NI 43-101 Technical Report on Resources

162 Pages·2013·7.41 MB·English

GALWAY GOLD INC.
TECHNICAL REPORT ON THE
VETAS GOLD PROJECT,
DEPARTMENT OF SANTANDER,
COLOMBIA
NI 43-101 Report
Qualified Persons:
James G. Lavigne, M.Sc., P.Geo.
Pierre Landry, P.Geo.
November 6, 2013
RPAInc.55 UniversityAve. Suite 501 I Toronto, ON, Canada M5J 2H7 I T+ 1 [phone] www.rpacan.com
Report Control Form

Document Title Technical Report on the Vetas Gold Project, Department of
Santander, Colombia

Client Name & Address Galway Gold Inc.
36 Toronto Street

Suite 1000

Toronto, ON
Canada M5C 2C5

Document Reference Status & FINAL
Project #2209 Issue No. Version

Issue Date November 6, 2013

Lead Author Pierre Landry (Signed)

Peer Reviewer Wayne W. Valliant (Signed)

Project Manager Approval Deborah A. McCombe (Signed)

Project Director Approval Wayne W. Valliant (Signed)

Report Distribution Name No. of Copies
Client

RPA Filing 1 (project box)

Roscoe Postle Associates Inc.
55 University Avenue, Suite 501
Toronto, Ontario M5J 2H7
Canada
Tel: [phone]
Fax: [phone]
[email protected]
www.rpacan.com

TABLE OF CONTENTS
PAGE
1 SUMMARY ........................................................................................................................ 1-1
Executive Summary ........................................................................................................ 1-1
Technical Summary ........................................................................................................ 1-6
2 INTRODUCTION ............................................................................................................... 2-1
3 RELIANCE ON OTHER EXPERTS ................................................................................... 3-1
4 PROPERTY DESCRIPTION AND LOCATION ................................................................. 4-1
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY ................................................................................................................. 5-1
Access and Physiography .............................................................................................. 5-1
Climate ............................................................................................................................ 5-1
Local Resources and Infrastructure ................................................................................ 5-2
6 HISTORY ........................................................................................................................... 6-1
Regional History ............................................................................................................. 6-1
Property History .............................................................................................................. 6-3
7 GEOLOGICAL SETTING AND MINERALIZATION ........................................................... 7-1
Regional Geology ........................................................................................................... 7-1
Local Geology ................................................................................................................. 7-4
Property Geology ............................................................................................................ 7-4
Mineralization .................................................................................................................. 7-4
8 DEPOSIT TYPES .............................................................................................................. 8-1
9 EXPLORATION ................................................................................................................. 9-1
Underground Sampling and Mapping Program .............................................................. 9-1
Surface Sampling and Mapping Program ....................................................................... 9-2
Soil Geochemistry Survey .............................................................................................. 9-2
Induced Polarization and Magnetic Surveys ................................................................... 9-5
Mill feed Samples ........................................................................................................... 9-5
Tailings Sampling ........................................................................................................... 9-7
Summary of Exploration Results ..................................................................................... 9-7
10 DRILLING ...................................................................................................................... 10-1
Underground Drilling ..................................................................................................... 10-1
11 SAMPLE PREPARATION, ANALYSES AND SECURITY ............................................. 11-1
12 DATA VERIFICATION ................................................................................................... 12-1
Site Visit ........................................................................................................................ 12-1
Quality Assurance and Quality Control ......................................................................... 12-2
13 MINERAL PROCESSING AND METALLURGICAL TESTING ...................................... 13-1
14 MINERAL RESOURCE ESTIMATE .............................................................................. 14-1

