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Rajapalot Gold-Cobalt Project

Rajapalot is located 8 kilometres to the east of the Rompas vein trend. The style of mineralization at Rajapalot is predominately sulphidic and of a disseminated or replacement style, which differs from the nuggety vein style observed at Rompas. Rajapalot is the primary target area for the Company.

The Rompas-Rajapalot project is a new discovery in Northern Finland where high-grade gold and cobalt have been found within an area approaching 10 km by 10 km. The nature of the terrain and all-weather access allows year-round exploration work across more than 70% of the area. Winter access is possible in the remaining area when ice and snow conditions permit, usually after mid-December each year.

Rajapalot Disseminated Gold - Cobalt Project - Resources

Resource estimations at Rajapalot have been completed for the Raja and Palokas prospects by AMC. The two prospects lie approximately 2.0 kilometres apart within the same geological host sequence. The calculation represents the first resource estimate for the Rajapalot Gold-Cobalt Project. AMC has reported both a “constrained” and “unconstrained” resource, where the constrained resource has used spatial restrictions of a WhittleTM pit at a gold price of USD $1,250 per ounce and a cobalt price of $30/lb. The gold equivalent (“AuEq”) value was calculated using the following formula: AuEq g/t = Au g/t + (Co ppm/608) with assumed prices of Co $30/lb; and Au $1,250/oz. AuEq varies with Au and Co prices.

Table 1: Total constrained Inferred Mineral Resources Estimate as of December 14, 2018, at the cut-offs listed for constrained open pit and underground resources at Raja and Palokas.

Zone

Cut-off

(AuEq)

Tonnes

(kt)

AuEq

(g/t)

Au

(g/t)

Co

(ppm)

AuEQ

(koz)

Au

(koz)

Co

(tonnes)

Raja Pit

0.37

2,499

3.1

2.4

410

249

197

1,021

Raja UG

2.0

356

5.6

4.8

500

64

55

179

Raja Total

2,855

3.4

2.7

420

312

252

1,201

Palokas Pit

0.37

1,306

2.2

1.4

450

92

60

587

Palokas UG

2.0

96

3.6

2.7

560

11

8

54

Palokas Total

1,402

2.3

1.5

460

104

69

640

Total Pit

0.37

3,805

2.8

2.1

420

343

257

1,608

Total UG

2.0

452

5.2

4.4

520

76

63

233

Total

4,257

3.1

2.3

430

424

320

1,841

Table 2: Total unconstrained Inferred Mineral Inventory estimates as of December 14, 2018, at different AuEq g/t cut-off grades for the combined Raja and Palokas prospects

Cut-off

(AuEq)

Tonnes

(kt)

AuEq

(g/t)

Au

(g/t)

Co

(ppm)

AuEq

(koz)

Au

(koz)

Co

(tonnes)

