The Property forms part of the Kootenay Arc belt in southeastern British Columbia, a northerly trending arcuate structural zone, which includes Proterozoic to Ordivician sedimentary rocks which have been intruded by igneous granitic rocks of the Nelson batholith. It is believed that these intrusives are related to the gold silver mineralization found in the Bayonne and Sheep Creek properties. The belt is characterized by open to isoclinal north-trending folds in the oldest sedimentary rocks, which contain stratisform zinc-lead-silver deposits in Cambrian limestones and dolomites and gold deposits in quartz veins, filling late crossfaults.
The Sheep Creek property (Motherlode, Reno, Nugget, Goldbelt and Queen) produced 632,590 ounces of gold with an average grade of 15.12 g/t Au from the Reno, Queen, Goldbelt, Nugget, and Motherlode mines, and 252,461 ounces of silver.(2) Between 1899 and 1951 the Sheep Creek Camp exposed 55 Au bearing quartz veins distributed over a roughly 8 kilometres north-south trend. It is noted that 34 of the 55 veins have been past producers.
The Property has the following historic resource:
Note: The reader is cautioned that a qualified person has not done sufficient work to classify the historical estimate as current resources and Margaux is not treating the historical estimate as current mineral resources. The resource/reserve categories disclosed in the historical estimates are not consistent with current definitions. While we believe the estimates were completed to the standards of the day they do not use current mineral resource and reserve categories as required by NI 43-101. The historic resource includes 1,179.2 t at 5.3 grams per tonne in the proven category which is a stockpile owned by an unrelated 3rd party and not included in this transaction.
(2) Kushner, W, 2013: Geochemical Assessment Report on the Sheep Creek / Bayonne Property, Yellowstone Resources Ltd, Private company report.
(3) Price, B. (P. Geo.), 1988. Geological Summary Report Nugget Mine Sheep Creek Area prepared for Gunsteel Resources Inc.