Novo Tlamino

The Novo Tlamino Project is composed of 7 mineral permits, covers total of 521.8 square kilometers of exploration ground and is located in the Serbo-Macedonian Massif (“SMM”), a belt of Tertiary age igneous and metamorphic rocks that runs north-south through Serbia, and into Macedonia, Bulgaria and Greece.

In the most general terms, precious and base-metal mineralization occurs in the SMM where the volcanoclastic host rocks of the belt have been intruded by felsic porphyritic units. The contact zones between these intrusive rocks and their hosts are thought to control base and precious metal mineralization in the region. The SMM lies west of Serbia’s Timok district, which hosts a number of copper-gold porphyry-epithermal deposits including the Company’s Timok East Project.

The Novo Tlamino project

Between the 1950’s and the 1970’s the Yugoslav government systematically explored the SMM for lead and zinc but not gold, opening up significant exploration opportunity for Electrum. In Greece, however, the SMM gives host to a number of gold deposits including the high-grade Skouries Au-Cu porphyry and the Olympias Au-rich polymetallic carbonate replacement deposit, both operated by Eldorado Gold Corporation.

Within the Novo Tlamino Project, there is a historic gold inferred resource, so called the Tlamino gold project.

The Tlamino gold project is located near Bosilegrad in the far southeast of Serbia, and consists of two contiguous exploration licences, Donje Tlamino and Surlica-Dukat, covering a total area of 192 square kilometers. The Donje Tlamino Licence hosts the Barje Prospect, for which there is an Inferred Mineral Resource containing approximately 680,000 oz AuEq in 7.1Mt grading 3.0 g/t AuEq at cut-off grade of 0.7 g/t AuEq.

Following the acquisition of the Tlamino gold project in 2016, Medgold Resources Corp. (today Electrum Discovery Corp.), and over the following three years completed soil sampling, Induced Polarization geophysics, surface and underground channel sampling, returning intervals of 84 meters at 5.6 g/t Au and 105.2 g/t Ag, and 52 meters at 2.20 g/t Au and 88 g/t Ag. Between 2018 and 2019 Medgold also completed 55 diamond drill holes for a total of over 9,000 meters, returning near-surface intervals including 30.0 meters of 5.45 g/t Au, 13.35 meters @ 5.06 g/t Au and 38.20 meters @ 3.98 g/t Au from the Barje Prospect. Mineralization at Barje is near-surface, breccia-hosted, and is developed along the plane of a low-angle fault.

The Barje Prospect is the most advanced prospect within the Tlamino gold project. It is located on an east-west trending ridge at elevations ranging from approximately 1100 metres in the east to 1300 metres in the west. Medgold’s drilling has confirmed the continuation of mineralization between and to the west of the discovery outcrops in an area of 700 metres east-west by 250 metres north-south. Said mineralization is controlled by a hydrothermal breccia, of up to 20 metres in thickness, following a structure inclined approximately 18° towards the south. This structure cuts a fault-bounded sequence of schist and conglomerate above a dacite sill intruded along a detachment surface at the top of the basement rocks.

While mineralization is strongest in the hydrothermal breccia, a halo of lower-grade mineralization is also found in the overlying rocks. The hydrothermal breccia comprises transported clasts of the local wall-rocks cemented by a matrix of quartz ± calcite/siderite and sulphide minerals, including pyrite, arsenopyrite, sphalerite, galena and more rarely chalcopyrite and tennantite. Grains of electrum up to around 50 microns in size and containing approximately 60% gold and 40% silver, have been observed microscopically within the higher-grade mineralization.

An Inferred Mineral Resource containing approximately 680,000 oz AuEq in 7.1Mt grading 3.0 g/t AuEq at cut-off grade of 0.7 g/t AuEq was reported on January 30, 2020, and is presented in Table 1. Example cross-section and a block model view of the resource are given in Figure 1. This estimate was prepared in accordance with National Instrument 43-101 (NI 43-101) and CIM Definition Standards by Addison Mining Services Ltd. of the United Kingdom.

