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Webcast January 30, 2020

Victorian Goldfields

Overview

In the Victorian goldfields of Australia Mawson executed multifaceted agreements with Nagambie Resources Limited (NAG:ASX) (“Nagambie”), which holds tenements in the central Victorian goldfields of Australia. This includes:

Strategic 10% equity investment into Nagambie

Mawson has entered into a subscription agreement with Nagambie dated March 24, 2020, under which Mawson has 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 has 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 are subject to a 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 has 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. 

Acquisition of 100% of Nagambie’s Clonbinane (renamed Sunday Creek) Tenements 

Mawson has entered into an acquisition agreement dated March 24, 2020 with Nagambie pursuant to which Mawson has acquired 100% of the shares in Clonbinane Goldfield Pty Ltd (the “Clonbinane Acquisition”), a 100% subsidiary of Nagambie and the holder of 62 square kilometres of mineral tenements at Clonbinane, for consideration to Nagambie of A$500,000 cash and the issuance of 1.0 million shares of Mawson (the “Mawson Acquisition Shares”). Mawson will also pay Nagambie AUS $28,000 to replace environmental bonds. The Mawson Private Placement Shares are subject to a statutory four month hold period and to voluntary trading restrictions to be released from such restriction in four equal tranches (being 2,125,000 Mawson Private Placement Shares per tranche).

Clonbinane is a shallow orogenic (or epizonal) Fosterville-style deposit located 56 kilometres north of Melbourne. Small scale mining has been undertaken in the project area since the 1880s with total production being reported as 41,000oz gold at a grade of 33 g/t gold. Gold mineralization is hosted within, or proximal to, dykes with mineralization continuing along structures that extend into the sedimentary country rock. The diorite dyke and historic working trend continues for 11 kilometres and remains undrilled.

Two small drill campaigns have tested the Clonbinane mineralized system to 40-100 metres vertical depth over an 800 metre strike. In 1986, Ausminde Pty Ltd and Ausminde Holdings Pty Ltd (collectively “Ausminde”) were granted mineral tenure at Clonbinane. Ausminde’s completed soil and rock chip sampling and undertook RC drilling in 1993 (29 RC drill holes). Beadell Resources Limited subsequently drilled at Clonbinane in 2008 (30 RC holes with 7 diamond drill tails). None of the drill data has been independently verified at this time. Compilation of available data and 3D geologic modeling are in progress. The true thickness of the mineralized intervals is not known at this stage. Selected drill results with a 0.5g/t gold lower cut from these two drill programs at Clonbinane included:

  • 17 metres at 7.0 g/t gold and 0.8% antimony from 66 metres (VCRC022),
  • 38 metres at 2.8 g/t from 15 metres (VCRC011),
  • 27 metres at 3.7 g/t gold and 0.46% antimony from 3 metres (CRC013),
  • 2 metres at 42.5 g/t gold and 1.0% antimony from 70 metres (VCRC022),
  • 10 metres at 7.0 g/t gold from 42 metres (VCRC011), and
  • 5 metres at 11.2 g/t gold and 0.78% antimony from 67 metres (VCRC007).

Clonbinane is open at depth and along strike and is considered a high value exploration project with affinity to the Fosterville Mine. Mawson will compile all historic mining and exploration data into a 3D model, and look to apply large scale, deeper seeking geophysical methods to identify large mineral systems below 40-100 metres depth.

Option and Joint Ventures

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 in each of Nagambie’s Redcastle and Doctor’s Gully gold properties located in Victoria, Australia by incurring the following exploration expenditures on the each of the properties: AUS $100,000 in the first year and an additional AUS $150,000 in year 2 to earn 25%, an additional AUS $250,000 in year 3 to earn 50% and an additional AUS $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 A$4,000,000 per property.

(i)Redcastle Option and Joint Venture

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. ‘Redcastle’ a name of Scottish origin, displaced Balmoral sometime later. Underground mining continued until 1902.

Redcastle is a shallow orogenic (or epizonal) Fosterville-style historic high-grade orefield 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. The northern margin of the claim is surround by a Newmont Corporation exploration licence.

There are few historic reliable production records of the early mining at Redcastle, however very high grades of gold and associated stibnite were recorded from nearly all mines, which were only worked to an average of 55 metres depth within a 5 kilometre by 4 kilometre area. The Redcastle Gold Mining Company is reported to have produced 35,000 ounces of gold from Clarke’s Reef at a grade of 33 g/t gold.

Today six principal prospects or target areas have been identified at Redcastle: Reservoir, Mullocky, Laura, RFZ, Why Not and Pioneer. An RC drill program in 2007-08 by Nagambie totaled 239 holes for 10,169 metres. The average depth of drilling was 42.6 metres with the deepest hole being 81.0 metres and the shallowest hole being 5 metres deep. Of the 14 prospects drilled, 10 intersected gold greater than 1.0 g/t gold in 1 metre sample intervals. None of the drill data have been indep endently verified at this time. Compilation of available data and 3D geologic modeling are in progress. The true thickness of the mineralized intervals is not known at this stage. Selected drill results from this drill program at Redcastle included: 10 metres at 2.5 g/t gold from 22 metres (RRC26), 2 metres at 10.7 g/t gold from 39 metres (RRC41) and 2 metres at 6.3 g/t gold from 26 metres (PR16).

Previous workers have exclusively focused on heap leachable near-surface gold at Redcastle and the project remains untested to depth. Mawson will compile all historic mining and exploration data into a 3D model, and look to apply large scale, deeper seeking geophysical methods to identify large mineral systems below 50 metres depth.

(ii) Doctors Gully Option and Joint Venture

Doctor’s Gully is a shallow orogenic (or epizonal) Fosterville-style historic mining district. The Doctor’s Gully retention license covers a smaller area of 4 square kilometres with 21 historic gold showings and mines. In modern times it has been mined for oxide gold. It is located 13 kilometres northeast of Redcastle.

Gold Mines of Kalgoorlie (“GMK”, also working as Metals Exploration Ltd) mapped and drilled Doctor’s Gully in 1988. A total of 1,734 metres of RC drilling was conducted in 29 holes across the prospect. The results from this drill program have never been followed up. None of the drill data has been independently verified at this time. Compilation of available data and 3D geologic modeling are in progress. The true thickness of the mineralized intervals is not known at this stage. Better drill intersections from this program included 7 metres @ 4.1 g/t gold from 40 metres (WHP7) and 8 metres @ 3.2 g/t gold from 40 metres (WHP26) and 1 metre @ 14.6 g/t gold from 62 metres (WHP26).

Like Redcastle, previous workers have focused on heap leachable near-surface gold at Doctors Gully and the project remains untested at depth. Mawson will compile all historic mining and exploration data into a 3D model, and look to apply large scale, deeper-seeking geophysical methods to explore for a large mineral system below 50 metres depth.

Mawson has commenced a detailed geophysics program at Redcastle, and will undertake 5,000 metres of diamond drilling at both the Sunday Creek and Redcastle projects in the Victorian Goldfields, commencing from mid/late August.