TECHNICAL REPORT on the JACKSON WASH LITHIUM BRINE PROJECT … · 2017-04-03 · 2 Nevada Sunrise Gold Corporation & Advantage Lithium Corp. Jackson Wash Project Technical Report

1 Nevada Sunrise Gold Corporation & Advantage Lithium Corp. Jackson Wash Project Technical Report

TECHNICAL REPORT

on the

JACKSON WASH LITHIUM BRINE PROJECT

Esmeralda County, Nevada, USA

for

Nevada Sunrise Gold Corporation

and

Advantage Lithium Corp.

By

by

Robert M. Allender, Jr., CPG, RG, SME

Phoenix, Arizona, USA

TECHNICAL REPORT

R.M. Allender, Jr., CPG, RG, SME

Report No. 16-701

Effective Date: July 21, 2016

Signing Date: July 27, 2016


NOTICE

This report was prepared according to the National Instrument 43-101 Technical Report guidance, in

accordance with Form 43-101F1, for Nevada Sunrise Gold Cororation (“ Nevada Sunrise”) and

Advantage Lithium Corp (“Advantage”) by Robert M. Allender, Jr. (“Author”). The quality of

information, conclusions and estimates contained herein is consistent with the level of effort described

in the agreement between Nevada Sunrise and Author and based on: i) information available at the

time of preparation, ii) data supplied by Nevada Sunrise and other outside sources, and iii) the

assumptions, conditions, and qualifications set forth in this report.


TECHNICAL REPORT

ON THE

JACKSON WASH LITHIUM BRINE PROJECT,

ESMERALDA COUNTY, NEVADA, USA

TABLE OF CONTENTS

CONTENTS PAGE

Title Page 1

Notice 2

Date and Signature Page 5

Table of Contents 3

Item 1: Summary 7

Item 2: Introduction 9

Item 3: Reliance on Other Experts 10

Item 4: Property Description and Location 10

Item 5: Accessibility, Climate, Local Resources, Infrastructure and Physiography 16

Item 6: History 17

Item 7: Geological Setting and Mineralization 17

Item 8: Deposit Types 20

Item 9: Exploration 20

Item 10: Drilling 26

Item 11: Sample Preparation, Analyses and Security 26

Item 12: Data Verification 27

Item 13: Mineral Processing and Metallurgical Testing 27

Item 14: Mineral Resource Estimates 27

Item 23: Adjacent Properties 27

Item 24: Other Relevant Data and Information 28

Item 25: Interpretation and Conclusions 28

Item 26: Recommendations 30

Item 27: References 32


TABLE OF CONTENTS - CONTINUED

FIGURES PAGE

1 General location and physiographic setting, Western US 9

2 Jackson Wash Project Location Map 15

3 Basin and Range Province Map 17

4 Plate Tectonics, Western North America Map 18

5 Clayton Valley Aquifer Hosts 20

6 Jackson Wash Gravity Survey Map 22

7 Jackson Wash CSAMT Map 24

8 Gravity structures and inverted resistivity sections over topography 25

9 Proposed drillhole locations 30

TABLES PAGE

1 Jackson Wash Claim Information 10

2 Jackson Wash Basin Reconnaissance Sampling 31

3 Proposed drillhole location information 31


CERTIFICATE OF QUALIFIED PERSON

Robert M. Allender, Jr. Certified Professional Geologist (07475)

I, Robert M. Allender, CPG, residing at 5730 East Windrose Drive, Scottsdale, Arizona, USA do

hereby certify that:

1. I am a qualified geological consultant contracted by Nevada Sunrise Gold Corp.;

2. I am a graduate of Colorado State University with a Bachelor of Science degree in Geology (1978)

and I am currently a Certified Professional Geologist (CPG #07475) by the American Institute of

Professional Geologists (AIPG);

3. I have worked as a geologist for a total of 38 years since obtaining my B.Sc. degree; I have been

involved in general mineral commodity exploration, property development, and mining operations for

my entire career. I have been involved in exploration for lithium resources for the past seven (7) years

and have worked on fourteen (14) lithium brine exploration and property development projects in the

United States, Canada, and Australia during that time. Specifically, I have been the lead geologist on

eight (8) lithium brine exploration projects in and adjacent to Clayton Valley, Nevada including the

Jackson Wash Project and its predecessor project for the former operator, AmeriLithium Corporation.

These projects have included planning and implementation of geochemical sampling programs,

planning and direction of geophysical surveys, and planning and supervision of exploration drilling

programs as well as permitting, data interpretation, and technical report preparation.;

4. I am responsible for all sections of this technical report entitled “Technical Report on the Jackson

Wash Lithium Brine Project, Esmeralda County, Nevada, USA for Nevada Sunrise Gold Corporation

and Advantage Lithium Corp.” and dated June 27, 2016;

5. I have visited the Jackson Wash property on numerous occasions beginning in May, 2011; most

recently, I inspected the property in March, 2016;

6. I have had prior involvement with the Jackson Wash Project that is the subject of this Technical

Report as a consultant to the prior operator, AmeriLithium Corporation;

7. As of the date of this certificate, to the best of my knowledge, information and belief, the technical

report contains all scientific and technical information that is required to be disclosed to make the

technical report not misleading;

8. I have read the definition of “qualified person” set forth in National Instrument 43-101 (NI 43-101)

and certify that, by reason of my education and past relevant work experience, I fulfill the requirements

to be a “qualified person” for the purposes of NI 43-101. This report is based on my personal

knowledge of the project and surrounding area, my review of information provided by the Issuer and

on discussions with the Issuer’s representatives;

9. I am independent of the issuer applying the test in Section 1.5 of NI 43-101; I am independent of the

Vendor of the Jackson Wash claims and have no connection to or interest in the Jackson Wash

property.;


10. I have read NI 43-101, Form 43-101F1, and Notice 43-704. This report has been prepared in

compliance therewith;

Effective Date: July 21, 2016

Signing Date: July 27, 2016

_______________________________

Robert M. Allender, Jr.


Item 1. Summary The Jackson Wash Project is an exploration-stage project located in Esmeralda County, Nevada near the lithium production area of Clayton Valley. The Project is under option to Nevada Sunrise Gold Corporation of Vancouver, BC, Canada and is located southeast of Clayton Valley on the southeastern flank of the Montezuma Mountains. The original owners of the claim block, Nevada Alaska Mining Company, retain a 2% net smelter return (“NSR”) royalty on any future production. The property is comprised of 166 20-acre (8.1-hectare) unpatented placer claims totaling 3,320 acres (1,343.6 hectares) that were originally located to encompass a gravity or density low, called the Jackson Wash Basin Gravity Low, previously identified by a regional United States Geological Survey gravity investigation. This claim block is evidently underlain by a sequence of sedimentary formations and fault structures similar to those found in the zone of production at the Rockwood Lithium processing facilities which are located approximately 22 miles (35 kilometers) northwest of the Jackson Wash project. Geophysical investigations conducted by AmeriLithium in 2011 were designed to examine the Jackson Wash Basin Gravity Low, to determine basin depth and configuration, and examine the sedimentary basin fill. The Jackson Wash Project is initially a groundwater exploration program designed to discover a reservoir of continental brine within the outlined gravity low that could contain economically viable concentrations of lithium, magnesium, sodium, potassium, and other alkali metals. If warranted by brine presence and lithium concentration levels, groundwater investigations will be necessary to determine the hydrogeologic characteristics of the identified aquifer units. The geologic setting within the closed Great Basin and near Clayton Valley, with its thick sequence of clastic sediments and evaporate deposits, is prospective for metal-enriched brines. The geologic formations that compose the surrounding mountain ranges, specifically certain Tertiary-age volcanic formations, contain unusually high concentrations of lithium and are considered one likely source of lithium in brines and sedimentary layers in the Clayton Valley area. The volcanic rocks containing the highest concentrations of lithium occur in the Montezuma Range north and west of Jackson Wash and east of Clayton Valley. Anomalous lithium concentrations in a small sampling of surface volcanic debris at Jackson Wash ranged from 97 to 117 parts per million lithium. This debris is derived from volcanic rocks that outcrop in the Montezuma Range. Nearby Clayton Valley is currently the only North American source of lithium. Production by Rockwood Lithium Incorporated, a subsidiary of Albemarle Corporation, is facilitated through an extraction system that pumps groundwater enriched in lithium and magnesium to surface solar evaporation ponds on the property. Evapotranspiration of fluid from the ponds over a period of 12 to 18 months increases the lithium concentration prior to transfer of the concentrated brine to a processing plant for final product development. The conceptual deposit model for the Jackson Wash Project is adapted from the known deposits being exploited by Rockwood Lithium. Six different water-bearing formations or aquifer types have been identified in Clayton Valley. These are specific sedimentary units within the valley-fill sedimentary sequence that are either saturated in lithium-enriched brine or contain salt or clay minerals with anomalously high concentrations of lithium. Any geological, geochemical, or geophysical similarities between Jackson Wash and the Clayton Valley deposits being exploited by Rockwood are not necessarily indicative of similar mineralization at Jackson Wash. These similarities are significant only from the standpoint of drilling target definition and exploration and development planning activities on the Jackson Wash property that is the subject of this report.


