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Property Overview The Brewery Creek Project is a past producing heap leach gold mining operation located in the northwestern region of the Yukon. A total of 278,484 oz Au was produced from seven near-surface oxide deposits along the property's Reserve Trend from 1996 through 2002, when the mine (then operating under Viceroy Resource Corporation) shut down due to low gold prices. The 997 claim, 187 km2 property is located 55 km due east of Dawson City, accessible by paved and gravel roads from the junction of the North Klondike and Dempster Highways. In May 2011 the Company staked an additional 204 claims east of the existing Brewery Creek property, increasing the property to a total of 997 claims covering approximately 187 km2. The new claims were staked to cover geologically favorable ground outlined by geophysical and geochemical surveys. The Project is in receipt of all necessary permits, including the Class 3 Mining Land Use permit required to conduct additional exploration. The Brewery Creek Project is authorized under a Type A Water License with an expiry date of December 31, 2021, subject to the restrictions and conditions contained in the Yukon Water Act and Regulations. The Project also has a production license with an expiry date of December 31, 2021, and the ninety-three mining leases covering mine facilities, pits, waste dumps and adjacent drill indicated deposits have expiry dates beginning in 2016. In addition, Viceroy successfully negotiated the terms for a Socio-Economic Accord with Tr'ondek Hwech'in First Nation with respect to the Brewery Creek Project. In June 2009, the Company signed a Letter of Intent with Alexco Resources Corp. to acquire up to a 75% interest in the Brewery Creek Project. The Company can also earn a 50% interest in certain barite deposits present on the claim group. The Brewery Creek Project is subject to two underlying royalty agreements with third parties: a "sliding scale" royalty on the next 21,516 oz Au production, and a 5% net profits royalty on profits from gold production.
Historical Exploration The claims comprising the Brewery Creek Project were initially staked in 1987 by Noranda Exploration Limited ("NPL"), and most of the mineralized zones that have been mined to date were identified by 1989 through detailed geochemical surveys. Since 1989, more than 175,000 m of trenching and drilling has been completed on the Project, much of which was focused on defining the near-surface oxide potential and was completed to depths of 50 m or less. After the mine shut down in 2002 Viceroy conducted ongoing reclamation activities on the site, and various small exploration programs focusing on deeper sulphide gold mineralization have been conducted by various operators. From 2005 to 2009, Alexco completed reclamation activities on the majority of the previous operations.
Geology and Mineralization On the Brewery Creek Project, Tombstone Suite, Cretaceous monzonite and quartz monzonite intrudes lower Paleozoic Earn Group and Road River Group stratigraphy as a series of semi-conformable sills. Cretaceous biotite monzonite and syenite stock-like bodies occur locally in the south-central part of the project. This suite of coeval granitic rocks is known to be associated with gold mineralization at Fort Knox in Alaska and Dublin Gulch, Clear Creek and Gold Dome (Scheelite Dome) in Yukon. Intrusive rocks of a similar age host much of the mineralization at the world class Donlin Creek deposit in Alaska. At Brewery Creek, fracture-controlled gold mineralization is hosted within porphyritic monzonite, quartz monzonite, biotite monzonite and interbedded fine-grained, siliciclastic sedimentary strata. Local replacement mineralization is also hosted within calcareous siltstones. Major ore-controlling structures in intrusive rocks are related to a post Tombstone age (91 Ma), NNW compressional event that produced ESE and NE striking conjugate shears and ENE listric normal faulting localized along graphitic argillite/intrusive sill contacts. Viceroy geologists concluded that moderate south dipping to overturned, north dipping short limbs of south vergent folds were the main controls to mineralization. Approximately 85% of the mined ore was hosted by the various Cretaceous-aged quartz monzonite sills with the balance contained in silicified and brecciated Earn Group sediments. A Technical Report on the Brewery Creek Project was prepared in July 2009 by Richard M. Diment and Ronald G. Simpson, entitled "Technical Report on the Brewery Creek Gold Project, Yukon Territory, Canada." The Report contains a National Instrument 43-101 Indicated Resource of 3.98 million tonnes grading 1.135 gpt Au (145,000 contained ounces) and an Inferred Resource of 2.2 million tonnes grading 2.01 gpt Au (142,000 contained ounces), using a cutoff grade of 0.5 gpt Au.
Summary of Work and Results The Company's 2009 acquisition of the Brewery Creek Project presented two immediate targets for potential resource development: pursuit of potential for expansion on the un-mined, near-surface oxide gold mineralization; and exploration of the as-yet largely untapped deeper sulphide gold mineralization. The latter has only recently been targeted for further exploration; Diment and Simpson's 2009 technical report states that while the regional structural model for Brewery Creek offers potential for the discovery of higher grade sulphide deposits, the depth of drilling to date has been inadequate in testing this model (see Diment and Simpson, 2009). The Company acquired the Brewery Creek property in June 2009 and during that year carried out a thirty hole diamond drilling program on the Pacific, North Slope, Blue, Foster, and South Foster zones. The 2009 program mainly targeted deeper sulphide mineralization similar to that found at Donlin Creek, Alaska (see drill results reported in the news releases dated October 15, 2009; December 10, 2009; and January 27, 2010). In 2010, the Company conducted three drilling phases of exploration on the Property: i. Diamond drilling program totalling 1,416.10 m in six HQ-size oriented core holes, In Q1-2011 the Company completed a twenty-five hole drill program, focusing on expanding mineralization at the Bohemian Zone and testing the newly discovered Schooner Zone. This program resulted in the delineation of a strongly mineralized east-northeast striking corridor at Bohemian that has a minimum strike length of 250 m and an average width in excess of 25 m. The zone is open along strike in both directions and at depth. It is thought that the strong mineralization encountered at Schooner approximately 250 m east of the last Bohemian hole may represent the extension of the Bohemian Zone. To date in 2011, the Company has completed more than 240 drill holes at Brewery Creek, totalling over 38,000 m. Drilling has been concentrated on delineating the two 2011 discoveries at the Bohemian‐Schooner and Sleeman Zones, with significant additional drilling on the North Slope and Classic Zones, as well as the newly identified Ice Fog Zone. Results are still pending for over 100 core and RC holes. Year‐round drilling continues at Brewery Creek, with 3 core rigs and one RC rig presently operating on site. Resource modeling in support of an updated resource estimate is well underway. The Company plans to initiate an updated resource calculation in Q1-2012. The 2010 drill results for the Brewery Creek project were initially reported in Golden Predator news releases dated August 27, September 10, and December 8, 2010. The 2011 drill results were initially reported in Golden Predator news release dated March 24, 2011. Highlights from the reported 2010 and 2011 drill results are presented in Table below. Further drill results are reported within the companies news releases in 2011.
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