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Victorian Goldfields

Overview

In the Victorian goldfields of Australia, Mawson executed multifaceted agreements with Nagambie Resources Limited (NAG:ASX) (“Nagambie”) during March 2020 and again in October 2020. As a consequence Mawson controls three significant epizonal historic goldfields (Sunday Creek, Redcastle and Whroo) within 471 sq km of granted tenements and applications in Victoria and holds a right of first refusal to take up or match proposals being considered over the remainder of Nagambie’s 3,600 square kilometre tenement package in Victoria.

Victoria hosts one of the giant orogenic goldfields of the world with more than 80 Moz extracted since 1851. The state is now experiencing its third gold boom with the discovery of the Swan Zone at Fosterville (current proven and probable reserve 3 Mt @ 21.8 g/t gold for 2.1 Moz). There are two distinct sub-types of orogenic gold mineralization in Victoria (mesozonal and epizonal), formed during different metallogenic/orogenic events: the first recorded from the ~445 Ma Benambran Orogeny, and the second from the ~370-380 Ma Tabberabberan Orogeny occurring within distinct regional geological domains. The majority of gold recovered from the Victorian goldfields has been produced from the older, Benambran-aged mesozonal gold-quartz vein systems, targeted by the old-timers in the Bendigo and Stawell zones. More recently, Fosterville has rewritten the Victorian geological opportunity for epizonal gold deposits. We now understand that epizonal systems can develop extremely high-grade, free gold deposits, as the miners in 1859 demonstrated at Redcastle.

A diamond drill program has commenced and is ongoing in Victoria.

Given the advancement of the Company’s Finnish assets, and recent gold discoveries made in Australia by the Company, Mawson has commenced an internal corporate strategic review to identify, examine and consider opportunities related to its Australian assets in order to enhance shareholder value. Results from the review will be announced shortly.

 

Strategic 10% equity investment into Nagambie

Mawson entered into a subscription agreement with Nagambie dated March 24, 2020, under which Mawson subscribed for 50.0 million ordinary shares of Nagambie (the “Nagambie Shares”), which represent a 10.0% shareholding in Nagambie. As consideration for the acquisition of the Nagambie Shares, Nagambie received 8.5 million common shares of Mawson (the “Mawson Private Placement Shares”), which represent approximately 4.7% of the total issued Mawson Shares (after including the 1.0 million Mawson Acquisition Shares from the Clonbinane Acquisition, as defined below). The Mawson Private Placement Shares were subject to an initial statutory four month hold period and voluntary trading restrictions to be released from such restriction in four equal tranches (being 2,125,000 Mawson Private Placement Shares per tranche).

Mawson also secured a right of first refusal to take up or match proposals being considered over a competitive 3,600 square kilometre tenement package held by Nagambie. This package includes the Nagambie Gold Mine and provides Mawson with a pipeline of potential new projects. In addition, Mawson has a pre-emptive right on future issuances of Nagambie Shares to avoid dilution. 

Sunday Creek Tenements (100% Mawson)

Sunday Creek is a shallow orogenic (or epizonal) Fosterville-style deposit located 56 kilometres north of Melbourne and contained with 19,365 hectares of both granted and applied for exploration tenements. Historic gold mining between 1880-1920 occurred over a greater than 11-kilometre trend. Drilling during 1990-2000s focused on shallow, previously mined surface workings, covering an area of 100 metres in width, 800 metres length but only to 80 metres depth. As such, the entire field remains open along strike and to depth. Apollo was the original deepest shaft to 100 metres in the late 1800s in a series of sheeted stibnite-rich veins, predominately hosted within a felsic dyke that broadly controls gold distribution.

Mineralization at Sunday Creek is hosted in late-Silurian to early-Devonian-aged shales and siltstones containing a series of dykes of felsic-intermediate composition. Gold is concentrated mainly in and around the EW to NE-SW trending felsic dykes, within predominately NW oriented brittle multiple sheeted veins and cataclastic zones. Individual high-grade quartz-stibnite veins at Apollo and Golden Dyke, and cataclastic zones at Gladys were the focus of historical mining at Sunday Creek. These zones have been proven to continue to depth by Mawson. Broader vein-hosted and cataclastic mineralization grading less than 15 g/t gold appears untouched by the historic miners.

Mawson has now completed 24 drill holes (MDDSC001-024) for 5,561 metres at the Sunday Creek gold project where drilling continues. Assays from 15 out of the 24 completed holes have been released. Geophysical surveys (3D induced polarization and ground magnetics) have been completed. A 1,600-point soil sampling program at Sunday Creek has been completed extending east-northeast from drilling areas to test the 10 kilometre trend of historic epizonal dyke-hosted mineralization within Mawson’s tenured areas.

