EX-99.1 2 blackwatertechrep.htm TECHNICAL REPORT BLACKWATER GOLD PROJECT blackwatertechrep.htm
Exhibit 99.1
 
TECHNICAL REPORT
BLACKWATER GOLD PROJECT
Omineca Mining Division
British Columbia, Canada

 
Prepared for
 
New Gold Inc.
3110 – 666 Burrard Street,
Vancouver, BC V6C 2X8

And

Silver Quest Resources Ltd.
Suite 1410, 650 West Georgia Street
Vancouver BC V6B 4N8
 
 
 
Effective Date: September 19, 2011
Report Date: November 2, 2011


Ronald G. Simpson, P.Geo
GeoSim Services Inc.
1975 Stephens St.
Vancouver, BC, Canada V6K 4M7
Tel:           (604) 803-7470
Email: rgs@uniserve.com

 
 
 
TECHNICAL REPORT - BLACKWATER GOLD PROJECT


 

 
 

 
 

 
 

 
 

 
 

 
 
Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources
 
 
This technical report uses the terms 'measured resources', 'indicated resources' and 'inferred resources'. New Gold advises United States investors that while these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the United States Securities and Exchange Commission does not recognize them. United States investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for a Preliminary Assessment as defined under 43-101. United States investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.
 

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DATE AND SIGNATURE PAGE
 
 
The effective date of this Technical report, entitled “Technical Report, Blackwater Gold Project” is September 19, 2011.
 
 

 
 

 
 

 
 
“Ronald G. Simpson”
 
 
___________________________________
 
 
Ronald G. Simpson, P.Geo.
 
 
Date: November 2, 2011
 

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TABLE OF CONTENTS

1       EXECUTIVE SUMMARY
7
1.1
Introduction
7
1.2
Geology and Mineralization
7
1.3
Project History
7
1.4
Drill Hole and Assay Database
8
1.5
Metallurgical Testing
8
1.6
Mineral Resources and Mineral Reserves
9
2       Introduction and Terms of Reference
11
2.1
Introduction
11
2.2
Terms of Reference
11
3       RELIANCE ON OTHER EXPERTS
11
4       PROPERTY DESCRIPTION AND LOCATION
11
4.1
Location
11
4.2
Mineral Rights
12
4.3
Surface Rights
15
4.4
Nature and Extent of Issuer’s Title
15
4.5
Permits & Environmental Liabilities
16
5       Accessibility, Climate, Infrastructure and Physiography
16
5.1
Accessibility
16
5.2
Local Resources Infrastructure
17
5.3
Physiography
17
5.4
Climate
17
6       HISTORY
17
7       GEOLOGICAL SETTING AND MINERALIZATION
18
7.1
Regional Geology
18
7.2
Local and Property Geology
21
7.3
MINERALIZATION
23
8       DEPOSIT TYPE
27
9       EXPLORATION
29
9.1
Geophysical Surveys
29
10       DRILLING
30
10.1
Historic Drilling
31
10.2
Recent Drilling Aug 2009 – July 2011
34
10.3
Sampling Method and Approach
47
11       SAMPLE PREPARATION, ANALYSES AND SECURITY
48
11.1
Historic Drilling
49
11.2
Standards
49
11.3
Duplicate Samples
50
11.4
Blanks
54
11.5
Conclusions
54
12           DATA VERIFICATION
54
12.1
Site Visit
54
13       MINERAL PROCESSING AND METALLURGICAL TESTING
55
14       MINERAL RESOURCE ESTIMATE
56
14.1
Exploratory Data Analysis
56
14.2
Outlier Analysis
58
14.3
Deposit Modeling
59
14.4
Compositing
61
14.5
Density
61

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14.6
Variogram Analysis
62
14.7
Block Model and Grade Estimation Procedures
62
14.8
Mineral Resource Classification
69
14.9
Model Validation
71
14.10
Mineral Resource Summary
73
15       ADJACENT PROPERTIES
75
16       OTHER RELEVANT DATA AND INFORMATION
75
17       INTERPRETATION AND CONCLUSIONS
76
18       RECOMMENDATIONS
77
19       REFERENCES
78



LIST OF TABLES

Table 1-1
Mineral resource summary
9
Table 4-1
Blackwater Mineral Tenure Status
13
Table 6-1
Project work history
18
Table 7-1
Drill database lithologic codes
23
Table 10-1
Core drilling summary to July 2011
30
Table 10-2
Historic drilling summary
31
Table 10-3
Historic drilling - significant intercepts
33
Table 10-4
2009-2011 drill hole summary
34
Table 10-5
Significant intercepts 2009 drilling
38
Table 10-6
Significant intercepts 2010 drilling
39
Table 10-7
Significant intercepts 2011 drilling
43
Table 11-1
Certified reference standard values
49
Table 11-2
Field duplicate statistics
50
Table 11-3
Pulp duplicate recheck statistics
52
Table 12-1
 Assay results from samples collected during site 2010 visit
54
Table 14-1
Sample statistics
57
Table 14-2
 Block model lithologic codes
60
Table 14-3
Composite statistics
61
Table 14-4
Bulk density statistics for modeled lithologies
62
Table 14-5
Semi-variogram model parameters
62
Table 14-6
Block model parameters
62
Table 14-7
Grade model search parameters
63
Table 14-8
Global mean grade comparison
71
Table 14-9
Blackwater Gold Project mineral resource summary
73
Table 14-10
Mineral resource breakdown by area
74
Table 18-1
2012 Blackwater Proposed PEA Budget
77
     
     

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LIST OF FIGURES
 
Figure 4-1
Location map
12
Figure 4-2
Mineral claim map
13
Figure 7-1
Regional geology
20
Figure 7-2
Property geology
21
Figure 7-3
Lithogeochemistry plots
26
Figure 7-4
Alteration assemblages
27
Figure 8-1
Cross section of conceptual model
28
Figure 9-1
IP Chargeability - 2010 Quantec survey
29
Figure 9-2
 N-S section chargeability data near centre of the mineralized zone
30
Figure 10-1
Drill hole plan
38
Figure 11-1
Scatterplot of field duplicate results (2009-2011)
51
Figure 11-2
T-H plot for field duplicates
52
Figure 11-3
Pulp recheck scatterplots
53
Figure 11-4
T-H plot for pulp duplicates
53
Figure 14-1
Frequency distribution of Au
56
Figure 14-2
Frequency distribution of Ag
57
Figure 14-3
Scatterplot of Au vs Ag sample data
57
Figure 14-4
Cumulative log probability plots for Au and Ag
58
Figure 14-5
Box plots of Au distribution by major lithology
59
Figure 14-6
Block lithology on section 5892800N
60
Figure 14-7
Weathering profile on section 5892800N
61
Figure 14-8
Frequency distribution of Au grades in block model
63
Figure 14-9
Frequency distribution of Ag grades in block model
63
Figure 14-10
Au block grade distribution – Section 5892800N
64
Figure 14-11
Ag block grade distribution – Section 5892800N
64
Figure 14-12
Au block grade distribution – Section 5892850N
65
Figure 14-13
Ag block grade distribution – Section 5892850N
65
Figure 14-14
Au block grade distribution – Section 5892950N
66
Figure 14-15
Ag block grade distribution – Section 5892950N
66
Figure 14-16
Au block grade distribution and claim boundaries - plan view
67
Figure 14-17
Perspective view of block model Au grades
68
Figure 14-18
Perspective view of block model Ag grades
69
Figure 14-19
 Block classification - Plan view
71
Figure 14-20
Swath plot (E-W) at 5892800-2830 North
72
Figure 14-21
Swath plot (N-S) at 375570-5600 East
72
Figure 14-22
Swath plot by elevation at 375300 East
73
 


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1           EXECUTIVE SUMMARY
 
This technical report on the Blackwater Gold Project dated September 19, 2011 has been prepared by Geosim Services Inc. (“Geosim”) at the request of New Gold Inc. (“New Gold” or the “Corporation”), which has an office in Vancouver B.C., Canada.  The report was written in compliance with disclosure and reporting requirements set forth in the Canadian Securities Administrators’ National Instrument 43-101, Companion Policy 43-101CP, and Form 43-101F1. In general, the information in this report is current as of September 19, 2011.  An updated mineral resource estimate is provided based upon the current geological interpretation and exploration results obtained as of the effective date.
 
1.1           Introduction
 
The Blackwater Gold Project is on the northern flanks of Mt. Davidson in the Nechako Plateau approximately 110 km southwest of the town of Vanderhoof.  Richfield Ventures Corp. (“Richfield”) acquired the property through option agreements with Silver Quest Resources Inc. (“Silver Quest”) and from private individuals in early 2009.  On June 1, 2011 New Gold acquired all of the issued and outstanding common shares of Richfield pursuant to a court approved plan of arrangement, and Richfield ceased trading on the TSX Venture.
 
Mineral claims presently comprising the Blackwater Gold Project are owned by three parties. 53 of 60 claims are owned 100% by New Gold.  A New Gold subsidiary and Silver Quest operate under a joint venture agreement for the north portion of the claims which are owned 75% by New Gold and 25% by Silver Quest. The other mineral tenures are under option agreement from private individuals. The total area of the Project tenures is 23,670 hectares.
 
1.2
Geology and Mineralization
 
The property is within a structurally raised block termed the Nechako Uplift that juxtaposes older Jurassic arc related rocks (Hazelton and Bowser Lake groups) with younger Eocene extensional related rocks (Ootsa Lake and Endako groups).  This uplift provides a direct window into the volcanic, volcaniclastic, and sedimentary rocks of the Hazelton and Bowser Lake groups.  These stratified rocks are locally intruded by late Cretaceous felsic plutons such as the Capoose batholith. The widespread Eocene Ootsa Lake and Endako groups overlie these older volcanic and intrusive rocks. The entire package is capped by basalts of the Chilcotin Group.
 
1.3
Project History
 
The Blackwater Gold Project area has been actively explored since the discovery of anomalous concentrations of silver, lead, and zinc in silt samples taken from streams draining the Mt. Davidson area in 1973 by Granges Inc. (“Granges”).  Historic work includes soil geochemistry, geophysics (VLF, magnetics and IP), and RC and diamond drilling.
 
Granges completed 37 core holes (4478 m) and 33 RC holes (3400 m) between 1981 and 1994.  In 2005 and 2006 Silver Quest drilled 7 core holes (1333 m).
 
Richfield began exploration drilling on the Project 2009 when the company recognized the bulk gold potential on the property. In March 2009, Richfield optioned the Davidson and
 

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Dave claims from Silver Quest and the Rozek family respectively.  Between September 2009 and June 2011, Richfield completed 134 core holes totaling 44,736 m.
 
On June 1, 2011 New Gold acquired all of the issued and outstanding common shares of Richfield pursuant to a court approved plan of arrangement, and Richfield ceased trading on the TSX Venture.
 
Between June 2011 and July 1 2011, New Gold completed 15 additional core holes totaling 5,773 m. and drilling is still underway at the date of this report.
 
1.4           Drill Hole and Assay Database
 
New Gold’s drill hole and assay database is administered from the Vancouver head office using Maxwell Geoservices products. Access permission for entering and editing data into the database is restricted to the New Gold Corporate Exploration Manager and Database Administrator for the Project. Drill hole data logged in the field is entered into a LogChief database specifically tailored to the Blackwater Gold Project. LogChief validates this data as it is entered, and the final logs are exported and transferred to the database administrator in Vancouver for import to DataShed, the master database. Additional data validation checks are carried out in DataShed and all logs are checked by the administrator.
 
Assay certificates received from EcoTech Labs are delivered in a format specified by New Gold to allow instant import to Datashed.
 
The database is hosted on the New Gold server which runs a RAID 5 configuration to protect the database from any drive failures. The database is backed up after every major data upload and also as part of a weekly backup of the New Gold server.  Backups are stored off site to avoid any loss of data due to physical damage of the drives.
 
1.5           Metallurgical Testing
 
Preliminary metallurgical testing on samples from the Blackwater Gold Project was carried out on composites from three drill holes drilled in 2009. The work was carried out in early 2010 by the Metallurgical Division of Inspectorate Exploration and Mining Services Ltd. in Richmond BC.
 
The samples responded well to direct whole ore cyanidation tests with an average of 92% gold recovery across three tests at different conditions on each composite (9 tests in total). Accessory silver was recovered at an average of 47%.
 
The three composites were also subjected to flotation testing to produce a bulk sulphide concentrate under three different grinding and reagent conditions. The samples also responded well to this test and the best recoveries obtained under one set of test conditions returned an average for the three composites of 94% of the gold and silver reporting to the bulk sulphide concentrate.
 
The composites were also subjected to direct gravity concentration. The samples responded well with the three composites averaging 51% gold recovered into a gravity concentrate.
 
Additional metallurgical test work is in progress.
 

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1.6           Mineral Resources and Mineral Reserves
 
Analytical and lithologic data from 193 core holes (56,320 m) was used to develop the resource model.  However, only analytical data collected since 2009 was used for grade estimation which included 148 drill holes totaling 50,510 m.  Resource estimation was constrained by 3-dimensional solid models developed from geological and analytical data.  Grade estimation was carried out by the inverse distance cubed method using 5 meter downhole drill composites.  Gold grades were capped prior to compositing at 11 g/t within a low grade outer domain based on a 0.25 g/t gold grade shell and at 17 g/t within a higher grade inner domain based on a 0.5 g/t grade shell.  All silver grades were capped at 50 g/t.  Classified blocks were constrained by an optimized pit shell using a gold price of $1200 per ounce.  Block dimensions were 10 by 10 by 10 meters.   The density values assigned to the main lithologies were based on 7,705 bulk density measurements of drill core.
 
At a cut-off grade of 0.4 g/t gold, the Blackwater Gold Project is estimated to contain an indicated mineral resource of 165 million tonnes averaging 1.01 g/t Au and 5.1 g/t Ag.  An additional 39 million tonnes grading 0.94 g/t Au and 4.8 g/t Ag is classified as inferred (Table 1-1).
 
Table 1-1 Mineral resource summary
 
Property
Indicated
Inferred
Tonnes 000's
Grade
Contained Au M oz
Tonnes 000's
Grade
Contained Au M oz
Au g/t
Ag g/t
Au g/t
Ag g/t
Total Blackwater
165,155
1.01
5.1
5.35
38,759
0.94
4.8
1.17
Dave and Jarrit (100% New Gold)
87,226
1.12
6.0
3.13
9,533
1.13
6.5
0.35
Davidson (75% New Gold, 25% Silver Quest
77,929
0.89
4.1
2.22
29,226
0.88
4.2
0.82
Total New Gold
145,673
1.02
5.2
4.79
31,453
0.95
4.9
0.96
 
Conclusions and Recommendations
 
Drilling by Richfield and New Gold since August 2009 has outlined a large, low grade gold-silver deposit that extends at least 1200 meters along its longest dimension in an east-west direction and at least 700 meters in a north-south direction. The thickness of the presently defined zone ranges from 300 to in excess of 400 meters.
 
Results from preliminary metallurgical testing carried out in 2010 showed that the samples responded well to direct whole ore cyanidation tests with an average of 92% gold and 47% silver recovery.  Preliminary flotation tests suggest that up to 94% gold and silver may report to a bulk sulphide concentrate.  Direct gravity concentration tests gave average recoveries of 51% gold.
 
Sample preparation, security and analysis meets or exceeds industry standards and is adequate to support a mineral resource estimate as defined under NI 43-101.  QA/QC with respect to the results received to date for the 2009, 2010 and 2011 exploration programs is acceptable and protocols have been well documented.  The database contains all diamond drill core data collected on the Project to date and has been structured for resource estimation.
 

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At a cut-off grade of 0.4 g/t gold, the Blackwater Gold Project is estimated to contain an indicated mineral resource of 165 million tonnes averaging 1.01 g/t Au and 5.1 g/t Ag.  An additional 39 million tonnes grading 0.94 g/t Au and 4.8 g/t Ag is classified as inferred.
 
A preliminary economic assessment (PEA) is presently in progress.
 
The 2012 Blackwater PEA program will consist predominantly of additional delineation and infill drilling to expand and determine the economic limits of the Blackwater deposit, to better define the principal controls to mineralization and distribution of metal grades, and to further upgrade the mineral resource classification toward the measured and indicated categories. A program involving approximately 140,000 meters of delineation and infill core drilling is recommended. In parallel with the drilling program, a development program involving further metallurgical test work, evaluation of processing methods, engineering studies (e.g: mining methods, geotechnical characterization, site and infrastructure alternatives), and environmental baseline studies is also recommended. A budget for the 2012 PEA program is presented in Table 18-1.
 
