Wasamac

Property Description

Monarques Gold holds a 100% interest in the Wasamac property, which includes three mining concessions and 12 mining claims covering a total area of 7.6 km2. The property is located in Beauchastel township at about 15 km west of Rouyn-Noranda, in the heart of the Abitibi gold mining camp in the province of Quebec.

Gold mineralization on the Wasamac property was originally discovered in 1936, and a considerable amount of exploration and development work has been carried out on the property since then. Intermittent production from the Wasamac Mine from 1965 to 1971 totaled approximately 252,920 ounces of gold grading 4.16 g/t Au.

Resource Estimation

The updated mineral resource estimate on the Wasamac deposit was prepared by Tudorel Ciuculescu, M.Sc., P. Geo., Senior Geologist for Roscoe Postle Associates Inc. (RPA) and a qualified person as defined by NI 43-101. The effective date of the estimate is October 20, 2017.

Based on a cut-off grade of 1.0 g/t Au, RPA estimated a resource of 3.99 million tonnes at an average grade of 2.52 g/t Au for 323,300 ounces in the Measured category, and 25.87 million tonnes at an average grade of 2.72 g/t Au for 2,264,500 ounces in the Indicated category. An additional 4.16 million tonnes grading an average grade of 2.20 g/t Au for 293,900 ounces were estimated in the Inferred category. The cut-off grade is based on a gold price of US $1,500 per ounce and assumed operation costs.

The database includes 3,317 holes drilled for various purposes on the property and surrounding area from the 1940s to 2012. Of these, 2,016 holes were used for the resource estimate. The resource holes consist of 288 surface holes with a total length of 122,781 m and 24,613 samples (24,401 m sampled) and 1,728 underground holes with a total length of 36,842 m and 24,018 samples (32,148 m sampled).

Notes:
  1. CIM definitions for mineral resources were used.
  2. Mineral resources were estimated at a cut-off grade of 1.0 g/t Au.
  3. Mineral resources were estimated using a gold price of US$ 1,500 per ounce and an exchange rate of US $0.80 = C $1.00.
  4. A minimum mining width of four metres was used.
  5. A bulk density of 2.8 g/cm³ was used.
  6. Numbers may not add due to rounding.

Gold mineralization is hosted in a number of zones located along the Wasa Shear Zone (WSZ), namely, from west to east, the Main Zone, Zone 1, Zone 2, Zone 3, the MacWin Zone and Zone 4 (see map). The Wildcat Zone occurs off the WSZ to the south of the Main Zone. Historical production from 1965 to 1971 was predominantly from the Main Zone and the upper portion of Zone 1, with a limited tonnage extracted from the Wildcat Zone. Zone 2 was partially developed but was not mined.

The estimate was supported by a block model and was constrained with mineralized wireframes capturing mineralized intercepts with a nominal grade of 1.0 g/t Au over a minimum thickness of four metres.  Erratic higher-grade samples were capped at 35 g/t Au prior to compositing to two metre intervals. Block gold grade was estimated using an inverse-distance-to-the-power-three (ID3) interpolation method.

The new mineral resource estimate reflects a number of changes, including additional drilling, the exclusion of mineralization previously considered as resources, the addition of new resources, a lower cut-off grade, and the upgrading of Inferred mineral resources to the Indicated category.

The Wasamac property is near a major mining centre in a mining-friendly jurisdiction and benefits from significant infrastructure, including underground openings that could be redeveloped, road access, access to the provincial power grid, and a restored tailings disposal area.

* Source: Technical Report on the Wasamac Project, May 11, 2012, Rouyn-Noranda, Québec, Canada, Jacques Gauthier, ing., Yves Galarneau, ing., Marc Lavigne, M.Sc., ing., Daniel Adam, Ph.D., geo., Stéphane Lance, ing. and Colin Hardie, P. Eng., Roscoe Postle Associates Inc.

Notes:

Mineral resources parameters and estimation methods

The Mineral Resource estimate was done with all the assays results of the 2011 drilling program as of December 1, 2011 and after the reception of a re-interpretation of the continuity of the mineralized bodies in the Wasamac shear zone.

The method and parameters used for the resource estimation were as follows:

  • Interpretation and construction of the 3D envelope of the mineralized zones was done using section and plan views. Mineralized intercepts were coded by zone and all the intercepts, surface DDH, underground DDH and face, were verified.
  • A high grade assay capping value of 35 g/t Au was used as defined in the statistic review done by Belzile Solutions Inc. (“BSI”) in 2010.
  • 2 metre composites were created in all the mineralized intercepts and coded by zone. For the creation of the composites, the software was asked to create them in order to use the whole intercept, so the composite length was adjusted to make all intervals equal.
  • The Mineral Resource was estimated by 3D block modeling (Block dimension of 4 m x 4 m x 5 m wide) with Gems software and using 2 m composites. All of the underground developments and stopes were modeled in three dimensions. All the blocks located inside the stopes and developments were eliminated from the model (tonnage and grade equalled to zero).
  • Grade estimation was done by Ordinary Kriging using parameters based on a statistical study realized by BSI.
  • A density of 2.8 t/m3 was considered for tonnage calculation in mineralized zones. This tonnage factor is consistent with historical records and with the URSTM laboratory’s measurements completed in 2010 and 2011.
  • Grade estimation was verified and compared with an inverse square distance interpolation in Zone 2.
  • Inside the modeled mineralized zones, criteria to define the Mineral Resource was a minimum of 4 m true width with a minimum average grade of 1.5 g/t of gold. This cut-off was established using a gold price of US$1,200/oz. For the Measured and Indicated Resources of the Main Zone and Zone 1, a 10 metre pillar was left around all of the old stopes with the exception of 3 small stopes in the lower part of the Main Zone which were discarded from the Mineral Resources. To calculate the Mineral Resources inside each zone, lines were traced on a longitudinal section (to define blocks with at least a minimum true width of 4 metres and a minimum average grade of 1.5 g/t) and used to clip the blocks. Only the blocks inside the line were put into the Mineral Resources.

Mineralization

The Wasa shear zone runs east-west through the centre of the property. This shear zone, which trends at an azimuth of 265°, has a 50-60° dip to the north and a maximum thickness of 80 metres. To the west, the shear zone splits into two separate branches and becomes thinner, while to the east, the shear zone weakens as well and displays an average thickness of 25 metres. This shear zone is characterized by the development of a strong mylonitic fabric and an intense hydrothermal alteration which completely destroyed the primary structures and textures of the protolith. Mineral assemblages of rocks within the shear zone consist of chlorite, carbonate, hematite, albite and sericite in the middle of the zone. Gold is associated with a dissemination of fine pyrite in the altered portions of the shear zone.