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Canada Silver Cobalt Works Inc
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Canada Silver releases Castle East NI 43-101 estimate

2020-05-28 07:21 ET - News Release

Mr. Frank Basa reports


Canada Silver Cobalt Works Inc. has released results of its first National Instrument 43-101 mineral resource estimate for the early-stage Castle East Robinson zone discovery in the heart of the past producing Gowganda silver camp, 75 kilometres southwest of Kirkland Lake.

Castle East is part of Canada Silver Cobalt's 100-per-cent-owned, 78-square-kilometre Castle property also featuring the Castle mine. Late last year the company initiated a follow-up program to a 2011 discovery hole approximately two km southeast of the mine, and within two km of two other past producers, that returned a high-grade intercept of 40,944 grams per tonne silver (1,194 ounces per ton) over a core length of 0.45 metre (refer to Aug. 25, 2011, Gold Bullion Development news release). Four holes (CS-19-08W1, CS-19-08W2, CS-19-08W3 and CS-19-W4) were wedged off the 2011 hole followed by four holes (CS-19-20, CS-19-21, CS-20-22 and 23) drilled to intersect the vein zone from a different angle. The latest hole was drilled parallel to and collared 45 metres from the historic hole. Canada Silver Cobalt's program aimed to delineate the extent of the high-grade mineralization within the Robinson zone that shows very high grades in the form of native silver.

The mineral resource estimate used the four wedge holes and the four holes drilled from surface (CS-19-08W1 to W4; CS-19-20, CS-19-21; CS-20-22 and CS-20-23) and one historical drill hole (CA1108).

This resource estimate was independently prepared by GoldMinds Geoservices Inc. in accordance with National Instrument 43-101 and is dated May 28, 2020.

Notably, zones 1A and 1B have an average silver grade of 8,582 g/t (250.2 oz/ton) in a combined 27,400 tonnes of material for a total of 7,560,200 inferred ounces using a cut-off grade of 258 g/t silver equivalent (mineral resources that are not mineral reserves do not have demonstrated economic viability).

Inferred mineral         Ag       Co       Cu     Ni     Pb     Zn     AgEq   Tonnes          Ag        AgEq
resources               g/t      g/t      g/t    g/t    g/t    g/t      g/t                   oz          oz

Zone 1A               7,960      946      349    790     16     12    8,042    8,100   2,073,000   2,094,200
Zone 1B               8,843    2,308      325    336     30     52    8,998   19,300   5,487,200   5,583,200
Zone 2A                  38    5,673    2,101    453    118    108      426    5,500       6,800      75,300
Total inferred
resources             7,149    2,537      628    467     41     52    7,325   32,900   7,567,000   7,752,700

(1) Mineral resources that are not mineral reserves do not have demonstrated economic viability. The 
estimate of mineral resources may be materially affected by environmental, permitting, legal, title, market 
or other relevant issues. The quantity and grade of reported inferred resources are uncertain in nature 
and there has not been sufficient work to define these inferred resources as indicated or measured 
(2) The database used for this mineral estimate includes drill results obtained from historical (2011 one 
hole) to the recent 2019 drill program and wedges from the 2011 diamond drill hole. 
(3) Mineral resources are reported with minable shape cut-off grade equivalent to $125 (U.S.) (258 g/t 
AgEq) including mining, shipping and smelting cost with recovery of 95 per cent. The high-grade value of 
the mineral resources may potentially allow for direct shipping. The assay results are not capped as 
they are not considered as outliers at this stage and results are reproducible. 
(4) The geological interpretation of the mineralized zones is based on lithology and the mineralized 
intervals intersected by drill holes. The use of the borehole inspection camera provided a valuable 
geometric characterization of the mineralized intervals. 
(5) The mineral resource presented here was estimated with a block size of one m E by one m N by one m Z. 
(6) The blocks were interpolated from equal length composites of 0.5 m calculated from the mineralized 
(7) The minimum horizontal width of the mineralized envelopes includes dilution and is 1.3 m. 
(8) The mineral estimation was completed using the inverse-distance-to-the-square methodology utilizing 
two passes. For each pass, search ellipsoids followed the geological interpretation trends were used. 
(9) The mineral resources have been classified under the guidelines of the CIM Standards on Mineral 
Resources and Reserves, Definitions and Guidelines prepared by the CIM standing committee on reserve 
definitions in 2019 and adopted by CIM council (2020), and procedures for classifying the reported 
mineral resources were undertaken within the context of the Canadian Securities Administrators' National 
Instrument 43-101. 
(10) To convert volume to tonnage a specific gravity of 3.4 tonnes per cubic metre was used. Results 
are presented in situ without mining dilution. 
(11) This mineral resource estimate is dated May 28, 2020. Tonnages and AgEq ounces in the table are 
rounded to nearest hundred. Numbers may not total due to rounding. 

Additional details will be provided in the technical report.

