2011 FUGRO DIGHEM AIRBORNE SURVEY ASSESSMENT REPORT …

2011 FUGRO DIGHEM AIRBORNE SURVEY ASSESSMENT REPORT

ON THE

KINSKUCH PROJECT

SKEENA MINING DIVISION BRITISH COLUMBIA

55o45’N 129o10’W NTS MAP SHEET – 103P/11E, and 130P/11W

PREPARED FOR:

BRAVO GOLD CORP.

OF

MANEX RESOURCE GROUP

1100-1199 WEST HASTINGS ST.

VANCOUVER, B.C.

V6E 3T5

PREPARED BY:

R. MACDONALD, P.GEO., PROJECT MANAGER

B. MCGRATH, P.GEO., SENIOR GEOLOGIST

C. CAMPBELL, P.GEO., CONSULTING GEOPHYSICIST

SUBMITTED: JANUARY 2011

Bravo Gold Corp. Kinskuch Project

Manex Resource Group – Vancouver, BC i

TABLE OF CONTENTS

1.0 SUMMARY ...........................................................................................................................1

2.0 INTRODUCTION ..................................................................................................................3

3.0 LOCATION AND PROPERTY STATUS ..............................................................................3

4.0 PHYSIOGRAPHY, CLIMATE AND VEGETATION .............................................................8

5.0 EXPLORATION HISTORY ...................................................................................................8

6.0 REGIONAL GEOLOGY..................................................................................................... 11

7.0 PROPERTY GEOLOGY .................................................................................................... 14

8.0 AIRBORNE GEOPHYSICAL EXPLORATION PROGRAM ............................................. 16 8.1 Exploration Criteria…..………………………………………………………….…….16 8.2 Helicopter Frequency-Domain EM Overview…..…………………………………17 8.3 Operations…..……………………………………………………………………..……18 8.4 Data Presentation…..……………………………………………………….…………21

9.0 DATA INTERPRETATION ................................................................................................ 36

10.0 CONCLUSIONS AND RECOMMENDATIONS ................................................................ 54

11.0 STATEMENT OF EXPENDITURES .................................................................................. 56

12.0 STATEMENT OF QUALIFICATIONS ............................................................................... 57

13.0 REFERENCES .................................................................................................................. 60


Manex Resource Group – Vancouver, BC ii

TABLE OF CONTENTS

LIST OF TABLES

TABLE 1: MINERAL TENURES .....................................................................................................................6 TABLE 2: COMPARISON OF AIRBORNE GEOPHYSICS TO KNOWN MINERALIZATION ....................... 36 TABLE 3: AEM 'HIGH PRIORITY' ANOMALIES OR ZONES ....................................................................... 52

LIST OF FIGURES

FIGURE 1: KINSKUCH PROPERTY LOCATION MAP ..................................................................................4 FIGURE 2: MINERAL TENURE MAP .............................................................................................................5 FIGURE 3: TERRANES OF THE CORDILLERA .......................................................................................... 12 FIGURE 4: PROPERTY GEOLOGY ............................................................................................................. 15 FIGURE 5: SCHEMATIC OF THE HEM SYSTEM ........................................................................................ 18 FIGURE 6A: BIRD HEIGHT HISTOGRAM ................................................................................................... 19 FIGURE 6B: COMPUTED DIGITAL ELEVATION ......................................................................................... 19 FIGURE 7: KINSKUCH PROJECT CLAIMS WITH 2011 AIRBORNE FLIGHTPATH ................................... 20 FIGURE 8: APPARENT RESISTIVITY (56,000HZ) ...................................................................................... 22 FIGURE 9: APPARENT RESISTIVITY (7200HZ) ......................................................................................... 23 FIGURE 10: APPARENT RESISTIVITY (900HZ) ......................................................................................... 24 FIGURE 11 GAMMA-RAY SPECTROMETRY - TOTAL COUNTS ............................................................... 26 FIGURE 12: GAMMA-RAY SPECTROMETRY - POTASSIUM .................................................................... 27 FIGURE 13: GAMMA-RAY SPECTROMETRY - THORIUM ......................................................................... 28 FIGURE 14: GAMMA-RAY SPECTROMETRY - URANIUM ......................................................................... 29 FIGURE 15: TERNARY IMAGE EXPLANATION .......................................................................................... 30 FIGURE 16: TERNARY IMAGE RGB (K-TH-U) ............................................................................................ 31 FIGURE 17: INTERACTIVE REVIEW OF PROFILES AND IMAGES ........................................................... 33 FIGURE 18: DIGITAL ELEVATION MODEL (SRTM DATA) ......................................................................... 34 FIGURE 19: RESIDUAL MAGNETIC INTENSITY (DIGHEMV SURVEY) ..................................................... 35 FIGURE 20: STRUCTURAL ANALYSIS OF KINSKUCH PROJECT AREA ................................................. 40 FIGURE 21: CALCULATED VERTICAL DERIVATIVE (1ST VERTICAL DERIVATIVE OR GRADIENT) ...... 41 FIGURE 22A: TILT DERIVATIVE ................................................................................................................ 42 FIGURE 22B: TILT DERIVATIVE CLIPPED TO POSITIVE PHASE ONLY .................................................. 43 FIGURE 23: ANALYTIC SIGNAL .................................................................................................................. 44 FIGURE 24: ZS FILTER SUITE .................................................................................................................... 45 FIGURE 25: ZS FILTER - EDGE ZONE ....................................................................................................... 46 FIGURE 26: ZS FILTER - BLOCK ................................................................................................................ 47 FIGURE 27: RESIDUAL MAGNETIC INTENSITY W/ MULTISCALE EDGE DETECTION (‘WORMS‘) ....... 49 FIGURE 28: ROSE DIAGRAM - STRIKES ................................................................................................... 50 FIGURE 29: ANOMALOUS CONDUCTIVE ZONES (<100 OHM-M) ............................................................ 51

APPENDICES

APPENDIX A: 2011 AIRBORNE DIGHEM/MAGNETIC/RADIOMETRIC SURVEY REPORT. ALICE ARM, BC CANADA, PROJECT 11047, NTS 103P/5,6,11,12.

APPENDIX B: FUGRO GEOPHYSICAL MAPS (IN POCKET) MAP 1: RMI - RESIDUAL MAGNETIC INTENSITY (4 SHEETS) ................................... SCALE 1:20,000 MAP 2: CVG - CALCUALTED VERTICAL GRADIENT (4 SHEETS) .............................. SCALE 1:20,000 MAP 3: APPARENT RESISTIVITY - 7,200 HZ (4 SHEETS) .......................................... SCALE 1:20,000 MAP 4: APPARENT RESISTIVITY - 56,000 HZ (4 SHEETS)..... ................................... SCALE 1:20,000 MAP 5: GAMMA-RAY SPECTROMETER - TOTAL COUNTS (4 SHEETS) ................... SCALE 1:20,000 MAP 6: GAMMA-RAY SPECTROMETER - POTASSIUM (4 SHEETS) ......................... SCALE 1:20,000 MAP 7: GAMMA-RAY SPECTROMETER - THORIUM (4 SHEETS).............................. SCALE 1:20,000 MAP 8: GAMMA-RAY SPECTROMETER - URANIUM (4 SHEETS).............................. SCALE 1:20,000


Manex Resource Group – Vancouver, BC 1

1.0 Summary

This report describes the results obtained from 3,821.8 line-kilometres of heli-borne DIGHEM electromagnetic-magnetic and gamma-ray spectrometer geophysical surveying over the Kinskuch claims during the summer of 2011. The Kinskuch property is located in the Southern Stewart Complex of British Columbia, Canada and consists of 59,400 hectares of mineral claims and crown grants. The property and region was first explored for mineral potential in the early 1900’s.

Fugro Airborne Surveys Corp. was contracted by Bravo Gold Corp. to complete a survey over approximately 60% of the claim group which cost C$552,566.81 in total expenditures. The property geology is dominated by the Hazelton Group which hosts a variety of mineral deposits such as molybdenum and copper-gold porphyry deposits, as well as high grade silver vein deposits and VMS deposits rich in gold and silver. The purpose of the survey was to detect zones of sulphide-associated gold-silver-copper occurrences and assist in mapping of bedrock lithologies and structure to help define hosts of economic mineralization.

The airborne geophysical survey is comprised of 3,821.8 line-kilometres of data acquired on a grid pattern of 100 metre spaced, east–west traverses, controlled by 1,000 metre spaced tie lines oriented north–south. Products obtained from this survey include the residual magnetic intensity, (magnetic) first vertical derivative, and derived coplanar apparent resistivity grids at 7,200 and 56,000 Hz. Gamma-ray spectrometer grids of total counts, potassium, thorium and uranium were supplied. A Geosoft and Ascii database of the profile data was also provided by the contractor.

The survey employed Fugro’s frequency-domain DIGHEM electromagnetic system with additional equipment consisting of magnetometer, gamma-ray spectrometer, real-time differential GPS, radar altimeter and video recorder. The instrumentation was installed in an AStar AS350 B3 helicopter owned and operated Questral Helicopters Ltd. The helicopter flew at an average speed of approximately 20 metres per second with an effective bird height of approximately 50 metres above ground level, mean terrain clearance.

From the resulting data, Fugro personnel concluded that the surveyed region contains many anomalous features, several of which are considered to be potential exploration targets for further follow up.

The property is located in the “Stewart Complex” as described by Grove (1986), which is one of the largest volcanic arc terranes in the Canadian Cordillera and one of the best-studied areas of north-western Stikinia. It is bounded by Alice Arm to the south, the Coast Plutonic Complex to the southwest, the Iskut River to the north and the Skeena fold belt to the east. Within its boundaries is the “Golden Triangle”, an area hosting more than 200 mineral occurrences (Kasper and Metcalfe, 2005) including the gold mines Eskay Creek, Premier and Snip as well as the Granduc, Dolly Varden-Torbit and Anyox



mines. The dominant mineral occurrences are precious metal vein type, with related skarn, porphyry, and massive sulphide occurrences (Kasper and Metcalfe, 2005).

Locally the property overlies the Hazelton Group, a complex sequence of lower to middle Jurassic sedimentary, volcanic and intrusive rocks. The Hazelton Group contains the transition from Lower Jurassic volcanism to the hiatus and sedimentation belonging to the Salmon River and Bowser group (Evans and Lehtinen, 2001). This sequence hosts many sulphide occurrences and extensive areas of alteration on the property, primarily associated with the Lower Jurassic sequence. The Salmon River Formation shows a general fining upwards into the Bowser basin, which Evans and Lehtinen (2001) describes as a reflection of the large scale basin development at the end of Hazelton volcanism.

There have been numerous geological, geochemical, geophysical surveys, and drilling programs completed on the Kinskuch property in the past. The property hosts more than 35 sulphide mineral occurrences, the most important of which are labeled Illiance, Esperenza, Copper Crest, and Eagle zones.

Several drill programs have been conducted in the Kinskuch region by numerous operators focusing on the polymetallic signatures in the belt. One of the best drill results historically recorded was in hole 89-3 which returned 297 g/t Ag, 2.89% Pb and 9.56% Zn over 1.8m at the Illiance River area.

The 2011 airborne geophysical program was successful in confirming and defining many known occurrences and highlighting new anomalous zones. It is recommended to integrate the geophysical data with the geologic and drilling database to assist in overall exploration and prioritize targets for investigation beginning in 2012.

Exploration in 2012 should include mapping, prospecting and sampling; ground-based geophysical surveying (magnetics/3D IP-resistivity) is recommended on conductive zones (sulphidic/auriferous?), and between 2,500-5,000 metres of drilling is suggested to test the exploration targets.

