Troilus North Royalty

Asset Overview

Location:  Quebec

Location Details:  160 miles north of Chibougamau

Type of Project:  Early stage exploration

Number of Claims:  Royalty applies to 209

Est. Property Size:  11,300 ha

Emgold Ownership:   None, royalty only

Emgold Royalty:  1% NSR which Troilus Gold Corporation (TSX: TLG) can purchase at any time for C$1.0 million

Exploration completed:  Geological mapping, surface sampling, geophysics

Key Exploration Targets:  Troilus Mine extension, Dravite Zone, NE conductor zone

Technical Report: Troilus North Property, Troilus-Frotet Volcano-Sedimentary Belt, Opatica Geological Sub-province, Quebec, Canada, prepared for Emgold Mining Corporation by Donald Théberge, P.Eng., MBA, with Effective Date October 10, 2018

Highlights:  Adjacent to past producing Troilus Mine being advanced by Troilus Gold Corporation.  One of the most exciting exploration projects in Quebec with an exploration target of plus 5 million gold equivalent ounces, based on current indicated and inferred resource outlined in a 2019 Technical Report by Troilus Gold.

Troilus North Asset – 1% Net Smelter Royalty

In June 2018, Emgold Mining Corporation (“Emgold” or the “Company”) optioned an 11,309 ha (27,945 acre) property called Troilus North (“Troilus North” or the “Property”) in Quebec.  In November, 2018, the Company acquired a 100% interest in the Property, which it subsequently sold to Troilus Gold Corporation (“Troilus Gold”) (TSX:TLG) for C$250,000 in cash and 3.5 million TLG shares.   The Property is now part of a combined 67,000 hectare (165,600 acre) property consolidated by Troilus Gold, representing one of Quebec’s most exciting gold development opportunities.  Troilus Gold is now the largest claim holder in the Frotet-Evens Greenstone Belt.

Troilus Gold owns the past producing Troilus Mine, adjacent to Troilus North, which produced a reported 2.0 million ounces of gold and 70,000 tonnes of copper between 1996 and 2010.  Troilus Gold acquired Troilus Mine in 2018 with the goal of advancing it back into production.  Emgold has a 1.0% Net Smelter Royalty (“NSR”) on the 11,309 ha (27,945 acre) part of larger land package controlled by Troilus Gold, which Troilus Gold has the option to acquire at any time for C$1.0 million.  Note there are currently nor mineral resources or reserves defined on the Troilus North Property and no guaranteed that any will be delineated in the future, but the geologic structures found at Troilus Mine appear to trend to the northeast onto the Property.       

Summary

Emgold has a 1% NSR interest in the Troilus North Property (“Troilus North” or the “Property”), Quebec.  The Property is located adjacent to the former Troilus Mine, previously operated by Inmet Mining Corporation as an underground and open pit operation.  From 1997 to 2010, Troilus Mine produced more than 2 million ounces of gold and 70,000 tonnes of copper.  The main historic open pit at Troilus Mine is located about two kilometers from the Troilus North Property boundary. 

Troilus Gold Corporation (TSX: TLG), formed in 2018, is completing exploration on the Troilus Mine property with the goal of developing mineral reserves to bring the historic mine back into production.  An NI 43-101 compliant technical report titled “Technical Report on the Troilus Gold-Copper Mine, Mineral Resource Estimate, Quebec, Canada” was completed by Roscoe Postle Associates Inc (RPA) dated January 1, 2019 is available under Troilus Gold’s filing on Sedar.com (the “Troilus Technical Report”).  The Troilus Technical Report outlines an indicated mineral resource of 121.7 million tonnes containing 3.92 million gold equivlant ounces at 1.00 gram per tonne gold equivalent grade and an inferred resource of 36.1 million tonnes containing 1.17 million gold equivalent ounces at 1.17 gram per tonne gold equivalent grade.

