URZ.V · 2020-05-27 12:00:00

Nevada Exploration Presents Final RC Drilling Results from South Grass Valley Carlin-Type Gold Project

Drill Results

May 27, 2020

Nevada Exploration Inc. (“NGE” or the “Company”) (TSX-V: NGE; OTCQB: NVDEF) is pleased to report

that the recently-completed reverse-circulation (“RC”) drilling program at its South Grass Valley Project

has focused the Company’s search for new Carlin-type gold deposits (CTGDs) to a mineralized corridor,

which the Company believes is the potential common fluid source for three of the four target areas that

the program was designed to advance. Having used RC drilling to cost-effectively increase its data

coverage at the project, and thus its confidence in its geologic model, NGE is now preparing to return to

core drilling to complete a carefully-targeted deeper drilling program to test this corridor, which NGE

has named East Golden Gorge, for Carlin-type gold mineralization.

Discussing how the latest drilling program has advanced the project, Wade Hodges, NGE’s CEO: “The

objective of our preliminary, 2018-2019 core-drilling program at South Grass Valley, which consisted of

10 core holes spread along nearly four kilometers north-south, was to test for the presence of a Carlin-

type mineral system large enough to support one or more multi-million-ounce Carlin-type gold deposits,

at what is a completely-covered project that we identified as part of our hydrogeochemistry-led

exploration program. Achieving this objective was a big milestone for the project and NGE, though it is

important to point out that at the end of this initial program, while we believed we had successfully

discovered a large new Carlin-type mineral system, our geologic model was made up of only a couple

handfuls of drill holes across an area comparable in size to the entire northern Carlin Trend, in a part of

Nevada where geologic features important for mineralization can change quickly, over short distances.

“To continue to advance and de-risk this still early-stage project, the goal for our second round of drilling

at South Grass Valley was to establish the major geologic controls for mineralization in order to guide

our search for potentially economic deposits, and for this we needed to improve the resolution of our

geologic model, which required many more drill holes. To maximize the number of pierce points we

could complete, for this second round of drilling we changed to less-expensive RC drilling; and to guide

the distribution of these drill holes across the project, we chose to cluster the holes in four discrete

target areas, each of which represented places within the district that already showed promise in terms

of their specific geologic settings, and that also were supported by elevated gold and Carlin-type

pathfinder geochemistry in multiple sample mediums.

“As we shared in our monthly drilling updates, challenging drilling conditions across much of the project

- largely the result of a combination of swelling clay plus highly-fractured and intensely-silicified

bedrock, proved difficult for the medium-sized RC drill rigs we were using; and a significant number of

the RC drill holes did not reach target depth. As a result, we only completed 17 of the approximately 23

planned holes, and in several cases were forced to stop these holes shallower than we had expected.

Despite the challenges, with the addition of these 17 new drill holes, we are looking at an almost three-

fold increase to our total number of drill holes at South Grass Valley, which has considerably sharpened

our understanding of the geology across the project.

“We believe strongly that geology is what is going to drive any discovery at South Grass Valley, and as

we’ve shared, our goal at this stage of the project was essentially to establish what controlled the

hydrothermal fluid flow responsible for the mineralization. The combined results of our two drilling

programs have now given us multiple lines of evidence that at two of the four target areas, Freddie and

Golden Gorge, the mineralized hydrothermal fluid flow was focused along a specific stratigraphic

bedrock unit we call the Clm Unit, and that the direction of fluid flow at these targets appears to have

come from a common source area, which we have named East Golden Gorge, located immediately west

of a major structural corridor. Our third target area, Water Canyon, is located parallel to this same

structural corridor and similarly up dip of the projected southern extension of East Golden Gorge, and

while we’ve only completed two drill holes here so far, the results have provided some early

geochemistry support that the geologic features responsible for East Golden Gorge could extend

considerably further to the south. At our fourth target area, Waterfall, the results of the RC drilling

helped to improve our overall geologic model, but do not support continued work in this target area.

“In summary, despite completing a smaller program than planned, with our 2020 RC drilling: we

meaningfully advanced two of the four target areas (Freddie and Golden Gorge), which are resolving

into a single deeper target in the East Golden Gorge area; we collected initial drill samples in a third

target area (Water Canyon) along the projected extension of East Golden Gorge; and we effectively

killed the fourth target area (Waterfall), which helps us to now narrow our focus to East Golden Gorge,

which we believe represents the shared source of the shallower expressions we’re seeing at the

remaining targets areas.

“Having established the likely dominant geologic controls for mineralization, and where these features

are most likely to have focused hydrothermal fluids and concentrated their gold budgets to create

potentially economic grades, we’re now narrowing our focus for the next phase of exploration at East

Golden Gorge. This remains a district-scale target, with the potential for multiple discoveries, and as we

begin to shift scales and zoom in to this specific geologic setting, we are going to continue with our

systematic approach to exploration. Over the coming weeks, we’ll be sharing the details of our next-

stage program, which we expect will be a return to core drilling to complete a series of deeper holes,

generally oriented north-south, to test an approximately 3.5 km length of the East Golden Gorge target

area for increasing grades of Carlin-type gold mineralization.”

