BUCKSKIN RAWHIDE EAST NEVADA

The property is located approximately 40 miles southeast of Fallon, in Mineral County, Nevada, as shown on the Property Location Map. It is in the Rawhide Mining District (formerly known as the Regent Mining District).

Buckskin Rawhide East comprises approximately 835 acres consisting of 52 unpatented mineral lode claims which are under the jurisdiction of the Bureau of Land Management (BLM). Forty of the mining claims associated with the Buckskin Rawhide Property were originally staked by Maurice and Lorraine Castagne in 1994 and 1995. Nevada Sunrise LLC (a private company) staked 6 additional claims in 1995 and 2001. Nevada Sunrise LLC then acquired a 75% interest in the Maurice and Lorraine Castagne claims in 2001, including a carried interest and option to purchase the remaining 25%.

Nevada Sunrise LLC leased, with an option to purchase, the 46 claims to Emgold in 2009. Emgold expanded the Property by staking 6 additional claims in 2011. In 2013, Emgold acquired the 75% Nevada Sunrise interest in the Property and in 2014 acquired the 25% remaining interest from the Estate of Maurice and Lorraince Castagne, consolidating the Property under Emgold ownership with no underlying royalties.

In 2014 (effective date June 1, 2013), Emgold leased Buckskin Rawhide East to RMC. The terms of the agreement are as follows:

• A Lease Term is 20 years.
• Advance royalty payments will be $10,000 per year, paid by RMC to Emgold, with the first payment due at signing and subsequent payments due on the anniversary of the Lease Agreement.
• During the Lease Term, RMC will make all underlying claim fees to keep the claims in good standing.
• RMC will conduct a minimum of US$250,000 in exploration activities by the end of Year 1.
• RMC will conduct an additional minimum of US$250,000 in exploration activities by the end of Year 3, for a total of US$500,000 in exploration activities by the end of Year 3.
• RMC will have the option of earning a 100% interest in the Property by bringing it into commercial production.
• Upon bringing the property into commercial production, RMC will make “Bonus Payments” to Emgold. Bonus Payments will be US$15 per ounce of gold mined from the Buckskin Rawhide East Property when the price of gold ranges between US$1,200 per ounce and US$1,799 per ounce. If the price of gold exceeds US$1,800 per ounce, the Bonus Payment will increase to US$20 per ounce.

After meeting its exploration requirements, should RMC subsequently elect to drop the Property or decide not to advance it, the Property will be returned to Emgold.

On June 1, 2016, RMC and Emgold announced by press release that they had mutually agreed to amend the original Lease Agreement whereby RMC can pay Emgold US$175,000 in seven quarterly payments of US$25,000, starting June 1 2016, to keep the Lease Agreement in good standing. The payments, if made, will be in lieu of completing US$175,000 of exploration work under the lease (RMC had completed US$325,000 in exploration work of the required US$500,000 by the 3rd year of the agreement).

With the lease of Buckskin Rawhide East, RMC consolidated the Denton Rawhide Mine, Regent Property, and Buckskin Rawhide East Property. RMC is currently operating the Denton Rawhide Mine and permitting the operation of a satellite open pit on the Regent Property. RMC plans to explore Buckskin Rawhide East, starting with known exploration targets, with the goal of potentially identifying resources that may, subject to exploration success, permitting, and other factors, become additional satellite deposits of the Denton Rawhide Mine.

Note that proximity of the Buckskin Rawhide East Property to other exploration or mining properties in the area does not mean a resource will be identified or delineated on the Property or satellite deposits ultimately brought into production at Denton Rawhide Mine. However, management believes the presence of similar geology and structures on the properties does increase the potential for exploration success.

Buckskin Rawhide East
Claim Map

HISTORIC EXPLORATION AND MINING ACTIVITIES BY OTHERS

Gold was originally discovered on the Rawhide District in the year 1906. A gold rush in the area led to a number of mining claims being staked, ultimately forming the Regent Mining District (now known as the Rawhide Mining District). The gold rush led to the formation of the town of Rawhide, which grew to a population of 7,000 by 1908, falling back to 500 by the year 1910. By the 1940’s, the town was essentially abandoned.

The Rawhide District was active with mining from 1908-1920, during which time 46,218 fine ounces of gold and 685,901 fine ounces of silver were reportedly produced from the historic mines in the District. From 1921 through 1935, only 2,815 fine ounces of gold and 51,463 fine ounces of silver were reportedly produced from the Rawhide Mining District (Vanderburg, 1937).

