March 26, 2014
Greg Smith VP Exploration for Edgewater Exploration
Presented at the MEG Lunch in Vancouver.
Click to view our Presentation in PDF

2013 Corcoesto Gold Project Mineral Resource Estimate at various cut-off grades

Resource Category Cut-off Tonnes (kt) Au (g/t) Gold (koz)
Measured 0.5 14,910 1.34 644
0.6 13,160 1.45 613
0.7 11,586 1.56 580
0.8 10,170 1.67 546
Indicated 0.5 9,298 1.28 383
0.6 8,059 1.39 361
0.7 6,960 1.51 338
0.8 6,065 1.63 317
Measured + Indicated 0.5 24,208 1.32 1,027
0.6 21,219 1.43 974
0.7 18,546 1.54 918
0.8 16,235 1.65 863
Inferred 0.5 5,321 1.21 207
0.6 4,854 1.27 198
0.7 4,234 1.36 185
0.8 3,733 1.44 173

Notes:
  1. Mineral resources were classified following the guidelines of the JORC Code (2012) an accepted reporting code in terms of Canadian National Instrument 43-101.
  2. Mineral resources are constrained within a Whittle pit shell based on a gold price of US$1,400/oz.
  3. Numbers may not compute due to rounding.
  4. All grades have been quoted in grams per tonne (g/t) for the resource inventory.
  5. Density values were assigned in relation to an oxide surface; no further distinction between fresh and oxide material has been made within this resource estimate.
  6. There are no known legal, political, environmental or other risks that could materially affect the potential development of these mineral resources
Highlights of the Updated Measured and Indicated 2013 Resources include;
  1. Measured and Indicated resources have increased to over one million ounces providing a significantly greater confidence in the deposit
  2. The Corcoesto Resource holds together well at higher cut off grades providing an opportunity to potentially mine higher grades during the initial years of operation
  3. All zones remain open for expansion through further exploration.

EDGEWATER'S CORCOESTO GOLD PROJECT'S ENVIRONMENTAL IMPACT STATEMENT APPROVED AND PUBLISHED IN THE OFFICIAL GALICIAN, SPAIN BULLETIN

Vancouver, British Columbia: Edgewater Exploration Ltd. ("Edgewater" or the "Company") is pleased to announce that the Galician Government, Spain, have finalized their internal Environmental Impact Statement (EIS) approvals process on Corcoesto, with the publishing of a signed resolution in the Official Galician Bulletin. This is the final step which makes the EIS official within all levels of government, with immediate effect. The General Director of Industry, Energy and Mines, Mr. Angel Bernardo Tahoces, signed this final resolution approving the EIS.

Environmental Impact Statement (PDF, 747Kb)



Corcoesto Gold Mining Exploration Project - Spain


2011 Preliminary Economic Assessment Corcoesto Gold Project


November 17, 2011, Edgewater Exploration announced results of a Preliminary Economic Assessment ("PEA") on its 100%-owned Corcoesto gold project in Galicia, Spain.

The NI 43-101 compliant PEA study was prepared by Mr. Alan Noble, P.E Ore Reserves Engineering Inc. of Denver, Colorado as part of the on-going development plan on the Corcoesto Gold Project, Northwest, Spain.

Base Case Highlights

Average Annual Gold Production 102,000/oz
Average Annual Net Revenue (US$) 60.0 Million
Life of mine Net Present Value (NPV)(US$)(5%) 206 Million
Pre-Tax Internal Rate of Return (IRR) 24%
Pre-Tax Payback (years) 3.4
Initial Open pit and underground Capital Cost (US$) 135 Million
Average Annual Cost (US$/oz) 713
Combined open pit and underground operation 9.9 year mine life

Pre-Tax Financial Models


Pre-tax financial model was completed using a base case gold price of $1300 per ounce and an exchange rate of 1.38 Euro/$US. The Base Case economic evaluation has an IRR of 24%, payback of capital in 3.4 years and a NPV of $206 million at a discount rate of 5%.

