technical report (ni 43-101) penedono gold

Transcription

TECHNICAL REPORT (NI 43‐101) ON THE PENEDONO GOLD CONCESSION NORTHERN PORTUGAL LOCATION UTM Zone 29N (European Datum 1950): 4540000N, 630000E For COLT RESOURCES INC. 1550 Metcalfe St., Suite 502 Montreal, QC H3A 1X6 Canada By W. Gruenwald, P. Geo GEOQUEST CONSULTING LTD. August 27, 2010 TABLE OF CONTENTS 1.0 Page SUMMARY ..................................................................................................................................................... 1 2.0 INTRODUCTION & TERMS OF REFERENCE ............................................................................................... 5 3.0 RELIANCE ON OTHER EXPERTS ................................................................................................................. 5 4.0 PROPERTY LOCATION AND DESCRIPTION ............................................................................................... 6 4.1 4.2 4.3 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 5.1 5.2 5.3 5.4 5.5 6.0 Location ................................................................................................................................................ 6 Description of Property ........................................................................................................................ 6 Penedono Concession, Agreements and Surface Rights ...................................................................... 6 Accessibility .......................................................................................................................................... 7 Climate ................................................................................................................................................. 7 Local Resources .................................................................................................................................... 8 Infrastructure ....................................................................................................................................... 8 Physiography ........................................................................................................................................ 8 HISTORY ......................................................................................................................................................... 8 6.1 6.2 Exploration History up to 1998 ............................................................................................................ 8 Exploration History – 1998 to 2005 ..................................................................................................... 9 6.2.1 Santo Antonio ......................................................................................................................... 10 6.2.2 Turgueira ................................................................................................................................. 12 6.2.3 Parades – Dacotim .................................................................................................................. 12 6.2.4 Ferronha ................................................................................................................................. 14 6.2.5 Sirigo Dama ............................................................................................................................. 14 6.2.6 Boucoes ................................................................................................................................... 14 7.0 GEOLOGICAL SETTING 7.1 7.2 Regional Geology ............................................................................................................................... 15 Local Geology ..................................................................................................................................... 15 8.0 DEPOSIT TYPES ........................................................................................................................................... 16 8.1 9.0 MINERALIZATION ....................................................................................................................................... 16 9.1 9.2 9.3 9.4 9.5 9.6 Exploration Criteria ............................................................................................................................ 16 Santo Antonio .................................................................................................................................... 18 Marofa (North and South).................................................................................................................. 18 Turgueira ............................................................................................................................................ 19 Paredes‐Dacotim ................................................................................................................................ 19 Ferronha ............................................................................................................................................. 19 Boucoes ................................................................................................................................ 20 10.0 EXPLORATION ............................................................................................................................................. 20
10.1 Colt Exploration Programs – 2007 ...................................................................................................... 20 10.2 Colt Exploration Programs – 2008 ...................................................................................................... 21 10.3 Colt Exploration Programs – 2009/2010 ............................................................................................ 21 11.0 DRILLING ...................................................................................................................................................... 22 11.1 Colt 2007 Drilling Program ................................................................................................................. 22 11.2 11.3 11.1.1 Colt 2007 Drilling Results ...................................................................................................... 22
Colt 2008 Drilling Program ................................................................................................................. 23 11.2.1 Colt 2008 Drilling Results ...................................................................................................... 23 Colt 2009/10 Drilling Programs .......................................................................................................... 24 11.3.1 Marofa Drilling Results .......................................................................................................... 25 11.3.2 Santo Antonio Drilling Results .............................................................................................. 25 12.0 SAMPLING METHOD AND APPROACH ................................................................................................... 26 13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY ............................................................................. 27 14.0 DATA VERIFICATION .................................................................................................................................. 29 14.1 Site Visits ............................................................................................................................................ 29 14.2 Verification of Historic Work .............................................................................................................. 30 14.3 Verification of Colt Analytical Data .................................................................................................... 31 14.4 Author’s Verification (2008, 2010) ...................................................................................... 31 15.0 ADJACENT PROPERTIES ............................................................................................................................. 33 16.0 MINERAL PROCESSING AND METALLURGICAL TESTING ..................................................................... 33 17.0 MINERAL RESOURCES AND MINERAL RESERVE ESTIMATES .............................................................. 34 18.0 OTHER RELEVANT DATA AND INFORMATION ...................................................................................... 34 19.0 INTERPRETATION AND CONCLUSIONS................................................................................................... 35 20.0 RECOMMENDATIONS ................................................................................................................................ 36 21.0 REFERENCES ................................................................................................................................................ 37 22.0 DATA AND SIGNATURE PAGE .................................................................................................................. 38 23.0 CERTIFICATION OF THE AUTHOR ............................................................................................................ 39 TABLES Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table A1 Table A2 Page Penedono Concession Coordinates ................................................................................................ 6 Significant Trench Results ‐ Santo Antonio (Rio Narcea) .............................................................. 10 Significant Underground Results ‐ Santo Antonio Veins .............................................................. 11 Significant Rio Narcea Drilling Results ‐ Santo Antonio Area ....................................................... 11 Significant Trench Results ‐ Turgueira .......................................................................................... 12 Significant Trench Results ‐ Paredes‐Dacotim .............................................................................. 13 Significant Greystar Drilling Results ‐ Paredes‐Dacotim ............................................................... 13 Significant Rio Narcea Drilling Results ‐ Paredes‐Dacotim ........................................................... 13 Significant Drilling Results Drill Results – Santo Antonio (2007) .................................................. 23 Significant Drilling Results – Santo Antonio (2008‐2010) ............................................................ 24 Significant Drilling Results – Marofa Area .................................................................................... 25 Comparison of Reference Samples and Laboratory Analyses (2007‐2010).................................. 28 Comparison of Rio Narcea and W. Murton Sampling (2007) ...................................................... 30 Penedono Concession ‐ Rock Sample Descriptions 2008, 2010 (W. Gruenwald) .............. Appendix Penedono Concession Drilling Summary ........................................................................... Appendix PHOTOS Photo 1 Photo 2 Photo 3 Photo 4 View over Santo Antonio area of Penedono Concession ............................................................... 8 Core Photo Detail ......................................................................................................................... 27 Drill at Santo Antonio ................................................................................................................... 30 Santo Antonio Mine Tailings ......................................................................................................... 34 Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Figure 11a Figure 12 Figure 13 Figure 13a Figure 14 Figure 14a Figure 15 Figure 16 After Page Location Map .................................................................................................................................. 4 Penedono Concession .................................................................................................................... 6 Trench and Underground Sampling Plan – Santo Antonio Area .................................................. 11 Vein and Drill Hole Location Plan – Santo Antonio Area .............................................................. 11 Trench and Drill Hole Location Plan – Turguiera Area .................................................................. 12 Trench and Drill Hole Location Plan – Paredes‐Dacotim Area...................................................... 13 Drill Hole and Rock Sample Location Plan – Ferronha‐Sirigo Dama Area ..................................... 14 Regional Geology ......................................................................................................................... 15 Local Geology ............................................................................................................................... 15 Soil Geochemistry – Gold ............................................................................................................ 18 Rock Sample Location Plan – Marofa and Santo Antonio Areas .................................................. 21 Marofa South – Rock Sample, Trenches and Drill Hole Locations ...................................... Page 24 Longitudinal Section of Past Mining at Santo Antonio Vein No. 13 ................................... Page 26 Drill Hole Location Plan – Veins 4, 5 & 6 – Santo Antonio Area ................................................... 22 DDH Section 550E – Santo Antonio Area ...................................................................................... 21 Drill Hole and Trench Location Plan – Vein 11 and 13 Area – Santo Antonio Area ...................... 23 Drill Section PPE08‐03 and 06 ...................................................................................................... 23 Tailings – Santo Antonio Area ............................................................................................. Page 31 Adjacent Properties ............................................................................................................. Page 33 LIST OF ILLUSTRATIONS 1.0 SUMMARY The following technical (NI 43‐101) report prepared for Colt Resources Inc. describes the Penedono gold concession located in north‐ central Portugal. Its primary objective is to fulfill the company’s application for listing on the TSX Venture Exchange. In late August 2008, the writer examined several areas on the concession along with Colt’s 2007‐08 drilling programs. More recently (July, 2010) the writer examined exploration work conducted during the 2009 and 2010 programs as well as sampling procedures, QA/QC, core handling and storage facilities. Colt, with four concessions, is the second largest mineral rights holder in Portugal. The Penedono concession covers 102.5 km² and is easily accessible by an extensive network of paved and gravel roads. Infrastructure and local resources are excellent and the local population is supportive of resource development. The concession area was explored and exploited for gold since at least Roman times. Numerous small excavations attest to tungsten mining during the 1940s and 1950s. In the mid‐1950s, the Santo Antonio gold mine went into production near the town of Granja and operated for up to seven years. Underground mining exploited several gold veins. The amount mined and gold produced is unknown however, tailings suggest that over 100,000 tonnes were milled. During the 1970s to 1990s RTZ Corporation (now Rio Tinto) and a joint venture with a Portuguese company S.P.E. with French BRGM attempted exploration. In 1995, Portuguese company (Sociedade Mineira de Moimento Lta.) acquired a concession in the area and formed a joint venture with Greystar Resources Ltd. Trenching, rock sampling, and seven drill holes targeted the Paredes ‐ Dacotim area. In 1998, Greystar abandoned the concession. Rio Narcea Gold Mines S.A. first applied for the Penedono concession in 1998. From 1998 to 2003, they conducted extensive geochemical sampling, mapping, geophysics programs along with trenching and diamond drilling. The reported expenditures were €1,299,175. The company acquired the concession on October 24, 2004 and drilled several areas in 2005. Under a July 4, 2007 agreement Rio Narcea assigned to Colt the contract covering the concession. As required by Portuguese mining law upon the third anniversary the concession was reduced by 50% to 102.47 km². A required reduction on Oct. 29, 2008 resulted in three distinct blocks covering an area of 51.23 km². Renegotiation of the Exploration Contract with DGEG, the Portuguese mining authority, resulted in the granting of an exploration permit extension of a further three years, starting on October 29, 2009. This brought the concession area back to 102.47 km². By October 29, 2011 the concession will have to be reduced in area by 50%. In order to maintain the contract in good standing, Colt is required to complete annual exploration programs with defined expenditures and payments to the government. Since the concession was acquired, Colt has met its contractual obligations and has incurred exploration expenditures of € 1,199,213. Since 1996, ten separate drilling campaigns were completed on different areas of the concession with a total of 6,875.3 metres in 61 drill holes. Of these Colt has drilled 40 holes totaling 3157.7 metres with 34 holes on the Santo Antonio and six on the Marofa areas of the concession. The concession is largely underlain by upper Paleozoic age leucocratic “S Type” two‐mica granite. Rocks include equigranular to feldspar porphyritic, muscovite only to muscovite‐biotite granite. All gold mineralization on the concession is hosted by the “two‐mica granite”. Several clusters of auriferous quartz veins locally containing Penedono Concession, Portugal Colt Resources Inc. Page ‐ 1 ‐ Geoquest Consulting Ltd. August 27, 2010 tungsten mineralization occur within a broad west‐northwest trending 16 kilometre belt. The mineralized areas are referred to as Santo Antonio, Marofa, Turgueira, Paredes‐Dacotim, Ferronha, Sirigo Dama and Boucoes. Gold mineralization on the Penedono concession occurs as: • En‐echelon northeast striking, steep dipping quartz‐sulphide veins (Santo Antonio). • Quartz‐sulphide “greisen” zones associated with mineralized veins (Santo Antonio, Turgueira, Marofa). • Sheeted and stockwork fracture / micro vein systems (Ferronha). For most vein systems, there is a direct correlation between gold grade and arsenopyrite content. Higher gold grades are always associated with arsenopyrite‐rich material. Conversely however, not all arsenopyrite‐rich material is indicative of high gold grades. The Santo Antonio area comprises at least thirteen northeast striking, steeply dipping quartz veins that range from tight fracture veinlets (≤1cm) up to three metres wide. The longest, Vein 6, has a strike length of some 700 metres. Drilling has intersected veins to a depth of 150 metres below surface. Veins are open to depth and along strike. Rio Narcea and Colt have only drilled parts of the Santo Antonio vein system. Five of the thirteen known veins (veins 7, 8, 9, 10 and 12) have not yet been drilled. Rio Narcea’s drilling successfully located gold mineralization in Vein 5 where there was no apparent underground mining activity. Drilling yielded up to 5.90 g/t and 14.17 g/t Au in Veins 4 and 5 respectively. Core length intercepts range from 0.5 to 3.40 metres. In 2007, Colt drilled 12 holes (1,355 m) on Veins 4 and 5 based upon Rio Narcea’s work. This resulted in additional mineralized intercepts and indicated a 260 metre strike length and vertical extent of over 110 m. Veins 4 and 5 are considered open in all directions. Several intercepts in Vein 5 range from 0.23 to 8.96 g/t Au over core lengths of 0.57 to 1.53 metres. A newly located vein system oriented at 45° to Vein 4 was encountered to depths of 80 metres. Vein intercepts include 1.21 g/t Au over a core length of 17.00 metres containing 8.40 g/t Au over 0.57m. In 2008, Colt drilled Veins 11 and 13 in the west part of the Santo Antonio cluster where there was no previous drilling. Gold and occasional tungsten mineralization was encountered not only in quartz veins but also in adjacent greisen zones in granite. The greisen zones are substantially wider than in the eastern veins thus suggesting potential for more extensive mineralized zones. Gold mineralization was intersected at depths up to 100 metres below surface. Intercepts of note include 14.59 g/t Au over a core length of 3.15 metres and 5.89 g/t Au over 8.14 metres in Vein 11 and 39.67 g/t Au over 2.23 metres in Vein 13. Hole PPE08‐03 contains an intercept of 0.30% W. In 2009 and 2010 Colt completed 14 closely spaced diamond drill holes on Veins 11 and 13. Hole PPE10‐01 yielded the highest grade intercept to date where 0.38 m grading 180.57 g/t Au occurs within a 3.10 metre core length grading 22.66 g/t Au. Underground workings were intersected in three holes along Vein 13. Unmined vein and rubble from these workings grade up to 75.64 g/t Au indicating that the veins were quite high‐grade. There remain five known veins within the Santo Antonio vein cluster that have not been drill tested. In addition, strike extensions of many veins have also not been drill tested; these extensions have been interpreted from soil survey results, but have not been fully delineated. The 300‐500 metre area between the northern part of the Santo Antonio vein cluster and Marofa may offer additional exploration potential. A topographic low with no outcroppings, greisen in soils, gold‐in‐soil anomaly and change in vein directions between the two areas lend Penedono Concession, Portugal Colt Resources Inc. Page ‐ 2 ‐ Geoquest Consulting Ltd. August 27, 2010 support to this view. Recent trenching work in the 300 metre gap between Veins 3 and 4 also revealed locally high‐
