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Tuesday, August 15, 2017 Derek Macpherson

Site Visit: RPX is Unlocking Surluga’s Secrets


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Last week we had the opportunity to visit Red Pine Exploration Inc.’s (TSXV:RPX) Wawa Gold Project. Red Pine is the operator with a 60% stake in the project, with the balance held privately by Citabar Limited Partnership (“Citabar”). The company has two rigs turning as part of its ongoing 20,000m drilling program, with one rig currently testing the Surluga North Zone and another at the Minto Mine South Zone. Results from the latter have been especially encouraging, as the company consistently continues to intersect gold mineralization in step-outs to the south-south-east.


Top-Down, Science Based Approach Paying Dividends. Red Pine’s 5,600 hectare land package comprises eight small high grade mines, historically operated by separate companies, all situated within the 4.75 km Wawa Gold Corridor. Consolidation of the various claim blocks was not completed until the late 2000s and Red Pine’s involvement in the project only commenced in December 2014. Since that time the company has integrated and reinterpreted a large historic database by applying modern exploration concepts and techniques. Discussions during the site visit with Jean-Francois Montreuil, Project Chief Geologist, with a Ph.D. in geochemistry, revealed that Red Pine is systematically logging core with focus on precisely capturing alteration (using a short wave infrared spectroradiometer for identifying clay minerals) and structural data (using oriented core). These efforts have resulted in the creation of a revised geological/structural model and generation of new targets within the Wawa Gold Corridor (see Figure 1).


Minto Mine South Zone and “Minto E” discovery. Red Pine began testing the Minto Mine South Zone in May of this year. Drilling to date has defined a 350m x 300m zone which remains open down plunge to the south-south-east. An additional 2,000m in 11 holes are planned to test this zone. The structure has proven to be “predictable” and Red Pine continues to intersect narrow but high grade intercepts (see Figure 2), including:

• SD-17-86: 2.00m @ 24.9 g/t Au
• SD-17-89: 3.47m @ 8.55 g/t Au
• SD-17-90: 2.03m@ 15.3 g/t Au


While testing the south-south-east trending Minto Mine Structure, Red Pine recently discovered a new structure referred to as Minto E, adjacent to the Minto Mine South Zone and trending in a north-east direction. The Minto E discovery laterally expands the Minto Mine South Zone to the east. Moreover, the spatial relationship between Minto E and the Minto Mine South Zone bears a strong similarity to the Parkhill Mine, historically the highest grading mine within the Wawa Gold Corridor. Assay results from 12 holes (including Minto E) are still pending from the Minto Mine South zone. It should be noted that 7 of these 12 holes encountered visible gold in core as depicted in Figure 3.



Wawa Gold Project benefits from excellent infrastructure. The Wawa Gold Project benefits from excellent infrastructure access as it is situated on the outskirts of the town of Wawa (Population 3,000) which is serviced by the Trans Canada Highway and connected to the provincial hydro power grid - a 230 kV power line crosses the southern part of the property and a second power line crosses the western portion of the property. A well maintained gravel road provides access to large portions of the property and connects to Wawa’s municipal road network. Within minutes of landing at Wawa Municipal Airport we were on site in the company’s well equipped and spacious core logging facilities. The tour included stops at Surluga Road Shear Zone exposure (Figure 5) and reclaimed historic mine sites, including the “maiden” shaft sunk into the Jubilee Zone in the 1930s and the historic Darwin-Grace and Minto Mines.


Site visit supports our view that considerable upside remains. Results from Red Pine’s ongoing 20,000m drilling program appear to validate the company’s geologic model of the 4.75 km Wawa Gold Corridor. We are encouraged by the fact that Red Pine continues to encounter gold mineralization in the vicinity of the Surluga Deposit and believe they are on track to delineating new resources in the Minto Mine South zone. We look forward to drilling budgeted for later in the year to test targets proximal to the Parkhill Mine, historically the highest grading gold mine within the Wawa Gold Corridor. Red Pine currently trades at a steep discount to peers (C$28/oz vs. peers at C$59/oz), which does not appear to reflect the current deposit or its significant growth potential.


Site visit and note completed by Ed Thorose Red Cloud KS’ resident geologist.

Ed Thorose | VP Corporate Development
Victoria Ellis Hayes | Associate
 
Red Cloud Klondike Strike Inc.
105 King Street East, 2nd Floor
Toronto ON, M5C 1G6
RCKSTalk@RedCloudKS.com

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Red Pine Exploration Inc. - TSXV:RPX - 1, 2, 3, 4,7

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