The estimated cost of the exploration campaign outlined above is C$1.0-1.5 million dollars.



2.0 Introduction

The Kinskuch property has an excess of 35 mineral occurrences and this assessment report is being filed by Bravo Gold Corp. which entered into an option agreement to acquire the Kinskuch Property. The geophysical work completed in 2011 campaign accrues toward the overall financial requirements needed to maintain all claims in good standing. The statement of work for this report was filed by Bravo on August 25, 2011.

Fugro Airborne Surveys Corp. was contracted by Bravo in June 2011 to fly a helicopter-borne electromagnetic/magnetic/radiometric survey over the Kinskuch property in north-western British Columbia. Approximately 60% of the vast claim group was surveyed which cost C$552,566.81 in total expenditures. The project was managed from a base camp located in Alice Arm; a summer community located on the Alice Arm Inlet approximately 32 kilometres south-southeast of Bravo’s advanced Homestake Ridge property. Overseeing the project on behalf of Bravo was Robert Macdonald, Exploration Manager.

3.0 Location and Property Status

The Kinskuch property extends along the Illiance River valley from 15 kilometres east to 25 kilometres northeast of Alice Arm approximately 50 kilometres southeast of the port of Stewart BC. The property extends up past the east and south end of Kinskuch Lake on NTS 103P/11E and 103P/11W centred near 55o 45’ N, 129o 10’ E. The property is approximately 12 kilometres east of the Dolly Varden camp and is accessed by helicopter from the Alice Arm camp. Logging roads up the Tchitin and Kinskuch rivers are within seven and four kilometres, respectively of the eastern side of the property (Figure 1).

The property consists of 59,400 hectares within 156 claims located in the Skeena Mining District. The tenure is summarized in Figure 2 and Table 1.

Bravo optioned the claim group in March 2011 with the terms of the option as follows: an initial payment to optionors of C$60,000 and a first-year work commitment of $750,000. Bravo can earn an 85% interest by making Advanced Minimum Royalty payments totaling $580,000 and spending $3,000,000 in work on the property over a four year period. Bravo can purchase the remaining 15% interest by paying the Optionor $2,000,000 and granting a 2% NSR royalty, of which 1% may be purchased for $1,000,000.



Figure 1: Kinskuch Property Location Map



Figure 2: Mineral Tenure Map (from Smyth, 2010)



Table 1: Mineral Tenures

Tenure # Claim Name OwnerID Issue Date Good To Date Area(ha)515709 GLEB01 147265 2005/jun/30 2012/jan/28 454.992515710 GLEB02 147265 2005/jun/30 2012/jan/28 454.857515711 GLEB03 147265 2005/jun/30 2012/jan/28 454.931515712 GLEB04 147265 2005/jun/30 2012/jan/28 454.879515714 GLEB05 147265 2005/jun/30 2012/jan/28 454.824515715 GLEB06 147265 2005/jun/30 2012/jan/28 454.832515716 GLEB07 147265 2005/jun/30 2012/jan/28 454.706515717 GLEB08 147265 2005/jun/30 2012/jan/28 454.987515718 GLEB09 147265 2005/jun/30 2012/jan/28 455.106515719 GLEB10 147265 2005/jun/30 2012/jan/28 455.099515720 GLEB11 147265 2005/jun/30 2012/jan/28 455.128515721 GLEB12 147265 2005/jun/30 2012/jan/28 455.372515722 GLEB13 147265 2005/jun/30 2012/jan/28 455.362515723 GLEB14 147265 2005/jun/30 2012/jan/28 455.24515724 GLEB15 147265 2005/jun/30 2012/jan/28 455.389515725 GLEB16 147265 2005/jun/30 2012/jan/28 437.346515726 GLEB17 147265 2005/jun/30 2012/jan/28 455.6515727 GLEB18 147265 2005/jun/30 2012/jan/28 455.602515728 GLEB19 147265 2005/jun/30 2012/jan/28 455.395515729 GLEB20 147265 2005/jun/30 2012/jan/28 437.456515730 GLEB20 147265 2005/jun/30 2012/jan/28 455.804515731 GLEB21 147265 2005/jun/30 2012/jan/28 455.836515732 GLEB23 147265 2005/jun/30 2012/jan/28 455.781515733 GLEB24 147265 2005/jun/30 2012/jan/28 455.877515734 GLEB25 147265 2005/jun/30 2012/jan/28 455.979515735 GLEB26 147265 2005/jun/30 2012/jan/28 456.169515736 GLEB27 147265 2005/jun/30 2012/jan/28 456.44515737 GLEB28 147265 2005/jun/30 2012/jan/28 456.647515738 GLEB29 147265 2005/jun/30 2012/jan/28 456.635515739 GLEB30 147265 2005/jun/30 2012/jan/28 456.896515740 GLEB31 147265 2005/jun/30 2012/jan/28 456.856515741 GLEB32 147265 2005/jun/30 2012/jan/28 457.153515742 GLEB33 147265 2005/jun/30 2012/jan/28 457.395515743 GLEB34 147265 2005/jun/30 2012/jan/28 457.638515744 GLEB34 147265 2005/jun/30 2012/jan/28 420.56515745 GLEB35 147265 2005/jun/30 2012/jan/28 457.526515746 GLEB36 147265 2005/jun/30 2012/jan/28 457.88515747 GLEB38 147265 2005/jun/30 2012/jan/28 458.124515748 GLEB39 147265 2005/jun/30 2012/jan/28 458.296515749 GLEB40 147265 2005/jun/30 2012/jan/28 458.026515750 GLEB41 147265 2005/jun/30 2012/jan/28 458.156515751 GLEB42 147265 2005/jun/30 2012/jan/28 458.266515752 GLEB23 147265 2005/jun/30 2012/jan/28 458.088515753 GLEB44 147265 2005/jun/30 2012/jan/28 457.886515754 GLEB45 147265 2005/jun/30 2012/jan/28 457.658515755 GLEB46 147265 2005/jun/30 2012/jan/28 439.269515757 GLEB47 147265 2005/jun/30 2012/jan/28 457.582515758 GLEB48 147265 2005/jun/30 2012/jan/28 439.426515759 GLEB49 147265 2005/jun/30 2012/jan/28 457.744515760 GLEB50 147265 2005/jun/30 2012/jan/28 457.793515762 GLEB51 147265 2005/jun/30 2012/jan/28 457.579515763 GLEB52 147265 2005/jun/30 2012/jan/28 420.851515764 GLEB53 147265 2005/jun/30 2012/jan/28 457.243515765 GLEB55 147265 2005/jun/30 2012/jan/28 457.057515766 GLEB56 147265 2005/jun/30 2012/jan/28 274.129515767 GLEB56 147265 2005/jun/30 2012/jan/28 456.18515768 GLEB57 147265 2005/jun/30 2012/jan/28 456.277515769 GLEB59 147265 2005/jun/30 2012/jan/28 456.369515770 GLEB60 147265 2005/jun/30 2012/jan/28 456.519515771 GLEB61 147265 2005/jun/30 2012/jan/28 456.663515772 GLEB62 147265 2005/jun/30 2012/jan/28 456.427515773 GLEB63 147265 2005/jun/30 2012/jan/28 456.537515774 GLEB64 147265 2005/jun/30 2012/jan/28 456.717515775 GLEB65 147265 2005/jun/30 2012/jan/28 456.698515776 GLEB66 147265 2005/jun/30 2012/jan/28 438.44515777 GLEB67 147265 2005/jun/30 2012/jan/28 456.925515778 GLEB68 147265 2005/jul/01 2012/jan/28 457.361515779 GLEB69 147265 2005/jul/01 2012/jan/28 457.601515780 GLEB70 147265 2005/jul/01 2012/jan/28 457.457515781 GLEB71 147265 2005/jul/01 2012/jan/28 456.744515782 GLEB72 147265 2005/jul/01 2012/jan/28 456.823515783 GLEB72 147265 2005/jul/01 2012/jan/28 457.269515784 GLEB73 147265 2005/jul/01 2012/jan/28 457.44515785 GLEB74 147265 2005/jul/01 2012/jan/28 456.918515786 GLEB75 147265 2005/jul/01 2012/jan/28 438.785515787 GLEB76 147265 2005/jul/01 2012/jan/28 457.118515788 GLEB76 147265 2005/jul/01 2012/jan/28 457.164515789 GLEB77 147265 2005/jul/01 2012/jan/28 292.572



Tenure # Claim Name OwnerID Issue Date Good To Date Area(ha)515790 GLEB78 147265 2005/jul/01 2012/jan/28 329.058515791 GLEB80 147265 2005/jul/01 2012/jan/28 457.797515792 GLEB81 147265 2005/jul/01 2012/jan/28 457.84515793 GLEB81 147265 2005/jul/01 2012/jan/28 384.661515794 GLEB82 147265 2005/jul/01 2012/jan/28 348.109515795 GLEB83 147265 2005/jul/01 2012/jan/28 54.889518945 GLEBX 1 147265 2005/aug/11 2012/jan/28 437.63518946 GLEBX 02 147265 2005/aug/11 2012/jan/28 437.509518947 GLEBX 03 147265 2005/aug/11 2012/jan/28 437.388518948 GLEBX 04 147265 2005/aug/11 2012/jan/28 437.268518949 GLEBX 05 147265 2005/aug/11 2012/jan/28 437.147518950 GLEBX 06 147265 2005/aug/11 2012/jan/28 437.027518951 GLEBX 07 147265 2005/aug/11 2012/jan/28 436.906526482 DOLLY CAMP 1 147265 2006/jan/27 2012/jan/28 73.135529514 RIFT01 147265 2006/mar/06 2012/jan/28 437.724529515 RIFT02 147265 2006/mar/06 2012/jan/28 437.852529516 RIFT03 147265 2006/mar/06 2012/jan/28 437.919529517 RIFT04 147265 2006/mar/06 2012/jan/28 437.998529518 RIFT05 147265 2006/mar/06 2012/jan/28 456.323529519 RIFT06 147265 2006/mar/06 2012/jan/28 438.157529520 RIFT07 147265 2006/mar/06 2012/jan/28 438.238529521 RIFT08 147265 2006/mar/06 2012/jan/28 438.348529523 RIFT09 147265 2006/mar/06 2012/jan/28 438.459529524 RIFT10 147265 2006/mar/06 2012/jan/28 420.296529526 RIFT11 147265 2006/mar/06 2012/jan/28 438.68529527 RIFT12 147265 2006/mar/06 2012/jan/28 438.79529528 RIFT13 147265 2006/mar/06 2012/jan/28 438.878530210 KITSAULT SOUTH 1 147265 2006/mar/18 2012/jan/28 219.912530211 KITSAULT SOUTH 3 147265 2006/mar/18 2012/jan/28 458.29530212 KITSAULT SOUTH 2 147265 2006/mar/18 2012/jan/28 458.369530214 KITSAULT SOUTH 4 147265 2006/mar/18 2012/jan/28 439.782530215 KTSAULT SOUTH 5 147265 2006/mar/18 2012/jan/28 403.174530217 ZORKA 147265 2006/mar/18 2012/jan/28 18.262530218 SILVER CHORD 147265 2006/mar/18 2012/jan/28 18.306530219 HENDERSONS 147265 2006/mar/18 2012/jan/28 18.275530220 IXL 147265 2006/mar/18 2012/jan/28 18.3530221 RIVERSIDE 147265 2006/mar/18 2012/jan/28 18.289530222 EAGLE 147265 2006/mar/18 2012/jan/28 18.291530223 KITSAULT SOUTH 6 147265 2006/mar/18 2012/jan/28 458.082530224 KITSAULT SOUTH 7 147265 2006/mar/18 2012/jan/28 403.021530225 KITSAULT SOUTH 8 147265 2006/mar/18 2012/jan/28 146.61530249 COPPER CREST 147265 2006/mar/18 2012/jan/28 36.623530268 KITSAULT SOUTH 9 147265 2006/mar/19 2012/jan/28 458.215530536 VMS 147265 2006/mar/25 2012/jan/28 18.273530847 KITGOLD 1 147265 2006/mar/30 2012/jan/28 401.952530848 JADE 1 147265 2006/mar/30 2012/jan/28 91.06530849 JADE 2 147265 2006/mar/30 2012/jan/28 18.21530850 KITSAULT SOUTH 10 147265 2006/mar/30 2012/jan/28 439.849530852 KITSAULT SOUTH 12 147265 2006/mar/30 2012/jan/28 440.049537294 RED BLUFF 1 147265 2006/jul/17 2012/jan/28 109.772537295 RED BLUFF 2 147265 2006/jul/17 2012/jan/28 18.298537296 RED BLUFF 3 147265 2006/jul/17 2012/jan/28 201.371537297 RED BLUFF 4 147265 2006/jul/17 2012/jan/28 164.771537362 RED BLUFF 5 147265 2006/jul/17 2012/jan/28 36.593537433 EAST DOLLY 1 147265 2006/jul/20 2012/jan/28 456.55543139 ILLY 1 147265 2006/oct/13 2012/jan/28 219.2534543140 ILLY 2 147265 2006/oct/13 2012/jan/28 420.242543141 ILLY 3 147265 2006/oct/13 2012/jan/28 456.9824543142 ILLY 4 147265 2006/oct/13 2012/jan/28 73.1316543143 ILLY 5 147265 2006/oct/13 2012/jan/28 457.209543144 ILLY 6 147265 2006/oct/13 2012/jan/28 347.4506543145 ILLY 7 147265 2006/oct/13 2012/jan/28 402.3718543146 ILLY 8 147265 2006/oct/13 2012/jan/28 219.5074543147 ILLY 9 147265 2006/oct/13 2012/jan/28 457.5587543148 ILLY 10 147265 2006/oct/13 2012/jan/28 274.4895543149 ILLY 11 147265 2006/oct/13 2012/jan/28 457.8309543150 ILLY 12 147265 2006/oct/13 2012/jan/28 439.5922543151 ILLY 13 147265 2006/oct/13 2012/jan/28 109.9069543152 ILLY 14 147265 2006/oct/13 2012/jan/28 457.3259543153 ILLY 15 147265 2006/oct/13 2012/jan/28 457.5044543154 ILLY 16 147265 2006/oct/13 2012/jan/28 164.7841543155 ILLY 1A 147265 2006/oct/13 2012/jan/28 18.2691554224 RIFTXX1 147265 2007/mar/13 2012/jan/28 54.8699554277 RED BLUFF A 147265 2007/mar/14 2012/jan/28 128.2221567987 CARL 147265 2007/oct/15 2012/jan/28 36.6425574257 147265 2008/jan/22 2012/jan/28 402.0281574258 147265 2008/jan/22 2012/jan/28 511.7981574259 147265 2008/jan/22 2012/jan/28 896.3285

