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View PDF - GoGold Resources Inc.
TECHNICAL REPORT ON THE SAN DIEGO PROPERTY, DURANGO, MEXICO For GOGOLD RESOURCES INC. Location Zone 13 N WGS 84 466,000 E; 2,576,600 N Prepared By Peter Webster, P.Geo. Mercator Geological Services and Ramon Hiram Luna Espinoza P. Geo. Servicios y Proyectos Mineros de Mexico SA DE CV Effective Date: February 21, 2011 San Diego Property Technical Report ii February 2011 Table of Contents 1.0 Introduction and Terms of Reference ........................................................................ 1 2.0 Reliance on Other Experts ......................................................................................... 2 2.1 General ......................................................................................................................... 2 3.0 Property Description and Location ............................................................................ 3 3.1 General......................................................................................................................... 3 3.2 Summary of Exploration Title Information .............................................................. 3 4.0 Accessibility, Climate and Physiography .................................................................. 7 5.0 History ........................................................................................................................ 9 5.1 Consejo de Recursos Minerales.................................................................................... 9 5.2 Tom Albinson 1984.................................................................................................... 10 5.3 Castle Rock Exploration Corp. 1994-1995 ................................................................ 11 6.0 Geological Setting .................................................................................................... 15 6.1 Regional Geology ..................................................................................................... 15 6.2 Property Geology...................................................................................................... 18 6.3 Structural Geology...................................................................................................... 20 7.0 Deposit Type............................................................................................................. 22 8.0 Mineralization .......................................................................................................... 23 9.0 Exploration ............................................................................................................... 27 9.1 San Diego North ......................................................................................................... 28 9.2 San Diego Centre........................................................................................................ 29 9.3 San Diego East ........................................................................................................... 32 10.0 Drilling ................................................................................................................... 34 11.0 Sampling Method and Approach ........................................................................... 34 11.1 Channel Samples .................................................................................................... 34 11.2 Rock Samples.......................................................................................................... 35 11.3 Production Piles Samples....................................................................................... 35 11.4 Grab Samples .......................................................................................................... 35 12.0 Sample Preparation, Analyses and Security .......................................................... 35 13.0 Data Verification .................................................................................................... 36 13.1 Site Visit ................................................................................................................... 36 13.2 Independent Sampling .............................................................................................. 36 14.0 Adjacent Properties ................................................................................................ 38 15.0 Mineral Processing and Metallurgical Testing ...................................................... 38 16.0 Mineral Resources and Mineral Reserve Estimates .............................................. 38 17.0 Other Relevant Data and Information.................................................................... 38 18.0 Interpretation and Conclusions .............................................................................. 39 19.0 Recommendations .................................................................................................. 40 19.1 Phase 1 Recommendations ....................................................................................... 40 19.2 Phase 2 Recommendations ....................................................................................... 41 Date and Signatures........................................................................................................ 42 20.0 References Cited and Selected References ............................................................ 43 Appendix I ...................................................................................................................... 45 Statements of Qualifications .......................................................................................... 45 Appendix II..................................................................................................................... 50 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report iii February 2011 Servicios y Proyectos Mineros de Mexico SA DE CV ................................................. 50 Assay Data...................................................................................................................... 50 Appendix III ................................................................................................................... 51 Author Sample Data ....................................................................................................... 51 Appendix IV ................................................................................................................... 52 Laboratory Sample Preparation and............................................................................... 52 Assay Methods ............................................................................................................... 52 List of Figures Figure 1: Property Location Map ........................................................................................... 4 Figure 2: Claim Titles and Historic Mines ............................................................................. 5 Figure 3: Claims Location and Property Access Map............................................................ 8 Figure 4: Drill Hole Plan Map, Cerro Agujerado, Castle Rock Exploration 1994............... 12 Figure 5: Cross Section Looking Northeast ......................................................................... 12 Figure 6: Cross Section DDH BCA-004 .............................................................................. 13 Figure 7: Cross Section DDH BCA-002 .............................................................................. 13 Figure 8: Cross Section DDH BCA-008 .............................................................................. 14 Figure 9: Regional Geology Map ......................................................................................... 16 Figure 10: Property Geology Map........................................................................................ 19 Figure 11: Structural Geology Map...................................................................................... 21 Figure 12: Genesis of Epithermal Mineral Deposits (White, 1994)..................................... 23 Figure 13: Location of Open Pit and Underground Epithermal Au-Ag Deposits ................ 26 Figure 14: Cerro Agujerado Gossan Zone............................................................................ 28 Figure 15: A Gossan Zone at San Diego Centre .................................................................. 29 Figure 16: Geology and Sample Locations San Diego Centre............................................. 30 Figure 17: Part of the San Diego East Gossan Zone ............................................................ 32 Figure 18: Geology and Sample Locations San Diego East ............................................ 33 List of Tables Table 1: Summary of Land Owner Title ................................................................................ 3 Table 2: Results of Government sample mining distinct of Pueblo Nuevo 1979 .................. 9 Table 3: Cerro Agujerado Sample Results, (Albinson, 1984).............................................. 10 Table 4a: Select Open Pit gold and silver mines within the SMO ....................................... 24 Table 4b: Select Underground gold and silver mines within the SMO................................ 25 Table 5: Selected assay results from San Diego Centre ....................................................... 31 Table 6: Selected assay results from San Diego East........................................................... 34 Table 7: Author Samples Cerro Agujerado Gossan Zone .................................................... 37 Table 8: Author Samples San Diego Centre Property.......................................................... 37 Table 9: Phase 1 Estimated Budget ...................................................................................... 40 Table 10: Phase 2 Estimated Budget .................................................................................... 41 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report iv February 2011 Summary This Technical Report on the geology and mineralization of the San Diego Property was prepared by Mercator Geological Services Limited ("Mercator") and Servicios y Proyectos Mineros de Mexico SA DE CV ("SPM") on behalf of GoGold Resources Inc. ("GoGold") to comply with technical reporting and disclosure requirements set out under National Instrument 43-101. The property consists of five gold and silver properties consisting of a number of Mexican mining concession titles covering approximately 24,000 hectares in Durango, Mexico. GoGold has signed a binding letter of intent (“LOI”) to acquire all of the issued and outstanding securities of Mexican Gold Holdings Corporation Incorporated (“MHC”), a Canadian company, by way of security exchange. MHC and MHC’s wholly owned Canadian subsidiary, North American Gold Holdings Corporation Incorporated (“NAHC”), together own 100% of Minera Dorango Dorado S.A. DE C.V., a Mexican company, (“MDD”). MDD is a party to agreements to earn a 100-per-cent interest in five (5) gold and silver properties consisting of a number of Mexican mining concession titles (the “Claims”) covering approximately 24,000 hectares in Durango, Mexico (the “MDD Agreements”). The property is located in Durango State approximately 110 kilometers southwestern of the Durango capital; at WGS 84 E 466,000 / N 2,576,600 zone 13 N. The claims are host to an epithermal gold/silver system that extends for more than 15 kilometres. Widespread gold in quartz veins, breccias and stockworks occurs over the length of the system. The district has been mined on a small scale historically and has produced gold reportedly from as far back as the 1700’s. MHC has spent the last two years assembling the claim area and developing relationships with local officials, geologists, contractors and inhabitants. Their exploration work over the last two years included reconnaissance sampling which identified gold and silver in veins and in large disseminated alteration zones along the entire strike of the system. This report documents the exploration and mining history of the San Diego property. Although mining has taken place on the San Diego property since colonial times, much of this work has been undertaken by small scale artisanal miners called Gambusinos. The most significant documented historical exploration on the San Diego property was completed by Castle Rock Exploration Corp. (Castle) on the Cerro Agujerado gossan zone in 1994 and included geological mapping, sampling, and 1038.9 m of diamond drilling in 9 holes. The diamond drilling intersected gold and silver mineralization spatially associated with a breccia intrusive body, and the highest reported gold grades were associated with coarse sphalerite, galena and chalcopyrite mineralization which replaced the breccia matrix. Highlights of individual drill hole intersections include 1.91 g/t Au and 126.1 g/t Ag over 9.5 m (BCA-003), 1.83 g/t Au and 21.3 g/t Ag over 26.6 m (BCA-007), 2.54 g/t Au and 8.3 g/t Ag over 11.9 m (BCA-008), and 2.32 g/t Au and 12.4 g/t Ag over 15.45 m (BCA-009). Recent exploration work completed on the San Diego property by SPM on behalf of MDD has outlined three target areas for further investigation on the San Diego property. This work included geological mapping and sampling of a number of known gossan and quartz 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report v February 2011 veined zones and focused on three areas identified as the San Diego North, San Diego Centre and San Diego East. This program is currently ongoing but to date a total of 257 rock samples have been collected by SPM and represent chip samples, grab samples production ore pile samples and outcrop samples. This work was preliminary in nature and although chip samples were taken across veins and alteration zones more work is needed to fully assess the true width, size and grade of the veins and alteration zones sampled during this program. The San Diego property is located in the central portion of the Sierra Madre Occidental (SMO) province. The Sierra Madre is one of the largest volcanic belts in the world, and extends for over 2,000 km from the U.S. – Mexico border to southern Nayarit State where it is overlain by the Trans-Mexican Volcanic Belt. The SMO is recognized as an extremely prospective mineral belt for gold, silver and poly metallic mineral deposits. The volcanic-related epithermal precious metal deposits of middle Tertiary age occur throughout the north of the SMO and include low-sulfidation Ag-Au (±Pb-Zn-Cu) veins, and high-sulfidation Au-(Cu) deposits. Low-sulfidation deposits are mainly quartz ± calcite veins with chlorite + adularia + sericite alteration. These deposits are Ag-dominated at the lower levels of the volcanic column, and Au-dominated towards the top of the sequence. The authors visited the property in January 2011 and verification sampling has confirmed that known alteration and mineralization on the property is consistent with low sulfidation epithermal type gold and silver mineralization. Of the 12 samples taken by the authors 7 returned gold values in excess of 1 g/t. An outcrop sample from the Cerro Agujerado gossan zone, of strongly altered andesite with yellow to red brown alteration, goethite, hematite and disseminated pyrite returned 58.64 g/t Au, 161 g/t Ag and 2.29% Pb. A grab sample from an ore production pile, of quartz breccia with strong alteration, specularite, and manganese, from the San Diego Centre property returned 3.20 g/t Au, 30 g/t Ag and 1.07% Zn. This sampling is preliminary in nature and more work is needed to fully assess all alteration and mineralized zones on the San Diego property. Based on the finding of the report a Phase 1 and Phase 2 exploration program is proposed. Phase 1 exploration is recommended to include detailed mapping and sampling of known mineralized zones. In addition, satellite image analysis and reconnaissance mapping and sampling of newly identified gossan zone, and altered and mineralized zones is recommended. The Phase 1 estimated budget is $930,000. Recommended Phase 2 exploration is contingent on successful Phase 1 exploration and is proposed to include additional detailed mapping and sampling of new zones outlined in Phase 1. Phase 2 recommendations also include diamond drilling of the Cerro Agujerado gossan zone, targets at San Diego Centre and new targets outlined from the detailed mapping and sampling. The estimated Phase2 budget is $1,425,500. