Technical Report. on the New Carolin Gold Corporation. Ladner Gold Project. British Columbia Latitude 49 o 32ʼN, Longitude 121 o 17ʼW.

Transcription

1 Technical Report on the New Carolin Gold Corporation Ladner Gold Project British Columbia Latitude 49 o 32ʼN, Longitude 121 o 17ʼW Prepared for New Carolin Gold Corp. Report by Clifford A. Pearson, P.Geo Independent Qualified Person Pearson Geological Services 2604 Roseberry Avenue Victoria, B.C. V8R 3T7 Report Submitted: May 29, 2015

2 TABLE OF CONTENTS 1.0 SUMMARY INTRODUCTION AND TERMS OF REFERENCE Introduction Purpose of Report Sources of Information Data gathering and Site Visits Units, Conversions and Abbreviations Used RELIANCE ON OTHER EXPERTS PROPERTY LOCATION AND DESCRIPTION Property Location Property Description ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY Property Access Physiography and Climate Infrastructure and Local Resources HISTORY Prior Ownership Exploration History Property Exploration - Pre-Production Property Exploration - Production Years 1981 to Property Exploration - Post Production Historical Mineral Resources Historical Production Mineral Processing History Historical Sampling Method and Approach GEOLOGICAL SETTING AND MINERALIZATION Regional Geology Property Geology Mineralization DEPOSIT TYPES 48 2

3 9.0 EXPLORATION DRILLING General McMaster Zone Drilling Carolin Mine Drilling SAMPLE PREPARATION, ANALYSIS AND SECURITY DATA VERIFICATION MINERAL PROCESSING AND METALLURGICAL TESTING MINERAL RESOURCE ESTIMATES Mineral Resource Estimate, Tailings Deposit Mineral Resource Estimate, McMaster Zone Mineral Resource Estimate, Carolin Mine ADJACENT PROPERTIES OTHER RELEVANT DATA AND INFORMATION INTERPRETATIONS AND CONCLUSIONS RECOMMENDATIONS REFERENCES DATE AND SIGNATURE PAGES Certificate of Author, C. Pearson, P.Geo Consent of Author, C. Pearson, P.Geo 88 LIST OF TABLES Table 4.1 Claims Optioned from Century 18 Table 4.2 Claims Owned by New Carolin Gold Corp 23 Table 6.1 Significant Intersections Drilling, Carolin Mine 36 Table 6.2 Monthly Production Records, Table 10.1 McMaster Zone Diamond Drilling Record 53 Table 10.2 McMaster Zone Drillhole Details and Intersections 55 Table 18.1 Summary, Recommended Work Programs 79 LIST OF FIGURES 3

4 Figure 4.1 General Location Map 17 Figure 4.2 Property Claim Map 26 Figure Soil Geochemistry Anomalies 34 Figure 6.2 Relevant Diamond Drilling Locations (Ladner Gold Property) 35 Figure 7.1 Stratigraphic Column 46 Figure 7.2 Property Geology Plan 47 Figure 9.1 Geophysical Survey, 2011, Carolin Mine Area 51 Figure 10.1 McMaster Zone Drillhole Plan 54 Figure 10.2 Carolin Mine Drilling Plan 59 Figure 10.3 Idealized Longitudinal Section, Carolin Mine 60 Figure 14.1 Property Plan View showing Current Mineral Resources 72 Figure 17.1 Carolin Mine to McMaster Zone Longitudinal Section 76 Figure Survey Monuments 80 Figure 18.2 Property Diamond Drilling 81 LIST OF PHOTOGRAPHS Photograph 5.1 Remaining Mill Infrastructure 29 4

5 1.0 SUMMARY Property Description The property was assembled by Carolin Mines in the late 1970s to contain several historic small gold producers, along with numerous gold showings. At present this claim block notably includes the past producing Carolin (Idaho Zone), Emancipation and Pipestem Mines, the McMaster open pit prospect and the Carolin Mines tailings deposit. Gold showings of note include the Lorraine and Montana occurrences. Carolin Mines produced from 1982 to 1984 as a 1,000 ton per day underground operation. Approximately 45,000 oz of gold were produced from some 900,000 tons milled. The Emancipation Mine operated intermittently from 1913 to 1941 and produced a reported 2,897 oz of gold. The Pipestem Mine was in operation from 1935 to 1937 to produce a reported 248 oz of gold. The property (Figure 4.2) now consists of 204 claims covering 14,160 hectares. New Carolin Gold Corp. (formerly Module Resources) owns 52 claims (7,111 ha) and has a sales and purchase agreement with Century Mining for the remaining 152 claims. (Tables 4.1 and 4.2) This agreement enables New Carolin Gold Corp to acquire 100% of the Carolin Mine property upon completing the payments and meeting the defined conditions.. Location The New Carolin Gold Corp. Ladner Gold Property is well located, approximately 18 km northeast of Hope, B.C. and 150 km east of Vancouver, B.C. (Figure 4.1.) The southern portion of the property is in close proximity to the Coquihalla Highway, a major transportation route between Vancouver and the B.C. Interior. The 6 km access road from the Coquihalla Highway is well maintained and the property is easily accessible by four-wheel drive vehicle through to the old Carolin Mine site at 49 32ʼ N, ʼ W and 796m elevation. The McMaster Zone sits 1.2 km. northwest, at a higher elevation, and is accessed by logging roads. The property is located on topographic map sheets NTS 92H6 and 92H11 and claim maps 092H044, 092H054 and 092H064. Property Ownership and History The Carolin Mines property was assembled in the 1970ʼs, produced from and has seen sporadic review and exploration since. 5

6 Athabaska Gold Resources Ltd. conducted significant exploration in the mid-1990s, including underground development and drilling and a gold resource study of the tailings deposit. This work had considerable success in demonstrating gold mineral resources in the tailings deposit and underground in the Carolin Mine. However, production restart was not achieved due at least in part to the low gold price. Tamerlane Ventures Inc. optioned the property from Athabaska in 2004 and suboptioned the option to Century Mining the same year. The property was purchased from Athabaska Resources in 2006 and property ownership was then 30% Tamerlane Ventures, 70% Century Mining. Century had the right to purchase Tamerlaneʼs 30% at anytime. Century then optioned an up to 90% interest in the property to Module Resources (now New Carolin Gold Corp) in This option agreement was re-negotiated in 2011 to a revised agreement for the purchase and sale of the optioned claims. New Carolin Gold Corp (formerly Module Resources) has staked additional claims, purchased the Emancipation Mine claims in 2008 and has acquired additional claims through the Warkentin Option in 2012 (see press release in Section 19.0, References.) Module Resources was renamed to become New Carolin Gold Corp. in New Carolin Gold Corp. (NCGC), the Company, has entered into an agreement with the receiver to the assets of Century Mining Corp. (CMC), the Vendor, to purchase CMCʼs remaining 90% interest in the Carolin Mine and related mining properties. (See NCGC Press Release dated August 27, 2014) These assets will be acquired by NCGC for either, at their option, common shares in in the Company or a combination of cash and common shares in the Company. Completion of this purchase is subject to the Company and the Vendor meeting certain closing conditions and to approval by securities regulators having jurisdiction, including the TSX Venture Exchange. Geology and Mineralization The property extends some 28 km along the Coquihalla Serpentine Belt, an elongated (NW-SE) belt of serpentinic rocks bounded by the East and West Hozameen faults. This rock unit and fault system separates the Hozameen Group (an obducted ophiolite sequence) to the West from the Ladner Group sediments and Spider Creek Fm. greenstones to the East. This belt of rocks is host to five past gold producing mines (Carolin, Emancipation, Aurum, Pipestem and Ward) along with 24 other known gold occurrences (Figure 4.2) Mineralization at Carolin is generally hosted within a dense network of variably deformed quartz- 6

7 carbonate veins with intense albitic alteration and disseminated sulphides. The sulphide minerals are mainly pyrite, pyrrhotite and arsenopyrite and can comprise up to 15% of the mineralized rock. Gold is found as inclusions in the sulphides and less commonly as discrete grains, smears and plates. Exploration Initial exploration focused on testing broad recumbent fold structures in the Ladner Group sediments, where gold and sulphide mineralization was localized by major northwest trending fault systems. This early work, from original claim-staking in 1915, through to the 1960ʼs resulted in minor gold production from a number of showings (Emancipation and Pipestem) and the recognition of the Idaho zone as a potential producer. Carolin Mines undertook a major exploration program on the Idaho claims in 1973 and by the end of 1974 had indicated the mining potential of the zone. The McMaster Zone was discovered by soil geochemistry in 1975 (Figure 6.1.) The surface showings were trenched and diamond drilled and demonstrated a near-surface tonnage potential. Post-production exploration by Athabaska Resources in discovered significant gold mineralization in the Spider Creek Fm. volcanics (andesitic greenstones) as well, to the north and west of the known mineralization in the Carolin Mine Idaho Zone. Trenching and sampling above the Carolin mine workings demonstrated gold mineralization on the surface projection of the Idaho Zone. Additional trenching and diamond drilling on the McMaster Zone continued to show positive results. New Carolin Gold Corp (then Module Resources) continued surface drilling on the near surface McMaster Zone in 2009 and 2010 and test drilled the mine tailings deposit. Work on the McMaster Zone confirmed continuity and expanded the strike length of the mineralized zone. The Caroline Mine underground workings were examined in 2009 and 2010, and are in good condition, such that underground exploration in the mine can be initiated quickly as required. New Carolin Gold Corp. completed a 12-hole surface drill program in late 2012 at the Carolin mine. This work was undertaken to test the starter pit potential of an area around the 1015 portal, an area above the main mine workings that had received only sporadic exploration around surface showings. The 12-hole drill program sought to test the area, known as the Idaho zone, between the surface showings and the underlying mine workings. Two holes were drilled from each of 6 drill setups. All holes encountered significant mineralization to confirm the potential for a starter pit and further work is indicated. Mining History 7

8 The Carolin Mine was commissioned in late 1981 at a development cost of $40 million. Milling began in early 1982 and continued to late 1984, processing some 900,000 tons of ore to recover approximately 45,000 oz of gold. Gold recoveries were generally well below expectations, but did improve with time and experience. Mine records indicate that nearly half the mill head gold was not recovered but was sent to the tailings deposition area. (Table 6.3) The mine ceased operation in 1984 due to low gold recoveries and grade control problems, combined with the rapidly falling gold price. Mine access was provided by a number of adits and ramps, with production by blasthole and by room and pillar methods. Ground conditions were generally excellent. Backfill was not provided for ground support, but the workings remain in good condition to this day. The ore was crushed underground and moved by conveyor belt to the external fine ore bin. The adjacent mill, with a nominal 1,500 tpd capacity, processed the ground ore by flotation, cyanidation and a Merrill Crowe zinc precipitation circuit. The mill buildings collapsed due to snow loading in 2004, and little remains today of the mineʼs surface infrastructure except for access roads and the tailings deposit. No mining has taken place at the McMaster Zone, but a number of trenches provide visual confirmation of the geology and mineralization. Mineral Resources and Reserves A number of historic mine site mineral resource and mineral reserve estimates are reported in the literature. These estimates were relevant as calculated and reliable as confirmed by mining operations or subsequent recalculation to modern standards. These historic mineral resources were reported using different categories than are used at this time and must not be relied upon as current. An internal mineral resource was reported by Athabaska Resources in 1996 for the tailings deposit, based on a 60-hole drill program. This historic mineral resource was calculated and reported using methodology and reporting standards of the era and must not be relied upon as current. The data used in that estimate was verified from mine records and reports by C. Pearson P.Geo and used to develop a deposit modeled and computer- generated Mineral Resource for the tailings deposit. This estimate was completed to industry standards and best practices guidelines. It is reported in Section 14.0 of the Technical Report submitted on September 29, 2011 by Module Resources (now New Carolin Gold Corp). and summarized in Section 14.1 of this report. 8

