The Viking Project

The 6,225 hectare Viking Project is located 10 km southwest the communities of Pollards Point and Sop’s Arm in White Bay, Newfoundland and Labrador, and approximately 180 km by road (100 km by barge) from Anaconda’s Pine Cove mill. The project is accessible via a 2.5 km forest road leading from provincial Route 420 that intersects the Trans-Canada Highway approximately 75 km to the south.

The Viking Project consists of ground acquired under two option agreements with Spruce Ridge Resources Ltd. on the adjoining Viking and Kramer Properties, as well as ground staked 100% by Anaconda. These agreements allow the Company to acquire a 100% undivided interest in the Viking Project.

The Project centered along the Doucer’s Valley Fault, a regional splay off the Long Range Fault. The Doucer’s Valley Fault is a significant geological control on and host to several gold deposits, including Anaconda’s Thor Deposit (63,000 ounces Indicated and 20,000 ounces Inferred Resources) and the Rattling Brook Deposit (495,000 ounces Inferred Resources).

Mineral Resource

The Viking Property is host to several gold bearing trends including the Thor Trend and Deposit and the Viking, Asgard, Thor’s Cross and Odin’s Triangle Trends.  The Thor Deposit contains an Indicated Mineral Resource of 63,000 ounces Au (937,000 tonnes at an average grade of 2.09 g/t) plus an Inferred Mineral Resource of 20,000 ounces Au (350,000 tonnes at an average grade of 1.79 g/t) at a cut-off grade of 1.0 g/t Au.  The Thor Deposit remains open for potential expansion along strike near surface and at depth.

Thor Deposit Mineral Resource Estimate^

Au Cut-off

(grams per tonne)

Tonnes> Cut-off

(tonnes)

Grade > Cut-off

Au (grams per tonne)

Contained

Ounces Au*

 

Indicated

 

 

0.50

1,817,000

1.42

83,000

1.00

937,000

2.09

63,000

2.00

357,000

3.19

36,600

 

 

 

 

 

Inferred

 

 

0.50

847,000

1.15

31,000

1.00

350,000

1.79

20,000

2.00

94,000

2.90

8,800

 

 *Mineralized domains are spatially constrained and capped.

The Indicated and Inferred Resources referenced above are taken from a technical report filed on SEDAR titled “NI 43-101 Technical Report And Mineral Resource Estimate For The Thor Deposit, Viking Project, White Bay Area, Newfoundland and Labrador, Canada, Latitude 49o 42′ N Longitude 57o 00′ W” prepared for Anaconda Mining Inc. by David A. Copeland, P.Geo., Dr. Shane Ebert, P. Geo. and Gary Giroux, P. Eng. M.ASc., August 29, 2016.

The Historical Mineral Resource Estimate of the Thor Deposit is based on 109 diamond drill holes totaling 15,574 m and 74 lines of surface channel samples cut from trenches. Gold mineralization was constrained within a 3-dimensional geological solid built using Gemcom software. Gold assays within the mineralized solid were capped at 66.0 g/t Au while those outside the solid were capped at 4.0 g/t Au. Drill hole assay samples were composited into 2.5 m intervals and a block model with 5m x 5m x 5m block size was created. Gold grades were interpolated into all blocks, by a combination of ordinary and indicator kriging.

Geology and Mineralization

Bedrock geology on the property is characterized by ~1500 Ma granitoid gneisses that were intruded by both ~1980-1030 Ma granitoid bodies and late Proterozoic mafic and ultramafic dikes. Gold mineralization in the area was first explored by BP Selco Ltd. in 1986 and low-grade gold mineralization (<1.0 grams per tonne) occurring in altered gneisses and associated quartz veins was first encountered in drilling on the property by Noranda Exploration Company Limited in 1989. In 2007 Northern Abitibi Mining Corp. discovered high-grade gold mineralization (>20.0 grams per tonne) within quartz veins hosted by altered granitoid gneisses and intrusions. Subsequent trenching and sampling resulted in the discovery of the Thor Deposit, which was partially delineated through several core-drilling programs.

Mineralization and alteration are mainly developed in potassium-feldspar megacrystic to augen granodiorite of the Main River Pluton. Mineralization and alteration on the Kramer Property are developed in the Main River plutonic rocks and adjacent Cambro-Ordovician quartzites. The Thor Trend consists of mesothermal style quartz ± iron carbonate ± sulfide veins and stockworks hosted by altered Precambrian intrusive rocks. Surface mapping and drill core observations show that quartz veins within the Thor Trend commonly contain 2- 5% total sulfides consisting of pyrite, galena, chalcopyrite or sphalerite, and locally show trace amounts of visible gold.