Results of the PEA should be used as a basis for making additional detailed recommendations for:
 
·  
Further metallurgical test work
 
·  
Infill and additional definition drilling
 
·  
Geotechnical drilling
 
·  
Site investigation
 
·  
Infrastructure development
 
·  
Environmental baseline studies
 
·  
Mining method evaluation
 
·  
Processing option trade-offs and resource characterization.
 
 

 

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2           Introduction and Terms of Reference
2.1           Introduction
 
New Gold Inc. (“New Gold” or the “Corporation”) requested that Geosim Services Inc. (Geosim) provide an updated Technical Report and mineral resource estimate on the Blackwater Gold Project (the Project), located in the Omineca Mining Division, British Columbia, Canada. A New Gold subsidiary and Silver Quest Resources Ltd. (“Silver Quest”) operate under a joint venture agreement dated February 1, 2011 for the north portion of the Project claims which are owned 75% by New Gold and 25% by Silver Quest.
 
The current work by Geosim entailed the preparation of a Technical Report as defined in NI 43–101 and in compliance with Form 43–101F1 (the “Technical Report”).
 
2.2           Terms of Reference
 
Geosim is independent of New Gold and Silver Quest, and has no beneficial interest in the Blackwater Gold Project.  Fees for this Technical Report are not dependent in whole or in part on any prior or future engagement or understanding resulting from the conclusions of this report.  The Technical Report was requested in connection with the New Gold news release issued on September 19, 2011 announcing updated mineral resource estimate for the Blackwater Gold Project.
 
In preparing this report, the author relied on geological maps, reports and miscellaneous technical data listed in the Section 21 of this report.
 
The author conducted a site visits to the Blackwater Gold Project on December 13, 2010 and on September 8, 2011.  The purpose of the visits was to review the geology and mineralization encountered in the drill holes completed to date.  In addition, drilling, sampling, quality assurance/quality control (QA/QC), sample preparation and analytical protocols and procedures, and database structure were reviewed.
 
The Effective Date of the Technical Report is September 19, 2011.
 
All measurement units used in this report are metric, and currency is expressed in United States dollars unless stated otherwise.
 
3           RELIANCE ON OTHER EXPERTS
 
Geosim has not conducted independent land status evaluations, and has relied upon these statements and updated information from New Gold regarding property status, legal title and environmental compliance for the Project (Sections 4.2 to 4.5), which Geosim believes to be accurate.
 
4           PROPERTY DESCRIPTION AND LOCATION
4.1           Location
 
The Project lies in central British Columbia approximately 112 km southwest of Vanderhoof and 446 km northeast of Vancouver.  The property is centered at 5893000 N and 375400 E and is located in NTS sheet 93F/02 (Figure 4-1).
 

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Figure 4-1 Location map
 
 

4.2           Mineral Rights
 
Mineral claims comprising the Project are owned by three parties. 53 of 60 claims are owned 100% by New Gold. Claims 503050, 509273, 509274, and 509275 are held under a joint venture agreement with Silver Quest and claims 637203, 637205, and 637206 are under option agreement with private individuals (Figure 4-2).  Present claim status is shown in Table 4-1. The total area of the Project tenures is 23,670 hectares.
 


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Figure 4-2 Mineral claim map
 
 
Table 4-1 Blackwater Mineral Tenure
 
Tenure Number
Claim Name
Issue Date
Good To Date
Status
Area (ha)
515810
JARRIT
2005/Jul/01
2011//08
GOOD
348.9620
637203
OZZY
2009//19
2011//19
GOOD
484.4198
637205
BABY JANE
2009//19
2011//19
GOOD
464.5740
637206
DAVID DALE
2009//19
2011//19
GOOD
464.5708
503050
WHITEWATER
2005/Jan/13
2017/Jan/13
GOOD
348.7590
509273
GOT
2005/Mar/19
2016/Mar/19
GOOD
484.4480
509274
got2
2005/Mar/19
2016/Mar/19
GOOD
38.7500
509275
got3
2005/Mar/19
2016/Mar/19
GOOD
19.3750
515809
DAVE
2005/Jul/01
2016/Mar/19
GOOD
581.6040
602167
BWD
2009/Jul/05
2016/Mar/19
GOOD
387.9406
602168
BWD2
2009/Jul/05
2016/Mar/19
GOOD
310.3469
607194
BLACKWATER  2
2009/Jul/08
2016/Mar/19
GOOD
464.8588
607195
BLACKWATER 1
2009/Jul/08
2016/Mar/19
GOOD
348.7434
630903
BW1
2009//09
2016/Mar/19
GOOD
465.3307

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Tenure Number
Claim Name
Issue Date
Good To Date
Status
Area (ha)
630944
BW2
2009//09
2016/Mar/19
GOOD
251.9020
630963
BW3
2009//09
2016/Mar/19
GOOD
465.1538
630983
BW4
2009//09
2016/Mar/19
GOOD
387.2911
630984
BW5
2009//09
2016/Mar/19
GOOD
464.9757
631003
BW6
2009//09
2016/Mar/19
GOOD
484.1406
631024
BW7
2009//09
2016/Mar/19
GOOD
445.4864
631043
BW8
2009//09
2016/Mar/19
GOOD
464.7268
636583
KASSY 1
2009//18
2012/Mar/19
GOOD
464.5292
636603
KASSY 2
2009//18
2012/Mar/19
GOOD
464.2711
636604
KASSY 3
2009//18
2012/Mar/19
GOOD
464.0079
636623
KASSY 4
2009//18
2012/Mar/19
GOOD
463.8179
636643
KASSY 5
2009//18
2012/Mar/19
GOOD
483.3024
636644
KASSY 6
2009//18
2012/Mar/19
GOOD
483.4720
636663
KASSY 7
2009//18
2012/Mar/19
GOOD
290.1782
636683
RIGHT STUFF 1
2009//18
2012/Mar/19
GOOD
464.8647
636684
RIGHT STUFF 2
2009//18
2012/Mar/19
GOOD
464.8675
636703
RIGHT STUFF 3
2009//18
2012/Mar/19
GOOD
464.8687
636723
RIGHT STUFF 4
2009//18
2012/Mar/19
GOOD
464.4490
636724
RIGHT STUFF
2009//18
2012/Mar/19
GOOD
464.6267
636725
RIGHT STUFF 6
2009//18
2012/Mar/19
GOOD
484.1815
636727
RIGHT STUFF 7
2009//18
2012/Mar/19
GOOD
484.4075
636743
RIGHT STUFF 8
2009//18
2012/Mar/19
GOOD
483.8407
636763
RIGHT STUFF 9
2009//18
2012/Mar/19
GOOD
464.8490
636764
RIGHT STUFF 10
2009//18
2012/Mar/19
GOOD
484.5585
636765
RIGHT STUFF 11
2009//18
2012/Mar/19
GOOD
465.1158
636766
RIGHT STUFF 12
2009//18
2012/Mar/19
GOOD
464.7619
636767
RIGHT STUFF 13
2009//18
2012/Mar/19
GOOD
464.4173
642043
BW
2009//27
2011/Jul/01
GOOD
232.5739
642063
BW 2
2009//27
2011/Jul/01
GOOD
232.6623
642064
BW3
2009//27
2011/Jul/01
GOOD
310.3356
642603
TOP LAKE
2009//28
2011/Jul/01
GOOD
174.0916
643323
TOP
2009//29
2011/Jul/01
GOOD
309.4498
834371
DAVIDSON
2010//27
2011//27
GOOD
425.8729
834948
  
2010/Oct/03
2011/Oct/03
GOOD
484.6897
835005
  
2010/Oct/04
2011/Oct/04
GOOD
465.5035
835009
  
2010/Oct/04
2011/Oct/04
GOOD
271.2713
835011
  
2010/Oct/04
2011/Oct/04
GOOD
484.6897
835012
  
2010/Oct/04
2011/Oct/04
GOOD
484.4599
835013
  
2010/Oct/04
2011/Oct/04
GOOD
174.4104
835016
  
2010/Oct/04
2011/Oct/04
GOOD
232.7703

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Tenure Number
Claim Name
Issue Date
Good To Date
Status
Area (ha)
835019
  
2010/Oct/04
2011/Oct/04
GOOD
387.7691
835020
  
2010/Oct/04
2011/Oct/04
GOOD
329.4685
835021
BW WEST
2010/Oct/04
2011/Oct/04
GOOD
387.9372
835022
BW WEST2
2010/Oct/04
2011/Oct/04
GOOD
368.5550
835023
  
2010/Oct/04
2011/Oct/04
GOOD
465.1906
835025
BW WEST2
2010/Oct/04
2011/Oct/04
GOOD
38.7862
 
4.3           Surface Rights
 
No surface rights exist within the Project area. The claims are on Crown land, and the area is open to mineral exploration and development. None of the claims are covered by placer mining claims. The claim area is in the competing areas of interest of several First Nations, including the Lhoosk’uz Dene Nation and Ulkatcho.
 
4.4           Nature and Extent of Issuer’s Title
 
New Gold holds 100% interest in 53 of the 60 tenures listed in Table 4-1. To keep these claims in good standing in accordance with the Mineral Tenure Act a minimum value of work or cash-in-lieu is required annually. These values are currently set at $4 per hectare in the first three years of a tenure and $8 per hectare in the fourth and subsequent years. Below are the details concerning the optioned properties and an NSR agreement on one other claim (tenure number 515809).
 
In March, 2009, Richfield, acquired an option to earn up to a 75% interest in the Davidson Property from Silver Quest.  Richfield had the option to acquire an initial 60% interest in the Davidson Property by making aggregate cash and share payments totaling $90,000 cash and 350,000 shares and incurring an aggregate $1,000,000 in exploration expenditures within three years of TSX-Venture acceptance of the agreement. Richfield completed the requirements to earn its 60% in the Project in 2010. After vesting of the initial 60% interest, Richfield had the option to acquire an additional 15% (total 75%) interest in the Davidson Property by making an additional cash payment of $150,000, issuing 400,000 shares and incurring an additional $500,000 in exploration expenditures on the property in the fourth year. Richfield completed the requirements to earn the additional 15% interest in January 2011. Richfield and Silver Quest then entered into a joint venture agreement dated February 1, 2011 with respect to the Davidson Property.  Following its acquisition of Richfield pursuant to a court approved plan of arrangement, New Gold now owns a 75% interest in the Davidson property.
 
In May, 2009, Richfield acquired an option to earn a 100% interest in the Dave Property (‘Dave Option’ for Mineral Tenure number 515809) from Jane Roderick, Rebekah Antkow, David Rozek, Benjamin Rozek, and John Blackwell (“Dave Optionors”), by making aggregate cash and share payments totaling $185,000 cash and 800,000 shares and incurring an aggregate $625,000 in exploration expenditures within four years of TSX-Venture acceptance of the agreement. The Dave Optionors retain a 2.5% NSR royalty, of which New Gold may purchase 1% for $1,000,000. Richfield has met all of the requirements of the Dave Option agreement and has taken 100% ownership of the Dave Property as of November 29, 2010.
 

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In October, 2009, Richfield acquired an option to earn a 100% interest in the Jarrit Property (“Jarrit Option” for Mineral Tenure number 515810) from Jane Roderick, Rebekah Antkow, David Rozek, and Benjamin Rozek (“Jarrit Optionors”) by making aggregate cash and share payments totaling $180,000 cash and 120,000 shares and incurring an aggregate $400,000 in exploration expenditures within three years of TSX-Venture acceptance of the agreement. The Jarrit Optionors retain a 2% NSR royalty, of which New Gold may purchase 1% for $1,200,000. Richfield has met all of the requirements of the Jarrit Option agreement and took 100% ownership of the Jarrit property as of March 16, 2011.
 
In January, 2011, Richfield acquired an option to earn a 100% interest in 3 mineral tenures (“JR Option” for Mineral Tenures 637203, 637205, and 637206) from Jane Roderick, Rebekah Antkow, David Rozek, and Benjamin Rozek (“JR Optionors”), by making cash payments totaling $75,000 cash and incurring an aggregate $600,000 in exploration expenditures within two years of TSX-Venture acceptance of the agreement. The JR Optionors retain a 3% NSR royalty, of which New Gold may purchase 2% for $1,000,000.
 
On June 1, 2011 New Gold acquired all of the issued and outstanding common shares of Richfield pursuant to a court approved plan of arrangement, and Richfield ceased trading on the TSX Venture. Richfield is now a wholly owned subsidiary of New Gold.
 
4.5           Permits & Environmental Liabilities
 
All of the Blackwater Gold Project mineral claims are located on Crown land, and the area is open to mineral exploration and development. None of the claims are covered by placer mining claims. The claim area is in area of interest of several First Nations, namely the Lhoosk’uz Dene Nation and Ulkatcho.
 
The Project area is being actively logged to remove trees killed by the mountain-pine-beetle infestation and logging roads are extensive and in heavy use.
 
To perform the exploration work that will cause a physical disturbance, New Gold must first file, and receive approval of, a Notice of Work and Reclamation as required by Section 10 of the Mines Act of the Province of British Columbia. New Gold currently holds Notice of Work and Reclamation No. MX-13-177 which expires on December 31, 2012.
 
5           Accessibility, Climate, Infrastructure and Physiography
5.1           Accessibility
 
The Project is readily accessible by vehicle from the Kluskus-Ootsa forest service road originating south of Vanderhoof.  At kilometer 146.5 along this road an 18 km mine road built in 1986 by Granges and improved by Richfield provides direct easterly access to the property and camp location.  Driving time from Vanderhoof to the property is roughly 2.5 hours and vehicles should be radio equipped.
 
Additional road construction and continuation of the mine road from camp in 1991 provides further access to the PEM grid and additional historic drill setups.  Helicopter access is from bases in Vanderhoof, Quesnel, or Prince George.
 

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5.2           Local Resources Infrastructure
 
The area is very sparsely inhabited; three ranches are found within a 20 km radius. Services are available in Vanderhoof, a two and a half hour drive away. Prince George is the regional hub with air service from major centres.
 
5.3           Physiography
 
The Project is located within the Nechako Plateau, the northernmost region of the Interior Plateau physiographic province.  The area is characterized by rolling north to northwest trending hills cut by small to medium sized drainages.  The Project is located on the northern flank of Mt. Davidson with its peak at 1860 m.  Elevations on the property range from 1490 to 1820 meters; most current work is focused between 1520 and 1620 meters.  An extensive veneer of glacial debris covers the Project area and bedrock exposures are rare and generally restricted to higher elevations. On the ridge of Mt. Davidson outcrop is spotty although there is plenty of broken rock indicating shallow depth to bedrock.
 
Vegetation in the Project area is balsam fir and white spruce with lodgepole pine.   At higher elevations vegetation is less dense and dominated by subalpine fir and whitebark pine.  Tree line is about 1600meters.
 
5.4           Climate
 
Climate is characterized by brief warm summers and long cold winters.  The area receives on average 33 cm of precipitation yearly and temperatures range from a minimum of -40°C in winter to a maximum of 32°C in summer.   Snowfall can attain 2 meters at higher elevations.   The exploration period is between mid-June and late October.  Year round diamond drilling is possible given a suitable supply of water and a winterized camp.
 
6           HISTORY
 
The property was discovered in 1973 during a regional silt geochemical survey which located anomalous zinc and other metals in stream sediment east and north of the property. Between 1973 and 1985 a range of ground and airborne geophysical and geochemical surveys were conducted to locate and delimit mineralization. The nature and volume of the work is detailed in Table 6-1. Drilling began in 1985 and was concentrated between 1986 and 1994 with a total of 6300 meters completed during this period. A further 1332.6 meters of drilling was completed in the winter of 2005-06. The focus of the work during this period was on high grade vein targets which, at the time, were the only known gold targets in the Nechako Plateau
 
Richfield’s work on the Project began in 2009 when the company recognized the bulk gold potential on the property. In 2009, Richfield optioned the Davidson property from Silver Quest and the Dave and Jarrit claims from the Rozek family. Richfield subsequently completed all of the earn-in requirements for these agreements resulting in it holding a 75% interest in the Davidson property and 100% interests in each of the Dave and Jarrit properties. In June 2011, New Gold acquired all of the issued and outstanding common shares of Richfield pursuant to a court approved plan of arrangement.
 