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Summary ...................................................................................................................... 14-1
Geological and Structural Models ................................................................................. 14-1
Database – General Description ................................................................................... 14-8
Polygonal Grade Estimation Procedures .................................................................... 14-13
Cut-off Grade .............................................................................................................. 14-17
Classification ............................................................................................................... 14-17
Mineral Resource Reporting ....................................................................................... 14-17
15 MINERAL RESERVE ESTIMATE .................................................................................. 15-1
16 MINING METHODS ....................................................................................................... 16-1
17 RECOVERY METHODS ................................................................................................ 17-1
18 PROJECT INFRASTRUCTURE .................................................................................... 18-1
19 MARKET STUDIES AND CONTRACTS ....................................................................... 19-1
20 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
............................................................................................................................................ 20-1
21 CAPITAL AND OPERATING COSTS ............................................................................ 21-1
22 ECONOMIC ANALYSIS ................................................................................................ 22-1
23 ADJACENT PROPERTIES ............................................................................................ 23-1
24 OTHER RELEVANT DATA AND INFORMATION ......................................................... 24-1
25 INTERPRETATION AND CONCLUSIONS ................................................................... 25-1
26 RECOMMENDATIONS ................................................................................................. 26-1
27 REFERENCES .............................................................................................................. 27-1
28 DATE AND SIGNATURE PAGE .................................................................................... 28-1
29 CERTIFICATE OF QUALIFIED PERSON ..................................................................... 29-1
30 APPENDIX 1 ................................................................................................................. 30-1
Polygonal Resource Estimate Summary Tables ........................................................... 30-1
31 APPENDIX 2 ................................................................................................................. 31-1
Polygonal Resource Estimate Inclined Longitudinal Sections and Classification ......... 31-1

LIST OF TABLES
PAGE
Table 1-1 Mineral Resource Estimate Summary – November 6, 2013 ............................... 1-1
Table 1-2 Phase 1 Program Budget ................................................................................... 1-5
Table 1-3 Phase 2 Program Budget ................................................................................... 1-6
Table 4-1 Vetas Property Concessions .............................................................................. 4-4
Table 4-2 Vetas Option Agreements .................................................................................. 4-7
Table 9-1 Summary of the El Volcán Mine Belt Sampling .................................................. 9-5
Table 10-1 Underground Diamond Drilling Summary ....................................................... 10-2

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Table 10-2 Surface Drilling ............................................................................................... 10-6
Table 10-3 Surface Drilling ............................................................................................... 10-7
Table 12-1 QA/QC Summary ............................................................................................ 12-2
Table 12-2 Blank Summary Results ................................................................................. 12-3
Table 12-3 Summary Statistics for Gold Duplicates (30g FA-AA) .................................... 12-7
Table 12-4 Summary Statistics for Gold Duplicates (Screen Metallic) ............................. 12-8
Table 12-5 Expected Values and Ranges of CRMs ......................................................... 12-9
Table 12-6 Summary of CRM Results for Gold ................................................................ 12-9
Table 14-1 Mineral Resource Estimate Summary – November 6, 2013 ........................... 14-1
Table 14-2 Database Validation Error Summary .............................................................. 14-9
Table 14-3 Assay Statistics by Vein ............................................................................... 14-10
Table 14-4 Capped Assay Statistics by Vein Zone ......................................................... 14-11
Table 14-5 Composite Statistics by Vein Zone ............................................................... 14-12
Table 14-6 Cut-Off Grade Calculation Factors ............................................................... 14-17
Table 14-7 Mineral Resource Estimate – November 6, 2013 ......................................... 14-18
Table 26-1 Phase 1 Program Budget ............................................................................... 26-2
Table 26-2 Phase 2 Program Budget .............................................................................. 26-3