Total 59400.2



4.0 Physiography, Climate and Vegetation The Kinskuch property is situated south of the regionally prominent Cambria Ice Field in northwest BC. The property covers an expansive region from Kitsault Lake in the north to Alice Arm in the south. The topography in the area is generally rugged and steep with steep-sided valleys being U- to V-shaped. Elevations in the area range from sea level to over 2,270 metres.

The climate is typical for the region with high precipitation occurring as rain and snow in all seasons except summer. Winter precipitation generates heavy snowfalls of 5-12 metres (Evans and Macdonald, 2003). As a result, snow covers the property from late September to late June. Precipitation and heavy fog affect airborne access greatly.

The 1,000 metre elevation marks the approximate division between alpine style vegetation and forest vegetation (Evans and Lehtinen, 2001). The alpine vegetation includes slide alder, grass and lichen and on the upper slopes alpine grass, moss, lichen with the odd patch of alpine spruce (Kasper and Metcalfe, 2005). The forest vegetation consists of fir, hemlock, spruce and cedar with areas of thick brush comprised of alder, willow and devils club in wet seeps and avalanche areas (Evans and Lehtinen, 2001).

Currently, access to the property is by helicopter with the town of Stewart having the nearest permanent helicopter base. An old cat trail runs up the Kitsault River from Alice Arm along the eastern margin of the property, a distance of roughly 32 kilometres. Confederation Power (formerly Anyox Hydroelectric) has reopened and upgraded this trail, now called the Kitsault River road. In places the Kitsault River road follows an old rail bed that was initially constructed to service the Dolly Varden Silver mine. Additionally, a helicopter staging area is located at approximately 24.3 km on the Kitsault River road and there are no permanent habitations within or near the property.

5.0 Exploration History (from Smyth, 2010 and Evans, 2002)

Mineral exploration started in the Kitsault Valley in the early 1900’s as a result of discoveries at Anyox and in the Stewart region. The earliest recorded information dates back to provincial government Annual Reports from 1915. The primary exploration area has been centred in the Kitsault River area with lesser exploration in the Lahte Creek-Illiance River valley, the Dak River area and the area surrounding Kinskuch Lake.

The Dolly Varden, North Star and Torbit mines are past-producing mines, which operated in the Kitsault River valley at intermittent times from 1919 to 1959, and produced silver, lead, zinc, copper and gold. These deposits were originally considered to be “veins” hosted along a tensional fault system but were later studied by Devlin and Godwin (1987) and interpreted to be an exhalative, stratiform deposit. The Kitsault River valley as well as the surrounding area saw extensive exploration for a number of metals during the early part of the 20th century. Copper and gold mineralization was extensively explored in an area historically known as the “Copper Belt”, located west of the Kitsault



River near its headwaters. A number of showings, such as the Homestake Ridge, Vanguard Copper, Red Point and Vanguard Gold are located in this area. Numerous other showings such as the Sault, Ace/Galena and Wolf are all located in the Kitsault River/Kitsault Lake area.

The Homestake Ridge trend has seen numerous exploration programs of trenching, surface work and underground development during the period from 1914 to 1939. Numerous programs involving prospecting, geological mapping, rock and soil geochemistry, geophysics and diamond drilling have been carried out by Canex Aerial Explorations Limited, 196(?); Dwight Collison, 1964–1979; Newmont Canada, 1979-80; S.Coombes, D. Nelles and Cambria Resources Limited, 1986-88; Noranda Exploration Company Limited, 1989-91; Lac Minerals (Barrick Resources), 1994; Teck Corp., 2000; and Teck-Cominco, 2001.

The Red Point prospect, also within the “Copper Belt”, was discovered during the 1910’s and was subsequently explored by adits on the higher-grade copper prospects. The prospect was acquired by Dolly Varden Minerals Incorporated and was explored by geological, geochemical and geophysical methods and was later trenched and drilled.

Sporadic exploration throughout the Kitsault River valley has been conducted over many of the known showings. Of note are the silver lead zinc deposits of the Dolly Varden, Wolf, Torbit and Northstar deposits, which were explored during the period 1964 to 1990. These deposits have been explored by geophysical, geological and geochemical methods and in some cases have been trenched and/or drilled.

South of Kitsault Lake, the Sault property was discovered in 1966 by Cominco Ltd. and was explored intermittently until 1990. The property has been described by Tupper and McCartney (1990), as referenced from company reports by MacRobbie, as mineralized carbonate deposits restricted to syn-sedimentary grabens which acted as traps for local accumulation of carbonate, sulphate and minor sulphide mineralization. Cominco (1984) and Oliver Gold Corporation and joint venture partners Aber Resources Limited and Tanqueray Resources Limited (1989) drilled the property and conducted geological geochemical and geophysical work.

The area of the Illiance River and Lahte Creek saw numerous discoveries of relatively small veins commonly hosted within shear structures with high silver values associated with lead and zinc mineralization. The area first received attention during the period from early 1910’s through the 1920’s. Exploration activity increased again during the 1950’s- 1960’s, during which time numerous companies were active in the area. Hudson Bay Exploration and Development Co. explored this same area during 1980-81 to explore the rhyolite hosted lead-silver float and occurrences, which were discovered originally in 1916 and were re-discovered in 1980. The occurrence is known as the Left Over showing.



Exploration to the northwest of the Illiance River and southwest of Lahte Creek near Mt. McGuire was focused on a porphyry molybdenum deposit known as the Ajax. Minfile inventory reports 178,540,000 t combined reserves at 0.070% molybdenum.

Northwest of Lahte Creek in the area south and east of Kinskuch Lake copper showings were first explored in the 1930’s. The area was sampled by Brittania Mines in 1939 and was drilled in 1955-56 by Northwestern Explorations Limited, establishing a small reserve of a few million tons of 0.4% copper on the Bonnie zone. Forest Kerr Mines Ltd. conducted geological, geophysical and diamond drilling during 1965. Cyprus Exploration Corp. explored the property by geological, geochemical surveys and diamond drilling during 1966. In 1970 Kerr Addison Mines Ltd. conducted geophysical surveys and a limited diamond drill program. The property was restaked in 1979 as the Big Bulk and was mapped and sampled by Prism Resources in 1980. Procan Resources drilled five diamond drill holes in 1982. The property was again looked at in 1990 and 1991 by the joint venture partnership of Oliver Gold Corporation, Aber Resources Ltd. and Tanqueray Resources Ltd. The joint venture conducted extensive geological mapping, geochemical sampling, trenching and prospecting. During 1989 the joint venture also carried out a regional survey. The 1991 program focused on the Big Bulk area and was primarily a blast trench, geological mapping and prospecting program. The author’s results and conclusions of the 1990-1991 programs suggest porphyry copper-gold deposit potential as evidenced by the alteration assemblage of the Big Bulk area.

The entire Kitsault belt has reportedly been subjected to many regional reconnaissance geochemical surveys by companies including Newmont (1967), and Cominco (1985). The Geological Survey of Canada conducted a regional survey in 1978.

In 2005 Kitsault Resources Ltd conducted its own regional reconnaissance geochemical survey of the area (Lahti, 2006), which was extended in 2006, with follow-up soil sampling carried out at the confluence of the Tchichin River and Lahte Creek (Bronson and Smyth, 2007). A second season of follow-up soil and rock sampling was conducted in 2007 with encouraging results (Smyth, 2008). This work included soil sampling on strike of the San Diego copper/gold porphyry-associated soil anomaly on the FH property (Harris, 2003), which was optioned by Durango in 2007.

In 2008 a 10.65 line-kilometre 3D IP survey was commissioned in the most prospective core of the Big Bulk intrusive system. In parallel, a program of surface rock sampling was undertaken, focusing on the most sparsely sampled areas of the system. These surveys were followed by drilling of the most promising and accessible IP (chargeability and resistivity) and surface geochemical anomalies, as well as a single hole to test the lateral continuity of a 60 metre open drilling intersection which reported 0.4% copper at Big Bulk in 1982.

The central Big Bulk IP survey employed longer-than-normal (1,600m) arrays consisting of 32 dipoles at 50 metre spacing (line spacing: 200m) in order to achieve the greatest depth penetration possible (500m to 600m).



The resulting 3D inversion model displayed the following important chargeability and resistivity features:

(a) An extensive, potentially stratigraphically-influenced, circular high chargeability zone starting at approximately 350 metre depth as defined by the 30msec isosurface, with a few thin peripheral pipe-like bodies extending to surface;

(b) A broad, tongue-shaped low resistivity zone defined by the 750 ohm-m isosurface cutting east to west across the central survey area – interpreted to define the base of the coincident glacial moraine observable at surface. The now-retreated glacier which deposited this moraine is considered to have removed an upper portion of the underlying chargeability high, as well as any mineralisation it might have hosted.

