Contact Gold’s Green Springs gold project - Breathing new life into forgotten gold mines

0:12 Hi, everyone. Thank you for joining Contact Gold's live investment summit today hosted by 6. Today, we're going to be focusing on the company's Greensprings Gold Project, breathing new life into forgotten old mines. President and CEO Matt Lennox-King will walk you through a company presentation and then we will be accepting questions. As a reminder, you can submit your questions in the Q&A panel in the right-hand side of the screen at any point during the presentation. The presentation today is also available to download in the handout section if you'd like to

0:43 follow along. Without further ado, I'm going to hand over to Matt to kick things off. Great, thanks very much, Jane. Good morning, good afternoon, or good evening, everyone. Thanks for attending our Summit with 6 here on Contact Gold and specifically our Greensprings Gold Project in the great mining state of Nevada. We trade in Canada on the Toronto Venture Stock Exchange under the symbol C and in the US on the OTCQB with the symbol CGOL. Given we are doing an investor presentation, I will make some forward-looking statements, and I would please ask you to pay attention to the cautionary statement here on slide 2.

1:29 So when we look at contact gold here in the middle of November 2020, we're really looking at a rebuilt foundation for the company. This is based primarily on our strategic land position in Nevada where we have large projects and land positions both on the Carlin trend and on the Cortez trend. We recently completed at the end of September a $15 million financing underwritten by Cormark Securities. We really rejuvenated our shareholder base. We brought in a number of new institutional investors along with key retail investors. And that's provided us with a very strong treasury to accelerate exploration, first off at our Green Springs project. Our focus as a group has always been on the discovery and deposit definition end of the value creation spectrum.

2:21 We see really strong oxide grades and big thicknesses at both our Green Springs and Pony Creek project. We're actively drilling at Green Springs now. That program started on September 2nd. Yesterday we put out 3 really great drill results from the Echo Zone at Green Springs and that means we still have results pending for 31 additional drill holes through Q4 and into Q1 2021. Our team really is composed of a group of individuals whose experience and expertise spans the mining and capital market spectrum. Led by myself on the exploration and management side. We have a group of geologists, capital market professionals who have deep experience in Nevada, both on the corporate and on the technical side.

3:15 On the board of directors, led by our chairman John Dorward, we have a group of mine builders, serial mining entrepreneurs and capital markets professionals that we think really is second to none for a company of Contax size and stage of evolution. Looking at our capital structure, as of today post financing, we have 240 million shares outstanding at a current trading range of around 14 to 15 cents Canadian. That will give us a market cap of approximately 33 to 35 million Canadian. Cash is approximately $8 million and we are actively drilling at Green Springs today. Fully diluted share count, 304 million.

4:02 When we look at the major shareholders, we'll start off with Waterton, one of the founding shareholders in the company. They own 41.5%. Through the new financing, we have increased our institutional ownership from what was approximately 9% pre-offering to 27% today. Management and board collectively own approximately 4% and that leaves our retail float or our float at about 24%. You will note that Newmont Mining does own a 3% stake, and this is a legacy of an original investment by Goldcorp back in 2017. We have analyst coverage from Brock Colterjohn at Coremark Securities, who I believe has a very pragmatic view on Green Springs and Pony Creek and is well worth reaching out to.

4:56 Our focus has always been in Nevada, in the Great Basin, and looking really at Carlo type Gold deposits. So that's the principal type of Gold deposit that is mined today in Nevada. And when we think of Nevada, we think of a major mining state. We're looking at a jurisdiction that over its mining history has produced well in excess of 200 million ounces of gold on an annual basis. It accounts for about 75% or three quarters of US gold production. And globally, depending on the year, we're looking at either the number 4 or number 5 global gold producer. Really, it's a very favorable jurisdiction, not just that there are great rocks to host gold deposits here, but also you have a very well established permitting and regulatory regime that allows you to progress from exploration to development and ultimately to production.

5:54 Our 2 main assets here that we are active on are Green Springs at the Southern end of the Cortez trend and Pony Creek, which today is playing a bit of a supporting role to Green Springs on the central part of the Carlin trend. So we'll start at Green Springs. As you can see here, we're classic Nevada basin and range topography. Here we're looking across the historic Green Springs open pit heap leach mine that was active in the late 1980s.

6:29 By today's standards, it was a very small mine. It produced only 74,000oz of Gold, but the grade was very, very strong at 2.3g. That's especially strong in today's context. We are looking at Carlin type Gold mineralization. Simply put, That is classic Nevada Gold mineralization. And here it's hosted in 2 different units, the Chainman Shale and the Pilot Shale. Both are important regionally.