9 Several historical Mineral Resource estimates were completed on the McMaster Zone. These calculations are not well documented, are reported under non-standard categories and must not be relied upon as current. The McMaster database consists of 38 surface drillholes and a number of trench samples. C. Pearson used this database to complete a traditional sectional resource calculation for comparison to the historical estimates and to the current geology modeled computerized estimate done by Snowden Mining Industry Consultants in A summary of this current Mineral Resources estimate for the McMaster Zone is found in Section Cliff Pearson, P.Geo (Pearson Geological Services) has examined a number of the resource and reserve estimates reported for the Carolin Mine during its production life and finds them to be professionally and competently done. The various estimates are transparent and well reconciled to the production and milling history. They are, however reported under resource categories that do not comply to current industry resource reporting standards and are valid for comparison purposes only. Technical data from the production period (surveys, mine openings, mined out areas, geological sampling, diamond drill hole records, grade reconciliation records etc.) is well preserved and has been used to construct a computerized block model of the deposit.. This data was used to complete a current Mineral Resource estimate for the Carolin mine, as summarized in Section 14.3 An internal estimate of exploration potential within the Carolin zone was completed in 2009 and attributed to Century Mining Corporation. This indicates a range of potential quantity and grade of gold mineralization as a target for exploration work. The expressed quantity and grade of gold mineralization is conceptual in nature and there has not been sufficient exploration work done to date to define a mineral resource. It is uncertain if the exploration work recommended (Section 18) will result in the target being delineated as a mineral resource. Section 12.0 details the data verification initiatives undertaken to support and confirm the data used in computer modeling for the current Mineral Resource estimates for the Carolin Mine, McMaster Zone and Tailings deposit. These estimates are summarized below and in Section The current Carolin Mine Inferred Mineral Resource is reported, at a 2.0 gpt gold cutoff grade, as 2,589,000 tonnes grading 3.34 gpt gold (estimating a total gold resource of 278,000 oz). A second Inferred Mineral Resource was estimated as well, at a 0.5 gpt gold cut-off grade, to reflect open pit mining potential. This estimate was 12,132,000 tonnes grading 1.53 gpt gold and containing a total gold resource of 607,000 oz. The current McMaster Zone Inferred Mineral Resource is reported at a 0.5 gpt gold cut-off grade to acknowledge itʼs open pit potential. This estimate was 3,575,000 tonnes grading 0.69 gpt gold and containing a total gold resource of 79,540 oz. 9

10 The current Tailings deposit Indicated Mineral Resource estimate is reported, at a 1.0 gpt gold cut-off, as 445,000 tons grading oz/ton gold and containing 24,000 oz. gold. The current Inferred Mineral Resource for this deposit, at the same 1.0 gpt gold cut-off, is 93,000 tons grading oz/ton and containing 5,000 oz. gold. 10

11 Conclusions and Recommendations The Carolin Mine property (Ladner Gold Property) includes the formerly producing Carolin mine (45,000 oz gold from 900,000 tons milled), much smaller, sporadic producers (Emancipation mine at 2,897 oz and Pipestem mine at 248 oz), McMaster Zone surface drilled gold resource, gold bearing tailings deposit, along with known gold bearing surface showings (eg Montana, Lorrainne). The historic mines and known gold occurrences noted above lie along a well mineralized trend parallel to the West Hozameen Fault, within 600 metres of it and within a 6 km strike length along trend. Mineral Resource estimates have now been completed to industry standards and best practices guidelines for the Carolin Mine and McMaster Zone (May 15, 2012 technical report) along with the tailings deposit (September 29, 2011 technical report). These reports demonstrate significant Inferred gold resources and considerable exploration potential. Data verification of current and historical exploration programs, mineral resource estimates and mine production records confirms that the work programs to date have been completed in a reasonable and professional manner. In summary, specific recommendations are made (Section 18.0) to New Carolin Gold Corp for property advancement. These include collating and reviewing all available data, computer modeling that data, building a geological model, developing appropriate scale geology cross-sections along the mineralized trend and focusing exploration within the Carolin mine to confirm and upgrade mineral resources. Work programs recommended include surface and underground mapping, geochemical sampling programs and geophysical surveys. In addition, underground drilling programs are strongly recommended to confirm historic data and upgrade existing mineral resources, discover new resources and delineate open pit and underground mining potential. 11

12 2.0 INTRODUCTION AND TERMS OF REFERENCE 2.1 Introduction This report was commissioned by New Carolin Gold Corp. and reviews the Carolin Mines property, a past gold producer near Vancouver, B.C. Available data for the Carolin Mine and McMaster Zone gold bearing mineralized zones has been collated and verified by C. Pearson and was used to build a computer block model for each zone. These models were then used to generate current industry standards compliant Mineral Resource estimates, as summarized in Section 14.2 and The Tailings deposit Mineral Resource was calculated in 2011, using the available data as verified by C. Pearson. A block model of the deposit was constructed and enabled a computer generated Mineral Resource estimate to current industry standards This estimate is summarized in Section This report has been prepared by C. Pearson, P.Geo. as an Independent Qualified Person. 2.2 Purpose of Report The report summarizes Mineral Resource estimates for the Carolin Mines Idaho Zone, the near surface McMaster Zone and the on-site Tailings deposit and recommends the ongoing work required in order to upgrade the Inferred resources contained therein to a higher confidence level as required to allow economic studies to proceed. It also notes and verifies information regarding the New Carolin Gold Corporation property disclosed since the last Technical Report in This disclosure includes the results of a 2012 surface drill program, along with property claims status and ownership updates. 2.3 Sources of Information The material included in this technical report or referenced therein comes from site visits, previous technical reports, government reports, mine operating reports, press releases and personal discussions. G. Giroux provided the 2011 tailings deposit Mineral Resources estimates and calculation parameters. W.A. Dzick provided his 2012 Mineral Resource calculations and clarified calculation methods and results. New Carolin Gold Corp. provided the required historical and current data and reports as requested. A list of all references is provided in Section

13 2.4 Data Gathering and Site Visits Independent QP C. Pearson, P.Geo visited the property on July 25, 2008 and again on September 11, He met with W.A. Dzick, Snowden Mining Industry Consultants Inc.,, on December 21, 2011, February 1, 2012 and February 24, 2012 to review the mineralized zone models and Mineral Resource estimates. Mr. Pearson also examined and verified the remaining drill core from the McMaster Zone drilling. This work was completed February 1, 2012, at the company core storage site in Aldergrove, B.C. In addition, Mr. Pearson visited both the property and the new core storage facility in Hope, B.C. on October 21, This enabled him to verify access, adits and tailings deposit condition, along with the 2012 surface drilling setups and drill core. 2.5 Units, Conversions and Abbreviations All references to currency in this report are to Canadian dollars ($Cdn) All historic gold assays from exploration programs pre-1984 were reported in ounces per ton (oz/t or opt). Technical reports from 1984 to the present contain analyses in both Imperial and Metric format. (Note conversion factors below). Mineral Resource estimates and production records are reported in the format used in the various quoted references and may be converted as required. (Note conversion factors below) 13

14 Conversion Factors Used Imperial Unit Metric Equivalent short ton (t) tonne troy ounce (oz) grams 1 troy oz per ton (oz/t) grams per tonne foot (ft) metres mile 1.61 kilometres acre hectares Abbreviations Gold value, fire assay Gold Silver Troy ounce Gram Kilogram Ton Metric ton (tonne) Troy ounce per ton Grams per tonne Parts per million Metre Kilometre Hectare Quality Assurance/Quality Control Centrigrade aufa au ag oz gm (g) kg t to oz/t (opt) gm/to ppm m km ha QA/QC C 14

15 3.0 RELIANCE ON OTHER EXPERTS There was no reliance on other experts. 15

16 4.0 PROPERTY LOCATION AND DESCRIPTION 4.1 Property Location The Carolin Mine property is centered at coordinates 49 32ʼ N and ʼ W, at an elevation of 796 metres above sea level. Access is from the Coquihalla Highway, the main transportation link between Vancouver and the British Columbia interior regions, by 6 km of well-maintained gravel road. The exit from the highway is approximately 18 km from Hope, B.C. and is clearly signposted. The District of Hope is a local distribution and transportation hub some 150 km east of Vancouver by the TransCanada Highway. (Figure 4.1) 4.2 Property Description The property consists of a northwesterly orientated group of contiguous claims extending approximately 28 km in that direction, with a maximum width of 6.8 km (Figure 4.2). This claim group contains 204 contiguous mineral claims covering an area of 14,160 hectares. New Carolin Gold Corp. owns 52 claims covering 7,111 hectares, with the remaining 152 claims (7,049 ha) under a sales and purchase agreement with Century Mining. (Tables 4.1 and 4.2) The majority of these claims now record a good-to-date of 2018, the remainder are New Carolin Gold Corp has all the permits required for the surface and underground drill programs recommended in this report. 16

17 FIGURE PROPERTY LOCATION MAP 17

18 Table 4.1 Claims Optioned from Century Tenure Number Claim Name Area (ha) Good To Date Issue Date Map Number Owner FMC MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER /jan/ /jun/30 092H MCMASTER jan/ /jun/30 092H MCMASTER /jan/ /jul/03 092H MCMASTER /jan/ /jul/03 092H MCMASTER /jan/ /jul/03 092H MCMASTER /jan/ /jul/03 092H MCMASTER # /jan/ /jul/12 092H MCMASTER # /jan/ /jul/12 092H MCMASTER # /jan/ /jul/12 092H MCMASTER # /jan/ /jul/12 092H MCMASTER jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H054 18

19 MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/22 092H MCMASTER /jan/ /jul/29 092H MCMASTER /jan/ /jul/29 092H MCMASTER /jan/ /jul/29 092H MCMASTER /jan/ /aug/22 092H MCMASTER /jan/ /aug/22 092H MCMASTER /jan/ /aug/22 092H MCMASTER /jan/ /aug/22 092H MCMASTER /jan/ /aug/22 092H MCMASTER /jan/ /aug/22 092H MCMASTER /jan/ /aug/22 092H MCMASTER /jan/ /aug/23 092H MCMASTER /jan/ /aug/23 092H MCMASTER /jan/ /aug/23 092H MCMASTER /jan/ /aug/23 092H MCMASTER /jan/ /aug/25 092H MCMASTER jan/ /aug/25 092H MCMASTER /jan/ /aug/25 092H MCMASTER /jan/ /aug/25 092H MCMASTER /jan/ /aug/25 092H MCMASTER /jan/ /aug/25 092H MCMASTER /jan/ /aug/25 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H054 19

20 MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/25 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H MCMASTER /jan/ /sep/24 092H ELMAN CREEK # /jan/ /jun/28 092H054 20

21 M.M. FR /jan/ /jun/15 092H M.M. FR /jan/ /jun/28 092H MCMASTER /jan/ /nov/01 092H MCMASTER /jan/ /nov/01 092H MCMASTER /jan/ /nov/01 092H MCMASTER /jan/ /nov/01 092H MCMASTER /jan/ /nov/01 092H MCMASTER /jan/ /nov/02 092H MCMASTER /jan/ /nov/02 092H MCMASTER /jan/ /nov/02 092H MCMASTER /jan/ /nov/02 092H MCMASTER /jan/ /nov/02 092H REFER TO LOT TABLE /jan/ /jul/22 092H REFER TO LOT TABLE /jan/ /jul/22 092H REFER TO LOT TABLE /jan/ /jul/22 092H REFER TO LOT TABLE /jan/ /jul/22 092H REFER TO LOT TABLE /jan/ /jul/22 092H REFER TO LOT TABLE /jan/ /jul/22 092H REFER TO LOT TABLE /jan/ /jul/22 092H REFER TO LOT TABLE /jan/ /jul/22 092H CENTURY /jan/ /oct/31 092H CENTURY /jan/ /oct/31 092H CENTURY /jan/ /oct/31 092H MODULE /jan/ /nov/30 092H MODULE /jan/ /nov/30 092H MODULE /jan/ /nov/30 092H MODULE /jan/ /nov/30 092H MODULE /jan/ /nov/30 092H MODULE /jan/ /nov/30 092H MODULE jan/ /nov/30 092H MODULE /jan/ /nov/30 092H MODULE /jan/ /nov/30 092H MODULE /jan/ /nov/30 092H MODULE /jan/ /nov/30 092H 21

