Drumlummon Tailings, Montana

Gold and Silver Property

• Joint venture with Americas Silver Corp. was formed to acquire 400 acres of patented mining claims covering an overall length of about 5 miles and adjacent to Americas Silver Corp’s Drumlummon Mine near Marysville, Montana;
• A 1935 report by L.S. Ropes, a consulting engineer, estimated that there were 800,200 tonnes of tailings, containing 29,500 ounces of gold and 681,500 ounces of silver, for average grades of 1.15 grams per tonne of gold and 26.50 grams per tonne of silver;
• Based on sampling of cuttings from 608.4 metres of 9-inch drill holes, with fire assays of samples, and metallurgical testing of composite tailings samples;
• 2009 Work - limited sampling of shallow, hand-dug pits, and assaying by Spruce gave an average, on 13 samples, of 1.241 grams per tonne gold and 31.77 grams per tonne silver;
• These results are 7% and 20% higher, respectively, than the averages of the samples quoted by Mr. Ropes in his 1935 report, possibly indicating enrichment of near-surface layers by the winnowing effect;
• In 2010, 6 samples were taken from the bottom of five foot pits and assays averaged 1.265 grams per tonne gold and 33.83 grams per tonne silver.