AmeriLithium Corp. previously performed detailed gravity and electromagnetic geophysical investigations that identified a layered sequence of saturated sedimentary formations filling a deep basin beneath the Jackson Wash property. The geophysics suggests that some of these units may contain elevated levels of salinity which would further suggest the possible presence of elevated concentrations of lithium and other alkali metals. The identified basin beneath the property is faceted by faults of unknown displacement that apparently resulted in the development of what is termed a “pull-apart” basin in Jackson Wash. The geophysical investigations have identified geologic formations and structures that are consistent with the lithium-bearing brine deposit models identified in the adjacent Clayton Valley area. A deep basin containing a thick sequence of saturated sedimentary formations is apparently present beneath the Jackson Wash property. The geophysical signature of these formations and structures suggests that they are similar in nature to those currently being exploited for lithium brines at the Rockwood Lithium facilities to the northwest of the Jackson Wash Project. The results of the preliminary exploration geophysics warrant further investigation. Additional geophysical investigations in the form of seismic surveys could provide additional data for a better understanding of the sediments, structures, and groundwater in the identified basin. However, the potential benefits of this additional non-intrusive investigation do not, in the author’s opinion, justify the additional expense. Seismic survey programs are relatively expensive and, in this case, would not add significantly to the identification of potentially economic lithium deposits. Drilling and sampling of the sediments and groundwater in the basin are the next logical steps in the process of exploration for the Jackson Wash project. Physical examination of the drill cuttings and laboratory analysis of water and sediments is the most cost effective way to determine the presence or absence of economic lithium deposits beneath the property. An initial drilling program of ten holes has been designed and permitted through the United States Bureau of Land Management (USBLM) and the State of Nevada. The first four holes are designed to test specific structural and stratigraphic targets identified by the geophysical surveys. Given the success of these preliminary exploratory drillholes in finding brine aquifers and anomalous lithium contents, the additional six holes would be placed to expand on the information relating to basin hydrogeology and any lithium mineralization that might be discovered. Nevada Sunrise submitted a Notice of Intent (“NOI”) to conduct an exploration drilling program to the USBLM on February 10, 2016. The company received approval of its plan from USBLM on March 7, 2016. The preliminary four-hole program is estimated to cost US$560,000. The fully permitted ten-hole program is estimated to cost US$1,400,000. These estimated costs are based upon preliminary quotations received from drilling contractors during the process of developing the NOI.


Item 2. Introduction This technical report has been commissioned by and prepared for Nevada Sunrise Gold Corporation and Advantage Lithium Corporation. It is an update of information previously reported in 2013 for AmeriLithium Corporation (Allender, 2013). The general location of the Jackson Wash Lithium Brine Project is shown in figure 1. Nevada Sunrise Gold Corp. (“Nevada Sunrise” or the “Companies”) is a British Columbia corporation with primary offices at Suite 1100 – 1111 Melville Street, Vancouver, British Columbia, Canada V6E 3V6. The Company is an exploration-stage mineral explorer who owns or has options to acquire a portfolio of prospective lithium-brine and gold exploration properties in Nevada. Nevada Sunrise is traded publically on the TSX Venture Exchange (“TSXV”) market under the symbol NEV. The Company, through its US subsidiary Intor Resources Corporation, is in the process of exploring their current portfolio of lithium properties with the intent of identifying and developing lithium resources. Advantage Lithium Corporation (“Advantage” or the “Companies”), formerly North South Petroleum Corporation and Valor Ventures, Inc., is a resource company specializing in the strategic acquisition, exploration and development of lithium properties and is headquartered in Vancouver, British Columbia. Common shares are listed on the TSXV under the symbol "AAL". Advantage is in the process of optioning several prospective lithium brine projects from NEV including the Jackson Wash project. Currently, the Companies have no lithium resources to report on the Jackson Wash property. This report has been prepared for the purpose of summarizing all of the available information on the property designated as the Jackson Wash Lithium Brine Project (“Jackson Wash”). Additionally, this report is intended to provide a baseline of scientific, technical and exploration information on which future exploration and possible development may depend. Jackson Wash has the potential to contain economic lithium resources. The exploration plan for Jackson Wash is designed to identify the presence, quantity, and quality of any lithium-bearing groundwater present in the property subsurface. Detailed technical information specific to the Jackson Wash property is generally scarce. Publically available information in the form of published reports, maps, company press releases, competitor technical reports and technical data have been accessed and reviewed in the preparation of this report. Relevant technical reports have been acquired from the United States Geological Survey and the Nevada Bureau of Mines and Geology (“NBMG”). Other information has been collected from reports and public disclosures of other companies involved in lithium exploration, development, and production in and around Clayton Valley. Detailed reports on the exploration geophysical investigations performed by the company were used in the preparation of this report. Reports and publications cited in this report are listed under Item 27 References at the end of this report. The Author has personally inspected the property on numerous occasions since initial acquisition activities began in May, 2011. The Author observed the topography, physiography, vegetation,

Figure 1. General location and physiographic

setting, Western US


infrastructure, climate, geology, placer claim marker placements, and geophysical survey operations at the Jackson Wash property and the surrounding Clayton Valley district during these visits. The author has been responsible for the planning and implementation of exploration activities for the Jackson Wash property and other properties in the Clayton Valley area.

Item 3. Reliance on Other Experts No other experts were relied upon to produce this report.

Item 4. Property Description and Location The Jackson Wash Lithium Brine Project includes one hundred sixty six (166) 20-acre (8.1 hectare) placer claims totaling 3,320 acres (1,343.6 hectares) (see Figure 2). The claim block covers the entire so-called Jackson Wash Basin Gravity Low (Healey, et al, 1980) in Esmeralda County, Nevada. The property is situated generally between latitudes 37⁰32’0”N and 37⁰36’0”N and between longitudes -117⁰19’0”W and -117⁰22’0”W. Individual claim identifications and locations are shown in Table 1.

