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Located adjacent to the town of Cañazas, Panama, 300km from Panama City, resides the Minas Santa Rosa project that operated under the previous owner Greenstone Resources, Ltd. They operated an open-pit heap leach facility from mid-1996 through August 1999 and produced 100,007 oz of gold. Heavy rainfall in 1997 and 1998 caused operational problems and diluted the pregnant leach solution. The Minas Santa Rosa operation was put into care and maintenance by November 1999 and was closed by March 2000 when the average spot gold price fell below $290/oz.

In Panama, mineral rights are separate from surface rights and are regulated by the Codigo de Rescursos Minerales. Mining rights are granted through an extraction concession contract from the National Directorate of Mineral Resources of Panama (DNRM) having an initial term of 20 years with extensions available for an additional 20 years. On November 7th, 2013, the National Assembly of Panama approved Law N 92, whereby the mining concession contract for the extraction of gold and other metallic minerals granted by the government of Panama to Veragold Corporation was elevated to contract law (Contrato Ley). The Santa Rosa project covering over 3500 hectares is fully permitted and the surface rights and mining concession rights are sufficient to support a future gold mining and processing operation at the project area. All concessions for the exploration and/or the exploitation of metallic minerals reserves (gold and others) in a 50 km radius are covered by a contract law from the National Assembly of the republic of Panama (Law N92/2013) affording the company the opportunity to convert the mine into a hub for a regional operation.

The Santa Rosa (SR) and Cerro Otero (CO) deposits are a volcanic-hosted, low-sulfidization, epithermal gold-silver deposit. The mineralization is hosted in mid-tertiary lapila tuff agglomerate and lava flows of andesitic composition in the Cañazas Formation, which comprises a diverse suite of rocks deposited in an intermediate-composition shallow arc setting. The SR property is situated along crosscutting structural zones trending SW-NE and NW-SE that control the distribution of mineralization.

The two pit areas at SR show different styles of mineralization. The SR deposit is disseminated in a felsic tuff, associated with quartz and pyrite, and capped by a mafic lava flow. Mineralization at the Alto de la Mina (ADLM) deposit, hosted in dense brittle basaltic-andesitic lavas and a structurally controlled breccia body, is associated with stockwork-style quartz-sulfide veins.

Mineralization is surrounded by argillic alteration (acid leaching), carbonate veining and re-deposition, and an outer propylitic alteration zone marked by the presence of hematite, carbonate, celadonite, and chlorite. Gold is reported to occur as electrum in association with pyrite; gold grains are in the range of 5-40µ in size, with occasional coarse grains up to 205µ. Previous mineralogy studies indicated there is limited encapsulation of the gold grains by quartz and that 85 percent of the gold surfaces are exposed. Based on previous mineralogy work, gold-silver mineralization appears to post-date silicification. Silver to gold ratios are approximately 4:1 but locally range as high as 7:1. A map showing the concession areas and the local mineralogy is shown below.

Approximately 45,000 m of exploration drilling has been conducted by several operators. In 2012-2013 Veragold conducted an 11,000m drilling program comprised of 9,524 m confirmation, in-fill and step out drilling and 1,475 m of confirmation drilling on existing leach pads. A new drilling program is now underway that includes approximately 10,000 m of additional core holes.

The Minas Santa Rosa mineral inventory consists of the Alto de la Mina (ADLM), Mina Santa Rosa (SR), and Cerro Otero (CO) mineralized zones and the residual gold in the heap leach pads material. The mineral resource estimate has been produced and classified using the November 27, 2010 CIM Standards and Definitions for estimating resources, as required by NI 43-101. The estimate was originally completed by MICON International Ltd as part of a 43-101 compliant technical report, and updated by MICON in March 2016

“Approximately 90% of the 1.1M oz gold resource is measured and indicated. This includes 122,000 indicated ounces of gold in the historic heap leach.“

Consultores Ambientales y Multiservicios S.A. (CAMSA) of Panama City prepared three (3) Environmental Impact Studies (EIS) reports. The reports addressed potential impacts associated with processing, beneficiation, and transportation within the processing area of the property , with mining and exploration drilling in the wider deposit area , and a final one for extraction and plant facility. The objective of the reports was to identify potential impacts associated with the proposed operations including exploration drilling, to characterize current site conditions (surface water, flora, fauna, socioeconomic), and to identify mitigation measures for any environmental or social impacts.

The following three (3) Environmental Impact Studies have been approved by National Environmental Authority (La Autoridad Nacional del Ambiente or ANAM) for the Santa Rosa mining:

  • EIS dated April 25th, 2011 for the activity of Transport and Benefit in an area of 141.67 hectares, where the stockpiles are located.
  • EIS dated October 3rd, 2011 for the activity of Exploration in the area comprising the Exploration Concession (3,561.84 hectares).
  • EIS dated August 20th, 2013 for Extraction and building the plant facility.

A community survey was conducted in Cañazas to assess the support/opposition for renewed operations; the individuals surveyed were supportive of the proposed operation primarily based on job creation and economic benefits to the community.

In 2013, Vera Gold tested 10 composite samples from the leach pads and drilled 5 PQ size holes to provide samples of the in-situ mineralization for metallurgical testing. McClelland Laboratories, of Sparks, Nevada, undertook metallurgical work on samples of sulfide mineralization. The main objective of this preliminary test work was to determine the best recovery for gold and silver using gravity concentration, sulfide flotation treatment or cyanide processing. The testing was duplicated in additional testing in 2014.

Flotation was shown to produce the overall best results that were fairly uniform across the ore types. Furthermore, flotation does not require the use of cyanide which addresses the concerns expressed by the local community.

An updated NI 43-101 compliant report summarizing the mine production plan and reserve estimate is currently under preparation.

Detailed engineering for the three phases of mill construction for the Minas Santa Rosa project has begun. Current projections call for a 500 tpd plant that will operate for 9 months, followed by an additional 2000 tpd of capacity coming online in 2021. The third stage of construction will result in a total process capacity of 6,500 tpd.

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