Guadalupe y Calvo Gold-Silver

• High-Grade Vein Potential: Historic drilling includes 15.9 g/t Au and 1,225 g/t Ag over 4.0m with numerous targets identified for follow-up exploration.

• Prolific Geologic Feature: Main structural feature is the northwest striking Rosario fault complex with a total width of the mineralized zone up to 80m. Historic underground mining widths of high-grade gold-silver mineralization were up to 10m.

• Resource: Indicated Historical Estimate of 1.86M tonnes @ 2.40 g/t Au & 119.0 g/t Ag that translates to 237k oz gold-equivalent (Au Eq) at 3.95 g/t & an Inferred Historical Estimate of 154k tonnes @ 17k oz Au Eq at 3.38 g/t. This historical estimate remains open for expansion along strike and at depth*.

• Significant Exploration Database: Significant past exploration by Glamis Gold (Goldcorp), Gammon Gold (Aurico Gold), and Endeavour Silver totaling over 50,000 metres of drilling in over 200 drill holes.

• Exploration Opportunity: Numerous historical and artisanal gold and silver workings identified for further evaluation within 2,750-hectares of contiguous claims.

The Guadalupe y Calvo (GyC) Property is located in the municipality of Guadalupe y Calvo, in the southwest region of the northern state of Chihuahua, México, approximately 300km in a straight line from the state capital, Chihuahua City. It is located in the gold-sliver belt of the Sierra Madre Occidental belt that is famous for many other known gold-silver deposits.

The property contains the historic Rosario mine, with past production of  over 2.0 million ounces of gold and 31 million ounces of silver. Historical records indicate that past operations were hindered by water problems when the valley floor water table was reached, which limited the extend of historical mining at depth and not due to the absence of high-grade gold-silver mineralization.

The property is comprised of ten mineral concessions covering 2,750 hectares with several old adits and shafts identified. GyC is a classic gold-silver epithermal deposit and, in general, is classified as a pluton-related adularia-sericite system. The deposit sits within a structural trend hosted by volcanic and volcaniclastic rocks consisting of basalt, rhyolite, andesite and rhyolite volcaniclastics.

Based on mineralogy and alteration, gold-silver mineralization is of the low-sulfidation quartz-adularia type. The system contains quartz veins, quartz breccias and stockworks hosting economically significant gold and silver mineralization. The mineralization commonly exhibits open-space filling textures and is associated with volcanic related hydrothermal to geothermal systems that was the conduit and source of the precious metals.

The Project’s main structural feature is the Rosario fault complex. The total width of the mineralized zone is up to 80m. Historic underground mining widths of high-grade gold-silver mineralization were up to 10m. The second major vein is the Nankin vein, which is mostly an east-west striking vein, dipping shallowly to the south at an average of 30°. This structure has an obvious deflection where it intersects the Rosario vein, creating a complex pattern of stockwork and sheeted veinlets that provides a possibility for bulk-mining either in open pit or large underground stopes.

The Rosario vein on the Guadalupe y Calvo Project was reportedly discovered on October 4, 1835 and, because of its extraordinary richness in superficial gold and silver, it caused an immediate impact. The Ochoa family, who had sole ownership of the northern part of the district soon after its discovery, leased its holdings to two English mining companies in 1838 which worked the mines until 1849. The southern San Francisco portion of the district remained in the hands of small miners.

In 1844, a government mint was erected to use the mine’s products for coinage and was closed in 1850. From 1850 to 1895, there were small mining efforts until Rosario Mining Company bought the mines and operated for 15 years until 1910 when they sold it to Western Mexican Mines Ltd.

In 1923, Western Mexican Mines Ltd., (later called Compania Minera Wemeco, S.S.) started exploitation of mine and exploited much of the Rosario vein and developed the Nankin vein for the first time. The company ceased activities in 1938 and minor artisinal-scale mining was carried on from that time until the 1990’s. In the 2000’s there was exploration by Glamis Gold (Goldcorp), Gammon Gold (Aurico Gold), and Endeavour Silver totaling over 50,000 metres of drilling in over 200 drill holes.