0.2

6,335

2.4

1.7

402

485

347

2,548

0.4

6,156

2.4

1.7

410

482

345

2,522

0.6

5,680

2.6

1.9

429

475

345

2,434

0.8

5,000

2.8

2.1

451

456

339

2256

1.0

4,198

3.2

2.5

482

435

334

2024

1.2

3,555

3.6

2.8

501

416

321

1781

1.4

3,046

4.0

3.2

513

395

313

1564

1.6

2,600

4.5

3.6

522

380

304

1357

1.8

2,222

5.0

4.2

527

360

300

1170

2.0

1,904

5.6

4.7

533

340

290

1016

2.2

1,721

6.0

5.1

534

331

281

918

2.4

1,518

6.5

5.6

533

318

274

810

2.6

1,374

6.9

6.0

539

306

266

740

2.8

1,229

7.5

6.6

539

294

259

662

3.0

1,123

7.9

7.0

550

284

251

617

3.2

1,009

8.4

7.5

565

273

244

570

3.4

932

8.9

8.0

563

266

239

525

3.6

846

9.5

8.6

554

258

233

469

3.8

789

9.9

9.0

545

251

228

430

4.0

728

10.3

9.5

547

242

223

398

4.2

671

10.9

10.1

530

236

217

356

4.4

631

11.3

10.5

526

230

213

332

4.6

586

11.9

11.0

516

223

207

302

4.8

543

12.5

11.6

514

217

202

279

5.0

521

12.8

12.0

511

214

201

266

Resource Methodology

  • Mineral Resource estimates follow the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) definitions standards for mineral resources and reserves and have been completed in accordance with the Standards of Disclosure for Mineral Projects as defined by National Instrument 43-101.
  • Reported tonnage and grade figures have been rounded from raw estimates to reflect the relative accuracy of the estimate. Minor variations may occur during the addition of rounded numbers.
  • Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  • The Mineral Resource Statement complies with the standards for reporting mineral resources as set out under CIM guidelines.
  • Constrained Resources are presented undiluted and in-situ and are considered to have reasonable prospects for eventual economic extraction.
  • Optimitized open pit constrained resources are reported at a cut-off grade of 0.37 g/t AuEq; underground resources are reported at a cut-off grade of 2.0 g/t AuEq.
  • Gold equivalent “AuEq” = Au+Co/608 based on assumed prices of Co $30/lb and Au $1,250/oz.
  • Top cuts were applied to the composites at Palokas. For the low-grade gold domain within the Palokas deposit a gold top cap of 15.9 g/t was used. For the high-grade gold domain within the Palokas deposit a gold top cap of 50 g/t was used. No top caps were required for the Raja deposit.
  • A density value of 2.80 t/m3 was applied to all lithologies.
  • The three-dimensional wireframe models were generated using AuEq shells. Estimation parameters were determined by variography; all zones were interpolated using Ordinary Kriging (“OK”).
  • Block dimensions were 25 x 10 x 5 metres (Raja) and 20 x 10 x 5 metres (Palokas) with sub-block sizes down to 5 x 2 x 1 metre and 4 x 2 x 1 metres blocks for Raja and Palokas respectively.
  • AMC created the Rajapalot Mineral Resource estimate using the drill results available to July, 2018 from the Raja and Palokas prospects.

Table 3: Total unconstrained Inferred Mineral Inventory estimates as of December 14, 2018, at different AuEq g/t cut-off grades for the Raja prospect.

Cut-off

Tonnes

(kt)

AuEq

(g/t)

Au

(g/t)

Co

(ppm)

0.2

3,738

2.9

2.2

403

0.4

3,720

2.9

2.2

405

0.6

3,576

3.0

2.3

416

0.8

3,243

3.2

2.5

434

1.0

2,786

3.6

2.9

464

1.2

2,444

4.0

3.2

480

1.4

2,203

4.3

3.5

493

1.6

1,926

4.8

3.9

508

1.8

1,661

5.3

4.5

516

2.0

1,414

5.9

5.1

529

2.2

1,270

6.4

5.5

531

2.4

1,098

7.1

6.2

530

2.6

987

7.6

6.7

538

2.8

870

8.3

7.4

537

3.0

805

8.7

7.8

549

3.2

719

9.4

8.5

566

3.4

660

10.0

9.1

563

3.6

593

10.8

9.9

550

3.8

547

11.4

10.5

535

4.0

503

12.0

11.2

536

4.2

460

12.8

12.0

512

4.4

435

13.3

12.5

504

4.6

406

13.9

13.1

487

4.8

375

14.7

13.9

482

5.0

357

15.2

14.5

476

Table 4: Total unconstrained Inferred Mineral Inventory estimates as of December 14, 2018, at different AuEq g/t cut-off grades for the Palokas prospect.

