re Discovering Brewer the best Gold-Copper porphyry target in the - - PowerPoint PPT Presentation

reDiscovering Brewer

the best Gold-Copper porphyry target in the U.S.A. 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.

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Brewer Location & Context

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The Carolina Slate Belt is a gold-rich, underexplored mineralized corridor that runs northeast from Georgia up through South Carolina, North Carolina and Virginia, all the way to Nova Scotia,

• Canada. The first gold rush in the USA began in the late 1820s in South Carolina.

The former Brewer Gold Mine is just outside the town of Jefferson, South Carolina, less than 100 kilometres from 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).

Simply put: Brewer is an amazing gold-copper porphyry target and the best in the USA east of the Rocky Mountains.

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Brewer Location & Context

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Brewer is is located on the same mineralized trend 15 kilometres 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. Brewer is located 55 kilometres 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.

January 2020 4

Brewer History

1828 1970 1983 1990 1995

$450k dollars of gold production was mined (2/3 from placer mining from the Tanyard Syncline and 1/3 from the open pit)

First Mined in 1820s

Chris Cherrywell (Pancon’s Principal Geological Advisor) was the lead geologist responsible for discovering the oxide potential of the Brewer Gold Mine in 1983-84. High-grade oxide gold was mined near surface (down to ~50 metres) by

• xide-specific heap leach technology, in total 178,000 ounces of gold from

1987-95. 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

• n surface and left in the open pit.

Circa 1983-1995 Brewer becomes a Superfund Site

In 1990, following historic rainstorms, a tailings dam breached and >10 million gallons of cyanide solution contaminated nearby creek and river. The dam and plastic-lined tailings pond were repaired, and the company resumed mining in 1991.

1990 Flood Event

Drilling in the 1970s returned 64.3m of 3.3 g/t Au and 0.5% Cu from 30.8m to 95.1 m Reason to believe the oxide might be heap leachable

Drilling in 1970s

When the company abandoned the site in 1999, U.S. Environmental Protection Agency (EPA) took title to the site and oversaw water treatment operations to contain acid rock drainage. In 2005 EPA placed Brewer on the Superfund National Priorities List. The EPA confirms that Brewer, under its current control and maintenance (costing ~US$1 million/year) poses no threat to people at or near the site, nor to the natural environment.

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1999

In 1995, Brewer Gold Company notified the State of Carolina of its intent to stop operations at the mine. The State required Brewer to close and reclaim the

• mine. During reclamation activities, acid drainage began

to emerge and Brewer constructed a water treatment plant which they operated from 1995 to 1999.

Water Treatment

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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-metre depths.

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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 1.1grams per tonne of gold and

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. bit deeper, the hole might well have gotten into mineralization; the top of the southern pipe is projected to pass 50 metres below B97-2.

• Two holes 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.

1997 Placer Dome drill holes (plan view) 1997 Placer Dome drill holes (looking E-NE) www.panconresources.com January 2020 7

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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

• wnership of the Brewer property and the exclusive rights to explore and mine.

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Discovery Potential

Pancon is confident that this significant new Gold-Copper asset will be discovered less than 500 metres below surface, and probably between 200-400 metres below surface.

Most geologists who have worked carefully with Brewer core have commented on multiple events of brecciation and mineralization. Such multiple overlapping events are often favorable for building strong orebodies and are characteristic of viable porphyry copper systems. After extensive on-site and desktop research and analysis (over 400 hours), Pancon’s technical team is confident there are two separate pipes with distinct signatures forming part of a more complex mineralized system, and that additional such pipes may well exist relatively near surface and form part of a larger Copper – Gold system. The pipes and other mineralization may lie along the margins of diatremes. There are multiple indications that Brewer lies at the intersection of two major trends. Understanding the structural configuration will help us optimize our drill programs and enhances Brewer’s overall economic potential. The southwest-to-northeast trend is consistent with the larger Carolina Slate Belt trend, which runs from Georgia into Virginia, and which hosts the former Barite Hill and Ridgeway gold mines, as well as the operating Haile gold mine. At Brewer, this trend connects the main orebody with related satellite mineralization at Buzzard on the SW and at the Leach Mine, Anomaly A and

• ther areas on the North-east.