The following table details Project sensitivity for two additional metal prices;

Pre-Tax Financial Model*
  Units Metal Price Scenarios
  (Base Case)
Gold US$/oz 1,100 1,300 1,500
NPV 5% 71 206 340
Payback Years 5.6 3.4 2.5
IRR % 12 24 34

Initial Capital Costs for the mine and plant are estimated at $135 million, with an additional $9 million for resource drilling, $1.5 million to purchase part of the Lundin royalty, and $25 million (17.5%) for contingency. Working capital in the amount of $12.5 million, sustaining capital $33 million and reclamation and closure costs of $10.5 million are also included in the above economic evaluation.
* The Spanish corporate tax rate is 30%, but the impact of taxes on the project would be much less after allowances for depreciation and structure of the local and international corporations.

Life-of-Mine Parametres


Mill Feed Grade 1.70 g/t gold
Stripping Ratio 8.0/1
Annual Throughput 2.1 million tonnes
Milling Rate 6,000 tonnes/day
Gold Recovery 89.1%
Mine Life 9.9 Years

Corcoesto Gold Project site with concession boundaries and open pit locations
Corcoesto Gold Project site with concession boundaries and open pit locations
Corcoesto Gold Project site layout
Corcoesto Gold Project site layout

NI 43-101 Mineral Resources


The PEA was based on the May 27, 2011 NI 43-101 Mineral Resource estimate. (See following table for details).

Corcoesto Gold Deposit
Resource Class Cutoff
(g/t Au)
Tonnes
(x1000)
g/t Au Contained Gold
(x1000 oz)
Measured 0.65 3,899 1.77 222
Indicated 0.65 1,823 1.69 103
Measured + Indicated 0.65 5,783 1.74 325
Inferred 0.65/2.0 20,265 1.76 1,149
  1. CIM definition standards were followed for the resource estimate
  2. The 2010 and 2011 resource models used an inverse-distance-power (IDP) grade estimation within a three-dimensional block model with mineralized zones defined by wireframed solids.
  3. A total of 19,075.7 m of surface trenching in 225 trenches, 443.1 m of adit sampling in 4 adits and 42,111.18 metres of diamond and RC drilling in 342 drill holes were used in the resource with sample spacing's that were less than 30 m for Measured resources, less than 40 metres for Indicated resources and less than 195 m for Inferred resources except for Inferred resources below 200 m from surface and for the northern two vein systems that used drill spacing's of 196 m
  4. A base cutoff grade of 0.65 g/t Au was used for reporting resources above a depth of 200 m from surface and a cutoff grade of 2.0 g/t Au was used for reporting resources below 200 m from surface
  5. Dilution is included for a minimum mining width of 2.0 m on a 4.0 m high mining bench
  6. Mineral Resources that are not mineral reserves do not have economic viability. Preliminary Economic Assessment NI43‐101 Compliant includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

Corcoesto Gold Project underground view Fig 1.
Corcoesto Gold Project underground view Fig 1.
Corcoesto Gold Project underground view Fig 2.
Corcoesto Gold Project underground view Fig 2.

Initial Capital Cost using Contract Mining


An initial capital expenditure of $135 million is required to construct the project and is detailed in the following table.

Initial Capital Cost
Description $ Million
Engineering and Preproduction Development 28.5
Power 4.0
Process Plant 92.0
Tailings & Reclamation 10.9
Total Initial Cost 135
Resource Drilling 9.0
Royalty Purchase 1.5
Contingency -- 17.5% 25.3

This capital estimate utilized an exchange rate of 1.38 Euro/$US and is based on industry standard estimates and 2011 pricing supplied by vendors where applicable.

Site Operation Cost


The Corcoesto Project is modelled as a combined open pit and underground mining operation. Life-of-mine operating costs are $32.52/tonne ore milled for open pit and $56.78/tonne ore milled for underground, as detailed in the following table.