Notes to the Mineral Resource Estimate:

1. The independent Qualified Person for the Mineral Resource Estimate, as defined by NI 43-101, is Mr. Richard Siddle, MSc, MAIG, of Addison Mining Services Ltd since November 2014. The effective date of the Mineral Resource Estimate is January 13, 2020.
2. These Mineral Resources are not Mineral Reserves as they do not have demonstrated economic viability. The quantity and grade of reported Inferred Resources in this Mineral Resource Estimate are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as Indicated or Measured, however it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
3. Mineral Resources in Table 1 are presented as undiluted and in-situ for an open-pit scenario and are considered to have reasonable prospects for economic extraction. Pit optimization was carried out assuming pit slopes of 45° with other parameters as per the cut-off grade (see below).
4. A cut-off grade of 0.7 g/t AuEg was used for the Mineral Resource Estimate. This cut-off grade was calculated on the basis of the following assumptions: a gold price of 1350 USD/oz, a silver price of 16 USD/oz, mining costs of 3.30 USD/t, mining recovery and dilution of 5% and processing costs including tailings and concentrate handling of $21/t. G&A costs were included within mining and processing costs. Per metallurgical test work completed to date, recovery to concentrate after flotation of 89.4% for gold and 92.3% for silver were assumed; metals were assumed to be 80% payable. Recovery of gold and silver from partially oxidized material has not been tested. For the selection of cut-off grade and for pit optimization parameters, the partially oxidized material was assumed to have the same concentrate recoveries as indicated from the combined fresh rock composites.
5. Geological and block models for the Mineral Resource Estimate used data from 33 surface drillholes performed by Medgold in 2018 and 2019; data from four drillholes completed by Avala Resources Ltd., a prior operator, were used to constrain the model though they did not intercept significant mineralization. The drill database was validated prior to resource estimation and QA/QC checks were made using industry-standard control charts for blanks, core duplicates and commercial certified reference material inserted into assay batches by Medgold and by comparison of umpire assays performed at a second laboratory. No QA/QC was possible on the data relating to the drilling by Avala.
6. The geological model as applied to the Mineral Resource Estimate comprises two mineralized domains, a shallowly inclined high-grade hydrothermal breccia unit and a lower-grade schist unit immediately overlying the hydrothermal breccia. Individual wireframes were created for each domain. Weathering domains of fresh and partially oxidized material were defined within the two mineralised domains.
7. The block model was prepared using Micromine version 2020, Services Pack 1, A 10 m x 10 m x 4 m block model was created with sub-blocks of minimum 2 m x 2 m x 2 m on domain boundaries. Grade estimation from drillhole data was carried out for Au, Ag, As, Cu, Pb, Zn, Fe, S using Ordinary Kriging and was validated by comparison of input and output statistics, kriging neighbourhood analysis and by inspection of the assay data and block model in cross section. A gold equivalent (AuEq) grade was calculated for each block using the formula AuEq = ((Ag g/t) x 0.012)) + (Au g/t).
8. Bulk density values were calculated for each block of the model based on a broad linear relationship observed between 152 measured bulk density values within the mineralized domains and the assayed values of As, Cu, Fe, S, Pb and Zn. Blocks within the partially oxidized material were assigned a single bulk density value of 2.54 g/cm3.
9. Estimates in Table 1 have been rounded to two significant figures.
10. CIM Definition Standards for Mineral Resources have been followed.
11. The independent Qualified Person has been made aware that Medgold’s previously approved three-year work program for The Donje Tlamino exploration licence covering the Barje Prospect ended 31st October 2019. Medgold met all minimum work and expenditure requirements related to this work program and has submitted an additional work program to cover a further 3-year exploration period. Medgold has no reason to expect that the additional work program should not be renewed. The independent Qualified Person is not aware of any additional known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues that could materially affect the Mineral Resource Estimate.

Figure 1 – Cross-sections through the Barje Mineral Resource Estimate for the Barje Prospect

Metallurgical test work for the Mineral Resource Estimate included bulk rougher flotation tests on two composite samples blended from approximately 50 kg of drill core representing medium- and high-grade gold mineralization within unweathered hydrothermal breccias at the Barje Prospect. The composites reported head grades of 2.04 g/t and 10.99g/t Au and gold recoveries to concentrate of 88.2% and 90.5%, respectively. The same composites reported silver head grades of 15.1 g/t Ag and 107.2 g/t Ag, and silver recoveries to concentrate of 88.2% and 96.4% respectively. A summary of these results is presented in Table 2.

The metallurgical test work used conventional flotation methodology at a grind size of -74 microns, a pH of 8.2, a conditioning time of 3 minutes and a flotation time of 9 minutes. Metallurgical analyses were performed by Resource Development Inc. of Wheat Ridge, Colorado, and were overseen by Woods Process Services LLC of Denver, Colorado.

The Tlamino gold project has a straightforward site access via national and forest roads, ready power availability from adjacent 110 kV and lower voltage transmission lines already supplying the nearby Podvirovi Mine, 30 minutes from the municipality of Bosilegrad.