More recent exploration at in the Rawhide District, including the Buckskin Rawhide East Property, appears to have begun in 1982. Exploration activities consisted of geologic and alteration mapping, surface rock chip geochemical sampling, geophysics, and reverse circulation drilling, most of which was done by Kennecott Exploration Company. At that time, Kennecott was exploring the entire Rawhide District, eventually discovering and developing the Denton Rawhide Mine. Other companies also conducted reconnaissance exploration in the area.

More recent mining in the Rawhide Mining District began in 1988 with the startup of Kennecott Minerals Company’s Denton Rawhide Mine. The Denton Rawhide Mine was located near the historic town of Rawhide which was where the greatest concentration of historic mine workings had existed. Denton Rawhide Mine was historically owned and operated by Kennecott Minerals Company from 1988 to 2010. Operations at the mine were suspended in May 2003 due to low gold prices but the mine continued to produce gold from existing heap leach pads. In 2010, the Denton Rawhide Mine was acquired by RMC who continued to produce gold from the heap leach pads. In 2012, RMC recommenced mining activities at the mine. The Denton-Rawhide Mine is reported to have produced 1.7 million ounces of gold and 14.1 million ounces of silver from 1990 through 2014 (Source: Nevada Bureau of Mines and Geology Special Publication MI-2014). Buckskin Rawhide West is located three miles west of the Denton Rawhide Mine.

Buckskin Rawhide East is adjacent to the Denton Rawhide Mine and also adjacent to the Regent Property. The Regent Property was acquired by RMC in January, 2013 (source: Pilot Gold Corporation press release dated January 10, 2013). The Regent Property was explored by Kennecott Exploration and Newmont Mining Corporation in the 1980’s and 1990’s with over 580 shallow reverse circulation drill holes drilled. This drilling was used by Kennecott to define a small mineral resource that would be considered non NI 43-101 compliant by today’s standards. Pilot Gold acquired the Regent Property in 2011 and conducted additional exploration, including reverse circulation drilling, prior to selling the property to RMC. RMC is currently completing and Environmental Impact Statement (“EIS”) to permit mining of these resource as a satellite operation of the Denton Rawhide MIne.

Emgold also has the Buckskin Rawhide West Property which is located approximately one mile to the weat of Buckskin Rawhide East. The two properties are separated by the RMC’s Regent Property. Buckskin Rawhide East is leased to RMC, who are conducting exploration with the goal of delineating additional resources that may, subject to exploration success, permitting success, and other factors, become potential satellite deposits of the Denton Rawhide Mine. Kennecott Exploration drilled 80 reverse circulation drill holes on Buckskin Rawhide East in the 1980’s and 1990’s. RMC drilled 22 additional holes on the property in 2013.

Emgold management views Buckskin Rawhide East as a strategic acquisition, given its vincinity to Denton Rawhide Mine and other known targets on the Regent and Buckskin Rawhide West Properties. However, the proximity of the Buckskin Rawhide East Property to other exploration or mining properties in the area does not mean a resource will be identified or delineated on the Property or satellite deposits ultimatly brought into production. However, management believes the presence of similar geology and structures on the various properties does increase the potential for exploration success at Buckskin Rawhide East.

Historic Exploration of the Chicago Mountain and Chicago Gulch

Kennecott completed 351 surface rock chip and grab samples and conducted drilling programs in the Chicago Mountain, Chicago Gulch, and North Buckskin Mountain areas. Cordex Exploration and International All North Resources also evaluated the areas. A total of 416 samples were taken of rock outcrops in the area between Buckskin Mountain and Chicago Mountain and analyzed for gold-silver mineralization. Of these historic surface samples, 105 samples defined an anomalous mineralized zone at Chicago Mountain with grades at or above 0.001 ounce per ton gold, as shown below in Table 1. The mineralized zone is about 4,000 feet long by 400 feet in width (true width unknown).

Of the 80 reverse circulation drill holes on the Buckskin Rawhide Property drilled by Kennecott, 17 were drilled near Chicago Mountain (source of information was Rawhide Mining LLC). Reverse circulation drilling showed anomalous gold values in 10 of 17 holes within the same disseminated gold zone defined by the surface sampling, with mineralization occurring from the ground surface to depths of 165 feet, as shown in Table 2.

