Exploration for Base and Precious Metals in the Rainy River District, Northwestern OntarioTechnical Highlights of the Nicobat Project: A Pipeline of Exploration Opportunities 1
February 2018

Peter C. Lightfoot, PhD, P.Geo.

The global inventory of magmatic nickel sulfide ore deposits has dwindled as the ore bodies in large camps are either exhausted or extend to depths where they have marginal economics. Capital investment in new mines on deep ore bodies has also been reduced in times of low metal prices. Moreover, the global exploration activities of the major producers of Ni, Cu, and precious metals from magmatic sulfide ore deposits has declined, and there has generally been a failure of the minerals industry to maintain a pipeline of new opportunities in areas with good geological potential.

Geological models for magmatic sulfide ore deposits now recognize the controlling influence of translithospheric structures at the margins of ancient shield areas 2 . This understanding has grown out of empirical studies of the structural controls on magmatic sulfide ore deposits throughout the Central China Orogenic Belt, Noril’sk-Talnakh in Russia, and Voisey’s Bay in Canada. Exploration for magmatic sulfide ore deposits can now focus in highly prospective transform rift structures. An example is the Nicobat Project area in the heart of the Rainy River District of Northwestern Ontario where a combination of geological features are associated with the known occurrences of nickel sulfide mineralization in an area that has seen limited historic exploration for magmatic sulfide mineralization.

A classic transform rift environment to guide exploration

The Rainy River crustal block comprises a group of mafic to felsic volcanic and metasedimentary rocks cut by mafic to felsic intrusions within an Archean-aged extensional window of crust bounded by major strike slip faults and cut by cross-linking structures.

The geological evidence pointing to an original basinal configuration includes the development of immature sedimentary rocks like fault scarp conglomerates common in intra-cratonic rift structure with a wrench geometry. These structures are similar to other ancient rift basins like the Carajas Structure in Para State, Brazil, as well as younger settings like the Eskay Rift in British Columbia and the Tian Shan of Western China. The mineral endowment of these transtensional rifts can be prolific.

The Rainy River block is complex with evidence of both extension and compression, but the rocks of the region are endowed with epithermal gold deposits and examples of volcanogenic massive sulfide and magmatic sulfide occurrences.

The Rainy River Block is a domain separated by the complex intersection of the Quetico, Rainy Lake-Seine River and Vermilion Faults 3 . The presence of cross-linking structures and the common association of mafic intrusions associated with these fault structures may relate to one or more periods of mafic magmatic activity that exploited structural space along a major translithospheric fault in a transtensional setting. These same structures may have accommodated transpression during later gold-forming events.

In the Thunder Bay region, these long-lived structures are an important control on Keweenawan-aged magmatism. It is this transtensional crustal architecture that provides the controlling pathways for the migration of magmas from the mantle to the surface along what are termed “magma highways” This geological environment is prospective for magmatic sulfide ore deposits containing Ni, Cu, Co and precious metals.

Is there a magnetic fingerprint to the mafic intrusions of the Rainy River block?

The traditional viewpoint that magmatic sulfide mineralization is associated with magnetic mafic- ultramafic intrusions has been an important exploration guide despite the fact that some deposits have been remobilized into adjacent sedimentary rocks (e.g. Thompson, Manitoba), and others are hosted by intrusions that are relative magnetic lows when compared to highly magnetic country rocks (e.g. Eastern Deeps at Voisey’s Bay, Labrador). Prospective mafic- ultramafic intrusions with high grade nickel sulfide mineralization provide a signature that can be evaluated using magnetic and electromagnetic geophysical methods.

The size of prospective mafic-ultramafic intrusions is typically quite small. The Jinchuan Intrusion in Gansu Province, China, projects to surface in an area of < 1.5km², yet it contains China’s largest historic and current resources of nickel sulfide mineralization. This is just one example of a large number of smallvolume intrusions that host significant nickel sulfide ore deposits. A prospective magnetic target in the Rainy River Block may have a very small footprint, but this does not rule out the mineral potential of the feeders and embayed contacts of the larger intrusions.