22 MODULE /jan/ /nov/30 092H /jan/ /jul/16 092H /jan/ /jul/16 092H /jan/ /jul/16 092H /jan/ /jul/16 092H /jan/ /jul/16 092H LESSONS LEARNED /jan/ /jul/16 092H LESSONS LEARNED /jan/ /jul/16 092H LESSONS LEARNED /jan/ /jul/16 092H /jan/ /jul/17 092H /jan/ /mar/24 092H /jan/ /mar/24 092H /jan/ /mar/25 092H /jan/ /mar/25 092H /jan/ /mar/26 092H /jan/ /mar/26 092H /jan/ /mar/26 092H /jan/ /mar/26 092H /jan/ /mar/26 092H 22

23 Table 4.2 Claims Owned by New Carolin Gold Corp. Tenure Number Claim Name Area (ha) Good to Date Issue Date Map Number Owner FMC EMAN /jan/ /jul/13 092H NEW CAROLIN GOLD MODULE AA /jan/ /jul/15 092H NEW CAROLIN GOLD MODULE BB /jan/ /jul/15 092H NEW CAROLIN GOLD MODULE CC /jan/ /jul/16 092H NEW CAROLIN GOLD MODULE DD /jan/ /jul/16 092H NEW CAROLIN GOLD MODULE DD /jan/ /jul/20 092H NEW CAROLIN GOLD MODULE EE /jan/ /jul/20 092H NEW CAROLIN GOLD MODULE FF /jan/ /jul/20 092H NEW CAROLIN GOLD MODULE GG /jan/ /jul/20 092H NEW CAROLIN GOLD MODULE HH /jan/ /jul/20 092H NEW CAROLIN GOLD MODULE JJ /jan/ /jul/22 092H NEW CAROLIN GOLD MODULE LL /jan/ /sep/30 092H NEW CAROLIN GOLD MODULE XX /jan/ /oct/31 092H NEW CAROLIN GOLD EMANCIPATION /jan/ /nov/28 092H NEW CAROLIN GOLD /jul/ /May/6 092H NEW CAROLIN GOLD /jul/ /May/6 092H NEW CAROLIN GOLD /jul/ /May/6 092H NEW CAROLIN GOLD

24 PERL /nov/ /nov/17 092H NEW CAROLIN GOLD CGB /jun/ /feb/26 092H NEW CAROLIN GOLD EUREKA ONE /jul/ /jan/07 092H NEW CAROLIN GOLD /jul/ /jan/07 092H NEW CAROLIN GOLD CGB /jun/ /mar/24 092H NEW CAROLIN GOLD CGB-N FR /jun/ /apr/02 092H NEW CAROLIN GOLD MODUL E QUEEN /jul/ /jul/27 092H NEW CAROLIN GOLD CGB-NC /jun/ /oct/11 092H NEW CAROLIN GOLD LADNER /jul/ /oct/21 092H NEW CAROLIN GOLD /jul/ /oct/22 092H NEW CAROLIN GOLD FRACTIONS /jul/ /nov/23 092H NEW CAROLIN GOLD AUSERP /jun/ /feb/12 092H NEW CAROLIN GOLD MCGRAZERS /jun/ /mar/05 092H NEW CAROLIN GOLD SOWAQUA SW /jun/ /mar/26 092H NEW CAROLIN GOLD HOZW /jun/ /mar/26 092H NEW CAROLIN GOLD ST. PATRICK /jun/ /mar/30 092H NEW CAROLIN GOLD SOW SE /jun/ /apr/02 092H NEW CAROLIN GOLD LADNER /jul/ /apr/13 092H NEW CAROLIN GOLD LADNER /jul/ /apr/13 092H NEW CAROLIN GOLD CGB NORTH /jul/ /may/08 092H NEW CAROLIN GOLD HOZ SE /jun/ /may/23 092H NEW CAROLIN GOLD SOWAQUA CREEK /jul/ /jul/02 092H NEW CAROLIN GOLD MT SNIDER /jul/ /jul/13 092H NEW CAROLIN GOLD

25 LOWER ROAD /jul/ /jul/15 092H NEW CAROLIN GOLD CGB MT SNIDER /aug/ /aug/24 092H NEW CAROLIN GOLD /jan/ /jan/05 092H NEW CAROLIN GOLD NEW CAROLIN EAST /dec/ /dec/03 092H NEW CAROLIN GOLD /jan/ /jan/08 092H NEW CAROLIN GOLD /feb/ /feb/09 092H NEW CAROLIN GOLD FRACTION /feb/ /feb/23 092H NEW CAROLIN GOLD /mar/ /mar/23 092H NEW CAROLIN GOLD

26 FIGURE PROPERTY CLAIM MAP 26

27 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 5.1 Property Access The Carolin Mine property is located in mountainous terrain some 175 km northeast of Vancouver, B.C. and is easily accessed. The paved, generally four-lane, TransCanada Highway provides access to Hope, B.C., the local distribution hub. From there some 18 km of paved road (Coquihalla Highway) leads to the property access route, which is 6 km of wellmaintained gravel road. This road accesses the Carolin Mine property infrastructure, including the mine access adits to the Idaho Zone and the permitted tailings deposit. Four wheel drive logging roads from this point provide access to the McMaster Zone, Pipestem Mine, Emancipation Mine and many property gold showings. 5.2 Physiography and Climate The property is situated in the northern Cascade Mountains of British Columbia. Early exploration was limited by the rugged topography and dense vegetation characteristic of the entire region, although much of the southern portion of the claim group has been logged in the past. Logging of the first and second growth fir and cedar tree cover continues today, opening up more of the claim block to exploration. Elevations within the claim block range from 600 metres in valley bottoms to 1,560 metres atop Spider Peak. The Carolin mill site is located at an elevation of 796 metres with the tailings pond being located above the mill to the southeast at approximately 1,100 metres elevation. Weather conditions are typical of the Coast Mountains, generally wet and mild. Considerable snow can be expected at the Carolin site due to its elevation. Weather records for the nearby, but lower elevation, Hope Slide show average annual rain precipitation at 925 mm and snow as 286 cm. Most of the snow fell from November to March, with snow cover typically 35 cm during that period. Average monthly temperatures during the year range from -3 degrees C to plus 15 degrees C. Historical reports from the mine site indicate snow cover there may reach 3 metres, but that exploration and mining activities are possible year round. 5.3 Infrastructure and Local Resources The property was in production from 1982 to 1984 and has been intermittently explored 27

28 since then. Power to the site during operations was provided by power lines from the Coquihalla Highway. The power cables and poles have been removed but can be reinstalled if needed. Much of the surface infrastructure has been removed. Some of the Carolin operations milling facility remains, but it is unclear if any useful equipment can be salvaged. (Photograph 5.1) The underground adits are in good shape and open. Underground access drifts and mined out areas are reported to be in good condition throughout. Gravel logging roads provide access to the McMaster Zone, a trenched and diamond drilled near surface mineralized deposit. This zone has been the focus of surface exploration and drilling by Module Resources (now New Carolin Gold Corp) in 2008 and The permitted tailings pond is well maintained, easily accessible, water covered and should be amenable to reprocessing of the gold resource defined therein, as summarized in Section Local resources are in place to support year-round mining activities on site. There are readily available local sources of power, water, tailings storage and waste disposal, operating supplies and services. Mining personnel are available nearby in Hope and/or Vancouver. 28

29 Photograph 5.1 Remaining Mill Infrastructure 29

30 6.0 HISTORY 6.1 Prior Ownership The Carolin (Ladner Gold) property was first assembled by Carolin Mines in the late 1970s, operated from 1982 to 1984 and then closed. It was explored by Athabaska Gold Resources Ltd. (Athabaska) in the 1990s. Ultimately, Athabaska filed for bankruptcy and Tamerlane Ventures Inc. (Tamerlane) negotiated with the Trustee in the bankruptcy the right to earn a 90% interest in the property, with the right to a further 10% if Athabaska did not contribute its portion to the outlined exploration programs. Tamerlane sub-optioned their option in the Carolin Mine property in 2004 to Century Mining Corporation (Century), whereby Century had the exclusive right and option to earn an undivided 70% interest in the property with the right to purchase a further 30% for $6,666 per percent. Conditions to be met include replacing the $200,000 environmental bond and assuming the work commitments on the property. On March 2, 2006 Tamerlane amended the 2004 option agreement with Century to give Century the exclusive right to earn a 70% interest in the property upon payment of $40,000 with the other conditions, except for exploration funding, being waived. Tamerlane acquired from Athabaska 100% title and interest in the property in an agreement dated April 3, Property ownership was then 30% Tamerlane and 70% Century. Century had the right to purchase Tamerlaneʼs 30% at anytime for $200,000. In April 2007 Module Resources Inc. (Module) signed a letter of intent to option from Century 90% of the Caroline Mine and associated Ladner Creek properties, subject to approval by the TSX NEX Exchange and the TSX Venture Exchange, in exchange for a maximum payment of $4,900,000 cash, $3,500,000 in property development expenditures, 2 million common shares of Module and a Net Smelter Return Royalty of 3% payable to Century. In June 2011 Module Resources Inc (now New Carolin Gold Corp.) and Century Mining Corp. reached an agreement in principle to revise this property option agreement. Terms of the new purchase and sale agreement included: consideration of $5 million in cash plus 3.5 million common shares of Module Resources to be paid or issued to Century Mining, over four years time frame. upon signing the agreement, Module (now New Carolin Gold Corp) would have a 10% earned interest and would obtain an additional 40% interest upon completing cash payments of $2.5 million by October 31,

31 The 3% NSR Royalty to Century Mining continues, but can be repurchased by Module (now New Carolin Gold Corp) for $1.5 million per percent. This 3% NSR Royalty to Century will not apply to gold recovered from the tailings deposit resource, which was the subject a 2011 technical report. The back-in and joint venture rights of Century under the 2008 agreement will be eliminated. Module replaced Centuryʼs $200,000 mine permit bond with the B.C. government by August 31, (see Press Releases Sept. 30, 2011 and November 29, 2011) Module Resources Inc. changed itʼs corporate name to New Carolin Gold Corp. on October 18, McElhenney Associates Land Surveying Ltd. completed an initial site survey on the property in October, 2011 This survey re-established ground survey control stations from 1982, and added new stations around the Carolin Minesite, McMaster Zone and tailings impoundment areas. (Press Release, October 27, 2011) New Carolin Gold Corp. (NCGC), the Company, has entered into an agreement with the receiver to the assets of Century Mining Corp. (CMC), the Vendor, to purchase CMCʼs remaining 90% interest in the Carolin Mine and related mining properties. (See NCGC Press Release dated August 27, 2014.) These assets will be acquired by NCGC for either, at their option, common shares in the Company or a combination of cash and common shares in the Company. Completion of this purchase is subject to the Company and the Vendor meeting certain closing conditions and to approval by securities regulators having jurisdiction, including the TSX Venture Exchange. The closing date of this agreement was April 15, 2015, and the parties are currently negotiating an extension to April 15, Exploration History Property Exploration Pre-Production Placer gold was produced from creek gravels in the region from the 1890s and lode gold in quartz veins was reported. Prospector William Teague noted quartz vein gold near Ladner Creek, close to the present property boundary, in The Kettle Valley Railway was developed along the Coquihalla River from , opening up the area to intensive prospecting and leading to additional lode gold discoveries. The most noteworthy occurrence became the Emancipation Mine which produced intermittently from 1916 to Total production was minor, estimated at 2,897 oz. Another small mine, the Pipestem, operated in the 1930ʼs to produce some 248 oz gold These old mine sites are within the property boundary and along the mineralized trend defined by the Carolin Mine (Idaho Zone) and McMaster Zone. 31