As part of the resource estimation process, the company and GoldMinds compiled, verified and modelled all technical information available from the Castle East project. The 3-D geological models were built for subvertical structures. The mineralized envelopes were created using the last diamond drill holes (CS-19-08W1 to W4; CS-19-20; CS-19-21; CS-20-22; and CS-20-23) and the historical hole CA1108. A total of four mineralized envelopes were created by connecting the defined mineralized prisms on the sections with a minimum horizontal width of 1.3 m. A fixed density of 3.4 tonnes per cubic metre was used. This density reflects the typical mineralized interval composed mainly of diabase. The geological and mineralization wireframes were constructed using Genesis, a modelling and mineral estimation software.

The maximum depth of the mineralized envelopes is around Z equals minus 73 m (around 490 metres from the surface). The envelopes are extended from around 350 m to 490 m from the surface. A total of four block models were created. The block size (one m E by one m N by one m Z) has been defined to respect the geometry of the envelopes.

Search ellipsoids were used for the grade estimation and follow the geological interpretation trends. Block grades were interpolated from the composites (0.5 m length) within the envelopes in two passes using the inverse-distance-to-the-square methodology and the assays results are not capped.

For the first pass, the number of composites was limited to 12 with a minimum of three with a maximum of two composites from the same hole. For the second pass, the number of composites was limited to 12 with a minimum of two.

A cut-off grade of $125 (U.S.) (258 g/t AgEq) was applied for these underground mineral resources.

Element         Ag        Co        Cu        Ni        Pb        Zn
              (oz)     (ton)     (ton)     (ton)     (ton)     (ton)

USD            $15   $30,000    $5,150   $12,327    $1,650    $1,925

A technical report with respect to the present mineral resource estimate disclosed today will be filed within 45 days in accordance with NI 43-101. The report will also present more details on the project and findings. The company will continue to advance, explore and derisk the project with further engineering (metallurgical, mining) and environmental study and social community relations with locals and first nations.

CCW Castle East Robinson zone significant drill intercepts (core intervals)  
Hole No.            From           To       Length           Ag           Ag           Co
                     (m)          (m)          (m)        (g/t)     (oz/ton)          (%)

CA1108            563.54       566.63         3.09     6,476.29       188.92         0.13
including         564.34       564.79         0.45    40,944.00     1,194.40         0.91
CS-19-08W1        558.00       560.50         2.50    12,738.55       371.60         0.09
including         559.40       560.00         0.60    50,583.39     1,475.59         0.30
CS-19-08W2        545.00       549.00         4.00     7,259.50       211.77         0.20
including         547.20       547.50         0.30    70,380.15     2,053.10         2.61
CS-19-08W3        568.00       569.00         1.00        56.40         1.65         1.35
CS-20-22          563.90       564.50         0.60     4,971.39       145.02         0.39
including         564.15       564.50         0.35     8,338.41       243.24         0.66
CS-20-22          407.00       419.00        12.00        29.05         0.85         0.00
including         409.45       409.85         0.40       368.70        10.76         0.01
(1) True widths are estimated to be 50 per cent to 70 per cent of the reported downhole 
(2) CS-20-22 interval at 563.90 m to 564.50 m was not used in the inferred resource 

Quality control/quality assurance

During the 2019 and early 2020 drilling program, assay samples were taken from the NQ core. Samples were collected using a 0.3-metre minimum length, one-metre maximum length. Drill core recovery averaged 95 per cent. A strict QA/QC program was applied to all samples, which includes insertion of mineralized standards and blank samples for each batch of 20 samples. The drill core was split with one-half of the core placed in a plastic bag with the sample tag and sealed, while the second half was returned to the core box for storage on site. Core samples were sent for assaying to Swastika Laboratories Ltd. in Swastika, Ont., and ALS laboratory at Rouyn-Noranda, Que. For the high-grade intercepts, only one-fourth of the core has been sent to laboratory for assaying.

Qualified person

The technical information in this news release was prepared under the supervision of Dr. Merouane Rachidi, PhD, PGeo (PGO, OGQ, APEGNB and AIPG), of GoldMinds Geoservices, an independent qualified person in accordance with National Instrument 43-101.

About Canada Silver Cobalt Works Inc.

Canada Silver Cobalt has 100-per-cent ownership of the Castle mine and the 78-square-kilometre Castle property with strong exploration upside in the prolific past producing Gowganda high-grade silver camp of Northern Ontario. With underground access at Castle, a pilot plant to produce cobalt-rich gravity concentrates on site, and a proprietary hydrometallurgical process known as Re-2OX for the creation of technical-grade cobalt sulphate as well as nickel-manganese-cobalt (NMC) formulations, Canada Silver Cobalt is strategically positioned to become a vertically integrated North American leader in cobalt extraction and recovery while it also exploits a powerful new silver-gold market cycle.

We seek Safe Harbor.

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