nts: 12i/01 - newfoundland and labradorgis.geosurv.gov.nl.ca/geofilepdfs/batch2013/012i_0301.pdf ·...

NTS: 12I/01

8th Year Assessment Report: Rock Sampling of Main Vein;

Surface, Adit & Stockpiles

Deer Cove Gold Project, Baie Verte, Newfoundland

Map Staked License: 8014M

Work Performed: June & September, 2009

License

No. Number Claims

Assessment Amount Claimed This Report

8014M 10 $36,690 Prepared By: Charles Dearin, P. Geo. FORTIS GeoServices Ltd. 2 Forest Road, St. John’s, Nfld A1C 2B9 Tel (709) 754-8844 E-mail: [email protected] August 16, 2009 Updated: September 25, 2009

FORTIS GeoServices Ltd.

Tenacity Gold Mining Company Ltd. i 2009 Rock Sampling; Deer Cove Gold Project

TABLE OF CONTENTS Page SUMMARY.............................................................................................................................................. i I. INTRODUCTION

Scope ......................................................................................................................................1 Project Location & Access.....................................................................................................1 Physiography..........................................................................................................................1 Infrastructure ..........................................................................................................................1 Project Ownership & Land Tenure ........................................................................................5 Exploration History ................................................................................................................6 2009 Exploration Work Completed .......................................................................................8 2009 Expenditures..................................................................................................................9

II. GEOLOGY

Property Geology .................................................................................................................11 Property Mineralization........................................................................................................11 Gold Mineralization .............................................................................................................11 Main Vein – Surface Observations ......................................................................................12 Main Vein Adit-Drift Details ...............................................................................................13 2009 Sampling Results.........................................................................................................17

• Surface Sampling – Main Vein...................................................................................17 • Underground Adit Sampling – Main Vein .................................................................17 • Stockpile Sampling .....................................................................................................19 • Stockpile Metallurgical Samples ................................................................................22

III. CONCLUSIONS & RECOMMENDATIONS .....................................................................25 IV. REFERENCES ........................................................................................................................26 List of Figures Figure 1: Location map of the Deer Cove Gold Project, Baie Verte-Ming’s Bight, Newfoundland........2 Figure 2: Claim map of the Deer Cove Gold Project, Baie Verte-Ming’s Bight, Newfoundland. ...........3 Figure 3: Detail property map, Deer Cove Gold Project, Baie Verte, Nfld. .............................................4 Figure 4: Deer Cove surface trench channel samples - gold results Noranda 1987 data........................14 Figure 5: Deer Cove adit back & wall chip-sampling – gold results Noranda 1987 data ......................16 Figure 6: Deer Cove surface trench channel samples – gold results Tenacity Gold 2009 sampling......18 Figure 7: Deer Cove adit back & wall chip sampling – gold results Tenacity Gold 2009 sampling......20 Figure 8: ‘Ore’ stockpiles, trench-cut locations and gold values, Deer Cove Gold Project. ..................21 Figure 9: Metallurgical bulk sample locations from ‘ore’ stockpiles, Deer Cove Gold Project.............24 List of Tables Table 1: Summary & Statistics of Map Staked License 8014M, Deer Cove Project, Baie Verte, Nfld...5 Table 2: Personnel & Contractors Employed on the Deer Cove Project, Baie Verte, Nfld....................10 Table 3: 2009 Expenditures Incurred on License 8014M; Deer Cove Project, Baie Verte, Nfld...........10 List of Appendices Appendix A: Rock Sample Summary Sheet and Assays .......................................................................28

FORTIS GeoServices Ltd. 8th Year Assessment Report.

CindySaunders

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I. INTRODUCTION Scope This compilation is the 8th year assessment report for exploration work completed on the Deer Cove Gold Project during June and September, 2009 by FORTIS GeoServices Ltd. on behalf of Tenacity Gold Mining Company Ltd. of St. John’s, Nfld. The objective of this 2009 work was to resample the Main Vein, both on surface and underground in the adit, to resample the two existing stockpiles and to obtain a representative bulk sample from the stockpiles for possible future metallurgical testing.. The results of this work have confirmed the high-gold values obtained by Noranda’s surface and underground sampling in 1986 and 1987. Project Location & Access The Deer Cove Gold Project is located on the east side of Baie Verte approximately 12-km NE of the town of Baie Verte and about 4-km north of the fishing village of Ming’s Bight, on the Baie Verte Peninsula in northwestern Newfoundland (Figure 1). Baie Verte is linked by a paved road (Route 410) to the Trans-Canada Highway approximately 60 km south of Baie Verte. Deer Lake airport, with daily scheduled flights to and from St. John’s and Halifax-Toronto, is located about 96 km west of Route 410 via the TCH or about 160 road km from Baie Verte (Figure 1). A paved highway from Baie Verte (Routes 414 and 418) connects with the town of Ming’s Bight approximately 25 road-km to the NE. The property is easily accessed by an unmaintained, but currently drivable, 6.5-km long gravel road near Ming’s Bight which cuts through the centre of the Deer Cove Project, passes along the west side of the Goldenville gold zones and ends at the Deer Cove Pond gold zone (Main Vein) and talc deposits near the north end of the Project (Figure 2). PhysiographyPhysiographically the property ranges from sea level to elevations up to 150 m (490 feet) above sea level. Topographic relief is rolling and rugged with numerous two to six metre deep linears; much larger and prominent cliffs ranging from shear 75 to 100 m cliffs to rugged, steep and rolling country exists over the northern part of the Project. Scrub brush and small stunted spruce covers the majority of the property and outcrop makes up less than 10%. Glacial till overburden is generally thin, likely less than one to three metres thick although it may be up to ten metres thick in several of the prominent linear, steep-sided valleys. Winter conditions with moderate to heavy snowfalls usually begin in early to mid-December and remain until early to mid-April. Geophysics and diamond drilling can however be carried out year-round in the area. Infrastructure Infrastructure in the area is well developed with paved roads giving excellent access to all parts of the Baie Verte Peninsula and the Trans-Canada Highway and Deer Lake airport within a one to 1.5 hours drive. A 6.5-km long, unmaintained gravel road near Ming’s Bight cuts through the centre of the entire Deer Cove Project and is adjacent to several gold zones and a large talc deposit on the property. Electrical lines exist along the Ming’s Bight road and a feeder line exists for about 500 metres into the Deer Cove gravel road on the property.

FORTIS GeoServices Ltd. 8th Year Assessment Report

Tenacity Gold Mining Company Ltd. 2 2009 Rock Sampling; Deer Cove Gold Project

Figure 1: Location map of the Deer Cove Gold Project, Baie Verte-Ming’s Bight, Newfoundland.



Figure 2: Claim map of the Deer Cove Gold Project, Baie Verte-Ming’s Bight, Newfoundland.



Figure 3: Detail property map, Deer Cove Gold Project, Baie Verte, Nfld.



At the north end of the property a 230-metre long horizontal adit (with an additional 280 m of drift & crosscut) driven in 1987 along the Main gold-quartz vein provides excellent underground access to the known gold resources (Figure 3). The town of Baie Verte has all amenities for exploration work including tractors, backhoes and diamond drills. Experienced exploration and mining personnel live in most communities in the area. A reliable assay lab is situated in nearby Springdale. The Nugget Pond gold mill, with a capacity of 450 tonnes/day is located approximately 52 road-km east of the Deer Cove Project via the La Scie highway (Figure 1); this mill is currently in a toll-milling contract to process 200,000 tonnes of low-grade ore (~2.8 g Au/t) from the Pine Cove gold deposit up to June 2010. During 2008 Anaconda Mining Ltd. constructed a 500 tpd gold mill at the Pine Cove gold deposit 8.5 km (14.5 road-km) south of Deer Cove. Poor engineering design has resulted in very poor gold recoveries here, however Anaconda is presently working to resolve this problem. The Rambler Mining base metal project and former mill is located 13 road-km south of the Deer Cove Project. The Baie Verte Peninsula has been a significant mining resource community for over 140 years and the region welcomes resource development and mining. Project Ownership & Land Tenure The Deer Cove Gold Project consists of 10 mineral claims (250 hectares) in one Map Staked License issued in May 2001 (Figure 2). The claims are held exclusively by Tenacity Gold Mining Company Ltd. of St. John’s, Nfld; there are no underlying owners or royalty interests in any of the claims. The property is covered on claim map sheet NTS 12I/01. The claim statistics are summarized in Table 1 below. The Crown holds all surface rights and timber rights. The region to the south has been a significant source of logging over the past 60 years however most of the existing timber on the property is small and in general not worth logging. Residents in the area utilize the woods resources for firewood. None of the property or adjacent areas is encumbered in any way and the area is not in an environmentally or archeologically sensitive zone. Table 1: Summary and statistics of Map Staked License 8014M; Deer Cove Gold Project, Baie

Verte, Newfoundland License

No. No. of Claims

Area (ha)

License Issuance Date

Next Report Due Date*

Next Expenditure Required*

8014M 10 250 May 28, 2001 July 27, 2013 $1,332 Note: (*) these dates and expenditure amounts refer to the dates and amounts due after this current report and assessment expenditures, listed in Table 3 below are filed.



Exploration History Mineral exploration and development in the Baie Verte region began in the late 1850’s which resulted in the development and mining of a number of copper deposits. The first copper deposit to be developed and mined (via five shafts) was the Terra Nova deposit in 1860. Within a decade the Tilt Cove and Betts Cove copper deposits on the eastern side of the Baie Verte Peninsula were producing high-grade copper and the area became one of the largest copper producers in the world (Martin, 1983). Significant Cu-Au VMS-type deposits were discovered in the late 1950’s with continuous mine production from 1964 to 1981 at the Rambler Mines located about ten km south of the Deer Cove Project. The largest mining venture in the Baie Verte area was the Advocate asbestos deposit; discovered in 1955 this large deposit (~50 million t) was mined from 1963 to 1987 with production of ~36 million tonnes grading 3.6% short-medium length fibre for ~1.3 million tons of fibre production. A number of small gold prospects were discovered near Ming’s Bight in the 1860’s and short adits were driven on several narrow but high-grade Au-bearing veins at the Barry & Cunningham zones. The Goldenville gold deposit discovered in 1902 near Ming’s Bight became Newfoundland’s first gold mine when it produced approximately 158 ounces of gold in 1904-05 via several shafts and a ten-stamp mill & Wilfley concentrator. This was the last of the gold exploration-development era in the Baie Verte Peninsula until 1985. From the early 1900’s to 1985 only minor exploration work for gold was carried out in the area due to the historically unfavorable political land-mineral claim situation in the Province. Despite the long history of mining and exploration from the early 1860’s in the Baie Verte-Tilt Cove-Rambler region on the Baie Verte Peninsula, there is no record of serious exploration work having been carried out in the Deer Cove-Devil’s Cove area prior to 1985. The following recent exploration work was carried out by Noranda Exploration:

1986: During early May, detailed prospecting by Noranda immediately north of their 1985 grid at Deer Cove Pond located very high-grade gold (10’s to 100’s of ounces/ton in spectacular high-grade grab samples) at the AK-1 / Main Zone (Graves, 1986). • This high-grade gold discovery led to a massive staking program over the entire Baie

Verte-Springdale Peninsulas with Noranda Exploration staking over 3,000 claims during the next three months.

• On the Deer Cove property a grid was cut with detailed geological mapping, prospecting, soil surveys and magnetic and VLF-EM geophysical surveys carried out.

• Continued stripping, trenching and sampling was done and prospecting located dozens of gold, sulfide and intense alteration zones.

• Some 50 holes totaling ~3,800 m were drilled on the Main Zone and several other showings.

1987: The Noranda exploration program was divided into two areas: the Deer Cove and Devil’s Cove Blocks (Gower, 1987). • At Deer Cove additional more close-spaced lines were cut on the 1986 grid with more

infill soil sampling, mag and VLF-EM work done. Preliminary IP surveys were carried out on 10-15 lines on and around the Deer Cove grid.