Site Operating Cost
Description Open Pit ($/tonne milled) Underground ($/tonne milled)
Mining (including waste and staff) 15.74 40.00
Milling 14.63 14.63
Tailings 1.00 1.00
G & A 1.15 1.15
Total 32.52 56.78

Infrastructure


The Corcoesto gold project is located in northwest Spain approximately 35 km west-southwest of the port city of La Coruna in the Autonomous Community of Galicia. The project has excellent infrastructure, which is connected to existing roads at the nearby community of Corcoesto. Delivery of electrical power will be completed connecting a new substation to the existing 22kV power line which currently bisects the project. Mine employees will commute daily from local communities.

Metallurgy and Processing


Metallurgical recovery is estimated at 89.1% based on a series of test completed at McClelland Laboratories in Sparks Nevada during 2011. Work included diagnostic tests completed on a series of composite samples from drill holes across the three main gold mineralized zones at Corcoesto. The 6,000 tpd process facility will utilize conventional crushing, grinding, gravity, flotation and cyanidation to produce gold dore.

Major equipment for the processing facility includes a primary crusher sized for 6,000 tpd (34" x 44"), a semi-autogenous (SAG) mill, two ball mills (14' x 18') and a vertical regrind mill for the flotation concentrate. The average ball mill work index is 14.3 kW/t and the mill feed will be ground to 53 microns.

The processing facility includes: centrifugal gravity units, leach and carbon adsorption tanks (13.8m x 13.8m), rougher, scavenger, and cleaner flotation cells (100 m3), concentrate thickener, elution circuit, electrowinning and smelting. Additionally the facility will include a reagent handling system which includes a cyanide detoxification unit.

Recommendations and Development Plan


The PEA demonstrates that the Corcoesto Gold Project has a NI 43-101 compliant mineral resource estimate that has the potential to be economically viable under a Base Case development scenario. As a result, Ore Reserves Engineering Inc. has recommended that the Company upgrade the PEA to feasibility-level status. Additional recommended work includes resource conversion utilizing surface drilling for in-pit resources as well as underground access and drilling targeted at the deeper resource areas.

Qualified Persons


The Corcoesto Gold Project PEA Technical Report data was prepared by Alan Noble, P.E., of Ore Reserves Engineering Inc., a professional mining engineer registered in the State of Colorado, USA and a Qualified Person ("QP") as defined by National Instrument 43-101.

Mr. Gregory Smith, P. Geo., Vice President of Exploration for Edgewater Exploration Ltd., is the qualified Person as defined by NI 43-101 and has prepared and approved the technical data and information on this web page

The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

The Spanish corporate tax rate is 30%, but the impact of taxes on the project would be much less after allowances for depreciation and structure of the local and international corporations.

Edgewater Exploration Anticipated Permitting Timeline




Property Description, Location and Accessibility


The Corcoesto Gold Mining Property (the "Property") is an advanced-stage gold exploration project situated in northwest Spain, approximately 36 km west-southwest of the port city of La Coruña in the Galician Autonomous Community. It is located approximately 1.5 km east of the village of Corcoesto, approximately 12 km west of the town of Carballo. The project has excellent infrastructure including a network of paved road access and a 22 Kv power-line that crosses the property. Galicia is one of the most pro mining regions in Spain with a number of active open-pit granite, slate, marble and coal mines currently in operation.

Location Map and Claim Boundaries
Location Map and Claim Boundaries
The Corcoesto region has limited commercial infrastructure, mainly consisting of local farming and agricultural activities. Although there are several small farms within a radius of 10 km of the project area, the primary targets for exploration and development are not in cultivated areas. The village of Corcoesto consists of small scattered centers of population located west, but outside the area to be affected by the planned mining operations.

Exploration History


Gold at Corcoesto was first exploited by the Romans and most recently in the late eighties and early nineties by mining companies including Sagasta Gold and Aurifera Gallega. During their exploration campaigns, they discovered 28 narrow high-grade gold-bearing structures, 12 of which became the focus of limited underground mining. Exploration efforts since that time were carried out by Rio Tinto Minera, Rio Narcea Gold Mines and Kinbauri Gold. Their efforts focused on defining a bulk tonnage, low grade gold resource, in view of potentiall developing an open-pit mining operation. A total of 31, 166 metres in 283 drill holes have been completed to date by the project's previous owners.


