2017 Exploration Targets for the Ootsa Project British Columbia

The Company’s 2011 and 2012 exploration programs at the Ootsa Property focused on increasing tonnage and were hugely successful bringing in an overall 885% increase in NI43-101 compliant resources on the project.  Our 2013 exploration program focused on higher grades and removing project risk and resulted in fantastic intersections such as 146.3 metres grading 0.51% Cu and 0.59 g/t Au at East Seel and 103.3 metres grading 0.44% Cu and 0.04% Mo at Ox, and the delineation of pit constrained resources totalling 154 million tonnes in the measured and indicated categories plus 223 million tonnes in the inferred category.  Our 2014 program was focused on delineating the large West Seel deposit on the north side and expanding known zones of higher grade within West Seel.  The 2014 program successfully extended the West Seel deposit over 400 metres down dip to the north, and has added some excellent grades to the northern, central, and southern parts of the deposit, confirming a very significant higher grade core to the system.  Results include hole S14-200 which intersected 207m grading 0.65% Cu Eq. (0.31% Cu, 0.24 g/t Au, 4.45 g/t Ag, 0.034% Mo), including 73m grading 0.96% Cu Eq.  (0.45% Cu, 0.31 g/t Au, 6.32 g/t Ag, 0.059% Mo); hole S14-208 which intersected 308m grading 0.68% Cu Eq. (0.28% Cu, 0.26 g/t Au, 3.50 g/t Ag, 0.046% Mo), including 160m grading 0.93% Cu Eq. (0.38% Cu, 0.41 g/t Au, 4.29 g/t Ag, 0.056% Mo), along with 52m grading 1.21% Cu Eq. (0.44% Cu, 0.64 g/t Au, 5.58 g/t Ag, 0.067% Mo); and hole S14-210 which intersected 668m grading 0.56% Cu Eq. (0.28% Cu, 0.17 g/t Au, 3.34 g/t Ag, 0.033% Mo) including 172m grading 0.89% Cu Eq. (0.39% Cu, 0.29 g/t Au, 4.99 g/t Ag, 0.062% Mo).  The West Seel deposit remains open to the south and southwest and additional exploration in these areas has good potential to increase resources.

As of March 2017 an exploration program and budget for Ootsa has not been determined and will be dependent on market conditions and financing opportunities.  The key exploration targets at Ootsa are summarized below whereas the timing and scope of future exploration activities at these key targets remains to be determined.

Targets Adjacent to the Seel and Ox Deposits
The maps below show the location of the main exploration targets surrounding the Ox and Seel deposits.  The West Ox, East Ox, and Northeast Ox targets are focused on large potentially bulk minable porphyry Cu-Mo-Ag systems.  The North Damascus and East Damascus targets are focused on potential bulk minable gold systems, and the Damascus Target is a known high grade silver vein systems with considerable historic drilling.

Location of the main exploration targets around the Ox and Seel deposits.

Induced Polarization (IP) geophysical surveys have proven very effective in identifying the large sulfide systems associated with porphyry style mineralization on the Ootsa property.  The IP map below shows the location of the Seel and Ox deposits and the associated chargeability highs associated with each.    There is a large chargeability anomaly located west of the Ox deposit, termed West Ox, and another east of the Ox deposit termed East Ox.  Together these anomalies form an east-west trend of chargeability highs termed the Ox Trend.  The Ox Trend extends over a strike length of 7 kilometres on the Ootsa property and connects with a similar east-west trend at Huckleberry to the west.    The Seel deposit also has chargeability anomalies trending east-west and this has been termed the Seel Trend.

Ootsa Property modeled IP chargeability at 50 metres depth showing the Ox and Seel Trends.

The map below shows both modeled chargeability and resistivity at 300 metres depth around the Seel and Ox deposits.  Copper and arsenic in soil anomalies are shown along with magnetic highs.  The Seel and Ox deposits are associated with chargeability highs and resistivity lows and both have low level B-horizon copper in soil anomalies (80 to 200 ppm range) within the overlying glacial till.  The East Seel deposit is associated with an airborne magnetic high, as is the hornfelsed areole around the Ox deposit.  Select exploration targets around Seel and Ox are labelled 1 to 10 on the map below.  Targets prospective for porphyry style mineralization ideally should have coincident chargeability highs and resistivity lows (targets 1, 2, 3, 4, 6, 7, 8, 9, and 10), ideally with coincident copper in soil anomalies (targets 6, 7, 8, 9), and with or without associated magnetic anomalies (targets 4, 5, and 8 are in or near magnetic highs).

