Photos Rozan

Maps Rozan

Summary

The Rozan Property is a poly-metallic property located in the Nelson Mining District and is located approximately 10 kilometres southwest of Nelson. William Rozan staked the area in 1928 and operated a small scale high grade gold mining operation on the property until the early 1970's. The Property consists of 32 mineral claims covering an area of 1,950 hectares. It is located in a region of historic mining activity and is part of a large north-south geologic trend containing occurrences of gold, silver, molybdenum, tungsten, copper, and other mineralization.

Rozan Property Looking South

The Rozan Property is located directly south of Valterra Resource Corporation's Star and Toughnut Properties. It is also located adjacent to and west of Altair Ventures/Sultan Mineral's Kena Property. The Kena Property has a reported gold resource of 541,000 measured and indicated ounces of gold (24.9 million tonnes at 0.68 gram per tonne gold) and an inferred resource of 557,000 ounces of gold (25.8 million tonnes at 0.67 gram per tonne gold) (Source: Sultan Minerals NI 43-101 compliant Technical Report, 2004, available on sedar.com). Note that the presence of the resource on the Kena Property does not imply a similar resource will be delineated on the Rozan Property. However, geological mapping of the Rozan, Star, Toughnut, and Kena properties does show similar geologic structures that overlap on the properties that warrant further exploration.

The Rozan Property is underlain by a sequence of meta-sedimentary and meta-volcanic rocks of the Early Jurassic Archibald and Elise formations, respectively. The units are part of the Rossland Group and are highly prospective for hosting economic mineralization (gold, molybdenum, tungsten, copper, and silver), especially where the rocks are intruded by later Mid-Late Jurassic granite-granodiorite bodies correlative with the Nelson Intrusions. The claims straddle a NW-SE trending package of sheared rocks proximal to the Silver King Shear Zone and cored within the Hall Creek Syncline. Emgold is currently focused on exploring for high-grade gold veins and bulk mineable disseminated gold zones, as well as looking for other metals such as molybdenum and tungsten.

Location

The Rozan Property is located 10 kilometers southwest of the community of Nelson and 12 kilometers northwest of the historic mining town of Ymir, in the Red Mountain area of southeastern British Columbia, Canada, as shown on the Location Map. The Rozan Property consists of 1,950 hectares, representing 32 mineral claims. It is centered at 49 degrees 24 minutes north latitude and 117 degrees 20 minutes west longitude on NTS map sheet 82F06.

Rozan Property Location Map

Ownership

The Rozan Property is currently 100 percent owned by Emgold, subject to a three percent underlying Net Smelter Royalty (NSR) held by Jack and Eric Denny (the "Denny Royalty"). Emgold currently has the right to acquire two thirds (a two percent NSR) of this three percent NSR by making a cash payment of CDN $1,000,000 to the Denny's. Emgold also has first right of refusal on the remaining one third (a one percent NSR) of the three percent NSR, should the Denny's elect to sell it to a third party.

Rozan Property Claim Map

Historic Exploration by Others Prior to 2000

The Rozan Property was initially staked by William Rozan in 1928 and was worked until 1972. A small high grade mining operation yielded a reported 115 tons of ore containing 127 ounces of gold with small amounts of silver, lead and zinc. During the summer of 1943, Rozan and an associate are reported in the Annual Report of the Minister of Mines as having conducted a small amount of stripping and surface work by hand methods on several narrow quartz bearing veins. In 1972, William Rozan passed away and the property reverted to the public domain.

Bill Rozan's Historic Cabin

Prospectors Eric and Jack Denny and Frank Cameron acquired the property in 1974. The next year, additional claims were added to the group.

In 1983, Patrick Resources Corporation acquired the property through an option agreement. Their compilation report outlines the collection of 11 rock samples focused mainly on the underground mine and ore dump and includes several detailed surface and underground maps (Santos, P.J., 1983).

In 1983, Rex Silver Mines Ltd. conducted a reconnaissance program consisting of geology, prospecting, and stream silt sampling on the HC 1-4 mineral claims. During 1984, Rex Silver continued the reconnaissance work and collected several non-anomalous pyritic samples (Aussant, C.H., 1983 and 1984).

Additionally, Greenwich Resources Inc. geochemically surveyed the Actinolite claims and collected 48 rock samples and 99 stream sediment samples (Sinden, G.W. and Evans, D.S., 1984).

In June 1986, Lacana Mining Corp. completed three days of traversing on the property collecting 14 rock and 51 'B' horizon soil samples. Anomalous gold soil samples were associated with epidote altered andesites which assayed from non-detect up to 210 parts per billion gold (Johnston, R.J., 1986).