Open Stopes at the Surface of the Rosario Vein, Looking Southeast Towards Town

The mining district of Guadalupe y Calvo is located within the Sierra Madre Occidental metallogenic province, a north-northwesterly trending linear volcanic belt. This volcanic field, 1,500km long and 200km wide, is one of the world’s largest epithermal precious metal terranes, hosting a majority of Mexico’s gold and silver deposits. It extends from south of Guadalajara to Arizona and New Mexico.

Regional Geology of the Guadalupe y Calvo Project

The Sierra Madre region is characterized by a thick sequence of predominantly Tertiary volcanic and volcaniclastic rocks that overly a basement of primarily Jurassic-Cretaceous flysch. There are multiple ages of intrusive rocks in the region, including Laramide calc-alkaline diorite to quartz monzonite (Cretaceous-Eocene), Oligocene-Miocene felsic stocks, and Miocene bimodal rhyolite-basalt stocks, domes and flows. The pre-Tertiary rocks are generally only exposed at the bottom of deep canyons. Paleozoic sedimentary rocks are exposed in the western part of the Sierra Madre near Sinaloa, but most other basement rocks are Jurassic-Cretaceous.

The volcanic stratigraphy of the Sierra Madre Occidental is divided into two groups (McDowell and Clabaugh, 1979): the Lower Volcanic Series (LVS) and the Upper Volcanic Series (UVS). The LVS dates from the Paleocene to Oligocene, and is dominated by andesite to dacite flows, tuffs, sills and stocks.

The total thickness of the LVS generally ranges from 300m to 900m. UVS ranges from Miocene to Oligocene (23 to 38 Ma). It is dominantly felsic ash-flow tuffs, commonly forming steep cliff faces and flat mesas, intermixed with flows of dacite through rhyolite, and having late basalt flows locally. This unit can range to over 1,000 m in thickness. In Guadalupe y Calvo, as well as many of the low-sulfidation epithermal deposits in the Sierra Madre, most or all of the UVS is post-mineral. The most typical host rocks for epithermal vein deposits in the Sierra Madre are LVS andesites and dacites.

The predominant structural grain of the Sierra Madre consists of large through-going northwest-striking normal and oblique normal-dextral faults. Numerous large caldera structures have been proposed, but few mapped, in the UVS. Many of the epithermal camps of the Sierra Madre are controlled by the northwest-striking fault systems.

The Guadalupe y Calvo Project occurs within an erosional window through the UVS, exposing a LVS package of andesites that are cut by a quartz monzonite pluton. The LVS is reported to be Paleocene in age (SGM, 2008). No older basement rocks are exposed in the district. The LVS package has been cut by a northwest-striking fault system which was mineralized to form the Rosario vein.

The LVS andesite is predominantly a dark green unit with porphyritic-aphanitic texture and locally aligned phenocrysts suggesting a flow origin. Phenocrysts consist of plagioclase, hornblende and augite that are variably altered to clays, epidote, chlorite and oxides. The andesites have a weakly developed propyllitic alteration that is strongest near the veins. This alteration consists of epidote, chlorite, pyrite and calcite.

Where the andesites are more propylitized, they are commonly also more deeply oxidized. The andesites have been intruded by a complex stock of granodiorite to quartz monzonite (predominantly the latter) that is believed to be Laramide in age, based on it being cut by the veining, and being in clear angular unconformity with the UVS tuffs. The quartz monzonite grades from slightly porphyritic (with large phenocrysts up to 1.5 cm in the longest dimension), to hypidiomorphic-granular.

It appears to have been emplaced at a moderate depth and is not believed to be a hypabyssal stock nor directly related to the mineralization. It is brittle and thus forms good open fractures for veining. This pluton has many complex emanations of dikes and sills in the andesite that are difficult to correlate from section to section. The quartz monzonite appears to be equally well-mineralized as the andesite in the drilling completed to date. All of the LVS units are locally cut by small aphanitic andesite/diorite dikes and minor sills that appear to be post-mineral but pre-UVS. These are unrelated to mineralization.

Guadalupe y Calvo Property Geology

Note: The wide hydrothermal breccia of the Rosario vein system is covered by the unconformable post mineral volcanics to the southeast, and is down-thrown by the Bufa Fault on the order of 400m vertically to the northwest.