A) Induced Polarization chargeability model 300 metres depth, showing drill holes (black squares), copper in soil anomalies (black dashed lines), arsenic in soil anomalies (pink dashed lines), airborne magnetic highs (green dotted lines), and exploration targets labelled 1 to 10.  B) Same as A showing modeled resistivity at 300 metres depth.

Select individual exploration targets are discussed in greater detail below.

West Seel Exploration Targets
Geophysical contractor SJ Geophysics tested their recently developed Volterra 3D induced polarization technology at the Seel deposit.  This new and innovative survey method has resulted in impressive survey resolution and excellent coverage at depth, allowing for a new interpretation of the zone and enhanced exploration targeting.  A compilation map showing the West Seel exploration targets is shown below.     The main target (Target 1) is the southwest extension of the large West Seel deposit which remains open in that direction.  Chargeability data suggest mineralization might be extended over a 400 metre by 400 metre surface area containing favorable chargeability values (yellow and green on the map below) and then could be bordered to the south and west by a semi-circular ring of high chargeability values (red) possibly indicating a pyrite rich halo bordering the edges of the West Seel intrusion.  By analogy to other parts of the West Seel deposit higher grade mineralization could occur near the intrusive-sedimentary contact partially overlapping with the conceptual pyrite halo.

West Seel exploration target compilation map showing modeled induced polarization chargeability at 300 metres depth along with drill holes (black squares), the outline of known West Seel mineralization (blue dashed line), and the outline of the known West Seel intrusive (pink dashed line).  Targets 1 and 2 are labelled.

Target 2 on the map above contains a zone with chargeability values similar to those that host mineralization at West Seel (20 to 35 m/s range) and is open for drill testing.

West and East Ox Targets
The West Ox Target (Targets 5, 6, 7, and 8) contains localized copper in soil anomalies associated with a large chargeability high.  Limited drill testing in the area during 2013 encountered widespread alteration along with narrow dikes of porphyritic intrusive containing minor potassic alteration and traces of chalcopyrite.  The target contains numerous positive indicators for porphyry style mineralization and additional drilling is required to try and focus in on a mineralized intrusive centre.

The East Ox Target (Target 10) contains no rock exposure and is covered by glacial till.  Limited drilling on the western side of the anomaly encountered widespread and intense clay-pyrite alteration, characteristic of high level alteration above a porphyry system.  On the eastern side of the target the zone contains a strong chargeability high that is coincident with an arsenic in soil anomaly that extends over 400m.  The coincident chargeability and arsenic in soil anomaly is potentially prospective for gold mineralization and remains a priority drill target.  

Northeast Ox Target
A copper in soil anomaly has recently been identified 1.3 km to the northeast of the Ox deposit (Target 9).  The anomaly occurs within a zone of high chargeability with corresponding low resistivity and is roughly 400m long by up to 100m wide.  This anomaly needs to be further defined with additional soils, mapping, and possibly trenching, and is considered prospective for porphyry copper style mineralization similar to the Ox deposit.

North Damascus Target
A large multi element As-Zn-Pb and weak Sb soil anomaly measuring 550m by 400m has been defined at the North Damascus Target (Target 3).  The map below shows arsenic in soils overlain on chargeability.    Soil samples were analysed by portable X-ray fluorescence (XRF) and gold and silver analyses are not available for most samples.   Thirty four of the soil samples from the North Damascus Target were also analysed for gold, silver and 42 other elements by fire assay and ICP methods at AGAT Laboratories as a routine quality control and check procedure.  Gold and silver in the 34 check samples from North Damascus were strongly anomalous, with gold ranging from 6 to 204 parts per billion and silver ranging from 0.5 to 3.7 parts per million.  Arsenic was also highly anomalous in the check samples ranging from 46 to 666 parts per million and correlates well with arsenic analysed by portable XRF.  Arsenic is a common pathfinder for gold in this environment and the elevated gold in the check samples is a positive indicator that the large North Damascus arsenic in soil anomaly may be related to a gold-silver target.

