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Mineral Resources & Reserves

The Company engaged Mine Development Associates, Reno, Nevada (“MDA”) to update the geological model from first principles and to provide updated mineral resource estimates. The work done by MDA indicates that vein widths are narrower than previously modeled but that vein continuity is well defined with excellent predictability, both along strike and down-dip.

The mineral resource estimates as set out in Table 1 below are shown on a 100% basis and were prepared by MDA under the supervision of Michael Gustin, Ph.D.

Table 1 – Mineral Resource Estimates

In-Situ GradeContained Metal
GoldSilverGoldSilver
ClassificationTonnesTong/toz/tong/toz/tonozoz
Measured4,298,2434,738,0000.9600.02813.370.39130,0001,865,000
Indicated79,237,16787,344,0000.5490.0169.260.271,415,00023,733,000
Measured & Indicated83,535,40992,082,0000.5750.0179.530.281,545,00025,598,000
Inferred21,392,32923,581,0000.3430.0107.200.21245,0004,965,000

Cautionary note to U.S. investors concerning Measured, Indicated or Inferred resources: We advise U.S. investors that while the terms “Measured resources”, “Indicated resources” and Inferred resources” are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission (“SEC”) does not recognize these terms and these terms do not comply with SEC Guide 7 requirements. Investors are cautioned not to assume that any part or all of the material in these categories will be converted into reserves. It should not be assumed that any part of an inferred mineral resource will ever be upgraded to a higher category.

Notes:

  1. Mineral Resources are inclusive of Mineral Reserves.
  2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  3. Mineral Resources are reported at a 0.004 oz/ton (0.137 g/t) AuEq cut-off in consideration of potential open-pit mining and heap-leach processing.
  4. Gold equivalent grades were calculated as follows: AuEq(oz/ton) = Au(oz/ton) + (Ag(oz/ton)/88, which reflect a long-term Au:Ag price ratio of 55 and a Au:Ag recovery ratio of 1.6.
  5. Mineral Resources are reported as partially diluted.
  6. Rounding as required by reporting guidelines may result in apparent discrepancies between tons, grade and contained metal content.
  7. Tonnage and grade measurements are in U.S. and metric units. Grades are reported in troy ounces per short ton and in grams per tonne.
  8. The Effective Date of the mineral resource estimate is December 31, 2014.
  9. Calculated on a 100% basis

Mineral Reserve Estimates

The Company engaged Norwest Corporation (“Norwest”), Vancouver, British Columbia in 2014 to assess mineral reserves for the Project as part of a revised independent feasibility study completed by Kappes, Cassiday & Associates, Reno, Nevada (“KCA”) in February 2015.

Norwest used the information provided by MDA to update the mineral reserve estimates as set out in Table 2 below and these are shown on 100% basis.

Table 2 – Mineral Reserve Estimates

In-Situ GradeContained Metal
GoldSilverGoldSilver
ClassificationTonnesTong/toz/tong/toz/tonozoz
Proven3,357,0003,701,0000.9480.02814.0560.410102,3001,517,100
Probable42,957,00047,352,0000.6380.01910.8600.317881,30014,999,100
Total & Average46,314,00051,053,0000.6610.01911.0920.324983,60016,516,200

Cautionary note to U.S. investors concerning Proven or Probable mineral reserve estimates: This table uses the terms “proven reserves” and “probable reserves” in accordance with NI 43-101. We advise U.S. investors that the requirements of NI 43-101 for identification of “reserves” are not the same as those of the SEC, and reserves reported by the Company in compliance with NI 43-101 may not qualify as “reserves” under SEC Guide 7 standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information presented by companies using only U.S. standards in their public disclosure.

Notes:

  1. The qualified person for the mineral reserve estimates is Sean Ennis, Vice President, Mining, P.Eng., APEGBC Registered Member who is employed by Norwest Corporation.
  2. A gold equivalent cut-off grade of 0.005 oz/ton was used for quartz latite and a cut-off grade of 0.006 oz/ton was used for all other rock types. Cut-off grade was varied to reflect differences in estimated metal recoveries for the different rock types mined.
  3. Gold equivalent grades were calculated as follows: AuEq(oz/ton) = Au(oz/ton) + (Ag(oz/ton)/88, which reflects a long-term Au:Ag price ratio of 55 and a Au:Ag recovery ratio of 1.6.
  4. Tonnage and grade measurements are in imperial and metric units. Grades are reported in troy ounces per short ton and in grams per tonne.
  5. The Effective Date for the mineral reserve estimates is February 1, 2015.
  6. Calculated on a 100% basis
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