The Rainy River Block in NW Ontario has a complex magnetic signature. Some of the most intense stratigraphic magnetic responses are due to magnetite facies iron formation and mafic volcanic rocks, but a strong magnetic response is also due to known mafic-ultramafic intrusions and may also be due to similar intrusions beneath cover. Good examples of outcropping intrusions include the ring-like response of the Dobie Intrusion where the rocks developed at the inner contact comprise variably mineralized pyroxenite as well as magnetite gabbro. A number of small discrete strong responses are clustered along NE-SW and W-E corridors that may correlate with structural splays of the Quetico Fault. Whether all of these magnetic features are due to mafic-ultramafic bodies within the fault zones remains to be established as there is limited outcrop and drilling in the area, but any one of these magnetic features could represent a small intrusion with potential for the discovery of magmatic sulfide mineralization.

Is the Rainy River block endowed with magmatic Ni-Cu- Co-PGE sulfide mineralization?

The 0.49km² Nico1 mining patent at the eastern contact of the Dobie Intrusion is home to a historic resource of disseminated Ni-Cu sulfide mineralization which is associated with a pyroxenite. Sulfide gossans are the surface expression of Nico1 where narrow ~ N-S trending semi-massive sulfide lenses in a wider zone of pyroxenite with disseminated sulfide come to surface in areas with limited overburden.

A low grade historic non non-NI 43-101 compliant resource was quoted in 1966 by Chibtown Copper Corp. based on diamond drilling. The historic estimate comprised 5.3 million short tons above approximately 100m depth grading 0.28 wt% Cu, 0.24 wt% Ni, and 0.05 wt% Co which contained a number of 4-8m wide northerly-plunging lenses of heavier sulfide mineralization within a broader envelope of disseminated sulfide. One of the lenses has a non-compliant historic resource* of 0.225 million short tons grading 0.65 wt% Cu and 0.87 wt% Ni. The Nico1 mineral zone has received some additional in-fill and shallow exploration drilling. Although the assay data do not comply with the Canadian Institute of Mines, Metallurgy and Petroleum (“CIM”) Best Practice Guidelines, continuous preserved core from nine recent boreholes helps to provide geological information on the nature of the sulfide mineralization and the host rocks.

In 2015 the geological staff of Crystal Lake Mining Corp reported results from a drill hole designed to establish continuity of mineralization along the plunge of a lens of higher grade mineralization identified in an historic plan and sections. The results support the observation that lenses of higher grade magmatic semi-massive breccia style sulfides occur within a lower grade envelope of pyroxenitehosted mineralization. The hole also tested the possible extension down-plunge of this known mineral zone. Although disseminated and semi-massive breccia mineralization was encountered at shallow depths within the historic* non-NI- 43-101 compliant resource envelope, the hole failed to identify a northerly plunge extension of this mineral zone at depth, although the bore-hole remained within the Dobie Intrusion. No geophysical work was undertaken on this borehole to identify proximal conductive domains that may represent sulfide targets for future drilling.

The Nico1 mineralization is the most significant known occurrence of magmatic sulfide in the Rainy River Block, but historic drilling around the margin of the Dobie Intrusion has encountered magmatic sulfide mineralization at locations to the north of the Nico1 patent and to the east of the patent.

To the north of the Dobie Intrusion, the Company has drilled one hole on their Nico2 target that encountered weakly disseminated magmatic-textured sulfide mineralization within a pyroxenite that resembles the host rock of the mineralization at Nico1.

Modelling of the historic drill data is fraught with difficulty as much of the information is not contained in the public record, but there is some information for the shallow mineral zone at Nico1 that indicates that it may be effectively tested. It is the roots of the Nico1 mineral zone at depth and towards the north, and the inner magnetic contact of the Dobie Intrusion that offers a focus for further exploration using electromagnetic methods to test for high grade massive Ni- Cu-Co- Pt-Pd- Au sulfide mineralization.

Estimates of the Ni and Cu concentrations in the sulfide component of the rock (i.e. the tenor, as distinct from the grade) at Nico1 and Nico2 can be made based on the available assay data for base metals and S. The concentrations of Ni in sulfide at both locations is based on drill core from historic programs and the results are indicative of a sulfide Ni metal tenor between 3 and 5 wt% Ni in 100% sulfide which is comparable to the contact style of mineralization at Sudbury. Typical examples of sulfide mineralized core with intervals are shown to illustrate the fact that the breccia style of mineralization often achieves grades of Ni and Cu that encourage further exploration for high grade mineralization in the Dobie Intrusion.