grade gold bearing quartz veins. No drilling has yet been conducted in the latter two areas. The Marofa North and South areas, situated west and southwest of Santo Antonio are defined by a roughly two kilometre gold‐in‐soil anomaly identified by Rio Narcea’s sampling. Within this area GeoLog personnel identified six areas of gold bearing quartz veins, fractures and float. In 2009, Colt conducted detailed excavator and hand trenching in three areas. Sampling returned low‐grade gold intervals the longest being 0.27 g/t Au across 14.50 metres. The highest grade trench sample was 1.82 g/t Au across 0.70 metres. This work was followed by the drilling of six holes to determine whether the density of mineralized fractures and veinlets increased with depth. The highest grade drill intercept was 3.70 g/t Au over a core length of 2.10 metres. Other intercepts ranged up to 0.88 g/t Au with widths up to 6.88 metres. The recent work has only tested a portion of the large Marofa gold anomaly and there remain other targets that warrant further exploration. Other areas of historic exploration in the Penedono concession include Turgueira, Paredes‐Dacotim and Ferronha. Previous trenching and drilling by Rio Narcea at Turgueira explored extensive greisen alteration and veining suggesting the potential to host substantial gold ± tungsten mineralization. Rio Narcea drilling returned 11.6 metres grading 2.6 g/t Au just north of a trench that cut 23 metres of 1.90 g/t Au. Past exploration at Paredes‐
Dacotim identified a highly altered quartz vein/shear structure extending over widths of greater than 10 metres. Drilling intersected this structure to depths exceeding 100 metres below surface. Notable results include 3.4 m of 2.96 g/t Au and 1.0 m of 6.17 g/t Au. The Ferronha vein cluster/swarm is an area of interest due to its four kilometre strike potential. A Rio Narcea drill hole intersected several vein zones with one yielding 2.68 g/t Au over 1.0 metre. Colt has not explored the Turgueira, Paredes‐Dacotim and Ferronha areas. During the writer’s 2008 and 2010 examinations a total of thirty‐four samples were collected for verification of mineralized zones and drill core. Samples assayed from 0.61 to 59.52 g/t Au with seventeen containing >5 g/t Au. Seven samples collected from Santo Antonio (underground and surface) in 2008 confirmed the gold content of this vein system. In 2010, the writer’s chip sample test of a new trench in the 300 metre gap between Veins 3 and 4 yielded 4.15 g/t Au and correlates well with previous sampling. Surface work suggests this area to be prospective and further exploration (i.e. drilling) may be warranted especially given the proximity to underground workings. Three samples collected from the Santo Antonio mine tailings contain very significant amounts of gold with values ranging from 4.88 to 9.32 g/t Au. This corroborated previous sampling results and indicates that the tailings may represent a potentially economic resource. The metallurgical test results from a 500 kg tailing sample are pending. Sampling of dump material near an old shaft on Vein 11 assayed 9.96 g/t Au indicating that high‐grade material was mined from this vein. Four samples collected from veins in the Marofa areas contained 1.32 to 15.2 g/t Au. Two samples collected in 2008 from the Turgueira area assayed 7.8 g/t Au with one containing 0.04% W. At the Marofa area four samples collected from veins and old trenches contained from 1.32 g/t to 15.2 g/t Au. One of these samples contains 0.61% tungsten. These results confirmed the historic and GeoLog’s recent rock sampling. At Ferronha, arsenopyrite‐rich material mined from an old shaft returned the highest value at 59.52 g/t Au. Drill core check sampling from Santo Antonio and Marofa correlated well with the previous values. The largest variance, a 46.73 g/t Au versus the previous 35.34 g/t Au (PPE10‐07), is due to arsenopyrite content variation. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 3 ‐ Geoquest Consulting Ltd. August 27, 2010 In summary the Penedono concession offers excellent potential for the discovery of gold ± tungsten deposits in a region with excellent infrastructure, local resources and resource friendly communities. Colt’s exploration programs have successfully delineated and tested gold mineralized zones in the Santo Antonio and Marofa areas. Previously unexplored veins were drilled and in some cases, new mineralized vein zones were discovered. Santo Antonio, Marofa and the Turguiera areas are but a few of the gold mineralized zones and geochemical anomalies that have yet to be fully explored. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 4 ‐ Geoquest Consulting Ltd. August 27, 2010 2.0 INTRODUCTION & TERMS OF REFERENCE Colt Resources Inc. (Colt) retained Geoquest Consulting Ltd. to prepare a technical report for the Penedono Gold concession to National Instrument 43‐101 standards. Between August 22 and August 28, 2008, the writer traveled to Portugal and conducted site examinations, sampling and a review of exploration data as well as Colt’s 2008 drilling program. Subsequently the writer conducted another review between July 25th and July 30th, 2010 to review trenching and drilling conducted in 2009 and 2010. The primary objective of this report is to fulfill the company’s application for listing on the TSX Venture Exchange. This report summarizes the exploration history, mining and Colt’s 2007‐2010 exploration programs. Review of the available data and the writer’s site visits form the basis of comments, opinions and recommendations contained in this report. The interpretive views expressed herein are those of the writer and may or may not reflect the views of Colt Resources Inc. Unless otherwise stated costs are denominated in Euros (€1.00 = CDN$1.35) and unless otherwise specified, metric units are used throughout this report. Gold content is stated in grams per metric tonne (g/t) or parts per million (ppm). Analytical results for gold are stated as g/t Au. Tungsten results are stated as either ppm W or % W. 3.0 RELIANCE ON OTHER EXPERTS The writer has relied heavily on historical and technical information provided by Colt and the prior site visit conducted in August 2008. Examination of mineralized zones, historic and recent exploration sites was facilitated by Mr. Filipe Faria, Luiz Lopes and Nelson Martins of GeoLog Gabinete de Geosciencias, Lda, a consulting company based in Lisbon, Portugal. Assessment of the mining rights, contracts, permitting and environmental policy in Portugal is beyond the scope and ability of the writer. Therefore, the writer has relied on data provided by GeoLog and Colt. Sources of information in this report include: • Reports by Wayne Murton, P. Eng. provided comprehensive descriptions of the historic work as well as Colt’s 2007‐08 exploration work. • Rio Narcea Gold Mines drilling reports and logs. • Information provided by Mr. Filipe Faria, senior consultant for GeoLog, Lisbon. • Exploration analytical data. • The writer’s 2008 examination, sampling and reports for Colt Resources Inc. While due care has been taken in preparing this report, the writer cannot guarantee the accuracy or completeness of all supporting documentation. The veracity of the information cannot be fully determined however, the writer has no reason to doubt its reliability or accuracy. Details regarding the monetary aspects (payment schedule) of the agreement between various parties were summarized from reports and by Mr. Wayne Murton, P. Eng, correspondence with Mr. Filipe Faria and from information posted on Colt’s website. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 5 ‐ Geoquest Consulting Ltd. August 27, 2010 4.0 PROPERTY LOCATION AND DESCRIPTION 4.1 Location The Penedono concession is situated in north central Portugal approximately 295 air kilometres north‐northeast or four hours driving time from Lisbon, the country’s capital (Figure 1). The village of Penedono, the exploration base for the concession, lies about 50 km northeast of the city of Viseu. Several smaller villages within the concession include Granja, Riodades, Castainco and Ferronha. 4.2 Description of Property In 2006, the concession encompassed an area of 205.19 km² and measured roughly 19 by 11 km. Subsequent government required reductions in 2008 resulted in the three separate, irregularly shaped blocks totaling 51.20 km². Renegotiation of the concession has resulted in the current configuration. The concession outline, geographic co‐ordinates and previous concession outlines are shown on Figure 2. Table 1 lists the geographic co‐ordinates of the current concession. Table 1 ‐ Penedono Concession Coordinates
Hayford‐Gauss UTM Coordinates
Coordinates (European 1950) Corner M P
Easting
Northing
1 55617 153940 628563 4545947 2 57093 153530 630043 4545552 3 65257 150198 638238 4542302 4 67500 148380 640499 4540507 5 67500 147080 640511 4539207 6 62340 142100 635402 4534177 7 60420 142940 633474 4534998 8 59000 148150 632003 4540192 9 49190 149080 622187 4541024 10 49190 152640 622151 4544583 Total area: 102.459 km² By way of clarification for the coordinate system used by the government, the proper description is “Hayford‐
Gauss” which relates to a coordinate system with a central or “0” point located at the Melrica geodesic point in the geographic center of Portugal. Distances to the west are negative, to the east are positive while distances to the south are negative and to the north are positive. Thus, the location of Point 1 in the above table refers to a point 55.617 km east and 153.940 km north of the “0” point. 4.3 Penedono Concession, Agreements and Surface Rights Rio Narcea Gold Mines S.A. Sucursal em Portugal, (hereinafter referred to as Rio Narcea), was the holder of the rights, benefits and obligations under an October 29, 2004 contract between Rio Narcea and Ministerio da Economia e da Inovação, Direccao‐Geral de Energia e Geologia (DGEG) to the Penedono concession, covering a total area of 205.19 sq km. The contract was for a five year period. Under a definitive agreement (July 4, 2007) Rio Narcea assigned to Colt the contract covering the concession. As a result, Colt has assumed all the rights, benefits and obligations covered by the contract in respect to the concession. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 6 ‐ Geoquest Consulting Ltd. August 27, 2010 625000 m
630000 m
635000 m
Sao Joao
Da Pesqueira
640000 m
N
Sao Joao
Da Pesqueira
Tabuaco
W
E
4545000 m
2
Penedono
Sendim
Vila Nova
De Foz Coa
10
4545000 m
1
Datum
European 1950 (Portugal, Spain)
UTM Zone 29T
3
Riodades
Santo Antonio Mine
Coordinates of the Corners
of the
Penedono Exploration Block
4
Meda
8
Moimenta
Da Beira
5
Penedono
4540000 m
9
4540000 m
S
Ferronha
7
1
2
3
4
5
6
7
8
9
10
628563
630043
638238
640499
640511
635402
633474
632003
622187
622151
4545947
4545552
4542302
4540507
4539207
4534177
4534998
4540192
4541024
4544583
4535000 m
4535000 m
Sernancelhe
Corner Easting Northing
Penedono
6
625000 m
630000 m
635000 m
640000 m
0
LEGEND
Scale: 1:100000
5 km
COLT RESOURCES INC.
Minesite
Penedono Concession, Portugal
Community
Municipal Boundary
Current and Former Outlines
Penedono Concession (2010)
Penedono Concession (2008)
To accompany a report by W. Gruenwald, P. Geo.
Tech Work by: GEOQUEST
Drawn by: EG
Date: Aug, 2010
Figure: 2
In the agreement, Colt agreed to pay Rio Narcea a 1% Net Smelter Return royalty up to a maximum of US $1,000,000 after the commencement of commercial production. In addition, there is an underlying net smelter return royalty payable after the commencement of commercial production to the government up to a maximum of 4% when the price of gold exceeds US $350 per troy ounce (oz). When the gold price is US$ 300 to 350/troy ounce, the royalty is 3%. At a gold price less than US $300/oz the royalty is 2%. Under Portuguese mining law after a three year period (Oct. 29, 2007), the concession was reduced by 50% to 102.47 km². By Oct. 29, 2008 the concession was reduced a further 50% to 51.23 km² in three distinct blocks. Towards the end of the 5th year Colt renegotiated the Exploration Contract with the mining authority DGEG, and on September 17, 2009, signed an Addendum to the Contract granting an extension of a further three years, starting on October 29, 2009. The concession was then brought back to the 102.47 km² held after Oct.29, 2007, and will remain so for two years. By October 29, 2011 the concession area will have to be reduced again by 50%. In order to maintain the contract in good standing, Colt must complete annual exploration programs totaling €160,250 by Oct.29, 2007 (completed); €205,125 by Oct. 29, 2008 (completed); €252,563 by Oct. 29, 2009, €500,000 by Oct. 29, 2011, €250,000 by Oct. 29, 2012, and make annual cash payments to DGGE of €10,250 by Oct. 29, 2007; €5,125 by Oct. 29, 2008; €2,562 by Oct. 29, 2009; €5,124 by Oct. 29, 2010, €5,124 by Oct. 29, 2011 and €2,562 by Oct. 29, 2012. As part of the Addendum to the Contract the expenditure commitment of €500,000 is a cumulative amount for the 6th and 7th years and not determined individually for each year. To date the aggregate expenditures by Colt are over €1,199,213, which meets their pro‐rated contractual obligations. The concession holder owns the mineral rights for gold, silver, copper, lead, zinc, antimony, tungsten, tin, molybdenum, tantalum and niobium. Surface rights are held by various entities / individuals and are available by negotiation. There has been a long history of mining in the area and the local population is pro development and mining. Previous exploration including diamond drilling were completed with little difficulty or opposition by landowners. There is an underlying ability of confiscation of surface rights (with government approval) but this option would only be used as a very last resort. There is an old mill site with tailings located at the Santo Antonio (Granja) location. At this time, to the extent known, there are no environmental liabilities associated with the concession due to previous work. There is no reported legal survey of the concession. 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 5.1 Accessibility
The concession is in a region with a well developed road system. The larger centre of Viseu lies about 50 km south west from Penedono and the coastal city of Porto is three hours westerly by paved highway. Paved roads from Porto and other centres provide regional access. Numerous gravel roads provide access to most of the concession. 5.2 Climate The climate is temperate ‐ humid with a mean temperature of 15° C and an annual rainfall of up to 20 cm. Summer temperatures can reach 40°C while minor snowfalls may occur in the winter at higher elevations. Snow does not last more than a day or two. The operating season for exploration and mining operations is year round. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 7 ‐ Geoquest Consulting Ltd. August 27, 2010 5.3 Local Resources Portugal is a mining friendly country of the European Union where the exploration and mining industry have a long history and good relationship with government at both the state and municipal levels. Penedono, the largest village in the area, with a population of 3,400 is located in the eastern part of the concession (Figure 2). Several smaller villages are scattered throughout the region. The local economy is devoted mainly to agricultural activities. New employment opportunities would be welcomed. Villages in the concession could provide many of the personnel for mining purposes although training would be required. As mentioned, surface rights are available by negotiation with land owners. Sub surface mining rights are held irrevocably by the concession owner. There are many areas suitable for milling operations or heap leach pads. The old Santo Antonio mill site and tailings storage is located within sight of the town of Penedono. Additional tailings storage is available near the present site. 5.4 Infrastructure In addition to excellent transportation corridors, high voltage power is locally available. Large water requirements would be readily available from several small rivers crossing the concession. The mine workings at Santo Antonio are flooded to the #2 access level and could provide water for diamond drilling purposes. 5.5 Physiography The concession lies at elevations ranging from 500 to 1,000 metres above sea level. Topography is mostly gentle with rounded hills and gentle slopes (Photo 1). Fires in the past have burned off most hills and thus hill tops are barren of trees with only scrub bushes and grass. Valley bottoms and hillsides are planted in chestnuts, olives or vineyards. Photo 1 ‐ View over Santo Antonio Area
6.0 HISTORY The Penedono concession has been the focus of gold exploration and mining since Roman Times (200 BC‐300 AD). There is still evidence of this activity and in fact some Roman workings are visible on satellite imagery. The writer visited deep open cuts where quartz veins were mined attesting to the competency of the host granitic rocks. 6.1 Exploration History up to 1998 The writer also observed numerous open cuts resulting from small‐scale tungsten mining in the 1940s. Abundant broken quartz near many of these veins is evidence of hand mining for wolframite. This mineral is a source of Penedono Concession, Portugal Colt Resources Inc. Page ‐ 8 ‐ Geoquest Consulting Ltd. August 27, 2010 tungsten, a strategic metal used in munitions during World War II. Portugal is ranked globally as one of the top tungsten producing nations with the Panasqueira mine being one of the largest tungsten mines in the world. In the 1930s to the 1950s, according to limited government records, investigations were carried out assessing the Santo Antonio (Granja) deposit and Ferronha gold deposits. There are many old shafts, some with elaborate rock structures as head frame supports. Evidence of mining attempts is seen elsewhere on the concession. At Paredes‐ Dacotim, old shafts and open cuts were excavated for gold. At Turgueira and Boucoes open cuts and short tunnels were excavated for tungsten. The gold bearing potential of these occurrences was apparently not exploited. In the 1950s, a Portuguese company (Companhia das Minas de Ouro do Penedono Lda.) started to develop and mine the Santo Antonio (Granja) gold veins near Penedono. Shafts and adits were driven and at least four underground levels were established on four of the thirteen known vein structures. The deepest level established was believed to be 150 metres below surface. A flotation mill plus a cyanide leach circuit with a possible capacity of 400 tonnes per day was constructed and began treating ore from the Santo Antonio deposits in about 1954. Operations ceased in 1957. Very tenuous records indicate that perhaps 110,000 tonnes of material were processed with perhaps 331,000 grams of gold recovered. These numbers cannot be substantiated by the writer. There are the dry remnants of several tailings ponds near the mine site. A very rough volume calculation by Wayne Murton (2007) estimated approximately 100,000 tonnes of tailings (not NI 43‐101 compliant). The writer substantiated a similar amount by way of GPS area measurement of the tailings and making assumptions as to average thickness. There are signs of a detailed survey having been done over the tailings pond, but no information is available. The Santo Antonio mill buildings are in a state of disrepair but may be partially recoverable if required. Leach tanks are still in place and only two of the original five rod mills (1.5 X 3.0m) are still in place although likely not useable. From the 1970s through the 1980s, several companies including a Portuguese company S.P.E. joint venturing with French BRGM and Rio Tinto evaluated the general concession area but were unable to conduct exploration on the main areas of interest (Santo Antonio, Ferronha, Paredes ‐ Dacotim and Turgueira) due to an uncooperative claim owner. Regional geochemical surveys were reportedly done but the results are unavailable. In 1995, after an invalidation of the old inactive mining claims by the Portuguese government, a Portuguese company (Sociedade Mineira de Moimento Lda.) acquired the area of the present concession and in a joint venture with a Canadian company, Greystar Resources Ltd., conducted exploration over portions of the concession. Their work included the collection of approximately 450 (probably rock) samples, the excavation of eighteen trenches on three prospects including Paredes ‐ Dacotim and culminated in the drilling of seven diamond drill holes totaling 556 metres in the Paredes ‐ Dacotim area. Drill core from the Soc. Min. Moimenta/Greystar joint venture is stored at the LNEG (Portuguese geological survey) facilities at S. Mamede de Infesta, in the outskirts of Porto. In 1998, Greystar abandoned the concession. 