The UVS rocks in the Project area consist of tuffs and flows of predominantly rhyolite composition, grading to rhyodacite and dacite. Most units have some quartz phenocyrsts and generally have abundant glass, variably devitrified. The tuffs commonly have large fiame typical of ignimbrites of the UVS, and are generally moderately to strongly welded, forming prominent cliffs and mountains. Minor flow units have been noted, but not subdivided, in this unit.

There appear to have been three phases of brittle extensional faulting in the district:

1. Early north-northwest-striking and east-west normal faulting that is pre- and syn-mineralization, which may be semi-continuous with number 2), below.
2. Later post-mineral north-northwest-striking faulting.
3. Latest north-northeast-striking normal faulting.

The structural geology of the Project is dominated by northwest-striking normal faults that dip moderately to steeply to the southwest. The SGM regional geologic map shows a major normal fault on the southwest side of the district (Falla Guadalupe) that down-drops UVS rocks and is thus post-mineral.

The major vein structure (Rosario vein) in the district is subparallel to this fault and forms part of a series of conjugate fracture systems related to this regional system. The Rosario vein is clearly a fault-related feature, with abundant gouge and breccia related to the mineralization. No good marker units have been recognized in the LVS to date, so the actual offset on these older faults is unknown.

The coincidence in attitude between the pre-mineral and post-mineral faults suggests that the structural system here was long-lived. These structures are visible as linear features on satellite imagery, and the SGM has mapped a series of northwest-striking faults sub-parallel to the Guadalupe-Rosario system on its regional geologic map.

Along with this prominent northeast trend, there were also east-northeast to east-striking vein/faults, such as the Nankin vein in the main Project area, that are mineralized and part of the oldest structural system.

The youngest recognized deformation is a north-northeast-striking fault “Bufa Fault” that Down-drops the UVS volcanics against the LVS and the Rosario vein, and is thus post-mineral. Based on surface mapping and contouring of the basal UVS contact from drill data, the Bufa Fault is believed to have on the order of 400 m of apparent vertical displacement.

Mineralization

The low-sulfidation epithermal mineralization at Guadalupe y Calvo occurs in structurally controlled, semi-tabular-shaped veins that appear to be vertically zoned in mineral content.

The mineralization consists predominantly of bands and irregular lenses of hydrothermal breccias and banded quartz-calcite-adularia veins that form wide zones (over 60 metres locally) of veins, sheeted veinlets and stockwork veinlets. The gangue is primarily quartz that ranges in colour from white to light grey to green to beige-green and is locally amethystine.

There are lesser amounts of calcite locally, and rare evidence of calcite replaced by quartz (a typical boiling feature in epithermal veins). Rare pink bands within the vein suggest the presence of adularia, and light green quartz-chlorite veining is observed locally. Sulphides are generally pyrite with rare argentite, and locally galena-sphalerite-chalcopyrite, and total sulphide content is generally less than 5%.

In the oxide zone, the sulphides are leached, leaving either casts or pseudomorphs of goethite-hematite. Abundant goethitic and hematitic staining is evident in much of the vein near surface, and some secondary silver minerals are probably developed, although definitive mineralogy has not been done. Banding of the fissure veins is common, with the bands generally sub-parallel to the walls of the veins, and open vugs commonly between bands in the upper part of the deposit. Breccia clasts of host rock are common in the veins, and the clasts are generally strongly altered either by quartz replacement and/or by argillization of feldspars and choritization of mafic phases and some feldspars.

The walls of the vein structure sometimes have sharp boundaries, but it is also quite common for the “vein” to consist of anastomosing veinlets and stockwork veinlets within a fragmented and fractured zone. In the latter case, the boundary of the vein system is defined by logging a gradual decrease in the intensity of sheeted veinlets. These walls of individual veins commonly have a 1 to 30 centimetres halo of weak silicification, and propylitic alteration (chlorite-epidote-calcite-pyrite) is commonly developed 2 to 25 metres from the vein.

These propylitic halos have variable 1 to 5% pyrite. There are two major veins that have been recognized in the Guadalupe y Calvo Project. The Rosario vein is by far the larger, consisting of an 8 to 60 metres wide zone of hydrothermal breccias, banded veining, and extensive stockworks and sheeted veins in the walls of the vein.

