Sturgeon Lake Zinc property

Zinc-rich Polymetallic

Gossan’s Sturgeon Lake Property lies within the zinc-copper-silver-rich polymetallic Sturgeon Lake Greenstone Belt in northwestern Ontario. It was originally comprised of a 14 claim block totaling 3,088 hectares that has been now expanded to over 4,500 hectares. The property is directly along strike and to the east of 6 Volcanogenic Massive Sulfide (VMS) deposits that were mined between 1970 and 1991. Approximately 18.7 million tonnes of ore was mined from these VMS deposits with typical grades of 8.0% zinc, 1.1% copper, 0.8% lead, 120 gpt silver and 0.5 gpt gold.

In November 2015, the Company staked three claims and on July 28, 2016, acquired an additional 12 claims from Excalibur Resources Ltd., along with a significant amount of recent exploration data. The work, conducted by Excalibur, includes: a VTEM electromagnetic geophysical survey by Geotech Ltd.; an Enzyme Leach geochem survey and a Soil Gas Hydrocarbon geochem survey, both processed by Actlabs; and the results of a limited drill program on the southeastern portion of the acquired claims, including drill core. The prior drilling intercepted favourable geological horizons containing blue-quartzeye-rich rhyolites with hydrothermal alteration and sulphide mineralization similar to rhyolite formations hosting the nearby Sturgeon Lake and Lyon Lake deposits.

Gossan acquired the property to explore what it believes are the most prospective untested targets in the historic Sturgeon Lake Camp. They are located in the central and the west end of the property and are along strike and closest to the historic Sturgeon Lake and Lyon Lake cluster of ore deposits. Management believes this property has the potential to host significant zinc-copper-silver-gold-rich VMS polymetallic deposits.

The most notable former mines in the camp extracted high-grade zinc-copper-silver ores with associated lead and gold. These properties are currently held by Glencore and First Quantum Minerals under option to ODIN Metals Ltd (Australia). The grades and tonnages of these former producers are provided in the table below.

Historical Production from Mineral Deposits of the Sturgeon Lake Mining Camp 1970-1991

In September 2017, a comprehensive report entitled the “Sturgeon Lake East Exploration Report and Recommendations for Diamond Drilling” was completed. The Report highly recommended a diamond drilling program of 2000 meters in up to 15 drill holes to test a series of prospective drill targets (A-D) defined along a corridor to the northeast of Glitter Lake, in the Sturgeon Lake VMS mining camp. The targets are defined by the coincidence of prospective geology with strong VTEM geophysical conductors and multiple geochemical indicators. Anomalous geochemistry includes the highest ranking for VMS deposits in SGH surveys, and Zn-Au-Ag (+ other metals) in an alder biogeochemical survey and an enzyme leach survey. Four distinct multi-parameter targets have been identified that warrant testing by diamond drilling.

The Report presents the results of a 2016 alder biogeochemical survey and 2017 geophysical modeling of the target areas using Maxwell EMIT modeling techniques for VTEM. The report also summarizes the results of 2010 geochemical (SGH and Enzyme Leach) and VTEM geophysical surveys carried out over the property, and summarizes the geology of the Sturgeon Lake region and Glitter Lake area as presently understood. The Report concludes with a recommendation for a winter drilling program.

During the winter of 2018, Gossan completed a preliminary drill program totaling 741 metres to initially test three of the four distinct high-priority, multi-parameter volcanogenic massive sulphide (VMS) target areas at the Sturgeon Lake Property. Two of four completed drill holes intersected significant separate zones of footwall style hydrothermal alteration with abundant stringer, semi- and near-massive-sulphides of pyrrhotite and pyrite with minor copper and up to 0.46% zinc indicative of VMS type systems in two separate areas.

The geology and alteration encountered appear similar to that of the nearby historic Lyon Lake, Sturgeon Lake, Creek and Sub-Creek ore bodies. Each of the two drill holes (SLG-18-01A, SLG-18-04) was collared within a wide zone of alteration and sulphide mineralization (including up to 80% near-massive sulphides), and requires step-back drilling to test the full width of the zone, as well as along strike drilling to test the extent of the two target areas. The two other drill holes intersected a third target area with significant widths of intercalated sulphidic and strongly graphitic tuffs with abundant pyrrhotite. A total of 380 samples were submitted for assay and geochemical analysis including a total of 16 standards and 12 blanks that were inserted for quality control purposes. The results obtained from AGAT Labs represent a level of quality satisfactory to Gossan’s management. Samples were analyzed using a Sodium Peroxide Fusion digestion and gold was analyzed using standard fire assay methods. Anomalous zinc mineralization up to 0.46% was reported. Preliminary results from geochemical analyses indicate strong Eu and other geochemical anomalies consistent with a potentially productive VMS horizon in drill hole SLG-18-1A.