6.2 Exploration History – 1998 to 2005 From 1998 to 2003, Rio Narcea conducted extensive exploration including soil, stream, rock and underground sampling, geological mapping, geophysics, trenching and drilling. Stream sampling (456 samples) were collected over the entire concession. Grid based soil sampling focused on several mineralized areas with 6,122 samples being collected Sampling of trenches, outcroppings and drill holes yielded a total 2,742 rock samples. Total exploration expenditures on these programs were reported as €1,299,175. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 9 ‐ Geoquest Consulting Ltd. August 27, 2010 Rio Narcea found geochemical sampling to be an effective exploration tool. Geochemistry indicated that the most promising areas for gold were in the Santo Antonio and Marofa areas. Results indicated that soil sampling, even in areas of poor soil development, was an effective method of evaluating areas for gold potential. Many soil samples are almost rock rubble and are thus quite site specific. Arsenic proved to be a good “pathfinder” element. Gold ranged from background up to 6,647 ppb in the Santo Antonio and Ferronha areas while arsenic values up to 25,974 ppm were reported in the Santo Antonio area. Geophysical exploration consisting of Induced Polarization (7 km) and VLF‐EM (53.2 km) surveys were conducted over selected areas of the concession. Results were less than satisfactory and did not contribute significantly to the overall understanding of the mineralization. Trenching totaling 8,187 metres was completed on several areas including Santo Antonio, Turgueira and Marofa. The largest amount of mechanical trenching occurred on Santo Antonio. The writer observed the reclaimed Rio Narcea trenches at Santo Antonio as well as hand trench chip sampling at the Marofa areas. Between 2001 and 2003 Rio Narcea conducted an eleven hole, 2,271 metre, diamond drilling program on Santo Antonio, Ferronha, Turgueira, Paredes‐ Dacotim including one “wildcat” hole in the Casa Branca area into a schist roof pendant north of Turgueira. In a 2005 joint venture with Canadian company ‐ C2C Inc., eight holes (1,080 m) were drilled on Santo Antonio, Paredes‐Dacotim and Turgueira. The early historical work, mining efforts and Rio Narcea’s exploration identified several areas of gold ± tungsten mineralization, which are displayed on Figures 2 and 4. They are summarized as follows: 6.2.1 Santo Antonio A major target of the historic exploration was the Santo Antonio vein system located approximately three kilometres northwest of Penedono. This was the site of a gold mine that operated for up to seven years in the 1950s. Rio Narcea’s exploration consisted of detailed trench and underground sampling along with five drill holes. Sixteen trenches were excavated on Santo Antonio veins 4, 5, 6 and 7. Trenches 18‐21 were completed on Veins 11‐13 however, no data is available. Gold grades up to 24.9 g/t were reported from samples ranging from 0.25 to 2.45 metres wide and over strike lengths up to 61 metres (Table 2). Table 2 – Significant Trench Results ‐ Santo Antonio (Rio Narcea) Vein 4 5 6 7 Easting (Eur 1950) 633700 633700 633500 633200 Penedono Concession, Portugal Colt Resources Inc. Northing
(Eur 1950) 4541850
Sample
Sites 3
4541800
2
4541750
3
4541500
1
Page ‐ 10 ‐ Au
(g/t) 14.46
24.93
10.71
5.88
7.47
4.02
19.13
17.61
8.52
Width
(m) 0.15
0.25
1.60
2.45
0.40
0.68
0.40
0.56
0.85
Strike Length (m) 62.10 15.70 61.08 Geoquest Consulting Ltd. August 27, 2010 Underground sampling by Rio Narcea on Veins 1, 2 and 3 yielded grades ranging from 0.20 to 16.22 g/t Au (vein 1); 0.06 to 24.87 g/t Au (vein 2); and 0.08 to 67.69 g/t Au (vein3). Average composite grade highlights range from 4.49 to 15.83 g/t Au across average widths of 0.65 to 1.68 metres: these are presented in Table 34.49 to 15.83 g/t Au across average widths of 0.65 to 1.68 metres (Table 3). Mineralized strike lengths up to 220 metres were reported. Trench and underground sample locations and significant results are shown on Figure 3. Table 3 – Significant Underground Results ‐ Santo Antonio Veins Avg
Au (g/t) 4.49
6.26
Vein 1 Avg
Width (m) 1.67
1.52
Over Length (m) 77.65
47.50
2 From 20 pillar locations in back of drift:
5.75 0.79
220.20
3 From 13 pillar locations in back of drift:
15.83
1.68
128.50
Short drift section of pillars:
13.93
0.65
36.10
The underground gold values do not necessarily represent the grade of what was mined in the past, as pillars may have been left in low grade or, a section of higher grade pillars may have been the only accessible areas left to sample by Rio Narcea. The values are listed to give some indication of what might be expected or targeted for future work. It is probable that the mineralized quartz vein system contains shoots of higher grade gold but the dimensions or orientation of these possible shoots is unknown (Murton, 2007). In 2005, Rio Narcea drilled Veins 1, 2 and 3 with one hole while the remainder tested Veins 4, 5 and 6 (Figure 4). All drill holes intersected veins with intercept grades ranging from 0.81 to 16.03 g/t Au over lengths ranging from 0.76 to 3.40 metres (Table 4). Drill intercepts are reported as core length and no conversion to true width has been made, as vein dip orientation is only approximately known as being 75° to 90°. True widths could be approximately 20% less than reported widths in some holes (Murton, 2007). Table 4 – Significant Rio Narcea Drilling Results ‐ Santo Antonio Area DDH Target PPE‐01 PPE‐02 PPE‐03 PPE‐04 PPE‐05 Vein 1 Vein 4 Vein 5 Includes:
Vein 4 Vein 5 Includes:
Vein 4 Vein 5 New Vein
Vein 5 Includes:
Penedono Concession, Portugal Colt Resources Inc. From
(m) 57.00
46.20
53.80
55.60
59.95
100.99
100.99
56.20
107.90
132.29
113.61
114.40
To
(m) 59.10
47.20
57.20
57.20
60.45
103.80
101.75
57.20
108.90
133.50
115.18
115.18
Page ‐ 11 ‐ Interval
(m) 2.10
1.00
3.40
1.60
0.50
2.81
0.76
1.00
1.00
1.31
1.57
0.79
Au (g/t) 3.18 0.81 4.00 7.78 2.13 4.18 14.17 5.10 3.51 1.05 9.05 16.03 Geoquest Consulting Ltd. August 27, 2010 632750 m
633000 m
633250 m
633500 m
633750 m
634000 m
N
Santo Antonio Mine
E
4542000 m
S
PW08-10
2.56
Datum
UTM Zone 29T
4542000 m
W
PW08-09
7.36
V-4c
V-6c
V-4b
V-5b
V-6b
PW08-03
8.80V-6a
Shaft
LEGEND
SA2-W01
12.80
V-4a
V-5a
PW08-07
9.96
Rock Chip Sample (g/t Au)
4541750 m
4541750 m
PW08-08
0.61
V-3b
PW08-06
4.04
Shaft
PW08-04
9.68
PW08-05
0.46
(W. Gruenwald, P. Geo.)
V-3a
Drill Hole Collars
Reo Narcea (2005)
Colt Resources (2008)
V-2
Colt Resources (2009-10)
V-7
PW08-02
5.48
4541500 m
4541500 m
Rio Narcea Sampling
Underground workings
PW08-01
24.8
Trench
V-1
Vein
0
Scale: 1:6000
250 m
Trench and Underground Sampling Plan
Santo Antonio Area
Data Source: Rio Narcea Company Maps and Reports
632750 m
633000 m
633250 m
633500 m
Drawn by: EG
633750 m
Date: Aug, 2010
Figure: 3
634000 m
4541250 m
4541250 m
COLT RESOURCES INC.
633250 m
633500 m
633750 m
634000 m
N
4542250 m
4542250 m
633000 m
Santo Antonio Mine
W
E
Figure 14
4542000 m
Datum
UTM Zone 29T
4541750 m
4541500 m
4541500 m
4541750 m
Figure 13
4542000 m
S
LEGEND
Vein
Drilling
Rio Narcea (2005)
0
Drill Hole Collar
Scale: 1:6000
250 m
COLT RESOURCES INC.
Horizontal Projection
Colt Resources Inc.
4541250 m
Vein and Drill Hole Location Plan
Santo Antonio Area
Drill Hole Collar (2008)
Drill Hole Collar (2009/10)
633000 m
633250 m
633500 m
633750 m
Drawn by: EG
634000 m
Date: Aug, 2010
Figure: 4
4541250 m
6.2.2 Turgueira This area is located approximately ten kilometres west‐northwest from the village of Penedono. Shallow shafts, tunnels and pits (now caved in) are evidence of the 1940s tungsten mining activity. Rio Narcea explored this area primarily for its gold within greisen and vein zones. Rio Narcea’s soil sampling indicated a weak to moderate gold and arsenic signature extending for over two kilometres. Rock sampling from old pits, trenches, an adit and dumps outlined a well developed trend of greisen alteration containing a higher grade section of gold mineralization. Trench sampling yielded numerous gold intervals grading up to 1.0 m @ 11.02 g/t Au (T1); 0.85 m @ 16.04 g/t Au (T2); and 0.07 m @ 52.00 g/t Au. Reported sample widths are up to 50 metres indicating the size potential of this area (Table 5). No tungsten analyses other than ICP were conducted. Table 5 – Significant Trench Results ‐ Turgueira Sample
Site Tunnel
includes:
Trench 1
includes:
includes:
Trench 2
includes:
includes:
Trench 3
Trench 4
Trench 5
Trench 6
includes:
Trench 7
includes:
includes:
Trench 8
includes:
Interval
(m) 23.70
13.00
51.70
14.30
1.00
51.00
31.60
13.50
5.80
18.70
5.30
7.40
12.50
0.60
52.20
10.00
1.50
1.70
0.07
Gold
(g/t) 2.07
3.45
0.50
1.10
11.02
1.01
1.47
2.70
0.65
0.38
0.52
1.02
0.85
7.57
0.64
1.89
7.07
4.33
52.00
Seven diamond drill holes totaling 1,028 metres were completed. Drilling indicated a continuation of the erratic greisen alteration and gold‐arsenopyrite mineralization continuing to depth with the better grades seemingly confined to a 15‐20 metre wide zone within a larger greisen envelope. Rio Narcea hole PTU‐06 drilled beneath Trench 1 and 2 and an old adit returned 1.23 g/t Au over 26.4 metres. The significant trench and drill intersections are presented in tables found on Figure 5. 6.2.3 Paredes – Dacotim This area is located nine kilometres northwest of Penedono and was explored for gold in the 1940s‐1950s by a shaft and underground work. It was explored in the mid‐1990s by Greystar and by Rio Narcea in 2002/05. Rio Narcea completed geochemical surveys covering an area of over 1 X 2 kilometres. Twenty‐three trenches were excavated by Greystar and Rio Narcea. Detailed trench results were not available other than a summary of highlights of the better mineralized intercepts. Table 6 summarizes the better trench results reported by Rio Penedono Concession, Portugal Colt Resources Inc. Page ‐ 12 ‐ Geoquest Consulting Ltd. August 27, 2010 625600 m
625800 m
LEGEND
N
(Values: g/t Au, ppm W)
W
E
Drill Hole Collar
4542000 m
4542000 m
Rock Sample
Trench
S
Significant Intersection (Au)
Datum
UTM Zone 29T
Lithology
Greisen Envelope
Overburden
Two-mica Granite
Biotite Granite
Biotite Granite Subcrop
Quartz Vein
PTU-04
4541800 m
4541800 m
PW08-16
7.96, 395
PW08-17
7.36, 6
PTU-02
PTU-01
PTU-07 PTU-05
PTU-06
4541600 m
4541600 m
PTU-03
0
Scale: 1:2500
100 m
COLT RESOURCES INC.
625600 m
Trench and Drill Hole Location Plan
Turgueira Area
Drawn by: EG
625800 m
Date: Aug, 2010
Figure: 5
Narcea. Murton (2007) stated, “these samples give an indication of the possible higher grades that might be located. There is a possibility of surface enrichment in the trench samples taken, as diamond drilling beneath some of these trenches returned lower grades than surface samples.” The “Lionel shear” shown on Figure 6 is an old mining cut on a quartz vein structure. Table 6 – Significant Trench Results ‐ Paredes‐Dacotim Area Caso do Lionel Cut
Dacotim Shaft area
Dacotim Shaft area
Coxo West Trench 18
includes
Strike Length (m) 80.75
78.50
50.00
Width (m) 1.12
0.73
4.40
11.26
5.10
Au (g/t) 8.91
3.87
9.00
2.52
4.40
The Paredes‐Dacotim area was targeted by two drilling campaigns comprised of 12 drill holes totaling 1,121 metres (Figure 6). In 1996 Greystar holes P‐96 1,2 and 5 were drilled in the main Dacotim pit and shear structure while holes P‐96‐3 andP‐96‐4 were drilled into a parallel quartz filled shear structure now named the Lionel shear. Holes P‐96‐6 and 7 tested the parallel Coxo shear structure located about one kilometre south east from the Dacotim pit. Table 7 – Significant Greystar Drilling Results ‐ Paredes‐Dacotim DDH Location P‐96‐1 P‐96‐2 P‐96‐3 Dacotim Pit/shear
Dacotim Pit/shear
Lionel Shear
Includes: Lionel Shear
Dacotim Pit/shear
Coxo Shear
Coxo Shear
P‐96‐4 P‐96‐5 P‐96‐6 P‐96‐7 Interval
Au
(m) (g/t) 0.95
2.67
0.30
3.12
2.90
2.43
0.60 8.29 Low values
0.65
21.54
0.50
1.20
0.20
4.00
In 2002/05, Rio Narcea drilled five drill holes (565 m) in the Dacotim pit area. Table 8 lists the significant results. Table 8 – Significant Rio Narcea Drilling Results ‐ Paredes‐Dacotim DDH Location PDA‐01 Dacotim Pit/shear
includes Dacotim Pit/shear
Dacotim Pit/shear
Dacotim Pit/shear
includes NE of DDH P‐96‐4
PDA‐02 PDA‐03 PDA‐04 PDA‐05 Interval
(m) 3.40
1.55 3.00
12.50
1.00 0.88
0.95 Au
(g/t) 2.96
5.12 1.04
NSA
0.82
6.17 1.54
2.03 Rio Narcea hole PDA‐01 broke into an old mined out area but still returned significant values adjacent to the mined out area. Hole 04 undercut hole 01 by 55 metres and intersected a broad highly altered shear zone structure. PDA‐
Penedono Concession, Portugal Colt Resources Inc. Page ‐ 13 ‐ Geoquest Consulting Ltd. August 27, 2010 05 intersected mineralization somewhat similar to Greystar hole P096‐03. The Lionel shear in this area seems to be a narrow mineralized structure within a larger (25 m wide) zone of strong silica sericite alteration. Surface mineralization was reported to be wider than that encountered in the drilling. Holes PDA‐02 and 03 are located 70 m to the south east of 01/04. Hole 02 also broke into an old mined out area but still returned gold mineralized quartz. Hole 03 was a deep undercut by 70 metres in a ‐78° hole. Drilling generally returned narrower intervals and lower gold values than from surface sampling suggesting the possibility of surface enrichment (Murton, 2007). 6.2.4 Ferronha The Ferronha area is located approximately two kilometres south of Penedono. Rio Narcea carried out reconnaissance mapping and rock sampling over an area of 3 x 5 kilometres area which covers Ferronha and includes the area of Sirgio Dama. Rio Narcea also undertook more detailed mapping and soil sampling over a small grid, 400 m x 1000 m, which covers an area of old workings. Rio Narcea outlined abundant clusters of northeast, and to a lesser extent northwest, trending fractures within granitic units. Fractures are closely spaced, commonly occurring at densities of the 3 to 8 fractures per metre. Locally, these fractures have associated sheeted veins with quartz and arsenopyrite. Rio mapped old working including shafts on three quartz veins in a 400 x 500 m area. Detailed mapping in this area outlined three en echelon eastnortheast trending dextral shear zones some 10 to 20 m wide. Of samples collected from rock dumps and grab samples, six samples returned results ranging from 15.69 to 151.54 g/t Au. Sampling across shear zones returned results up to 8 m @ 0.89 g/t Au. A selected grab sample collected from the more eastnortheast striking veins by Rio Narcea was reported to contain 134 g/t Au (Figure 7). Soil sampling over fracture and quartz vein clusters showed strong, 100 to 150 m wide gold‐ arsenic anomalies ranging up to 2616 ppb Au and 3970 ppm As. Stream sediment sampling by the S.P.E. – BRGM consortium in the early 1980s outlined an elongate northeast trending 2.7 x 5.7 km As anomaly that covers the Ferronha and Sigio Dama areas. In 2005, one hole (PFE‐01) was drilled to a depth of 265.9 metres and targeted veining near a 1940s era shaft. It intersected five areas of weakly mineralized quartz veins. These zones range from 1.95 to 7.00 m in drill width. Assays ranged from 0.44 g/t Au over 2.0 metres to 0.80 g/t Au over 5.5 metres, including 2.68 g/t Au over 1.0 metre. Although gold results from this hole were low, it is clear it did not intersect semi‐massive arsenopyrite mineralization found at area rock dumps and which returned high gold grades. 6.2.5 Sirigo Dama This area situated south of Ferronha received little exploration other than reconnaissance sampling of rock quarries. Rio Narcea reported low gold values (<1 g/t) from the sheeted vein swarms located in those quarries. The arsenopyrite rich sheeted vein system is apparently not as auriferous as veins at other locations of the concession. A grab sample of arsenopyrite bearing vein swarm collected by Wayne Murton (2007) in a rock quarry at UTM 634000E; 4535250N returned 0.08 g/t Au (Figure 7). 6.2.6 Boucoes This area, situated 1.5 kilometres west of Turgueira, was the site of trenching work on a north‐south 10 to 25 metre wide structural zone of alteration with greisen on quartz‐arsenopyrite stringer margins. This area is significant because of several large open cuts (150m long) on a small hill near the Tavora River that were apparently excavated to explore for tungsten (local rumors) during the 1940s‐1950s. Rio Narcea conducted trenching but did not drill this area. Results from trenching and channel sampling show several metre size intervals Penedono Concession, Portugal Colt Resources Inc. Page ‐ 14 ‐ Geoquest Consulting Ltd. August 27, 2010 in the 1.5 to 5 g/t Au range. Higher grades include 17.13g/t Au over 0.30 m; 19.70 g/t Au over 0.68 m; 28.10 g/t Au over 0.35 m; 29.03 g/t Au over 0.17 m; and 38.20 g/t Au over 0.05 m. 7.0 GEOLOGICAL SETTING 7.1 Regional Geology The Penedono concession area is underlain by a northwest ‐ southeast trending granitic intrusive complex relating to ductile shear zones and crustal overthrusting (Figure 8). The complex is of Hercynian age (~300 – 320 Ma) and is partially controlled by the northwest‐ southeast trending Vigo‐Regua shear belt. The presence of this regional shear corridor however is not obvious in the map area. The intrusive rocks are composed of “S type” two‐mica granites (muscovite and biotite) with associated pegmatite, aplo‐pegmatite and “I type” (biotite rich) granites. S‐type granites result from the partial melting of metasedimentary source rocks. I‐type granites are derived from source rocks of igneous composition that have not gone through the surface weathering process, or from crystal fractionation of magmas. In the Penedono region the S type granites are considered syn‐collisional with the Hercynian (Upper Carboniferous ‐ Permian) orogeny, while I type granites are considered post collisional and also have a northwest‐ southeast orientation. To the north, the granites intrude a lower Cambrian‐Pre Cambrian turbidite sequence that was overthrust onto the granites. The turbidite sequence is composed of in order of relative abundance shales, siltstones/silty shales, graywackes, quartzites, conglomerates, carbonates with a metamorphic alteration halo (chloritic schist and phyllite) near the granite contacts. A crustal scale series of north east trending fault structures cross cutting all lithologies and appear to have played a role in mineralization in the region. Several of these large fault structures are documented to both the west and east of the concession area while lesser north east trending structures are present on the concession. 7.2 Local Geology The dominant rock type underlying the concession is leucocratic S type two‐mica granite. Found within the granite mass are local roof pendants of a chloritic schist complex up to 2 x 4 kilometres named the Beiras Schist along with aplopegmatite masses up to 2 km² (Figure 9). A granodiorite complex lies to the southwest and south just and into the concession is I‐type biotite granite known as the Bezelga granite. The two‐mica granites vary from fine to coarse‐grained and from equigranular to porphyritic. Variations may be gradational but can be abrupt and reflect intrusive contacts. Granite composition may vary from fine‐grained muscovite only granite to medium to coarse‐grained, muscovite‐biotite granite. Most of the gold‐mineralized veins occur in this granite. Broad areas have undergone extensive hydrothermal alteration with the formation of kaolin, sericite and development of “greisen” envelopes around the quartz veins. Greisen alteration often appears as a bleached looking, pale brown or tan rock containing an abundance of muscovite mica. Pegmatite veins are widespread and comprise quartz, feldspar (K‐feldspar and albite) muscovite, black tourmaline and locally biotite. The width of the pegmatites veins range from <1 cm to several 10s of centimeters. The Bezelga granite in the southern boundary of the concession is biotite rich, mostly massive and unfractured porphyritic granite with feldspar phenocrysts up to 4 cm long. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 15 ‐ Geoquest Consulting Ltd. August 27, 2010 625000 m
630000 m
635000 m
640000 m
N
4545000 m
4545000 m
W
Sendim
Riodades
E
S
Datum
UTM Zone 29T
4540000 m
4540000 m
Santo Antonio Mine
Penedono
4535000 m
4535000 m
Ferronha
625000 m
Penedono Concession (Exploration Licence)
630000 m
LITHOLOGY
Community
Beira Schist Complex
Reservoir
Schists, Shales and Graywackes
Undifferentiated Metamorphic Rocks
Mineralized Vein
Intrusive Rocks
Other Quartz Vein
Syntectonic Granites
Fault
Leco-granites and Pegmatites
Inferred Fault
Post-Tectonics Calc-Alkaline Granites
Early to cyn-tectonic biotite rich granodiorite
635000 m
640000 m
0
Scale: 1:100000
5 km
COLT RESOURCES INC.