A second occurrence of nickel sulfide mineralization was encountered in the footprint of the Rainy River Gold Project by Nuinsco Resources Ltd. (“Nuinsco”). During exploration for gold, Nuinsco encountered an ultramafic intrusive body with nickel sulfide mineralization. Nuinsco reported in 2004 that its best intersection on their Rainy River Property consisted of 9.65 m core length graded 3.00 wt% Ni, 2.69 wt% Cu, 1.6 g/t Au, 4.22 g/t Pt, 11.39 g/t Pd, and 25.66 g/t silver.

What sort of encouragement do the host rocks and mineralization provide?

Certain textural relationships between sulfide mineralization and silicate rocks are indicative of an encouraging geological environment for further exploration. Samples of available historic drill core from holes positioned within the Nico1 historic resource exhibit disseminated magmatic sulfide textures where pyrrhotite, pentlandite, and chalcopyrite reside between variably altered crystals of pyroxene and plagioclase in an interstitial relationship. These disseminated sulfides are cross-cut by what appear to be later veins and stringers of semi-massive sulfide where the mineralization comprises pyrrhotite, pentlandite and chalcopyrite, and carries xenocrysts of pyroxene and xenoliths of pyroxenite that either come from the wall rocks or are derived from more mafic rocks at depth. The two styles of mineralization are indicative of a significant sulfide saturation event in the Dobie Intrusion, and the observations encourage further exploration of the magnetic inner contact phase around the ~15 km strike length of the outer contact of the intrusion as well as possible feeder-like apophyses surrounding the Dobie Intrusion.

In the absence of surface outcrop or drill core data, the search for regional intrusionrelated targets involves a basic evaluation of the magnetic anomalies using airborne electromagnetic survey methods; this approach is designed to add new projects into the Company’s pipeline of projects.

Is the style of mineralization a potential winner from a processing perspective?

Polished thin sections of drill core from Nico1 indicate that the host rocks are pyroxenites and the mineralization comprises pyrrhotite, pentlandite, and chalcopyrite. Although there is locally some pyrite, the sulfides appear to be devoid of minerals that negatively impact process technology (e.g. arsenic-rich sulfide minerals and/or platy minerals such as talc). Examination of the pentlandite indicates that the bulk of this mineral occurs in granular form that can easily be liberated from pyrrhotite. Moreover, an electron microprobe study of the pyrrhotite indicates that the Ni concentrations in representative samples are in the range 0.27-0.78 wt% Ni. Careful attention to the early recognition of any problem chemistry or mineralogy is a key part of the Company’s proactive scientific and technical approach to understanding the mineral potential of the Rainy River Region.

How is the Company positioned to explore the region?

The land position controlled by the Company in the Rainy River Block is centered over magnetic features and adjacent to known or potential fault structures and/or known maficultramafic intrusions with magmatic Ni-Cu- Co sulfide mineralization. The land position is growing as land option agreements are secured in areas of highest mineral potential.

The Company is planning a helicopter deep-penetrating time-domain electromagnetic survey to help evaluate the mineral potential of the claims. The product and interpretation will be available to support a program of surface follow-up and drilling in the early summer of 2018.

The Nico1 patent and Nico2 claim require further drilling to establish whether the known disseminated sulfide mineralization extends at depth into more continuous zones of semi- massive breccia style sulfide. Work is in progress to secure access to ground through option agreements, and completion of the heads of an agreement is expected to trigger a program of drilling and surface and borehole electromagnetic surveying to identify highly conductive massive sulfide mineralization on the Nico1 patent.

Benefits of exploration and development projects in Ontario?

The drivers to exploration success in Northwestern Ontario are quite varied, but all come together to make this area a suitable exploration opportunity. The rule sets for exploration and development in Ontario, and the opportunity to engage First Nations in the work provides a foundation that represents potential benefits for the Province and the stakeholders. The nexus of the project is in an area with roads, rail connection to Winnipeg and Thunder Bay, and an electrical grid power supply. The area has grown a legacy of exploration and mine development resulting most recently in the commissioning of the Rainy River Gold Mine and support facilities. Open ground for staking is not common, but the Company has a strategy to secure access to some of the most prospective land through land options agreements with owners.

