43-101 Report

43-101 Report

Genesis Metals has announced a new resource estimate for the 100% owned Chevrier gold project located near Chibougamau, Quebec. This resource estimate is for both the Main Zone and East Zone on the Chevrier project. The East Zone is located approximately 10 km northeast of the Main Zone. Both zones are located within the Fancamp Deformation Corridor, a major structural break that appears to control the location of gold mineralization.

Highlights

Totals for each category

*Mineral Resource Estimate for a combined pit constrained and underground scenario at a cut-off of 0.3 g/t Au in-pit and 0.95 g/t Au underground

The mineral resource statement for each of the Main Zone and East Zone are presented in Table 1, while assumptions used to derive the optimized pit shells and additional underground mining costs are presented in Table 2. The mineral resources are stated at various gold cut-offs in Table 3 for the indicated resources, and in Table 4 for the inferred resources.

Table 1 Mineral Resource for the Main Zone and East Zone

Indicated Resources1 – Chevrier Project – Effective February 04, 2019

Zone Tonnes Grade
(g/t Au)
Cut-off
(g/t Au)
Contained oz Au
Main Zone Pit Constrained 8,903,000 1.13 0.3 323,000
Main Zone Underground 1,890,000 1.64 0.95 100,000
Total Main Zone 10,793,000 1.22   423,000

Inferred Resources1 – Chevrier Project – Effective February 04, 2019

Zone Tonnes Grade
(g/t Au)
Cut-off
(g/t Au)
Contained oz Au
Main Zone Pit Constrained 1,684,000 1.12 0.3 61,000
Main Zone Underground 4,622,000 1.33 0.95 198,000
Total Main Zone 6,306,000 1.27   259,000
East Zone Pit Constrained 399,000 1.28 0.3 16,000
East Zone Underground 732,000 1.19 0.95 28,000
Total East Zone 1,131,000 1.22   44,000
  1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. The CIM definitions were followed for the classification of Indicated and Inferred Mineral Resources. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as an Indicated Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated Mineral Resource category.

Table 2 Pit Constrained and Underground Assumptions (US$)

Price of gold $1400
CAD:USD Exchange rate 1.25
Open Pit Mining Cost (per ton) $2.20
Processing Cost (per ton) $12.00
G&A Cost (per ton) $2.50
Mill Recovery 95%
Pit Slope (degrees) 50
Underground Mining Costs (per ton) $7.50

Table 3 Indicated Mineral Resources - Chevrier Project – Sensitivities to Cut-off Grade

  Cut-Off Grade
Au g/t
Tonnage
tonnes
Average Au Grade
g/t
Contained Au
ounces
Pit Constrained 0.3 8,903,000 1.13 323,000
0.4 7,684,000 1.26 311,000
0.5 6,602,000 1.39 295,000
Underground 0.9 2,133,000 1.56 107,000
0.95 1,890,000 1.64 100,000
1.0 1,682,000 1.72 93,000
Pit Constrained +
Underground
0.3 PC, 0.9 UG 11,036,0000 1.21 430,000
0.3 PC, 0.95 UG 10,793,000 1.22 423,000
0.3 PC, 1.0 UG 10,585,000 1.22 416,000

Table 4 Inferred Mineral Resources - Chevrier Project – Sensitivities to Cut-off Grade
(Includes Main Zone and East Zone)

  Cut-Off Grade
Au g/t
Tonnage
tonnes
Average Au Grade
g/t
Contained Au
ounces
Pit Constrained 0.3 2,083,000 1.15 77,000
0.4 1,799,000 1.28 74,000
0.5 1,605,000 1.38 71,000
Underground 0.9 5,695,000 1.29 236,000
0.95 5,354,000 1.31 226,000
1.0 4,687,000 1.36 205,000
Pit Constrained +
Underground
0.3 PC, 0.9 UG 7,778,000 1.25 313,000
0.3 PC, 0.95 UG 7,438,000 1.27 303,000
0.3 PC, 1.0 UG 6,770,000 1.29 282,000

The estimate was completed by Marc Jutras, P.Eng., M.A.Sc. of Ginto Consulting Inc. and complies with National Instrument 43-101 (“NI 43-101”) and guidelines developed in 2014 by the Canadian Institute of Mining and Metallurgy (“CIM”). Mr Jutras is a registered professional engineer in the provinces of British Columbia, Quebec and Newfoundland. Geological data were modeled for each of the Main Zone and East Zone by Daniel Gaudreault, P.Eng. of Geologica Inc. Messrs Jutras and Gaudreault are Qualified Persons (“QP”) as defined by NI 43-101 and are independent of Genesis.

The resource estimate was prepared by utilizing Geotic and Vulcan software. Geotic was used to model five sub-zones of the Main Zone and 6 sub-zones of the East Zone. The models resulted in polygons defined by using a 0.3 g/t Au cut-off and geological controls to establish continuity of gold mineralization. Vulcan was employed for grade estimation, block modelling, and pit optimization. Three-dimensional block modelling employed Ordinary Kriging and Inverse Distance squared for interpolation within the Main Zone and Inverse Distance squared for interpolation within the East Zone due to the smaller number of composite samples within the mineralized envelopes of the latter.

For the Main Zone, the drill hole database is comprised of 205 holes with 56,718.7m of drilling. The mineral resource estimate is based on 163 drill holes intersecting the mineralized orebodies with 8,801 1.0m composites. The composites were capped with thresholds selected from the probability plots and a cutting statistics utility for each of the five sub-zones. Variograms were modeled to assess the gold grade continuity of each sub-zone. Gold grade estimates were calculated with ordinary kriging for four of the sub-zones, while inverse distance squared was utilized for the grade estimation of the other sub-zone. A rotated block model (X axis at an azimuth of 43°) was discretized on 5m (strike) x 2.5m (across strike) x 5.0m (vertical) blocks over the area of interest. The estimates were validated and classified based on the gold grade continuity and drill density for the indicated portion.

For the East Zone, the drill hole database is comprised of 34 drill holes with 8,520.1m of drilling and 280 surface channel with 201.5m of sampling. The mineral resource estimate is based on 34 drill holes and 170 surface channels intersecting the orebodies with a total of 643 1.5m composites. The composites were capped for four of the six sub-zones. Variograms were carried out on all data to assess the general continuity of gold grades and to help in dimensioning the search ellipsoids. An inverse distance squared approach was selected for the gold grade interpolation of the six sub-zones. An orthogonal block model was discretized on 5.0m (strike) x 2.5m (across strike) x 5.0m (vertical) blocks over the area of interest. The estimates were validated and classified as inferred.

The resource estimates for the Main Zone and East Zone are constrained within optimized Lerchs-Grossmann constrained pits calculated within Vulcan. Additionally, mineralized material below the optimized open pit shells was considered as amenable to bulk underground mining. The Company believes that the wider intervals of mineralization encountered in drilling at depth would support such a conceptual underground mining method. Relevant underground mining cost assumptions are based on current operating mines.

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