Hole ER14-01 was drilled just south of the North Damascus anomaly and intersected 50m of gravel till cover.  The thick till cover indicates the North Damascus anomaly is a transported soil anomaly that has been moved and spread out by glaciers.  The source of the anomaly is possibly “up ice” or to the southwest, and could correlate with a large chargeability anomaly located immediately southwest of the soil anomaly.  This large untested chargeability anomaly is a priority drill target due to its proximity to the gold-rich East Seel deposit.

North Damascus Target, arsenic in soils and induced polarization chargeability.

East Damascus Target
During 2014 six holes (ER14-04 to 09) were drilled at the East Damascus Target testing a large soil geochemical anomaly coincident with a prominent fault zone.  Drilling at East Damascus intersected large continuous zones of highly altered felsic volcanic and porphyritic intrusive rocks and confirmed the presence of a significant fault zone.  All of the holes encountered patchy zones of anomalous gold including 0.68 g/t gold over 2 metres in hole ER14-08 and 9.2 metres grading 0.27 g/t gold in hole ER14-08.  Hole ER14-08 also intersected 22 metres of 0.24% zinc.  The presence of anomalous gold associated with the large alteration zone at East Damascus opens up the possibility for new bulk minable gold targets in the area. 

Damascus Target
High grade precious-base metal veins are widespread on the Ootsa property and have been intersected in drilling at the Seel and Ox deposits, and at the historic Damascus Silver Vein.  Select vein intercepts are summarized in the Table below.  The Damascus Vein contains a historic resource of 196,000 tonnes grading 411 g/t Ag and 7% combined Pb + Zn to a down dip depth of 100 m.

This resource is historical and is not compliant with NI 43-101.  It was estimated for Lansdowne Oil and Minerals in a 1984 company report titled “Review of 1982-83 Exploration Lean-To and Panther Groups of Mineral Claims Tahtsa Lake Area Omineca Mining Division BC”.  The historical estimate was done using a cross sectional method based on drill holes and additional drilling is required to verify the historical estimate.  A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and Gold Reach is not treating the historical estimate as current mineral resources or mineral reserves.

The precious metal veins at the Ox and Seel deposits or at Damascus have not been targeted by Gold Reach but are a potentially important exploration target in the district.

Select high grade vein intercepts from the Ootsa property.

Hole Zone Width (m)* Ag g/t Au g/t Pb% Zn% Cu%
DM-21 Damascus 3.8 1228.6 0.31 7.32 5.67 -
DM-23 Damascus 1.5 230.7 0.66 3.92 3.35 -
DM-37 Damascus 0.9 1244.1 0.9 6.33 9.74 -
DM-46 Damascus 2.6 271.2 0.15 3.48 2.12 -
DM-41 Damascus 1.1 340.6 1.24 3.32 6.24 -
S11-81 East Seel 1.0 223 0.09 0.25 0.54 8.56
S12-120 West Seel 2.0 19.7 13 0.01 0.03 0.99
S12-133 West Seel 2.0 3 15 - - -
Ox12-33 Ox 4.0 304 0.12 11.9 11.3 0.28

*Width refers to drill hole intercepts, the true width of the veins have not been estimated.  

The Damascus Vein occurs along the Damascus Fault, part of the inferred Damascus Graben (see map below), and this graben structure has considerable exploration potential along its length which is at least 4 km in a north-south direction.  

Resistivity map illustrating the Damascus Graben.  

Regional Gold-Silver Targets
The Ootsa property contains 5 regional gold-silver targets located outside of the main Ox and Seel resource area.  From west to east these include the Hope Prospect, the Captain Mine, Troitsa Peak, Play Prospect, and Whitegold.  The location of the prospects are shown on the map below.

Ootsa Property claim map showing the location of regional gold-silver targets.

