Pueblo Grande Project

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Pueblo Grande Project

Latest News from Pueblo Grande

In January 2020 the Company announced that in partnership with GoldQuest Mining Corp. (“GoldQuest”) it had completed the purchase of drills and associated equipment sufficient to assemble up to 5 operational man-portable diamond drill rigs at a substantial discount to the assessed replacement value of the equipment. This equipment will be utilized to streamline drill costs and secure ongoing access to drills.

In December of 2019, the Company announced the engagement of former Pueblo Viejo Chief Geologist (2002-2006) for Placer Dome (now Barrick), Darren O’Brien P.Geo. to provide a project geology review and assist with the selection of drill collar locations and orientations for the Company's upcoming drill program. Additionally, the Company announced that field crews had completed clearing and repairs, and establishment of the necessary pathways and drill site preparations in advance of drilling at the Loma Cuaba Lithocap Zone.

In September 2019 the Company announced it had completed an extensive program of data compilation and review and delineated and prioritized eight highly prospective target areas for drill testing within the Company's Loma Cuaba Lithocap Zone. Five of the targets are classified as primary priority rank.

In late September 2019 the Company announced receipt of the government issued permit for diamond drill testing within the Loma Cuaba Lithocap Zone at the Pueblo Grande Project. The permit allows for 30 drill platforms at various key locations within the broader Loma Cuaba Lithocap target area.

The drill targets are selected by the presence of certain geological and/or geophysical characteristics commonly associated with high-sulphidation epithermal and in one case porphyry style mineralization, including a combination of a geophysical magnetic inversion low anomaly, favourable host rock or structure, silica/clay alteration and rock-soil geochemical anomalies. See accompanying drill target compilation map in the right side column of this page.

Drilling is expected to commence in Q1 2020.

Highlights of The Pueblo Grande Project

  • 100% interest in strategic land position surrounding Barrick’s Pueblo Viejo mine (largest active gold mining operation in Latin America; top 5 in the world);
  • 2 high-level historical drill discovery zones (Tres Bocas and Lechoza) warranting follow-up;
  • 8 Newly delineated drill target zones prioritized for drill testing;Five of the targets are classified as primary priority rank.
  • Substantial under-explored lithocap alteration zones proximal to Pueblo Viejo open pits;
  • Extensive project-wide drill dataset from over 200 historic drill holes totalling over 29,500 metres (DDH and RAB);
  • Situated in active and mining-friendly district within 10 km of 3 operating mine sites; and
  • Select reported historical highlight drill intercepts include:
    Zone Everton News Source
    23.4 m 4.76 23.0 Lechoza Jan 27/11 (DDH APV-30)
    10.6 m 2.96 104.9 2.0 9.4 Tres Bocas May 17/06 (DDH TBM-07)
    27.0 m 2.46 26.7 Lechoza Feb 02/11 (DDH APV11-02)
    7.5 m 2.56 47.2 1.4 4.4 Lechoza Dec 20/10 (DDH APV10-13)
    10.5 m 2.29 65.0 0.6 3.4 Lechoza Apr 13/11 (DDH APV11-30)
    All above noted intercepts commence at less than 20m drill depth and are core widths not true widths

Pueblo Grande Project Location

The Pueblo Grande Property is contiguous to the Pueblo Viejo mine operated by Barrick Gold via a joint venture between Barrick (60%) and Newmont/Goldcorp (40%). The land position surrounds the Pueblo Viejo mine site on the west, north and east sides, covering about 9,863 contiguous hectares. A second property, named the “Ponton Project” is located approximately 30 kilometres (“km”) east of Pueblo Grande in a similarly favourable and prospective geological environment. See maps for the property location illustration maps.

Highlights of Pueblo Grande Exploration Potential:

In June 2019 the Company announced results and interpretation of a geophysical magnetic 3D inversion study conducted on the advanced argillic altered Loma Cuaba Lithocap Zone of the Company’s 100% owned Pueblo Grande Project in the Dominican Republic. See the accompanying two magnetic inversion anomaly maps for additional illustrations of the Loma Cuaba Lithocap Zone illustration maps. Highlight results from the survey and interpretation are as follows.

  • Identification of five magnetic low anomalies (near surface and concealed at depth) likely associated with magnetite destruction characteristics of Pueblo Viejo style high sulphidation epithermal alteration;
  • Identification of a sizeable egg-shaped magnetic low anomaly possibly associated with porphyry style magnetite destruction alteration (possibly potassic) measuring up to 450 metres in diameter, at an estimated depth of 400 metres from surface to the top of the anomaly;
  • Identification of a large magnetic low anomaly in the southeast lithocap area, concealed at depth (+400 metres) appearing to extend eastward to Barrick`s new exploration target called Arroyo Hondo which is a high sulphidation epithermal target situated between Barrick’s mining pits and Precipitate’s claim boundary; and
  • None of the aforementioned geophysical anomalies have been drill tested by prior operators, making them compelling targets for the Company to prioritize for drill testing.

