Estrades Project

MINERAL RESOURCE ESTIMATE

Click here to download the Mineral Resource Estimate

Galway has acquired an undivided 100% ownership interest in the former producing, high grade Estrades mine, related Newiska concessions, and adjacent Casa Berardi claims in western Quebec, Canada, located approximately 95 km north of the town of La Sarre. The claims are largely contiguous and comprise 31 km of strike. In September, 2018 the Company reported that the resource at Estrades has grown substantially and now contains 543,051 gold equivalent ounces (AuEq oz) of Indicated Mineral Resources grading 11.3g/t AuEq, plus 520,430 AuEq oz of Inferred Mineral Resources grading 7.4 g/t AuEq. From a zinc equivalent perspective, the Estrades deposit now contains 685 million ZnEq lb of Indicated Mineral Resources grading 20.8%, plus 656 million ZnEq lb of Inferred Mineral Resources grading 13.5%. The Estrades deposit was previously mined via a 200-metre deep ramp, with production in 1990-91 totaling 174,946 tonnes grading 12.9% Zn, 6.4 g/t Au, 1.1% Cu and 172.3 g/t Ag.

Breakwater Resources Ltd. spent CDN$20 million in 1990 developing Estrades, including the installation of a 200-metre deep by 150-metre along strike decline, a ventilation raise and associated infrastructure. Production in 1990-91 totalled 174,946 tonnes grading 12.9% Zn, 6.4 g/t Au, 1.1% Cu and 172.3 g/t Ag. Breakwater closed the mine amid weak metal prices and excessive contract mining and processing costs. In order to consolidate the Estrades, Newiska and Casa Berardi claim blocks, Galway completed deals with Mistango River Resources Inc., CR Capital Corporation, First Quantum Minerals Ltd., Globex Mining Enterprises Inc. and a private company, plus the Company staked additional claims.

Updated Mineral Resource Estimate for the Estrades Polymetallic VMS Deposit, Quebec, Canada, by RPA Inc., September 10, 2018

Notes for the Mineral Resource Estimate are provided below.

 Details of the Estrades Mineral Resource Update

For a long section of the 2018 Mineral Resource estimate, see Figure 1. For comparative purposes, the 2016 Mineral Resource long section is in Figure 2. The Mineral Resource update represents significant increases in tonnes and metal content, with Indicated and Inferred tonnes rising by 15% and 80%, respectively, and respective Indicated and Inferred contained metals growing by 5% and 79%, compared with the previous Estrades Mineral Resource estimate. The much larger increase of Inferred versus Indicated Mineral Resources was in-line with Company expectations because Galway’s exploration program focused on step-out drilling designed to increase the Mineral Resource rather than on infill definition drilling. Average Indicated Mineral Resource grades remain very high as measured by AuEq or ZnEq grades of 11.3 g/t or 20.8%, respectively. Inferred Mineral Resource grades are also strong at 7.4 g/t AuEq or 13.5% ZnEq. Detailed comparisons of the 2018 versus 2016 Mineral Resource Statements are provided below.

Estrades Mineral Resource Comparisons, Grades and Tonnages: September 10, 2018 vs August 12, 2016

Estrades Mineral Resource Comparisons, Ounces and Pounds: September 10, 2018 vs August 12, 2016

Note: All notes for the 2018 Mineral Resource Statement apply to the 2016 Mineral Resource Statement.

Four important observations were made by Reno Pressacco, Principal Geologist with RPA Inc. during preparation of the Mineral Resource estimate:

• “The favourable Mine Unit felsic package has been modelled along a strike length of approximately 2.6 kilometres. Available historical drill hole information indicates that the Mine Unit felsic package continues along strike both to the east and west.”
• “The thickness of the Mine Unit felsic package is increasing at depth in the western block, and in the vicinity of the Mine Fault in the eastern block.”
• “The presence of considerable talc in the deepest hole in the west block (which remains short of its target) suggests the presence of an alteration pipe. The deep TITAN conductance in the area coincides with the thickening of the Mine Unit felsic package and the location of the possible alteration pipe.”
• “The new lithology information gained from Galway’s exploration programs is also serving to highlight several locations in both the western and eastern fault blocks where Galway’s drilling is suggesting very good potential for location of additional sulphide mineralization. Additional drill targets are clearly apparent from this revised interpretation.”

Galway will conduct downhole geophysics on deep hole 21 located below the Main Zone (west of the cross fault and below the mine workings), with follow-up drilling to commence after the winter freeze in January. Galway will also expand the best high-grade new area east of the ramp and cross fault as defined by the 4 strong drill holes in the area—holes 24, 27, 32 and 48 by drilling below and to the west. This area coincides with one of the strong Titan IP/EM chargeability/resistivity anomalies as highlighted in the July 26, 2018 press release (see Figure 1 and Figure 2).  The extent of Galway’s 2019 drill program will depend on market conditions given the prolonged downturn in metal prices and the junior mine exploration resource sector.