32 The Idaho claims, site of the subsequent Carolin Mine development, were staked in 1915, but little exploration was conducted until At that time a series of shallow diamond drill holes was completed across the mineralized zone. These holes averaged 0.19 oz/t gold over 17.7 feet (5.4 gm/to gold over 5.4 m.) Sporadic follow-up work continued until 1973 when exploration interest in the property was renewed as the gold price improved. Carolin Mines Ltd. acquired the property at that time and advanced the Idaho Zone to production in late Concurrent property-wide surface exploration and soil geochemical test programs led also to the discovery in 1974 of the McMaster Zone. (Figure 6.1) This mineralized zone was found on surface (elevation 1,482m. above sea level) some 1.2 km NW of the Carolin Mine. The mineralization was explored by surface trenching and diamond drilling, with positive results. Surface drilling in 1975 totaled metres, in 7 drill holes. All of the holes encountered good gold grades near surface. However, the push to bring the Idaho Zone to production drew attention away from the McMaster and it was not re-evaluated until 1989, after the Carolin Mine ceased production. (see Section 6.2.3) Property Exploration - Production Years Pre-production geological reserves were in the order of 1.5 million tonnes, grading 4.83 gm/to. Production records through to mine closure in 1984 indicate just over 800,000 tonnes mined at a reported mill head grade of 3.22 gm/to (881, oz/t). It has been estimated that 85,000 oz of gold were mined but only 45,000 oz recovered in the mill. Excessive mining dilution was reported, leading to the lower than expected head grades. Mill recoveries were below target as well, averaging only 53.4% gold recovery. This indicates that almost half the mined gold reported to the mill tailings and ultimately resides in the tailings deposit, the subject of a 2011 Mineral Resource report providing a current Mineral Resource estimate done to industry standards and best practices guidelines. During the life of the mine underground exploration, development and drilling continued along trend toward the McMaster Zone to the northwest. This work was generally successful in confirming known gold reserves and discovering additional gold resources. (Figures 10.2, 10.3,) Annual mine specific mineral resource and reserve reports tracked tons mined and milled. These reports reconciled the tonnages and detailed the new ore discoveries through ongoing definition drilling The 1984 report was examined in detail to provide a standard with which to compare later resource estimates Property Exploration - Post Production Athabaska Gold Resources Ltd. acquired the property after production ceased and completed significant exploration drilling and underground development within the Carolin mine 32

33 in , aimed at restarting operations. The 1995 work included 110 metres of underground development, 1,630 metres of underground diamond drilling and 564 metres of surface diamond drilling. This exploration was successful in defining new targets, confirming expected gold resources and led to a more comprehensive program in The 1996 property exploration program by Athabaska Resources included 280 metres of underground development and 7,010 metres of underground diamond drilling. This work confirmed that mineralization extended some 200 metres NW of previous mining and discovered a new type of higher grade mineralization in the Spider Creek Formation volcanics west of the mined trend. Table 6.1 reports significant drill hole mineralized intercepts from that drilling. Surface trenching above the mine adits encountered gold mineralization along the surface projection of the Idaho Zone. This work comprised 4 trenches, sampled over an total distance of 79.4 metres. The average grade of the 65 chip samples taken was 5.76 gpt gold, demonstrating the potential for a small open pit to be developed. A small surface drill program in 2012 confirmed the presence of gold mineralization between the surface trenches and the underground workings. The database for the Carolin mine now includes over 40,000 metres of diamond drilling and 10 km of underground development. Unfortunately no diamond drill core remains intact, except that from the 2012 program. The McMaster Zone, a surface occurrence along trend to the NW of the Carolin mine, was drilled sporadically after mine shutdown. Work is reported in 1989, 1995 and 1996 as defining several discontinuous gold mineralized zones with open pit potential. In 1989, 6 surface drillholes were completed for a total of metres drilled. All holes encountered good gold grades to expand the mineralized zone along trend but work was suspended for a number of years. Athabaska Resources recommenced exploration at the McMaster in 1995, with a 6 hole surface drilling program, totaling metres. Five of the holes encountered good gold grades and one hole was abandoned near surface. These positive results supported additional exploration in That drilling program included 9 surface holes, for a total of 1,040.9 metres drilled. All the holes successfully intersected gold mineralization to confirm and expand the zone, particularly down dip. These drill programs are summarized in Tables 10.1 and 10.2 The mine site tailings deposit was drilled in 1995 to confirm that the gold not recovered by the milling process during the production years did indeed reside in the tailings. A 60 hole program covered the half of the tailings deposit not water covered at the time. Sample lengths ranged from 0.5 feet to 15.5 feet, providing 392 tailings samples for assay. This data base provided the basis for a traditional historic mineral resource estimate in 1996, by Athabaska Resources, and the current mineral resource estimate completed in 2011 and summarized in Section

34 FIGURE SOIL GEOCHEMISTRY ANOMALIES 34

35 Figure 6.2 (Relevant Diamond Drilling Locations, Ladner Gold Property) shows the main historically diamond drilled areas along the property mineralized trend. FIGURE RELEVANT DIAMOND DRILLING LOCATIONS (LADNER GOLD PROPERTY) 35

36 Table 6.1 Significant Intersections, Drilling, Carolin Mine DDH No. From (m) To (m) Width (m) Gold gm/to Width (ft) Gold oz/t

37 DDH No. From (m) To (m) Width (m) Gold gm/to Width (ft) Gold oz/t LD Historical Mineral Resources There are currently no historical mineral resource estimates of in-situ mineralization that comply with current NI reporting standards and industry best practices guidelines for Mineral Resource estimation and none are reported herein. A number of historic in-situ resource reports generated by other authors were reviewed by a Qualified Person (C. Pearson) to confirm data quality, estimation methods and reporting standards for comparison purposes. 6.4 Historical Production The Emancipation Mine is reported to have produced 2,897 oz gold and 605 oz silver while operating intermittently from 1916 to Three other small operations (Aurum, Pipestem and Ward) report total production of 940 oz gold around the same time. Carolin Mines produced for 3 years ( ) from the Idaho Zone, with total gold production estimated at close to 45,000 oz, from some 900,000 tons of ore milled, including 394 oz of gold recovered from 10,410 tons of mine tailings re-processed as the mine was shutting down (Table 6.2) Carolin produced gold dore bars for shipment to the Royal Canadian Mint. The mine operated as a 1,000 to 1,500 tons per day room and pillar/blasthole underground operation. Mined out areas were not backfilled but ground conditions were generally good and the workings are intact today. Mine tailings were sent to a dedicated storage facility about 1 km from the milling facility and stored behind a well constructed but unlined tailings dam. Gold recoveries in the mill were not as expected and the tailings deposit is calculated to contain significant gold content. Mine records demonstrate that the mine operated within acceptable cost and productivity parameters. Grade control and ore dilution issues were evident, and adversely affected the gold grade delivered to the mill. 37

38 The mine adits are well secured and the underground workings in good shape, such that renewed underground production, development, backfill placement and/or exploration can be quickly and reasonably undertaken. 6.5 Mineral Processing History The Carolin Mill was constructed in the early 1980s and operated from Operations ceased due to a combination of low gold prices and poor gold recovery. Gold recoveries did improve each year of operation, but not enough to keep with up with dropping gold prices. The facility was crushed by excessive snow load in the winter of The area was cleaned up by Century Mining in 2006, leaving only the rod mill, ball mill, regrind mills and fine ore bin in place. (Photograph 5.1) This remaining infrastructure is deteriorating through time and vandalism. The underground crusher was located at the lowest point in the mine and included both jaw and cone crushers. Ore was crushed to 3/4 inch and fed to the surface fine ore bin via an underground conveyor system. The crusher is believed to be in place but the area is flooded and cannot be examined without de-watering. On surface, ore was fed to the ball mill/rod mill combination for final crushing, then on to the flotation circuit. Flotation concentrate was reground prior to cyanidation and gold recovery in a Merrill Crowe circuit. The tailings were pumped uphill to the storage area, located some 250 metres above the mill. Original metallurgical studies had predicted a gold recovery of over 80%. Actual gold recoveries are summarized in Table 6.3. Monthly gold recovery fluctuated widely but averaged only 53.4% for the life of the mine and only 65.6% in the best year (1984). The Carolin property was acquired in the 1990s by Athabaska Gold Resources. In 1995, they completed a test drilling program on the tailings deposit and initiated metallurgical testing on both in-situ mineralization and tailings. This work was conducted by Lakefield Research and Melis Engineering and was aimed at achieving acceptable gold recovery from both materials. Test work on the in-situ material indicated a medium grade flotation concentrate could be produced at a grade of 350 gm/to Au, giving an expected gold recovery of 83%-84%. The tailings material was tested as well for gold recovery, with favorable results. Work programs encompassed head grade variation, screen analysis, grinding indices, batch flotation tests, reagent optimization, smelter payments analysis, acid generating potential and LC50 fish survival tests. Several flow sheets were developed to provide this level of gold recovery, using the existing mill, and additional test work was recommended. Unfortunately, Athabaska failed to 38

39 bring the operation back into production and the mill facility was damaged by snow-load in 1996 and is now inoperable. Any re-start of operations on site will require a new milling facility, temporary or permanent construction. Module Resources (now New Carolin Gold) in 2009 drilled nine short holes into the tailings deposit from a floating drill rig. This program provided some 70 kg of tailings which confirmed the gold content of that material. Mineral processing studies were initiated to confirm the Lakefield results and define a viable process flows sheet. New Carolin Gold Corp. has recently recovered diamond drill core for metallurgical testing. This core came from a number of representative drill holes from the McMaster Zone 2009/2010 surface drill programs. The material was provided to SGS Canada Ltd. for analysis and testing. (see Section 13.0) 39

40 TABLE 6.2 MONTHLY PRODUCTION RECORDS Month Tons Milled Grade Oz/Ton Oz produced Recovery % Comments Jan.-June , Pre-production July, , August, , September, , October, , , November, , , December, , , Total 258, , Averages January, , , February, , , March, , , Environmental April, 1983 nil nil nil nil Shutdown May, , June, , , July, , , August, , , September, , , October, , , Month Tons Milled Grade Oz/Ton Oz produced Recovery % Comments November, , , December, , , Total 382, , Averages 40

41 January, , , February, , , March, , , April, , , May, , , June, , , July, , Float only August, , September, , Total 239, , Averages TOTAL MINE LIFE 881, , OCTOBER, , Reprocessing tailings 6.6 Historical Sampling Method and Approach Details of the historic sampling methods and assaying procedures are not available to the author for many of the sampling programs, and cannot be verified. These procedures and methods are reported by other qualified authors to be professional in the context of the time. In general, exploration samples were assayed by either Chemex Labs (North Vancouver) or Acme Labs of Vancouver, using fire assay procedures. Carolin Mineʼs monthly and other reports, covering the time period describe a typical operating mine set of sampling procedures and parameters. Ore definition and later exploration drilling activities were professionally completed. Production sampling of run-of-mine material was conducted at several locations, and included in-stope samples, haulage system samples and Mill samples. These sample values were used in grade reconciliation and grade control and demonstrate that the gold grades in the deposit were generally as estimated in the ore reserves. Exploration drilling at the McMaster Zone in 1989, by New Global Resources, is well described in a report by J. T. Shearer. In that program previously excavated surface trenches 41

