Photos Rozan

Maps Rozan

Summary

The Rozan Property is an early stage gold exploration property 100% owned by Emgold Mining Corporation (Emgold). 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.

Exploration by Emgold to date has included geological mapping, geochemical sampling and geophysical surveys along with small drilling programs, all of which had encouraging results. The Rozan Property has the potential for high-grade gold veins, bulk mineable disseminated gold zones, as well as discovery of other minerals.

Location

The Rozan Property is located ten 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.

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.

History

The Rozan Property was initially staked by William Rozan in 1928 and was worked until 1972. A small high grade mining operation yielded 115 tons containing 127 ounces of gold with small amounts of silver, lead and zinc.

Eric and Jack Denny and Frank Cameron purchased the property in 1974. 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.

Emgold Mining Corporation acquired the Rozan Property in early 2000. Emgold completed several small exploration programs between 2000 and 2008 including soil sampling, prospecting-mapping-rock sampling studies, ground geophysics, a 161 kiloimeter DIGHEM V EM-MAG airborne survey, and the drilling of three diamond drill holes totaling 410 meters. Historic drill results include 1.45 gram per tonne gold over 4.08 meters in hole RZ00-01 and 60.73 grams per tonne gold over 0.25 meters in hole RZ00-02.

In January, 2010, Emgold completed a Lease and Option to Purchase Agreement with Valterra Resource Corporation who own the nearby Star and Toughnut Properties. In 2010 and 2011, Valterra completed an enhanced surface topographical and digital elevation model, reinterpreted the airborne electromagnetic survey (AEM), and identified AEM anomalies for follow up. Two zones of anomalous conductivity were identified with key targets identified. In late 2011, Valterra crews collected 150 soil and rock chip samples, with results pending. In 2012, the property was returned to Emgold when Valterra was unable to meet its work commitments.

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:

Rozan is south of Valterra Resource's Star and Toughnut Properties. Valterra's holdings cover five gold-silver-polymetallic mineralized zones that are structurally aligned within a 3.5 kilometer belt called the Silver King Shear Zone. The Silver King Shear Zone continues southeast toward the past-producing Silver King Mine and the Kena Gold-Copper Property owned by Altair Ventures Corporation and Sultan Minerals Incorporated. The Kena Property has an NI 43-101 Compliant Mineral Resource (2004) of 541,000 measured and indicated ounces and 557,000 inferred ounces of gold (see Altair Venture's website for details).

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.

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.

Exploration

Since acquiring the property in 2000, Emgold has mapped geology, conducted geochemical sampling and geophysical surveys, and completed small drilling programs. This has resulted in the discovery of a new mineralized structure while also confirming the presence of subsurface mineralization.

Soil and rock geochemistry sampling of quartz and quartz-sulphide veins and veinlets identified areas of elevated gold values. Both low grade sheeted or stockwork veining and higher grade quartz-sulphide veining (the Main or Rozan Vein) are present. Intrusive-related gold occurrences may also exist on the property.

Exploration results also suggest that there is a correlation between areas of elevated gold in soil, anomalous airborne geophysical survey data and veining and alteration.

A DIGHEM electromagnetic-resistivity-magnetic survey indicates the presence of a large magnetic high area on the western margin of the property. Higher gold soil geochemical values were associated with this magnetic high.

Drilling results indicate that low grade stockwork veins are present, with quartz-pyrite veining in granodiorite ranging in width from 0.5 to 2.0 centimeters. Samples of such veined areas had gold values of up to 1.69 g/t over lengths of three meters. Drilling also indicated the presence of high grade gold vein mineralization.

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.

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.

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