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Mineral Resource Estimate

The Candelones Project is currently composed of two distinct mineralization zones: the Candelones Main and Connector (“CMC”) and the Candelones Extension (“CE”). As previously predicted by Micon's QPs, the new drilling has allowed joining the CM and CMC zones into a single continuous zone. The present Candelones resource update is focused on the updated economic parameters for the oxidized portion of the CMC zone which were used as the basis for the oxide PEA described in this Technical Report. The sulphide portions of the CMC and the CE models have not only been updated to reflect the new economic parameters but, in the case of the CE zone, have been updated to reflect the new drilling information obtained during the 2015, 2016, 2019, 2020 and 2021 drilling.

Oxide Mineral Resource Estimate for Candelones Project PEA, Effective Date May 10, 2021

Deposit Mining
Method
Mineralization Type Category Tonnes
(x1,000)
Au g/t Au oz
(x1,000)
Strip Ratio
CMC Open Pit (Starter) PEA Oxide (Heap Leach) Measured 1,851 0.82 49 0.13
Indicated 1,616 0.82 42
Total Measured + Indicated 3,467 0.82 91
Oxide (Heap Leach) Inferred 1,154 0.6 22
Transition (Heap Leach) 478 0.87 13
Total Inferred 1,632 0.68 36


Sulphide Mineral Resource Estimate for the Candelones Project, Effective Date May 10, 2021

Deposit Mining
Method
Category NSR$ Cut-off Tonnes
(x1,000)
AuEq g/t Au g/t Ag g/t Cu % AuEq oz
(x1,000)
Au oz
(x1,000)
Ag oz
(x1,000)
Cu lb
(x1,000)
Strip
Ratio
CE Open Pit (Ultimate) Measured 20 6,280 2.22 1.90 3.28 0.18 449 383 662 25,042 7.46
Indicated 20 13,098 1.63 1.40 4.18 0.12 688 591 1,762 34,201
M+I 20 19,378 1.82 1.56 3.89 0.14 1,137 974 2,425 59,243
Inferred 20 18,594 1.55 1.38 2.93 0.09 928 826 1,749 36,022
CMC 20 4,448 1.38 1.25 1.17 0.07 197 178 167 7,207 0.91
CMC + CE Inferred Subtotal 20 23,042 1.52 1.36 2.59 0.09 1,125 1,005 1,916 43,229 N/A
CE Underground Measured 77 759 3.15 2.65 1.88 0.29 77 65 46 4,836 N/A
Indicated 77 348 2.73 2.35 2.32 0.22 31 26 26 1,652
M+I 77 1,107 3.02 2.56 2.02 0.27 107 91 72 6,488
Inferred 77 417 2.63 2.32 3.53 0.17 35 31 47 1,535
CMC 77 338 2.72 2.46 0.81 0.15 30 27 9 1,114
CMC + CE Inferred Subtotal 77 755 2.67 2.38 2.31 0.16 65 58 56 2,649
Sulphides Total Measured + Indicated   20,484 1.89 1.62 3.79 0.15 1,244 1,065 2,497 65,731  
Sulphides Total Inferred   23,797 1.55 1.39 2.58 0.09 1,190 1,063 1,972 45,878

For full disclaimers, please see Micon Candelones Oxide PEA 2021 NI43-101 report.

Supporting Data

The Candelones Project database provided to Micon is comprised of 425 drill holes and 31 test pits, with a total of 107,839 m of drill core and containing 67,814 samples. This database was the starting point from which the two mineralized envelopes, CMC and CE, were modelled.

For the mineral resource update of the oxidized zone at the CMC, Micon QPs used only the data contained within the wireframes, so that the effective number of drill holes and samples used to produce the estimate are 147 drill holes, including 14 new drill holes from 2016 and 2019, and 21 test pits, totalling 6,611 samples of mineralized intercepts.

In addition to the drill holes, Micon's QPs included trench sample data for the CMC zone, as it assisted in defining the shape of the outcropping mineralization. A total of 70 trenches containing 2,778 samples were used in the resource estimate.

For the CE resource update, Micon's QPs used 153 drill holes with a total of 13,700 samples inside the wireframes. This represented a substantial increase of drilling information compared to the 4,579 samples used in 2013.