• Detailed surface trenching, mapping and sampling along the Main Vein on surface was complete.

• The main grid was remapped in greater detail from a structural analysis point of view.



• An additional ~40 holes totaling ~5,100m was done on the Main Zone and several other showings.

• A 507 metre underground exploration adit was completed with detailed face, back, wall and muck sampling done on the Main and AK-2 Zones.

• A new 7.2 km gravel road was constructed from the paved Ming’s Bight road to the Deer Cove Pond adit site.

• Preliminary trenching, diamond drilling and bulk sampling on the Deer Cove talc deposit began.

• On the Devil’s Cove Block regional scale prospecting with reconnaissance flagged lines (100m apart) were soil sampled (50m stations).

• A till and Au-grain analysis is carried out to check it’s effectiveness as a prospecting tool; preliminary results were good to excellent. Although briefly mentioning the placer potential of Deer Cove Valley in their report, no details or results were given (Gower, 1987).

1988: Detailed exploration work continued on both the Deer Cove and Devil’s Cove Blocks (Gower, 1988). • On the Deer Cove Block several more holes are drilled into the Main Zone and several

adjacent showings. • Several untested soil anomalies are trenching and sampled. • A series of holes are drilled into and around the talc deposit for fresh unweathered talc

samples. More detailed talc beneficiation-‘metallurgical’ studies are conducted on some 13 separate drill cores (each ~10m in length). Beneficiation results are excellent (I.M.D. Labs assessment reports; in Gower, 1988) and Noranda classified the Deer Cove talc deposit as “world class”.

• On the Devil’s Cove Block detailed exploration continued on the Norman’s Pond zone. A program of detailed griding (50m spaced lines and 25m spaced stations, totaling 45 km of lines) with prospecting, soil sampling, trenching and IP surveying is carried out over the Norman’s Pond east and west grids.

• Several soil and till anomalies are trenched and two ‘Winkie’ holes are drilled. 1989: Due to drastic funding cut-backs in junior company ‘flow-through-financing’,

exploration work on the Deer Cove and Devils Cove Blocks essentially stops; most of Noranda’s exploration work in the region was partially to fully funded by a number of junior exploration companies controlled by Murray Pezim.

1990-95: Detailed structural studies by the GSC on the Deer Cove, Dorset, Stog ‘er Tight, etc. veins are reported on (Dube, 1990a; Dube et. al., 1992; Dube, 1992; and Belanger, et. al., 1992 & 1996).

1990-2000: Due to very poor gold markets very little to no gold exploration work is carried out along the Baie Verte Brompton Line-Fault; most landholders gradually allow their claims to lapse.

2001: Most of the original Noranda claims in the Deer Cove area expire and C. Dearin immediately stakes the strategic Deer Cove Pond claim block.

2002-2004: Dearin researches, compiles and digitizes all of the Noranda soil sampling, magnetics and VLF-EM surveys over the Deer Cove-Devils Cove area (Dearin, 2003).



2009 Exploration Work Completed During June, 2009 FORTIS GeoServices Ltd. carried out a detailed rock sampling program over a 30 metre strike length of the high-grade Main Vein both on surface and underground. In addition the two lower-grade surface stockpiles were also sampled. During September 2009, FORTIS collected a series of hand-picked bulk samples from the high-grade stockpile for future metallurgical testing. Surface Sampling The surface exposure of the Main Vein was first hand stripped of alders and power washed. Following this the vein was channel sampled with a diamond blade rock saw on lines spaced approximately 1.5 m apart (Figure 6). Sawn channel cuts are approximately 4.5 cm wide and 3.5 cm deep. All sample lines are at right angles to the strike of the vein. Each of the 19 channel cuts began and ended from 0.5 to 3 m on both sides of the vein for continuous cut line lengths up to 4 m across the vein. Individual samples were then cut to represent waste rock and vein material; these samples are generally less than 1.0 m long. Aluminum tags were nailed into the rock at the beginning of each sample. This ~30 m exposed section of the vein was then mapped in detail. A total of 50 rock channel samples were collected (S-19851 to S-19900). Sample locations, results and detailed geological mapping of the vein are shown on Figure 6. Assay results and sample descriptions are located in Appendix A. Underground Sampling The adit, driven by Noranda in 1987, was opened using a backhoe to clean the slumped debris from the wooden portal entrance. Once cleaned, some of the 2” x 10” side timbers were cut to gain direct access to the adit. The entire adit was carefully inspected for back and wall loose rock and continuous oxygen readings were taken through out the 500 m of the adit and drifts. This inspection was done by the Mine Superintendent & Safety Officer from Rambler Mines and the author. Rock ground conditions were excellent with no evidence of loose or rock falls since 1988 when the adit was closed up by Noranda; all oxygen readings were normal at 20.9% O2. Following this inspection, the walls and back of the ~32 m length of the high-grade section of vein was washed and cleaned. Due to most of the back being strapped and screened it could not be properly sampled. Chip channel samples were taken across the vein along the walls where possible. Most samples in the vein were less than 1 m wide and consisted of 2 to 4 chip lines from the back down towards the floor. Near the north end of the vein most of the vein had been slashed out and the walls of the adit were generally barren basalt and gabbro; the entire back in this section was screened and not accessible for sampling. Here the walls were sampled continuously along the west wall. Aluminum tags were nailed into the rock at the beginning of each sample. This section of the vein/adit was then check mapped and compared to Noranda’s original geological mapping. A total of 27 rock chip samples were collected (U-19751 to U-19777). Two additional panel and chip samples (23855 & 23856) across the vein were collected in 2008. Sample locations, results and detailed geological mapping of the vein are shown on Figure 7. Assay results and sample descriptions are located in Appendix A. Stockpile Sampling The two surface stockpiles were trenched using a backhoe. Trenches were placed along the stockpiles at approximately 3 to 5 m apart and cut across the entire width of the piles to depths from 1 to 1.8 m. A total of 13 trench cuts were made. Grab samples were taken in each of the cuts; each sample consisted of random, but near continuous shovels of muck taken over 3 to 6 m lengths per sample from each wall of the cut. These shovels of muck were dumped into a 5 gallon bucket and when full



(~25 to 35 kg) the bucket was dumped and approximately 8-10 kg of random grab sample was taken and put into a sample bag and labeled with an aluminum tag for careful identification. A total of 35 rock grab-muck samples (M-19701 to M-19735) were collected. Sample locations, results and a map of the stockpiles and trench-cuts are shown on Figure 8. Assay results and sample descriptions are included in Appendix A. Metallurgical Sampling All sample rejects and pulps from the above three areas of sampling have been archived for future metallurgical testing. Over 55 channel, chip and muck samples grading between 1.5 and 77 g Au/t and averaging 23 g Au/t have been archived. These samples weigh approximately 400 kg in total from which composite bulk samples of varying grades can be made up for future metallurgical testing. In addition, during September 2009 four separate bulk samples were collected from Trench cuts 1 to 4 in the high-grade stockpile. A total of 18 sub-samples, each weighing 10 to 15 kg (~200 kg in total) (M-19737A-D to 19740 A-F) were carefully hand picked from the high-grade ‘ore’ stockpile for future metallurgical sampling. The four sample locations and results are shown on Figure 9. Assay results and sample descriptions are included in Appendix A. 2009 Expenditures A total of 56 man-days were spent on the Deer Cove Gold Project during the above work with the 2009 program expenditures totaling $36,690. The following Tables 2 & 3 summarize personnel who worked on and expenditures incurred on the Deer Cove Gold Project during June 2009.



Table 2: List of Personnel who worked on the Deer Cove Project; Baie Verte, Newfoundland Name Residence Dates Worked Work Done C. Dearin St. John’s, Nfld June 2009 = 10 days Supervise, sample & mapping C. Dearin St. John’s, Nfld Aug-Sept. 2009 = 10 days Report & map work C. Dearin St. John’s, Nfld Sept. 2009 = 4 days Bulk Sample stockpile D. Dearin St. John’s, Nfld June 2009 = 10 days Sampler D. Dearin St. John’s, Nfld Sept. 2009 = 4 days Bulk Sample stockpile C. Foote Ming’s Bight, NL June 2009 = 8 days Sampler D. Rowsell Miles Cove, NL June 2009 = 5 days Wash & cut channel samples A. Rowsell Miles Cove, NL June 2009 = 5 days Wash & cut channel samples Total Mandays 56 mandays Contractors FORTIS GeoServices St. John’s, Nfld June-August 2009 Supervision, sampling & report Eastern Analytical Springdale, Nfld July & Sept Rock assays SCI Exploration Miles Cove, Nfld June 2009 Wash trench, channel cut samples Barker Construction Baie Verte, Nfld June 2009 Backhoe rental and use Table 3: 2009 Expenditures incurred on License 8014M; Deer Cove Project, Baie Verte, Nfld. Expenditure Item Amount Fees & wages $15,050 Backhoe rental 1,450 Accommodations & expenses 2,695 Vehicle use (truck & ATV), expenses & travel costs 3,855 Equipment rentals (diamond saw, Wajax pump, gen set, Drill, etc.) 1,856 Assays (133 rocks) & supplies 3,848 Report writing & repro 3,150 Overhead @ 15% 4,786

Total 8th Year 2009 Program Costs $36,690



II. GEOLOGY Property Geology The Deer Cove Project is underlain by the upper ophiolite stratigraphy of the Point Rousse Ophiolite Complex and includes pillowed mafic flows, mafic pyroclastics, well-preserved volcaniclastics, sheeted dykes and gabbro in the north and south and extensive ultramafic rocks in the central portion of the property. The Deer Cove thrust fault is a south-verging thrust that separates the ultramafic rocks from the overlying mafics, volcaniclastics and gabbros. This fault is a dominant structural feature on the property and hosts both significant gold deposits/showings and the talc deposit immediately south of and adjacent to the thrust. The structure of the Point Rousse Complex is dominated by moderately to steeply dipping thrust faults that divide the property into a series of discrete, imbricate fault blocks. The strategically positioned thrust faults adjacent to and cutting ultramafic rocks (peridotites and dunites) are conducive to forming serpentinite-talc-carbonate-magnesite altered rocks. Repeated thrust movement and intrusion of hot carbonate-rich fluids into structural fold areas and along faults can lead to a favorable structural and chemical environment conducive to forming and hosting mesothermal type high-grade gold deposits in secondary fault zones as well as lower-grade, disseminated gold deposits in more porous rocks (sediments and volcaniclastics) as occurs at Pine Cove to the south of the Project. Property Mineralization The strategically positioned thrust faults adjacent to and cutting mafic volcanics and ultramafic rocks are conducive to forming both gold deposits and talc-altered rocks. Repeated thrust movement and formation of subsidiary fracture sets in adjacent rocks along with the intrusion of hot carbonate-rich fluids into structural fold areas and along faults can lead to the formation of a variety of gold deposits and high-grade talc deposits. This structural and chemical environment is most conducive to forming and hosting mesothermal type high-grade gold deposits in secondary fault zones as well as lower-grade, disseminated gold deposits in more porous rocks (sediments and volcaniclastics) as at Pine Cove to the south of the Project. Depending on structural attitudes very large volumes of talc and talc-carbonate-magnesite can form. Gold Mineralization At least 25 significant gold zones and showings have been documented on and adjacent to the Deer Cove Gold Project. Gold mineralization on the property occurs in at least three modes as: Low sulfide (3 to <10% pyrite with or without rare traces of chalcopyrite and galena) in quartz

veins in and adjacent to faults cutting mafic volcanics, volcaniclastics and occasionally gabbros. This is the most important type discovered to date on the Project; the Deer Cove Pond Main Vein belongs to this mode. Locally disseminated auriferous pyrite in altered mafic volcanics and volcaniclastics adjacent to

fault-shear zones. A number of such minor gold occurrences have been found on the Deer Cove Project; the best example of this type is the Pine Cove gold deposit (open pitable 2.4 million tonnes grading 2.7 g Au/t) located 8.5 km SW of the Project in altered flows and volcaniclastics. This type of gold mineralization has not been explored for on the Project but could be important in the Deer Cove Pond area where favorable host rocks have been mapped.



