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JAMESON RESOURCES LIMITED Capital/Financing Update 2014

Feb 16, 2014

65152_rns_2014-02-16_d8215785-2674-4c7f-bf6b-2bae26d93f99.pdf

Capital/Financing Update

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ASX RELEASE
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Positive South Block Coal Quality Results Crown Mountain Coking Coal Project

17 February 2014

Fast Facts ASX: JAL
Share Price Range (6mths) $0.19 - $0.28
Shares on issue 189,665,619
Options ($0.15 -$0.20) 10,976,390
Market Capitalisation ~$40M
Major Shareholders
(as at February 14, 2014)
Macquarie Bank 10.5%
Pershing Aus Nom P/L 5.0%

Highlights

  • Jameson has previously released Coke Strength After Reaction (CSR) metrics for the North Block, ranging from 73 – 76, which are excellent and at the high end of worldwide shipments of hard coking coal.

  • The first three CSR results have been received for the South Block, ranging from 67 - 74.

  • These results confirm coking coal characteristics as defined by CSR remain positive, and within the range of typical hard coking coal shipments from the Elk Valley of British Columbia.

Directors & Management

David Fawcett (Chairman)

Art Palm (Executive Director & CEO) David Prentice (Non Executive Director) Jeff Bennett (Non Executive Director)

Jameson Resources Ltd (“Jameson”, the “Company”) is pleased to announce that initial CSR results from sole heated oven (SHO) testing have been received for a portion of the South Block resource area at Jameson’s Crown Mountain Coking Coal Project, and that these results indicate the Crown Mountain product can be expected to be a hard coking coal.

Key Projects

Crown Mountain Coal Project Elk Valley Coalfield, Canada Dunlevy Coal Project Peace River Coal Field, Canada

Samples analyzed are from: (a) hole CM11-22-CH seam 10 blend (upper, middle, lower), (b) hole CM11-22-CH seams 8, 9, and 10 blend, and (c) hole CM13-15-CM seam 10 blend. Figure 1 displays the location of these core holes.

Investment Highlights

  • Positioned in world class metallurgical coalfields

  • Significant development expertise on board with successful track record

The CSRs are 68.7, 66.8, and 74.4 respectively. Table 1 contains all currently available CSR information.

  • Modern rail and port facilities

  • Strong financial position

Newsflow / Catalysts

Dunlevy NoW approval Q1 2014e Dunlevy exploration starts Q1 2014e Crown PFS completion Q2 2014e Dunlevy initial expl results Q2 2014e Overview

Contact Details

Australia

L2, 79 Hay Street, Subiaco WA, 6008 P +61 (8) 9200 4473 F +61 (8) 9200 4463 Overview E [email protected] .au

CSR is one of the most important, and widely accepted, properties of coking coal. In the Elk Valley typical shipments run between 68 and 72 CSR. The Crown Mountain CSRs indicate a hard coking coal similar to the high quality products shipped from neighboring mines. While further work (ie: pilot oven) will eventually be required to confirm these results, SHO CSRs are generally reliable and widely accepted as indicative of a coal’s coking properties.

The Company is very pleased with these CSR results, and remains enthusiastic regarding the potential of the Crown Mountain Project. The prefeasibility study (PFS) continues to progress, with a completion date expected by June/July of this year.

Canada

S8, 1199 West Hastings, Vancouver P +1 (604) 629-8605

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www.jamesonresources.com.au

Discussion of Results

Jameson has previously released a full suite of coal quality results from the North Block of Crown Mountain. Those results indicate hard coking coal in all cases (other than oxidized zones). Based on CSR, each seam (8, 9, and 10) exhibits stand-alone coking coal characteristics as does the 8, 9, and 10 seam blend. The CSRs contained in this announcement are the first SHO results available for the South Block. This is significant, and indicates favourable coking coal characteristics are not limited to the North Block.

The core holes involved in this announcement are CM11-22-CH and CM13-15-CH. Hole CM11-22-CH is located near the middle of the South Block, while CM13-15-CH is near the northern limit of the South Block. CSR is not yet available for South Block core hole CM11-19-CH.

HOLE AREA SEAM CSR
CM12-01-CH NORTH 8 74.0
CM12-01-CH NORTH 9 76.5
CM12-01-CH NORTH 10 76.7
CM12-01-CH NORTH 8/9/10 73.6
CM11-11/12-CH NORTH 9/10 75.7
CM11-22-CH SOUTH 10 68.7
CM11-22-CH SOUTH 8/9/10 66.8
CM13-15-CH SOUTH 10 74.4
8 Sample Average 73.3
Crown Mountain Range 67-76
Typical Elk Valley Range 68-72

Table 1: Crown Mountain SHO CSR Results

(Source: CANMET)

It is important to note that the information contained in this announcement is partial (additional analyses are underway) and yet to be interpreted by third party consultants preparing the PFS.

On Behalf of the Board of Directors,

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Art Palm Chief Executive Officer

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Figure 1 – Crown Mountain Drill Hole Location Plan

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www.jamesonresources.com.au

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CROWN MOUNTAIN Measured (Mt) Indicated (Mt) Measured &
Indicated(Mt)
Inferred (Mt)
North Block 7.9 7.1 15.0 0.0
South Block 51.3 0.0 51.3 0.0
Southern Extension 0.0 0.0 0.0 23.7
TOTAL 59.2Mt 7.1Mt 66.3Mt 23.7Mt

Table 2 – Classification of Resources – Crown Mountain Project (effective 21 January 2013)

Note Regarding Resource Compilations:

This information was extracted from the Company’s ASX Announcement titled “Initial Coal Resource of 90 million Tonnes at Crown Mountain” dated 4 February 2013 which was prepared and disclosed under the National Instrument 43-101. The announcement is available from the Company’s ASX announcements platform (ASX:JAL). The Company is not aware of any new information or data that materially affects the information included in the original market announcement and all material assumptions and technical parameters underpinning the Mineral Resource estimates in the relevant announcement continue to apply and have not materially changed. The information has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported .

