A Chronology of the Lawyers Mineral Claims

As noted elsewhere in our web page information disclosures, between 2013 and 2015, PPM management searched for a method to preserve and enhance property tenures at the Lawyers.  Diligent and creative efforts resulted in first enabling PPM, with the cooperation of Guardsmen Resources Inc., using PAC application to extend the life of its core claim group out to 2025.  Subsequently, partly as a result of this extension, PPM attracted the attention of partners which enabled the company to undertake its 2015 exploratory drilling program at Cliff Creek and Duke's Ridge.  As at the date of writing March 1 2016, management awaits production of a 43 101 report which will delineate the calculated resource at Cliff Creek as drilled.  Given that the P2 vein discovery (with its 8 ounces of gold and 7 kilograms of silver per ton) was only encountered twice in the program, any mineral resource arising from that discovery will not be included in the 43 101 calculation until such time as it is more significantly explored.  As a result of the 2015 exploration program, PPM was enabled to add assessment work credits to all of the expanded Lawyers claim group tenure thus extending them all out to 2025.  With the 43 101 report being produced by Bob Lane and Barney Bowen in hand, PPM expects to be able to continue its exploration of the Lawyers mineral claims in the summer of 2016.

Between August 2010 and March 2013 principals of PPM Phoenix Precious Metals Corp. (as owner of 100% of the Lawyers Mineral Claim group), have been researching the history of the operations of Cheni Gold Mines Inc., particularly focusing on the period 1988 to 1993 to glean an understanding of what took place and WHY from start up to Cheni’s cessation of mining/milling operations.

As a background summary the following is drawn from a 2011 Assessment report:

The Lawyers property covers a large area of widespread epithermal gold and silver vein mineralization; including the former Lawyers (Cheni) underground gold-silver mines (the AGB, Cliff Creek and Phoenix).  The Lawyers mines were operated between 1989 and 1992.   A total of 5,401,981 grams of gold and 113,184,127 grams of silver were produced from the processing 619,900 tonnes of ore. Most of the production came from the AGB deposit, with subordinate amounts coming from the Cliff Creek and Phoenix deposits.  Additional undeveloped zones and prospects on the property include Duke’s Ridge, Silver Pond West and M Grid.

The Lawyers property is located in the Toodoggone region, 450 km northwest of Prince George, British Columbia.  The property consists of 36 contiguous MTO mineral claims covering 8498.78 hectares of land.  Access to the property is provided by the Omineca Resource Access Road. PPM has added some additional claims since 2011 which solidify its tenure position and bring in more minfiles. 

The property is underlain primarily by volcanic strata of the Lower Jurassic Toodoggone Formation. Past trenching, diamond drilling and underground development on the Cliff Creek deposit, carried out by Cheni Gold Mines Ltd. up until 1991, outlined a gold-bearing silica vein, stockwork and breccia system with a strike length of about 1,600 metres and with widths of up to 58 metres. The episodic nature of the system is characterized by banded crack-and-seal veins and multi-stage chalcedonic breccias, the latter of which are particularly well-developed in dilatant zones that occur at the intersection between the main northwest- trending through-going fault and cross-cutting structures.

In 2010 we re-opened the Cliff Creek portal to determine its condition. The underground was flooded, but the portal was in excellent shape.  Grab samples of epithermal mineralization collected from the floor of the portal and dump returned a range of gold and silver values.  Many samples assayed well in excess of historic average mine grades (being 7 grams gold and 243 grams silver) with a high of 86.10 g/t Au and 9855 g/t Ag.  PPM undertook modelling of historic drill results at Cliff Creek and Dukes Ridge in 2012.

We have reviewed the following documents as a basis for our presentation:

Complete set of all Wright Engineering feasibility and mine and mill design studies 1986 – 1988;

Actual Cheni Mill Production records and notes for 1992 including summary of production for 1988-1991

Northern Miner news reports 1990-1993;

BV Mine Plan, BV Project, AL Property Cheni Gold Mines Inc. 10 June 1991;

Prospectus/application METS Project Cheni Gold Mines. Inc. May 29 1992;

Interviews conducted with Ned Reid, Austin Hitchins, Jack Vincent and some former Cheni miners and shift bosses;

Review of Skeena Resources Limited news release 2009 reporting on METS acquisition

The exploration history of the Lawyers property has been well documented in assessment reports by Pegg (2003), Blann (2004), and Jacob and Nordin (2006). 

1970-1974: Kennco Explorations (Western) Ltd (Kennco) carried out reconnaissance work in the area of the Lawyers property through the 1960s and recorded the earliest, focused exploration on the property in 1970. Kennco is credited with discovering the AGB deposit in 1973 and conducted the first diamond drilling in 1974.    

1980 – 1986: SEREM  Ltd (a subsidiary of BRGM the French banking concern)  optioned  the  property  from Kennco and completed extensive exploration work programs on the property;

1986: the project was being advanced towards a production decision and SEREM Ltd changed its name to Cheni Gold Mines Ltd (Cheni).

1989: Cheni brought the Lawyers AGB mine into production which contained Proven Reserves of 498,900 tons grading 0.243 ounces per ton gold and 7.69 ounces per tonne silver.  The Cliff Creek deposit contained Probable Reserves of 463,300 tons grading 0.170 opt Au and 7.61 opt Ag; Duke’s Ridge deposit contained Probable Reserves of 75,400 tons grading 0.23 opt Au and 6.57 opt Ag (Wright, 1986).   1988, the Cliff Creek deposit reserves were revised to 838,900 tons grading 0.183 opt Au and 7.12 opt Ag in the Probable category and 524,500 tons grading 0.170 opt Au and 6.57 opt Ag in the Possible category.   Note that all of the figures listed above were estimated prior to the implementation of National Instrument 43-101 and are considered to be historical estimates only.

