REG - Landore Resources Ld - Updated PEA & Strategic Review of Canadian Assets

Landore ResourcesAnnouncement

09/05/2022 07:00

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RNS Number : 7048K  Landore Resources Limited  09 May 2022

This announcement contains inside information as defined in Article 7 of the
Market Abuse Regulation No 596/2014.

 

LANDORE RESOURCES LIMITED

(AIM Ticker: LND.L)

 

TECHNICAL REPORT AND PRELIMINARY ECONOMIC ASSESSMENT OF

THE BAM GOLD DEPOSIT

 AND

STRATEGIC REVIEW OF CANADIAN ASSETS

 

London, United Kingdom 9th May 2022 - Landore Resources Limited (AIM:LND)
("Landore Resources" or "the Company") is pleased to confirm that, further to
the Company's announcement on 8th February regarding a Mineral Resource
Estimate update, Cube Consulting Pty Ltd has now completed  a Technical
Report and Preliminary Economic Assessment ("PEA") on the BAM Gold Project,
Junior Lake Property, Ontario, Canada ("BAM Gold Project").

In addition, Landore Resources confirms that it has commenced a review of the
strategic options available to the Company in relation to its Canadian
subsidiary/assets (the "Strategic Review").

 

Technical Report and PEA Highlights:

 

·    The Mineral Resource Estimate of the BAM Gold Project at a 0.3g/t
cut-off is: 49,231,000 tonnes (t) at 1.0 grams/tonne (g/t) for 1,496,000
ounces of gold (oz Au) including 30,965,000t at 1.0g/t for 1,029,000 ounces
gold in the Indicated Category.

 

·    The PEA considers the economics of exploiting resources inside
optimised pit shells of 22.4 Mt at 1.16g/t Au containing 833,000 ounces gold
using a long term gold price of US$1,800. The project assumes the construction
of a 2.2 Mt per annum processing plant over 4 quarters followed by a
production period of 10.5 years.

 

·    The PEA indicates that the BAM Gold Project generates a pre-tax and
post-tax NPVS of, respectively, US$333.6M and US$231.2M and pre-tax and
post-tax real IRRs of 87.4% and 66.7%. The BAM Gold Project has an after-tax
simple pay back of 1.25 years from the start of production or 2.25 years from
the start of project.

 

Strategic Review:

 

·    In light of the significance of the BAM Gold and Battery Metals
deposits located on the Junior Lake property, as announced in the Company's
Mineral Resource Estimate (MRE) update released on 8(th) February 2022, the
Directors will now review the strategic options available to the Company in
relation to the Company's Canadian subsidiary/assets. The options under the
Strategic Review will consider options including the sale of all or a part of
its wholly owned subsidiary, Landore Resources Canada Inc., or the Junior Lake
Project, potential joint venture arrangements or strategic partnerships, or a
combination thereof.

 

·    The Board believes the Strategic Review process is appropriate at
this stage of the Company's development to help the Board achieve its
objective in maximizing shareholder value. The BAM MRE has now reached 1.5
million ounces of gold and the Board believes that it has the clear potential
to become a multi-million ounce gold project. Whilst the above process is
undertaken, the Company will continue to seek to advance the BAM Gold Project
towards future development, with further drilling planned to commence in July
2022..

 

·    Strand Hanson Limited ("Strand Hanson") has been appointed as
Financial Advisor in connection with the Strategic Review. Any parties
interested in submitting an indication of interest should contact Strand
Hanson via the contact details shown below.

 

Commenting on this report, Chief Executive Officer of Landore Resources, Bill
Humphries, said:

 

"This Preliminary Economic Assessment, combined with the 50% resource increase
reported in February 2022, reaffirms the profitability of the BAM Gold
Project. The resource has excellent growth potential remaining open at depth
and along strike to the east and west, all within established mining leases
which cover more than 20 kilometres potential strike length. Other exploration
works completed by Landore including exploratory drilling, trenching and soil
surveys have identified anomalous gold over this area and the incredible
potential for future resource growth.

Over half of the gold resources delineated to date are extractable by
cost-effective open pit mining. This coupled with the 98% recovery achieved by
conventional milling demonstrates the BAM Gold Deposit's potential for low
capex costs and economical mining operation. Other advantages include the
project's road accessibility and proximity to national rail thus ensuring
secure market access.

It is the Company's belief that the highly prospective Junior Lake Property
has the potential to host multi-million ounce gold resources and is now
exploring various strategic options to ensure the development of this
rapidly-growing asset to the benefit of shareholders."

 

Technical Report:

 

The full Technical Report and Preliminary Economic Assessment can be found on
Landore's web site www.landore.com (http://www.landore.com)

 

Extracts from CUBE Technical Report and Preliminary Economic Assessment May
2022:

 

Executive Summary

 

Cube Consulting Pty Ltd (Cube) was engaged by Landore Resources Canada Inc.
(Landore) to complete a Mineral Resource estimate (MRE) and conduct a
preliminary economic assessment (PEA) for the BAM Gold Project, in compliance
with the requirements of the Canadian National Instruments 43-101 Standards of
Disclosure for Mineral Projects (NI 43-101).

The Junior Lake Project is located approximately 235 km north-northeast of
Thunder Bay, Ontario, and approximately 75 km east-northeast of the village
of Armstrong Junior Lake Property Status.

Landore has successfully delineated several deposits and other potential areas
of significant mineralization throughout the Junior Lake property including
the BAM Gold Deposit, the Lamaune Gold Prospect, the B4-7 Ni-Cu-Co-PGE
Deposit, and VW Ni Deposit. The main focus of this report is the BAM Gold
Deposit which is located in the south-central area of the Junior Lake property
and is interpreted as an Archean-aged mesothermal gold deposit.

Recent exploration and development drilling activity have highlighted the
following:

·    Acquisition of additional mining claims. The Junior Lake property now
consists of six mining leases and 1,318 staked mining claims, all together
totaling approximately 33,029 ha.

·    The results of the soil sampling programs in 2019 and 2020 indicated
a possible linking of gold anomaly trends over several hundred metres strike
length for several Junior Lake prospects.

