Black Dragon Gold Corp.: Drilling Identifies New High-Grade Extensions to Salave Gold Resource

Table 1 - Select results from diamond drill holes BD18-01, 02 and 03

(Criteria in this section apply to all succeeding sections)

• Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.

Black Dragon Gold’s (BDG or "the Company") 2018 drilling programme comprised 7 diamond core drill holes totalling 2,217m of PQ and HQ size drill core. Hole BD18-XX failed to reach its target depth due to issues with drilling fluid, but recovered core was sampled and is to be reported.

• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

The 2018 drilling was initiated with PQ size core to variable depths to approximately the fresh rock interface (16-61m) and then HQ size core in fresh rock till the end of the hole.

Samples consisted of quarter core over predominantly 1 to 2 m lengths (average sample length of 1.33m).

All core was cut along oriented core markings (producing one half and two quarter core lengths) with a diamond saw into various lengths depending on lithology and alteration contacts determined by the drill site geologist. All drill core was sampled and the average sample length for the 2018 drilling was 1.33 m.

• Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases, more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

Core drilling was used to obtain PQ or HQ size drill core which was subsequently cut lengthwise using a diamond saw to obtain quarter core samples, which were crushed in a jaw crusher before being pulverised in a ring mill to produce a 50 g charge for fire assay and a 25 g charge for near total four acid digest for S, As and Sb analyses. Sample interval breaks were determined by changes in alteration types. There is a strong correlation between gold grades and alteration type and intensity.

• Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.).

• Method of recording and assessing core and chip sample recoveries and results assessed.

• Measures taken to maximise sample recovery and ensure representative nature of the samples.

No special measures were needed to maximise recovery, with standard drilling practice providing high recoveries.

• Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

• Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Also density measures were taken.

Drill core is stored at Black Dragon’s warehouse and logging facility.

The level of detail captured in the logging data is believed to be of an appropriate level to support resource estimation.

• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.

• The total length and percentage of the relevant intersections logged.

• If core, whether cut or sawn and whether quarter, half or all core taken.

For the 2018 drill campaign, all core was cut in half and quartered, and quarter core was assayed.

• If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

• For all sample types, the nature, quality and appropriateness of the sample preparation technique.

For the 2018 drill campaign, individual drill core samples were crushed by jaw crusher to 70% <2mm, split sample d using a Boyd rotary splitter, then 1000 gm pulverized to 85% <75um. The Boyd rotary splitter is a demonstrated method of accurately splitting the primary sample and is verified by duplicate analyses of the 2018 drilling. Sample preparation was conducted by ALS Laboratories in Spain.

• Quality control procedures adopted for all subsampling stages to maximise representivity of samples.

• Measures taken to ensure that the sampling is representative of the in-situ material collected, including for instance results for field duplicate/second-half sampling.

For the 2018 drill campaign, a second quarter core sample was collected for duplicate analyses and inserted into the sample stream at a rate of one in every thirty samples. All duplicate analyses were reviewed and show acceptable precision and variability.

• Whether sample sizes are appropriate to the grain size of the material being sampled.

• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

For the 2018 drill campaign, BDG used ALS Laboratory Group. SL ("ALS") in, Spain and Ireland. ALS, is an ISO 17025-2005 accredited and internationally recognized analytical services provider. ALS utilized the following methods which were deemed to be appropriate for the style of mineralisation:

• PREP-31CY for sample preparation, Fine crushing – 70% <2mm, split sample – Boyd rotary splitter, Pulverise 1,000 gm to 85% <75um
• Ore grade Au_AA26 Au by fire assay and AAS (50 gm pulp sample) for gold
• ICP 61 – Near total four acid digest for S, As, and Sb.

Sample analyses are considered a partial digestion when using an aqua regia digest and total when using fire assay.

• For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

• Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

AGQ Laboratories in Seville, Spain was used as an umpire lab for approximately 100 samples, and results have conformed to the initial assay results to an acceptable level of accuracy.

All QA/QC data was reviewed and yielded acceptable levels of precisions and accuracy. No batches failed QA/QC analyses.

• The verification of significant intersections by either independent or alternative company personnel.

Douglas Turnbull, P.Geo. a Qualified Person as defined by National Instrument 43-101, a Competent Person as defined by JORC and consultant to Black Dragon visited the property and core logging facilities in May 2018 and has reviewed and approved of the data reported herein.

CSA Global visited the property in February 2018 and inspected the current drilling and some of the historical collars.

• The use of twinned holes.

• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Core is boxed at the drill site and trucked to the company’s core storage facility for logging and storage.

• Discuss any adjustment to assay data.

• Accuracy and quality of surveys used to locate drillholes (collar and downhole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

• Specification of the grid system used.

The grid system used is UTM-29, ETRS89 datum.

• Quality and adequacy of topographic control.

• Data spacing for reporting of Exploration Results.

• Whether the data spacing, and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

The data spacing and distribution is sufficient and appropriate for a mineral resource estimate.

• Whether sample compositing has been applied.

• Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

• If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

• The measures taken to ensure sample security.

The drillers put the core in core-boxes. A Company geologist transported the core to the core logging and storage facility.

At the core logging facility, samples are marked by a project geologist at intervals according to changes in lithology or alteration.

The samples are numbered sequentially including the control samples. The same person always takes the samples with the supervision of the BDG project manager.

There is always oversight of the person controlling the accuracy of the saw cuts.

Each sample is bagged in two bags for transport with bar codes on both sides of the bag and another label inside the bag and closed with a cable tie.