7:00 We have Kinross's Bald Mountain Mine to the north, the Pan Mine, which is owned and operated by Fiori Gold, and their Gold Rock project as well. These are all either active mines or development projects hosted within those same rocks. As I mentioned previously, we started our 2020 drill program on September 2nd. That is budgeted as a 7,300-metre program. As of today or as of last night, we've completed 34 drill holes for approximately 4,800 meters. So we're well on our way to program completion. And we have received and released results for 3 holes from that program so far. So yesterday we released the first holes at long last from the 2020 program from the echo zone. Certainly the headline there is the 2.18 grams per ton over almost 29 m in a hole to that is an offset or a step out of approximately 25 m from an existing zone. It's a great way to start on what you'll know on each of these holes is that we have very strong cyanide solubility.

8:08 That's something we try to address early on in any project that we work on. And this is a very good indication that Greensprings could 1 day again be an operating key bleach mine. Quickly, before we get into the nuts and bolts, we're looking at an 18.5 kilometre square property position. We have an approved plan of operations, meaning that we are fully permitted for exploration and drilling. Access is fantastic, and we are roughly an hour's drive from the old mining town of Eureka and approximately an hour and a half drive from Ely. We'll look a little bit more closely at the district here. Green Springs itself will put front and centre in the district.

8:56 It sits 10km to the east of the Fiore Gold land package where they have the Gold Rock development project that's at feasibility stage. They're actively working on advancing that towards production. They have the Pan Mine which produces on the order of 45,000 ounces per year, puts a lot of cash on their balance sheet. And both these deposits are hosted within the same rocks that we see and are exploring in at Great Springs. Finally, to the north, there's Mount Hamilton, which is 500,000 ounce, approximately, gold deposit, roughly 4 million ounces of silver owned by our shareholder, Waterton. And when we step back, we see a very active district, considerable current resources or reserves in the ground, 2 active feasibility studies, active mining, and certainly, I think perhaps most importantly, our ongoing drill program at Greenspring.

9:54 We'll now take you through the key target zones where we're active this year and have been targeting. So our whole concept here is looking for that oxidized gold mineralization in the near surface. The first set of targets are what we call the mine trend. That stretches from an area down at Echo, where we just had the drill holes come out from yesterday, up all the way through to what we call Charlie up here in the north. So that's looking at chain and hosted near surface Gold mineralization and incrementally increasing the footprint of what we see there. The next set of targets that we're interested in this year and could have wide-ranging implications for the rest of the property are the Bravo and Alpha zones.

10:42 So these are also near-surface thick intervals of up to 1.68 over 35 meters of oxidized gold mineralization, but these are hosted in the pilot shale. That's the secondary unit. It's relatively unexplored here at Green Springs and we think there's significant potential to expand that concept across the property. Finally, we come to the Tango, Whiskey and Foxtrot targets, which are new, undrilled green fields targets, where we think there's an excellent potential to come and make new Gold discoveries based on what we see as far as the geology, what we see as far as Gold and rock samples at surface. We also have the Gulf target, which was drilled back in 2017 by a previous operator.

11:31 They drilled 2 holes, both hit very strong grades at over a grand per ton of gold mineralization over about 6m in the near surface. So we have drilled follow-up holes at Gulf as well. Finally, the fourth set of targets, and we think, we'll say for the North American audience could be one of the real home runs here, is testing beneath the mine trend down to the pilot shale. We'll take a look at that in a few slides. Starting up in the north, we have the Alpha and Bravo zones. They're separated by nearly a kilometer. We're looking at shallow or near surface oxidized gold mineralization with very strong cyanide solubility numbers from initial bottle roll testing up to 99% gold recovery at Bravo. It's an excellent indication or an excellent sign of potential heap leach processing here again in the future.

12:30 We'll focus in on Alpha here. And what we see at Alpha is we have our near surface and shallowly dipping zone of gold mineralization hosted in the pilot shale. And this will become important on the next slide. Here it's specifically open both down dip to the left, up dip to the east or to the right, and also in and out of the page. This in and of itself is a very exciting target. What becomes, I think, more interesting or potentially more interesting is coming to the south. So now we've come about 1.5 kilometers or a mile south back to the mine trend. We're looking east through a composite long section. So there is actually a lot of information here.