42 and completed surface drill holes were resurveyed and tied to the property grid and the new, and current, baseline. The 1975 drill core was re-logged to conform to current stratigraphy. Drill core handling is described in detail and was done professionally. Sampled core was transported by truck to Chemex Labs in North Vancouver, and a number of samples sent to a second lab for check assay. Chemex work procedures 207, 214 and 236 were noted on the assay certificates, defining sample prep and gold fire assay procedures. Silver was not assayed for and no QA/QC procedures are recorded. Summary reports on the Athabaska Resources diamond drilling programs in and around the Carolin Mine and McMaster Zone describe the field procedures used. Drilling was completed in feet and the footage markers converted to metric at the core sheds. Core recoveries were measured and reported. Mineralized zones were marked for assay by the recording geologist and the core split or sawn by a sample technician. Sample numbers were checked and recorded and the samples bagged for transport by truck to the Lab. A suite of duplicate samples was generally collected for check assay and the Labs used would have their own internal QA/QC procedures. Assay certificates note the internal QA/QC procedures: one Standard sample, 2 pulp duplicates and 2 reject duplicates were inserted in each sample batch. No blank samples are recorded. The core processing facility was reported to be kept locked at all times when not in use by company personnel. Recent drilling on the property includes the 2009 and 2010 surface drill programs at the McMaster Zone and the 2012 surface drill program at the Carolin mine (Idaho zone). This work is described in reports, and has been confirmed verbally with the Qualified Persons involved. The work was done to current industry standards with respect to hole placement, drill core handling and logging, sampling, assaying and site security. McMaster drill hole sites were located by GPS and later surveyed, in Idaho zone drill hole sites were located by GPS, but the drill setups were on an access road and no casing was found. All drill core was logged and sampled off property. Sample intervals were determined by qualified geologists and the core sawn by a technician. The sawn core was bagged and taken by company personnel to the assaying lab in Vancouver. Standard QA/QC programs were in place with Acme Labs. More detail is provided in Section In summary, Qualified Person C. Pearson, P.Geo has reviewed the historical database regarding sample acquisition and assaying and has not found any generic or systemic problems. 42

43 7.0 GEOLOGICAL SETTING AND MINERALIZATION 7.1 Regional Geology The regional geology has been summarized by Cavey and Gunning (2003) and Pearson (2008). The most prominent feature of the area is the Coquihalla Serpentine Belt. This elongate belt of rocks is dominantly serpentine, with lesser gabbro. It hosts the Coquihalla Gold Belt, is bounded by the east and west Hozameen faults and separates the Hozameen Group to the west (an obducted ophiolite sequence) from the andesitic greenstones of the Spider Peak Formation and the much larger Ladner Group sedimentary rocks to the east. The serpentine belt trends north-westerly through the area for upwards of 60 kilometres, is steeply dipping, and reaches a maximum width of 2 kilometres in the vicinity of the Carolin Mine. The east and west margins of the belt are believed to be major faults, which have experienced recurrent vertical and transcurrent movement. (Ray, 2003, 2004). The Hozameen Group is an oceanic supracrustal sequence of Permian to Triassic age (Ray, 1990). It is mainly composed of cherts, pelites and basaltic greenstones, metamorphosed to lower greenschist facies, and increasingly deformed near the serpentine and fault boundaries. The Spider Peak Formation is in direct contact with the East Hozameen fault and can be traced for some 15 kilometres (Ray, 1990). The contact with the overlying Ladner Group sediments is unconformable and age dated as Early Triassic. The Formation is comprised of a basal gabbro, overlain by a thick succession of massive to pillowed andesitic greenstones. The Ladner Group, dated as Jurassic age, is a sedimentary sequence of turbiditic wackes, siltstones and argillites. The stratigraphic sequence (Ray, 1983) consists of a lower section of coarse clastic rocks, overlain sequentially by thicker units of siltstone and argillite. Intrusive rocks cut both the Hozameen and Ladner Groups. Dykes and sills of various composition are noted in both Groups, while the Ladner Group additionally contains larger intrusions, up to 300 metres wide. Fault structures are a very important component of regional and property geology. The Coquihalla Gold Belt is defined by Northwesterly trending structures of the Hozameen Fault system and is transected by Northeasterly trending faults. Within this framework, numerous 43

44 shear zones and zones of dilation have developed and are amenable to gold mineralization. These structurally controlled mineralized zones crosscut lithology and may occur as stacked lenses up to fifty metres wide. 7.2 Property Geology On a property scale rocks of the Coquihalla Serpentine Belt (Figure 7.2) are generally composed of massive dark serpentinite of probable peridotite origin, along with fine to coarse grained intrusive rocks of gabbroic composition (Ray, 1990). The East Hozameen Fault bounds the Serpentine Belt to the east and may represent a suture zone between the serpentine and the rock units to the east (Spider Creek volcanics and Ladner sediments). Close to the fault contact these rocks are highly sheared, talcose and often contain minor quantities of listwanite. A series of gold occurrences and former producing gold mines are hosted in sediments or volcanics in close proximity to the East Hozameen. These include the McMaster, Montana, Monument and Lorraine showings and the past producing Pipestem, Aurum, Emancipation and Carolin mines. The Spider Peak Formation is represented on the property by successions of pillowed andesite, tuffaceous andesite and agglomeratic volcanics which are cut by localized dioritic and gabbroic intrusive rocks. Exploration drilling by Athabaska Resources in discovered high grade gold mineralization in these rocks, west of the known Carolin Mine mineralization trends. The Ladner Group sedimentary rocks host most of the known gold mineralization on the property. They are comprised of turbidite, conglomerate, greywacke, siltstone and argillite. The stratigraphic sequence as seen on the property is thought to be overturned, based on observations of graded bedding and sedimentary scouring (Ray, MEMPR Bull. 79) (Figure 7.1) 7.3 Mineralization Cavey and Gunning (2003) describe most gold mineralization at the Carolin Mine as being hosted in the lower coarse clastic unit of the Ladner Group. Mineralization occurs as a dense network of variably deformed quartz-carbonate veins with generally intense albitic alteration and sulphide dissemination. These veins are best developed in the more competent rock types, namely wackes, conglomerates and siltstones. Mineralization is focused within the hinge zone of a complex local antiform, becoming less intense in the narrower fold limbs. Sulphide mineralization consists mostly of pyrrhotite, arsenopyrite and pyrite, with minor chalcopyrite, sphalerite and bornite also present. Sulphide concentrations can reach up to 15% of the rock unit. Gold generally is associated with sulphides and found as small grains occurring as inclusions within, or rims around, the sulphide minerals. Visible gold is rarely seen 44

45 but gold has been noted as thin plates and smears on fault surfaces or as tiny grains within quartz, carbonate or albite crystals. Exploration drilling in outlined a new gold mineralized zone within the stratigraphically underlying Spider Peak Formation volcanics. This mineralization is not yet widely described or further explored. In general, the mineralized zones consist of a mineral assemblage of quartz, carbonate, albite, chlorite, sericite, magnetite and sulphides. The sulphides in decreasing order of abundance are pyrrhotite, arsenopyrite, pyrite, chalcopyrite, bornite and sphalerite. Visible gold is uncommon, but is found as smears, plates and grains. The mineralized zones can be up to 30 metres thick and may be traced underground by mining and exploration for over 700 metres along trend within the Carolin Mine. This mineralized horizon comes to surface to the southeast, but is completely open along trend to the northwest, toward the McMaster Zone. The McMaster Zone mineralization is described as being very similar to that of the Idaho Zone (Carolin Mine). The zone is up to 30 metres thick and appears to be localized by, and dipping parallel to, a major fault (the McMaster Pond fault). 45

46 FIGURE STRATIGRAPHIC COLUMN 46

47 FIGURE PROPERTY GEOLOGY PLAN 47

48 8.0 DEPOSIT TYPES The gold deposits within the Coquihalla Gold Belt are defined by their relationship to the Hozameen fault system.this fault system can be traced from Washington State to the south through to the Bralorne gold camp to the north. It demonstrates strong right lateral movement of undefined extent and is believed to have acted as a conduit for gold rich mineralizing fluids. The Coquihalla Gold Camp hosts 5 historic gold producers (Carolin, Emancipation, Aurum, Pipestem and Ward) as well as 24 other known gold occurrences. (Figure 6.2). Most of these producers and occurrences lie within 600 metres of the East Hozameen fault and 95% of the gold camp production is reported to have been within 150 metres of that fault. It appears that this fault system has been instrumental in mineralizing the surrounding rocks, particularly in brittle zones where fractures easily develop. A review of the lithological and tectonic setting of gold-quartz vein systems has determined that these vein systems can be divided by host lithology into two main types, namely ʻophiolite hostedʼ and ʻmixed mafic igneous-sedimentary hostedʼ. (Ash, 2002) The ʻophiolite hostedʼ type is represented by gold camps such as Bralorne and Atlin in B.C., along with Grass Valley and Allegheny in the U.S. The second type includes major fault systems associated with serpentine and sedimentary rocks in well known gold camps such as the Mother Lode area in California and the Juneau Gold Belt in Alaska. The deposits of the Coquihalla Gold Camp, including the Carolin Mine, are believed to fit into this category - which is characterized by close proximity to deep crustal, right lateral, northwest trending fault systems with serpentine emplacement. Gold deposits have been found at depth in these fault systems, suggesting exploration potential at depth within the Carolin Mine. Gold mineralization is hosted in several rock types along the Coquihalla Gold Belt. These rocks are generally more competent than the surrounding country rock, typically silicified and more amenable to fracture formation. These fractures provide a good depositional environment for gold mineralizing fluids. Ray (1984) defined four types of mineralized units in the area, namely: 1. Thin, highly irregular and generally discontinuous quartz veins. These host the majority of the minor gold occurrences. 2. More continuous, wider and more discrete quartz veins such as seen at the Emancipation 48

49 Mine and Monument occurrence. 3. Irregular mineralized zones hosted in highly fractured coarse clastic sedimentary rocks. These zones are associated with silicification, quartz veining, albitization and sulphide deposition (generally pyrite, arsenopyrite and pyrrhotite). This type of mineralization is typical of the Carolin Mine and McMaster Zone. 4. Gold deposition within talcose shears along the East Hozameen Fault, immediately adjacent to serpentinites and Ladner Group metasedimentary rocks. The Aurum Mine mineralization is the defined exampled of this type. 49

50 9.0 EXPLORATION Note that historical exploration on the property has been reported within Sections to New Carolin Gold Corp. (formerly Module Resources) has conducted a number of exploration initiatives, in addition to the McMaster Zone surface drill programs, since it optioned the property. In 2008 and 2009, company crews undertook programs to establish surveyed exploration grids and conducted surface mapping programs. Work in 2010 focused on preparing the underground workings for future reopening and exploration work. The workings were examined and the adit (entrance) areas were rehabilitated. The adits were also secured again to prevent unauthorized entry. In 2011 New Carolin commissioned an airborne geophysical survey by Precision Geophysics of Vancouver, B.C This survey collected high resolution magnetic and radiometric data over 762 line miles (approx 90 sq. km of ground). (Figure 9.1) The survey indicated the presence of a major magnetic linear (attributable to the serpentine unit associated with gold mineralization) that could be traced over the entire property mineralized trend. Radiometric data reported indicated the presence of felsic rocks in the northern half of the property, noting that felsic dykes are associated with gold showings in the area. (Press Release, Jan. 19, 2012) This work demonstrates the need for ground based IP and Magnetic geophysical surveys, as recommended in Section 18.0 Also in 2011 New Carolin commissioned a site survey, by McElhanney Associated Land Surveying, which reestablished previous ground survey control stations both in the mine grid and the UTM grid coordinate systems and established new ones in the Carolin mine, McMaster Zone and tailings impoundment areas. (Figure 18.1 and Press Release dated October 27, 2011) Late in 2011, New Carolin Gold Corp. relocated the Montana gold showing near the Carolin mine Sampling of the historic mine dump provided three samples, which assayed between 1.7gpt and 8.20 gpt. (see press release of December 15, 2011) 50