Competent Person Statements

Exploration and Laboratory Testing

The information in the report to which this statement is attached that relates to exploration and laboratory testing results is based on information compiled by Mr. Art Palm P.Eng., a Competent Person who is a Member of a Recognised Professional Organisation (RPO) included in a list that is posted on the ASX website from time to time, being the Association of Professional Engineers and Geoscientists of British Columbia. Mr. Palm is a full time employee of Jameson Resources Limited and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Palm consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Mr. Palm holds the following securities in Jameson Resources Limited: 1,350,000 Ordinary Shares, 3,000,000 performance rights and 83,333 $0.15 options expiring 30 September 2014.

Mineral Resource

The information in this document that relates to the Mineral Resources is based on information compiled by Mr. Geoff Jordan P.Geo., who is a Member of a Recognised Overseas Professional Organisation (ROPO) included in a list promulgated by the ASX from time to time, being the Association of Professional Engineers and Geoscientists of British Columbia. Mr. Jordan is an employee of Norwest Corporation and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Jordan consents to the inclusion in the document of the matters based on his information in the form and context in which it appears.

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www.jamesonresources.com.au

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About Jameson Resources Limited

Jameson Resources Limited (ASX:JAL) is a junior resources company focused on the acquisition, exploration and development of strategic coal projects in western Canada. The Company has a 90% interest in the Crown Mountain coal project, and a 100% interest in the Peace River coal projects located in British Columbia. Jameson’s tenement portfolio in British Columbia is positioned in coalfields responsible for the majority of Canada’s metallurgical coal exports and are all close to railways connecting to export facilities.

To learn more, please contact the Company at +61 89200 4473, or visit: www.jamesonresources.com.au

Forward Looking Statements

This announcement contains “forward-looking statements”. Such forward-looking statements include, without limitation: estimates of future earnings, the sensitivity of earnings to commodity prices and foreign exchange rate movements; estimates of future production and sales; estimates of future cash flows, the sensitivity of cash flows to commodity prices and foreign exchange rate movements; statements regarding future debt repayments; estimates of future capital expenditures; estimates of resources and statements regarding future exploration results; and where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to commodity price volatility, currency fluctuations, increased production costs and variances in resource or reserve rates from those assumed in the company’s plans, as well as political and operational risks in the countries and states in which we operate or sell product to, and governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s Annual Reports, as well as the Company’s other filings. The Company does not undertake any obligation to release publicly any revisions to any “forward looking statement” to reflect events or circumstances after the date of this release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

