SAKO TARGET

Summary

Seven drill holes comprising a total of 1,087.36 metres have been completed at the Sako Target. The gold-bearing rocks at Sako are a sequence of quartz-sericite-pyrite schists and mylonite and dismembered fragments of banded iron formation with gold-bearing disseminated sulphide accumulations. The target area occupies the axial plane of a large antiform that opens to the west. The felsic schists and mylonites in the fold axis coincide with the Pistol Bay Corridor.

The location and detailed geology and drilling results of the Sako Target are illustrated on the following three maps.

Location of the Sako Target on TMI

Detailed map illustrating the Sako Target in a fold nose in the Pistol Bay Corridor, and the proposed geophysical survey grid

Detailed drilling plan, proposed drill holes, and proposed geophysical grid of the Sako Target

Summary of weighted average grade of gold in drill holes PB-11-13 to 16 and PB-12-01 to PB-12-03 from the Sako Target

Note: Intersection lengths are core lengths and do not necessarily represent the true width of the mineralized zone. Weighted average grades are calculated from assays of drill core with nominal sample lengths of 1.0 metres. The detection limit of the assay method is 0.05 ppm gold. Some of the samples within the intersected lengths reported in the table are below the detection limit and the assay value for those samples used in the weighted average grade calculation is zero. NSV means no significant values, n/a means not applicable.

PB-11-13 had the best drilling intersection in 2011 of 2.00 ppm gold over 6.17 metres. The hole was drilled below an outcrop that contains 1.55 ppm gold in a grab sample of siliceous, sericitized, porphyritic felsic rock, moreover, in the vicinity of PB-11-13, there are a few small outcrops where grab samples were collected that contain up to 4.62 ppm gold from similar rock types and from fragments of banded iron formation.

Three follow up drill holes were completed in 2012. PB-12-01 is an undercut of PB-11-13 and intersected long intervals of low grade gold including 0.24 ppm gold over 50.21 metres and 0.74 ppm gold over 11.26 metres. PB-12-02 was drilled 50 metres east of PB-12-01 and intersected 1.76 ppm gold over 15.53 metres (including 28.60 ppm Au over 0.73 metres) plus 0.43 ppm gold over 28.12 metres. PB-12-03 was drilled 50 metres west of PB-12-01 and intersected three long intersections grading over 0.25 ppm gold including 0.79 ppm gold over 15.49 metres. An interpretation is that the intersected widths and grade of gold encountered in drill holes increases to the east where there has been no drilling and where there are few outcrops.

The SakoTarget is prospective because pyritic, siliceous, gold-bearing rocks have been intersected in drill holes over a strike length of 600 metres and the target coincides with the deformed axial plane of a folded iron formation.

Plan for future exploration work

Because there are few outcrops in the target area, most of the information about the target is from an airborne geophysical survey completed by Northquest in 2012. Given that the target rocks are siliceous and pyritic, follow-up drilling targets can probably be quickly and inexpensively generated by IP/resistivity surveying in order to provide context for the existing drill holes and prioritize new drilling targets with emphasis on following the mineralized trend to the east where it appears to increase in thickness and gold grade.