LIST OF FIGURES
PAGE
Figure 4-1 Location Map ..................................................................................................... 4-5
Figure 4-2 Concession Map ................................................................................................ 4-6
Figure 5-1 Vetas Property Location and Access ................................................................ 5-3
Figure 7-1 General Geology of Colombia ........................................................................... 7-2
Figure 7-2 Geology of the Eastern Andes .......................................................................... 7-3
Figure 8-1 Conceptual Model for Styles of Magmatic Arc Epithermal Au-Ag and Porphyry
Cu-Mo Mineralization ............................................................................................................ 8-2
Figure 9-1 Geology of the Vetas Gold Property and Contoured MMI Au Response .......... 9-4
Figure 9-2 Mill Feed Sampling ............................................................................................ 9-6
Figure 9-3 Tailings Sampling .............................................................................................. 9-7
Figure 9-4 Exploration Targets ........................................................................................... 9-9
Figure 10-1 Diamond Drill Hole Locations – Plan View .................................................... 10-4
Figure 12-1 Blanks – Gold Results ................................................................................... 12-4
Figure 12-2 Blanks – Silver Results .................................................................................. 12-4
Figure 12-3 Reject Duplicates Gold Scatter Plot .............................................................. 12-6
Figure 12-4 Reject Duplicates Gold Q-Q Plot ................................................................... 12-7
Figure 12-5 Precision Curves for Gold Duplicates ............................................................ 12-8
Figure 12-6 CRM CDN-GS-10D – Gold .......................................................................... 12-11
Figure 12-7 CRM CDN-GS-6A – Gold ............................................................................ 12-12
Figure 12-8 CRM CDN-GS-P2A – Gold ......................................................................... 12-13
Figure 14-1 Vetas Mineralized Wireframes ...................................................................... 14-4
Figure 14-2 Longitudinal Projection Showing Workings and Vein Zones ......................... 14-5
Figure 14-3 Plan View of Vein Zones and Intersection Composites (3420 RL to 3370 RL) ....
............................................................................................................................................ 14-6
Figure 14-4 Vertical Section of Vein Zones and Intersection Composites (12.5m View
Corridor) ............................................................................................................................. 14-7

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Figure 14-5 Significant Geological Structures ................................................................ 14-15
Figure 14-6 Manzanilla Longitudinal Section .................................................................. 14-16
Figure 14-7 Typical Classification Longitudinal Section ................................................. 14-19
Figure 23-1 Map of Concessions - California-Vetas District ............................................. 23-4

APPENDIX TABLES AND FIGURES
Table 30-1 Measured Resource Chip Blocks (Polygons) ................................................. 30-2
Table 30-2 Indicated Resource Polygons ......................................................................... 30-3
Table 30-3 Inferred Resource Polygons ........................................................................... 30-8

Figure 31-1 Burro 105 Polygon Grades ............................................................................ 31-2
Figure 31-2 Burro 105 Polygon Classification .................................................................. 31-3
Figure 31-3 Burro 106 Polygon Grades ............................................................................ 31-4
Figure 31-4 Burro 106 Polygon Classification .................................................................. 31-5
Figure 31-5 Corteros 110 Polygon Grades ....................................................................... 31-6
Figure 31-6 Corteros 110 Polygon Classification ............................................................. 31-7
Figure 31-7 Corteros 111 Polygon Grades ....................................................................... 31-8
Figure 31-8 Corteros 111 Polygon Classification ............................................................. 31-9
Figure 31-9 Corteros 112 Polygon Grades ..................................................................... 31-10
Figure 31-10 Corteros 112 Polygon Classification ......................................................... 31-11
Figure 31-11 Corteros 113 Polygon Grades ................................................................... 31-12
Figure 31-12 Corteros 113 Polygon Classification ......................................................... 31-13
Figure 31-13 Green 115 Polygon Grades ....................................................................... 31-14
Figure 31-14 Green 115 Polygon Classification ............................................................. 31-15
Figure 31-15 Loscas 120 Polygon Grades ..................................................................... 31-16
Figure 31-16 Loscas 120 Polygon Classification ............................................................ 31-17
Figure 31-17 Loscas FTW 125 Polygon Grades ............................................................ 31-18
Figure 31-18 Loscas FTW 125 Polygon Classification ................................................... 31-19
Figure 31-19 Manzanilla 130 Polygon Grades ............................................................... 31-20
Figure 31-20 Manzanilla 130 Polygon Classification ...................................................... 31-21
Figure 31-21 Tajo 135 Polygon Grades .......................................................................... 31-22
Figure 31-22 Tajo 135 Polygon Classification ................................................................ 31-23
Figure 31-23 La Virgen 140 Polygon Grades ................................................................. 31-24
Figure 31-24 La Virgen 140 Polygon Classification ........................................................ 31-25
Figure 31-25 La Virgen1 141 Polygon Grades ............................................................... 31-26
Figure 31-26 La Virgen1 141 Polygon Classification ...................................................... 31-27