TECHNICAL SUMMARIES BY TARGET AREA

Freddie

Freddie is centred northeast of Goodwin Butte, where initial core drilling defined large zones of

sulphide-bearing, silicified breccias within silty carbonate units that showed evidence of low-angle thrust

faulting. These favourable host units sit below a shale cap rock at the intersection of major structural

features along an antiformal fold hinge, which together represent a characteristic combination of host

rocks and mineral controls for CTGD mineralization. The target is supported by elevated gold and

related pathfinders within the silicified breccias, as well as by strong overlying geochemistry anomalies

in soils and groundwater. NGE’s objectives for the RC drilling program were to determine the extent

and controls of the alteration features seen in the core drill holes, and to test their shallower, up-plunge,

extension towards the west and north for increasing gold and Carlin-type pathfinders.

NGE completed five RC drill holes in and around the Freddie target area for a total of 1,960 metres.

With these RC drill holes, NGE was specifically aiming to collect samples of a Cambrian-aged limey

mudstone containing sedimentary debris flows and turbidite breccia units (the “Clm Unit”) that sits

immediately below a less-permeable and less-chemically-reactive laminar shale and calcareous siltstone

unit. Based on the intensity of silicic alteration and Carlin-type pathfinders, the results of the earlier

core drilling suggested the Clm Unit had seen the most hydrothermal fluid flow. Four of the five RC drill

holes encountered at least the top of the Clm Unit (all except SGVR017), and two of the holes tested all

or most of the full thickness of the unit (SGVR002 and SGVR003).

Collectively, the results of the RC drill holes have confirmed that the Carlin-type alteration features seen

in the initial core drilling extend another kilometre to the WNW, which provides additional evidence of

the massive scale of the mineral system at the project. The results of the RC drilling also further confirm

that the intensity of both the alteration and Carlin-type pathfinder geochemistry is strongly related to

the Clm Unit, consistent with what was seen in the earlier core holes. In terms of testing the up-plunge

(westward) extension of the alteration features, the zonation and decreasing intensity of the alteration

seen in the RC drill holes, as well as the decrease in the relative concentrations of Carlin-type

pathfinders, provide multiple vectors, all of which point to a source direction for the mineralized fluids

back towards the east, having most likely followed the Clm Unit upwards, along dip from the direction of

a major structural feature that NGE refers to as the Water Canyon structural corridor, which as detailed

below, defines the eastern boundary of Company’s East Golden Gorge target area

In summary, based on the combined evidence from the core and RC drill holes, NGE believes that the

mineralized hydrothermal fluid flow at Freddie was predominantly stratigraphically controlled within the

Clm Unit, and that the source direction for this lateral flow was from the east, down dip, from the

direction of East Golden Gorge. Having established these likely important controls for mineralization,

with NGE’s next drilling program, the Company expects to use deeper core drill holes to follow the

projection of the Clm unit down dip, eastwards, closer to what the Company believes is the likely source

of the mineralized hydrothermal fluid flow.

Section A ‐ A’ (Freddie Target Area)

Geology

Arsenic (ppm)Gold (ppb)

Mercury (ppm)Antimony (ppm)

Clm

Alluvium

Clm

Alluvium

Clm

Alluvium

Clm

Alluvium

Argilization

Silicification

Clm

Alluvium

Clm

Alluvium

500 m grid 500 m grid

Alteration and

East Golden Gorge Target

Waterfall

Waterfall is located within lower-plate bedrock, now known to be sitting directly on top of the Grass

Valley Stock, at the projected intersection of high-angle NW and NE-trending faults. The target was

supported by early evidence that a component of the high concentration of gold in groundwater centred

over Golden Gorge could potentially have originated upstream from the Waterfall area, as well as by

moderately elevated arsenic in soil across the western part of the target. The target concept to test at

Waterfall was that of fracture-controlled mineralization within hornfelsed lower-plate. NGE’s objectives

for the RC program were to define the interface between the lower-plate and the Grass Valley Stock in

this area, and to test this geologic setting for evidence of mineralization.

NGE completed a NE-SW fence of three RC drill holes (SGVR004, SGVR009, and SGVR010) along the

northwestern edge of the target, for a total of 966 metres. The three holes encountered a thick section

of the projected favourable carbonate host rocks, including the Clm Unit, above large areas of the Grass

Valley Stock, which confirms their up-dip projection to the west. While the holes did encounter

anomalous CTGD pathfinder geochemistry, the concentrations at Waterfall are considerably lower and

less consistent than those seen at Freddie and Golden Gorge to the east, and are associated with much

weaker alteration features. Furthermore, the results of the more-detailed 3D groundwater sampling

provided by the RC drilling also show that the high concentrations of gold in groundwater seen in the

Golden Gorge area do not continue this far west to Waterfall.