Historic Exploration at North Buckskin Mountain

Analysis of historic surface samples and drilling indicate an exploration target also exists at North Buckskin Mountain. The target is approximately 2,000 feet long by 400 feet wide. Kennecott drilled 21 reverse circulation holes in this target area in the 1990’s with 10 encountering structurally controlled mineralization to depths up to 500 feet.

Historic Exploration of the Black Eagle Fault

Kennecott conducted surface sampling along the Black Eagle Fault, a north-south trending structure situated on the west side of Emgold’s claim block, between years 1996 and 2002. Kennecott was exploring for bulk disseminated gold deposits similar to the one found at the adjacent Denton Rawhide Mine. They assayed a total of 125 rock chip and grab samples over a strike length of 5,700 feet in the area of Black Eagle Fault (true width unknown). The average grade of those samples was 0.031 ounces per ton gold.

Kennecott drilled 36 of reverse circulation holes in the area along the Fault, with 20 of those holes showing gold anomalies greater than 0.005 ounces per ton. However, Kennecott was not looking for high grade gold associated with the Black Eagle Fault and their surface sampling and drilling did not focus on vein structures.

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Historic Exploration at Toiyabe

Kennecott also conducted surface sampling and drilling of the Toiyabe Target, in the southwest portion of the Property. This work indicates the presence of a large bulk disseminated mineralized area about 3,000 feet long by 1,200 feet wide (true width unknown) that warrants additional exploration activity.

Use of Historic Information

Historic information includes drilling summaries, assay laboratory reports and geologic descriptions of surface sampling. Details of the sampling methods, handling, and quality control methods are unknown, and the historic drilling results being disclosed cannot be verified. The results, however, are similar to modern exploration results and provide a useful guide for current exploration by Emgold,s geologists.

GEOLOGY AND MINERALIZATION

The Buckskin Rawhide East Property is a volcanic-hosted, structurally controlled, epithermal gold-silver target situated in the Walker Lane gold belt of western Nevada. The Walker Lane is a regional shear zone and known gold trend that has hosted large and small historic and recent gold-silver mines in western Nevada, including mines of the Comstock Lode, Tonopah District and Rawhide District. From 1981 through 2009, mines located in Mineral County that were situated in the Walker Lane gold trend have produced 2.8 million ounces of gold and 56.1 million ounces of silver (Muntean, 2010).

Property geology and mineralization is similar to that of Denton Rawhide Mine. Mineralization is associated with structures from the Walker Lane Basin and Range along with lithologic units and structures of the Rawhide volcanic center. The Buckskin Rawhide East Property is situated adjacent to Denton Rawhide Mine and Regent Properties.

EXPLORATION ACTIVITIES BY EMERGENT AND RMC

Emgold acquired Buckskin Rawhide East in 2011. Emgold’s exploration activity was focused on the Chicago Mountain/Chicago Gulch bulk diseminated exploration target and a new high grade area discovered by Emgold called the Black Eagle high grade vein target (an area in the Black Eagle Fault).

Recent Exploration at Chicago Mountain and Chicago Gulch

Surface sampling by Emgold focused on the Chicago Mountain area and was designed to develop an understanding of the mineralized structures in that area and confirm historic sampling results. Twenty-five rock chip-channel samples, ranging from 6-12 inches in length, were taken from outcrops of bedrock and structures. Five samples were also taken from historic mine dumps. Dry sample weights varied from one to two pounds. A summary of assays from Emgold’s sampling in the Chicago Mountain and Chicago Gulch area is shown in the Table 3 below.

This historic sampling, by Kennecott and others, combined and confirmed with Emgold’s work, has defined a significant northwest trending mineralized zone at Chicago Mountain that is approximately 4,000 feet in length and 400 feet in width (true width unknown). Grades range from an outer lowest grade contour line of 100 parts per billion (0.003 ounce per ton gold) and increase to higher grades of over 2,000 parts per billion (0.06 ounce per ton gold) in the center of the zone.

The sample results and the grade contour map are preliminary in nature and are not conclusive evidence of the likelihood of the occurrence of a mineral deposit. However, the results do justify further exploration of the Property, including core and reverse circulation drilling, for a bulk disseminated gold target.

In 2013, RMC drilled 22 reverse circulation holes at Chicago Mountain and Chicago Gulch totalling 7,100 feet. As part of the lease and option to purchase agreement on the Property, RMC must spend US$500,000 in exploration activities on the Property by June 1, 2016. As RMC is a private company, results from this drilling are currently not made public.