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 1 February 2011 1.0 Introduction and Terms of Reference This Technical Report on the geology and mineralization of the San Diego Property was prepared by Mercator Geological Services Limited ("Mercator") and Servicios y Proyectos Mineros de Mexico SA DE CV ("SPM") on behalf of GoGold Resources Inc. ("GoGold") to comply with technical reporting and disclosure requirements set out under National Instrument 43-101. The property consists of five gold and silver properties consisting of a number of Mexican mining concession titles covering approximately 24,000 hectares in Durango, Mexico. The terms of reference for this NI43-101 Technical Report were established through discussions between GoGold and Mercator in January 2011. GoGold has signed a binding letter of intent (“LOI”) to acquire all of the issued and outstanding securities of Mexican Gold Holdings Corporation Incorporated (“MHC”), a Canadian company, by way of security exchange. MHC and MHC’s wholly owned Canadian subsidiary, North American Gold Holdings Corporation Incorporated (“NAHC”), together own 100% of Minera Dorango Dorado S.A. DE C.V., a Mexican company, (“MDD”). MDD is a party to agreements to earn a 100-per-cent interest in five (5) gold and silver properties consisting of a number of Mexican mining concession titles (the “Claims”) covering approximately 24,000 hectares in Durango, Mexico (the “MDD Agreements”). The property is located in Durango state approximately 110 kilometers southwestern of the Durango capital; at WGS 84 E 466,000 / N 2,576,600 zone 13 N. Under the terms of the LOI, GoGold will issue 14 million shares of the Company to the shareholders of MHC and pay a total of $1,100,000. GoGold also agreed to make a nonrefundable payment of $115,000 to MHC for entering into a confidentiality and standstill agreement. This report documents the exploration and mining history of the San Diego property and although mining has taken place on the San Diego property since colonial times, much of this work has been undertaken by small scale artisanal miners called Gambusinos. There are no reports of grade and tonnage extracted by these operations. The most significant documented historical exploration on the San Diego property was completed by Castle Rock Exploration Corp. on the Cerro Agujerado gossan zone in 1994. The information and data used in the preparation of this report was sourced from government assessment files, publicly accessible academic papers and publicly disclosed technical information from company websites. The authors have provided citations throughout the report where this information has been referenced. The authors of this report are professional geologists (P.Geo.) and prepared this report after review of past exploration on the property and mineralization viewed during the property visit. Peter Webster P.Geo is an Independent Qualified Person (IQP) as defined by NI43101 and is responsible for all sections of this report. The author and the company worked strictly on a fee for service basis and this work was one of many contracts under management by Mercator. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 2 February 2011 Ramon Luna P.Geo. is a co-author of this report and President of Servicios y Proyectos Mineros de Mexico, S.A. de C.V. (SPM) a Mexican company that was contracted to complete exploration on the property for MDD. Mr. Luna is not independent of MHC, MDD or GoGold as he is shareholder in MHC and part of his compensation will include shares of GoGold pursuant to the contemplated transaction. In addition, the company SPM currently derives the majority of its income from MDD. Both authors of this report visited the San Diego Property on January 19th, 2011 at which time mineralization was observed in outcrop at two historic mine sites. Based on the site visit and the observed historic mine workings and mineralization, the IQP is certain that the work detailed in this technical report has actually been completed. Mr. Luna supervised all exploration by SPM for MHC, and this work was complete in manner consistent with industry standards. The authors have experience in the geology and mineralization detailed in this report having worked on surface exploration and underground mining projects within the Sierra Madre and operating gold mines and mineral deposits within this region of Mexico. These deposit types display geology and styles of mineralization similar to that which occurs on the San Diego property. 2.0 Reliance on Other Experts 2.1 General No other experts were consulted in the preparation of this report. This report was prepared by Mercator and SPM for GoGold and the information, conclusions and recommendations contained herein are based upon information available to Mercator at the time of report preparation. This includes data made available by GoGold, and from government and public record sources. Information contained in this report is believed reliable but in part the report is based upon information not within the authors’ control. The authors have no reason, however, to question the quality or validity of data used in this report. Comments and conclusions presented herein reflect best judgment at the time of report preparation and are based upon information available at that time. This report also expresses opinions regarding exploration and development potential for the project, and recommendations for further analysis. These opinions and recommendations are intended to serve as guidance for future development of the property, but should not be construed as a guarantee of success. The authors are not Qualified Persons with respect to comment on validity of surface rights titles and other issues of land ownership in the state of Durango, Mexico. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 3 February 2011 3.0 Property Description and Location 3.1 General The San Diego property is located in Durango State, Mexico and is located approximately 110 km southwest of the capital city Durango and is located at 466,000E / 2,576,600N WGS84 Zone 13 N (Figure 1). 3.2 Summary of Exploration Title Information The San Diego property is located in the Pueblo Nuevo mining district, and some mineralized zones have been mined by small scale mining (Gambusinos). The property consists of a number of Mexican mining concession Titles covering a total of 24,213.12 hectares in Durango State, Mexico. Exploration land owner Titles are permitted by the Mexican government. Table 1 summarizes the 16 land owner Titles negotiated by MHC (Figure 2). Property boundaries are established by survey measurements taken relative to a concrete monument erected near the center of the Title property. Table 1: Summary of Land Owner Title Title Title Name Hectares Expiry Date 222633 Segunda Ampleacion la 1,066.60 Garibaya 02/08/2054 213491 La Garibaya 75 28/04/2051 222045 Ampliación la Garibaya 136.3895 28/04/2054 222046 Ampliación de la 4.2081 Garibaya Fracción 29/04/2054 225570 Las Europas 16,742.03 21/09/2055 236626 La Planta 4,570.61 29/07/2060 236627 La Planta Fracción 6.7865 29/07/2060 218833 La Chinacatera 1 118.6364 20/01/2059 218835 La Chinacatera1 fracción 6.7508 2 20/01/2059 227827 La Chinacatera 1 113.7237 21/08/2056 218834 La Chinacatera 1 fracción 95.1784 1 20/01/2059 236212 Real de Guadalupe 85.208 24/05/2060 236313 Real de Guadalupe 96 24/05/2060 227991 Hacienda Real 96 25/09/2056 Not finalized 25/34243 San Felipe II 500 Not finalized 25/34255 San Felipe III 500 Total 24,213.1214 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com -500,000 mE 0 mE 500,000 mE 1,000,000 mE 1,500,000 mE 2,000,000 mE 2,500,000 mE CHIHUAHUA U.S.A. 3,500,000 mN 3,500,000 mN COAHUILA DURANGO BAJA CALIFORNIA SONORA MEXICO BAJA CALIFORNIA SUR ZACATECAS COAHUILA Mazatland SINALOA NUEVO LEON DURANGO 4 ( San Diego Project Durango ( NAYARIT TAMAULIPAS ZACATECAS JALISCO 100 Kilometres 2,500,000 mN 2,500,000 mN SAN LUIS POTOSI San Diego Project 3,000,000 mN 3,000,000 mN Durango SINALOA CHIHUAHUA NAYARIT AGUASCALIENTES YUCATAN GUANAJUATO QUERETARO HIDALGO JALISCO QUINTANA ROO TLAXCALA COLIMA 2,000,000 mN CAMPECHE EDO. DE Mexico City MEXICO MORELOS PUEBLA 2,000,000 mN Pacific Ocean MICHOACAN TABASCO VERACRUZ Belize GOGOLD RESOURCES INC. GUERRERO OAXACA 0 250 CHIAPAS 500 Figure 1 Guatemala Kilometres Property Location Map Honduras El Salvador 0 mE 500,000 mE 1,000,000 mE 1,500,000 mE Date: Feb. 2011 2,000,000 mE mercator 1,500,00 Projection: UTM Zone 13, Northern Hemisphere (WGS 84) GEOLOGICAL SERVICES 5 450000mE 460000mE 470000mE 12 14 2590000mN 13 CORRALITOS 4 1 3 PUEBLO NUEVO Cerro Agujerado 2 6 Los Fresnos 2580000mN Animas Perdidas Las Conchas La Puerta Chinacatera La Gariballa 5 15 16 EL COSOMATE 11 97 La Higuerita 10 La Fierrosa Cuahutemoc El Nopal 8 2560000mN 2570000mN AGUA CALIENTE Map # Claim Title 1 222633 2 213491 3 222045 4 222046 5 225570 6 236626 7 236627 8 218833 9 218835 10 227827 11 218834 12 236212 13 236313 14 227991 15 25/34243 16 25/34255 Oro Fino Cuahutemoc Los Tajos Legend Claim title boundary Historic mines GOGOLD RESOURCES INC. Vein showings Figure 2 0 5 Claims Titles and Historic Mines San Diego Project Kilometres Date: Feb. 2011 mercator GEOLOGICAL SERVICES San Diego Property Technical Report 6 February 2011 GoGold has signed a binding letter of intent (“LOI”) to acquire all of the issued and outstanding securities of Mexican Gold Holdings Corporation Incorporated (“MHC”), a Canadian company, by way of security exchange. MHC and MHC’s wholly owned Canadian subsidiary, North American Gold Holdings Corporation Incorporated (“NAHC”), together own 100% of Minera Dorango Dorado S.A. DE C.V., a Mexican company, (“MDD”). MDD is a party to agreements to earn a 100-per-cent interest in five (5) gold and silver properties consisting of a number of Mexican mining concession titles (the “Claims”) covering approximately 24,000 hectares in Durango, Mexico (the “MDD Agreements”). The terms of the MDD Agreements provide MDD with an option to acquire a 100% interest in the Claims in exchange for the following: i. ii. iii. iv. a first year payment of $140,000; a total work commitment for all Claims for the first three years of $900,000 and a total work commitment for years four through eight for all Claims of $2,650,000; payment of a minimum advance royalty of $130,000 per annum starting in year three and ending in year eight. The royalty is based on a payment of up to $4.00 per ounce of gold equivalent NI 43-101 compliant mineable reserves (“Reserves”). Any advance royalty payments will be applied against the final royalty payment due. MDD has agreed to pay the current optionors of the Claims an ongoing royalty of up to $4.00 per ounce of any future increase in Reserves; and MDD may exercise the option to acquire the Claims at any time by paying the royalty or at the end of the eight year period provided all payments above have been made. Property mineral tenure does not include land access but this has been negotiated with the Ejido Pueblo Nuevo, the local native land owners. MDD has all necessary permissions to complete surface and underground exploration, which includes mapping and sampling of the San Diego property. In order for MDD to complete advanced exploration on the property, including diamond drilling, an environmental permit is required from the Mexican government. MDD has applied for this permit and expects to have it in place prior to Phase 2 drilling. All historic mining on the property has been small scale hand mining and the authors are not aware of any environmental liabilities on the property. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 7 February 2011 4.0 Accessibility, Climate and Physiography The San Diego property is located in Durango State, Mexico and approximately 110 km southwestern of the capital Durango at 466,000E / 2,576,600N WGS84 Zone 13 N. The property is accessible by paved and local gravel roads from either of the main centres of Durango or Mazatlan, where commercial international flights land from the United States and from Mexico City (Figure 3). From the city of Durango or Mazatlan follow paved federal highway Number 40 to El Salto, at this point take the highway south to the town of Corralitos. The road is paved for the first 40 km and is then dirt road for the remaining distance to Corralitos. From Corralitos follow a dirt road for 20 km to the town of Pueblo Nuevo. Pueblo Nuevo sits on the northern portion of the study area and within 2 km on the San Diego property, north zone. Most of the property can be accessed by 4 wheel drive vehicle along dirt roads. Many of the historic mining properties are accessible by narrow switch back hiking trails and locals use donkeys to carry supplies to these sites. The authors accessed the property by helicopter from the Durango airport and could land within 500 m of the San Diego North and Centre showings. The area of the San Diego property is generally semi-arid and daily temperatures range from a low of -6°C during the coldest winter night time periods to daytime seasonal highs temperatures that range from 18°C to 36°C. The San Diego River flows through the central part of the property area and water levels vary during the year, increasing during the rainy season of July and September. Smaller streams that are generally dry during much of the year increase substantially during the rainy season. The topography in the area is generally steep and dominated by escarpments and deeply incised streams valleys that form gorges with a generally NW-SE orientation. Typical vegetation is dry scrub on steep slopes and coniferous forest and fragmented forest on the high flatter ground. Elevations above sea level on the property range from 500 m in the deep river valleys to a high of about 2300 m on the ridge tops. Pueblo Nuevo is the closest local town but has very few amenities and has an approximate population of 500 inhabitants and sits at an elevation of about 1500 m (Figure 2). Local infrastructure in Pueblo Nuevo area is very limited but includes electrical power and several telephones. Phone and electrical service is not available through most of the property, which has a limited local population. A high tension power line crosses the central part of the property but the capacity is not known by the authors. El Salto is the largest local town in the area with a population of 21,000. The larger centres of Durango and Mazatlan have all the amenities of a modern city and all supplies necessary to support an exploration program. Labor type manpower would be available within the small towns close to the property. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com 8 U.S.A. San Diego Project 1000 km MEXICO DURANGO DURANGO Durango SINALOA 40 El Salto Cebollas Corralitos Pueblo Nuevo San Diego Project Mazatlan Mazatlan 15 NYARIT Pacific Ocean GOGOLD RESOURCES INC. Figure 3 0 25 50 Claims Location and Property Access Map Kilometres Date: Feb. 2011 mercator GEOLOGICAL SERVICES San Diego Property Technical Report 9 February 2011 5.0 History Mining in Mexico dates back almost 500 years when the Spaniards arrived in the country and began mining silver in the 1520’s. During the next 300 years of Spanish rule many minerals were extracted including silver, gold, copper, lead coal and iron. The SMO is a prolific and extensive mining district and the San Diego property has a mining history that dates back to colonial times. There is no recorded mining history, yet many of these historic mines continue to be worked by the local miners better known as Gambusinos, some mines on the property date back to the 1700’s. These are pick and shovel operations and gold is hand panned from the material mined. There is no record of the grade and amounts extracted by these operations. The San Diego North property is located in the Pueblo Nuevo mining district and includes historic mining at the Cerro Agujerado, San Patricio, Animas Perdidas, Candelaria, Cuauhtémoc, and the Europa mines (Figure 2). The authors were unable to locate much in the way of recorded historical field work on the San Diego property. However, limited information was sourced for exploration completed at the historic Cerro Agujerado mine located on the San Diego North property. 5.1 Consejo de Recursos Minerales The Consejo de Recursos Minerales (government geological survey) completed sampling of a number of historic mining areas within the mining district of Pueblo Nuevo (Figure 2). Although there is little in the way of supporting documentation available for this work, a table of results from a 1979 report was accessed by the authors (Table 2) (Consejo de Recursos Minerales, 1993). Table 2: Results of Government sample mining distinct of Pueblo Nuevo 1979 These sample results were not located or verified by the authors and represent an example of grades from known mineral showings. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 10 February 2011 5.2 Tom Albinson 1984 A geologist by the name of Tom Albinson visited the Cerro Agujerado mine in 1984, and completed a small sampling program during the site visit to the area. The object of the site visit was to evaluate a stockwork zone for gold, silver, lead, zinc and copper mineralization in the area called Cerro Agujerado. The preliminary results of 17 samples taken in the oxidation and sulfide zone indicated that precious and base metal mineralization was restricted to the oxidation zone, and that this zone varied in wide from 5 to 10 m (Albinson, 1984). Results of this sampling are outlined in the table below, however, the authors were unable to find exact locations for these sampling. Table 3: Cerro Agujerado Sample Results, (Albinson, 1984) 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 11 February 2011 5.3 Castle Rock Exploration Corp. 1994-1995 The most extensive work on the San Diego property was completed by Castle Rock Exploration Corp. (Castle) on the Cerro Agujerado gossan zone in 1994 (Figure 2). The Cerro Agujerado gossan zone was visited by the authors of this report in January 2011 and verification samples were collected. The results of these samples will be discussed in Section 13.0 of this report. The Cerro Agujerado property is located on a topographically prominent hill and the gossan zone is being mined by local artisanal miners and this work is visible from the number of adits cut into the side of the hill. The Castle exploration program was supervised by geologist George Sivertz P.Geo, and was initially directed towards gold and silver mineralization. However, the scope of the exploration work expanded when extensive alteration and sulfide mineralization was identified during the initial mapping phase. The exploration program included the construction of a 3 km access road, geological mapping of 1.2 km2 of the property, sampling of road cuts and other surface rock exposures, and 1038.9 m of diamond drilling in 9 holes (Figure 4). The diamond drilling intersected gold and silver mineralization that is spatially associated with a breccia intrusive body, which underlies the Cerro Agujerado zone. The mineralized breccia is open at depth and to the southeast, where it is reported to be at least 50 m thick (Sivertz, 1995). Highlights of individual drill hole intersections include 1.91 g/t Au and 126.1 g/t Ag over 9.5 m (BCA-003), 1.83 g/t Au and 21.3 g/t Ag over 26.6 m (BCA-007), 2.54 g/t Au and 8.3 g/t Ag over 11.9 m (BCA-008), and 2.32 g/t Au and 12.4 g/t Ag over 15.45 m (BCA-009) (Sivertz, 1995) (Figures 5-7) . The highest reported gold grades were associated with coarse sphalerite, galena and chalcopyrite mineralization which replaced the breccia matrix. This mineralization was best developed near the base or footwall of the breccia zone, both in the breccia and in intensely altered and fractured footwall tuff, which often included narrow breccia intervals. Drill holes BCA-008 and BCA-009 intersected coarse sphalerite, galena, and chalcopyrite and at depths of 38.25 m to 47.7 m hole BCA-008 intersected and average grade of 3.25 g/t and hole BCA-009 intersected 3.59 g/t between 78.55 m and 86.7 m. In both holes the mineralization occurs at the base of the breccia zone (Sivertz, 1995) (Figure 5 and 8). A silicified crystal tuff located below the breccia contact was found to host fractured and quartzpyrite veinlets with chalcopyrite mineralization which was intersected in hole BCA-009 (Figure 5). The company suggested that copper grades were significance and that samples of fracture and veinlet hosted chalcopyrite mineralization average approximately 1600 ppm Cu (0.16%), and ranged between of 845-2590 ppm (Sivertz, 1995). The copper mineralization both on surface and in the drill holes is different from the phyllic alteration in the breccia and is associated with silicification, and phyllic and propylitic alteration in intermediate volcanic rocks, which may be indicative of a "porphyry copper" environment (Sivertz, 1995). Sivertz noted that surface occurrences of precious and base metal mineralization in breccias occur along strike from the drilled area. These showings were located on the lower flanks of the Cerro Agujerado, southeast and east of drill hole BCA-009. The breccia zone in this 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 12 February 2011 Figure 4: Drill Hole Plan Map, Cerro Agujerado, Castle Rock Exploration 1994 Figure 5: Cross Section Looking Northeast 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 13 Figure 6: Cross Section DDH BCA-004 Figure 7: Cross Section DDH BCA-002 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com February 2011 San Diego Property Technical Report 14 February 2011 Figure 8: Cross Section DDH BCA-008 location was recommended by Sivertz as an attractive target for further drilling. Castle completed surface exploration on other areas of the property, especially along the access road, and this work yielded some anomalous copper values averaging 1088 ppm (0.109% Cu). The anomalous copper samples occurred in rocks described as a strongly oxidized andesite tuff with abundant clay and iron oxides, especially jarosite and hematite. Quartz stringers were also abundant in hematite-rich zones. A series of well mineralized samples were collected from the lower eastern and southern flanks of the main alteration zone and from the portal of an adit near the top of the Cerro. These samples reportedly returned gold values from 0.377 g/t to 14.2 g/t, with 30.5 g/t to 146 g/t Ag and up to 0.39% Cu, 0,60% Pb, and 3.05% Zn. The mineralization in these samples is described as coarse grained sphalerite, chalcopyrite and galena in a pyrite-calcite-quartz gangue, which replaces the breccia matrix between fragments, and is similar to that described in drill hole BCA-009. A grab sample of spongy quartz sericite-hemitite boxwork from an adit in the upper part of the hill returned a gold value of 101.2 g/t Au and 1570 g/t Ag (Sivertz, 1995). Based on the work by Castle on the Cerro Agujerado property, Sivertz concluded that: 1. Gold and silver mineralization appears to have a strong affinity for the southwest or footwall portion of the breccia zone. 2. The breccia zone and its associated mineralization are open at depth and to the southwest, and work by Castle was unable to determine the size and shape of the breccia zone. 3. Based on the breccia fragments, quartz fragments, cherty fragments, sulfide fragments and plagioclase porphyry, the breccia zone is an intrusive body. 4. The breccia system and its enclosing rocks appear to be a target for bulk tonnage base and precious metal mineralization. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 15 February 2011 5. Gold is associated with chalcopyrite, pyrite, galena and sphalerite mineralization and occurs with silicification and propylitic and phyllic hydrothermal alteration, and has been identified in drill holes and in surface outcrops at Cerro Agujerado. The Cerro breccia system remains an open and attractive target for gold-silver and base metal (Cu-Pb-Zn) mineralization. 6. Further work, including road construction, geological mapping and prospecting of copper and precious metal targets, and diamond drilling of the Cerro breccia was also recommended. Limited additional exploration has reportedly been completed on the Cerro Agujerado property but the authors were unable to locate the sources for this information. In addition, during the visit to the Cerro Agujerado property for this report the authors saw that active artisanal hand mining was underway at the property. The local miners hand panned mineral concentrates and displayed visible gold to the authors. There is no record of grade and tonnage of the material extracted from this mining, which is transported daily by donkey to the local village of Pueblo Nuevo where the rock was crushed and concentrated by hand panning. The results of this work are not recorded. The authors completed independent sampling at Cerro Agujerado and this will be discussed in Section 13.0 of this report. 6.0 Geological Setting 6.1 Regional Geology The San Diego project is located in the central portion of the Sierra Madre Occidental (SMO) province (Figure 9). The Sierra Madre is one of the largest volcanic belts in the world, and extends for over 2,000 km from the U.S. – Mexico border to southern Nayarit State where it is overlain by the Trans-Mexican Volcanic Belt (Figure 9). The SMO is recognized as an extremely prospective mineral belt for gold, silver and poly metallic mineral deposits. The geology of northwestern of Mexico is defined by the boundary between the Pacific and North America Plates. The Baja Peninsula of California sits on the Pacific plate and is separated from mainland Mexico by the displacement along the extensional boundary with the North America Plate. The western boundary of the North American Plate is an extensional zone bound to the east by the Sierra Madre Occidental, which is a north-northwest trending plateau of thick Tertiary volcanic rocks (Figure 9). The SMO is a silicic volcanic province which has been affected by various phases of Basin and Range extension and strike-slip deformation since the Early Miocene (Ferrari, et al, 1999). It is terminated to the south by the Trans-Mexican Volcanic Belt (MVB) where alkaline and calcalkaline volcanism has been active since Late Miocene and is still active today. The MVB is 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com 16 100ºW 110ºW North America Plate Hermosillo 30ºN Chihuahua A S. U. exico M S Na M P gr erm an oito Tr id ias be sic lt za sA rc O Mazatlan Durango San Diego Property Pacific Plate 0 250 km 20ºN Rivera Plate Tepic Trans -M exica n Volc Cocos Plate anic b elt Mexico City Guadalajara Map of Mexico showing the present-day plate boundaries and the distribution of Oligocene to Early Miocene principally silicic volcanic rocks associated with the Sierra Madre Occidental (SMO). GOGOLD RESOURCES INC. Figure 9 Regional Geology Map Modified from Bryan et al. (2007). Date: Feb. 2011 mercator GEOLOGICAL SERVICES San Diego Property Technical Report 17 February 2011 thought to conceal the tectonic boundary between different tectonostratigraphic terranes which underwent hundreds of kilometres of strike-slip displacement in Mesozoic to earliest Tertiary times (Sedlock et al., 1993). The basin and range province has been subdivided into three sub provinces. Northwest-trending plateaus, which consist of near or horizontal plains that are thought to represent the original surface of the Sierra Madre Occidental. The depth canyon province is located towards the western margin of the SMO and is represented by the vertical erosion caused by rivers. The exterior margin province is formed along the steep slopes produced by the erosion of the SMO. These margins are affected by extension but the plateaus have clearly undergone less net extension than provinces to the east and west. Cenozoic igneous rocks in northern Mexico, including the SMO, are generally thought to reflect subduction-related continental arc magmatism that slowly migrated eastward during the early Tertiary and then retreated westward more rapidly, reaching the western margin of the continent by the end of the Oligocene (Sedlock et al., 1993). The SMO is a relatively undisturbed plateau that contains volcanic rocks left from an intensive period during the midTertiary in western Mexico. In general, the SMO contains two vast and largely coextensive calcalkalic igneous sequences. The older of these sequences, which ranges in age from late Cretaceous to Eocene, is characterized by abundant batholithic as well as volcanic rocks and is dominantly intermediate in composition and has traditionally been called the Lower Volcanic Complex (LVC). The LVC is principally represented by andesites, ignimbrites, lavas, and composite batholiths. The rocks are best exposed where they have been uncovered by erosion in deep canyons along the western margin of the SMO. The batholiths are also exposed on the coastal margin plain of mainland Mexico adjacent to the Gulf of California. The volcanic rocks are generally deformed by faulting, tilting and usually altered and typically represented within regional propylitic alteration. Generally only a few hundred metres of the LVC is exposed but in Tayoltita, the canyon of the Rio Piaxtla, in the state of Sinaloa, the LVC is exposed for more than 2,000 m and includes volcanic rocks intruded by granodioritic intrusives at the base of the section (Ferrari, et al, 1999). The younger sequence is dominated by rhyodacitic to rhyolitic ignimbrites erupted from large caldera complexes and is estimated that this younger sequence was produced by 350 calderas distributed throughout the SMO and is referred to as the Upper Volcanic Series (UVS). Others suggest that a considerable amount of these ignimbrites were extruded through extensional Basin and Range-related faults, generally accompanied by rhyolitic flows. The SMO volcanics represent one of the largest ignimbrite-dominated felsic provinces in the world. They extend in uninterrupted exposures for more than 1,200 km along the plateau-like SMO. Similar exposures extend from the plateau into surrounding fault-bounded basins and ranges of Mexico to produce a total aerial distribution of 296,000 km2 (Sedlock et al., 1993) (Figure 9). The UVS is an extensive sequence of volcanic and volcaniclastic rocks, although shallow intrusions are present. These rocks form the plateau of the SMO with an average thickness of 1,000 m and generally consist of ignimbrites that are the result of continuous eruptions between 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 18 February 2011 34 and 27 Ma, although some activity persisted until 23 Ma. This volcanic sequence is dominated by rhyodacitic to rhyolitic ignimbrites, generally accompanied by rhyolite flows and domes and small outpourings of mafic lavas. Volcanic rocks of intermediate composition have been reported at the base of the felsic rocks in several localities throughout the SMO (Ferrari, et al, 1999). Metallic mineralization is abundant and widespread throughout northwestern Mexico; its origin is related to tectono-magmatic events which have been active since Jurassic time. The types include deposits associated with magmatic (intrusion- and extrusion-related), metamorphic, and sedimentary rocks. The older mineralizing period is related to the magmatic event that originated the LVC mostly during the Eocene compressional regime and a later event is related to the UVS during the Oligocene. Intrusion-related mineralization in the northern SMO corresponds to the end of the Laramide orogeny and the most common metals of this age are Cu, Mo, W, and PbZn; which resulted from skarn-, greissen-, and porphyry-type systems. 6.2 Property Geology The San Diego property is located within the SMO and is characterized by deep ravines and steep topography that is typical of the basin and range provinces described above. The oldest rocks on the property are Paleozoic basement rocks and these rocks are represented by a deformed and metamorphosed sequence of continental clastic sediments represented by sandstone and limestone. Arenaceous basement rocks occur on the property, are brown-black to gray in color, and generally appear in layers that vary from 5-30 cm in thickness. These rocks have a preferred strike direction of north-south and generally dip 40-450 to the east. Within these units small limestone blocks occur having a dark gray color, fine texture and containing small veins of calcite and quartz. The thickness of this unit is unknown as the full section is poorly exposed. The Paleozoic stratigraphy is unconformably overlain by flows and andesitic breccias of the LVC. The LVC stratigraphy exhibits hydrothermal alteration, and mineralization and this is the host rock for mineralization on the San Diego property. The unit is widely distributed and is typically represented by flows and andesitic breccias that are fine grain with phenocrysts of plagioclases, and small fragments of dark volcanic rock. The andesitic units are well exposed due to erosion on the sides of the steep hills that occur southwestern of Pueblo Nuevo and extensively throughout the property area (Figure 10). The andesites are typically green to gray rock, fine grained to aphanitic, massive and locally containing feldspars phenocrysts, calcite and chlorite. The thickness of the unit typically averages in the order of 600 – 800 m. The andesitic stratigraphy is unconformably overlain by UVS. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com 19 460,000 mE 450,000 mE 470,000 mE 480,000 mE 2,590,000 mN 2,590,000 mN 2,580,000 mN 2,580,000 mN 2,570,000 mN 2,570,000 mN Claim title boundary 2,560,000 mN 2,560,000 mN Legend UVC - Upper Volcanic Complex LVC - Lower Volcanic Complex Regional fault system TmB- UVC Basalt ToRP-UVC-Rhyolite - Ignimbrite ToTR-lg-UVC-Tuff - IgnimbriteAndesite TpaeA-BvA-UVC Rhyolitic-Andesitic Tuff - Andesite 4 0 8 Kilometres ToPA-LVC-Andesitic Porphyry ToBvR-lg-LVC-Volcanic Breccia GOGOLD RESOURCES INC. 2,550,000 mN ToqMz - Quartz Monzonite Figure 10 Property Geology Map TpaeGr-Gd - Granodiorite ToPDa - Trachytic Porphyry 450,000 mE 460,000 mE 2,550,000 mN JtMAr-Pz-Slates Projection: UTM Zone 13, Northern Hemisphere (WGS 84) 470,000 mE Date: Feb. 2011 mercator GEOLOGICAL SERVICES San Diego Property Technical Report 20 February 2011 The andesitic unit is Paleocene in age and can be correlated with the type section for this unit in Tayoltita, Durango. The origin of this unit suggests it is associated with explosive activity, flows and eruptions of fissures. The unit shows moderate to strong propylitic alteration and is the host rock of the majority of the mineral deposits in the area and represents a good target for future exploration. The UVS is considered to be the biggest ignimbrite unit in the world and is represented by an alternated sequence of breccias, and rhyolitic and andesitic tuffs that are distributed extensively throughout the SMO. Three major volcanic events are represented in this unit and the first is represented by light gray andesitic lithic tuffs that are massive in character, with lithic fragments, feldspar, quartz and iron oxides that are cut by dikes of andesitic composition. The second volcanic event consists of a sequence of andesitic, rhyolitic and sometimes dacitic tuffs and individual layers range from 0.5 – 1.0 m in thickness. The units include quartz, feldspar, lithic fragments and iron oxides that are light gray, greenish to reddish in color. The units are generally flat lying to sub horizontal with dips that vary between 10° and 25°. The third and youngest event corresponds to the deposition of massive thick sequences of ignimbrites and imbricated tuffs of andesitic to rhyolitic composition. These rocks cover a large area of the property and are observed in high topographic areas and are characterized by sub-horizontal strata displaying columnar joints. During the Tertiary (Eocene and Oligocene) the entire stratigraphic sequence was intruded by intrusive volcanic rocks that included porphyritic andesitic and rhyolitic, dacitic and quartz monzonite and granodiorite. Intrusive rocks are represented on the property particularly in the north where quartz monzonite and granodiorite have been mapped (Figure 11). Rocks are described as green, compact, massive, phenocrysts of feldspar, quartz eyes and chlorite in an aphanitic matrix. These units have been observed cutting andesites of LVC and thought to of Eocene age. The intrusive bodies are considered to be the source of the mineralization and responsible for strong pervasive hydrothermal alteration including propylitic alteration and silicification. 