WHITE LAKE PROJECT– HEMLO EXPLORATION

DISCUSSION IN SUPPORT OF NEWS RELEASE

April 10, 2018                                                                                                                                                                                                                                                                       Trading Symbol: MKR 

TSX Venture Exchange

 

Timmins, Ontario. Melkior Resources Inc. (“Melkior”) is pleased to present the following discussion on exploration plans for the White Lake Project (Hemlo). The White Lake Project is comprised of 373 contiguous claim units (13,745 acres). The White Lake Project is located approximately 15 km northeast of the Hemlo Gold Mine currently operated by Barrick Gold Corporation (Map 1, Map 2).

Since the Hemlo discovery in 1982 the White Lake Project area has been evaluated as a patch work of different claim groups owned by various companies, using a variety of exploration methods through the preceding decades. The available information is highly informative yet provides an incomplete, fragmented picture.

The Ontario government has published an excellent regional geological map: Muir, T.L 2000. Geological Compilation of the eastern half of the Shreiber-Hemlo greenstone belt Ontario Geological Survey, Map 2614, scale 1:50,000. This map is used as a base map in some of the accompanying maps.

In 1983, Aerodat Limited carried out an airborne geophysical survey of approximately 1,570 square kilometers in the Hemlo area of Ontario. Operating equipment included 3 – frequency HEM and VLF electromagnetic systems, a magnetometer and a radar positioning device. At a nominal line spacing of 100 metres. Sheet 6B of this private data has been use by several companies advancing their exploration plans. The Ontario government has since incorporated this survey data into the Public Domain. Map 3 outlines Melkiors White Lake claim group overlain on the 1983 Aerodat survey and provides the location of the “Detail Map Area” that is subject to the majority of the accompanying maps.

Within the White Lake Project there is a core area,” Detail Area”, that is the focus for the initial exploration efforts. This core area is centered on the Kakeeway Claim Group. Map 4 displays the Detail Area of the claim group over the bedrock geology compilation (Map 2614). Map 5 overlays the Detail Area of the claim group over the 1983 Aerodat Survey EM and magnetic data.

The following discussion attempts to present some of the data and reasoning used in re-evaluating the Detail Area of the White Lake Project. It is not meant to be exhaustive, but to allow some of the more relevant information to be placed into a context that allows constructive discussion to be initiated. Historical maps from AFRI files were georeferenced as best possible, however a significant amount of error can be introduced in the georeferencing process of pre-digital maps.

The first recorded work was undertaken in the area in 1983 (AFRI 42C12NE0014). The work program consisted of 782 B-Horizon soil samples being collected and analyzed. The report states in part: “The main anomalous zone, Anomaly A, extends from Station 1+75W on Line 7+00 South, northwestwards for at least 700 meters (2300 feet) to 1+50W on Line 0. Anomaly A is a narrow, lineal zone that varies from 25 to 75 meters (80-250 feet) in width, and averages about 40 meters (130 feet). This anomaly is directly on strike with known pyritic mineralization in an outcrop of altered metasediments situated on the east shore of White Lake. Selected grab samples from this outcrop contain up to 10% disseminated pyrite and have returned up to 140 ppb Au in assay. Anomaly A continues on to the northwest, under the. water of White Lake. The highest values in Anomaly A are 16 and 14 ppb Au, obtained at Station 1+25W on Line 1+OOS, and at Station 1+75W on Line 7+OOS, respectively. Anomaly A is underlain by mainly metasediments, and a thin band of metavolcanics, and is concordant to this strata. Disseminated pyrite mineralization was also noted by the geological mapping to be present in metasediments at the southeast end of this anomaly, in outcrops lying between Lines 7+OOS and 8+OOS.” (Map 6).

