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Goldsource Mines Inc.

Current Program

Eagle Mountain Gold Project 

The Company’s main focus is its Eagle Mountain Gold Project (“Eagle Mountain”) located on its 100% owned Eagle Mountain Property (the “Property”) which consists of an area of approximately 5,050 hectares (12,480 acres) in central Guyana, South America. 

During Q1 2017 and into May, the following events occurred at Eagle Mountain: 

OPERATIONS 

  • The Krebs cyclone* was installed on February 12, 2017 to improve gold recovery. Initial assay results suggest gold recoveries of 15% to 50%, depending on cyclone parameters and processing feed rates. Work continues to define the optimal operating parameters for both short and long-term planning. 
  • Operations for the pilot gravity plant consist of a feed mix of dry (truck-excavator) and wet mining (Marok pumping). 
  • During the month of April, the main plant averaged an estimated 230 tonnes per day (“tpd”) with an estimated gravity gold recovery of 15% to 30% from lower grade feed material. 
  • In Q2 2017, the Company is intermittently operating the plant at a reduced average rate (below 300 tpd) with subsequent reduction in onsite costs. Operations will continue in this manner until optimum processing parameters run on a consistent basis to support breakeven to positive cash flow in country. Other important reasons for operating are: (1) to further test the Marok system for potential large-scale mining, (2) cyclone optimization and (3) metallurgical test work for PFS. 
  • The high-density polyethylene (“HDPE”) slurry pipeline, to reduce operating downtime, was installed by mid-May. Testing of the HDPE piping is pending based on ongoing mobilization of the Marok system to Pit 6. 
  • As of early May, tailings facility expansion is ongoing and operations are temporarily curtailed until expansion is complete in June 2017. 
  • Gold recovered during testing from January 1, 2017 to May 25, 2017 was 68.28 ounces resulting in revenue of CAD$93,769 (US$70,288), net of royalties. 
  • Capital and sustaining costs spent to date on the Eagle Mountain Phase I pilot plant for testing and optimizing gravity recovery is estimated at $350,010 (US$262,363). 

*the Krebs cyclone is a materials classifier that has been successful at other gravity operations for increasing gold recovery. 

2017 EXPLORATION PLANS 

  • Based on recent and historical drilling data, the Company has defined priority exploration targets within its 5,030 hectare Eagle Mountain Prospecting License. The objective is to expand saprolite resources by completing additional drill holes in the immediate proximity of the known deposit and infill drilling to reclassify Inferred Resources to Measured or Indicated. 
  • The program consists of low-cost drilling for an estimated 75 core holes totaling 1,500 metres and 450 holes with the manual (auger) drills totaling 2,700 metres. The program will take six to eight months to complete (Q4 2017). 
  • A revised updated resource estimate is anticipated in Q4 2017 with a subsequent Preliminary Feasibility Study (“PFS”) to be completed in 2018. 
  • Permitting work will be completed in parallel with the PFS. 
  • The Company anticipates that exploration and operating activities will cost approximately US$120,000 per month, net of revenue. 

The Company’s target is to increase saprolite resources to a minimum of 600,000 ounces grading 1.0 to 1.5 grams per tonne (“gpt”) gold with a strip ratio of less than 1:1 (waste:ore). The Company believes that this will support the completion of a PFS on a low cost large-scale, 4,000 to 5,000 tpd, open pit gravity-cyanidation operation.

Currently, Eagle Mountain gold resources consist of both saprolite and fresh rock mineralization (refer to Technical Report titled "Preliminary Economic Assessment of the Eagle Mountain Saprolite Gold Project, Guyana", dated September 12, 2014 ("PEA)). click here for more details

The saprolite resources only are:

Category Tonnes Gold Grade (gpt)* Contained Ounces Gold
Indicated 1,590,000 1.45 74,100
Inferred** 7,202,000 1.32 305,600

*Estimated at 0.5 gpt cut-off for gold.
**Inferred Resources have been estimated from geological evidence and limited sampling and must be treated with a lower level of confidence than Indicated Resources.

The Company cautions that the PEA is preliminary in nature in that it is based on inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves, and there is no certainty that the results or recommendation of the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Management’s production decision for Eagle Mountain was not based on a feasibility study of mineral reserves demonstrating economic and technical viability. This project has a much higher risk of economic or technical failure and may adversely impact the Company’s projected profits, if any.