Insert link to Troilus Gold Technical Report

Troilus North consists of 209 contiguous claims totaling 11,309 hectares located adjacent to the Troilus Mine property.  Emgold filed a technical report titled, “Troilus North Property, Troilus-Frotet Volcano-Sedimentary Belt, Opatica Geological Sub-province, Quebec, Canada”, prepared for Emgold Mining Corporation by Donald Théberge, P.Eng., MBA, with Effective Date October 10, 2018 (the “Troilus North Technical Report”).   The Troilus North Technical Report summaries historical work done on the Troilus North Property to date, discusses six exploration targets that have been identified for exploration, and recommended exploration work proposed for the Troilus North Property.  One of the main exploration targets identified was the “Troilus Mine Extension”, which was a target identified primarily from geophysics work that shows potential to expand mineralized zones from the adjacent Troilus Gold Property onto the Troilus North Property.

Insert link to Troilus North Technical Reprot

Troilus North is north and adjacent to X-Terra Resources’ (TSX:V XTR), 4,982 ha Troilus East Property and also north of Kenorland Mineral’s 37,840 ha Frotet Project.  Both are exploration stage properties focused on the Frotet-Evans Archean Greenstone Belt.

Note that the location of the Troilus North Property to the Troilus Mine, Troilus East, Frotet, or other properties in the area does not ensure exploration success or discovery of mineral resources and reserves at Troilus North.  Note also that no mineral resources or reserves have yet been delineated at Troilus North. 

Location and Ownership

The Property consists of 209 contiguous claims totaling 11,309 ha located 160 km north of the town of Chibougamau in the province of Quebec. It is in the northwest section of the Val-d’Or mining district within the Frotet-Evans Greenstone Belt.  The Property is easily accessible from regional Trans Taiga road going from Chibougamau to Nemiscau and from a well maintained secondary gravel road to the former Troilus Mine, up to the southern boundary of the Property. 

Troilus Mine and Troilus North Property Location

Source:  Troilus Gold Technical Report by RPA dated January 1, 2019

The combination of the 4,700-hectare Troilus Mine property with the 11,309-hectare Troilus North Property to the north east creates a roughly 16,000-hectare exploration Property and enhances Troilus Gold’s ability to further increase mineral resources and, subject to exploration success and other factors, ultimately bring the Troilus Mine back into production.

Main Troilus Mine Claim Block and Troilus North Claims, January 2019

Source:  Troilus Gold Technical Report by RPA dated January 1, 2019

Mine Troilus Mine Claim Block and Troilus North Property, November 2018

Source:  Troilus Gold Press Release dated November 28, 2018

Troilus Gold is 100% owner of Troilus North, subject to two underlying NSR royalties.  Emgold owns one of the royalties, a 1.0% NSR that can be acquired by Troilus Gold for C$1.0 million at any time.

The history of the ownership of the Property with regard to Emgold and Troilus Gold is as follows: 

1. On May 22, 2018, Emgold announced a Letter of Intent to enter into a definitive Option, Earn-in, and Joint Venture Agreement with Chimata Gold Corporation (TSXV:CAT) giving the Company options to acquire up to 100% interest in the Troilus North Property.
2. On June 27, 2018, the Emgold announced it had received TSX Venture Exchange for the transaction.  Emgold assumed Chimata’s rights and obligations under and underlying Acquisition Agreement between Chimata and a group of underlying vendors (the “Vendors”).
3. On August 13, Emgold announcedan amendment to the Option, Earn-in, and Joint Venture Agreement with Chimata to make a cash and share payment in lieu of future work commitments on the Property.
4. On October 24, 2018, Emgold announced it had completed an Assignment Agreement with Chimata and the Vendors, assigning Chimata’s rights and obligations under the Acquisition Agreement to Emgold and Emgold exercised the underlying option with the Vendors.   The Vendors transferred the Troilus North claims into Emergent's name.  The Vendors retained a 1.5% NSR on the Property and Emgold, with Emgold having the option to acquire 0.5% (1/3^rd) of the NSR at any time by paying the Vendors C$0.5 million.
5. On November 11, 2018, Emgold announced it had received TSX Venture Exchange approval to amend the Option, Earn-in, and Joint Venture Agreement and that it had exercised its options and acquired a 100% interest in the Troilus North Property.  At part of this transaction, Emgold assigned Chimata a 1.0% NSR on the Property, which Emgold retained the option to acquire 0.5% (1/2) of the NSR at any time for C$0.5 million.
6. On November 28, 2018, the Company announced it had signed a Purchase and Sales Agreement with Troilus Gold Corporation to sell its 100% interest in Troilus North.  As a requirement of the transaction, Emgold and Chimata completed a Net Smelter Royalty Agreement whereby Emgold had the right to acquire Chimata’s 1.0% NSR for C$1.0 million at any time.  Emgold and the Vendors completed a second Net Smelter Royalty Agreement whereby Emgold had the option to acquire 1.0% of the NSR up to the date that is 24 months from the beginning of commercial production of precious metals from the Property for C$1.5 million and 1.5% for C$2.0 million.  Once the option period has lapsed, Emgold would have the right to acquire the 1.0% of the royalty for C$2.5 million and 1.5% for C$3.0 million.
7. On December 5, 2018, the sale of Troilus North to Troilus Gold closed.  Troilus assumed the obligations for the royalty agreements with Chimata and the Vendors.  Emgold received C$250,000 in cash and 3.5 million TLG shares.
8. On March 2^nd, 2020, Emgold announced it had acquired the rights to the 1% royalty from Chimata (now called CAT Strategic Metals). 