In October 1986, Hiawatha Resources Inc. collected six representative rock and 194 grid based soil samples from the top of Red Mountain to below Rozan's historic cabin. Strongly anomalous gold in five of the rock samples ranged from 0.15 to 0.77 ounce per ton and over 21 soil samples returned more than 100 part per billion gold.

During 1988 to 1992, Hiawatha optioned the Rozan claim group and conducted property wide mapping and the collection of some 1,000 soil samples. The soils successfully outlined a 600 by 600 metre gold-in-soil anomaly where the best result was 560 part per billion gold (Sevensma, P.H., 1988 through 1992).

Also during 1988, Geostrategic Consultants conducted a detailed magnetometer survey of the Honky Tonk claim group (correlating with the Flying Dutchman occurrence) to attempt to identify the source of mineralization. The survey was unsuccessful in identifying a possible source (Evans, D.S., 1988).

In the summer of 1996, Yukon Revenue Mines investigated the property attempting to ascertain the source of Hiawatha's gold-in-soil anomaly. The exploration work consisted of geological mapping, soil sampling and a detailed analysis of the surficial materials (Craig, L.O. 1997).

In summary, from 1983 to 1997, exploration of the property consisted primarily of geological mapping and geochemical (soil and rock) sampling, which resulted in the definition of two veins with gold values reported to be up to half-ounce per ton. In addition, stockwork veins were discovered in granodiorite.

Note that historic exploration work does not meet current National Instrument 43-101 standards and can only be used as a guide for ongoing exploration activities.

Historic Main Vein Portal Photo

Historic Exploration by Emgold and Others since 2000

During 2000, Emgold Mining Corporation acquired the Rozan property and collected 169 'B' horizon soils, 19 rock chip samples, conducted a magnetometer geophysical survey amounting to 5.8 line kilometres and diamond drilling. Two BQ core holes were completed on two primary targets (hole RZ00-01 tested a granodiorite ridge hosting sheeted and stockwork quartz veining and hole RZ00-02 tested the extension of the main Rozan vein at depth). RZ00-01 returned 1.45 grams per tonne gold over 4.08 metres. Hole RZ00-02 returned 60.73 grams per tonne gold over 0.25 metres (see press release dated December 4, 2000). Other assay results were generally less than 0.10 g/t. Assaying was done by ACME Analytical Laboratories in Vancouver following standard procedures (Grunenberg, P., 2001).

In the winter of 2003, Emgold retained Fugro Airborne Surveys Corp. who flew 161 line kilometres along NE-SW oriented flight lines utilizing a DIGHEM V EM-MAG geophysical system covering the majority of the Rozan property. The survey identified 167 anomalies, with 88 being traceable to discrete bedrock sources often indicative of conductive sulphides and several discrete weak conductors were located.

In late 2004, Emgold completed a follow-up soil sampling program over the airborne anomalies. A total of 333 soil samples and nine rock samples were collected. Several correlations were discovered between areas of anomalous magnetic and electromagnetic features, areas of mineralized veining and alteration mapped during prospecting and gold-in-soil geochemical anomalies (Grunenberg, P., 2005).

In 2007, a third diamond drill hole was undertaken by Emgold. Hole 07ROZ-01 was drilled to a depth of 104.29 metres and was designed to further test the extension of the main Rozan Vein. The highest assay result from this drill hole, which failed to intercept the vein, was 0.2 grams per tonne gold over 1.7 metres (see press release dated June 11, 2008). Assaying was done by ACME Analytical Laboratories in Vancouver following standard procedures.

In January, 2010, Emgold completed a Lease and Option to Purchase Agreement with Valterra Resource Corporation who own the nearby Star and Toughnut Properties. Valterra conducted topographical and geophysical compilation studies, and re-logged, re-sampled and catalogued some of the historic drill core (McGrath, B. and Baker, B., 2010).

In 2011, all previous soil sampling campaigns on the property were digitally compiled into a single database (1,637 samples) by Valterra and tied to corrected UTM, NAD83 coordinates based on available grid stations identified/found from the old grid. The historic soil geochemical data was scanned and optically recognized using analytical certificates from assessment and company reports. Valterra conducted geological mapping (approximately two square kilometers) which indicated that the Jurassic aged Nelson Intrusions consisting of granodiorite and porphyritic diorite extend further north than previously thought, expanding the potential for further precious and base mineralization within and adjacent to the intrusives and Elise Formation mafic to intermediate tuffaceous rocks. The mapping also discovered that the Mount Verde fault consists of an approximately 200 metre wide breccia zone with local zones of extensive shearing. Coincident with the Mount Verde fault is spotty but strongly anomalous gold and molybdenum in soils.