Banded iron formation and chemical sediments within the ophiolite mafic flows host the oldest known gold zones in the Project area; the Barry & Cunningham, the Goldenville and the Corkscrew gold zones are of this type.

Main Vein – Surface Observations The most important gold deposit-zone on the Deer Cove Project is the Main Zone (aka: AK-1, Showing 2, etc) (Figure 3). On surface the zone consists of discontinuous lenses of hydrothermally/structurally brecciated quartz vein hosted in a fault-shear structure trending around 0o to 10o north and dipping 45o to 75o west; the quartz filled fracture cuts through carbonatized gabbros, mafic volcanics and coarse grained, well-preserved volcaniclastics (Figure 4). The quartz veining is accompanied by strong hydrobrecciation (?), silicification and sericitization of the wall rocks; a weak, localized carbonate alteration appears to be a later (?) overprint and may postdate the gold mineralization. Mineralization consists of fine to very coarse free gold and auriferous pyrite; no other sulfide minerals have been observed. There is a strong correlation between high pyrite contents (i.e. <10%) and higher-grade gold values. On surface, pyrite averages 1 to <5% in the quartz vein and 2 to <8% in adjacent wallrock; visible gold is very fine and difficult to see. The Main vein has a fairly continuous strike length of over 550 m long, ranges from less than 1 m to over 3 m wide and remains open to the north. Crosscutting structures appear to be common and may aid in forming bonanza high-grade ore shoots (>10 oz Au/t to local pockets of >150 oz Au/t). The key structure controlling the auriferous zones is the northerly dipping Deer Cove thrust which has produced sympathetic tear-type shears and conjugate vein sets during thrusting; these conjugate veins, generally at 90o to the thrust fault are the main gold-bearing veins. Interestingly, local individual strike directions of the quartz vein, ribboning-laminations, stockwork veining, etc are generally at N40o to 65oE, dipping 45o to 70o NW yet the overall vein structure strikes approximately N0o to 10oE. This is likely the conjugate vein direction from the E-W striking thrust fault structure. The Main Zone is tightly isoclinally folded near the basal thrust but is remarkably very continuous along strike and is characterized by pinching and swelling (Figures 4 to 8). It has yet to be determined, but it is likely that the swelling sections of the veins are related to plunging lineations mimicking the thrust structures and if correct this could be important in localizing shoots of high-grade gold. Noranda’s 1987-89 surface drilling into the Main Vein cut veins grading up to 12.3 g Au/t over 11.5m. The breccia type quartz veins contain an average of 3 to <5% pyrite with ranges of trace to locally 15% pyrite. The sulfide content is remarkably simple with generally pyrite-only being present. No other sulfide minerals have been observed by the writer. Auriferous pyrite, often with high gold values (<20 g Au/t) also occurs in the altered host wall rocks within 1 to 1.5 m of the auriferous gold quartz vein; this auriferous wall rock may make up to 10 to 20% of the gold in the Main vein resources. The Main Vein and the adjacent wall rock silicification are enclosed in a broader zone of weak to moderate carbonatization (+/- sericitization). Carbonate alteration is better developed along more intense cleavage within and adjacent to shear zones as opposed to more massive weakly sheared-deformed wall rocks, thereby indicating the importance of shear zones in focusing fluid flow. The carbonate alteration is most intense and widest in the chlorite schist adjacent to the Deer Cove thrust.



In 1986 after discovering extremely high-grade gold (hand samples with 10-15% native gold) in an outcropping quartz vein, Noranda hand-stripped and power-washed the vein for some 30 m along strike. Sawn channel sampling by Noranda both across and along the strike of the vein (see Figure 4) indicated a high-grade gold quartz vein. Of Noranda’s 44 channel samples taken, 36 assayed >1.9 g Au/t and only three samples assayed >30 g Au/t (see Figure 4). In this report the writer has blocked out the surface area of this high-grade part of the Main Vein (S-1 to S-6) and weight averaged the samples based on sample width and also the sample direction to the vein; at right angles a weight of 3 is used and for samples along strike a weight of 1 is used. The three samples assaying >30 g Au/t were cut to 30 g Au/t. This yielded a weighted average of 14.0 g Au/t over an average gold zone width of 2.7 m along a strike length of 29.7 m and covering an area of 79.3 m2 (see Figure 4). The vein was intermittently trenched and stripped along 157 m of strike length north of the 32 m long high-grade section (i.e. from 1+83 N to 3+40N) (Figure 3). While the quartz vein system is present along this entire length it is not as strongly developed as the mineralized and brecciated vein and the adjacent wall rocks are not as strongly silicified.

• A small trench 27 m north of the high-grade portion (i.e. at 2+08N) exposed a strong quartz vein which assayed 4.6 g Au/t over 1.0 m.

• A 67 m long section of the vein 95 m north of the high-grade section (i.e. 2+80N to 3+40N) was stripped and channel-sampled by Noranda in 1987. Here the Main Vein (‘North Extension’) contains erratic but semi-continuous gold values. Over the 67 m strike length eight channel lines, totalling 61 samples, were sawn at right angels to the vein and 75 samples were cut along the strike of the zone; nearly all samples are ~1.0 m in length. Detailed mapping shows the quartz vein to be similar to the Main Vein to the south but much narrower, averaging ~1 m wide, and erratic. The vein pinches and swells locally and does contain minor visible gold at two locations. The vein appears to dip from 35o to 60o to the west and probably averages near 55o west. Gold values in the quartz vein are generally low, ranging from 2 g Au/t to a maximum value of 10 g Au/t and probably averaging 3 to 4 g Au/t over 0.75 to 1.0 m true width. Adjacent to the vein, weakly altered wall rocks carry gold values ranging from 0.25 to 5.0 g Au/t over 2 to 3 m. Of the total 136 samples in vein and altered wall rock only 9 assayed >5 g Au/t with the highest being 10.0 g Au/t over 1.0 m. Using Noranda’s sampling, the gold zone (vein and altered wall rock) averages between 2.2 and 2.8 g Au/t over an approximate average horizontal width of 3.8 m (true width approximately 2.7 m) along 67 m of strike length.

• Based on diamond drilling the Main Vein continues north of section 3+40N for an additional 300 m to at least section 6+50N.

Main Vein Adit-Drift Details The Main Vein adit collared within and at the north end of the intensely sheared section the Deer Cove thrust and in and perpendicular to a chlorite-serpentinite schist shear zone. This shear is a thrust separating mafic volcanics (hyaloclastites) and coarse grained volcaniclastic rocks (with common jasper fragments), all of which form the hanging wall rocks above the Deer Cove thrust. Cleavage in this shear is approximately E-W dipping 45o to 75o north and mimics the attitude of the main Deer Cove thrust. Rock fragments are stretched and flattened parallel to this cleavage direction and the host rocks are strongly carbonatized and locally pyritized; this pyrite is generally nonauriferous. Silicification with pyrite appears to be important for higher-grade gold mineralization in adjacent wall rocks.


S-8S-8

5+75E5+75E

1+50N1+50N

DDH 4 (UG)

Noranda 'mine grid'

Adit back elevation = 79.5 m ASL

"Ore" blocks outline in adit

Surface trench & "ore" blocks outline

Surface elavations in m ASL

Noranda 1987Cut-channel samples- gold in g/t;- lenght as shown.

S-3S-3

S-4S-4

S-2S-2

S-5S-5

S-1S-1

S-6S-6

S-7S-7

U-6U-6

U-1U-1

U-5U-5

U-3U-3

U-4U-4

U-8U-8U-2U-2

U-7U-7

0.10.1

7.0

7.0

1.91.9

6.6

6.6

0.30.3

1.11.1

1.21.2

5.75.7

8.68.6

0.80.8

3.03.0

4.34.3

7.77.7

9.79.7

3.9

3.9

6.76.7

25.525.5

21.821.8

28.828.8

12.812.8

66.966.9

11.2

11.2

29.029.0

10.110.1

15.1

15.1

15.515.5

12.312.3

22.622.6

17.617.6

10.310.3

28.928.9

30.230.2

49.049.0

10.910.9

2558.62558.6

0.50.5

0.80.8

0.10.1 0.10.1

7.0

7.0

0.30.3

0.10.1

11.211.2

1+50N

1+75N

5+75

E

105105

100100

110

110

9595

3344

11

22

77

88

5566

568,500

568,500

568,510

568,510

5,54

0,67

0

5,54

0,67

0

5,54

0,68

0

5,54

0,68

0

5,54

0,69

0

5,54

0,69

0

5,54

0,70

0

5,54

0,70

0

Basalt, massive & altered

Chlorite schist

Qtz bull vn

Qtz vein, bx, py

Qtz-calcite vning

Silic-chlorit py basalt

0 2.5 5

Meters1:100

Tenacity Gold MiningCompany Ltd.

FIGURE 4: Deer Cove Surface Trench Channel Samples - Gold Results

Noranda 1987 DataCompiled By: C. Dearin, P. Geo. May 25, 2009

Note: All high gold values above (3 of 32)cut to 30 g Au/t

All samples are continuous channel cuts4-5 cm wide by 3-4 cm deep; - most samples are 1.0 m long. - assays in g Au/t.

Noranda 1987Trench Sample assays

VG surface

Legend

Noranda 1987-89 DDH's

g Au/t0.1 - 1.01.1 - 3.53.6 - 10.010.1 - 25.025.1 - 2,559

UTM grid = NAD 1927Topo contours in m ASL


The Main Vein occurs as a somewhat irregular banded to laminated (ribbon) to brecciated quartz vein which can be traced nearly continuously for some 200 m underground along the adit-drift back and for over 500 m on surface via trenching and drilling (Figure 3). The vein begins at the footwall contact of the E-W trending Deer Cove thrust fault where the south end of the vein has been dragged, attenuated and folded westerly into the fault; drilling immediately south of here has indicated that the N-S shear structure hosting the vein continues into the E-W shear-thrust zone for possibly 20-30 m to the south. The vein is first intersected in the adit 27 m north of the portal (Figure 3). At this point it has been dragged and attenuated into the E-W shear zone as seen on surface about 22-23 m above the back of the adit. At this south end of the vein and for 30 m to the north (i.e. 1+53N to ~1+80N) the vein is best developed and carries the highest and most consistent gold grades of the entire vein system (Figure 5). This 30 m section is more highly mineralized than the rest of the structure hosting the vein and it contains considerable amounts of visible gold. Six surface drill holes (all NQ) in this 30 m section around and near the adit had an average drill hole grade of 6.24 g Au/t over 3.8 m. Based on initial back sampling of the vein as the adit-drift advanced (11 rounds with preliminary back chip sampling), Noranda calculated the average grade of the vein from this section of the adit to be 14.25 g Au/t over the adit width of 2.9 metres (Gower, 1988); a 229% gold grade increase above the drill hole average grade. However this calculation did not take into account better mapping and later more detailed back sampling at the end of the Noranda program in 1987. A more accurate analysis is given below. Incomplete muck sampling from 10 of the 13 blasted rounds and slashes in this 30 m section averaged 6.3 g Au/t over 3.7 m; over 60% waste dilution occurred in this drifting due to the Main Vein being left in the west wall. Working backwards over the vein width mined, the vein would have averaged about 15.3 g Au/t over the 1.5 m width mined in the drift. The detailed underground back mapping and chip sampling compilation shown in Figure 5 provides a more accurate summary of the high-grade nature of the Main Vein in this section of the adit. Based on detailed underground chip sampling of this section of the vein (115 samples within the gold mineralized zone) the vein averages 11.2 g Au/t over 3.2 m (~3.0 m true width) along 29 m of strike length and covering an area of 90.8 m2. About 30% of this vein length is unexposed in the west wall, however detailed structural mapping indicates the presence of the vein into this wall (see Figure 5). At approximately section point 1+79N, the Main Vein appears to be offset or at least left in the west wall of the adit-drift. At section 1+83N the vein is offset back to the east and incorporated into a ‘mylonitized’ gabbro for about 6 m to the north; gold values here are generally low and erratic (Figure 5). From section 1+79N to the end of the adit-drift at section 3+60N the vein is continuous but erratic, dislocated and pinches and swells (from a few cm to <1.5 m). Back chip sampling along this length of the vein shows the gold tenor to be low, averaging approximately 3.1 g Au/t over 1.0 m along a strike length of ~170 m. However, considerable sections of the vein and mineralized wall rocks were left in one or both walls of the adit-drift, hence the gold zone width is likely wider than this 1.0 m width.


