Notice to Readers:

The following discussion contains references to inferred mineral resources in several places. Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined economically. It cannot be assumed that all or any part of inferred mineral resources will ever be upgraded to a higher category. Mineral resources are not mineral reserves and do not have demonstrated economic viability.


The Tower Mountain Gold Project was acquired (100%) by ValGold Resources Ltd. (ValGold) in 2001. It was the subject of small drill campaigns by prior management from 2002 to 2005 which were used to compile an NI 43-1010 compliant inferred mineral resource of approximately 151,000 ounces in 2005 (see below). Further drill programs were completed in 2007 and 2011 and an airborne survey was flown in 2011.

ValGold's focus shifted during the period from 2002 to 2012 to the Garrison Gold Project, Venezuela, the Ukraine and other jurisdictions with Tower Mountain being addressed only periodically. The property hosts several identified gold zones which have largely been discovered from surface prospecting and are open on strike and at depth. Both lower grade bulk tonnage and high-grade vein hosted gold mineralization has been found.

ValGold is developing a computer-based three dimensional model of prior drilling on the property. A targeting analysis will also be completed integrating drill results, regional geology, geochemistry and geophysical results. These modern tools will be used to evaluate the property's potential and to coordinate future evaluation and drilling programs.


The Tower Mountain Gold Project is owned 100% by ValGold and is located approximately 40 km west of Thunder Bay, in northwest Ontario. The property is underlain by Archean-age volcanic and sedimentary rocks with a syenitic intrusive complex being an important focal point for the widespread gold mineralization. Exploration targets include both high-grade veins and large low-grade bulk mineable deposits and several zones of interest having been discovered in earlier drill campaigns. In 2011, ValGold drilled the 31-Bench Zone (2.00 g/t Au over 27.0m), 04-36 Zone (1.136 g/t Au over 16.5m), the 04-9 Zone (0.54 g/t Au over 18.0m) and the UV Zone (0.815 g/t Au over 73.5m). The U-V Zone contains an NI 43-101 compliant inferred resource of 151,000 ounces in a bulk tonnage model within 7.15 million tonnes at an average grade of .66 g/t.

Exploration History

Exploration work by ValGold on Tower Mountain began in November 2002 and focused on diamond drilling. Eight drill programs comprising 75 drill holes and18,700 metres were completed to August 2007. The majority of drilling was conducted in the U and V Trench areas (U-V Zone) and defined several mineralized structures. The most continuous of these structures is designated the Main Vein which dips moderately northeast and can be traced along strike for a minimum 400 metres. The Main Vein measures from 0.6m to 20.0m true width plunging steeply to the southeast. Drill intercepts from this zone returned assays ranging from 304.00 g/t Au over 3.0m in drill hole TM04-3 to 2.58 g/t Au over 55.5m in TM04-9.

Additional zones of high-grade mineralization have been found. The 04-31 Zone, located 800 metres southeast of the U-V Zone, appears similar to the U-V Main Vein. This target was tested with two holes, with the best drill intercept returning 21.14 g/t Au over 1.5m. A hole drilled in 1996 by Avalon Ventures Limited in the vicinity of the 04-31 Zone was orientated sub-parallel to the zone and returned an average grade of approximately 0.3 g/t Au over its entire 739 metre length.

The third high-grade zone identified is the 04-36 Zone located 400 metres southwest of the U-V Zone. Unlike the U-V and 04-31 Zones, the 04-36 strikes north-northeast. Two drill holes have intersected this zone; one hole with 41.35 g/t Au over 1.5m and a second hole with 5.31 g/t over 1.5m.

The following table summarizes the drill programs and highlights of the eight drilling campaigns conducted by Resources from 2002 to 2007.

Highlights of Tower Mountain Drill Intersections (2002 2007)

A NI 43-101 compliant resource estimate for the U-V Zone was compiled by Caracle Creek International Consulting Inc. of Sudbury, Ontario. The report dated February 9, 2006, is filed on SEDAR. The resource estimate for the U-V Zone consists of 151,000 gold ounces within a bulk mineable volume. The zone is open to expansion on strike to the southeast and at depth. ValGold also completed an airborne geophysical survey over the property to complement the 2011 diamond drill program. The survey was intended to test for any geophysical signatures to the newly discovered gold zones and to determine the potential extensions of the zones beyond the drilled areas. The survey was not interpreted by prior management but is now under way.



