• PEMC

President's Newsletter Q4-2019

November 27, 2019

Drilling Ongoing at Pinnacle

Reverse circulation drilling is underway at the Elbow Zone on the Company’s 14,040 hectare Pinnacle Porphyry Project located in Central British Columbia, 50 km to the west of Centerra Gold’s Mt. Milligan Mine and 20 km to the southeast of Kwanika Copper Corp.'s Kwanika Deposit.

The current drill program is focused on the highest priority targets at Pinnacle. Although the Elbow and Sooner Zones have seen partner-funded diamond drilling in 2015 and 2016, with the majority of exploration funded by OZ Minerals Exploration Pty ("OZE") in 2015, the Later target area has yet to be drill tested. Broad scale alteration and anomalous gold +- copper has been intersected in drilling to date on the property and suggests a robust gold-copper hydrothermal system in the vicinity.

Elbow Zone

The first exploration program ever conducted at the Elbow Zone was initiated in 2014, targeting favourable magnetic signatures in an area covered by 5 - 20 metres of glacial gravel deposits with no outcropping rock exposure. During 2014, OZE conducted an extensive Induced Polarization ("IP") survey which outlined a 2.5 km x 1.5 km IP chargeability high anomaly that is now part of a much larger area of anomalous chargeability.

The first diamond drill hole of the 2015 program tested the southern margin of the IP chargeability anomaly and intersected 94 metres grading 0.34 g/t gold (DD15ELB001) with anomalous copper mineralization up to 0.23% copper over 2 metres in a continuous zone of quartz stockwork veining and quartz-sericite-pyrite alteration overprinting pervasive biotite alteration.

The alteration assemblages encountered indicate higher temperature conditions may be possible in the area. The current focus of drilling is to the north of the 2015 drilling and is intended to vector towards the center of a potential copper-gold porphyry deposit.

Later Target Area

The Later target area covers mineral tenure "Later #1", and was the first mineral tenure staked in this area by PEMC in July of 2012. Since that time, PEMC has seen over $2,000,000 partner-funded exploration and grown the land position to over 14,000 hectares however, the Later target area remains untested with drilling.

The target was staked to cover a significant geophysical signature best characterized as an ovate magnetic anomaly interrupting a prominent NW trending structural feature.

Exploration at the Later target area in 2014, targeted the ovate magnetic signature in an area covered by 5 - 20 metres of glacial gravel deposits with no outcropping rock exposure. At this time, OZE conducted an extensive IP survey identifying an intriguing chargeability signature.

In 1971, Dension Mines Ltd. competed an exploration program in this area consisting of a soil geochemical survey and geophysical surveys. The soil geochemical sampling program collected a total of 1,781 samples and identified an area of anomalous copper. No record of follow-up driling exists in this area.

2019 RC drill program at the Later target area is intended to test this ovate magnetic signature for the first time.

Sooner Zone

Exploration at the Sooner Zone in 2014, targeted favourable magnetic signatures in an area covered by 5 - 20 metres of glacial gravel deposits with no outcropping rock exposure. At this time, OZE conducted a limited IP survey which outlined a 1600 x 800 metre IP chargeability high anomaly that, similar to the signature at the Elbow Zone, is part of a much larger area of anomalous chargeability.

The first diamond drill hole at this target area, drilled in 2015, tested a strong magnetic high coincident with the southern margin of the IP chargeability anomaly identified in 2014 by OZE. DD15SON001 intersected 220 metres grading 300 ppm copper from surface, with anomalous yet erratic gold mineralization up to 0.5 g/t over 2 metres, in a zone of propylitic alteration and intermittent low-grade magnetite skarn.

The anomalous mineralization and alteration assemblages encountered, along with geophysical and oriented core measurements, indicate increasing temperature conditions vectoring to the northwest.

Pinnacle History
From 2014 through 2017, partner-funded exploration resulted in a total of 14 diamond drill holes and four induced polarization surveys on the property. At the Elbow Zone, five of the six diamond drill holes were sent for laboratory analysis and all five of these holes returned anomalous gold, highlighted by 94 metres grading 0.34 g/t gold in DD15ELB001. At the Sooner Zone, where diamond drilling in 2015 encountered broad intervals of anomalous copper, no further drilling was completed.

PEMC acquired the Pinnacle property through staking in 2012 and, since 2014, the property has seen over \$2,000,000 in partner-funded exploration. During 2014, a total of 44 line-km of IP surveys were completed over three target areas at Elbow, Sooner and Later. This program identified three areas of anomalous chargeability, two of which (Elbow and Sooner) were prioritized for follow up diamond drill testing in 2015, one (Later) remains untested. In 2015, the Elbow and Sooner target areas were tested with diamond drilling by OZE with six holes totaling 2,493 m. Additional drilling was completed during 2016 by ML Gold at the Elbow Zone with three diamond drill holes totaling 1,107 m. Similar to the 2015 drill results, anomalous gold intercepts were associated with localized phyllic alteration at the Elbow Zone.

The northern half of the Pinnacle property was staked by PEMC in the fall of 2018 to cover an area of anomalous gold geochemistry in stream sediments and to cover a subtle magnetic anomaly from government funded regional airborne magnetic surveys. In the spring of 2019, PEMC completed a high resolution airborne magnetic survey over the entirety of the property to determine if greater levels of detail could assist in interpreting the underlying bedrock. The survey was successful in providing a much greater level of detail and identifying areas for IP geophysical surveys and follow up drill testing. Initial results suggest the property is centered on an area with a complex magnetic signature cut by numerous northeast trending structures.

Over the past several years, logging operations on the property have opened up large areas for exploration.