1+75N

1+50N

U-4U-4

U-5U-5

U-6U-6

U-7U-7

U-3U-3

U-8U-8

U-2U-2

U-1U-1

Surface trench & ore outline (blocks)

DDH 4 (UG)DDH 4 (UG)5a5a 7a7a

5c5c

5a5a

5c5c

5c5c

5d,f5d,f

5d,f5d,f

7a7a

22

7a7a

22

5c5c

Back Elevation ASL: ~79.5 mFloor @ 76.5 m.

Noranda 'mine grid'


3344

11

22

77

88

5566

1+50N

1+75N

5+75E

3.03.0

6.7

6.7

4.44.4

1.31.3

3.13.1

0.60.6

1.61.6

6.46.4

1.2

1.2

1.5

1.5

6.16.1

5.25.2

2.02.01.11.1

3.23.2

1.41.4

9.3

9.3

3.73.7

9.69.6

0.80.8

2.32.3

0.70.7

1.0

1.0

4.74.7

2.52.5

7.37.3

6.66.6

6.56.5

2.22.2

2.62.6

5.75.7

5.05.0

4.04.0

5.5

5.5

2.82.8

2.7

2.7

4.14.1

0.20.2

7.17.1

4.64.6

9.89.8

2.12.1

0.50.5

3.93.9

2.42.4

7.87.8

8.68.6

6.9

6.9

8.88.8 7.97.9

0.40.4

0.1

0.1

4.34.3

9.29.2

8.18.1

0.30.3

0.90.9

0.0

0.0

6.36.3

5.95.9

7.47.4

5.85.8

12.812.8

26.126.1

43.143.1

19.419.4

16.416.4

13.613.6

19.219.2

11.111.1

69.769.7

42.642.6

50.350.3

14.514.5

10.610.6

17.5

17.5

40.240.2

22.122.1

13.913.9

10.310.3

18.818.8

11.411.4

41.441.4

11.611.6

15.915.9

27.527.5

26.626.6

13.213.2

35.135.1

127.3127.3

0.20.2

0.0

0.0

0.00.0

0.2

0.2

0.0

0.0

0.60.6

0.80.8

0.00.0

0.00.0

0.0

0.0

0.10.1

2.72.7

0.00.0

0.1

0.1

0.20.2

0.00.0

0.10.1

0.00.0

0.0

0.0

0.00.0

0.00.0

0.00.00.00.0

0.00.0

0.10.1

0.00.0

0.00.0

0.00.0

0.10.1

0.0

0.0

0.50.5

0.20.2

0.0

0.0

2.72.7

0.00.0

0.0

0.0

0.00.0

0.80.8

0.80.8 0.70.7

0.60.6

0.00.0

0.00.0

0.10.1

0.0

0.0

0.30.3

0.00.0

0.00.0

0.00.0

0.0

0.0

0.0

0.0

0.2

0.2

0.0

0.0

0.00.0

0.00.0

0.00.00.10.1

0.0

0.0

0.00.0

0.00.0

0.80.8

0.00.0

0.0

0.0

0.0

0.0

0.30.3

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

6.46.4

0.00.0

0.00.0

1.2

1.2

0.00.0

0.0

0.0

0.60.6

0.00.0

0.0

0.0

0.00.0

0.0

0.0

0.00.0

2.1

2.1

0.50.5

0.0

0.0

0.00.0

0.00.0

0.00.0

0.00.0

0.0

0.0

0.00.0

0.0

0.0

0.10.1

0.10.1

0.0

0.0

2.12.1

0.00.0

0.30.3

0.00.0

0.00.0

0.00.0

0.10.1

0.80.8

0.70.7

0.00.0

0.10.1

0.00.0

0.50.5

0.00.0

0.10.1

0.00.0

0.10.1

0.00.0

0.00.0

0.00.0

0.0

0.0

0.00.0

0.10.1

0.1

0.1

0.00.0

0.00.0

0.00.0

0.0

0.0

0.00.0

0.00.0

0.00.0

0.10.1

0.0

0.0

1.31.3

0.00.0

0.0

0.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

1.51.5

0.0

0.0

0.10.1

0.00.0

0.00.00.

00.

0

0.00.0

0.00.0

0.0

0.0

0.0

0.0

0.00.0

0.00.0

0.00.0

0.00.0

0.10.1

0.10.1

0.0

0.0

0.00.0

0.00.0

0.00.0

0.10.1

0.10.1

0.00.0

0.00.0

0.0

0.0

0.20.2

0.0

0.0

0.00.0

0.0

0.0

0.00.0

2.42.4

0.00.0

0.00.0

0.0

0.0

0.20.2

0.40.4

0.00.0

0.10.1

0.00.0

0.0

0.0

0.00.0

0.00.0

0.0

0.0

0.00.0

0.00.0

0.00.0

0.40.4

0.80.8

2.12.1

0.00.0

0.00.0

0.90.9

0.1

0.1

0.00.0

0.0

0.0

0.00.0

0.00.0

0.00.0

0.10.1

0.00.0

0.0

0.0

0.10.1

0.1

0.1

0.0

0.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

1.21.2

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.1

0.1

0.10.1

0.10.1

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.20.2

0.00.0

0.20.2

0.80.8

0.10.1

0.10.1

0.00.0

0.0

0.0

0.10.1

0.00.0

0.10.1

0.00.0

0.00.0

1.21.2

0.00.0

0.00.0

0.00.0

0.00.0

0.10.1

0.2

0.2

0.0

0.0

0.10.1

4.14.1

3.13.1

0.00.0

0.00.0

0.00.0

0.60.6

0.10.1

0.00.0

0.00.0

9.39.3

0.00.0

0.0

0.0

0.0

0.0

0.0

0.0

0.00.0

0.0

0.0

0.0

0.0

0.10.1

0.10.1

0.00.0

0.0

0.0

0.10.1

0.80.8

0.00.0

0.00.0

0.00.0

0.00.0

0.20.2

0.20.2

0.00.0

0.00.0

0.0

0.0

3.93.9

0.00.0

0.00.0

0.30.3

0.00.0

0.10.1

0.0

0.0

0.00.02.52.5

0.10.1

0.00.0

0.00.0

0.00.0

0.00.0

0.0

0.0

0.10.1

0.00.0

0.20.2

0.00.0

2.5

2.5

11.111.1

0.30.3

0.0

0.0

11.111.1

0.50.5

0.0

0.0

0.60.6

0.00.0

0.20.2

0.00.0

0.00.0

0.10.1

0.00.0

0.00.0

0.00.0

0.00.0

0.10.1

0.00.0

0.00.0

0.20.2

0.30.3

1.41.4

0.00.0

0.00.0

0.40.4

0.00.0

0.00.0

0.0

0.0

0.00.0

0.00.0

0.00.0

3.6

3.6

1.2

1.2

3.33.32.02.0 2.02.0

3.53.5

6.56.5

1.7

1.7

7.17.1

3.4

3.4

2.42.4

0.40.4

0.90.9

7.4

7.4

25.025.0

21.421.4

10.410.4

13.513.5

30.030.0

14.5

14.5

10.610.6

11.811.8

26.026.0

14.214.2

13.713.7

41.3

41.3

80.180.1

10.010.0

10.810.8

22.222.2

25.725.731.931.9

13.813.8

10.510.5

33.133.1

27.127.1

16.216.2

10.210.216.516.5

35.635.6

130.2130.2

121.7121.7

34.734.7

34.734.7

196.1196.116.716.7

0.00.0

0.10.1

0.0

0.0

0.00.0

0.20.2

1.61.6

0.20.2

0.00.0

0.00.0

2.5

2.5

1.11.1

6.76.7

0.0

0.0

1.61.6

0.0

0.00.00.0

0.9

0.9

0.00.0

0.00.0

0.10.1

0.00.0

1.01.0

1.11.1

0.00.00.

00.

0

0.0

0.0

0.00.0

7.97.9

10.610.6

2.12.1

0.00.0

0.00.0

6.96.9

0.70.7

0.90.9

0.10.1

0.00.0

0.0

0.0

0.0

0.0

0.3

0.3

0.10.1

1.11.1

0.00.0

0.00.0

1.21.2

0.40.4

0.00.0

0.00.0

0.00.0

0.0

0.0

0.10.1

0.20.2

0.00.0

0.00.0

0.00.0

0.00.0

0.0

0.0

0.00.0

1.31.3

2.1

2.1

0.00.0

0.10.1

0.00.0

0.00.0

0.1

0.1

0.20.2

0.10.1

0.0

0.0

0.20.2

0.00.0

0.10.1

0.00.0

4.04.0

2.42.4

8.18.1

0.10.1

0.00.0

5.05.0

0.00.0

0.10.1

0.00.0

0.00.0

0.00.0

0.0

0.0

0.00.0

0.10.1

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.0

0.0

7.97.9

0.00.0

0.60.6

0.00.0

0.0

0.0

0.0

0.0

0.00.0

6.96.9

0.0

0.0

2.62.6

1.3

1.3

0.0

0.0

0.00.0

6.46.4

0.00.0

0.00.0

0.00.0

0.00.0

2.52.5

0.1

0.1 0.

00.

0

0.00.0

0.00.0

0.0

0.0

0.00.0

0.00.0

0.0

0.0

19.219.2

0.0

0.0

0.00.0

0.00.0

0.00.0

0.00.0

0.0

0.0

0.00.0

0.0

0.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.10.1

0.00.0

0.40.4

0.00.0

0.00.0

0.30.3

0.00.0

0.00.0

0.00.0

0.00.0

0.00.0

0.0

0.0

0.00.0

0.00.0

0.90.9

0.0

0.0

0.0

0.0

0.00.0

0.10.1

0.00.0

0.00.0

3.23.2

0.00.0

0.00.0

0.0

0.0

0.10.1

0.10.1

0.00.0

0.00.0

0.10.1

0.00.0

7.47.4

0.00.0

0.00.0

0.00.0

0.00.0

0.10.1

0.00.0

0.60.6

0.10.1

0.0

0.0

0.20.2

0.50.5

0.00.0

0.0

0.0

0.10.1

0.10.1

0.0

0.0

4.44.4

0.20.2

0.10.1

0.00.0

0.00.0

0.00.0

13.613.6

14.514.5

0.10.1

0.0

0.0

0.00.0

2.72.7

0.00.0

0.0

0.0

0.10.1

0.00.0

0.00.0

0.00.00.00.0

0.0

0.0

0.0

0.0

0.00.0

0.10.1

2.72.7

0.0

0.0

0.00.0

0.30.3

0.00.0

0.00.0

0.30.3

0.00.00.00.0

0.00.0

0.10.1

0.00.0

0.00.0

0.10.1

0.1

0.1

0.10.1 0.50.5

0.00.0

0.0

0.0

0.10.1

0.10.1

0.10.1

0.00.0

0.30.3

568,500

568,500

568,510

568,510

5,54

0,67

0

5,54

0,67

0

5,54

0,68

0

5,54

0,68

0

5,54

0,69

0

5,54

0,69

0

5,54

0,70

0

5,54

0,70

0

1:100

U/G Geology

7a - Qtz vein, bx, py

7d - qtz-calcite vning

7i - epi pods alteration

5a - Basalt, massive & altered

5c - Chlorite schist

5d,f - Tuffs, seds, BIF, jasper

2 - Gabbro

2 myl- gabbro mylonitized


FIGURE 5: Deer Cove Adit Back & WallChip-Sampling - Gold Results

Noranda 1987 DataCompiled by C. Dearin, P. Geo. May 25, 2009

0 2.5 5

Meters1:100

Note: All samples are back and wall samplesValues in g Au/t; all samples are 0.5 m wide.Samples are continuous chips.Detailed face sampling confirms high gold values in back.