The regional geology of the Tower Mountain property is analogous in many respects to the setting of world class gold deposits found in the Timmins and Kirkland Lake Camps in northeastern Ontario. The property is underlain by Timiskaming-like clastic sediments and felsic-to-intermediate alkali volcanics which are, in turn, intruded by felsic to intermediate stocks and sills. Numerous gold occurrences, spatially related to felsic intrusions, large zones of alteration and sulphide mineralization, and the presence of several small and large-scale faults indicate characteristics favorable for both bulk tonnage, disseminated and high-grade vein styles of gold mineralization.

Exploration by previous property owners identified numerous gold occurrences proximal to the contact of the Tower Mountain Intrusive Complex ("TMIC") and along the contacts of dykes radiating out from the TMIC. Broad zones of disseminated gold mineralization, often containing discrete high-grade vein material, are accompanied by up to 25% pyrite. Gold mineralized zones commonly are altered by quartz, ankerite, tourmaline, hematite, chlorite, epidote and sericite.

Several gold occurrences are also hosted by pyritic breccias containing up to 20% tourmaline. Grab and channel samples collected by previous operators returned gold values ranging from 1.0 to 28.0 g/t. Historical drilling identified several broad zones of anomalous gold mineralization including high-grade zones of up to 5.9 g/t Au over 11.0 meters.

2011 Drill Program

In 2011, ValGold completed two diamond drill programs, referred to as Phase 1 & 2 of totaling 29 holes over 4,680 meters. Based on these results (set out below), Tower Mountain has significant potential to host near-surface, large tonnage, low-grade gold mineralization amenable to open pit, bulk mining methods.

Phase 1 Highlights:

The Phase 1 program in February 2011, consisted of 2,100 metres of core drilling in 13 holes targeting the 04-36 Zone, 04-9 Zone, U-V Zone and the 31-Bench Zone.

04-36 Zone:

04-9 Zone:

U-V Zone:

31-Bench Zone:

Phase 2 Highlights:

Phase 2 in May/June 2011 onsisted of 2,580 metres in 16 holes. The program was designed to provide additional data and to better determine the dimensions of the wide intersection of low-grade gold mineralization encountered on the 31-Bench Zone in Phase 1.

The Phase 2 included 2 core holes targeting the near-surface and down-dip extension of the wide, low-grade gold mineralization beneath drill hole TM-11-64. Additional holes are then targeted the south-westerly extension of this wide gold zone outlined in Phase 1 (TM-11-64 to 71).

31-Bench Zone

Preliminary definition of the 31-Bench Zone used the overall average value for each hole when assaying the entire hole and not applying a cut-off grade. For Phase 1 and 2, the average grade of each hole ranged from 0.2g/t to 0.4g/t Au over widths of 100 to 200 metres. Within this mineralized envelope there are better grading sections over significant widths such as the following:

The Sections were planned to be 60m apart and with 3-5 holes per section to define the 31-Bench Zone.

For a complete listing of the results, please refer to:

Drill Hole Location Database, Drill Hole Location Map (High Res) and Drill 31-Bench Zone Section 4 with significant assays (High Res).

Some Sections are composed of multiple intersections of significant gold values and more drilling is required to fully delineate the potential size of the Zone.

The mineralized intersections are reported as core lengths because, as yet, insufficient data is available to calculate true widths. A program of quality control and quality assurance of the sampling was undertaken with the insertion of blanks and standards in the regular stream of assay samples submitted for analysis. A check of the values did not find any irregularities in the Certificate of Analysis from Accurassay Laboratories.

On a property-wide scale the drilling has tested only a small portion of the peripheral extent of the Tower Mountain Intrusive Complex where previous operators discovered up to 25 occurrences with grab sample assays of greater than a gram. Detailed AEM results and ground geophysical surveys should help in targeting new prospective gold zones as one of the key factors in the 31-Bench Zone mineralization is pyrite running 3-10%.

Drill Hole Assay Results

Drill Hole Location Map