re Discovering Brewer the best Gold-Copper porphyry target in the USA east of the Rocky Mountains
Context In February 2019 a South Carolina State circuit court appointed the Brewer Gold Receiver (www.brewergold.com), who was tasked to find a qualified company to explore for new gold-copper mineralization and to ensure Brewer remains clean and environmentally safe. Since March 2019 a competitive process has been facilitated by the Receiver, with four original bidders and two finalists, one of which is Pancon-Environmental Risk Transfer. The Receiver selected our team as the winner of the bid on January 15, 2020. February 2020 www.panconresources.com 2
Brewer Location & Context The Carolina Slate Belt is a gold-rich, underexplored mineralized corridor that runs northeast from Georgia up through South Carolina, North Carolina and Virginia. The first gold rush in the USA began in the 1820s in South Carolina. The former Brewer Gold Mine is just outside the town of Jefferson, South Carolina, less than 90 kilometers south of Charlotte, North Carolina. In 1828, prospectors first discovered and started mining gold at Brewer. Surrounded by Pancon’s 100%-owned Jefferson Gold Project, the former Brewer Gold Mine produced 178,000 ounces of oxide gold from open pit mining that extended to 50-metre depths, where copper- and gold-rich sulfides were exposed but could not be processed by oxide heap leach processing facility. Brewer’s prospective geology, including diatreme breccias, associated high sulphidation alteration, gold and copper mineralization, and geophysics support a possible porphyry-style copper-gold system at depth ( Schmidt, R.G., 1978, The Potential for Porphyry Copper-Molybdenum Deposits in the Eastern United States, U.S. Geological Survey ). Bottom line: Brewer is the best gold-copper porphyry target in the USA east of the Rocky Mountains. February 2020 3 www.panconresources.com
Brewer Location & Context Brewer is is located on the same mineralized trend 12 kilometers northeast of the operating Haile Gold Mine, which produced 131,819 ounces of gold in 2018 and has measured and indicated gold resources of 3.1 million ounces (source: www.oceanagold.com). Brewer is located 55 kilometers along trend northeast of the former Ridgeway Gold Mine, where Kennecott Minerals produced more than 1.6 million ounces of gold from 1988-1999. Pancon acquired the Jefferson Gold Project in mid-2016. Pancon’s 100%-owned Jefferson Gold Project (1,758 acres/711 hectares) surrounds the Brewer property (996 acres/403 hectares) on all sides. Of the 10 holes drilled on the Jefferson Gold Project between 2011-17, nine of them intersected gold mineralization, including one averaging 1.27 grams per tonne over 164.3 metres, true width unknown. February 2020 www.panconresources.com 4
Brewer History Brewer becomes a Superfund Site When the company abandoned the site in 1999, the U.S. 1990 Flood Event Environmental Protection Agency (EPA) took title to the site and Drilling in 1970s In 1990, following historic rainstorms, a tailings dam oversaw water treatment operations to contain acid rock drainage. breached and >10 million gallons of cyanide solution Drilling in the 1970s returned 64.3m of 3.3 g/t Au contaminated the nearby creek and river. In 2005, the EPA placed Brewer on the Superfund National Priorities and 0.5% Cu from 30.8m to 95.1 m List. The dam and plastic-lined tailings pond were repaired, and Reason to believe the oxide might be heap the company resumed mining in 1991. The EPA today confirms that Brewer, under its current control and leachable maintenance (costing ~US$1 million/year) poses no threat to people at or near the site, nor to the natural environment. 1828 1970 1995 1999 1990 1983 Circa 1983-1995 Water Treatment First Mined in 1820s Chris Cherrywell (Pancon’s Senior Project Advisor) was the lead geologist In 1995, Brewer Gold Company notified the State of $450k dollars of gold production was responsible for discovering the oxide potential of the Brewer Gold Mine in South Carolina of its intent to stop operations at the mined (2/3 from placer mining from 1983-84. mine. the Tanyard Syncline and 1/3 from the open pit) High-grade oxide gold was mined near surface (down to ~50 metres) by The State required Brewer to close and reclaim the oxide-specific heap leach technology, in total 178,000 ounces of gold from mine. During reclamation activities, acid drainage began 1987-95. to emerge and Brewer constructed a water treatment plant which they operated from 1995 to 1999. Sulphide-hosted gold and copper below 30 metres depth was known, but since there was no way to process it, the sulphide-rich ore was stockpiled on surface and left in the open pit. February 2020 www.panconresources.com 5