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Table 6-1 Project work history
Year
Period
Work
1973
Summer
Regional silt survey located anomalous silver, zinc, and lead in the Mt. Davidson area.  This was followed by a wide spaced soil survey northeast of Mt. Davidson.
1976
September
Soil sample and ground magnetometer surveys follow up of 1973 soil results.
1977
March
Pulse EM survey on the Pem claim.
1979
Nov. to Dec.
Vector Pulse EM survey on the Pem claim.
1981
February
Helicopter EM and magnetometer survey.
1981
August
Horizontal Loop EM survey on the Deb #1 claim.
1981
November
Reconnaissance mapping of the Mt. Davidson area.
1982
July
Soil sample and ground magnetometer surveys on the Pem claim.
1983
July
Hammer seismic survey.
1984
September
Hand trenching and VLF survey on the Pem claim.
1985
Aug. to Sept.
Winkie drilling (507.02m) on the Pem claim. Holes Dav 1-8.
1986
July to Aug.
Construction of access road.
1986
September
Percussion drilling (1524 m) on the Pem claim. RC 1-34.
1987
July to Nov.
Diamond drilling (2724.61 m) on the Pem claim. Holes Dav 9-31.
1992
July to Aug.
Soil sampling, stream silt sampling, geological mapping, IP, mag, VLF surveys and diamond drilling of five (785.47 m). Drill holes BD92-32 to BD92-36.
1994
Summer
Diamond drilling (759.36 m). Holes DAV 94-37 to DAV 94-41.
1997
June to Aug.
Linecutting and an Induced Polarization survey.
2005
Sept. to Oct.
Diamond drilling (938.65 m). Holes DAV05-01 to DAV05-05.
2006
September
Diamond drilling (393.97 m). Holes DAV06-06 and DAV06-07.
2007
June to July
Soil sampling program, 335 samples.
2010
Sept - Dec
Diamond drilling (21337.03 m). Holes BW0042 BW0116
2011
Jan - Sept
Diamond drilling (30469.24 m). Holes BW0117 to BW0199 and  BWMET01 to BWMET04.
 
7           GEOLOGICAL SETTING AND MINERALIZATION
7.1           Regional Geology
 
The Project is underlain by rocks of the Stikine Terrane within an uplifted block termed the Nechako uplift. The Nechako Plateau is an area of moderate relief between the Skeena Arch, and the Stikine and Cache Creek Terrane contact.
 
The southern Nechako Plateau near the Blackwater property is underlain by Late Triassic to Middle Jurassic island and continental arc assemblages and epicontinental sedimentary strata (Diakow et al. 1997).  Near the Project, the volcaniclastic Hazelton Group represents the Stikine Terrane (Diakow and Levson 1997).  The Hazelton Group has a lower unit of felsic tuffs and sediments, named the Entiako Formation and an upper unit of felsic to mafic volcanic flows and volcaniclastic and sedimentary rocks, termed the Naglico Formation (Diakow and Levson 1997).  Rocks of the Stikine Terrane in the southern Nechako Plateau
 

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are overlain by post-accretion Upper Jurassic volcaniclastic, sedimentary and mafic to felsic volcanic rocks of the Bower Lake Group (Diakow and Levson 1997).  The Hazelton and Bowser Lake groups in the area are collectively intruded by Late Cretaceous granitic to granodioritic plutons (e.g., Capoose batholith) exposed within the Nechako uplift.
 
Rocks of the Hazelton and Bowser Lake groups are overlain by Upper Cretaceous and Paleocene continental volcanic arc intermediate volcanic rocks and related sedimentary rocks of the Kasalka Group (Diakow et al. 1997).  The Kasalka Group is a rock unit which occurs locally south of Natalkuz fault. Widespread Eocene volcanic arc related extensional felsic volcanic rocks and minor sedimentary rocks of the Ootsa Lake Group overlie the older rocks and are themselves overlain on higher ridges by basalt and andesite of the Eocene Endako Group (Diakow et al. 1997).
 
The Bowser Lake Group is poorly exposed in the southern Nechako Plateau, except within Nechako uplift.  Nechako uplift is a structurally raised block bounded by the Natalkuz fault to the north and the Blackwater fault to the south (Diakow and Webster, 1994). Both faults juxtapose older rocks of the Stikine Terrane (e.g., Hazelton and Bowser Lake groups) with younger Cretaceous and Eocene rocks of the Ootsa Lake and Endako groups. This uplift provides a direct window through younger cover into older rocks (Diakow et al. 1997).The regional geologic setting is illustrated in Figure 7-1.
 

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Figure 7-1 Regional geology
 

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7.2           Local and Property Geology
 
Quaternary glacial overburden, colluvial and fluvial deposits mask the majority of bedrock within the Project area. Outcrop on the Blackwater property is sparse and limited to the peak and ridges of Mt. Davidson. Property geology is based on historic and 2009/2010 drill core interpretations. Figure 7-2 presents a sketch map of the Project geology.  Interpreted geology is overlain on the regional geology as mapped by Diakow and Levson. The coloured area represents the gold gram*meter interpretation of mineralization as known on Feb 5, 2011.
 
 
Figure 7-2 Property geology
 
 
The Project is underlain by intercalated volcanic and volcaniclastic felsic to intermediate lapilli and ash tuff, volcanic breccia, and andesitic flows.  These strata form a local wedge of laterally discontinuous strata. The Blackwater wedge is thought to dip generally northwest and is of limited aerial extent.  On the west the Blackwater wedge is faulted against younger massive felsic volcanic rocks of the Ootsa Lake Group. The fault is a north trending, presumed steep dipping structure. A similar relationship exists on the north side where Blackwater host rocks are also juxtaposed next to Ootsa Lake Group strata across an east-northeast trending fault. Although displacement across the faults is not known, the relative age of rocks across the two faults implies that the Blackwater block is a horst or high standing remnant west and north of which the Ootsa Lake Group has been dropped.
 

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East and south of the Blackwater block the relationship to the country rocks is unknown but presumed stratigraphic. Likely the Blackwater strata are underlain by Bowser Lake Group beds as at Capoose Lake.
 
The Blackwater wedge includes felsic to intermediate volcaniclastic rocks that comprise two suites, massive grey and white heterolithic breccia and massive dacite-andesite lapilli tuff.  The heterolithic breccia is characterized by subrounded dark grey dacitic-andesitic clasts and near-white rhyolite and siliceous clasts.  Clasts range to 20 cm, but are generally one to five cm across. The volcanic clasts are extremely fine grained massive and presumed to be felsic to intermediate composition based on colour and limited chemical data from historic work. The heterolithic breccia is mostly matrix supported and layering is absent. The heterolithic breccia matrix is very fine grained and is interpreted to consist of devitrified ash or recrystallized glass. Dark reddish-brown anhedral equant, garnet crystal fragments up to a cm in diameter are seen as an accessory in the heterolithic breccia and locally make up 1-2% of the rock. XRF data on the garnets indicates they are Mn-rich spessartine.
 
The dacite-andesite tuff is massive and characterized by its dark grey angular dacite-andesite lapilli in a dark grey very fine grained matrix of similar composition. Lapilli are up to 15 cm across, angular and not rounded; the rock is mainly clast supported. The dacite-andesite tuff fragments locally have oval quartz filled amygdules to 5 mm across and rarely pale grey to white subhedral short stubby plagioclase lath ghosts to 5 mm long. The dacite-andesite tuff grades to dacite-andesite without fragments. This rock unit may be subvolcanic or subaerial but lacks evidence of surface reworking.
 
Strata within the Blackwater wedge are laterally discontinuous over short distances. In sections it is impossible to trace units between drill holes even where holes are only 50 meters apart. A general stratigraphic sequence for the Blackwater wedge remains elusive; the dacite-andesite is generally below the lapilli tuff and felsic volcanic rocks.
 
Blackwater rocks are pervasively hydrofractured and silicified. Rocks are broken into small (2 mm to 10 cm) highly angular fragments. The fragments are “welded” together by very fine grained light to medium grey chalcedonic silica which fills the space between fragments. Examples of repeated hydrofracturing and silicification are common implying that this was a protracted process. The space generated by hydrofracturing varies widely even over distances of a few centimeters. Thus in one place the angular fragments almost fit together with only narrow cracks arating them. Centimeters away similar angular fragments have wider zones of siliceous cement between them. The amount of silica introduced through hydrofracturing and silicification may amount to 25% or more of the total volume of volcanic rocks. Hydrofracturing was driven by fluid overpressure of late magmatic and/or post magmatic fluid related to the volcanism. Silica between the fragments is thought to derive from the same fluid and to have been deposited as a result of sudden sharp fluid pressure decrease as a result of and immediately following hydrofracturing.
 
Although intensely hydrofractured, the Blackwater wedge lacks clearly recognizable large scale faults or shear zones. Instead, extensive zones of broken rocks are seen in the mineralized zone. Rocks are broken into angular pieces a centimeter or more across and tightly packed but not cemented. Space between fragments may be occupied by a few tiny terminated clear quartz crystals but generally it is empty. The zones grade laterally into unbroken rock and are generally not bounded by planar surfaces. Fragment strain ratios are 1:1 and planar surfaces such as joints, slickensides or fabric are lacking. Evidence for displacement across these broken sections is generally lacking and they appear to be
 

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simply broken zones. The shape of broken zones is highly irregular. The volume of broken rocks may amount to 15% of the volume of the Blackwater wedge. Broken zones are interpreted as late stage hydrofactured zones when little silica remained in the fluid to cement fragments and/or when the system was close enough to surface to allow fluid escape.
 
The minimum age of Blackwater volcanic rocks is inferred from a concordant U-Pb zircon age of 67 Ma from a felsic dyke sampled from historic drill hole 92-35 (Friedman et al. 2001) and from two K-Ar ages of 70.2 and 68.1 Ma on related rocks.  These authors interpret that the ages represent the age of felsic magmatism and, more importantly, the age of precious metal mineralization. This age falls within the mineralization age bracket of 74-66 Ma for the Capoose prospect located approximately 30 kilometers to the northwest of the Project.  This age is suspect because it is unclear from current evidence what was sampled to obtain these results. However, if this age does define the age of mineralization the Blackwater and the Capoose properties likely represent mineralization associated with the waning stages of Bulkley suite magmatism (Friedman et al. 2001); volcanism and mineralization can be correlated with the Kasalka Group.
 
On the peak and ridges of Mt. Davidson are outcrops of massive felsic lapilli tuff assigned to the Ootsa Lake Group. This rock is generally darker grey than rocks drilled on the property, clasts are larger and plagioclase porphyry dominates. This unit is also characterized by fresh, black stubby euhedral doubly terminated quartz crystals up to 1 mm across which commonly make up a few percent of the rock.
 
At lower elevations near the Kluskus Road, bedded tuffs and sediments of the Jurassic Naglico Formation are observed.
 
The modified lithologic codes used in the Blackwater drill database as of August, 2011 are presented in Table 7-1.
 
Table 7-1 Drill database lithologic codes
Code
Description
OB
Overburden
AND
Andesite
LTFF
Heterolithic Breccia
SIL 5
Siliceous breccia/microbreccia
SED
Argillite / Sandstone / Conglomerate
RHY
Rhyolite
 
7.3           MINERALIZATION
 
A total of 21 polished thin sections were prepared from samples taken from 2009 drill core and submitted to Vancouver Petrographics Ltd.  The sections were analyzed by reflected and transmitted light petrographic methods.  Sample selection was based primarily on gaining a representative suite containing; 1) the dominant lithologies and alteration assemblages described and used in core logging and, 2) all the different styles of sulphide mineralization observed with different gold grades. The purpose of this study was to understand the nature of the host volcanic and volcaniclastic sequence and the nature of gold and base metal mineralization.  This study was ultimately intended to assist with lithologic correlation between drill holes.
 

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A second petrographic study of 21 drill core samples from 2010 drilling was carried out by Vancouver Petrographics Ltd who reported as follows:
 
“The samples submitted can be subdivided into five different suites. The first suite of samples are volcaniclastic lithologies and the nomenclature used in this report follows the suggestions reported in McPhie et. al. (1993). The components of the deposits are generally poorly sorted, polymict lithic fragments with a grain-size ranging from mudstone to breccia. Only sample 20 showed evidence of volcanic derived lithic fragments, such as microstructural evidence of the compaction of the lithic fragments under high temperature conditions and possibly devitrified spherulites. In the same sample, the coexistence of rounded and angular fragments indicates syn-eruptive re-sedimentation of primary deposits.
 
The second group of samples show a more intense alteration and they are possibly the altered equivalent of the volcaniclastic lithologies described above. Alteration products include clay, quartz and white mica, albite, chlorite and tourmaline
 
The third group of samples show flow microstructures and a possibly rhyo-dacitic composition.
 
The fourth group are porphyritic andesites with differing alteration products. One sample is altered by a biotite-white mica-quartz-pyrrhotite-chalcopyrite-sphalerite assemblage and another sample is altered by a weak to subtle clay alteration.”
 
Material from BW 59 was tested by Inspectorate Labs Metallurgical Division which reported that:
 
“The principle (sic) minerals observed in the BW-59 Drill Hole Composite were non-opaque phases (90.02% average by optical analysis), which X-ray diffraction analysis indicates consist primarily of quartz (39.1% average), micas (27.9% average), orthoclase (17.0% average), clays (8.3% average), and minor calcium sulfates (1.8% average) and carbonates (0.5% average). The divergence in agreement between optical and XRD analysis is due mainly to the inability of XRD to detect amorphous limonite and subsequent overstating of the remnant phases; XRD analysis reflects only those components that are crystalline. Pyrite (3.96% average), iron oxides (limonite, hematite, magnetite and goethite, 3.88% average) and pyrrhotite (1.14% average) were the principle opaque phases. Ore minerals included sphalerite (0.77% average), chalcopyrite (0.23% average), cubanite (0.03% average), and traces of tetrahedrite, chalcocite and dioptase. Chalcopyrite and cubanite were occasionally tightly intergrown. Sphalerite rarely alters to bianchite. Principle other minerals included tetrahedrite, chalcocite, dioptase, rutile and ilmenite (traces of each), with a few particles of graphite observed. Dioptase and bianchite are only partially observable by reflected light microscopy, and a transmitted light study would better quantify their presence.”
 

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Twenty-one samples were submitted to Eco Tech labs in 2009 for whole rock lithogeochemical analyses.  The aim of this study was to constrain the geochemical fingerprint of the host volcanic rocks by providing insight into the tectonic affinity, geochemical classification, and petrological evolution.  Sample selection was primarily based on gaining a representative suite of volcanic rock types observed during the 2009 drill program.  Below is a brief summary of an internal report that details the results of the lithogeochemistry study.
 
Owing to the intensity of silica and clay alteration only immobile trace elements (e.g., Ti, Y, Nb, Th, Zr etc) are used for volcanic rock classification and geochemical modeling.  For example, the classic TAS diagram plots Blackwater rocks as andesite, dacites, and rhyolites because of increasing SiO2 concentrations.  On the basis of lithologic observation we know that SiO2 is largely secondary therefore discriminating on the basis of SiO2 is highly suspect. Blackwater volcanic rocks are geochemically classified as andesites on the basis of a revised Zr/TiO2 vs. Nb/Y plot (Figure 7-3) using only immobile elements. The trend observed in the TAS diagram is likely a result of silica alteration.  On a chondrite normalized REE (rare earth element) spider diagram (Figure 7-3) a pronounced negative Eu anomaly is observed in most samples and indicates that feldspar was conserved during melting and resides in the source.  This has implications for the mineralogy of the source and therefore the potential of a feldspar porphyritic source is plausible.  Also, the fractionated pattern observed in the plot (e.g., depletion of heavy REEs to light REEs) is indicative of garnet residing is the source as heavy REEs preferentially reside in garnet during partial melting.  Garnet is commonly observed as clasts in Blackwater volcaniclastic rocks and based on geochemistry it is likely that they originated from the source.  The commonly used tectonic discrimination diagrams for felsic volcanic rocks (e.g. Figure 7-3; Rb vs. Y+Nb diagram) plot Blackwater rocks as volcanic arc related.  These diagrams have little use for distinguishing volcanic rocks in this area as all volcanic rocks of Jurassic to Eocene age have an arc affinity (Diakow et al. 1997).  Furthermore, there has been little geochemistry published in literature on volcanic rocks in the Nechako Plateau therefore distinguishing between Jurassic and Cretaceous/Eocene volcanism on the basis of this limited geochemistry is not presently attempted.
 
In a plot of Au vs. SiO2 (Figure 7-3) it is observed that rocks with the highest SiO2 content are not necessarily correlated with higher gold content.  The samples that yielded the highest gold assays are mostly confined to SiO2 concentrations of 63.5-66%.  This indicates that gold precipitation is likely associated with hydrothermal alteration but not necessarily restricted to the most intense phase of alteration.  This implies that the primary target at Blackwater is also proximal to the siliceous pipes where the intensity of silica alteration is somewhat weaker.
 