Recent Exploration at the Black Eagle Fault

The Black Eagle Fault is a prominent north-trending structure situated on the west side of Emgold’s claim block. The surrounding bedrock is volcanic and includes latite and vent breccia. The known gold-silver mineralization to date is related to the fault and occurs over a measured strike length of 3,000 feet (and open to extension). Emgold has identified the Black Eagle High Grade Vein Target (the “Target”), in the Black Eagle Fault, which consists of fault gouge, quartz veins, and silicified wall rocks overprinted with iron-manganese oxides. The Target is currently 360 feet in strike length, open to extension, and contains high grade gold. It is interpreted to be a steeply dipping shoot. Lower grade mineralization appears in a halo around this high grade area, representing a lower grade bulk disseminated target about 3,000 feet long by 1,200 feet wide (true width unknown).

Rock chip samples in the mineralized shoot in the Black Eagle High Grade Vein Target are shown in Table 4 below.

To date, Emgold has taken 106 surface rock chip samples along with seven grab samples of historic mine dumps and bedrock along the potential strike of the Black Eagle Fault to date. These results indicate:

• The potential for the presence of low grade bulk disseminated mineralization in the vicinity of the Black Eagle High Grade Vein Target (east and west of high grade zone, which carries low grade gold and silver mineralization). Eighteen samples had grades between 0.010 and 0.039 ounce per ton gold.
• The potential for additional higher grade mineralized zones along the strike of the Black Eagle Fault structure (EBE 11-64, to the north of the high grade zone, with a grade of 0.136 ounce per ton gold and 1.109 ounce per ton silver).
• The potential for mineralized historic waste dumps (see EBE-D, EBE-ST-D, EBE-ST-L, Shaft West, and Shaft North). Three of these five samples had grades greater than 0.100 ounce per ton gold.

A total of 57 samples collected to date had gold grades that were non-detectable or below 0.010 ounce per ton gold, indicating that significant mineralization was not present in all samples, or that the mineralized structure was not sampled.

EMERGENT’S QUALITY ASSURANCE AND QUALITY CONTROL PROGRAM FOR EXPLORATION

Emgold’s quality assurance program and quality control measures for exploration at Buckskin Rawhide were described in the press release dated October 4, 2011 and pertain to all surface geochemical samples taken on the property. Quality control measures include representative sampling, proper numbering, and accurately locating samples in the field both visually on maps and also with a GPS instrument. Samples are transported by the geological staff from the field to Emgold’s office-warehouse facility to assure secure storage, and are then packaged for shipment to the assay laboratory. The Company may also incorporate its own samples as test blanks and assaying standards for analysis. Samples are shipped by Emgold employees or via commercial carriers directly to the assay laboratory for analysis.

Emgold’s Qualified Person Mr. Robert Pease, Chief Geologist of the Company, visits the assay laboratories to review the general sample handling and preparation measures, to make sure they are adequate. The assay laboratory catalogs all samples, maintains complete chain of custody throughout the analytical process, and electronically mails the chain of custody forms to Emgold for review prior to initiating sample preparation. All sample preparation is done at the laboratory by their staff. As part of their quality assurance, the laboratory incorporates assaying standards, test blanks, and duplicate analyses of samples, and includes those results in final reports. The final signed reports complete the chain of custody process. Thus far, no factors have been encountered in sampling programs conducted by Emgold on the Buckskin Rawhide property that would materially affect the accuracy or reliability of Emgold’s sample data or cause loss of confidence in the laboratory. American Assay Laboratories, Inc. of Sparks, Nevada, an independent and adequately certified laboratory, has conducted the laboratory analyses of Emgold’s samples. Samples taken by Emgold were analyzed using standard fire assaying and ICP methods.

DISTRICT EXPLORATION POTENTIAL

The Denton Rawhide Mine, the Buckskin Rawhide East Property, and the Regent Property, are all indications of the exploration potential of the Rawhide Mining District and the potential for discovery of bulk disseminated and high grade vein mineral deposits. Other properties exist with known gold and silver mineralization in the District and the Walker Lane, as shown in the above map.