6.3 Structural Geology Two main structural events have been recognized on the San Diego property. The oldest structures show a general NE-SW trend and are possibly related to late intrusives that affected the Paleocene rocks throughout region. The brittle deformation is related to the post-Laramide deformation phase and is manifested by NE-SW and NW-SE faults. These faults show a general dextral lateral component and generated a series of stairs-like basins and trenches responsible for the horst and graben morphology, which controls the clastic sedimentation from the Tertiary onward (Ferrari, et al, 2007), (Figure 11). 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com 21 Rodeo half-graben (32.3-30.6 and ca. 24 Ma) E E go ran Du loa a Sin Culiacan RioChicho-Otinapa graben (ca. 11 Ma) Tayolita graben (< 20 Ma) E Durango Gu lifo f lf o a i rn Ca W Southern Sinaloa graben (ca. 13-10 Ma) San Diego Property Mezquital graben (< 30 Ma) Mazatlan 0 W 100 50 Kilometres Legend Caldera (inferred) Normal fault Main roads State boundary Accomodating zone with tilting inversion W Zone with WSW tilting Main normal fault E Zone with ENE tilting GOGOLD RESOURCES INC. Figure 11 Structural Geology Modified from Ferrari et al. (2007). Date: Feb. 2011 mercator GEOLOGICAL SERVICES San Diego Property Technical Report 22 February 2011 A second more recent structural event affected much of the UVS and is associated with a regional structural system with a strike preferred orientation of NW-SE that divides the SMO into a series of blocks of basin and range type. The faults show a normal near vertical throw which has caused the structural contact of UVS and LVC rocks. This structural system is thought be the most important in the region as it is these younger structures where mineralization seems to occur. Interpretation of the satellite imagery shows a circular pattern to some structures and it’s believed that these structural features are related to depth intrusive bodies or volcanic calderas (Ferrari, et al, 2007), (Figure 11). 7.0 Deposit Type The San Diego property and its associated mineralization is related to a deposit type know as low to intermediate sulfidation epithermal Au-Ag deposits. This group of gold deposits is one of the world’s major sources of gold and silver and the largest source in Mexico. These deposits are distinguished from high sulfidation deposits primarily by the different sulfide mineralogy. The terms low and high-sulfidation refer to deposits formed in these respective environments and are based on the sulfidation state of the sulfide assemblage (Corbett, G.J., 2002) (Figure 12). Low-sulfidation deposits contain pyrite-pyrrhotitearsenopyrite and high Fe sphalerite, in contrast to pyrite-enargite-luzonite-covellite typifying high-sulfidation deposits. Low sulfidation mineralization typically formed from hydrothermal fluids influenced by igneous intrusions and occur at relatively low temperatures (<200°C) and in moderate pressure conditions. Mineralization occurs within quartz veins with local carbonate, and associated wallrock alteration including illites and clays (Corbett and Leach, 1998) (Figure 12). Many low sulfidation veins are well banded and each band represents a separate episode of hydrothermal mineral deposition. Epithermal deposits form near surface and veins are the common ore host. Deposits form in extensional tectonic settings with well developed fracture systems and normal faults like the SMO. Mineralization commonly occurs in volcanic terranes with well differentiated, sub-aerial pyroclastic rocks and numerous sub-volcanic intrusions. At the San Diego property gold and silver are the main economic minerals and are associated with pyrite, iron oxide, quartz and manganese oxides. Hydrothermal alteration is generally pronounced and is locally represented by deeply weathered, reddish iron oxide staining. Zones of silicification are represented by stockwork quartz veins and veinlets which are flanked by illite-sericite and clay alteration. Typical epithermal textures include banded and crustiform chalcedony and crystalline quartz. The majority of epithermal deposits in Mexico are polyphase and multi-episodic in character, and are the product of several phases or stages of vein formation, not all of which are associated with silver-gold mineralization. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 23 February 2011 Figure 12: Genesis of Epithermal Mineral Deposits (White, 1994) Low sulfidation mineralization was observed at San Diego North during the field visit by the authors. The area is characterized by vertical and sub-vertical quartz veins, stockwork and breccia zones developed within extensive zones of hydrothermal alteration. The alteration zones observed by the author were in excess of 100 m in width and in other locations in excess of 500 m in width, although this may not represent true width of the zones. Quartz veins display banded and colloform textures that represent the multiple phases of quartz veining. Propylitic alteration is present throughout the district in association with weakly disseminated pyrite within the andesitic rocks. 8.0 Mineralization Known mineralization at the San Diego property occurs within a number of distinct alteration zones. Limited historical exploration has been completed on the claims and recent work in 2010 by SPM geologists provides some descriptions of mineralization on the property. During the recent site visit the author was flown by helicopter and visited two alteration zones on the property and was able to observe a number of other alteration zones on the property from the air. Volcanic-related epithermal precious metal deposits of middle Tertiary age occur throughout the SMO and both low-sulfidation Ag-Au (±Pb-Zn-Cu) veins, and highsulfidation Au-(Cu) type deposits occur. Low sulfidation deposits generally display quartz ± calcite veins with chlorite + adularia + sericite alteration and these deposits are Agdominated at the lower levels of the volcanic column, and Au-dominated towards the top of the sequence (Wisser, 1966). High sulfidation deposits are less common within the SMO 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report February 2011 24 but several occurrences have been identified in the last few years and are now important targets for mining exploration because of their large gold content (e.g. Mulatos and El Sauzal). Based on the limited exploration completed on the San Diego property to date, all mineralization is related to low sulfidation deposits near the top of the LVC. The SMO hosts a number of world class low sulfidation gold and silver deposits of which the majority are open pit deposits as well as a number of vein hosted underground deposits. Table 4a and 4b outlines grade and production rates from select low sulfidation open pit and underground gold and silver mines. The location of these operations in relation to the San Diego property is outlined in Figure 13. Table 4a: Select Open Pit gold and silver mines within the SMO Open Pit Bulk Tonnage Deposits Ore Deposit Company Tonnes (,000) Rounded Ocampo Reserves Proven & Probable Ocampo Resources Measured & Indicated Gammon Gold Gammon Gold 70,000 35,000 0.56 0.20 24.00 9.00 Ocampo Inferred Resources Gammon Gold 20,000 1.37 81.00 Pinos Altos (open pit) proven Pinos Altos (open pit) probable Pinos Altos (underground) probable Pinos Altos (open pit) indicated Pinos Altos (underground) indicated Pinos Altos (open pit) inferred Agnico Eagle Agnico Eagle Agnico Eagle Agnico Eagle Agnico Eagle Agnico Eagle 880 18,000 23,000 7,000 8,500 12,000 1.51 2.05 2.92 0.67 1.11 1.02 26.35 49.30 86.87 8.30 41.78 15.33 Pinos Altos (underground) inferred Agnico Eagle 4,000 2.42 43.41 Palmarejo proven Palmarejo probable Palmarejo measure Palmarejo indicated Coeur Coeur Coeur Coeur 4,500 9,000 1,600 3,000 2.80 1.56 1.24 1.56 221.45 133.43 100.46 123.17 Palmarejo inferred Coeur 12,000 1.56 89.27 Castillo M & I Resources (Including P&P Reserves) Argonaut 170,000 0.32 0.00 Castillo - Inferred Argonaut 43,000 0.42 0.00 • • Gold Grade g/t Silver Grade g/t Note: These figures are NI 43-101 compliant resources and reserves summarized from company websites and have been publicly disclosed. They are used as examples only. These projects are not considered adjacent properties and occur at a distance of over 100 km away from the San Diego property (Figure 13). The author has not been able to verify this information and mineralization on these properties is not indicative of mineralization on the San Diego property that is the subject of this report. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report February 2011 25 Table 4b: Select Underground gold and silver mines within the SMO Underground High Grade Vein Deposits Ore Deposit Tonnes (,000) Rounded Gold Grade g/t Silver Grade g/t 4,000 5.04 348 2,000 4.07 306 17,000 3.67 330 Tayoltita Inferred Company Primero Mining Primero Mining Primero Mining La Parrilla (Oxides plus Sulphides) proven First Majestic 300,000 0.00 302 La Parrilla (Oxides plus Sulphides)probable La Parrilla (Oxides plus Sulphides) Measured Resources First Majestic 200 0.00 287 First Majestic 2,000 0.00 264 La Parrilla (Oxides Plus Sulphides)Indicated Resources First Majestic 900 0.00 245 La Parrilla Total Inferred First Majestic 8,000 0.00 169 La Encantada Proven Reserves La Encantada Probable Reserves La Encantada Measured Resources La Encantada Indicated Resources La Encantada Inferred Resources First Majestic First Majestic First Majestic First Majestic 700 4,500 450 5,000 0.00 0.00 0.00 0.00 354 186 399 156 First Majestic 2,500 0.00 220 Tayoltita Proven Tayoltita Probable • • Note: These figures are NI 43-101 compliant resources and reserves summarized from company websites and have been publicly disclosed. They are used as examples only. These projects are not considered adjacent properties and occur at a distance of over 100 km away from the San Diego property (Figure 13). The author has not been able to verify this information and mineralization on these properties is not indicative of mineralization on the San Diego property that is the subject of this report. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 26 February 2011 Figure 13: Location of Open Pit and Underground Epithermal Au-Ag Deposits The San Diego North area has the best documented description of mineralization on the San Diego property. This target area is underlain by porphyritic andesite, andesite breccias, dacite, diorite, granodiorite intrusive and tuff. A wide zone of alteration and mineralization appears to be controlled by NW-SE faulting and rusty red brown alteration defines a zone of silicification, brecciation and strong oxidation that reaches an estimated width of 100 m. Previous drilling by Castle on the Cerro Agujerado showing reported that the highest gold grades were associated with coarse sphalerite, galena and chalcopyrite mineralization which replaced the breccia matrix. This mineralization was best developed near the base or footwall of the breccia zone, both in the breccia and in intensely altered and fractured footwall tuff, which often includes narrow breccia intervals. A grab sample of spongy quartz sericite-hemitite boxwork from an adit in the upper part of the hill returned a gold value of 101.2 g/t Au and 1570 g/t Ag (Sivertz, 1995). Various samples were collected by the authors on the Cerro Agujerado showing and included strongly altered yellow to reddish brown to black andesite. Mineralization included chlorite, sericite, goethite and hematite, fine disseminated pyrite and minor chalcopyrite and galena. A quartz vein sample was collected that showed strong silicification with minor banding and strong goethite and hematite alteration along the edge of the vein. A sample of massive galena was collect from an ore pile where local Gambusinos miners had hand mined the high grade ore. The grab sample consisted of massive galena with minor silicification and hematite and goethite. The San Diego Centre area is underlain by andesite, andesitic tuffs and breccias, dacite 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 27 February 2011 porphyries in the form of dikes, and rhyolitic tuffs. Mineralization and alteration examined by the authors was restricted to andesitic rocks which were grey blue in color. Mineralization included fine disseminated specular hematite (specularite) and dark grey to black manganese staining. A quartz breccia grab sample from an ore pile at the site displayed a strong grey white vuggy texture with disseminated specularite and a black mineral thought to be manganese. A second high grade ore sample of semi-massive specularite was also collected by a local prospector but the authors did not visit that site. Prospecting and mapping by SPM also outlined a number of veins hosting mineralization within disseminated alteration zones. Other veins on the property were described as massive white quartz veins with disseminated sulfides and copper oxides, and irregular character. The authors did not examine outcrops on San Diego East property during the site visit but did observe large zones of yellow to rusty red brown epithermal alteration from a helicopter during a recent property visit. Recent mapping and sampling by SPM geologists has provided a limited description of mineralization in the area. In this zone the lithological units are represented mainly by andesitic and rhyolitic rocks, and these units are locally affected by dikes of dacitic composition or dacite porphyries. Pyrite is disseminated throughout the alteration zone, and jarosite and hematite oxides were also observed. Within this alteration are zones of quartz veins and stockwork quartz veins with disseminated pyrite. 9.0 Exploration GoGold has not completed exploration on the San Diego property but based on the recommendations of this report, GoGold plans to completed mapping, sampling and diamond drilling on selected targets during 2011. The most recent reconnaissance level exploration was completed on the property by SPM on behalf of MDD, during 2010. This work included geological mapping and sampling of a number of known gossan and quartz veined zones on the San Diego property, and focused on three areas identified as the San Diego North, San Diego Centre and San Diego East. To date a total of 257 rock samples have been collected by SPM and represent chip samples, grab samples, production ore pile samples and outcrop samples. The sampling focused on large gossan zones and included veins, alteration zones and zones of mineralization. In addition, basic geological mapping was completed and forms the basis of the target area descriptions contained in this report. The only mine workings are related to artisanal mining (Gambusinos) where small tunnels have been cut along high grade gold veins and mineralized zones. This work was preliminary in nature and although chip samples were taken across veins and alteration zones, more work is needed to fully assess the true width, size and grade of the veins and alteration zones sampled during this program. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 28 February 2011 9.1 San Diego North This target area is underlain by porphyritic andesite, andesite breccias, dacite, diorite, granodiorite intrusive rocks and tuffs of the UVS. A zone of alteration and mineralization occurs at Cerro Agujerado where a large gossan zone is exposed on a topographic high (Figure 2). The alteration appears to be controlled by a NW-SE fault system and associated silicification and strong oxidation, and quartz vienlets define a zone that reaches and estimated width of 100 m. The central core part of this zone is defined by a quartz breccia zone that is 4 m wide (Figure 14). Figure 14: Cerro Agujerado Gossan Zone Reconnaissance exploration included collection of chip and channel samples on property. This preliminary work by SPM identified zones of alteration where pyrite mineralization was present and a number of these had associated quartz veining. These alteration zones are not continuous but generally align at approximately 340°Az and extend for over 2 km in length and 500 m in width (Figure 14). Additional exploration work is planned by GoGold to fully assess the alteration and mineralization associated outlined by SPM. The author collected samples from the Cerro Agujerado alteration zone pictured above and results are found in Section 13.0. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 29 February 2011 9.2 San Diego Centre The San Diego Centre target area is underlain by outcrops of andesite, andesitic breccias, dacite porphyries in the form of dikes, and rhyolitic tuffs. The andesitic rocks vary from fine to medium grained and have been found to locally exhibit zones of alteration, silicification, mineralization and brecciation (Figure 15 and 16). Preliminary mapping and sampling was completed on known vein zones at Cuauhtemoc, Oro Fino, Buena Fe, Chinacatera, El nopal, La Higuerita, La Fierrosa and others (Figure 2). Figure 15: A Gossan Zone at San Diego Centre The Cuauhtemoc vein occurs in a fault zone with a general 60° strike trend and dips towards the southwest of 70°. A mineralized zone with disseminated pyrite was identified in andesitic rocks and is 30 m wide and approximately 160 m long (Figure 16). The Oro Fino vein is a massive white quartz vein with disseminated sulfides and copper oxides, and appears to be irregular in width varying from 80 cm up to 3.5 m. The vein outcrops over a distance of approximately 1 km and is hosted by andesites that are cut by dikes of dacitic composition. The vein trends 20° Az and has a dip of 55° to 65° to the NW (Figure 2). 