51 FIGURE GEOPHYSICAL SURVEY, 2011 CAROLIN MINE AREA 51

52 10.0 DRILLING 10.1 General Module Resources (now New Carolin Gold Corp) has completed a number of surface drilling programs since it optioned the property. Note that historical drilling programs are reported within sections 6.1 to A small 9-hole drill program was conducted over part of the tailings deposit in 2009 to confirm gold content of the tailings. This work was done by Beard Technologies from a floating drill platform. Each hole was 2 inch diameter and penetrated 10 feet into the tailings. Some 70 kg of tailings material was collected for assay and mineral processing studies McMaster Zone Considerable surface drilling was completed in 2009 and 2010 on the McMaster Zone. In 2009, New Carolin completed a 6-hole surface drilling program, totaling metres. Five holes, including two twinned holes, encountered significant gold mineralization and one hole was abandoned due to fault gouge in the hole. These results encouraged New Carolin to continue work into 2010 to confirm continuity of mineralization and expand the zone. In 2010, New Carolin completed a 5-hole surface drilling program, totaling metres. All holes were successful and further defined the mineralized zone both down dip and along trend. Surface drilling at the McMaster Zone now totals 4,185 metres, in 38 completed holes. A total of 1,361 core samples have been obtained and assayed at reputable assay labs. Drill core is available from 11 of these holes and that has been data verified by C. Pearson. Drill core from the remaining holes was destroyed by vandalism at the mine site storage facility.. The McMaster surface drill programs are summarized in Table 10.1 (McMaster Zone Diamond Drilling Record) and Table 10.2 (McMaster Zone Drillhole Details and Intersections). For completeness, all McMaster Zone drilling is reported, including that done by past operators. Figure 10.1 (McMaster Zone Drillhole Plan) presents a drill hole location plan for reference. 52

53 TABLE 10.1 McMaster Zone Diamond Drilling Record Year Drillhole Nos. Total Holes Total Metres 1975 M1 to M M8 to M M14 to M M20 to M28 9 1, M30 to M33, M09A, M12A M34 to M TOTALS All Holes 39 4,

54 FIGURE McMASTER ZONE DRILLHOLE PLAN 54

55 TABLE McMASTER ZONE DRILLHOLE DETAILS AND INTERSECTIONS Hole No. Hole Length (m) Azimuth Degree s Dip Degree s Intersection Interval Length (m) Average Gold Grade (gpt) M M M M M M M Summary: Seven holes were completed along 108 metres of strike length. Holes were drilled perpendicular to the NE dipping, 135 azimuth striking zone and intercepts should be near true thickness. M M M M M M

56 Hole No. Hole Length (m) Azimuth Degree s Dip Degree s Intersection Interval Length (m) Average Gold Grade (gpt) Summary: Six holes were completed, drilled near perpendicular to dip and strike so intersections will be near true thickness. The strike length of the zone was expanded to 180 metres. M M M M M Summary: Five holes were completed, drilled mainly to test down dip of earlier drilling. This was generally successful. Note that with steeper hole dips the true thickness of intersections will not be as close to intersection width as in earlier drilling. M M N/A M M N/A M M

57 Hole No. Hole Length (m) Azimuth Degree s Dip Degree s Intersection Interval Length (m) Average Gold Grade (gpt) M N/A M N/A Summary: Eight holes were successful in intersecting significant mineralization. True thickness of intersection was generally one half the intersection thickness. Drilling confirmed down dip mineralization and expanded to zone to 310 metres. M M M M12A M09A Summary: Five holes were completed, including two twin holes. Drilling confirmed earlier intersections. M M M M M N/A Summary: Five holes were completed, expanding the zone by approximately 100 metres to 400 metre strike length and highlighting itʼs open pit potential. 57

58 10.3 Carolin Mine In the case of the Carolin Mine, exploration and ore definition programs before and during production were successful in developing a mineable reserve and tracing that mineralization underground for some 500 metres. These were traditional programs with tightspaced drill holes that were more production oriented than exploration driven. Subsequent to the perhaps inevitable mine shutdown in 1984, Athabaska Resources funded significant exploratory underground drilling programs in 1995 and This work attempted to expand the known mineralization as defined during mining from Underground drilling, 8,640 metres in total, did discover new mineralized zones to the north and west of the underground workings but the Company ran out of funding and the mine could not be advanced to production again. More detail on these programs is provided in Section and significant intersections from that period are reported in Table 6.1. Figure 10.2 (Carolin Mine Drilling) presents a plan view showing the historical drill hole pattern (both surface and underground drill holes) at the Carolin Mine, in relation to the underground workings. The vital 1995/96 exploratory drilling, north and west of the previously known Caroline mine mineral resources, is shown on Figure 10.2 as the more widely spaced drilling setups to the upper left of the plan. Figure 10.3 (Carolin Mine Idealized Longitudinal Section) provided by New Carolin Gold Corp, relates the known and projected mineralized zones to mine workings. Note that these are projected zones of mineralization, not ore zones, and there is no guarantee of economic viability. New Carolin Gold Corp completed a 12-hole surface drill program, totaling 1,378 metres, at the Carolin Mine in late This work, consisting of two down holes from each of 6 setups, tested the area in the Idaho zone between surface showings and the Carolin mine workings. All holes encountered significant mineralization and follow up work is recommended. 58

59 FIGURE CAROLIN MINE DRILLING PLAN 59

60 FIGURE CAROLIN MINE IDEALIZED LONGITUDINAL SECTION 60

61 11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY Note that historical sampling programs and procedures are reported within Section 6.6. Module Resources (now New Carolin Gold) has completed several sampling programs since it optioned the property, as follows: Nine samples of tailings were recovered from a 2009 surface drilling program utilizing a Vibracore drill on a floating drill platform on the tailings deposit. Sample preparation, analyses and security details are reported in the September 29, 2011 technical report by Pearson and Giroux and summarized as follows. Two-inch diameter core was recovered from nine 10 foot deep test holes., resulting in some 70 kg of material available for assay and met talurgical testing. These samples were sent to the Metallurgy Lab at UBC, where two assay splits were taken from each, bagged and delivered to Acme Analytical Labs for analysis. These eighteen samples were fire assayed for Gold with results ranging from 1.27 g/t to 2.53 g/t and averaging 1.68 g/t. The bulk of the material was retained by the Metallurgy Lab for metallurgical test work and mineralogical process study.. This work is reported in Section 13.0 Diamond drilling test programs on the McMaster Zone were undertaken in 2009 and In these programs drill hole collars were located by GPS, checked in reference to older hole collar locations and later (2011) surveyed by a professional land surveyor. Acid dip tests were used to confirm drill hole dip but no down hole surveying program is recorded. Drill core was logged by professional geologists; using rock, mineralization and alteration parameters developed for the property by earlier workers. The geologist was responsible for defining sample intervals for core sawing, based on rock and mineralization type. A qualified core technician sawed the drill core as directed, then bagged and secured it for shipment to the assay lab. Sample blanks and standards were inserted in the sample stream at the time of sampling at a ratio of one of each per 20 samples.. Company personnel personally delivered the drill core to Acme Analytical Labs in East Vancouver, B.C. Acme has the following Certifications in place: ISO/IEC 17025:2005 and ISO9001:2000. The Acme assay certificates record the following procedure codes for this drill core: R (sample prep), G603 (fire assay, Au/Ag) and 1DX1 (ICP-MS, 36 element). Internal Acme QA/QC procedures are defined, noting 1 Blank per 5 samples, 1 Standard for 5 samples (split between Fire Assay and ICP) and 1 Duplicate per 10 samples (split between Pulp and Reject). The QA/QC program samples assayed within acceptable variance limits and no concerns were reported. The procedures defined and followed throughout the sampling process, from core drilling to final assay, are considered to be relevant and professional. A 12-hole surface diamond drilling program was completed in 2012 above the Carolin 61

62 mine workings, totaling 1,378 metres of drill core. The drill hole collars were recorded by GPS but not found for verification. Mineralized core was sawn in half, with one half remaining in the core box for verification and sample tagged to reflect sample interval. The other half of the drill core was bagged, along with the appropriate sample tag, for delivery to Acme Labs in Vancouver, an ISO 9001:2000 certified analytical laboratory. Prior to shipment QA/QC required sample blanks and standards were inserted in the sample stream, at a ratio of 1 Blank and 1 Standard per 20 core samples. Acme has a rigorous QA/QC program at the lab as well, comprising 1 Blank per 5 samples, 1 Standard per 5 samples (split between fire assay and ICP) and 1 Duplicate per 10 samples (split between pulp and reject samples). All samples from the drill program were fire assayed for gold (Acme package G603) and ICP-MS analyzed for multi-elements (Acme package IDX2). The QA/QC program samples assayed within acceptable variance limits and no concerns were reported. Procedures followed throughout the progression from diamond drilling to sample assaying are seen to be professional and to industry best practices guidelines. 62

63 12.0 DATA VERIFICATION The Carolin mine (Ladner Gold Project) property was visited on three occasions by C. Pearson, P.Geo and Independent Qualified Person,. The initial visit, on July 25, 2008, was to examine the historic Carolin mine site and associated surface infrastructure. The subsequent visit, on September 20, 2010, focused on the tailings deposit, infrastructure and road access. In the course of both visits, Mr. Pearson examined surface facilities (tailings storage, mine adits, remaining infrastructure, site roads) along with access roads and site security. The third visit, on October 21, 2014, focused on road access, general surface infrastructure and examination of recent surface drilling sites. Roads were in reasonable shape and the property accessible. The tailings deposit was water covered and in good shape. The 2012 surface drilling setups were not definitively located. Evidence of drilling activity was found at the recorded GPS locations but drill hole collars were not in place. These drill holes are reported to have been collared on the upper adit access road and any drill hole collars buried by later roadwork. The surface facilities were as anticipated from literature review and discussions with individuals familiar with the property. Access roads were in good condition, surface adits were rehabilitated and secured, and the tailings storage area was well maintained. The tailings deposit was examined during each site visit and its and condition verified. Corporate records were provided regarding the test drilling programs undertaken and mineral resource calculations completed. These records were examined in 2011 and a manual resource calculation was done for comparison with the current computer modeled Mineral Resources summarized in Section The remaining surface artifacts, such as the milling facility and associated ore conveyance system have deteriorated and are in need of rehabilitation or replacement. The underground workings were not examined during any of the site visits. The McMaster Zone surface showings, trenches and drill sites were not visited due to time constraints. No intact drill core was found on the property. New Carolin Gold has provided full and easy access to the available data relating to mine operations ( ) and to the extensive database covering property exploration before and after production. The mine operating data includes mine monthly reports, mine sections and plans, resource and reserve calculations, mill head grade reconciliation studies, drill hole records and geology logs, assay certificates etc. Property description and exploration data provided includes claims description and status, survey control programs, trenching reports, surface maps, underground geology plans and sections, drill hole locations and geology logs, assay certificates, geophysical surveys, Government reports, technical papers and press releases. 63