LegendNoranda 1987

Adit Back Chip Sample Assays

1.1 - 3.5

3.6 - 10.0

10.1 - 25.0

25.1 - 196.1

0.0 - 1.0 g Au/t

VG underground

Noranda 1987-89 DDH's (surface)

Note: All high gold values above within blocks U-1 to U-7 (18 of 195) cut to 30 g Au/t.


Despite the lower gold grades in this section of the Main Vein (i.e. 1+79N to 3+60N) and similar grades along the surface portion of the vein up-dip, there are areas of higher grades within this low-grade zone. This section of the vein could make up a significant gold resource with a higher gold price in the near future. 2009 Sampling Results Summarized below are the results of the 2009 rock assays from the surface and underground sections of the high-grade Main Vein and of the two ‘ore’ stockpiles. Sample locations are shown on Figures 6, 7, 8 and 9. Sample descriptions and assay results are included in Appendix A. Surface Sampling – Main Vein The 1987 surface trench over the high-grade section of the Main Vein was hand stripped and power washed to better expose the vein. Once cleaned sample lines were marked up every 1.5 m apart and at right angles to the strike of the vein. A total of 19 separate lines were marked (Figure 6). A diamond blade cut-off saw was used for cutting continuous channel samples approximately 4.5 cm wide and 3.5 cm deep. Individual samples are generally 1.0 m wide. One or more samples were cut on both sides of the vein in wall rock. Samples were then cut out with a chisel and bagged and tagged. Sample numbers were marked on aluminum tags, which were placed in each sample bag. Marked aluminum tags were then nailed into the beginning (west side) of each channel cut for future identification. A total of 50 channel samples (S-19851 to S-19900) were taken on 19 separate cut channel lines along approximately 30 m of strike length (Figure 6). Of the 50 samples, 37 were >1.0 g Au/t and 4 were >30 g Au/t. In averaging calculations these high 4 samples were cut to 30.0 g Au/t. The six ‘ore’ blocks (S-1 to S-6) in Figure 6 were weight averaged by width and individual block results are shown in the summary table on Figure 6. Based on these samples, the 30 m strike length of the vein averages 7.7 g Au/t over 2.1 m; this compares to the 1987 Noranda average of 14 g Au/t over 2.7 m. Figure 6 shows the detailed geology of the trench and the location and assay results of all 50 channel samples. Underground Adit Sampling – Main Vein A total of 27 rock chip samples (U-19751 to 19777) were collected along sections of the walls of the adit where the vein remains (Figure 7). All samples were chipped across the vein at right-angles to the dip of the vein using a Hilti demolition drill with a concrete-busting tungsten carbide drill bit in hammer mode. Chipped pieces were collected into a 12”x 20” plastic paint roller tray held directly under the drill bit; this ensured nearly 100% collection of all chips. This worked extremely well and ensured complete chip coverage across the vein. For most samples 2 to 3 lines of chips were taken from near the back down towards the floor of the adit. The majority of the vein as seen in the back of the adit was screened and rock bolted in 1987 and is currently inaccessible for sampling. A visual examination of these screened sections show the vein in the back to be strong and fairly well mineralized; hence the high-grade gold values obtained by Noranda (see Figure 5) appear to be well founded.


S-8S-8

5+75E5+75E

1+50N1+50N

Noranda 'mine grid'

Adit back elevation = 79.5 m ASL


Surface trench & "ore" blocks outline

Surface elavations in m ASL

S-19851S-19851

S-19858S-19858

S-19859S-19859

S-19860S-19860

S-19861S-19861S-19862

S-19862S-19865S-19865

S-19866S-19866 S-19870

S-19870

S-19871S-19871

S-19873S-19873

S-19874S-19874 S-19878

S-19878

S-19879S-19879 S-19883S-19883

S-19884S-19884 S-19886

S-19886

S-19887S-19887 S-19888

S-19888S-19889S-19889 S-19890

S-19890

S-19891S-19891

S-19892S-19892S-19893

S-19893S-19894S-19894

S-19895

S-19895S-19896

S-19896S-19897

S-19897S-19898S-19898

S-19899

S-19899S-19900

S-19900S-19852S-19852

S-19854S-19854

S-19855S-19855

S-19857S-19857

2009 Tenacity Channel samples& gold assays (g/t)

S-3S-3

S-4S-4

S-2S-2

S-5S-5

S-1S-1

S-6S-6

S-7S-7

U-6U-6

U-1U-1

U-5U-5

U-3U-3

U-4U-4

U-8U-8U-2U-2

U-7U-7

1+50N

1+75N

5+75

E

105105

100100

110

110

3344

11

22

77

88

5566

3.73.7

2.32.3

1.91.9

8.98.9

0.20.2

0.10.1

6.76.7

1.51.5

3.43.4

0.90.91.31.3

8.28.2

9.59.5

2.02.0

7.17.1

4.64.6

1.21.2

0.40.4

26.726.7

3.03.0

0.70.7

16.316.3

22.822.8

4.14.1

7.77.7

5.15.1

77.477.4

12.312.3

3.53.5

11.111.19.99.9

3.13.1

7.47.4

35.235.2

0.30.3

29.629.6

7.37.3

59.059.0

15.715.7

33.433.43.53.5

0.90.9

0.10.1

0.40.4

3.43.4

4.14.1

0.70.7

77.477.4

77.477.4

0.10.1

0.20.2

0.10.1

568,500

568,500

568,510

568,510

5,54

0,67

0

5,54

0,67

0

5,54

0,68

0

5,54

0,68

0

5,54

0,69

0

5,54

0,69

0

5,54

0,70

0

5,54

0,70

0

Basalt, massive & altered

Chlorite schist

Qtz bull vn

Qtz vein, bx, py

Qtz-calcite vning

Silic-chlorit py basalt

0 2.5 5

Meters1:100


Note: All high gold values above (4 of 50)cut to 30 g Au/t

All samples are continuous channel cuts4-5 cm wide by 3-4 cm deep; - most samples are 1.0 m long. - assays in g Au/t.

Tenacity 2009Trench Channel Sample assays

VG surface

Legend

Noranda 1987-89 DDH's

g Au/t0.1 - 1.01.1 - 3.53.6 - 10.010.1 - 25.0

UTM grid = NAD 1927Topo contours in m ASL

25.1 - 78

FIGURE 6: Deer Cove Surface Trench Channel Samples - Gold Results

Tenacity Gold Mining 2009Compiled By: C. Dearin, P. Geo. Sept. 23, 2009


Of the 27 chip samples taken, 13 samples assayed >1.0 g Au/t, 7 samples assayed >10 g Au/t and the highest assay was 30.4 g Au/t. Only 4 separate chip sample lines could be obtained across walls hosting the mineralized vein (Figure 7). Weight averaging by sample width, these 4 lines (14 samples) yielded an average grade of 11.2 g Au/t over 2.5 m true width. Noranda’s 1987 back chip sampling, based on 195 samples, averaged 11.2 g Au/t over 3.2 m. Figure 7 shows the detailed back geology of the vein in the adit and the location and assay results of all 27 chip samples. Sample descriptions and assay results are included in Appendix A. Stockpile Sampling In 1988-89 Noranda calculated a low-grade gold resource of approximately 4,275 tonnes grading 3.1 g Au/t in two separate stockpiles near the adit portal (Figures 3 & 8). This resource muck stockpile came from various mineralized rounds along the length of the adit and was initially based on the geologists visual observation of the pyrite content in the blasted muck pile, walls, back and face of various blasted rounds. Grades were latter confirmed and recorded from actual muck and chip samples. Assuming these ‘ore-grading’ rounds were not re-mucked from their original stockpile, the high-grade section of the initial 30 m of the vein must be at the base of the 2 to 3.5 m high stockpile. During 2009, six and seven trench cuts were made across the high-grade and low-grade stockpiles respectively (Figure 8). These cuts were made with a track-mounted backhoe with each cut being made across the width of the pile to a depth of 1 to 2 meters. Random, but near-continuous muck grab samples were taken along one or both walls of the trench cuts with a shovel and dumped in a 5 gallon bucket; none of the sample material was visually observed or selected. Sample lengths range from 3.4 to 6.1 m in length along the trench walls. When the 5 gallon bucket was full (20-25 kg) it was dumped and split into quarters with random grabs taken to fill a plastic sample bag (8-10 kg). All samples were fire assayed (50 gram assay) for gold and silver only. A total of 36 samples were collected with the following results:

• Averaging the 17 samples from the high-grade stockpile yields an average grade of 2.4 g Au/t and 0.2 g Ag/t; Noranda’s 1987 sampling (100’s of muck, wall & backs) averaged ~6.7 g Au/t in 1,275 tonnes.

• Averaging the 19 samples from the low-grade stockpile yields an average grade of 1.1 g Au/t and 0.2 g Ag/t; Noranda’s 1987 sampling (100’s of muck, wall & backs) averaged ~1.6 g Au/t in 3,000 tonnes.

It is now suspected that the initial 30 m of high-grade vein in the adit forms the base of the stockpile and was not sampled by FORTIS due to the shallowness of the 2009 trench cuts. In general, the trench cuts bottomed approximately an average of 1.5 to 2 m above the road base. Figure 8 shows the 13 trench cuts in the two stockpiles and the trench sample locations and grades. Sample summaries and assay results are included in Appendix A.


1+75N

1+50N

U-4U-4

U-5U-5

U-6U-6

U-7U-7

U-3U-3

U-8U-8U-2U-2

U-1U-1

Surface trench & ore outline (blocks)

DDH 4 (UG)DDH 4 (UG)

5a5a

5c5c

5a5a

5c5c

5c5c

5d,f5d,f

5d,f5d,f

22

7a7a

22

5c5c

Back Elevation ASL: ~79.5 mFloor @ 76.5 m.

Noranda 'mine grid'


7a7a

U-1

975

1U

-197

51

U-19752

U-19752

U-1

9753

U-1

9753

U-1

975

4U

-197

54

U-1

9755

U-1

9755

U-1

9765

U-1

9765

U-1

9766

U-1

9766

U-1

9768

U-1

9768

U-1

9764

U-1

9764

U-19762

U-19762

U-19763

U-19763

U-19756

U-19756

U-1975

7U

-19757

U-19758

U-19758U

-19761U

-19761

U-1976

0U

-19760

U-19759

U-19759

10.0

10.0

0.10.1

0.9

0.9

0.0

0.0

0.0

0.0

0.2

0.2

14.4

14.4

0.6

0.6

17.1

17.1

3.23.2

7.07.0

12.812.8

4.24.2

3.13.1

1.71.7

0.10.10.1

0.1

0.00.0

0.00.0

0.00.0

0.10.125.725.7

30.430.4

1.31.3

0.00.0

0.10.1

U-19777U-19777

U-19776U-19776

U-19775U-19775

U-19774U-19774

U-19773U-19773

U-19772U-19772

U-19771U-19771

U-19770U-19770

U-19769U-19769

2009 Tenacity Chip samples& gold assays (g/t)

2385523855

2385623856 7.27.2

19.419.4

21.921.9

U-19767U-19767

1+50N

1+75N

5+75E

3344

11

22

77

88

5566

568,500

568,500

568,510

568,510

5,54

0,67

0

5,54

0,67

0

5,54

0,68

0

5,54

0,68

0

5,54

0,69

0

5,54

0,69

0

5,54

0,70

0

5,54

0,70

0

1:100

U/G Geology

7a - Qtz vein, bx, py

7d - qtz-calcite vning

7i - epi pods alteration

5a - Basalt, massive & altered

5c - Chlorite schist

5d,f - Tuffs, seds, BIF, jasper

2 - Gabbro

2 myl- gabbro mylonitized


0 2.5 5

Meters1:100

Note: All samples are back and wall samplesValues in g Au/t; all samples are 0.5 m wide.Samples are continuous chips.Detailed face sampling confirms high gold values in back.