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com 30 468,000 mE 470,000 mE Key Map 2,578,000 mN 2,578,000 mN San Diego Centre Adri 8 Adri 9 0.52 4.22 La Fierrosa PNA-92 PNA-93 PNA-94 PNA-95 PNA-96 PNA-97 Chinacatera Nop-02 Nop-04 Nop-05 Nop-06 Nop-07 PNA-67 1.77 Adri 13 PNA-236 8.87 1.30 2.10 4.72 0.85 3.33 3.85 4.99 9.52 1.75 2.80 6.26 2,576,000 mN 2,576,000 mN 1.01 Adri 14 Cuahutemoc 1.61 PNA-12 0.54 PNA-13 0.76 Chinc-03 2.82 PNA-14 Chinc-05 3.44 0.90 Legend PNA-234 Au g/t Rock sample (>0.5 Au g/t) Rock sample (<0.5 Au g/t) Claim title boundary PNA-34 2.33 5.0 0.53 Faults Vein showing PNA-32 0.53 PNA-101 3.20 PNA-114 Veins 0.64 Adri 20 1.61 PNA-35 El Nopal PNA-31 Silicification Oxidation Adri 22 Ryholite 1.87 Dacite Andesite Diorite 2,574,000 mN 2,574,000 mN GOGOLD RESOURCES INC. 0 400 Metres 800 See Table 6 in report for assay results San Diego Centre. Figure Figure 16 3 Geology and Rock Samples Geology Claims Location Map Centre of Center Map San Diego San Diego Project Projection: UTM Zone 13, Northern Hemisphere (WGS 84) 468,000 mE Date: Date: Feb. Feb. 2011 2011 470,000 mE merc ator GEOLOGICAL SERVICES San Diego Property Technical Report February 2011 31 Buena Fe Vein has a width of approximately 1 m, and has a strike of 350° Az with a dip of 80° to the NE. The vein can be traced for a distance of 300 m, but intercepts the La Higuerita vein and appears to be cut off. The La Higuerita vein is hosted by andesite and the vein outcrops for 200 m, has a width of 80 cm a strike 260° and a dip 65° to the NE (Figure 2). The Chinacatera, El Nopal, La Fierrosa veins are hosted by andesites cut by dacite dikes and the vein size is not well exposed since they occur on the steep slope of the mountains and are covered by slope deposits (Figure 16). The mineralization in this area appears to be associated with fissures but more work is needed to fully expose these veins. Old small scale (Gambusinos) mine workings were evident but mining is not presently underway. Preliminary mapping and sampling was completed by SPM and the results of this work are summarized in Figure 16 and Table 5. Complete assay results are available in Appendix II. More detailed work is required to full define the relationship between these individual alteration zones. Table 5: Selected assay results from San Diego Centre Sample Name Adri 8 Adri 9 Adri 13 Adri 14 Adri 20 Adri 22 Nop-02 Nop-04 Nop-05 Nop-06 Nop-07 Chinc-03 Au g/t 0.52 4.22 1.01 1.61 1.61 1.87 8.87 1.3 2.1 4.72 0.851 2.82 Ag ppm 1.7 5.4 2.7 0 1.9 0 8.9 2.7 2.9 6.4 3.8 128 Width (m) 3 2 2 2 2 2 1.9 2 4 2.5 2 2 Sample Type channel channel channel channel channel channel rock sample rock sample rock sample rock sample rock sample rock sample Chinc-05 PNA-12 PNA-13 PNA-14 PNA-31 PNA-32 PNA-34 PNA-35 PNA-67 PNA-92 PNA-93 PNA-94 0.901 0.535 0.762 3.444 0.639 0.525 2.334 4.998 1.765 3.851 4.988 9.521 20.6 7 26 97 1 1 2 9 5 54 41 40 2 2 2 1 1 3 3 0.55 0.7 1 1 1.5 rock sample rock sample rock sample channel channel channel rock sample rock sample rock sample channel channel channel Geology andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic breccia with quartz fragments and pyrite andesitic rock with pyrite and quartz veinlets andesitic rock with pyrite and quartz veinlets andesitic rock with pyrite and quartz veinlets andesitic rock with pyrite andesitic rock with pyrite andesitic rock with pyrite with silicification and Fe oxide andesitic rock with pyrite and silicification andesitic rock with pyrite and silicification quartz breccia with pyrite fault zone fault zone fault zone fault zone fault zone fault zone andesitic breccia with quartz fragments and pyrite andesitic breccia with quartz fragments and pyrite 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report Sample Name PNA-95 PNA-96 PNA-97 PNA-101 Au g/t 1.749 2.795 6.259 3.209 Ag ppm 13 17 19 2 Width (m) 1.3 1 2 0.5 February 2011 32 Sample Type channel channel channel rock sample Geology andesitic breccia with quartz fragments and pyrite andesitic breccia with quartz fragments and pyrite dacitic rock with strong silicification andesitic rock with silicification and Fe oxide 9.3 San Diego East The San Diego East zone is mainly underlain by andesitic and rhyolitic rocks, and these units are locally affected by dikes of dacitic or dacite porphyries composition. The andesites outcrop in the low topographic parts on the area and generally display moderate to strong oxidation and silicification along a zone that is approximately in 2.5 km length by 750 m in width (Figure 17 and 18). Figure 17: Part of the San Diego East Gossan Zone Pyrite is disseminated throughout the alteration zone, and jarosite and hematite oxides have also been observed. Within this alteration are zones of quartz veins and stockwork quartz veins with disseminated pyrite. Overlying the andesitic rocks are rhyolitic tuffs of the UVS, and the alteration, oxidization and silicification observed in the low andesitic rocks appears to pass into the overlying stratigraphy, and similar mineralization can be found in these rocks. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com 33 470,000 mE 472,000 mE Key Map San Diego East 2,578,000 mN 2,578,000 mN PNA-236 3.33 PNA-207 0.59 PNA-204 0.78 PNA-199 1.33 2,576,000 mN 2,576,000 mN Legend PNA-234 Au g/t Rock sample (>0.5 Au g/t) Rock sample (<0.5 Au g/t) Claim title boundary Veins 0 Faults 400 800 Metres Silicification Oxidation Ryholite GOGOLD RESOURCES INC. Dacite Andesite Figure Figure 18 3 Geology and Rock Samples Geology Claims Location Map ofEast Center Map San Diego San Diego Project Diorite See Table 7 in report for assay results San Diego East. 470,000 mE Projection: UTM Zone 13, Northern Hemisphere (WGS 84) 472,000 mE Date: Date: Feb. Feb. 2011 2011 mercator GEOLOGICAL SERVICES San Diego Property Technical Report February 2011 34 Preliminary mapping and sampling was completed by SPM and the results of this work are summarized in Figure 18 and Table 6. Complete assay results are available in Appendix II. More detailed work is required to full define the relationship between these individual alteration zones and sample results. Table 6: Selected assay results from San Diego East Sample Name PNA-197 PNA-199 PNA-204 PNA-236 Au g/t 0.305 1.303 0.782 3.333 Ag ppm 18 28 16 2 Width (m) 3 1.5 5 1.5 Sample Type rock sample rock sample rock sample rock sample Geology andesitic rock with pyrite andesitic rock with pyrite andesitic rock with pyrite andesitic rock with silicification and oxidation 10.0 Drilling No drilling has been completed by GoGold and no drilling was completed by MHC. Limited historical drilling was completed on the property and this is reported Section 5.3 of this report. 11.0 Sampling Method and Approach No sampling has been completed by GoGold however recent sampling was completed by SPM for MHC and this sampling is discussed in this section. As part of a reconnaissance exploration program completed by SPM collected 257 samples from various location of the San Diego property as described in Section 9.0 of this report. This included the sampling of quartz veined, altered and mineralized zones that the geologists felt were representative of the nature and style of mineralization of these zones, and had potential to return anomalous precious and base values. A description of each sample method follows. 11.1 Channel Samples Channel samples were collected across the exposed width of quartz veins and alteration zones. Samples were chipped perpendicular to the exposed veins in an attempt to get a true width sample. However, due the nature of some surface exposures, it was difficult to determine if the sample actually represented a true width. Samples were collected with hammer and chisel along a continuous line of exposed rock. Fragments or chip samples from a channel of approximately 5 cm or less in depth were collected in numbered plastic sample bags, and approximately 2 to 3 kg of rock was collected. Sample intervals are marked on the rock with spray paint along with the sample number. In addition, the sample number is marked on florescent orange flagging tape. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 35 February 2011 11.2 Rock Samples Rock samples were collected where large areas of exposed outcrop exist. Representative samples from veins and alteration zones were collected in a circle pattern with an approximate 5 m radius. Each sample was placed in a numbered sample bag and approximately 2-3 kg of rock was collected from the exposed outcrop. 11.3 Production Piles Samples Production pile samples were collected from small piles of ore material, hand mined by the Gambusinos. Approximately 2 to 3 kg of rock was randomly sampled from active mining ore, or piles left from previous operations. The purpose of this sampling was to determine the grade and mineral content of material considered to be ore by local Gambusinos. 11.4 Grab Samples Fist size grab samples were taken of loose rock from veined, altered and mineralized zones considered by the geologist to be a zone of potential interest. These samples are not outcrop but were collected as a reconnaissance evaluation tool to help the geologists to determine if an area warranted additional exploration work. All samples were collected in separate plastic bags and labeled with the sample number. All samples taken by the project geologist to a certificate laboratory and SPM utilized both ALS Chemex Labs and SGS Labs. 12.0 Sample Preparation, Analyses and Security All independent samples collected by the authors for this report were taken to SGS Laboratories in Durango Mexico and were processed by method FAG323 and ICP14. Samples were crushed and pulverized in a ring and puck pulverizer until 250 g of material passed through a 75 micron screen. All samples were first assayed by ICP 14 for a multielement analysis. Samples were also assayed by method FAG323 for gold and silver which has detection limits for Au of 3 g/t and Ag 5 g/t. A 30g sample was assayed by Fire Assay with an AAS finish for Au and a gravimetric finish for Ag (Appendix IV). All samples collected by SPM were supervised by author Ramon Luna. These samples were bagged, tagged and sealed at the sample site and delivered to either SGS labs or ALS Chemex labs and were in the control of SPM geologists at all times. At no time were SPM employees involved in sample preparation. SPM utilized sample preparation facilities operated by SGS in Durango, Mexico and ALS Chemex in Hermosillo, Mexico and these labs are ISO certified and also tested by an independent body. All assays were performed by the associated lab at assay facilities located in Canada and the methods used are described in Appendix IV. These commercial labs utilized internal QA/QC including blanks, standards and duplicates, results were verified by SPM falling within acceptable levels. The authors are certain that the sample 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 36 February 2011 preparation, security, analytical procedures and sample results, from the SPM sampling are representative of the mineralized zones detailed in this technical report. 13.0 Data Verification 13.1 Site Visit The authors of this report completed a site visit to the San Diego property on January 19th, 2010 in the company of Terry Coughlan, President of GoGold Resources Inc. At that time mineralized and alteration zone outcrop locations were inspected and sampled at San Diego North and San Diego Centre. In addition, the authors inspected a small scale underground mining operation at Cerro Agujerado and sampled vein and wallrock from a mining face. The authors completed a visual inspection of a number of other alteration zones on the property by helicopter. The authors did not verify or validate all mineralization on the property although a co-author of this report Ramon Luna was responsible for all current exploration and sampling on the property complete for MHC in 2010. All sampling followed industry standard procedures and the authors relied on assay quality control procedures utilized by the commercial lab. The independent sampling completed by the authors did not exactly duplicate sample points previous completed by SPM or other companies, as the exact location of these samples was not located. However, the authors feel the sampling completed is representative of previous samples and verifies the mineralization found within specific mineralized zones sampled on the property. The authors did not sample all mineralization on the property due to time constraints and accessible issues. 13.2 Independent Sampling A total of 12 samples were collected by the IQP at two property locations. Samples included chip samples across altered and mineralized zones, outcrop samples of veined or mineralized rock, grab samples of mineralized rock, and production pile ore from the small scale mining location. Samples were not taken at the exact location of previous sampling by SPM and it was not the author’s intent to verify the auriferous nature of mineralization at each site location. This sampling is preliminary in nature and more work is needed to fully assess all altered and mineralized zones on the San Diego property. All samples were collected bagged, tagged and dropped at the SGS laboratory in Durango, Mexico, and all samples were under the control of the IQP at all times. Samples were analyzed by Fire Assay, Atomic Adsorption and gravimetric methods and over limit values were recorded for Zn ppm, Pb ppm and Cu ppm and the lab performed quantitative analysis to record a percentage value as required. SGS labs utilized QA/QC standards as part of the laboratory procedures. The IQP sample descriptions and summary results are reported in Table 7 and 8. A complete table of assay values is presented in Appendix III. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report February 2011 37 Table 7: Author Samples Cerro Agujerado Gossan Zone Sample Number 26576 26577 26578 26579 26580 26581 26582 Description Cerro Agujerado – Outcrop sample - Strongly altered andesite with yellow to red brown alteration, goethite, hematite and disseminated pyrite Cerro Agujerado – Outcrop Sample - Quartz vein in strongly altered andesite, white to light grey banded quartz vein with pyrite hematite and goethite alteration and mineralization Cerro Agujerado – Chip sample - strongly altered andesite, 20 m chip sample along rib of small mining tunnel, red brown silicification and hematite and goethite alteration Cerro Agujerado – Chip sample - 3m chip samples across breccia zone at the working face of small underground mining operation quartz veining with pyrite hematite and goethite alteration and mineralization Cerro Agujerado – Chip sample - Footwall andesite – 2 m chip sample across footwall zone of working face of 26579 Cerro Agujerado – Chip sample - Footwall andesite – 2 m chip sample across footwall zone of working face of 26579 Cerro Agujerado – Grab sample production pile - Semi massive galena with minor silicification and hematite and goethite Au g/t Ag g/t Cu ppm Pb ppm Zn ppm 58.64 161 834 2.29% 163 0.18 24 208 4560 124 0.09 7 333 1400 136 2.64 76 655 1.46% 258 7.80 26 545 5410 212 1.79 9 312 7090 133 2.30 550 773 73.2% 21 Cu ppm Pb ppm Table 8: Author Samples San Diego Centre Property Sample Number 26583 26584 26585 26586 26587 Description Grab Sample – ore production pile – quartz breccia with strongly altered vuggy, specularite, manganese Chip sample – 2m chip sample across zone of grey green andesite near old workings, resample of SPM chip sample LCH-13, propylitic alteration with pyrite, chlorite, epidote, fine disseminate specularite Same zone as above - Chip sample – 2m chip sample across zone of grey green andesite near old workings, resample of SPM chip sample LCH-13, propylitic alteration with pyrite, chlorite, epidote, fine disseminate specularite Grab sample from area of old pit – andesite tuff with propylitic alteration , weakly disseminated specularite Ore sample – From a local prospector and apparently from mine workings on the property - massive silver grey specularite Au g/t Ag g/t Zn ppm 3.20 30 287 3500 1.07% 0.03 <2 41 569 354 0.65 <2 19 83 300 0.015 <2 125 30 89 15 3 122 30 28 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 38 February 2011 14.0 Adjacent Properties There are no adjacent properties as defined by NI43-101 that exist in relation to the GoGold property. The San Diego project area is part of the historical Pueblo Nuevo mining region but this district has never had a formal mining operation and there are no records of historic mining work or NI43-101 compliant reporting of resources or reserves. All existing mine works are from small scale (Gambusinos) some of which date back to colonial times. In 1986 the Consejo de Recursos Minerales completed an historic mineral reserve estimate from the underground development and existing mining works for the Animas Perdidas mine local near Agua Caliente (Figure 2). This mine is located approximately 10 km south west of Pueblo Nuevo and 5 km southwest of the property boundary. This historic reserve estimate outlined 61,341 tons probable 41,667 tons possible ore that graded with 3.54 g/ton Au and 179 g/ton Ag (Consejo de Recursos Minerales, 1993). The reader should note that this is a historical mineral reserve and 1) a qualified person has not done sufficient work to classify the historical estimate as a current mineral reserve estimate; 2) the issuer is not treating the historical estimate as current mineral reserve estimate as defined in sections 1.2 and 1.3 of NI43-101; and 3) the historical estimate should not be relied upon. The author has not been able to verify this information and mineralization on this property is not indicative of mineralization on the San Diego property that is the subject of this report. 15.0 Mineral Processing and Metallurgical Testing No mineral processing or metallurgical testing has been completed by GoGold and is therefore not part of this report. 16.0 Mineral Resources and Mineral Reserve Estimates No new mineral resource estimates were prepared as part of this report. 