1989 – 1991 Cheni mined and milled AGB mine ore;

1991 January to July Cliff Creek mine is in development stage

1991 April – Nov Cheni developed and mined BV and other surface gold resources on Ranch/Al claims (optioned from Energex) stated to offset a production shortfall arising from the timing of transition from AGB mine ore to Cliff Creek ore to ensure Lawyers Mill could run in the fall 1991 through 1992;

1991 July – Dec Cheni mining commenced at Cliff Creek, but July 1991 Ed McCormack was brought in (some say to begin mine/mill closure processes);

1992 Mill records reveal that 48,200 tons of Cliff Creek ore grading (in combination with AGB/Energex (BV) ore) between .21 oz/t and .27 oz/t Au and 4.92 oz/t and 8.89 oz/t Ag were processed from March 1 to July 31 after which the mill shut down until Phoenix mine was opened and ore was processed in Nov/Dec 1992; total mill through put calculations reveal that AGB was the primary ore supply for the mill and that no more than the recorded 48,200 tons of ore from Cliff Creek were processed;

1992 Aug – Oct METS ore body was planned to be developed and mined Oct 1992 to Feb 1993; project not being recorded as supplying any ore to the mill; mined rock was put back and mine reclaimed; Skeena Feb 5 2009 news release reports acquisition of METS and that A Zone resource by Cheni in 1992 of 53,215 tons grade 11.6 grams/t Au; deposit development material was to be trucked to Cheni mill....Program abandoned when French owners of Cheni prematurely shut down Canadian Gold operations. In 1993 the stockpiled development rock was placed back underground and adit was sealed and site reclaimed.

1992 Nov – Dec Phoenix mined and mille (5400 tons);

Mining was conducted from multi-level underground developments between 1989 and 1992, producing over 171,000 ounces of gold and 3,548,000 ounces of silver.  Cheni mined out the AGB deposit, partially mined the Cliff Creek deposit, and mined out the surface expression of the small Phoenix deposit.  

Infill surface exploration, underground development and mining resulted in Cheni reporting downward revisions of the Cliff Creek reserves; then declining metal prices had the company “writing-off” the remaining mineral inventory.  The mine was closed early in 1993, following the milling of ore from the Phoenix deposit.   The reasons cited for mine closure were low metal prices, Canadian dollar fluctuations coupled with high mining costs.

1995 The then NDP provincial government determined that since no mining or milling had been done on the Cheni property for over 3 years the mining and milling operations at AGB and Cliff Creek had to be dismantled and cleaned up ending and potential operations there.

1997: AGC Americas Gold Corp (AGC) optioned the property, formed a joint venture with Antares Mining and Exploration Corp (Antares) and carried out a large airborne EM-Mag-Radiometric survey, which included coverage of the Lawyers property.  We have that survey. Limited surface work was also undertaken (Hawkins, 2003).   In 1999 Antares sold its interest in the property back to AGC.  The claims and the mining lease were later allowed to lapse.

2000-2001: Guardsmen Resources Inc. (an associated company to PPM Phoenix Precious Metals Corp.) acquired the former Cheni mining lease and mineral claims by ground staking.

2001-2007: Small exploration programs were conducted on the property by several different operators, but the claims remained wholly-owned by Guardsmen (until transferred to PPM in 2011);

In addition to the previously defined zones on the Cheni ground, the current expanded Lawyers property also encompasses several important targets, including MGrid and Silver Pond West zones, that were not part of the original Cheni claims.

TABLULAR BACKGROUNDER

1925

IndividualPlacer Miners

1930’s

Prospecting by Cominco

1960’s

Prospecting by Kennco Exploration

1969-1975

Exploration by Kennco Exploration discovers gold on Lawyers property

1973

Discovery of AGB zone by Kennco

1978

Exploration by SemcoMining and SEREM

1984,  1985

St. Joe Canada diamond drill the SilverPond prospect

1987

SEREMchanged to Cheni Gold Mines

1989

Testproduction by Cheni Gold Mines of Lawyers mine

1992

Cheni terminates production on property after test mining at Cliff Creek and Phoenix zones

1997

Antares Mining & Americas Gold Corporation acquire property & conduct detailed airborne EM Survey

2000

Guardsmen Resources stakes and acquires complete property

2000-2003

Exploration by Guardsmen Resources

2003

Guardsmen options property to Bishop Gold; hand trenching carried out on M Grid

2004

BishopGold carries out backhoe trenching on M Grid

2005

Bishop Golddrills 5 DDH on southern part of Cliff Creek zone

2006

Bishop Golddrills 5 DDH on central part of Cliff Creek zone

2007

rock geochemical sampling in the Marmot Lake area

2010

Guardsmen reopensCliff Creek Portal

2011

PPM undertakes FNconsultations and assessment dewatering of portal;

2012

PPM continuesacquisition/evaluation of historical data and interviews; dewatering approvalto 2013

2013

PPM arrangingdewatering, mapping, geophysics, drilling, bulk sampling for summer 2013

2014

Economic conditions limited exploration in 2013; 2014 will engage management in exploring alternative methods of securing capital to enable 2015 exploration and development at Cliff Creek or as markets dictate.