Local Geology
To accompany a report by W. Gruenwald, P. Geo. Drawn by: EG
Date: Aug, 2010
Figure: 9
8.0 DEPOSIT TYPES The mineral deposits on the Penedono concession come under the category of “Intrusion Related Gold”. The gold occurrences are hosted by texturally variable S‐type, syn‐ tectonic, two‐mica granites but a relationship to post‐
tectonic I‐type granitoids is supported by a number of observations (Lang, 2000). The deposit characteristics can include: 1) Steeply dipping quartz‐sulphide gold bearing such as at Santo Antonio. 2) Quartz, sulphide, gold bearing “greisen” zones often associated with micro quartz‐ sulphide veining with greisen envelopes varying from centimetre to metres wide. 3) Sheeted to stockwork fracture / micro vein systems such as those at Sirigo Dama. Lang also stated that, “greisen alteration is mostly related to later hydrothermal overprints which may have been controlled by textural variations in the host intrusions”. His conceptual exploration targets for the concession include: •
High‐grade vein deposits (clusters) represented by Santo Antonio, Marofa, Turgueira, Ferronha and Paredes‐Dacotim. The vertical extent is not known however Lang (2000) states “encouragement is offered by the >600 metre vertical extent found in generally similar veins at the Jales deposit”. •
Large tonnage moderate grade deposits. Lang (2000) favoured the Ferronha area because of the extent of north‐northeast fracture development and widespread occurrence of arsenopyrite veins and gold, consistently anomalous Bi, Te and proximity to the I‐Type Bezelga granite. •
Metasedimentary‐intrusive contact between Turgueira and Paredes‐Dacotim could be an excellent lithologic barrier to fluid flow. •
Intrusion hosted disseminated gold deposits beneath cap rocks suggested as possibility by Lang (2000) for metasedimentary rocks southwest of Paredes‐Dacotim. •
Lateral transitions of pegmatites into veins (i.e. Pogo, Alaska) is a suggested possibility for Paredes‐
Dacotim 8.1 Exploration Criteria Grass roots exploration such as soil and stream sampling and prospecting has identified several areas of mineralization and potential. The association of gold mineralization with greisen presents potentially larger exploration targets. The higher muscovite and sericite content associated with greisen zones may be mappable by spectrometric (radiometric) surveys that can detect changes in potassium (K‐40 isotope) content. 9.0 MINERALIZATION The concession hosts several areas of intrusion hosted gold± tungsten vein mineralization that may be indicative of an overall large hydrothermal system. Most exploration since Roman times focused on gold. Small excavations observed by the writer attest to small‐scale tungsten mining that took place during the 1940s to 1950s. Quartz fragments near these workings are evidence of small‐scale mining that took place to extract wolframite (Fe,MnWO4). Arsenopyrite‐rich vein material, some of which was gold bearing, was apparently left behind. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 16 ‐ Geoquest Consulting Ltd. August 27, 2010 Distinct clusters of gold ± tungsten bearing veins along with occasional tungsten occur within a broad zone sixteen kilometres long extending from the south east edge through to the central western edge of the concession. These clusters include the multiple veins at Santo Antonio, the Ferronha fracture controlled vein system and its southern extension to Sirigo Dama, the quartz vein‐greisen mineralized system at Turgueira and Boucoes and the shear‐
vein system at Paredes‐Dacotim. Gold and tungsten mineralization occurs at the Marofa area situated just west‐
southwest of Santo Antonio. With only minor variations, the vein systems share similar structural characteristics. • Veins have vertical to sub vertical dips and strike between 340° and 070°. Strike and dip variations are usually limited to within a few degrees of the average for a given vein although in the Santo Antonio cluster there are larger variations (probably due to a better understanding of the veins). •
Individual veins range in size from tight fracture veinlets (<1cm) to widths of up to three metres. They may have a strike extension of from 10s of metres to over 700 metres as in Vein 6 at Santo Antonio. Individual veins or at least the structures that host them commonly remain open at one or both ends, as do the depth extensions. Some veins at Santo Antonio vein system have been mined (from incomplete government records) to at least 150 metres below surface. •
Vein orientations appear to have a bearing on width with the northeasterly oriented veins being wider than the northwesterly to northerly striking veins. The mineralogical characteristics of the veins are described as follows: • Early massive commonly clear to milky white quartz that is often sheared and recrystallized. It usually does not contain sulphides or gold, but may contain tourmaline. •
A later arsenopyrite replacement event that introduced gold into the veins. Fine‐grained arsenopyrite is mostly emplaced along vein margins but occasionally has a crosscutting characteristic and may replace some of the early barren quartz. When this occurs, the early quartz may exhibit a grey cast reflecting the presence of trace amounts of very fine‐grained sulphides. Other minerals reported are pyrrhotite, pyrite, wolframite and molybdenite. Petrographically gold is found as native grains and electrum, in arsenopyrite, and within bismuth minerals (i.e. bismuthinite) and tellurides (i.e. sylvanite) or sulphosalts (Lang, 2000). •
Many veins and veinlets are bounded by “greisen” alteration envelopes resulting from the complete replacement of the feldspar in the granite by muscovite and sericite. A common intermediate stage of "greisenization" is a partially sericitized granite, where the alteration of the feldspars is incipient. In some outcroppings, greisen around veins or mineralized fractures is manifested by a pale brown, bleached envelope with a raised relief due to resistance imparted by silicification. The extent of the greisen envelope varies both between and along veins and no relationship between the extent of greisen development and vein orientation, width or host rock texture is evident. Vein gold content is invariably dependent upon arsenopyrite content. High gold grades are always associated with arsenopyrite‐rich material. However not all arsenopyrite rich material indicates high gold grades. An example of the latter is reported by Wayne Murton (2007) at Sirigo Dama where arsenopyrite filled fractures contain only 0.08 g/t Au. There is a good correlation between gold and bismuth. In the previous case there was no bismuth reported. The mineralized vein zones on the Penedono concession are outlined as follows: Penedono Concession, Portugal Colt Resources Inc. Page ‐ 17 ‐ Geoquest Consulting Ltd. August 27, 2010 9.1 Santo Antonio The Santo Antonio vein system or cluster consists of at least thirteen known en‐echelon veins that outcrop over an area of 1.2 km x 1 km. These veins all strike approximately N45°E and display near vertical dips. The veins are numbered starting with Vein 1 on the eastern side of the cluster and progressing westward to Vein 13 (Figure 4). The vein strike lengths vary from 350 ‐ 540 metres for Veins 1‐4, 300 metres for Vein 5, 700 metres for Vein 6, and 100‐600 metres for Veins 7‐13. It is noteworthy that underground work on Veins 1‐3 and 6 indicates potential vein lengths exceeding that seen on surface. The actual limits for the strike length for Veins 7‐13 are based solely on surface indications. The thirteen known en‐echelon veins have a combined strike length of some 5000 m. Possible strike length extensions of these veins, interpreted from soil survey results, total another 3700 m. The depth extent of the veins has only been partially tested. The Santo Antonio veins are similar in that they usually consist of a translucent to milky white quartz core that is commonly sheared and recrystallized. The barren core is often bounded on the vein walls by auriferous arsenopyrite. The arsenopyrite often occurs as irregular sinuous fractures extending into the brittle barren quartz and to a lesser extent as small irregular replacement zones. Quartz veins range from < 5 cm up to three metres wide. As veins strikes swing further to the east from the N45°E orientation, their thickness may decrease. Some old Roman workings that exposed the top 10+ metres of the veins. These are still open to partially open demonstrating the steep dip of the veins and competency of the host granitic rocks. The writer was shown underground workings on Veins 1, 2 and 3. On the latter two, raises in the Santo Antonio mine driven in the 1950s broke out into Roman excavations. Most of the underground mining and development took place at veins 2 and 3, and to a minor extent at veins 13 and 7. While significant underground development took place in preparation for mining at veins 1, 6 and 11 (6>11>1) no significant amount of ore was extracted to the mill. Veins 4 and 5 have had some trenching and have been drill tested by twelve drill holes to date (Rio Narcea and Colt). Colt drilling (2009) intersected tunnels along Vein 13 indicating that a system of workings of unknown extent. Located to the southwest are the Marofa gold‐bearing vein systems which strike north to north‐northeast and are located within a large soil‐in‐gold anomaly. Northeast of the Santo Antonio vein system are several quartz veins depicted in a published geological survey map. This vein cluster strikes north‐northeast to northeast extending from Granja in the south to Bebezes in the north. The veins are crossed by an important regional scale north‐south feature that extends further north and south. These veins contain wolframite and cassiterite but no gold. Thus it appears that the north‐south fault defines a separation between two distinct mineralized zones. 9.2 Marofa (North and South) The Marofa areas, situated west and southwest of Santo Antonio, consist of quartz veins, and fracture veinlets hosted by granitic rocks. As opposed to Santo Antonio most veins/fractures at Marofa strike northerly. Many of the larger veins (>0.50m) were hand trenched and date to the 1940s tungsten mining period. Arsenopyrite is present in many veins and locally comprise >50% of the vein especially along vein contacts. The vein/fracture density is highly variable. Thin pale brown greisen envelopes (<10 cm) are often seen adjacent to quartz veins, veinlets and fractures. These areas are situated within a large (~2 km) gold‐in‐soil anomaly defined by Rio Narcea (Figure 10). Penedono Concession, Portugal Colt Resources Inc. Page ‐ 18 ‐ Geoquest Consulting Ltd. August 27, 2010 At Marofa North, several north striking and steep west dipping quartz veins up to 0.9 metres wide are exposed by old hand trenches. Veins are exposed or traceable for up to 40 metres however, quartz float along strike suggests some veins have an even greater extent. Semi‐massive to massive, fine‐grained arsenopyrite is locally present. Marofa South consists of thin fracture quartz veinlets seldom more than 10 cm wide. Fracture/veinlet density was observed up to 7‐8/metre but is more often less than 3/metre. Greisen envelopes are manifested as pale brown sometimes raised relief (resistant) envelopes up to a few centimetres wide. The writer observed rare black wolframite crystals in some quartz fragments. 9.3 Turgueira Turgueira is a broad northeast trending greisen system containing arsenopyrite‐pyrite ± tungsten. Sporadic and irregularly distributed arsenopyrite along with grey quartz veins and veinlets containing arsenopyrite occur within muscovite, quartz, tourmaline greisen zones. Gold has been shown to occur at cracks in grain boundaries of the arsenopyrite. Greisen development is fairly widespread over an area of 750 by up to 150 metres with the strongest alteration over an area of 350 by 25‐50 metres. This area appears to have considerable exploration potential. Drilling intersected arsenopyrite‐gold mineralized greisen zones up to 200 metres down hole. Holes drilled beneath mineralized trenches and the adit encountered gold mineralization. The best hole (PTU‐06) drilled beneath two trenches yielded 1.23 g/t Au over a 26.4 metre core length including 2.50 g/t Au over an 11.6 metre core length at a depth of 40 m below surface. The erratic nature of the greisen alteration and gold mineralization makes it difficult to tie the intersections together without more closely spaced drilling. The greisen zones appear to have a near vertical orientation, and although the intersection lengths are reported as “down hole” lengths, the true width should be approximately 20% less (Murton, 2007). Tungsten analysis was reportedly limited to ICP which utilizes only a partial digestion for tungsten. A split drill core sample (W. Murton) from Rio Narcea hole PDU‐06 assayed 1.90% tungsten over a core length of 0.7 metres demonstrating the potential for higher‐grade tungsten zones. 9.4 Paredes‐Dacotim Gold mineralization is associated with a cluster of gold bearing veins and shears found over an area of ~ 900 m in width by 300 ‐ 900 metres in length. Soil geochemistry, mapping and trenching (Rio Narcea) identified up to eight parallel zones. They strike from N20°E to N60°E and range from less than one metre to >6 metres wide. The main vein structure consists of a deformed and anastomosing system of quartz – arsenopyrite veining. Mineralization appears to be more persistent where the shear zones cut pegmatite with the development of greisen. Veins are hosted by a fine to medium grained two‐mica granite becoming more medium grained to the south before disappearing under metasedimentary cover. The granites are intermixed with aplopegmatite dikes. Areas of intense sericite and kaolinite alteration are present and probably related to the shearing and veining. 9.5 Ferronha Geochemical sampling and trenching revealed a northeast striking quartz vein swarm that is cut by another series of veins with a more east‐northeast trend. The host rock is two‐mica granite. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 19 ‐ Geoquest Consulting Ltd. August 27, 2010 Sporadic high‐grade gold up to 152 g/t was reported from chip sampling. The single Rio Narcea drill hole intersected five distinct veined sections. They were described as accompanied by strong phyllic and silica alteration haloes. The highest grade intersection was 2.68 g/t Au over one metre in a quartz breccia zone containing chalcopyrite, arsenopyrite and pyrite. This was interpreted as representing a possible 100 metre down dip continuation of a zone explored from one of the old shafts. 