Interview Scottie Resources: Exciting Story in the Golden Triangle

AUX Resources brings another promising property to our Company in the form of the Georgia pro-ject. The former producing mine stands for large gold deposits with grades up to 27.6 g/t. The prop-erties of AUX Resources are adjacent to our Cambria project and complement it perfectly. The transaction offers benefits to all parties: Shareholders now have three promising projects in their portfolio. In addition, AUX Resources has just successfully completed a round of financing. We expect the transaction to close by mid-year.

In the Golden Triangle, distances are short and it is easy to see the neighbor. What was unique about the relationship between AUX Resources and Scottie Resources was that there had been previous overlaps in personnel. For example, our VP Exploration, Thomas Mumford, is also a technical advisor at AUX Resources. I myself have served as a director at AUX in addition to being CEO for Scottie. Rest assured that the most recently announced acquisition is not a rush job but a careful consideration by qualified individuals in the best interest of all shareholders involved.

We create value through exploration in several ways. The area is naturally undergoing rapid "deglaciation," exposing never-before-seen rocks. Our field mapping geologists have discov-ered numerous new high-grade gold occurrences by focusing on recently retreating glaciers. We are also using new geological models to better understand the mineralized systems identi-fied in the past and to provide a framework in which they can be explored and expanded. In the past, the fragmented land package in the area has constrained many of the large-scale geo-logic models we are now pursuing. Our expanded mineral claims now provide the latitude needed to move the project forward. In addition, we are currently operating in a different economic climate than in the past. When the Scottie gold mine was in production, the gold price was USD 300/ounce and the cut-off grade for the mine was 10 g/t gold. Now the gold price is well over USD 1600/ounce and comparable mines in the area have cut-off grades of 3 to 4 g/t gold, which ultimately lowers the threshold of what can be considered economical.

Compared to most projects in the Golden Triangle, the infrastructure in place at the Scottie Gold Project is exceptional, including a year-round road that connects to a nearby deepwater port. In 2017, Pretium installed a 57-kilometer power line to supply electricity to the newly established Brucejack Mine. The power line extends to within 1.5 km of the historic Scottie Gold Mine, which was previously powered by diesel generators. In addition, Ascot Resources, which is adjacent to Scottie Resources to the south, has secured funding to restart the 2800 tonne per day Premier mill. The mill is located 20 kilometers south of the Scottie gold mine. We also have a small mine permit that will be of interest to many mid-tier producers looking to start operations in the area quickly.

The 2019 and 2020 drill programs have delivered exceptional gold results on all three zones, demonstrating that they stand on their own as excellent independent exploration targets - but together speak to the existence of an extensive mineralized system. The economics of the broad zones of near-surface mineralization (e.g. 7.44 g/t over 34.78 meters) at the Blueberry Zone is enhanced by its valley floor location and the fact that it occurs adjacent to the main haul road. The Scottie Gold Mine was shut down with over two years of production remaining and was severely underexplored due to pressures when the mine was commissioned. Drilling around the ore body in areas close to the existing underground workings returned exceptional grades, such as 109.4 g/t gold over 2.53 meters. The 2020 season was the first to drill test the domino structure and confirmed a mineralizing system with 12.4 g/t over 2.69 meters along the trend of the intercept 2 km west of the Scottie Gold Mine.

Drilling in 2021 will begin in mid-June at the Blueberry Zone and will expand to the Scottie Gold Mine and Domino Zones later in the season. In total, we plan to drill 12,500 meters with 3 diamond drill rigs and will also explore the Scottie Gold Mine for the first time using electromagnetic (EM) drill hole surveys. To begin work, our staff at Stewart is currently preparing our core drilling rig for a busy summer. In addition, drilling on the Georgia project of AUX Resources will start in the summer. Investors can therefore expect a steady news flow.

The acquisition of AUX Resources, which just closed a financing deal with Eric Sprott, puts us in the comfortable position of having more than CAD 6 million in cash to fund the 2021 projects. Even be-fore closing the transaction, we had several financing options. The current solution is the best for all parties involved.

We see ourselves as an exploration company focused on consolidation and aggressive exploration in a fragmented area that is chronically under-explored. We believe the results we have achieved in just a few seasons and the land package we have put together, particularly after the AUX Resources acquisition, make us a compelling exploration story. As we continue to expand the zones of mineralization, we will continue to re-evaluate our position as an exploration company versus a near-term producer. If a larger company comes into the southern part of the Golden Triangle, we are sure we will be a company to watch.

In terms of precious metals, the Golden Triangle is undoubtedly one of the most exciting regions in the world. Several recent successes illustrate the potential, including the sale of GT Gold Corp to Newmont, the recent development of the first resource at Treaty Creek by Tudor Gold, and the positive preliminary feasibility study by Skeena Resources. Most recently, Yamana Gold invested more than CAD 20 million in Ascot Resources, a company that is our neighbor in the Golden Triangle. This transaction demonstrates the great interest in the region.

As major shareholders, we are in the same boat as private investors. I myself own more than 9 million shares in our Company. We strive to engage with our existing shareholder base through regular press releases and are active on several social networks, including LinkedIn, Twitter, Facebook and Instagram. To get a sense of Scottie's recent exploration work, interested parties should visit our YouTube channel. This way, investors can be part of the action as we begin another exciting exploration season in the Golden Triangle.