News Releases

EnGold Adds to Lac La Hache Resources with Maiden Aurizon Inferred Resource Estimate, Metallurgical Results Encouraging

January 19, 2018


For Immediate Release. January 19, 2018. Vancouver, BC. David H. Brett, President & CEO, EnGold Mines Ltd., (TSX-V: EGM, “EnGold” or the “Company”) reports that independent geologist Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd (“KGL”), has completed and provided to EnGold a maiden Mineral Resource Estimate on the Aurizon South Gold Zone located within the Company’s 100% owned Lac La Hache Property in the Cariboo Region of BC. The Lac La Hache Property comprises multiple mineralized zones including the Spout Copper Deposit (SRK 43-101 Technical Report available online here), a newcopper-gold-silver zone south of Spout discovered in 2017, the Aurizon Central Gold Zone, the Aurizon South Gold Zone, and several other prospects within a large porphyry-copper mineralizing system.

The maiden, base-case Aurizon South inferred resource estimate, using a 2.5 gpt cut-off grade, totals 1,073,000 tonnes grading 3.6 gpt gold equivalent containing 124,206 ounces of gold equivalent. See tables below for additional detail, including estimates based on higher and lower cut-off grades. Recent metallurgical testing completed by ALS Metallurgy on Aurizon South drill core materials showed recoveries of 95%, 92% and 90% for copper, gold and silver respectively.

“This initial estimate at Aurizon South, which is open for expansion, adds important value to the Lac La Hache project, where excellent infrastructure greatly enhances the attractiveness of currently outlined copper resources at Spout, the high-potential 2017 discovery area, and many other exciting prospects on the property,” said EnGold President & CEO David Brett. “EnGold’s goal is to identify multiple potentially underground minable deposits within the property that could support an economically viable, multi-zone operation in the future.”

The estimate is based on the 65 drill holes that have intercepted the structure to date, which remains open for expansion on strike and down dip. The gold-bearing Aurizon South also has significant amounts of copper and silver, and as such, the Company is expressing the resource as a gold equivalent, which incorporates the value of the copper and silver into the resource.

Table 1: Maiden resource estimate for Aurizon utilizing a 2.5g/t AuEq cut-off value.

Cut-off

Tonnes

AuEq

Au

Cu

Ag

AuEq

g/t

x 1,000

g/t

g/t

%

g/t

ounces

2.5

1,073

3.6

2.48

0.64

5.98

124,206

Notes: The 2.5g/t AuEq cut-off value was calculated using average long-term prices of $1200/oz. gold, $16/oz. silver, $2.75/lb. copper, and metal recoveries of 92% gold, 95% copper, and 90% silver. The base case cut-off grade assumed $90/tonne operating and sustaining costs. All prices are stated in $US.

Table2: Mineral resource cut-off sensitivities at Aurizon.

Cut-off

Tonnes

AuEq

Au

Cu

Ag

AuEq

g/t

x 1,000

g/t

g/t

%

g/t

ounces

0.5

5,526

1.70

1.11

0.34

2.95

302,006

1

3,651

2.17

1.41

0.44

3.86

255,251

2

1,529

3.19

2.16

0.60

5.36

156,993

2.25

1,277

3.41

2.32

0.62

5.70

139,835

2.5

1,073

3.60

2.48

0.64

5.98

124,206

3

495

4.69

3.64

0.60

6.01

74,675

4

257

5.87

4.80

0.60

6.99

48,550

5

178

6.53

5.38

0.64

9.34

37,310

6

102

7.26

5.95

0.71

12.58

23,712

Notes:

1) The current Resource Estimate was prepared by Garth Kirkham, P.Geo., Kirkham Geosystems Ltd.

2) All mineral resources have been estimated in accordance with Canadian Institute of Mining and Metallurgy and Petroleum (“CIM”) definitions, as required under National Instrument 43-101 (“NI43-101”).

3) Mineral resources were constrained using mainly geological constraints and approximate AuEq grade domains.

4) AuEq values were calculated using average long-term prices of $1200/oz. gold, $16/oz. silver, $2.75/lb. copper, and metal recoveries of 92% gold, 95% copper, and 90% silver were used. Base case cut-off grade assumed $90/tonne operating and sustaining costs. All prices are stated in $US.

5) All contained metal content values (including equivalencies) were calculated assuming 100% recoveries.

6) Mineral resources are not mineral reserves until they have demonstrated economic viability. Mineral resource estimates do not account for a resource’s mineability, selectivity, mining loss, or dilution. All figures are rounded to reflect the relative accuracy of the estimate and therefore numbers may not appear to add precisely.

The Aurizon South prospect is one of several copper-gold-silver mineralized zones on the property, formed by alkali porphyry-style system processes, which include porphyritic intrusion-hosted copper (gold-silver), intrusion hosted hydrothermal breccia-fracture/vein systems and related exoskarns/carbonate replacements.