Drilling


Cross Section Peton de lobo
Cross Section Peton de lobo
RNGM has drilled more than 19,000 m in Corcoesto, 16,795m of which were HQ diameter core holes, with the balance being Reverse Circulation ("RC") drill holes. RC drilling was done during the infill program in 2003 only in those parts of the project where RC twinning of existing core holes had been successfully tested in 2002.

The RNGM holes were drilled towards the south for most of the project, except for the Peton de Lobo area where holes were drilled parallel to the Rio Tinto drill holes at an azimuth of 154º (S26E).

Three drilling companies performed drilling for the RNGM drilling campaigns using HQ or larger core) and core recoveries are generally excellent (>97%)

Most part of RNGM's drilling was conducted early in 2003, as part of the infill program for a proposed open pit, heap-leach operation. Almost 13,000 m of drilling was conducted as part of this program, including 2,000 meters of condemnation drilling.. General results of the infill program confirmed expected tonnage and grade for the deposit, although gold grade was unexpectedly higher in some areas. For Cova Crea vein system, results were quite homogeneous and predictable for the sheeted vein mineralization hosted in the fine grained orthogneiss which is located in the eastern part of Cova Crea system. Mineralization at Cova Crea is open at depth and to the west where COR200 intersected 1.77 g Au/t over 14.95m starting at 4.20m in section 3410.

For Peton de Lobo, RNGM did not complete the planned infill program and mineralization remained open to the east where COR202 had intersected 1.34 g Au/t over 30m starting at 37m, 3.15 g Au/t over 7m, starting at 107m and 2.45 g Au/t over 18.3m starting at 120m, including 8.13 g Au/t over 3.25m. Up to June 2006, KNB has drilled 21 DDH with a total of 4378.30m of drilling, in HQ core diameter.

In 2005, Kinbauri Gold Corp. ("KNB") focused most of the drilling in Pozo del Ingles area (8 holes) to test high gold grades at depth. In addition, four holes were drilled to investigate previously undrilled gold geochemical soil anomalies over which KNB had found high grade quartz float (17.7g Au/t ->30g Au/t).

In 2006, KNB drilled 3 deep holes at Pozo del Ingles, 2 deep holes at Peton de Lobo and 4 shallow holes over soil anomalies in the northern areas.

The KNB deep holes at Pozo del Ingles confirmed some high grade shoots for more than 300 m down dip in the footwall mineralized zone.

The westernmost section drilled at Pozo del Ingles, was Section 3460, where drill hole 06K20 intersected 10.26 g Au/t over 2.50m starting at 222m and 4.93 g Au/t over 3.55m starting at 264.75m including 8.40 g Au/t over 1.40m. Hole 05K2, drilled 25m east of 06K20, intersected 19.34 g Au/t over 2.50m, starting at 137m. KNB's deep hole confirming high grade shoot for zone PI-20, was 06K14 (section 3700) which intersected 5.45 g Au/t over 4.5m, starting at 340m, including 7.95 g Au/t over 2.0m. A previous shallower hole (05K5, section 3760) drilled by KNB in same shoot, had intersected 7.68 g Au/t over 3.30m starting at 211m, including 18.0 g Au/t over 1.0m.


Mineral Rights


The Corcoesto deposit is located within the boundaries of the "Ciudad de Masma", "Ciudad de Landró" and "Emilita" exploitation concessions (E.C.). The concession descriptions are shown in the following table. The concessions are 100% owned by Rio Narcea Gold Mines, SL ("RNGM").

The three mining leases have a term of 90 years with a start date of August 10th, 1974, as detailed in the Corcoesto Mining Rights Certificate issued by the Energy and Mines Service (Conselleria of Economy and Industry) of the Territorial Department of A Coruna, Galicia on February 8, 2011.

