AVPMF Avrupa Minerals Limited (PK)

Item 4.  Information on the Company

(1) These companies are in the process of being wound up.  

Currently, the Company conducts mineral exploration in Portugal, Kosovo and Germany.

History and Development of the Business

Avrupa was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia. The Company became a “Capital Pool Company” as defined in the Exchange’s Listing Policy 2.4 and its common shares began trading on the TSX Venture Exchange (the "Exchange") on September 2, 2008.

As a Capital Pool Company, the principal business of the Company was to identify and evaluate opportunities for the acquisition of an interest in an asset or business and, once identified and evaluated, to negotiate an acquisition or participation subject to receipt of shareholder approval and acceptance for filing by the Exchange.  Until the completion of such a Qualifying Transaction (“QT”), as defined under Exchange Listing Policy 2.4, the Company did not carry on any business other than the identification and evaluation of assets or businesses in this connection.

The Company completed its QT on July 13, 2010 to acquire 90% of the issued and outstanding shares in MAEPA Empreendimentos Mineiros e Participacoes Lda., a private Portugese company (“MAEPA”) and (b) 92.5% of the issued and outstanding shares of Innomatik Exploration Kosovo LLC, a private Kosovo company (“Innomatik”).  The Company received the final approval from the Exchange for its QT and its common shares resumed trading under its current name and trading symbol “AVU” on the Exchange as of July 14, 2010. In April 2012, the Company acquired the remaining 10% of MAEPA to own 100% by paying $150,000 cash and issuing 500,000 common shares. In August 2013, the Company acquired the remaining 7.5% of Innomatik to own 100% by issuing 450,000 common shares and paying €100,000.

The Company, through its holding in MAEPA, holds four exploration licenses in Portugal within the Portuguese portion of the Iberian Pyrite Belt in the southern portion in the country. The licenses have been issued to MAEPA by the government of Portugal, and are as follows:

 Alvalade  

 Marateca  

 Alvito  

 Mertola  

Licenses have varying work commitments, as approved by the government of Portugal, and all licenses carry a 3% net smelter royalty (“NSR”), payable to the government of Portugal.

In Kosovo, the Company, through its 100% holding in Innomatik, holds the Metovit exploration license. The original Kamenica license was dropped but replaced by the fully-overlapping new Metovit license. It also has a 10.29% ownership interest in Peshter Mining JSC., which has a 100% interest in the Slivovo property, subject to a NSR payable to the government of Kosovo.

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In Germany, the Company currently has an 85% interest in the Oelsnitz Exploration License, a gold and tin exploration project located in the Free State of Saxony in Eastern Germany. Under the terms of the original Memorandum of Understanding with Beak Consultants GmbH ("Beak"), once the Company has earned an 85% interest in the property, the Company and Beak will form a joint-venture to further explore the property. The Company earned its 85% interest through meeting its minimum exploration expenditure requirement of €140,000 during 2012 and is currently working with Beak to establish the joint-venture entity.

Business Overview

The Company currently has interests in mineral exploration projects located in Portugal, Germany and Kosovo. The Company and all of its properties are at the exploration stage. There is no assurance that a commercially viable resource deposit is present on any of the Company’s properties, and additional exploration is required before it is determined if any property is economically and legally viable.

Operations in certain areas are seasonal as the Company cannot conduct certain exploration activities on its properties year-round. The Company is not currently dependent upon market prices for its operations, nor is it dependent upon any patents, licenses or manufacturing processes. The Company’s operations are dependent upon exploration rights and claims as well as the terms of option and/or joint venture agreements on those properties. Please see the individual property descriptions below for the details of each of the Company’s current exploration projects.

Mineral Properties

The Company currently has interests in 7 mineral exploration properties, including 4 properties in Portugal, 2 properties in Kosovo, and 1 property in Germany. All of the Company's properties are currently at the exploration stage.

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Portugal

The Company through its subsidiary MAEPA, is currently focused in the Portuguese portion of the Iberian Pyrite Belt, a district with over 2,000 years of mining history from at least Roman times.

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The licenses in southern Portugal are all exploration contracts with exploration commitments but not environmental liabilities attached to any of the contracts.  These licenses typically have duration of 2+1+1+1 years. In addition, all the licenses have a 3% NSR attached which may be negotiated downwards in certain instances.  

The governing body for Portugal is the Direcao-Geral de Energia e Geologia (“DGEG”).  Typically, from application to issuance of licenses, it takes anywhere from 6-12 months, depending on the government’s ability and efficiency to check the application area for competitive application bids, various liabilities (local or regional,

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political, and/or technical), and anything that might obstruct exploration progress.  Often the wait for issuance depends on the prior activities and obligations of the responsible government officials, and the desire to make a public showing of the signing ceremony which advertises investment into Portugal.  The Company has experienced a couple of delays due to the change of the political party in power where the Company had to wait for a new minister to be selected, and therefore his/her involvement in the signing ceremony

Despite some exploration properties located on sites with historical operations, the Company does not have any potential environmental liabilities associated these properties.

Alvito

The Alvito IOCG (Iron Oxide Copper Gold) exploration license covers 303.1 square kilometers of prospectable land in the Ossa Morena zone of southern Portugal. The current license agreement with the Government for the Alvito license has been extended for an additional 30 months to September 2019. The Company currently has a 100% interest in the property.

There has been a moderate amount of previous work, which has been documented and archived by the Portuguese geological survey ("LNEG").  A partial historical data set from LNEG has been obtained that includes copper and zinc sample results from a total of 66,500 soil samples previously collected within the boundaries of the license area.  Review of the results indicates a NW-trending zone of copper anomalies that stretches across the license for more than 20 kilometers, with a width of 3-4 kilometers, and covers not only the prospects visited, but also other areas not previously recognized as definitively prospective.  

In April 2013, the Company announced positive results from first-pass exploration work on the property. 144 rock chip samples were collected, centering around 16 separate prospect areas. A total of 14 of these samples contain greater than 0.4 g/t gold, up to 3.95 g/t gold.  27 of the samples contain greater than 5 g/t silver up to a high value of 160 g/t silver. 42 of the samples contain greater than 0.25% copper, including 26 with greater than 1% copper. Others carry strongly anomalous lead, zinc and molybdenum values, as well. The Company completed additional exploration which has identified eight separate copper and copper-gold targets in the Alcaçovas copper belt and another 14 poly-metallic targets of various types around the license.

On June 17, 2015, the Company signed an agreement to option out the Alvito IOCG Project to Lowell Copper Ltd.  On November 16, 2015, the Company announced that Lowell decided to terminate its option on Alvito to focus work on its Warintza project in Ecuador.  

Prior to Lowell dropping its option on Alvito, the team advanced the Alcaçovas iron oxide copper-gold target within the license area.  The Company will utilize the results of the work to continue to upgrade Alcaçovas as well as upgrade several other important targets around the license.