17.0 Other Relevant Data and Information There is no additional information or explanation necessary for this report. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 39 February 2011 18.0 Interpretation and Conclusions The San Diego property and its associated mineralization are related to a deposit type known as low to intermediate sulfidation epithermal Au-Ag deposits. This type of gold deposit is one of the world’s major sources of gold and silver and the largest source of gold and silver deposits in Mexico. The GoGold property consists of 24,213.12 hectares and the recorded exploration work to date has outlined prospective mineralization and alteration zones that have returned positive gold values. Although mining has taken place on the San Diego property since colonial times, much of this work has been undertaken by small scale artisanal miners called Gambusinos. Small tunnels have been cut along high grade gold veins and mineralized zones but the results of this work have not been recorded. The most significant documented historical exploration on the San Diego property was completed by Castle on the Cerro Agujerado gossan zone in 1994. The exploration program by Castle included geological mapping, sampling, and 1038.9 m of diamond drilling in 9 holes. The diamond drilling intersected gold and silver mineralization spatially associated with a breccia intrusive body, which underlies the Cerro Agujerado zone. The mineralized breccia is open to depth and to the southeast, where it is reported to be at least 50 m thick (Sivertz, 1995). The highest reported gold grades were associated with coarse sphalerite, galena and chalcopyrite mineralization which replaced the breccia matrix. This mineralization was best developed near the base or footwall of the breccia zone, both in the breccia and in intensely altered and fractured footwall tuff, which often includes narrow breccia intervals. Highlights of individual drill hole intersections include 1.91 g/t Au and 126.1 g/t Ag over 9.5 m (BCA-003), 1.83 g/t Au and 21.3 g/t Ag over 26.6 m (BCA-007), 2.54 g/t Au and 8.3 g/t Ag over 11.9 m (BCA-008), and 2.32 g/t Au and 12.4 g/t Ag over 15.45 m (BCA-009) (Sivertz, 1995). The P.Geo. working for Castle, on the Cerro Agujerado gossan project, recommended additional drilling to fully test the size and extent of the gossan zone. Recent exploration work completed on the San Diego property by SPM on behalf of MDD included geological mapping and sampling of a number of known gossan and quartz veined zones on the San Diego property and focused on three areas identified as the San Diego North, San Diego Centre and San Diego East. This program is currently ongoing but to date a total of 257 rock samples have been collected by SPM and represent chip samples, grab samples production ore pile samples and outcrop samples. These samples returned anomalous gold and silver values, which will assist in focusing future exploration on the property. This work was preliminary in nature and although chip samples were taken across veins and alteration zones, more work is needed to fully assess the true width, size and grade of the veins and alteration zones sampled during this program. Verification sampling by the authors has confirmed that known alteration and mineralization on the property is consistent with a low sulfidation epithermal type gold and 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 40 February 2011 silver mineralization, and that more work is warranted to full evaluate the gold and silver mineralized zones on the property. Of the 12 samples taken by the authors 7 returned gold values in excess of 1 g/t. An outcrop sample from the Cerro Agujerado gossan zone, of strongly altered andesite with yellow to red brown alteration, goethite, hematite and disseminated pyrite returned 58.64 g/t Au, 161 g/t Ag and 2.29% Pb. A grab sample from an ore production pile, of quartz breccia with strong alteration, specularite, and manganese, from the San Diego Centre property returned 3.20 g/t Au, 30 g/t Ag and 1.07% Zn. This sampling is preliminary in nature and more work is needed to fully assess all alteration and mineralized zones on the San Diego property. 19.0 Recommendations Based on the findings of this report the following recommendations are presented for ongoing exploration of the property. 19.1 Phase 1 Recommendations 1. Complete detailed mapping and sampling of the San Diego North property and in particular the Cerro Agujerado gossan zone. 2. Complete detailed mapping and sampling of veins and alteration zones on the San Diego Centre property and in particular veins that have been or are presently being mined by small scale artisanal miners called Gambusinos. Find the location of the massive specularite sample that was given to the authors by one of these miners. 3. Complete detailed mapping and sampling of the large alteration zone observed by the authors on the San Diego East property. 4. Complete a satellite image study to define structures, alteration and mineralization that may be indicative of new target zones with potential to host precious and base metal mineralization. 5. Complete reconnaissance geological mapping and sampling of all new gossan and alteration zones on the San Diego property. Based on the recommendations outlined above the following Phase 1 budget is proposed. Table 9: Phase 1 Estimated Budget Task Personnel (incl. Geologists) Transportation Travel Labour Camp food Camp communication Geological samples Safety equipment Earthmoving equipment Total Phase 1 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com Estimated cost $300,000 $56,000 $40,500 $102,000 $24,000 $10,000 $300,000 $7,500 $90,000 $930,000.00 San Diego Property Technical Report 41 February 2011 19.2 Phase 2 Recommendations The Phase 2 work programs presented below are in part contingent on positive results of the Phase 1 exploration. Geological mapping of historic mineral occurrences and identified structures is an important part of the on-going property evaluation. Diamond drilling listed below is contingent on the identification of suitable targets from the Phase 1 evaluation process. 1. Completed additional detailed mapping and sampling of mineralized zones defined by Phase 1 exploration. 2. Complete diamond drilling of targets on the Cerro Agujerado gossan zone to better define the size of the mineralized zone and in particular the distribution of gold mineralization. 3. Complete diamond drilling of targets at San Diego Centre and San Diego East that were defined by the detailed mapping and sampling completed in Phase 1. 4. Complete diamond drilling on new targets identified from Phase 1 exploration. Table 10: Phase 2 Estimated Budget Task Personnel (incl. Geologists) Transportation Travel Camp food Camp communication Geological samples Earthmoving equipment Diamond drilling (4000 metres) Total Phase 1 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com Estimated cost $200,000 $60,000 $40,500 $25,000 $10,000 $300,000 $90,000 $700,000 $1,425,500.00 San Diego Property Technical Report February 2011 42 Date and Signatures The effective date of this report is February 21st, 2011. “Signed and Sealed by” ________________________ Peter C. Webster, P.Geo. President Mercator Geological Services Limited “Signed” _______________________________ Ramon Hiram Luna Espinoza P. Geo. President Servicios y Proyectos Mineros de Mexico, S.A. de CV Date: February 21, 2011 Date: February 21, 2011 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 43 February 2011 20.0 References Cited and Selected References Albinson T., 1984, Visita preliminar al prospecto Cerro Agujerado, Pueblo Nuevo Durango México, reporte Privado Albinson, T, Norman, D.I., Cole, D., Chomiak, B, 2001, Controls on Formation of LowSulphidation Epithermal Deposits in Mexico: Constraints from Fluid Inclusion and Stable Isotope Data, In: Albinson, T. and Nelson, C.E., eds., Society of Economic Geology Special Publication 8, p. 1-32. Bryan, S.E. 2007. Silicic Large Igneous Provinces. Episodes, vol 30; p. 20-31. Davila R. T., 1992, evaluación del potencial minero del proyecto Cerro Agujerado en Pueblo Nuevo Durango México, reporte privado Corbett, G.J., 2002, Epithermal gold for explorations, AIG Journal – Applied geoscientific practice and research in Australia Paper 2002-01, February 2002 26p. Corbett, G.J., and Leach, T.M., 1998, Southwest Pacific rim gold-copper systems: Structure, alteration and mineralisation: Economic Geology, Special Publication 6, 238 p., Society of Economic Consejo de Recursos Minerales, 1993, Monografias Geologico Mineras Ferrari, L., Pasquarè, G., Venegas-Salgado, S., and Romero-Rios, F., 1999, Geology of the western Mexican Volcanic Belt and adjacent Sierra Madre Occidental and Jalisco block, in Delgado-Granados, H., Aguirre-Díaz, G., and Stock, J. M., eds., Cenozoic Tectonics and Volcanism of Mexico: Boulder, Colorado, Geological Society of America Special Paper 334. Ferrari, l., Valencia-Moreno, M. and Bryan, S. 2007. Magmatism and tectonics of the Sierra Madre Occidental and its relation with the evolution of the western margin of North America. In Geology of Mexico; ed: S.A. Alaniz-Alvarez and Angel F. NietoSamaniego. Geological Society of America Special Paper 422; p. 1-40. Manriquez R., 2005, Characteristics of the major epithermal gold deposits in the northern Sierra Madre Occidental, Mexico, Thesis Presented to the Faculty of the Graduate School of The University of Texas at El Paso in Partial Fulfillment of the Requirements for the Degree of Master of Science Department of Geological Sciences The University Of Texas at El Paso. Sedlock, R. L., Ortega-Gutierrez, F., and Speed, R. C., 1993, Tectonostratigraphic Terranes and Tectonic Evolution of Mexico, Geological Society of America Special Paper 278, 142p Sivertz G., 1995, Castle Rock Exploration Corp, 1995, Phase I exploration and Drilling program Cerro Agujerado Project, Pueblo Nuevo Durango Mexico 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 44 February 2011 White, N C and Hedenquist,J W, 1994, Epithermal environments and styles of mineralization; variations and their causes, and guidelines for exploration, In: Epithermal gold mineralization of the Circum-Pacific; geology, geochemistry, origin and exploration; II.Siddeley-G (editor), Journal of Geochemical Exploration. 36; 1-3, Pages 445-474. 1990. Wisser, E., 1966, The epithermal precious-metal province of northwest Mexico: Nevada Bureau of Mines Geological Report, no. 13, p. 63-92. Websites Used Agnico Eagle Inc. http://www.agnico-eagle.com Argonaut Gold Inc. http://www.argonautgoldinc.com Coeur d’Alene Mines Corporation http://www.coeur.com First Majestic Silver Corp http://www.firstmajestic.com Gammon Gold Inc. http://www.gammongold.com Primero Mining Corp http://www.primeromining.com 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 45 Appendix I Statements of Qualifications 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com February 2011 San Diego Property Technical Report 46 February 2011 CERTIFICATE of AUTHOR I, Peter C. Webster, P. Geo. do hereby certify that: 1. I currently reside in Dartmouth, Nova Scotia and I am currently employed as President and Senior Manager with: Mercator Geological Services Limited 65 Queen Street Dartmouth, Nova Scotia, Canada B2Y 1G4 2. I graduated with a Bachelors Degree in Geology from Dalhousie University in 1981. In addition, I obtained a Certificate in Environmental Management (C.E.M.) from the Technical University of Nova Scotia in 1996. 3. I am a registered member in good standing of the Association of Professional Geoscientists of Nova Scotia, registration number 047. I am a member in good standing of the Association of Professional Engineers and Geoscientists of Newfoundland and Labrador, member number 03337. 4. I have worked as a geologist in Canada and internationally for over 27 years since my graduation from university in 1981. I have a wide variety of commodity experience including, gold, VMS, base metals, nickel, and industrial minerals. I have completed numerous NI43-101 compliant Technical Reports and Resource Estimates. 5. I have relevant work experience and authored reports on similar epithermal gold deposits. I have worked in Mexico on two occasions for Gammon Lake Resources and evaluated similar style gold and silver mineralization and alteration. 6. I have no prior involvement with the San Diego Property that is the subject of this report. 7. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101. 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 8. 47 February 2011 I am the qualified person responsible all items in this Technical Report: Technical Report On The San Diego Property, Durango, Mexico For GoGold Resources Inc. Location Zone 13 N WGS 84 466,000 E; 2,576,600 N Effective Date: February 21, 2011 9. I visited the San Diego property on January 19th, 2011 at which time I visited the San Diego North and Centre properties and viewed outcrop mineralization and alteration that is the subject of this report. 10. To the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make those sections of the technical report not misleading. 11. I am independent of GoGold Resources Inc. applying all of the tests in Section 1.4 of National Instrument 43-101. 12. I have read National Instrument 43-101 and Form 43-101F1, and believe that this Technical Report has been prepared in compliance with that instrument and form. Dated this 21st Day of February, 2011 “Signed and Sealed by” ____________________________ Peter C. Webster, P. Geo. President Mercator Geological Services Limited 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 48 February 2011 CERTIFICATE of AUTHOR I, Ramon Luna, am a professional geologist and independent consultant. For the last year since September 2009, I President and Manager for my own company: Servicios y Proyectos Mineros de Mexico S.A. de C.V. Calle Quinta del Roble #5 Colonia Las Quintas Hermosillo, Sonora, Mexico 1. I graduated from the Universidad de Sonora, in Hermosillo Sonora Mexico, with a Bachelor’s of Geology degree in 2000 2. I am a Geologist, registered with the Australian Institute of Geosciences, since May 26, 2008, registration number 3772. 3. I have been engaged in mineral exploration and mine development for more than eleven years. 4. I am the qualified person and participated in writing of the Technical Report: Technical Report On The San Diego Property, Durango, Mexico For GoGold Resources Inc. Location Zone 13 N WGS 84 466,000 E; 2,576,600 N Effective Date: February 21, 2011 5. As a result of my affiliation with a professional association, experience and education, I am a “Qualified Person” as defined in National Policy 43-101. 6. I am not aware of any material fact or material change that is not reflected in the Technical Report. 7. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101. 8. I have read National Instrument 43-101 and Form 43-101F1. The Technical Report has been prepared in compliance with that instrument and form. 9. I am President of Servicios y Proyectos Mineros de Mexico, S.A. de C.V. (SPM) a Mexican company that was contracted to complete exploration on the property for Mexican Gold Holdings Corporation Incorporated (MHC) and GoGold. I am not 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 49 February 2011 independent of MHC, Minera Dorango Dorado S.A. DE C.V. (MDD) or GoGold as I am a shareholder in MHC and part of his compensation will include shares of GoGold. In addition, the company SPM currently derives the majority of its income from these companies. 10. I consent to the filing of the Technical Report with any stock exchange or other regulatory authority and any publication by them, including electronic publication of this report, in the public company files on their websites accessible to the public. 