LegendNoranda 1987

Adit Back Chip Sample Assays

1.1 - 3.5

3.6 - 10.0

10.1 - 25.0

25.1 - 196.1

0.0 - 1.0 g Au/t

VG underground

Noranda 1987-89 DDH's (surface)

Note: All of Noranda high gold values within blocks U-1 to U-7 (18 of 195) cut to 30 g Au/t. FIGURE 7: Deer Cove Adit Back & Wall

Chip-Sampling - Gold ResultsTenacity Gold Mining 2009

Compiled by C. Dearin, P. Geo. Sept 23, 2009


Figure 8: ‘Ore’ stockpiles, trench-cut locations and gold values, Deer Cove Gold Project.



Stockpile Metallurgical Samples A series of 18 hand-picked samples (M-19737 A-D to M-19740 A-F) were collected from four of the trench cuts in the high-grade stockpile for future bench scale metallurgical testing. During this sampling it was not then realized that the ‘high-grade’ muck from the initial 30 m section of the Main Vein in the adit was likely not exposed in the trench cuts but rather formed the basal 1 to 2.5 m of the stockpile. The sampled rock is most likely lower-grade tenor vein material from sections 2+00N to 3+50N in the adit (see Figure 3). Selected hand samples were collected along each of the four trench cuts (Figure 9) and placed in two 5-gallon buckets. Typical ‘ore’ quartz vein and mineralized, altered basalt and gabbro wall rock pieces were visually selected in an attempt to collect a ‘representative’ sample of the gold zone which would assay between 7 and 15 g Au/t. Each of the two 5-gallon buckets contained approximately 20 to 25 kg of ~70-80% brittle, white-grey mineralized quartz vein and 20-30% silicified basalt or gabbro. Once the two 5-gallon buckets were full they were dumped in a pile and each large piece was hammered and broken to 5-10 cm pieces and placed in a 6-gallon bucket. Most of these broken pieces were carefully examined for geology, sulfide content and visible gold. On average, each of the four 6-gallon buckets had selected samples containing quartz and altered wall rock with 8 to 12% fine to very fine grained (<1 mm) pyrite as disseminations and 1-3 mm stringers (especially in wall rocks). No visible gold was observed in any of the selected pieces. Once the 6-gallon bucket was full (40 to 50 kg), it was dumped on a tarpaulin, spread around, washed, photographed and all pieces were randomly selected and put into four separate plastic sample bags (six bags for M-19740 A-F). Sample numbers were marked on an aluminum tag and placed in each bag. At the lab all 18 samples were crushed to –10 mesh with a 200-gram sub-sample selected and pulverized to –100 mesh from which a 50-gram sub-sample was selected for gold fire assay and ICP-11. All 18 sample rejects and pulps will be retrieved and stored for future bench scale metallurgical testing. A total of approximately 180 to 200 kg of coarse (-10 mesh) reject sample is available from these samples. The 18 samples assayed between 1.0 and 7.9 g Au/t and averaged 2.9 g Au/t. This average gold value is much lower than the expected visually estimated grade of 8 to 12 g Au/t; this estimate was based on the visually estimated pyrite content (i.e. 8 to 12% pyrite) of each of the 18 sub-samples. The likely explanation for the lower than expected gold grade are:

• the four main bulk samples were taken from the upper half of the high-grade stockpile which is likely derived from lower-grade muck from the northern section of the adit. The higher-grade muck from the high-grade section of the vein likely forms the base of the high-grade stockpile of which the backhoe did not reach during trenching.

• the gold tenor of the pyrite in this northerly section of the vein/adit is probably only ¼ of the gold tenor of the pyrite in the high-grade section of the vein (i.e. 1+55N to 1+80N) which is adjacent to the main thrust fault. This higher gold tenor is also confirmed by the relative high gold grades obtained from this section of the vein in the 2009 surface and underground vein sampling where the pyrite content averaged between 1 and 3% yet gold values ranged from 7 to 77 g Au/t.



Figure 9 shows the location of the four main samples. Sample locations and assay results are included in Appendix A.



Figure 9: Metallurgical bulk sample locations from ‘ore’ stockpiles, Deer Cove Gold Project.



III. CONCLUSIONS & RECOMMENDATIONS A comprehensive rock-sampling program was carried out on the Main Vein of the Deer Cove Gold Project during June and September, 2009. On surface the Main Vein was channel sampled on 1 to 1.5 m spaced lines. Based on these 50 channel samples the gold zone on surface averages 7.7 g Au/t across 2.1 m (true width) along 30 m of strike length; this compares to Noranda’s 1987 channel sampling (32 samples) which averaged 14.0 g Au/t over 2.7 m wide along 29 m of strike length. The underground adit was opened and the high-grade section of the vein was washed. Four separate lines were chipped across the vein where it was left exposed along the adit walls. Of 27 chip samples taken, 14 samples were in the vein; these weighted samples averaged 11.2 g Au/t over 2.5 m (true width. This compares to Noranda’s 1987 back chip sampling (195 samples) which averaged 11.2 g Au/t over 3.2 m. Significant portions of well mineralized, robust quartz breccia vein- exists in the back of the adit but most of this has been screened and strapped and is not accessible for sampling. Visual observations did confirm good mineralization, which would be reflective of the high-gold numbers obtained by Noranda. Thirteen trenches were cut into the Noranda 1987 high and low-grade stockpiles. Some 36 random muck samples were collected along the trench walls. The high-grade stockpile averaged 2.4 g Au/t based on 17 mucks; this compares to Noranda’s estimated grade of ~6.7 g Au/t. The low-grade stockpile averaged 1.1 g Au/t based on 19 mucks compared to Noranda’s estimate of ~1.6 g Au/t. It is now suspected that the high-grade muck from the initial 30 m section of the vein in the adit forms the base to the stockpile and the trench cuts were not deep enough to reach this. This possibility appears to be confirmed by the significantly lower gold tenor in the well-mineralized quartz material sampled for metallurgical testing (see below). Four of the high-grade stockpile trenches were selectively sampled for bulk sample metallurgical purposes. Four large (~45 kg) samples were broken down into 18 sub-samples weighing ~10 kg each. The 18 samples range in grade from 1.0 to 7.9 g Au/t and average 2.9 g Au/t. These gold values were surprisingly low from the visually estimated average grade of 8 to 12 g Au/t which was expected. These low gold values likely confirm that the high-grade portion of the vein in the adit forms the base to the stockpile and this was not sampled in this exercise. In addition it is likely that the gold tenor of the sulfide rich (i.e. 8 to 12% pyrite) quartz is probably only 25% of the gold tenor of similar mineralized quartz near the main 30 m section of the high-grade Main Vein in the adit. This tenor is also confirmed by the relative high gold grades obtained from this section of the vein in the 2009 surface and underground vein sampling where the pyrite content averaged between 1 and 3% yet gold values ranged from 7 to 77 g Au/t.



IV REFERENCES Belanger, M., Dube, B. & Malo, M., 1996: The Dorset showings: mesothermal vein-type gold occurrences

associated with post-Ordovician deformation along the Baie Verte-Brompton Line, Baie Verte Peninsula, Newfoundland; in Current Research 1996-E; GSC, p. 269-279.

Christie, B J; Dearin, C., 1986: Second year assessment report on geological and geochemical exploration for licence 2664 on claim blocks 4261-4264 in the Five Mile Brook and Six Mile Brook areas on the Baie Verte Peninsula, Newfoundland, Dearin Geological Consulting Ltd., GSN Assessment File 12H/16/0966, 84 pages.

Dearin, C. 1984: Mother Lode gold environments in the Baie Verte, Ming’s Bight, Nippers Harbour, Glover Island (Baie Verte-Brompton Line Fault) and Gander (GRUB Line) areas, Newfoundland; a proposal for staking & prospecting. Priv. Report for South Coast Resources Ltd., Calgary, Alta, 10 p.

Dearin, C. & Jacobs, W., 1987: Preliminary second year assessment report on prospecting and geochemical sampling for License 2664 on claim blocks 4261-4264 in the Baie Verte Highway area on the Baie Verte Peninsula, Newfoundland. Priv. Report for South Coast Resources Ltd. & Marker Res., Calgary, Alta, GSN Assessment File 12H/16/0985, 6 p.

Dearin, C., 2002: First year assessment report (digital compilation) on the Deer Cove Project Gold & Talc Project, Baie Verte. (Map Staked License 8014M); Priv. Report for South Coast Ventures Inc. 14 p.

Dearin, C., 2003: First Year Assessment Report: Digital Geochemical, Geophysical & Geological Compilation; Deer Cove Gold Project, Baie Verte, Newfoundland. Map Staked Licenses: 8014M, 8853M, 9037M, 9056M, 9057M, 9058M & 9059M; Priv. Report for South Coast Ventures Inc. 42 p.

Dearin, C., 2006: Fourth & Fifth Year Assessment Report: Placer Gold-in-Tills Study, Deer Cove Gold Project, Baie Verte, Newfoundland (Map Staked Lic 8014M). Priv. Report for South Coast Ventures Inc. 24 p.

Dube, B., 1990: A preliminary report on contrasting structural styles of gold-only deposits in western Newfoundland. In: Current Research, Part B, GSC, Paper 90-1B, p. 77-90.

Dube, B. & Lauziere, K., 1992: Structural control of the mesothermal Dorset gold showing, Baie Verte Peninsula, Newfoundland. In GAC-MAC Meeting, Atlantic Geoscience Society, Wolfville ’92, Field Excursion Guidebook A-4, p. 53-58.

Dube, B., Lauziere, K., Swinden, S. & Wilson, M., 1992: Gold mineralization in Western Newfoundland. GAC-MAC Meeting, Atlantic Geoscience Society, Wolfville ’92, Field Excursion Guidebook A-4, 82 p.

Evans, D. T. W. & Wells, C., 1998: Epigenetic gold mineralization, Baie Verte Peninsula, Newfoundland; in Current Research; Geological Survey Report 98-01, pages 39-51. GSN Geofile No. NFLD/2646.

Gower, D., 1988: Third year assessment report on geological, geochemical, geophysical, trenching and diamond drilling exploration for licence 2463 on claim blocks 3706-3708 and claims 15001-15010 and licence 2878 on claims 15544-15548 in the Deer Cove Pond, Devils Cove Pond and Mings Bight areas on the Point Rousse Peninsula, Newfoundland. Noranda Exploration Company Ltd., 1498 pages, GSN Assessment File NFLD/1744.

Gower, G; Kriens, J; Wallace, B P., 1988: Fourth year assessment report on geological, geochemical, geophysical, trenching and diamond drilling exploration for licence 3435 on claim blocks 3442, 3706-3708, 3746, 3763, 3786, 15001-15010 and 15544-15548 in the Deer Cove, Devils Cove and Green Cove areas on the Point Rousse Peninsula, Newfoundland, 6 reports; 2044 pages, Noranda Exploration Company Ltd; GSN Assessment File NFLD/1812.