13:17 And spanning from the Charlie North zone all the way down to Echo, where we had the drill results out yesterday, we can see the historically defined or identified zones of Gold mineralization at Charlie North, Charlie, Delta and Echo. Those are all hosted in the Chainman Shale. That's effectively what outcrops or sticks out of the ground. Beneath that, there's another unit called the Joanna Limestone. It's not a good host for gold mineralization here, but can be elsewhere in Nevada. And then finally we have the pilot shale, that same unit that's strongly gold mineralized at Bravo and Alpha, projecting all the way through this mine trend and off to the south. Now this has been, or was identified by previous operators with 9 widely spaced and I would say curiously targeted drill holes but what it does do is gives us very good geologic control on where the pilot shale is and how we target that.

14:19 Furthermore, one of those drill holes did have a gold intercept just here beneath the Charlie pit of approximately 0.3 grams per ton over 7 meters. So pretty good proof of concept that this pilot shale can be strongly gold mineralized. So our target, our targeting concept here, I believe is quite straightforward, and that's drilling beneath the existing zones of gold mineralization at Echo, at Delta, at Charlie and Charlie North, focusing on the main faults or structures that control gold mineralization in that upper zone, projecting those faults down to depth and looking for those new gold discoveries in that environment.

15:05 The total depth of drilling to get down through the chainman, through the Joanna limestone, through the pilot shale, and into what we would consider the shutdown rock, which is the Gilmette limestone, is on the order of 150 to 200 meters, so still very shallow and certainly shallow if you were to compare this to a similarly staged project in say northern Ontario. We'll look in a bit more detail at the echo zone. This is the highest grade zone that's been identified to date at Green Springs. We're looking at up to 5g over 39m of oxidized Gold mineralization, starting at a depth of about 70m, so still quite shallow. The main control to mineralization here is that mine trend, so that's your north-south, essentially structural corridor that projects from Echo all the way up to the Charlie North target.

16:05 The second major control that we see are a series of northwest or nearly east-west faults that project through this area and that's where we see the real kick up in grade. So removing those, yesterday we released these 3 holes. So 41 meters at 0.35, 28 meters at 2.18, and 28 meters at 0.44. So those are all step outs. And we're going to take a look at a cross section. So here we're looking to the West. We've simplified things a bit.

16:47 And just to highlight, so we have hole 2 here on this section, we have hole 3. One thing that's interesting on hole 3 is that we had a zone where the drill was not able to return any sample. We believe that's due to the intensity of alteration and structural deformation within that Joanna limestone and we are looking to redrill that hole. So the story here at Echo, if you get right down to it, is quite simple. We have 2 faults, we have one in the north, 3 faults, I beg your pardon, 2 and 3. And it's these faults, which are east-west oriented, cutting the section that we see the kick up in grades and thicknesses adjacent to within that lower chainman.

17:38 So this scenario here, you can see a couple of gaps in the historic drilling that we think are very interesting and are going to look to infill here as well in that scenario there. So certainly it's very encouraging here at Echo what we've been able to turn up so far. And when we look at the material that's coming out of the drill, so this would be from the core drill or the diamond drill, you can see that chainman limestone. It's strongly sheared, it's intensely oxidized and this would be akin to the 2-gram material that we saw in yesterday's drill release. So, when we look at that drill program again, really it's focused on 2 things. 1, it's focused on expansion of known zones. So that's that near surface incremental progress, we'll call it high confidence, low risk drilling on

18:34 the shallow material on the mine trend at Bravo and Alpha. We're also looking at 30% of the metres of the budget here going to that deeper test of the pilot shale beneath the mine trend, and then 30% allocated to testing the brand new greenfields targets like Tango, Whiskey, Foxtrot and Golf. So thus far, we're looking at 34 holes complete, results in for only 3 of those holes. And that equates to 31 holes remaining and almost the full 4,800 meters of core still to be assayed. Now, as far as next holes to expect, the next holes in the drill sequence were from what we call the Zulu target, which is the southern end of the mine trend to the south of Echo.

19:31 It's either being poorly tested or not tested at all. And that's where we see the chain when shale so the shallow or original host unit projecting off to the south. So that's what I would look for as far as next year results.

19:45 From Green Springs. So 2020 has certainly been a very catalyst full year for us. When we think back to June, we had the permit for our Pony Creek project finally come in. So that's our plan of operations and we'll facilitate a drill program there in the spring of 2021. Obviously, the major catalyst for us was the September financing. It revamped our capital structure, it brought in a number of very key and supportive long-term shareholders, and I think most importantly, provided us with that robust treasury to support that started drilling at Green Springs, which did start in September of 2020.