– JORC Code, 2012 Edition Table 1

Section 1 Sampling Techniques and Data

Criteria JORC Code explanation JORC Code explanation Commentary Commentary
Sampling Nature and quality of sampling (eg cut channels, random chips, or Reverse circulation (“RC”) and large diameter core (“LDC”) drilling
techniques 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.
was used to collect samples.
RC samples were collected on 0.5m intervals as soon as coal zones
were reached. Drilling was stopped between each sample for
dewatering and to allow accurate interval separation.
Include reference to measures taken to ensure sample representivity
and the appropriate calibration of any measurement tools or systems
used.
Sample bags were assigned hole and individual sample numbers,
zipped tied and stored in heavy duty plastic tubs for transportation to
laboratory.
Aspects of the determination of mineralisation that are Material to the
Public Report.
For LDC drilling, all coal seams ≥0.5m were sampled. The entire coal
zone was sampled and bagged for analysis. Rock partings ≥0.5m
In cases where ‘industry standard’ work has been done this would be were sampled and bagged separately.
relatively simple (eg ‘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
A suite of geophysical logs, including density, gamma, neutron,
temperature and drill hole deviation were run both within drill pipe on
all holes and in the open hole where ground conditions permitted.
problems. Unusual commodities or mineralisation types (eg
submarine nodules) may warrant disclosure of detailed information.
Drilling Drill type (eg core, reverse circulation, open-hole hammer, rotary air In 2012 Jameson Resources Limited (“Jameson”) undertook an
techniques blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple
or standard tube, depth of diamond tails, face-sampling bit or other
exploration drilling program which included 40 reverse circulation drill
holes for a total of 5,707m.
type, whether core is oriented and if so, by what method, etc). In 2013 Jameson undertook an exploration drilling program which
included a total of 6 RC drill holes for 796m and 7 LDC (150mm) core
holes for 853m using standard tube.
LDC holes were twinned from existing 2012 and 2013 RC pilot holes.
Holes were drilled vertical. The majority of the hole was cored.
Certain sections of thick interburden(sandstone)were hammer
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
drilled.
RC holes were drilled using a conventional face hammer, PDC or tri-
cone drill bit.
Drill sample Method of recording and assessing core and chip sample recoveries Core recovery from the LDC was excellent - overall greater than 95%.
recovery and results assessed.
Measures taken to maximise sample recovery and ensure
representative nature of the samples.
Prognosis depth to coal seams was known from the geophysical log
of the RC pilot hole. The driller was advised prior to reaching top of
seam. Core catcher tools were used through less competent coal
zones to ensure maximum recovery.
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.
For the majority of LDC holes all of the coal seam recovered was
submitted to laboratory for coal quality test work
2012 RC samples were largely wet and passed over a static 100
mesh screen. 2013 RC samples were passed over a 325 mesh
vibrating screen to ensure the vast majority of fine coal was retained
and dewatered as much as possible.
Sample was collected in polywoven cloth bags on 0.5 metre intervals.
Logging Whether core and chip samples have been geologically and All core was photographed immediately following separation of split
geotechnically logged to a level of detail to support appropriate barrel at rig and also following mark-up.
Mineral Resource estimation, mining studies and metallurgical
studies.
Core was geologically and geotechnically logged before sampling and
shipment to lab.
Whether logging is qualitative or quantitative in nature. Core (or
costean, channel, etc) photography.
RC holes were geologically logged.
The total length and percentage of the relevant intersections logged. Holes were geophysically logged as described in the section above.
All geophysical tools were calibrated by the logging Company
(Century Wireline) using their internal calibration procedures.
Geophysical logs are analysed extensively and used to confirm and
correct geological logs. Validation of geological logs against
geophysics is undertaken to ensure accuracy.
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
Sub- If core, whether cut or sawn and whether quarter, half or all core All core coal samples were bagged and placed into heavy duty plastic
sampling
techniques
taken.
If non-core, whether riffled, tube sampled, rotary split, etc and
tubs on site before being transported to Birtley Coal & Minerals
(“Birtley”) in Calgary for coal quality test work.
and sample
preparation
whether sampled wet or dry.
For all sample types, the nature, quality and appropriateness of the
Roof and floor dilution samples were also collected and sent to
laboratory for test work.
sample preparation technique. Core samples from the roof and floor along with selected zones of
Quality control procedures adopted for all sub-sampling stages to
maximise representivity of samples.
interburden have been retained for metal leaching and acid rock
drainage analysis. The British Columbia Ministry of Energy and
Mines requires this data as part of the environmental approvals
Measures taken to ensure that the sampling is representative of the in process.
situ material collected, including for instance results for field
duplicate/second-half sampling.
All remaining core sample (non-coal) was retained in wooden boxes
and has been retained on pallets at each drill site within project area.
Whether sample sizes are appropriate to the grain size of the material
being sampled.
The majority of RC sample collected through the coal zones was
retained.
Birtley complies with Australian Standards for sample preparation and
sub-sampling.
The collection of LDC ensured sufficient bulk sample was retained for
all the required coal quality test work.
Quality of The nature, quality and appropriateness of the assaying and Birtley adheres to ASTM and ISO preparation and testing
assay data
and
laboratory procedures used and whether the technique is considered
partial or total.
specifications and has Quality Control processes in place.
Birtley adopts standard quality control procedures and have
laboratory
tests
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.
participated in the International Canadian Coal Laboratories Round
Robin Series (CANSPEX) since its inception.
Geophysical tools were calibrated by the logging Company Century
Wireline using their internal calibration procedures.
Nature of quality control procedures adopted (eg standards, blanks,
duplicates, external laboratory checks) and whether acceptable levels
of accuracy (ie lack of bias) and precision have been established.
Verification The verification of significant intersections by either independent or Many levels of analysis results verification are included in the ASTM
of sampling alternative company personnel. standards relating to coal quality analysis.
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
and The use of twinned holes. All LDC holes are twinned holes from RC pilot holes drilled in 2012
assaying Documentation of primary data, data entry procedures, data and 2013 by Jameson. All holes have geophysical logs.
verification, data storage (physical and electronic) protocols. Sample and coal quality results were verified by Jameson and
Discuss any adjustment to assay data. Norwest Corporation before being reported or used in the resource
model.
All analytical data is provided by the coal laboratory and reviewed by
external consultants for comments and reporting. No adjustments are
made to any coal quality data: they are reported as received from the
laboratory.
Coal quality data is stored in electronic format (Microsoft Excel) and
then transferred to a database retained by Norwest Corporation in
Calgary.
Location of Accuracy and quality of surveys used to locate drill holes (collar and All Jameson drill hole and trench locations are positioned by external
data points down-hole surveys), trenches, mine workings and other locations
used in Mineral Resource estimation.
professional contract surveyors Garrett Winkel Land Surveying Ltd
both prior to and on completion of drilling campaign.
Specification of the grid system used. Holes are surveyed in UTM NAD83 CSRS datum with geodetic (sea
Quality and adequacy of topographic control. level) elevation.
LIDAR topographic survey data with a 1m by 1m spacing was used
to create gridded topographical surface.
Data Data spacing for reporting of Exploration Results. Drill holes were nominally spaced at 150m in the North Block where
spacing and
distribution
Whether the data spacing and distribution is sufficient to establish the
degree of geological and grade continuity appropriate for the Mineral
geology is classified as Complex and at 250-300m spacings in the
South Block where geology is classified as moderate.
Resource and Ore Reserve estimation procedure(s) and A total of 12 trenches were constructed using a back hoe. Coal
classifications applied. seams exposed were surveyed and provided additional data points
Whether sample compositing has been applied. used to confirm the geological model.
The data spacing is considered sufficient to give accurate control to
the resource model and give the required confidence to the resource
areas.
Coalqualitysamples were individuallyanalysed. Individual samples
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
from coal intervals from the 2013 drill campaign were subsequently
composited on a seam basis.
Orientation Whether the orientation of sampling achieves unbiased sampling of The orientation and spacing of the drilling grid is deemed to be
of data in possible structures and the extent to which this is known, considering suitable to detect geological structures and coal seam continuity
relation to the deposit type. within the resource area.
geological
structure
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.
Sample The measures taken to ensure sample security. Core when removed from the borehole remains in the core splits until
security identified and photographed.
All coal sample is then bagged and labelled both internally and
externally, then placed in heavy duty sealed plastic tubs.
Samples are transported to laboratory on a hole by hole basis at the
completion of each drill hole. A list of samples is created and a
receipt is provided by the local courier.
All of the un-sampled core is placed in heavy duty sealed wooden
boxes and placed on pallets, strapped with metal banding and stored
on-site.
Audits or The results of any audits or reviews of sampling techniques and data. Jameson together with Norwest Corporation, Birtley Coal & Minerals
reviews Laboratory and other independent consultants were responsible for
implementing and developing the sampling techniques and data
capture.
Birtley adheres to ASTM and ISO preparation and testing
specifications and has Quality Control processes in place.
All drill hole and analytical data is stored and retained by Norwest
Corporation in a database. Jameson has retained copies of all
analytical reports and data in excel format