·    The infill and step out drilling conducted for the 2020-2021 drilling
programmes further confirmed the correlation of previously defined geophysics
anomalies within the main BAM gold mineralisation trend and provided upgrades
to the BAM Mineral Resource estimate.

The 2020-2021 diamond drilling consisted of 102 HQ size drill holes
(0420‐725 to 0421‐826), for 24,361 metres. The BAM gold mineralisation
trend has now been tested by diamond drilling over a strike length 4.5 km. The
2020-2021 drilling has:

·    Continued to show the close association between gold mineralisation
and the VTEM geophysical anomaly trend

·    Confirmed the extension and continuity of the gold mineral resources
at depth within the main BAM mineralisation zone

·    Identified additional gold mineralization within the hanging wall GPS
unit.

·    Demonstrated the continuation of the main BAM gold mineralization to
the east and west

·    Infill drilling has also allowed for conversion of Mineral Resources
from Inferred to Indicated.

The January 2022 Mineral Resources for the BAM Gold Project has been estimated
by Cube based on drill hole and assay data available up to 14th January 2022.
The addition of the new drilling data has resulted in the increase in
Indicated and Inferred Resource of 47% (in-situ contained metal) above a
cut-off of 0.3g/t Au compared with the gold mineral resources reported in
2019.

Given the shallow nature of the mineralization and the initial metallurgical
test results, material could be extracted by means of open pit mining methods
and processed using conventional milling techniques. 3DM modelling and block
construction were created with aim of preparing a suitable model for open pit
optimisation and mine scheduling. A US $1800 gold price pit optimization run
was selected, which represented a potential 12 year mine life (including
pre-production, and post-mining processing). A series of metallurgical test
programs have been carried out on samples from the BAM Gold Deposit in 2016
and also in 2017. On average, 98% of the feed gold was recovered through
combined gravity concentration and cyanidation leaching of gravity tails for
composites tested.

For the preliminary economic analysis, the BAM Gold Project base case
considers the economics of exploiting a resource of 22.4 Mt at 1.16 g/t
containing 833 koz Au. Metallurgical recoveries of 98% are envisaged to yield
816 koz. The base case generates a pre-tax and post-tax NPV of respectively US
$333.6 M and US $231.2 M and pre- and post-tax real IRRs of 87.4%% and 66.7%.

Based on exploration work completed by Landore up to January 2022, there is
significant resource potential that clearly indicates follow up district scale
exploration programs are warranted. There is potential for further gold
mineralization and other multi-commodity targets along the 31 km strike length
of Landore's Junior Lake Properties.

Mineral Resources

The BAM Gold Project Mineral Resource, Effective Date as at 31 January 2022,
is suitable for public reporting in accordance with the NI 43-101 and the CIM
Definition Standards (May 2014). All drilling information, including all
drilling completed up to the end of 2021 has been used in the preparation of
the January 2022 MRE.

Table 1 is a summary of the Indicated and Inferred Mineral Resources,
effective as of 31 January 2022.

Table 1 BAM Gold Project In Situ Mineral Resources- All Indicated and Inferred
Resources (31 January 2022)

 Resource Category  Material Type  Au g/t cut off  Tonnes (kT)  Grade (g/t Au)  Contained Metal

                                                                                (Oz Au)
 Measured           ALL            >0.3            0            0               0
 Indicated          ALL            >0.3            30,965       1.0             1,029,000
 Inferred           ALL            >0.3            18,266       0.8             467,000

 

 Notes:
 1       Effective date 31 January 2022.
 2       Mineral Resources are estimated at a block cut-off grade of 0.3 g/t Au.
 4       A minimum mining width of two metres was used.
 5       Bulk densities for the main host rocks are 2.82 t/m(3), 2.84 t/m(3), and 2.90
         t/m(3).
 6       Mineral Resources that are not Mineral Reserves do not have demonstrated
         economic viability.
 7       Figures may not add up due to rounding

 

Based on the current input parameters that have been used for the 2022 pit
optimization by Cube, a 0.3 g/t Au lower cut-off was deemed appropriate for
the January 2022 Mineral Resource reporting.

At a cut-off grade of 0.3 g/t Au, the Mineral Resources are reported here
within the pit optimization Run B open pit shell. The Run B open pit shell
includes Indicated Mineral Resources and Inferred Mineral Resources. The
figures reported in Table 2 are estimated using a long-term gold price of
US$1,800 per ounce.

 

 

 

 

 

Table 2 2017 BAM Gold Project Mineral Resources Inside US $1,800 Pit Shell (as
at 31 January 2022)

 Resource Category  Material Type  Au g/t cut off  Tonnes (kT)  Grade (g/t Au)  Contained Metal

                                                                                (Oz Au)
 Measured           ALL            >0.3            0            0               0
 Indicated          ALL            >0.3            21,922       1.1             785,000
 Inferred           ALL            >0.3            1,483        1.5             72,000

 

 Notes:
 1       Effective date of 31 January 2022.
 2       Mineral Resources are estimated at a block cut-off grade of 0.3 g/t Au.
 3       Mineral Resources are estimated using a long-term gold price of US$1,800 per
         ounce.
 4       A minimum mining width of two metres was used.
 5       Bulk densities for the main host rocks are 2.82 t/m(3), 2.84 t/m(3), and 2.90
         t/m(3).
 6       Mineral Resources are constrained by a preliminary pit shell generated in
         Whittle software.
 7       Mineral Resources that are not Mineral Reserves do not have demonstrated
         economic viability.
 8       Figures may not add up due to rounding

 

The pit optimization study resulted in two distinct areas, an east pit
optimisation (BAM East Pit) and a west pit optimisation (BAM West Pit).

Figure 1 shows a plan view of the pit designs in relation to the block model
mineral resources and based on the Run B scenario (Indicated and Inferred
Resources) from the January 2022 pit optimization work carried out by Cube.

There are no Mineral Reserves estimated for the BAM Gold Project at this time.