The vein strikes from N15°W to N35°W and dips 45° to 70° to the southwest. The greatest thicknesses of veining occur near surface, and especially near the intersection with the Nankin vein.

The second major vein is the Nankin vein, which is mostly an east-west striking vein, dipping shallowly to the south at an average of 30°. This structure has an obvious deflection where it intersects the Rosario vein, creating a complex pattern of stockwork and sheeted veinlets that provide a possibility for bulk-mining either in open pit or large underground stopes.

The deflection in the vein’s strike is obvious on level maps, where it can be seen to have suffered either fault drag or is simply a major split off the Rosario, forming a 60° bend in the strike. The Nankin vein is another target for exploration especially where it intersects the Rosario vein.

To the southeast, the projection of the Rosario and Nankin veins is masked under the unconformity of the post-mineral tuffs. A parallel structure, the “Vein of the Sun”, is parallel to the Nankin, and is interpreted as a footwall limit to what is sometimes a stockwork-sheeted vein system below the Nankin vein.

Schematic Surface Map of the Guadalupe y Calvo Project showing the Main Veins

The Concordia vein is a footwall split from the Rosario vein but has a weak surface expression and has been discontinuous in drill results to date. Numerous other small vein splits have been cut in drilling, but none has been followed over substantial lengths to date. Previous exploration drilling has been focused on testing the Rosario structure, and drill intersections on the Nankin vein were made only when the vein fell between the drill collar and the Rosario target. The area tested by infill drilling was approximately 600 metres in strike and 550 metres in vertical dimension (approximately 600 metres in the plane of the Rosario vein).

The Rosario deposit is a high grade, epithermal Au-Ag bearing deposit occurring as a vein that is structurally controlled and runs parallel to the Sierra Madre belt. It was discovered in 1835 and has been mined sporadically until 1939 in an organized fashion and then by artisans until today.

Endeavour Silver Corp. performed exploration from 2012 to 2020 until Ridgestone Mining took control of the claims in 2021. Total metal mined historically in the past by underground methods is thought to be in excess of 2.0 million ounces of gold and 31.0 million ounces of silver.

The Rosario vein is the main source for Au-Ag mineralization, consisting of an 8 to 60-metre-wide zone of hydrothermal breccias, banded veining, and extensive stockworks and sheeted veins in the walls of the vein. The vein strikes from N15°W to N35°W for 700 – 800 metres and dips 45° to 70° to the southwest.

The greatest thicknesses of veining occur near surface, and especially near the intersection with the Nankin vein. Previous exploration drilling has been focused on testing the Rosario structure, and drill intersections on the Nankin vein were made only when the vein fell between the drill collar and the Rosario target. The area tested by infill drilling was approximately 600 metres in strike and 550 metres in vertical dimension (approximately 600 metres in the plane of the Rosario vein).

This provided a good understanding of the vein’s character in three dimensions. The Rosario vein exhibits high gold grades, up to 62.37 g/t Au over 1.1m from recent drilling. The deposit has been well defined down to 450 metres and the potential to extend the deposit towards the SE is low after being terminated by a cross-fault and with only 100 to 200 metres on the down dip extension.

The Nankin vein is mostly an east-west striking vein, dipping shallowly to the south at an average of 30°. This structure has an obvious deflection where it intersects the Rosario vein, creating a complex pattern of stockwork and sheeted veinlets that provides a possibility for bulk-mining either in open pit or large underground stopes.

The deflection in the vein’s strike is obvious on level maps, where it can be seen to have suffered either fault drag or is simply a major split off the Rosario, forming a 60° bend in the strike.

Typical Transverse Section Looking Northwest, Showing the two Major Veins

Intersection between the Nankin and Rosario veins has wide areas of sheeted mineralization and have been productive from a mining standpoint. These intersections can be targeted down depth to increase resources.

Level 5 South Underground Workings, Showing the Projection of the Rosario and Nankin Veins Under the Unconformity with the Post Mineral Tuffs

To the southeast, the projection of the Rosario and Nankin veins is masked under the unconformity of the post-mineral tuffs.  This area is highly prospective and is found south-east of the town of Guadalupe. There are surface showings and drilling from previous operators having intersected high grade but narrow intersections of one to two metres.

*CIM standards for disclosure of mineral resources requires us to state that confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.