Exploration on the east shores of the White Lake Narrows was further advanced in 1985 with AFRI 42C12NE0011 describing the geological sequence underlying the previous soil sampling as follows: “A band of stratigraphy was outlined at No Beaver Lake which bears striking resemblance to the ore stratigraphy at Teck-Corona, Hemlo. “…“From west to east, the units are: rhythmically banded siliceous slates and greywackes, conglomerates, fine-grained felsic tuffs, felsic pyroclastic, a transition zone of felsic and siliceous tuffs intermixed with sediments derived from felsic volcanic and a basal unit of mafic volcanic rocks. Within this sequence, at No Beaver Lake, north-northwest trending altered shear zones occur with quartz sericite mineralization. It is currently believed, that the sheared and altered units of this 1-kilometer-wide band of transitional rocks and the contact zone with the monotonous and rhythmically banded greywackes, bear the most potential for the discovery of economic deposits of gold similar in style to Hemlo.“ (Map 7).

The goals of the 2017 exploration program were three fold: Verifying the high grade CarrollMacDougall gold occurrence; verifying the lithology present in the vicinity of No beaver lake, that has been described as being similar to the geological units that hosts the Teck-Corona deposit in Hemlo; and due diligence in conducting a soil sampling program to verify the presence of elevated gold in soil in the vicinity of “No Beaver Lake”.

In June 2017 Melkior made a site visit to the Carroll-MacDougall gold occurrence, samples were taken and confirmed its gold bearing nature with values up to 19.2 g/t gold. The structure hosting the Carroll-MacDougall gold occurrence is parallel to and within one meter of a transition from mafic to felsic volcanic rock. This contact zone has been reported to be auriferous over about 100 meters (Map 7).

In June 2017 Melkior conducted an initial property visit to the Kakeeway Property with the vendor to review the property geology and specifically the No Beaver Lake area. The geology was confirmed as being similar to Teck-Corona lithology.

An initial evaluation of the results of the 2017 soil sampling program validate the overall results of previously reported soil sampling, increasing confidence in other reported gold in soil anomalies. The 2017 Melkior soil sampling program obtained the highest gold in soil value, 73 ppb Au, 500m south-east and on strike with Anomaly A as described in AFRI 42C12NE0014 (Map 8).

The above synopsis provides an understanding for: Melkiors entry into the Hemlo area; the acquisition of the Kakeeway Claim group; the acquisition and staking of additional claims that form the present White Lake Project claim group; and Melkiors continued interest in the area.

In evaluating the next steps to advance the White Lake Project all historical information was reviewed, again, repeatedly. The following discussion is to provide some insight to the results of this review.

AFRI 42C13SE0078, presents an interpretation map prepared by Aerodat for the specific claim group (Map 9).

The largest A-Horizon soil sampling program reported on in the White Lake Project was in 1995 (AFRI 42C13SE0075). The following list relates approximate location of Aerodat EM anomalies validated by gold in soil anomalies (Map 10):

EM Target 6- 42 ppb Au

EM Target 7, 8 – 6 ppb Au

EM Target 9 – 707 ppb Au

EM Target 10 – 9 ppb Au

A significant amount of ground VLF has been undertaken by various surveys over various parts of the project area. One of the first VLF surveys, conducted in 1984 (AFRI 42C13SE0027) was conducted on the same grid as the soil data previously discussed. One of the most interesting results was the definition of the NNW striking VLF “Target 2”. VLF “Target 2” is co-incident with gold in soil anomalies of 42, 26, 52, 616 ppb Au (Map 10b).

VLF “Target 2” is co-incident with Aerodat EM Target 6 (Map 11).

VLF “Target 2” has a reasonable correlation with a high chargeability zone in the 15-30m chargability depth slice of Spectral IP AFRI 42C12NE2009 (Map 12).

Germanium as pathfinder element?

As previously reported statistical analysis of the 2017 soil data indicates that the only element with a positive correlation with gold is germanium. This is a surprising result, there is an absence of published research in the use of germanium as a pathfinder element in gold exploration in the Hemlo area. Map 13 presents the germanium anomaly, including some of the overlay information from the previous analysis. Map 14 forms a new base for the next series of overlays developing the discussion on the germanium in soil anomaly and presents the axis of the main germanium in soil anomaly. While there is more than one germanium anomaly only the most significant is going to be considered initially. The positive statistical correlation of germanium with gold requires that the germanium anomalies be considered in the exploration plans.

