2018 Annual Group Report GR378 MLN 342, MLN 346, MLN 405, MLN 459, MLN 811, MLN 816, MLN 1033, MLN 1039, ML 30512 and ML 30589, Mount Bonnie, year ending 31 December 2018

Abstract

PNX Metals Ltd ('PNX') purchased the Mount Bonnie tenements from Newmarket Gold Inc in late 2014. This is the third of the Group Reports (GR378) pertaining to MLNs 342, 346, 405, 459, 811, 816, 1033, 1039 and MLs 30512 and 30589, collectively referred to as the 'Mount Bonnie leases'. PNX are exploring the Mount Bonnie leases as part of the Hayes Creek Project, which also includes the Iron Blow leases located approximately 2km to the north. Mount Bonnie is a polymetallic Au, Zn, Ag, Pb and Cu deposit within the Pine Creek Orogen, discovered in the 1870's and mined sporadically up to 1985. It produced approximately 25,000oz of gold and 810,000oz of silver from oxide ore totalling about 110,000t in the open pit, as well as minor historical underground production. During the 2018 reporting period assays awaiting from late 2017 resource extension drilling at Mt Bonnie were received, once quality controlled were incorporated into the resource model to increase the inferred and indicated resource estimations. Pits sampled for environmental studies in late 2017 near or in tailings dams surrounding Mt Bonnie pit contained >1.53 g/t Au and >3.54% Pb from assay results received in 2018. MSU (high grade Au and base metal zones) accompanied with zones of Low-grade Au carbonaceous zones were sent for metallurgical testing to ascertain the best method for Au and poly metallic recovery, once recommendations are ascertained they will be included in the Project's Definitive Feasibility Study (DFS).