The Company has announced the results of 15 holes from the ongoing diamond drill program at Sunday Creek, where drilling continues. The results to date include:

  • MDDSC001 drillhole intersected 15.2 metres @ 3.7 g/t gold from surface including 0.6 metres at 17.9 g/t gold from 10.4 metres while testing unmined extensions of the historic Apollo mine area. This confirmed the tenor of gold mineralization found within earlier reverse-circulation drill results, from previous explorers, using orientated HQ-sized core.
  • MDDSC002 intersected 5.0 metres @ 5.2 g/t gold from 53.8 metres including 0.29 metres at 79.4 g/t gold from 53.8 metres and 21.0 metres @ 3.4 g/t gold from 109.0 metres including 1.1 metres at 22.3 g/t gold from 109.0 metres, while testing immediate down dip extensions of Mawson drill hole MDDSC001.
  • MDDSC003, located 330 metres WNW of MDDSC002, intersected 7.9 metres @ 1.8 g/t gold from 71.7 metres while testing unmined extensions of the historic Rising Sun area.
  • MDDSC004 drilled to test the eastern end of the Golden Dyke trend, with a best result of 1.0 metres 0.5 g/t gold from 44 metres. The hole intersected an historic mining void between 71.4 metres to 78.6 metres with 5.2 metres core loss in the 7.2 metre interval leaving potential to test the mined-out zone at deeper levels, with a low gold mineralized halo intersected between 44 metres to 104 metres (50 metres downhole width), leaving potential to test the mined-out zone at deeper levels.
  • MDDSC005 was drilled immediately beneath the 100-metre-deep Apollo shaft to test the parallel and down dip extensions of the unmined extensions of the historic mine area. The hole intersected the north-west oriented mineralized structure over 47.5 metres @ 1.3 g/t gold from 88.0 metres down hole depth without applying a lower-cut. Higher grade intersections in the hole were 4.2 metres @ 3.4 g/t gold from 88.0 metres and 11.5 metres @ 3.3 g/t gold from 123.7 metres, including 0.1 metres @ 52.6 g/t gold from 123.7 metres, 0.3 metres @ 17.9 g/t gold from 128.2 metres and 0.3 metres @ 45.1 g/t gold from 133.5 metres. An historic mining void was intersected from 100.4 to 103.4 metres down the hole. Visible gold was observed within stibnite+quartz veins at 88.7 metres, 123.7 metres, 128.2 metres and 130.9 metres.
    • 5.3 metres @ 3.1 g/t Au and 1.1% Sb (4.2 g/t AuEq) from 111.1 metres
      • Including 0.6 metres @ 14.4 g/t Au and 9.6% Sb (24.0 g/t AuEq) from 111.1 metres
      • Including 0.6 metres @ 8.4 g/t Au and 0.01% Sb (8.4 g/t AuEq) from 113.5 metres.
    • 4.6 metres @ 1.6 g/t Au and 0.1% Sb (1.7 g/t AuEq) from 222 metres; and
    • 15.3 metres @ 2.2 g/t Au and 2.1% Sb (4.3 g/t AuEq) from 231.4 metres
      • Including 0.8 metres @ 1.1 g/t Au and 6.8% Sb (7.8 g/t AuEq) from 232.3 metres
      • Including 0.5 metres @ 6.6 g/t Au and 15.3% Sb (21.9 g/t AuEq) from 238.1 metres
      • Including 2.8 metres @ 5.7 g/t Au and 5.5% Sb (11.1 g/t AuEq) from 241.3 metres
      • Including 0.5 metres @ 10.1 g/t Au and 0.7% Sb (10.8 g/t AuEq) from 245.6 metres.
  • Diamond drillhole MDDSC007, drilled 60 metres to the SW of MDDSC010, intersected a broad 20 metre lower grade zone from 76.2 metres, that included 5.8 metres @ 2.2 g/t gold (“Au”), 0.4 % antimony (“Sb”) from 76.2 metres including 0.4 metres @ 22.3 g/t gold and 3.2 % antimony from 78.6 metres.
  • Diamond drillhole MDDSC008, drilled 60 metres above MDDSC010, intersected 2.1 metres @ 7.6 g/t gold, 1.7% antimony from 67.7 metres including 0.7 metres @ 21.5 g/t gold and 5.0 % antimony from 73.9 metres and 0.2 metres @ 8.0 g/t gold, 3.9 % antimony from 95.0 metres.
  • Diamond drillhole MDDSC0010 intersected 7.0 metres @ 6.0 g/t gold from 72.4 metres including 2.0 metres @ 18.5 g/t gold from 73.9 metres and 3.4 metres @ 9.7 g/t gold from 97.9 metres including 0.3 metres @ 72.9 g/t gold from 101.0 metres while testing the down dip extensions of the historic Gladys mine area.
  • Diamond drillhole MDDSC0012 was drilled 110 metres vertically below the historic Apollo mine workings and intersected thick and high-grade mineralized intervals over a combined width of 36.4 metres @ 2.4 g/t gold and 0.4% antimony (2.8 g/t gold equivalent (“AuEq”)) from 177 metres (without a lower cut). Better intervals included (lower cut of 0.3 g/t Au cut over 2.0 metre width, with higher grades reported with a 5 g/t Au cut over 1.0 metre):
    • 13 metres @ 1.7 g/t Au and 0.14% Sb (1.9 g/t AuEq) from 177 metres
      • including 0.8 metres @ 11.4 g/t Au and 0.9% Sb (12.3 g/t AuEq) from 178.0 metres
    • 17.7 metres @ 3.7 g/t Au and 0.7% Sb (4.4 g/t AuEq) from 196.0 metres
      • Including 10.4 metres @ 5.4 g/t Au and 1.0% Sb (6.4 g/t AuEq) from 203.0 metres
    • 0.2 metres @ 37.3 g/t Au and 12.0% Sb (49.2 g/t AuEq) from 207.0 metres and
    • 2.2 metres @ 15.8 g/t Au and 3.3% Sb (19.2 g/t AuEq) from 209.0 metres
  • Diamond drillhole MDDSC013A, the most south-easterly hole at Apollo, intersected:
  • Diamond drillhole MDDSC015A, the deepest hole reported to date at the Apollo mine area, intersected (lower cut of 0.3 g/t Au cut over 2.0 metre width, with higher grades reported with a 5 g/t Au cut over 1.0 metre):

