Khoemacau s Positive Exploration Drill Results and Inferred Maiden Mineral Resources at Zeta NE and the Newly Discovered Zone 5 North Deposits During the 2015 and 2016 exploration programs at the Khoemacau sediment hosted Copper-Silver Project in Botswana, drilling continued to produce encouraging results. Drilling completed 36 holes totaling 14,240 meters at Zeta NE and the newly discovered Zone 5 North deposits (Figures 1 thru 4). Following recent success, further drilling was proposed to test continuity of mineralization and confirm copper-silver grade. The exploration drilling programs exceeded expectations, intersecting continuous high-grade copper and silver mineralization over wide intersections. Deep drilling at Zeta NE included 8 diamond core holes totaling 5,561 meters. Drilling focused on confirming high-grade mineralization at depth and expanding and upgrading the Mineral Resource estimate. These new results have confirmed high-grade copper and silver mineralization over thick intervals to a depth of 900 meters below surface. The Zeta NE deposit remains open at depth and along strike. Highlights of Zeta NE deep drilling exploration results include: Copper intercepts: o 3.01% CuEq (1) (2.51% Cu and 50.9 g/t Ag) over 23.6 meters (16.6 meters true width) in hole HA-1080-D o 2.46% CuEq (1) (2.03% Cu and 43.5 g/t Ag) over 8.3 meters (5.8 meters true width) within a wider mineralized interval of 1.47% CuEq (1) (1.22% Cu and 25.5 g/t Ag) over 23.3 meters (16.3 meters true width) in hole HA- 1100-D o 2.93% CuEq (1) (2.57% Cu and 36.0 g/t Ag) over 7.6 meters (5.3 meters true width) in hole HA-1073-D o 2.05% CuEq (1) 1.71% Cu and 34.0 g/t Ag) over 14.8 meters (10.4 meters true width) in hole HA-1090-D Discovery of the Zone 5 North deposit in late 2015 continued to return outstanding drilling results in 2016. Eighteen diamond core holes totaling 7,085 meters and 10 RC holes totaling 1,594 meters intersected mineralization over a strike length of 5 kilometers and to a depth of 700 meters below surface. The drilling was able to provide high-grade copper and silver results as well as prove high-grade mineral continuity along strike and at depth. This deposit is still open at depth and along strike. Highlights of Zone 5 North exploration drilling results include: Copper intercepts: o 2.79% CuEq (1) (2.30% Cu and 49.0 g/t Ag) over 8.0 meters (7.3 meters true width) in hole HA-1076-D o 2.72% CuEq (1) (2.30% Cu and 42.0 g/t Ag) over 9.0 meters (8.3 meters true width) in hole HA-1077-D o 2.38% CuEq (1) (2.03% Cu and 35.0 g/t Ag) over 8.1 meters (7.5 meters true width) in hole HA-1087-D o 2.47% CuEq (1) (2.20% Cu and 27.0 g/t Ag) over 8.0 meters (7.4 meters true width) in hole HA-1097-D o 2.87% CuEq (1) (2.40% Cu and 47.0 g/t Ag) over 7.3 meters (6.7 meters true width) in hole HA-1099b-D (1) Copper equivalent calculated using US$2.50/lb Cu, US$17/oz Ag and is not adjusted for metallurgical recoveries.
Mineral Resource Estimates These positive drill results lead to two maiden Mineral Resource estimates at Zeta NE and Zone 5 North. The models were built using classification definitions established by JORC and complies with the recommended guidelines of the JORC Code (2012). The estimates were prepared by independent consultants RungePincockMinarco (RPM) of Denver, Colorado. The drilling and assay result cutoff date for the Zone 5 North deposit was June 9, 2016. The drilling and assay database cutoff date for the Zeta NE deposit was August 4, 2016. The Mineral Resource for Zone 5 North was supported by 18 diamond core holes (7,085 meters) and 10 RC holes (1,594 meters) all drilled by Khoemacau. Zeta NE was supported by 76 diamond core holes (14,358 meters) and 110 shallow RC holes (4,527 meters). Eight of the diamond core holes (5,561 meters) were drilled by Khoemacau. All other holes were drilled by predecessors on the property. The drill hole and assay databases have been reviewed and audited by RPM. Two separate block models were completed for each deposit using MineSight 11.0 software. The block models were constrained by interpreted 3D wireframes of the mineralized horizons using a 1.0% Cu cutoff for high-grade mineralization and 0.1% Cu cutoff for lower grade hanging wall and footwall mineralization. Inverse Distance Squared Weighted (IDW) was used for resource estimation. The model was validated using Nearest Neighbor (NN). Both block models were rotated 40 degrees counter-clockwise to align with the 50 degree strike of each deposit. A block size of 10 x 5 x 5 meters was used. Copper and silver assays were variably capped by mineralized horizons prior to compositing, restriction and block grade estimation. Search distances ranged from 600 x 600 x 120 meters to 400 x 400 x 80 meters, depending upon the estimation pass and drill hole spacing for each deposit. Inferred classification was assigned to blocks that used at least two drill holes and the average distance to the closest three drill holes was less than 300m. The Zeta NE Mineral Resource, using a 1% Cu cutoff and constrained within the high-grade wireframe and includes sulphide only material, is presented in the following table: Classification Tonnes (Mt) Cu (%) Ag (g/t) Inferred ¹ ² 24.8 2.19 44.6 The Zone 5 North Mineral Resource, using a 1% Cu cutoff and constrained within the high-grade wireframe and includes sulphide only material, is presented in the following table: Classification Tonnes (Mt) Cu (%) Ag (g/t) Inferred ¹ ² 17.0 2.27 43.4 Notes: 1. Inferred Mineral Resources are not Mineral Reserves and do not demonstrate economic viability. 2. It cannot be assumed that all of the Inferred Mineral Resources will be upgraded to and Indicated or Measured Resource.