Hope Prospect
The Hope Prospect is located roughly 3km east of an access road into the west end of Tahtsa Reach and is 22km northeast of Kemano.  The prospect was intermittently explored from 1982 to 1990 and historic exploration consisted of sampling, mapping, trenching and geophysical surveys.  Historic work has delineated a sulphide-bearing alteration zone within volcanic and intrusive rocks that is 40 to 50m wide and more than 700m long.  This zone locally carries significant gold, silver, and base metals in numerous sub-parallel quartz-calcite veins.  Historic assessment reports document a chip sample from within the zone that assayed 1305 g/t Ag and 3.1 g/t Au across 0.17 metres, with values from grab samples containing up to 13 g/t Au and 6.3% Cu.  Gold Reach has not yet visited or sampled the prospect and none of the historic results have been confirmed by the Company and they should not be relied upon.   Future work by Gold Reach will focus on evaluating both the narrow high grade vein potential and the bulk mineable potential of the zone.

Captain Mine
The historic Captain Mine contains 2 exploration adits which follow a high grade silver lead zinc vein.  One of the adits extends about 100m into the hillside and remains in good condition.  Gold Reach collected 2 samples from the adit which returned values up to 2220 g/t Ag (65 ounces per tonne), 9.2% Pb, and 0.27% Cu.   The exposed vein at Captain can be readily explored from the underground workings and from surface exposure and the area is considered prospective for both high grade silver base metal veins and porphyry style mineralization.

Photographs from the Captain Mine.  Left: upper adit.  Right: vein in roof and wall of upper adit.

Troitsa Peak Prospect
The Troitsa Peak Prospect is located in the south central part of the Ootsa claim block at high elevation roughly 3.5km west of the nearest logging road.  Historic reports indicate epithermal style veins and alteration extend over an area 2km by 4km and the zone has good potential to host both high grade vein and disseminated styles of Au-Ag mineralization.  Assessment reports describe surface grab samples with values such as 41 g/t Au and 9238 g/t Ag, 5.9 g/t Au and 4120 g/t Ag, 36.5 g/t Au and 825.6 g/t Ag, and 11.4 g/t Au and 2614.4 g/t Ag.  A grab sample from a historic trench returned 3.9 g/t Au and 2356 g/t Ag and thin veins of quartz-chalcopyrite-sphalerite returned values up to 44.7 g/t Au and 2683.2 g/t Ag.  Gold Reach has not yet visited or sampled the prospect and none of the historic results have been confirmed by the Company and they should not be relied upon.    Due to the large size potential and high grade nature of the Troitsa Peak Prospect it remains the Companies highest priority regional exploration target.

Play Prospect
The Play Prospect occurs on the southern edge of the Ootsa claim block roughly 1.2km west of the nearest logging access road.  Alteration and veining have been traced over an area 50m by 200m, however limited exploration has been conducted at the zone.  Historic sampling in Assessment reports describe surface grab samples containing up to 2.6 and 4 g/t Au.

Whitegold Prospect
The Whitegold prospect is located at the eastern edge of the Ootsa claim block, and sits roughly 1km east of the nearest logging access road.  The prospect was intermittently explored from 1983 to 1994 (prior to logging road access) with historic exploration work consisting of soil and rock sampling, mapping, prospecting and 13 short diamond drill holes.  Historic work has defined a zone 350m by 130m containing alteration and quartz veining that remains open for expansion.  Historic drilling, as described in a 1984 assessment report by Canamax Resources Inc., intersected numerous mineralized quartz veins with the best interval returning 3.1 g/t gold over 3.9 metres.  The best historic surface sample was from a quartz and chalcedony vein which graded 7.8 g/t gold.   

During 2014 Gold Reach conducted surface soil and rock sampling and geologic mapping at Whitegold, and successfully traced gold bearing quartz veins for 125 metres along strike in a north northwest direction, with the zone remaining open along strike.  Surface chip sampling of outcrop has returned 1.4 g/t gold over 7 metres including 4.6 g/t gold over 1 metre, and the zone remains open to the southeast.  This defines a new drill ready gold target on the large Ootsa claim block which can be rapidly advanced by trenching and drilling.

Photograph of mineralized outcrop at Whitegold showing chip sample locations and results.   

Exploration Objectives
Ongoing exploration programs at Ootsa will have the following objectives:

  1. Explore and define the numerous bulk minable and underground high grade vein targets proximal to the Ox and Seel deposits and incorporate these into Preliminary Economics.
  2. Explore the regional gold silver prospects, define drill targets, and determine if high grade precious metal resources can be delineated.  The ultimate goal will be to establish sufficient gold silver resources in the district to support a centralized milling and processing facility.