Historical Impacts All old workings have been filled in, likely including previously stockpiled material with significant sulphide mineralization. Although most historic work was shallow, existing data on site at Brewer significantly enhances our understanding of the area to design optimal exploration strategies and tactical plans. Brewer was only mined for shallow oxide gold ore, stopping when it reached gold- copper sulfide material at 50-meter depths. February 2020 www.panconresources.com 6
1997 Placer Dome drill holes (plan view) Last Known Exploration at Brewer In 1997, Allan Bradford Resources (ABR), a small junior mining company, partnered with Placer Dome (PD) to drill 6 holes over 6 months: 4 under the former mine and 2 at targets to the south. Falling gold prices and PD corporate dynamics resulted in no further exploration until the US EPA took control of Brewer in 1999. The 1997 Placer Dome drill program was the last work done and the deepest exploration beneath the pit. The results were relatively uninformative: • The holes from the south (B97-3) and east (B97-1) were collared in the footwall and drilled down the dip; • The hole from the north (B97-4) did hit mineralization: 70m of 1.1 grams per tonne of gold and 1997 Placer Dome drill holes (looking E-NE) 0.23% copper; • The hole from the west (B97-2) went through a barren patch in the mine, which had already been identified in drill holes (such as BDH011 directly above it) and from the pit maps; collaring 50 metres south, closer to where they drilled B97-1 on the east, would have been far more likely to encounter mineralization; • Study of the data suggests that the rock was getting more favorable with depth, and if they had drilled a bit deeper, B97-2 might well have gotten into mineralization; the top of the southern pipe is projected to pass 50 meters below B97-2; • Two holes (B97-5 and B97-6) were also drilled on other targets south of the pit, and they were either drilled down the dip like two of the first four holes, or under shallow superficial deposits such as the alluvial workings at the Tanyard pit. February 2020 www.panconresources.com 7
Brewer Current Status Ongoing site environmental control and maintenance costs ~US$1 million per year • In August 2005, EPA completed a focused remedial investigation/feasibility (RI/FS) study that recommended continued treatment of contaminated water in the existing wastewater treatment plant as an interim action. • Interim cleanup activities began at the site in December 2006 and are ongoing. EPA completed a sitewide RI in December 2010. The site’s first Five-Year Review was completed in 2011 and found that the cleanup activities at the site were expected to be protective of human health and the natural environment upon completion. EPA completed a second 2016 Five Year Review found the recommended remedy to be protective of human health and the environment and recommends institutional controls be implemented. Key components of the recommended remedy include: • Revegetate the former waste rock hill slope to minimize degradation of precipitation runoff from contact with acid producing material; • Install a new extraction well (EW) within the former Brewer or B-6 pit; • Collect impacted water from the B-6 pit; • Capture the upper and lower seeps; • Construct a new 56 M gal annual capacity lime treatment plant; • Construct a new passive zero valent iron (ZVI) treatment system and aerobic wetland to polish the lime treatment effluent and lower selenium concentrations in treated water prior to discharge; EPA completed the Remedial Design Report in October 2016 (https://semspub.epa.gov/work/04/11050335.pdf). EPA recommended budgeting ~US$22 million to build a new updated water treatment plant at the site to continue to pump and treat contaminated water from the site and discharge clean water to Little Fork Creek. In 2017-18, EPA and the State of South Carolina agreed to initiate a Receivership for Brewer, so that EPA would not pay for or oversee the 2016 recommendations, but rather private companies, overseen by the Receiver on behalf of the State, would do so, in return for title to and ownership of the Brewer property and the exclusive rights to explore and mine. February 2020 www.panconresources.com 8
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