Overview of the WUSA Gold Project

Through a partnership with USA’s largest private landholder, Aguila has accessed mineral rights to a tract of 70,000 hectares of privately owned forestry land in the Western Cascade Ranges of Oregon. This area, called the WUSA Gold Project, secures a district that is highly prospective for high and low sulphidation epithermal gold systems. The site lies immediately east and south of the township of Cottage Grove adjacent to the Bohemia mining district where a 19th century gold rush occurred, and placer gold mining is still active.

For more than 150 years, as the gold price moved from $35 to $1900 per ounce, the gates to WUSA remained locked to miners such that almost no exploration was completed. Through long term relationship building, demonstrated commitment to best practice ESG and exploration methods, the project is now accessible to Aguila. The Company has a unique opportunity to explore a large tract of land with multiple evidence for epithermal gold mineralization including two gold in drilling discoveries.

The Cascade Range in Oregon is underlain by Eocene to Holocene intermediate to felsic volcanic and volcaniclastics rocks erupted along the western margin of North America. The Western Cascades were formed by same subduction/ Cordilleran tectonics that created gold-rich mineralization in the Andes of Peru, Chile and Columbia, and the Tethyan Belt of Serbia, Turkey and Romania.

The Oligocene-Miocence arc volcanics/volcaniclastics and intrusives are highly prospective for intrusion related high and low sulphidation epithermal gold systems that are well known around the Pacific Rim of Fire. In these volcanics near the WUSA Gold Project, here termed the Little Butte Volcanic Series there are numerous sites that provide evidence for intense epithermal alteration and intrusion-associated mineralization:

  • Black Butte & Bonanza – large hot-spring mercury mines, typical of those associated with near surface epithermal vents in gold-rich districts
  • Hobart Butte – high alumina kaolinite/dickite clay mine, formed from intense acid alteration of andesite volcanics
  • Quartz Mountain – high purity microcrystalline silica mine, formed from intense acid alteration of andesite volcanics
  • Bohemia – famous vein gold and copper-zinc sulphide field with large placer mining areas
  • Bornite – high grade tourmaline-copper sulphide breccia pipe; and
  • Margaret – 0.5 B tonne Cu, Au, Ag porphyry deposit

Epithermal gold deposits have a reasonably predictable set of features that relate to their formation at shallow depths of up to 1.5 km below the surface of the earth in continental margin settings. Around the Pacific Rim, these deposits contribute over 1 million oz per year in production. Low sulphidation veins and breccia bodies with subtle surface footprints form high-grade targets for underground mining. Vein widths are variable however grade can range to ounces per tonne, and near misses may be subtle. High-grade, low-tonnage deposits can develop over large lateral extents.

Aguila has developed a clear exploration model for discovery that can be quickly and cheaply applied at WUSA. Four areas for detailed exploration follow up have been identified, the Scorpion-Cinnabar, Huckleberry, Walker Creek and Hobart Butte prospects. Prospects are characterised by gold anomalous soil and rock geochemistry with associated, Sb, As, Hg, Bi, Mo that are coincident with classic epithermal alteration zones (alunitic, silicification, argillic and propylitic).

  • Scorpion-Cinnabar, a gold in soil geochemical anomaly has been identified across a 2.2 km long up to 400-metre-wide area. Soil samples regularly exceed 1g/t Au (up to 5.51g/t Au) above highly acid altered rocks;

  • Huckleberry, where siliceous ridges trend over 3 kilometres with high sulphidation vuggy silica textures and acidic steam vents that outcrop for 1,000 metres. Geochemically anomalous rock samples with Sb, As, Hg, Bi, Mo are coincident with classic epithermal alteration zones;

  • Walker Creek, where high-level maar-type low sulphidation epithermal alteration is developed over an area of more than 3 square kilometres. 10 vertical RC holes by an earlier explorer intersected anomalous gold over significant intervals;

  • Hobart Butte, where past production for high alumina clay highlights the intensity of epithermal-style alteration.

Joint Venture and Landholder Agreements

Aguila has gained rights to the WUSA Gold Project through a Joint Venture with Mawson Gold Ltd. Mawson’s interest in the project is held by its wholly owned Canadian subsidiary M2 Resources Corp, which is the 100% owner of Mawson Resources USA Inc, a US registered corporation.

The Joint Venture provides Aguila the right to earn an 80% interest in the WUSA Gold Project. Through exploration expenditure of US$200,000 and completion of 600 meters of drilling during the calendar year of 2020, Aguila shall earn a 51% interest in the project.

In addition, by investing a further US$1,000,000 in exploration by no later than by December 31, 2022, Aguila shall earn an additional 29% interest in the project (80% in total). On Aguila acquiring an 80% interest, the 20% holding of Mawson will be non-dilutable until a decision to mine, and Mawson shall be free carried by loans from Aguila, repayable from production cash flows.

Mawson Resources USA Inc is the 100% owner of the legal rights, title and interests in a private exploration permit (the “WUSA Exploration Permit”) signed 28th August 2017 with a private third-party Landholder.

The third-party Landholder has permitted Mawson Resources USA Inc to conduct non-invasive mineral exploration on approximately 150,500 Ha (371,900 acres) of private commercial timberlands in Lane and Douglas Counties (the “WUSA Exploration Area”). The third-party Landholder is the majority but not exclusive surface and mineral rights holder within the WUSA Exploration Area comprising 68,075 hectares where mineral and land rights are held by the Landholder; 1,447 hectares where mineral rights only are held by the Landholder; and 333.1 hectares (40 claims) of unpatented Bureau of Land Management claims held by the Landholder.

The third-party Landholder granted permission to conduct exploration and data acquisition (stream sediment sampling, rock chip sampling, mapping, and geophysical surveys) pertaining to precious and base metals (the “Exploration Activities”) on and/or across the WUSA Exploration Area, noting that Exploration Activities shall not include any drilling or other invasive activities.

Throughout the duration of the WUSA Exploration Permit, Mawson Resources USA Inc may request the exclusive optioning of up to a total of 16,187 Ha (40,000 acres) for more detailed exploration (the “Option Area”). At the time of writing, 4,169 Ha have been optioned, with rights assigned to Mawson Resources USA Inc under the WUSA Option to Lease Agreement.

The WUSA Option to Lease Agreement and its extensions, provides Mawson Resources USA Inc with sole and exclusive rights to conduct exploration on the Option Area, subject to various conditions, until December 31st, 2023. Conditions include an annual rental payment to the Landholder of US$35 per acre for the Option Area subject to an annual minimum payment of US$100,000; and annual exploration expenditures of 2020 (balance of year) – US$200,000, 2021 – US$550,000, 2022 – US$1,000,000, 2023 – US$1,000,000. Such expenditures are inclusive of the expenditure requirements defined by the Joint Venture with Mawson.

Should mine production occur the Lessee will pay a Net Smelter Return Royalty to the Landholder based on the quarterly average gold price. For additional information, please refer to NI43-101 Technical Report by Mr John Rice dated 8th September 2020.

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