The best Cu-Au-Ag assay returned from drilling into the shallower peripheral areas of the Big Bulk chargeability anomaly was in hole BB-06 which yielded 0.21% Cu, 0.10 g/t Au and 0.49 g/t Ag over 114.39 metres.

In order to assist with the interpretation of the Big Bulk system and the interpretation and prioritization of follow-up of other existing early stage exploration targets on the property a preliminary structural study of the project area was also produced for the project area. The most significant feature to emerge from this study was the identification of likely, hitherto unrecognized, rift inversion structures, already known to be important structural controls on VMS deposits elsewhere in British Columbia.

Also in 2008 sixty seven talus samples were collected over the copper and gold talus anomaly on the Midnight Blue claim, the results of which confirmed the magnitude and extent of the anomaly. In early August an IP survey was conducted over the anomaly. The survey yielded a poorly defined medium-level chargeability anomaly which was the focus of the two diamond holes drilled on the property which did not encounter significant economic intersections.

In March 2011, Bravo entered into the option agreement and by mid-July commenced its initial exploration program lead by the airborne survey discussed herein.

6.0 Regional Geology (from Kasper and Metcalfe, 2005)

The Kinskuch property is located at the southern end of a northwest trending area defined by Grove (1986) as the “Stewart Complex”. The Stewart Complex is one of the largest volcanic arc terranes in the Canadian Cordilleran collage and one of the best-studied areas of north-western Stikinia (Figure 3). It is bounded by Alice Arm to the south, the Coast Plutonic Complex to the southwest, the Iskut River to the north and the Skeena fold belt to the east. Within its boundaries is the “Golden Triangle”, an area that is host to more than 200 mineral occurrences including the gold mines Eskay Creek, Premier and SNIP as well as the Granduc, Dolly Varden-Torbit and Anyox mines. The dominant mineral occurrences are precious metal vein type, with related skarn, porphyry, and massive sulphide occurrences.



Figure 3: Terranes of the Cordillera. The Kinskuch Property is located within the Stikine Terrane (from Folk and Makepeace, 2007)

KinskuchProject



The Stewart Complex is situated within the Intermontane Belt. Stikinia, which contains the Kinskuch property, is the dominant terrane of the complex. Stikinia is an island arc terrane which formed in the Pacific Ocean during Carboniferous to Early Jurassic (320-190 Ma) and collided with North America during the middle Jurassic (Folk and Makepeace, 2007).

Stikinia is comprised of at least four Paleozoic to Cenozoic tectonostraticgraphic packages (Kasper and Metcalfe, 2005):

1. Paleozoic Stikine Assemblage quartz-rich rocks, carbonate slope deposits, and minor mafic to felsic volcanic rocks;

2. Early Mesozoic volcanic and inter-arc and back-arc basin sedimentary rocks;

3. Middle to Upper Jurassic Bowser Basin turbiditic sedimentary rocks and;

4. Tertiary post-kinematic granitoid intrusions of the Coast Plutonic Complex.

The majority of the metalliferous deposits discovered to date within Stikinia are associated with Mesozoic arc assemblages. Northwestern Stikinia Mesozoic assemblages have undergone at least five magmatic episodes, the formation of three sedimentary basins, at least two periods of deformation and at least two metallogenic episodes bracketed by important unconformities.

The five magmatic episodes mentioned above were defined by concordant biochronology and U-Pb geochronometry as being:

1. Late Triassic (ca. 230-226 Ma);

2. Late Triassic to early Jurassic (ca. 219-205 Ma);

3. Early Jurassic (ca. 196-187 Ma). Intrusions of this period are related to mineral deposits such as Premier, SNIP, Sulphurets, Kerr and Red Mountain (Folk and Makepeace, 2007);

4. Late Early Jurassic (ca. 185 Ma). This is the age of the Eskay Creek mineralization (Folk and Makepeace, 2007);

5. Middle Jurassic (ca. 179-172 Ma).

Magmatic episodes of the Stikinia alternated with the development of three sedimentary basins. These basins formed during the Late Triassic to Early Jurassic, the Toarcian to Bajocian and the Bathonian to Oxfordian. The basin formed during the Toarcian-Bajocian is of considerable importance because this west-facing, north-trending back arc basin contains the Eskay Creek “contact zone” rocks (Hazelton Group), which are overlain by Middle and Upper Jurassic marine basin sediments (Bowser Lake Group).

At least two periods of deformation occurred in the region, a contractional deformation during the Triassic-Jurassic (post-Norian, pre-Hettangian) and an Early Jurassic hiatus. These periods of deformation are represented by unconformities one of which also separates two metalliferous events that took place in the Early Jurassic (e.g. Premier, SNIP, Stonehouse, Inel, Sulphurates and Kerr) and Middle Jurassic (e.g. Eskay Creek) (Kasper and Metcalfe, 2005).



7.0 Property Geology

The Kinskuch property comprises a succession of volcanics and sediments of the Upper Triassic Stuhini Group and the Lower to Middle Jurassic Hazelton Group, folded at both regional and property scale. These units are overlain by sediments from the Middle to Upper Jurassic Bowser Lake Group.

The primary host for many sulphide occurrences and extensive areas of alteration on the property is dominantly affiliated with the Lower Jurassic Hazelton Group, a complex sequence of lower to middle Jurassic sedimentary, volcanic and intrusive rocks (Figure 4). The Hazelton Group contains the transition from Lower Jurassic volcanism to the hiatus and sedimentation belonging to the Salmon River and Bowser group (Evans and Lehtinen, 2001).

Hazelton Group rocks comprise lithic wackes and volcanic breccias which transition into debris flows with tuffaceous mudstone to sandstone interbeds which are believed to have been deposited in a developing pull-apart basin. Maroon to green andesite and dacite pyroclastic-epiclastic rocks with discrete flows and tuffaceous beds were likely derived from volcanic rocks of the Betty Creek Formation (Evans and Macdonald, 2003), which overlie the basinal volcano-sedimentary and porphyritic rocks in the area.

Sub-basin development continued and resulted in a rapid change in facies into calcareous mudstones, grits, and conglomerates coeval with intruding felsic dome material and believed related to the Salmon River Formation (Evans and Lehtinen, 2001). The Salmon River Formation shows a general fining upwards into the Bowser basin, which Evans and Lehtinen (2001) describes as a reflection of the large scale basin development at the end of Hazelton volcanism.

The area is structurally complex and variably deformed by folding, faulting and greenschist facies metamorphism. Several doubly plunging, anticlinal and synclinal folds occur within the area and the majority of fault sets trend dominantly northeast.



Figure 4: Property Geology Map (modified from Smyth, 2010)

- Stuhini - Stuhini

- Hazelton - Stuhini - Hazelton

- Bowser



8.0 Airborne Geophysical Exploration Program

8.1. Exploration Criteria

The majority of mineralization in this region is not expected to provide particularly good conductive responses due to the relatively thin and discontinuous nature of the vein and stockwork systems as well as the perhaps dissemination of the associated sulphides. An exception would however occur in the event of VMS mineralization, which because of the significant sulphide content, should normally result in strong conductive responses.

As pointed out by Hodges and Amine1, gold mineralization presents a challenge for geophysical surveys. First, because the gold mineralization itself does not provide a contrast with the host geology that is detectable by any of the geophysical parameters, and second, because economic deposits can be quite small, with complex geology and structure. Discovery of gold deposits requires geophysical surveys that can detect subtle structures which might control deposition, and directly detect the weak anomalies created by alteration and deposition processes. Exploration for gold is therefore commonly a mapping exercise. Magnetic and electromagnetic as well as gamma-ray spectrometer surveys can all be valuable mapping tools, depending on the terrain, the regolith and geomorphology, and the target.

Geophysical signatures may include all or some of the following:

• airborne and ground magnetic surveys to detect magnetite-rich zones and as an aid to mapping;

• induced polarization/resistivity surveys to outline disseminated sulphides;

• resistivity surveys to help map alteration zones;

• airborne and ground radiometric surveys to help delineate K-rich alteration zones;

• audio-frequency magnetotelluric surveys to define the limits of the porphyry systems; and

• short-wave infrared spectroscopy for clay alteration identification in the field.

The low mineral concentrations of shear-hosted and contact Au deposits generally do not provide direct-targeting for any EM system, unless there is significant supergene enrichment. Exploration for these deposits does benefit from using airborne geophysics, however, including electromagnetic, magnetic and radiometric applications for mapping geology, structure and alteration. Based on these characteristics and through extrapolations to the known and suspected mineralization on the Kinskuch Property, an airborne geophysical survey of combined electromagnetic (broadband, frequency-domain DIGHEM) and magnetics was chosen in 2011 by Bravo Gold as an optimum first 1 Hodges, G. and Amine, D., 2010. Exploration for Gold Deposits with Airborne Geophysics. KEGS PDAC Symposium 2010



pass method of mapping and hopefully delineating controlling structures as well as possible sulphide mineralization.

8.2. Helicopter Frequency-Domain EM Overview

Electromagnetic induction involves generating an electromagnetic field which induces current in the earth which in turn causes the subsurface to create a magnetic field. By measuring this magnetic field, subsurface properties and features can be deduced. This method measures the magnitude and phase of induced electromagnetic currents, which are related to the subsurface electrical conductivity. Electrical conductivity is a function of the soil and rock matrix, percentage of saturation, and the conductivity of the pore fluids. A transmitter (Tx) coil or loop is used to generate a time-varying magnetic field, the primary field, which induces an electromagnetic force in the neighbouring regions of space. This electromagnetic force drives eddy currents in the earth, and other conductive elements, which in turn produce a new magnetic field, the secondary field, registered by one or more receiver (Rx) coils. The secondary magnetic field contains information on the resistivity distribution in the ground, which can then be converted into geological knowledge because of the different electric properties of earth materials. In HEM systems, the electromagnetic sensor equipment is placed in a cylindrical tube, the so- called bird, carried by a helicopter over the survey area (see schematic below). Data are collected along selected flight lines at predetermined sampling rates, and the associated system flight heights are registered simultaneously by the aid of radar and/or laser altimeters. Most modern HEM systems allow surveying at two to six different transmitter frequencies in a typical bandwidth from a few hundred Hertz to more than 100 MHz. Normally, a set of transmitter and receiver coils is used for each frequency of operation, and the separation between the rigidly mounted coils ranges between 5 and 10 m. The unit of measurement for both the in-phase I and the quadrature Q component is traditionally the dimensionless ratio of secondary to primary field intensity expressed in part-per-million, i.e., I;Q = Hs/Hp * 106 ppm where Hs and Hp denotes the secondary and the primary field at the receiver, respectively.