Cut-off

Tonnes

(kt)

AuEq

(g/t)

Au

(g/t)

Co

(ppm)

0.2

2,597

1.64

0.99

401

0.4

2,436

1.73

1.05

417

0.6

2,104

1.93

1.19

450

0.8

1,757

2.17

1.38

483

1.0

1,412

2.48

1.63

518

1.2

1,111

2.86

1.96

547

1.4

843

3.35

2.42

567

1.6

674

3.82

2.89

561

1.8

561

4.24

3.33

558

2.0

490

4.58

3.69

546

2.2

451

4.80

3.91

541

2.4

420

4.99

4.10

542

2.6

387

5.20

4.31

541

2.8

359

5.40

4.50

543

3.0

318

5.72

4.81

552

3.2

290

5.97

5.05

561

3.4

272

6.15

5.22

564

3.6

253

6.35

5.42

563

3.8

242

6.47

5.54

566

4.0

225

6.66

5.72

571

4.2

211

6.84

5.90

570

4.4

196

7.02

6.08

574

4.6

180

7.25

6.30

580

4.8

168

7.43

6.46

585

5.0

164

7.48

6.52

586

Cobalt in Finland

Finland plays a significant role in the global cobalt supply chain. The Democratic Republic of the Congo (“DRC”) mined 54% of the world’s cobalt in 2016 whilst 80% of cobalt used in lithium-ion batteries is refined in China.

Half of the world’s non-Chinese production (10% of total production) comes from Freeport Cobalt, the world’s largest single cobalt refinery, located only 400 kilometres from Mawson’s Rajapalot project in Kokkola, Finland. Freeport Cobalt is a joint venture between Freeport-McMoRan (56%), Lundin Mining Corporation (24%) and La Générale des Carrières et des Mines (20%) (or Gécamines, the DRC state mining company). A significant amount of feedstock for Freeport Cobalt comes via a long-term supply agreement with the Chinese-owned Tenke Fungurume mine in the DRC. A future Finnish domestic source of cobalt from Rajapalot would satisfy the recent announcements by Finland and Sweden that the countries will work together on a traceable ledger for sustainable minerals, which are considered crucial for achieving climate goals.

Owing to the growth in the electrification of transport and need for storage of renewable energy, the battery sector has become an important driver of cobalt demand. Demand for lithium-ion batteries is surging, which is expected to support both price and volume for the cobalt market for years to come. With cobalt on the European Commission’s critical raw minerals list, there is a strong mandate to secure local and ethical supplies of cobalt, which are likely to contribute to further tightened supply.

Rajapalot Disseminated Gold-Cobalt Project - Exploration

The 100% owned gold-cobalt Rajapalot discovery hosts numerous hydrothermal gold-cobalt prospects drilled between 2013 and April 2018 within a 3 by 4 kilometre area. Mineralization at Raja and Palokas prospects occurs as replacement bodies with both structural and stratigraphic controls. Refer to Tables 1-4 above for resources by zone, which remain open in multiple directions.

Rajapalot Diamond Drilling

To date a total of 34,234.4 metres have been drilled at Rajapalot (average depth of drilling 88.2 metres). A total of 32 holes for 6,813.4 metres and 87 holes for 8,354.3 metres (total 119 holes for 15,167.7 metres with an average depth of 127.5 metres) were used within the maiden resource estimation at Raja and Palokas respectively.

Table 5: Drilling history at Rajapalot

Drill Program

Number

of Holes

Year

Drilled

(m)

Average

Hole Length

(m)

Core Diameter

Drill Company

PAL0001-PAL0007

8

2013

757.1

94.6

NQ=47.6 mm,

HQ=63.5 mm

ADC

PRAJ0001-PRAJ0120

120

2013-2016

3431.4

28.6

EW=25.2 mm

Mawson

LD0001-LD0120

120

2014

873.8

7.3

BQ=36.4 mm

Ludvika Borrteknik AB

PAL0008-PAL0025

18

2015-2016

3290.1

182.8

NTW=56.0 mm

Energold

PAL0026-PAL0082

57

2017

11139.2

195.4

NQ2=50.7 mm,

NTW=56.0 mm

ADC, MSJ Drilling, KATI Oy

PAL0083-PAL0147

65

2018

14742.8

226.8

NQ2=50.7 mm,

WL76=57.7 mm

ADC, MK Core Drilling Oy, KATI Oy

Total

388

34,234.4

88.2

Table 6: Drill Hole Best Results Summary table

Prospect

Drill Hole

Intersection

width

(metres)

Grade AuEq

(g/t)