During the third quarter of 2015, the Company completed further geological mapping, in-fill soil sampling, and sub-surface rock sampling at Alcaçovas, utilizing a portable drill rig to access down to a maximum of approximately 20 meters depth.  The Company drilled 29 short holes, totaling 356 meters, at eight targets located along two sub-parallel trends of strong copper-in-soil anomalism. Each trend is approximately three kilometers long.  Twenty-two of these holes intercepted visible copper mineralization beneath the shallow cover to a depth of <20 meters below the surface. The best results of these holes include 10.5 meters of 0.43% copper in Hole 23 and 5.5 meters of 0.49% copper in Hole 28.  Single sample values reached 0.89% copper and 0.53 g/t gold.  With this limited work, the Company has defined an initial target area along the west zone, 1,000 meters long and 200 meters wide, open at both the north and south ends. Other IOCG target areas occur along the Alcaçovas trend but have not been explored to date.

On April 5, 2017, the Company signed an earn-in option agreement on the Alvito project with Australia-based OZ Exploration Pty. Ltd, (“OZE”), a wholly-owned subsidiary of OZ Minerals Ltd. The agreement allows for OZE to earn up to a total 75% interest in the property from the Company by spending AUS$4,000,000 over approximately 2 ½ years under the following terms;

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 Fund AUS$1,000,000 in exploration expenditures in the first year to earn a 51% interest;  

 Fund an additional AUS$3,000,000 in exploration expenditures by September 30, 2019 to earn an additional 24% interest (75% interest in total)  

The Company will be the operator of the project during the first earn-in stage with active technical support and oversight from OZE’s experienced IOCG team.

A new exploration program funded by OZE commenced in June 2017. The program was focused on an area containing a large copper-in-soil anomaly with a strike extent of 24 kilometers, and consisted of ground magnetics, gravity geophysical surveys, geological mapping, rock chip sampling, and drill targeting. Exploration discovered new copper targets within the license area.

Exploration targets are summarized in the following table. Most exploration at Alvito has concentrated on the southern half of the license where numerous copper prospects along two sub-parallel, 10-km long, NNW-trending structures highlight the potential for copper-gold mineralization.  However, the latest work also suggests the potential for copper mineralization in the northern portion of the license.

Recent rock chip sampling and mapping suggest new targets in several areas, particularly around the Mata and Monte de Outeiro targets where geochemical anomalies in gold, copper, bismuth, molybdenum, tungsten, lead and zinc suggest the presence of a previously unsuspected, potentially mineralized, buried felsic intrusion. Gold and copper anomalism associated with magnetite breccias and gossans at the Entre Matinhas, Entre as Matas, and Manisela target areas are also high on the targeting list for the planned drill program. A number of copper-bearing quartz vein occurrences in the Nogueira and Vale Nogueira areas suggest further target possibilities in larger, less-explored parts of the Alvito license.

In May 2018, the Company announced that the proposed drill project has been increased to 15 holes and approximately 2,100 meters at seven separate target areas.  Targeting has been based on positive results from ground magnetics and gravity surveys along with coincident copper and gold geochemical anomalism.

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On the following map, the drill target areas are marked in red.

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The Company completed a total of 18 holes, totaling 2,437.5 meters, in eight separate prospect areas within the Alvito license. IOCG-style mineralization is present in drill holes in at least two of the prospect areas, Entre Matinhas and Entre as Matas. Possible IOCG-style sulfide mineralization is present in drill holes at the Outeiro and Manisela prospects. Epithermal-style sulfide mineralization is present at the Mata and Cova das Minas prospects.

The Company sampled several holes in their entirety, but most sampling covered only areas of continuous, visible mineralization and alteration in the drill holes. Several holes were not sampled in this phase of the program. The best overall consistent results came from the Entre Matinhas target area where copper values in six of eight holes came in at 0.1% and greater over intervals of 1.5 meters to 86 meters. Highest grade intervals included:

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 86.3 meters @ 0.16% copper, including 9.8 meters @ 0.41% copper, in EMS001  

 21.4 meters @ 0.1% copper in EMS002  

 2.55 meters @ 0.91% copper in EMS003  

 44.65 meters @ 0.21% copper, including 7.1 meters @ 1.0% in EMS005  

 5.25 meters @ 0.31% copper in EMS006  

 4.45 meters @ 0.46% copper in EMS008  

Anomalous intervals in other target areas include:

 4.7 meters @ 0.13% copper in EAM001  

 7.8 meters @ 0.11% copper in EAM002  

 10 meters @ 0.11% copper in OUT001  

The following table contains the significant copper results from the 2018 drill program.

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Mineralization style and alteration patterns at Entre Matinhas fit into the general characteristics and parameters for IOCG deposits. This first-pass drilling program covered only a limited area at shallow depths over 300 square kilometers, yet results clearly demonstrate real, close-to-surface potential for IOCG mineralization in a well-defined, easily prospectable target area. Further IOCG-style mineralization and alteration are present in the Manisela target area, located north of Entre Matinhas, and at Entre as Matas, located northeast of Entre Matinhas. First-pass geological mapping and ground geophysics suggest that the area to the west of Entre Matinhas and Manisela may also host IOCG possibilities in the Vale da Rata, Nogueira, Vale Nogueira, and 1440 target areas. The total area of the resulting, preferred IOCG target interest is approximately 20 square kilometers as detailed in the following map:

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In October 2018, OZE declined to earn its potential interest in the project, and Avrupa retains a 100% interest. The Company is now free to advance the project with further drilling in 2019 or establish a new option agreement with another partner.

Alvalade Project

The Alvalade joint-venture project is located in southern Portugal in the Portuguese Pyrite Belt. The project consists of one exploration license and covers approximately 902 square kilometers. The Company currently has a 100% interest in the project as it recovered the interest held by a former JV partner during 2017.

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Location and Access

The project is located on the Northwest extension of the Portuguese Pyrite Belt in the southwest portion of the country. The Alvalade Joint Venture is easily accessed by both paved and unpaved roads.  Regional two to four lane paved roads cross the license block east to west and north to south.  Secondary and Tertiary roads form a network that allows access to much of the JV area.  A railroad line, which is used to transport copper and zinc concentrates from the Neves Corvo Mine to the port of Setubal passes through the Alvalade license.  Several large towns, including Grandola, Ferreira do Alentejo, Castro Verde, and Aljustrel lie within or just outside of the borders of the license block.  Electric power lines are ubiquitous, and a number of year-round rivers cross the license area, the main one being the Sado River.

As the Alvalade JV license block is considered to be a pure exploration play, there are no development types of facilities or plants at this time. The Company uses two warehouses for core storage and detailed review of the core, as well as for a small field office.

