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Clarence Stream


Galway Metals has an Option Agreement to acquire a 100% undivided interest in the Clarence Stream gold project, which is located 70 kilometres (km) south-southwest of Fredericton in south-western New Brunswick, Canada. Galway's land position comprises 60,465 hectares (149,412 acres) with 65 km of strike length (and a width of up to 28 km) along the Sawyer Brook Fault System, which straddles several intrusives that are believed to have created the conditions necessary for gold deposition.


Clarence Stream and
Estrades Project Presentations


The Company released an updated NI 43-101 resource estimate prepared by SRK Consulting (U.S.) in September of 2017, which included for the first time, a pit constrained resource.  All prior resource estimates were based on underground mining only but there are wide, high-grade and near-surface intersects in both the South and North Zones that indicated the potential for pit development.

Updated Mineral Resource Statement for Gold, Clarence Stream Gold Deposit, New Brunswick, Canada, by SRK Consulting (U.S.) Inc., August 21, 2017
Area Cutoff Grade Au (g/t) Class Tonnes (000) Au Grade (g/t) Au Ounces (000)
North Pit 0.42 Measured 28 2.96 2.7
Indicated 1,593 1.96 100.4
M&I 1,622 1.98 103.0
Inferred 1,838 2.09 123.3
South Pit 0.42 Measured 207 1.66 11.0
Indicated 4,081 1.81 38.0
M&I 4,289 1.81 249.0
Inferred 709 1.31 29.9
Total Pit 0.42 Measured 236 1.81 13.7
Indicated 5,675 1.86 338.4
M&I 5,910 1.85 352.2
Inferred 2,723 1.87 153.1
Underground 2.55 Indicated 267 4.39 37.8
Inferred 862 4.48 124.1
Total Gold Resource Variable Measured 236 1.82 14.0
Indicated 5,941 1.97 376.0
M&I 6,178 1.96 390.0
Inferred 3,409 2.53 277.0

Updated Mineral Resource Statement for Antimony, Clarence Stream Gold Deposit, New Brunswick, Canada, by SRK Consulting (U.S.) Inc., August 21, 2017
Area Class Tonnes (000) Sb Grade (%) Sb Pounds (000) Au Eq
Grade (g/t) Ounces (000)
North Pit Inferred 1,153 0.50 12,746 1.1 42.5
South Pit 1,421 0.28 8,633 0.6 28.8
Underground 162 0.18 650 0.4 2.2
Total Sb Resource 2,736 0.37 22,030 0.8 73.4

Notes for the Clarence Stream Mineral Resource Statement for Gold
  1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into Mineral Reserves;
  2. Pit constrained resources as stated are contained within a potentially economically minable pit; pit optimization was based on an assumed gold price of US$1,350/oz (CAD$1,687.50/oz at a 0.8:1 CAD$:US$ conversion rate), an Au Recovery of 90%, a mining cost of CAD$3.00/t, an ore processing and G&A cost of CAD$20.00/t, and pit slopes of 45 degrees;
  3. Pit constrained resources are reported using a gold cutoff grade of 0.42 ppm, which incorporates a 3% royalty and Au sales costs of CAD$5.00/oz beyond the costs used for pit constrained optimization;
  4. Underground resources as stated are contained within modeled underground stope shapes using a nominal 1.5m minimum thickness, above an Au cutoff grade of 2.55 ppm, and below the reported pit constrained resource;
  5. The underground cutoff is based on an assumed gold price of US$1,350/oz (CAD$1,687.50/oz at a 0.8:1 CAD$:US$ conversion rate), Au Recovery of 90%, a mining cost of CAD$100/t, an ore processing and G&A cost of US$20.00/t, a 3% royalty, and Au sales costs of CAD$5.00/oz;
  6. Tonnage estimates for the resource statement were informed by 139 new density determinations collected in 2017 by Galway technicians advised by SRK. Average density values were assigned to the block model by material type, with break-outs for major lithology units, overburden and mineralized zones.
  7. Mineral Resources were classified based on NI 43-101 guidelines using distance to source data and geologic continuity. In general, Measured Resources required a minimum of four drill holes within 18m of a block. Indicated Resources required a minimum of two drill holes within 40m of a block. Inferred Resources required at least one drill hole within 80m of a block. All Mineral Resources are reported less than 80m from source data.
  8. Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.

Notes for the Clarence Stream Mineral Resource Statement for Antimony
  1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into Mineral Reserves;
  2. Metal reported in this table is in addition to the metal reported in the gold resource and contained within the reported gold resource tonnage;
  3. Antimony is considered for inclusion in the resource when contained within the block model in the gold resource AND above an Sb cutoff grade of 0.1%;
  4. Equivalent gold is calculated using the ratio of the Au sales price of US$1,350/oz and an assumed Sb sales price of US$4.50/lb;
  5. No consideration has been made for any deleterious material that may be associated with the antimony; and
  6. Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.