During August 2018, a field program was conducted comprised of line cutting and improvements to the drill trail.

During the Fall of 2018, Gossan completed a detailed gravity survey over the Sturgeon Lake East polymetallic VMS property in order to help delineate those areas with the greatest concentration of massive sulphides. The gravity survey was carried out in response to very encouraging results from a 4hole drill program completed earlier in the year, which encountered wide intercepts of strongly altered rocks, and stringer, semi-massive and massive sulphides with anomalous copper and zinc values up to 0.46% Zn. The hydrothermal alterations encountered in the drill holes are similar to those at the Lyon Lake and Sturgeon Lake deposits, and along with ongoing geochemical studies indicate the area is highly prospective for economic VMS type deposits in two main target areas (A and D).

The gravity survey, conducted by MWH Geo-Surveys, defines several areas of high density rocks which are coincident with the previously defined VTEM, magnetic, and geochemical (Zn-Ag-Au) anomalies. The coincidence of the gravity anomalies with these previous surveys, known sulphide mineralization and favourable host rock geology, strongly suggests the presence of massive sulphide bodies.

In spite of the abundance of sulphides and alterations encountered in the first 4 drill holes in the preliminary drill program, the gravity survey suggests that they missed the main mass of possible sulphide material in all cases. A winter drill program of about 15 drill holes has been recommended to test the coincident gravity, VTEM, magnetic and geochemical surveys.

The geology and alteration encountered during the 2018 winter drill program appears similar to that of the nearby historic Lyon Lake, Sturgeon Lake, Creek and Sub-Creek deposits. Each of the two drill holes (SLG-18-01A, SLG-18-04) was collared within a wide zone of alteration and sulphide mineralization, and require step-back drilling to test the full width of the zone, as well as along strike and deeper drilling to test the extent of the two target areas. The potential of these areas is reinforced by the current gravity survey.

Drill holes 18-2 and 18-3 intersected a third target area with significant widths of intercalated sulphidic and graphitic tuffs with abundant pyrrhotite and anomalous zinc mineralization up to 0.29%. This third area also requires additional drilling to test an associated strong gravity anomaly, which was missed by holes 2 and 3.

Gossan management is strongly encouraged by the results of exploration carried out on their Sturgeon Lake property to date.

On February 7, 2018, ODIN Metals Ltd (Australia) entered into a 3-year option agreement with First Quantum Minerals Limited to acquire a 100% interest in a 11.7 sq km property located west of Gossan’s ground for three cash payments totaling $475,000; a 1.5% NSR; and assumption of all historical liabilities with respect to the property, in excess of $1,000,000 which will be funded by First Quantum.

On February 4, 2019, ODIN entered into a 3-year option to acquire a 50% interest in Glencore’s Sturgeon Lake Properties by spending $6.67 million on exploration and providing Glencore with an option to purchase 50 million shares of ODIN at AUD $0.40 per share. Glencore also has the right to all off-take from the property and board representation in certain circumstances. Glencore is the operator.

Dr. Hamid Mumin, P.Geo., a director of Gossan, and a distinguished geologist, and professor in the Department of Geology at Brandon University is acknowledged for his expertise in VMS, gold, and ironoxide-copper-gold (IOCG) deposit types. Dr. Mumin graduated from Geo-Engineering at the University of Toronto in 1985, where he also completed an M.A.Sc. in Economic Geology before completing his Doctorate degree and Post-Doctoral Fellowship at the University of Western Ontario in 1994, for his studies in lode gold deposits in the Ashanti and Carlin goldfields. Before joining Brandon University in 1995, Hamid worked, over 6 years, as a mine, exploration and research geologist for Noranda at the Sturgeon Lake mining camp. In addition to teaching at Brandon, Dr. Mumin continues to consult for industry, both as a Professional Engineer and Geologist, managing projects in Canada and internationally. He was directly involved with several discoveries and mine developments. Dr. Mumin joined Gossan’s Board of directors in 2015.