Colt Resources helping to boost the country’s economic recovery

Colt Resources has invested in two projects (Boa Fé – Gold and Tabuaço – Tungsten) in Portugal that have provided hundred of jobs for local people, thereby helping to boost the country's economic recovery.

Boa Fé - Gold

Location

The Boa Fé Gold Project is located in the Alentejo Region of Portugal, approximately 100 km east of the Lisbon, near the town of Santiago do Escoural. The current license area encompasses 47 km2, with an additional 728 km2 of exploration concession (Montemor) staked surrounding the Boa Fé license area. Both licenses were fully approved by the Portuguese mining authorities on November 2nd, 2011.

Geology and Mineralization

The known Montemor gold deposits are located within a segment of the Boa Fé shear corridor, considered as part of the wider Montemor shear zone that crosses the Ossa Morena Zone, an important tectonic and metallogenic domain in southern Portugal. Gold mineralisation at Boa Fé – Montemor is considered to conform to the orogenic gold model and occurs in association with several NW-SE trending shear corridors, which make part of the wide Montemor shear zone. Most of the gold deposits outlined to date are located along the northernmost of such shear corridors, referred to as the 'Boa Fé shear corridor'.

Mineral Resources

On March 4, 2013, Colt reported the results of a Mineral Resource estimate prepared by SRK for the Chaminé, Casa Novas, Banhos, Braços, Ligeiro and Monfurado deposits in the Boa Fé – Montemor gold project, using data from both historic drilling and the 2011/2012 exploration drilling program carried out by Colt. The Summary Mineral Resource Statement for the Boa Fé gold project is provided in Table 1.

Mineral Resouce
Category
Quantity
Tones
Average Grade
Au g/t
Contained Metal
Au Oz
Indicated 6,070,000 1,74 340,310
Inferred 1,555,000 1,69 84,200

Table 1: Mineral Resource Statement for the Boa Fé/Montemor Gold Project (March 4, 2013)

Preliminary Economic Assessment – May 2013 ("PEA")

In May 2013, Colt published a PEA prepared by SRK Consulting that addressed the six deposits for which NI43-101 compliant Mineral Resource Estimates have been prepared. Four different processing scenarios were studied and the most attractive, Scenario D, involves conventional open pit mining followed by processing by gravity and flotation and gold recovery using Halogen.

Colts prefers scenario D, demonstrates post tax NPV5% results of US$64m, IRR of 33% and cash costs of US$666/oz.

Upside Potential

Since receiving approval for the licenses at Boa Fé and Montemor in late 2011, Colt has focussed the bulk of its work on the previously identified deposits representing a total strike length of approximately 2 kilometres. Regional geophysics combines with regional geochemistry and field mapping has indicated good potential to identify similar deposits along the entire strike (30 kilometres) of the shear within the 100% controlled ground controlled by Colt. Furthermore, the known deposits are believed to continue to greater depth. Current drilling has not systematically tested the deposits below 150m from surface thus there is further potential for economic mineralization nearby.

The EIA (Environmental Impact Assessment) for the property was approved on July 1, 2013 subject to several additional studies that are ongoing but which must be completed before a full mining license application can be made.

Tabuaço - Tungsten

Location

The Tabuaço Tungsten Project (100% Colt Resources) granted to Colt on February 20, 2013, is located within the Tabuaço Experimental Mining Licence ("EML"). The area is situated in the North Central region of Portugal, approximately 300 km north north east of Lisbon, 100 km to the east-south east of Porto. The current license area encompasses 45 km2. The Tabuaço project is located in a port wine growing area of varying topography, overlooking the banks of the Távora River. The Project area is divided into three deposit areas the São Pedro das Águias-Herédias resource area ("SPA") and the Aveleira and Quintã exploration areas. On August 24, 2011, Colt acquired 100% of QSPA (http://www.senhoradoconvento.com/) thereby securing key surface rights covering approximately 140 hectares at its Tabuaço project which includes an operational winery and a 13 century convent.

Geology and Mineralization

The Tabuaço EML is situated at the border zone of two major geologic units in the Central Iberian Zone ("CIZ") of northern Portugal. The region is noted for tungsten and tin occurrences and has seen a number of past artisanal workings. Mineral deposits within the Tabuaço EML and surrounding area include skarn tungsten, tin & tungsten bearing veins and orogenic gold. The Tabuaço project is considered a skarn Tungsten deposit. The Tabuaço geological model used for exploration is best described as a contact metamorphosed tungsten skarn model. An aplite/skarn interface is present with the mineralisation proximal to the granite boundary.

There are two main skarn horizons: upper and lower skarn, separated by schist. There are also numerous lenses or pods of tungsten bearing skarn material above and below the main horizons along with tungsten-bearing silicified lenses with carbonate.

Mineral Resources

On October 3, 2013, Colt reported the results of a Mineral Resource Estimate prepared by SRK for the SPA and Aveleira deposits in the Tabuaço tungsten project, using data from the 2012/2013 exploration drilling program carried out by Colt. The Summary Mineral Resource Statement for the Tabuaço tungsten project is provided in Table 2.

Mineral Resouce
Category
Tonnage
t
Grade
% WO3
Contained Metal
MTU WO3
Indicated 1,495,000 0,55 815,00
Inferred 1,230,000 0,59 720,000

Table 2: Mineral Resource Estimation for the Tabuaço Tungsten Project

Preliminary Economic Assessment – October 2013

In October 2013, Colt published a PEA prepared by SRK that addressed the two deposits for which NI43-101 compliant Mineral Resource Estimates have been prepared.

Six different processing scenarios were studied, the most attractive, scenario B3 involves conventional underground mining methods followed by processing that includes gravity recovery, flotation and acid digestion followed by precipitation of Tungsten containing powders as required by the end user.

Colt prefers option B3, demonstrates post tax NPV5% results of US$70.3m, IRR of 30.7% and cash costs of US$206.9/MTU.

Upside Potential

Since receiving approval for the Trial Mining license at Tabuaço in March 2013, Colt has accelerated work on the project towards mining feasibility and beyond. The delineated mineral resources are believed to represent a fraction of a larger resource base hosted in a sequence of mineralized skarns that continue for several kilometres to the north. The entire zone is 100% controlled by Colt. Drilling in June/July 2014 has been reported to have intersected a previously undetected zone of mineralization located between the two previously identified deposits. Colt remains optimistic that this zone will form the basis of additional resources that will add to the overall resources at Tabuaço and that the potential exists for similar zones to be identified in the near term.

The ''PDA'' for the property was finalized in October 2012, which provides the framework for the environmental studies to be completed during the EIA process. The EIA must be completed before a full mining license application can be made.

Luís Martins
Vice-President Business Development
Colt Resources Inc.