McKenzie Break

Property Description

Monarques Gold has an option to acquire a 100% interest in the McKenzie Break property from Agnico Eagle Mines Limited. The McKenzie Break property hosts a high-grade gold deposit that lies just 40 kilometres north of the Beacon mill and 25 kilometres north of Val-d'Or, Quebec. It consists of nine mineral claims covering a total area of 3.3 km2, and is accessible year-round via Route 397 and a gravel road. The property is also about nine kilometres south of the rail link between Barraute and Senneterre. The property has surface and underground infrastructure, including a ramp providing access to the deposit, 80 metres below surface.

The McKenzie Break deposit has a historical estimate of 813,871 tonnes grading an average 6.63 g/t Au for a total of approximately 173,500 ounces of gold (source: Technical report on the McKenzie Break property, Claude P. Larouche, July 15, 2007). This historical estimate was realized by Placer Dome in 1991 and was calculated using the polygonal method and all the data collected from the green and orange zones and a cut-off grade of 1.70 g/t Au. Close to 60% of those ounces are located in the green zone, which grades an average of 8.49 g/t Au. In 1994, following the drilling of 67 additional holes in high-grade areas identified by Placer Dome’s mineral inventory, Western Quebec Mines performed a new resource estimate for two of the six lenses interpreted. Both lenses were drilled on a tight grid (30 x 30 metres) to optimize the resource estimate. This new calculation, based on the polygonal method and using a cut-off grade of 3,5 g/t Au, shows a historical estimate of 161,348 tonnes grading 10.86 g/t Au, or approximately 56,300 ounces of gold, classified as indicated, and 24,695 tonnes grading 5.23 g/t Au, or approximately 4,200 ounces of gold, classified as inferred (Mannard, 1994). These estimates are not supported by an official technical report. A Monarques qualified person has not performed sufficient work to classify these historical estimates as current mineral resources as defined by NI 43-101, and the Corporation therefore does not consider them as current mineral resources. Although the historical estimates may not be reliable, the Corporation nevertheless believes that they provide an indication of the property’s potential and are relevant for any future exploration program. In order for the historical estimates to become current resources, the Corporation must carry out new drilling on the property, and issue a new mineral resource estimate pursuant to NI 43-101.

A total of 37,750 metres of diamond drilling coming from 258 holes was carried out on the property. Drilling was concentrated on the green and orange zones. Most of the holes were shallow, with an average length of 150 metres per hole.The mineralization consists of multiple narrow veins, some of which are high-grade with a nugget effect.

In addition, metallurgical testing on samples involving gravity separation followed by direct cyanidation yielded a recovery rate of up to 99.5% (Source: Laboratoire LTM, July 2010).