TABLE 1. JACKSON WASH CLAIM INFORMATION

JACKSON WASH CLAIMS LIST

CLAIM NAME BLM Serial

No. CLAIMANT LOCATION

LOCATION DATE

MER TWN RANGE SEC SUBDIV

JACKSON 1 NMC1117773 NEVADA ALASKA MINING CO INC 21 0040S 0410E 13 SW 11/15/2015


JACKSON 3 NMC1117775 NEVADA ALASKA MINING CO INC 21 0040S 0410E 13 SE 11/15/2015









JACKSON 12 NMC1117784 NEVADA ALASKA MINING CO INC 21 0040S 0420E 23 NE 11/15/2015


JACKSON 14 NMC1117786 NEVADA ALASKA MINING CO INC 21 0040S 0410E 24 NW 11/15/2015








JACKSON 22 NMC1125831 NEVADA ALASKA MINING CO INC 21 0040S 0420E 18/19 SW/NW 5/19/2016



































JACKSON 56 NMC1125833 NEVADA ALASKA MINING CO INC 21 0040S 0420E 19 NW/SW 5/19/2016




















































JACKSON 107 NMC1125836 NEVADA ALASKA MINING CO INC 21 0040S 0420E 19/30 SW/NW 5/19/2016

























JACKSON 131 NMC1125840 NEVADA ALASKA MINING CO INC 21 0040S 0420E 30 NW/SW 5/19/2016





































The claims that comprise the Jackson Wash property are unpatented placer mining claims acquired originally through staking and registration with both the U.S. Bureau of Land Management and Esmeralda County. Nevada Alaska Mining Company, Lovelock, Nevada and several related individuals are the original holders of the claims which were acquired by Nevada Sunrise on December 22, 2016. NEV paid Nevada Alaska 500,000 common shares in the company to purchase a 100% interest in the property. Additional requirements include 100,000 shares on signing a definitive agreement, 150,000 common shares on the first anniversary of the agreement, and 250,000 common shares on the second anniversary of the agreement. Nevada Alaska also retains a 3% gross overriding royalty (GOR) on any future production from the property. NEV has the right to purchase 1.0% of the GOR for US$1,000,000 on the third anniversary of the agreement. There are no other obligations that must be met to retain the property other than the annual claim maintenance fees that must be paid to the USBLM in September of each year. These maintenance fees have been paid and the claims are current with USBLM through September, 2016. On June 20, 2016 NEV and Advantage announced an agreement whereby Advantage can earn a 51% interest in the Jackson Wash property by meeting certain obligations under an agreement that includes options on four other NEV lithium properties and water rights in the Clayton Valley area. Advantage can earn 51% by making a cash payment totaling US$600,000, issuing common shares of its stock to NEV equal to 4.9% of the outstanding shares of Advantage on a predetermined schedule, and incurring exploration expenditures totaling US$1,500,000 over two years. The agreement on all of the properties including Jackson Wash is subject to all underlying options and royalties. The Author is not aware of any environmental liabilities or other significant risk factors that would affect the Company’s ability to access the property or perform exploration and development activities on the property. Exploration permitting is relatively simple in Nevada and involves submittal of a Notice of Intent “(NOI”) to conduct drilling operations and an appropriate reclamation bond in an amount determined by an established formula related to the surface area to be disturbed by the proposed drilling program. NEV submitted an NOI for a drilling program at Jackson Wash on February 10, 2016 and approval was received from USBLM on March 7, 2016.



Item 5. Accessibility, Climate, Local resources, Infrastructure, and Physiography The Jackson Wash property is located approximately 22 miles (35 kilometers) as the crow flies southeast of the small settlement of Silver Peak, Nevada which is home to the Rockwood Lithium Silver Peak Lithium Operations. The small village of Goldfield lies 14.5 miles (23.3 kilometers) by road northeast of the project. The closest support center is Tonopah, approximately 27 highway miles (43.5 kilometers) north of Goldfield. Travel to Jackson Wash by road from Goldfield covers 6.3 miles (10.1 kilometers) of US Highway 95 to East Railroad Springs Road, a gravel road turnoff to the west. US Highway 95 is the major paved north-south highway in western Nevada. From there the property is accessible via well-maintain secondary gravel road for 8.2 miles (13.2 kilometers). This is the Silver Peak-Railroad Pass Road that bisects the property from northeast to southwest (Figure 2). Topography over the property is generally flat with a low-angle slope from north to south. Elevations range from 5,400 feet (1,646 meters) above sea level (ASL) in the north to 5,250 feet (1,600 meters) ASL at the south end of the claim block. Topographic relief is very low across the property. Vegetation is sparse and consists of hardy, low growing grasses and shrubs that are able to survive the arid conditions. Climate in the Jackson Wash Basin and Clayton Valley area is characterized by arid conditions. Summers are hot and dry. Winters are cold and dry. The area receives on average about 4.5 inches (114.3 millimeters) of precipitation annually, distributed fairly evenly throughout the year. The precipitation total includes approximately 13 inches (330 millimeters) of snow during a typical winter. There are typically 28 days of precipitation in any given year and 290 sunny days. High summertime temperatures during July and August range from 95⁰F to 97⁰F (35⁰C to 36.1⁰C) with low temperatures in the 60⁰F to 62⁰F (15.6⁰C to 16.7⁰C) range. Winter high temperatures generally fall in the 45⁰F to 47⁰F (7.2⁰C to 8.3⁰C) range and average lows between 17⁰F and 19⁰F (-7.2⁰C to -8.3⁰C). Jackson Wash climate conditions allow for year-round exploration and production operations. Cold winter temperatures and attendant reduced evapotranspiration rates can be expected to reduce the yield from solar evaporation ponds that might be employed in the extraction of lithium and other alkali metals. The Jackson Wash property is of sufficient size to accommodate any future processing facilities and solar evaporation ponds. The USBLM claims held by NEV include surface rights for any activities related to mineral exploration and production. Naturally, any production processing and facilities will require permitting prior to construction and operation. Power is not readily available on or near the Jackson Wash property. Potable water is also not available on site but is available for purchase from the municipal water company in Goldfield. Water can be purchased from the utility for drilling operations or potable needs. Tonopah is regional center for mining and tourist activities and as such can supply nearly all of the needs of an exploration program or operating facility. The town has numerous motels, hotels and restaurants as well as grocery stores, fueling stations, and business-related services. A small civil airport facility lies approximately 8 miles east of town that accommodates small private and limited commercial aircraft.


Item 6. History The claims that comprised the original Jackson Wash property were unpatented association placer mining claims acquired originally through staking in 2011 and registration with both the U.S. Bureau of Land Management and Esmeralda County. Nevada Alaska Mining Company of Lovelock, Nevada and several related individuals were the original holders of the claims. The original claim block was staked to cover the entire so-called Jackson Wash Basin Gravity Low (Healey, et al, 1980) and included sixty five (65) association placer claims totaling 2,450 acres (991.5 hectares). The claim block consisted of fifty five (55) 40-acre (16.2-hectare)and ten (10) 25-acre (10.1-hectare) claims. These original claims were acquired by AmeriLithium Corporation (AMEL) on September 23, 2011. AMEL paid Nevada Alaska 400,000 common shares in the company to purchase a 100% interest in the property. Nevada Alaska also retained a 2% Net Smelter Return (NSR) royalty on any future production from the property. There were no other obligations required to retain the property other than the annual claim maintenance fees that must be paid to the USBLM in September of each year. AMEL withdrew from the project in 2014 and the claims ownership reverted to Nevada Alaska. These claims were subsequently re-staked as 20-acre placer claims in the configuration currently optioned by NEV. There is no evidence of any ownership of placer claims for lithium in this area prior to 2011. The author is not aware of any previous ownership of claims or of any other exploration activities in the Jackson Wash area prior to the AMEL option and exploration work. Certainly, no mineral resources or reserves have been reported in publically available literature. No production from the property is evident on site.