Section 2 Reporting of Exploration Results

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

Criteria JORC Code explanation JORC Code explanation Commentary Commentary
Mineral Type, reference name/number, location and ownership including Jameson through its wholly owned Canadian subsidiary NWP Coal
tenement agreements or material issues with third parties such as joint Canada Ltd (“NWP Coal”) has a 100% interest in the five granted coal
and land
tenure
ventures, partnerships, overriding royalties, native title interests,
historical sites, wilderness or national park and environmental
settings.
licenses and one coal licence application covering the Crown
Mountain project. The licenses 418150, 418151, 418152, 418153,
418154 and 418430 (Application) cover a combined area of 3,563 ha.
status The security of the tenure held at the time of reporting along with any NWP Coal acquired the coal license rights from Robert J Morris in
known impediments to obtaining a licence to operate in the area. 2011. On completion of the transaction, Jameson has acquired a
90% interest in the property, the remaining 10% being retained by Mr
Robert J Morris as an undivided 10% interest (non-profit sharing)
Jameson holds an option to acquire the remaining 10% interest. The
option agreement requires that Jameson pay an annual rental fee of
C$100,000. If Jameson elects to exercise the option and acquire the
remaining 10% interest in the property it is obliged to pay Mr Robert J
Morris a fee of C$2,000,000 which may take the form of a series of
staged payments.
The only other payment that the property is subject to is the annual
rental fee of C$18,116 and the statutory production royalties to the
BC Provincial government.
The licences are in good standing and Jameson is unaware of any
impediments to the security of tenure.
Exploration Acknowledgment and appraisal of exploration by other parties. In 1969, Crowsnest Industries Ltd. completed a drilling program of 11
done by
other parties
holes for a total of 1,668.m. Geophysical logs and survey data of the
hole collars are the only records that remain from this drill program.
In 1979, Crownsnest Resources Ltd / Shell Canada completed a
drilling program of 7 holes for a total of 901m. Core drilling was
attempted in two shallow holes.
In 1980 and 1981, exploration using other methods was completed
Onlyminimal coalqualitydata was available from the historical
Criteria JORC Code explanation JORC Code explanation JORC Code explanation Commentary Commentary
exploration programs.
Geology Deposit type, geological setting and style of mineralisation. The Crown Mountain Coal project lies within the Elk Valley coal field
in southeast British Columbia, Canada.
The property is divided into three structural domains with separate
geological attributes. The domains are referred to as the North Block,
South Block, and Southern Extension. The Crown Mountain thrust
fault (“CMF”) separate the North Bock from the South Block and
Southern Extension.
Coal seams are hosted within the Jurassic to Lower Cretaceous Mist
Mountain Formation. The coal bearing Mist Mountain Formation is
underlain by the Morrissey Formation which includes the regional cliff
forming Moose Mountain Member.
Drilling has intersected three principal seams, named 8 Seam, 9
Seam and 10 Seam. The 8 and 10 Seams consist of three major
plies. The term major seam has been defined to include all seven
seams in order to distinguish them from other coal horizons referred
to as rider seams.
The seven major seams have combined average net coal zone
thickness of 35.32m in the North Block, 15.04m in the South Block
and 14.79m in the Southern Extension.
Drill hole A summary of all information material to the understanding of the At Crown Mountain a total of 71 holes have been drilled on site. A
Information exploration results including a tabulation of the following information total of 40 holes were drilled by Jameson in 2012, and a total of 13
for all Material drill holes: holes in 2013. Some of the holes were drilled as angle holes.
o easting and northing of the drill hole collar All of the holes excluding CMR79-104 were used in the 2012
o elevation or RL (Reduced Level – elevation above sea level in
metres) of the drill hole collar
resource model. In addition, 12 trenches, 39 outcrop points with coal
description and 203 outcrop points with dip and dip direction data
were used in the 2012 resource model.
o dip and azimuth of the hole A full list of the drill holes used in the 2012 resource estimate
o down hole length and interception depth including easting, northing, RL, dip and azimuth, down hole depth and
o hole length. coal zone combined thickness and hole length is presented at the end
of Table 1.
If the exclusion of this information isjustified on the basis that the
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
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.
Data In reporting Exploration Results, weighting averaging techniques, For Crown Mountain a minimum coal thickness of 0.5m and a
aggregation
methods
maximum and/or minimum grade truncations (eg cutting of high
grades) and cut-off grades are usually Material and should be stated.
maximum non-separable parting thickness of 0.5m was used for coal
and waste discrimination
Where aggregate intercepts incorporate short lengths of high grade The compositing of the Reverse Circulation (RC) samples was done
results and longer lengths of low grade results, the procedure used by checking the thicknesses and depths of the recorded sample
for such aggregation should be stated and some typical examples of intervals against the depths on the geophysical logs. The sample
such aggregations should be shown in detail. intervals were then corrected to the logs, where needed. The
The assumptions used for any reporting of metal equivalent values
should be clearly stated.
composites of the 0.5m samples were assembled based on the
sample description and the seam limits of the coal interval from the
geophysical logs.
The compositing of the core samples was completed in a similar
manner as the RC samples; the first step was to adjust the sample
depths to those of the geophysical logs and then prepare the
composites based on sample description, seam limits of the coal
interval from the geophysical logs, and, additionally, from information
on the core photographs. Separable and non-separable partings
greater than a thickness of approximately 20cm were sampled
independently from the coal. Depending on the parting thicknesses
they were included or excluded in the composites. Selected rock
parting, roof, and floor samples were analyzed separately from the
coal.
Relationship These relationships are particularly important in the reporting of All 2013 holes were drilled vertical. Drill holes had a natural tendency
between Exploration Results. to deviate from vertical because of the varying dips of strata and also
mineralisatio
n widths and
If the geometry of the mineralisation with respect to the drill hole
angle is known, its nature should be reported.
variance in competency between coal seams and harder sandstone
partings.
intercept
lengths
If it is not known and only the down hole lengths are reported, there
should be a clear statement to this effect (eg ‘down hole length, true
width not known’).