From

(metres)

Raja

PAL0062

13.5

4.5

180.0

Raja

PAL0092

5.0

16.1

245.0

Raja

PAL0093

33.6

9.7

244.1

Raja

PAL0097

11.0

2.6

276.3

Raja

PAL0048

13.7

3.6

82.0

Raja

PAL0118

20.7

5.6

365.3

Raja

PAL0075

10.8

8.7

82.2

Rumajärvi

PAL0037

19.5

2.1

20.5

Rumajärvi

PAL0040

8.0

1.6

35.3

The Hut

PAL0033

2.2

7.9

152.5

Palokas

PRAJ0003

13.0

8.3

0

Palokas

PRAJ0009

30.8

8.2

2.5

Palokas

PRAJ0107

15.0

8.7

24.7

Palokas

PRAJ0109

33.0

4.2

38.7

The true thickness of mineralized intervals at Palokas is interpreted to be approximately 90% of the sampled thickness. The true thickness of the mineralized intervals at Raja, Rumajärvi and The Hut require additional drilling to determine owing to the complicated structural controls.

Combined gold-cobalt mineralized intersections display increased widths and often show better continuity. Mineralogical studies on selected Rajapalot samples indicates that sulphide cobalt mineralization is hosted in cobaltite and cobalt pentlandite that are conventionally mined and processed in other deposits.

Raja Prospect

The Raja gold-cobalt resource forms 75% of the Inferred Mineral Resource and extends 575 metres down plunge, with an average depth of 100 metres and each of the 3 mineralized horizons averaging 10 metres width. Gold-cobalt mineralization is a potassic-iron type characterized by muscovite-biotite-chlorite quartz pyrrhotite-rich schist with subordinate albite, iron-magnesium amphiboles and tourmaline which is best developed to date at the Raja prospect. Gold and cobaltite along with scheelite, pyrite, chalcopyrite and bismuth tellurides accompany the silicates.

The mineralization at Raja is concentrated in the hinge regions of minor folds interpreted to have formed subsequent to the peak of high-grade metamorphism and coincident deformation.

Palokas Prospect

The Palokas gold-cobalt Inferred Mineral Resource extends over two separate bodies (Palokas and South Palokas) with at least two mineralized horizons in each. The dimensions of the Palokas resource are 240 metres of strike, depth of 300 metres and 20 metres width. The dimensions of the South Palokas resource are 180 metres of strike, depth of 220 metres and width up to 20 metres. Mineralization forms within a retrograde mineral alteration assemblage include chlorite, iron-magnesium amphiboles, tourmaline and pyrrhotite commonly associated with quartz veining. Subordinate almandine garnet, magnetite and pyrite occur with bismuth tellurides, scheelite, ilmenite, gold and one of cobaltite or cobalt pentlandite.

Other Prospect Areas in Rajapalot

The Raja and Palokas Inferred cover only 20% (800 metres) of the 4 kilometres known mineralized trend at Rajapalot.The Hut, Terry’s Hammer and Rumajärvi prospects within the same trend are still in the early stages of exploration, but have significant potential, as shallow and deeper geophysical anomalies, surface samples (boulders) and initial drilling indicate the correct stratigraphic host sequence and encouraging assay results.Drilling at Terry’s Hammer for example, intersected 4.7 metres at 2.1 g/t gold from 65.7 metres in PAL0099, the first large diameter drill test of a combined remanent magnetic/chargeable/conductive anomaly comprising gold-bearing sulphidic rocks in outcrop.

Geophysics

A series of airborne (VTEMplus) and ground geophysical surveys have been conducted since 2013 to locate the conductive and magnetic mineralization at Rajapalot. More recent work indicates that a combination of ground magnetic surveys, electromagnetics (both airborne and ground) and IP-resistivity methods are the most promising for location of sulphidic gold-cobalt mineralization. The highly conductive nature of the sulphidic host also makes mise-a-la-masse and important tool for tracing the location of near-surface intersections with the ever-present thin glacial till cover. Much of the southeastern portion of Kairamaat 2/3 permit and more than 40 % of Hirvimaa permit is now also covered by gradient array IP/chargeability surveys.