Additional Drill Results In the second half of 2016, four additional diamond core holes were drilled at depth at Zone 5 North totaling 4,063 meters of deep drilling and two additional diamond core holes were drilled deep at Zeta NE totaling 1,669 meters. These holes intersected mineralization at depths below the current Inferred Mineral Resource (Figure 5 and 6). These drill results confirm continuous high-grade copper mineralization to depths greater than 1,000 meters below surface at both Zeta NE and Zone 5 North. The results from these holes are in addition to, and were not included in the recent Resource estimates tabulated and reported above. These results have the potential to increase both the tonnage and grade of the Mineral Resource estimate at both Zeta NE and Zone 5 North. An updated Mineral Resource estimate for both Zeta NE and Zone 5 North is planned to begin in Q1 2017 to be released by Q2 2017. Figure 1: Location of Khoemacau Copper Project and Expansion Deposits
Figure 2: Deposit Location of Zeta NE and Zone 5 North Showing General Geology Figure 3: Location of Zeta NE Drilling Results
Figure 4: Location of Zone 5 North Drilling Results
Figure 5: Zeta NE Long Section Colored by Copper Equivalent x Thickness Contours Figure 6: Zone 5 North Long Section Colored by Copper Equivalent x Thickness Contours
Table 1: Drill Results from Zeta NE Hole # Estimated Cu Ag Moly (%) (g/t) (ppm) (m) (m) (m) (m) Section Zeta NE HA-1071-D 600.00 605.87 5.87 4.11 1.60 35.2 1009 N4400 inc. 601.17 605.50 4.33 3.03 2.11 46.9 1352 HA-1073-D 770.00 778.46 8.46 5.92 2.40 34.4 10 N3600 inc. 770.00 777.63 7.63 5.34 2.57 36.2 10 HA-1075-D 553.62 565.85 12.23 8.56 0.22 2.7 10 N3200 HA-1079-D 606.00 621.32 15.32 10.72 0.63 11.9 154 N5200 inc. 606.45 609.00 2.55 1.78 1.61 27.1 729 and 616.16 618.72 2.56 1.79 1.33 27.9 32 HA-1080-D 530.74 554.36 23.62 16.53 2.51 50.9 124 N4800 inc. 530.74 544.26 13.52 9.46 3.20 63.3 194 and 551.54 554.36 2.82 1.97 5.61 119.9 88 HA-1090-D 620.13 639.56 19.43 13.60 1.44 26.6 28 N2700 inc. 624.75 639.56 14.81 10.37 1.71 33.7 33 HA-1096-D 740.00 745.30 5.30 3.71 1.38 28.5 802 N4200 HA-1100-D 883.30 906.58 23.28 16.30 1.22 25.5 395 N4800 inc. 898.00 906.30 8.30 5.81 2.03 43.5 771 HA-1104b-D 743.63 746.01 2.38 1.67 1.54 4.3 711 N4360 HA-1106-D 860.31 879.00 18.69 13.08 0.92 18.8 48 N2500 inc. 870.32 877.34 7.02 4.91 1.53 40.3 40