Gower, D., Graves, G., Walker, S. & MacInnis, D., 1991: Lode Gold Mineralization At Deer Cove, Point Rousse Complex, Baie Verte Peninsula; in: Metallogenic Framework Of Base And Precious Metal Deposits, Central And Western Newfoundland [Field Trip 1]; Swinden, H S; Evans, D T W; Kean, B F. Geological Survey of Canada, Open File 2156; pages 165-172. GSN Geofile No. NFLD/2045.

Graves, G., 1985: First year assessment report on geological, geochemical and geophysical exploration for licence 2463 on claim blocks 3706-3708 in the Devils Cove area on the Point Rousse Peninsula, Newfoundland. 60 pages, Noranda Exploration Company. GSN Assessment File NFLD/1490.



Graves, G., 1986: Second year assessment reports on prospecting, trenching, geological, geochemical and geophysical exploration for licence 2463 on claim blocks 3706-3708 and claims 15001-15010 in the Devils Cove and Deer Cove areas on the Point Rousse Peninsula, Newfoundland, 2 reports, 138 pages Noranda Exploration Company; GSN Assessment File NFLD/1512.

Hibbard, J., 1983: Geology of the Baie Verte Peninsula, Newfoundland. Nfld. Dept. Mines & Energy, Min. Dev. Div., Memoir 2, 279 p.

Huard, A., 1990: The Noranda/Impala Stog’er Tight gold deposit. In: Metallogenic framework of base and precious metal deposits, Central & Western Newfoundland. 8th IAGOD Symposium Field Trip Guidebook. GSC, OF 2156, p. 173-177.

MacDougall. C. & MacInnis, D., 1990: The Dorset showing: A structurally controlled lode gold occurrence adjacent to the Baie Verte Line. In: Metallogenic framework of base and precious metal deposits, Central & Western Newfoundland. 8th IAGOD Symposium Field Trip Guidebook. GSC, OF 2156, p. 162-164.

Wells, S., 1989: Fifth year assessment report on geological, geochemical and geophysical exploration for the Deer Cove/Devils Cove project for licence 2471 on claim block 3668 in the Mings Bight area on the Point Rousse Peninsula, Newfoundland. Noranda Exploration Company Ltd., 58 pages, GSN Assessment File 12H/16/1122.

Wells, S; Gower, D; Andrews, C; Newman, L; Turner, D; O'Flaherty, C; Basha, M; Regular, K; Smith, R; Kriens, J. 1989: Report on geological, geochemical, geophysical, trenching and diamond drilling exploration for licence 2471 on claim block 3668 and licence 3435 on claim blocks 3442, 3706-3708, 3746, 3763 and 3786 and claims 15001-15010 and 15544-15548 in the Deer Cove-Devils Cove area, on the Baie Verte Peninsula, Newfoundland, Noranda Exploration Company Ltd., 2 reports, 721 pages; GSN Assessment File NFLD/2825



Appendix A:

2009 Sample Descriptions

and

Assay Analysis

Deer Cove Gold Project Ming’s Bight-Baie Verte, Newfoundland


Tenacity Gold Mining Company Ltd. Deer Cove Main VeinSurface Channel Sampling

1 of 9

SAMPLE Au ppb Ag ppm Width (m)S-19851 77,350 1.0 0.65S-19852 92 0.2 0.45S-19853 1,237 0.2 1.00S-19854 58,956 1.7 0.65S-19855 1,955 0.2 0.80S-19856 7,271 0.4 0.65S-19857 82 0.2 0.50S-19858 22,803 0.9 1.00S-19859 341 0.2 0.50S-19860 2,301 0.2 1.40S-19861 732 0.2 0.70S-19862 3,091 0.4 0.40S-19863 4,080 0.5 0.80S-19864 9,450 0.7 0.90S-19865 8,880 0.6 1.20S-19866 921 0.2 0.40S-19867 9,855 0.6 1.10S-19868 11,125 0.7 1.00S-19869 7,073 0.8 0.90S-19870 1,872 0.2 1.00S-19871 406 0.2 0.80S-19872 29,619 1.5 0.60S-19873 8,240 0.7 1.00S-19874 198 0.3 0.60S-19875 1,490 0.2 1.10S-19876 4,094 0.3 0.70S-19877 3,359 0.4 1.00S-19878 52 0.2 1.50S-19879 946 0.2 1.00S-19880 401 0.2 1.00S-19881 7,395 0.7 0.50S-19882 4,626 0.4 0.60S-19883 156 0.2 1.40



2 of 9

SAMPLE Au ppb Ag ppm Width (m)S-19884 6,676 0.5 1.10S-19885 12,258 0.6 1.00S-19886 1,250 0.2 1.10S-19887 35,181 1.6 0.75S-19888 126 0.2 1.00S-19889 3,446 0.2 0.60S-19890 15,653 1.2 0.60S-19891 724 0.3 0.70S-19892 26,700 2.4 1.00S-19893 33,356 3.0 0.45S-19894 3,466 0.4 0.50S-19895 2,961 0.5 0.85S-19896 3,451 0.4 0.65S-19897 5,110 0.5 0.75S-19898 16,258 1.5 1.00S-19899 3,708 0.3 1.50S-19900 7,745 0.4 0.70

Note: See Figure 6 for sample locations and ve



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Geology3 cuts ~0.3 m apart of qtz vein (50-60%) and altered basalt; 1-3% vfg py. Cuts of 0.4, 0.45 & 1.1 m added as 1 sample.altered basaltaltered basalt with qtz knots & stock work.qtz vein & strong qtz stockwork; dip appears to be 30 W but is steeper.altered basalt/gabbro; 5-8% py with 10-12% locally.qtz vein breccia in altered basalt matrix; <1% py in basaltsheared & knobby basalt cut by a few qtz-carb veinlets; <1% pyqtz vein & stkwrk cutting altered basalt; 1-2% fg py; 1 grain VGaltered & knobby basaltqtz vein breccia with rounded knobs of qtz; silicif basalt; <1% pyknobby chl. Basalt; <1% pysheared basalt (N60E 60NW); silic & weak qtz stkwk parralel to schistosity.silic basalt cut by (80%) qtz vein & stkwrk; hematite alteration; <1% pyqtz vein & knobby stkwrk; good section of vein; few clusters of 5-7% pyqtz vein & knobby stkwrk; vein blowout; 1-3% pyalt basalt; tr pysilicif basalt cut by qtz stringers & stkwrk; fg dissem py 2-4%; possible 1 VG grainsilicif basalt cut by qtz stringers & stkwrk; fg dissem py <2%.silicif basalt cut by qtz stringers & stkwrk; fg dissem py <1%.altered, sheared basalt (N40W 30NE).altered basalt; <1% pysilicif basalt cut by qtz stkwrk; tr-1% vfg pybroken, sheared qtz vein & silicif basalt; tr pysilicif basalt, tr pysilicif basalt; 1-3% py50% silicif basalt 1-2% py and 50% dark grey qtz breccia +/- py.silicif basalt cut by qtz stringers-stkwrk; tr-1% pyknobby silicif-chlor basalt; tr-no pychlor basalt; 1% pychlor basalt; +/- 1% pysilicif basalt with milky lenses qtz vein; <1% py.silicif basalt cut by 60% white qtz veining (N50E 55NW); tr -<1% py.knobby altered basalt; tr py.



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Geologysilicif & chlor basalt; <1% py.Main qtz vein (N50E 40NW), glassy white-grey; tr-<1% pyknobby +/- silicif basalt; tr py.Main (heart of) qtz vein; 1% fg dissem py, +/- VG.silicif-chlor basalt; tr py.silicif basalt cut by brecciated Main vein; `1-2% PY, +/- vfg VG?shear zone-sericite schist with 1-2% rusty py; qtz vein over 0.4m with 1-2% py; contact @ N35E 60NWwell-sheared basalt (N80E 70N); tr-<1% py.very silicified basalt in shear.white massive qtz vein striking N08Esolid qtz vein & chlor-silicif basalt; in thrust fault at N55E 75NWsheared thrust fault & qtz breccia fragments-boudins; tr py.sheared chlor-rich thrust in volcaniclastics; no qtz; tr-no py.0.25m of qtz vein in sheared thrust (N55E 75NW), vuggy; +/- 1% py.20% qtz knobs & boudins in sheared thrust as per 198970.20 m qtz knobs & boudins in sheared thrust; tr-1% py.0.15 m qtz knobs & boudins in sheared thrust; tr-1% py.

vein mapping.


Tenacity Gold Mining Company Ltd. Deer Cove Main VeinUnderground Adit Chip Sampling

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SAMPLE Au ppb Ag ppm Width (m)U-19751 10,000 0.8 1.00U-19752 138 0.2 1.00U-19753 941 0.2 0.75U-19754 26 0.2 0.50U-19755 28 0.2 1.00U-19756 4,214 0.5 1.00U-19757 64 0.2 1.00U-19758 81 0.2 1.00U-19759 12,758 1.3 1.00U-19760 3,055 0.4 1.00U-19761 1,703 0.2 1.00U-19762 3,190 0.4 1.50U-19763 6,995 0.8 1.00U-19764 17,123 1.6 1.20U-19765 160 0.2 0.40U-19766 14,385 1.4 0.85U-19767 21,960 1.2 1.00U-19768 585 0.7 0.90U-19769 58 0.2 1.00U-19770 10 0.2 1.00U-19771 1,265 0.4 1.00U-19772 30,406 2.5 1.00U-19773 25,681 2.3 1.50U-19774 83 0.2 1.00U-19775 34 0.2 1.00U-19776 9 0.2 1.00U-19777 5 0.2 1.00

23855 19,405 1.5 2.0023856 7,240 0.8 2.50

Note: See Figure 7 for sample locations and basamples 23855 & 23856 taken in 2Sample 23855 was made up of 4 li


Tenacity Gold Mining Company Ltd. Deer Cove Main VeinUnderground Adit Chip Sampling

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Geologybanded, laminated (ribbon) quartz vein in sheared mafics (both at N70E 65NW); 5-8% fg py, VG??weak sheared chlor basalt cut by qtz stkwrk (at N70E 70N); 3-5% dissem pysheared chlor basalt cut by very irregular qtz-carb stkwrk; ~15 py.sheared chlor basalt cut by irregular qtz-carb stkwrk (10% or rock); ~15 py.sheared basalt, no qtz veining.silicif shear-thrust fault cut by very hard, silicif grey qtz veining; 3% py.silicif shear-thrust fault cut by very hard, silicif grey qtz veining; 3-5% py.basalt cut by sheared qtz-carb stkwrk; 3-5% pyWell mineralized qtz vein (N80E 75N) & stkwrk with 5-8% py; clusters to 15% py; VG?? In back above 19756.mineralized stkwrk +/- qtz vein with 3-5% py. In back above 19757.weak stkwrk +/- qtz vein with 1-3% py. In back above 19758.sheared (thrust fault) basalt cut by silicif zone & qtz stkwrk; 1-5% dissem fg py.well sheared qtz vein cut by dissem & stringers of pr.massive white qtz & carb vein pieces in thrust remnants; 1-3% py & local clusters to 10% py; +/- VG.sheared thrust fault; 1-3% py.adjacent & down dip of 19765; thrust-sheared strong silicif basalt cut by weak qtz-carb stkwrk; 3-5% py.adjacent & down dip of 19764;sheared silicif basalt; 5-7% pyadjacent & down dip of 19766; sheared silicif basalt; 5-7% pymoderate qtz-carb stkwrk cutting sheared, chl-silicif basalt; veining at N50E 35-50Nweak qtz-carb stkwrk cutting sheared, chl-silicif basalt; 1-3% py.weak qtz-carb stkwrk & veinlets cutting sheared, chl-silicif basalt; 3-5% py; shear & veining @ N40E 50N.Main vein; solid qtz vein-breccia @ N55E 60N; 1-3% py clusters to 10% py; sample from wall; 3 cuts.Strong qtz-breccia vein; few chl vnlets; 8-10% fg brassy py & few 10-15 cm pods py. 3 cuts along wall.chl-schist basalt cut by fg felsic buff dike; minor qtz-carb stkwrk & 1-3% py.chl-schist basalt; 1-2% py.chl basalt & silic dike; only a few qtz-carb stringers; 1-2% fg dissem py.chl basalt & silic dike; only a few qtz-carb stringers; 1-2% fg dissem py.