Modern frequency-domain airborne electromagnetic (AEM) systems utilize small transmitter and receiver coils having a diameter of about half a metre. The transmitter signal, the primary magnetic field, is generated by sinusoidal current flow through the transmitter coil at a discrete frequency. As the primary magnetic field is very close to a dipole field at some distance from the transmitter coil, it can be regarded as a field of a magnetic dipole sitting in the centre of the transmitter coil and having an axis perpendicular to the area of the coil. The oscillating primary magnetic field induces eddy currents in the subsurface. These currents, in turn, generate the secondary magnetic field which is dependent on the underground conductivity distribution. The secondary magnetic field is picked up by the receiver coil and related to the primary magnetic field expected at the centre of the receiver coil. As the secondary field is very small with respect to the primary field, the primary field is generally bucked out and the relative secondary field is measured in parts per million (ppm). Due to the induction process



Figure 5: Schematic of the HEM System (Siemon, 2009)

within the earth, there is a small phase shift between the primary and secondary field, i.e., the relative secondary magnetic field is a complex quantity. The orientation of the transmitter coil is horizontal (vertical magnetic dipole 'VMD') or vertical (horizontal magnetic dipole 'HMD'), and the receiver coil is oriented in a maximum coupled position, resulting in horizontal coplanar, vertical coplanar, or vertical coaxial coil systems.2

8.3. Operations

Fugro Airborne Surveys was contracted to fly an airborne electromagnetic and magnetic survey for Bravo Gold Corp. over the Kinskuch Property; operations were based out of the hamlet of Alice Arm. Data acquisition occurred during the period August 1 to September 14, 2011. Final survey coverage consisted of 3,281.8 line-kilometres, including tie lines acquired in 85 flights (multiple flights per day). Flight lines were flown east–west (000°–090°) with a nominal line separation of 100 metres. Tie lines were 2 Siemon, B., 2009. Electromagnetic Methods – Frequency Domain: Airborne Techniques; in Kirsch, R. (ed.), Groundwater Geophysics – A Tool for Hydrogeology, 2nd ed., Springer-Verlag, Berlin, Heidelberg, p. 155– 170.



flown perpendicular (000°–180°) to the traverse lines at intervals of 1,000 metres (Figure 7).

The survey employed the DIGHEMV-DSP electromagnetic system. Ancillary equipment consisted of a high-sensitivity cesium-vapour magnetometer and a 256-channel spectrometer, radar and barometric altimeters, a digital video camera, a digital recorder and an electronic navigation system. The instrumentation was installed in an AS350-B3 turbine helicopter (registration C-GHKM) owned and operated by Questral Helicopters Ltd. The helicopter flew at an average airspeed of 70.55 km/h (~19.6 m/s); although the nominal EM sensor height was 35 metres, the actual achieved (varied terrain plus tree heights) was 50.4 metres, mean terrain clearance.

In many portions of the survey area, thick forest and extreme topography forced the pilot to exceed normal terrain clearance for reasons of safety; the standard deviation of bird height is 24.5 metres, with a maximum of ~669 metres. It is very possible that some valid anomalous features may have escaped detection in areas where the bird height exceeded 100 metres. In difficult areas, the forward speed of the helicopter was reduced to a level that permitted excessive bird swinging. This problem, combined with the severe stresses to which the bird was subjected, gave rise to aerodynamic noise levels that are slightly higher than normal on some lines. Where warranted, re-flights were carried out to minimize these adverse effects.

The survey was further hampered by very poor weather, even for this part of the north coast, British Columbia; only 12.75 days of production were achieved while 23 days were lost completely to unacceptable weather precluding airborne survey operations, and many if not most days were cut short due to fog, rain and high winds along the higher elevations and ridge tops. Average production was less than 75 line-kilometres per day, indicating the very poor conditions.

Figure 6a: Bird Height Histogram Figure 6b: Computed Digital Elevation

A complete description of the field program is provided by the contractor‘s logistical report3, attached to this report as Appendix A.

3 Fugro Airborne Surveys, 2012, DIGHEM/Magnetic/Radiometric Survey, Alice Arm, British Columbia, Canada, Project 11047, January 5, 2012, 69 p.



Figure 7: Kinskuch Project Claims with 2011 Airborne Flightpath



8.4. Data Presentation

Electromagnetics

The DIGHEM electromagnetic system utilizes a multi-coil coaxial/coplanar technique to energize conductors in different directions. The coaxial coils are vertical with their axes in the flight direction. The coplanar coils are horizontal. The secondary fields are sensed simultaneously by means of receiver coils that are maximum-coupled to their respective transmitter coils. The system yields an in-phase and a quadrature channel from each transmitter-receiver coil-pair. In HEM, the coplanar coils lie in the horizontal plane with their axes vertical, and parallel. These coils are most sensitive to massive conductive bodies, horizontal layers, and the halfspace. Coaxial coils in an HEM system are in the vertical plane, with their axes horizontal and collinear in the flight direction. These are most sensitive to vertical conductive objects in the ground, such asthin, steeply dipping conductors perpendicular to the flight direction. Coaxial coils generally give the sharpest anomalies over localized conductors.

• in-phase: that component of the measured secondary field that has the same phase as the transmitter and the primary field. The in-phase component is stronger than the quadrature phase over relatively higher conductivity.

• quadrature: that component of the measured secondary field that is phase-shifted 90° from the primary field. The quadrature component tends to be stronger than the in-phase over relatively weaker conductivity.

Apparent resistivity grids, which display the conductive properties of the survey area, were produced by the contractor from the 7,200 Hz, and 56,000 Hz coplanar data; these images are also presented in the following figures.



Figure 8: Apparent Resistivity (calculated from 56,000 Hz coplanar in-phase and quadrature channels)

The image above is displayed using a histogram equalization using a reverse-colour lookup table, so that high resistivities (low conductivity) are shown as ‘cold’ colours (blues).; note that a north-south power lines is clearly evident running through the west-central portion of the survey block, this cultural artefact is increasingly evident at the lower frequencies.

To reiterate, the apparent resistivity images above are expressed in units of ohm-m and are generated from the relative in-phase and quadrature EM components for each of the three coplanar frequencies using a pseudo-layer half-space model. The inputs to the resistivity algorithm are the in-phase and quadrature amplitudes of the secondary field.



Figure 9: Apparent Resistivity (calculated from 7,200 Hz coplanar in-phase and quadrature channels)

As stated in Fugro (2012), both resistive and weakly conductive trends are evident on the apparent resistivity images. Although there are several areas where the more magnetic units correlate with resistive units there is no consistent resistivity/magnetic correlation. This suggests that in some cases, the magnetic and resistivity parameters are responding to different causative sources; i.e., the EM-derived resistivity is responding to changes in the overburden and near-surface layers, while the magnetic data are reflecting changes in the underlying deeper basement units.

If the target shears are highly silicified and non-porous, these should show as narrow resistive units. These non-magnetic, non-conductive linear trends may prove to be the more attractive targets in the search for quartz-vein mineralization. Conversely,



increased porosity, alteration, or an increase in sulphide content associated with some shears or faults, could show as more conductive trends. Any weak responses that are associated with the margins of inferred intrusive features will also be of exploration interest.

Figure 10: Apparent Resistivity (calculated from 900 Hz coplanar in-phase and quadrature channels)

There are other resistivity lows and highs in the area that might also be of interest. Some of these are quite extensive and might reflect "formational" conductors or layers that could be of minor interest as direct exploration targets. However, attention may be focused on areas where these zones appear to be faulted or folded or where anomaly characteristics differ along strike

Some of resistive areas are due to resistive rock units, or might be attributed to



magnetite suppression. Some anomalous magnetite-associated responses exhibit positive quadrature responses, denoting weak conductivity, but still show as resistive units because of the magnetite suppression.

Other resistive zones are quite subtle, and could be due to changes in overburden thickness, rather than changes in rock type. However, those are associated with linear magnetic breaks, contacts, or decreases in magnetite, are considered to be of slightly higher priority.

In the search for auriferous mineralization, the value of EM conductors may be of little importance, unless the gold is known to be associated with conductive material such as sulphides, conductive shears or faults, alteration products, or magnetite-rich zones. As mentioned previously, resistive zones can often be of greater exploration interest, particularly if the host rocks are siliceous. The magnetic parameter appears to have been more effective than the resistivity, in delineating rock units and areas of structural deformation that may have influenced local mineral deposition.

Radiometrics

Radiometric or gamma-ray spectrometer (GRS) surveys detect and map natural radioactive emanations, called gamma rays, from rocks and soils. All detectable gamma radiation from earth materials come from the natural decay products of only three elements, i.e. uranium, thorium, and potassium. In parallel with the magnetic method, that is capable of detecting and mapping only magnetite (and occasionally pyrrhotite) in soils and rocks, so the radiometric method is capable of detecting only the presence of U, Th, and K at the surface of the ground. The use of the method for geological mapping is based on the assumption that absolute and relative concentrations of these radioelements vary measurably and significantly with lithology. The method provides estimates (once the full suite of corrections and processing is completed) of apparent surface concentrations of, the most common naturally occurring radioactive elements, potassium (K), equivalent uranium (eU), and equivalent thorium (eTh).

No other geophysical method, however, and probably no other remote sensing method, requires the consideration of so many variables in order to reduce the observational data to a form that is useful for geological interpretation. For example, in addition to the geometry and physical property contrasts of the radioactive sources, the measured gamma radiation is a function of the size, efficiency and speed of the detector. It is also dependent on environmental and other effects, such as soil moisture, rainfall, vegetation, non-radioactive overburden, and the movement of airborne sources of radiation in the lower atmosphere. Interpretation of gamma-ray spectrometry requires an understanding of the underlying physics of the method, and an insight into the data acquisition, system calibration and data processing and presentation procedures. An excellent and thorough



review of AGRS is provided by Minty, 19974.

Figure 11: Gamma-Ray Spectrometry - Total Counts

As stated by Fugro (2012), although the results are attenuated by overburden cover the lower elevations in the south, there are a few local weak Potassium or Uranium zones that appear to be mapping distinct rock types or zones of alteration. Most of the higher background counts occur in the more resistive units and higher elevations, where the (thinner) overburden suppression of radioelement responses is expected to be less.

There are exceptions however, as evidenced by the coincident radioelement highs and

4 Minty, B. R. S., 1997, Fundamentals of Airborne Gamma-Ray Spectrometry: AGSO Journal of Australian Geology & Geophysics, vol. 17, no. 2, p. 39–50.



the resistivity lows associated with the drainage patterns in the survey area. Although some of these features could be partially due to inaccurate altitude corrections in areas of steep topography or dense tree cover, they could indicate that some of the valleys are fault-controlled. Fault-controlled valleys can yield higher total counts that are coincident with linear magnetic lows. However, some silica-rich alluvial deposits can also yield (Thorium) highs. Younger sediments within these valleys will be more closely related to the rock types from which they were derived.

There is some correlation between the radiometric and magnetic trends, due to the very different depths of exploration. A general correlation exists between anomalous radiometric responses along the higher ridges and the more resistive rock units.

Figure 12: Gamma-Ray Spectrometry - Potassium



Figure 13: Gamma-Ray Spectrometry - Thorium



Figure 14: Gamma-Ray Spectrometry - Uranium

Another way to display radiometric data is to combine three datasets on the one image using a red-green-blue ternary ratio. Each of the datasets are displayed using a different basic colour, which when combined make a display with each shade representing different relative amounts of potassium, thorium and uranium. Usually the colours are displayed as follows:

Red = potassium

Green = thorium

Blue = uranium



Using this colour scheme the following can be interpreted from the colours on the map:

Red = high potassium with low uranium and thorium

Blue = high uranium with low potassium and thorium

Green = high thorium with low potassium and uranium

Cyan = high thorium and uranium with low potassium

Magenta = high potassium and uranium with low thorium

Yellow = high potassium and thorium with low uranium

Black = low potassium, thorium and uranium

White = high potassium, thorium and uranium.

Figure 15: Ternary Image Explanation

The units of measurement of a radiometric survey are counts per second. The values can vary depending on the survey height, type of spectrometer used and background radiation. To ensure that the units have geological significance and that adjacent surveys can be directly compared, the measurement units are (or should be) converted to reflect mean-ground-level abundances of the radioelements.