Also in 2011, Valterra conducted soil sampling, comprising approximately 150 samples, to infill a gap in the historic soil sampling coverage and to expand the soil survey to the north. Results of the 2011 soil sampling compiled with previous soil surveys has defined an area 1.8 by 1.6 kilometres in size with several gold anomalies based on a 55 part per billion gold grade contour. The gold in soil anomaly appears to have two preferential orientations being NW-SE and NE-SW. The northwest orientation is related to the contact between Elise Formation tuffaceous rocks to the west and granodiorite to the east. Gold values in soils ranged from 0.300 to 2,625 parts per billion. Mapping was completed for gold, arsenic, molybdenum, iron, tungsten, and manganese. Assaying was done by Acme Labs of Vancouver, and independent laboratory, following standard laboratory procedures, with standard quality control measures (Payne, C., 2011).

A total of 10 gold anomalies were identified by Valterra in 2011. A NW-SE trending gold soil anomaly (Target A) extends for some 1.8 kilometres and is up to 200 metres wide (true width is unknown). Along the surface trace of the Mount Verde fault there is a strong anomaly (Target B) identified by gold, tungsten, arsenic, and manganese in the soils. The remaining gold soil anomalies are generally NE-SW orientated and are considered related to high grade or sheeted quartz vein gold mineralization (most of which remain unexplained) on the property.

Of the NE 'trends', three Trends C, D and G appear to be the most significant. Trends C and D are two sub-parallel NE trending gold in soil anomalies located within granodiorite and may suggest that the sheeted quartz vein system located at the NE end of the soil anomalies extends some 500 metres further to the SW. Trend G appears to originate at the historic Rozan workings and extends some 450 metres to the SW.

Valterra recommended that additional geological mapping be completed initially on five soil anomalies (A-D and G). They also recommended geological sampling and mapping be extended to the entire property. Targets are to be followed up with a core drilling program to explore the extent of mineralization to depth.

In 2012, the Property was returned to Emgold when Valterra was unable to meet its work commitments. Emgold plans to proceed with further exploration on the property in 2012, based on the targets outlined by Emgold and Valterra's work to date.

In total, three holes totaling 410 metres have been drilled at Rozan. Results of diamond drilling done by Emgold to date are shown in Table 1.

Table 1
Emgold Drill Results
Rozan Property, B.C.

Drill Hole No.	Hole Length (m)	Interval (opt)	Width (m)	Gold Assay (g/t)
RM00-01	149.35	7.00 to 11.08	4.08	1.45
RM00-02	154.84	77.82 to 78.94	1.12	13.72
07ROZ-01	107.29	66.30 to 68.00	1.7	0.2
Total Length	411.48	-	-	-

Sample size is BQ core.
Drillholes were randomly spaced, distance between holes is unknown. True width not yet determined.

Geology and Mineralization

The Rozan Property is located in a region of much historic mining activity, with the Ymir, Erie, Sheep Creek and Nelson districts being sites of extensive exploration and production for over 100 years. Rozan is part of a large geologic trend of gold, silver, molybdenum, tungsten, copper, and other mineralization. The trend contains:

The Kena Property has a NI 43-101 compliant gold resource (2004) of 541,000 measured and indicated ounces of gold (24.9 million tonnes at 0.68 gram per tonne gold) and an inferred resource of 557,000 ounces of gold (25.8 million tonnes at 00.67 gram per tonne gold) (see sedar.com). Note that the presence of the resource on the Kena Property does not imply a similar resource will be delineated on the Rozan Property. However, geological mapping of the Rozan, Star, Toughnut, and Kena properties does show similar geologic structures that overlap on the properties.

The Rozan Property is underlain by Early Jurassic Rossland Group volcanic (Elise Formation) and sedimentary (Archibald Formation) rocks, which have been intruded by the Nelson Batholith, Tertiary dikes and small stocks. Quartz veins have cut the Nelson Batholith and older formations. A zone of silicification in the intrusives is normally developed on both sides of these quartz veins. Lamprophyre dikes also cut across the Nelson Intrusives.

The quartz veins appear to follow two directions, northwest and northeast. The northwest direction is the regional trend, which is also followed by the lamprophyre dikes. The northeast trend of the larger quartz veins is reflected by the gold soil geochemistry contours.