Geology and Mineralization

The Property is located within the eastern segment of the Archean Frotet-Evans Greenstone Belt, in the Opatica Subprovince of the Superior Province in Quebec. The belt extends for more than 300 km between James Bay and Mistassini Lake, and varies from a few kilometres up to 45 km in width. The belt is divided into two similar volcano-sedimentary domains, west domain and east domain. The east domain is known as the Frotet-Troilus Domain and hosts the Troilus deposit. The Frotet-Troilus Domain is underlain by a supracrustal sequence of submarine mafic volcanic rocks with intercalated cogenetic mafic intrusions.

From west to east, the geology of the Property consists in migmatite with biotite gneiss of the Opatica sub-province, ultramafic pyroxenite/peridotite layer, felsic to intermediary tuffs, and banded mafic and basalt rocks with some felsic to intermediary tuffs and gabbro and the Parker granite. Most of the mineralized occurrences lie in the Volcanoclastic Suite units between the gneiss/migmatite units and the Parker Intrusive.

Geology of the Troilus Mine Area and Troilus North Property

Source:  Troilus Gold Technical Report by RPA dated January 1, 2019

Airborne Magnetics Showing Distinct Magnetic Low Associated with Mineralization

at Troilus Mine and Along the Parker Pluton

  Source:  Troilus Gold Press Release dated November 28, 2018

Resources

Troilus North is an early stage exploration property with no mineral resources or reserves defined at this time that meet CIM or Ni 43-101 Standards of Disclosure.

Mining

No mining activity has occurred on the Property to date.

Metallury

No metallurgical work has been done on the Property to date.

Conclusions

The Troilus North Property is an early stage exploration property.  It is located northeast of the past producing Troilus Mine which hosts a five million plus gold equivalent ounce exploration target based on current indicated and inferred ounces defined in a 2019 Technical Report.  While no mineral resources and reserves have been defined on the Troilus North Property, the geological and geophysical targets identified at the Troilus Mine appear to extend onto the Troilus North Property.  It remains a prospective exploration property requiring further work to potentially develop mineral resources, subject to exploration success.

Qualification

Technical information included on this web page has been reviewed and approved by Robert Pease, CPG, a Qualified Person as Defined by National Instrument 43-101.

References

Technical Report for the Troilus North Property, Troilus-Frotet Volcano-Sedimentary Belt, Opatica Geological Sub-province, Quebec, Canada, prepared for Emgold Mining Corporation by Donald Théberge, P.Eng., MBA, with Effective Date October 10, 2018

Technical Report on the Troilus Gold-Copper Mine, Mineral Resource Estimate, Quebec, Canada completed by Roscoe Postle Associates Inc (RPA) dated January 1, 2019

Troilus Gold Corporation website

DISCLAIMER

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