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Aurizon Gold Deposit

High Grade Underground Mine-Making Potential

Current Focus: Assessment of u/g mining potential of gold-rich (Au-Ag-Cu) Aurizon

Aurizon Gold 43-101 Report

The Aurizon Zone, located in the southeast corner of the Lac La Hache Property (yellow circle in image), is viewed by EnGold management as having the potential for high grade gold-copper-silver underground mining. EnGold has specifically targeted the Aurizon South area, which has yielded the best gold/copper/silver values within a strong structure demonstrating excellent continuity.

Drilling at Aurizon South indicates gold-copper-silver occurs within a near-vertical structure that measures at least 400m along strike (open), with true widths ranging from 2 m to more than 20 m and extending to 670 m depth with most recent drilling (open). High grades are associated with sulphide-rich (chalcopyrite, chalcocite, pyrite) hydrothermal breccia and related fractures. In fall, 2016, drilling intersected bonanza grades, exceeding 50 gpt Au and as high as 263 gpt Au, associated with quartz veins lying adjacent to the structure, featuring abundant visible gold specks and semi-massive sulphides. Quartz veins have been intersected in surface trenches, and drill holes down to more than 550 m vertical depth (open). Silicification also occurs within the main hydrothermal breccia structure, associated with improved grades (see recent assays in EnGold’s Oct. 26/16, Nov. 23/16, Dec. 21/16 and Jan 18/17 News).

Gold assays from historical and recent drilling include 10.36 grams per tonne (gpt) over 14m (downhole length), 6 gpt/8 m, 26.3 gpt/ 3 m, 6.7 gpt/6 m, 5.1 gpt/10 m, 5.7 gpt/4 m, 6.7gpt/6 m, 11.7 gpt/5 m, 10.7 gpt/2 m, 15.5 gpt/1.9 m, 15.7 gpt/1.8 m and many wider intervals of 3-4 gpt gold. Many of these intervals also carry 1-3 % copper, and 15-96 gpt silver.

Resource Estimate

On January 19th, 2018, EnGold reported that independent geologist Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd (“KGL”) completed and provided to EnGold a maiden Mineral Resource Estimate on the Aurizon South Gold Zone. The maiden, base-case Aurizon South inferred resource estimate, using a 2.5 gpt cut-off grade, totals 1,073,000tonnes grading 3.6 gpt gold equivalent containing 124,206 ounces of gold equivalent. See tables below for additional detail, including estimates based on higher and lower cut-off grades. Recent metallurgical testing completed by ALS Metallurgy on Aurizon South drill core materials showed recoveries of 95%, 92% and 90% for copper, gold and silver respectively.

The estimate is based on the 65 drill holes that have intercepted the structure to date, which remains open for expansion on strike and down dip. The gold-bearing Aurizon South also has significant amounts of copper and silver, and as such, the Company is expressing the resource as a gold equivalent, which incorporates the value of the copper and silver into the resource.

Table 1: Maiden resource estimate for Aurizon utilizing a 2.5g/t AuEq cut-off value.

Cut-off Tonnes AuEq Au Cu Ag AuEq
g/t x 1,000 g/t g/t % g/t ounces
2.5 1,073 3.6 2.48 0.64 5.98 124,206

Notes: The 2.5g/t AuEq cut-off value was calculated using average long-term prices of $1200/oz. gold, $16/oz. silver, $2.75/lb. copper, and metal recoveries of 92% gold, 95% copper, and 90% silver. The base case cut-off grade assumed $90/tonne operating and sustaining costs. All prices are stated in $US.

Table 2: Mineral resource cut-off sensitivities at Aurizon.

Cut-off Tonnes AuEq Au Cu Ag AuEq
g/t x 1,000 g/t g/t % g/t ounces
0.5 5,526 1.70 1.11 0.34 2.95 302,006
1 3,651 2.17 1.41 0.44 3.86 255,251
2 1,529 3.19 2.16 0.60 5.36 156,993
2.25 1,277 3.41 2.32 0.62 5.70 139,835
2.5 1,073 3.60 2.48 0.64 5.98 124,206
3 495 4.69 3.64 0.60 6.01 74,675
4 257 5.87 4.80 0.60 6.99 48,550
5 178 6.53 5.38 0.64 9.34 37,310
6 102 7.26 5.95 0.71 12.58 23,712

Notes:

1) The current Resource Estimate was prepared by Garth Kirkham, P.Geo., Kirkham Geosystems Ltd.

2) All mineral resources have been estimated in accordance with Canadian Institute of Mining and Metallurgy and Petroleum (“CIM”) definitions, as required under National Instrument 43-101 (“NI43-101”).

3) Mineral resources were constrained using mainly geological constraints and approximate AuEq grade domains.

4) AuEq values were calculated using average long-term prices of $1200/oz. gold, $16/oz. silver, $2.75/lb. copper, and metal recoveries of 92% gold, 95% copper, and 90% silver were used. Base case cut-off grade assumed $90/tonne operating and sustaining costs. All prices are stated in $US.

5) All contained metal content values (including equivalencies) were calculated assuming 100% recoveries.

6) Mineral resources are not mineral reserves until they have demonstrated economic viability. Mineral resource estimates do not account for a resource’s mineability, selectivity, mining loss, or dilution. All figures are rounded to reflect the relative accuracy of the estimate and therefore numbers may not appear to add precisely.

On March 5th, 2018, the Company published on SEDAR a Technical Report in support of the above resource calculation in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects. A copy of the report can be downloaded here.

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