Table 1
Corcoesto Project Mineral Rights

Mineral Right Type Number Granted Expiring Surface (Ha)
Emilita E.C. 1221 May-18-1912 Ago-10-2064 270.5
Ciudad de Masma E.C. 1455 June-16-1926 Ago-10-2064 305.5
Ciudad de Landrķ E.C. 1454 June-16-1926 Ago-10-2064 197.6

Claims Deposits
Claims Deposits
The Spanish exploitation concession, which is granted by the Spanish government, provides the holder of the concession the right to extract minerals from a specified area. The concession does not grant the surface rights, which must be purchased or leased from the surface rights owner. The exploitation concession is considered senior to the surface rights, however, and an unwilling surface rights holder may be forced to relinquish surface rights through a condemnation process. The normal duration of a concession is 30 years, but the concessions are renewable for another 30 years. The original exploitation concessions were awarded in1912 and 1926, and have been renewed several times since then.
There are no royalties on the property; although there is a minimal "surface cannon" payment in effect that is not a royalty.

There are no known environmental liabilities on the property.


Geological Setting


Fig. 7
Figure 7
The Corcoesto gold deposit lies in a 2 km wide N30E-trending dextral shear zonehosted within a regional antiform structure in the northwest part of the Schistose Domain of Galicia-Tras Os Montes (SDGTM), as shown in Figure 7. The SDGTM represents the basement within the Galicia-Tras Os Montes Zone (GTMZ), whichis part of the Iberian Hercynian Massif. The SDGTM is a strongly deformed metamorphic unit, which has been subjected to regional scale recumbent folding and thrust faulting. It consists of metasediments (phyllites, graywackes, quartzites and cherts) of Precambrian to Devonian age, and orthogneisses derived from Hercynian granites and migmatites.

Igneous rocks in the Corcoesto area are related to synkinematic granites, that were deformed during late stages of formation. Metamorphism deformed these rocks generating a strongly foliated texture.


Mineralization


Gold mineralization at the Corcoesto deposit consists of sheeted quartz veins, quartz breccias and silicification that is related to extensional zones within the north-east trending Malpica-Noia dextral Shear Zone. The quartz veins and breccias are hosted in potassically altered orthogeniss, biotitic gneiss and schists.

The Corcoesto gold deposit is composed of several major vein systems all of which trend in a north-easterly direction, as shown in figure 8. The southernmost vein system is the Cova Crea vein system. The NE part of the structure, hosted in the fine-grained orthogneiss band consists of sheeted veins. To the SW, the Cova Crea system is hosted in migmatites, biotitic gneiss and paragneiss. Narrow quartz veins with arsenopyrite in wider zones of silicification, are predominant. Typical Cova Crea mineralization is shown in Figure 8-1, Section 3885, where it is mostly sheeted veins with a thick low-grade zone (between 1.5 and 2.0 g Au/t) that includes a higher grade core (above 3 g Au/t). The structure has been drilled along strike for at least 500 m and to a vertical depth of 100 m and the mineralization remains open to the west and at depth.

The most significant mineralized structure in the Corcoesto gold deposit, is a N70E trending structure in the central area of the deposit, that crosscuts all of the N30E trending lithologic units. The central and west part of this structure has been named the Pozo del Ingles vein system following the local terminology for old underground workings in the area. The easternmost part of the structure is called Peton de Lobo vein system also following the local terminology.

From 2005 to 2008 previous operator KNB obtained an option on the Property from Rio Narcea and completed a NI 43-101 technical report entitled, "Technical Report for the Coroesoto Gold Deposit, Galcia, Spain" (the "Report") dated August 22nd, 2006 by Alan Noble, P.E. of Ore Reserves Engineering. The previous operator Kinbauri Gold Corporation (KNB) retained Ore Reserves Engineering (ORE) in June 2006, to compile a NI 43-101 Technical Report for the Corcoesto property located in Galicia, in the northeastern corner of Spain. The purpose of the 2006 Technical Report is to provide an independent assessment with regard to the exploration potential, gold resources, and further development of the Corcoesto property. This report provides a technical summary of the exploration and development activities and results, and the currently defined mineral resource for the Corcoesto Project.


