Guewilik describes the property geology as follows: “The vein strikes N40ºE and dips 80º plus west. It is in granite formation, near the granite contact with the quartzite. It outcrops the whole length of the UP claim and part of the Burlington. The UP claim lies on the slope of a steep hill, the crest of which is the NE end line of the UP and the beginning of the Burlington claim. The Burlington claim lies on flat ground; heavy overburden covers the continuation of the outcrop and no effort has been made to expose it further. The vein is of fissure type filled with quartz and coarse gouge. Gouge is mostly crushed quartz, partly schist as found in No. 5 tunnel. Gold is deposited partly free, rest is found in pyrite, there are no other minerals worthy of mention found in the vein.” (Guewilik, 1935).

Geologic mapping in the 1980’s (Connor & Evans, 1986) shows the UP Burlington property to be underlain by both middle Proterozoic granite, and the middle unit of the Yellowjacket Formation quartzitic sediments, with the contact between quartzite and granite lying somewhere within the property. More recent research however, has redefined the Yellowjacket Formation to a more restricted locale, and the quartzites at the UP & Burlington property are identified as part of the Lemhi Group, more particularly the Mesoproterozoic Gunsight Formation. The granites Tysdal, 2000).

Sample descriptions and photographs from the 2011-2012 sampling near the No. 5 and No. 6 tunnels and dumps describe granite, quartzite, sheared quartzite, white quartz vein with or without sulfides (pyrite, sphalerite, galena, chalcopyrite), sheared quartz vein, strongly iron-oxidized fault zone, and rock gouge.

The 1935 reserve report presents computation of “developed and probable ore reserves” based on “map records” (Guewilik, 1935). KMS has reviewed the 1935 report, but the map records on which it is based were not available for review. The calculations presented in the 1935 report are summarized in the following table, which has retained the terminology from the report. A discussion of the terminology will follow in the discussion section.

Guewilik calculated the “Tons” column amounts of “developed” ore by simply computing a volume of vein material and applying a tonnage factor (13 cubic feet per ton which calculates to 2.46 metric tonnes per cubic meter). The columns labeled “OPT” and “Ounces” were calculated from Guewilik’s tonnage and value figures. The column labeled “Tons of Minable Ore” resulted from Guewilik’s subtraction of 20, 25 or 30 per cent of the resource tons to account for possibly un-minable ore. The column labeled “Ounces Recoverable” was calculated because of Guewilik’s estimation of 90% mill recovery.

The three blocks of “developed” ore add up to 58,600 tons at an average grade of 0.6686 opt Au for 38,813 ounces before any subtractions for mining. Guewilik reduced that amount to 38,650 tons/29,856 ounces minable and 26,870 ounces recoverable. Guewilik compares this reserve to the ore reserves originally shown on a 1907 map as Blocks A through E. The original 1907 reserves reportedly totaled 14,702 tons at a value of $13.50 per ton ($20 Au) or 0.675 opt Au. Guewilik cites improved mining and metallurgical processes over the interceding 28 years as the reason for the increased reserves.

For the two areas of “probable ore reserves”, Guewilik postulated that it was reasonable to assume two factors: (1) that the vein continues 300 feet along strike to the northeast with the same width and grade as the “developed” ore reserve, and (2) that the mineralization continues 150 feet below the lowest adit at grades equal to the grades evident in the lowest adit, the No. 6 tunnel. However, he conservatively assumed a slightly decreased value in the zone below the

As a worst case scenario, and “to show the margin of safety”, drift sample results from November 1934 sampling of drift No.5 were used in further calculations on page 6 of the 1935 report. Areas of vein surface were not changed, but the vein width and grade were taken from below the workings.

the 1934 sampling (3.28 feet and 0.2677 opt Au) resulting in a total resource of 165,260 tons at 0.2677 opt Au before any subtractions.

This is a conservative and appropriate way to assess the potential ore blocks and the associated tonnage. Survey samples collected by Mr. Brewer and reviewed as part of this audit, supports grades and width could be significantly better.