20:31 And then we've started to see the fruits of that program and of that financing with yesterday's drill results. We expect those to continue from November well through Q1, 2021. Now, as far as future drill programs, we do anticipate Pony Creek drilling starting in the spring of 2021. And we certainly would like to get back on the ground at Green Springs in Q1 of 2021 as well. We're off to the races. We're very excited with what we've been able to accomplish so far this fall. And we're also very excited for what the gold market will bring in the coming months and years. You can of course follow us on all the usual social media channels or on the website at contactgold.com.

21:18 So thank you very much. I'll turn it back to Jane for a Q&A session. Thank you.

21:26 Great, thank you very much for the presentation, Matt. We did have some questions come in, so let's jump right into it. Great. Our first question is from Jim. Jim is asking, in the echo zone of Green Springs, to reach the deeper pay layers, would you have a deeper open pit mind of an underground mining operation? Would you bring in an experienced partner to set up an operation? What are your thoughts around that? Yeah, that's a great question. Perhaps a bit early on in our evolution at Green Springs, I think in an ideal scenario you would do it as a deeper open pit. That's of course on the assumption that grades and thicknesses would support that.

22:12 But there's a bit of wood to chop until we get to that decision point, not least of which is making that new discovery at the pilot shale. And I know you mentioned this a bit earlier, can you remind us again, how many more meters and how many more drill holes are you, is in plan for Green Springs? Yeah, absolutely. It's roughly 2000 meters, 2000 to 2200 meters. That would equate to 10 to 12 drill holes. Our drill holes tend to be 150 to 200 meters in this year's program.

22:48 And what results can we expect upcoming? When will we get to a resource?

22:54 Yeah, both great questions. And next results should be from the Zulu zone. So that's the southern end of the mine trend to the south of Echo. And then through this year's program, we've also drilled in the area of Gulf, Alpha, Bravo, Charlie and Delta. So there will be a mix of drill results from across Greensprings. On the resource question, I think we have quite a bit of work to do before we are ready to put a pin in what Green Springs looks like. And I think the more success we have with the drill and the results, the more drilling you can expect to come before we do get to that resource. So not to evade the question, but I think we're at least 12 months out from putting a pin in a formal compliant resource.

23:47 Gotcha. Our next question is from Jerry. First of all, Jerry says, hello. He's asking, the market is not really celebrating yesterday's drill results. So do you have any comments or feedback about that? Yeah. Hi, Jerry. Thanks for the question. Yeah, I think we're in a bit of a phase right now in the market in general, where not many of the equities are performing, even if they do have very good draw results out.

24:18 Certainly our hope and our expectation that as we, hit our stride or get some more momentum on the news front with, With Green Springs that we will reverse that trend and perhaps there will be some more excitement as we release results. I think that the other aspect here is we did have a private placement, Gerry, as you do know, in the spring and the hold period has recently come off that private placement that was done at a 10 cent unit. So certainly anyone who invested in that round is well in the money and could be looking at taking some profit today.

24:59 Great, thanks Matt. How about Pony Creek? I know for our investors, even though we're focusing today on Green Springs, that they would be interested in Pony Creek as well. And Matt, you mentioned that you'll begin drilling in 2021. So what would be the priorities for drilling in Pony Creek? Yeah, absolutely. And thanks for bringing Pony Creek up. With the new plan of operations or exploration permit, we now really have the ability to take a big swing or be more aggressive with how we target at Pony Creek. So in the past at Pony, we've had a really good success rate as far as hitting gold and drilling, but we were relatively restricted on how far we could step out or which targets we could test.

25:48 So now at Pony, we do have very large scale targets, some of them up to 2 kilometers of strike length. And with that new exploration permit, we have the ability to get out and really drill for new discoveries. And that will be the focus in that Pony Creek program.

26:06 Now Robert's asking a great follow-up question to you Matt. He asks are you more excited about Green Springs than Pony Creek? In the short term yes, really because we see the great profile at Green Springs as being something very exciting. The vast majority of drill results from the property are north of a gram per ton in the oxide. It's very shallow and the targets are quite well defined, meaning that we think we can be aggressive and quite efficient

26:43 at Green Springs and make a lot of progress very quickly. Pony Creek, I think has potentially enormous size potential. You have very large scale targets, but the read through there is that it's relatively earlier stage and we'll need a lot more drilling to get to an answer, to get that, potentially to get to a discovery, but certainly to get to a resource. So it's, yeah, Pony is a bit more mysterious, but I think it still has, there's a lot of reasons to be very excited about Pony Creek still. So following on the theme of drilling, is Waterton doing any drilling on their property?