Regional and Property Geology

Rocks in the area include Devonian sediments, volcanic sediments, felsic sub-volcanic domes, and mafic diabase-like rocks form the package of target rocks in the area that potentially host copper- and zinc-bearing massive sulfide deposits. These are often covered by younger Carboniferous clastic sediments and turbidites. About 75% of the license block is covered by Tertiary sediments and/or Quarternary gravels.  The Devonian target rocks, form a unit that is traceable from south of Lisbon, Portugal to near Seville, Spain, which is the Iberian Pyrite Belt (IPB).  The IPB is host to many massive sulfide and stockwork sulfide deposits, which have a history of mining that dates back to Roman times.

The Alvalade JV encompasses the Portuguese part of the IPB that lies just north of the regional Messajana Fault.  The giant Aljustrel massive sulfide body lies just to the south of the fault.  Two formerly producing mines, Lousal and Caveira, lie within the property boundaries.  Previous explorers have drilled upwards of 300 holes within the JV area.  However, many of the holes did not penetrate more than a few 10’s of meters into bedrock.  The Company’s compilation and review of the geology and structure of the Alvalade JV licenses indicates the strong possibility of new interpretations for the stratigraphy and the structural framework of the region, allowing for potential discoveries in previously drilled parts of the property block.

Acquisition Details

The Company originally acquired its interest in the property through its acquisition of 90% of MAEPA in July 2010 and increased its interest to 100% (subject to a 3% NSR to the government of Portugal) upon the acquisition of the remaining 10% of MAEPA in April 2012.

The Alvalade JV formerly covered 3 licenses (Ferreira do Alentejo, Lousal Alvalade and Canal Caveira). In October 2013, the government of Portugal approved the amalgamation of the three exploration licenses into a single exploration license. The license has a 3% NSR attached which may be negotiated downwards in certain instances.  

In December 2017, the Company signed an exclusivity agreement with a subsidiary of an international mining company, allowing it a right to negotiate the acquisition of an interest in the Alavade property, the Marateca property and the Mertola property for non-refundable payments of €25,000 in respect of each property for a total of €75,000. Such amount was received in December 2017 and was used to offset the expenditures incurred in fiscal 2018.

Former Joint-Venture Agreements

On June 6, 2011, the Company announced that it signed a Memorandum of Understanding (“MOU”) with Antofagasta Minerals S.A. (“Antofagasta”) to undertake exploration for copper-zinc massive sulfide deposits on the Alvalade project.

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The agreement covered the three original Avrupa licenses:  Alvalade, Canal Caveira, and Ferriera do Alentejo. The formerly operating Lousal and Caveira copper mines are located within the project area.  Antofagasta completed a US$300,000 Initial Study of the project, which included acquisition of much of the remaining historic data, re-logging of selected drill holes, systematic sampling, and integrated geological and geophysical interpretation of the targeted areas

Under the original agreement, Antofagasta had the option to acquire an undivided 51% interest in the project, which can be exercised by Antofagasta funding or incurring expenditures of an additional US$4 million over three years. After exercise of the first option, Antofagasta would be granted a further option to acquire an additional 24% interest in the project for an aggregate 75% undivided interest, by completing and delivering a Feasibility Study on the project to the Company within five years. The Company was the operator of the joint-venture through the first option period. In February 2014, Antofagasta completed the expenditure of the required US$4 million and earned a 51% interest in the joint-venture.

On February 25, 2014, the Company and Antofagasta signed an amended Joint Venture Agreement. On January 27, 2015, the Company and Antofagasta signed a second amended Joint Venture Agreement which allowed for more interim funding by Antofagasta, an expanded time frame in which to get a feasibility study decision, and a means for Avrupa to be carried to production, if there is a production decision to be made on the project. Antofagasta subsequently earned an additional 9% in the project (60% total) by funding an additional US$2,000,000 on exploration for a total of US$6,300,000.

On August 31, 2015, the Company signed an agreement with Colt Resources Inc. (“Colt”) and Antofagasta, whereby Colt will purchase Antofagasta’s 60% interest in the property for a total of US$7.1 million in incremental payments and a 1% NSR to Antofagasta. With the purchase, Colt became the optionee partner with the Company operating the project. Under the revised joint-venture agreement, Colt could earn up to 80% of the Joint-venture through a combination of exploration expenditures, completion of a feasibility study, and generation of a mine development decision by the end of the year 2023.

Colt subsequently defaulted on its joint-venture obligations. In order to regain a 100% interest in the property, Avrupa entered into an agreement with Colt and Antofagasta. Under the agreement, the Company agreed to forgive approximately €160,000 in debts, assume a deposit on the project of €75,000, and make the following payments to the initial partner on the project in return for increasing its interest in the project from 40% back to 100%:

 Cash payment of US$250,000 on the filing of an initial NI 43-101 compliant resource estimate meeting certain minimum criteria;  

 Staged cash payments totaling US$1,000,000 on the completion of a NI 43-101 compliant feasibility study meeting certain minimum criteria; and  

 Staged cash payments totaling US$3,000,000 on the commencement of commercial production from the project.  

Exploration History

At the start of the Initial Study, first-pass review of re-processed regional gravity and magnetics covering the Alvalade license led to the identification of up to ten target areas on the potential Alvalade JV property.  The Company has upgraded three of these areas – Aldeia dos Elvas, Monte da Bela Vista, and Azinheira dos Barros – and has defined drill targets in all three areas for the Alvalade Joint Venture.  Four more of the target districts need further detailed examination, while the other four areas have been temporarily downgraded, though will be re-visited at a later date.  Further first-pass review of recently completed re-processing of regional geophysics, covering the entire three-license block (Canal Caveira, Ferreira do Alentejo, and Alvalade licenses), is continuing.  

On October 19, 2011, the Company announced that work completed to date included re-logging of an additional 31 historic drill holes, collection of approximately 250 more samples from the drill core, re-processing of regional gravity and magnetics data, first-pass selection of specific target areas, including the Azinheira dos Barros and

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Aldeia dos Elvas locations, detailed re-processing of gravity data for the Aldeia area, and 1:10,000-scale geologic mapping and rock chip sampling at Aldeia and Azinheira.  Integration of geophysical data, geochemical data, and the results of recent surface work in these two districts suggests the potential for multiple drilling targets in both places.

On February 2, 2012, the Company announced the commencement of exploration work in the Portuguese Pyrite Belt under the Alvalade Joint Venture. The budget for work in 2012 was increased to US$2.5 million and approved by Antofagasta. Company geologists re-logged and selectively sampled over 50,000 meters of historic drill core from 194 drill holes completed in the JV area by other companies prior to the Company's acquisition of the property. A Phase 1 exploratory core drilling program was completed by the Company in three separate target areas. The initial program consisted of 8 holes totaling 3,269.8 meters and was designed to test targets located within two windows of exposed Paleozoic volcano-sedimentary rocks that host massive sulfide deposits elsewhere in the Iberian Pyrite Belt. 7 of the 8 holes drilled encountered alteration characteristic of massive sulphide systems in the Iberian Pyrite Belt. These same 7 holes crossed numerous zones of pyritic material, and 1 of the holes, MBV01, contained significant intervals of low-grade copper that may have been transported from a nearby potentially larger zone of copper mineralization.