Item 7. Geological Setting and Mineralization

Regional Geology Jackson Wash Basin lies within the Basin and Range Physiographic Province, an extensive geographical and geological region that covers a large portion of the western United States, nearly all of the State of Nevada, and parts of northern Mexico (Figure 1). The province is characterized by north-south oriented structural features that manifest themselves as mountain ranges and intervening valleys known as Basin and Range topography. The province also contains the Great Basin which is the largest area of contiguous endorheic watersheds or closed drainage basins in North America (Figure 3). The Great Basin is noted for its arid conditions and Basin and Range topography. The Central Nevada Desert, in which Jackson Wash lies, is a USGS hydrologic sub region of 14 watersheds with endorheic drainages that terminate in the Great Basin.

Figure 3. Great Basin Location

(from Great Basin Water Network)


The topography and geology of the Basin and Range is a result of crustal extension within this part of the North American Tectonic Plate (Figure 4). The crust in this province has been stretched to nearly twice its original width. In fact, the crust beneath the Basin and Range, especially under the Great Basin, is some of the thinnest in the world. Geothermal waters are abundant in the Great Basin indicating magmatic heat sources below much of this thin-crusted region. Along the roughly north-south-trending faults, mountains were uplifted and valleys down-dropped during this extension, producing the distinctive alternating pattern of linear mountain ranges and valleys of the Basin and Range province.

These tectonic plate movements have resulted in the development of the unique Basin and Range topography and structure. The rocks exposed in the mountain ranges consist of sedimentary, igneous, and metamorphic rocks ranging in age from late Precambrian to Holocene (Albers and Stewart, 1972). Intervening valley fill consists of Quaternary sediment accumulations resulting from erosion and mass wasting of the surrounding mountains. The Jackson Wash property is situated in classic Basin-and-Range terrain. Jackson Wash Basin is flanked on the east and south by the Goldfield Hills and Mt. Jackson Ridge and on the north and west by the Montezuma Range. The southwest portion of the Montezuma Range (to the west of Jackson Wash) is composed primary of a thick sequence of overthrusted Cambrian-Ordovician sedimentary rocks intruded by numerous rhyolite dikes and several small quartz latite intrusives masses. The northeast section of the range (to the north of Jackson Wash) is composed of a similar sequence of intruded,

deformed, and faulted Cambrian-Ordovician sedimentary rocks overlain by a thick mass of rhyolitic tuff which in turn is overlain in places by a mass of fused volcanic splatter fragments called agglutinate. These rock types and associations indicate the presence of a large rhyolite volcano in the immediate vicinity of Montezuma Peak at some time during the Tertiary period (Albers and Stewart, 1972; Price, et al, 2000; Kunasz, 1974). This is the glassy, rhyolitic volcanic rock that has tested high in lithium concentration (Price, et al, 2000).

Local Geology The geology of Jackson Wash Basin is characterized by rocks and sediments typical of Basin and Range terrain. The surface of Jackson Wash in this area is composed of Quaternary alluvial deposits derived from rocks in the surrounding ranges by erosion and mass wasting. The Montezuma Range to the west and north, the Goldfield Hills to the east, and Mt. Jackson Ridge to the south are composed of Paleozoic sedimentary rocks, Tertiary volcanic deposits and granitic intrusive bodies. The Paleozoic rocks are highly deformed and faulted with high-angle normal faults and thrust faults prevalent in rocks throughout the area around Jackson Wash Basin. The Clayton Valley playa is characterized as an immature clastic salar or salt flat. The valley fill is dominated by a thick sequence of clastic sedimentary deposits derived from the surrounding highlands with lesser amounts of chemical precipitates. Zampirro (2003) describes the limited, shallow nature of the Salt Aquifer system in the central Clayton Valley area which is composed primarily of halite with minor clay and gypsum interbeds. While the geophysical investigations conducted by AMEL suggest a similar set of aquifer characteristics in the

Figure 4. Plate Tectonics, Western North America. http://www.platetectonics.com/book/images/Transformfaults.gif


Jackson Wash Project area, further investigations and drilling will be necessary to define the aquifer characteristics of the basin underlying the property. A large scale United States Geological Survey (USGS) gravity survey (Healey, et. al., 1980) found a gravity low (-205 milligals) in the north central end of Jackson Wash Basin. This gravity low is apparently filled by a thick sequence of clastic alluvial sediments that accumulated over about the past 20 million years during the erosion of the surrounding mountain ranges and the tectonic events that resulted in the formation of the closed basins characteristic of the Great Basin. Sources of lithium in basin brines could be certain lithium-rich lithologic units within the sedimentary sequence as described by Kunasz (1974). The source of this lithium could be, as suggested by Price, et. al. (2000), the devitrification of rhyolitic vitrophyres of the adjacent Montezuma Range and Goldfield Hills that are some of the most lithium-rich rocks in the world. Deposition of lithium into Jackson Wash may have been the result of direct mass wasting of these volcanic rocks into the valley or by dissolution and transport of lithium by surface and groundwater or some combination of these processes. The Jackson Wash Basin gravity anomaly is likely associated with the Basin and Range structure that developed during the formation of the Silver Peak Range – Montezuma Range complex within the Walker Lane deformation belt (Albers and Stewart, 1972). Albers and Stewart (1972) also suggested that the Jackson Wash valley contains one or more large north-trending fault structures. These inferred structures may be buried Basin and Range faults. Bedrock in the surrounding ridges and mountain ranges reveal evidence of thrust faults, high-angle strike slip faults, and high-angle dip slip faults (Albers and Stewart, 1972). Many of these fractures are largely or entirely concealed by the post-fault sedimentary formations of Jackson Wash Basin. Evidence in the form of fault traces mapped on the surface (Albers and Stewart, 1972) and hot springs in the vicinity of Clayton Valley (Garside and Schilling, 1979; NBMG, 2006) indicate possible upwelling of lithium-bearing hydrothermal waters or migration of lithium enriched meteoric waters as possible sources of lithium in the Clayton Valley area. Numerous hot springs in the area, some of which no longer flow due to drawdown resulting from years of groundwater extraction by Rockwood Lithium and its predecessors, are reported to have contained anomalous concentrations of lithium and uranium.

Local Hydrology and Hydrogeology The structural and stratigraphic history of the Jackson Wash and Clayton Valley area has resulted in the development of a complex hydrologic system. The interbedded sequence of sediments includes alluvial formations, bedded volcanic tuffs, and welded tuffs that have been identified as aquifers in Clayton Valley (Zampirro 2005). The chemical character of the groundwater contained in these aquifers varies widely across the Clayton Valley and adjacent basins. Three basic groundwater types have been identified in the Clayton Valley area (Davis, et al, 1986):

1. Cold, dilute groundwater in aquifers of the bedrock highlands; 2. Thermal, saline groundwater in sediments at playa margins; 3. Cold, saline brines in playa centers

The subsurface stratigraphy and aquifer systems in the Jackson Wash Basin are unknown. They are, however, expected to be similar in nature to those described for nearby Clayton Valley. Zampirro (2003) has described the aquifer systems and stratigraphy that contain the lithium-bearing brine deposits exploited by Rockwood and others in central Clayton Valley. Development of both basins would have progressed in a similar fashion and at the same time. All or any of the groundwater types and aquifer systems identified in Clayton Valley could be present in the subsurface of the Jackson Wash property. Therefore, exploration plans and methods are designed to identify these types of aquifers as well as the stratigraphy and the structures that control brine


accumulation. Understanding the hydrogeology of the Jackson Wash property area is critical to developing any resources present in that area and to any future production that might occur.