Gold grades within the quartz veins range from less than 1.0 up to 335 g/t and sheeted or stockwork vein sets surrounding high-grade veins typically contain 0.5% – 2% pyrite-galena-chalcopyrite-sphalerite along with minor visible gold. Iron carbonate is locally present in both high-grade veins and in mineralized vein stockworks. High-grade veins ranging from a few 10’s of centimetres to a few metres in width are common and are typically surrounded by a halo of veinlets containing lower grade mineralization. High-grade veins occur in all 3 of the main rock types (granite, augen gneiss, diorite) whereas larger lower grade zones of mineralization are best developed within the granite and augen gneiss units, and poorly developed within the diorite.

The Viking trend is host to a significant zone of altered and quartz-sulphide veined granodiorite augen gneiss, foliated monzogranite and deformed mafic rocks up to 45 m thick and extending over a strike length of 3+ kilometres. Trenching along the Viking Trend has returned Au grades ranging between 0.10 and 0.40 g/t over continuously sampled intervals of up to 40 m, and high-grade results including a grab sample from a large boulder of altered granite from the northeast end of the Viking trend which returned 12 g/t Au, and a channel sample grading 9.9 g/t Au and 52 g/t Ag over 1.4 m. This northeast trending zone of anomalous Au in-soil geochemistry and linear magnetic low is interpreted to be a moderately east-dipping reverse fault which splays into the Doucers Valley Fault. Based on the lateral extent of gold in soil and rock mineralization and thickness of the host alteration system the Viking Trend warrants follow-up exploration drilling.

Metallurgical Testing

Preliminary metallurgical test work was completed on the Thor Deposit in 2010 and in 2015. The 2010 sample consisted representative drill core and was conducted by Met-Solve Laboratories Inc. of Burnaby, British Columbia. The work included screen analysis to determine average free gold particle size, preliminary grind size versus recovery studies, and determination of gravity recoverable gold percentage and gold recovery by bottle roll cyanide leaching. Results of the metallurgical testing showed that gold mineralization at the Thor Trend is not refractory and can be readily extracted by gravity or cyanide recovery methods. No significant metallurgical concerns were identified. Results included: gold recovery of 97% by cyanide leaching of a 59-micron grind size product, 70% of the gold is recoverable by gravity concentration methods at a 97-micron grind size, and higher gravity recoveries might be possible through process optimization.

As part of its due diligence, Anaconda Mining conducted metallurgical testing in late 2015, which indicates that ore from the Thor Deposit could be processed at the Pine Cove Mill using current flotation and leach circuit configuration. The results of the study are based on a homogenized sample collected from two diamond drillholes. Bench scale test work, conducted by NB Research and Productivity Council, primarily focused on flotation, cyanide leaching and grinding to evaluate the response of the Thor Deposit material to the current plant flow sheet for the Pine Cove Mill. In a flotation test, using a grind of (80% passing) 150 µm, currently used for Pine Cove ore, the Thor Deposit sample attained 96.0% Au recovery in 4.4% of the mass at a grade of 35.12 grams per tonne Au in the rougher stage. In a bottle roll cyanidation test the current Pine Cove Mill, regrind size of (80% passing) 20 µm obtained 94.1% Au extraction without requiring accelerating reagents and consumed 1.1 kilograms per tonne NaCN compared to 3.6 kilograms per tonne for Pine Cove ore. A Bond Ball mill grindability test was performed utilizing a limiting screen size of 150 µm and indicated that the sample has a Bond Ball Work Index value of 18.5 kWh/t.