 

Figure 1:  Plan View of West and East Pit USD1800 Optimisation Shells with
Mineralization Interpretations (January 2022)

Preliminary Economic Assessment

The BAM project base case considers the economics of exploiting a resource of
22.4 Mt at 1.16 g/t containing 833 koz Au. Metallurgical recoveries of 98% are
envisaged to yield 816 koz.

Capital costs are derived from estimates provided by Landore and based on
examples for capital costing studies for similar and larger mining projects
economic assessments in Canada. Mining operating costs, which include drill
and blast, load and haul, mining owners costs, rehandle, grade control and
dewatering were provided by Cube and are derived from estimates from similar
sized gold mining operations in Western Australia. Plant operating costs were
provided by Landore and based on estimates of plant operating costs of gold
operations in Canada.

The project assumes the construction of a 2.2 Mtpa processing plant over four
(4) quarters followed by a mine production period of 10.5 years. Mining, which
is assumed to be undertaken by a contractor with a contractor fleet, will
begin one (1) quarter before mill processing and end two quarters prior to
mill processing completion. Overall, with pre-production, mine production and
mill processing, the total mine life is estimate at 12 years.

The project assumes a constant dollar (i.e. real) gold price of US $1,800 / oz
(this means gold price goes up at the rate of inflation in a nominal
environment to maintain its real value).

The base case generates a pre-tax and post-tax NPV of respectively US
$333.6 M and US $231.2 M and pre- and post-tax real IRRs of 87.4%% and
66.7%.

The base case has an after-tax simple payback period of 1.25 years from start
of production or 2.25 years from start of project. The all-in-sustaining cost
(AISC during production) is US $1,133 / oz (real). Maximum drawdown is US
$87.4 (nominal) or US $86.4M (real). The breakeven gold price on an after-tax
basis is US $1,289 / oz (real) and a price of US $1,433 / oz (real) would
provide an after-tax IRR of 30% showing the leverage to price. AISC does not
include income taxes or Ontario Provincial Mining tax.

A summary of the project physicals is shown in Table 3.

Table 3: BAM Gold Project Physicals - Life of Mine (January 2022)

 Project Physicals (LOM)     Units  Base Case
 Project Life (Total)        Years  11.50 Yr(s)
 Mine Life (Total)           Years  10.75 Yr(s)
 Ore Mined                   kt     22,388
 Waste Mined                 kt     178,168
 Total Mined                 kt     200,555
 Gold Grade                  g/t    1.16 g/t
 Contained Au Mined and fed  oz     832,620
 Plant feed                  kt     22,388
 Au Recovery                 %      98.0%
 Au Recovered                oz     815,967

 

A summary of ungeared financials are summarized in Table 4.

Table 4: BAM Gold Project Financials (Ungeared) (January 2022)

 Project Financials (Ungeared): real unless stated  Units     Base Case
 Gold Price (Average LOM)                           USD/oz    1,800 / oz
 Net Gold Revenue (Ex Site)                         USD M     1,464.66
 Mining Costs                                       USD M     569.95
 Plant and Other Operating costs                    USD M     348.08
 Operating Margin                                   USD M     546.63
 Margin % of Ex-Site Revenue                        %         37.3%
 Initial Capex                                      USD M     85.45
 Sustaining Capex and Mine Development costs        USD M     2.24
 C1 Cost                                            USD / oz  1,130 / oz
 C2 Cost                                            USD / oz  1,239 / oz
 C3 Cost (including Ontario Provincial Mining Tax)  USD / oz  1,283 / oz
 C3 Cost (excluding Ontario Provincial Mining Tax)  USD / oz  1,239 / oz
 AISC including Ontario Provincial Mining tax       USD / oz  1,177 / oz
 AISC excluding Ontario Provincial Mining tax       USD / oz  1,133 / oz
 Project NPV (Pre-Tax)                              USD M     333.15
 Project NPV (Post Tax)                             USD M     231.28
 Project IRR (Pre-Tax)                              %         87.4%
 Project IRR (Post Tax)                             %         66.7%
 Project Break-Even Gold Price                      USD / oz  1,289 / oz
 Breakeven Au Price at 30% IRR                      USD / oz  1,433 / oz
 Project Payback Period from Construction Start     Years     2.25 Yr(s)
 Maximum Project Drawdown                           USD M     87.37

 

A sensitivity analysis for pre-tax and post-tax considerations is illustrated
graphically Figure 2 and tabulated in Table 5.

Figure 2:  Post-Tax Sensitivity Analysis - Base Case (January 2022)

 

Table 5: BAM Gold Project Gold Price Sensitivity Analysis: Base Case - Post
Tax (January 2022)

 Base Case - Post Tax
 Gold Price                 -40%     -30%    -20%    -10%    0%      10%     20%     30%     40%
 NPV                        -111.02  -15.30  74.09   154.20  231.28  306.92  382.03  457.12  532.33
 Ave. Gold Price (US $/oz)  1080     1260    1,440   1,620   $1,800  1,980   2,160   2,340   2,520
 Plant Opex                 -40%     -30%    -20%    -10%    0%      10%     20%     30%     40%
 NPV                        302.36   284.73  267.02  249.18  231.28  213.26  195.02  176.61  157.90
 Mining Opex                -40%     -30%    -20%    -10%    0%      10%     20%     30%     40%
 NPV                        346.64   318.00  289.29  260.44  231.28  201.71  171.52  140.33  108.78
 Overall Opex               -40%     -30%    -20%    -10%    0%      10%     20%     30%     40%
 NPV                        418.15   371.53  325.05  278.45  231.28  183.07  132.93  81.71   23.27
 Capex                      -40%     -30%    -20%    -10%    0%      10%     20%     30%     40%
 NPV                        256.65   250.33  244.00  237.66  231.28  224.89  218.45  212.01  205.54
 Discount Rate (Real)       -4%      -3%     -2%     -1%     0%      1%      2%      3%      4%
 NPV                        300.55   280.95  262.98  246.47  231.28  217.28  204.34  192.37  181.28

 

Property Location Access and Description

The Junior Lake property is located approximately 235 km north-northeast of
Thunder Bay, Ontario, and approximately 75 km ENE of the village of
Armstrong. The centre of the Project is located at 87°59'4" W longitude and
50°23'9" N latitude; the NAD83 UTM coordinates (Zone 16) are 430,000E and
5,584,000N. The BAM Gold Project is located at approximate UTM coordinate
434,910E and 5,581,555N.

