Resource Summary

PROVEN & PROBABLE

Resource
Class

Tonnes (mm)

Au Equivalent g/t

Au
g/t

Ag
g/t

Cu
%

Zn
%

Contained Au EQ (000 oz)

Contained Au (000 oz)

Contained Ag (000 oz)

Contained Cu (mm lbs)

Contained Zn (mm lbs)

Proven

8.4

2.35

1.41

15.75

0.17

0.75

614

368

4,115

31.5

138.9

Probable

72.5

2.37

1.44

13.98

0.17

0.78

5,347

3,247

31,525

271.7

17.6

Total P&P

80.9

2.37

1.44

14.14

0.17

0.77

5,961

3,616

35,640

303.2

156.5

 

MEASURED & INDICATED + INFERRED (at C$55 NSR cut-off)

Resource
Class

Tonnes (mm)

Au Equivalent
g/t

Au
g/t

Ag
g/t

Cu
%

Zn
%

Contained Au EQ (000 oz)

Contained Au (000 oz)

Contained Ag (000 oz)

Contained Cu (mm lbs)

Contained Zn (mm lbs)

Measured

9.3

2.59

1.58

16.20

0.19

0.83

770

470

4,824

38.0

168.5

Indicated

81.9

2.56

1.55

14.74

0.18

0.89

6,731

4,070

38,796

325.4

1,599.3

Total M&I

91.2

2.56

1.55

14.89

0.18

0.88

7,501

4,540

43,620

363.4

1,767.8

Inferred

21.5

2.51

1.44

23.04

0.20

0.71

1,736

1,000

15,925

96.3

337.2

 

RESOURCE ESTIMATE NOTES

1.        The effective date of the mineral resource estimate is July 25, 2017. The Independent QP for the Mineral Resource Estimate as required by National Instrument 43 101 is Carl Pelletier, P. Geo., B.Sc., employee of InnovExplo.

2.        Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

3.        While the results are presented undiluted and in situ, the reported mineral resources are considered by the QP to have reasonable prospects for economic extraction.

4.        These estimates include six low-grade gold-bearing mineralized envelopes.

5.        The main low-grade gold-bearing mineralized envelope includes six high-grade gold-bearing zones, one high-grade copper-bearing zone, one high grade zinc-bearing zone, and three high-grade silver-bearing zones. Note that these high-grade zones may overlap each other.

6.        Mineral resources were compiled at NSR cut-offs of (in C$) $40, $45, $50, $55, $60, $65, $70, $75, $80, $85, $90, $95 and $100 per tonne for sensitivity purposes.

7.        The official base case mineral resource is reported at a $55 per tonne NSR cut-off.

8.        The appropriate NSR cut-off will vary depending on prevailing economic and operational parameters to be determined.

9.        NSR estimates are based on the following assumptions: Exchange rate of C$1.00 /0.78 US$; Metal prices as follows: gold $1,300/oz, silver $19.50, copper $2.90/lb, zinc $1.10/lb (inspired from a long-term analyst consensus price forecast study); Net recoveries are variable in function of grade of each commodity. Smelting cost (including transportation) of C$6.52 per tonne (based on the cost mine service, as well as a non-public smelter contract obtained from one of the proposed destinations and talks with transport providers).

10.     Gold equivalent calculations assume these same metal prices.

11.     Inferred Mineral Resources are separate from Indicated Mineral Resources.

12.     The quantity and grade of reported Inferred Mineral Resources are uncertain in nature and there has not been sufficient work to define these Inferred Mineral Resources as Indicated or Measured Mineral Resources. It is uncertain if further work will result in upgrading them to an Indicated or Measured mineral resource category.

13.     The mineral resource was estimated using Geovia GEMS 6.8. The estimate is based on 5,980 diamond drill holes (483,254 m) of which 4,141 cut mineralized zones for a total of 178,150 m of core within these zones. For silver, the estimate also uses the results of an exhaustive metallurgical test comprising 2,112 diamond drill holes assayed for silver over a total length of 75,540 metres. A minimum true thickness of 7.0 m was applied, using the grade of the adjacent material when assayed, or a value of zero when not assayed. Only the silver interpolation in the Inferred mineral resources does not use the material when not assayed.