11. The Technical Report is based on the examination of the available data including previous reports, the information generated by the SPM geologist on the property and my experience as a geologist and “Qualified Person” 12. As at the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information required to be disclosed to not make it misleading. Dated this 21st day of February, 2011. “Signed” ____________________________ Ramon Luna Espinoza Q.P., P.Geo 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com San Diego Property Technical Report 50 Appendix II Servicios y Proyectos Mineros de Mexico SA DE CV Assay Data 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com February 2011 Sample_Name Adri 8 Adri 9 Adri 13 Adri 14 Adri 19 Adri 20 Adri 21 Adri 22 Nop‐01 Nop‐02 Nop‐03 Nop‐04 Nop‐05 Nop‐06 Nop‐07 chinc‐01 chinc‐02 chinc‐03 chinc‐04 chinc‐05 chinc‐06 chinc‐07 chinc‐08 PNA‐10 PNA‐11 PNA‐12 PNA‐13 PNA‐14 PNA‐15 PNA‐16 PNA‐17 PNA‐18 PNA‐19 PNA‐20 PNA‐21 PNA‐22 PNA‐23 PNA‐24 PNA‐25 PNA‐26 PNA‐27 PNA‐28 East_WGS84 467284 467321 467835 467823 467821 467821 468585 467683 467823 467833 467833 467834 467836 467860 467862 467699 467699 467699 467699 467699 467810 467811 467812 467681 467681 467682 467684 467684 467684 467797 467795 467795 467800 467771 467771 467770 467769 467768 467767 467765 467763 467762 North_WGS 84 2576931 2576881 2576181 2576083 2575326 2575021 2574997 2574672 2576168 2576176 2576178 2576179 2576178 2576183 2576185 2575662 2575660 2575658 2575656 2575655 2575326 2575327 2575327 2575655 2575653 2575651 2575650 2575648 2575647 2575325 2575323 2575320 2575324 2575394 2575395 2575397 2575399 2575400 2575402 2575403 2575404 2575406 Auppm 0.52 4.22 1.01 1.61 0.2 1.61 0.21 1.87 0.358 8.87 0.17 1.3 2.1 4.72 0.851 0.022 0.12 2.82 0.097 0.901 0.057 0.136 0.09 0.005 0.011 0.535 0.762 3.444 0.061 0.112 0.07 0.036 0.164 0.005 0.013 0.016 0.005 0.005 0.005 0.005 0.005 0.005 Agppm 1.7 5.4 2.7 ‐9999 ‐9999 1.9 ‐9999 ‐9999 1.3 8.9 0.2 2.7 2.9 6.4 3.8 1 4.8 128 3.4 20.6 0.8 1.3 3.8 1 1 7 26 97 6 5 1 1 1 1 1 1 1 1 1 1 1 2 Wide 3 2 2 2 4 2 2 2 6 1.9 2 2 4 2.5 2 2 2 2 0.8 2 1.1 1.1 1.1 2 2 2 2 1 2 1.2 2.4 2 1 1.2 2 2 2 2 2 2 2 2 Sample Area san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro Type chanel chanel chanel chanel chanel chanel chanel chanel rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample chanel rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample chanel rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample Geology andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic rock with silicification andesitic breccia with cuatz fragments and pirite adensitic rock with pirite adensitic rock with pirite and cuarz veinlets adensitic rock with pirite and cuarz veinlets adensitic rock with pirite and cuarz veinlets adensitic rock with pirite adensitic rock with pirite adensitic rock with pirite adensitic rock with pirite cuarz breccia with pirite adensitic rock with pirite with silicification and ox adensitic rock with pirite and silicification adensitic rock with pirite and silicification adensitic rock with pirite and silicification adensitic rock with pirite and silicification adensitic rock with pirite and silicification adensitic rock with pirite and silicification adensitic rock with pirite and silicification cuarz breccia with pirite adensitic rock with pirite cuarz breccia with pirite adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite and cuarz veinlets adensitic rock with pirite and cuarz veinlets adensitic rock with pirite and cuarz veinlets adensitic rock with pirite and cuarz veinlets adensitic rock with pirite and cuarz veinlets adensitic rock with pirite and cuarz veinlets adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox Sample_Name PNA‐29 PNA‐30 PNA‐31 PNA‐32 PNA‐33 PNA‐34 PNA‐35 PNA‐60 PNA‐61 PNA‐62 PNA‐63 PNA‐64 PNA‐65 PNA‐66 PNA‐67 PNA‐68 PNA‐81 PNA‐82 PNA‐83 PNA‐84 PNA‐85 PNA‐86 PNA‐87 PNA‐88 PNA‐89 PNA‐90 PNA‐91 PNA‐92 PNA‐93 PNA‐94 PNA‐95 PNA‐96 PNA‐97 PNA‐98 PNA‐99 PNA‐100 PNA‐101 PNA‐102 PNA‐103 PNA‐104 PNA‐105 PNA‐106 East_WGS84 467764 468585 468574 468572 467874 467815 467814 466900 466899 466900 466900 466896 466894 466894 466892 466892 467890 467889 467887 467886 467884 467882 467880 467874 467875 467895 467965 468779 468779 468780 468781 468781 468781 468781 467856 467854 467750 467839 467695 467703 467700 467700 North_WGS 84 2575439 2575031 2575014 2575010 2575102 2575044 2575047 2576555 2576555 2576516 2576527 2576527 2576529 2576529 2576531 2576531 2576124 2576123 2576121 2576120 2576119 2576117 2576175 2576170 2576155 2576150 2576110 2576710 2576710 2576710 2576703 2576703 2576697 2576701 2574663 2574663 2574763 2574699 2574635 2574665 2574665 2574669 Auppm 0.005 0.24 0.639 0.525 0.307 2.334 4.998 0.288 0.272 0.235 0.036 0.073 0.431 0.164 1.765 0.026 0.033 0.041 0.005 0.045 0.005 0.005 0.046 0.005 0.005 0.027 0.005 3.851 4.988 9.521 1.749 2.795 6.259 0.038 0.022 0.051 3.209 0.034 0.067 0.026 0.005 0.03 Agppm 1 1 1 1 1 2 9 7 1 1 1 4 17 35 5 1 1 1 1 1 1 1 1 1 1 3 1 54 41 40 13 17 19 3 1 1 2 1 1 1 1 1 Wide 2 1 1 3 1 3 0.55 1 2 2 4 2.5 0.8 1.8 0.7 2 1.5 2.5 1.8 2 3 5 2 2.5 2.5 6 3.5 1 1 1.5 1.3 1 2 3.5 2.5 4 0.5 2 3 3 4 4 Sample Area san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro Type rock sample chanel chanel chanel grab sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample chanel chanel chanel chanel chanel chanel chanel rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample Geology adensitic rock with pirite with silicification and ox fault zone fault zone fault zone cuarz fragments fault zone fault zone cuarz breccia with pirite andesitic breccia with cuatz fragments and pirite andesitic breccia with cuatz fragments and pirite andesitic breccia with cuatz fragments and pirite andesitic breccia with cuatz fragments and pirite fault zone cuarz breccia with pirite fault zone fault zone adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox adensitic rock with pirite with silicification and ox dacitic rock with strong sili dacitic rock with strong sili dacitic rock with strong sili fault zone andesitic breccia with cuatz fragments and pirite andesitic breccia with cuatz fragments and pirite andesitic breccia with cuatz fragments and pirite andesitic breccia with cuatz fragments and pirite dacitic rock with strong sili dacitic rock with strong sili andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox Sample_Name PNA‐107 PNA‐108 PNA‐109 PNA‐110 PNA‐111 PNA‐112 PNA‐113 PNA‐114 PNA‐115 PNA‐116 PNA‐117 PNA‐118 PNA‐119 PNA‐120 PNA‐121 PNA‐122 PNA‐123 PNA‐124 PNA‐125 PNA‐185 PNA‐186 PNA‐194 PNA‐195 PNA‐196 PNA‐197 PNA‐198 PNA‐199 PNA‐200 PNA‐201 PNA‐202 PNA‐203 PNA‐204 PNA‐205 PNA‐206 PNA‐207 PNA‐208 PNA‐209 PNA‐210 PNA‐211 PNA‐212 PNA‐213 PNA‐214 East_WGS84 467696 467684 467685 467697 467695 467646 467643 467639 467634 467657 467657 467600 467598 467596 467561 467560 467557 467555 467542 467400 467395 471898 471898 471898 471898 471900 471910 471919 471915 471910 471906 471901 471880 471920 471920 471940 471935 471931 471926 471922 471918 471907 North_WGS 84 2574669 2574679 2574682 2574747 2574746 2574731 2574735 2574738 2574740 2574765 2574765 2574768 2574770 2574773 2574812 2574815 2574816 2574819 2574832 2574504 2574500 2576412 2576416 2576418 2576420 2576422 2576427 2576511 2576514 2576516 2576519 2576519 2576530 2576510 2576530 2576608 2576608 2576611 2576613 2576616 2576618 2576623 Auppm 0.23 0.005 0.048 0.032 0.148 0.072 0.019 0.527 0.04 0.039 0.005 0.011 0.005 0.01 0.005 0.031 0.057 0.179 0.024 0.005 0.005 0.076 0.003 0.003 0.305 0.098 1.303 0.016 0.038 0.154 0.048 0.782 0.161 0.013 0.585 0.015 0.165 0.063 0.003 0.174 0.102 0.016 Agppm 1 1 1 1 3 1 1 1 2 1 1 1 1 1 3 1 3 3 2 19 1 15 2 37 18 2 28 2 2 10 2 16 2 2 14 2 2 2 2 2 2 2 Wide 1 3 2 2 3 5 5 5 5 3 3 3 3 3 3 3 3 6 4 3 3 4 2 1.5 3 2 1.5 5 5 5 5 5 5 1.5 1.5 5 5 5 5 5 5 5 Sample Area san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego centro san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este Type rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample Geology andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox cuartz breccia with pirite cuartz breccia with pirite andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets andesitic rock with cuartz veinlets dacite rock with oxi dacite rock with oxi andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite andesitic rock with pirite fault zone fault zone andesitic rock with strong oxi andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets Sample_Name PNA‐215 PNA‐216 PNA‐217 PNA‐218 PNA‐219 PNA‐220 PNA‐221 PNA‐222 PNA‐223 PNA‐224 PNA‐225 PNA‐226 PNA‐227 PNA‐228 PNA‐229 PNA‐230 PNA‐231 PNA‐232 PNA‐233 PNA‐234 PNA‐235 PNA‐236 East_WGS84 471950 471931 471920 472387 472382 472432 472432 472430 472427 472425 472423 472420 472418 472415 472422 472421 472420 470262 470261 470178 470079 470078 North_WGS 84 2576681 2576675 2576680 2577134 2577128 2577220 2577387 2577388 2577393 2577397 2577401 2577406 2577410 2577414 2577455 2577460 2577465 2576853 2576854 2577003 2576754 2576756 Auppm 0.205 0.058 0.082 0.125 0.046 0.037 0.19 0.031 0.057 0.202 0.064 0.036 0.016 0.016 0.392 0.032 0.037 0.003 0.003 0.096 0.024 3.333 Agppm 12 50 12 2 2 2 22 2 2 23 12 2 2 2 24 2 2 21 2 2 2 2 Wide 5 4 4 7.5 5 5 2.5 5 5 5 5 5 5 5 5 5 5 1 5 5 1.5 1.5 Sample Area san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este san diego este Type rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample rock sample Geology andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets andesitic rock with silicification and cuartz veinlets cuartz breccia with pirite andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox cuartz breccia with pirite andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox andesitic rock with silicification and ox San Diego Property Technical Report 51 Appendix III Author Sample Data 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com February 2011 IQP Assay Data SGS Labs ANALYTE METHOD DETECTION UNITS 26576 26577 26578 26579 26580 26581 26582 26583 26584 26585 26586 26587 DUP-26576 AuAASGT FAG323 0.01 g/t >10 0.18 0.094 2.642 7.798 1.795 2.303 3.199 0.031 0.649 0.015 >10 >10 Ag FAG323 10 g/t 161 24 <10 76 26 <10 550 30 <10 <10 <10 <10 175 Au FAG303 Ag ICP14B 1 ppm 58.64 >10 N.A. >10 N.A. N.A. >10 N.A. >10 N.A. N.A. >10 N.A. >10 N.A. <2 N.A. <2 N.A. <2 15 58.45 >10 2 g/t 7 9 3 Al ICP14B 0.01 % 0.49 1.5 1.05 1.17 1.05 1.42 0.02 0.84 2.51 2.71 1.57 0.17 0.49 As ICP14B Ba ICP14B 10 ppm 1 ppm 46 <10 56 66 28 15 19 199 28 23 <10 11 47 109 21 109 178 19 76 15 17 57 41 86 7 111 Be ICP14B 0.5 ppm <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 <0.5 1.1 0.6 0.6 0.6 <0.5 <0.5 Bi ICP14B 10 ppm 40 <10 <10 70 150 <10 30 10 <10 <10 <10 20 40 Ca ICP14B 0.01 % <0.01 <0.01 0.03 <0.01 <0.01 <0.01 <0.01 2.55 0.96 1.06 0.62 0.02 <0.01 Cd ICP14B Co ICP14B 1 ppm <1 <1 <1 <1 <1 <1 <1 <1 <1 Cr ICP14B 1 ppm <1 <1 1 ppm 6 <1 <1 <1 68 <1 6 3 4 <1 Cu ICP14B 8 13 15 7 10 <1 1 ppm 11 26 18 18 21 15 2 6 17 14 10 12 834 208 333 655 545 312 773 287 41 19 125 122 841 San Diego Property Technical Report 52 Appendix IV Laboratory Sample Preparation and Assay Methods 65 Queen St. • Dartmouth, NS B2Y 1G4 • Ph.: (902) 463-1440 • Fax: (902) 463-1419 E-mail: [email protected] • Web: www.mercatorgeo.com February 2011 Sample Preparation Package – PREP-31 Standard Sample Preparation: Dry, Crush, Split and Pulverize Sample preparation is the most critical step in the entire laboratory operation. The purpose of preparation is to produce a homogeneous analytical subsample that is fully representative of the material submitted to the laboratory. The sample is logged in the tracking system, weighed, dried and finely crushed to better than 70 % passing a 2 mm (Tyler 9 mesh, US Std. No.10) screen. A split of up to 250 g is taken and pulverized to better than 85 % passing a 75 micron (Tyler 200 mesh, US Std. No. 200) screen. This method is appropriate for rock chip or drill samples. Method Code Description LOG-22 Sample is logged in tracking system and a bar code label is attached. CRU-31 Fine crushing of rock chip and drill samples to better than 70 % of the sample passing 2 mm. SPL-21 Split sample using riffle splitter. PUL-31 A sample split of up to 250 g is pulverized to better than 85 % of the sample passing 75 microns. Revision 02.02 07-May-07 Page 1 of 2 Flow Chart - Sample Preparation Package – PREP-31 Standard Sample Preparation: Dry, Crush, Split and Pulverize Receive Sample LOG-22 Affix Bar Code and Log Sample in LIMS WEI-21 Record received sample weight Is sample dry? NO Dry Sample YES Keep Reject If samples air-dry overnight, no charge to client. If samples are excessively wet, the sample should be dried to a maximum of 120°C. (DRY-21) CRU-31 Fine crushing of rock chip and drill samples to better than 70 % < 2 mm QC testing of crushing efficiency is conducted on random samples (CRU-QC). SPL-21 Split sample using riffle splitter The sample reject is saved or dumped pending client instructions. Prolonged storage (> 45 days) of rejects will be charged to the client. PUL-31 Up to 250 g sample split is pulverized to better than 85 % < 75 microns QC testing of pulverizing efficiency is conducted on random samples (PUL-QC). Retain pulp for analysis Lab splits are required when analyses must be performed at a location different than where samples received. Reject Revision 02.02 07-May-07 Page 2 of 2 Geochemical Procedure - ME-ICP41 Trace Level Methods Using Conventional ICP-AES Analysis Sample Decomposition: Analytical Method: Nitric Aqua Regia Digestion (GEO-AR01) Inductively Coupled Plasma - Atomic Emission Spectroscopy (ICP - AES) A prepared sample is digested with aqua regia in a graphite heating block. After cooling, the resulting solution is diluted to 12.5 mL with deionized water, mixed and analyzed by inductively coupled plasma-atomic emission spectrometry. The analytical results are corrected for inter-element spectral interferences. NOTE: In the majority of geological matrices, data reported from an aqua regia leach should be considered as representing only the leachable portion of the particular analyte. Symbol Units Lower Limit Upper Limit Default Overlimit Method Silver Ag ppm 0.2 100 Ag-OG46 Aluminum Al % 0.01 25 Arsenic As ppm 2 10000 Boron B ppm 10 10000 Barium Ba ppm 10 10000 Beryllium Be ppm 0.5 1000 Bismuth Bi ppm 2 10000 Calcium Ca % 0.01 25 Cadmium Cd ppm 0.5 1000 Cobalt Co ppm 1 10000 Chromium Cr ppm 1 10000 Copper Cu ppm 1 10000 Iron Fe % 0.01 50 Element Cu-OG46 Revision 06.02 20-Apr-09 Page 1 of 3 Fire Assay Procedure – Ag-GRA21, Ag-GRA22, Au-GRA21 and Au-GRA22 Precious Metals Gravimetric Analysis Methods Sample Decomposition: Fire Assay Fusion (FA-FUSAG1, FA-FUSAG2, FA-FUSGV1 and FAFUSGV2) Gravimetric Analytical Method: A prepared sample is fused with a mixture of lead oxide, sodium carbonate, borax, silica and other reagents in order to produce a lead button. The lead button containing the precious metals is cupelled to remove the lead. The remaining gold and silver bead is parted in dilute nitric acid, annealed and weighed as gold. Silver, if requested, is then determined by the difference in weights. Method Code Element Symbol Units Sample Weight (g) Detection Limit Upper Limit Ag-GRA21 Silver Ag ppm 30 5 10,000 Ag-GRA22 Silver Ag ppm 50 5 10,000 Au-GRA21 Gold Au ppm 30 0.05 1000 Au-GRA22 Gold Au ppm 50 0.05 1000 Revision 03.01 7-Mar-11 Page 1 of 1 Lab Accreditation & QA Overview (rev05.00) Revision: 05.00 December 7, 2010 Page 1 of 9 ISO 9001 CRU-31 PUL-31 ( DetectionLimit c P) 100% %Precision as a Function of Detection Limit 120.00% 100.00% 80.00% % Precision Pc 1 ppm DL 2 ppm DL 10 ppm DL 60.00% 40.00% 20.00% 0.00% 1 2 5 10 20 50 100 200 Concentration (ppm) 500 1000 2000 5000 10000 Minerals Services METHOD SUMMARY Sample Reduction 1. Parameter(s) measured, unit(s): All 2. Typical sample size: .250 – 3 Kg. 3. Type of sample applicable (media): Geological and metallurgical samples (ores, concentrates, rocks, soils and metallurgical process products) 4. Sample preparation technique used: Samples require various preparation procedures to ensure sample homogeneity, representative subsamples and prevent cross contamination. The stepwise procedure may involve all steps or some of the steps depending upon the state of the sample as received. The sample is dried at 95 +/-10°C, if received wet or if requested by client. Drying temperatures can vary based on client specific requests or when mercury determination is requested. The next step involves crushing to reduce the sample size to typically 2mm/10 mesh (9 mesh Tyler). The sample is then split via a riffle splitter continuously in order to divide the sample into typically a 250g sub-sample for analysis and the remainder is stored as a reject. A rotary sample divider may also be used to split the sample. Pulverizing is done using pots made of either hardened chrome steel or mild steel material. Crushed material is transferred into a clean pot and the pot is placed into a vibratory mill. Samples are pulverized to typically 75 microns/200 mesh or otherwise specified by the client. 5. Method of analysis used: This may involve various analyses depending upon the analytes requested and sample type. 6. Data reduction by: Computer, on line, data fed to Laboratory Information Management System with secure audit trail. 7. Quality Control Crushing/ Pulverizing Parameters Cru. Prep. Blank Cru. Prep. Replicates Cru. % Passing Checks Pul. Prep. Blank Pul. Prep. Replicates Pul. % Passing Checks Frequency At the start of batch Every 50 samples Every 50 samples At the start of batch Every 50 samples Every 50 samples Quality Control Requirement If not specified otherwise by the client 75% passing 9 mesh (2mm) (Tyler) 75% passing 9 mesh (2mm) (Tyler) 75% passing 9 mesh (2mm) (Tyler) 85% passing 200 mesh (75 um) 85% passing 200 mesh (75 um) 85% passing 200 mesh (75 um) SGS Minerals Services in Durango is accredited by the Standards Council of Canada (SCC) for specific mineral tests listed on the scope of accreditations to the ISO/IEC 17025 standard. Copies of the current scope of testing and accreditation documents are available upon request. A link to our current scope of accreditation is available on our website or directly from the SCC website www.scc.ca. Refer to our General Conditions of Service accessible at http://www.sgs.com/terms _and_conditions.htm. SGS Minerals Services Durango Laboratory www.sgs.com Member of the SGS Group (Société Générale de Surveillance) Minerals Services METHOD SUMMARY ICP90Q: Preparation and Determination of 7 Elements in Mineralized (Ore Grade) Samples by Sodium Peroxide Fusion and Inductively Coupled Plasma Optical Emission Spectrometry [As, Fe, Cu, Ni, Pb, Sb, Zn; Na2O2; ICP-OES] 1. Parameter(s) measured, unit(s): The method consists of a sodium peroxide fusion with ICP-OES finish and is applicable to the determination of Copper, Lead, Nickel, Zinc, Arsenic, Antimony and Iron in any geological sample matrix. The method is applicable to the assay analysis of base metals in samples and provides precision and accuracy of greater than 5% for individual elements. Results are reported in %. 2. Typical sample size: 0.20 g 3. Type of sample applicable (media): Crushed and Pulverized rocks, soils and sediments 4. Sample preparation technique used: Crushed and pulverized rock, soil and /or sediment samples are fused by Sodium peroxide in zirconium crucibles and dissolved using dilute HNO3. 5. Method of analysis used: The digested sample solution is aspirated into the inductively coupled plasma Optical Emission Spectrometer (ICP-OES) where the atoms in the plasma emit light (photons) with characteristic wavelengths for each element. This light is recorded by optical spectrometers and when calibrated against standards the technique provides a quantitative analysis of the original sample. 