Results of the re-logging and sampling, combined with the Phase 1 drill results, were used to plan Phase 2 drilling, which commenced in October 2012. The program consisted of 8 drill holes totaling 3,491 meters. 7 of the holes tested new targets along four separate trends of potentially mineralized host rocks. The 8th hole was drilled in the Monte a Bela Vista target area as a follow-up to hole MBV01 drilled in Phase 1, approximately two kilometers north of the past-producing Lousal Mine. The best results were obtained from the follow-up hole, MBV02, which was drilled to 653.1 meters and intercepted long intervals of probable feeder zone-style mineralized stockwork quartz veining, which may be indicative of the presence of a nearby massive sulfide system. Copper results from MBV02 included 45.90 meters (from 7.30 to 53.20 m) grading 0.24% Cu, including 8.05 meters (from 11.80 to 19.85 m) grading 0.39% Cu and 15.80 meters (from 23.70 to 39.50 m) grading 0.44% Cu; and 24.15 meters (from 146.30 to 170.45 m) grading 0.24% Cu, including 1.50 meters (from 154.15 to 155.65 m) grading 1.64% Cu and 7.50 meters (from 159.60 to 167.10 m) grading 0.44% copper. Gold results included 23.70 meters (from 154.15 to 177.85 m) assaying 1.35 g/t Au, including 1.50 meters (154.15 to 155.65 m) of 5.11 g/t gold and 7.45 meters (161.75 to 169.20 m) of 2.16 g/t gold; and 97.50 meters (279.50 to 377.00 m) of 0.40 g/t Au, including 7.00 meters (293.00 to 300.00) of 1.08 g/t Au and 9.50 meters (310.80 to 320.30 m) of 2.30 g/t Au. The hole also included numerous intervals of greater than 0.1% lead and/or zinc.

In March 2013, the Company commenced the Phase 3 drill program. The program was planned for up to 10 drill holes totaling approximately 4,500 to 5,000 meters. Drilling was planned for several areas along the Neves Corvo and Aljustrel target trends, as the Company developed a total of 23 targets of new, high quality targets. The first part of the program targeted the Monte da Bela Vista area where Phase 1 and Phase 2 drill holes MBV01 and MBV02 intersected copper and gold vein mineralization, and around the formerly producing mines at Canal Caveira and Lousal. Drill results continue to show positive potential at Monte da Bela Vista. Drill hole MBV03 intersected several zones of stockwork quartz-sulfide mineralization, including a 65-meter wide zone at a depth of 426 to 491 meters.

Phase 4 drilling commenced in January 2014. One hole was planned for the Monte da Bela Vista West target, located approximately 400 meters to the west of the Monte da Bela Vista mineralization drilled in Phase 3. An additional 6 holes were planned around two new, previously undrilled target areas. These holes will be collared in young cover sediments which may be as thick as 200 meters which completely obscure visual sighting of the target rocks. The holes will be drilled through the sediments and then 30-40 meters into the target basement rocks with the intention of using the information collected from the short drilling in the basement rocks to target vectoring towards true deep massive sulfide targets. The final 3 holes of Phase 4 will be follow-up deep tests from locations indicated from the blind vectoring drilling.

Massive sulfide mineralization was discovered in the second drill hole at the Sesmarias South target area, approximately 7 kilometers south of the past producing Lousal Mine. The area is covered by approximately 100 meters of cover sediment, which completely obscures the target rocks. The mineralized intercept in SES002 totals

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16.85 meters.  The intercept includes a zone of massive sulfide mineralization, then underlain by a zone of semi-massive sulfides and strong stockwork sulfide veining.  There follows a narrow shear zone, which is, in turn, underlain by a further zone of strong alteration with anomalous disseminated and stockwork sulfide mineralization.  The analytical results for the Massive and Semi-massive zones are included in the table below:

Six additional holes were drilled in this initial Sesmarias program in the immediate vicinity of the initial Sesmarias massive sulfide intersection (SES002). A total of 1,961 meters were drilled in the general target area. Highlights from the 6 additional holes include:

 SES008, a 650-meter step-out NW from discovery SES002, intersects 5.5 meters of massive sulfide mineralization with positive gold and silver results, and including 5.0 meters @ 0.64% Copper, 0.94% Lead, and 1.54% Zinc.  

 SES006, a 50-meter step-out NW from SES002, intersects 1.5 meters of VMS mineralization @ 1.66% Copper, 2.3% Lead, and 3.66% Zinc.  

A further five holes were then drilled to follow-up on the prior eight-hole program. The highlight of this follow-up program is a thick massive sulfide intercept in drill hole SES010, which started at a depth of 228.40 meters, and continued for 57.85 meters to 286.25 meters depth. Average grades for the entire massive sulfide intercept are: 0.32% copper, 0.61% lead, 1.95% zinc, 0.45 g/t gold, and 25.1 g/t silver. True thickness of the intercept is estimated to be approximately 35 to 40 meters. The joint-venture partners completed 13 holes, over a total strike length of 1,700 meters, at Sesmarias, for a total of 3,807 meters in the general target area. The Sesmarias target zone is heavily faulted, and the rocks are strongly contorted and displaced, which makes exploration extremely difficult. Despite these difficulties, the results from the drill programs continue to clearly indicate the potential for a large-scale mineralized system.

Drilling at the Alvalade project resumed on October 28, 2015 with funding by the new joint-venture partner Colt.  In the new phase of drilling, the partners planned to drill 5,000 to 6,000 meters, mostly in the immediate area of the Sesmarias copper-zinc discovery.

On February 3, 2016, the Company announced results from the drilling. Analytical results from four diamond drill holes completed in late 2015 in the area of previously-drilled SES010 (58 meters @ 0.32% Cu, 0.61% Pb, 1.95% Zn, 0.45 g/t Au, 25 g/t Ag) confirm and extend the massive sulfide lens to a present length of 300 meters with a 35-40 meter thickness.  The lens is open to the northwest and down dip to the northeast.  Following are the results from the recent drilling.

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Results from recently-completed downhole geophysics, utilizing the “mise-a-la-masse” (MALM) method, combined with historic ground magnetics data, suggest that the sulfide lens may continue another 300 meters or more to the northwest from SES022.  Future drilling will test this target area.