The Aurizon South structure is a near-vertical gold-copper-silver bearing hydrothermal breccia/ fracture system developed within one of several Late Triassic monzodioritic intrusions on the property. The structure strikes northerly (020 degrees) and extends >400 m along strike (open) and >700 m to depth (open). True width varies from a few m to more than 10 m locally, defined by mineralized splays.Mineralization occurs mainly as copper and iron sulphides (chalcopyrite, lesser bornite and chalcocite, pyrite) containing variable amounts of gold and silver. Higher grades of gold, copper and silver are typically hosted by strongly developed hydrothermal breccia formed of clasts of monzodiorite altered to albite-potassium feldspar-carbonate-minor chlorite-epidote within a matrix of quartz-potassium feldspar-carbonate-hematite after magnetite. Visible gold is generally rare within the main structure, however, narrow (10-20 cm wide) quartz veins discovered near-surface in 2016 drilling contain abundant visible gold specs and massive chalcocite, producing multi-ounce gold and tens of percent copper assays. These have not been included in the initial resource reported.

Metallurgical testing by ALS Metallurgy, Kamloops (23 drill core samples totalling 52 kilograms) shows copper, gold, and silver recoveries to the rougher concentrate average 95, 92, and 90 percent, respectively. KGL suggests that an underground mining scenario is appropriate for Aurizon at this stage and has recommended a 2.5g/t AuEq cut-off value for the base-case resource estimate. Also listed are grade-tonnage sensitivities at varying AuEq cut-off values (see Table 2 above) which demonstrate both a significant increase in contained precious and base metals at lower cut-off values and good tonnage retention, at increasing overall grade, at incrementally higher cut-off values. A NI 43-101 Technical Report will be posted on SEDAR within 45 days.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be classified as Mineral Reserves. There is no assurance that any part of the Inferred Resource will be converted to Measured or Indicated Mineral Resources or ultimately converted to a Mineral Reserve.

EnGold VP Exploration Rob Shives, P.Geo., stated: “The metallurgical results and recoveries are very encouraging. We regard this initial resource at Aurizon South (now the second on the property) as a great start, which we can grow based on open strike and depth extents to provide a valuable addition to our inventory as we attempt to build a potentially economic, multiple-deposit resource at the Lac La Hache Project”.

Aurizon South Resource Estimation Parameters

The estimate was carried out using a block model constrained by 3D wireframes of the individual mineralized zones. The block model is comprised of an array of blocks measuring 10m x 10m x 5m, with grades for Au, Cu and Ag interpolated using Inverse Distance to the Second Power (ID2) weighting. Gold equivalent values were subsequently calculated from the interpolated block grades.

The interpolation was carried out in one pass using search radii to a maximum of 100m x 100m x 30m. The interpolation was restricted to a minimum of 2 and a maximum of 16 composites, with a maximum of 4 composites from any one drill hole (i.e. a minimum of two drill holes required for +4 composites).

An average value of 2.71 t/m3 was used as it was thought to be representative of the densities within the Aurizon South zone.

Gold and copper values have been capped in order to remove the effects potential overestimation due to statistical outliers. The threshold chosen was 10 g/t gold and 1% copper. No capping was performed on silver values.

The mineralized zones were initially defined by EnGold personnel and then validated and refined by KGL. The mineralized wire frames were defined using a combination of geological constraints, grade contacts and no minimum thickness.

All resources are classified as Inferred.

About EnGold

EnGold is a Vancouver-based copper/gold exploration company focused solely on its 100% owned Lac La Hache property in the Cariboo region of BC. EnGold’s vision is to identify and delineate mineral resources at Lac La Hache that could potentially support an economically feasible and environmentally sustainable underground mining operation. The Spout Deposit, the Aurizon Gold Zone and the 2017 G1 Discovery, located within a 7 kilometer area on the property, are all considered by EnGold to be potentially underground minable targets. EnGold’s significant new copper discovery in 2017 adds to the already extensively drilled Spout Copper Deposit and Aurizon Gold zones. Discovery potential for new high-grade zones remains strong, and existing areas are open for expansion. With world class infrastructure at its doorstep, Lac La Hache is a great location to be exploring. EnGold’s corporate philosophy rests on three interdependent pillars: Environment, Engagement and Gold. Through sound environmental stewardship, commitment to transparent engagement with local communities, the Company is dedicated to driving exceptional shareholder and stakeholder value by fulfilling its vision to profitably supply valuable and much needed metals to the global marketplace.

Rob Shives P.Geo., VP Exploration and a Qualified Person as defined under National Instrument 43-101, has reviewed and approved the technical content of this release.

Engold Mines Ltd.

Per/

David Brett, MBA

President & CEO,

For further info contact David Brett, 604-682-2421 or david@engold.ca

This news release may contain “forwardlooking statements”. Readers are cautioned that any such statements are not guarantees of future performance and that actual development or results may vary materially from those in these “forward looking statements.”

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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