.00 355.00 -22.00






1987 BD-R5 Main Zone underground 918.8 990.7 1086.6 39.6 SEABRIGHT 0.00 11.00 41.00

1987 BD-R6 Main Zone underground 919.1 991.4 1085.7 70.1 SEABRIGHT 0.00 15.00 18.00




Documents

Annual Qualified Persons Report for Beaver Dam Gold ... · Annual QPR for the Beaver Dam Gold Project for the Year Ended 31 March 2014 LionGold Corporation Ltd 140516_Acadian_Beaver