Some Aspects of Karouni Gold Mine

Development Near Omai, Guyana

University of Guyana GEM 3205

Mineral Resources Utilization

Andy Chater Ph.D.,P.Geo.

20 April 2015
Important References for Karourni
1933 GGMC Bulletin 1 by Grantham et al
2005 GGMC Kaburi Gap Geochemical Project Report by
Heesterman and Kemp
2007 NI 43-101 Project Report for Takatu Minerals
May 2012 NI 43-101 Project Report for Azimuth by
Runge
Mar 2013 NI 43-101 Project Report for Azimuth by
Runge Pincock Minarco
Feb 2014 NI 43-101 PEA for Troy Resources by Troy
Resources
Jul 2014 NI 43-101 Prefeasibility report for Troy
Resources by Troy Resources
2013-2015 Investor Presentations by Azimuth and Troy
from www.asx.com.au
 Karouni (ex West Omai) Project is 25 Km
Northwest of Omai Mine, with Road Access

Karouni
Guiana Shield from Azimuth 2012/3
Azimuths (Takutus) Land Position by 2013
- Hicks and Smarts zones are the prime mineralized areas
- Azimuth amalgamated with Troy Minerals in late 2013

Hicks &
Smarts
Amalgamation
in Late 2003
 Many Mineralized Vein Systems in Hicks and
Smarts Area, Extending to Honey Camp/9 Mile
Kaburi District Well Located for Potential Power
- Kaburi (now Whitehall) is not the same as Tajiris Kaburi
Initial Gold Production and Government Records
for Kaburi (incl. Karouni) for 1913-1968
1913 High grade gold in quartz veins mined by shallow shaft and
levels at Eldorado vein system
1916-26 Alluvial mining at the Kaburi vein (now called Whitehall)
1933 Kaburi significantly extended (during the 1930s gold boom)
1933 GGMC Bulletin 1 by Grantham records his geological
mapping and information on gold in the Kaburi (Karouni) area
1947-59 Various small GGMC studies, including 3 drill holes GGMC
showed Au associated with white clay and black carbonaceous
clay (in saprolite)
1963 and 1968 GGMCs geochemistry found high Cr values (to
400ppm) in soil associated with the Au (and fuchsite alteration) in
a 60m wide x 400m long area over Hicks
(Azimuth and Troy subsequently refer the cause of fuchsite to be
high magnesium basalts in Karouni host rocks which might be
appropriately called ultramafic flows within Karounis host
volcanics being the source of Cr and the subsequent Cr-rich
fuchsite alteration formed in the Au episode)
 Pre-Takutu/Azimuth/Troy Company
Exploration in the Karouni Area since 1968
1974/5 Cominco (now Teck) soil sampled and drilled Hicks but left (still in
a gold down period)
1988 Overseas Platinum Corporation (Reynolds Metals) explored Cr
geochem for Pt, but ended up drilling for Au
1989+ Dennison Mines completed soil sampling, trenching and mag surveys
around Kaburi (Whitehall)
1993-2002 Cathedral Gold (became Imperial Metals - that still holds 1% NSR
royalty) optioned Dennisons property and defined northwesterly trending
Au mineralization over 1.6 km (including Hicks) with soil samples, extensive
trenching and extensive diamond drilling
1999 Omai Gold (Cambior) began hauling ore to Omai Mine from Hicks (by
agreement with Cathedral), but it proved uneconomic
2000-2003 GGMC carried out geochemical sampling and compiled past data
on geology and mineralization in the area regionally
1996-2006 Patrick Harding, J.W. Carter and other (some informal/illegal)
miners hydraulic and sluiced gold from pits and areas from Hicks to Kaburi
2006 Takutu Minerals optioned Hicks from J.W Carter and acquired interests
in other surrounding lands, including East Omai Prospecting Licenses
J.W. Carter standing by
excavated reef in
Cathedral Golds Pit

According to Takutu in 2006:

Sub-vertical Quartz reefs

occur with apparent good
continuity within the core of
the Hicks mineralized zone
 Evident West-Northwest Trend at Omai
- purple color is area of drilled intersections more than 1.5 g/t Au
- light blue outlines are mined open pits, red areas are drill targets
- west-northwest shear zone parallel and at edge of Wenot pit

West-Northwest
Shearing

Mahdia Gold Info

 Omai Gold Mine
Pits in 2005

Operated by
Cambior Inc.

Massive Cyanide-containing
Tailings Spilt into Omai River
and on into Essequibo River
on 18th August 1995
Fennell Pit at Omai, Wenot Pit in Foreground
 ?Azimuths Land Acquired Based on Gold
Past History and Northwest Trend Concept