Road access to the Junior Lake property from Thunder Bay is via paved
provincial highways No. 17 (15 km) and No. 527 to Armstrong, with an overall
distance of 255 km. From Armstrong, the Buchanan Forest Products Inc. gravel
haulage road (BHR) is taken east to kilometre 105, where a skidder haulage
road leads approximately one kilometre to the Landore Junior Lake exploration
camp. The total distance from Thunder Bay to the property is approximately
360 km.

Landore mineral holdings in the Lake Nipigon area comprise the Junior Lake
claim group and the immediately adjacent claim group of Lamaune Iron Inc.
(Lamaune Iron), subsidiary company of Landore. In November 2019, the Ontario
government granted the Landore two mining leases encompassing all of the
staked mining claims within the Lamaune portion of the property. The Junior
Lake property now consists of six mining leases and 1,318 staked mining
claims, all together totaling approximately 33,029 ha.

Landore has access to all of the mining and surface rights for those leases
and patented claims over an area encompassing the BAM Gold Deposit, the
Lamaune Gold Prospect, the B4-7/Alpha Zone Ni‐Cu‐Co‐ PGE Deposit, and
the VW Ni Deposit. For the BAM Gold Deposit, B4-7/Alpha Zone Deposit (CLM
leases), and VW Deposit, the leases are granted for 21 years up to August
2029, and renewable for further terms of 21 years. For the Lamaune Gold
Prospect and the B4-7/Alpha Zone Deposit (PA leases), the leases are granted
for 21 years up to August 2040, and renewable for further terms of 21 years.

Within the mining leases, Landore has the rights to:

·    Sink shafts and carry out excavations, etc., for mining purposes

·    Construct dams, reservoirs, railways etc., as needed

·    Erect buildings, machinery, furnaces, etc., as required

·    Treat ores

These activities may be subject to provisions of certain Acts and
reservations.

Property History

Geological mapping and exploration in the vicinity of the Junior Lake property
is recorded as early as 1917. In 1968, Canadian Dyno Mines Limited staked 333
claims in 15 groups to cover conductors detected by an airborne
electromagnetic (EM) and magnetic (Mag) survey. Eight diamond drill holes
totaling 674.8 m were drilled to test conductors in January 1969, resulting
in the discovery of the B4-7 sulphide zone. The B4-7 Deposit was delineated by
an additional 30 holes (6,850 m, or 22,479 ft) in 1969.

Landore optioned part of the property from North Coldstream Mines Limited in
1998 and additional claims from Brancote Canada in 2000. In 2005, the VW
Nickel Deposit was discovered by Landore as a result of drill testing a
promising geophysical target. The BAM Gold Deposit was discovered in the fall
of 2015 as a result of drilling a geophysical target located two kilometres to
the east of the B4-7 Ni-Cu-Co-PGE Deposit.

Geological Setting and Mineralization

Geology

A highly prospective Archean greenstone belt traverses the Junior Lake
Property from east to west for approximately 31 kilometres. The greenstone
belt ranges from 0.5 to 1.5 kilometres wide and contains many of Landore's
stated mineral resources and prospects. However, the greater proportion of
this belt remains unexplored. The BAM Gold Deposit is located in the
south-central area of the Junior Lake property and is interpreted as an
Archaean mesothermal gold deposit in which gold mineralization is hosted by
sheared and altered rocks of the Grassy Pond Sill and the BAM
volcano-sedimentary sequence.

Mineralization

Mineralized structures appear to strike approximately parallel to lithologies,
averaging at 280° strike and steeply dipping to the south between -65° to
-80°. Gold mineralization remains open along strike to the east and west, and
down dip.

The gold mineralization is interpreted to reside within a series of tabular
shaped zones that are oriented in a roughly en-echelon configuration and are
generally parallel to the overall strike of the host rock units. The gold
mineralization occurs as a fine dissemination and also is commonly observed in
drill core to exist as visible gold that is hosted by very thin,
foliation-parallel quartz-rich veinlets, hosted by highly fissile ultramafic
sediments of the BAM Sequence, or by foliated rocks of the Grassy Pond Sill. A
preliminary petrographic study carried out on a number of samples has
identified the presence of coarse native gold in association with either
tourmaline, ankerite, or scheelite assemblages that occur within calcite
replacement patches and veinlets.

Exploration and Project Status

Exploration activities during 2019 included the following:

·    Gridding - A large grid was cut on the Junior Lake property during
the summer of 2019 and used for multiple exploration surveys (Felix Lake
Grid). The grid roughly spanned 5 km x 1.2 km and was used as the basis for
both soil sampling programs and ground geophysics in 2019.

·    Soil Geochemistry ‐ The results of the soil sampling programs in
2019 and 2020 indicated a possible linking of gold anomaly trends over several
hundred metres strike length.

·    The 2019 soil sampling program over the Felix Lake Grid and Junior
Lake Grid collected a total of 1141 samples (1,036 primary samples plus 105
reference samples). The samples were collected from the B‐horizon at a
nominal distance of 25 m along the grid lines using a hand‐held Dutch auger.
The 2019 soil sampling results indicate prospectivity of the BAM gold
mineralization trend extending a further 1.5 km to the west. Further soil
sampling is planned for 2020, along with drilling planned to test the
potential for extensions of the BAM gold mineralization.