Each hole is sent as one shipment to avoid confusion or mixing of samples from different drillholes.

All core and samples are stored at the core logging and storage facility. The facility is protected by an alarm system and BDG minimizes the number of staff involved with handling the core and having access to the facility.

• The results of any audits or reviews of sampling techniques and data.

CSA Global has conducted audits of the current sampling techniques and data.

(Criteria listed in the preceding section also apply to this section)

• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

BDG owns 100% of the Salave gold deposit through its wholly owned Spanish subsidiary Exploraciones Mineras del Cantabrico SL (EMC). The BDG tenure includes five mining concessions and associated extensions covering 662 Ha and an investigation permit covering another 2,765 Ha.

BDG currently has five Mining Concessions and an Investigation Permit detailed in the January 2017 "Amended Technical Report on the Salave Gold Project" by MDA on the Company’s website.

A Mining Concession entitles the holder to develop resources located within the concession area, except those already reserved by the State. An Investigation permit gives the holder the right to carry out, within the indicated perimeter and for a specific term (a maximum of three years), studies and work aimed at demonstrating and defining resources and the right, once defined, to be granted for mining those resources. The term of an Investigation permit may be renewed by the Regional Ministry of Economy and Employment for three years and, exceptionally, for successive periods. The BDG Investigation permit expired in February of 2017 and is currently under application for extension and is pending a response from the respective authority.

The Salave gold deposit and mineral resources as currently defined is situated completely within the confines of the Company’s Mining concessions and is therefore not impacted by a renewal of the Investigation permit.

The Mining Concessions and Investigation permit are subject to restrictions defined by the Plan de Ordenacion del Litoral de Asturias (POLA) which does not allow any surface activity within 500 metres of the coast line of the Bay of Biscay.

The Salave Project is subject to a royalty agreement with SPG Royalties Inc. described in the January 2017 Amended Technical Report on the Salave Gold Project by MDA on the Company’s website.

• The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Mining Concessions are believed to be in good standing with the governing authority and there is no known impediment to the Concessions remaining in force until expiry dates (2037 to 2045 for the main concessions covering the project).

• Acknowledgment and appraisal of exploration by other parties.

Exploration activities commenced in 1967 with several periods of exploration and mining studies prior to BDG (originally named Dagilev Capital Corp., renamed Astur Gold Corporation in 2010, renamed Black Dragon Gold Corp. in 2016) taking ownership of the project in 2010. A significant amount of drilling has been undertaken on or immediately adjacent to the current property boundary during this period totalling 484 drill holes for 69,585m completed. The first drilling commenced with Northgate/IMBESA in 1970 and continued with various owners until 2005.

BDG commenced the 2018 drill program in January 2018, the first to be undertaken since 2013.

• Deposit type, geological setting and style of mineralisation.

Most of the gold mineralisation has been delineated within an area of approximately 500m wide, 780 m long and test to a depth of 420 m. Gold mineralisation occurs in a series of stacked irregular lenses related to faults and fracture zones collectively forming a broad northwest dipping tabular zone parallel to the contact between the Salave granodiorite and overlying metasedimentary rocks. The faults and fracture zones appear to be related to one or more steeply dipping structures, some of which contain high grade gold. These structures may play a role as conduits and opening shallow dipping structures (lenses) for hydrothermal solutions.

Gold mineralisation at Salave is related to hydrothermal alteration of the host granodiorite. The highest grades are associated with intense albite-sericite alteration with fine grained arsenopyrite and stibnite. Destruction of the original textures is a major feature of the most intensively altered and mineralised granodiorite. Quartz veins and quartz carbonate molybdenite bearing veins are present are present in the deposit do not contain gold and represent a separate mineralising event.

• A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drillholes:
  • easting and northing of the drillhole collar
  • elevation or RL (Reduced Level – elevation above sea level in metres) of the drillhole collar
  • dip and azimuth of the hole
  • downhole length and interception depth
  • hole length.
• If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.

Significant mineralized intervals from the 2018 drill program were selected based on a 2.5 g/t Au cut off, a minimum interval length of 2m and a maximum allowable, continuous interval of waste of 2m. Assay averages were weighted by individual sample length and no top cutting was applied. Where appropriate, select samples or internal intervals of higher grade gold mineralisation was broken out as an included interval to illustrate how it influenced the overall average of the larger mineralised intervals.

• Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

Where encountered included shorter intervals of higher grade results have consistently been broken out as included intervals in the accompanying news release.

• The assumptions used for any reporting of metal equivalent values should be clearly stated.

There are no metal equivalents reported.

• These relationships are particularly important in the reporting of Exploration Results.

• If the geometry of the mineralisation with respect to the drillhole angle is known, its nature should be reported.

• If it is not known and only the downhole lengths are reported, there should be a clear statement to this effect (e.g. ‘downhole length, true width not known’).

Readers are cautioned that information regarding the precise geometry and orientation of the mineralized zones is insufficient in some cases and the reported intervals may not be true widths.

• Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drillhole collar locations and appropriate sectional views.

• Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

Criteria for the selection of mineralised intervals is clearly defined in the accompanying news release and the 2018 drilling was entirely sampled.

All intervals not reported failed to meet the criteria as a result of having little or no gold mineralisation.

• Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

In 2013 Astur Gold engaged a Structural Geological consultant to complete a structural analyses based on observations and measurement of oriented core data from 6 historical drill holes. Details of this work are summarized in the 2017 MDA technical report on the Company’s website.

• The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).

• Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.