J & L Project
The J&L Property is located 35 km north of Revelstoke in British Columbia, Canada. The property consists of 20 mineral tenure claims and 10 crown granted claims for a total of 3,051.73 ha. It has been explored intermittently during the 20th century by a number of operators. In total, 311 drill holes (40,886 m) have been completed, together with about 3 km of underground development. In 2010, a 100% unencumbered interest in the property was acquired by Huakan (formerly, Merit Mining Corp.) after making payments totaling $10.79 million. Huakan completed extensive drilling and drifting on the property, advancing it to the point of a Preliminary Economic Assessment (“PEA”) in 2012; however, in 2014 further work ceased due to deteriorating market conditions in the metal sector.
The J&L Property has well-established road access via paved highways and forestry roads; it has an easy access to railroad, with a 100%-owned rail siding and load-out facility in Revelstoke. The power source could be provided by transmission from Revelstoke and Mica Major hydro-generation facilities. The Property infrastructure includes mine buildings (40-person camp, maintenance buildings and workshops) and an underground mining equipment fleet.
The J&L Property Geology and Mineralization
The J&L Property incorporates several paralleling to en-echelon, shear-hosted, replacement-style, 2-3 m to 15 m wide, moderately-dipping (55o), gold-silver-lead-zinc-bearing sulfide-rich mineralized zones, which are considered to possibly be of the distal intrusion-related style. Main sulfide minerals include pyrite, arsenopyrite, galena, bournonite, freibergite, sphalerite, and chalcopyrite. Both sulfide-related (refractory) and native (free) gold are present. The drilled extent of the mineralized zones is up to 1.5 km along strike and up to 0.85 km downdip; they remain open for further expansion. The largest known mineralized zones include the Main, Footwall and Yellowjacket Zones; the Main Zone was traced up to 3 km along strike on surface.
Historic Mineral Resource Estimate for the J&L Property.
In 2010, Merit/Huakan commenced a 2,000 m underground drill program with the objectives of verifying historic drilling and broadening the Main Zone resource. The program was expanded to 7,897 m with the completion of 60 cored holes by February, 2011. In 2012, Merit drilled an additional 45 underground holes, and then further expanded the program by completing the Phase 2 exploration, with an additional 6,700 m of drilling from underground. Huakan also initiated metallurgical testing on drill core samples, including heavy media separation, grinding, several stages of flotation and pressure oxidation, and bioleaching on a portion of the flotation products prior to cyanidation. Subsequently, as a result of its Phase 2 exploration, a mineral resource estimate was announced in a news release by Huakan dated September 18, 2012, which included the Main, Footwall and Yellowjacket Zones. This estimate was restated by Huakan in a later news release dated January 21, 2014.
The historic mineral resource estimate presented above is taken from a Huakan news release dated January 21, 2014. The estimate is reported herein as historical resources in accordance with the requirements of NI 43-101, as these resources were prepared before Golden Dawn entered into this agreement to acquire an interest in the property that contains the deposit.
Historic Mineral Resource Estimate for the J&L Property (as reported by Huakan Int’l Mining Inc. on September 18, 2012)