64 Mr. Pearson has reviewed that data and the more recent Carolin zone block models, developed in 2009 and 2012, and has determined that the block models reasonably represent the underground workings and drill hole data base for the Carolin mine. Claims data provided by New Carolin Gold was checked against the B. C. government MapPlace and Mineral Titles Online (MTO) databases. A total of 30 randomly selected individual claims were compared to the database in 2012 with no discrepancies noted. All 204 claims were checked against the MTO database in 2014 and Tables 4.1 and 4.2 in this report are current to the MTO database. There is not any attributable diamond drill core available, except for the 11 holes representing the surface drilling at the McMaster Zone and the 12 holes from the 2012 Carolin mine (Idaho zone) surface drill program. This drill core was located and data verified, as noted. Some 295 core boxes were found from the McMaster Zone representing 11 drill holes and 1,669 metres of NQ drilling. Three holes were randomly chosen for detailed examination, namely M30, M32 and M38. These holes provided 357 metres of drill core, 21% of the total available. They were chosen to provide a representative selection of rock type, mineralization tenor and zone location. All core boxes were opened and checked against drill hole logs and assay reports. The core appeared to be competently logged, sampled and analyzed and no concerns were noted. All 12 holes from the Idaho zone drill program were found at a core storage facility in Hope, B. C. These holes were designated ID01 to ID12 inclusive and 310 boxes of NQ drill core were counted, representing 1,378 metres of drilling. Three holes were selected for more detailed examination ID04, ID05 and ID10. These holes represented 343 metres of drilling, or 25% of the total program. The drill core was in good shape, with generally very good core recovery. Most of the drill core was sawn and sampled. An issue was noted with a number of Acme Labs sample tags representing sampled intervals, especially close to the start of two of the holes. In these instances the sample number was not visible on the tag and appeared to have faded away due to sunlight or moisture conditions during the 2-year storage interval. The author was, however, able to verify the sampled intervals by using the drill hole logs and assay certificates provided. Industry standard QA/QC procedures were noted in the core boxes and assay certificates examined. The remainder of the historic property drill core is reported to have been stored in several locations on site. These drill core storage racks and core boxes are said to have been vandalized for their wood content, with the core being scattered and now not attributable to drill hole or location. The Carolin mine did operate for a number of years, followed by serious and 64

65 professional attempts to restart operations. This work provided voluminous exploration, diamond drilling and mine operating data for data verification In summary, in the near complete absence of physical diamond drill core, C. Pearson has reviewed and verified the database available and representative historic mineral resource reports. This extensive database was then used to manually calculate comparison resource estimates for both the Carolin Mine and McMaster Zone. These estimates were then compared, for the relevant cut-off gold grades, to the values reported by Snowden. The two sets of mineral resources compared well to each other and to the historical estimates reported from 1984 to On-going surface and underground diamond drilling programs will be needed to fully validate the historical data and provide additional information to increase the mineral resources reported and move all resources into the Indicated category. 65

66 13.0 MINERAL PROCESSING AND METALLURGICAL TESTING Historical work, by operators other than Module Resources (now New Carolin Gold Corp), is reported in Section 6.5. Tailings deposit samples recovered from the 2009 surface drilling program were analyzed by Acme Analytical Labs and then tested by the UBC Metallurgy Lab. Work undertaken at the UBC Metallurgical Lab included size distribution and gold association studies, along with tests for gold recovery using gravity concentration (Knelson concentrator) and cyanide leaching. The results included confirmation that gold was associated with sulphides (arsenopyrite mainly) and with the more finely ground tailings material. Gold recoveries with the Knelson concentrator averaged only 40-45% after 7 passes and work on the recovery method was halted. Gold recoveries by leaching averaged from 78.1% to 87.2% and additional test work was recommended. In addition, petrographic study was completed on each sample by C. Leitch, Ph.D, P.Eng. He determined that all samples had very similar composition; namely quartz-albitefeldspar-carbonate-chlorite-sericite-pyrrhotite-pyrite-arsenopyrite. This work is summarized in the 2011 technical report by Pearson and Giroux (References, Section 19.0). More recently, a preliminary test work program was undertaken in 2011 on selected McMaster Zone drill core, from DDH M09A. Some 17 kg of material was delivered to UBC Dept. of Mining Engineering students, supervised by Professor M. Veiga. (Section 19.0, References) The work involved fire assay of over 30 samples, followed by crushing, bond work index determination, grinding, Knelson gravity concentrator tests and flotation, aimed at developing an optimal mill flow sheet. Total gold recovery was reported at 88.6%. A second phase metallurgical study has been recently initiated (2012), also using McMaster Zone drill core from the 2010 drilling program. This work is being undertaken by SGS Canada Ltd. and is focused on a scoping level metallurgical test program, including evaluation of heap leaching potential and environmental testing of the mill feed and tailings materials. (Press Release, April 17, 2012) This drill core, from DDH-M32, provided a metallurgical composite sample averaging 3.70 gpt Au and 0.55 gpt Ag. Key results from the variety of metallurgical tests conducted on this sample included flotation gold recovery of 91.3% and gold recovery of 97.9% through a combination of flotation plus cyanidation of the flotation tails. Other results reported indicated low gravity (Knelson concentrator) gold recovery at 8.5%, poor amenability to heap leaching and indications that the tailings produced are acid consuming. Test work continued on the flotation concentrate to determine total gold recoveries from a combination of flotation, pressure oxidation and carbon in leach cyanidation processes. This work reported a total gold recovery of 94.5%. In general, the metallurgical tests indicated that substantially improved gold recoveries are achievable, in the plus 90% range, compared to historical recoveries of about 50%. (Press Releases August 9, 2012 and August 29, 2012) 66

67 14.0 MINERAL RESOURCE ESTIMATES Current Inferred Mineral Resources are now completed for three mineral deposits at the New Carolin Gold property. These include the Tailings deposit, the Carolin Mine (Idaho zone) and the McMaster Zone. The Tailings deposit Mineral Resource was reported in 2011 and the remaining two Mineral Resources reported in All three current Mineral Resources are summarized below. Figure 14.1 below shows the areal extent of each current Mineral Resource in relation to claim boundaries, roads and each other. There are no Mineral Reserves reported in this summary of current Mineral Resources. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves Tailings Deposit Mineral Resource Summary The current tailings deposit Mineral Resource was calculated in a technical report authored by G. Giroux and C. Pearson, dated September 29, 2011 and titled NI Tailings Resource Estimate on the Ladner Gold Project. See References (Section 19). Data was provided from a 1995 sixty-hole drilling program completed by Athabaska Resources on the Carolin mine site tailings deposit. This program provided 392 samples of the in situ tailings material, which were analyzed at Acme Labs in Vancouver for gold content. Sampling and assaying procedures were standard for the time, as were QA/QC procedures. C. Pearson completed the necessary data verification with a site visit and office examination of program reports and assay certificates pertaining to this drill program. The 1995 drill program took place over the half of the tailings deposit that was not water covered and thus accessible. This area was nearest to the tailings dam, with the greatest thickness of tailings in place, which allowed the program to test the bulk of the deposit. After data verification, the drilling and assay data were used to develop a deposit block model and calculate a computer generated Mineral Resource estimate to industry standards and best practices guidelines. The 392 assays had a mean gold grade of 1.74 gpt. Samples ranged from 0.5 to 15.5 feet in core length and from 0.03 gpt to 6.07 gpt in gold assay. The standard deviation was 0.88 and the co-efficient of variation Uniform 5 foot composites were produced from the data, providing 584 data points, with a mean gold grade of 1.85 gpt, standard 67

68 deviation of 0.74 and co-efficient of variation of A pairwise relative isotropic semivariogram was completed to determine the interpolation range, from 20 feet in the short dimension to 90 feet in the long dimension. A block model of 5 foot cubes was produced and block grades were estimated by ordinary kriging, with search ellipses ranging from 22.5 feet to 180 feet. Block grades estimated in passes 1 and 2, with search ellipses of 22.5 feet and 45 feet respectively, were defined as the Indicated Mineral Resource category. Block tonnages and grades estimated in subsequent passes were defined as Inferred Mineral Resources. Specific gravity used was 1.46 tonnes/cu.metre to reflect the wet sand like condition of the tailings. No gold assay cutting was required. The preferred reporting gold assay cutoff was 1.0 gpt and at that cutoff the following Mineral Resources are reported: Tailing Deposit Indicated Mineral Resource of 445,000 tons, grading oz/ton (1.83gpt), for a contained gold ounces estimate of 24,000 oz. Tailing Deposit Inferred Mineral Resource of 93,000 tons, grading oz/ton (1.85 gpt), for a contained gold ounces estimate of 5,000 oz. These results compare closely to previous manual estimations and are considered to be of economic interest due to site location, contained gold grade, easy accessibility and low extraction costs. No subsequent work has been undertaken here and the Mineral Resource estimation parameters summarized above remain current and reasonable. As noted above and in Section 12, the author has verified the existing drill hole and assay data, completed a manual resource estimation for comparison purposes and verified that the statistical calculation parameters remain reasonable. These mineral resources are not known to be affected by any environmental, permitting, legal, title or any other relevant factors McMaster Zone Mineral Resource Summary The current McMaster zone Mineral Resource was calculated in a technical report authored by W.A. Dzick and C. Pearson, dated May 15, 2012 and titled NI Mineral Resource Estimates on the Carolin Mine and McMaster Zone, Ladner Gold Project. See References (Section 19) Data provided from 38 surface drill holes within the McMaster zone, covering a surface area of 100m by 400m, was used to construct a block model and calculate a mineral resource using Maptek Vulcan software. These holes were completed through a number of drilling campaigns, mainly in 1989, 1995/96 and 2009/10. Refer to Table 10.1 and Figure 10.1 Drillcore remains from 11 of these holes and that core was verified by C. Pearson, as were drill logs and assay records for all holes. C. Pearson utilized the verified data to complete a manual Mineral 68

69 Resource calculation. This was developed by constructing 7 cross-sections across the deposit (Sections 1770N, 1870N, 1920N, 1970N, 2020N, 2120N and 2150N) and making a traditional sectional mineral resource calculation. That calculation compared well, at a 1.0 gpt grade cut-off, to the computer modeled mineral resource summarized below. After verification, all available drilling and assay data was used to develop a zone block model and calculate a Mineral Resource to industry standards and best practices guidelines. Total drilled footage for the zone was 4,185 feet, providing 1,361 core sample assays to the block model. The parent block size used was 10mx10mx5m and no sub blocks were developed. The assay interval averaged 1.35 metres and the mean sample grade was 1.03 gpt, with a range of gold grades between 0.08 gpt and 32.3 gpt. The raw assay data was composited to 2 metres and these were grade capped at 7.2 gpt gold. Grade calculation methodologies included Inverse Distance Cubed (ID3) and ordinary kriging. Grade estimation search ellipses were developed as follows: Pass 1 search ellipse was 4mx10mx3.4m., and Pass 2 search ellipse was 40mx103mx34m. The specific gravity used was 2.78 tonnes/cu metre. The preferred gold assay reporting cutoff was 0.5 gpt gold, to represent the open pit potential of this surface zone. At that 0.5 gpt cutoff the following Mineral Resource is reported: McMaster Zone Inferred Mineral Resources Estimate of 3,375,000 tonnes, grading 0.69 gpt, for a contained gold ounces estimate of 79,540 oz. The McMaster Zone is reported in the Inferred category due to sparse drill hole density and a relatively wide drill hole spacing. Detailed economic studies of this resource would be premature as it is in the Inferred category. Significant resource definition work is required to bring the Inferred resource to the Indicated category and allow such detailed economic studies. A Whittle pit optimization exercise was successfully conducted to demonstrate that the resources had a reasonable expectation of eventual economic extraction through open pit methods... As noted above and in Section 12, the author has verified the drill hole and assay data used, and completed a manual resource estimation for comparison purposes. The statistical calculation parameters used in the above noted Mineral Resource are of industry standard and can be considered to be current and reasonable. These mineral resources are not known to be materially affected by any environmental, permitting, legal, title or any other relevant factors Carolin Mine Mineral Resource Summary The current Carolin mine Mineral Resource was calculated in a technical report authored by W.A.Dzick and C. Pearson, dated May 15, 2012, and titled NI Mineral Resource Estimates on the Carolin Mine and McMaster Zone, Ladner Gold Project. See References (Section 19) 69