Exploration

Anaconda Mining conducted a 33 hole, 5,184 m diamond drill program during the summer and fall of 2016 on its Viking Project, with goal to expand the resource size of the Thor Deposit and define economic gold mineralization in other prospective areas of the property. The 2016 drilling program tested seven major target areas on the Viking Project: the Thor North, Thor South, Thor, Thor’s Cross, Viking, Asgard, and Kramer prospects.  Drilling tested a combination of alteration and mineralization exposed at surface, IP (chargeability) and magnetic (vertical gradient lows) geophysical and soil geochemical (Au, As) anomalies. At Thor North and Thor South drilling was designed to test for immediate northerly and southerly extension to the gold resource at the Thor deposit.  At Thor’s Cross, drilling tested beneath outcrop exposures of gold mineralization and hydrothermal alteration that were associated with Au-soil anomalies, vertical gradient magnetic lows, and mapped fault systems.  Along the Viking trend drilling tested the exposed, thick (~40 m) alteration zone that was associated with coincident IP chargeability (historic and recent), vertical gradient magnetic lows, and Au-As soil anomalies.   Drilling at Asgard tested a known alteration trend and coincident IP chargeability responses, while a single drillhole at the Whiskey Jack occurrence at Kramer undercut known mineralization in hole KR-10-07 and 08 (1.12 g/t gold over 20.05 m and 1.50 g/t gold over 14.4 m, respectively).

Drilling at each of the prospects was successful in intersecting zones of hydrothermal alteration and quartz veining, and low-tenor (generally <3 g/t Au) at each of the prospect areas tested. 

Anaconda was successful in extending the strike length of the Thor Deposit and outlined broad zones of mineralization at the Viking Trend along with discovering new mineralization at Thor’s Cross. The Viking Trend and Thor’s Cross also contained localized high grade intersections. Highlights of the exploration program include:

  • Gold bearing alteration zones intersected in 21 of 33 drill holes illustrating a widespread mineralizing system present at the Viking Project.
  • Extending the Thor Deposit 100 m north along strike, for a total of 650 m of strike length, at shallow depths, as demonstrated by 2.73 g/t Au over 6.0 m in hole VK-16-30, 1.25 g/t Au over 7.0 m in hole VK-16-31, and 1.16 g/t gold over 4.0 m in hole VK-16-132.
  • Intersecting a 40 to 80 m wide zone of very intense alteration, and broad zones of gold mineralization that characterize the Viking Trend as exemplified by 0.45 g/t Au over 20 m in hole VK-16-151 and 0.37 g/t Au over 16.5 m in an historic drill hole, VK-11-125 as well as local high grades as indicated by 7.43 g/t Au over 1.0 m in hole VK-16-155.
  • Determining that Thor’s Cross is an area at least 100 m in strike length, characterized by a 20 m wide zone of alteration and gold mineralization coincident with a fault structure as demonstrated by 0.78 g/t Au over 10.3 m in hole VK-16-144, 0.42 g/t Au over 8.0 m in hole VK-16-141 and 0.45 g/t Au over 7.9 m in hole VK-16-143 as well as local high grades as indicated by 9.93 g/t Au over 0.3 m in hole VK-16-148.
  • Follow-up drilling in VK-16-161 at the Whiskey Jack prospect below drillholes KR-10-07 and 08 intersected 1.21 g/t Au over 2 m and 2.55 g/t Au over 3 m.
  • Prospecting at Viking and Kramer uncovered outcrops with 1.37 and 1.38 g/t Au, and float samples with 6.44, 3.44, 1.17, and 1.07 g/t Au. The 3 soil samples with the highest grade are from the western grid adjacent to the Viking Fault were 0.79, 0.75, and 0.5 g/t Au respectively. The two highest channel samples were split between the Kramer Main and Kramer East prospects. Respective to the localities listed they have gold concentrations of 0.84 and 0.89 g/t Au, with no continuity.
  • The IP survey had chargeability anomalies along the Viking Fault and at Thor South. The IP highs were targeted by drilling. The ground magnetics survey at Kramer Main and Kramer East delineated several local magnetic lows. At Kramer East one magnetic low is associated with the Cambrian Unconformity. The only magnetic low targeted by drilling is at Whiskey Jack where it is associated with mineralization discovered by previous work.
  • Fingerprinting of the key geochemical, geophysical, and structural characteristics of the Thor Deposit and developing new, refined drill targets based on the fingerprint characteristics.

 

^NI 43-101 Technical Report And Mineral Resource Estimate For The Thor Deposit, Viking Project, White Bay Area, Newfoundland And Labrador, Canada. Prepared for Anaconda Mining Inc. By David A. Copeland, M.Sc., P.Geo., Shane Ebert, Ph.D., P.Geo., and Gary Giroux, Masc., P.Eng. (Independent Qualified Persons). Effective Date: August 29, 2016. Publication Date: August 29, 2016.


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