 The location of the germanium anomaly axis may represent a structural zone. A fault zone at this location has supporting evidence in published geological maps (Map 15), evaluation of lineaments in satellite imagery and a creative interpretation of the geophysical data east of White Lake. There are a very limited number of drill holes on the property, one of these was drilled in proximity and subparallel to the germanium axis. Drill hole C97-4 (AFRI 42C13SE0084, Map 15) encountered unusual and significant amounts of “red alteration” and fractured zones that could be related to potassic alteration and faulting. The presence of potassic alteration could be significant as there is an existing hypothesis that the earliest gold mineralization event in Hemlo is related to gold+molybdenum+potasium enrichment. Drill hole C97-4 was terminated in proximity to the germanium anomaly and encountered lamprophyre dyke (Map 15). Lamprophyres are deep seated intrusive features that could reinforce the potential presence of a of significant fault zone.

The germanium anomaly continues to the limit of the sample area where it is co-incident with reported gold in soil anomalies in excess of 500 ppb (AFRI 42C13SE0069, Map 14, Map 15). Further support of the fault is provided by geophysical data that indicates magnetic trend disruption where No Beaver Lake stratigraphy it intersects the germanium anomaly.

In considering the potential for the germanium anomaly in soil as a pathfinder element the correlation of other elements to the germanium anomaly and inferred structure were considered. Reverting to published norms for Hemlo pathfinder elements for Hemlo type deposits could include Au, Mo, W, Zn, Sb, As, Hg. Overlaying the results of the 2017 soil sampling data onto our working base map there appears to be a positive correlation with some of the typical Hemlo deposit type pathfinder elements. The best correlation to the axis of the germanium anomaly appears to be mercury.

Map 16: Gold in Soil / Germanium Anomaly Axis

Map 17: Molybdenum in Soil / Germanium Anomaly Axis

Map 18: Antimony in Soil / Germanium Anomaly Axis

Map 19: Mercury in Soil / Germanium Anomaly Axis

Map 20: Zinc in Soil / Germanium Anomaly Axis

If mercury were to be considered a significant pathfinder element on the White Lake Project it is very interesting to note the presence of a significant mercury in soil anomaly that extends from the proposed fault/germanium is soil anomaly to the NW, within the No Beaver Lake volcanic sequence. This volcanic sequence is reportedly similar to the volcanic stratigraphy that hosts the Teck-Corona deposit, where mercury was used to define the alteration corridor of the deposit. Co-located with the mercury in soil anomaly within the No Beaver Lake volcanic sequence there are distinct coincident anomalies in soil of mercury with antimony, zinc and to a lesser extent molybdenum.

Distribution of the typical pathfinders for Hemlo type deposits needs to be further considered as exploration advances, the relative importance of these elements will be better understood as exploration progresses.

Sediment – volcanic contact target in the Finger Lake – Patio Lake Area

Several kilometers east of the No Beaver Lake there is a parallel volcanic sequence of greenstone, about one kilometer wide. This NW trending section of the greenstone belt hosts numerous molybdenum and gold occurrences (Map 2). Within the White Lake claim group this volcanic sequence passes through Finger Lake and Patio Lake where there is about a 3-kilometer strike length of unmapped greenstone (Map 2, Map 21). A NNE trending substantial diabase dike reportedly traverses the NW section of Finger Lake. The regional magnetic data suggests that this diabase dyke is also a fault and that there is a decrease in the width of the more magnetic volcanic units to the southeast of this structure (Map 22, Map 23).

