Reserves and Resources

On June 9, 2015, Gowest announced the results from the Pre-Feasibility Study (“PFS”) completed for its 100% owned Bradshaw Gold deposit (“Bradshaw”), part of the larger North Timmins Gold Project (“NTGP”). In preparing to reach this critical milestone, Gowest has raised sufficient capital over the last few years to enable the Company to significantly advance Bradshaw by expanding the historical resource (through drilling and analysis in excess of 65,000 meters of core), developing a detailed mine plan and completing the work required to obtain the various mining permits. The PFS was conducted by Stantec Mining (“Stantec”) through their Mississauga, Ontario office. The PFS was focused on mining the upper 500 vertical meters (“m”) of mineralization at Bradshaw. Previous drilling has intercepted mineralization at a vertical depth of 1,350 m, indicating the deposit remains open for additional development.

Mineral Reserve Estimate

The defining of probable reserves is a significant step forward for the Bradshaw, which has previously reported only mineral resources. While useful, these resources were estimated using less critical and non-economic technical parameters. The PFS Mineral Reserve is based on an economic analysis of the updated mineral resource using the costs developed during the PFS, and the metallurgical and ore sorting test work to estimate the recovery factors. The Mineral Reserve estimate also incorporated engineering and operational design parameters described in the PFS conducted by Stantec.

The deposit is planned to be mined using blast hole stoping with delayed backfill methods with 30 m sub-levels in the majority of the mining areas.   Internal dilution has been included in the final Mineral Reserve estimate.  Stantec is of the opinion that this Mineral Reserve estimate reasonably quantifies the economical ore mineralization of the Bradshaw. The Mineral Reserve is effective as of June 5, 2015.

BRADSHAW MINERAL RESERVES (at a 3 g/t Au cut-off)

Category Tonnes Average Grade Ounces of Gold
Probable 1, 787,295 4.82 g/t Au 277,101

 

The total amount of gold (305,058 oz) expected to be extracted at Bradshaw during initial mining consists of the mineral reserves and mineralized development rock. The development rock is material that will be excavated when mining drifts cut through the mineralized zones to access the mineral reserves. This development rock was calculated to be 664,479 tonnes grading 1.30 g/t Au.   The planned utilization of advanced ore sorting technology will upgrade the gold concentration of the development rock for shipping to the mill for processing.

Mineral Resource Estimate

An updated mineral resource estimate was prepared for the Bradshaw Deposit as part of the PFS as follows: Indicated Resources 2,121,866 tonnes grading 6.19 g/t Au and Inferred Resources of 3,629,097 tonnes grading 6.47 g/t Au using a 3 g/t Au cut-off grade, effective January 12, 2015.

The purpose of the update was to incorporate new drill hole and assay data from infill drilling completed in 2013 and 2014 since the last reported mineral resource in November 2012.  The new model and resource is based on diamond drilling and assay data from 322 drill holes (93,867 m) and 22,736 assay samples. Of this total, 62 drill holes (12,414 m) came after the November 2012 mineral resource. These new drill holes represent a significant increase in the density of geological and assay information available in the upper half of the deposit, which now has drill hole spacing of approximately 25 m (previously it was approximately 50 m drill hole spacing). It is reported in accordance with the requirement of National Instrument 43-101 – Standards of Disclosure for Mineral Projects and CIM Standards on Mineral Resources and Reserves.  This resource estimate and block model was used by Stantec for their report. While the Indicated Resource has changed from the 2012 report (Gow, November 15, 2012) due to implementation of more rigorous modelling parameters such as improved wireframes, reduced search distances and removal of non-compliant historical drill holes, it has also shown an increased average grade of 6.2 g/t and the emergence of two additional hanging wall zones, as well as an average drill hole spacing of 25 m.

Indicated Resources at the Bradshaw were identified above 500 m vertical depth for the Main Zone (“MZ”) 1 and MZ2 and above 400 m vertical depth for the Hanging Wall Zones (“HWZ”), where drill hole spacing is approximately 35 m or less.  Inferred Resources occur directly below the Indicated Resources and the deposit remains open along strike and at depth.

 Bradshaw Mineral Resource Estimate as of January 12, 2015

    3 g/t Au cut off
Category Zone Volume Tonnes Au grade OZ
Indicated MZ1            142,735          412,503 6.14              81,429
MZ2            219,579          634,583 5.88            119,963
HWZ1            119,598          345,637 6.35              70,563
HWZ2            103,550          299,258 5.33              51,281
HWZ3                67,138          194,029 6.93              43,230
HWZ4                43,978          127,096 6.16              25,171
HWZ5                18,372            53,094 8.01              13,673
HWZ6                19,262            55,666 9.36              16,751
  TOTAL            734,212        2,121,866 6.19            422,059
Inferred MZ1            114,793          331,752 8.64              92,153
MZ2            373,044        1,078,096 4.36            151,121
HWZ1            240,116          693,934 5.16            115,119
HWZ2            196,164          566,913 6.45            117,559
HWZ3            153,560          443,788 11.85            169,073
HWZ4            178,067          514,614 6.62            109,527
  TOTAL          1,255,744        3,629,097 6.47            754,553

Notes:

  1. CIM (Canadian Institute of Mining, Metallurgy and Petroleum) definitions were followed for Mineral resources.
  2. Mineral Resources are estimated at a cut-off grade of 3 g/t Au.
  3. Mineral Resources are estimated at a long-term gold price of US$1,200/oz., and a $US/$CAD exchange rate of $0.80.
  4. A minimum width of 2 m was used.
  5. Bulk density of 2.89 g/cm3 was used.
  6. The mineral Resource estimate is based on drilling up to December 2014.

Details of the updated mineral resource and reserves estimate can be found in Stantec’s Bradshaw Gold Deposit NI 43-101 Technical Report and Prefeasibility Study, which is to be available by late July 2015.