Potassium 0–450 cps 0–5% potassium percent

Thorium 0–230 cps 0–58 ppm equivalent thorium parts per million

Uranium 0–120 cps 0–20 ppm equivalent uranium parts per million

Total count 0–4600 cps 0–150 nGy/h air absorbed dose rate nanoGray per hour



Figure 16: Ternary Image RGB (K-Th-U)

Magnetics

Modern high-resolution aeromagnetic data provides a view of completely obscured rocks, allowing much finer divisions of provinces regionally, and units locally. As magnetic field compilations extend to greater scales, they may be used to tie existing isolated interpretations or maps together through continuous data coverage, provide continent-scale perspectives on geologic structure and evolution, and extend geological mapping of exposed (particularly Precambrian basement) regions into sediment-covered areas. A fundamental building block in these interpretations is the geophysical domain, distinguished on the basis of anomaly trend, texture, and amplitude. Where basement is exposed, these domains often coincide with lithotectonic domains, geologic provinces, or



cratons, depending on the scale of investigation. Delineating areas of magnetic anomalies having similar characteristics is intended, therefore, to isolate areas of crust having similar lithological, metamorphic, and structural character, and possibly, history. Anomaly trends may indicate the type of deformation undergone: for example, sets of parallel, narrow curvilinear anomalies may attest to penetrative deformation whereas broad ovoid anomalies might suggest relatively undeformed plutons. The average anomaly amplitude within a domain reflects its bulk physical properties. For example, calc-alkaline magmatic arcs generally are marked by belts of high-amplitude positive magnetic anomalies while greenstone terranes commonly are associated with subdued magnetic fields. Additionally, where anomaly trends show abrupt changes in direction at domain boundaries, the relative age of the adjacent domains may also be inferred.

This airborne geophysical interpretation is based on an integrated analysis using a combination of GEOSOFT’s integrated editors (spreadsheet and flight path), INTREPID’s advanced Fourier filtering and multiscale edge detection, ER MAPPER’s image enhancements and MAPINFO/DISCOVER’s GIS capability. All the final data is also presented as a series of digital maps and images generated at scale of 1:20,000. The airborne geophysical gridded data was analyzed using the following enhanced images:

• Residual Magnetic Intensity; pseudocolour and colourdrape images

• Calculated Vertical Derivative; greyscale shaded-relief and colourdrape images

• Total Horizontal Derivative; colourdrape images

• Analytic Signal (total gradient); colourdrape images

• Tilt derivative; colourdrape images

• ZS Filters; Edge and Area group derivatives, colourdrape images

• Apparent resistivities based on 7,200 and 56,000 Hz coplanar coils; pseudocolour images

• Mulitplots of magnetics and electromagnetics.

Projection Specifications:

Map projection NUTM15 Datum NAD83 Central meridian 129° West False Easting 500000 m False Northing 0m Scale Factor 0.9996 m

In addition, the analysis and interpretation included a methodical review of the underlying profile data via both the contractor-supplied multiplots and an interactive review via GEOSOFT’s integrated editors; example shown below in Figure 17.



Figure 17: Interactive Review of Profiles and Images

The subsequent analysis depends in part at least on the processing, visualization, mapping, and integration capabilities provided by specialized geophysical software. Discrete features and trends are checked on a profile by profile basis, linked to a variety of images and GIS layers, before final decisions as to interpretation and recommendations for ground follow-up are made.

One of the by-products from the airborne geophysics program is a digital elevation model, derived from the GPS height and radar altimeter. Although not as accurate as a terrestrial geodetic survey, it remains a relatively inexpensive and accurate model of the topography of the study area. The errors contained in these sorts of DEMs are of the order of approximately 10 metres; the main contributions being from the radar altimeter data (1-2 metres) and the GPS height data (5-10 metres). When height comparisons are made in areas of flat terrain to elevations obtained during the course of third order gravity traverses and/or the elevations of geodetic stations, the errors are on the order of approximately 2 metres.

The DEM in this event reflects a very rugged topography, with approximately 2,270 m relief present.



Figure 18: Digital Elevation Model (SRTM Data)



Figure 19: Residual Magnetic Intensity (DIGHEMV Survey)

The final magnetic intensity (Figure 19 above) has been corrected for parallax and diurnal, and a spike-removal filter applied. Additionally, the data was edited for abrupt elevation shifts which did cause some associated jumps or spikes on the steeper slopes. The data was then tie-line levelled and gridded using a bi-directional grid technique using a 20 metre cell size, one-fifth of the nominal traverse line spacing. A correction for the regional reference field (IGRF) was applied; hence the term ‘residual magnetic intensity.’



9.0 Data Interpretation

Overview - Electromagnetics/Magnetics/Radiometrics

Analogies to known mineralization within the immediate area of the present survey were established as part of this interpretation, and are tabulated below.

Table 2: Comparison of Airborne Geophysics to Known Mineralization

Minfile_No Name Status Airborne Response

103P 003 Devlin Showing Lays on flank NNW-trend dyke, weak DIGHEM CP response. Local K-anomaly.

103P 015 Monarch Showing No direct geophysics apparent.

103P 030 B and C Showing No direct AEM, but lays in local mag low ~250 m west of moderate DIGHEM conductor itself in NE-trend mag low. Elevated AGRS counts.

103P 042 Dak Showing No direct geophysics; localized mag high ~120 m east but AEM due surficial only?

103P 044 Falcon Showing Lays on N-trending magnetic linear and corresponding K-trend (parallel to drainage?). No direct AEM.

103P 047 Left Over Showing Occurs on E-margin NNW-trend formational conductor; possible coincident magnetic linear structure?

103P 121 Beverley Showing Lays on edge of prominent NE-trend mag high; localized resistive anomaly adjacent. Possible elevated Th counts.

103P 123 Billy Barton Showing NE-trend mag dykes/mafics cut by N-structures; resistive ground, elevated Th

103P 126 Esperanza Past

Producer NE-trend magnetic fabric cut by N-trend subsidiary features; lays on far west margin of NW-trend formation conductor

103P 127 Acadia Showing Localized mag low in NE-trend fabric; AGRS suggests NE-trend Th linear. No direct DIGHEM response.

103P 128 Lone Maid Showing NE-trend magnetic fabric, but cut by N-trend subsidiary features; lays on margin of NW-trend formational conductor

103P 130 Alice Prospect NE-trend mag dykes/mafics, adjacent to x-cutting N-structures; resistive ground, elevated Th counts

103P 132 Brown Bear Showing Marginal to NE-trend mag high and topo plateau; otherwise no direct geophysics.

103P 133 Three Mile Showing No direct geophysics obvious; coincident elongated conductors due to surficial or formational response assoc. w/ drainage?

103P 134 Ingraham's Showing NE-trend magnetic fabric, but otherwise no direct geophysics obvious; adjacent elongated conductors due to surficial or formational response assoc. w/ drainage?

103P 135 Silver Leaf Showing NE-trend magnetic fabric, but otherwise no direct



geophysics obvious; adjacent elongated conductors due to surficial or formational response assoc. w/ drainage?

103P 137 Copper Creek

Showing

Lays off south end NE-curvilinear magnetic high, but otherwise no direct geophysics obvious; coincident elongated conductors due to surficial or formational response assoc. w/ drainage?

103P 138 Golden Crest

Showing Lays on southwest margin of strong K-zone; magnetically anomalous w/ NNE- and N-elements. Weak AEM response.

103P 139 Bellevue Showing Marginal to NNE-trend mafic belt with anomalous K-response. No direct AEM

103P 140 Grey Goose Showing Marginal to NNE-trend mafic belt with anomalous K-response. No direct AEM (N-trend elongated weak conductive and AGRS due to corresponding drainage?

103P 141 Illy Past

Producer Adjacent to N-trending magnetic linear and corresponding K-trend (parallel to drainage?). No direct AEM apparent.

103P 143 Silver Showing Marginal to NNE-trend mafic belt with anomalous K-response. No direct AEM

103P 144 Yankee Boy Showing Lays on NNW-trend formational(?) conductor; adjacent to localized magnetic high and NNE- x-linear (mag and AGRS).

103P 145 Glacier Showing Lays on NNW-trend formational(?) conductor; adjacent to localized magnetic high and NNE- x-linear (mag and AGRS.

103P 146 Horseshoe Showing Coincent w/ E-W fault/linear which ‘breaks’ NNE-mafics trend. No direct AEM nor obvious AGRS

103P 147 Sunrise Showing NNW-trend AGRS ‘linear’ suggests formational or structure; no direct magnetics nor DIGHEM response.

103P 148 Standard Showing Localized mag high on NE-trend dyke, possible offsetting N-linear? No direct AEM nor AGRS.

103P 149 Billy Mack Showing Lays on margin of NNE-trending formational(?) conductor, but otherwise no direct, obvious association

103P 150 Highland Showing General NE-fabric, but otherwise no direct geophysical response apparent

103P 153 Lone Star Showing No direct geophysics obvious; NE-elongated conductor to north due to surficial or formational response?

103P 154 Silver Bell Showing No direct geophysics obvious

103P 155 San Diego Prospect No direct geophysics; lays on margin of NW-trend dyke, itself ‘kinked’ due to x-cutting structural offset? Elevated AGRS counts, but AEM due surficial response?

103P 158 IXL Showing Lays in NW-drainage; no clear geophysical response (weak AEM due transported material?) Elevated K due surface clays?

103P 159 Silver Chord

Prospect Occurs on flank of moderate DIGHEM conductor (formational?); no direct mag. Suggested high thorium with



low potassium and uranium counts.

103P 160 Red Bluff Showing Direct assoc. w/ NE and NNW-trend mag structure/linears, cross-cutting. No direct AEM but elevated AGRS counts.

103P 161 Fox Showing Occurs on flank of NE-trend mag dyke; possible blow? apparent. No direct AEM.

103P 162 Observer Showing Lays on N-margin of mag low (~200 x 400m), no direct AEM, possible N-S structure (esp. AGRS)?

103P 166 Riverside Showing Occurs at S-end ~600 m N-S bedrock conductor in mag low (on river); assoc. linear AGRS anomaly

103P 168 Cape Nome Showing Lays on margins of weak magnetic high, resistive feature; NE-trend mag fabric apparent. Weak DIGHEM CP response ~100m west

103P 169 Titrite Showing Marginal to NNE-trend mafic belt with anomalous K-response. No direct AEM.

103P 170 La Rose Past

Producer Adjacent to strong NNE-trend bedrock conductors (thin-sheet type?), in mag low. NNE-trend AGRS pattern

103P 173 Bunker Hill Showing Occurs in deeply-incised river valley; possible? v. weak DIGHEM CP response. Adjacent strong NW-trend mag high and x-cutting NE-trend mag dykes/linears

103P 174 Eagle Showing Weak AEM ~100 m NE of showing, which occurs at intersection of NW-trend mag and NE-trend conductive feature

103P 175 Hendersons Showing Coincident w/ NE-trend mag dyke, no direct AEM. AGRS suggests high potassium and uranium with low thorium

103P 176 Zorka Showing Occurs on flank of mag low, resistive anomaly; noticeable NW-trend of AGRS paralleling drainage

103P 178 Silver King Showing Lays on NW-trend mag gradient; area marked by strong K-response. No AEM.

103P 179 Homeguard Showing ~250m west from isolated mag high, resistive zone

103P 181 Basin Showing Lays on N-margin broad conductive zone (formational?); occurs on NNE-trend mag gradient and elevated AGRS counts

103P 229 Dollar Bill Showing Direct AEM, thin-sheet response; NW-trend mag dyke/structure, elevated AGRS

103P 259 Kitgold Showing Weak conductive response on hilltop, anomalous magnetics, elevated AGRS

The tabulated results above are based on the MINDEP published locations for the respective showings, etc.; uncertainties in these locations may therefore be affecting the comparison. For the most part, there is no direct, strong conductive correlation (exceptions indicated by the Riverside, La Rose, Eagle and Dollar Bill occurrences),



although a combination of magnetics and gamma-ray spectrometry appear to suggest structure and/or lithology as being a component of the overall geophysical responses.