Sunday Creek is open at depth and along strike and is considered a high value exploration project with affinity to the Fosterville Mine.

Recently, Mawson announced that trenches located 200 metres east of the drilled area intersected 14.0 metres at 11.5 g/t gold and 0.3% antimony (Trench 1) including 8.0 metres @ 19.6 g/t gold and 0.4% antimony and 2 metres @ 4.9 g/t gold and 0.2% antimony (Trench 2). Mineralization remains open 10 kilometres to the east of these trenches, where historic mining was common, but no drilling has ever taken place.

Option and Joint Ventures

(i)Redcastle Option and Joint Venture (Option to earn up to 70%)

Pursuant to Option and Joint Venture Agreements entered into on March 24, 2020, between Mawson and Nagambie, Mawson has the right to earn an up to 70% joint venture interest Nagambie’s Redcastle gold project located in Victoria, Australia by incurring the following exploration expenditures: AUD $100,000 in the first year and an additional AUD $150,000 in year 2 to earn 25%, an additional AUD $250,000 in year 3 to earn 50% and an additional AUD $500,000 by year 5 to earn 70%. Once Mawson earns 70% a joint venture between the parties will be formed. Nagambie may then contribute its 30% share of further exploration expenditures or, if it chooses to not contribute, dilute its interest. Should Nagambie’s interest be reduced to less than 5.0%, it will be deemed to have forfeited its interest in the joint venture to Mawson in exchange for a 1.5% net smelter return royalty (“NSR”) on gold revenue. Should Nagambie be granted the NSR, Mawson will have the right to acquire the NSR for AUD $4,000,000.

On November 22, 2020 the Company advised Nagambie that it had incurred the requisite total exploration expenditures to earn a 50% interest (the “Initial Earn-In”) in the Redcastle property. Nagambie is in the process of transferring the Initial Earn-In to the Company.

Redcastle is located in central Victoria 45 kilometres east of Bendigo and 18 kilometres north of Heathcote. Redcastle was discovered in 1859 and named the Balmoral Diggings, later renamed ‘Redcastle’. Underground mining continued until 1902.

Redcastle is a shallow orogenic (or epizonal) Fosterville-style historic high-grade field held within a tenure area of 51 square kilometres. It is located 7 kilometres along strike from Mandalay Resources Costerfield mine and on a parallel north-south structure, 24 kilometres east of Kirkland Lake Gold’s Fosterville mine – two of the worlds highest grade gold mines. The northern margin of the claim is surrounded by a Newmont Corporation exploration licence.