Detailed ground magnetic surveys at line spacings between 100 metres and 15 metres have been completed during 2014-2018. The testing has indicated that 25 metre line spacing is optimum for discovery and geological interpretation. Geological, primarily structural interpretation of the ground magnetic data indicates a complexly refolded and faulted sequence, but still including distinctive and traceable units. Additional magnetic surveys to infill surveys to 25 metres over the inferred most prospective rocks are completed across the most prospective portions of Rajapalot.

Magnetic pyrrhotite associated with gold-cobalt mineralization typically shows reverse remanent magnetism (RRM). Thus, combined RRM-conductive-chargeable anomalies usually represent near-surface sulphides. The coincidence of the three geophysical properties was used to successfully locate the mineralization at Raja and The Hut, and corresponding anomalies at Palokas, South Palokas and Terry’s Hammer indicate the effectiveness of the programs.

A fixed-loop transient electromagnetic (“TEM”) corresponds closely with the resource block model at Raja and defines a strongly conductive body that extends 550 metres down plunge beyond the maiden resource. This conductive body more than doubles the potential Raja mineralization footprint to more than 1 kilometre down plunge and the conductor remains open down plunge to the NNW. Earlier stage airborne VTEMplus electromagnetic (“VTEM”) data shows a conductive body which more than doubles the Palokas potential mineralized footprint to 450 metres below the surface. TEM surveying to better define conductors continues at site, at Raja to map the northern extension of the conductive body and will then continue to map strong VTEM anomalies along the 3 kilometre trend from the Rumajärvi, Hut and Palokas prospects.

Geology of Mineralized Rocks at Rajapalot

The style of mineralization at Rajapalot is predominately sulphidic and of a disseminated or replacement style, generally concentrated around fold hinges and brecciated rocks. Most of the mineralization at Rajapalot consists of sulphide (pyrrhotite>>pyrite), magnetite, biotite, muscovite and chlorite hydrothermal mineral assemblages hosted in predominately muscovite-biotite schists and grey albitites. Variations in gold-cobalt mineralization style occur, from an end member of sulphidic, potassic iron-rich rocks (K-Fe type, for example at Raja prospect) through to iron and magnesium-rich (Fe-Mg type) hydrothermally altered sulphidic rocks such as those at Palokas. Textures range from veined albitic granofels through fractured and brecciated to locally schistose. Veining and fracture fill minerals include pyrrhotite, magnetite and magnetite-pyrrhotite (+/- quartz). Local retrograde chlorite after biotite and vein-controlled chlorite+/- tourmaline and magnetite are also present. Preliminary hand-held XRF analysis confirms the presence of associated scheelite and molybdenite, the former visible under UV light as tiny veinlets and disseminations. The iron-rich nature of the mineralized rocks is a common theme in either the oxide or sulphide form, with a variably sulphidic and chloritic overprint. The alteration is clearly post-metamorphic, reduced, and most likely driven by granitoid intrusions. Chlorite, hydrothermal muscovite and quartz are regarded as the lowest temperature silicate minerals with gold, cobaltite, linnaeite, cobalt pentlandite structurally controlled in apparent spatial association with fold hinges or quartz veins. Altered rocks enclosing the mineralized package contain locally abundant talc and tourmaline.

The disseminated sulphidic gold-cobalt mineralization at Rajapalot remains the primary target for the Company. However, the company interprets that the host strata can occur across the full extent of the Rompas-Rajapalot project area and therefore the potential for disseminated sulphidic gold-cobalt mineralization should not be discounted in the Rompas project area.

Surface Sampling

Surface samples from Rajapalot include prospecting grab samples taken from outcrop that returned 2,817 g/t gold, 2,196 g/t gold, 1,245 g/t gold, 933 g/t gold, 151 g/t gold and 135.5 g/t gold. A total of 160 boulders and outcrops with >0.1 g/t gold have been discovered within a 4 kilometre by 3 kilometre area at Rajapalot. Gold grades range from 0.1 g/t gold to 3,870 g/t gold, with an average of 74.9 g/t gold and median of 0.71 g/t gold. Samples from boulders are grab samples, which are selective by nature and are unlikely to represent average grades on the property.