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Figure 7-3 Lithogeochemistry plots
 
Alteration assemblages at Blackwater indicate neutral pH fluid at mesothermal temperatures as illustrated in Figure 7-4. Sampling for this work was done by Andre Panteleyev in 2009 and the PIMA work was done by Kim Heberlein. The diagram is after Corbett and Leach (1997)
 

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Figure 7-4 Alteration assemblages
 
 
8           DEPOSIT TYPE
 
What is known of the Blackwater deposit is exclusively from drilling. Host rocks are not exposed but are thought to occupy a roughly 5 square kilometer area east of a north trending fault which juxtaposes younger Ootsa Lake Group strata and south of a similar fault north of which the same relationship is hypothesized.
 
Blackwater has the characteristics of, and is considered to be, a low sulphidation epithermal gold-silver deposit. Mineralization occurs in stratigraphically chaotic volcanic rocks of Late Cretaceous age emplaced through and on Hazelton Group strata. The rocks are extensively hydrofractured and silicified and in association with pervasive stockwork and disseminate fine grained pyrite and other sulphide minerals distributed throughout. Gold is mainly associated with the sulphide minerals as gold grains between 5 and 50 microns across.
 

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Figure 8-1 illustrates the hypothesized relationship of the mineralized volcanic rocks to surrounding strata.
 
Figure 8-1 Cross section of conceptual model
 
 

 

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9           EXPLORATION
 
The Project was discovered in 1973. Since then a wealth of data has been collected on the property by the various operators. These data are publicly available where filed for assessment. For example, complete soil geochemical data were collected over the property. Ground total magnetic field data were also collected. A pole-dipole IP survey was carried out as part of the pre Richfield work. These data have been digitized, synthesized and reinterpreted and are used to help guide the current work on the property.
 
9.1           Geophysical Surveys
 
During 2010 Richfield contracted Quantec Geoscience Ltd of Toronto to conduct a 17.5 line kilometer deep focus Induced Polarization (‘IP’)-Resistivity survey on five 3.5 km long north-south lines spaced 400 meter apart. Results of the survey have been reported and interpreted in terms of drill data. Excellent correspondence is seen between IP chargeability and known mineralization and the IP data helps guide the drilling.
 
Figure 9-1 is a view looking northwest across the IP survey area showing chargeability variation across the Project.  Figure 9-2 is a plot of the chargeability data through the centre of the mineralized zone.  The high near-surface zone between 2500 and 3500N coincides with the gold mineralization.
 
Figure 9-1 IP Chargeability - 2010 Quantec survey
 

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Figure 9-2 N-S section chargeability data near centre of the mineralized zone
 
 

10         DRILLING
 
A total of 193 core holes (56,320 m) have been drilled in the Project area between 1985 and the end of June 2011.  The details of the programs are summarized in Table 10-1.
 
Table 10-1 Core drilling summary to July 2011
Series
Year
Company
Holes Drilled
Total meters
Comments
Intervals Assayed
Meters Assayed
DAV 3 TO DAV 8
1981
Granges
4
310.86
no assays
NA
NA
DAV 9 TO DAV 31
1987
Granges
23
2,617.13
  
1,656
2,080.53
BD 92-32 TO BD 92-36
1992
Granges
5
788.50
  
425
571.76
DAV 94-37 TO DAV 94-41
1994
Granges
5
761.68
  
370
368.75
 
Subtotal
Granges
37
4,478.17
  
2,451
3,021.04
               
DAV 05-01 TO DAV 05-05
2005
SQI
5
938.65
  
335
674.60
DAV 06-06 TO DAV 06-07
2006
SQI
2
393.97
  
137
273.99
 
Subtotal
SQI
7
1,332.62
  
472
948.59
               
BW0042 TO BW0059
2009
RVC
18
3,664.95
  
3,408
3,413.62
BW0060 TO BW0116
2010
RVC
57
21,337.03
  
20,034
20,219.03
BW0117 TO BW0175
2011
RVC
59
19,733.74
  
18,243
18,840.35
 
Subtotal
RVC
134
44,735.72
  
41685
42,473.00
BW0176 TO BW0186 +Met
Jun-11
New Gold
15
5,773.24
  
5,284
5,370.72
 
Total
All
193
56,319.75
  
49,892
51,813.35
 
No analytical data was available for 33 RC holes completed in 1986 by Granges and their precise locations are uncertain.
 

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TECHNICAL REPORT - BLACKWATER GOLD PROJECT

 
10.1           Historic Drilling
 
Between 1981 and 1986, 4 core holes were drilled for a total 311 meters by Granges Inc. The helicopter supported winkie drill had difficulty with the ground conditions and some holes did not reach target depths. Drilling focused on northern parts of the property. Results of this early drilling including drill logs, assays and core have not been located.
 
During the 1986 season 34 percussion drill holes were completed for a total 1,524 meters. As with data for the earlier drilling, and despite thorough search, the drill logs and assays could not be located.
 
During 1987 some 23 diamond drill holes (2617.13 meters) were completed on the Gold and Silver Zones. Drill logs and assay data were filed for assessment and drill core is stored on the property. The core was re-logged and the data were reviewed by Richfield.
 
In 1992, 788.5 meters were drilled in five holes focused mainly southwest of the Gold Zone and on the Dave claim. Logs and assays were filed for assessment and core is stored on the property.  This core was also re-logged by Richfield in 2010.
 
Five holes were drilled in 1994 for a total 761.68 meters. The data was filed for assessment and the core stored. The data have been reviewed and the core re-logged by Richfield.
 
Silver Quest drilled five holes in 2005 for a total 938.65 meters and another two holes in early 2006 for 393.97 meters. The holes were widely dispersed. The later drilling focused on the Quest Zone (holes DAV 05-02, DAV 06-06 and DAV 06-07). Cumulative drilling to the end of 2006 was 5,810.79 meters in 44 holes.
 
Location of historic drilling is listed in Table 10-2Table 10-2 Historic drilling summary.  Significant intercepts are shown in Table 10-3.
 
Table 10-2 Historic drilling summary
 
DDH
EAST
NORTH
ELEV (m)
DEPTH (m)
YEAR
DAV 3
375765.25
5893261.91
1535.00
97.56
1985
DAV 4
375195.23
5893222.61
1568.00
67.37
1985
DAV 7
376033.43
5893482.70
1507.00
67.37
1985
DAV 8
374988.06
5893518.94
1513.00
78.56
1985
DAV 9
375778.58
5893132.71
1531.47
155.75
1987
DAV 10
375663.55
5893227.34
1532.43
19.51
1987
DAV 11
375666.30
5893256.30
1520.92
139.30
1987
DAV 12
375567.59
5893233.73
1550.00
137.80
1987
DAV 13
375954.10
5893477.50
1510.00
110.00
1987
DAV 14
375854.41
5893410.76
1518.00
125.90
1987
DAV 15
375238.12
5893616.54
1508.00
141.70
1987
DAV 16
375243.03
5893482.37
1521.00
152.70
1987
DAV 17
375142.62
5893591.92
1502.81
134.40
1987
DAV 18
375161.82
5893301.01
1529.24
65.80
1987
DAV 19
375716.26
5893223.41
1529.83
145.70
1987
DAV 20
375816.04
5893256.92
1516.43
144.20
1987
DAV 21
375661.74
5893263.62
1546.00
100.30
1987

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TECHNICAL REPORT - BLACKWATER GOLD PROJECT

DDH
EAST
NORTH
ELEV (m)
DEPTH (m)
YEAR
DAV 22
375777.54
5893087.86
1543.61
161.80
1987
DAV 23
375633.68
5893223.70
1548.00
82.60
1987
DAV 24
375643.37
5893275.73
1534.62
32.50
1987
DAV 25
375650.66
5893201.67
1550.00
71.93
1987
DAV 26
375718.94
5893094.52
1550.45
145.70
1987
DAV 27
375696.47
5893040.74
1556.83
185.00
1987
DAV 28
375643.37
5893032.65
1571.55
153.01
1987
DAV 29
375599.67
5893005.99
1576.00
95.10
1987
DAV 30
375639.26
5893281.14
1544.00
60.96
1987
DAV 31
375840.62
5893169.55
1523.59
55.47
1987
BD 92-32
374522.39
5893772.59
1475.00
152.40
1992
BD 92-33
375477.42
5893085.64
1575.01
183.80
1992
BD 92-34
375591.60
5892870.26
1603.39
144.80
1992
BD 92-35
375386.29
5892935.95
1606.06
171.30
1992
BD 92-36
375470.63
5893186.87
1558.25
136.20
1992
DAV 94-37
375607.00
5892606.00
1632.00
152.40
1994
DAV 94-38
375420.86
5892783.20
1624.92
167.64
1994
DAV 94-39
374749.00
5892011.00
1689.00
88.90
1994
DAV 94-40
374456.00
5891639.00
1739.00
185.10
1994
DAV 94-41
374977.14
5892618.34
1629.00
167.64
1994
DAV 05-01
375234.61
5893611.26
1494.88
302.97
2005
DAV 05-02
375081.00
5893000.00
1603.00
237.60
2005
DAV 05-03
375641.93
5893710.96
1500.00
52.43
2005
DAV 05-04
375635.25
5893711.13
1501.00
209.40
2005
DAV 05-05
375870.99
5893003.80
1562.00
136.25
2005
DAV 06-06
375029.21
5892960.49
1599.00
156.97
2006
DAV 06-07
375048.00
5893035.87
1595.00
237.00
2006

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Table 10-3 Historic drilling – significant intercepts
 
Hole
From
To
Width
Au g/t
Ag g/t
DAV 05-02
96.00
162.00
66.00
1.76
6.0
DAV 06-06
47.00
79.00
32.00
3.33
  
DAV 06-07
35.66
56.00
20.34
0.96
  
 
66.00
68.00
2.00
0.88
  
DAV 11
57.00
110.80
53.80
3.43
5.8
 
117.20
138.70
21.50
0.74
1.4
DAV 12
44.80
67.70
22.90
0.69
3.6
DAV 15
101.80
118.60
16.80
0.03
42.7
 
128.30
141.70
13.40
0.03
35.7
DAV 16
37.20
38.70
1.50
0.07
35.1
DAV 19
82.40
130.50
48.10
2.02
6.6
DAV 21
55.30
72.10
16.80
1.53
9.4
DAV 22
16.80
31.70
14.90
0.59
2.1
DAV 23
40.80
60.20
19.40
0.82
3.9
DAV 26
85.04
126.58
41.54
0.80
4.0
DAV 27
172.67
181.66
8.99
1.84
1.5
DAV 28
48.92
69.80
20.88
0.50
12.2
DAV 29
77.57
91.44
13.87
1.27
12.4
DAV 9
33.38
102.08
68.70
1.15
5.2
BD 92-33
66.00
162.00
96.00
0.73
5.2
BD 92-34
118.90
138.50
19.60
0.61
8.8
BD 92-35
150.00
171.30
21.30
1.41
1.8
DAV 94-37
82.00
123.00
41.00
0.64
6.0
 
139.00
152.40
13.40
1.14
6.5
DAV 94-38
20.00
36.00
16.00
0.53
4.9
 
 
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10.2           Recent Drilling Aug 2009 – July 2011
 
Richfield began drilling at Blackwater in August 2009 and during that year drilled 18 holes for a total 3,368.58 meters. During 2010 Richfield drilled a further 58 holes (including one water well) for a total 21,585.56 meters. Following completion of work requirements for the option agreements on the Davidson, Dave and Jarrit properties the 2010 drilling focused on the Dave and Jarrit claims. Between January and June 2011, Richfield completed 59 core holes for a total of 19733.74 meters. In June 2011 New Gold took over as operator and completed an additional 18 core holes (6859 m) by the end of the month.  Drill hole collar details are listed in Table 10-4.  The drill hole layout is illustrated in Figure 10-1.
 
 
Table 10-4 2009-2011 drill hole summary
 
DDH
EAST
NORTH
ELEV (DEM)
TD
YEAR
BW 42
375682.83
5893212.29
1535.31
254.20
2009
BW 43
375727.04
5893130.29
1543.07
307.54
2009
BW 44
375591.81
5893014.61
1568.47
181.66
2009
BW 45
375587.12
5892875.17
1583.78
186.70
2009
BW 46
375591.00
5892746.00
1601.30
215.50
2009
BW 47
375426.74
5892772.90
1615.39
102.47
2009
BW 48
375295.69
5892956.22
1593.24
159.11
2009
BW 49
375155.80
5892976.10
1589.99
149.96
2009
BW 50
375274.85
5893100.82
1576.92
113.39
2009
BW 51
375088.91
5893098.97
1564.89
123.14
2009
BW 52
374897.49
5892947.88
1548.84
146.91
2009
BW 53
374892.84
5892945.39
1560.05
165.20
2009
BW 54
375389.64
5893297.97
1550.00
143.87
2009
BW 55
375582.00
5893245.34
1549.00
143.87
2009
BW 56
375687.32
5893401.27
1529.00
118.57
2009
BW 57
375588.87
5892747.82
1604.38
259.70
2009
BW 58
375311.32
5892805.27
1603.19
260.60
2009
BW 59
375427.12
5892957.49
1596.32
588.87
2009
BW 60
375498.5
5892947.4
1590.2
422.45
2010
BW 61
375494.8
5893046.6
1594.2
355.40
2010
BW 62
375494.0
5893036.1
1578.6
366.98
2010
BW 63
375347.7
5892991.4
1585.4
447.14
2010
BW 64
375582.7
5892752.7
1601.0
306.93
2010
BW 65
375586.5
5892751.9
1608.9
297.48
2010
BW 66
375204.8
5892853.8
1598.0
427.33
2010
BW 67
375204.0
5892846.8
1590.4
378.69
2010
BW 68
375203.8
5892852.8
1598.2
431.44
2010
BW 69
375609.0
5892612.5
1625.4
290.27
2010
BW 70
374959.4
5892854.2
1583.7
289.86
2010
BW 71
375004.9
5892860.5
1585.2
348.39
2010
BW 72
375092.6
5892854.9
1595.9
362.58
2010
BW 73
375059.0
5892845.4
1594.2
369.42
2010
BW 74
375797.2
5892746.8
1589.2
261.51
2010
BW 75
375252.2
5892850.4
1594.6
529.74
2010
BW 76
375747.0
5892745.7
1592.8
377.95
2010
BW 77
375299.8
5892852.8
1598.7
505.36
2010
 
 
 
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DDH
EAST
NORTH
ELEV (DEM)
TD
YEAR
BW 78
375700.8
5892745.5
1598.9
332.84
2010
BW 79
375646.8
5892745.4
1597.0
362.1
2010
BW 80
375349.3
5892846.4
1594.4
367.59
2010
BW 81
375796.3
5892703.4
1595.5
321.11
2010
BW 82
375398.2
5892849.2
1606.0
426.1
2010
BW 83
375753.6
5892709.3
1601.5
278.89
2010
BW 84
375451.7
5892853.9
1610.4
392.13
2010
BW 85
375496.1
5892840.7
1604.3
453.54
2010
BW 86
375696.7
5892696.6
1605.5
303.89
2010
BW 87
375553.7
5892845.6
1592.6
456.59
2010
BW 88
375646.3
5892694.2
1610.7
342.29
2010
BW 89
375605.0
5892840.8
1592.2
395.63
2010
BW 90
375894.4
5892748.0
1569.2
314.9
2010
BW 91
375549.1
5892797.8
1600.9
474.88
2010
BW 92
375650.00
5892850.00
1598.36
377.3
2010
BW 93
375300.00
5892750.00
1614.82
401.73
2010
BW 94
375350.00
5892750.00
1615.92
346.86
2010
BW 95
375000.00
5892750.00
1607.55
288.9
2010
BW 96
375850.00
5892850.00
1581.55
379.78
2010
BW 97
375500.00
5892750.00
1620.78
365.15
2010
BW 98
375100.00
5892750.00
1610.30
435.25
2010
BW 99
375750.00
5892850.00
1592.60
346.86
2010
BW 101
375140
5893331
1536
98.15
2010
BW 102
375050
5892800
1600.30
349.91
2010
BW 103
375150.00
5892800.00
1605.30
389.53
2010
BW 104
375950.00
5892600.00
1621.70
261.21
2010
BW 105
375250.00
5892800.00
1610.90
429.16
2010
BW 106
375800.00
5892800.00
1592.20
438
2010
BW 107
375500.00
5892650.00
1630.50
450.49
2010
BW 108
375750.00
5892800.00
1598.30
504.44
2010
BW 109
375450.0
5892800.0
1615.00
450.19
2010
BW 110
375600.0
5892650.00
1630.00
263.04
2010
BW 111
375650.0
5892800.0
1605.70
413.92
2010
BW 112
376000.0
5892750.00
1591.90
415.44
2010
BW 113
375600.0
5892800.0
1611.60
465.73
2010
BW 114
375500.0
5892800.0
1605.70
383.52
2010
BW 115
375850.0
5892800.0
1589.90
315.16
2010
BW 116
375700.0
5892800.0
1603.50
356.01
2010
BW0117
375147.80
5892860.20
1599.86
130.86
2011
BW0118
375699.50
5892843.50
1594.97
386.49
2011
BW0119
375147.80
5892860.20
1599.86
438.00
2011
BW0120
375852.80
5892754.10
1593.61
324.00
2011
BW0121
374848.40
5892848.70
1577.48
285.60
2011
BW0122
375945.20
5892755.00
1588.94
343.81
2011
BW0123
375210.60
5892802.00
1609.59
416.66
2011
BW0124
375947.80
5892695.20
1602.29
340.77
2011
 