The drill core was transported by Company personnel from the drill sites to a nearby secure storage facility for logging and sampling. The sample intervals were one meter, unless visual inspection of the core indicated that a slightly different interval was necessary to preserve continuity of mineralization and rock type for analysis. One half of the core was collected and sent to the geochemical laboratory, while the remaining half of the core was retained in the core boxes for future reference. All samples were sent by courier or transported by Company personnel to the ALS Minerals sample preparation facility in Seville, Spain. ALS shipped the prepped material to their main European analytical laboratory located in Loughrea, Ireland. The samples were analyzed by ICP methods for copper, lead, zinc, and silver, and by fire assay with an AAS finish for gold. In addition to ALS Minerals quality assurance/quality control (QA/QC) of all work orders, the Joint Venture conducted its own standard, internal QA/QC from results generated by the systematic inclusion of certified reference materials, blank samples, and field duplicate samples. The analytical results from the quality control samples in the Sesmarias work orders have been evaluated, and conform to industry best-practice standards.

Current and Anticipated Exploration

Recent geochemical sampling, using ultra-trace level detection methods to analyze for base metals and a suite of pathfinder elements, in the area of the original SES002 discovery hole, has demonstrated even further northwest extension potential for the SES010 massive sulphide lens. Technical understanding of the sub-surface geology also suggests a possible extension of the lens to the southeast of up to 100 meters. There is also potential for further extension of the SES002 discovery lens, which now appears to be a separate lens from the SES010 lens. It is common to have multiple massive sulphide lenses in Pyrite Belt deposits.

In addition to further downdip and strike length massive sulphide targets found along the 1.8-kilometer trend of Sesmarias mineralization, there are at least four other separate, drill-ready targets in the immediate Sesmarias area, a significant target in the Pombal area located about 10 km southeast of Sesmarias, and several targets at the Monte da Bela Vista stockwork discovery located about 10 km north of Sesmarias, all on the Neves Corvo mineral trend. In the upcoming drilling program, the Company intends to drill in the areas of the SES002 and SES010 sulphide lenses and in the four other target areas noted in the following figure.

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Furthermore, with completion of recent internal studies of the Sesmarias-Lousal-Monte da Bela Vista area, the Company anticipates the potential and possibility of creating a new mineral district that combines the positive results from the Sesmarias area, located seven kilometers south of the old Lousal Mine, to the Monte da Bela Vista stockwork mineralization, located two kilometers north of Lousal, with the Lousal Mine, itself. Review of historic Lousal Mine resource and production reports suggests that copper/zinc-bearing massive sulphide mineralization remains in the immediate area of the historic mine workings. The Company will work towards establishing a continuum and enlargement of the massive sulphide mineralization between all three target areas.

To date, 54 holes have been drilled around the license by the Company for a total of 21,121 meters. More than 10 of the holes intercepted massive sulphides with various grades of copper, zinc, and lead. At least 75% of the holes contained base metal mineralization in veins and veinlets, often in stockworks, and often containing detectable gold and silver.

Recent, ongoing geological review of Sesmarias area core, along with subsequent interpretation and three-dimensional (3D) modeling of the data, suggests a simplified deposition history of mineralization and surrounding rock units. Using the newly developed information, the Company’s geologists see continued potential in the SES002 (“2”) Lens and in the SES010 (“10”) Lens. The new work indicates the possibility that a third lens may be located between widely-spaced drill holes SES008 and SES009 (the “8” Lens).

The 2 Lens is characterized by higher grade mineralization, including 10.85 meters @ 1.81% Cu; 75.27 ppm Ag; 2.57% Pb; 4.38% Zn; 0.13% Sn, although at this point, the extents of the mineralized envelope are undefined. The new 3D modeling suggests that the Lens is oriented in a non-parallel direction to the 10 Lens, which may explain why previous follow-up drilling did not significantly extend the discovery area. The Company also sent massive sulfide mineralization for analysis from previously-drilled hole SES003, which intersected the 2 Lens, but was never analyzed.

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The 10 Lens, as defined by previous drilling, currently measures approximately 400 meters long, 30 meters wide, and tested to a depth of nearly 200 meters. It is open to the south, north, and to depth. The new drilling targets its extension to the north and potential for increasing copper and zinc grades.

The 8 Lens has been tentatively defined by the area between, and including, two drillholes: SES008 and SES009. Located 500 meters apart, SES008 and SES009 contained narrow zones of sulfide mineralization apparently truncated (from the previous interpretation) by faulting. The SES008 intercept included 5.0 meters @ 0.64% Cu; 36.8 ppm Ag; 0.94% Pb; 1.54% Zn. The SES009 drill hole contained 4.0 meters of pyrite mineralization. The new interpretation suggests that the 8 lens is dipping to the northwest, and that SES008 and SES009 intercepted the outer edge of the mineralized lens.

On November 30, 2018, the Company announced startup of drilling at the Alvalade project. The Company would drill approximately 2,500 meters in five to seven diamond drill holes to enlarge and upgrade at least two lenses of copper- and zinc-bearing massive sulfide mineralization discovered by Avrupa during previous exploration work in the target area. Drill plans for this program include enlargement/upgrade targets on all three lenses. The recent 3D modeling has given good support for placement of drill collars that will potentially upgrade the Sesmarias prospect.

The Company completed six holes totaling 2,498 meters. The drilling program successfully tested a new exploration model and concepts, with the following important results:

 Provided a much higher degree of predictability in location of mineralization in the immediate Sesmarias Project area, as the new model was tested successfully in all six drill holes;  

 Enlarged the “10” Lens from 300 meters strike length to at least 600 meters long, up to 400 meters wide, and 25 meters thick (SES026 and SES027);  

 Discovered the footwall feeder zone stockwork for the “8” Lens (SES028);  

 Intercepted the edge of the “2” Lens/Horizon (SES025 and SES030);  

 Intercepted a stockwork-stringer sulfide zone above the “10” Lens, providing evidence for a new, fourth lens/horizon, noted for now, as the “26” Horizon (SES026);  

 Showed that mineralization is open to the east up to the bounding fault;  

 Showed that mineralization is open to the west up to the boundary of the Devonian-age Volcano-Sedimentary (VS) host rocks for mineralization and the overlying Tertiary-age gravels and semi-consolidated sediments.  

In March 2019, the Company reported on drilling results at the Alvalade project. Highlights from the program include the following results:

 SES026 intercepted 28.95 meters of 0.48% copper, 0.77 g/t gold, 15.7 ppm silver, 0.52% lead and 1.31% zinc.  

 SES026 extended the “10” Lens by 300 meters to the north from previous drilling.  

 The “10” Lens is now at 600 meters x 300 meters x 25 meters.  

 Mise-à-la-masse (MALM) geophysical anomalism extends another 150 meters past SES026 location.  

 SES028 intercepted the edge of a significant feeder zone stockwork beneath the “8” Lens.  Assays indicated anomalous gold, silver, copper, lead, and zinc throughout the entire length of the stockwork from 373.40 meters to 460.80 meters in depth, beneath the 8 Lens.  