A broad area of 4 by 6 kilometres has been tested by 2,775 base-of-till (“BOT”) drill holes (within the Kairamaat 2-3, Hivimaa and Raja permit areas). A further 601 BOT drill holes have been completed in the Männistö permit area surround the Rompas prospect searching for the disseminated style of mineralization.

Metallurgical Testing

During October 2014 the Company announced results from preliminary metallurgical testing on drill core from the Palokas prospect at the Rompas-Rajapalot gold project in Arctic Finland by SGS Mineral Services UK in Cornwall. Excellent gold extraction results of between 95% and 99% (average 97%) were obtained by a combination of gravity separation and conventional cyanidation. Gravity extraction for the four composites responded well with 26%-48% gold extraction. Leaching was performed on the pulverised and blended tailings from the three size fractions after gravity extraction. Samples tested are not classified as refractory. Metallurgical test work indicates gold recovery and processing are potentially amenable to conventional industry standards with a viable flowsheet which could include crushing and grinding, gravity recovery, and cyanide leaching with gold recovery via a carbon-in-pulp circuit for production of onsite gold doré.

Metallurgical testwork for cobalt and gold to continue with liberation studies and QEMSCAN work to investigate the relationships of the cobalt minerals (cobaltite, linnaeite and cobalt pentlandite) to the gold, sulphide and silicate minerals. These studies are being conducted with the Geological Survey of Finland (GTK) and the Camborne School of Mines (University of Exeter).

Rajapalot Global Analogues

As a result of the diamond drilling programs over the 2016-2018 winters, Mawson was been able to define the Rajapalot mineralization as typical of a Paleoproterozoic gold system. This well-documented deposit style appears to be late tectonic, has a stratabound geochemical control on gold precipitation and commonly has a regional granitoid association in the age range 1.75-1.85 Ga. A global metal contribution of more than 200 million ounces makes for a significant target type. The best analogues to the Rajapalot mineralization are the Homestake Mine in South Dakota; Tanami mines in Northern Territory, Australia and Salobo (Brazil).

The similarities of Rompas-Rajapalot to the Paleoproterozoic Lode Gold±Ironstone-Copper deposit style include:

  • similar age host rocks and mineralization age;
  • a similar tectonostratigraphic setting with a Paleoproterozoic sequence with large layered mafic sequence at the base, mature clastic and carbonate platform sediments, including rocks deposited during the Great Oxidation Event (GOE) transitional into deeper water, reduced facies including carbonaceous rocks;
  • post-peak metamorphic emplacement of large intrusives driving hydrothermal fluids causing metal deposition in a brittle and brittle-ductile regime;
  • a strong stratigraphic-structural control including stratabound and fold hinge related mineralization;
  • large retrograde hydrothermal fluid systems carrying significant gold and cobalt; and
  • similar iron and magnesium-rich alteration rock types forming a close association with gold mineralization.

The Rajapalot project continues to evolve with significant advances in the understanding of similar structural-stratigraphic and fluid-rock controls on apparently contrasting mineralization styles. The adoption of a “mineral systems” approach combined with the results of the recent winter diamond drilling allows us to interpret the entire new mineralized gold camp that Mawson has defined. This new interpretation has led to the definition of more than 65 kilometres of host stratigraphy in the project area. The Paleoproterozoic gold target style is a geological concept and is not necessarily indicative of the mineralization style that will eventually exist on the Property. The exploration programs systematically test strike extensions to known resources, in order to test structural and stratigraphic traps that may host this style of gold mineralization.The Rompas-Rajapalot project is a new discovery in Northern Finland where high-grade gold and cobalt have been found within an area approaching 10 km by 10 km. The nature of the terrain and all-weather access allows year-round exploration work across more than 70% of the area. Winter access is possible in the remaining area when ice and snow conditions permit, usually after mid-December each year.