 

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DDH
EAST
NORTH
ELEV (DEM)
TD
YEAR
BW0125
375193.30
5892742.30
1611.91
129.38
2011
BW0126
375898.00
5892702.80
1600.70
409.65
2011
BW0127
374948.20
5892799.10
1594.70
184.71
2011
BW0128
375848.00
5892703.20
1600.96
306.32
2011
BW0129
375003.10
5892790.00
1601.04
305.71
2011
BW0130
375548.50
5892696.10
1621.25
349.91
2011
BW0131
375097.70
5892799.50
1603.26
358.75
2011
BW0132
375448.00
5892693.20
1624.41
227.99
2011
BW0133
375350.10
5892652.60
1626.11
211.00
2011
BW0134
375494.70
5892704.40
1621.06
287.12
2011
BW0135
375344.80
5892950.00
1606.47
426.11
2011
BW0136
375599.40
5892700.00
1618.49
292.30
2011
BW0137
375794.90
5893201.00
1537.58
319.50
2011
BW0138
375251.80
5892943.70
1602.57
428.85
2011
BW0139
375812.30
5893095.60
1547.87
452.63
2011
BW0140
375696.70
5893203.50
1543.54
319.50
2011
BW0141
375604.30
5893195.50
1550.14
353.00
2011
BW0142
375143.60
5892949.90
1594.77
162.46
2011
BW0143
375706.60
5893097.70
1556.19
350.52
2011
BW0144
375393.60
5893001.00
1598.23
410.00
2011
BW0145
375143.60
5892949.90
1594.77
114.30
2011
BW0146
375095.40
5892952.00
1589.57
416.97
2011
BW0147
375295.10
5892992.00
1598.36
345.00
2011
BW0148
375607.40
5893099.70
1562.72
314.55
2011
BW0149
375002.60
5892950.80
1578.97
434.64
2011
BW0150
375353.80
5893044.80
1589.52
340.40
2011
BW0151
375248.00
5893044.20
1592.54
353.25
2011
BW0152
375398.80
5892903.90
1612.46
382.83
2011
BW0153
375497.00
5893103.60
1571.61
407.82
2011
BW0154
375644.80
5892991.50
1578.16
377.34
2011
BW0155
375203.70
5893053.50
1589.26
375.50
2011
BW0156
375948.90
5893102.00
1536.46
339.44
2011
BW0157
375701.50
5892998.80
1571.81
375.82
2011
BW0158
375150.90
5893051.40
1587.17
371.50
2011
BW0159
375892.20
5893093.90
1542.08
366.67
2011
BW0160
375750.70
5892993.00
1568.45
395.63
2011
BW0161
374941.70
5893299.90
1537.90
350.52
2011
BW0162
375048.90
5893054.00
1579.78
361.50
2011
BW0163
375852.60
5893092.70
1544.76
412.40
2011
BW0164
375796.20
5892993.30
1564.59
382.96
2011
BW0165
375053.70
5893301.50
1541.23
279.81
2011
BW0166
374997.50
5893054.30
1570.77
307.00
2011
BW0167
375497.80
5893197.00
1556.56
269.90
2011
BW0168
375901.30
5892999.00
1554.15
401.10
2011
BW0169
375152.50
5893200.60
1564.09
352.96
2011
BW0170
375160.40
5892905.00
1597.14
449.50
2011
BW0171
375651.30
5893300.70
1538.60
296.57
2011
 
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DDH
EAST
NORTH
ELEV (DEM)
TD
YEAR
BW0172
375253.50
5893200.10
1568.75
425.20
2011
BW0173
376000.00
5893000.00
1550.23
249.80
2011
BW0174
375746.40
5893300.10
1532.44
233.17
2011
BW0175
375853.80
5893300.30
1526.20
298.09
2011
BW0176
375250.20
5892897.40
1605.66
580.00
2011
BW0177
376096.30
5893000.70
1543.84
491.64
2011
BW0178
376098.10
5892898.00
1557.82
374.30
2011
BW0179
375041.40
5892902.90
1586.91
364.00
2011
BW0180
374889.10
5892754.50
1598.70
377.34
2011
BW0181
374848.30
5893400.70
1511.43
291.69
2011
BW0182
374949.00
5893398.70
1519.03
286.51
2011
BW0183
376001.10
5892896.90
1563.14
325.53
2011
BW0184
375100.00
5893050.00
1584.80
511.00
2011
BW0185
374950.00
5892900.00
1578.54
359.50
2011
BW0186
374950.00
5892700.00
1611.72
375.82
2011
BWMET01
375700.00
5893200.00
1543.72
325.53
2011
BWMET02
375003.10
5892790.00
1601.04
368.20
2011
BWMET03
375900.00
5892700.00
1601.22
352.65
2011
BWMET04
375150.00
5893050.00
1587.28
389.53
2011
 
 

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Figure 10-1 Drill hole plan
 
 
The tables below list the significant intervals intercepted during the 2009/2010 drill programs based on a cut-off grade of 0.3 g/t Au.  The minimum width reported is 10m and up to 5m internal dilution was accepted.  The mineralized zone is irregular and not tabular in shape and true thickness cannot be determined and was not used as a factor in the resource model.
 
 
Table 10-5 Significant intercepts 2009 drilling
 
Hole
From
To
Width
Au g/t
Ag g/t
BW0042
62.00
94.00
32.00
3.254
9.7
BW0042
119.00
140.00
21.00
0.546
2.7
BW0042
149.00
160.00
11.00
0.384
2.0
BW0043
11.00
115.00
104.00
0.847
5.9
BW0043
161.00
180.00
19.00
1.421
5.6
BW0043
254.00
298.00
44.00
0.756
3.1
BW0044
59.00
116.00
57.00
0.592
2.5
BW0044
122.00
175.00
53.00
1.213
2.8

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Hole
From
To
Width
Au g/t
Ag g/t
BW0045
108.00
126.00
18.00
0.517
3.2
BW0045
141.00
186.50
45.50
0.516
2.2
BW0046
8.25
22.00
13.75
0.652
16.0
BW0046
28.00
146.00
118.00
1.058
6.1
BW0046
163.00
203.00
40.00
1.903
2.8
BW0047
5.70
31.00
25.30
2.844
7.8
BW0047
38.00
56.00
18.00
0.303
3.1
BW0048
13.00
39.00
26.00
0.729
2.6
BW0048
40.00
159.00
119.00
1.404
5.6
BW0049
16.00
26.00
10.00
0.459
6.3
BW0049
77.00
104.00
27.00
0.488
6.9
BW0054
95.00
143.87
48.87
0.379
2.6
BW0055
36.00
65.00
29.00
1.991
5.7
BW0057
11.13
156.00
144.87
0.973
7.8
BW0058
139.00
149.00
10.00
0.296
3.6
BW0058
156.00
171.00
15.00
0.224
1.9
BW0058
203.00
224.00
21.00
0.411
2.2
BW0058
241.00
260.00
19.00
0.814
2.1
BW0059
14.00
56.00
42.00
0.526
1.6
BW0059
61.00
248.00
187.00
1.651
2.6
 
Table 10-6 Significant intercepts 2010 drilling
 
Hole
From
To
Width
Au g/t
Ag g/t
BW0060
54.00
98.00
44.00
0.539
1.3
BW0060
108.00
124.00
16.00
0.310
1.7
BW0060
154.00
176.00
22.00
1.117
3.4
BW0060
239.00
256.00
17.00
0.517
1.3
BW0060
289.00
326.00
37.00
0.450
1.1
BW0061
50.00
102.00
52.00
0.453
7.1
BW0061
113.00
126.00
13.00
0.365
2.0
BW0061
159.00
232.00
73.00
0.548
0.7
BW0061
239.00
297.00
58.00
0.433
1.5
BW0062
50.00
64.00
14.00
0.354
4.3
BW0062
101.00
133.00
32.00
1.055
3.2
BW0062
139.00
218.00
79.00
1.248
1.4
BW0062
243.00
258.00
15.00
0.347
4.3
BW0063
33.00
50.00
17.00
0.598
3.1
BW0063
58.00
74.00
16.00
1.543
3.7
BW0063
101.00
346.00
245.00
0.794
3.4
BW0065
54.00
169.00
115.00
1.287
7.9
BW0065
207.00
224.00
17.00
0.878
7.1
BW0064
6.71
82.00
75.29
1.583
10.1
BW0064
105.00
142.00
37.00
1.003
3.8
BW0064
170.00
267.00
97.00
2.498
7.6
BW0065
54.00
139.00
85.00
1.486
9.7
BW0065
207.00
224.00
17.00
0.878
7.1
BW0066
23.00
93.00
70.00
0.928
2.8
BW0066
231.00
252.00
21.00
0.516
3.4
BW0067
25.00
49.00
24.00
0.536
2.5
 
 
 

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 Hole    From To  Width  Au g/t  Ag g/t
BW0067
130.00
184.00
54.00
0.816
3.0
BW0067
191.00
204.00
13.00
0.302
2.6
BW0068
51.00
142.00
91.00
2.902
9.6
BW0068
158.00
272.00
114.00
0.595
3.1
BW0069
179.00
213.00
34.00
0.611
5.9
BW0070
16.00
31.00
15.00
0.767
7.0
BW0070
180.00
209.00
29.00
2.141
2.8
BW0070
228.00
289.86
61.86
0.706
1.0
BW0071
76.00
283.00
207.00
1.715
4.5
BW0072
31.00
58.00
27.00
0.427
6.8
BW0072
71.00
148.00
77.00
0.552
2.4
BW0072
278.00
306.00
28.00
0.901
6.2
BW0072
311.00
362.58
51.58
0.828
5.8
BW0073
49.00
143.00
94.00
0.746
2.4
BW0073
205.00
222.00
17.00
0.501
4.1
BW0073
231.00
245.00
14.00
0.629
4.4
BW0073
274.00
367.00
93.00
0.776
4.5
BW0074
163.00
193.00
30.00
2.752
15.7
BW0074
206.00
225.00
19.00
1.027
4.3
BW0075
68.00
252.00
184.00
1.573
9.1
BW0076
99.00
144.00
45.00
0.821
4.1
BW0076
149.00
192.00
43.00
5.489
8.6
BW0077
116.00
145.00
29.00
0.548
3.0
BW0077
180.00
192.00
12.00
0.326
10.3
BW0078
98.00
112.00
14.00
1.346
5.6
BW0078
126.00
143.00
17.00
0.831
5.1
BW0078
176.00
238.00
62.00
2.018
13.6
BW0079
21.00
72.00
51.00
1.290
10.1
BW0079
103.00
124.00
21.00
0.774
7.2
BW0079
144.00
173.00
29.00
0.452
2.1
BW0079
195.00
301.00
106.00
0.959
3.6
BW0080
13.00
42.00
29.00
1.072
3.7
BW0080
146.00
164.00
18.00
0.418
2.2
BW0081
35.00
113.00
78.00
0.814
7.2
BW0081
127.00
176.00
49.00
1.137
11.7
BW0081
183.00
220.00
37.00
1.645
8.7
BW0082
2.40
32.00
29.60
0.870
5.8
BW0082
42.00
55.00
13.00
0.798
4.5
BW0082
120.00
147.00
27.00
0.812
4.8
BW0082
343.00
356.00
13.00
0.351
7.8
BW0083
58.00
134.00
76.00
1.627
6.5
BW0083
142.00
196.00
54.00
1.060
5.1
BW0083
208.00
224.00
16.00
0.307
2.9
BW0084
4.00
34.00
30.00
0.818
2.9
BW0084
130.00
144.00
14.00
0.817
2.7
BW0084
153.00
163.00
10.00
0.725
2.2
BW0085
4.00
28.00
24.00
0.909
3.2
BW0085
56.00
70.00
14.00
0.429
6.6
BW0085
97.00
113.00
16.00
1.416
4.3
BW0085
192.00
206.00
14.00
0.398
14.4

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 Hole  From  To  Width  Au g/t  Ag g/t
BW0085
271.00
293.00
22.00
0.499
7.9
BW0086
89.00
136.00
47.00
0.510
5.2
BW0086
143.00
161.00
18.00
0.883
8.8
BW0086
274.00
294.00
20.00
0.321
4.4
BW0087
47.00
65.00
18.00
0.519
5.0
BW0087
72.00
156.00
84.00
3.398
4.1
BW0087
303.00
316.00
13.00
4.329
13.4
BW0088
155.00
168.00
13.00
0.379
13.5
BW0089
19.00
48.00
29.00
0.955
7.6
BW0089
61.00
74.00
13.00
0.582
4.2
BW0089
80.00
102.00
22.00
1.406
4.1
BW0089
108.00
124.00
16.00
0.399
3.2
BW0090
71.00
219.00
148.00
1.772
8.5
BW0090
252.00
291.00
39.00
2.986
8.2
BW0091
7.00
27.00
20.00
8.292
31.9
BW0091
34.00
179.00
145.00
2.568
8.2
BW0091
293.00
319.00
26.00
0.709
63.1
BW0091
436.00
452.00
16.00
0.529
1.3
BW0092
27.00
52.00
25.00
0.707
12.2
BW0092
108.00
129.00
21.00
0.811
14.7
BW0092
214.00
246.00
32.00
0.946
4.6
BW0092
297.00
315.00
18.00
0.525
5.4
BW0093
167.00
181.00
14.00
0.542
1.3
BW0094
3.05
21.00
17.95
3.869
9.6
BW0094
42.00
52.00
10.00
0.530
0.9
BW0094
186.00
197.00
11.00
0.336
0.8
BW0094
329.00
346.86
17.86
0.653
2.9
BW0095
105.00
116.00
11.00
1.711
2.3
BW0095
124.00
139.00
15.00
0.508
1.8
BW0095
194.00
204.00
10.00
1.274
2.4
BW0097
3.00
53.00
50.00
0.864
5.4
BW0097
74.00
195.00
121.00
0.842
5.4
BW0098
130.00
165.00
35.00
0.553
3.5
BW0098
183.00
205.00
22.00
0.555
4.2
BW0099
127.00
137.00
10.00
1.265
12.7
BW0099
185.00
195.00
10.00
0.478
1.4
BW0099
239.00
254.00
15.00
0.507
1.2
BW0102
58.00
68.00
10.00
0.454
0.8
BW0102
202.00
242.00
40.00
0.501
1.8
BW0102
291.00
328.00
37.00
1.202
9.4
BW0103
40.00
100.00
60.00
0.640
1.7
BW0103
107.00
119.00
12.00
0.555
9.0
BW0103
129.00
158.00
29.00
1.510
3.5
BW0103
160.00
176.00
16.00
0.586
5.8
BW0103
177.00
192.00
15.00
0.938
11.9
BW0103
194.00
262.00
68.00
2.314
8.5
BW0103
332.00
364.00
32.00
2.395
11.9
BW0105
35.00
36.00
1.00
0.320
2.0
BW0105
51.00
78.00
27.00
0.620
4.4
BW0105
120.00
148.00
28.00
0.386
2.6