Economic Assumptions

The mineral resource estimates have been constrained using economic assumptions that consider both open pit (shallow mineralization) and underground (mineralization below the conceptual pit) mining scenarios. The optimized pit shells are conceptual in nature and are based on the economic assumptions stated herein, applied using the Lerchs-Grossman algorithm contained in the Datamine NPV Scheduler software. The potential underground blocks are also conceptual in nature and are based on identifying a reasonable spatially continuous tonnage sufficient to justify an eventual underground development. No specific underground mining method nor economic model was evaluated, but scattered and isolated blocks were excluded from out of the resource.

The mineral resource estimate and open pit optimization have been prepared without reference to surface rights or the presence of overlying private property or public infrastructure or geographical constraints.

The Candelones Project has been evaluated using gold assays only for the oxide resources, while the updated sulphide resources were evaluated using the silver and copper assays as well.

Operating costs were estimated based on similar operations. It is Micon's QPs opinion that the costs are reasonable, but they were not developed from first principles and are considered conceptual in nature.

Table 1.1 summarizes the open pit and underground economic assumptions upon which the resource estimate for the Candelones Project is based. All monetary values are expressed in US dollars.


Summary of the Candelones Project Economic Assumptions for the
Conceptual Open Pit and Underground Mining Methods

Candelones Parameters Oxides (PEA) Sulphides
Oxides Transition
Au price $/oz $1,700 $1,700 $1,700
Ag price $/oz $20.00 $20.00 $20.00
Cu price $/lb $4.00 $4.00 $4.00
Au recovery 80% 50% 84%
Ag recovery     55%
Cu recovery     87%
Open Pit Mining Cost $/t $2.35 $3.61 $2.85
Processing Cost (Heap Leach) $/t $7.40 $7.40  
Processing Cost (Flotation) $/t     $25.00
G&A Cost $/t $2.39 $2.39 $2.39
Open Pit Overall Cost $/t $12.14 $13.40 $30.24
Underground Mining Cost $/t     $60.00
Underground Overall Cost $/t     $87.39
Open Pit Au Cut-off g/t 0.28 0.49 0.66
Au Eq. Cut-off g/t     0.65
Open Pit NSR Cut-off ($/t)     $20.24
Underground Au Cut-off (g/t)     1.9
Underground Au-Eq Cut-off (g/t)     1.89
Underground NSR Cut-off ($/t)     $77.39
Open pit slope 45 45 45

The open pit parameters noted above were input into the pit optimization software and a series of nested pit shells representing varying revenue factors (gold prices) were generated.

The pit shell maximizing revenue (optimum pit) indicated that the cut-off grades for open pit mining are:

  • Oxide mineralization (starter pit)                       0.28 g/t.
  • Transition mineralization (starter pit)                0.49 g/t.
  • Sulphide mineralization (ultimate pit)               $20/t NSR.
  • Sulphide mineralization (underground)            $77/t NSR.

The stripping ratios for the optimized pit shells at a gold price of US $1,700/oz are 7.46 for the CE, 0.91 for the CMC ultimate pit and 0.13 for the CMC starter pit.

For the underground mining scenario, the model indicated that the mining cut-off value is $77/t NSR for the sulphide mineralization. There is no oxide mineralization in the underground scenario.

Mineral Resource Estimate

The mineral resource estimates for the Candelones Project are summarized above.

Mineral resources which are not mineral reserves do not have demonstrated economic viability. At the present time, Micon and the QPs do not believe that the mineral resource estimate is materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

The production plan for the PEA discussed in the report includes Inferred Mineral Resources which are considered to be too speculative geologically to have the economic considerations applied to them that would allow them to be classified as Mineral Reserves. There is no assurance that the economic conclusions of the PEA would be realized in practice.

Micon and the QPs consider that the resource estimate for the Candelones Project has been reasonably prepared and conforms to the current 2014 CIM standards and definitions for estimating resources. The mineral resource estimate can be used as Unigold's basis for the ongoing exploration at the Candelones Project.

The process of mineral resource estimation includes technical information that requires subsequent calculations or estimates to derive sub-totals, totals and weighted averages.  Such calculations or estimations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, Micon and the QPs do not consider them to be material.