?Kabouri
Location of Omai-Hicks-Kaburi Corridor

Thin White Sand Cover

(Azimuth Information)
To Omai
Azimuth Comments in Early 2011 on (their)
Kaburi Property (Tajiris had outcrop Au)
Largest artisanal bedrock pit in Guyana, 200m
diameter and 5m to 15m deep
Estimated 20,000oz of saprolite and alluvial gold
historically produced at 20% recovery
High levels of Cu and anomalous Mo and W with
geochemical characteristics of larger Au/Cu style
deposit
Trenching by Azimuth failed to located source of
gold sampling - probably in the footwall
Scout RC drilling to commence in September
2011
 Tajiris Extensive Alluvials at Kaburi
- close to Hicks and Smarts in nearby subparallel trend to the
general Omai-Hicks-Smarts-Honey Camp Trend
- mineralized linear trends ?= structural and magmatic related
 Tajiris Kaburi Pit
- quartz vein, and white weathered clay-type
?alteration alongside gold bearing vein
Hicks Zone North Pit Stockworks
and Disseminated Mineralization
Hicks Zone Sheared and
Boudinaged Quartz Veining
in Shear Zone (looking SE)
Troys Main Mineralization Map + Placer Gold
- Troys Whitehall is Azimuths Kaburi
Mineralization Related to Weakly Magnetic
Local Linear Trends (?shear zone related)
- mag trends are reminiscent of schists and phyllites/shear
zones within in metavolcanics flanking Auora granite
Troy Resources Ground Mag Survey in 2014
- very apparent levelling problems, looking northwest
Troys Combined New Ground + Old Airmag
- new ground mag is not reduced to pole
 Current Troy Diagram Showing Mineralization
Flanking an Intrusive (?source) with shear zone
+/- stratigraphic control in subparallel horizons
Still a Concept of Two Separate Corridors

? Underlain by
Intrusive
 Azimuths Hicks Zone is Over 2 km Long
- cut by post mineralization dolerite/diabase (micro gabbro/diorite) dike
 Steeply Dipping Hicks Zone, in Sections
- drilled at about 25 meter centers, plus 1.5 g/t material near surface
- saprolite to +/- 50 meters, no White Sands cover in main portion
Smarts Cross Section Under Original Pit
- excellent near surface grades, ? two weatherings
Smarts Longitudinal Section in Gram-Meters
- shallow plunging shoots might explain rapid loss of grade at depth
- note contouring uncertainty this is contoured very subjectively
 Prefeasibility Study 2014 Smarts Sections
- previous slide includes mineralization that is not contiguous

More Volcanic
More Volcanic
More
Sedimentary

More Red =
Sedimentary Porphyritic
Rhyodacite

Green = Extensive
Carbonate Lenses
All Volcaniclastics All Volcaniclastics
 Post Mineralization Hicks Zone Dolerite
- Hicks Zone appears as series of very thin, subparallel veins
 View of Smarts Wireframes, Similarly
Showing Thin, Subparallel Veins, as Drawn
Hicks and Smarts Resource Model Longitudinal
Blocks in Main Solids (Objects)

Hicks

Smarts
Smarts Longitudinals on Troy Website in 2014
- compare with previous slide, same grade blocks but more
grades show as red!
In Feb 2014, Troy Minerals Prepared Their
Own Preliminary Economic Assessment

Visible Gold in Diamond Drill Core Smarts Deposit

 Troy Reported on Results of Earlier
Azimuths Twin Hole Drilling
- six twin drill holes averaging 4 m apart in Smarts zone

The variation partly reflects the small data set and is

considered reasonable for the style of the deposit and
nuggety nature of mineralisation
RungePincockMinarcos Resource Estimate
for Azimuths 2012/3 43-101 Reports
Created wireframe solids (objects) within mineralized
envelope (? limits)
Used cut-off grade of 0.25-0.35 g/t Au over minimum 2m
down hole length for wireframe extents included some
internal waste for continuity
Used 20 g/t capping grade for all wireframes
Populated wireframes with blocks and used Ordinary Kriging
for grade interpolation
Blocks were 20m along strike, 4m across strike and 10m
downdip
At 1.0 g/t cut-off, calculated inferred resources to total 16.7Mt
at 3.1 g/t Au containing 1.65 million oz Au
(Hicks 8.7Mt at 2.1 g/t Au, Smarts 8.1Mt at 4.2 g/t Au)
Mineral Resources Remained Unchanged
- used prior (RungePincockMinarco 2013) estimates but
now provided tonnes and grade at three cut-off ranges
- large increase in tonnes from 2-1 g/t cut-off with just 50%
increase in grade for 2 g/t cut-off no grade tonnage curve
New (Internal) Resources and Reserves in
Troys July 2014 Prefeasibility Study
- mineral resource included open pit and underground
- reserves were for open pit portion only (mined in 3 years)
 In May 2014 Troy Announced Go-
Ahead for Open Pit Portion of Mine

Underground Portion to Await

Subsequent Prefeasibility Study
Summary of Studies for Early Open Pit

More Drilling
Required for
Underground
Pre-feasibilty
 Troys 3-Year Open Pit
Production Plan - Good
Stand-Alone Economics
- for about 300,000 ozs
(milling at ~2,300 tpd)

(Effectively, much of the capital

for an underground mine will be
bought and paid for by start time)
Scheduling for 3-Year Open Pit Ore Sources
- from July 2014 Pre-feasibility Study
General Lay Out Plan for Karouni Mine
Concept of Open Pit Phases at Hicks
Concept of Open Pit Phases at Smarts
An Underground Mine Will Be Developed
at Smarts When Open Pit Exhausted
Economics - for 2,100 tpd, 8-year Mine
Life, Open Pit (strip ratio 10:1) plus
Underground Mine at Smarts (PEA)
Capital Costs Estimated at $86.8 million (including
significant pre-stripping)
Sustaining Capital at $40.5 million (most into
underground mine development), equivalent to
$156/oz
Operating Costs consisting of
Mining ore and waste at $355/oz
Processing at $239/oz
Admin at $45/oz
Refining at $14/oz
Analysis at $1,200/oz Au, after tax
At 6% discount rate NPV = $85.5 million
IRR = 38.5%, Pay-back = 4.5 years
Recent Hicks Concept Presentation
Recent Smarts Concept Presentation
Bulk of Economic Ounces are at Smarts
Recent Economic Summary for 3-Year Mine