This eastern margin of the currently defined greenstone belt has seen little exploration, yet it has had significant grassroots success. Significantly a B-Horizon soil sampling program (AFRI 42C12NE0013) in 1984 was focused over a NNW trending magnetic trend between Finger Lake and Patio Lake. The results of the soil sampling were encouraging and included a continuous 275- meter-long sequence of soil samples along an east west line with a weighted average of 30ppb Au (results ranged from nil/no sample to 60ppb Au, Map 24).

Subsequently in 2003 a ground magnetic survey (Map 25) and HLEM survey followed up on these results and defined two HLEM anomalies (H-01, H02) 400 and 600 m long, in close proximity to the highly anomalous gold in soil anomalies (Map 26). These two HLEM anomalies are parallel to magnetic trends in close proximity to the dominant magnetic trends, but not collocated with them, being somewhat discordant, they also have overlying gold in soil anomalies up to 40ppb Au. The supporting report for the HLEM survey AFRI 42C12NE2007 describes the stronger H-01 anomaly as “conductive zone possible weak disseminated mineralization > 600m”.

NW of Finger Lake and Patio Lake is a series of airborne EM anomalies (1983 Aerodat) that are intimately associated with a magnetic trend (Map 27). This eastern margin of the greenstone belt was the focus of a mapping, magnetometer, VLF and B-Horizon soil sampling program in 1983. The area of work included the northern EM anomaly trend and extended southward to Finger Lake and included about half of its western shore (AFRI 42C13SE0020, 42C13SE0039). The ground magnetics in conjunction with the ground VLF, on the same grid, illustrates the presence of a potential conductor, located along the southern boundary of the magnetic high (Map 28, Map 29). Discontinuities clearly defined in the ground magnetic survey, in conjunction with the abrupt termination of the airborne EM trend suggests a NE-SW trending fault crosses through this area. This location for an inferred fault correlates with the NE extension of the Germanium in soil anomaly /inferred fault trend (Map 29). As an exercise red dots were placed on gold in soil anomalies of 8 ppb or greater in close proximity to this inferred fault trace, while inconclusive, the results are interesting (Map 30).

AFRI 42C13SE0020 identified a significant number of threshold and above gold in soil assays. To aid in visualization of the results of soil sampling (AFRI 42C13SE0020) red dots were placed on top of gold in soil >= 8ppb on Map 31. There is a widespread distribution of gold in soil in this area and, perhaps most importantly the distribution includes the extreme NE corner of the sample grid, currently mapped as granitic rock (Map 31). The combined presence of significant gold in soil anomalies and a two-kilometer long trend of airborne EM anomalies 500 m to the north of the area sampled (Map 22) suggests the greenstone belt extends beyond its currently defined limits to the NE. This NE corner of the “Detail Area” could host an undefined and unexplored extension of the Hemlo greenstone belt.

A follow up survey in 1995 covered the area of AFRI 42C13SE0020 a second time with AHorizon soil sampling program (AFRI 42C13SE0069) and notably several consecutive samples exceeded 500ppb Au within the previously defined gold in soil “” in AFRI 42C13SE0020.

Within the work program (AFRI 42C13SE0020) there is an outcrop mapped as “arkosic, minor disseminated pyrite”. This sedimentary outcrop is located in a relative magnetic low between two broadly spaced NW trending magnetic highs (Map 32). The frazer filtered ground VLF survey identified “Anomaly A” immediately NW of the sedimentary outcrop and extending for over one kilometer to the NW between the magnetic highs. The overlying area also hosts gold in soil anomalies. A sedimentary – volcanic contact with associated gold in soil anomalies and HLEM anomaly would be a high priority exploration target.

In 2003 a magnetometer and HLEM survey was conducted over a one kilometer trend of EM anomalies identified by Aeodate in 1983 (AFRI 42C13SE2008) in the northern section of the Detail Area. The HLEM survey identified a significant conductor that is interpreted to be on the south side of a NW trending prominent magnetic high, the report recommended drilling (Map 33). A portion of this EM anomaly trend, magnetic trend, and HLEM conductor trend were covered by B-Horizon soil sampling (AFRI 42C13SE0020) in 1983. This soil sampling program identified gold in soil Anomaly in close proximity (within mapping and georeferencing error?) of the HLEM conductor on the south side of the prominent NW trending magnetic high. (Map 34).