9.6 Boucoes This area consists of a north‐south trending band of greisen alteration approximately 10‐25 metre wide and 300 metres long that is open to the north. Greisen is evident on quartz‐arsenopyrite stringer margins in hand specimen. Rio Narcea trenching returned narrow intervals (0.5 ‐ 1.0 m) grading from 0.1 to 28.1 g/t Au. One trench (T4‐L1S) averaged 3.09 g/t Au over a width of 1.8m for a strike length of 28.5m and open at both ends. 10.0 EXPLORATION Since 2007 Colt has conducted a variety of exploration programs on several targets in the Penedono concession. These include rock sampling, trenching and diamond drilling. All of Colt’s exploration work to date has been conducted by the GeoLog staff at Colt’s facilities based in Penedono. Trench excavations were conducted by local equipment contractors using a backhoe. The writer’s August 2008 and recent property visit allowed direct examination of the field exploratory work conducted by Colt since 2007. During the writer’s two visits, exploration reports and documentation were reviewed. This also included the 2006 Rio Narcea exploration data which contained detailed drill logs and sections. 10.1 Colt Exploration Programs ‐ 2007 In addition to drilling in 2007, rock sampling (data verification) was conducted by Mr. Murton in several mineralized areas on the concession. One area investigated was the Santo Antonio mine tailings where the previously mentioned Greystar sampling in 1995 revealed the tailings contained substantial amounts of gold and tungsten. Two samples were collected by Mr. Murton. One sample was a channel sample over 3 metres down the side of a cut in the center of the tailings and the second was a grab sample over a 0.5 m oxidized layer on the northwest corner of the tailings. The samples assayed 1.72 and 2.63 g/t Au and 0.23% tungsten. These values are similar to the Greystar average of 1.68 g/t Au and 192 ppm (0.19%) tungsten. At Turgueira, a grab sample collected from greisen altered bedrock rubble left from backfilled trenches in the area of the tunnel and Rio Narcea Trenches 1 and 2 assayed 2.39 g/t Au and 0.008% tungsten. Two grab samples were collected from the Ferronha area by Mr. Murton. One sample of bedrock rubble from bedrock rubble near an old shaft assayed 2.08 g/t Au. The other from arsenopyrite bearing quartz in greisen returned 0.73 g/t Au. At Paredes‐Dacotim Mr. Murton collected several grab samples from the Dacotim shaft area as well as a grab sample from a new exposure of a quartz vein / breccia system exposed in a new road borrow pit at the north end of the Coxo Shear structure. These samples assayed 57.0 g/t Au from arsenopyrite mineralized material from the shaft and surrounding area and 0.11 g/t Au from the Coxo zone at the north end. This northernmost sample was from a newly opened cut near the highway where a quartz / breccia zone was exposed over a width of 2‐3 metres. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 20 ‐ Geoquest Consulting Ltd. August 27, 2010 At Boucoes, Mr. Murton collected a sample from seven centimetre of nearly solid arsenopyrite vein in a dark grey silicified matrix at the south end of the mineralized structure near one of the open cuts that assayed 46.7 g/t Au and 0.003% tungsten. A grab sample of the greisen zone over its approximate 300 m strike length assayed 1.87 g/t Au and 0.001% tungsten. 10.2 Colt Exploration Programs – 2008 In May‐June 2008, Colt conducted rock sampling in the Marofa North‐South (Castainco) areas. Thirty‐one samples were collected from areas of greisen alteration and arsenopyrite bearing veins. Twenty‐two samples were float grabs and nine were chip samples taken from bedrock sites. Most float samples are proximal to the source veins that were exposed by hand trenching during the 1940s. The location of the above samples and those collected by the writer are shown on Figure 11. All of the samples contain gold with assays ranging from 0.15 g/t Au to 96.00 g/t Au. Arsenic is present in all samples which is a consistent feature of the quartz veins. Anomalous tungsten (>100 ppm or 0.01% W) was reported in twelve samples with values ranging to 2,229 ppm W. It should be noted that tungsten analysis by standard ICP methods only reports partial content due to the relative insolubility of this metal. Therefore another technique, metaborate fusion with ICP‐Mass Spectrometry (ICP‐MS), was and is now consistently used. As seen in Table A‐1, this sometimes results in tungsten values considerably greater than the original ICP analysis. Ten of the tungsten bearing samples also contain multi‐gram gold). Numerous veins at Marofa North and greisen alteration seen along the west side of Estrada 508 and around the 2008 drill sites suggest the potential for sizeable zones of mineralization. The distinct change in the strike of veins between these two areas is thought to have structural implications. 10.3 Colt Exploration Programs – 2009/2010 In 2009, Colt conducted prospecting, trenching and rock sampling in two areas of the Penedono concession. At Marofa, ten trenches were excavated with six in Marofa South and four at Marofa North (Figure 11). Trenches were designed to expose mineralized quartz veinlets and fractures and allow for detailed mapping and chip sampling. Most of the trenches were dug with a small excavator. In areas of no overburden, channel chip sampling was conducted by the use of portable diamond saws. Sample widths ranged from 0.70 to 2.0 metres. A total of 664 lineal metres of trenching were completed from which 111 rock samples were collected. In the Santo Antonio area two northwesterly oriented trenches totaling approximately 410 metres were excavated across the northeastern portions of Veins 11 and 12. This was done to expose the known veins and potentially locate other veins. The westerly vein, Vein 11, was exposed in both trenches while Vein 12 was only intersected in the easterly trench. The highest grade sample trench sample returned 2.87 g/t Au across 0.50 metres in Vein 12. Approximately 800 metres to the east‐southeast hand trenching and sampling was conducted in the 300 metre “gap” between Veins 3 and 4. An en‐echelon series of three trenches spanning an east‐west length of 62 metres were established (SA2‐T01). Twenty‐three metres of this were channel and chip sampled resulting in the collection of 22 samples averaging about one metre long. This work identified numerous north to northeasterly striking and steeply west dipping (60°‐80°) arsenopyrite bearing veins which are in sharp contrast to the major veins. Quartz veins here ranged from < 1cm to 30 cm however most are less than 10 cm wide. Gold grades ranged up to 25.56 Penedono Concession, Portugal Colt Resources Inc. Page ‐ 21 ‐ Geoquest Consulting Ltd. August 27, 2010 COLT RESOURCES INC.
DDH Section 550E
(Looking 055°)
Santo Antonio Area
Tech work by: Geolog
Drawn by: FL
Date: Aug, 2010
Figure: 13a
g/t Au. Given that the highest grade sample (GeoLog) was across one metre and consisted of at most 15% quartz indicates that the veins themselves can be very high‐grade. 11.0 DRILLING Since acquiring the Penedono concession Colt has carried out several diamond drilling programs with the most recent being completed in early 2010. Drilling programs have been managed by the well qualified staff of GeoLog – Gabinete de Geociencias, Lda., an independent Portuguese consulting company. The diamond drilling division of LNEG, a geological division within the Portuguese Government, carried out the drilling for Colt using a truck mounted rig. The holes at Santo Antonio and Marofa were all drilled with HQ rods while Rio Narcea holes (other contractors) started with HQ and reduced to NQ. Figure 4 displays all of the Santo Antonio drill holes. Table A2 (Appendix) is a summary of all drilling completed on the Penedono concession. 11.1 Colt 2007 Drilling Program Diamond drilling consisting of twelve holes totaling 1,355 metres was completed on the Santo Antonio vein system between July 26 and October 19, 2007. Drilling targeted Veins 4 and 5 since previous widely spaced drilling by Rio Narcea indicated potential for gold mineralization within this area of the Santo Antonio vein cluster. The Rio Narcea and Colt drill collars were located by GPS. Drill hole azimuth was established by compass bearing and Eastman down hole equipment was used to measure the drill hole azimuth and dip components. The 2007 holes and their horizontal projections are presented on a plan (Figure 13) using a Reference Line oriented at 055° with the collar of hole PPE 07‐01 used as the control point for the Reference Line. Cross sections were plotted for all holes at right angles to the Reference Line. 11.1.1 Colt 2007 Drilling Results: The Colt 2007 drilling program successfully built on the Rio Narcea program. Colt and Rio Narcea drilling has repeatedly intersected significant gold mineralization in Veins 4 and 5 without any apparent underground mining activity (although surface mined in Roman times). The drilling program extended the known dimensions of these veins to an area of approximately 120 metres in a north east‐south west direction and to 105 metres vertically below surface. The veins were considered open along strike and to depth. Figure 13a is a drill section showing some of the Rio Narcea and Colt 2007 drill holes. During the program, a new vein system was located adjacent and oriented at 45° to Vein 4. This discovery returned substantial gold values to a depth of 80 metres below surface. Mineralized intervals range up to 17.0 metres in core length. Given that Veins 4 and 5 are near vertical, the true thicknesses of mineralized intercepts for ‐45° and ‐60° holes would be 72% and 53% respectively of the core length. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 22 ‐ Geoquest Consulting Ltd. August 27, 2010 633500 m
633600 m
633700 m
4541900 m
4541900 m
See Figure 13a
for Cross-Section 550E
N
W
E
S
Datum
UTM Zone 29T
Legend
4541800 m
4541800 m
Significant Intersection (Au)
Vein
Rock Sample (Value in g/t Au)
Drilling
Rio Narcea (2005)
Drill Hole Collar
Cross Section Lines
Drill Hole Collar
PW08-04
9.68, 80
4541700 m
4541700 m
PW08-03
8.80, 118
PW08-05
0.46, <5
633500 m
633600 m
633700 m
0
Scale: 1:2000
100 m
COLT RESOURCES INC.
Drill Hole Location Plan - Veins 4, 5 & 6
Santo Antonio Area
To accompany a report by W. Gruenwald, P. Geo. Drawn by: EG
Date: Aug, 2010
Figure: 13
Table 9 – Significant 2007 Drill Results – Santo Antonio Hole No. From (m) To
(m) Interval
(m) 07‐01 07‐02 07‐03 includes: 07‐04 includes: 07‐05 07‐06 07‐07 07‐08 includes: includes: 07‐09 includes: includes: 07‐10 includes: includes: includes: 07‐11 07‐12 includes: 72.43 43.32 49.20 66.89 67.89 43.70 46.33 46.90 62.53 68.72 73.88 20.36 102.25 49.43 49.80 53.80 53.80 54.80 88.06 88.06 136.85 136.85 35.95 41.73 66.00 71.93 76.28 88.00 105.80 19.43 19.43 75.65 72.58 44.46 50.20 68.74 68.74 44.13 47.48 47.48 64.24 69.29 75.21 20.85 103.25 50.43 50.80 57.80 55.60 55.60 89.85 88.85 138.38 137.38 45.91 41.91 83.00 72.50 76.51 93.00 113.28 20.80 19.80 76.75 0.15 1.14 1.00 1.85 0.85 0.43 1.15 0.58 1.71 0.57 1.33 0.49 1.00 1.00 1.00 4.00 1.80 0.80 1.79 0.79 1.53 0.53 9.96 0.18 17.00 0.57 0.23 5.00 7.48 1.37 0.37 1.10 Au
(g/t) 0.10 0.23 0.72 3.90 8.30 0.16 1.32 1.76 0.18 6.50 2.80 1.30 4.78 5.90 1.29 2.52 4.62 8.96 1.86 3.92 4.80 9.60 1.14 46.00 1.21 8.40 11.10 0.89 0.59 8.24 30.00 1.24 Intersected Zone Vein 5? Vein 5 Vein 5 Vein 5 zone Vein 5 Vein 5 zone Vein 5 zone Vein 4 Vein 4 Vein 5 Vein 5 zone Vein 4 Vein 5 New vein system New vein system New vein system New vein system Possible new vein Vein 5 11.2 Colt 2008 Drilling Program Eight holes totaling 704 metres were drilled between June 10 and Sept 4, 2008 with the targets being Veins 11 and 13 in the western part of the Santo Antonio vein system. No previous drilling had ever been conducted in an area where quartz float, old shafts and dumps indicated the presence of quartz vein mineralization. The 2008 drilling is located approximately 600 metres west of Veins 4 and 5 (Colt 2007 and Rio Narcea drilling). Figure 14 displays the 2008 drill holes, horizontal projections, mineralized intervals and the writer’s 2008 surface sampling. 11.2.1 Colt 2008 Drilling Results: Most drill holes in this program intersected gold‐tungsten mineralization with four yielding significant intercepts (Table 10). Mineralization was encountered up to 100 metres below surface. Figure 14a presents the section for drill holes PPE08‐03 and 06. Mineralized intercepts often consisted of quartz veins containing variable amounts of arsenopyrite. Of significance is that quartz veining and mineralized greisen were intersected over widths greater than that seen elsewhere on Santo Antonio. This is consistent with the presence of substantial amounts of greisen Penedono Concession, Portugal Colt Resources Inc. Page ‐ 23 ‐ Geoquest Consulting Ltd. August 27, 2010 632800 m
632900 m
633000 m
633100 m
633200 m
W
E
4542200 m
4542200 m
N
S
4542100 m
4542100 m
Datum
UTM Zone 29T
4542000 m
4542000 m
PW08-10
2.56
4541900 m
4541800 m
4541800 m
4541900 m
PW08-09
7.36
PW08-08
0.61
PW08-07
9.96
Shaft
PW08-06
4.04
632800 m
632900 m
633000 m
633100 m
633200 m
0
Scale: 1:2500
100 m
COLT RESOURCES INC.
LEGEND
Vein
Drilling (Colt Resources)
Mineralized Intersection
Trench
-45°
Rock Sample (g/t Au)
-60°
Drill Hole Collar (2009-10)
-75°
Drill Hole Location Plan - Veins 11 and 13
Santo Antonio Area
Drawn by: EG
Date: Aug, 2010
Figure: 14
SE
DRILL COLLAR COORDINATES
(European Datum 1950 Zone 29T)
PPE08-03, 06: 632927E;4541780N
Vein 11
Elev 945m
-45°
NW
-60°
940m
0.1
1
4.6
0
30
0. .02
0 4
0
0. .01
0 05
0.
07
0. 6
3
0. 17
1. 0
6
0. 23
0. 15
0. 9
2
0. .04 0
15 4.4 78
3 0. 8
1
0. .29
0 00
7. 48
0. 08
0. .57 8
0 .0
0
includes:
8.34 g/t Au
6.74m
900m
44
0.
G
re
ise
n/
Ve
in
40m
<0
<0 .01
.0
0.0 1
1
H
EO .90m
75
PPE08-03
(Dip: -45°, Az 315°)
01
0.
m
40
4.62 g/t Au
12.80m
<0
.01
80m
<0
.
0.201
0.1 3
0.0 0
9
Au
g/t
<0.50
0.50-1.00
1.00-5.00
>5.00
860m
0.0
1
<0
.01
120
m
E
129 OH
.00
m
0.
0. 20
0.4 46
0.3 5
0. 4
0.026
0. 9
0. 13
0.119
0. 8
0. 08
0.1 11
0.1 0
0.0 7
0.0 8
1
PPE08-06
(Dip: -60°, Az 315°)
Scale: 1:500
0
5
10m
15
25
COLT RESOURCES INC.
