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Goldsource Mines Inc.

Current Program

Goldsource Mines has reached commercial production on Phase I at its Eagle Mountain Gold Project (“Eagle Mountain”) located in Guyana, South America. The Company had defined commercial production as achieving an average minimum of 80% of the 1,000 tonnes per day nameplate capacity and 45% recovery in Falcon gold concentrate over a continuous period of 30 days. The operation achieved this milestone as of June 20, 2016. 

Highlights for Year to Date:

  • Start of commissioning on January 28, 2016.
  • In February and March, re-designed and re-fabricated the mine grizzly and processing gold room.
  • Mined an estimated 17,919 tonnes year to date.
  • Processed an estimated 16,726 tonnes grading 0.76 grams per tonne (“gpt”) gold year to date.
  • Average of 236 tpd processed year to date. So far, for April, an average of 470 tpd has been processed or 47% of nameplate capacity.
  • Estimated 45% gravity recovery for the plant year to date. April recoveries are estimated to have increased to 50%.
  • Estimated 58% gravity recovery from table concentrate year to date. April recoveries are estimated to have increased to 68%.
  • First gold pour on March 6, 2016.
  • Produced 104 ounces of gold year to date.
  • First gold shipment and sale on April 14, 2016 of 81.7 ounces of gold at US$1,240 per ounce with estimated inventory of 22.3 ounces of gold.
  • Estimated 40,000 man-hours worked during commissioning, with no lost time accidents.
  • Commercial Production Announced in Q2 2016 (June 20, 2016).
  • Aggressive Expansion Phases for H2 2016 and 2017 are currently analyzed.
Eagle Mountain Gold Mine Operating Statistics Q1, 2016 Total April 1 - 17
Year to Date Total
Mined tonnes 9,814 8,105 17,919
Processed tonnes at minus 2mm 8,742 7,984 16,726
Average tpd(1) processed 162 470 236
Average estimated grade, gpt 0.76 0.76 0.76
Estimated gravity recovery for plant 40% 50% 45%
Estimated gravity recovery for table 50% 68% 58%
Gold ounces produced at estimated 89% fine 38.1 65.9 104.0
Gold ounces sold 38.1 43.6 81.7

(1)      based on PEA of 25 operating days per month
(2)      All numbers are rounded

During the 30 days prior to announcing commercial production, operations reached a maximum daily throughput of approximately 1,400 tonnes with an estimated average of 900 tonnes. Falcon gravity recovery to concentrate was approximately 50%. For the remainder of 2016, Management will continue to optimize the operation and anticipates a total production of approximately 3,600 ounces of gold for 2016. Starting in Q3, 2016, Eagle Mountain operations plan to implement a second shift as well as begin use of a newly purchased 40 tonne articulating truck to increase throughput from higher grade areas. With the planned expansion of operations, Eagle Mountain is targeting an average throughput of approximately 1,800 tonnes per day.

The processing plant and equipment are currently performing to Management's expectations and the camp site is fully equipped and functional. The Company currently employs 37 staff and contractors at Eagle Mountain. During the commissioning phase, which commenced on January 28, 2016, the Company performed approximately 55,000 man-hours, with one minor lost time accident.

Goldsource plans to release its Q2, 2016 and year to date production results on Monday, July 11, 2016.

The tailings storage facility is expected to be sufficient to support operations for the next six months before expansion is required. In addition, the Company has constructed a clarification pond to reduce water turbidity prior to planned recycling or discharge.

The Company continues to evaluate the potential to utilize low impact intensive cyanide leaching of the gold concentrates to improve the overall gold recovery and production for the Eagle Mountain Gold Project.

The Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects is N. Eric Fier, CPG, P.Eng, and Chief Operating Officer for Goldsource, who has reviewed and approved its contents.

Reserves & Resources

July 2014 Updated Eagle Mountain Resource Estimate
(Cut-off of 0.5 g/t Au)
Au Grade (g/tonne)
Contained Ounces Au
Used in PEA
Fresh Rock
Fresh Rock

Eagle Mountain (2012) and Goldsource (2014) Mineral Resource (0.5 g/t cut-off)
Technical Report Mineral Resource Update, dated November 21, 2012, by ACA Howe; and PEA, June 15, 2014 by ACA Howe.

*Inferred Resources have been estimated from geological evidence and limited sampling and must be treated with a lower level of confidence than Indicated Resources.

Summary of PEA Preliminary Economic Assessment Highlights (Effective date June 15, 2014)

The PEA incorporates a gold price of $1,250 /oz Au. Estimate includes:

  • Pre-tax Internal Rate of Return (“IRR”) of 84% and after-tax IRR of 63%.
  • Cash operating costs, exclusive of sustaining capital, for saprolite mine life averages $480 per ounce gold including a 15% contingency.
  • Total capital costs including all proposed expansions (Phase II, III & IV expansions) and sustaining capital are estimated at $24.2 million.
  • Phase I, pre-production capital costs of $5.9 million including a 15% contingency.
  • Conceptually, the first four years of gold production would be 5,600, 14,400, 21,600 and 28,800 ounces gold, respectively.
  • Life of mine production of estimated 168,700 ounces gold from gravity-only processing at estimated 60% recovery.
  • Inventory of 161,900 oz Au in settlement ponds from gravity-only processing rejects for potential future reprocessing using standard technologies.
  • Not considered in the PEA are the in-situ “fresh-rock” resources of Indicated 2,331,000 tonnes @ 1.52 g/tonne Au containing 114,000 oz and Inferred 13,433,000 tonnes @ 1.13 g/tonne, containing 486,000 oz (both at 0.5 g/t Au cut-off).

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The Company cautions that the PEA is preliminary in nature in that it is based largely 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 PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Management’s production decision for the project is 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 future profitability.