14.     The estimate database also contains 14,799 channel samples for a total of 23,791 m from historically sampled drifts. Channel sample data was only used for distance to composite criterion for mineral resource classification purposes.

15.     91% of density values were estimated using historical iron assay drill hole data and Falco density data for an average of 3.41 g/cm3. The interpolation method uses three passes for the ENV_A and HG_A to HG_F zones. 8% of the density values were fixed at 2.88 g/cm3 for ENV_B to ENV_E due to the scarcity of the data. 2.88 g/cm3 represents the median of the available data. 1% of density values were fixed at 2.67 g/cm3 for ENV_F due to the scarcity of the data and to adequately characterize this quartz-rich zone.

16.     Compositing was done on drill hole sections falling within the mineralized zones (composite = 3.0 m). Tails shorter than 0.75 m were not generated.

17.     Mineral resources were evaluated from drill holes using an ID2 interpolation method in a block model (block size = 5 x 5 x 5 m).

18.     High-grade capping was done on raw assay data and established on a per zone basis for gold (Au g/t): (HG_A: 35; HG_B: 35; HG_C: 25; HG_D: 35; HG_E: 25; HG_F: 35; ENV_A: 35; ENV_B: 25; ENV_C: 25; ENV_D: 20; ENV_E: 35; ENV_F: 25) and for silver (Ag g/t): SG_HG:100; HG_D: 165; HG_F: 165; ENV_A_SG_Low: 110; ENV_B: 100; ENV_C: 100; ENV_D: 100. Capping grade selection is supported by statistical analysis. No capping was applied to the Cu and Zn data based on statistical analysis.

19.     The reported Mineral Resources are categorized as Measured, Indicated and Inferred. The Inferred category is only defined within the areas where blocks were interpolated during pass 1 or pass 2 in areas where continuity is sufficient to avoid isolated blocks. The Indicated category is only defined by blocks interpolated in areas where the maximum distance to the closest drill hole composite is less than 25 m for blocks interpolated in passes 1 and 2. The Measured category is only defined by blocks classified as Indicated and within sufficient proximity to sampled drifts (< 15m). The average distance to the nearest composite is 6.97 m for the Measured mineral resources, 10.01 m for the Indicated mineral resources and 40.10 m for the Inferred mineral resources.

20.     Tonnage estimates were rounded to the nearest hundred tonnes. Any discrepancies in the totals are due to rounding effects. Rounding practice follows the recommendations set forth in Form 43-101F1.

21.     CIM definitions and guidelines were followed in estimating mineral resources.

22.     InnovExplo is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect the mineral resource estimate.

23.     Metal contained in ounces (troy) = metric tonnes x grade / 31.10348. Calculations used metric units (metres, tonnes and g/t). Metal contents are presented in ounces and pounds.

 

RESERVE ESTIMATE NOTES

1.        The QP, as defined below, for the Mineral Reserve estimate is Mr. Patrick Frenette (InnovExplo).

2.        Estimated at $2.15/lb Cu, $1.00/lb Zn, $1,300/oz Au and $18.50/oz Ag, using an exchange rate of C$1.00:US$0.77, cut-off NSR value of C$55.00/t. Metallurgical recoveries and other parameters for the November 2016 MRE are shown in Chapter 6 of the Feasibility Study.

3.        Mineral Reserve tonnage and mined metal have been rounded to reflect the accuracy of the estimate and numbers may not add due to rounding.

4.        Mineral Reserves presented include both internal and external dilution along with mining recovery.  The external dilution is estimated to be 2.3%.  The mining recovery factor was set at 95% to account for mineralized material left in the margins of the deposit in each block.

Falco Resources Ltd.

1100, avenue des Canadiens-de-Montréal, Suite 300
Montréal, QC H3B 2S2

Tel: +1.514.905.3162

info@falcores.com

+1.514.940.0670
+1.514.940.0669
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