It is one of the most significant historic epizonal high-grade goldfields in Victoria, Australia. First discovered in 1859, it is an extremely high-grade epizonal gold system with visible gold in quartz (+/- stibnite) association. Extremely high gold grades were mined over a 4.5 x 7 square kilometre area containing over 24 historic mining areas.:

Mawson is undertaking a twofold approach at Redcastle. Initially the Company is systematically collecting “tenement scale” data to understand the broad mineral system and allow it to also explore beneath the significant alluvial cover. This includes ground magnetics, gravity and gradient array induced polarization (“IP”) to test the entire Redcastle mineralizing system. Secondly the company has completed stage one diamond drilling to test beneath the high-grade old mines. The combination of the stage one drilling data with the “tenement scale” data (geophysics, geological reconnaissance and detailed analysis of historic mine records) will aid in the development of new drill targets.

Fifteen holes (MDDRE001-015) for 2,774.8 m have now been drilled at the Redcastle Project. A full analysis of the work completed by the Company over the year at Redcastle will be made soon.

(ii) Whroo Option and Joint Venture (Option to earn up to 70%)

In October 2020 Mawson executed an Amended and Restated Option Agreement (the “Amended and Restated Agreement” or “Whroo JV”) with Nagambie Resources Limited (NAG:ASX) (“Nagambie”) over 199 square kilometres of exploration tenure in the Victorian Goldfields of Australia. This replaced an original agreement, the Doctors Gully Option and Joint Venture signed on March 23, 2020 between Mawson and Nagambie, and has now been substantially amended and restated as the Whroo JV. The Whroo JV substantially modifies the original agreement from 4 square kilometres to 199 square kilometres of mineral tenure and includes the 14-kilometre-long Whroo gold mineralized trend. The Whroo JV consists of four granted exploration licences: EL6158 (Rushworth, 46 sq km), EL6212 (Reedy Lake, 17 sq km), EL7205 (Angustown, 69 sq km), and EL7209 (Goulburn West, 34 sq km), two exploration licence applications ELA7237 (Kirwans North 1, 20 sq km) and ELA7238 (Kirwans North 2, 9 sq km); and one granted retention licence RL2019 (Doctors Gully, 4 sq km).

Mawson has the option to earn an up to 70% joint venture interest in the Whroo JV by incurring the following exploration expenditures: AUD $400,000 in the first year (effective date December 2, 2020) and an additional AUD $500,000 in year 2 to earn 25%, an additional AUD $1,600,000 in years 3 and 4 to earn 60% (cumulative AUD $2.5M over 4 years). At this point, either party may provide notice to the other to form a joint venture (“JV”) under which the percentage ownership of each of Nagambie and Mawson will be 40% and 60%, respectively. If Nagambie elects not to form a JV at 40% of the Whroo JV, Mawson then has the option, but not the obligation, to invest a further AUD $1.5M of exploration expenditures over 2 years (cumulative AUD $4.0M in Years 1 to 6), to earn a 70% interest in the Whroo JV. Once Mawson earns 70% a joint venture between the parties will be automatically formed. Nagambie may then contribute its 30% ownership with further exploration expenditures or, if it chooses to not contribute, dilute its interest. Should Nagambie’s interest be reduced to less than 5.0%, it will be deemed to have forfeited its interest in the joint venture to Mawson in exchange for a 1.5% net smelter return royalty (“NSR”) on gold revenue. Should Nagambie be granted the NSR, Mawson will have the right to acquire the Whroo JV NSR for AUD $4,000,000.

Mawson made an initial cash payment of AUD $100,000 to Nagambie, and will have subsequent payments of AUD $50,000 on the second, third and fourth anniversary dates of Nagambie’s shareholder approval. Mawson has the option to accelerate its spending to achieve its various percentage ownership interest positions in the Whroo JV Property.

Alluvial gold mining commenced at Whroo during the initial gold boom of the 1850s and a settlement was quickly established. Significant alluvial workings are present throughout the field. Hard rock mining commenced in 1855. Whroo consists of the Balaclava Hill area which contains thirteen named reefs, while shallow workings extend the trend over 9 kilometres to the White Hills mining area. Production at Whroo is estimated to have been 40,000 oz of gold. At White Hills, 21 historic gold showings and mines occur within a larger alluvial gold field.

Mawson has completed gradient array and ground magnetic geophysical survey over the Doctors Gully Retention Licence RL2019 and completed a 3 diamond drill hole, 330.5 metre diamond drill program. Further drilling at the Balaclava area is planned during 2021.