Mercedes

Elemental acquired a 1% NSR royalty on the Mercedes gold-silver mine in July 2018, payable from the earlier of either a 450,000 ounces of gold production hurdle or July 28, 2022. Production at Mercedes in 2019 totalled 59,901 ounces of gold and 191,306 ounces of silver.

The Mercedes mine is a 2ktpd underground operation located in the State of Sonora in northern Mexico, 250km northeast of Hermosillo and 300km south of Tucson, Arizona. The mine is operated by Equinox Gold Corp. (TSX: EQX) and consists of 39 mining concessions covering approximately 692sq km and encompassing 45km of mineralised faults.

The geology of north-central Sonora displays a complex history of tectonic and magmatic activity. Gold-silver mineralization at Mercedes is hosted within epithermal low sulphidation veins, stockworks, and breccia zones. Over 15km of veins have been identified within or marginal to andesite-filled basins which constitute the primary exploration target. Three new orebodies have been developed to increase the number of available ore sources as a precursor to increased production, and several additional exploration targets have been identified to extend the mine life.

Exploration Potential

In addition to the large Resource base available for conversion into Reserve, which will likely only be done progressively just prior to mining due to access / drilling costs, recent new discoveries of new veins and small very high grade zones (>1Oz/t) near both new and old developments provide encouragement for ongoing Reserve replacement.

For further information please visit the Equinox Gold Corp. website.

• Unless otherwise noted, the disclosure contained on this website of a scientific or technical nature for the Mercedes mine is based on Premier Gold Mines Limited’s Management Discussion and Analysis for the year ending December 31, 2019, which was prepared in accordance with NI 43-101 and is available on Premier’s company profile at www.sedar.com, and an independent technical report on the property dated April 18, 2018, entitled “Technical Report on the Merceces Gold-Silver Mine, Sonora State, Mexico”

• Mineral reserves and mineral resources were calculated under the supervision of a Premier Gold employee who is a Qualified Person as per NI 43-101 at gold prices of US$1200 and US$1400 and silver prices of US$16.50 and US$19.25 respectively.

• Mineral Resources are estimated at a cut-off grade of 2.0 g/t AuEq for underground resources and 0.4 g/t AuEq for open pit resources. No minimum mining width was used. Bulk density is 2.42 t/m3 for mineralization and 2.40 t/m3 for waste. Mineral Resources are exclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves have not demonstrated economic viability.

• Information contained on this website with respect to each of the royalties has been prepared in accordance with the exemption set forth in section 9.2 of NI 43-101. Richard Evans, FAusIMM, is Senior Vice President, Technical for the Company and a qualified person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has reviewed and approved the scientific and technical disclosure.

• Certain Resource and Reserve estimates covering properties related to certain mining assets in this website have been prepared in reliance upon the JORC Code. Estimates based on JORC Code are recognized under NI 43-101 in certain circumstances. In each case, the Mineral Resources and Mineral Reserves included in this website are based on estimates previously disclosed by the relevant property owner or operator, without reference to the underlying data used to calculate the estimates. Accordingly, the Company is not able to reconcile the Resource and Reserve estimates prepared in reliance on JORC Code with that of CIM definitions. The Company previously sought confirmation from its Qualified Person who is experienced in the preparation of Resource and Reserve estimates using CIM and JORC Code, of the extent to which an estimate prepared under JORC Code would differ from that prepared under CIM definitions. The Company was advised that, while the CIM definitions are not identical to those of JORC Code, the Resource and Reserve definitions and categories are substantively the same as the CIM definitions mandated in NI 43-101 and will typically result in reporting of substantially similar Reserve and Resource estimates.