Cross Section - PPE08-03 and 06
(Looking Southwest)
Santo Antonio Area
Tech work by: Geoquest
Drawn by: EG
Date: Aug, 2010
Figure: 14a
material on the dump from an old shaft that was excavated on Vein 11. The increased amount of greisen alteration in this area was thought to indicate the potential for more extensive zones of mineralization. Drilling also intersected significant tungsten (wolframite) mineralization. Drill holes PPE08‐03, 04 yielded tungsten intercepts with one sample in PPE08‐03 containing 0.30% W. 11.3 Colt 2009‐2010 Drilling Programs: In 2009 Colt completed six holes on each of the Marofa and Santo Antonio areas totaling 341.1 and 330.6 metres respectively. Marofa holes were drilled at angles of ‐45° and below the 2009 trenches to determine whether the mineralized vein and fracture density increased with depth (Figure 11a). The six holes on Santo Antonio were also angled holes drilled along Veins 11 and 13 to follow up on gold mineralized intersections from previous drilling. Table 10 ‐ Significant Drilling Results Drill Results – Santo Antonio (2008‐2010) Hole No. PPE08‐01 Includes: PPE08‐02 Includes: PPE08‐03 Includes: PPE08‐04 Includes: PPE10‐01 Includes: PPE10‐04 PPE10‐07 Includes: From (m) 64.94 64.94 56.30 57.06 55.05
56.05 39.16
39.16 29.40 30.33 64.75 49.20 49.50 To (m) 66.35 65.50 58.53 58.06 58.20
56.92 47.30
40.70 32.50 30.71 64.83 51.00 50.25 Interval (m) 1.41 0.56 2.23 1.00 3.15 0.87 8.14 1.54 3.10 0.38 0.08 1.80 0.75 Au (g/t) 13.35 26.56 39.67 87.04 14.59
34.40 5.89
18.37 46.50 180.57 75.64 15.31 35.34 Intersected Zone Vein 13 Vein 13 Vein 11 Vein 11 Vein 11 Vein 13 Vein 13 In 2010 an additional eight angled drill holes totaling 367 metres were drilled on Santo Antonio. Three holes (PPE10‐01 to 03) tested Vein 11 and the rest of the holes were drilled along Vein 13. The holes along Vein 11 have now tested over 200 meters of strike length at 25 metre intervals. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 24 ‐ Geoquest Consulting Ltd. August 27, 2010 11.3.1 Marofa Drilling Results: The Marofa drill holes intersected numerous mineralized veinlets and fractures ranging up to five centimetres however most are less ≤ 1cm. In Hole MF2‐D01, the easterly most drill hole, a 2.10 metre interval averaged 3.70 g/t Au. Mineralized sections on average however grade <1 g/t Au. Table 11 summarizes the mineralized intersections. Arsenic is anomalous in all holes and reflects the presence of arsenopyrite in veinlets and factures. Although mineralization is present in all the holes the thickness and density of fractures and veinlets is insufficient in this area to present a bulk tonnage gold deposit. Table 11 – Significant Drilling Results – Marofa Area From
To Interval
Au DDH (m) (m) (m) (g/t) MF1‐D01 MF1‐D02 includes MF1‐D03 MF1‐D04 MF1‐D05 MF2‐D01 12.30 38.20 11.69 24.13 24.13 47.04 27.32 19.60 18.26 44.60 18.57 31.57 5.96 6.40 6.88 7.44 25.13 1.00 56.30 9.26 No significant assays No significant assays 31.36 4.04 21.70 2.10 0.25 0.44 0.52 0.38 2.01 0.45 0.63 3.70 11.3.2 Santo Antonio Drilling Results: Quartz veins and greisen zones were intersected in most of the 2009/10 holes. Mineralized intercepts range from core lengths of <0.5 metres to nearly ten metres. Table 10 presents some of the significant drilling results that have been reported by Colt. Three holes along Vein 13 intersected underground working probably dating to the 1950s when the Santo Antonio mine was in operation. Hole PPE09‐02 intersected a tunnel or stope at approximately the 890 metre elevation (based on collar elevation). PPE 10‐04 drilled on section below hole 09‐02 intersected a mined out vein likely from a stope driven up from a mining level around the 850 metre elevation. Interestingly, hole PPE10‐04 intersected 8 cm of unmined quartz grading 75.64 g/t Au. A sample of loose rubble collected in the core barrel two drill runs after intersecting the stope that would have likely fallen in from the stope assayed 45.85 g/t Au. Although not representative these samples at this section give a good indication of the high gold content of Vein 13. Southwest and 50 metres from the aforementioned holes, PPE10‐06 encountered mined out vein at an elevation of ~905 m which may also have been a stope or raise driven up along Vein 13 from the 890 metre level. Information provided by Mr. Faria indicated that access to the vein was by: “a set of two or three shafts, as in the attached long section, reproduced from old drawings filed with the mining authorities” (Figure 12). Three shafts were found but their relative position does not match with this section so it was difficult to locate the mined out stopes longitudinally in the field. This resulted in the drill holes intersecting the workings. Mr. Faria went on to Penedono Concession, Portugal Colt Resources Inc. Page ‐ 25 ‐ Geoquest Consulting Ltd. August 27, 2010 state: “we found that their underground mining stopes had been more extensive up from both levels 1 & 2 than shown in this section.” Figure 12 Longitudinal Section of Past Mining at Santo Antonio Vein No. 13 Drilling to date along Veins 11 and 13 are at or near a density that may allow the estimation of a mineral resource. Further potential exists along strike and to depth. In addition there are veins in the immediate area (i.e. Veins 8‐10 and 12) that have never been drill tested. Deep drilling attempts on Santo Antonio have not yielded encouraging results however there are considered too few to rule out the possibility of stronger or more extensive mineralization at depth. Drill testing of the veins at greater depths is warranted especially in any larger and or detailed drilling programs. 12.0 SAMPLING METHOD AND APPROACH Sampling on the Penedono concession comprises numerous stream sediments, soils, tailings, rocks and drill core. Rio Narcea personnel under competent professional supervision conducted the sampling. Rio Narcea’s regional work included a stream sediment sampling program that covered the entire 205 km² concession. Where possible samples were collected from the active part of stream channels otherwise dry water borne sediment was used. The 456 silt samples collected equates to a favourable density of over two samples/km². Soils samples were collected on grids oriented at 120°, which is roughly at right angles to many of the vein orientations. Approximately 20 % of the concession was sampled. Grid lines were generally spaced at 200 metres however; this was reduced to 100 metres at the Turgueira, Boucoes and Sendim areas. Soil samples were collected at 25‐metre intervals over the grids for a total of 6,122 samples. Sampling density is considered ample for the deposit types being sought. Soils are generally poorly developed with the “C” horizon being the most common material collected. This often consists of locally derived decomposed bedrock. In such situations it is common to collect enough “fines” to yield sufficient screened (‐80 to ‐150 mesh) material for gold and ICP analysis. Given the type of material collected, the geochemical results are often quite site specific. The identified gold‐in‐soil anomalies are considered to be strong Penedono Concession, Portugal Colt Resources Inc. Page ‐ 26 ‐ Geoquest Consulting Ltd. August 27, 2010 indicators of mineralization. A cautionary note put forward (Murton, 2007) was that that arsenic from the roasting of the sulphide concentrates was likely emitted from a large chimney on the hillside above the Santo Antonio mine. Arsenic soil anomalies at Santo Antonio therefore could be suspect even though there is a strong presence of arsenopyrite in the vein systems. Rio Narcea’s work also included the collection of 2,054 rock samples from trenches, outcrops and the accessible underground workings on the Santo Antonio veins. Continuous chip samples were collected using hammer and chisel across and along the length of trenches. Strongly mineralized sections were sampled in greater detail. Underground sampling was of adequate density with well marked sample sites. The writer observed chip sampling at some Marofa outcroppings and underground on Veins 1 and 2 at Santo Antonio. All drill cores (Rio Narcea and Colt) have been routinely logged, labeled and photographed. The writer ascertained that for the Colt programs the sequence of core treatment began by measuring core recovery between each “drill run” identified by wooden markers. This was followed by RQD where the length of core >10 cm was measured. Detailed description or logging of the core was completed followed by sample marking. Prior to sampling, the core was photographed using a digital camera. The writer reviewed core photos and Photo 2: Core Photo Detail found that each hole was presented as a high resolution continuous strip colour photo displaying the wetted core with the labeled sample intervals (Photo 2). The photo documentation is exceptionally well done. Core was then cut longitudinally using an electric diamond saw with one half collected as a sample and the other returned to the core box for storage. Sampling for all Colt drill programs was done to test not only quartz veins but wall rock as well. No sampling was done across geologic contacts. Sample lengths, ranging from <0.50 metres to seldom more than 1.50 metres, are consistent and appropriate for this type of mineralization and deposit type. Core recovery for Colt’s 2008 to 2010 drilling (21 holes) averaged 93.3%. Any significant core losses were documented. Other than four intersections of underground workings on Vein 13 (PPE08‐02, 09‐02, 10‐04, 10‐6), there were no significant core losses of the mineralized zones and none that would adversely affect the accuracy or reliability of the assay data. 13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY Rio Narcea’s soil, stream and rock chip samples were not prepared prior to analysis. Drill cores for the Rio Narcea and Colt programs were cut longitudinally with a diamond saw. One half of the core was collected for sampling in and the other half was stored in core boxes. The saw is routinely cleaned between samples to prevent cross contamination. During the course of Colt’s 2007‐2010 exploration programs all rock and core sampling were conducted by GeoLog personnel. No Colt directors or officers handled or sampled drill cores. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 27 ‐ Geoquest Consulting Ltd. August 27, 2010 Prior to Colt’s programs “metallics” assays were reportedly conducted by Rio Narcea to determine the possible presence of coarse gold (Murton, 2007). This procedure involves assaying the coarse and fine fractions of a sample and calculating a weighted average gold grade. Comparison to the original assay reveals if metallic gold is present. Analysis revealed little indication of coarse gold and thus standard fire assay procedures were deemed to be appropriate. Rio Narcea’s own laboratory conducted some analysis with duplicates in some cases analyzed by OMAC Laboratories in Ireland and ITMA in Oviedo, Spain. There was no indication that Rio Narcea introduced analytical reference samples however, the laboratories did use internal reference samples. The Colt drill core samples were subjected to a 50 gram fire assay with Atomic Absorption finish (FA‐AA) rather than the more common 30‐gram (one assay‐ton) assay. A larger sample size can be more representative especially with high‐grade and “nuggety” gold mineralization. The fire assay method is regarded as the industry standard for gold analysis. In addition, all samples are subjected to ICP analysis that reports the concentration of 47 elements. Because the tungsten minerals wolframite and scheelite are relatively insoluble, a metaborate fusion followed by ICP‐MS analysis is used. For some rock samples very significant increases in tungsten were reported over standard ICP methods. Colt employed QA/QC protocols for the 2007 to 2010 drilling programs consisting of the insertion of reference samples including certified sample standards and blanks and duplicates into the sample stream. This was in addition to laboratory quality control protocols. No check assays at another laboratory were conducted. Inspection of the analytical data revealed a frequency of reference sample insertion of 14.23% or one reference sample for every seven samples. This is considered more than adequate for these exploration programs. Table 12 – Comparison of Reference Samples and Laboratory Analyses (2007‐2010) Reference Samples Type Inserted Certified Value Au (g/t) % Difference Laboratory and Reference # Inserted Reference Samples 2007 Blank PM 413 PM 914 Duplicates n/a
2.05
10.40
n/a
Blank PM 413 PM 914 Duplicates n/a
2.05
10.40
n/a
n/a
2.22
9.25
17
9
8
17
n/a
1.27
‐2.02
n/a
8
5
5
12
2008
Blank PM 413 PM 914 Duplicates Blank PM 413 PM 914 Duplicates Penedono Concession, Portugal Colt Resources Inc. 2009/10
n/a
n/a
2.05
‐4.27
10.40
3.89
n/a
n/a
Average ‐ all Colt Programs
n/a
n/a
2.05
‐2.49
10.40
4.68
n/a
n/a
Page ‐ 28 ‐ 12
8
4
0
37
22
17
29
Geoquest Consulting Ltd. August 27, 2010 The laboratory analytical results compare very well with the inserted certified reference samples with the average variance being within 5% (Table 12). Duplicate assays display a considerable assay variance due to differences in vein and sulphide content. When comparing duplicate samples containing ≥0.25 g/t Au the grade variance averages 29.3% which is considered acceptable for vein type deposits. Based upon the writer’s review the analytical data are considered very reliable and that the QA/QC protocols are appropriate for the current stage of exploration. In 2007, Colt samples were shipped to EcoTech Laboratory Ltd. in Kamloops, BC, Canada by airfreight through customs broker Orey Comercio E Navegacao Lda. Since 2008 all samples were shipped by to OMAC Laboratories in County Galloway, Ireland. Because the lab is in the European Union, TNT Worldwide Express (Portugal) SA was used as the courier service. OMAC, part of Stewart Group Global, is a provider of inspection, analysis, geochemical and assay services with over 30 years of experience. The company is accredited to ISO 17025 which “differs from ISO 9000 in that it takes quality management system a stage further setting requirements for the technical competence of the laboratory as well as for the fitness for purpose of the quality management system, thus assuring that the laboratory generates technically valid results.” (OMAC Website, Nov 4, 2008) Core and rock samples were collected in durable, labeled and tagged plastic sample bags secured by tamper proof, single use plastic straps. Individual samples were packaged in larger fibre bags that were sealed for shipment. Core and rock samples are stored and securely locked at Colt’s Penedono facility. Sample shipments were picked up by the courier company and transported to the laboratory thus completing a complete and proper chain of custody. No Colt employees, officers, directors or associates handled or shipped any samples. The six Santo Antonio mine tailings samples (Apr, 2009) were packed under supervision of Peter Sullivan from Maelgwym Mineral Services and shipped by TNT Courier to the Cardiff University metallurgical laboratory for test work. GeoLog collected smaller duplicate samples in case the company wished to conduct future check assays. In summary, the writer is completely satisfied that proper handling, sampling, analytical and quality control measures, storage and chain of custody procedures are being utilized. 14.0 DATA VERIFICATION Data verification was conducted during the writer’s 2008 and most recent visit (July, 2010). This included drill site and core examinations, detailed review of historic and recent analytical data as well as Colt’s QA/QC protocols. 14.1 Site Visits Mr. Filipe Faria, Luis Lopes, Pedro Amaral and Nelson Martins of GeoLog greatly assisted the writer’s examinations by providing transportation and information on the geology, mineral occurrences, exploration areas and the Santo Antonio mine. It was evident that excellent access is present throughout the concession and unlikely there are any parts of the concession more than 1‐2 kilometres from a road. There was no terrain seen that was adverse enough to completely prevent exploration or development. Infrastructure is complemented by nearby power and water and the local population is pro‐mining development. As a matter of fact the centre of Granja, the community nearest the Santo Antonio mine, has a small replica of the former mine’s head frame. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 29 ‐ Geoquest Consulting Ltd. August 27, 2010 Numerous old and recent excavations were examined, GPS located and in some cases sampled. These included a Roman era open cut on Santo Antonio ‐ Vein 3 and numerous hand dug trenches dating to the tungsten mining period of the 1940s‐50s. Several reclaimed Rio Narcea trenches at Santo Antonio and Turgueira along with detailed bedrock channel samples at the Marofa areas were also examined. Most of the Colt 2007‐10 drill holes and some Rio Narcea holes were examined. Hole collars are permanently marked by concrete monuments. Collar locations were recorded by a handheld GPS. The writer’s UTM co‐
ordinates correspond very well with company documentation with locations usually within 10 metres. During the writer’s 2008 visit drilling was ongoing affording a firsthand look at drilling procedures and core handling (Photo 3). It was apparent that drilling was being done in a professional and environmentally sound manner. Photo 3 Drill at Santo Antonio
The site visits also confirmed the deposit types being explored, the extent and orientation of mineralization along with alteration and structure. 14.2 Verification of Historic Work In 2007, Mr. Murton collected eighteen rock samples from the Santo Antonio, Dacotim, Coxo, Turgueira, Ferronha and Boucoes areas. Bedrock rubble grab samples were collected from old trenching as well as from pit walls. It was concluded, “The sample results roughly corroborated the Rio Narcea data and lend credence to their results.” Included were six core and one underground sample. Two Santo Antonio and four Turgueira cores were sawn in half for sampling. Table 13 compares the original Rio Narcea assays with Mr. Murton’s assays from EcoTech Labs. Table 13 – Comparison of Rio Narcea and W. Murton Sampling (2007) Location Sample Description Santo Antonio Vein 1 Santo Antonio PPE‐05 Santo Antonio PPE‐05 Turgueira PDA‐06 Turgueira PDA‐06
Turgueira PDA‐06
Turgueira PDA‐06
Underground
113.61 ‐ 114.40
114.40 ‐ 115.18
47.20 ‐ 48.20
48.20 ‐ 49.20
49.20 ‐ 50.20
50.20 ‐ 50.90
Rio Narcea Au (g/t) 11.39
2.06
16.03
0.36
2.87
0.03
6.13
W. Murton Au (g/t) Description 1.51
0.44
14.80
0.36
2.80
<0.03
6.10