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1 SUMMARY
EXECUTIVE SUMMARY
Roscoe Postle Associates Inc. (RPA) was retained by Galway Gold Inc. (Galway) to prepare
an initial Mineral Resource estimate and a supporting independent Technical Report on the
Vetas Gold Project (the Project) located in the Vetas Mining District, Department of
Santander, Colombia. The purpose of this report is to document the initial Mineral Resource
estimate on the Project based on drilling and channel/chip sampling completed to date. This
Technical Report conforms to NI 43-101 Standards of Disclosure for Mineral Projects. RPA
visited the property on April 4 to 6, 2011 and again on November 11 and 12, 2012.

The Project is located within the California-Vetas Mining District, which has a long history of
small scale mining and it is considered to be the largest mine in the Vetas-California-Surata
region of Colombia. More recently, the California-Vetas Mining District has been the subject
of modern day exploration and resource delineation projects that have resulted in three multi-
million ounce resource estimates.

The Mineral Resource estimate for the Vetas Gold Project dated November 6, 2013, is
summarized in Table 1-1.

TABLE 1-1 MINERAL RESOURCE ESTIMATE SUMMARY – NOVEMBER 6, 2013
Galway Gold Inc. - Vetas Project

Category Tonnes Grade Contained Ounces
(g/t Au) (g/t Ag) (oz Au) (oz Ag)
Measured 23,900 7.79 12.4 6,100 9,400
Indicated 641,000 10.62 14.9 218,800 307,700
Measured & Indicated 664,900 10.52 14.8 224,900 317,100

Inferred 1,146,000 10.3 15.3 377,000 563,000

Notes:
1. CIM definitions were followed for classification of Mineral Resources.
2. Mineral Resources are estimated at a gold cut-off grade of 3.00 g/t Au.
3. Resources are estimated using a gold price of US$1,500 per ounce.
4. High grade assay values are capped at 50 g/t Au.
5. Tonnage factor applied to estimate tonnage is 2.74 g/cm3.

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CONCLUSIONS
Based on the site visit and subsequent review of available data including diamond drilling
data and results to date, RPA offers the following interpretations and conclusions:
• Epithermal gold-silver mineralization is the dominant deposit type in the California-
Vetas Mining District and application of the epithermal gold-silver and related
porphyry mineralization model is appropriate.

• The occurrence of porphyry style veinlets underground at the El Volcán Mine and the
results from surface drilling suggest that a porphyry style of mineralization may be
present on the Vetas property. However, the exploration and development of targets
for porphyry type mineralization, in the district and on the Vetas Gold Project, is still at
an early stage.

• The Vetas Gold Project comprises one concession totalling 124 ha. The El Volcán
Mine is the primary target for exploration and resource delineation, however, the
Project also holds potential for early stage exploration and discovery of new targets.

• The procedures for diamond drilling used at the Project are consistent with industry
best practices and RPA is not aware of any factors that could materially impact the
accuracy and reliability of the results. The results and interpretation of drilling
completed can support the planning of continued drilling programs.

• The exploration program has been completed in an industry standard manner.

• In RPA’s opinion, sample preparation, security, and analytical procedures for the
diamond drilling and exploration programs are adequate.

• The quality assurance/quality control (QA/QC) program implemented by Galway and
the results, evaluated by RPA, are acceptable.

• In the opinion of RPA, the database provided to RPA is acceptable for the purposes
of resource estimation.