Resource Expansion Potential

Management believes that this resource can be significantly expanded and is optimistic about the potential for satellite discoveries. Both the North and South Zones are open along strike in both directions, and the South Zone is open to depth. Resources at Clarence Stream are contained within 2.5-km of Galway's 65-km strike length. There are many additional strong targets identified along the 65-km trend, including many that exhibit coincident highly anomalous glacial tills, soils, boulders and chip samples, along magnetic lows. Galway's management believes the confluence of these anomalies is significant, and they have never been drilled. Galway plans on drilling several of these in late 2017-2018.

Metallurgy: Initial Tests Indicate 90% Recovery; Property is Adjacent to the Dormant Mount Pleasant Mill

Initial metallurgical test results for gold and antimony estimated recoveries using gravity, flotation and conventional carbon-in-leach (CIL) milling at more than 90% for both the South and North Zones. As with the need for more exploration to gain insight into the ultimate size of the Clarence Stream resource, Galway believes more metallurgical testing is also required. Galway's property is adjacent to the Mount Pleasant tin-tungsten-molybdenum mine and mill, which closed in 1985. Although the gravity concentrators, flotation cells and the ball mill has been sold, mill infrastructure remains intact, and the property has a fully permitted tailings facility, power line and buildings. Strategically, Galway has reached an agreement to lease space within the mill buildings, as well as outside, for core, chip sample, pulp and reject storage, and for core splitting and logging purposes, among other requirements.

New Brunswick: An Excellent Place to Operate in Canada

New Brunswick is well known as a mining-friendly jurisdiction, having ranked first worldwide for Mining Policy Perception by the Fraser Institute in 2011/12, and has ranked in the Top-10 each year since. The Clarence Stream property is accessible via airports at Fredericton and Saint John, via Provincial Highway 770 that bisects the property and rail. Also bisecting the property is a major power line, which services Clarence Stream and the neighbouring Mount Pleasant Mine and Mill as well. Employees, services and supplies will be sourced from nearby towns of St. Stephen, St. Andrews and St. George and a major seaport is located at Saint John 110 km to the east.

Clarence Stream Deal Terms

Jubilee: Galway acquired the Birneys Lake project at Clarence Stream for CDN$200,000 plus a 1% NSR royalty with a buyback option for half (0.5%) at any time for CDN$500,000.
Globex: Galway acquired the Lower Tower Hill Property from Globex Mining Enterprises for 260,000 shares, plus a 2.5% Gross Metal Royalty
Staking: Galway staked 1,170 claims, or in excess of 26,500 hectares (65,500 acres) of land to the east and west along the prospective Sawyer Brook Fault System and associated intrusives for CDN$70,200. This added approximately 30 km of prospective ground for future exploration (included in the 65 km total).
Wolfden: Galway has the option to acquire 100% of Wolfden's interest in the Clarence Stream property by making the following payments:
  • CDN$750,000 upon closing (completed)
  • CDN$750,000 upon the first anniversary of closing (completed)
  • CDN$1.0 mm upon the second anniversary of closing
  • CDN$750,000 upon the third anniversary of closing
  • 1% NSR royalty with a full buyback option at any time for CDN$2.0 mm.

Pre-existing royalty agreements

Franco-Nevada Corporation has a 1% NSR royalty on a portion of the Clarence Stream property, on which there is no buyback option. In addition, a portion of the Clarence Stream property is subjected to a 2% NSR royalty, of which half (1%) is subject to a buyback option at any time in two 0.5% increments for CDN$500,000 each.

Clarence Stream Geology and Mineralization

Clarence Stream is located along, and controlled by, the Sawyer Brook Fault boundary of the Gander and Avalon terranes of the Canadian Appalachians in Palaeozoic age intrusive and sedimentary rocks, which are the primary hosts of gold mineralization. The deposits are intrusion-related quartz-vein hosted fault-controlled gold with pyrite, base metal sulphides, and stibnite plus anomalous concentrations of bismuth, arsenic, antimony and tungsten, with sericitization and chloritization. Gold is present in two main areas---the South Zone along the Sawyer Brook Fault and the North Zone 3.5 km NW. The South Zone is steeply dipping, east-northeast trending, with two horizons identified to date, and multiple shoots extending over more than 2.5 km with the resource extending to a maximum depth of 336 metres to date along contacts and within sheared and altered metagabbro and microgranite sills and dikes that crosscut the meta-sedimentary rocks and are related to the Saint George Batholith to the south (presence of hornfels + veined and altered auriferous microgranite dikes + high concentrations of Bi, As and Sb). The North Zone consists of four lenses that appear to be part of the same shallow dipping horizon up to 37.4 metres thick within a one km by two km area to a maximum depth of 90 metres, and is hosted within metagreywacke and argillite, and in quartz veins with stringers and semi-massive stibnite, arsenopyrite, and pyrite.

   
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