Chip‐channel ¼ core ¼ core ¼ core ¼ core ¼ core ¼ core One Santo Antonio drill core sample and the underground sample show a considerable difference while the higher grade Santo Antonio core sample assays compared well. The distribution of arsenopyrite and veinlets could readily account for the assay variations. By comparison, the Turgueira core samples compare very well. This may be a Penedono Concession, Portugal Colt Resources Inc. Page ‐ 30 ‐ Geoquest Consulting Ltd. August 27, 2010 result of the finely disseminated and more evenly distributed arsenopyrite in the greisen mineralization. The writer’s own direct field observations support this view. 14.3 Verification of Colt Analytical Data A comprehensive review of Colt’s analytical data, specifically the drill sample data was performed. Drill logs along with all laboratory analyses for the 2007‐2010 programs were received from GeoLog in Microsoft Excel format. This allowed the direct calculation and verification of the gold intersections reported by Colt. The data review revealed a more than ample frequency of reference sample insertion and an acceptable variance between the lab’s data and that of the reference samples. Table 12 was generated by the writer from the laboratory analyses. Based upon the data review there are no concerns over the veracity of the exploration data. 14.4 Author’s Verification (2008, 2010) In August, 2008 twenty‐two rock samples were collected by the writer from several mineralized zones, areas of previous sampling and drill core. Table A1 (Appendix) contains the gold, silver, arsenic and tungsten analytical data for these samples along with the GPS location, sample type and description. Sample assays range from 0.61 to 59.52 g/t Au with fifteen containing over 5 g/t Au. Eight samples contain over 100 ppm (0.01%) tungsten. Arsenic content ranges from 2,513 to 145,352 ppm. An outline of the results is presented as follows: Two samples were collected from the underground workings on Santo Antonio Veins 1 and 2. Sample PW08‐01 returned 24.8 g/t Au that is considerably greater than the 6.26 g/t Au average reported over a 47.5 metre length of Vein 1 (Figure 3). The difference is a result of the writer’s sample being collected from the arsenopyrite rich part of the 1.2 metre wide vein. Sample PW08‐02 assayed 5.48 g/t Au and compares very favourably with the average grade of Vein 2 (5.75 g/t Au). Samples PW08‐03 toPW08‐10 collected from Santo Antonio confirmed the gold and tungsten mineralization of these areas. Sample PW08‐07 (9.96 g/t Au) is a composite of quartz fragments from dump material excavated from an old shaft on Vein 11. Nine drill holes have thus far targeted this vein and intersected gold bearing veins and associated mineralized greisen altered granite. Sample PW08‐09 (7.36 g/t Au) collected from a 1.2 metre vein in an old trench is located 170 metres east‐northeast of the nearest drill hole. Figure 15
Penedono Concession, Portugal Colt Resources Inc. Page ‐ 31 ‐ PW08‐11, a split of drill core from original sample #17266 (7.0 g/t Au) in drill hole PPE08‐03, Geoquest Consulting Ltd. August 27, 2010 assayed 2.16 g/t Au. The difference is again due to the variability of arsenopyrite content within veins and is borne out by the significantly lower arsenic content reported in the writer’s sample. Samples PW08‐20 to 22 were collected to check and verify the gold and tungsten reported in the Santo Antonio mine tailings. Oxidized or suspect sulphide rich layers (20‐30 cm) were sampled. Assays ranged from 4.88 g/t to 9.32 g/t Au and up to 0.11% W. ICP‐MS analysis of PW08‐21 and 22 yielded higher tungsten values than regular ICP analysis. Sample PW08‐22 contained abundant arsenopyrite and scorodite, a green secondary arsenic mineral. These results corroborate the presence of gold and tungsten and also indicate that the Santo Antonio tailings could represent a potentially economic resource. Further investigation may be warranted. Figure 15 displays the writer’s samples along with the approximate location of the samples collected by Wayne Murton. At Marofa, Rio Narcea’s work revealed extensive gold‐in‐soil anomalies. GeoLog personnel have found many rock samples containing highly anomalous amounts of gold and tungsten. The writer collected five rock chip samples three of which (PW08‐12 to 14) assayed over 10 g/t Au demonstrating the high‐grades of the veins/fractures. Gold mineralization appears to be narrow however it is possible there may be areas where the vein‐fracture density is sufficient to present bulk tonnage potential. At Turgueira sample PW08‐16 consisting of quartz fragments from an old 1940s (tungsten) trench assayed 7.96 g/t Au and 0.04% W (Figure 5). Sample PW08‐17 (7.36 g/t Au) is especially significant as it is associated with cobbles of greisen altered granite containing disseminated arsenopyrite. The extent of greisen material suggests the potential for a significantly large mineralized zone. At Ferronha, two grab samples were collected near a 1940s (?) shaft. Sample PW08‐18 comprised of arsenopyrite‐
rich quartz assayed 59.52 g/t Au (Figure 7). Sample PW08‐19 was from a boulder of greisen altered granitic containing disseminated arsenopyrite, chalcopyrite and pyrite. This sample assayed a 6.96 g/t Au along with 0.26 % Cu. Both samples probably originated from excavated material that was likely mined from the large nearby shaft. Most of this material was removed and likely used as fill for nearby road work. During the July, 2010 visit the writer collected six samples, specifically one rock and five core samples (Table A1 – Appendix). Rock sample SA2‐W01 was collected from a one metre channel sample of arsenopyrite bearing quartz veining from a GeoLog hand trench in an area between Veins 3 and 4 (Figure 3). This sample assayed 4.15 g/t gold which compares very well with the GeoLog sample that grades 3.84 g/t Au. The five core samples were obtained from selected mineralized intervals from core stored at Colt’s facility in Penedono. This was done by longitudinally cutting the core using a diamond saw. This is similar to the method used to obtain duplicates except in this case a ¼ core sample was used for analysis. The analytical results of the writer’s samples also compared favorably with the GeoLog sampling. The largest variance, a 46.73 g/t Au versus GeoLog’s 35.34 g/t Au (Hole PPE10‐07) is due to arsenopyrite content variation. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 32 ‐ Geoquest Consulting Ltd. August 27, 2010 15.0 ADJACENT PROPERTIES There are two adjacent properties, the Armamar‐Meda and Moimenta‐Almendra concessions where Colt is exploring for tungsten and gold (Figure 16). The writer has recently visited these concessions. Located about 50 kilometres north‐northwest of the Penedono concession is the Jales mine, that was in production from 1933 to 1992. During that time the mine produced some 830,000 oz. gold and 3,000,000 oz. silver from approximately 2,184,000 Figure 16
tonnes. The reported grade was 12.9 g/t Au. The deposit was reportedly mined over a 2,000 metre strike length and to a depth of greater than 600 metres. It is said to be open to depth. The Jales mine has a mineralization style and geological setting similar to the Santo Antonio mine. It is described as northeast striking, sub vertical auriferous arsenopyrite bearing quartz veins ranging from 0.5 to 1.5 metres wide that are hosted by Hercynian age two‐mica granite. The mine is being explored by St. Elias Mines Ltd. (51%) and Kernow Resources & Developments Ltd. (49%). The writer reviewed information about the mine at the following websites: http://www.steliasmines.com/portugal.htm and http://www.kernowresources.com/ The above information is not intended to be indicative of the mineralization on the Penedono concession but simply to present the potential of these types of gold deposits. 16.0 MINERAL PROCESSING AND METALLURGICAL TESTING There are no records of recent mineral processing on the Penedono concession. The Santo Antonio mill was reported to have treated approximately 400 tonnes per day. This figure has been loosely referred to in several unauthenticated references, and its authenticity cannot be established. Still evident (seen by the writer) are two of five original ball/rod mills with dimensions of approximately 1.5 by 3 metres. Located near the mill are mine tailings where sampling by Greystar (1995), Mr. Murton (2007) and most recently by the writer all confirmed that the tailings contain significant amounts of gold and tungsten. The identification of high‐grade gold (nearly 10 g/t Au) in some layers of the tailings indicates less than optimal mill efficiency. As part of a Government plan to rehabilitate the old Santo Antonio mine, including sealing the tailings (which has been halted upon COLT's request to assess the possibility of reprocess the latter), a land surveyor conducted a more accurate measurement of the tailings volume. This revealed a total volume of 95,000 tonnes or potentially >150,000 tonnes (dependant on specific gravity used). Penedono Concession, Portugal Colt Resources Inc. Page ‐ 33 ‐ Geoquest Consulting Ltd. August 27, 2010 In April, 2009 six samples, totaling 500 kg were collected by use of a backhoe from the largest Santo Antonio mine tailings area (Photo 4). GeoLog staff assisted personnel from Maelgwyn Mineral Services who were in charge of sample collection. The objective of the program was to conduct metallurgical tests to determine gold and tungsten recovery. The metallurgical work has not been completed at the time of this report. Photo 4 Santo Antonio Mine Tailings While taking the large volume samples from the tailings for the metallurgical test work by digging vertical wide channels with the excavator smaller duplicate samples were collected by GeoLog for check assaying. The results of this more statistically and representative sampling yielded a grade of 1.37g/t Au. 17.0 MINERAL RESOURCES AND MINERAL RESERVE ESTIMATES There are no estimates of mineral resources or reserves on the concession. 18.0 OTHER RELEVANT DATA AND INFORMATION The writer reviewed a very informative report compiled from the experience of Mr. Fausto Caldas who in the 1950s was a mining engineer at the Santo Antonio mine. Mining details from the report are summarized as follows: • The underground mining operations did not encounter any major faults. • The granite host rock was competent. This is evident to this day. • Most production came from Veins 2 and 3 while Veins 4, 5, 6 were not exploited. • The majority of ore came from the 855m and 815m levels. Spacing of levels is 40 metres. • Stopes were not backfilled and timbers were only occasionally used for safety. • No large volumes of water were encountered and dewatering was easily done. This report also provided other revelations about the mining/milling process. • Mining commenced without drill holes, trenches or other work that could have provided information on the grade of the ore bodies. • Work started rapidly because it was taken for granted that the operation would be successful. • No metallurgy was conducted to determine the optimal gold recovery process. The latter point is particularity interesting in that it could explain the high sulphide and gold content of the tailings. If indeed the ore was subjected to floatation and the resultant concentrate was cyanide leached it is possible that gold recovery could have been poor. This is because unless carefully monitored, cyanide will be preferentially consumed by sulphides (arsenopyrite) and thus be less available to complex with gold. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 34 ‐ Geoquest Consulting Ltd. August 27, 2010 19. 0 INTERPRETATION AND CONCLUSIONS The early mining history and the more recent Rio Narcea/Colt programs have identified several gold ± tungsten mineralized areas on the Penedono concession. It is apparent that there exist hydrothermal systems with the capacity and potential to host significant gold ± tungsten deposits. The following summarizes the writer’s observations, interpretations and conclusions on the following: Field surveys and exploration • Rio Narcea’s and Colt’s sampling programs are of a high caliber. • Geochemical surveys are effective exploration tools. • Soil sampling delineated distinct and locally extensive gold‐in‐soil anomalies in several areas. • Soil surveys reveal a strong correlation with “in situ” gold mineralization. • Arsenic is often but not always a good indicator or “pathfinder” for gold. • Geophysical techniques to date have not proven to be useful exploration tools. • Trenching confirmed the validity of the geochemical targets (i.e. Marofa). • There remain a number of untested geochemical anomalies and areas of prospective greisen alteration. Analytical Data • Analytical laboratories and data reported are very reliable. • Colt’s QA/QC protocols are rigorous and appropriate for the level of exploration being conducted. Trenching/Drilling • Santo Antonio drilling successfully tested quartz vein systems from 50 to over 150 metres below surface. There are several veins and areas between veins that have received little exploration. • Veins 11 and 13 have yielded some of the highest gold grades reported in drilling and offer additional exploration potential. • At Marofa, work to date has identified granite hosted gold mineralization associated with narrow quartz veinlets and fractures. Although the density of the mineralization was insufficient for bulk tonnage deposits there remain other areas worthy of follow‐up for such deposits. • The Turgueira auriferous greisen system was trenched and only lightly drilled by Rio Narcea. Given the extensive greisen development and zones of disseminated auriferous arsenopyrite and local tungsten, this is a target worthy of further work. • The Paredes ‐ Dacotim and Ferronha areas have yielded localized high‐grade gold mineralization. The latter has received very minor drilling. The Penedono concession offers excellent potential for the discovery of gold ± tungsten deposits. Colt’s exploration programs have methodically tested and delineated gold mineralized zones in the Santo Antonio and Marofa areas. Previously unexplored veins were drilled and in some cases, new mineralized vein zones were discovered. Santo Antonio, Turguiera and several other gold mineralized zones and geochemical anomalies have yet to be fully explored. Penedono Concession, Portugal Colt Resources Inc. Page ‐ 35 ‐ Geoquest Consulting Ltd. August 27, 2010 20.0 RECOMMENDATIONS Continued exploration on the concession is definitely warranted and should target two main areas. Santo Antonio – Continued exploration drilling is warranted in two primary areas (not in priority order): • Drilling on Veins 11 and 13 both along strike and to depth. • Drilling on untested Veins 8‐10 and 12. • Drilling the 300m gap between Veins 3 and 4 to test high‐grade veins and NE striking veins. • Area of low topography, greisen soil and gold soil anomaly between Santo Antonio and Marofa. • Trenching and possible drilling on Marofa target MF6. Turgueira: • Soil sampling and prospecting to further delineate of greisen alteration and Au‐W mineralization. • Trenching and drilling gold ± tungsten greisen and gold‐in‐soil soil anomalies. Marofa: • Prospecting, rock sampling. • Trenching and drilling untested exploration targets Ferronha: • Prospecting and detailed rock sampling to define targets within large soil geochem anomaly. • Trenching and drilling of select targets. It is estimated that this work will take two to three months. Program Cost Estimate Santo Antonio Area: Diamond Drilling – 3750 metres @ CDN $160/m (all inclusive) Trenching, sampling and assaying Turguiera Area : Drilling program ‐ 1500 metres @ CDN $160/m (all inclusive) Trenching, sampling, assaying Other Penedono Concession Targets (i.e. Ferronha, Marofa) : Prospecting, soil and rock sampling, trenching, assaying Reconnaissance drilling programs – 400 metres @CDN $160/m (all inclusive) $599,625 25,000 239,850 25,000 15,000 63,960 Total: $624,625 264,850 78,960 $ 968,435 Penedono Concession, Portugal Colt Resources Inc. Page ‐ 36 ‐ Geoquest Consulting Ltd. August 27, 2010 21.0 REFERENCES GeoLog Gabinete de Geosciencias, Ltn (2008 and 2010) Personal Communications and data acquired from Mr. Filipe Faria Gruenwald, W. (Nov 28, 2008) Technical Report (43‐101) on the Penedono Gold Concession, Northern Portugal Murton, J.W. (Mar 28, 2008) 2007 Diamond Drill Report on the Santo Antonio Project, Penedono Concession. Internal report for Colt Resources Inc. Caldas, Fausto, S. (Mar 23, 2008) Penedono Gold Mines Memorandum. Private report on the Penedono mining operation. Murton, J.W. (June 25, 2007) Technical Report on the Penedono Gold Concession for Colt Capital Corp. Rio Narcea Gold Mines Ltd. (2007) Summary Reports and in house geological data from 2003 – 2007 Rio Narcea Gold Mines Ltd. (2006) Penedono Project Technical File. Drill logs and Assays for Santo Antonio, Dacotim, Turgueira and Ferronha areas. Rio Narcea Gold Mines Ltd. (2006?) JV Proposal – Penedono Gold Project Lang, Dr. James R. (Nov, 2000) Regional Evaluation of Gold Prospects in Oscos Belt, Asturias, Spain and the Penedono Concession, Northern Portugal. Report prepared for Rio Narcea Gold Mines Ltd. Web sites: Colt Resources Inc http://www.coltresources.com OMAC Laboratory ‐ http://www.omaclabs.com St. Elias Mines Ltd ‐ http://www.steliasmines.com/ Penedono Concession, Portugal Colt Resources Inc. Page ‐ 37 ‐ Geoquest Consulting Ltd. August 27, 2010 APPENDIX Table A1 Table A2 Penedono Rock Sample Descriptions 2008 and 2010 (W. Gruenwald, P. Geo.) Penedono Concession Drilling Summary TABLE A1 ‐ ROCK SAMPLE DESCRIPTIONS ( W. GRUENWALD) 2008
Sample
No.
Easting
(ED50)
Northing Elev. (ED50)
(m)
PW08‐01
N/A
N/A
N/A
PW08‐02
N/A
N/A
N/A
PW08‐03
633446
4541735
972
PW08‐04
633416
4541712
978
PW08‐05
633618
4541666
958
PW08‐06
632912
4541721
946
PW08‐07
632878
4541781
942
PW08‐08
632874
4541786
944
PW08‐09
633182
4541968
961
PW08‐10
633041
4542027
945
PW08‐11
NA NA NA
PW08‐12
632390
4542046
968
PW08‐13
632338
4541781
975
PW08‐14
632277
4541746
970
PW08‐15
631592
4541111
917
PW08‐16
625688
4541833
PW08‐17
625620
PW08‐18
636049
Area
Santo Antonio
Santo Antonio
Santo Antonio
Santo Antonio
Santo Antonio
Santo Antonio
Santo Antonio
Santo Antonio
Santo Antonio
Santo Antonio
Santo Antonio
Marofa North
Outcrop/
Type
Description
Float/ Width/Area Other
Rock Chip across Underground sample on Vein 1 approximately 13.5 metres from SE end of tunnel. At Rio 0.50 m
Narcea's sample "B". Taken from arsenopyrite rich side of 1.2 metre wide quartz vein.
Rock Chip across Underground sample of arsenopyrite bearing quartz vein 138 m from portal of Vein 2. Vein 0.70 m
attitude 070°/90°.
Outcrop Chip across Greenish weathering quartz‐muscovite arsenopyrite bearing vein. Attitude 050°/80° SE. Rio 0.35 m
Narcea trench along road. Outcrop Chip across Quartz vein along one metre high wall of granite. Probable continuation of vein at PW08‐03. 0.35 m
Grey fractured quartz with patchy (15%+) arsenopyrite. Attitude 047°/80° SE. Pre‐Rio Narcea Outcrop Chip across Collected from old trench (pre‐1950s) that trends 016°. Quartz vein with <3% arsenopyrite. 0.25 m
Greisen alteration envelope up to 0.8m. Outcrop Chip across 8‐ Sample from quartz vein uncovered and traced for 4 metres at drill site for hole PPE 08‐07.
12 cm
Float Random Composite of rusty quartz fragments collected over 10 metres from overgrown dump grab material excavated from nearby old shaft. Some fragments with 10‐20% arsenopyrite. Float Composite Greisen altered rock from PW08‐07 dump. Coarse‐grained granite with abundant muscovite, grab trace tourmaline. Some pieces with up to 1.5 cm quartz veinlets containing generally <5% Outcrop Random Sample taken along 5 metres of NW wall of very old 2.5 metre deep trench excavated on 1.2 grab metre quartz vein. Attitude 055°/90°. Patchy arsenopyrite ‐ overall <10% of vein. Float From 5‐6 Composite of quartz fragments in soil up to 10 cm. Some contain up to 10 % arsenopyrite but metre area generally <1%. Located between Veins 12 and 13. Suggests large volume of rock is veined. Core
Re‐cut of sample 17266 in drill hole PPE08‐03.