Item 8. Deposit Types A clear understanding of the environment in which lithium brines develop and the conditions under which lithium deposits form is critical to identifying the indicators related to lithium-brine deposits and the discovery of economic concentrations of lithium and other metals. Lithium deposits underlying the Jackson Wash property have yet to be identified and delineated. Host rocks or aquifers that may contain lithium in economically attractive concentrations have yet to identified as well. There are several deposit models that could account for the comparatively high lithium content in Clayton Valley and that could be present specifically underlying the Jackson Wash property:

1. Brine deposit derived from dissolution of lithium and other salts from basin sediments 2. Brine deposit derived from groundwater enrichment by transport of lithium- enriched groundwater to

basin traps from devitrified volcanic rocks in the Montezuma Range. 3. Continuing re-enrichment of lithium in basin sediments and groundwater via upwelling of

hydrothermal fluids from a lithium- enriched magma beneath Jackson Wash Basin. 4. A combination of all of these deposit models for lithium deposit genesis.

Rockwood has conducted significant exploration and lithium deposit studies in Clayton Valley. The six conceptual deposit models for lithium-enriched aquifer deposits are shown in Figure 5 (Zampirro 2003). The Rockwood investigations have included drilling and analysis of the entire stratigraphic column from the surface to a depth of approximately 1,200 meters (3,937 feet). The conceptual deposit model generally drives decisions regarding selection of exploration techniques and the overall exploration program. The early phases of the Jackson Wash Project exploration program have employed nonintrusive techniques that allowed for the investigation of multiple deposit concepts simultaneously.

Item 9. Exploration Exploration activities to date have included a small surface sampling program of limited areal extent and more comprehensive geophysical investigations that have covered the entire claims block as well as narrow peripheral zones immediately surrounding the property. Reconnaissance surface sampling:

Figure 5: Clayton Valley Aquifer Hosts (Zampirro 2003, Figure 4)


The surface of Jackson Wash is covered by a layer of alluvium consisting of sand and gravel and in some places larger cobble-sized fragments of rock derived from the surrounding mountains. These materials were deposited on the surface of the basin by surface water runoff from the mountains and possibly by wind action. Of interest are widespread deposits of obsidian fragments (or “Apache Tears”) possibly derived from vitrophyric rhyolite units present on Montezuma Peak at the north end of Jackson Wash Basin. Random grab samples of this material were collected from six locations 1,320 feet (400 meters) apart along a north-south-oriented line running approximately 6,600 feet (2,000 meters) through the center of the AMEL claim block. The purpose of this sampling was to complete a preliminary examination of the lithium content and distribution in these rocks. Approximately 4.5 pounds (2 kg) of obsidian fragments were collected at each of the six locations. Samples were collected on May 12, 2011 by the Author on behalf of AMEL and delivered under chain-of-custody procedures to ALS Minerals Laboratory in Reno, Nevada for chemical analysis by mass spectrometry methods. Sample location and other information as well as the lithium concentration for each sample are shown in Table 2.

Table 2. Jackson Wash Basin Reconnaissance Sampling (May 12, 2011) AMEL Claim

Corner Latitude Longitude

Elevation (feet)

Sample Sample Number

Sampled Shipped Results

Received Lithium Content

JAC 19 NE 37 35.039 117 20.506 5,327 Y JAC 19 NE 12-May 17-May 7-Jun 107.0






Geophysical Investigations: The first phase of exploration on the Jackson Wash prospect involved non-intrusive geophysical methods intended to delineate subsurface geological formations and structural features. The conceptual deposit models discussed earlier describe mineral deposits that, regardless of source, could accumulate in stratigraphic traps or bedrock surface lows. These traps represent barriers to groundwater flow and lithium migration in the subsurface.

Gravity - Gravity surveys are used in the delineation of bedrock surface, geologic structure and formation differences. This method involves the measurement of the gravitational field at a series of different locations over an area of interest. The primary goal of studying detailed gravity data is to provide a better understanding of the subsurface geology. The gravity method is a relatively inexpensive, non-invasive, non-destructive remote sensing method that has been used extensively in mineral exploration. Measurements of gravity provide information about densities of rocks underground. There is a wide range in density among rock types, and therefore inferences can be made about the distribution of strata through the analysis of gravity data. Structural features are also apparent in gravity data. Since faults commonly juxtapose rocks of differing densities, the gravity method is an excellent technique for mapping subsurface faults. A gravity survey of the Jackson Wash property was conducted by Magee Geophysical Services, LLC of Reno, Nevada from October 18 to October 22, 2011. Magee collected gravity data from 146 gravity stations which had been located prior to surveying. Data for 106 of these stations was acquired during this survey and 40 were reprocessed from archival US Geological Survey data stations. Relative gravity measurements were made with a LaCoste & Romberg Model-G gravity meter. Model-G gravity meters


measure relative gravity changes with a resolution of 0.01 mGal. The gravity survey is tied to a US Department of Defense gravity base in Tonopah (#0455-2). Topographic surveying was performed with Trimble Real-Time Kinematic (RTK) and Fast-Static GPS. Magee provided the raw gravity data to J.L. Wright Geophysics of Sparks, Nevada who analyzed the data and interpreted the results. As shown in Figure 6, the survey described a fault-bounded basin, elongate in a northeast-southwest direction. Wright’s interpretation identified an elongate bedrock depression that occupies the north central portion of the Jackson Wash Basin. According to Wright, “A large, shallow pediment is indicated surrounding the inner basin. In this area Tertiary rocks should be present beneath a thin cover of Quaternary material. The inner basin is elongate in a north-northeast direction with abrupt sides, suggesting faceting by faults. Depth is on the order of 400 meters with isolated deep points reaching to over 600 meters. Steep depth gradients indicate the basin to be fault bounded on most sides. The prominent north-south directed structures represent dilation within the overall right lateral regime of the Walker Lane, and the northeast structures are inferred to be a conjugate set. Indeed, extensions of the various structures find support in the topography. The southwest corner of the basin tapers into what appears to be a major paleo-channel, which likely fed sediments into the developing basin. Other channels are interpreted to enter from the north and southeast.

Figure 6. Gravity survey map. (Wright 2011, Figure 8)

Coordinate system: NAD83/UTM Zone 11N


Fault structures (black lines in Figure 6) apparently facet the basin on all sides, resulting in a pronounced north-northeast elongation. Interpreted paleo-channels (yellow lines on Figure 6) enter the basin from several directions and probably delivered sediments during basin growth. A particularly well developed paleo-channel extends along the southwest extension of the basin. Proximity to outcrops of volcanic rocks on the nearby Montezuma Range that have tested high in lithium concentrations coupled with the identified paleo-channels suggest that lithium-bearing sediments and groundwater may be present in the subsurface at Jackson Wash. Electromagnetics- Electromagnetic (EM) profiling is a surface geophysical technique used to measure terrain conductivity, a term which refers to the bulk electrical conductivity of subsurface materials. EM conductivity surveying is primarily a tool for rapid lateral mapping of variations in sediment and groundwater conductivity. It is used for mapping lateral transitions in soil type, saline groundwater, sand and gravel deposits, clay aquitards, and shallow bedrock. The electrical conductivity of the earth depends on several soil or geologic parameters including:

• groundwater conductivity, • clay content, • soil or formation porosity, and • degree of water saturation.

EM techniques will respond to changes in any of these parameters. EM techniques are widely used for:

• mapping changes in soil type, • mapping saturated zones, • mapping alluvial paleo-channels, • mapping aquitards, • mapping geologic features.

