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Caribou

Overview

The Caribou Gold property is located 80 kilometers northwest of the city of Halifax, Nova Scotia and 10km south of the rural community of Upper Musquodoboit, in Halifax County. The property contains a historic gold deposit which was sporadically mined between 1869 & 1955.

Gold was first found in the Caribou area in 1967, with first recorded production in 1869. Past production indicates the property was mined to a vertical depth of 240 meters producing a totals of 108,250 oz of gold from material with an average grade of 13 g/t gold. Some highlights include:

  • Large property straddling the Cochrane Hill anticline in Halifax County, Nova Scotia;
  • 10 kilometers (“km”) north of Atlantic Gold’s Touquoy Mine and Moose River Consolidated mill site and 80 km Northeast of Halifax, Nova Scotia
  • Easily accessible from secondary road from Upper Musquodoboit
  • 16 contiguous claims covering approximately 256 hectares
  • Past production of over 100,000 ounces between 1869 and 1955, as reported in a historical technical report prepared for Scorpio Gold Corporation by Guy Mac Gillivray, P.Geo. of W.G. Shaw and Associates Limited in a report dated October 8, 2008 (the “Historical Report”).
  • An inferred historic resource of 94,763 ounces of gold in 350,305 tonnes grading 8.81 grams per tonne (“g/t”) gold, uncut (the “Historic Estimate”);
  • Protects a large section of the anticline, including broad areas of Halifax Group argillites. Recent work in the region indicates argillites are a favored host rock for disseminated gold. These rocks are largely unexplored at Caribou;
  • The Historic Estimate includes distinctive zones of gold in stockwork veining hosted by shears within the anticline. These contain broader zones of high grade gold than normally seen in the camp. Historic drill results in the stockwork zones include 11.2 metres grading 10.86 g/t gold in Hole CM-98-01 and 9.8 metres grading 12.2 g/t gold in Hole SB-88-11;
  • Using a statistical grade cap for gold of 47 g/t (to compensate for nugget effect) the Historical Estimate for the Caribou Gold Property is 350,305 tonnes grading 5.83 g/t gold, or 67,425 ounces of gold; and
  • Osprey intends to plan exploration programs to test the argillites, extend known high grade veins, and expand and discover new zones of stockwork veining

The reader is cautioned that a qualified person has not done sufficient work to classify this Historical Estimate as current resources and Osprey is not treating this Historical Estimate as a current mineral resource. While this estimate was prepared in accordance with National Instrument 43-101 and the “Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves Definition Guidelines” in effect at the time, there is no guarantee that it would be consistent with current standards and it should not be regarded as consistent with current standards. The Historical Estimate is relevant to obtain a reference to mineral potential present on the property. The Company has not undertaken any verification of the historical data upon which the historical estimates are based on.


Location map for Caribou Project, Halifax County, Nova Scotia

Acquisition Terms

The terms of the LOI set forth the basic terms and conditions upon which Osprey and Logan intend to move forward with the acquisition (the “Transaction”) by Osprey of the Option to acquire a 100% in the Caribou Property in consideration for aggregate payments of $900,000 and 100,000 common shares of Osprey, payable over a period of three years as follows:

  • A $10,000 non-refundable deposit on signing the LOI;
  • $190,000 and 100,000 common shares of Osprey on Closing;
  • $200,000 and minimum work expenditure commitment of $100,000 within one year of Closing;
  • $200,000 and an additional minimum work expenditure commitment of $100,000 within two years of Closing;
  • $300,000 and an additional minimum work expenditure commitment of $100,000 within three years of Closing

Upon completion of the Transaction and earning its interest in the Caribou Project, Osprey shall grant Logan a 3.0% Net Smelter Royalty (“NSR”) payable upon commencement of commercial production. Osprey retains the right to buy down 1.0%of the NSR for $500,000, and an additional 1.0% for an additional $750,000.

Completeion of the Transaction is subject to certain customary conditions including without limitation, of satisfactory due diligence in respect of the Caribou Project, execution of definitive transaction documents and receipt of all necessary corporate and regulatory approvals, including the approval of the TSX Venture Exchange.

Historical Results

Discovery of gold in the Caribou area in 1867 was quickly followed by first recorded production in 1869.

Since that time, gold production of approximately 108,250 oz. can be documented, of which 43,205 oz. was produced by Consolidated Mining and Smelting Ltd. (Cominco) from the Holman Mine between 1934 and1947. A compilation of gold production from the Caribou district indicates the average grade for ore mined was 0.387 oz/ton gold.

The Caribou Property lay idle between 1848 and 1979, with no activity reported on the property

In the fall of 1988, Antioch Res. optioned the Caribou from John Logan and renamed the property the Logan Mine. Exploratory work by Antioch Res. includes 17 drill holes from the 100 and 500 levels of the Holman Mine, a 100 foot raise from the 800 level and slashing on the 500 and 800 levels. Limited test stoping was completed. By the fall of 1989, a valuation of the Caribou Mine Property was done and a preliminary resource estimate was completed. Antioch subsequently relinquished its option on the property due to lack of financing and poor market conditions. RJZ Mining Corp. optioned the property in 1998 and completed a limited assessment of low grade potential with emphasis on the Main Zone flexure in the Holman Mine Area and on other mineralized zones previously identified by Seabright Resources. They were unable to raise sufficient funds to advance the property and terminated the option.

In October 2006 the author and W.G. Shaw and Associates Ltd. completed a NI 43-101 compliant resource study on the Caribou property which outlined an Inferred gold resource on the Caribou property, amounting to 350,305 tonnes grading 8.41 g/t gold, using uncut gold assay data or 350,305 tonnes grading 5.83 g/t gold using a statistical cut-off of 47 g/t gold. The gold resources outlined are sufficient to warrant an advanced exploration program including surface drilling and underground sampling of high-grade veins and stock-work zones to expand the existing gold resource

Geology and Mineralization

The Caribou Property located along the Cochrane Hill – Caribou anticline, and is underlain by folded Cambrian-Ordovician age sedimentary sequences of the Meguma Group that have been intruded extensively by granite and granodiorite of Mid-Devonian age.

Two formations comprise the Meguma Group, the greywacke-dominated Goldenville Formation occurring conformably below the slate and predominantly argillite Halifax Formation.

Mineralization is a result of folding and fracturing which increases permeability and thickens beds at the crest of folds. Mineralizing fluids moving along the permeable crest fill the openings and replace favorable rocks nearby. Gold may also be remobilized into bedded leads and or shear stock-work zones related to cross cutting structures.

Mineralization on the Caribou Gold Property occurs in two main deposit styles, bedding parallel quartz veins and flexure-associated quiartz stock-work zones with or without related fissure veining.

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