Outcrop Grab across From west wall of 0.75 metre wide and 15 metre long (pre‐1950s) trench on quartz vein. 0.20 m Attitude 005°/85°W. Selected sample of nearly massive arsenopyrite fragments. Greisen Float
Grab Float
690
Marofa North
Marofa North
Marofa South
Turgueira
4541710
703
Turgueira
Float
Composite grab Composite grab Composite grab Grab
4537607
939
Ferronha
Float
Grab
Geoquest Consulting/2010
Float
Float
Au
ppm
24.8
5.48
Ag ppm
As
%
26.0 17.83
265
5.39
40
8.8
4.3 14.54
118
9.68
3.9 12.03
80
0.46
0.8
0.25
<5
4.04
0.9
2.28
<5
9.96
2.6
3.09
43
0.61
<.5
0.10
38
7.36
3.6
1.01
19
2.56
1.4
0.45
80
2.16
<.5
0.42
15
<.5 14.05
874
13.28
Composite grab of quartz scattered east of old trench. Occasional fracture veinlets found 10 10.48
metres east of trench. Density <1/metre.
Quartz fragments adjacent to another old trench. Fragments up to 20 cm with up to 5‐10% 15.2
arsenopyrite. Trench indicates north striking 0.8 m wide vein traceable for 40 metres. Quartz fragments near old pit (005° trend). Fragments 5‐7 cm. Collected over 6 metre strike 1.32
length. Vein dips ~80 west. Mined for wolframite. Quartz fragments (up to 5cm) from old pit near end of Rio Narcea trench T‐7. Highly broken 7.96
nature suggest wolframite mining. Pyrite > arsenopyrite. Pieces up to 20 cm of greisen altered granite in cultivated field. Disseminated arsenopyrite 7.36
clots to 0.5 cm. Abundant muscovite in soil over > 20X20 m area. Suspect trend of zone 070°
Quartz and greisen fragments excavated from old shaft. Pieces to 10 cm, some with 50% asp. 59.52
2.6
W*
ppm
W**
ppm
269
6103
3.7
3.17
69
35.4
3.89
33
<.5
1.39
702
756
2.5
2.97
403
395
1.8
1.59
6
29.0 12.13
<5
TABLE A1 ‐ ROCK SAMPLE DESCRIPTIONS ( W. GRUENWALD) Sample
No.
Easting
(ED50)
Northing Elev. (ED50)
(m)
PW08‐19
636039
4537610
939
PW08‐20
633978
4542591
806
PW08‐21
633992
4542507
807
PW08‐22
633977
4542487
816
2010
SA2‐W01
633871
4541777
Outcrop/
Type
Description
Float/ Width/Area Other
Ferronha
Float Grab
From boulder (25 cm) of greisen altered granitic rock with disseminated arsenopyrite, chalcopyrite and pyrite. 5‐10% sulphides. Also likely came from mining of old shaft. Santo Tailings Grab
Sample of 20 cm dark grey layer 4 metres below top of Santo Antonio mine tailings. Suspect Antonio
this to be sulphide‐rich layer. Santo Tailings Grab
Grey weathering, bright orange‐brown cemented tailings. Definite arsenopyrite present. Antonio
Santo Tailings Grab
From "boulders" of semi‐indurated tailings with abundant green scorodite (arsenopyrite Antonio
alteration mineral). Some pieces show >10% arsenopyrite. Suspect visible gold. This sample comes from area of tailings nearest the old Santo Antonio mill site. Area
Santo Antonio
205388 (W)
N/A
N/A
N/A Marofa South
205623 (W)
N/A
N/A
N/A
Santo Antonio
205896 (W)
N/A
N/A
N/A
Santo Antonio
205814 (W)
N/A
N/A
N/A
Santo Antonio
* Aqua Regia Sample Digestion ** Metaborate Geoquest Consulting/2010
Au
ppm
Ag ppm
As
%
W*
ppm
W**
ppm
6.96
8.4
1.02
<5
4.88
4.6
2.74
342
329
8.52
6.6
9.30
725
865
9.32
4.7
8.77
766
1109
4.15
12.8
0.72
<5
7
Core Chip across Chip sample of 15 cm quartz‐arsenopyrite vein hosted by granite in SA2 area situated 1.00 m
between Veins 3 and 4. Vein attitude ENE, steep dipping. 1.01 m
Re‐cut of sample 205388 in drill hole MF1‐D02
1.03
<.5
0.71
7
<5
Core 0.75 m
Re‐cut of sample 205623 in drill hole PPE09‐03
6.32
3.1
5.16
<5
7
46.73
3.4
9.06
7
12
2.63
<.5
1.14
12
<5
Rock
Core Core 0.98 m
TABLE A2 - PENEDONO CONCESSION - DRILLING SUMMARY
Drilled By
Easting
Northing
Elev
(m)
Az Angle Depth (deg) (deg)
(m)
Santo Antonio Area RN PPE‐01 2005
RN PPE‐02 2005
RN PPE‐03 2005
RN PPE‐04 2005
RN PPE‐05 2005
Rio Narcea
Rio Narcea
Rio Narcea
Rio Narcea
Rio Narcea
633982
633501
633539
633583
633673
4541477
4541667
4541700
4541725
4541773
884
962
958
953
938
PPE07‐01
PPE07‐02
PPE07‐03
PPE07‐04
PPE07‐05
PPE07‐06
PPE07‐07
PPE07‐08
PPE07‐09
PPE07‐10
PPE07‐11
PPE07‐12
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. 633522
633561
633561
633593
633593
633615
633628
633614
633627
633585
633564
633650
4541736
4541762
4541762
4541786
4541786
4541695
4541762
4541806
4541719
4541661
4541665
4541821
PPE‐08‐01
PPE‐08‐02
PPE‐08‐03
PPE‐08‐04
PPE‐08‐05
PPE‐08‐06
PPE‐08‐07
PPE‐08‐08
2008
2008
2008
2008
2008
2008
2008
2008
Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. 632998
633029
632927
632969
633029
632927
632901
632969
4542117
4542158
4541780
4541823
4542158
4541780
4541734
4541823
PPE‐09‐01
PPE‐09‐02
PPE‐09‐03
PPE‐09‐04
PPE‐09‐05
PPE‐09‐06
PPE‐10‐01
PPE‐10‐02
PPE‐10‐03
PPE‐10‐04
PPE‐10‐05
PPE‐10‐06
PPE‐10‐07
PPE‐10‐08
2009
2009
2009
2009
2009
2009
2010
2010
2010
2010
2010
2010
2010
2010
Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. 633007
632912
632958
633002
632904
632935
632866
632866
632980
632906
632941
632886
632884
632895
4542233
4542132
4541904
4541932
4541844
4541888
4541804
4541804
4541916
4542138
4542174
4542088
4542089
4542008
315
‐50
325
‐50
325
‐50
318
‐50
324
‐50
Total 2005
960
325
‐60
956
325
‐45
956
325
‐63
953
325
‐45
953
325
‐65
952
322
‐45
948
341
‐50
950
325
‐60
949
331
‐45
956
100
‐45
955
100
‐50
946
325
‐66
Total 2007
934
315
‐45
929
315
‐45
945
315
‐45
947
315
‐45
929
315
‐60
945
315
‐60
942
315
‐45
947
315
‐60
Total 2008
135
916
‐45
135
920
‐45
135
939
‐45
135
941
‐45
135
937
‐45
135
936
‐45
135
936
‐45
135
936
‐60
135
941
‐45
135
920
‐60
135
920
‐60
135
921
‐45
135
921
‐75
315
927
‐45
Total 2009/10
349.91
167.00
168.25
196.30
227.40
1108.86
140.74
61.84
106.09
64.14
114.54
183.98
124.59
69.14
153.33
98.66
150.71
87.28
1355.04
72.87
64.18
75.90
55.52
105.00
129.00
117.82
83.33
703.62
46.33
52.93
65.83
60.10
42.35
63.08
52.29
55.88
59.83
69.03
5.65
26.78
60.33
97.51
757.92
Marofa Area
MF1‐D01
MF1‐D02
MF1‐D03
MF1‐D04
MF1‐D05
MF2‐D01
2009
2009
2009
2009
2009
2009
Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. Colt Res. 631570
631560
631658
631648
631569
631926
4541074
4541114
4541059
4541098
4541074
4541063
100
100
100
100
100
109
Total
56.05
59.73
80.23
50.80
38.32
56.00
341.13
Hole ID
Year
Geoquest Consulting Ltd./2010
907
907.5
907
908.5
907
941
‐45
‐45
‐45
‐45
‐45
‐45
Target
Results and Interval Interval #2 To Test Veins #1, #2,#3
To Test Veins # 4, #5, #6 at depths from 35m to 100m below surface.
As Above
As Above
Vein #1‐ 3.18 g/t Au 2.1m
Vein #5‐ 4.0 g/t Au over 3.4m
Vein #4‐5.10 g/t Au over 1.0m
Vein #4 ‐ Au to 0.19 g/t Au Vein #2‐ 0.30 g/t Au over 1.00m
Previous includes 7.78 g/t Au over 1.60m
Vein #5‐ 4.18 g/t Au over 2.81m including →
New Vein ‐ 1.05 g/t Au over 1.0m
Vein #5 ‐ 16.03 g/t Au over 0.79m
Vein #5, #6
Vein #5, On section with PPE‐04 Vein #5, On section PPE07‐02 Vein #5
Vein #5 deeper Vein #4, #5; PPE07‐02, 03 section
Vein #4, #5 Ahead of PPE07‐07, Vein #5
Veins #4, #5; Hole behind PPE07‐04
To test tension veins at 195° trend
Test vein swarm beneath PPE07‐10
Vein #5 up dip from Rio Narcea hole
No Vein#5 intersection
0.23 g/t Au over 1.14 m (43.32m)
8.30 g/t Au over 0.85m (67.89 m)
0.16 g/t Au over 0.43m (43.70 m)
0.37 g/t Au over 0.71 m (62.53 m)
Vein #4 ‐5.90 g/t Au over 1.00m
Several veins from 27 to 98.09m
0.59 g/t Au over 7.48m including
30.00 g/t Au over 0.37m (19.43m)
Alteration zone 0.08 g/t Au over 1.15m
0.72 g/t Au over 1.00m (49.20 m) Greisen zone ‐ 0.77 g/t Au over 10.81m
0.46 g/t Au over 5.64 m ending at 49.34m
6.50 g/t Au over 0.57m (68.72m) ‐ Vein #5 ?
Altered zone 0.45m of 0.04 g/t Au (Vein #5?)
Broader zone below =1.04 g/t Au over 7.75m
Several veins incl #5 = 1.29 g/t Au over 9.10m
Within broader zone 1.86 g/t Au over 1.79m
Incl 1.14 g/t Au 9.96m, 1.21 g/t over 17.00m
3.02 g/t Au over 1.00 m
Vein #5 ‐ 1.24 g/t Au over 1.10m within →
Vein #13
Vein #13, 50m NE of PPE‐08‐01
Vein #11
Vein #11, 50m NE of PPE‐08‐03
Vein #13, below PPE‐08‐02
Vein #11, 50m SW of PPE‐08‐03
13.35 g/t Au over 1.41 m
59.99 g/t Au over1.47 m
4.62 g/t Au over 12.80 m
5.89 g/t Au over 8.14 m
Incl. 8.34 g/t Au over 6.74 m
Incl 18.37 g/t Au over 1.54 m
4.60 g/t Au over 0.52 m
1.08 g/t Au over 1.00 m
1.21 g/t Au over 2.77 m
Interval #3
Vein #3 ‐ 0.37 g/t Au over 1.00m
14.17 g/y Au over 0.76m
Vein #6 ‐ 0.07 g/t Au Vein #6 ‐ Trace Au 150 m below surface
Overall 0.20 g/t Au over 7.16m
2.80 g/t Au over 1.33 m (73.88m) 1.05 g/t Au over 1.31 g/t Au (new vein?) Vein # 5 weak ‐ 0.17 g/t over 0.60m Vein #5‐4.80 g/t Au over 1.53m
0.89 g/t Au over 5.00m
Broader zone of 8.24 g/t Au over 1.37m
1.39 g/t Au over 0.75 m
Vein #13
Vein #13
Vein #11
Vein #11
Vein #11
Vein #11
Vein #11
Vein #11
Vein #11
Vein #13
Vein #13
Vein #13
Vein #13
Vein #13
(Santo Antonio ‐ Total Drilling To Date): 0.31 g/t Au over 1.00m
22.84 g/t Au over 0.20m
46.50 g/t Au over 3.10m
0.83 g/t Au over 13.35m
75.64 g/t Au over 0.08m
15.31 g/t Au over 1.80m
3925.44
includes 35.34 g/t Au over 0.75m
Beneath trench MF1‐T01
Beneath trench MF1‐T02
Au veins/fractures in granite
Beneath trenches MF2‐T01, T02
0.38 g/t Au over 7.44m (incl. 2.01 g/t over 1.00 0.45 g/t Au over 9.26m
0.13 g/t Au over 0.75 m
1.45 g/t Au over 7.75 m
includes 1.21 g/t Au over 4.48 m
includes 11.15 g/t Au over 0.7 m
includes 0.97 g/t over 2.00m
incl 2.67 g/t Au over 3.87m, 10.53 g/t Au over 0.75m
2.67 g/t Au over 3.43 m ( incl 3.51 g/t over 1.00m
TABLE A2 - PENEDONO CONCESSION - DRILLING SUMMARY
Hole ID
Year
Drilled By
Easting
Northing
Elev
(m)
Az Angle Depth (deg) (deg)
(m)
Dacotim Area
P96‐1 to 7 1994‐96 Greystar JV
P96‐1 to 7 1994‐97 Greystar JV
PDA‐01
PDA‐02
PDA‐03
PDA‐04
PDA‐05
2002/05
2002/05
2002/05
2002/05
2002/05
Rio Narcea
Rio Narcea
Rio Narcea
Rio Narcea
Rio Narcea
627540
627479
627479
627565
627569
4544706
4544679
4544679
4544670
4544413
671
671
671
670
629
Turguiera Area
PTU‐01
2001
PTU‐02
2001
PTU‐03
2001
PTU‐04
2001
PTU‐05
2005
PTU‐06
2005
PTU‐07
2005
Rio Narcea
Rio Narcea
Rio Narcea
Rio Narcea
Rio Narcea
Rio Narcea
Rio Narcea
625574
625532
625557
625722
625634
625682
625602
4541689
4541689
4541632
4541848
4541661
4541661
4541661
700
701
710
731
Ferronha Area
PFE‐01
2002
Rio Narcea 636007
4537465
935
Geoquest Consulting Ltd./2010
704
Total
328
328
328
328
322
Total ‐60
‐45
‐78
‐60
‐60
90
90
90
298
270
270
270
Total ‐45
‐50
‐50
‐50
‐50
‐50
‐50
325
‐50
555.70
122.10
84.40
114.80
141.50
102.20
565.00
170.70
170.40
209.90
232.00
79.65
86.65
78.20
1027.50
Target
Results and Interval Interval #2 Interval #3
Dacotim shear, 1940‐1950 & 1995 trenches DDH 96‐1: 2.7 g/t Au over 0.95m
Also tested Lionel and Coxo structures DDH 96‐3,4 intersected Lionel shear
DDH 96‐6,7 intersected Coxo shear
DDH 96‐5: 21.54 g/t Au over 0.65m
DDH 96‐2: 3.12 g/t Au over 0.30m
DDH 96‐3: 2.43 g/t Au over 2.90m
DDH96‐4 located 200m SW yielded low Au Narrow intervals up to 4.0 g/t Au over 0.20 m
Below Dacotim pit area; hit UG workings
PDA‐2 and 3 are 70m SW of 1 and 4
Undercut PDA‐02 by 70m PDA‐4 under hole 1 and near P96‐2
Drilled NE of Greystar P96‐4; Lionel Shear
1.55 g/t Au over 10.40m at 56.10m Hit UG workings: Qtz frags recovered Only trace Au. Altered shear: 0.82 g/t Au over 12.5m
1.54 g/t Au over 0.88m and →
including →2.96 g/t Au over 3.40 m graded 1.04 g/t Au →Includes 6.17 g/t Au over 1.0 m (123.2m) 2.03 g/t Au over 0.95m
S end of greisen, Trenches 1,2 and Adit 1
To test south south end of Greisen zone
Greisen and old tungsten trench
Undercut Rio Narcea Trenches 1, 2
Four mineralized zones
Three one‐metre intervals Three zones between 33.8 and 187m
Mineralization between 36 and 217m
1.01 g/tAu over 0.65 m at depth of →
Best interval of the drilling program
Two 1‐metre intervals of ~0.90 g/t Au Best interval ‐ 2.20 g/t Au over 1.00m Best interval ‐1.96 g/t Au starting at 114.0m
1.25 g/t Au over 3.00m including →
1.14 g/t over 2.90m incl 2.35 g/t Au over 1m
20 m below surface
1.23 g/t au over 26.4 m including →
between 11.80m and 22.80m
Numerous veins intersected
Best interval ‐ 2.68 g/t Au over 1.00m →
265.90 NE trending quartz veins near 1940s shaft Also 3.35 g/t Au over 1.00m (at 65.50m)
2.24 g/t Au over 1.00m at 33.80m
1.51 g/t Au over 10.10m with 4.24 g/t/ 2.1m
2.50 g/t Au over 11.6 m at 40 m below surface
in quartz breccia with cpy, asp, py

technical report (ni 43-101) penedono gold

Transcription

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