Table 2: Drill Results from Zone 5 North Hole # Estimated Cu Ag Moly (%) (g/t) (ppm) (m) (m) (m) (m) Section Zone 5 North HA-633-R 78.00 85.00 7.00 6.40 3.52 85.3 176 N126600 HA-634c-R 137.00 143.00 6.00 5.10 2.72 44.9 95 N126600 HA-635-R 120.00 145.00 25.00 12.50 2.73 54.6 59 N127650 inc. 121.00 141.00 20.00 10.00 3.37 67.7 72 HA-636-R 215.00 227.00 12.00 7.20 0.43 3.9 18 N125500 inc. 224.00 226.00 2.00 1.20 0.91 6.7 10 HA-637-R 40.00 65.00 25.00 23.00 0.96 15.0 74 N124600 inc. 46.00 62.00 16.00 14.72 1.31 22.8 110 inc. 46.00 50.00 4.00 3.68 2.49 55.0 216 and 60.00 62.00 2.00 1.84 4.96 66.2 385 HA-638-R 176.00 193.00 17.00 15.64 1.16 14.9 57 N124600 inc. 177.00 186.00 9.00 8.28 1.83 24.3 97 HA-639-R 169.00 195.00 26.00 23.92 0.35 5.6 37 N124050 inc. 172.00 178.00 6.00 5.52 0.94 17.4 103 HA-640-R 55.00 81.00 26.00 23.92 1.09 27.0 171 N128650 inc. 74.00 81.00 7.00 6.44 3.28 97.0 605 HA-641-R 78.00 87.00 9.00 8.28 0.33 8.8 16 N129150 inc. 82.00 85.00 3.00 2.76 0.73 20.1 17 HA-642-R 218.00 232.00 14.00 12.88 0.40 8.9 17 N129150 inc. 226.00 228.00 2.00 1.84 0.96 21.7 56 HA-1076-D 227.80 238.00 10.20 9.38 1.93 41.0 175 N126650 inc. 228.15 236.45 8.30 7.32 2.32 49.2 213 HA-1077-D 242.25 253.43 11.18 10.29 2.00 34.5 33 N127650 inc. 244.00 253.00 9.00 8.28 2.34 42.1 38 HA-1078-D 219.07 222.60 3.53 3.25 1.68 30.0 160 N127150 HA-1081-D 227.00 243.80 16.80 15.46 0.31 4.4 10 N126000 inc. 235.66 238.00 2.34 2.15 1.02 12.5 10
Estimated Hole # From To Interval TRUE Cu Ag Moly (%) (g/t) (ppm) Section (m) (m) (m) (m) HA-1082-D 295.88 297.00 1.12 1.03 0.17 2.5 63 N125050 HA-1083-D 165.48 166.51 1.03 0.95 0.14 6.2 10 N128150 HA-1084-D 216.00 233.73 17.73 16.31 0.23 3.9 16 N128650 HA-1085-D 396.94 404.43 7.49 6.89 2.00 31.7 210 N126850 inc. 396.94 401.55 4.61 4.24 3.15 46.7 334 HA1086-D 377.00 392.35 15.35 14.12 0.84 15.1 36 N126300 inc. 379.26 385.00 5.74 5.28 1.68 28.5 78 HA-1087-D 405.00 417.48 12.48 11.48 1.48 26.6 36 N127200 inc. 407.00 415.04 8.04 7.47 2.03 35.5 49 HA-1088-D 691.00 699.00 8.00 7.36 0.12 1.5 10 N126200 HA-1091-D 630.46 640.33 9.87 9.08 1.41 31.5 184 N127200 inc. 631.08 636.72 5.64 5.19 2.31 53.9 315 HA-1094-D 322.00 331.72 9.72 8.94 0.99 22.6 55 N128200 inc. 323.95 330.05 6.10 5.61 1.38 33.8 78 HA-1095-D 383.85 399.94 16.09 14.80 0.60 7.6 35 N124250 inc. 386.26 391.53 5.27 4.85 0.91 13.3 49 HA-1097-D 480.88 490.59 9.71 8.93 1.89 23.6 93 N124850 inc. 480.88 488.94 8.06 7.42 2.19 26.8 109 HA-1098b-D 421.16 428.63 7.47 6.87 0.92 11.2 79 N128850 inc. 421.16 427.06 5.90 5.43 1.12 13.3 65 HA-1099b-D 1079.60 1096.75 17.15 15.78 1.16 21.2 20 N126350 Inc. 1083.50 1090.83 7.33 6.74 2.40 46.6 34 HA-1101-D 973.46 976.26 2.80 2.58 0.36 8.5 12 N126850 HA-1103b-D 916.62 929.84 13.22 12.16 1.08 15.6 77 N127850 Inc. 917.37 929.23 11.86 10.91 1.17 16.9 84 HA-1105-D 1011.72 1025.06 13.34 12.27 0.84 22.5 27 N127350 Inc. 1013.00 1019.60 6.60 6.07 1.31 39.5 16