·    The 2020 soil sampling program collected a further 1013 samples
including 121 reference samples from the Felix and Junior Lake grids. The
combined 2019/2020 geochemistry surveys have identified more exploration
targets prospective for potential significant gold mineralization to the east
and west of the currently defined BAM Gold Deposit. Numerous anomalous gold
trends were noted, of which four priority areas are:

o  Continuation of the BAM Gold trend an additional 1.5 km to the west of
which follow up drilling along a portion has had encouraging results.

o  Anomalous gold values associated with iron formation between Juno Lake and
Boras Lake that are open to the west, towards the known Lamaune Gold
occurrence.

o  Anomalous gold values continuing west towards Juno Lake along the
projected metasedimentary sequence of the BAM gold and the possibility of a
southwest splay from this trend passing just south of Juno Lake.

o  The gold trend east of the BAM Gold Deposit has been extended for a
further 2 km. Gold anomalies continue eastward beyond the surveyed grid.

o  Further soil sampling programs were recommended to cover the width of the
property. The soil sampling programs have provided an effective low cost tool
for gold exploration and potentially other economic minerals

·    Ground Geophysics -Electromagnetic (Horizontal Loop (HLEM) & Very
Low Frequency (VLF)) and Magnetic (Mag) ground surveys were conducted in June
2019, on the Junior Lake property. The EM-VLF and Mag surveys covered 15.85 km
of local grid lines. The HLEM-MaxMin survey covered 14.2 km of lines. The
results of the geophysical survey on both the Felix Lake Grid and Junior Lake
Grid areas indicated a number of significant anomalies. Eight (8) MaxMin
anomalies were identified and are located from less than 5 m and up to 40 m
depth. Two of these anomalies coincide at least partly with high magnetic
anomalies (MM-21 and MM-22). Two (2) anomalies coincide with weak magnetic
anomalies (MM-24 and MM-27), one anomaly (MM-28) with low magnetism, and four
anomalies have variable magnetic features. Several of the anomalies have been
proposed for drilling.

·    From 2015 to 2019, Landore completed several diamond drilling
campaigns at the BAM Gold Project. In 2019, Landore completed a drill
programme consisting of 38 HQ diamond drill holes (0419-687 to 0419-724) for
5,946 m. The aim of this programme was to extend the existing BAM Gold
Resource to the west (14 HQ holes) and infill to nominal 50 mE x 25 mN
spacing within the BAM pit design areas (24 HQ holes).

·    BAM Drilling programs conduced in 2020-2021 consisting of 102 HQ size
drill holes (0420‐725 to 0421‐826), for 24,361 metres, have confirmed the
continuity of the gold mineralisation at depth within the main BAM
mineralisation zone and also upgraded the mineralisation within the hanging
wall GPS unit. The new drilling results have allowed for conversion of Mineral
Resources from Inferred to Indicated, and also demonstrated the continuation
of the main BAM mineralisation to the west to local grid line 200W. The
drilling has continued to show the close association between gold
mineralisation and the VTEM geophysical anomaly trend. The BAM gold
mineralisation trend has now been confirmed by diamond drilling over a strike
length 4.5 km, extending from the local grid line 200W and passed line 4100E.
Drill testing has confirmed gold mineralisation within the main BAM zone
extends from below the glacial till overburden (~10m average depth) surface to
a maximum vertical depth of approximately 380m.

Data Validation and Verification

Landore provided Cube with data files including drilling databases, quality
assurance/quality control (QAQC), topographic survey files, PDF files
containing hand drawn cross section interpretations of the mineralized domains
and geological boundaries, and surface topography in DXF file format covering
the entire BAM Gold Project area.

Cube has previously completed a site visit to the Project and data storage
facilities at the Junior Lake camp and Thunder Bay offices in June 2018 and
carried out data verification and data validation on all the drilling data
supplied for the 2022 MRE.

Collar, survey, assay, geology, and other relevant drilling data in .ASC and
MS Excel file formats were provided to Cube up to January 2022, following the
completion of the 2020 and 2021 drilling campaigns. Validation and
verification of drill hole data was assessed for all drilling within the BAM
Gold Project area.

The data validation prior to resource estimation included checks for duplicate
surveys, downhole survey errors, assays, and geological intervals beyond drill
hole total depths, overlapping intervals, and gaps between intervals. Data was
validated utilizing visual review of digital and paper files, as well as
computer-aided checking systems. Site visit validation included review of
recent core samples and interrogation of digital and paper data, including
paper plans and sections, assay records, downhole survey records, hardcopy
geology logs and data storage systems of hardcopy data. Other data
verification included database searches, certificate validation, and quality
assurance/quality control review of assay results.

Verification of supplied electronic drill hole data with drill hole logs and
assay certificates was completed. The primary returned assay result was used
for reporting of all intersections in the MRE. No averaging with field
duplicates or laboratory repeats was undertaken so as not to introduce volume
bias.

Cube considers the drilling database to be appropriate for the January 2022
MRE.

Mineral Resource Estimation

The Mineral Resources for the BAM Gold Project were estimated by Cube based on
drill hole and assay data available as at 14 January 2022. The following key
points summarise the modelling process and key parameters used by Cube for the
estimation work:

·    A total of 251 diamond drill holes for approximately 45,686 m have
been completed with the BAM Gold Project area, with a total of 207 holes used
in the current MRE (37,540 m).

·    The data used for the resource estimation is informed by good quality
drilling on regular drill spacing - down to 50 mE x 25 mN for the central
areas of the project, stepping out to a nominal 100mE x 50 mN to the east and
west of the main mineralisation. Maximum extrapolation of wireframes from
drilling was 25 m to 50 m along strike and 50 m down-dip.

·    Geological and mineralisation interpretations in plan and cross
sections were provided by LND and used to assist with updating 3D wireframe
models of the gold mineralisation envelopes based on analysis of all the
recent information collated. A total of 25 mineralised domains were modelled
for the January 2022 MRE.

·    Assessment of the raw assay interval lengths and raw gold assay
values were completed in order to determine the most appropriate length for
compositing of the samples. The most common sample length is 1.0 m and covers
the range of the Au grades. Therefore, 1 m composes were used as the source
data for the gold grade estimates.

·    Gold grade distributions within the estimation domains were assessed
to determine if high grade cuts or distance limiting should be applied. The
effects of grade capping were reviewed and applied on a domain basis where it
was deemed appropriate). The range of cut off values varied from 10g/t Au to
25g/t Au.

·    Variogram modelling conducted on estimation domains with sufficient
data to provide parameters for OK estimation method - nugget, sill and range
for 3 directions.

·    Kriging Neighbourhood Analysis (KNA) was used to assist with
assessing the most appropriate block sizes and other estimation parameters
such as minimum and maximum samples, discretization, to be used for the
estimation.