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 Hole From  To  Width  Au g/t  Ag g/t
BW0106
42.00
78.00
36.00
2.102
15.2
BW0106
83.00
111.00
28.00
1.736
18.8
BW0106
112.00
124.00
12.00
18.780
53.8
BW0106
126.00
155.00
29.00
0.632
9.3
BW0106
158.00
173.00
15.00
0.421
2.6
BW0106
177.00
202.00
25.00
0.539
3.9
BW0106
220.00
247.00
27.00
0.954
4.3
BW0107
87.00
117.00
30.00
0.357
2.2
BW0107
134.00
186.00
52.00
0.829
4.8
BW0107
195.00
281.00
86.00
0.803
3.6
BW0107
288.00
314.00
26.00
0.367
2.6
BW0107
325.00
339.00
14.00
0.576
1.9
BW0108
45.00
58.00
13.00
0.844
7.9
BW0108
66.00
86.00
20.00
1.756
10.6
BW0108
141.00
152.00
11.00
0.825
2.3
BW0108
177.00
212.00
35.00
1.109
4.1
BW0108
251.00
267.00
16.00
0.702
3.7
BW0109
28.00
39.00
11.00
0.346
5.9
BW0109
63.00
74.00
11.00
0.310
3.1
BW0109
81.00
105.00
24.00
0.938
4.4
BW0109
129.00
157.00
28.00
3.986
5.5
BW0110
3.00
57.00
54.00
0.463
6.1
BW0110
137.00
155.00
18.00
1.036
4.7
BW0111
43.00
62.00
19.00
0.617
14.1
BW0111
74.00
96.00
22.00
0.415
4.1
BW0111
155.00
168.00
13.00
0.622
3.3
BW0111
174.00
189.00
15.00
0.420
2.4
BW0111
202.00
245.00
43.00
0.584
4.1
BW0112
97.00
129.00
32.00
0.606
5.1
BW0112
142.00
184.00
42.00
2.555
9.7
BW0112
194.00
214.00
20.00
0.666
4.0
BW0112
230.00
241.00
11.00
0.461
0.5
BW0113
29.00
82.00
53.00
1.889
9.0
BW0113
85.00
110.00
25.00
0.571
8.4
BW0113
125.00
149.00
24.00
1.070
5.3
BW0113
155.00
194.00
39.00
1.000
7.4
BW0113
341.00
360.00
19.00
4.295
10.7
BW0114
6.00
44.00
38.00
2.208
11.1
BW0114
70.00
84.00
14.00
0.503
2.0
BW0114
91.00
175.00
84.00
2.549
3.1
BW0114
182.00
193.00
11.00
0.248
2.6
BW0114
199.00
212.00
13.00
0.741
3.4
BW0114
300.00
314.00
14.00
0.624
3.1
BW0115
125.00
169.00
44.00
1.754
8.8
BW0115
254.00
273.00
19.00
0.769
2.8
BW0115
290.00
306.00
16.00
1.986
4.6
BW0116
6.00
50.00
44.00
0.686
5.0
BW0116
54.00
72.00
18.00
1.032
10.4
BW0116
79.00
97.00
18.00
2.631
14.1
BW0116
116.00
128.00
12.00
8.962
9.0

GeoSim Services
 
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TECHNICAL REPORT - BLACKWATER GOLD PROJECT

 
Table 10-7 Significant intercepts 2011 drilling
 
Hole
From
To
Width
Au g/t
Ag g/t
BW0117
41.00
62.00
21.00
0.678
1.2
BW0117
92.00
130.00
38.00
0.545
2.3
BW0118
12.00
111.00
99.00
1.518
10.0
BW0118
194.00
212.00
18.00
2.693
12.3
BW0118
221.00
235.00
14.00
0.409
4.0
BW0119
41.00
64.00
23.00
0.556
1.3
BW0119
102.00
167.00
65.00
1.335
5.2
BW0119
176.00
291.00
115.00
0.605
2.6
BW0119
296.00
337.00
41.00
0.522
2.3
BW0119
350.00
383.00
33.00
0.612
4.0
BW0119
402.00
424.00
22.00
1.590
3.1
BW0120
61.00
145.00
84.00
0.826
9.3
BW0120
160.00
229.00
69.00
4.130
11.9
BW0120
235.00
303.00
68.00
1.542
6.0
BW0121
12.00
31.00
19.00
0.440
2.6
BW0121
57.00
82.00
25.00
0.525
2.1
BW0122
71.00
115.21
44.21
0.385
4.8
BW0122
126.00
142.00
16.00
0.638
26.6
BW0122
148.00
163.00
15.00
0.935
7.1
BW0122
286.00
321.00
35.00
1.200
12.5
BW0123
24.10
61.00
36.90
0.555
3.6
BW0123
71.00
92.00
21.00
2.316
1.9
BW0123
116.00
160.00
44.00
1.955
5.5
BW0123
264.00
279.00
15.00
0.442
2.0
BW0123
344.00
380.00
36.00
0.469
3.7
BW0123
406.00
416.66
10.66
2.963
1.9
BW0124
271.00
327.00
56.00
0.802
6.3
BW0125
115.00
128.00
13.00
3.180
2.5
BW0126
202.00
236.00
34.00
0.567
2.8
BW0126
264.00
320.00
56.00
2.058
22.2
BW0126
329.00
340.00
11.00
0.770
12.7
BW0127
57.00
127.00
70.00
2.236
22.5
BW0127
159.00
184.71
25.71
8.912
58.2
BW0129
49.00
65.00
16.00
3.001
4.9
BW0129
117.00
147.00
30.00
0.868
14.0
BW0129
179.00
303.00
124.00
1.899
19.3
BW0130
23.00
41.00
18.00
0.516
2.3
BW0130
59.00
238.00
179.00
1.077
3.2
BW0130
268.00
316.00
48.00
1.252
1.9
BW0130
323.00
349.91
26.91
0.675
2.4

GeoSim Services
 
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TECHNICAL REPORT - BLACKWATER GOLD PROJECT

Hole
From
To
Width
Au g/t
Ag g/t
BW0131
145.00
160.00
15.00
0.551
0.5
BW0131
207.00
241.00
34.00
0.724
9.1
BW0131
262.00
276.00
14.00
0.319
4.4
BW0131
311.00
351.00
40.00
0.855
4.0
BW0132
33.00
69.00
36.00
0.459
4.5
BW0134
27.00
59.00
32.00
0.861
4.3
BW0134
77.00
167.00
90.00
2.066
9.2
BW0134
173.00
193.00
20.00
0.459
3.6
BW0134
211.00
224.00
13.00
0.861
3.7
BW0134
242.00
264.00
22.00
0.575
3.3
BW0135
44.00
81.00
37.00
0.467
4.1
BW0135
96.00
178.00
82.00
3.291
5.8
BW0136
3.05
62.00
58.95
0.830
8.6
BW0136
72.00
90.00
18.00
1.252
7.7
BW0136
188.00
217.00
29.00
1.037
3.6
BW0137
183.00
197.00
14.00
0.691
11.5
BW0137
230.00
240.00
10.00
0.348
8.8
BW0137
250.00
286.00
36.00
0.590
9.5
BW0138
2.00
164.00
162.00
1.030
7.4
BW0138
176.00
213.00
37.00
0.617
2.5
BW0139
64.00
78.00
14.00
1.537
5.7
BW0139
127.00
141.00
14.00
0.450
2.5
BW0139
160.00
176.00
16.00
0.553
3.3
BW0139
271.00
285.00
14.00
0.406
2.1
BW0139
364.00
378.00
14.00
4.954
7.1
BW0139
398.00
426.00
28.00
0.369
6.7
BW0139
435.00
452.63
17.63
0.770
18.4
BW0140
24.00
96.00
72.00
1.414
5.0
BW0140
122.00
157.00
35.00
0.499
2.1
BW0141
38.00
63.00
25.00
8.440
10.0
BW0141
87.00
98.00
11.00
0.487
2.6
BW0141
105.00
150.80
45.80
0.663
1.5
BW0141
168.00
188.00
20.00
0.497
0.3
BW0142
52.00
80.00
28.00
0.501
6.5
BW0142
107.00
132.00
25.00
0.433
4.3
BW0143
12.00
122.00
110.00
1.239
12.4
BW0143
146.00
181.00
35.00
0.602
6.0
BW0143
199.00
223.00
24.00
0.680
2.7
BW0143
279.00
321.00
42.00
0.448
2.3
BW0143
328.00
349.00
21.00
1.255
1.4
BW0144
150.00
210.00
60.00
0.789
1.3

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Hole
From
To
Width
Au g/t
Ag g/t
BW0144
257.00
338.00
81.00
0.383
1.0
BW0145
101.00
113.00
12.00
0.371
0.5
BW0146
47.00
246.00
199.00
1.394
4.9
BW0146
258.00
416.97
158.97
0.834
2.9
BW0147
56.00
98.00
42.00
0.535
2.3
BW0147
149.00
169.00
20.00
0.554
3.2
BW0147
258.00
269.00
11.00
0.408
1.8
BW0147
274.00
284.00
10.00
0.334
0.9
BW0147
300.00
315.00
15.00
1.280
5.8
BW0148
146.00
171.60
25.60
1.748
5.0
BW0148
173.43
186.00
12.57
0.779
2.6
BW0148
188.00
246.00
58.00
0.725
3.0
BW0148
263.00
308.00
45.00
0.601
4.2
BW0149
56.00
66.00
10.00
0.918
3.3
BW0149
205.00
250.00
45.00
0.769
4.2
BW0149
274.02
320.00
45.98
0.516
3.1
BW0149
324.00
354.00
30.00
3.888
6.8
BW0149
360.00
434.64
74.64
1.806
10.6
BW0150
261.00
271.00
10.00
0.623
1.5
BW0151
165.00
208.00
43.00
0.693
1.5
BW0151
229.00
248.00
19.00
0.657
2.7
BW0151
272.00
284.00
12.00
0.364
5.4
BW0151
322.00
343.00
21.00
1.079
5.4
BW0152
86.26
118.00
31.74
0.612
3.7
BW0152
124.00
152.00
28.00
0.951
4.6
BW0152
234.00
254.00
20.00
1.028
3.2
BW0153
44.00
57.00
13.00
1.330
2.3
BW0153
132.00
252.00
120.00
0.961
2.3
BW0153
277.00
304.00
27.00
1.443
2.1
BW0154
17.00
37.00
20.00
1.650
25.3
BW0154
59.00
170.00
111.00
0.634
3.7
BW0154
186.00
227.00
41.00
0.507
2.3
BW0155
147.00
201.00
54.00
0.461
2.4
BW0155
237.00
248.00
11.00
0.538
2.2
BW0156
29.00
41.00
12.00
0.453
4.3
BW0156
87.00
113.00
26.00
1.062
10.0
BW0156
135.00
149.00
14.00
47.946
23.0
BW0156
211.00
226.00
15.00
0.530
17.3
BW0156
253.00
274.00
21.00
0.570
11.4
BW0157
9.75
21.00
11.25
1.343
4.5
BW0157
77.00
217.00
140.00
1.266
8.7

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Hole
From
To
Width
Au g/t
Ag g/t
BW0158
103.00
266.00
163.00
1.270
6.2
BW0159
161.00
196.00
35.00
1.813
7.8
BW0159
209.00
297.00
88.00
0.750
6.1
BW0159
305.00
341.00
36.00
0.551
2.7
BW0160
106.00
119.00
13.00
0.759
3.1
BW0160
132.00
144.00
12.00
0.428
3.1
BW0161
266.00
276.00
10.00
0.604
10.9
BW0161
282.00
340.00
58.00
0.673
1.8
BW0162
41.00
103.00
62.00
1.190
13.4
BW0162
123.00
221.00
98.00
1.089
11.4
BW0162
235.00
318.00
83.00
2.761
8.8
BW0162
343.00
361.50
18.50
1.133
1.8
BW0163
17.00
41.00
24.00
0.727
3.9
BW0163
264.00
334.00
70.00
1.376
5.2
BW0164
168.00
178.00
10.00
0.483
3.5
BW0164
284.00
297.00
13.00
0.475
5.9
BW0166
130.00
235.00
105.00
0.522
1.1
BW0166
244.00
265.00
21.00
0.491
1.0
BW0167
65.00
76.00
11.00
0.516
3.0
BW0167
166.00
186.00
20.00
0.632
1.0
BW0167
193.00
246.00
53.00
1.069
1.6
BW0169
162.00
175.00
13.00
0.585
7.7
BW0169
247.00
275.00
28.00
0.804
2.8
BW0170
71.00
83.00
12.00
0.872
6.4
BW0170
93.00
104.00
11.00
1.018
7.2
BW0170
114.00
270.00
156.00
1.161
3.5
BW0170
309.00
351.00
42.00
0.586
2.8
BW0170
390.00
437.00
47.00
0.710
2.3
BW0171
121.00
174.00
53.00
0.535
7.2
BW0171
197.00
221.00
24.00
0.700
1.3
BW0172
220.00
237.00
17.00
0.457
0.8
BW0172
246.00
271.00
25.00
0.437
3.5
BW0172
325.00
372.00
47.00
0.369
0.8
BW0172
404.00
422.00
18.00
0.626
1.9
BW0173
126.00
160.00
34.00
0.592
4.8
BW0173
166.00
185.00
19.00
1.925
8.9
BW0174
91.00
108.00
17.00
0.801
6.2
BW0176
41.00
167.00
126.00
1.666
2.6
BW0176
251.00
299.00
48.00
0.538
3.0
BW0179
83.00
307.00
224.00
3.070
7.5
BW0179
327.00
364.00
37.00
2.329
1.7

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Hole
From
To
Width
Au g/t
Ag g/t
BW0180
77.00
148.00
71.00
1.199
6.1
BW0180
172.00
227.00
55.00
2.250
26.4
BW0183
204.00
241.00
37.00
0.672
4.8
BW0184
47.00
63.00
16.00
0.588
5.2
BW0184
70.00
316.00
246.00
0.580
4.7
BW0184
331.00
378.00
47.00
0.574
4.9
BW0184
394.00
455.00
61.00
0.555
2.5
BW0185
158.00
186.00
28.00
0.548
1.9
BWMET01
27.00
93.00
66.00
0.905
4.1
BWMET02
50.00
72.00
22.00
0.605
2.5
BWMET02
100.00
155.00
55.00
0.487
10.4
BWMET02
175.00
299.00
124.00
2.626
25.3
BWMET03
71.00
81.00
10.00
0.492
2.5
BWMET03
194.00
226.00
32.00
0.727
3.2
BWMET03
252.00
264.00
12.00
0.443
2.6
BWMET03
270.00
298.00
28.00
1.105
12.9
BWMET04
107.00
264.00
157.00
0.719
4.1
BWMET04
308.00
318.00
10.00
0.572
4.0

10.3           Sampling Method and Approach
 
Drill core is transported from drill to camp by 4-wheel drive vehicle.  Core is logged in a specially built core handling facility. Logging includes geotechnical, magnetic susceptibility and specific gravity measurements taken at regular intervals. Lithology is logged and the core prepared for systematic sampling of at regular 1 meter intervals. Core sawing and sampling are the last steps in core handling.
 
Logged data is entered into LogChief in tables designed specifically for this Project.  Logging was carried out by Project geologists.  Magnetic susceptibility and conductivity were measured at 10 cm increments along the core with a handheld conductivity and magnetic susceptibility meter (GDD MPP-EM2S+Probe).  This data was stored internally and was downloaded to an excel spread sheet.
 
Recovery and RQD (Rock Quality Designation) data were measured and recorded in LogChief.  An RQD measurement is the cumulative length of core pieces longer than 10cm in a given core run divided by the total length of that run.  Recovery and RQD measurements were performed by company geotechnical staff.  Core recovery for the 2009/2011 drilling averaged 89% and the median core recovery was 97%.  Poor core recovery often occurs in fault/shear zones.  The average RQD value is 43%.
 

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11           SAMPLE PREPARATION, ANALYSES AND SECURITY
 
Sampling for analysis is done systematically on one meter sample composites. Intervals are measured and marked on the core boxes where sample tags are stapled at the beginning of each interval.  Core is sawed in half lengthwise using a diamond saw. Half the core is placed in standard heavy poly sample bags with the pre-printed sample tag in a zip log baggy; the whole is then closed with zip ties. The remaining half core is kept for reference in the core box stored on site at camp.
 
A certified reference standard, a blank standard, or a duplicate sample is inserted into the sample stream every tenth sample. The certified reference standards used were purchased from supplied by CDN Resource Laboratories Ltd., an independent laboratory in Langley, BC. The reference standards were selected to match the precious metal content range and material type at Blackwater as closely as possible at the start of the exploration program.  However, the certified gold grades of the standards used in the 2010 program were significantly higher than the average grade of around 1 g/t gold. This has since been corrected.
 
For shipment to the lab, four samples are placed in rice bags with sample ID numbers on each bag and sealed with numbered banker’s security tags.  Between preparation and shipment, a period up to four days, the rice bags with samples are stored at site in a secure area behind the core cutting area.
 
