Boticas

Northern Portugal

Commodity: Gold

Location, Tenure and Ownership

The Limarinho gold project is located approximately 30km north of the historic Jales/Gralheira gold mine, 10km west of the town of Chaves, and 60km north of Vila Real in northern Portugal.

The 100%-owned Medgold properties cover 603.1 sq km. Medgold was awarded to Limarinho-Poço das Freitas exploration licence by the Direção-Geral de Energia e Geologia (DGEG) of Portugal in August 2013. It was classified as National Interest Project by the Secretary of State for Energy in 2015.

Medgold recently optioned two projects, including Limarinho, to Centerra Gold Corp.("Centerra"). Centerra Gold Corp. is a mid-tier gold producer. They have the option to earn 51% interest by spending $3m over 3 years, and the option to earn a further 19% by spending $3m over 2 years. The Limarinho property covers 106.5 sq km and is currently under its 1st year of contract out of 5.

For further details on the joint venture, please review this press release:

http://www.medgoldresources.com/s/news-releases.asp?ReportID=736240&_Type=News&_Title=Medgold-Expands-Joint-Venture-with-Centerra

Target Type

The prospect hosts orogenic-style gold mineralization within what may be a regional-scale structural dilation zone, or 'crumple-zone'. This zone is large enough to potentially host a multi-million ounce gold system. It's well known that such dilational zones can repeat along major regional structures creating a series of en echelon mineralized zones, opening up additional exploration potential at Boticas.

At Boticas, dilation in these zones can focus hydrothermal fluid flow and concentrate gold into northeast-trending structural corridors. These are structurally-controlled systems with gold mineralization occurring within quartz veins and as disseminations commonly associated with sericite-silica-sulphide alteration.

Project History

In the 1980s COGEMA - the French exploration and mining company- explored the licence, completing detailed grid-soil sampling. They identified 15 gold anomalies but only tested 3 in the late 1980s. Kernow Resources & Developments Ltd subsequently drilled a number of targets in the early and late 2000s. Both companies focused mainly on the Limarinho prospect itself, completing 2,893m of drilling in 24 diamond drill holes.

Their drilling defined gold mineralization over at least 600m strike length and 150m width, and to greater than 150m vertical depth. The mineralization remains open in all directions. Historical drilling results* reported by both companies include:
  • KL4: 40.1m@ 1.96 g/t Au from 19.3m, including 20.4m @ 2.92 g/t Au from 20.7m
  • KL4: 9.05 m @ 3.37 g/t Au from 145.0 m
  • PF3: 50.05m @ 1.70 g/t Au from 8.65m, including 19.7m @ 2.80 g/t Au from 32.2m
  • PF10: 103.60m @ 0.83 g/t Au from 28.1m
  • PF11: 75.5m @ 0.92 g/t Au from 6.80m, including 12.1 m @ 2.98 g/t Au from 51.1 m
  • PF17: 104.7m @ 0.83 g/t Au from 45.5m, including 13.5 m @ 2.17 g/t Au from 65.7 m
  • PF8 10.0 m @ 1.37 g/t Au from 86.2 m
*This is historical data and is provided for information purposes only. Medgold has not yet completed sufficient work to verify these results

3D geologic modelling of the historical drilling data

After compilation and homogenization of data collected from historical drilling, a 3D geological model was constructed with the objective of outlining mineralization envelopes and to assist on drill hole planning.



Geology and Mineralization

Gold mineralization at Limarinho is hosted in granites and appears to be controlled by large-scale regional faults, a feature which is common to many large-scale orogenic gold deposits around the world. Medgold's licence covers approximately 14km strike length of a major regional structure that is believed to control the orogenic gold mineralization. The gold-bearing quartz veins are typically subvertical, sub-parallel to en echelon, and range in thickness from millimetres to several centimetres. Gold mineralization is commonly associated with arsenopyrite, occurring along mineral fracture faces, but also as free gold and electrum.

The regional geology is dominated by a NNE-trending structural lineament, known as the Régua-Verin Fault (the RVF), which cuts through the Boticas license, and coincides with the mineralization at Limarinho. The RVF trends for more than 200km. The Limarinho prospect is oriented at right angles to this major structure, and may be a major dilational, or 'crumple-zone', typical of orogenic gold systems. Within the license area, the principal geological unit is a two-mica granite which is believed to have been emplaced into structures - such as folds and faults- associated with the Hercynian Orogeny.

Medgold Sampling and Exploration Work

Limarinho Target

Medgold carried out sampling work at Limarinho which yielded a composite channel-chip sample with a length weighted average of 3.98 g/t Au over 14.10m (channel CH001). Individual rock-chip samples returned from trace up to 28.3 g/t Au over 1.70m (channel CH007). Of 58 samples collected, 11 returned assays that were greater than or equal to 1.0 g/t Au with the balance ranging from trace to 1 g/t Au.

A new zone of mineralization, measuring approximately 350m by 250m, broadly elongate north-south, is located 200-300m to the southeast of the main Limarinho anomaly.

Medgold geologists, applying the structural concept of repeating en echelon zones associated with major orogenic faults, mapped and sampled favourable structural targets including the newly discovered Limarinho South zone.

In addition to results reported in press release of 1st August, 2013, which included sample assays from trace to maximums of 13.1 g/t Au and 8.19 g/t Au, Medgold's new sampling yielded results from trace up to highs of 6.55 g/t Au and 4.98 g/t Au, plus a channel sample of 10.80 m at 1.01 g/t Au, including 4.40 m at 1.75 g/t Au.