• Diamond drilling has intersected the major vein structures historically developed at
the El Volcán Mine. In addition, drilling has intersected a number of veins and
structures at positions between, and adjacent to, the interpreted projections of the
major veins. The distribution of vein/structure intersections, including grade and
thickness considerations, suggests that El Volcán Mine mineralization may occur in
an environment of main structures with branching, anastomosing, and linking
structures.

• The vein zones defined by diamond drilling in this Mineral Resource estimate are still
open along strike to the southwest and northeast as well as down dip, indicating that
there may be potential to discover and delineate additional resources.

• Continued drilling within the domain of the El Volcán Mine as well as below and along
strike is warranted to further explore for and delineate resources.

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• Interpretation of the vein zones defined within this estimate, integrated with the
mapping and sampling of the El Volcán drifts, will form the basis for a drill program
focused on resource expansion.

• The results of surface drilling on exploration targets are positive and indicate that the
continued development and evaluation of early stage exploration targets on the
property is warranted.

RECOMMENDATIONS
Based on the site visits and review of the available documentation, RPA recommends that
the Vetas Gold Project continue to be evaluated. A two stage exploration program is
proposed that includes continued evaluation of the El Volcán Mine, to support a Mineral
Resource estimate, as well additional exploration on potential targets.

RPA has evaluated the interpretation completed to date and concurs with the approach taken
by Galway. In RPA’s opinion, Galway should focus on assessing the spatial distribution of
gold grade and thickness of the individual vein structures. In addition, RPA recommends that
Galway:

• Create standardized, well-defined notations for each method, as well as adding
separate method fields for both gold and silver to help with QA/QC management and
data validation.

• Select reject samples after receiving the initial assay results in order to ensure that
duplicates are tested using matching analytical methods and that a variety of grade
ranges are covered.

• Introduce certified reference materials (CRM) for silver into the QA/QC process,
covering the expected range of concentrations of the deposit, if Galway believes that
silver may potentially represent a payable metal.

• Replace the standard reference material CRM CDN-GS-P2A or send it to additional
laboratories as a form of independent round-robin testing, due to the poor
performance of this CRM.

• Continue improvement of the QA/QC process to provide accurate sample insertion
and numbering of the duplicates and CRMs, as 21 (1.3%) cases of mislabelling were
detected in the provided databases.

• Carry out regular and timely QA/QC monitoring.

• Compare the statistics of assays from future diamond drill campaigns with the chip-
channel samples if an inverse distance or kriging estimation method is used to
estimate resources.

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• Complete additional density measurements for all veins prior to future resource
estimate updates or economic studies.

Galway has proposed the following work plan and budget. RPA has reviewed the plan and
considers the proposed program and budget to be reasonable. RPA understands that
Galway will proceed with the plan contingent on favorable market conditions.

PHASE 1 PROGRAM – $2.36 M:
• Undertake additional underground diamond drilling at the 50 m centre drill spacing
used to date and designed to provide further coverage of 500 m vertically below the
Reina de Oro level and 500 m along strike. The drill coverage will follow existing
mineralized plunges to add Indicated plus Inferred Resources, and fill in some gaps
between Inferred blocks to upgrade to the Indicated category. Approximately 10,000
m is proposed for this phase of drilling (20 holes at 500 m average depth). Some of
this drilling would target new veins above the bottom mine level elevation (where no
mining has occurred).

• Complete a comprehensive interpretation of the El Volcán Mine that includes the
results of the diamond drilling and underground mapping and sampling carried out to
date.

• Undertake a concerted effort to channel/chip sample and survey all old workings
above the bottom level of the mine, in a safe manner. It is recommended hiring local
miners to re-install ladders, etc. RPA believes that a Mineral Resource estimate can
be prepared based on the sampling of mine areas without the need to drill, which is
much more cost effective.

• Complete preliminary metallurgical test work on El Volcán Mine mineralization.

• Implement/improve the following procedures related to the QA/QC process:
Undertake referee sampling at a second laboratory.
o

A budget of approximately $2.36 million is proposed for Phase 1 (Table 1-2).

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