 Discovered a possible new mineralized horizon in SES026, located above the “10” Lens, and intersected it again in SES027 and SES029.  

 Confirmed that the high grade “2” Lens is a fault-bounded fragment of massive sulfide mineralization with origin yet to be determined. Hole SES003, drilled previously on this target, is now also being assayed and will be reported shortly.  

 Continued re-logging of historic drill holes has upgraded targets in the northern portions of the Sesmarias Prospect.  

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 Each hole drilled in this exploration phase of the Project has enhanced the revamping of the exploration model.  Combined with strong assay results in SES026, in particular, the information will be used in the next drill targeting exercise for this large area.  

SES026 intercepted 28.95 meters of massive sulfide mineralization grading 0.48% copper and 0.77 g/t gold, extending the “10” massive sulfide lens to at least 600 meters in strike length.  The top seven meters of the intercept contained higher grade silver, copper, lead, and zinc, followed by a nine-meter interval of 1.09 g/t gold, as shown in the table below. The hole was collared on a geophysical anomaly which extends a further 150 meters beyond the SES026 location.  At this time, the estimated average dimensions of the 10 Lens are 600 meters long x 300 meters wide x 25 meters thick.  The mineralization is open to the east boundary fault and to the west intersection of the Devonian host rocks and the Tertiary gravels.  The lens appears to be cut by post-mineral dikes to the north and remains open to the south, though faulting may truncate the lens about 100 meters south of SES021.

Mineralization in SES026 showed significantly higher gold values compared to previous drilling on the 10 Lens, as shown below, as well as slightly higher overall copper values.

The Sesmarias Prospect area continues for a further 1000 meters to the north of the area of the present phase of drilling.

SES028 hit 87.40 meters of stockwork quartz-iron sulfide veining that marks the possible edge of a feeder zone for the previously discovered “8” Lens.  Assays indicated anomalous gold, silver, copper, lead, and zinc throughout the entire length of the stockwork from 373.40 meters to 460.80 meters in depth, beneath the 8 Lens. Examples of variable intervals of anomalism include:

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SES026, SES027, and SES029 intersected a horizon of stockwork quartz-sulfide veining located 20-40 meters above the “10” lens.  While mostly iron sulfides, the location of the horizon suggests potential for another possible mineral layer in the Sesmarias massive sulfide system.

The Company also provided assay results for drill hole SES003 which was drilled on the Alvalade Project in 2014, but not analyzed until now due to its general proximity and similar visible characteristics to drill hole SES002.  The SES003 assays were completed now in order to be added into Avrupa’s 3D model of the “2” Lens.  Hole SES002 is the Sesmarias “2” Lens discovery hole, and its assay results are also shown below.  SES003 added approximately 18 meters of dip length to the “2” Lens, as calculated in 2014.  Results from SES003 are comparable to those from SES002, as shown in the tables below.

To date, Avrupa has drilled seven closely-spaced, shallow core holes in the area of SES002 and SES003 to determine possible extent of the “2” Lens. Avrupa also conducted several types of downhole and surface geophysical surveys.  Intercepts of broken massive sulfide mineralization in SES005, SES006, and SES007, along with results from the geophysical work, and review of the actual core material in all of the holes suggested that mineralization comprising the “2” Lens occurred in a fault zone (now understood as the eastern boundary fault described in recent news releases of February 11, 2019 and March 11, 2019).  The interpretations from the 2014 drilling program suggested that the possible extents of the “2” Lens were on the order of 100-125 meters dip x 50-75 meters strike, and 5-10 meters thickness, as demonstrated in the following cross section and map view of the mineralization.

The program continues to be highly successful, accomplishing goals of better technical understanding of the Sesmarias mineralizing system and significantly enlarging it. This self-funded drilling program is the seventh phase of drilling to be completed by Avrupa Minerals on the Alvalade license. In addition to further targets in the immediate Sesmarias Project area, additional future drilling is anticipated for the Sesmarias-Lousal-Monte da Bela Vista District, as well as in other Avrupa-generated target areas with related Pyrite Belt-style massive sulfide targets and mineralization.

Marateca

The Marateca property covers approximately 923.2 square kilometers and is located in south-central Portugal in the Portuguese Pyrite Belt, approximately 40 kilometers north of the Company’s Alvalade Joint-Venture project.  The Company currently has a 100% interest in the project.

On July 26, 2013, the Mining Bureau of Portugal issued a new Marateca license. The new license covers a portion of the Company’s former license by the same name. The current property surrounds the northernmost known volcanic center on the Neves Corvo trend in the Iberian Pyrite Belt. Targets within the license area are potential copper- and zinc-bearing massive sulfide deposits, hosted in a similar geological setting to that of the Alvalade Project. 

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With only a moderate amount of exploration, prospecting and research work, on a small portion of the Marateca license area, the Company has identified at least 13 potential, and separate, copper-zinc, volcanogenic massive sulfide-style target areas. Several of the target areas have outcropping mineralization including iron, manganese, and silica at Serrinha and copper, lead, manganese and silica at Cordoeira. Previous work in the area by the Company included exploratory core drilling at three different targets:  Serrinha, São Martinho, and Monte de Volta.  The two holes at Serrinha intercepted zones of stockwork sulfide-quartz veining with anomalous base metal values and silver.  Subsequent geological work around the Serrinha target area produced several new drill targets.  The holes at São Martinho and Monte de Volta were lost due to difficult drilling conditions before reaching the target zones. 

In December 2013, the Company announced the Company discovered an outcropping gossan zone in volcanic-sedimentary rock units that are known to host massive sulfide mineralization in other parts of the Pyrite Belt. Follow-up mapping has extended the Pego do altar gossan zone to nearly 1,000 meters in strike length with a possible thickness of up to 50 meters. Limited rock chip sampling along strike (11 samples) returned copper values up to 0.12% and lead values to 0.08%. Anomalous bismuth, molybdenum, and gold values further indicate the hydrothermal nature of the metals’ presence, thus providing early support for further geological mapping, sampling, and drill targeting. In addition, the Company discovered a second gossan zone in the Pego do Altar target area, with visible copper oxide staining at several locations. The Company drilled two shallow stratigraphic test holes at the end of 2016, totaling 175 meters.  Both holes confirmed downdip from the gossan sulfide mineralization in the proper stratigraphic section of VS sediments.  The first hole cut 35 meters of mixed stockwork and semi-massive pyritic mineralization, and the second hole cut 20 meters of similar pyritic mineralization.

The Company is currently seeking a joint-venture partner to advance the exploration program on the property.

Mertola

In June 2014, the Company received a new license for the Mertola project, which is located in the Pyrite belt of southern Portugal. It is east of Neves Corvo, and covers the eastern Portuguese portion of the Sao Domingos VMS target belt. The past-producing Sao Domingos Mine is located close to the east end of the license, and is central to an area of copper and zinc-bearing massive sulfide targets. Core from over 35 holes of historic drilling is available for re-logging and re-sampling. This core has been collected by the Company which has begun to re-log the material. The new information gathered from the re-logging suggests that there will be new targets defined through re-interpretation of the geology.