Recent work (see press release dated July 21, 2015) included the completion of reconnaissance soil sampling and ground magnetics around the Limarinho zone, with the aim of expanding the known area of mineralization. The soil sampling results identified anomalous gold over an area of 3km by 2km which is far larger than the existing Limarinho zone. Recent results from rock chip sampling, collected from zones within the soil anomaly yielded 15 new results from 0.01 g/t Au to 45.00 g/t Au, 13.90 g/t Au and 11.75 g/t Au, which are in addition to reported highs, in July 2015, of 75.10 g/t Au, 6.91 g/t Au and 4.53 g/t Au.

Approximately 300 soil samples were collected in six 2.5km-long lines, spaced 50m along the lines and 400-500m between lines, covering Limarinho, Limarinho South. Results identified an area of 3 km by 2 km which is far larger than the currently known Limarinho Main Zone which remains open to the north and south.

Detailed mapping of structures and veins over the Limarinho Main Zone was finalized allowing to correlate surface observations with anomalies highlighted by the new soil sampling and the 3D geological modelling.



Casas Novas Target

The mineralization style at Casas Novas is similar to Limarinho. Subvertical quartz veins swarms with arsenopyrite and other minor sulphides are hosted by syn-orogenic two mica granites. The best historical exploration results from rock chip sampling by COGEMA are 7.79g/t Au, 4.26g/t Au.

In September 2015, Medgold published recent rock sampling which yielded 4 new gold results from 0.02 g/t Au to highs of 71.90 g/t Au and 5.20 g/t Au in float samples. Previous sampling yielded highs of 5.53 g/t Au and 1.63 g/t Au in outcrop samples. These results allowed the definition of the area as a high-priority follow-up target and additional field reconnaissance work and grid-soil sampling programs are planned.

Medgold completed soil sampling over a 3km by 2km area identified from Landsat and Aster imagery. The soil sampling confirmed the presence of broad zones of gold and arsenic anomalism. A first phase of rock chip sampling over the anomaly returned best results of 71 g/t Au and 11.8 g/t Au. More recently, additional rock chips collected up to 600m away the previous samples returned grades up to 8.54g/t Au and 7.31g/t Au in similar style sheeted vein swarms.



Leiranco Target

The Leiranco zone, which was previously known only to academics from the Universities of Porto and Oviedo, was recently studied by Medgold geologists. It is located approximately 5km to the west of Limarinho and is an outcropping vein swarm covering an area of approximately 300m by by 300m. Reconnaissance rock chip samples yielded 9 new results from 0.06 g/t Au to highs of 22.40 g/t Au, 4.80 g/t Au and 3.75 g/t Au. This area will likely be the focus of detailed channel-chip sampling in the coming months.

Recent work 2km south of Leiranco following up a BLEG anomaly with values up to 131.6ppb Au identified a similar style of mineralization to that seen at Limarinho. Field reconnaissance in the area found a 70m by 30m open pit suggesting the area might have been subject of ancient small-scale gold mining.





Medgold's Exploration Programme

Future work at Boticas will focus on additional detailed channel-chip sampling at Limarinho South, to define drill targets. Our primary objectives are a) to complete a phase of drilling in 2016 targeting the high-grade zones at Limarinho, and b) extend the known mineralization to the northeast and southwest.

Future work at Boticas will involve extension of detailed mapping and sampling coverage on the extensions of Limarinho and Limarinho South. This will comprise detailed line mapping, specifically focussing on structure and alteration, plus channel-chip sampling. Historical drill core will be re-logged and re-interpreted. Resulting from this work a series of detailed geological maps, cross- and long-sections, and stereographic projections will be generated and analysed. The overall objective of this first phase of work is to delineate geologically-constrained drilling targets which, in turn, is expected to infill high-grade mineralization identified from previous drilling and to extend the known mineralization to the northeast and southwest.

Assuming that this drilling returns positive results, subsequent drilling will aim to define resources and to establish the geological framework to complete a Preliminary Economic Assessment.
At a more regional scale plans are to conduct extensive recon soils programs looking to define new target areas as well as to run additional detailed field work and rock chip sampling to mature existing targets.

Centerra JV - Option Terms

Medgold has granted to Centerra the exclusive right to earn a 51% interest in the Property by incurring expenditures on the Property totaling USD$3.0 million over three years, of which USD$500,000 is committed to be spent by Centerra. To keep the option in good standing, Centerra must incur USD$1.0 million in the first year, a further USD$1,500,000 in the second year, and a further USD$500,000 in the third year. Of these expenditures, USD$100,000 will be paid to Klondike Gold Corp. to complete Medgold's obligations relating to its purchase of the Property from Klondike earlier in 2014. Medgold will be the initial operator and manager of the project.

Once Centerra has acquired the initial 51% interest in the Property, it may acquire a further 19% (for a total 70% interest) by incurring an additional USD$3.0 million on exploration within two years.

QA/QC

Samples were prepared by ALS Minerals at the Seville Laboratory, Spain. Samples were analyzed for gold by fire assay with atomic absorption finish, and multi-elements were analyzed by inductively coupled plasma mass spectrometer (ICP-MS) and inductively coupled plasma emission spectrometer (ICP-AES) by ALS Minerals at the Omac Laboratory, Ireland. Certified reference materials (CRM's), blanks and field and laboratory duplicates were routinely inserted for quality assurance and quality control.