Salave Project

 Salave NI 43-101 Report

Location & Infrastructure

The Salave gold deposit, includes five Mineral Concessions covering a total area of 433 ha.  Access to the Salave property is by paved roads from Oviedo, the Capital of Asturias, northwestern Spain. Logistical support, in terms of power and telephone lines, is available at Tapia, which is linked to the Asturias Power grid.  Water is available from wells near the property and from the Porcia River east of the property.  Infrastructure is excellent for mining activities since the area has a long history of coal mining.  Infrastructure for mining equipment and personnel are available at Rio Narcea's El Valle gold mine, some 100 km east of Tapia.  A high voltage power line and a rail line transect the property, and shipping facilities are available at the port of Ribadeo , some 10 km west of Tapia, within the Province of Galicia.

History

Gold in the NW part of the Iberian Peninsula has been known since antiquity. Following the Cantabrian War (19 BC), when Romans battled local tribes, gold mining developed in this area due to the reorganization of the Roman monetary system carried out by Augustus, who established the gold standard known as the "Aureus" (7.8g Au).

The introduction of gold coinage in the ancient world brought about a notable change in all respects. The precious metal no longer had only symbolic value and became an essential standard of currency within the economic system. This encouraged the systematic search for deposits and the intensity of mining them.

The gold mines in the northwest Iberian Peninsula were managed directly by the Roman State, under the authority of the Treasury. During the second half of the first century, in Vespasiano´s time, there were significant changes in the administration of the region, and the creation of the position, "procurator metallorum," the person in charge of the organization and management of every mining zone.

The arm of the Roman State in control of the gold mining activity was the Army, not as occupation forces, but in technical support of the mining design and operation, mainly in the hydraulic infrastructure.

At the beginning of the third century, gold ceased to be the monetary standard and the majority of the mines closed, although Caracala tried to return the value to the Aureus enabling a brief extension of mining activity.

The imprints left from Roman mining operations are still recognizable in the Asturian landscape. More than 500 historical mining sites are presently known in the northwest portion of the Iberian Peninsula . The total volume of alluvial and hard rock material mined was about 600 Mm³; more than at any time in Iberian mining history until the end of the 19th century.

The older mines used hydraulic systems, either to remove the barren overburden or to exploit the gold-bearing rocks. Many kilometers of ditches that carried water to the mine locations still flow through the surrounding mountains.

The amount of gold extracted by the Romans in the NW of Iberian Peninsula was estimated at 6,200,000 oz through 2-3 centuries of operation. The equivalent gold price during Augustus´ time was quite possibly higher than at present. A legionnaire earned as much as 70 g of gold per year in Aureus, while the price of 8.8 liters of wheat was the equivalent of 0.3 g Au.

The Roman miners could not recover the refractory gold (within the sulphide structure). In Salave where the sulphides with gold are finely scattered within the granite, only in the upper part was the gold free due to strong weathering. The fine gold particles concentrated in the lower horizons of the weathered zone (eluvium) levels were workable for the Romans, with the refractory gold remaining "in situ".

The Salave operation consisted in a main SW-NE pit, perpendicular and near to the coast, approximately 500m long and 20m deep. There were channels cut in the rocks and drainage channels  to evacuate the material toward the sea. The total earth movement in Salave was estimated at 4 million tonnes, and the water was transported through 21km flume from the Porcia River. The Roman miners had to crush and mill the ore making the liberation of the free gold easier.

Remains of mining activity, millstones, mortars and furnaces, were discovered within the Roman pits, on the beach, and in a Roman habitat situated on a small peninsula (named Castelo), 300m northeast  from the mining works. Some bronze coins from Hadrian (117-138 CE) have been found near Castelo.

Geology & Resources

The Salave gold deposit is hosted mainly by the Salave granodiorite, at its western boundary, close to the contact with the Los Cabos Formation. The deposit contains gold mineralization along numerous north to northwest trending and gently west dipping irregular lenses. In places they may be subhorizontal. In other places they are affected by a set of north trending structures and define a complex network, within a northeast trending, at least 350 m wide shear zone. Gold mineralization is also present within the Los Cabos metasedimentary rocks.

The Salave gold deposit is NI 43-101 compliant and is considered to be one of the largest and highest grade undeveloped gold deposits in Western Europe .

Mineral Resources are listed below at a nominal cut-off grade of 0.7 g/t Au and 2.5 g/t Au for the Underground Inferred portion. There are areas of higher grade mineralization within this overall Mineral Resource.

Mineral Resource Statement* for the Salave gold deposit

* Mineral resources are not mineral reserves and do not have demonstrated economic viability.  All figures have been rounded to reflect the relative accuracy of the estimates.