During 2017, the Company conducted limited exploration at Mertola. The Company began preparing and updated study of the historic Sao Domingos mine on the eastern end of the license. New information suggests additional brownfields exploration possibilities within sight of the mine complex, with several drill-ready targets identified at the historic Chanca mine located less than 10 kilometers away from Sao Domingos.

The Company is currently seeking a joint-venture partner to advance the exploration program on the property.

Other Portugal Properties

Covas

The Covas property is a tungsten-gold exploration project located in the northwestern portion of Portugal. The property consists of a single exploration license and is 1,949 hectares in size. The Company had a 25% interest in the property, with 75% owned by Blackheath Resources Inc. through a JV agreement.

In October 2017, Blackheath funded a single 225-meter drill hole to partially test for the possibility of a large-tonnage, close-to-the-surface, bulkmineable, disseminated tungsten deposit directly related to or hosted in the presumed porphyritic granitic Covas intrusive body.  Surface and close-to-surface indications for potential mineralization included strong alteration affiliated with an intense linear, negative magnetics anomaly, multi-

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element geochemical anomalism contained in soil samples covering the linear magnetics anomaly and supporting IP/chargeability anomalism. The single drill hole partially tested the target idea.  Alteration was present throughout the hole, particularly strong silicification through the bottom half of the hole.  Porphyritic intrusive rocks were present in the hole in the form of cross-cutting dikes.

In March 2018, Blackheath terminated the joint-venture agreement on the property and the license for the property was cancelled by the Portuguese DGEG in 2018. The Company wrote-off its capitalized acquisition costs of $71,289 as of December 31, 2017.

Santa Margarida do Sado

In June 2014, the Company received a new license in the Pyrite Belt of southern Portugal. The Santa Margarida do Sado license covered potential northward extensions of mineralization from the historic Canal Caveira Mine which is located on the Company’s Alvalade Joint Venture license located immediately adjacent to the south.

While the Company had identified VMS target potential within the license boundaries, the Company dropped the Santa Margarida license which became official in fiscal 2017

Generative work

The Company is continuing prospecting for additional properties in other parts of Portugal, using its experience-amassed database to review old prospects and districts from new angles and to develop wholly new generative ideas. The Company maintains excellent relations with both the Mining Bureau and the Geological Survey in Portugal.

Kosovo

The Company has been advancing its property interests in Kosovo though its 100% owned subsidiary Innomatik Exploration Kosovo (IEK). The Company initially purchased a 92.5% interest in IEK in July 2010. During the year ended December 31, 2013, the Company acquired the remaining 7.5% interest in IEK.

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The Company’s senior Kosovo management has long-term experience with the democratically-elected Kosovo government, with the United Nations and European Union administrators of the pre-independent country, and with the metallogeny and mineral deposits of the region.  The Company is currently the most active metals’ exploration group in Kosovo.  There has been little modern, systematic exploration performed in Kosovo to date, leaving an opportunity for successful prospect and project generation. The Company optioned one exploration license to a partner (Slivovo), while continuing to upgrade its other project at Metovit exploration license to JV ready status.

Both of the Company’s Kosovo properties have outcropping base metal mineralization and/or significant alteration zones.  Most of the targets have not been previously drilled and have old workings of perhaps Roman and certainly Saxon age, to possibly early 20th century age in a number of locales.

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The Company’s licenses in Kosovo all have work expenditure commitments and are valid for three years, with a two-year renewal possible (which coincides with a 50% reduction in size of the license).  Licenses have a variable 4.5-5% NSR.  There is a lobbying effort to change this level, in order to attract further investment into the country.  The Company has no environmental liabilities attached to its licenses there.  The governing body for licensing is the Independent Commission for Mines and Minerals (“ICMM”).  Once an application is made and all required documents are attached, ICMM is required to respond (positively or negatively) within 3 months of the date of application.  The Company has experienced only one exception to this, in the granting of the Slivovo license, but through all proper channels, the Company received the license after about 5 months of delay.

Despite some exploration properties located on sites with historical operations, the Company does not have any potential environmental liabilities associated these properties.

Slivovo

The Slivovo license, located approximately 15 km southeast of Prishtine, the capital city of Kosovo, and covering 15.2 km2, was issued to the Company on June 27, 2012. The Company currently has a 15% interest in the project with joint-venture partner Byrnecut International, who has an 85% interest in the project through a completed earn-in agreement.

On April 10, 2014, the Company signed an earn-in and shareholders agreement (“Earn-In Agreement”) to option out the Slivovo property to Byrnecut International Limited (“Byrnecut”). Under the Earn-In Agreement, Byrnecut could earn a 51% interest in the Slivovo property by spending €1,000,000 in exploration on the project by April 10, 2015. Byrnecut can then earn a further 24% by spending an additional €1,000,000 for a total interest of 75% with total expenditures of €2,000,000, by April 10, 2016. Byrnecut can further earn an additional 10% by completing a Preliminary Feasibility Study on the Slivovo Project for a total interest of 85% by April 10, 2017. Byrnecut completed all of the required conditions under the agreement and reached the 85% ownership level in February 2017.

The Company and Byrnecut have transferred the Slivovo license to Peshter Mining J.S.C, which is currently owned 89.85% by Byrnecut and 10.15% by the Company.

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Early rock chip sampling of the Peshter gossan zone (22 samples) returned strongly anomalous lead, zinc, silver, and gold results. Subsequent, wide-scale geological mapping of the area indicated potential for gold-bearing, massive sulfide mineralization of the style common in the Vardar Zone, which extends through east-central Europe. Following the discovery of the Peshter gossan zone, the Company then discovered several gold-bearing rock units in the Peshter area. First-pass soil and rock chip sampling outlined two separate areas with anomalous gold results. One area surrounds the Peshter gossan zone, measures approximately 500 x 150 meters in size, and is potentially open along strike. The other, more important anomalous gold-bearing zone, located approximately 1,000 meters from the Peshter gossan, is related to beds of a strongly altered, calcareous sandstone unit, intruded by a mineralized felsic dike(s).

Avrupa started targeting work at Slivovo in April 2014, upon receipt of the first tranche of funding from Byrnecut. Work focused around two primary targets on the property, including a gold/silver/lead/zinc-bearing gossan, and an epithermal gold-polymetallic target located about one kilometer away. In addition, work in the field identified several new zones of interest, all requiring further follow-up. In total, nearly 1,300 rock and soil samples have been collected, and 1,615 meters of trenches excavated for sampling and geological mapping purposes. Of greatest interest is the average gold value in a northeast-trending zone, of which the 39 samples collected there returned 2.9 g/t gold, with a top cut of 10 g/t gold. Five of these samples contained >10 g/t gold, ranging from 12.25 g/t to 389 g/t.