Any bias in apparent thickness was eliminated using geophysical
logs.
Differentiation of coal of mineable thickness from separable waste
intervals is based on true thickness. Using the down-hole survey for
each drill hole,in combination with footwallpolylines of each seam,
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
an algorithm was used to convert down-hole lengths into true
thickness for each of the intervals in a given coal zone.
Diagrams Appropriate maps and sections (with scales) and tabulations of Formal resource and other technical reports containing diagrams
intercepts should be included for any significant discovery being drawn to JORC listed requirements have been prepared by
reported These should include, but not be limited to a plan view of independent consulting firm Norwest Corporation.
drill hole collar locations and appropriate sectional views. Diagrams include location maps, drill hole location plans and
appropriate sectional views.
Jameson has also prepared diagrams for external reporting according
to JORC listed requirements.
Balanced Where comprehensive reporting of all Exploration Results is not Norwest completed a resource estimate for Crown Mountain based
reporting practicable, representative reporting of both low and high grades
and/or widths should be practiced to avoid misleading reporting of
on Jameson’s 2012 drilling campaign. The resource estimate was
released in February 2013 and expressed the opinion that the
Exploration Results. majority of Crown Mountain coal is expected to be hard coking coal
similar to that shipped from neighbouring mines.
Norwest also identified the need to perform additional exploration,
including bulk sampling, before definitive clean coal quality (and plant
yield) can be determined. Results from the coal quality test work from
the 2013 drilling campaign are expected by year end subject to lab
availability/schedule.
Other Other exploration data, if meaningful and material, should be reported Crown Mountain seams appear to have more non-separable partings
substantive including (but not limited to): geological observations; geophysical than nearby mines, plant yield may be below the prevailing yields of
exploration
data
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.
60 to 70 % in the Elk Valley.
Some groundwater has been encountered in drill holes. Five ground
water monitoring stations (piezometers) have been installed in
selected drill holes. In addition a well has been installed in one of the
drill holes in the North Block to monitor water volumes.
As a requirement of the Environmental Assessment, significant rock
core and cuttings have been collected from the 2013 drilling
campaign to address potential metal leaching and acid rock drainage
issues.
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
Further work The nature and scale of planned further work (eg tests for lateral The Crown Mountain geological model and resource estimate will be
extensions or depth extensions or large-scale step-out drilling). revised on receipt of the 2013 coal quality testwork.
Diagrams clearly highlighting the areas of possible extensions, Jameson has proposed to commence a pre-feasibility study following
including the main geological interpretations and future drilling areas, revision of the geological model.
provided this information is not commercially sensitive. Further drilling will be required to upgrade the resource status in the
Southern Extension from Inferred to Indicated.

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section. This section is subject to change following update of existing geological model and resource estimation on receipt of all outstanding analytical results.)