27:30 Meaning Mount Hamilton? I don't believe they're drilling at the moment. They have been actively updating and working on their feasibility study. Going all the way back, I know they've been doing quite a bit of engineering work. They've been doing even geologic mapping as well to try and refine the feasibility study that was done by a previous owner. So are there any other miners with activities further south than Contact gold in the trend or is contact gold working at the furthest south margin of the trend? There is one more company in the immediate vicinity called Fremont Gold. They have another old open pit heap leach mine that they were drilling earlier this year called Griffin.

28:19 It's a similar geologic setting to Green Springs and the Fiore assets, and that you're looking at the chainman shale and the pilot shale

28:30 as a target. And then as you move even further south, you get into more of an epithermal district as you move south and east. More of an epithermal district and there are some companies active down in that vicinity. Greensprings Gold would be one of the companies down there. Thank you. Typically, what is the depth of oxidation? Oxidation. Yep. Great question. We see oxidized material down to as deep as 150 meters at Green Springs. We don't have a definitive answer given that while our drilling is on the order or has been on the order of 150 to 200 meters.

29:19 Most of the historic work that was done here prior to us was very shallow, the average depth of only about 50 meters. And certainly all those holes are well, well oxidized. So it's evolving, But it does appear to be to be quite deep here. Right, switching gears a little bit, Robert is asking. Redeeming preferred saves, How much cash or balance of cash raised? How long would that last? Gotcha, yeah. Okay, so the redemption of the preferred shares, these were owned by Waterton since the inception of the company. As Part of the financing, we used the recently completed financing, we used 5 million of the proceeds of that offering to redeem 5 million of the preferred shares.

30:12 That left us with a balance of cash of just under $10 million. And of course, the caveat on this is it all depends on how aggressively and how quickly we do drill. But we project cash on the books and well until the end of 2021. Here's the next question. Why the delay in getting to a resource at Pony Creek? Anything to do with COVID at all? No, nothing on the resource side at pony is related to, to Covid. I think that the main delay there is that it took us about 18 months or a year and a half.

31:00 Longer to receive that plan of operations permit for Pony Creek than anticipated or planned and that put a hitch in our ability to certainly drill and drill some of the key areas that we believed were essential to testing prior to completing a resource estimate at Pony Creek. Just to address the COVID question more generally, we specifically at Contact haven't seen an impact as far as COVID-19 amongst staff, the board, or I guess the extended family. We've all been working from home for the duration of the pandemic unless we've been actively involved in the exploration programs.

31:47 And we do have pretty rigorous protocols at site and certainly our drilling contractor as well does adhere to those and does have their own COVID-19 specific protocols. It's good to hear that operations are still moving strong and everyone's working safely through the pandemic. Our next question is from Jim. He asks, in addition to gold, are there any identified rare earth minerals apparent in any of the drill results? No, it really does appear to be, it does appear to really be a gold only system in the vein of a classic Karlin system. So We do see the associated pathfinder elements like Arsenic, Antimony, Mercury, Thallium, but there are no rare earths to speak of here at Great Springs.

32:43 The next question is from Victor Zhao. Is mineralization in pilot shale still oxidized? Certainly what we see in the drilling done to date at the Alpha and Bravo zones, that is intensely oxidized for the most part. Time and I guess results, specifically the cyanide solubility results, will really let us know about the pilot shale and mineralization beneath the mine trend. Great. Our next question is from Robert. Any board representation along with the last capital raise? Any board? So insiders did participate, as we have done our best to do all along.

33:32 And as far as board representation, Waterton does have 1, 1 of their team on the board. That's Charlie Davies, who is their head of technical services. Great. I do think those are all the questions that we have right now. Let me just double check. Yeah, so I think Those are all the questions that we have today. I wanna thank you, Matt, of course, for answering the questions that were submitted and taking us through the presentation. And also thank you everyone that was submitting questions today. If you didn't get a chance to get your question answered or if you just thought of 1 now or even after the webinar, please stick around. We have a short survey that you can complete to tell us how we did and also to leave your contact details so the Contact Gold team can reach out to you directly and follow up with you directly for any questions or additional information you may be looking for. For more information you can always go to Contact Gold's website at www.contactgold.com and as always this video is being recorded and it'll be available on six.com.

34:46 Matt I'm going to hand it back to you for the final word. Great, thanks very much Jane and thanks everyone for attending this morning or this afternoon as the case may be. Again we're very excited with the current program at Green Springs and certainly that the logjam on assays appears to have broken. So we do anticipate and are excited to deliver to the market new results over the coming weeks and months from Green Springs. So thank you again for attending the webinar or the summit. And please do follow us on the usual channels and look for those results over the coming weeks and months. Thank you. Thank you.