Samples are transported to Prince George by truck. The driver waits with the samples in the truck until pick up for shipment by ACE Courier.  Samples including the blanks, standards and duplicates, are shipped by bonded courier to Eco Tech Stewart Group Laboratories (“Eco Tech”) in Kamloops, BC.
 
Eco Tech was used as the primary analytical laboratory and has an ISO 9001:2008 certification.
 
In the lab standard sample preparation procedures were used. A multi element (28 elements) package with aqua-regia digest (nitric and hydrochloric acids) ICPOES finish coupled with a 30g fire assay with an AA finish was used for multi element and gold analyses respectively.  Overlimit ICP analyses of Ag, Cu, Pb, and Zn were performed on analyses that returned grades of Ag >30g/t, and Cu, Zn, Pb >1%. Assay certificates received from Eco Tech Labs are delivered in a format specified by New Gold to allow instant import to Datashed.
 
The drill hole and assay database for the Project is administered from the Vancouver office using Maxwell Geoservices products. Drill hole data logged in the field is entered into a LogChief database specifically tailored to the Blackwater Gold Project. LogChief validates this data as it is entered, and the final logs are exported and transferred to the database administrator in Vancouver for import to DataShed, the master database. Additional data validation checks are carried out in DataShed and all logs are checked by the administrator. Access permission for entering and editing data into the database is restricted to the New Gold Corporate Exploration Manager and Database Administrator for the Project.
 
The database is hosted on the New Gold server which routinely backs up every day to protect the database from any drive failures.
 

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11.1           Historic Drilling
 
No records exist regarding QA/QC practices prior to 2005.  The 2005 assessment report by Silver Quest states the following:
 
Routine duplicate samples were inserted into the sample stream about every 20 samples. Blank samples were inserted into the sample stream about every 40 samples.
 
A microdiorite sill rock unit was used for the blank samples in the sampling program. This blank rock was collected from diamond drill holes that intersected the sill during historical diamond drilling on Southern Rio's 3T’s property, located about 20 km southwest of the Davidson property. Laboratory results show that the ten blank samples contain from zero to 30 ppb gold and zero to 0.3 ppm silver, therefore no contamination within the laboratory is indicated by the blank sample results.
 
Duplicate samples were obtained by quartering the drill core sample from the selected interval (splitting one half of the core into two quarters). The two quarter-core samples were then submitted to the assay laboratory as a duplicate pair. Nineteen duplicate pairs were analyzed.
 
No assessment report was filed in 2006 but it is believed that the same protocol was used for the two core holes completed during that season.
 
11.2           Standards
 
As noted above, certified reference standards are inserted systematically into the sample stream. Every tenth sample is a standard, a blank or a duplicate.
 
The standards used during the 2009, 2010 and 2011 drill programs were used to monitor laboratory performance.  The certified values and “Between Laboratory” two standard deviation limits are shown in Table 11-1.
 
Table 11-1 Certified reference standard values
Year
Standard
Au g/t (Fire Assay)
Ag g/t
Zn %
Cu %
2009
CDN-PGMS-14
0.259 ± 0.034 g/t
      
2009
CDN-GS-11A
11.21 ± 0.87 g/t
      
2009
CDN-GS-3E
2.97 ± 0.27 g/t
      
2010
CDN-GS-3F
3.10 ± 0.24 g/t
      
2010
CDN-GS-7B
6.42 ± 0.46 g/t
      
2009
CDN-ME-1
0.87 ± 0.09 g/t
39.3 ± 4.6 g/t
0.347 ± 0.028 %
  
2010
CDN-ME-2
2.10 ± 0.11 g/t
14.0 ± 1.3 g/t
1.35 ± 0.10 %
  
2011
CDN-CGS-22
0.64 ± 0.06
    
0.725 ± 0.028
2011
CDN-GS-1G
1.14 ± 0.09
      
2011
CDN-GS-1P5D
1.47 ± 0.15
      
2011
CDN-GS-3H
3.04 ± 0.23
      

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Year
Standard
Au g/t (Fire Assay)
Ag g/t
Zn %
Cu %
2011
CDN-GS-P4A
0.438 ± 0.032
      
2011
CDN-GS-P7B
0.71 ± .07
13.4 ± 1.6
    
 
Upon receipt of the assay data the standards are carefully examined and compared with accepted values. For standards a result within two standard deviations from the mean of the certified standard were deemed to pass. No unacceptable standard verification results were found in 2010 and one was found in 2009. Five instances were found where a blank was inserted into the sample stream instead of a standard. Five cases of misclassified standards being inserted were also noted.
 
The average standard grades from Eco Tech compared closely with the certified grades except for CDN-GS-3E where the average grade of 78 samples was almost 10% higher (3.26 vs. 2.97 g/t).  Examination of the CRM certificate revealed one of the round robin tests returned similar levels so the certified value may not be completely reliable.  When performance limits were adjusted for the bias the results were deemed acceptable with one failure. Use of this standard was discontinued at the end of 2009.
 
11.3           Duplicate Samples
 
Assay results for duplicates were compared to those for the original sample and statistical plots were prepared for comparison.  A total of 1495 field duplicate results were examined; 14% of which were duplicate half core with the remainder quarter core duplicates.  Two of the samples were suspected of being misclassified and excluded from statistical analysis.  No significant sample bias was evident in the statistics (Table 11-2) or scatterplot (Figure 11-1).
 
Table 11-2 Field duplicate statistics
 
HALF CORE
QUARTER CORE
COMBINED
 
Original
Duplicate
Original
Duplicate
Original
Duplicate
n
181
181
1314
1314
1495
1495
Min
0.02
0.02
0.02
0.02
0.02
0.02
Max
8.55
12.70
59.50
82.00
59.50
82.00
Mean
0.51
0.59
0.49
0.53
0.50
0.54
Median
0.17
0.16
0.12
0.13
0.13
0.13
Var
1.42
2.74
6.33
8.96
5.74
8.21
Std Dev
1.19
1.66
2.52
2.99
2.40
2.86
CV
2.34
2.82
5.09
5.65
4.83
5.34

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Figure 11-1 Scatterplot of field duplicate results (2009-2011)
 
 
The Thompson-Howarth plot for Au in the field duplicates is shown in Figure 11-2.  The precision values for the core duplicates measure the cumulative error in the sampling, preparation and analytical processes. At the 95% confidence level and at 0.5 g/t Au, the precision values indicate about a ± 17% error.  This is in the normal range for gold deposits which can often have greater than a ± 20% cumulative error.
 

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Figure 11-2 T-H plot for field duplicates
 
 
For a check on the primary assays by another laboratory every thirtieth reject from holes BW0060 to BW0090 was sent to Acme Labs of Vancouver, BC for check assay by staff at the Eco Tech Stewart Group Laboratories. Assay data were sent by Acme to Richfield as pdf and xls files.  Results up to hole BW 90 have been received to date totaling 397 samples.  The statistical comparison (Table 11-3 and scatterplots (Figure 11-3) indicate that ACME has a very minor high bias which is not considered significant.
 
Table 11-3 Pulp duplicate recheck statistics
 
Original
Eco Tech Lab
Duplicate ACME Lab
n
397
397
Min
0.00
0.00
Max
22.80
24.70
Mean
0.60
0.63
Median
0.13
0.14
Var
3.58
3.63
Std Dev
1.89
1.90
COV
3.17
3.02

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Figure 11-3 Pulp recheck scatterplots
 
 
The Thompson-Howarth plot for Au in the field duplicates is shown in Figure 11-4.  The precision values for the core duplicates measure the cumulative error in the sampling, preparation and analytical processes. At the 95% confidence level and at 0.5 g/t Au, the precision values indicate about a ± 9% error.
 
Figure 11-4 T-H plot for pulp duplicates
 
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11.4           Blanks
 
Blanks used in this Project and inserted into the sample stream derive from outcrop of a barren granodiorite exposed about 10 km north of the mineralized zone. Before use as blanks 13 samples of this material were analyzed at was analyzed at Eco Tech Stewart Group Laboratories.
 
Upon receipt of the assay data the blanks are carefully examined and compared with accepted values. Assay results for blanks were uniformly below or at detection limit for gold. For other elements the blanks show good consistency giving confidence that the same material was being used in each instance.
 
11.5           Conclusions
 
QA/QC with respect to the results received to date for the 2009, 2010 and 2011 exploration programs is acceptable and protocols have been well documented.  A lower level of QA/QC exists for the seven drill holes completed between 2005 and 2006 but it is believed to be sufficient to support a resource estimate.  Data from holes drilled between 1981 and 1994 have no documented QA/QC information and they are not deemed acceptable for use in resource grade estimation.
 
The author recommends acquiring some lower grade Au standards as the ones presently in use are over twice the average grade of the deposit.  Two standards of approximately 0.4 and 1 g/t gold levels would be appropriate.
 
It is the author’s opinion that sample preparation, security and analysis meets or exceeds industry standards and is adequate to support a mineral resource estimate as defined under NI 43-101.
 
12           DATA VERIFICATION
12.1           Site Visit
 
The author visited the site on December 13, 2010 and on September 8, 2011.  The purpose of the visits was to review the geology and mineralization encountered in the drill holes completed to date.  In addition, drilling, sampling, quality assurance/quality control (QA/QC), sample preparation and analytical protocols and procedures, and database structure were reviewed.
 
Four samples of drill core were collected by the author in 2010 and submitted for assay.  Results were consistent with those from the intervals in which they resided (Table 12-1).  No samples were collected during the 2011 site visit.
 
Six drill hole collar locations were also verified by GPS readings.
 
Table 12-1  Assay results from samples collected during site 2010 visit
Sample
Dhole
Depth
Assay g/t Au
Assay Interval
Au_g/t
B2-81A
BW0081
192
0.384
192-193
0.51
BW-81B
BW0081
191
0.210
191-192
0.51
BW-87A
BW0087
133.5
15.93
133-134
3.53



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Sample
Dhole
Depth
Assay g/t Au
Assay Interval
Au_g/t
BW-87B
BW0087
146.5
0.603
146-147
0.75

The author is of the opinion that the data is adequate support a mineral resource estimate as defined under NI 43-101.
 
13           MINERAL PROCESSING AND METALLURGICAL TESTING
 
Preliminary metallurgical testing on samples from the Project was carried out on composites from three drill holes drilled in 2009. The work was carried out in early 2010 by the Metallurgical Division of Inspectorate Exploration and Mining Services Ltd. in Richmond BC.
 
The composite samples are of drill core from BW 43, BW 46 and BW 59. Samples are of selected sections from the three drill holes and represent different rock and alteration types; the samples are of drill core sawed in half lengthwise.
 
The samples responded well to direct whole ore cyanidation tests with an average of 92% gold recovery across three tests at different conditions on each composite (9 tests in total). Accessory silver was recovered at an average of 47%.
 
The three composites were also subjected to flotation testing to produce a bulk sulphide concentrate under three different grinding and reagent conditions. The samples also responded well to this test and the best recoveries obtained under one set of test conditions returned an average for the three composites of 94% of the gold and silver reporting to the bulk sulphide concentrate.
 
The composites were also subjected to direct gravity concentration. The samples responded well with the three composites averaging 51% gold recovered into a gravity concentrate.
 

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14           MINERAL RESOURCE ESTIMATE
14.1           Exploratory Data Analysis
 
The sample database for the Blackwater Gold Project contains results from 193 core holes (56,320 m) drilled between 1987 and July 1, 2011.  148 of these have been drilled since the start of 2009 including 4 holes for metallurgical testing completed in 2011. Four core holes drilled between 1981 and 2006 were not sampled or records have been lost.  An additional 7 core holes were either missing analytical data or were beyond the limits of the resource model. No analytical data was available for 33 RC holes completed in 1981 and their precise locations are uncertain.
 
Due to lack of QAQC and survey information, holes drilled prior to 2009 were not used for statistical analysis or grade estimation in the previous resource estimate.
 
Cumulative frequency distribution for the Au and Ag samples within a 0.25 g/t grade shell domain is illustrated in Figure 14-1 and Figure 14-2.  Sample populations are highly skewed approaching log normal distribution with no significant bimodality evident.
 
Au and Ag show a weak positive correlation (correlation coefficient = 0.3) and a linear regression yields a very low R2 value of 0.03 (Figure 14-3).
 
Basic statistics are shown in Table 14-1.
 
Figure 14-1 Frequency distribution of Au
 

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Figure 14-2 Frequency distribution of Ag
 
Figure 14-3 Scatterplot of Au vs Ag sample data
 
 
Table 14-1 Sample statistics
 
 
Au g/t
Ag g/t
n
21159
21159
Min
0.01
0.10
Max
262.00
638.00
Median
0.39
2.40
Mean
1.01
5.43

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Au g/t
Ag g/t
Wt Avg
1.01
5.46
Variance
16.48
165.87
Std Dev
4.06
12.88
COV
4.02
2.37


14.2           Outlier Analysis
 
Before compositing, grade distribution in the raw sample data was examined to determine if grade capping or special treatment of high outliers was warranted. Cumulative log probability plots were examined for outlier populations and decile analyses was performed for Au within the zone domains. As a general rule, the cutting of high grades is warranted if:
 
·  
the last decile (upper 10% of samples) contains more than 40% of the metal; or
 
·  
the last decile contains more than 2.3 times the metal of the previous decile; or
 
·  
the last centile (upper 1%) contains more than 10% of the metal; or
 
·  
the last centile contains more than 1.75 times the next highest centile.
 
For the Blackwater outer 0.25 g/t Au grade shell domain the last decile for Au contains 60% of the metal content and 27% is contained in the top centile. After reviewing the probability distribution it was decided to cap grades 17 g/t Au and restrict the influence of grades between 11 and 17 g/t.  The 17 g/t topcut affects 111 samples and the outlier restriction of 11 g/t affects an additional 213 samples.
 
For Ag the last decile contained 51% of the metal and the upper centile contained 17%.  A cap grade of 50 g/t was selected which approximates the 99th percentile level. A total of 208 samples assayed above this threshold for Ag.
 
CPP plots and cap grade levels are illustrated in Figure 14-4.
 
Figure 14-4 Cumulative log probability plots for Au and Ag
 

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Analysis of statistics for the major lithologies reveals that all major rock types can contain significant levels of Au (Figure 14-5).  Examination of contact profiles throughout the mineralized zones showed that lithologies were not principal controls of mineralization and that the use of hard boundaries for grade estimation were not justified.
 
Figure 14-5 Box plots of Au distribution by major lithology
 

 
14.3           Deposit Modeling
 
Due to the irregular and chaotic nature of the lithologic contacts it was not possible to create valid wireframe lithology solids based on sectional or level plan interpretations.  Alternative methods considered were nearest neighbour interpolations and indicator kriging to assign lithologic codes to the block model and to generate a grade shell domain to constrain grade estimation.
 
Core drilling has defined a continuous zone of +0.25 g/t Au mineralization that extends at least 1200 meters along its longest dimension in an east-west direction and at least 700 meters in a north-south direction. The thickness of the zone ranges up to 400 meters. This zone was modeled as two isosurfaces using Leapfrog3D© software at levels of 0.25 and 0.5 g/t Au. The Au data was composited to 5m intervals and put through a log transform and modeled using ordinary kriging with a maximum search distance of 100 meters. A moderate anisotropy of 1.5:1 was imposed parallel to the main trend of the zone (plunging 0° towards an azimuth of 100°).  The resulting solids were imported to Gemcom Surpac© software and clipped to the bedrock surface.  Isolated solids based on intercepts from single drill holes were eliminated.  An indicator kriging run was also carried in Surpac out using the same Au
 

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thresholds as a comparison and blocks with a 50% probability of containing grades above this level were compared with the solid model.  The general geometry of the solid models correlated reasonably well with the 50% level of the indicator kriged models.
 
Lithologic shapes were generated using indicator kriging with intercepts of the modeled lithology being assigned a value of 1 and all others a value of 0.  The 0.5 level was then used as a threshold for generating the solid models.  Several lithic tuff lithologies that had similar characteristics and densities were combined for block assignments as listed in Table 14-2.  The block lithologic code assignments are illustrated in Table 14-2 and the block model lithologic coding is shown in cross section in Figure 14-6
 
Table 14-2  Block model lithologic codes
Code
Lithology
1
Overburden
10
Andesite
20
Heteroloithic Breccia
30
Siliceous breccia / microbreccia
50
Rhyolite

 
Figure 14-6 Block lithology on section 5892800N
 
 
A bedrock surface was modeled by creating profiles based on drill hole intercepts and generating a digital elevation model.   Surfaces representing the base of the oxide and oxide-sulphide transition zone were supplied by New Gold geological staff and used to code the blocks as illustrated in Figure 14-7.