 The Estrades Mineral Resource Estimate Remains Robust at Trailing 12-Month Average Metal Prices

RPA Inc. provided a sensitivity analysis on the Base Case Mineral Resource estimate at trailing 12-month average metal prices and the US$/C$ exchange rate. The table below shows that there are negligible differences between the two estimates. Galway considers this to be a reflection of the robust, high-grade nature of the Estrades deposit. The one area where there are differences is in AuEq and ZnEq grades. Compared with the Base Case, the trailing 12-month average price scenario has higher AuEq grades as a result of applying higher zinc prices and lower ZnEq grades in response to using lower gold prices. Grades for each individual metal remained little changed, as did total tonnes.

Sensitivity Analysis, 12-Month Trailing Average Prices and Exchange Rate vs Base Case, Estrades Deposit, September 19, 2018

Notes to accompany the Mineral Resource tables:

1. CIM (2014) Definition Standards were followed for Mineral Resources.
2. No Mineral Reserves are present.
3. All metal prices, the US$/CDN$ exchange rate and cut-off grade were provided by RPA Inc.
4. Mineral Resources are estimated at long-term metal prices (USD) as follows: Au $1,450/oz, Ag $21.00/oz, Zn $1.15/lb, Cu $3.50/lb and Pb $1.00/lb.
5. Mineral Resources are estimated using an average long-term foreign exchange rate of US$0.80 per CDN$1.00.
6. Mineral Resources are estimated at a cut-off grade of CDN$140/tonne NSR, which included provisions for metallurgical recoveries, freight, mining, milling, refining and G&A costs, smelter payables for each metal and applicable royalty payments.
7. Metallurgical recoveries for resource estimation are: Zn 92%, Cu 90%, Pb 85%, Au 80% and Ag 70%.
8. A minimum mining width of approximately 1.5 m was used.
9. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
10. Au Eq (g/t) and Zn Eq (%) represent the in-situ metal content expressed as Au and Zn equivalents and do not provide for metal recoveries or other economic considerations.
11. Preliminary analysis indicates that no metal is dominant; however, Au and Zn are the largest contributors.
12. Numbers may not add due to rounding.

Quebec: An excellent place to operate in Canada

Quebec is an excellent place to conduct business in the mining industry, having ranked 8th and 9th by the Fraser Institute (2015) in its Investment Attractiveness and Best Practices Mineral Potential indices, respectively, out of 109 locations around the world. Estrades is accessible via Highway 109 and 78 km of gravel roads (most of which is year round), or via Highway 810 and a 7.3 km bush road, although a Bailey bridge over a river would need to be erected to complete the connection. Highway 810 connects to both the Casa Berardi mine and Matagami mill (via Hwy 109), as well as to the town of La Sarre (via Hwy’s 109 and 111). As part of Breakwater’s mine development, power was brought to Estrades, but in the intervening years power lines were taken down. However, two power lines that exist within 25 km of Estrades can be tapped into, thereby re-establishing power to the mine. Quebec’s electricity rates have consistently been second lowest among Canadian provinces, with large-consumer industrial costs as of May 2016 at approximately CDN$0.05/kWh. Quebec has a large and experienced mining labour force, which can be sourced from the nearby towns of Matagami, La Sarre and Amos.

Estrades Geology and Mineralization

During the preparation of the RPA resource estimate, anew understanding of where the mineralization sits in the stratigraphy was developed. Two mineralized intervals appear to be kept separate by a Key Marker Horizon. It has been logged as an intermediate or mafic unit – often an intrusive. The presence of two separate horizons was recognized in the 2006 Resource estimate, but the scope of that assignment was limited to the Main Zone only, which lessened its impact as, in this area, most of the mineralization sits in the footwall (FW) layer. As work was undertaken along strike to the east through the Central and East Zones, these two layers were traceable along the entire strike length of the Mine Unit package. Two sets of longitudinal section projections are used (one for the hanging wall (HW) layer and one for the FW layer). As mentioned above, most of the mineralization in the Main Zone sits in the FW layer, but the mineralized pods to the east that form the current Mineral Resource can be found in both horizons.

The following is taken from various sections of the Scott Wilson RPA NI 43-101 Technical Report dated November 20, 2006. RPA considers the information in this Estrades and the subsequent Casa Berardi Geology and Mineralization sections to be current and plans on incorporating key elements of it in its updated August 12, 2016 Technical Report that will be published within the next 45 days. The Estrades area is constituted in meta-volcanic and sedimentary rocks of the Harricana-Turgeon Belt (HTB), which is located in the NW part of the Abitibi Subprovince. The regional metamorphism is of greenschist facies. The lithology is generally east-west striking and vertically dipping. Rocks of the Estrades Unit and the Taibi sediments (Casa Berardi) are cut by two major ENE to NE trending diabase dykes.

The Main Felsic Unit refers to the immediate felsic volcanoclastic hanging wall and footwall rocks that envelope the Estrades Unit. The Main Felsic Unit is referred to as a felsic schist or felsic tuff or lapilli tuff, depending on the degree of deformation. The common fragmental appearance of this unit is generally deformation induced, and does not represent a primary pyroclastic feature. This unit has been described as a rhyolite, mainly schistose, though locally flow-banded. Generally, this unit is light yellow to grey in colour, with variable quartz crystal content, and is typically schistose and/or brecciated.

