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Canadian Exploration Company Focused on Developing Exploration Assets in British Columbia

Greenwood Map Kinross Past producers

Kinross Option Exploration Program

On September 23, 2015, the Company entered into an agreement (“Kinross Option”) with a subsidiary of Kinross Gold Corporation (“Kinross”) whereby the Company granted to Kinross the option to earn a 75% interest in certain mineral claims within the Company’s Greenwood Gold Project, covering approximately 27,000 hectares (approximately one third of the area comprising the Greenwood Gold Project), by completing US $3,000,000 in exploration expenditures, with a minimum of 3,000 metres of diamond drilling, including a minimum of 750 metres of diamond drilling and expenditures totaling US $750,000 by September 23, 2017 (which has been completed). In order to earn its 75% interest, Kinross must complete the expenditures within five years of signing the Kinross Option. Provided Kinross completes the option, the Kinross Option provides that the Company and Kinross shall subsequently enter a joint venture with dilution provisions. Upon being diluted to a 10% interest, the diluted party’s interest will convert to a 2% net smelter royalty. The Kinross Option primarily covers mineral claims within the Midway, Sappho, verlander and Attwood blocks.

Kinross has completed small ground exploration programs in 2015 through 2018 and the Company expects that Kinross will continue to earn in to the option in 2019.

Kinross undertook a planned 1,200 m drill program at the Midway area during July and August, 2018, to continue the proof of concept drilling at the Midway Epithermal Target intersected in 2017. Proof-of-concept drilling in 2017 intersected silicification, alteration, anomalous geochemistry, and minor quartz veining in 2 out of 3 holes along strike, warranting further follow-up exploration. Further details of the 2018 results will be provided from Kinross once logging, sampling and assaying is completed.

The 2017 exploration program focused primarily on core drilling at the Midway and Mt Attwood-Overlander target areas. In addition, surface sampling and geological mapping were carried out at the Midway, Attwood West and Evening Star target areas. A total of 1,129 m of core drilling was completed in 7 holes, with 3 holes at the Midway target area and 4 holes at the Mt Attwood – Overlander target area. Hole 4 at the Mt Attwood – Overlander area, targeting the Penny/Milo vein complex, was lost prior to intersecting the targeted vein. KG Exploration completed approximately $US$761,520 worth of exploration since inception. Accordingly, Kinross has met its second anniversary obligations pursuant to the Kinross Option.

Kinross geologists hypothesize that the Midway Epithermal target is an Eocene-aged epithermal system developed within Triassic clastic sediments and limestone, and Jurassic (possibly) hornblende diorite intrusions, all unconformably overlain by Eocene Kettle River Formation sediments and Marron volcanics.

An approximately 3 m thick blanket of massive silica (locally banded, brecciated and vuggy) occurs at the basal Eocene unconformity. Remnants of this silica blanket occur in outcrop, intermittently over a 1 x 1 km area, in some places replacing Triassic limestone. The massive silica contains elevated gold (Au) (to1.175 ppm) as well as locally anomalous arsenic (As), mercury (Hg) and antimony (Sb). Near the eastern end of the (known) silica exposure, up to 15% marcasite occurs as disseminations within the silica, and as cm-scale clasts that exhibit internal banding. This showing is interpreted as representing a hydrothermal vent intersecting the unconformity.

Widespread argillic alteration and more local silicification occur in the footwall of the unconformity. Two separate zones of alteration and veining have been discovered: The western zone is a north-trending 200 m long by 50-75 m wide zone of silicification, with peripheral argillic alteration centered on a north trending fault zone marked by a narrow band of listwanite. Multiple narrow (up to 0.5 m) chalcedonic quartz (+/-quartz breccia) veins (up to 4.2 ppm Au) occur within the broader zone of silicification. A second similar zone of alteration and veining is located 200 m to the east. The target areas were further delineated via a large Au-Cu-Ag +/- Hg, Sb, Se, Ba soil anomaly over the exposed epithermal system.

Rock chip and drill hole results indicate predominately argillic, and lesser propylitic alteration. Kaolinite dominates the argillic suite. The strongest zone of alteration is a north-trending 200 m long by 50-75 m wide zone of silicification near the irregular clastic/intrusive contact centered on a north-trending fault zone. Multiple narrow (to 0.5 m) chalcedonic quartz (+/- quartz breccia) veins occur within the broader zone of silicification. Values of up to 4.2 ppm Au have been recovered from these veins.