·    Parent block size of 25mE x 5mN x 25mRL in the X, Y, Z directions
respectively was used, and they were sub-blocked to 6.25m x 1.25m x 6.25m.
This was deemed to be appropriate for block estimation and modelling the
selectivity for a likely open pit operation.

·    Ordinary Kriging ("OK") estimation method was used to estimate gold
into the 3D block model using spatial data analysis parameters informed from
the variogram and KNA analyses.

·    Au estimated in 2 passes - 1st pass using optimum search distances
for each domain (max 120m) as determined through the KNA process, with a 2nd
pass set at longer distances in order to populate all blocks (2nd = max
>360m).

·    Local variations in domain orientations were managed by applying a
dynamic anisotropy search in which the search neighbourhood ellipse dip and
dip direction are defined separately for each block approximating the
orientation of the estimation domain where appropriate.

·    Blocks have been classified as Indicated Mineral Resources or
Inferred Mineral Resources. The resource classification is based on the
quality of information for the geological domaining, well established
continuity of the gold mineralisation, as well as the drill spacing and
geostatistical measures to provide confidence in the tonnage and grade
estimates.

·    The estimation domaining, MRE parameters, classification and block
model report replication have all been internally peer reviewed by qualified
professionals at Cube.

With the addition of the 2020-2021 drilling, the new data has resulted in a
47% increase in Indicated and Inferred Resource (in-situ contained metal)
above a cut-off of 0.3g/t Au compared with the MRE reported in 2019.

Mining Methods

Given the shallow nature of the mineralization and the initial metallurgical
test results, material could be extracted by means of open pit mining methods
and processed using conventional milling techniques.

3DM modelling and block construction were created with the aim of preparing a
suitable model for open pit mine design and pit optimisation, with a minimum
mining width of 2 m. Internal dilution has been considered by re-blocking the
resource block model, with a maximum downhole width of 3 m (2.5 m true
width) of sub-grade material (<0.3 g/t Au).

Open pit optimisation and mine scheduling work has been carried out by Cube
for the January 2022 MRE.

Metallurgy

A series of metallurgical test programs have been carried out on samples from
the BAM Gold Deposit. ALS Metallurgy Americas was engaged by Landore in
December 2016 to carry out a preliminary assessment of the metallurgical
response of two composite samples from the BAM East Gold Project (Allard,
2019). Between 98% and 99% of the feed gold was recovered through combined
gravity concentration and cyanidation leaching of gravity tails for the two
composites tested. Gold leach kinetics were fast, with most of the gold
extraction taking place within the first six hours. Gold head grades were
calculated at 2.0 g/t for both composites based on combined gravity and
cyanidation leach test results (Sloan and Roulston, 2016).

Landore completed additional metallurgical testing on the BAM Gold Project in
September of 2017 using samples collected from a drill hole completed in the
2017 drilling program (Sloan and Roulston, 2017). This additional test work
was designed to assess the metallurgical response of two additional
mineralized samples from the BAM East gold mineralisation, and to provide a
determination of the gold feed grade using gravity and cyanidation leach
techniques, identical to those employed for the 2016 metallurgical test work.
The metallurgical performance was excellent for both tested composites. Leach
kinetics were rapid with most of the gold extraction completed within two to
six hours, the combined gold recovery and cyanidation leach gold extractions
for both composite samples measured between 97% to 99%, and the sodium cyanide
and lime consumption was very low (<0.1 kg/tonne and 0.3 kg/tonne,
respectively). Results indicate that a combination of gravity concentration
followed by cyanidation leaching of the gravity tails would be an effective
flowsheet for the composites tested

Environmental Studies

Landore has conducted various environmental baseline studies on the Junior
Lake property since 2007. Surface water sampling of various lakes and streams
has been conducted since 2007.

Beginning in 2007, Landore retained Golder Associates Ltd. (Golder) to
implement a baseline surface water quality monitoring program for the
Property. The most recent report on the surface water quality monitoring was
issued on 7 March 2022. The purpose of water quality monitoring program is to
characterize local baseline surface water quality and help in identifying
potential receiving water environments. This data would be required as one
component to the supporting documentation for permit applications to various
regulatory agencies, should the project be developed as a mining operation.

Bathymetry and fish habitat studies of Ketchikan Lake were conducted in 2007.
In 2008, a bedrock surface investigation of the northern portion of Ketchikan
Lake was completed.

Terrestrial and fish habitat studies were conducted by Golder over the
property during 2008 and subsequently reported in an environmental baseline
study in 2009. Results of the vegetation surveys, wildlife surveys, and
incidental observations did not identify any listed species within the site
boundary that would trigger a specialized study. The site has been highly
disturbed in some locations by recent commercial forestry activity.

Social and Community Impact

Landore maintains a sound working relationship with First Nations on whose
traditional lands the Junior Lake property is situated. In 2007, Landore
signed a Memorandum of Understanding (MOU) with Whitesand and Animbiigoo
Zaagi'igan Anishinaabek (AZA) First Nations. This agreement formalizes the
desire and commitment to develop a positive, mutually beneficial relationship
amongst all parties and establishes the process by which this is to be
accomplished while Landore is conducting exploration and advanced exploration
activities in the area.

The MOU was later revised to reflect significant changes in Landore's claim
holdings in the Junior Lake area. Whitesand signed the revised MOU on April
30, 2012. AZA signed the revised MOU on December 6, 2013.

More recently, in December 2018, an Exploration Agreement between Landore, AZA
and Aroland First Nations was signed which reaffirms this mutually beneficial
relationship going forward. A separate Exploration Agreement between Landore
and Whitesand First Nation was signed in February 2019.

The Project has involved a range of stakeholders. These stakeholders have
included those that hold a direct interest in the development of the Project,
Federal and Provincial government agencies, community and municipal
organizations, First Nation representatives, and other similar groups. The
range of stakeholders is expected to grow with the development of the Project,
particularly within the local community.