New targets around the Peshter gossan zone have been identified. The gossan zone has been extended to the southwest by over 300 meters, and the so-called epithermal zone, located further to the west, has been extended northwards by several hundred meters. Mapping and sampling indicate that the entire Peshter mineral target area is likely related to a buried porphyritic intrusion. The mineralization zone runs for over 1,000 meters along an ENE-trending corridor from the epithermal target (olive) to the sandstone gossan (orange) to the sulfide-oxide gossan (black). The epithermal zone now runs for over 800 meters, north-south. Following well known models of mineral deposits related to porphyry systems, the various targets at Peshter fall into a generalized model that hypothesizes the presence of a buried porphyry system, which has been long-suspected for the area.

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A drill program commenced in September 2014 to test all three target zones. The program was planned for at least eight drill holes totaling 2,000 meters.

Holes SLV004, SLV005 and SLV006 were drilled in the main Peshter Gossan zone and contained the following gold and silver assay intervals:

Holes SLV007 and SLV008 were drilled in the southwest extension of the Peshter Gossan, located about 200 meters south of hole SLV004.  SLV007 was drilled to a depth of 97.4 meters at a dip angle of -55 degrees through sediments to 70 meters depth and then through intrusive rocks (possibly a parallel-to-sedimentary-bedding sill) to the final 97.4-meter depth. SLV008 was drilled to a depth of 183.6 meters at a dip angle of -85 degrees (nearly vertical).  Much of the rock in this hole was intrusive sill material, as in the bottom of SLV007.  The follow-up detailed review of the drill core now indicates that both drill holes were drilled more or less along the strike of the sedimentary rocks and intrusive sill material. 

SLV007 contained an intercept of 13.05 meters (from 16.00 to 29.05 meters) with an average gold value of 1.78 g/t Au, within a longer intercept of 53.6 meters (from 16.00 to 69.6 meters) with an average gold value of 0.91 g/t Au.  Further sampling of this hole is in process, as the core contained anomalous gold all the way down to the bottom of the sampling interval.

SLV008 contained narrow intervals of strongly anomalous gold, including 2.65 meters (from 75.00 to 77.65 meters) with an average gold value of 1.06 g/t, within a much wider zone of gold anomalism. This hole will be re-sampled, as well, given the information obtained from the assays. Sampling of the intrusive sill rocks (from 89.60 to 183.60 meters) indicated low-moderate anomalism in gold values throughout the sill.

The second phase of drilling, totaling five holes and 1,035 meters, was completed during Q2 2015.

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The third phase of drilling was predominantly conducted in the Peshter Gossan zone. Some of the highlighted intercepts are as follows:

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Byrnecut contracted with associate company Mining Plus Pty. Ltd. (“Mining Plus”) to work on an initial resource model and calculation. The goal will be to provide enough information to make a tactical decision to move onto the next phase which will include work to move the Slivovo exploration license to a mining license and work on pre-feasibility study. Mining Plus is tabulating and compiling the project data. The Company contracted with Mr. Gary Giroux to prepare an NI 43-101 compliant maiden resource estimate which will be part of a larger NI 43-101 compliant document prepared by Mining Plus.

The initial indicated Mineral Resource for the main Peshter Gossan Zone was completed in May 2016. The mineralized body at Slivovo is a moderately ENE-plunging block of mineralization, exposed at the surface to the SW, and cut off on the NW and SE by steep, post-mineralization faults and underneath by a shallow ENE-dipping, post-mineralization fault. The mineralization is open down-plunge to the ENE. Precious metal mineralization is

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hosted within a package of steeply dipping sedimentary beds of silicified and de-calcified pebble conglomerates, sandstone conglomerates, and sandstones. Understanding of the total post-mineral fault movement suggests that further mineral targets exist in the proximity of the Slivovo Indicated Mineral Resource, as well as elsewhere on the exploration license.

The results of the Mineral Resource estimate are provided in the table below. The Indicated Mineral Resources are reported at a cut-off of 1.0 g/t gold.

Cautionary Note to U.S. Investors concerning estimates of Indicated Resources

This section uses the term “indicated resources”.  We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it.   U.S. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

All samples were submitted for gold and silver analysis, with samples from holes up to SLV014 submitted for a full multi-element suite of analysis. Multi-elements analysis ceased from SLV015 onward due to budget constraints. All analysis was undertaken by ALS at a number of their fully accredited laboratories. All samples were sent to the ALS sample preparation facility in Serbia where they were logged into the Company’s LIMS and prepared for analysis. The sample is logged in the tracking system, weighed, dried and finely crushed to better than 70 % passing a 2 mm (Tyler 9 mesh, US Std. No.10) screen. A split of up to 250 g is taken and pulverized to better than 85% passing a 75 micron (Tyler 200 mesh, US Std. o. 200) screen. This pulp is then used for the gold, silver and multi-element analysis.

Gold analysis was undertaken at the ALS laboratory in Romania using Fire Assay with an Atomic Absorption Spectrometry Finish on a 30g charge. The upper detection limit for this method (Au-AA23) is set at 10 g/t gold, with any over limit values re-analysed via Fire Assay with a Gravimetric Finish (Au-GRA21). Silver analysis has been undertaken at the ALS laboratory in Ireland using a multi-acid digest and a hydrochloric acid leach with an AAS read. An upper detection limit of 100 g/t silver is set for this analytical technique – no samples returned grades above this upper detection limit. The analytical techniques for gold and silver are considered appropriate for the style of mineralization at the Slivovo Project.

The QA/QC program used for Phase 1 drilling consisted of the submission of only standards and pulp blanks used along with the laboratory repeat analyses to test for the accuracy and precision of the analytical laboratory. A more comprehensive system was introduced from SLV009 (Phase 2 onward) which expanded to include the submission of a barren marble as a blank to test the sample preparation, as well as the regular submission of field duplicates (quarter core) and pulp duplicates. Mining Plus reviewed the QA/QC protocols during the site visit and found that they were generally acceptable for the stage of the project, although it was noted that the submission of standards closer to the mean gold grade of the deposit would be preferable than the low grade nature of the standards used.

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Based on the initial indicated Mineral Resource, Byrnecut proceeded with funding a Pre-Feasibility Study (“PFS”) of the project through the new JV company, Peshter Mining. A geophysical program consisting of 10 lines of IP/Resistivity covering 21.375 line kilometers and 5 lines of Turam electromagnetics was initiated over the zones of Slivovo mineralization and surrounding lands. A new 15 hole drill program was also completed in 2016. Most of the holes were infill drilling to confirm continuity of mineralization and to potentially increasing the size of the indicated resource in the Gossan Extension Zone. The gold and silver assays from the 2016 drilling are as follows: