Location

The Montemor gold project and Montemor Regional concession are located some 100 km east of the Lisbon, the capital city, near the towns of Montemor-o-Novo and Évora, in the Alentejo region of southern Portugal (Figure 1).

Access to the area is excellent; there are no weather impediments to operating a mine year round; and, the area has abundant power, being close to the Portuguese national grid.

Fig. 1: Location map of southern concessions: the Montemor gold project (Experimental Mining License) is contiguous with and surrounded by the Montemor regional concession (pending). Note close proximity to Santa Margarida do Sado concession.

Montemor Gold Project - Letter of Agreement: Transaction Summary

The Montemor gold project is an advanced stage exploration project, covering an area of some 46.8 km 2 in southernPortugal.

On January 28, 2009, Iberian Resources Portugal Recursos Minerais Unipessoal Lda (Iberian), a Portuguese subsidiary of privately owned Australian Iron Ore PLC (AIOC), submitted to the Direcção-Geral de Energia e Geologia (DGEG), a division of the Portuguese Ministry of Economy and Innovation, a request for an Experimental Mining License (EML) covering the Montemor gold project (the “Project”).

On July 30, 2010, Colt Resources Inc. (“Colt” or the “Company”) executed an agreement with AIOC whereby Colt is to become the operator of and acquire in two stages 100% ownership of the Project. The transaction is subject to the approval of the DGEG.

The agreement between Colt and AIOC states that upon the DGEG granting an extension to Iberian for the submittal of an application for an EML on the Project, Colt will pay AIOC €60,000 and become 51% owner and operator of the Project. Upon award of the EML to the Colt-AIOC joint venture by the DGEG, Colt will pay AIOC €125,000, issue to AIOC 3,000,000 common shares of Colt, and Colt will become 100% owner of the Project. The common shares of Colt to be issued will be escrowed with gradual release of 500,000 shares every four (4) months over a twenty-four (24) month period from the date of granting of the EML.

On September 14, 2010, the DGEG granted Iberian an extension till the end of January 2011 to submit an application for an Experimental Mining License over the Project. With the official granting by DGEG of the above mentioned filing date, Colt under the terms of its agreement with AIOC, became 51% owner and operator of all the mining rights and claims to the Project. 

Montemor Regional Concession

On September 29, 2010 Colt submitted to the DGEG an application for an exploration license, the Montemor Regional concession, which is contiguous with and completely surrounds the Montemor gold project. Granting of the concession contract signed on November 2, 2011.

The Montemor Regional concession (including the Montemor gold project) covers a total area of some 728,22 km². The concession encompasses nearly the entire length of the Boa Fé shear zone and most of the known gold prospects that have been identified in the greater area surrounding the Montemor gold project (Figure 2). 

Mining License Approved for the Boa Fé Gold Project in Portugal

 Colt-AIOC Joint Venture application for an Experimental Mining License on its 46.78 Km² Boa Fé gold project from the Direcção-Geral de Energia e Geologia, a division of the Portuguese Ministry of Economy and Innovation, has been formerly ratified in an official signing ceremony held in Lisbonat the Ministry of Economy and Innovation on November 2, 2011. In the same ceremony, Colt was also formally awarded the larger Montemor Gold Exploration License.

As a result, the Company has proceeded yesterday with the final payment of €125,000 and the issuance of 3 million restricted shares, thus satisfying the requirements of the August 10, 2010 transaction (see press release of August 10, 2010). This has now increased ownership and control of the Boa Fé gold project from 51% to 100%.  

Mineralization

Gold occurs in a series of occurrences and deposits located along the Boa Fé shear zone: a major shear zone formed within a strongly folded Proterozoic volcano-sedimentary sequence of the Ossa Moreno tectonic zone (Figure 2). Some forty (40) gold prospects and deposits have been identified in the greater region of Montemor and surrounding areas. Individual deposits defined within the Montemor area include Banhos, Casas Novas, Chaminé, Ligeiro, Caras, Covas, Braços, Braços South and Tabuleiros. The principal deposits of economic interest are Casas Novas, Chaminé, Braços, and Banhos (Figure 2).

The geological model for the gold occurrences and deposits within the Montemor project has been described as “orogenic” or “shear-zone-related” gold deposits.

Gold is commonly associated with arsenopyrite, loellingite, and pyrite; locally, it occurs in native form. Gold mineralization, for the most part, occurs disseminated in the schistose fabric of host schists or in quartz veins. Gold is closely associated with zones of silicification and adjacent quartz veining, and is commonly found in proximity to breccias zones, fault intersections and shear zones. Within individual deposits, gold mineralization occurs largely near-surface and is considered amenable to open pit mining or shallow underground mining.

  
Fig. 2: Regional setting and location of principal gold occurrences and gold deposits of economic interest in the area of the Boa Fé gold project (Experimental Mining License) and Montemor regional concession.  

Exploration History

From the 1940s to the 1980s, the geological division of the Portuguese government conducted intermittent exploration for iron, gold and base metals. Regional exploration work carried out in the 1980s established the widespread occurrence of gold in the general area.

In the larger Montemor area, gold exploration has been carried out and concessions held by various operators including BP Minerals (1984 – 1986), Sociedade Minera Rio Artezia Lda (Riofinex – Rio Tinto group) (1984 - 1992), and Portuglobal Exploraçoes Mineiras - Auspex Limited (1995 – 1999) (Portuglobal). In 1996, Portuglobal farmed out its project in a joint-venture with Montemor Resources Inc. In 1999, Portuglobal relinquished the exploration concession over the Montemor gold deposits.

On September 29, 2004, Iberian Resources Portugal Recursos Minerais Unipessoal Lda, at the time a 100% owned Portuguese subsidiary of Iberian Resources Limited (ASX:IBR de-listed), signed an exploration contract with the Government of Portugal covering much of the area formerly held by Portuglobal.

On May 10, 2007 Tamaya Resources Limited (ASX:TMR de-listed) acquired a 86.5% interest in Iberian. On October 28, 2008, due to the unprecedented collapse of copper prices, Tamaya Resources Limited was put under Voluntary Administration. On January 2, 2009, Iberian was sold to Australian Iron Ore PLC.

The Montemor gold project is at an advanced development stage. Previous operators have undertaken extensive work including some 510 trenches and 1157 drill holes: 308 diamond drill holes, 176 reverse circulation holes (RC), 20 rapid air blast holes (RAB), and 653 open hole percussion holes. Other work carried out includes metallurgical testing by Riofinex (1991) and Iberian Resources Limited (2006), and environmental base line studies by Riofinex (1991). Resource estimates were undertaken by or on behalf of Riofinex (1991), Iberian Resources Limited (2004, 2005), and Tamaya Resources Limited (2007, 2008). 

During 2007, in preparation for an application for an Experimental Mining Licence, Tamaya Resources Limited commissioned Stage 1 of the Montemor feasibility study including metallurgical testing, commencement of baseline work an environment impact assessment, resource modelling, mine planning and appointment of a contractor to manage the tailings dam site selection and design work (Tamaya Resources Limited 2007 Annual Report; press release dated November 15, 2007).

Experimental Mining License Application

Following the granting of the Experimental Mining License by the DGEG, Colt will initiate a NI 43-101 compliant Resource Estimate.

The reader is cautioned that all information herein is based on press releases, prior data and reports obtained and prepared by previous operators. Colt has not independently verified all the information concerning the Montemor gold project obtained from previous operators. Colt has not completed the work necessary to verify the classification of previous mineral resource estimates and is not treating the mineral resource estimates as NI 43-101 compliant. A Qualified Person has not verified mineral resource estimates, including geological model, parameters, and key assumptions used in such estimates.