Very silicif-brittle quartz vein & mylonitized?? Stkwrk; vein & parrallel fabric @ N60E 65-70N; 2-3% pyVery hard-silicif qtz vein breccia, massive & stkwrk; 2-5% py.

ack geology.2008 as checks to Noranda's 1987 sampling lines across the 2.0 m width, from back to floor.


Tenacity Gold Mining Company Ltd. Deer Cove Main VeinHigh and Low-Grade Stockpile Sampling

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High-Grade StockpileSAMPLE Au ppb Ag ppm Width (m) GeologyM-19701 696 0.2 3.4 Trench 1 southM-19702 739 0.2 3.4 Trench 1 northM-19703 750 0.2 3.7 Trench 2 southM-19704 865 0.2 3.7 Trench 2 northM-19705 23,731 0.2 4.3 Trench 3 southM-19706 758 0.2 4.3 Trench 3 middleM-19707 823 0.2 4.3 Trench 3 northM-19708 1,127 0.2 4.3 Trench 4 southM-19709 1,627 0.2 4.3 Trench 4 south middleM-19710 220 0.2 4.3 Trench 4 north middleM-19711 658 0.2 4.3 Trench 4 northM-19712 2,343 0.2 4.0 Trench 5 southM-19713 722 0.2 4.0 Trench 5 middleM-19714 109 0.2 4.0 Trench 5 northM-19715 1,328 0.2 3.7 Trench 6 southM-19716 3,180 0.2 3.7 Trench 6 middleM-19717 1,054 0.2 3.7 Trench 6 northAverage 2,396 0.2

Low-Grade StockpileM-19718 1,106 0.2 5.5 Trench 7 southM-19719 2,065 0.2 5.5 Trench 7 middleM-19720 3,091 0.2 5.5 Trench 7 northM-19721 1,471 0.2 4.6 Trech 8 southM-19722 1,500 0.2 4.6 Trench 8 south middleM-19723 1,153 0.2 4.6 Trench 8 north middleM-19724 1,031 0.2 4.6 Trench 8 northM-19725 2,266 0.2 4.9 Trench 9 southM-19726 1,008 0.2 4.9 Trench 9 south middleM-19727 1,913 0.2 4.9 Trench 9 north middleM-19728 1,179 0.2 4.9 Trench 9 northM-19729 623 0.2 5.5 Trench 10 southM-19730 222 0.2 5.5 Trench 10 middleM-19731 731 0.2 5.5 Trench 10 northM-19732 209 0.2 4.6 Trench 11 southM-19733 231 0.2 4.6 Trench 11 northM-19734 362 0.2 4.3 Trench 12 eastM-19735 485 0.2 4.3 Trench 12 westM-19736 211 0.2 6.1 Trench 13Average 1,098 0.2

Note: See Figure 8 for sample locations.


Tenacity Gold Mining Company Ltd. Deer Cove Main VeinHigh-Grade Stockpile Metallurgical Bulk Samples

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Sample No. Au ppb Au average Ag ppm As ppm Fe % Width (m)M-19737A 3,739 0.5 152 1.81 Trench 1M-19737B 2,292 0.5 156 1.62 ~8 mM-19737C 3,674 0.5 188 1.69M-19737D 3,209 3,229 0.5 153 1.35

M-19738A 1,030 0.5 120 2.21 Trench 2M-19738B 2,974 0.5 238 2.45 ~7 mM-19738C 7,923 0.5 215 1.84M-19738D 2,115 3,511 0.5 128 1.48

M-19739A 1,225 0.5 108 0.87 Trench 3M-19739B 1,410 0.5 132 1.47 ~13 m M-19739C 1,714 0.5 198 2.27M-19739D 3,915 2,066 0.5 214 2.09

M-19740A 2,589 0.5 103 1.50 Trench 4,M-19740B 3,544 0.5 125 1.55 2 & 1M-19740C 1,944 0.5 126 1.75 ~20 mM-19740D 1,731 0.5 153 1.85M-19740E 4,616 0.5 208 2.20M-19740F 2,061 2,748 0.5 138 2.49Average 2,873 0.5 159 1.81

Note: See Figure 9 for Trench cut locations


Tenacity Gold Mining Company Ltd. Deer Cove Main VeinHigh-Grade Stockpile Metallurgical Bulk Samples

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Geology~90 lbs of 70-80% brittle white-grey quartz vein with 8-10-12% vfg (<1mm) dissem. pyrite and 20-30% silicified wallrock with 8-10% dissem & stringer pyrite. No VG seen.Average 8-10% py; expect aver grade of 12-15 g Au/t. HS-19737: Hand spec taken for thin-polished section work; qtz breccia 3-5% py & silic & chlor wallrock frags.

~100 lbs of 75-80% brittle white-grey quartz vein with 3-5-8% vfg dissem py and 20-25% silicif wallrock with 10-20% py. No VG seen. Average of 8% py; expect aver grade of 8-12 g Au/t. HS-19738 A & B: Hand specs for thin section work

~100 lbs of 70-80% white-grey qtz with 2-4% py & 20-30% altered wallrock with 5-7% py. Aver of 5% py; expect aver grade of 5-7 g Au/t.

~125 lbs of 70-80% white to smokey grey quartz vein (2-8% py aver 5%); 20-30% silic wallrock (5-8% py aver 7%). No VG. Expect aver grade ~8-15 g Au/t?

Samples E & F weigh ~10 kg each


Au Fire Assay/Geochem Analysis CertificateClient: Tenacity Gold Mining Company Ltd.Geologist: C. Dearin Eastern Analytical LimitedProject: Deer Cove P.O. Box 187Sample: Rock 403 Little Bay Road

Springdale, NLDskFile: E99301 A0J 1T0 Signed by:______________________

Graham SmithDateIn: June 25, 2009 Phone: 709-673-3909DateOut: July 03, 2009 Fax: 709-673-3408

Email:[email protected] ------------------- -------------- -------------- -------------- -------------- -------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------

SAMPLE Au AgNUMBER ppb ppm

------------------- ------------------- -------------- -------------- -------------- -------------- -------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------M-19701 696 0.2M-19702 739 0.2M-19703 750 0.2M-19704 865 0.2M-19705 23731 0.2M-19706 758 0.2M-19707 823 0.2M-19708 1127 0.2M-19709 1627 0.2M-19710 220 0.2M-19711 658 0.2M-19712 2343 0.2M-19713 722 0.2M-19714 109 0.2M-19715 1328 0.2M-19716 3180 0.2M-19717 1054 0.2M-19718 1106 0.2M-19719 2065 0.2M-19720 3091 0.2M-19721 1471 0.2M-19722 1500 0.2M-19723 1153 0.2M-19724 1031 0.2M-19725 2266 0.2M-19726 1008 0.2M-19727 1913 0.2M-19728 1179 0.2M-19729 623 0.2M-19730 222 0.2M-19731 731 0.2M-19732 209 0.2M-19733 231 0.2M-19734 362 0.2M-19735 485 0.2M-19736 211 0.2U-19751 10000 0.8U-19752 138 0.2U-19753 941 0.2U-19754 26 0.2






------------------- ------------------- -------------- -------------- -------------- -------------- -------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------U-19755 28 0.2U-19756 4214 0.5U-19757 64 0.2U-19758 81 0.2U-19759 12758 1.3U-19760 3055 0.4U-19761 1703 0.2U-19762 3190 0.4U-19763 6995 0.8U-19764 17123 1.6U-19765 160 0.2U-19766 14385 1.4U-19767 21960 1.2U-19768 585 0.7U-19769 58 0.2U-19770 10 0.2U-19771 1265 0.4U-19772 30406 2.5U-19773 25681 2.3U-19774 83 0.2U-19775 34 0.2U-19776 9 0.2U-19777 5 0.2S-19851 77350 1.0S-19852 92 0.2S-19853 1237 0.2S-19854 58956 1.7S-19855 1955 0.2S-19856 7271 0.4S-19857 82 0.2S-19858 22803 0.9S-19859 341 0.2S-19860 2301 0.2S-19861 732 0.2S-19862 3091 0.4S-19863 4080 0.5S-19864 9450 0.7S-19865 8880 0.6S-19866 921 0.2S-19867 9855 0.6






------------------- ------------------- -------------- -------------- -------------- -------------- -------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------S-19868 11125 0.7S-19869 7073 0.8S-19870 1872 0.2S-19871 406 0.2S-19872 29619 1.5S-19873 8240 0.7S-19874 198 0.3S-19875 1490 0.2S-19876 4094 0.3S-19877 3359 0.4S-19878 52 0.2S-19879 946 0.2S-19880 401 0.2S-19881 7395 0.7S-19882 4626 0.4S-19883 156 0.2S-19884 6676 0.5S-19885 12258 0.6S-19886 1250 0.2S-19887 35181 1.6S-19888 126 0.2S-19889 3446 0.2S-19890 15653 1.2S-19891 724 0.3S-19892 26700 2.4S-19893 33356 3.0S-19894 3466 0.4S-19895 2961 0.5S-19896 3451 0.4S-19897 5110 0.5S-19898 16258 1.5S-19899 3708 0.3S-19900 7745 0.4

Au Fire Assay / ICP Geochemistry CertificateClient: Tenacity Gold Mining Co. Ltd.Geologist: C. Dearin Eastern Analytical LimitedProject: Deer Cove P.O. Box 187Sample: Rock 403 Little Bay Road Signed by:______________________

Springdale, NF G. SmithDskFile: E99797 A0J 1T0

(Concentrations in assay rangeDateIn: September 21, 2009 Phone: 709-673-3909 may cause interferences inDateOut: September 30, 2009 Fax: 709-673-3408 associated elements.)

Email:[email protected] ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SAMPLE Au Fe As Mo Zn Cu Sb Ag Pb Co Ni MnNUMBER ppb % ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm

-------------------- -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------M-19737A 3739 1.81 152 1 8 73 5 0.5 5 15 15 332M-19737B 2292 1.62 156 1 5 20 5 0.5 5 10 12 262M-19737C 3674 1.69 188 1 5 40 5 0.5 5 11 13 257M-19737D 3209 1.35 153 1 6 26 5 0.5 5 9 12 295M-19738A 1030 2.21 120 1 5 742 5 0.5 5 16 19 323M-19738B 2974 2.45 238 1 8 73 5 0.5 5 17 19 302M-19738C 7923 1.84 215 1 7 57 5 0.5 5 13 17 329M-19738D 2115 1.48 128 1 4 38 5 0.5 5 10 13 264M-19739A 1225 0.87 108 1 8 24 5 0.5 5 9 12 321M-19739B 1410 1.47 132 1 8 18 5 0.5 5 11 15 316M-19739C 1714 2.27 198 1 8 29 5 0.5 5 18 20 383M-19739D 3915 2.09 214 1 2 20 5 0.5 5 16 18 330M-19740A 2589 1.50 103 1 7 17 5 0.5 5 11 17 333M-19740B 3544 1.55 125 1 3 20 5 0.5 5 10 12 256M-19740C 1944 1.75 126 1 4 32 5 0.5 5 12 13 345M-19740D 1731 1.85 153 1 2 24 5 0.5 5 13 13 329M-19740E 4616 2.20 208 1 7 78 5 0.5 5 14 17 370M-19740F 2061 2.49 138 1 5 22 5 0.5 5 18 16 386

CindySaunders

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See preceding better quality (but unsigned) versions of these certificates.

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