A significant Ni-Cu- Co-Pt- Pd-Au sulfide discovery would potentially support a new mine-mill complex that is expected to bring job opportunities and growth to the region. The supply of high quality nickel sulfide concentrates to global smelters is in strong demand and the opportunity to substitute high quality low cost feeds in place of deep and expensive ore bodies from camps is a strong driving force which is underpinned by the future demand for high quality cathode nickel for applications like batteries in electric vehicles. A discovery in the footprint of the Nicobat Project is positioned to fill gaps in sulfide smelter supply into the future.

What are the next steps?

The Company has acquired a strong land position through staking of claims in the Rainy River Block, and continues to investigate and understand the mineralization at Nico1. Through option agreements, the Company is expanding its land position, and work is now progressing towards an evaluation of the claims using deep-penetrating helicopter electromagnetic survey methods. The Company is positioned through Emerald Lake Development Corp., its operator, to undertake this work using a team of experience explorers from Ronacher McKenzie Geoscience Inc., and with the magmatic sulfide expertise of Lightfoot Geoscience Inc. The project is now growing a pipeline of opportunities, the Company will make sound technical and scientific decisions on exploration in order to drive its success.

Cautionary Statement Regarding Forward –Looking Information

This publication includes “forward looking statements”, within the meaning of applicable securities legislation, which are based on the opinions and estimates of management and the author and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Such statements relate to, among other things, the success of the Company’s exploration activities, the impact of mineralogy, the estimation of mineral resources at mineral projects of the Company, the benefits of the development potential of the properties of the Company, the Company’s ability to expand its land position and the Company’s ability to successfully negotiate agreements with landowners. Forwardlooking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “budget”, “plan”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the resource and mining industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainties involved in the discovery and delineation of mineral deposits, resources or reserves; the uncertainty of resource and reserve estimates and the ability to economically exploit resources and reserves; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of the Company to obtain all permits, consents or authorizations required for its operations and activities; and health and safety and environmental risks), the risk of fluctuations in commodity price, the ability of the Company to fund the capital and operating expenses necessary to achieve the business objectives of the Company, the uncertainty associated with commercial negotiations and negotiating with governments and First Nations, as well as those risks described in public disclosure documents filed by the Company. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of the Company should not place undue reliance on these forward-looking statements.

Readers are cautioned that the foregoing lists of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this publication are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward- looking statements contained in this publication or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements contained in this publication are expressly qualified by this cautionary statement.


1 This publication contains references to historic resources, estimates and drill data. All references in this publication to historic resources, estimates or drill data are considered historical in nature and as such are based on prior data and reports prepared by previous property owners. Key assumptions and methods used to prepare the historical estimates are not known, and Crystal Lake Mining Corp. (the “Company”) is not in possession of more recent estimates. No work has been carried out by the Company to classif y any historical estimates as current mineral resources nor is the Company treating the historical estimates as a current mineral resource. The work necessary to verif y the classification of these mineral resource estimates has not been completed by a “Qualified Person” (as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the resource estimates, therefore, cannot be treated as such as they were not made in accordance with NI 43-101 or verified by a Qualified Person. The historical estimates should not be relied upon and there can be no assurance that any of the historical resources, in whole or in part, will ever become economically viable. The author has not confirmed any historical estimates contained in this publication.

2 Lightfoot, P.C., and Evans-Lamswood, D. 2014. Structural controls on the primary distribution of mafic-ultramafic intrusions containing Ni-Cu- Co-(PGE) sulfide mineralization in the roots of large igneous provinces. Ore Geology Reviews 64: 354-386.

3 Hendrickson, M.D. 2016. Structural analysis of aeromagnetic data from the Rainy River Block, Wabigoon sub-province, Minnesota, USA and Ontario, Canada: Strain partitioning along a Neoarchean terrane boundary and implications for mineral exploration. Precambrian Research 286: 20-34.

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