Controlled source audio-frequency magnetotellurics - Controlled source audio-frequency magnetotellurics (CSAMT) is a broadband, high-resolution, frequency-domain, electromagnetic sounding, and profiling system. CSAMT is used for mapping subsurface geology and structure, and in exploration for massive sulfides, geothermal sources, hydrocarbons, and groundwater. Broadband EM systems are used extensively in mineral prospecting and are used regularly in Nevada to delineate sedimentary basins like Clayton Valley. Earth resistivity values obtained with electromagnetic systems are influenced by water salinity, mineralization content, porosity, and changes in structure. Various rock types have a corresponding difference in resistivity, allowing electromagnetic methods to accurately map subsurface geology. A CSAMT survey of the Jackson Wash property was designed and supervised by J.L. Wright Geophysics based on the results and interpretation of the previously completed gravity survey. The CSAMT survey was conducted by Zonge International, Inc. of Tucson, Arizona from December 6 to December 8, 2011. Wright then analyzed the data, interpreted the results, and presented the findings in a technical report to AMEL (Wright 2012). The survey report includes a complete Geographic Information System (GIS) database for the property including the gravity data, topography, geology, and the CSAMT data. The Zonge report includes the following details regarding survey procedures and instrumentation: “The CSAMT data were acquired in the scalar mode along the two survey lines using a station spacing (electric-field dipole) of 50 meters. Each line was 5,450 meters long. The data were acquired in spreads, reading five or six electric field dipoles simultaneously with the perpendicular magnetic field in the center of the spread. All data were acquired with Zonge model GDP-32II multiple purpose receivers


(serial numbers 32284 and 3292). The Zonge GDP32II instrument is a commercially-available, backpack-portable, 16 bit, microprocessor-controlled receiver that can gather data on as many as 16 channels simultaneously. The electric-field signals were sensed using non-polarizable porous pot electrodes, connected to the receiver with 16-gauge insulated wire. The CSAMT magnetic-field signal was sensed with Zonge Ant/6 magnetic field antennas (SNs 586 and 2156). The transmitter used for this survey was a Zonge GGT-30 transmitter (SN 2017), with a 30-kilowatt Zonge ZMG-30D motor-generator set (SN 003).” Wright compiled and interpreted the data collected by Zonge with the objective of further defining structures and stratigraphy in the basin as an aid to the identification of possible brine target areas and development of a lithium brine test drilling program. Delineation of possible aquifers and inter-basin structures is critical to the exploration effort. The previously accomplished gravity survey preceded the CSAMT work and was used to place two CSAMT survey lines over the central portion of the Jackson Wash gravity anomaly defined by the gravity survey.

Figure 7 shows the layout of the CSAMT survey lines on the gravity-derived basin model and topography. The lines were oriented to cut the basin axis at right angles and to cut the two deepest portions of the basin as described by the gravity survey.

Figure 7. Jackson Wash CSAMT survey map (from Wright 2012, Figure 4) Coordinate system: NAD83/UTM Zone 11N


Figure 8. Gravity structures and inverted resistivity sections over topography

(from Wright 2012, Figure 7)

Figure 8 shows the interpretation of the results of the CSAMT survey for both survey lines. The figure shows the surface expression and subsurface extension of structures identified in the geophysical surveys (black lines on the section) atop Jackson Wash topography. Conductive layers (yellow to white section contours) in close proximity to these structures are similar conditions to the Marginal Gravel Aquifers identified by Zampirro (2003) in Clayton Valley. Sedimentary units are evident in the interpreted data along both survey lines. Distinct low-resistivity layers stand out on both survey profiles as separate from high-resistivity beds above and below. Data for both survey profiles returned some remarkable results. Of significance, is the presence of a low-resistivity layer approximately 250 to 400 meters thick lying between 500 and 750 meters below the surface. This layer dips about 15 degrees to the east and is apparently present across the entire Jackson Wash property. This orientation indicates that surface and groundwater enter the basin from the Montezuma Range to the west. Montezuma Peak, in the center of the Range, is composed of volcanic rocks that have been postulated to be the source of the large lithium-brine deposits in nearby Clayton Valley. The layer is persistent horizontally to the east for nearly 5 kilometers. Near the west boundary of the property, this layer is apparently cut by an inter-basin fault. Groundwater appears to have accumulated against this barrier, evidenced by the apparent thickening of the high-conductance layer in the area.


In addition, a 200-meter thick high-conductance layer is present at a shallower depth (350 meters) in the center of the basin. This unit is essentially flat-lying and extends horizontally for about 600 meters west from the point at which this layer intersects an inter-basin fault. CSAMT data suggests that groundwater has accumulated against this fault barrier. These are similar geologic conditions to those in which lithium has accumulated in Clayton Valley and from which Chemetall-Foote has been producing. According to published reports, the presence of highly conductive (low resistivity) sedimentary units in proximity to basin-bounding and inter-basin faults is an important indicator of the presence of brines in Clayton Valley.

Item 10. Drilling No drilling has been completed on this property although a limited exploration drilling program has been planned and permitted. Nevada Sunrise has received approval from USBLM for a 10-hole drilling program on the Jackson Wash property. The exploration program will consist of drilling a maximum of 10 reverse circulation drill holes to maximum depth of 2,000 feet (610 meters). Average drillhole depth is anticipated to be approximately 1,400 feet (427 meters). All drill holes will be vertical in orientation. Nevada Sunrise may not drill all of the proposed holes, if initial results do not meet company expectations.

Item 11. Sample Preparation, Analysis and Security Surface rock sampling, discussed in Section 9, Exploration, at present constitutes the extent of physical sampling at Jackson Wash. This reconnaissance-level sampling was conducted to preliminarily evaluate the extent of surface distribution of rhyolitic debris containing elevated concentrations of lithium from deposits in the Montezuma Range to the west and north of Jackson Wash. Grab samples were collected, packaged and sealed by the author in the field and delivered to ALS Minerals Laboratories in Reno, Nevada. All samples were delivered to the ALS Minerals Reno laboratory by the author under chain of custody procedures. The samples were in the possession of the author from collection until they were surrendered in person to ALS. Preparation and analysis of the rock samples was completed by ALS Minerals. The laboratory prepared the sample material and employed a four-acid digestion procedure as preparation for analysis and then utilized the Inductively Coupled Plasma – Mass Spectrometry (ICP-MS) analysis method to test for lithium and 47 other elements. The laboratory is an independent contractor of the issuer. No other relationship exists between the two. ALS Minerals operates under several international accreditations (including a Standards Council of Canada (SCC) accreditation to the ISO/IEC 17025 standard) and is regularly independently tested to confirm that it meets the standards of the accreditation organization. The laboratory has an extensive ISO 9001-certified Quality Management System (QMS) that includes duplicates, blanks, spikes, and spike recoveries. A Quality Assurance and Quality Control (QA/QC) was provided with the analytical results report and showed no problems with the analyses.


It is the Author’s opinion that the data provided by the independent and accredited ALS Minerals laboratory, the sample preparation and analysis, and sample security are sufficient for the purposes of this report.

Item 12. Data Verification Due to the limited, reconnaissance-level nature of the surface rock sampling program at Jackson Wash, no field-level QA/QC program was conducted. However, laboratory testing of the samples was the subject of quality control procedures. ALS Minerals Laboratories have an extensive Quality Management System (QMS), which involves standard reference materials, duplicates, blanks, spikes and spike recoveries. The lab provided a Quality Assurance and Quality Control (QA/QC) summary with the report of analytical results for the Jackson Wash rock sampling. Analyses and QC data demonstrated that there were no problems with the analyses provided by the ALS Minerals.