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Figure 14-7 Weathering profile on section 5892800N
 
 
14.4           Compositing
 
Fixed length downhole composites of Au and Ag were generated using 5 meter intervals within the zone domain.  All samples within the domain constraints were capped prior to compositing at levels of 11 and 17 g/t Au.   All samples were capped at 50 g/t for Ag.  Statistics for composites are summarized Table 14-3.  The combination of capping and compositing reduce the coefficient of variation for Au from 4.02 in the raw sample data to 1.37.
 
 
Table 14-3 Composite statistics
 
 
Au g/t      (11 g/t cap)
Ag g/t      (50 g/t cap)
n
3980
3980
Min
0.01
0.1
Max
14.88
50.0
Median
0.52
3.2
Mean
0.94
5.2
Variance
1.68
36.1
Std Dev
1.30
6.0
COV
1.37
1.16

 
14.5           Density
 
 
A total of 7,705 bulk density measurements were made on core sampled between 2009 and June 2011.  Statistics for the major lithologies are listed in Table 14-4.  The average bulk density values for each modeled lithology were assigned to the corresponding blocks in the resource model.
 

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Table 14-4 Bulk density statistics for modeled lithologies
Lith
n
Median
Mean
AND
2466
2.79
2.79
LTFF
1644
2.75
2.74
RHY
2636
2.68
2.67
SIL 5
503
2.70
2.70
 
14.6           Variogram Analysis
 
Directional pairwise relative semi-variograms for Au and Ag were modeled using composites falling within the domain constraint in order to determine kriging parameters, search parameters and anisotropy.  Variogram model parameters for Au and Ag are shown in Table 14-5.
 
Table 14-5 Semi-variogram model parameters
Item
Type
Axis
Azim
Dip
co
c1
a1
c2
a2
Au
Pairwise Relative Spherical
major
100
0
0.246
0.2000
18
0.0923
80
semi-major
10
0
0.246
0.2000
18
0.0923
65
minor
100
-90
0.246
0.2000
15
0.0923
50
Ag
Pairwise Relative Spherical
major
100
0
0.144
0.167
14
0.1833
120
semi-major
100
-90
0.144
0.167
14
0.1833
120
minor
10
0
0.144
0.167
14
0.1833
94
 
14.7           Block Model and Grade Estimation Procedures
 
A block model was created in Gemcom-Surpac Vision© software using a block size 10 x 10 x 10 m.  Block model extents are summarized in Table 14-6.
 
Table 14-6 Block model parameters
 
East
North
Elev
Min
374500
5892000
1100
Max
376500
5893700
1750
Extent
2000
1700
650
Block Size
10
10
10
Blocks
200
170
65
 
The model blocks were first coded by the partial percent within the zone domain and below topography.  Lithologic codes and SG values were then assigned as described in Sections 17.3 and 17.5.
 
Au and Ag grades within the zone domain were estimated in three passes using the inverse distance weighting method to the third power (ID3).  Search parameters are outlined in Table 14-7.  The frequency distributions of block grades are shown in Figure 14-8 and Figure 14-9.
 
Block model grade distribution is illustrated in Figure 14-10 to Figure 14-18.


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Table 14-7 Grade model search parameters
Item/Zone
Pass
Search Type
Max Search Dist (m)
Min # Composites
Max # Composites
Min Octants Required
Max per Hole
Topcut g/t Au
Au / 0.25 g/t Domain
1
Ellipsoidal
35
4
16
na
3
11
2
Octant
80
4
24
5
-
11
3
Ellipsoidal
60
4
24
na
-
11
Au / 0.5 g/t Domain
1
Ellipsoidal
35
4
16
na
3
17
2
Octant
80
4
24
5
-
17
3
Ellipsoidal
60
4
24
na
-
17
Ag
1
Ellipsoidal
30
4
16
na
3
50
2
Octant
90
6
24
5
-
50
3
Ellipsoidal
120
6
24
na
-
50
 
Figure 14-8 Frequency distribution of Au grades in block model
 
 
Figure 14-9 Frequency distribution of Ag grades in block model
 
 

 

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Figure 14-10 Au block grade distribution – Section 5892800N
 
 
Figure 14-11 Ag block grade distribution – Section 5892800N
 

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Figure 14-12 Au block grade distribution – Section 5892850N
 
 
Figure 14-13 Ag block grade distribution – Section 5892850N
 
 

 

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Figure 14-14 Au block grade distribution – Section 5892950N
 
 
 
Figure 14-15 Ag block grade distribution – Section 5892950N
 

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Figure 14-16 Au block grade distribution and claim boundaries - plan view
 

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Figure 14-17 Perspective view of block model Au grades
 

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Figure 14-18 Perspective view of block model Ag grades
 
 
 
14.8           Mineral Resource Classification
 
Resource classifications used in this study conform to the following definition from National Instrument 43-101:
 
Mineral Resource
 
A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.
 
Measured Mineral Resource
 
A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is
 

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based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
 
Indicated Mineral Resource
 
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
 
Inferred Mineral Resource
 
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
 
In order to meet the requirements of NI43-101 with respect to reasonable prospects of economic extraction, by open pit mining methods, a 45° wall slope Lerchs-Grossman pit was generated to constrain the resource within the block model.  Metal prices assumed were $1200/ounce for gold with recovery of 92%. Combined processing, G & A, and ore mining costs were assumed to be $12.79/tonne.  Base waste mining costs were assumed to be $2.00/tonne.
 
Consideration was given to classifying blocks estimated in the first estimation pass as ‘measured’.  However the structural and geologic modeling is still at an early stage and for this reason it was decided to delay classifying any blocks as measured at this point.
 
Blocks were classified as indicated if they were estimate in the 1st or 2nd estimation passes and were within a boundary limit surrounding the area of recent grid drilling.  Blocks within this boundary were also classified as indicated if they were estimated in the 3rd pass but had a composite within 40 meters of the block centroid (half the maximum variogram range).  All other estimated blocks were classified as inferred.  Block classification is illustrated in Figure 14-19.
 

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Figure 14-19  Block classification - Plan view
 
 
14.9           Model Validation
 
Model verification was initially carried out by visual comparison of blocks and sample grades in plan and section views. The estimated block grades showed reasonable correlation with adjacent composite grades.
 
Block grades were also estimated using ordinary kriging and the nearest neighbour methods. A comparison of global mean values within the grade shell domain shows a reasonably close relationship with samples, composites and block model values (Table 14-8).
 
Table 14-8 Global mean grade comparison
 
Au g/t
Samples (Wt Avg)
1.01
Samples Capped
0.85
Composites
0.85
ID3
0.81
Kriged
0.80
Nearest Neighbour
0.79
 
Swath plots were generated to assess the model for global bias by comparing Kriged, ID3 and nearest neighbour estimates on panels through the deposit. Results show a reasonable
 

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comparison between the methods, particularly in the main portions of the deposit indicated by the bar charts (Figure 14-20 to Figure 14-22).
 
Figure 14-20 Swath plot (E-W) at 5892800-2830 North
 
 
Figure 14-21 Swath plot (N-S) at 375570-5600 East
 

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Figure 14-22 Swath plot by elevation at 375300 East
 
 
 
14.10                       Mineral Resource Summary
 
The following tables present the mineral resource estimate for the Blackwater Gold Project at a range of cut-off grades with the base case in bold face.  The selected base case cut-off grade of 0.4 g/t gold is considered consistent with other mineral deposits of similar characteristics, scale and location.  The effective date of the estimate is September 19, 2011.
 
Table 14-9 Blackwater Gold Project mineral resource summary
 
Indicated
Inferred
Cut-off g/t Au
Tonnes 000's
Grade
Contained Au M oz
Tonnes 000's
Grade
Contained Au M oz
Au g/t
Ag g/t
Au g/t
Ag g/t
0.25
187,301
0.93
4.8
5.59
43,165
0.88
4.6
1.22
0.30
183,726
0.94
4.9
5.56
42,604
0.88
4.7
1.21
0.35
176,498
0.97
4.9
5.48
41,222
0.90
4.7
1.20
0.40
165,155
1.01
5.1
5.35
38,759
0.94
4.8
1.17
0.45
151,738
1.06
5.2
5.16
35,686
0.98
5.0
1.12
0.50
137,035
1.12
5.4
4.94
32,315
1.03
5.1
1.07
 

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Table 14-10 Mineral resource breakdown by area
Property
Indicated
Inferred
Tonnes 000's
Grade
Contained Au M oz
Tonnes 000's
Grade
Contained Au M oz
Au g/t
Ag g/t
Au g/t
Ag g/t
Total Blackwater
165,155
1.01
5.1
5.35
38,759
0.94
4.8
1.17
Dave and Jarrit (100% New Gold)
87,226
1.12
6.0
3.13
9,533
1.13
6.5
0.35
Davidson (75% New Gold, 25% Silver Quest
77,929
0.89
4.1
2.22
29,226
0.88
4.2
0.82
Total New Gold
145,673
1.02
5.2
4.79
31,453
0.95
4.9
0.96
 

 
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15           ADJACENT PROPERTIES
 
Not applicable
 
 
 
16           OTHER RELEVANT DATA AND INFORMATION
 
There are no other data known to Geosim that are relevant to this Technical Report: therefore there are no relevant data or information presented in this section.  Furthermore, there are no known factors or issues that materially affect the estimate of mineral resources.
 
 
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17           INTERPRETATION AND CONCLUSIONS
 
The Blackwater Gold Project has the characteristics of, and is considered to be, a low sulphidation epithermal gold-silver deposit. Mineralization occurs in stratigraphically chaotic volcanic rocks of Late Cretaceous age emplaced through and on Hazelton Group strata. The rocks are extensively hydrofractured and silicified and shot through with fine grained pyrite and other sulphide minerals. Gold is primarily associated with the sulphide minerals as gold grains between 5 and 50 microns across.
 
Drilling by Richfield and New Gold since August 2009 has outlined a large, low grade gold-silver deposit that extends at least 1200 meters along its longest dimension in an east-west direction and at least 700 meters in a north-south direction. The thickness of the presently defined zone ranges up to 400 meters.
 
Results from preliminary metallurgical testing carried out in 2010 showed that the samples responded well to direct whole ore cyanidation tests with an average of 92% gold and 47% silver recovery.  Preliminary flotation tests suggest that up to 94% gold and silver may report to a bulk sulphide concentrate.  Direct gravity concentration tests gave average recoveries of 51% gold.
 
Sample preparation, security and analysis meets or exceeds industry standards and is adequate to support a mineral resource estimate as defined under NI 43-101.  QA/QC with respect to the results received to date for the 2009 - 2011 exploration programs is acceptable and protocols have been well documented.  The database contains all core data collected on the Project to date and has been structured for resource estimation.
 
At a cut-off grade of 0.4 g/t gold, the Blackwater Gold Project is estimated to contain an indicated mineral resource of 165 million tonnes averaging 1.01 g/t Au and 5.1 g/t Ag.  An additional 39 million tonnes grading 0.94 g/t Au and 4.8 g/t Ag is classified as inferred.
 
 
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18           RECOMMENDATIONS
 
A preliminary economic assessment (PEA) is presently in progress.
 
The 2012 Blackwater PEA program will consist predominantly of additional delineation and infill drilling to expand and determine the economic limits of the Blackwater deposit, to better define the principal controls to mineralization and distribution of metal grades, and to further upgrade the mineral resource classification toward the measured and indicated categories. A program involving approximately 140,000 meters of delineation and infill core drilling is recommended. In parallel with the drilling program, a development program involving further metallurgical test work, evaluation of processing methods, engineering studies (e.g.: mining methods, geotechnical characterization, site and infrastructure alternatives), and environmental baseline studies is also recommended. A budget for the 2012 PEA program is presented in Table 18-1 below.
 
Table 18-1 2012 Blackwater Proposed PEA Budget
2012 Exploration & Development Program
2012 Budget (M$)
Exploration: Delineation & Infill - ˜140,000 meters core drilling
$     37.80
Metallurgical & Processing Studies
$       0.35
Engineering Studies – Mining,  Geotechnical, Site investigations
$       3.70
Environmental Baseline Studies
$       2.70
Total Blackwater PEA
$     44.55

 
Results of the PEA should be used as a basis for making additional detailed recommendations for:
 
·  
Further metallurgical test work
 
·  
Infill and additional definition drilling
 
·  
Geotechnical drilling
 
·  
Site investigation
 
·  
Infrastructure development
 
·  
Environmental baseline studies
 
·  
Mining method evaluation
 
·  
Processing option trade-offs and resource characterization
 
 
 
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19           REFERENCES
 
Corbett, G.J. and Leach, T.M. (1997); Southwest Pacific rim gold-copper systems: Short Course Manual.
 
Diakow, L.J., and Webster, I.C.L. (1994): Geology of the Fawnie Creek Map Area (93F/3); in Geological Fieldwork 1993, Grant, B and Newell, J.M., Editors, B.C. Ministry of Energy Mines, and Petroleum Resources, Paper 1994-1, pages 15-26.
 
Diakow, L.J. and V.M. Levson (1997): Bedrock and Surfical Geology of the Southern Nechako Plateau, Central British Columbia (93F/2,3,6,7), Geoscience Map 1997-2. (Map)
 
Diakow, L.J., Webster, I.C.L., Richards, T.A. and Tipper, H.W. (1997): Geology of the Fawnie and Nechako Ranges, Southern Nechako Plateau, Central British Columbia (93F/2,3,6,7); in Interior Plateau Geoscience Project: Summary of Geological, Geochemical and Geophysical Studies, Newell, J.M. and Diakow L.G., Editors. B.C. Ministry of Employment and Investment, Paper 1997-2.
 
Friedman, R.M., Diakow, L.J., Lane, R.A., and Mortensen, J.K. (2001): New U-Pb age constraints on latest Cretaceous magmatism and associated mineralization in the Fawnie Range, Nechako Plateau, central British Columbia: Canadian Journal of Earth Sciences, vol. 38: pp. 619-637
 
Simpson, R.G. (2011): Technical Report, Blackwater Gold Project, British Columbia, Canada. NI43-101 report prepared for Richfield Ventures Corp. and Silver Quest Resources Ltd. Filed on SEDAR.
 
 
 
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Certificate of Author – Ronald G. Simpson, P.Geo.
 
 
I, Ronald G. Simpson, P.Geo, residing at 1975 Stephens St., Vancouver, British Columbia, V6K 4M7, do hereby certify that:
 
 
1.  
I am president of GeoSim Services Inc.
 
2.  
This certificate applies to the Technical Report entitled “Technical Report, Blackwater Gold Project, British Columbia, Canada”, dated effective September 19, 2011.
 
3. 
I graduated with an Honours Degree of Bachelor of Science in Geology from the University of British Columbia in 1975. I have practiced my profession continuously since 1975. My relevant experience is as follows:
·  
1975-1993: Geologist employed by several mining/exploration companies including Cominco Ltd., Bethlehem Copper Corporation, E & B Explorations Ltd, Mascot Gold Mines Ltd., and Homestake Canada Inc.
·  
1993-1999: Self-employed geological consultant specializing in resource estimation and geomatics.
·  
1999 – Present: President, GeoSim Services Inc.
 
4.  
I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia (Registered Professional Geoscientist, No. 19513) and a Fellow of the Geological Association of Canada. I am a “qualified person” for the purposes of National Instrument 43-101 (“NI 43-101”) due to my experience and current affiliation with a professional organization as defined in NI 43-101.
 
5.  
I have visited the property that is the subject of the Technical Report on December 13, 2010 and on September 8, 2011.
 
6.  
I am independent of the issuer, New Gold Inc., applying all of the tests in section 1.4 of NI 43- 101.
 
7.  
I am independent of the issuer, Silver Quest Resources Ltd., applying all of the tests in section 1.4 of NI 43-101.
 
8. 
I have had prior involvement with the property that is the subject of the Technical Report, the nature of which involves the preparation of a technical report prepared for Richfield Ventures Corp. and Silver Quest Resources Ltd. dated 2 March, 2011 and titled “Technical Report, Blackwater Gold Project, British Columbia, Canada”.  The report was readdressed to New Gold Inc. on June 6, 2011.
 
9. 
I am responsible for the preparation of all sections of the Technical Report.
 
10.  
I have read NI 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.
 
11.  
As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading
 
12.  
I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them, including electronic publication in the public company files on their websites accessible by the public, of the Technical Report.
 
 
DATED this 2nd day of November, 2011
 
 
“Ronald G. Simpson”
 
 
Ronald G. Simpson, P.Geo.
 
 
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