Criteria JORC Code explanation JORC Code explanation Commentary Commentary
Database Measures taken to ensure that data has not been corrupted by, for Data is recorded manually onto logsheets in the field. Information is
integrity example, transcription or keying errors, between its initial collection
and its use for Mineral Resource estimation purposes.
entered into the Norwest database. Data correction and validation
checks are undertaken both internally and by external consultants
Data validation procedures used. before the data is used for modeling purposes.
Site visits Comment on any site visits undertaken by the Competent Person and Jameson has undertaken several site visits during the year including
the outcome of those visits. being present for the duration of the 2012 and 2013 drilling programs.
If no site visits have been undertaken indicate why this is the case. Several reviews were conducted of the field procedures and sampling
practices, and they were deemed to be of an acceptable industry
standard at the time of the visit.
The Vice President of independent consultants Norwest Corporation
undertook several site visits in 2012 and 2013
Geological Confidence in (or conversely, the uncertainty of ) the geological Geological interpretation of stratigraphy and seam continuity is at a
interpretatio interpretation of the mineral deposit. stage where confidence is high.
n Nature of the data used and of any assumptions made. An improved interpretation of the overall strata will be undertaken
The effect, if any, of alternative interpretations on Mineral Resource
estimation.
once the 3D geological model has been updated with 2013
exploration data.
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
The use of geology in guiding and controlling Mineral Resource
estimation.
The factors affecting continuity both of grade and geology.
Dimensions The extent and variability of the Mineral Resource expressed as The Crown Mountain property is divided into two distinct structural
length (along strike or otherwise), plan width, and depth below domains separated by a northerly trending thrust fault or CMF. There
surface to the upper and lower limits of the Mineral Resource. are three prospects within the project area, the “North Block” which is
positioned above the CMF and the “South Block” and “Southern
Extension” which are both below the CMF.
Strike lengths for each of the three prospects are; North Block –
1.5km, South Block - 4.4km and Southern Extension – 4.1km.
The major seams in the North Block are structurally bound within a
south plunging syncline, extending from surface to a maximum depth
of 155m. Coal seams in the South Block and Southern Extension
extend from surface to a maximum depth of 150m and are structurally
bound within a dip slope monoclinal setting.
Estimation The nature and appropriateness of the estimation technique(s) The resource model for the Crown Mountain project was developed
and applied and key assumptions, including treatment of extreme grade using Mintec’s geological modeling and mine planning software,
modelling
techniques
values, domaining, interpolation parameters and maximum distance
of extrapolation from data points. If a computer assisted estimation
method was chosen include a description of computer software and
parameters used.
Minesight®. This system is widely used throughout the mining
industry for digital resource model development.
The selected block size was based on the density of the drill hole
dataset as well as the requirements for the mining selectivity of this
The availability of check estimates, previous estimates and/or mine deposit, in this case being 25m x 25m x 5m.
production records and whether the Mineral Resource estimate takes
appropriate account of such data.
The Geological Type is classified as “Moderate” in the South Block
and Southern Extension and “Complex” in the North Block.
The assumptions made regarding recovery of by-products. Thickness models were prepared for the seven major seams 8 upper,
Estimation of deleterious elements or other non-grade variables of 8 middle, 8 lower, 9, 10 upper, 10 middle and 10 lower plus the Rider
economic significance (eg sulphur for acid mine drainage Seams where appropriate.
characterisation). The depth limit for the potential surface mineable resource was based
In the case of block model interpolation, the block size in relation to on a vertical cut-off ratio limit of 20:1 m3/tonne.
the average sample spacing and the search employed. Acoaldensityvalue of 1.53 g/ccwas usedforthe conversionof
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
Any assumptions behind modelling of selective mining units. volumes of in-place coal to tonnes.
Any assumptions about correlation between variables. The resource areas include a provision at the coal outcrop to allow for
Description of how the geological interpretation was used to control
the resource estimates.
oxidation and weathering of the coal at the surface. The oxidation
limit was taken to be 10m vertically
Discussion of basis for using or not using grade cutting or capping. Coal thicknesses were determined from drill hole intersections on the
property, as well as from geophysical logs.
The process of validation, the checking process used, the comparison
of model data to drill hole data, and use of reconciliation data if
available.
Moisture Whether the tonnages are estimated on a dry basis or with natural The tonnages are reported on an As Received Basis with natural
moisture, and the method of determination of the moisture content. moisture included. The moisture content is determined from the
results of Proximate Analysis laboratory testing.
Cut-off The basis of the adopted cut-off grade(s) or quality parameters Two resource estimates were made using different minimum net coal
parameters applied. thickness criteria. One estimate was made using a minimum
thickness of 0.5 m and the second was made using a minimum of
0.75m. In both cases these estimates were used to define potential
surface mineable coal in the individual seams but the results were
planned for use in examining different mining options.
Mining Assumptions made regarding possible mining methods, minimum The targeted coal seams at Crown Mountain are suitable for open-cut
factors or mining dimensions and internal (or, if applicable, external) mining operations using the truck/shovel mining method. It is expected that
assumptions dilution. It is always necessary as part of the process of determining
reasonable prospects for eventual economic extraction to consider
the mining conditions at Crown Mountain will be very similar to those
at the nearby mines which also use the truck/shovel method.
potential mining methods, but the assumptions made regarding
mining methods and parameters when estimating Mineral Resources
may not always be rigorous. Where this is the case, this should be
reported with an explanation of the basis of the mining assumptions
made.
Metallurgical The basis for assumptions or predictions regarding metallurgical In January 2013, the coal quality aspects of Crown Mountain were
factors or amenability. It is always necessary as part of the process of reviewed by independent consultants Kobie Koornhof Associates Inc.