Altogether, the gold and Carlin-type pathfinders in the bedrock and groundwater samples from the RC

drilling at Waterfall show significantly lower concentrations compared to those seen to the east. With

the improved understanding of the geology at Waterfall it appears that the favourable lower-plate host

units at Waterfall were likely separated from hydrothermal fluid flow from the east.

In summary, the RC drilling results do not support additional work in this area. Rather, the results at

Waterfall, notably the major contrast in terms of gold and pathfinder concentrations between Waterfall

and Golden Gorge, further emphasize the importance of establishing the edge of the intrusive, which

marks the boundary between the two target areas, in understanding the controls for mineralization

across the project. In this case, the intrusive appears to have blocked the lateral flow of mineralized

fluids from reaching the Waterfall target area.

Section B ‐ B’ (Waterfall Target Area)

AlterationGeology

Arsenic (ppm)Gold (ppb)

Mercury (ppm)Antimony (ppm)

Alluvium

Grass

Valley

Stock

Clm

Grass

Valley

Stock

Grass

Valley

Stock

Clm

Grass

Valley

Stock

Clm

Grass

Valley

Stock

Clm

Grass

Valley

Stock

Clm

No significant alteration features

compared to other targets

500 m grid 500 m grid

Golden Gorge

Golden Gorge is located to the east of the Grass Valley Stock, where NGE’s earlier core drilling confirmed

the presence of anomalous gold and CTGD pathfinders within silicified and marbled breccias along the

intrusive margin. The target is supported by the coincident alignment of the highest gold-in-

groundwater concentrations seen at the Project, which closely map the interface between the lower-

plate bedrock units and the intrusive. NGE’s objectives for the RC drilling program were to establish the

extent of and test for mineralization within the hornfels aureole on the east flank of the intrusive, as

well as to test the western, up-dip extension of favourable alteration and geochemistry features seen in

the earlier drilling.

NGE completed seven RC drill holes at the Freddie target area for a total of 1,470 metres. With these

holes, NGE was specifically aiming to accurately establish the edge of the intrusive, and then to sample

the lower-plate bedrock units along its margin. Additionally, with an improved understanding of

importance of the Clm Unit based on the drilling results at Freddie, the Company was also aiming to

complete the RC drill holes at Golden Gorge deep enough to sample this unit. NGE began drilling at the

western edge of the target, moving eastward. Four of the westernmost holes proved to be located on

top of the granite. The other three drill holes (SGVR006, SGVR015, and SGVR016) successfully entered

and sampled lower-plate bedrock along the intrusive, with SGVR006 and SGVR015 exhibiting significant

hornfelsization.

In terms of testing for mineralization within the hornfels aureole, while the shallower-than-expected

drill holes only sampled a portion of this vertical zone, they encountered significant silicification

associated with highly-anomalous Carlin-type pathfinder geochemistry, which most notably included a

52-metre interval in SGVR015 averaging 200 ppm arsenic and 145 ppm antimony. The location and

relative intensity of the alteration and pathfinders seen in the drill holes at Golden Gorge suggest the

presence of localized vertical fluid flow along the intrusive margin, which could represent an important

setting for mineralization, consistent with the Company’s original target concept, though at depths

below where the RC drill holes could test. Beyond the hornfels aureole, the general intensity of

alteration and geochemistry seen in the Golden Gorge drill holes increases at depth and towards the

east, as also seen to the north at Freddie, consistent with mineralized hydrothermal fluids being sourced

from the Water Canyon structural corridor.

In summary, compared to Freddie, Golden Gorge is located closer to the Water Canyon structural

corridor to the east, and bounded to the west by the Grass Valley Stock. Together, NGE believes these

features focused the mineralized hydrothermal fluid flow to a narrower volume of bedrock in this area

of the project, which is often favourable for depositing gold. Like at Freddie, NGE believes the source

direction of the lateral flow of mineralized fluids at Golden Gorge was down dip to the east, from the

East Golden Gorge area, and that the dominant control for fluid flow was likely the Clm Unit.

Accordingly, in this area of the project, just as at Freddie to the north, NGE expects its next drilling will

test the down-dip projection of the Clm Unit, closer to the likely source of the mineralized hydrothermal

fluid flow. Also, based on the evidence for a vertical component to the fluid flow within the hornfelsed

lower-plate along the margins of the Grass Valley Stock, NGE expects to continue to include this area in

its next phase of work, particularly where the fluid-controlling Clm Unit intersects the intrusive.

Section C ‐ C’ (Golden Gorge Target ‐ North)

Geology

Arsenic (ppm)Gold (ppb)

Mercury (ppm)Antimony (ppm)

Clm

Alluvium

Grass

Valley

Stock

Grass

Valley

Stock

Clm

Grass

Valley

Stock

Clm

Grass

Valley

Stock

Clm

Grass

Valley

Stock

Clm

Grass

Valley

Stock

Alluvium

AlluviumAlluvium

500 m grid 500 m grid

Alteration and

East Golden Gorge Target

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