70 Data from 51 surface and 586 underground drill holes, along with mine cross-sections and a 3D record of mine workings and mined out areas, was used to construct a block model and calculate a mineral resource to industry standards and best practices guidelines. No drill core remained intact from these holes but any available mine records, drill hole logs, assay records, cross-sections and exploration reports were data verified by C. Pearson. These records provided the basis for manual, sectional mineral resource calculations on 6 cross-sections across the deposit (Sections 575N, 679N, 766N, 934N, 1000N and 1100N). These calculated mineral resources compared well to the current computer block modeled calculations summarized below. After verification, all available data was used to develop the block model of the mine area and calculate, to industry standards and best practices guidelines, a Mineral Resource for the Carolin mine. Maptek Vulcan software was used to develop the block model, with parent block size of 10mx10mx5m, sub-blocked to 2mx2mx2.5m. Total footage drilled in the deposit is over 40,000 metres, providing 13,657 core samples for gold assay. These assay intervals were used in the deposit model, averaging 1.5 gpt and with a range of 0.08 gpt to gpt. Raw sample assay data was composited to 1m lengths and these were grade capped at 17.2 gpt. Block grade calculation methodologies included Inverse Distance Cubed (ID3) and ordinary kriging. Historic mine cross-sections were used to cross check drillhole locations and mined out areas. Grade estimation search ellipses were developed as follows: Pass 1 search ellipse was 14.4mx9.4mx6.0m, Pass 2 was 72mx47mx30m and Pass 3 used the same search ellipse as Pass 2 but required only 1 sample per hole. The specific gravity used was 2.78 tonnes/cu. meter. The preferred gold assay reporting cutoff was 0.5 gpt to indicate the open pit mining potential. A second grade cutoff at 2.0 gpt gold is noted here to allow comparisons to historical estimates and represent underground mining scenarios. Carolin Mine Inferred Mineral Resources Estimate, at 0.5 gpt cutoff, of 12,352,000 tonnes, grading 1.53 gpt for a contained gold ounces estimate of 607,000 ounces. Carolin Mine Inferred Mineral Resources Estimate, at 2.0 gpt cutoff, of 2,589,000 tonnes grading 3.34 gpt for a contained gold ounces estimate of 278,000 ounces. The Carolin mine is reported in the Inferred category due to the lack of any drill core for verification, and the wider (50m) spacing of drill holes in the mineralized zones discovered after the mine shut down. Detailed economic study of these Inferred mineral resources would be premature, pending significant resource confirmation programs (including diamond drilling) to allow upgrading of these resources to the Indicated category. A Whittle pit optimization exercise was completed on the Inferred resource at the 0.5 gpt gold grade cutoff to test itʼs potential for open ipit mining. Open Pit mining Input parameters used in this exercise included pit slopes of 45 degrees, 95% mining recovery, 10% mining dilution, mining costs of $2.50/tonne and a 1.0 million tonne/year mining rate. Milling input parameters included a 90% mill recovery and overall processing costs of $25.00/tonne. The price of gold used was $1,500/oz, a reasonable price estimate considering the current gold price and Cdn/US $ exchange rate. Using these parameters a significant portion of that Inferred mineral resource is considered to be amenable to 70

71 eventual economic extraction by open pit mining, from surface down to the 875 metre elevation, through the southeastern half of the defined resource. The remaining mineral resources, below the 875 metre elevation and along trend to the northwest, are likely more amenable to underground mining subsequent to the open pit production. These resources are considered to have reasonable prospects for eventual economic extraction due to the underground mining history of a similar gold grade at this site. This history indicates easy access, excellent ground conditions and good continuity of mineralized zones. As noted above and in Section 12, the author has verified the available drill hole, assay and mining records and completed a number of manual resource estimations for comparison purposes between the historic and current resource estimates. The statistical calculation parameters used in the current Mineral Resource estimate are of industry standard and remain current and reasonable. There has not been any significant work done on this deposit subsequent to the current Mineral Resource, as completed in These mineral resources are not known to be materially affected by any environmental, permitting, legal, title or any other relevant factors. Inferred Mineral Resource: that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. 71

72 Figure 14.1 Property Plan View showing current mineral resources 72

73 15.0 ADJACENT PROPERTIES No information concerning adjacent properties is included in this report OTHER RELEVANT DATA AND INFORMATION Other relevant data and information which will be of use in understanding this report include the following: The original mining permit has been retained and both surface and underground exploration permits are in place The tailings dam and pond have been inspected regularly by independent engineers and the 2012 reclamation report has been submitted and approved. The tailings dam and pond have been inspected in 2014 by both the Provincial Government and an independent engineering firm and their reports are pending. Preliminary discussions have begun with government agencies to permit tailings reprocessing Water sampling has been initiated at selected sites to better understand water quality on the property 73

74 17.0 INTERPRETATIONS AND CONCLUSIONS The Carolin Mine property is a past producing mine with considerable unexplored potential to add additional Mineral Resources. The property encompasses over 14,000 hectares of prospective ground, including five past producing mines and numerous mineralized showings and historically explored zones. The three years of past production (45,000 oz gold from 900,000 tons milled) at the Carolin mine ( ) were characterized by mining and milling shortcomings, resulting in poor recoveries in the Mill. Nearly half of the gold mined and delivered as mill feed was not recovered but went to the tailings impoundment. The other past producers were much smaller scale and operated sporadically. The property extends some 28 km along the trend of the East Hozameen Fault and itʼs emplaced serpentine rock unit. Most gold occurrences along this fault system are found within 600 metres of the fault, which was likely instrumental in the mineralizing events. The underground Carolin workings have remained in good condition but the surface infrastructure has deteriorated markedly. Significant mineral resources remain within the mine area and the underground development is in place to quickly resume exploration activities. Exploration work in 1995 and 1996 developed significant new targets that have not been actively pursued to date. In addition, the Carolin mineralization has not been systematically explored toward the McMaster zone. Figure 17.1 illustrates the relative locations of the Carolin mine, Montana showing and McMaster zone. This longitudinal section defines the drilled areas within them and the trend line between them that remains untested. Along that trend the Montana showing has gold mineralization similar to that at the Carolin mine and McMaster zone. (see press release of December 15, 2011) Historical trenching above the top mine adit (1000 level) at the Carolin mine found considerable widths of good grade gold mineralization on surface (press release from Athabaska Gold Resources, dated September 18, 1996, as noted in Section 19.0) This occurrence was tested by a small 12-hole surface diamond drilling program in late Significant mineralization was encountered in all the holes, helping to further define the potential for a starter open pit. Follow up drilling is recommended, along with surface sampling and mapping. The McMaster Zone, a surface occurrence some 1.2 km along trend from the Carolin workings has been explored with six campaigns of surface drilling, from 1975 to The more recent drilling expanded the zone and highlighted its open pit potential. 74

75 Small past producing mines (Emancipation, Pipestem) and surface showings (Montana and Lorrainne) occur along the mineralized trend, within several km of the Carolin Mine. All have seen only piecemeal and sporadic exploration and have significant exploration potential. This report reviews the Carolin Mine, McMaster Zone and tailings deposits and summarizes the Mineral Resources reported for each zone. (Section 14.0) Resources for the McMaster and Carolin zones are reported as Inferred due to the lack of historical drill core for verification. A number of historic mineral resource estimates were reviewed to provide a comparison base to the current estimates summarized in Section 14. The current resources are significant and open to upgrading and expansion through the recommended work programs. (Section 18.0) Previous technical reports have recommended that a geological model be developed for the Carolin Mine, to include all available information regarding rock type, structural data, mineralization details and assay records. This work is underway and when completed will prove to be a useful tool to allow data verification of current, historical and future Mineral Resource estimates. In 2009, Century Mining Corp completed a resource estimate for the mine. There was no technical report provided, thus the input data and calculation details cannot be verified by an Independent QP. The stated global resource estimates agree reasonably well with the current Mineral Resource summarized in Section Specific gold grade cutoff estimates show significant variation from the current resource estimate but a direct comparison and verification is not possible without more detail around the assumptions made and calculation procedures used in the Century estimates. Completion of the mine geological model will assist with understanding the Century estimate and making comparisons to other estimates. 75

76 Figure 17.1 Carolin Mine to McMaster Zone Longitudinal Section Legend; Cutoff (g/t) Colour 76

77 18.0 RECOMMENDATIONS Review and collate all available data on record between the historic Emancipation and Pipestem mines, a 6 km strike length. This data will include survey control (expanding on the 2011 McElhanney work, Figure 18.1), topography, geological mapping, geochemical surveys, geophysical surveys, structural (faults and folds) geology and interpretation, surface diamond drill holes, surface trenching; along with the underground data from the Carolin, Emancipation and Pipestem workings. Continue to build a computerized geological property model to reflect the data available and develop a series of geological cross-sections across the 6 km of mineralized trend, at an appropriate scale and section spacing. These modeled sections will highlight specific and general exploration ready targets. Continue to surface explore the McMaster Zone, through a dedicated drilling program to: 1. upgrade the Inferred category mineral resources to Indicated and, 2. expand these mineral resource along strike and down dip. Reopen the Carolin mine underground workings for rock sampling (chip, channel, stockpile etc) and diamond drilling. This will enable: 1. confirmation of existing resources in and around the areas previously in production, 2. confirmation and expansion of the post production discoveries to the north and west, 3. upgrade of the Inferred mineral resource to the Indicated category as the verifiable database is expanded. Recent logging has provided access and the potential for well located surface drilling platforms along the mineralized trend west and north of the Carolin workings (Figure 18.2). Surface drill programs are recommended to test this trend, in conjunction with the underground drilling planned upon reopening of the Carolin mine. Continue to confirm the potential for a starter open pit above the Carolin mine. This work program would consist of surface surveying and sampling, followed by additional surface diamond drilling to define the extent of mineralization trenched earlier and diamond drilled in late Refocus surface exploration along the 6 km mineral trend between the Emancipation and Pipestem mines, including geological mapping, geochemical and geophysical surveys (surface IP, surface Mag etc). (Figure 6.2) This work will include surface diamond drilling as targets mature. 77

78 An internal report, completed in April 2009, has provided an estimate of the potential quantity and grade of gold mineralization for the Carolin zone. This exercise used all available property data to build a computerized block model of this zone, and reported on the exploration potential therein. This potential may be reported within a range of 5.0 to 5.6 million tonnes, grading between 4.2 to 4.8 gpt gold at a 2.5 gpt gold grade cutoff, or between 0.9 to 1.1 million tonnes grading between 8.0 to 9.0 gpt gold, at a 5.0 gpt gold grade cutoff. This potential quantity and grade of mineralization is conceptual in nature and there has been insufficient exploration work done to define this potential as a mineral resource and it is uncertain if further exploration will result in this potential quantity and grade being realized, in whole or in part, as a mineral resource. The range of tonnage and grade noted above has been outlined using all available property mining and exploration data for the Carolin zone. This data was built into a geological model and extrapolated in a reasonable manner to provide an exploration target for the work here recommended. The principal work requirement for advancing this property is a comprehensive program of strategic underground diamond drilling. This work is fundamental to confirming and quantifying the extent of gold mineralization within Carolin zone, such that a comprehensive and updated geological block model can be constructed for on-going mineral resource calculations. 78

79 Table Summary of Recommended Work Program Component Cost ($ Cdn) 1 Property review, survey control and data collation 50,000 2 Computerization of data and model building, construction of geological model & cross-sections, target development 3 Re-open Carolin workings; confirm, upgrade and expand mineral resources (including the 1995/96 discoveries) by underground drill programs. 5,000 50,000 1,000,000 4 Geochemical surveys, regional and targeted 100,000 5 Surface geophysics, ground IP and Magnetometer 100,000 Total cost 1,300,000 79

80 FIGURE SURVEY MONUMENTS 80

81 FIGURE SATELLITE MAP CAROLIN MINE AREA 81