The Denton Rawhide Mine represents the largest producing mine in the Rawhide District to date. Several exploration targets have been identified in the vicinity of Denton Rawhide Mine and synergy may exist to developed these targets as satellite deposits of the Mine. However, potential exists for discovery stand alone exploration targets that could be developed independently of Denton Rawhide Mine.

While exploration success at the Denton Rawhide or Regent properties does not guarantee success at Buckskin Rawhide East, it does indicate the potential of the Rawhide District for gold-silver discoveries. There may ultimately be potential synergy for exploration, discovery, and development of the properties, given their close proximity. There may also be potential to expand the Buckskin Rawhide West Property or acquire other properties in the area.

RESOURCES AND RESERVES

Buckskin Rawhide East is an early stage exploration property. No NI 43-101 compliant resources have been defined for the property at this time.

MINING

If a resource is delineated by exploration on the Property, the potential might exist for mining of high grade vein zones and bulk minable disseminated gold targets using either open pit or underground mining methods. Selection of mining methods would be subject to additional exploration activity, mining planning and engineering studies, and economic studies.

METALLURGY

If a resource is delineated by exploration on the Property, heap leaching of low grade ore or milling of higher grade ore would be evaluated. RMC operates a heap leach operation at the adjacent Denton-Rawhide Mine. Selection of a metallurgical process would be subject to additional exploration activity, metallurgical test work, and economic studies.

PERMITTING AND ENVIRONMENTAL

The Property is currently an exploration stage project and permits for drilling will be administered by BLM in Carson City, Nevada. Permits for small drilling programs disturbing less than five acres typically can be obtained in about 30 days, although the time can be longer depending on the work load of BLM staff at the time of application. Large programs requiring an Environmental Assessment would take several months to as much as a year, depending on the size and scope of the project.

The Buckskin Rawhide East Property does not appear to be situated close to any restricted areas (such as BLM wilderness areas). The Walker Lake Indian Reservation is situated approximately one mile west of the Buckskin Rawhide West claim block.

The State of Nevada is considered to be one of the best jurisdictions in the world for permitting mining operations. Permitting of a mining operation would be done under the National Environmental Policy Act (NEPA).

CONCLUSIONS

The Buckskin Rawhide East Property is a strategically located property given it location to the Denton Rawhide Mine, Regent Property, and Buckskin Rawhide West Properties, all of which have similar geological structures and mineralogy. That being said, being located adjacent to these adjacent properties does not guarantee exploration success.

Four main exploration targets have been identified on the Property to date, from surface sampling, geologic mapping, and reverse circulation drilling. These targets are:

1. Chicago Mountain/Chicago Gulch;
2. North Buckskin Mountain;
3. Black Eagle Fault (including the Black Eagle High Grade Vein Target); and
4. Toiyabe.

Emgold’s development strategy includes advancing the Buckskin Rawhide East Property in cooperation with RMC, who own the adjacent Denton Rawhide Mine and Regent Property. In 2014 (effective date June 1, 2013), RMC leased the Buckskin Rawhide East Property from Emgold, with the goal of exploring known and new exploratipn targets and potentially defining resources that may, subject to exploration success, permitting success, and other factors, ultimately become satellite deposits of the Denton Rawhide Mine. If RMC is successful in their exploration activities and is able to develop and mine any satellite deposits on the Buckskin Rawhide East Property, they have the option to acquire the Property. At that point, Emgold’s interest will become a royalty interest. The Buckskin Rawhide East Property therefore is a potential path for Emgold to obtain cash flow through royalty payments. Emgold management believes the quickest way to achieve any cash flow from the property would be for RMC to define resources and permit their extraction as satellite operation(s) of the Denton Rawhide Mine.

QUALIFICATION

Emgold’s Qualified Person, Mr. Robert Pease CPG, Chief Geologist of the Company, has reviewed and approved the information on this webpage.

REFERENCES

Muntean, J. L., 2010, Major Precious-Metal Deposits, in the Nevada Mineral Industry 2009: Nevada Bureau of Mines and Geology Special Publication MI-2009.

Muntean, J.L., et. al, 2014, Nevada Bureau of Mines and Geology Special Publication MI-2012.

Vanderburg, W. O., 1937, Reconnaissance of Mining Districts in Mineral County, Nev.: Dept. of the Interior United States Bureau of Mines Information Circular 6941.

DISCLAIMER

Readers are cautioned to review the Disclaimer Page on this website for qualifications that may be applicable to the information contained on this Project Page, including Forward Looking Statements.