As stated earlier, the mineralization of this region is not expected to provide particularly strong conductive responses due to the relatively thin and discontinuous nature of the vein and stockwork systems as well as the (perhaps) dissemination of the associated sulphides. Fortunately, the magnetic intensity images and derived derivatives serve to delineate the contacts of both magnetic and non-magnetic units. The latter could reflect felsic intrusions or siliceous breccias that might host auriferous mineralization).

Magnetics

Overall, the magnetics suggests that this area has been subjected to significant deformation and/or alteration. Structural complexities are evident on the contour maps as variations in magnetic intensity, intercalated bands, irregular patterns, and as offsets or changes in strike direction. A strong correlation is shown between a previous structural analysis carried out by Coller5 and the current aeromagnetic survey.

Enhancement filters applied to the magnetic grid have highlighted a number of dominant structural orientations and trends. Interpretation of these data has identified regionally significant structures that define the gross structural architecture of the area. Geological mapping taken from the available regional geology sheets has been incorporated with the structural interpretation for improved geological context. A sophisticated suite of filter enhancements were applied to the gridded magnetic data.

5 Coller, D., 2008, Hastings Structural Project, April 2008, Internal Report/Presentation Prepared for Durango Capital Corp., 20p.



Figure 20: Structural Analysis of Kinskuch Project Area (Coller, 2008)

The initial (and standard) first vertical derivative or calculated vertical gradient is commonly used to isolate and map edges of magnetic bodies. Essentially, these types of derivatives work to suppress the longer wavelength anomalies allowing one to follow the traces of the (near) outcropping geological formations more closely. In addition to the first vertical derivative (shown following), the tilt derivative (TILT) was found to be the particularly informative, and is referenced further in the report6.

6 Verduzco, B., Fairhead, J. D., and MacKenzie, C., 2004, New Insights into Magnetic Derivatives for Structural Mapping: The Leading Edge, February 2004, p. 116–119.



Figure 21: Calculated Vertical Derivative (First Vertical Derivative or Gradient)



Figure 22a. Tilt Derivative

A combination of the total horizontal and tilt derivative are highly suitable for mapping shallow basement structure and mineral exploration targets; they have distinct advantages over many conventional derivatives. The total horizontal derivative provides an effective alternative to the vertical derivative to map continuity of structures and enhance magnetic fabric. The advantages of the tilt derivative are its abilities to normalize a magnetic field image and to discriminate between signal and noise.



Figure 22b: Tilt Derivative Clipped to Positive Phase Only

The analytic signal phase data can also be used to directly map the approximate position of the anomaly source bodies. Miller and Singh7 showed that the analytic signal phase is positive over source bodies and negative otherwise. A geographic information system (GIS) layer of the approximate source body positions can be produced by:

• Calculating the analytic signal phase of the gridded potential field • Converting the resultant grid into a binary grid: +1 for positive phase values and -

1 for negative phase values • Using a raster-to-polygon utility to convert the positive areas to polygons

7 Miller, H.G. and Singh V., 1994. Potential Field Tilt - A New Concept for the Location of Potential Field Sources. Journal of Applied Geophysics, vol. 32, p. 213–217.



Where there are shallow sources, the polygons will tightly map the lateral extent of the source bodies. For deeper sources the source body polygons will be wider, and the deeper the source body the wider the polygon. The method is therefore dependent on the quality of the gridded data used. The advantage of this method is that it objectively determines the source positions from the magnetic anomaly data with more detail than can be manually interpreted.

Figure 23: Analytic Signal



Figure 24: ZS Filter Suite



Additionally, a suite of filters known as ZS ‘filters'8 (after Zhiqun Shi, the primary author of this development) were employed and are depicted in summary form on Figure 24 above and in selected detail following.

Figure 25: ZS Filter - Edge Zone

Two types of filters have been developed for the purpose of enhancing weak magnetic anomalies from near-surface sources while simultaneously enhancing low-amplitude, long-wavelength magnetic anomalies from deep-seated or regional sources. The Edge filter group highlights edges surrounding both shallow and deeper magnetic sources. The results are used to infer the location of the boundaries of magnetized lithologies.

8 Shi, Z. and Butt, G., 2004, New Enhancement Filters for Geological Mapping, Extended Abstracts, ASEG 17th Geophysical Conference and Exhibition, Sydney 2004.



The Block filter group has the effect of transforming the data into zones which, similar to image classification systems, segregate anomalous zones into apparent lithological categories. Both filter groups change the textural character of a dataset and thereby facilitate interpretation of geological structures.

Figure 26: ZS Filter - Block

Figures 25 and 26 above illustrate several advantages of the ZS filters; the 1vd, tilt and analytic signal derivatives will typically not provide easily interpreted edges when the sources are weakly magnetized or deeply buried, whereas the Edge and Edge Zone filter are designed to overcome that limitation. The two edge filters appear to provide a very sharp delineation of geologic units and at the same time, provide a relatively clear indication of structural breaks, such as along the Bowser Basin Transfer Zone which extends across the southern limits of the study area. The block filters (Area, Block and



Plateau) appear to map the relatively non-magnetic Stuhini Group which borders the survey on the east and along the southern margins very well; these units additionally appear to extend northward through the central region.

Multiscale Edge Analysis

The analysis of lineaments is of fundamental importance to understanding geological structures and the stress regimes in which they are produced. Automatic analysis of lineaments has previously been done with information mapped from remotely sensed data, using either satellite- based imagery or aerial photographs. Potential field data may also be analyzed in terms of their lineament content. Edge detection and automatic trend analysis using gradients in such data are methods for producing unbiased estimates of sharp lateral changes in physical properties of rocks. The assumption is made that the position of the maxima in the horizontal gradient of gravity or magnetic data represents the edges of the source bodies, although this should be used with caution. Such maxima can be detected and mapped as points, providing the interpreter with an unbiased estimate of their positions. The process of mapping maxima as points can be extended to many different levels of upward continuation, thus providing sets of points that can be displayed in three dimensions, using the height of upward continuation as the z-dimension. There have been recent developments and use of this method for interpretation of potential field data (e.g. Archibald et al, 19999 and Hornby et al, 199910).

Archibald (1999) refers to this process as multiscale edge analysis. Milligan (200311) more recently discusses the spatial and directional analysis of potential field gradients and in particular, new methods to help solve and display three-dimensional crustal architecture using a proprietary system of Eüler deconvolution ‘worms.‘

In multiscale edge analysis the assumption is made that lower levels of upward continuation map near-surface sources while higher levels of continuation map deeper sources. This assumption is generally true but must be treated with caution, due to the non-uniqueness of potential field solutions. The INTREPID software‘s unique implementation of multiscale edge analysis includes the use of Eüler w̳orms‘ which provide a view of structural geology obtained directly from potential field geophysical data. The method is based on Fourier techniques for continuation, reduction to pole and total horizontal derivatives coupled with automatic edge detection.

9 Archibald, N., Gow, P. and Boschetti, F., 1999, Multiscale Edge Analysis of Potential Field Data: Exploration Geophysics, 30, 38–44. 10 Hornby, P., Boschetti, F. and Horowitz, F.G., 1999, Analysis of Potential Field Data in the Wavelet Domain: Geophysical Journal International, 137, 175–196. 11 Milligan, P. R., Lyons, P. and Direen, N. G., 2003, Spatial and Directional Analysis of Potential Field Gradients - New Methods to Help Solve and Display Three-dimensional Crustal Architecture: Australian Society of Exploration Geophysicists‘ 16th Geophysical Conference and Exhibition, February 2003, Adelaide, Extended Abstracts.



Figure 27: Residual Magnetic Intensity w/ Multiscale Edge Detection (‘Worms‘)

This fabric analysis‘ determines the preferred orientation of basement or at least, magnetic linears within the Kinskuch property. A number of statistical analytical methods of analyzing fabrics have been devised, with perhaps the simplest way of presenting and analyzing the data being diagrammatically via a rose diagram, shown on a following figure.



Figure 28: Rose Diagram - Strikes

The rose diagram above is based on the computed strikes obtained through the multiscale edge detection. A preferential NNW strike is evident, although a significant NE cross-cutting fabric is also present and only marginally secondary. Further analysis and correlation to geology and the possible impact on economic mineralization is currently underway in conjunction with staff of Bravo Gold Corp. Nonetheless, a number of dominant structural orientations and key features in the data have been identified on the basis of the magnetic data. These include:

• The western survey area is dominated by a juxtaposition of NE and NW structure/linears; multiple NE-trending magnetic linears are interpreted as dykes which intersect and in places, appear to offset or break the preferred NW-Stikinia fabric. These may provide a focus of mineralization.

• The eastern portion of the survey block is dominated by a NNE-trend; this may reflect a slight rotation of the regional structural fabric and is associated with the appearance of epiclastic and volcanic rocks of the Hazelton Group.

Electromagnetics

As stated by Fugro (2012), there are several low resistivity zones where values of less than 100 ohm-m are evident. Some of these broader zones are likely due to conductive clays or graphitic shales, while some of the more discrete responses might be attributed to increases in conductive sulphide content or clay-altered shears. Although the former “formational” zones may be of little economic interest, those in the latter category might warrant additional work. Other anomalous responses coincide with magnetic linears that could reflect contacts, faults, or shears. These inferred contacts and structural breaks are also considered to be of particular interest as they may have influenced or controlled mineral deposition within the survey areas.



Anomalously conductive zones have been identified on the following image; these fall exclusively along the western side of the survey. A conductive zone is apparent on the far eastern limits, but given the host rock geology of Stuhini Group (mudstones, siltstones, shales, fine clastics) is interpreted at this stage to be formational and not indicative of sulphide mineralization. This premise should however be field checked before the zone is discounted completely.

Figure 29: Anomalous Conductive Zones (<100 ohm-m)

It is not expected that quartz-vein type auriferous mineralization would give rise to discrete AEM conductors, unless it was associated with semi-massive to massive sulphides (e.g., potential targets within the area could be associated with very weakly disseminated sulphides, which may be hosted by non-magnetic quartz-rich units, and which may in turn be overlain by conductive overburden. However, electromagnetic



anomalies have been picked for this survey area in order to locate any possible conductive sulphide deposits and any conductive faults or shears that could serve as conduits or host units for auriferous mineralization.

This interpretation has identified approximately 34 ‘high-priority‘ AEM anomalies or zones based on favourable structure, magnetic association, conductance, length, width, or depth extent. Although some of these could reflect sulphide-type targets, most are considered to be of moderately low grade in this regard, given the non-conductive nature of the expected (auriferous) target mineralization. These are recommended for ground investigation during the coming field season; the anomalies are tabled below with brief annotation and location information.

Table 3: AEM ‘High Priority’ Anomalies or Zones

ID Easting Northing Description

1 473,354 6,147,839 strong bedrock conductor in magnetic low; east-west faulting on N-flank?

2 471,246 6,149,456 strong to moderate bedrock conductors; corresponding magnetic high

3 475,542 6,149,638 strong sheet-like, multiple conductors; cut by NNE-magnetic linears (faults, shears?)

4 469,189 6,150,481 moderate DIGHEM conductors across several lines; partially correlative to magnetic lows

5 470,713 6,150,968 dual-lobed, weak conductive zone; corresponds to similar shaped magnetic low

6 476,261 6,150,980 very strong, sheet-like conductors over ~3 lines; cut by NNW-magnetic linears (faults, shears?)