The stratigraphy of the Estrades Unit is over 5 km wide and known as the Joutel-Raymond Basaltic-Rhyolite Domain. The Estrades Unit is the mineralized unit that includes (from west to east) the West (intersected by two drill holes), Main, Central and East Zones of the Estrades deposit. Alteration is typically a strong pervasive sericite with local chlorite depending on proximity to the stringer zone. Pyrite is the dominant sulphide, however sphalerite is common, as is chalcopyrite and galena. Elevated values of both silver and gold occur in the hanging wall and footwall. This mineralization has been identified as classic Archean age of the syngenetic exhalative type. The deepest drill hole (Hole H-281AW) targeting the Estrades Unit under the mine intersected sulphide mineralization 900 m below surface; it returned 3.3% Zn, 0.5% Cu, 1.1 g/t Au and 38.7 g/t Ag over 1.9 m. The Estrades deposit is covered by glacial silt, clays and sandy gravels of variable thickness.

Main Zone
The Main Zone is mineralized over a strike length of 600 m and extends to at least 650 m below surface with an average width of 3.8 m. All historic production originated in this zone. Pyrite is the predominant sulphide mineral, followed by, in decreasing abundance, sphalerite, chalcopyrite, galena and pyrrhotite. The precious metals content is represented by a silver-gold amalgam, ranging from silver-rich electrum to gold-rich kustelite. There is a major fault associated with the Main Zone deposit, known as the Main Fault, which is the dominant structure within the deposit. The Main Fault strikes 338o and dip 65o SW, separating the Main Zone from the Central and East Zones.

Central Zone
The Central Zone has a strike length of 500 m and an average width of two metres. Drilling to a depth of 400 m indicates a massive sulphide orebody that appears to be cut by several faults. The western limit of the Central Zone appears to terminate against the Main Fault.

East Zone
The East Zone, which lies 100 m east of the Central Zone, has a strike length of 500 m and has been identified to a depth of 600 m. Massive sulphide thicknesses generally range from 1.0 m to 2.5 m.

Newiska Block
A broad sericite-chlorite alteration zone and chalcopyrite-sphalerite stringer mineralization that cuts the felsic volcanic rocks have been intersected in drill holes over a strike length of 3.8 km, with the alteration zone up to 300 m wide. There tends to be a zonation of Zn and Cu mineralization along strike, with drill intersects on the western portion of the Newiska Block being Zn-rich whereas grades to the east have higher Cu values.

Casa Berardi Geology and Mineralization

A major regional deformation zone, the Casa-Berardi Break, is located approximately two km north of the Estrades Unit within the 700 m to 1.5 km-wide Taibi sediments. The Casa-Berardi Break is a graphitic fault with injections of quartz-carbonate veining. Iron formations, which are well defined on magnetic maps, occur in the southern portion of the Taibi sediments.

Taibi sedimentary rocks are composed of sandstone, siltstone, greywacke and argillite. The unit hosts the Casa Berardi Fault, a four-metres wide graphitic fault with quartz-carbonate veining. Iron formation occurs in the southern portion of the sedimentary package and is evident on magnetic maps as a series of magnetic highs traversing the centre of the property block. This iron formation consists of fine-grained alternating laminae and beds of magnetite and chert. The Casa Berardi sediments are variably sericitized and carbonatized. The alteration increases toward the Casa Berardi Fault where the sediments are strongly sericitized and contain up to 20% ankerite and locally, pyrite, arsenopyrite-bearing, smoky to dark quartz veins containing pyrite and arsenopyrite. Anomalous gold occurs locally.

Review by Qualified Person, Quality Control and Reports

In compliance with National Instrument 43-101, Mr. Mike Sutton, P.Geo., is the Qualified Person responsible for accuracy. Mr. Reno Pressacco, P. Geo., is the Qualified Person responsible for preparation and disclosure of the Estrades Mineral Resource estimate, and is independent of Galway. The drill core is sawn in half with one half of the core sample shipped to Swastika Laboratories situated in Swastika, ON, which has accreditation of ISO/IEC 17025. The other half of the core is retained for future assay verification. Other QA/QC measures includes the insertion of certified reference standards (gold and polymetallics) and blanks into the sample stream, and the regular re-assaying of pulps and rejects at alternate certified labs. Gold analysis is conducted by fire assay using atomic absorption or gravimetric finish for samples greater than 10 g/Mt gold. Other Metals (Ag, Cu, Pb, Zn, Co, As) have full acid digestion and analyzed by AAS; with over limits (10,000 PPM) analyzed by AAS using method dilutions, and the Silver (Ag) over limits (> 200 ppm) analyzed by fire assay (FA) & gravimetric finish. The laboratory re-assays at least 10% of all samples and additional checks may be run on anomalous values.