Resource World Magazine

28 www.resourceworld.com o c t o b e r / n o v e m b e r 2 0 1 5 miNiNG Carlisle Goldfields Ltd. [CGJ-TSX; CGJCF- OTCQX] and joint venture partner Alamos Gold Inc. [AGI-TSX, NYSE] continue to receive encouraging drill results from their projects in the Lynn Lake Mining Camp, northwest Manitoba. Under the JV, Alamos Gold owns a 25% interest in the Farley Lake Project and can earn 51%. Alamos recently merged with AuRico Gold which had a joint ven- ture with Carlisle on the Lynn Lake Joint Venture (LLLV) and had a 25% inter- est that may be increased to 51%. Both JVs continue with the surviving entity, Alamos Gold. Abraham Drost, President and CEO of Carlisle, told Resource World, "The merger resulted in the surviving company com- prised of Alamos and AuRico shareholders at about 50% each with some changes at the senior management level, (John McCluskey remains President and CEO), and no operational changes. Currently, Alamos is carrying Carlisle on a feasibility study and have assumed the obligations of AuRico and must spend $20 million to earn a 51% inter- est in the LLJV. To earn 60%, Alamos must deliver a compliant feasibility study within three years [November 2017]." Drost noted that the Feasibility Study area is focused on McClellan and Farley Lake deposits which collectively repre- sent about 1.7 million ounces of gold in the measured and indicated resource cat- egories. Recent drill results from 4,841.2 metres in 38 holes included 16.4 g/t gold over 9.3 metres between 212.0 and 221.8 metres at Farley Lake. "In addition to Farley Lake and McClellan, there are three other deposits (Burnt Timber, Linkwood and Last Hope) that are defined with NI 43-101 technical reports," said Drost. "They collectively represent about 2 million ounces of open pittable material." The infill drilling at Farley Lake is designed to upgrade the inferred resources to the indicated category. "It's a combina- tion of reclassification of inferred material to a tighter drill spacing, condemnation of the outer limits of the known deposit as well as mine design and pit planning," said Drost. Regarding the good drill results west of the Burnt Timber and Linkwood deposits, Drost views these intersections as possible new separate and discreet gold deposits. "The intersections are on a different trend, or splay, than the Johnson shear zone that hosts the Burnt Timber and Linkwood deposits." At the present time, Carlisle manage- ment sees the Farley Lake deposit as an open pit operation down to 190 metres. "However, there is an indication of a deeper horizon that we call the Farley Deeps which grades about 6.8 g/t gold over 35 metres and tops out at about 300 metres below the planned open pit ultimate depth," said Drost. "This is an explora- tion target that could be considered as a potential underground operation later in the mine life. Presently, it is not part of the mine plan or current resources." Together, Carlisle Goldfields and Alamos Gold own at least five gold deposits in the Lynn Lake Camp. Looking forward, said Drost, "We would expect to be a junior partner carrying our end of the develop- ment costs, namely, ending up with a 40% interest when Alamos fully vests. Based on the Preliminary Economic Assessment of Farley Lake and McClelland, we would expect an initial 12-year mine life with the resources in those two pits. We would expect that the other three deposits would be developed in the intervening period, giving the Lynn Lake Gold Camp a mine life in excess of 20 years." "We are not contemplating bringing in a major," said Drost. "Since Alamos has demonstrated the capability to construct and operate gold mines, this would be no different." Drost said that the proposed processing plant would be designed to handle feed from both the simultaneous co-mingling of ore from the Farley Lake and McClelland open pits. "Based on the PEA, we envision something in the neighbourhood of 7,500 tonnes per day. This would lower the bar for the lower grade deposits such as Burnt Timber and Linkwood. The mill will likely be built near the McClelland deposit to serve the various other mining operations." The PEA features a post-tax IRR of 26%, an NPV at 5% of $257 million, net cash flow of $422 million and a payback of 2.8 years. Initial capital cost is $185 million. Annual average mill production would be 145,000 ounces of gold with a peak of 230,000 ounces in the fifth year. Life-of-Mine gold production would be 1.74 million ounces with silver production of 1.59 million ounces. All known deposits are road-accessible; however, additional roads may have to be built depending on mine plans and layout. n Carlisle Goldfields and Alamos Gold getting good results at Lynn Lake by Ellsworth Dickson Abraham Drost, President and CEO of Carlisle Goldfields, examines Farley Lake diamond drill core. Photo courtesy Carlisle Goldfields Ltd.

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