Rozan Quartz Vein in Trench

There have been two types of gold mineralization exposed at the Rozan Property. Relatively high-grade gold mineralization is associated with quartz-sulphide veins that cut both the Nelson granitics and the Elise volcanic rocks. These veins, which include the Rozan Main Vein, exhibit pinch and swell characteristics. Gold mineralization is also associated with sheeted and stockwork quartz veining within and adjacent to the granitic rocks. Potential also exists for other minerals including tungsten, molybdenum, copper, silver, lead, and zinc.

Current Exploration Activities

Thus far, exploration indicates that the Rozan Property has the potential to host both high-grade gold in individual quartz veins and stockwork style disseminated gold in quartz vein systems. Exploration also shows that the Rozan Main Vein is open at depth. Other types of polymetallic mineralization may also be present.

In late 2011, Emgold raised funds for exploration of its B.C. properties. Emgold plans to conduct exploration activities at Rozan in 2012 using these funds, to further advance the Property and assess its mineral potential. Exploration program development, budgeting, and permitting is currently underway.

Resources and Reserves

Rozan is considered an early stage property. No NI 43-101 compliant resources have been defined for the property at this time.

Mining

Exploration would target high grade veins and disseminated gold deposits suitable for mining by either surface or underground methods. Selection of mining methods would be determined following exploration and economic studies.

Metallurgy

Selection of a metallurgical process would be determined following additional exploration activity, metallurgical test work, and economic studies.

Conclusions

The Rozan Property is favorable for gold exploration because mineralization is present and new veins have been delineated from recent exploration. Also, it is part of a regional trend of mineralization and potential exists for discovery of polymetallic mineralization.

The development strategies could include advancing Rozan as a stand alone exploration project or alternatively, and subject to agreements with other companies, combining the Rozan Property with other properties in the region to create a larger regional exploration program.

Technical information included on this web page has been reviewed and approved by Perry Grunenberg, P.Geo., a Qualified Person as defined by National Instrument 43-101.

Qualification

Emgold's Qualified Person Mr. Perry Grunenberg has reviewed and approved the information on this webpage.

References

Aussant, C.H., Geological and Prospecting Report on the HC 1-4 Mineral Claims, Rex Silver Mines Limited, Assessment Report 11782, 1983.

Aussant, C.H., Prospecting and Geochemical Report on the HC 1-4 Mineral Claims, Rex Silver Mines Limited, 1984, Assessment Report 13489).

Craig, L.O., Geochemical and Geologica Report on the Rozan Group, Yukon Revenue Mines Limited, Assessment Report 24843, 1997).

Evans, D.S., Magnatometer Survey on the Honky Tonk Claim Group, Geostrategic Consultants, Assessment Report 18939, 1988).

Grunenberg, P., Geological, Geophysical, Geochemical, and Diamond Drilling Report on the Rozan Property, Emgold Mining Corporation, 2001, Assessment Report 26606).

Grunenberg, P., Geological and Geochemical Report on the Rozan Property, Emgold Mining Corporation, 2005, Assessment Report 27702).

Johnston, R.J., Geochemical Assessment Report on the Rozan Mineral Claim, Lacana Mining Corp., 1986, Assessment Report 15277).

McGrath, B., and Baker, B., 2010 Prospecting and Airborne Geophysical Interpretation, Valterra Resources, Assessment Report 32128).

Payne, C., Geological Mapping and Soil Sampling Report, Valterra Resources, 2011, Assessment Report number pending).

Santos P.J., Report on the Rozan Project, Patrick Resources, 1983, unpublished report).

Sevensma, P.H., Geological and Geochemical Report, Rozan Property, Hiawatha Resources Inc., 1988, Assessment Report 19357.

Sevensma, P.H., Geochemical Report; OGG Property, Hiawatha Resources Inc., 1989, Assessment Report 19357.

Sevensma, C.H., Geochemical-Geological Report, Rozan and OGG Properties, Hiawatha Resources Inc., 1990, Assessment Report 21730.

Sevensma, C.H., Geochemical Report, Rozan and OGG Properties, Hiawatha Resources Inc., 1991, Assessment Report 21730; and

Sevensma, C.H., Geochemical Report, Rozan and OGG Properties, Hiawatha Resources Inc., 1992, Assessment Report 22568).

Sinden, G.W. and Evans, D.S., Geochemical Survey and Prospecting Report, Actinolite 5/6 Claims, 1984, Greenwich Resources, Inc., Assessment Report 12984).

Note: Assessment Reports can be found at the B.C. Ministry of Mines ARIS Website.

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