Item 13. Mineral Processing and Metallurgical testing No testing of this nature has been conducted for this project.

Item 14. Mineral Resource Estimates No mineral resource estimates are available or yet warranted for this project.

Item 23. Adjacent Properties Rockwood Lithium’s Silver Peak Lithium operation is located within Clayton Valley about 22 miles (35 kilometers) northwest of the Jackson Wash Project. Construction of production wells, a lithium carbonate production facility, and an evaporation pond system began in 1964. Production commenced in 1967 and has continued essentially uninterrupted to present day. Lithium concentration and total production data for this facility is not well known, as proprietary production figures are not available publically. According to Zampirro (2003), pumping tests and continuous production pumping records show brine salinity in production wells ranges from 40,000 to 170,000 milligrams per liter of Total Dissolved Solids (TDS). Lithium concentrations exceeding 400 parts per million (ppm) have been extracted from the basin (Papke, 1976; Vine, 1980). Economic grades ranging between 230 ppm and 300 ppm have been reported (Kunasz, 1970; Davis et al, 1986). Due to the proprietary nature of the Rockwood operations and the limited publically available information on deposits and historical operations at Silver Peak, the author is unable to independently verify the information describing the lithium deposits in Clayton Valley. Similarities between the geology and sedimentary rock formations in Clayton Valley and in Jackson Wash are not necessarily indicative of similar brine occurrences or lithium mineralization in Jackson Wash. The author is not aware of any other active mining claims or exploration activities within the Jackson Wash area.


Item 24. Other Relevant Data and Information No other information pertinent to the property is available at this time.

Item 25. Interpretation and Conclusions The results of the early exploration phase work on the Jackson Wash property are encouraging. Additional more detailed and invasive exploration techniques are warranted given the results of the two geophysical surveys at Jackson Wash. Drilling of identified targets is the next logical step in the exploration process and has reasonable potential to identify mineralized brine aquifer units under the Jackson Wash property and may identify brine deposits with economic potential. The limited surface reconnaissance sampling results indicate that highly anomalous concentrations of lithium are found in alluvial materials on the surface of the Jackson Wash property. These rocks are similar to and probably derived from rocks that outcrop in the Montezuma Range that borders the basin on the north and west. These rocks are described as some of the most lithium-enriched volcanic rocks on earth (Price, et al., 2000). The sampling results are indications of possible lithium-bearing sediments and groundwater in the subsurface of the Jackson Wash Basin. The gravity survey data shows a structural depression underlying the Jackson Wash claim block (Figure 6). The resolution of the data is such that geologic structures bordering the basin and paleo-stream channels are clearly evident in the data analysis. The basin measures approximately 6.2 miles (10 kilometers) in the northeast-southwest direction and 2 miles (3.2 kilometers) at its widest point in the west-east direction, encompassing a surface area of about 4,100 acres (1,660 hectares). Basin depth exceeds 1,970 feet (600 meters) in two locations within the basin. Data interpretation identified an elongate bedrock depression that occupies the north central portion of the Jackson Wash Basin. According to Wright, “A large, shallow pediment is indicated surrounding the inner basin. In this area Tertiary rocks should be present beneath a thin cover of Quaternary material. The inner basin is elongate in a north-northeast direction with abrupt sides, suggesting faceting by faults. Depth is on the order of 400 meters with isolated deep points reaching to over 600 meters. Steep depth gradients indicate the basin to be fault bounded on most sides. The prominent north-south directed structures represent dilation within the overall right lateral regime of the Walker Lane, and the northeast structures are inferred to be a conjugate set. Indeed, extensions of the various structures find support in the topography. The southwest corner of the basin tapers into what appears to be a major paleo-channel, which likely fed sediments into the developing basin. Other channels are interpreted to enter from the north and southeast. Fault structures apparently facet the basin on all sides, resulting in a pronounced north-northeast elongation. Interpreted paleo-channels enter the basin from several directions and probably delivered sediments during basin growth. A particularly well developed paleo-channel extends along the southwest extension of the basin. Proximity to outcrops of volcanic rocks on the nearby Montezuma Range that have tested high in lithium concentrations coupled with the identified paleo-channels suggest that lithium-bearing sediments and groundwater may be present in the subsurface at Jackson Wash. The Jackson Wash property covers the deepest and largest portion of the identified structural basin. The presence of the well-formed basin, evidently filled with Quaternary sediments, is highly prospective for lithium-bearing sediments groundwater. Basin sediments are expected to be similar in nature to those from


which Clayton Valley lithium production has historically been confined. The presence of drainage patterns showing evidence of fluid migration from Montezuma Range rocks suggests hydraulic connection with several potential sources of lithium-rich groundwater. Stratigraphic and structural detail shown in the CSAMT survey data for both survey lines indicates the presence of highly conductive layers that are indicators of possible brines below the surface within the Jackson Wash claim block. Conductive sedimentary units are evident in the interpreted data along both survey lines. Distinct low-resistivity layers stand out on both survey profiles as separate from high-resistivity beds above and below. The presence of a low-resistivity layer approximately 250 to 400 meters thick lying between 500 and 750 meters below the surface is noteworthy. This conductive formation dips approximately 15 degrees to the east and is apparently present across the entire Jackson Wash property. This orientation indicates that surface and groundwater enter the basin from the Montezuma Range to the west. According to Wright (2012), “the CSAMT reveals a layered sediment package with components of dip to the northeast and southeast. Layer resistivities generally decrease with depth with a prominent low resistive (conductive) layer noted as a possible host to brines. The water table is also interpreted at the base of the surface high resistivity layer”. The report also states that “Increased permeability and brine content should lower the resistivity of the rocks. Thus conductive layers (i.e. low resistivity) proximal to interpreted structures are considered target characteristics”. Volcanic ash, sand, and gravel layers are the host units for groundwater aquifers in Clayton Valley from which Rockwood Lithium has produced lithium since the 1960s. These units appear as low-resistivity formations in the CSAMT profiles. Additional evidence of brine accumulation may be indicated by the clearly identifiable faults on the basin edges that were first evident in the gravity survey. The presence of highly conductive (low resistivity) sedimentary units in proximity to basin-bounding faults is an important indicator of the presence of brines in Clayton Valley (Zampirro 2003). While the presence of low resistivity in sedimentary layers within the Jackson Wash Basin and their proximity to basin-edge faults is highly suggestive of brine aquifers, it does not guarantee the presence of economic lithium-bearing brine concentrations. The only true test for economic concentrations of lithium is drilling, groundwater sampling, and laboratory analysis. This is the next step in the Company’s exploration process. Four target drillhole locations have been identified based on the CSAMT results. Drilling depths are anticipated to be between 245 and 845 meters depending on the targeted stratigraphic horizon. The drillholes are designed to penetrate into the low-resistivity units allowing the collection of sediment and water samples for analysis. An additional target will be the base of the lower conductive layer in order to confirm the stratigraphy in the basin. Location and target depth of additional drillholes within the permitted ten-hole program will depend on the results of the initial four-hole program. This is an early stage exploration target. The risks of pursuing this type of project are high. Exploration programs could lead to the conclusion that no mineral resource or reserve exists on the site. The discovery of anomalous concentrations of lithium in groundwater and sediments in the basin underlying the Jackson Wash property do not necessarily mean that there will be economic mineral deposits. Further investigations will be necessary to understand the hydrogeology of the property and the nature of the brines. Determination of aquifer characteristics will be critical to determining the economic feasibility of the development of lithium production from saturated units underlying the Jackson Wash Project.


