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Summary of PEA

[zukuenftiger]

The Summary of the "PEA" can be read here. Then everyone can form their own opinion.

Based on the results of the PEA Study, the following conclusions can be made:

1. The Madsen Gold Project has significant potential to provide positive and robust returns.

2. Additional exploration and expansion of the potentially mineable resource are warranted including the potential conversion of inferred resources to measured and indicated.

3. The Madsen Gold Project is a brownfield site with existing infrastructure such as an existing mill, permitted tailings management facility, McVeigh Portal, decline and Madsen Shaft. This lowers the estimated capital required to advance the project into production.

4. The PEA considers only mining methods historically used in the past 38 years of production mining at Madsen.

5. The PEA considers approximately 25% of the existing mineral resource tonnes. Opportunities exist to expand the base case scenario in the study through continued exploration and resource growth.

6. Under the existing Environmental Compliance Approval, the mill and tailings management facility is permitted to run at 1,089 tonnes per day leaving capacity for increasing the processing and overall mining rates.

7. Further metallurgical testing and upgrading of reagent and grinding circuit controls could lead to increased gold recovery above the 92% used in the PEA.


The results of this PEA study demonstrate that the Madsen Gold Project has the potential to be technically and economically viable. Significant potential in the McVeigh horizon and satellite targets provide an opportunity for enhancement and optimization of the base case PEA under the existing Environmental Compliance Approval.
Given the positive results of this study and the potential for enhancement, Nordmin recommends a two-phase approach to the advancement of the Madsen Gold Project which would reduce the upfront financial requirement. A phased approach allows confirmation of the initial recommended work, provides opportunity to make changes to the next phase if required, and possibly reduce schedule constraints for the project.
26.1 Phase 1
26.1.1 Geology and Exploration
1. Continue drilling the mineralized zones to increase confidence of the mineral resource.
2. Continue with the current surface drilling program targeting areas where additional mineralization is expected within, below and adjacent to the gold mineralization considered in this study.
3. Update the geological and mineral resource model to incorporate new understanding from exploration drilling.
4. Continue to advance satellite targets, including Russet South through additional exploration and drilling to potential resource definition.

(NORDMIN ENGINEERING LTD., April 20, 2016)