assumptions determining reasonable prospects for eventual economic extraction to
consider potential metallurgical methods, but the assumptions
using public data from historic exploration, regional quality studies
and data from the adjacent coal mines. They concluded that in the
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
regarding metallurgical treatment processes and parameters made absence of detailed quality data which would allow a definitive
when reporting Mineral Resources may not always be rigorous. classification of these coals, and based on the information available,
Where this is the case, this should be reported with an explanation of the coals from Crown Mountain are considered to be similar in quality
the basis of the metallurgical assumptions made. or very close to, the premium Canadian coking coals.
Norwest Corporation made recommendations in February 2013 to
undertake a LDC drilling program to obtain bulk sample for
washability testwork to determine plant yield as well as develop a
definitive understanding of the coking properties of clean coal
product.
Results from the LDC testwork are still being processed.
Environmen- Assumptions made regarding possible waste and process residue The Preliminary Economic Assessment (“PEA”) study shows open-pit
tal factors or disposal options. It is always necessary as part of the process of mining will commence from the North and advance southwards to the
assumptions determining reasonable prospects for eventual economic extraction to
consider the potential environmental impacts of the mining and
Southern Extension over a 24 year mine life. Waste will be placed as
either back fill as mining is completed or delivered to a West Dump
processing operation. While at this stage the determination of adjacent to the South and North pits.
potential environmental impacts, particularly for a greenfields project,
may not always be well advanced, the status of early consideration of
these potential environmental impacts should be reported. Where
these aspects have not been considered this should be reported with
The PEA shows the wash plant facility will be located on the west
side of the North Pit. It is proposed to deliver plant refuse to the West
Dump.
an explanation of the environmental assumptions made. The greatest potential impacts of surface mining are likely to be those
that affect surface water. In mines developed some years ago in
similar physical locations with such topographical constraints, it was
the accepted practice in waste dump areas to construct rock drains in
the core of the dump as a means to conveying run-off. This method is
no longer acceptable for water management since precipitation and
runoff waters still interact with mined materials and can thus dissolve
substances that occur in those rocks. These affects can cause the
surface waters to acquire elevated levels of chemicals beyond those
of the original water state. Thus the mine design will require that a
water impoundment system be employed that minimizes this
interaction while ensuring that all mine-affect waters can be treated
prior to release.
Environmental baseline studies are well advanced with the BC MOE
required twoyear monthlywater samplingandqualitytest work
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
scheduled for completion in April 2014.
Hydrological studies including the installation of several down-hole
ground water monitoring stations were completed in conjunction with
the LDC drilling program in September 2013.
Interburden rock samples for the purpose of geochemical analysis to
evaluate the potential for metal leaching and acid rock drainage have
been retained.
Bulk density Whether assumed or determined. If assumed, the basis for the A coal density value of 1.53 g/cc was used for the conversion of
assumptions. If determined, the method used, whether wet or dry, the volumes of in-place coal to tonnes.
frequency of the measurements, the nature, size and
representativeness of the samples.
Additional bulk density testwork is being undertaken on the samples,
both coal and interburden, from the 2013 drilling program.
The bulk density for bulk material must have been measured by
methods that adequately account for void spaces (vugs, porosity,
etc), moisture and differences between rock and alteration zones
within the deposit.
Discuss assumptions for bulk density estimates used in the
evaluation process of the different materials.
Classificatio The basis for the classification of the Mineral Resources into varying The Resource Estimate has been prepared in accordance with the
n confidence categories. requirements of the Canadian National Instrument (NI) 43-101 and
Whether appropriate account has been taken of all relevant factors (ie
relative confidence in tonnage/grade estimations, reliability of input
the CIM Definition Standards. NI 43-101 is the Canadian equivalent
of the JORC Standard.
data, confidence in continuity of geology and metal values, quality, The mineral resources are classified as to the assurance of their
quantity and distribution of the data). existence into one of three categories JORC equivalent categories
Whether the result appropriately reflects the Competent Person’s
view of the deposit.
Measured, Indicated and Inferred. The category to which a resource
is assigned depends on the level of confidence in the geological
information available (CIM Definition Standards –GSC Paper 88-21).
Audits or The results of any audits or reviews of Mineral Resource estimates. An internal Company review of the Resource and the associated
Criteria JORC Code explanation JORC Code explanation Commentary Commentary
reviews Technical Reports have been undertaken prior to public release of
this information.
Discussion Where appropriate a statement of the relative accuracy and The Categories were considered acceptable by the Qualified Person
of relative confidence level in the Mineral Resource estimate using an approach during the classification of the resources.
accuracy/
confidence
or procedure deemed appropriate by the Competent Person. For
example, the application of statistical or geostatistical procedures to
quantify the relative accuracy of the resource within stated confidence
limits, or, if such an approach is not deemed appropriate, a qualitative
The accuracy of resource estimates is, in part, a function of the
quality and quantity of available data and of engineering and
geological interpretation and judgment by the Qualified Person.
discussion of the factors that could affect the relative accuracy and Based on the historical and 2012 drill hole data, the resource
confidence of the estimate. estimate is considered reasonable.
The statement should specify whether it relates to global or local Additional data and analysis available subsequent to the 2013
estimates, and, if local, state the relevant tonnages, which should be Resource Estimate estimates may necessitate revision. These
relevant to technical and economic evaluation. Documentation should revisions may be material.
include assumptions made and the procedures used. There is no guarantee that all or any part of the estimated resources
These statements of relative accuracy and confidence of the estimate will be recoverable
should be compared with production data, where available.

