Kuulu Project

Overview

The Kuulu Project is located 40 km northwest of the port town of Rankin Inlet in Nunavut, Canada.  The property covers 4,174 hectares less than 20km along trend from Agnico Eagle Mines Limited’s (‘Agnico’) world class Meliadine gold mine(with applications pending to increase the size of the property to 10,670 hectares).

Figure 1

NxGold, pursuant to an earn-in agreement, has the right to earn up to a 70-per-cent interest in the Kuulu property.

Permitting

Permit/Licence/Decision Date received Comment
Nunavut Tunngavik Inc.   Mineral Exploration Agreement October 2010 Valid via annual renewal payments until September 30, 2030*
Nunavut Planning Commission Conformity Decision April l2017 POSITIVE conformity decision
Nunavut Impact Review Board Screening Decision June 2017 POSITIVE decision
Nunavut Water Board          Type B Water License October 2017 For camp and drilling
KivIA Land Use License KVL311B01 Needs renewal CLARC** concerns over too much development activity and ‘professional’ harvesters’ area
KivIA Land Use License KVRW12E01 Needs renewal Winter road

*Under Force Majeure, **Community Lands and Resources Committee

Exploration

Kuulu is located in the Archean aged Rankin Inlet Greenstone Belt in the Churchill Structural Province of the northern Canadian Shield, a comparable geological environment to the prolific Abitibi greenstone Belt in the southern Shield. Known mineralisation in this belt includes the series of gold deposits making up the Meliadine gold system owned by Agnico. The belt is composed of mafic volcanic and sedimentary rock units intruded by gabbroic and granitoid intrusive rocks; all units have been poly-deformed, folded and metamorphosed.  The property is bisected by large scale faulting events including the inferred continuation of the Dickson-Pyke Fault, the main structural control on the Meliadine gold deposits. The large Dickson-Pyke fault separates a regionally folded package of volcanic and meta-sedimentary rocks termed the ‘Eastern Fold Structure’ (“EFS”) on the east side of the property from locally carbonatized and magnetically altered amphibolite, gneiss and granitoids of the ‘Western Magnetic Linears’ (“WML”) on the westside.

Figure: regional geology and property location.

Figure 2

On the property, widespread gold mineralization has been identified using drift prospecting: regional and focused till sampling and boulder sampling. The eastern part of the Kuulu Property, the EFS area, has a till sample station density of between 200 to 1000 m while the WML area has a wider till sample density of 500 to 1500 m. All till material was collected at active ‘frost boil’ sites. Till samples were collected and screened through a #10 or #8 sieve size to an approximate 10 kg field weight. Overburden Drilling Management Limited (‘ODM’) in Nepean, Ontario processed the samples for individual gold grain content. At the lab, ODM dried and screened the sample material to a ‘table feed’ of < 2mm and then counted the individual gold grains within the whole sample. Each individual gold grain was then classified as reshaped, modified or pristine with the shape described by thickness, width and length. The pristine gold grains represent ‘near source gold’ (within 1 km or less) while modified and reshaped gold grains have generally been transported by glacial movement over longer distances of 1 - 10 km, respectively.

The ‘pristine gold grain count’ till survey is a critical dataset to help identify local areas representing zones of mineralized float and sub-outcrop with gold. At least 3 of the 6 new gold zones identified by the previous owners had quartz boulders and quartz vein stock-work float within 1 km or less of these till anomalies consistently up-ice, representing high priority drill targets.

Figure: map of PRISTINE gold grain count indicative of proximal source.

Figure 3

Following up on till anomalies, numerous clusters of high-grade boulders have been located in broad areas; the angular nature of the boulders suggest that the boulders haven’t travelled far and therefore may be proximal to a potential bedrock source. Found within the EFS area, these target areas are called the Hinge, RB, and GD zones. At these zones quartz boulders and quartz vein stock-work float were identified within 1 km or less of these till anomalies, consistently up-ice. In the WML area several metre scale amphibolite float boulders with pitted pervasive carbonate alteration, gold rich quartz veining, quartz/calcite/magnetite alteration including local zones of ankerite, sericite and biotite were located. Both the EFS and the WML areas have returned high-grade gold assays from angular boulder samples. These represent high priority drill targets for the Company.

In the EFS area, nine of the twenty angular quartz vein float samples collected in the Hinge, RB, and GD zones assay greater than 1 gram per tonne (“g/t”) gold with local highs of 16.8 and 38 g/t gold. Host rocks to the mineralized gold quartz veins are commonly non-magnetic and vary in composition from mafic to intermediate metavolcanics, ortho and paragneiss and granitic to diorite gneiss.

The WML is an area directly west of the Dickson-Pyke break where detailed airborne magnetics identify a series of strong magnetic high lineaments. These magnetic features begin near the northwest trending Dickson-Pyke fault and splay outwards towards the west-northwest forming a network of parallel to sub-parallel magnetic high features. The lineaments vary from 1 to 4 km length, are commonly less than 100 m wide and occur over an area of approximately 50 square km. Along these magnetic high trends, metre scale altered amphibolite float boulders have been located suggesting broad haloes of pitted pervasive quartz, carbonate, magnetite alteration with local gold rich quartz vein boulders and zones of ankerite, sericite and biotite. Fifteen of the fifty-one angular quartz float rock samples collected from these zones in the WML assay greater than 1 g/t gold with highs of 27, 65, and 451 g/t gold. These high potential target zones represent priority drill targets and are locally named the “Island”, “RIL”, and “282” zones.

Figure: rock sample selective results* from target areas associated with till anomalies

Figure 4

*Sample results ranges from detection limit to indicated ranges; samples were grab samples of float material and may not be indicative of mineralisation within the property boundary.