The southeast-to-northwest trend is probably the most significant control of the Brewer deposit itself, with mineralization appearing to plunge towards the northwest. The B6 pit and the northwest pit lie on this trend. Pancon considers it likely that below any significant new Gold-Copper discovery –and quite possibly as a connected/continuous part of this discovery –there exists a large Copper porphyry system with additional potential for economic resources. January 2020 9

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Discovery & Development

Pancon-ERT is confident we can quickly discover a new economic gold-copper asset at Brewer and with superior environmental de-risking systems, guarantees and capacities. Pancon is highly confident that Brewer Gold-Copper mineralization extends beyond the Brewer property boundary and onto Pancon’s Jefferson Gold Project, in multiple directions. The mineralization at the Jefferson Project’s Anomaly A and the historic Leach Mine, two kilometers northeast of Brewer, almost certainly constitute part of the larger Brewer system. Further, Pancon believes that Brewer mineralization on Jefferson Project land will be very valuable in gaining a complete understanding of the larger Brewer Gold-Copper system and its economic potential. Thus, Pancon’s Jefferson Project has relevance for and adds value value to Brewer itself. In addition to surrounding the former Brewer Gold Mine, the Jefferson Project is adjacent, on the southwest quadrant, to the land hosting the Buzzard gold project, an epithermal gold project similar to Haile and Brewer that was co-discovered by Dr. Criss Capps with Cepeda Minerals in 1996 (currently Pancon's Jefferson Gold Project Senior Consulting Geologist). Drilling by Dr. Capps at Buzzard, which is currently owned by Firebird Resources, returned multiple high- grade, near-surface gold intersections including: 6 metres of 27.97 grams per tonne, 35.3 metres of 9.76 grams per tonne, 44.7 metres of 7.07 grams per tonne, and 15 metres of 5.72 grams per tonne.

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Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8-15 Month 16 Purchase XRF gun Evaluate core, some relog Finalize proposal for phase 1 drilling and test round of imaging Phase 1 drilling with

• ne drill and two shifts

Initial test of imaging Receive assays, evaluate drilling Final imaging proposal Carry out additional imaging Phase 2 drill proposal Phase 2/3 drilling Receive results/report

Preliminary Exploration Strategy

• Further understanding will be obtained in the first stage of our

initial Brewer exploration program, which will be to clean,

• rganize and examine all existing core, using an XRF gun and an

innovative low-cost onsite hyperspectral unit, among other techniques, to examine mineralization and alteration"

• We will also determine how much core might benefit from full

hyperspectral digital imaging (a hyperspectral digital image of entire core boxes) and will choose intervals for a first pass test

• f the efficacy of this more costly technique.
• The location, orientation and depth of our first diamond drill

holes has already been established with a fair degree of certainty, and the remainder of phase 1 drill holes will be refined based on the examination of the core.

Based on work conducted thus far, much insight has been gained which will guide exploration when bid is awarded

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Industry Leaders with Environmental Assurance

Combined financial, operational, technical and risk management expertise to provide the best in class solutions that define, mitigate and contain environmental and financial liability backed by innovative financial products

Eliminating Environmental Risk

With proven success in the USA with Superfund site and strong relationships with EPA, industry leaders and State and Federal governments, Waterfield/ERT is ready to deliver assurance and consent decree within 12 months of license to explore is granted. Environmental Risk Transfer or its affiliates would assume pre-existing environmental conditions, take title to the property, sign a Consent Decree with EPA to perform the remedy for pre-existing conditions and execute a lease with the mining operator containing an indemnity for the mining operator for pre-existing environmental conditions.

Robust Environmental Risk Transfer Solution

www.panconresources.com Pancon has partnered with Environmental Risk Transfer LLC (https://www.environmentalrisktransfer.com), a privately owned company specializing in purchasing, cleaning up, and turning a profit from environmental contaminated and condemned sites, including Superfund sites. ERT is the sector leader in the U.S. environmental risk transfer industry. The Waterfield Group (https://www.waterfield.com ) and Environmental Operations, Inc. (https://www.environmentalops.com) created Environmental Risk Transfer LLC (ERT) to provide complex environmental risk-transfer solutions to corporations that wish to cost-effectively eliminate environmental liability. By offering integrated environmental experience with innovative financial products, ERT provides clients with best in class solutions that define, mitigate and contain environmental and financial liability. January 2020 12

Brewer is a “company making”

• pportunity for Pancon investors

Transforming Pancon from an Explorer to a Developer

A classic high sulphidation Copper-Gold system commonly associated with an underlying porphyry deposit in a proven gold belt and a safe pro-mining jurisdiction.

High Discovery Potential

Partnering with ERT to eliminate all risks associated with historic EPA Superfund status/liability with unmatched track record of purchasing, re-purposing and profiting from EPA Superfund sites

Environmentally De-Risked

Technical team with unrivalled local expertise and success, including discovering Brewer in 1983, Buzzard (an extension of Brewer) in 1996, and other discoveries in North America and globally, including the Brewer analogue high sulphidation Gold- Copper porphyry mine in Indonesia: Tujuh Bukit – 28.1million

• unces of gold and 3 billion tonnes of copper

Superior Talent

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Summary

Large Copper-Gold Porphyry Discovery Potential Exploration Plan Prepared & Budgeted Exploration Team Selected and Ready Environmental Assurance Secured Financial Details and Capital Structure laid out for the win

With interests aligned with the EPA/State of SC, our team can eliminate environmental liability, generate value through responsible exploration, and spearhead economic development.”

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