6. Data reduction by: The results are exported via computer, on line, data fed to the Laboratory Information Management System (LIMS CCLAS EL) with secure audit trail. 7. Quality control: The ICP-OES is calibrated with each analytical run. An instrument blank and calibration check is analyzed with each run. Preparation blanks and reference materials are analyzed randomly within the batch, one replicate every 12 samples. All QC samples are verified using LIMS. The acceptance criteria are statistically controlled and control charts are used to monitor accuracy and precision. Data that falls outside the control limits is investigated and repeated as necessary. SGS Minerals Services in Durango is accredited by the Standards Council of Canada (SCC) for specific mineral tests listed on the scope of accreditations to the ISO/IEC 17025 standard. Our method ICP90Q is currently listed on the scope. ISO/IEC addresses both the quality management system and the technical aspects of operating a testing laboratory. Copies of the current scope of testing and accreditation documents are available upon request. A link to our current scope of accreditation is available on our website or directly from the SCC website www.scc.ca. Refer to our General Conditions of Service accessible at http://www.sgs.com/terms _and_conditions.htm. SGS Minerals Services Durango Laboratory www.sgs.com Member of the SGS Group (Société Générale de Surveillance) Minerals Services METHOD SUMMARY ICP40B: Preparation and determination of 32 Elements by 4-acid Digest and Inductively Coupled Plasma Optical Emission Spectrometry [HNO3, HCl, HF, HClO4; ICP-OES; Ag, Al, As, Ba, Be, Bi, Ca, Cd, Cr, Co, Cu, Fe, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, Sb, Sc, Sn, Sr, Ti, V, W, Y, Zn, Zr] 1. Parameter(s) measured, unit(s): The method is applicable to the determination of Aluminum, Antimony, Arsenic, Barium, Beryllium, Bismuth, Cadmium, Calcium, Chromium, Cobalt, Copper, Iron, Lanthanum, Lead, Lithium, Magnesium, Manganese, Molybdenum, Nickel, Phosphorus, Potassium, Scandium, Silver, Sodium, Strontium, Tin, Titanium, Tungsten, Vanadium, Yttrium, Zinc and Zirconium in geological sample matrices. Results are reported in ppm (g/t) or %. 2. Typical sample size: 0.2 g 3. Type of sample applicable (media): Crushed and Pulverized rocks, soils and sediments 4. Sample preparation technique used: Crushed and pulverized rock, soil and /or sediment samples are digested using HNO3, HCl, HF and HClO4. 5. Method of analysis used: The digested sample solution is aspirated into the inductively coupled plasma Optical Emission Spectrometer (ICP-OES) where the atoms in the plasma emit light (photons) with characteristic wavelengths for each element. This light is recorded by optical spectrometers and when calibrated against standards the technique provides a quantitative analysis of the original sample. 6. Data reduction by: The results are exported via computer, on line, data fed to the Laboratory Information Management System (LIMS CCLAS EL) with secure audit trail. 7. Quality control: The ICP-OES is calibrated with each analytical run. An instrument blank and calibration check is analyzed with each run. Preparation blanks and reference material are randomly placed; one replicate sample is selected every 12 samples. All QC samples are verified using LIMS. The acceptance criteria are statistically controlled and control charts are used to monitor accuracy and precision. Data that falls outside the control limits is investigated and repeated as necessary. SGS Minerals Services in Durango is accredited by the Standards Council of Canada (SCC) for specific mineral tests listed on the scope of accreditations to the ISO/IEC 17025 standard. Our method ICP40B is currently listed on the scope. ISO/IEC addresses both the quality management system and the technical aspects of operating a testing laboratory. Copies of the current scope of testing and accreditation documents are available upon request. A link to our current scope of accreditation is available on our website or directly from the SCC website www.scc.ca. Refer to our General Conditions of Service accessible at http://www.sgs.com/terms _and_conditions.htm. SGS Minerals Services Durango Laboratory www.sgs.com Member of the SGS Group (Société Générale de Surveillance) Minerals Services METHOD SUMMARY ICP14B: Preparation and Determination of 34 Elements by 2-acid Digest and Inductively Coupled Plasma Optical Emission Spectrometry [HN03; HCL; ICP-OES; Ag, Al, As, Ba, Be, Bi, Ca, Cd, Cr, Co, Cu, Fe, Hg, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sn, Sr, Ti, V, W, Y, Zn, Zr] 1. Parameter(s) measured, unit(s): The method consists of a nitric and hydrochloric acid digestion (aqua regia) with an ICP-OES finish and is applicable to the determination of Aluminium, Antimony, Arsenic, Barium, Beryllium, Bismuth, Cadmium, Calcium, Chromium, Cobalt, Copper, Iron, Lanthanum, Lead, Lithium, Magnesium, Manganese, Mercury, Molybdenum, Nickel, Phosphorus, Potassium, Scandium, Silver, Sodium, Strontium, Sulphur, Tin, Titanium, Tungsten, Vanadium, Yttrium, Zinc and Zirconium in geological sample matrices. Individual detection limits, accuracies, precisions and validation ranges are stated in the method file. Results are reported in ppm (g/t) or %. 2. Typical sample size: 0.25 g 3. Type of sample applicable (media): Crushed and Pulverized rocks, soils and sediments 4. Sample preparation technique used: Crushed and pulverized rock, soil and /or sediment samples are digested using HNO3 and HCl. 5. Method of analysis used: The digested sample solution is aspirated into the Inductively Coupled Plasma Optical Emission Spectrometer (ICP-OES) where the atoms in the plasma emit light (photons) with characteristic wavelengths for each element. This light is recorded by optical spectrometers and when calibrated against standards the technique provides a quantitative analysis of the original sample. 6. Data reduction by: The results are exported via computer, on line, data fed to the Laboratory Information Management System (LIMS CCLAS EL) with secure audit trail. 7. Quality control: The ICP-OES is calibrated with each analytical run. An instrument blank and calibration check is analyzed with each run. Preparation blanks and reference materials are analyzed randomly within the batch, one replicate every 12 samples. All QC samples are verified using LIMS. The acceptance criteria are statistically controlled and control charts are used to monitor accuracy and precision. Data that falls outside the control limits is investigated and repeated as necessary. SGS Minerals Services in Durango is accredited by the Standards Council of Canada (SCC) for specific mineral tests listed on the scope of accreditations to the ISO/IEC 17025 standard. Our method ICP14B is currently listed on the scope. ISO/IEC addresses both the quality management system and the technical aspects of operating a testing laboratory. Copies of the current scope of testing and accreditation documents are available upon request. A link to our current scope of accreditation is available on our website or directly from the SCC website www.scc.ca. Refer to our General Conditions of Service accessible at http://www.sgs.com/terms _and_conditions.htm. SGS Minerals Services Durango Laboratory www.sgs.com Member of the SGS Group (Société Générale de Surveillance) Minerals Services METHOD SUMMARY Refer to our General Conditions of Service accessible at http://www.sgs.com/terms _and_conditions.htm. SGS Minerals Services Durango Laboratory www.sgs.com Member of the SGS Group (Société Générale de Surveillance) Minerals Services METHOD SUMMARY FAG323: Preparation and Determination of Gold and/or Silver by Lead Fusion Fire Assay, Atomic Absorption Spectrometry or Gravimetric Finish [ME-FAA313 for Au by AAS; ME-FAG323 for Au by AAS and Ag by Gravimetric; ME-FAG313 for Ag by Gravimetric; ME-FAG303 for Au by Gravimetric] 1. Parameter(s) measured, unit(s): This method summary applies to FAG323 (combined Au and Ag determinations), FAA313 (Au determination with AAS finish), FAG303 (Au determination with a Gravimetric Finish), and FAG313 (Ag determination only). All codes have been combined since the method is Fire Assay (consisting of two consecutive pyrometallurgical processes), with only slight variations either based on the client’s request and/or Au concentrations. Results are reported in ppb, ppm, g/t or %. 2. Typical sample size: 30 g 3. Type of sample applicable (media): Crushed and pulverized rocks. 4. Sample preparation technique used: Crushed and pulverized rock samples are weighed, mixed with lead oxide flux and fused at approximately 1100°C, followed by cupellation of a lead button resulting in a dore bead consisting of gold and silver. In some cases when no dore bead is visible or when there is not enough silver present, the bead is either recupelled with silver and lead foil, in order to allow for gold determination or the sample is refused with silver nitrate. 5. Method of analysis used: If FAG323 is selected by the client, the dore bead is first weighed by micro-balance for total silver and gold. Gravimetric Analysis is a technique through which the amount of an analyte can be determined through the measurement of mass from the use of a micro balance. The dore bead is then transferred to at test tube where silver is precipitated by acid forming silver chloride, and gold remains in solution. The solution is aspirated into a Flame Atomic Absorption Spectrometer (AAS), aerosolized, and mixed with combustible gas (acetylene and air). The mixture is ignited in a flame that has a temperature ranging from 2,100 to 2,800 C. During combustion, atoms of gold in the sample are reduced to free, unexcited ground state atoms, which absorb light. Light of the appropriate wavelength is supplied and the amount of light absorbed can be measured against a standard curve. The silver is then calculated by difference. If FAA313 is selected, then gold only is determined with an AAS. If FAG313 is selected, then the dore bead is weighed by micro balance for silver only. If FAG303 is selected, the dore bead is placed into a porcelain crucible, where silver is removed by using dilute Nitric Acid and heating to 650 C. The remaining gold is determined by micro-balance. 6. Data reduction by: The results are exported via computer, on line, data fed to the Laboratory Information Management System (LIMS CCLAS EL) with secure audit trail. Refer to our General Conditions of Service accessible at http://www.sgs.com/terms _and_conditions.htm. SGS Minerals Services Durango Laboratory www.sgs.com Member of the SGS Group (Société Générale de Surveillance) Minerals Services METHOD SUMMARY 7. Quality control: Fusion blanks and certified reference materials are analyzed randomly within the batch, one replicate every 12 samples. The micro-balance is calibrated annually by an accredited source. It is verified using a calibrated, traceable weight on a daily basis as required. All QC samples are verified using LIMS. The acceptance criteria are statistically controlled and control charts are used to monitor accuracy and precision. Data that falls outside the control limits is investigated and repeated as necessary. SGS Minerals Services in Durango is accredited by the Standards Council of Canada (SCC) for specific mineral tests listed on the scope of accreditations to the ISO/IEC 17025 standard. Our methods FAA313, FAG323, FAG313, and FAG303 are currently listed on the scope. ISO/IEC addresses both the quality management system and the technical aspects of operating a testing laboratory. Copies of the current scope of testing and accreditation documents are available upon request. A link to our current scope of accreditation is available on our website or directly from the SCC website www.scc.ca. Refer to our General Conditions of Service accessible at http://www.sgs.com/terms _and_conditions.htm. SGS Minerals Services Durango Laboratory www.sgs.com Member of the SGS Group (Société Générale de Surveillance) Minerals Services METHOD SUMMARY AAS21E: Preparation and Determination of Silver by 3-acid Digest and Atomic Absorption Spectrometry [HNO3, HCl, HF; Ag; AAS] 1. Parameter(s) measured, unit(s): The method consists of a nitric, hydrochloric and hydrofluoric acid digestion with an atomic absorption spectrometry finish (AAS), and is applicable to the determination of Silver in geological sample matrices. Results are reported in g/t (ppm) 2. Typical sample size: 2 g in 50 mL 3. Type of sample applicable (media): Crushed and Pulverized rocks, soils and sediments 4. Sample preparation technique used: Crushed and pulverized rock, soil and /or sediment samples are digested using HNO3, HCl and HF in 50 mL centrifuge tubes in a hot water bath. 5. Method of analysis used: The digested sample solution is aspirated into Flame Atomic Absorption Spectrometer (AAS), aerosolized, and mixed with the combustible gas, acetylene and air. The mixture is ignited in a flame at a temperature that ranges from 2100 to 2800 C. During combustion, atoms of the Silver in the sample are reduced to free, unexcited ground state atoms, which absorb light. Light of the appropriate wavelength is supplied and the amount of light absorbed can be measured against a standard curve. 6. Data reduction by: The results are exported via computer, on line, data fed to the Laboratory Information Management System (LIMS CCLAS EL) with secure audit trail. 7. Quality control: The atomic absorption spectrometer (AAS) is calibrated with each workorder. An instrument blank and calibration check is analyzed with each run. Preparation blank and reference material are analyzed randomly withing the batch, one replicate sample every 12 samples. All QC samples are verified using LIMS. The acceptance criteria are statistically controlled and control charts are used to monitor accuracy and precision. Data that falls outside the control limits is investigated and repeated as necessary. SGS Minerals Services in Durango is accredited by the Standards Council of Canada (SCC) for specific mineral tests listed on the scope of accreditations to the ISO/IEC 17025 standard. Our method AAS21E is currently listed on the scope. ISO/IEC addresses both the quality management system and the technical aspects of operating a testing laboratory. Copies of the current scope of testing and accreditation documents are available upon request. A link to our current scope of accreditation is available on our website or directly from the SCC website www.scc.ca. Refer to our General Conditions of Service accessible at http://www.sgs.com/terms _and_conditions.htm. SGS Minerals Services Durango Laboratory www.sgs.com Member of the SGS Group (Société Générale de Surveillance) SCOPE OF ACCREDITATION SGS MINERALES - DURANGO Cd. Industrial C.P. 34208 Durango, DURANGO, Accredited Laboratory No. 657 (Conforms with requirements of CAN-P-1579 , CAN-P-4E (ISO/IEC 17025:2005)) CONTACT: TEL: FAX: EMAIL: Ms. Valerie Murphy (705) 652-2044 (705) 652-2129 [email protected] CLIENTS SERVED: All interested parties FIELDS OF TESTING: Chemical/Physical PROGRAM SPECIALTY Mineral Analysis AREA: ISSUED ON: 2009-11-10 VALID TO: 2013-11-10 METALLIC ORES AND PRODUCTS Mineral Analysis Testing Mineral Assaying ME-AAS21E ME-CON11V Preparation and Determination of Silver by 3-acid Digest and Atomic Absorption Spectrometry [HNO3, HCL, HF; Ag; AAS] Preparation and Determination of Lead in Ores, Concentrates and Metallurgical Products by Separation, Precipitation and Titration of Acid Solubles, Fusion with Atomic Absorption Spectrometry of Acid The approved and most recent version of this document can be viewed on the SCC website at http://palcan.scc.ca/SpecsSearch/GLSearchForm.do Page 1 of 2 Standards Council of Canada Accredited Laboratory No. 657 ME-CON12V ME-FAA313 ME-FAG323 ME-FAG313 ME-FAG303 ME-ICP14B ME-ICP40B ME-ICP90Q Insolubles [Pb, AAS] Preparation and Determination of Zinc in Ores, Concentrates and Metallurgical Products by Separation, Precipitation and Titration of Acid Solubles, Fusion with Inductively Coupled Plasma Optical Emission Atomic Absorption Spectrometry of Acid Insolubles [Zn, ICP-OES AAS] Preparation and Determination of Gold and/or Silver by Lead Fusion Fire Assay, Atomic Absorption Spectrometry or Gravimetric Finish [ME-FAA313 for Au by AAS; ME-FAG323 for Au by AAS and Ag by Gravimetric; ME-FAG313 for Ag by Gravimetric; ME-FAG303 for Au by gravimetric] Preparation and Determination of 34 Elements by 2-acid Digest and Inductively Coupled Plasma Optical Emission Spectrometry [HN03; HCL; ICP-OES; Ag, Al, As, Ba, Be, Bi, Ca, Cd, Cr, Co, Cu, Fe, Hg, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sn, Sr, Ti, V, W, Y, Zn, Zr] Preparation and Determination of 32 Elements by 4-acid Digest and Inductively Coupled Plasma Optical Emission Spectrometry [HNO3, HCL, HF, HCLO4; ICP-OES; Ag, Al, As, Ba, Be, Bi, Ca, Cd, Cr, Co, Cu, Fe, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, Sb, Sc, Sn, Sr, Ti, V, W, Y, Zn, Zr] Preparation and Determination of 7 elements in Mineralized (Ore Grade) Samples by Sodium Peroxide Fusion and Inductively Coupled Plasma Optical Emission Spectrometry [As, Fe, Cu, Ni, Pb, Sb, Zn; Na2O2; ICP-OES] Notes: CAN-P-4E (ISO/IEC 17025:2005): General Requirements for the Competence of Testing and Calibration Laboratories (ISO/IEC 17025: 2005) CAN-P-1579: Guidelines for the Accreditation of Mineral Analysis Testing Laboratories S. Cross, Director, Conformity Assessment Date: 2009-11-10 Number of Scope Listings: 10 SCC 1003-15/831 Partner File #0 Partner: The approved and most recent version of this document can be viewed on the SCC website at http://palcan.scc.ca/SpecsSearch/GLSearchForm.do Page 2 of 2