The computer-generated 3D inversion study utilized the combination of historical airborne data with newly derived ground geophysical data to aid interpretation of lithology, alteration and structural features. The inversion study was completed by Tom Weis (ex-Chief geophysicist Newmont) and Carl Wendels of Thomas Weis and Associates Inc.

Also in June 2019 the Company announced results of a detailed infill geochemical soil sampling survey conducted within the Loma Cuaba Lithocap Zone of the Pueblo Grande Project located three kilometres west of Barrick’s world-class Pueblo Viejo gold-silver mine in the Dominican Republic.

The soil sampling program identified and refined numerous multi-element anomalies of surface mineralization within the target zone; several of which have an important northwest trend. Northwest trending geological structures at the neighbouring Pueblo Viejo gold mine frequently host high-grade feeder-style gold mineralization. See the accompanying map for the Loma Cuaba soil anomaly illustration map.

Highlight results are as follows.

  • The largest northwest trending multi-element soil geochemical anomaly exceeds 2,000 metres (“m”) in length, by 400m width, and is open to the southeast, projecting from the eastern property boundary shared with the Pueblo Viejo mine site;
  • Soil anomalies contain elevated gold, silver, molybdenum, copper, zinc and lead values, with important pathfinder elements associated with high-sulphidation epithermal systems, such as arsenic, antimony, mercury, selenium and tellurium. Soil anomalies on the north portion of Loma Cuaba have a stronger base metal signature;
  • Many of the northwest trending soil anomalies are coincident with silica enriched (erosion resistant) topographic high ridges, which provide clear linear early stage exploration targets; and
  • Historical drilling has tested only small portions of these large soil anomalies, or in some cases not at all, leaving large areas prospective for future drill testing.

Highlights of Acquired Pueblo Grande Dataset:

In acquiring the Pueblo Grande Property (previously named the APV, Mermejal, Jobo Claro Loma Mate and others) and the nearby Ponton Property from Everton, the Company acquires valuable associated datasets that include:

  • Two high level historical drill gold-base metal discovery zones: Tres Bocas and Lechoza;
  • Drill hole database, including 158 diamond drill holes and 62 shallow RAB drill holes; totalling about 29,500 metres and 10,600 core - rock pulp samples;
  • Heliborne magnetic-GeoTEM geophysical survey (729km of flight lines);
  • Numerous ground geophysical surveys, including magnetics, induced polarization and max-min EM;
  • Approximately 10,750 surface geochemical samples (combined stream sediment, rock, soil, trench);
  • Extensive surface geological mapping at various detail levels; and
  • A large prospective surface area of ‘lithocap alteration’ to the west of the Pueblo Viejo mine.

Highlights of Barrick’s Pueblo Viejo Gold-Silver-Copper Mine

  • Largest active gold mining operation in Latin America; within the top 5 global gold mines;
  • 13.4 million ounces (“Moz”) gold, 74.4 Moz silver, and 298.5 million pounds copper (measured and indicated mineral resource from 169.5 million tons grading 2.46 g/t gold, 13.66 g/t silver and 0.08% copper)*;
  • Additional 3.6 Moz gold, 16.0 Moz silver, and 87.2 million pounds copper in the inferred category;
  • Annual production of 1.0 million ounces gold at $US 525.00 all-in-sustaining cost per ounce**; and
  • Refractory ore is mined by conventional open pit truck and shovel method, where gold and silver are closely associated with pyrite.

*March 2018, NI 43-101 report. **Based on annual 2017 production Barrick website

Pueblo Grande Purchase-Sale Agreement Terms:

Precipitate acquired a 100% interest in Everton’s three Dominican Republic mineral exploration concessions by delivering to Everton upon closing in January 2019:

  • $CDN 25,000 cash;
  • Seven million common shares of Precipitate subject to resale legend restrictions for up to 3 years, expiring as follows:
    • 10% (700,000 shares) with resale legend expiring 6 months from the date of issue;
    • 10% (700,000 shares) with resale legend expiring 12 months from the date of issue;
    • 10% (700,000 shares) with resale legend expiring 18 months from the date of issue;
    • 15% (1,050,000 shares) with resale legend expiring 24 months from the date of issue;
    • 15% (1,050,000 shares) with resale legend expiring 30 months from the date of issue; and
    • 40% (2,800,000 shares) with resale legend expiring 36 months from the date of issue,
  • No royalty is payable to Everton on any of the acquired concessions

Additional payment stock conditions include (i) should Everton elect to sell or dispose of any of the payment shares, and in each instance, it will give Precipitate at least 10 business days advance notice, so as to allow the Company to assist in finding a purchaser for such shares and (ii) the selective legend removal of various escrow payment share release restrictions should the Company’s common shares trade at or above $0.20, $0.40 and $0.60 per common share for 10 consecutive trading days on the TSXV (based on a volume weighted average price, “VWAP”). Pre-existing advanced stage or mining related commitments to a third party include (i) a sliding scale net smelter royalty (NSR) ranging from 1%, where gold is under $US 1,000/oz, to 2%, where gold is over $US1,400/oz and (ii) a cash or share payment in the event the a resource of 1.0 million gold equivalent ounces or greater are delineated in various indicated and inferred categories.

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