Conclusions and Recommendations
Conclusions

The January 2022 MRE incorporates diamond drilling data over the BAM Gold
Project area, completed predominantly since 2016. It is also informed by
sampling and geological information from trenches, the surface expression of
exposed mineralized zones as indicated by geological mapping, a dataset of
bulk density measurements taken from whole core samples, topographic survey
files of the project, digital photos of all relevant diamond drill core, and
updated geological interpretations.

Data Quality

The input drill data is comprehensive in its coverage of the gold
mineralization at BAM Gold Project and is representative of the
mineralization. Knowledge of the geological controls on mineralization has
been used to develop the overall January 2022 MRE.

In Cube's opinion, the drilling, logging, and sampling procedures at the BAM
Project have been carried out to industry best practices. Following the
standard validation checks, Cube believes the database for the BAM Gold
Project is adequate for Mineral Resource estimation.

The typical drilling data spacing (50 m x 50 m) is adequate to determine the
geological and grade continuity for reporting of Mineral Resources and Mineral
Reserves.

Interpretation and 3D Modelling

The BAM Gold Deposit is made up predominantly of broad to narrow, very
continuous mineralised gold zones hosted within a volcano-sedimentary sequence
The confidence in the geological interpretation of the January 2022 MRE is
good as a result of the optimally spaced diamond core drilling programs,
predominantly between 2016 and 2021 by Landore. There are minimal changes in
strike and dip of the mineralization across the sequence, and there is very
good continuity overall from east to west for the main BAM gold
mineralization, but it is likely to be affected by minor faulting and dolerite
dyke intrusives, disrupting the mineralization trends.

Estimation and Model Validation

Ordinary Kriging (OK) estimation method is considered an appropriate method to
estimate gold into the 3D block model for the BAM Gold Project. The
correspondence between mean grade composite samples and block grade estimates
is good, as demonstrated by the visual inspection in cross sections, global
comparisons of volume and mean grade statistics, and semi‐local comparisons
on sections and levels.

It is Cube's opinion that the OK gold estimates are valid and satisfactorily
represent the informing data for the January 2022 MRE.

Classification

The January 2022 Mineral Resource has been classified as Indicated or Inferred
Resources based on data spacing and using a combination of kriging parameters
and number of data used for the estimation:

·    Geological continuity and volume

·    Drill spacing and drill data quality

·    Modelling technique

·    Estimation properties

·    Risk or uncertainty present in the estimated grades

The classification of the January 2022 MRE appropriately reflects the QP's
view of the BAM Gold Project.

Mining and Metallurgical Considerations and Assumptions

Given the shallow nature of the mineralization and the initial metallurgical
test results, material could be extracted by means of open pit mining methods
and processed using conventional milling techniques.

The base input parameters used in the open pit optimization completed by Cube
are based on information collated after discussions with Landore and review of
economic analyses in PEA reports from similar projects in Ontario, Canada.
Geotechnical pit design parameters were based on recommendations from the
geotechnical assessment work carried out by WSP in 2018 (Nelson, 2018).

The open pit optimization study undertaken by Cube has yielded two distinct
areas, an east pit shells (BAM East Pit) and a west pit shells (BAM West Pit).

Metallurgical Studies

The recent metallurgical test work conducted has determined the following:

·    The BAM composite was amenable to gravity concentration of the
liberated gold with 65% or greater of the contained gold recoverable in the
gravity concentrate.

·    Cyanide consumption was low.

·    Cyanide leaching of the gravity tail increased the overall extraction
of gold to ±98%. The 98% recovery has been applied to the pit optimisation
studies for the 2022 MRE.

PEA Study

For the 2022 economic analysis study, a base case scenario considers the
economics of exploiting a resource of 22.4 Mt at 1.16 g/t containing 833 koz
Au. Metallurgical recoveries of 98% are envisaged to yield 816 koz. The 2022
base case correlates with the 2018 PEA report extended case (Cube, 2019) which
estimated to yield of 760 koz recovered. The subsequent infill and step out
drilling carried out by Landore has therefore met the expectations of the 2018
extended case scenario.

Future Exploration Potential

Based on exploration work completed by Landore up to January 2022, there is
significant resource potential that clearly indicates follow up district scale
exploration programs are warranted. There is potential for further gold
mineralization and other multi-commodity targets along the 31 km strike length
of the Junior Lake Shear (Lamaune) and historic discovery at Toronto Lake
(Figure 3).

Recommendations

Cube concurs with the Landore opinion there is significant potential to expand
the limits of the BAM Gold Project.

The current 3D model interpretation of the extents the BAM gold mineralization
remains open along strike, both to the east and west, and future drilling
should target the eastern extension of the BAM Sequence. The BAM gold
mineralization remains open down dip, providing additional open pit and
possible underground targets for future drill programs.

The infill and step out drilling conducted for the 2020-2021 drilling
programmes further confirmed the correlation of an IP anomaly from geophysics
conducted in 2004 with the main BAM gold mineralisation trend to the west
passed local grid line 200W toward the Lamaune Gold Prospect, which contains
anomalous gold mineralisation requiring further drill testing.

Future drill testing recommendations to target gold mineralisation still open
along strike and down dip and further targets identified and based on the
following data are listed as follows:

·    To the east past the local grid line 4100E, further exploration and
drill testing is planned to test the relationship between the BAM
mineralisation and other anomalies associated with the B4-7 Deposit.

·    Highly prospective soil geochemistry results based on recent
geochemical sampling.

·    IP anomaly targets have been identified by LND previously in 2004 and
related to FW massive to disseminated sulphides zones adjacent to the main BAM
Au mineralised units. In addition, there are 3 to 4 WNW trending anomalies
that are possible targets for exploration drilling (northern anomalies), and
step-out drilling along strike from the BAM sequence

·    Regional Prospectivity - other gold mineralisation targets along the
31km strike length of the Junior Lake Shear (Lamaune Prospect), B4-7 Deposit
and a historical discovery at Toronto Lake.

Figure 3:  Plan View Showing Exploration Potential of the Multi-Element
Prospects within the Junior Lake Property (Landore, 2022)

 

Cube concurs with Landore's proposed exploration and drilling work program on
the Junior Lake Project for 2022. The drilling budget is estimated at
C$7.5 M.