Updated 2013 Mineral Resource Methodology


Resource Estimation Methodology: the updated 2013 Mineral Resource Statement was prepared for the Corcoesto Gold Project by Micon International Limited of Toronto, Canada ("Micon") in conjunction with Edgewater. Previous mineral resource statements have been produced by Ore Reserve Engineering of Denver, USA in 2011. In the opinion of Micon, the 2013 mineral resource estimate is a reasonable representation of the tonnage and grade of gold bearing rock present at the Corcoesto Project given the current level of sampling. Micon considers there to be sufficient data and information for the estimation of a Mineral Resource for the Corcoesto Project prepared under the guidelines of The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore reserves, The JORC Code, 2012 Edition ("JORC Code"). Total mineral resource estimates for the Corcoesto Project are based on resource models from six mineral deposits, namely Cova Crea, Pozo del Ingles, Peton de Lobos, Montefurado, Fonterremula, and Picotos.

The exploration history of the project is protracted with initial (modern) exploration being conducted from the 1970's, and the first drilling by Rio Tinto in 1987. Since 2010 Edgewater has completed almost 300 drill holes for over 50,000 metres, adding to the previous 332 drill holes (>35,000 metres) undertaken between 1987 and 2008 by three different operators. The most up-to-date version of the database for Corcoesto has been supplied to Micon for use in the current Mineral Resource Estimate. The database used by Micon in the current estimate contains 50,207 samples and 112,877.27 m including drill holes (diamond drill holes, RC holes, geotechnical, and hydrogeological drill holes), 176 trenches for 18,469.293 m, and 10 adits (channels) for 1,322.90 m.

Micon is of the opinion that the current information is sufficiently reliable to interpret the boundaries for the gold mineralization and that the assay data are sufficiently reliable to support mineral resource estimation. Micon is not aware of any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors which would affect the mineral resource estimate reported here.

The database for the Corcoseto project was developed by Edgewater in Microsoft Access. The database was imported into Gem's Surpac software for analysis and review. The import process identified no errors within the database, no overlapping samples were evident.

Interpretation of the mineralised zones was undertaken by Edgewater and six zones have been defined: Picotos, Fonterremula, Montefurado, Pozo del Ingles, Peton de Lobo and Cova Crea. The general strike of the mineralised bodies is North East -- South West, they dip to the north between 54° and 73°, and are thus concordant with the main lithological trend and extensional shear zones. The wireframes have been reviewed by Micon and adjusted in areas to minimise the inclusion of material below cut off, this has led to the generation of additional wireframe structures in many of the zones. Micon believes that the mineralized envelopes defined in this process represent the limits of gold mineralization based on the development of a grade shell, and therefore provide a reasonable control of the gold estimation. High grade intervals occur within some of the mineralised envelopes but could not be delineated as high grade zones within the mineralized envelopes. A contiguous sample length analysis was completed to investigate the effect of the cut-off grade on intercepts and the cut-off grade of 300 ppb Au (0.3 g/t Au) is acceptable for the dataset.

The mineralised envelope wireframes were developed through the digitising of strings on cross sections which were linked to form solid objects enclosing the mineralised zones. Wireframe solids were developed for each zone by Micon, this process included the re-digitising of the sections using Edgewater's initial interpretations. The wireframe solids generated by Micon were verified to ensure that no overlapping or open edges were present. Wireframes for five dykes present within the zones of mineralisation have also been developed and these verified solids were used to limit the mineralised envelope wireframes in the areas they represent.

Statistical analysis and compositing of the sample database was undertaken in Surpac software. Samples were selected within each mineralised zone for analysis. Each vein structure within the zones was assigned a vein code. The frequency distributions of Au within the sample populations were examined to identify the possible presence of high-grade outlier populations. The log probability plots clearly show that the sample populations from each area have different distributions. High grade sample populations are present within the sub datasets. The areas with larger sample populations, such as Cova Crea and Peton de Lobo, have smoother grade distributions which are expected due to the higher density of sample data. Capping factors ranging from 5.0 to 13.4 g/t Au were applied to raw assays prior to compositing.

Compositing of the data was undertaken in Surpac, and the composite sample files imported into Datamine for use in estimations. The compositing length has been chosen according to the length distribution of the sample populations. A comparison was undertaken on the Length Weighted Average grades for each vein structure within the zones using the raw data set, top cut data set and composite dataset.