Item 26. Recommendations Drilling is the next step in the exploration process. Nevada Sunrise, through its US subsidiary Intor Resources Corporation, has received approval from USBLM for a 10-hole drilling program on the Jackson Wash property. The Notice of Intent (NOI) to conduct exploration drilling at Jackson Wash was submitted to USBLM on February 10, 2016 and approved on May 7, 2016. Exploration can proceed at Jackson Wash under this NOI for a period of two years from the approval date. The drilling program will consist of a maximum of 10 vertically oriented reverse-circulation drill holes. The initial four-hole program involves drilling to specific depths to test identified geophysical anomalies. The deepest hole in this first set of drillholes is anticipated to be completed to a depth of 2,800 feet (845 meters). NEV may not drill all of the proposed holes, if initial results do not meet company expectations. The initial four drillholes should be drilled in the locations and to the depths shown in Table 2 and on Figures 9A and 9B.

Figure 9A.


Figure 9B.

Figures 9A & B. Proposed drillhole location on inverted CSAMT survey line cross sections

Drillhole P1 tests the perched conductive layer near major structures. The target analogy would be to both Marginal Gravel Aquifers and stratigraphic control such as the Main Ash Aquifer (see Figure 5). Drillhole P2 tests the large, deep, low resistivity layer proximal to a major structure as well. Target analogies are similar to Drillhole P1. Drillholes P3 and P4 fall on the southern line and also test both the shallow and deep conductive layers. Structural associations for these two holes are not clearly evident in the geophysical data. They are designed to test the conductive layers at more shallow depths than those anticipated for the north line Drillholes P1 and P2 (see Table 3).

Table 3. Proposed drillhole location information.

HOLE UTM_E_27 UTM_N_27 STATE_E_83 STATE_N_83 INCL. TD (m)

P1 471240 4159000 2988834 14155700 90⁰ 425

P2 468730 4159000 2980597 14155561 90⁰ 845

P3 468730 4158000 2980652 14152279 90⁰ 770

P4 470840 4158000 2987577 14152396 90⁰ 275

(Shown in coordinate systems NAD27, UTM zone 11N and Nevada State Plane West 83)


Sampling and analysis of sedimentary units and encountered groundwater should be accomplished during the drilling. Drill cuttings should be collected for each 5-foot (1.7-meter) interval drilled. Samples should be packaged and labeled according to a predetermined sample labeling plan. Discreet samples of water from each water-bearing unit should be collected, packaged, and labeled. The plan should also include the insertion of quality control and quality assurance samples for both solids and groundwater sample sets and should include field blanks, field duplicates, and standards. Once packaged and labeled, samples should be delivered to the selected project laboratory for analysis under chain-of-custody procedures to ensure sample integrity. The permitted 10-hole program, if completed in its entirety, is estimated to cost approximately US$1,400,000 including drilling services, laboratory analysis, and supervision. The initial four-hole program would target the four zones identified by the geophysical survey programs and would have estimated completion cost of US$560,000 including drilling services, supervision, and laboratory analysis. The decision to advance to the full ten-hole program will depend on the results of the initial four-hole drilling and sampling phase. Successful identification of brine aquifers and indications of anomalous lithium concentrations during the initial testing program may be sufficient to advance to the next phase of drilling. The intent of the full ten-drillhole drilling program is to identify and delineate a preliminary lithium-brine resource. Any subsequent phases of exploration, resource development, and economic evaluations are dependent on the success of this initial drilling program. Depending upon the results of the drilling and sampling program, aquifer testing and hydrogeologic studies should be completed to determine the characteristics of any lithium-bearing aquifers underlying the site. Variables such as porosity, specific yield, permeability, brine volume, aquifer geometry, and chemical composition all must be determined in order to demonstrate the feasibility of economic extraction. Extended-duration pumping tests will be necessary to determine aquifer parameters and characteristics.

Item 27. References Albers, J.P., and Stewart, J.H., 1972, Geology and minerals resources of Esmeralda County, Nevada: Nevada Bureau of Mines and Geology Bulletin 78, 80 p. Allender, Jr., R.M., 2013, Technical Report on the Jackson Wash Lithium Brine Project, Esmeralda County, Nevada, USA, prepared for AmeriLithium Corporation, May 1, 2013, 28p. Garside, L.J., and Schilling, J.H., 1979, Thermal waters of Nevada: Nevada Bureau of Mines and Geology Bulletin 91, 163 p. Harrop, John, 2009. Technical Report on the Clayton Valley Lithium Property, Esmeralda County, Nevada, prepared for Rodinia Minerals, March 12, 2009, 31p. Healey, D.L., Wahl, R.R., and Currey, F.E., 1980. Bouguer Gravity Map of Nevada, Goldfield and Mariposa Sheets; Nevada Bureau of Mines and Geology Map 86. Houston, J., Butcher, A., Ehren, P., Evans, K., and Godfrey, L., 2011, The evaluation of brine prospects and the requirement for modifications to filing standards: Economic Geology, November 2011, v. 106, p. 1225-1239.


Kunasz , I.A., 1974, Lithium occurrence in the brines of Clayton Valley, Esmeralda County, Nevada, in Proceedings of the Fourth Symposium on Salt – Northern Ohio Geological Survey, pp. 57-66. OSC Staff Notice 43-704, 2011. Mineral Brine Projects and National Instrument 43-101 Standards of Disclosure for Mineral Projects. OSC Bulletin, volume 34, issue 29, 7977-7978. Papke, K.G., 1976, Evaporites and brines in Nevada playas: Nevada Bureau of Mines and Geology Bulletin 87, 35 p. Pantea, M. P., Asher-Bolinder, S., and Vine, J. D., 1981, Lithology and lithium content of sediments in basins surrounding Clayton valley, Esmeralda and Nye Counties, Nevada: United States Department of the Interior Geological Survey OFR 81-962.

Pantea, M. P. and Asher-Bolinder, S., 1982, Lithologic log and lithium content of sediments in Clayton valley, Esmeralda County, Nevada: United States Department of the Interior Geological Survey OFR 82-415. Price, J.G., Lechler, P.J., Lear, M.B., and Giles, T.F., 2000, Possible volcanic source of lithium in brines in Clayton Valley, Nevada, in Cluer, J.K, Price, J.G., Struhsacker, E.M., Hardyman, R.F., and Morris, C.L., eds., Geology and ore deposits 2000: the Great Basin and beyond: Geological Society of Nevada Symposium Proceedings, May 15-18, 2000, Reno, p. 241-248. Rodinia, 2013. Clayton Valley Project: http://rodinialithium.com/projects/clayton_valley/; accessed 1/4/2013. Vine, J.D., 1980. Where in the world is all the lithium?: United States Geological Survey Open-file Report 80-1234, 107 p. Wright, J. L., 2011, Jackson Wash Property, Gravity Survey & Basin Model, GIS database: AmeriLithium company report, dated November 17, 2011. 11 p. Wright, J. L., 2012, Jackson Wash Property, CSAMT Survey, GIS database: AmeriLithium company report, dated January 18, 2012. 10 p. Zampirro, D., 2003, Hydrogeology of Clayton Valley brine deposits, Esmeralda County, Nevada: Nevada Bureau of Mines and Geology Special Publication 33, p. 271-280.

Zampirro, D., 2005, Hydrogeology of Clayton Valley brine deposits, Esmeralda County, Nevada, The Professional Geologist, Vol. 42, No.3, p. 46-54.

http://rodinialithium.com/projects/clayton_valley/

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TECHNICAL REPORT on the JACKSON WASH LITHIUM BRINE PROJECT … · 2017-04-03 · 2 Nevada Sunrise Gold Corporation & Advantage Lithium Corp. Jackson Wash Project Technical Report