Lithia Motors Inc V.LAD

Project Recommendations from the May 2015 Tech Report...

[MurrayMac]

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 g e o l o g i c a l 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 a d d i t i o n a l surface diamond drilling to define the extent of mineralization trenched earlier and diamond drilled in late 2012.

• 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. 

  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. 

  Table 18.1 -- 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	50,000
  3	Re-open Carolin workings; confirm, upgrade and expand mineral resources (including the 1995/96 discoveries) by underground drill programs. 5,000 metres @$200/m)	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