A fault is interpreted to be present at the south-eastern limit of the: one-kilometer trend of EM Anomalies identified by Aerodat in 1983; the parallel prominent magnetic high; the associated parallel HLEM conductor. Abrupt discontinuities in the magnetic data can be interpreted to support a NE fault at this location. Co-incidentally the extension of this inferred fault is coincident with the previously discussed germanium in soil anomaly. Also, co-incidentally there appears to be a string of discontinuous gold in soil anomalies along the inferred location of this fault (Map 30). The potential for a NE striking fault, potentially with gold mineralization, needs to be considered as exploration focuses on Hemlo type deposits.

Outcrop mapping combined with: ground and airborne magnetic-electromagnetic trends; HLEM conductors interpreted to be at the transition from sedimentary to volcanic rock; and anomalous gold in soil suggests a Hemlo style deposit is possible in the Finger Lake-Patio Lake area. The strike length of this favorable package is in excess of three kilometers. Additional strike length is possible to the SE however there is insufficient information at present to evaluate the SE extension, numerous gold and molybdenum showings SE along strike is encouraging.

Priority Exploration Areas

In summary the Melkior 2017 soil sampling program focused on a central area of the White Lake Project and succeeded in validating previously reported soil sampling results. The initial review of historical data was intriguing but complex and fractionated. In evaluating the next steps to advance the White Lake Project all historical information was reviewed again in more detail. The review evaluated all of the known previous work (AFRI files) available from the MNDM and georeferencing the historical digital maps into a GIS database. The AFRI files and maps were individually evaluated and polygons created over the perceived most important areas defined by the individual work program. All AFRI files available were processed and used to produce a “Target Map – Detail Area” the last of the accompanying Maps.

Five priority exploration areas were defined and are presented in the following table:

Area 1
  • located within a geological sequence reported as similar to that hosting the TeckCorona deposit.
  • locally areas of strong co-incident: VLF anomalies; IP chargeability zones; gold in soil anomalies up to 616 ppb Au; margins located along competency contrast associated with volcanic, sedimentary stratigraphy; Germanium in soil anomaly; Mercury in soil anomaly; Zinc in soil anomaly; Antimony in soil anomaly, Molybdenum in soil anomaly. Transected by inferred fault system also with associated germanium in soil anomaly; 700m trend of multiple airborne EM anomalies.
Area 2
  • a three kilometer long volcanic and sedimentary package that is interpreted to be transected by a fault system with elevated germanium that disrupts the continuity of two one-kilometer long trends of multiple airborne EM anomalies.

 

  •  HLEM and VLF anomalies situated between high and low magnetic units locally interpreted to be a sedimentary-volcanic contacts with co-incident gold in soil anomalies, including one area that has a weighted average of 30ppb Au over 275m. Outcrop of sedimentary rock “arkose” reported in area of transition from magnetic low to magnetic high with associated coincident gold in soil anomalies and HLEM conducters.
Area 3  Inferred stratigraphic contact associated with transition from high to low magnetics that is transected by inferred fault system with associated Germanium in soil anomaly; Mercury in soil anomaly; Zinc in soil anomaly; Antimony in soil anomaly, Molybdenum in soil anomaly. Reproduced strongly elevated Gold in soil anomalies, up to 707 ppb
Area 4  Section of inferred fault system between Area 3 and Area 4 with associated Germanium in soil anomaly; Mercury in soil anomaly; Zinc in soil anomaly; Antimony in soil anomaly, Molybdenum in soil anomaly, gold in soil anomaly
Area 5  Section of inferred fault system immediately west of Area 1 with associated Germanium in soil anomaly; Mercury in soil anomaly; Zinc in soil anomaly; Antimony in soil anomaly, Molybdenum in soil anomaly, gold in soil anomaly