A block model prototype was developed which enveloped all the mineralized zones. Block models were generated for each mineralised zone and dyke structure within this prototype. The block model has a parent block size of 8 m x 8 m x 4 m with variable sub-blockings to a minimum of 2 m x 2 m x 1 m. The blocks were generated primary along the X axis and then along the Z axis. In order to account for the changes in orientation, dynamic anisotropy has been undertaken for each mineralised zone and dyke, which allows for the orientation of the search ellipsoid to be defined for each block within the models, through the estimation of true dip and dip direction angles. The changes in orientation in the wireframes volumes are established through the development of digitised strings in both plan and section through the wireframe volumes. Strings were digitised at intervals of 25 m in section and 20 m in plan section through the wireframe volumes. The digitised strings were used to generate the dip direction and dip for each block within the model. These values were then estimated into the block model using Inverse Distance Weighting (IDW) for angular data.

Composite samples for each zone were used for the development of variograms. Anisotropic variograms were developed in three directions, along the strike of the wireframes represented by the X axis, down the general dip direction of the wireframes as represented by the Y axis, and across the width of the wireframes represented by the Z axis. Variographic analyses were made for all mineralised zones. Continuity could not be established within Picotos, Fonterremula Montefurado and Cova Crea; therefore the estimation for these zones was undertaken using IDW3. Pairwise relative variograms were generated along the three principle axes for each of the two larger zones; Peton de Lobo and Pozo Del Ingels.

The basic statistical analysis, combined with the variography and assay composites analysis indicated the appropriate method and parameters for block grade estimation. Three concentric search radii were selected for the estimation of each zone. The search ellipses were aligned so that the X axis aligned along the strike of the wireframes, the Y axis aligned with the dip of the wireframes and the Z axis was aligned across the width of the wireframes. All estimations were undertaken into the sub cells of the block model in order to minimise smearing effects. Search ellipses representing the general strike and dip of the lenses within each zones were established and used where dynamic anisotropy angles were absent.

In order to validate the block model estimates and check for conditional bias, plots were created which compare block model grade estimates and composite sample average grades. Composite samples were declustered into blocks of the parent cell dimensions of 8m x 8m x 4m. It is apparent from the plots that there is no significant bias between block grades and composite grades. Visual Validation of the blocks against composite grades was also undertaken for both the mineralised block models and the dyke models. These validations supported the findings of the declustering in that the block grades and composite grades compared well. Global validation of the block models was undertaken though the generation of swath plots in a northing (Y) and easting (X) direction though the block models. It is clear that the block model grades follow the trend of the composite grades, albeit that in certain areas a slight underestimation of block grades in comparison to composite grades is observed.

Densities were coded into the block model based on each block's location with respect to a surface representing the base of the oxidised zone in the drill hole database. Where drill hole information was limited, a depth of 25 m below surface was taken as the oxide limit.

Mineral Resources were categorised in accordance with the JORC Code (2012) which is a recognized reporting code under the CIM Standards. The following definitions were adopted for the classifications of the mineral resources:
  • Measured mineral resources were defined by those portions of the mineralised zone outlined by a sample spacing of 25 m x 25 m and having three or more composite samples within the first search ellipse with two or more of these samples from different drillholes/trenches/adits;
  • Indicated mineral resources were defined by those portions of the mineralised zone outlined by having two or more samples from different drillholes/trenches/adits, and falling within the second search ellipse for each zone; and,
  • Inferred mineral resources were defined as those portions of the mineralised zone which were outlined by widely spaced composite samples, or lenses containing multiple composite samples but only from one drill hole, trench or adit.
The 2013 Corcoesto resource estimate data approved by Jason Ché Osmond, M.Sc., EurGeol., C.Geol., FGS, Senior Geologist, Micon International Co. Limited, and a Qualified Person ("QP") as defined by National Instrument 43-101. The Technical report has been completed and is available in the Technical Report section of this website.

Mr. Gregory Smith, P. Geo., Vice President of Exploration for Edgewater Exploration Ltd., is the qualified Person as defined by NI 43-101 and has prepared and approved the technical data and information on this web page