7 468,396 6,151,523 strong DIGHEM conductive response (single-line); correlating NW-trend magnetic linears/shears

8 467,542 6,152,273 moderate-strong DIGHEM conductive response (multiple-lines); correlating NW-trend magnetic linears/shears

9 469,288 6,152,792 moderate-strong DIGHEM conductive response (multiple-lines); correlative N-trend magnetic linears/shears

10 468,930 6,153,435 weak conductor (bedrock?) on river bank; no direct magnetic correlation

11 467,870 6,153,900 weak-moderate conductive response across several lines; N-trending magnetic linears/shears?

12 468,553 6,154,357 weak conductor (bedrock?) on river bank; no direct magnetic correlation

13 468,211 6,154,962 weak-moderate conductor (bedrock?) on river bank; coincident magnetic low



14 474,434 6,155,010 broad, moderate conductor immediately. SE Silver Chord; magnetic low

15 475,025 6,155,652 broad low-resistivity zone; includes stronger conductors (sheet-like?); complex magnetics but includes N- and E-trending edges

16 467,037 6,155,798 moderate DIGHEM conductor (single-line); magnetic low

17 466,339 6,157,315 moderate DIGHEM conductor (single-line); magnetic low

18 466,086 6,157,605 moderate DIGHEM conductor (single-line); magnetic low but w/ N-trending linears

19 465,947 6,157,984 strong DIGHEM conductor (single-line); magnetic low but w/ NNE-trending linears

20 466,218 6,158,257 weak DIGHEM conductors across several lines; NNE-magnetic linears

21 466,433 6,158,786 weakly conductive zone; cut by NNE-magnetic edge

22 473,057 6,159,093 very strong, sheet-like conductors across ~3 lines at survey edge; no direct magnetic correlation

23 465,224 6,159,112 weak-moderate conductive zone; no direct magnetic correlation?

24 466,844 6,159,207 weakly conductive zone; cut by NNW-magnetic linears

25 468,750 6,159,250 weak-moderate DIGHEM conductors, just north of Riverside occurrence; no direct magnetic correlation

26 464,811 6,159,546 very strong, sheet-like conductive response; cut by NW-magnetic linears

27 465,106 6,159,754 very strong, sheet-like conductive response; cut by NE-magnetic linears

28 464,159 6,160,023 includes strong bedrock conductive responses; mag low but w/ NE-trend edges

29 472,793 6,160,307 includes multiple, strong bedrock conductors (sheet-like responses); NNE-trend magnetic edges/linears

30 466,166 6,160,390 moderate-strong conductive zone, incl. v. strong sheet-like responses; NW-magnetic fabric (complex)

31 468,821 6,160,546 weak-moderate DIGHEM conductors; no direct magnetic correlation

32 465,165 6,160,752 weak-moderate conductive zone; correlative NW-magnetic edges

33 465,558 6,162,428 broad, weak conductive zone; NW-trending magnetic edges

34 468,995 6,162,632 weak-moderate conductive zone close to Hendersons' occurrence; correlative NE-magnetic edges



10. Conclusions and Recommendations

A helicopter-borne electromagnetic and magnetic survey was flown by Fugro Airborne Surveys in August-September 2011 over the Kinskuch property in the Skeena mining district of northwestern British Columbia; the survey is comprised of 3,281.8 line-kilometres of data acquired on a grid pattern of 100 metre spaced traverses oriented east–west, controlled by 1,000 metre spaced tie lines oriented north–south. The survey was hampered by thick forest and extreme topography as well as by very poor weather, even for this part of the north coast. Average production was less than 75 line-kilometres per day, indicating the very poor conditions throughout.

The survey utilized Fugro’s DIGHEMV-DSP electromagnetic system. Ancillary equipment consisted of a high-sensitivity cesium-vapour magnetometer and a 256-channel spectrometer. The survey was completed without incident from a base of operations at Alice Arm at the southern margin of the survey block.

Products obtained from this airborne geophysical survey include the residual magnetic intensity, (magnetic) first vertical derivative, and derived coplanar apparent resistivity grids at 900, 7,200 and 56,000 Hz. A geosoft and ascii database of the profile data were also provided by the contractor.

Additionally, as part of this interpretation, enhanced derivative grids of the magnetics were generated and imaged; a profile by profile review of all AEM anomalies was carried out preparatory to identifying high-priority areas of interest and zones for further investigation and ground follow-up.

The original objectives of this survey were two-fold:

• provide high resolution electromagnetic and magnetic data for the direct detection and delineation of sulphide-associated gold occurrences

• facilitate the mapping of bedrock lithologies and structure which in turn influence the emplacement or hosting of economic mineralization.

These objectives have been or are being met via this interpretation; the data has enabled both the mapping and delineation of controlling structures, and identification of anomalous conductivity suggesting sulphide mineralization. Enhancement filters applied to the magnetic grid have highlighted a number of dominant structural orientations and trends. The magnetics suggests that this area has been subjected to significant deformation and/or alteration. Structural complexities are evident on the contour maps as variations in magnetic intensity, intercalated bands, irregular patterns, and as offsets or changes in strike direction.

Several zones of anomalous conductivity are also identified with key target zones tabulated and mapped. A table listing comprised of 34 high-priority targets zones is presented as the basis for further investigation and ground follow-up. A program of geological prospecting, sampling and ground geophysics consisting of magnetics and



3D induced polarization / resistivity is recommended to further delineate the conductive zones and possible identify disseminated sulphides which in turn could indicate anomalous Au mineralization.



11.0 Statement of Expenditures

During 2011, the following Assessment-related airborne geophysical exploration expenditures were made by Bravo Gold Corp. on the Kinskuch Project in Northwest BC.

Personnel / Position Details Days Rate Subtotal

Robert Macdonald, P.Geo. QP - Project Management 3 $700.00 $2,100.00

$2,100.00 $2,100.00 Office Studies

Report Preparation R. Macdonald 2 $700.00 $1,400.00

B. McGrath 5 $700.00 $3,500.00

$4,900.00 $4,900.00 Airborne Survey

Heli-borne EM-MAG 3,820 Line-km $160.00 $400,000.00

Standby $2,500.00 $48,385.00

$448,385.00 $448,385.00 Support Costs Helicopter 1 (Hughes 500D) 3.7 Hours $900/h $3,330.00 Helicopter 2 (AStar B3) 0.4 Hours $1,950/h $780.00 Fuel – Jet Grade 19,711.40 Litres $1.94/L $38,151.69 Fuel – Gasoline 205 Litres (Equipment Power) $1.46/L $299.17 Freight (Fuel-related) $4,960.95 $47,521.81 $47,521.81 Accommodation & Food

Camp 4 Persons (Aug 1-Sep15/11) 191 $260.00 $49,660.00

$49,660.00 $49,660.00

TOTAL Expenditures $552,566.81



12.0 Statement of Qualifications

I, Robert W. Macdonald, with business address 1100-1199 West Hastings Street,

Vancouver, British Columbia V6E 3T5, hereby certify that:

1. I am a graduate (1990) of the Memorial University of Newfoundland, with a Bachelor of Science degree in Earth Sciences (Honours), Geology.

2. I am a graduate (1999) of the University of British Columbia, with a Master of

Science in Geology

3. I am a registered member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia.

4. I have practiced my profession continuously since graduation.

5. I was involved in the planning of the program herein described and the co-

writing of the report.

6. This report is an accurate account of the 2011 Fugro airborne geophysical program conducted for Bravo Gold Corp. on the Kinskuch Project, northwest British Columbia.

Dated at Vancouver, British Columbia, this 12th day of January, 2012.

Rob Macdonald, M.Sc., P.Geo.



12.0 Statement of Qualifications (cont’d)

I, Brian T. McGrath, P.Geo., of Langley, British Columbia hereby certify as follows:

1. I graduated from Memorial University of Newfoundland with a Bachelor of Science degree in Earth Sciences, Geology, in 1992.

2. I am a registered Professional Geoscientist with the Association of

Professional Engineers and Geoscientists of British Columbia, Registration Number 23643, since March 1998.

3. I have practiced my profession continuously since graduation.

4. I was involved in the co-writing of this report.

5. This report is an accurate account of the 2011 Fugro airborne geophysical

program conducted for Bravo Gold Corp. on the Kinskuch Project, northwest British Columbia.

Dated at Vancouver, British Columbia, this 12th day of January, 2012.

_______________________________

Brian T. McGrath, B.Sc., P.Geo.

Senior Geologist

Manex Resource Group



12.0 Statement of Qualifications (cont’d)

I, Christopher J. Campbell, with business address of 4505 Cove Cliff Road, North

Vancouver British Columbia V7G 1H7, hereby certify that:

1.0 I am a graduate (1972) of the University of British Columbia, with a

Bachelor of Science degree in Geophysics.

2.0 I am a graduate (1986) of the University of Denver, with a Masters of

Business Administration.

3.0 I am a registered member in good standing of the Association of

Professional Engineers and Geoscientists of British Columbia.

4.0 I have practiced my profession for approximately forty years in Canada

(British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec,

Newfoundland/Labrador, Yukon and Northwest Territories / Nunavut),

United States of America, Australia, Russia, and Africa.

5.0 I have no interest, direct or indirect, in the properties or securities of

Bravo Gold Corp., or in any of their related companies or joint venture

partners anywhere in Canada.

Dated this day January 12, 2012 in North Vancouver, British Columbia.

Christopher J. Campbell, P. Geo.


60

13.0 References

Aeroquest Surveys, 2009 “Report on a helicopter-borne AeroTEM system electromagnetic and magnetic survey, Homestake Ridge project, Job no. 09-019 for Bravo Venture Group Inc., September 2009.

Alldrick, D. J. 1986, Geology of the Kitsault River Area; BC Geological Survey Open file 1986-2. Alldrick, D. J. 2006, Rifts and Rewards: Exploration Potential of Ancient & Modern Rifts. Presentation at the Exploration RoundUp, Vancouver, January, 2006.

Bryson, A., 2007; Assessment Report on the Homestake Ridge Project. Report for Bravo Ventures Group Inc., dated October 29, 2207. Mineral Resources Branch Assessment Report No. 29355.

Campbell, C., 2009, Airborne Geophysical Interpretation of the Homestake Ridge AeroTEM Survey Skeena Mining Division, British Columbia., October 30, 2009. Intrepid Geophysics Ltd. Project No. 09-205-BVG.

Coller, D., 2008, Hastings Structural Project, April 2008, Internal Report/Presentation Prepared for Durango Capital Corp., 20p.

Collinson, D., 1976. Mineral Resources Branch Assessment Report no. 6049 (undated)

Coombes, S. F., 1986; Assessment Report on the Cambria Group (Cambria 1-3 Claims) Skeena Mining Division British Columbia. Report for Cambria Resources Ltd., December 12, 1986.

Evans G., (2003): 2002 Geological & Geochemical Report on the Kit Group Skeena Mining Division British Columbia for Teck-Cominco Ltd. AR# 27122.

Evans, G. and Macdonald, R., 2003; Technical Report on the Homestake Ridge Project, Skeena Mining Division, B.C. Report for Bravo Venture Group Inc., December, 2001.

Evans, G. and Lehtinen, J., 2001; 2001 Geological and Geochemical Report on the Homestake Ridge Property. Report for Teck Cominco Ltd., December, 2001.

Folk, P., 2008; 2008 Exploration Report - Homestake Ridge Project. Internal report for Bravo Venture Group Inc., March 27, 2009.


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