End of the Executive Report of the CUBE Technical Report and Preliminary
Economic Assessment May 2022

 

Click or paste the following link on to your web browser to view the full
announcement, including images.

http://www.rns-pdf.londonstockexchange.com/rns/7048K_1-2022-5-8.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/7048K_1-2022-5-8.pdf)

 

Planning:

Exploration activities are planned to re-commence at Junior Lake in May 2022,
initially with re-sampling of core and infill soil sampling in the Felix area
along strike and to the west of the BAM Gold Project.

 

Drilling will re-commence in early July 2022 initially with a 7,500 metre HQ
core drilling campaign on the highly prospective Felix area along strike and
to the west of the BAM Gold project. A further 7,500 metres is planned for
infill and extension of the BAM Gold Deposit and for deeper drilling on
several potential underground mining targets. This drilling activity will be
subject to funding.

 

The Junior Lake Property:

The Junior Lake Property, 100% owned by Landore, together with the contiguous
Lamaune Iron property (90.2% owned) (jointly the "Junior Lake Property"),
consisting of 33,029 hectares, is located in the province of Ontario, Canada,
approximately 235 kilometres north-northeast of Thunder Bay and is host to the
BAM Gold Deposit; the B4-7 Nickel-copper-cobalt-Platinum-Palladium-gold
Deposit; the VW Nickel-Copper-cobalt Deposit; Lamaune Gold Prospect and
numerous other precious and base metal occurrences..

 

 

 

 

 

 

Brian Fitzpatrick, (MAusIMM CP.), Principal Geologist of Cube Consulting Pty
Ltd., Perth, Western Australia, a Qualified Person as defined in the Canadian
National Instrument 43-101 and the AIM Rules, and responsible as lead author
for the preparation of the Technical Report and Preliminary Economic
Assessment for the BAM Gold Project, has reviewed and verified all scientific
or technical disclosure relating to the Mineral Resource Estimate.

 

Michele Tuomi, (P.Geo., BSc. Geology), Director/VP Exploration of Landore
Resources Canada Inc. and a Qualified Person as defined in the Canadian
National Instrument 43-101 and the AIM Rules for Companies, has reviewed and
verified all scientific or technical mining disclosure contained in this
announcement.

 

- ENDS -

 

For more information, please contact:

 

 Landore Resources Limited
 Bill Humphries, Chief Executive Officer                   Tel: 07734 681262
 Glenn Featherby, Finance Director                         Tel: 07730 420318

 Cenkos Securities (Nominated Advisor and Broker)
 Derrick Lee / Peter Lynch                                 Tel: 0131 220 6939

 Strand Hanson Limited (Financial Adviser)

 James Dance / James Spinney / Robert                      Tel: 020 7409 3494
 Collins

 

 

 

 

 

 

 

 

Glossary of Key Terms

 

 "assay"               the chemical analysis of rock or ore samples to determine the proportions of
                       metals

 "Au"                  chemical symbol for gold

 "diamond drilling"    drilling method which obtains a cylindrical core of rock by drilling with an
                       annular bit impregnated with diamonds

 "drill core"          The cylindrical rock samples obtained by means of annular-shaped rock-cutting
                       bits rotated by a borehole-drilling machines

 "g/t"                 grams per tonne, equivalent to parts per million

 "grade"               relative quantity or the percentage of ore mineral or metal content in an ore
                       body

 "greenstone"          green, chlorite rich, generally metavolcanic rocks resulting from low
                       temperature and pressure metamorphism

 "indicated resource"  that part of a Mineral Resource for which tonnage, densities, shape, physical
                       characteristics, grade and mineral content can be estimated with a reasonable
                       level of confidence.  It is based on exploration, sampling and testing
                       information gathered through appropriate techniques from locations such as
                       outcrops, trenches, pits, workings and drill holes.  The locations are too
                       widely or inappropriately spaced to confirm geological and/or grade continuity
                       but are spaced closely enough for continuity to be assumed

 "inferred resource"   that part of a Mineral Resource for which tonnage, grade and mineral content

                     can be estimated with a low level of confidence.  It is inferred from
                       geological evidence and assumed but not verified geological and/or grade

                     continuity.  It is based on information gathered through appropriate
                       techniques from locations such as outcrops, trenches, pits, workings and drill

                     holes which may be limited or of uncertain quality and reliability

 "IP"                  an electromagnetic geophysical method that uses electrodes with time-varying
                       currents and voltages to map the variation of electrical permittivity
                       (dielectric constant) in the earth at low frequencies

 "Kriging"             a method of interpolation which predicts unknown values from data observed at
                       known locations. It uses the variogram to express spatial variation, and
                       minimizes the error of predicted values that are estimated by spatial
                       distribution of the predicted values

 "mineral resource"    a concentration or occurrence of material of intrinsic economic interest in or
                       on the earth's crust in such form that there are reasonable prospects for
                       eventual economic extraction. The location, quantity, grade, geological
                       characteristics and continuity of a mineral resource are known, estimated or
                       interpreted from specific geological evidence and knowledge. Mineral resources
                       are sub-divided, in order of increasing confidence, into Inferred and
                       Indicated categories

 "mineralisation"      process of formation and concentration of elements and their chemical

                     compounds within a mass or body of rock

                     the reporting standard adopted for the reporting of the Mineral Resources is
 "NI 43-101"           that defined by the terms and definitions given in the terminology,
                       definitions and guidelines given in the Canadian Institute of Mining,
                       Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral
                       Reserves (December 2005) as required by NI 43-101. The CIM Code is an
                       internationally recognised reporting code as defined by the Combined Reserves
                       International Reporting Standards Committee

 "reserve"             the economically mineable part of a Measured and/or Indicated Mineral Resource

 "SMU"                 selective mining unit-sized blocks

 "strike length"       the longest horizontal dimension of an orebody or zone of mineralisation

 "strike"              The direction, or bearing from true north, of a vein or rock formation measure
                       on a horizontal surface

 "veinlets"            a deposit of non-sedimentary origin, which may or may not contain valuable
                       minerals

 

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