Section 4 Estimation and Reporting of Ore Reserves

This section is not addressed as no Coal Reserves have been determined at this stage of investigations.

Section 5 Estimation of Diamonds and Gems

This section is not addressed as no diamonds or other gemstones are reported for this EPC.

Drill Hole Data

Hole Name Dip Azm Lease Prospect Hole Type Coal Zone
Combined Net
Thickness (m)
Geological
Model
Core Diameter Geophysical
Tools Run
Total Depth
(m)
Year Drilled
CM12-01-CH Vertical - 418150 North LDC 32.89 YES 150mm CDRGNVT 152 2013
CM11-12-CH Vertical - 418150 North LDC 15.42 YES 150mm CDRGNVT 73 2013
CM13-15 Vertical - 418151 East RC 8.8 YES n/a CDRGNVT 139 2013
CM13-15-CH Vertical - 418151 East LDC 10.22 YES 150mm CDRGNVT 124 2013
CM11-11-CH Vertical - 418151 North LDC 13.67 YES 150mm CDRGNVT 126 2013
CM13-06 Vertical - 418151 North RC 4.95 YES n/a CDRGNVT 54 2013
CM13-17 Vertical - 418151 South RC 8.35 YES n/a CDRGNVT 194 2013
CM11-22-CH Vertical - 418151 South LDC 15.74 YES 150 mm CDRGNVT 126 2013
CM13-25 Vertical - 418151 South RC 12 YES n/a CDRGNVT 115 2013
CM13-25-CH Vertical - 418151 South LDC 10.89 YES 150mm CDRGNVT 102 2013
CM11-19-CH Vertical - 418151 South LDC 18.55 YES 150 mm CDRGNVT 150 2013
CM13-20 Vertical - 418151 South RC 11.85 YES n/a CDRGNVT 158 2013
CM13-19 Vertical - 418151 South RC 4.5 YES n/a CDRGNVT 136 2013
CM11-02 50 60 418150 North RC 27.1 YES n/a CDRGNV 174 2012
CM11-04 Vertical - 418150 North RC 19.45 YES n/a CDRGNV 184 2012
CM11-12 Vertical - 418150 North RC 14.8 YES n/a CDRGNV 116 2012
CM11-03B 50 265 418150 North RC 23.6 YES n/a DGN 125 2012
CM11-03A Vertical - 418150 North RC 31.9 YES n/a CDRGNV 186 2012
CM11-07 Vertical - 418150 North RC 18.8 YES n/a CDRGNV 163 2012
CM11-02B Vertical - 418150 North RC 22.8 YES n/a CDRGNV 144 2012
CM11-11 Vertical - 418151 North RC 14.25 YES n/a CDRGNV 142 2012
CM11-08 Vertical - 418150 North RC 2.85 YES n/a CDRGNV 82 2012
CM11-22 Vertical - 418151 South RC 14.8 YES n/a CDRGV 166 2012
CM11-14 Vertical - 418151 South RC 17.1 YES n/a DGN 136 2012
CM11-18 Vertical - 418151 South RC 13.25 YES n/a DGNV 109 2012
CM11-16C Vertical - 418151 South RC 13.8 YES n/a DGN 111 2012
CM11-20 Vertical - 418151 South RC 12.1 YES n/a CDRGNV 131 2012
CM11-19 Vertical - 418151 South RC 14.5 YES n/a CDRGNV 172 2012
CM11-17 Vertical - 418151 South RC 19.35 YES n/a DGN 169 2012
CM12-21 Vertical - 418151 South RC 0 YES n/a DGN 160 2012
CM11-21 Vertical - 418151 South RC 6.65 YES n/a DGN 62 2012
CM11-15 Vertical - 418151 South RC 11.8 YES n/a CDRGNV 141 2012
CM11-22B 50 75 418151 South RC 13.35 YES n/a CDRGNV 160 2012
CM12-18 Vertical - 418151 South RC 9.7 YES n/a CDRGNV 231 2012
CM12-01A Vertical - 418150 North RC 30.9 YES n/a CDRGNV 178 2012
CM12-01B 50 265 418150 North RC 29.2 YES n/a CDRGNV 148 2012
CM12-09 Vertical - 418150 North RC 13.05 YES n/a CDRGNV 163 2012
CM12-10 Vertical - 418150 North RC 29.25 YES n/a CDRGNV 172 2012
CM12-17 Vertical - 418151 South RC 10.45 YES n/a CDRGNV 148 2012
CM12-19 Vertical - 418151 South RC 9.85 YES n/a CDRGNV 182.5 2012
CM12-28 Vertical - 418151 South RC 12.45 YES n/a CDRGNV 142 2012
CM12-29 Vertical - 418151 South RC 3 YES n/a n/a 64 2012
CM12-25 Vertical - 418151 South RC 2.8 YES n/a CDGN 133 2012
CM12-24 Vertical - 418151 South RC 0 YES n/a CDRGNV 157 2012
CM12-31 Vertical - 418153 North RC 16.95 YES n/a DGN 100 2012
CM12-16 Vertical - 418151 North RC 14.1 YES n/a DGN 82 2012
CM12-06 50 256 418150 North RC 22.15 YES n/a CDRGNV 175.5 2012
CM12-04 Vertical - 418150 North RC 24.25 YES n/a DGN 181 2012
CM12-34A Vertical - 418154 Southern Exte RC 17.5 YES n/a CDRGV 118 2012
CM12-34B 60 60 418154 Southern Exte RC 17 YES n/a DGN 109 2012
CM12-33B 65 60 418151 Southern Exte RC 4.6 YES n/a CDRGNV 123 2012
CM12-36B 70 60 418154 Southern Exte RC 0 YES n/a CDRGV 75 2012
CM12-38B 50 60 418151 Southern Exte RC 4.55 YES n/a DGNV 192 2012
CMD79-101B Vertical - 418150 North Core 14.62 YES Hole dia. 4 3/4" DGN 45.2 1979
CMD79-105B Vertical - 418151 South Core 4.5 YES Hole dia. 5 1/2" DGN 66.3 1979
CMR69-25 Vertical - 418150 North Rotary 25.9 YES n/a n/a 152.7 1969
CMR69-26 Vertical - 418150 North Rotary 22.12 YES n/a GN 147.2 1969
CMR69-27 Vertical - 418151 South Rotary 9.9 YES n/a GN 141.4 1969
CMR69-28 Vertical - 418151 South Rotary 13.71 YES n/a GN 126.8 1969
CMR69-29 Vertical - 418151 South Rotary 18.32 YES n/a GN 121.6 1969
CMR69-30 Vertical - 418151 South Rotary 8.3 YES n/a n/a 134.1 1969
CMR69-31 Vertical - 418151 South Rotary 11.75 YES n/a GN 189.6 1969
CMR69-32 Vertical - 418151 South Rotary 13.48 YES n/a GN 140.2 1969
CMR69-33 Vertical - 418150 North Rotary 20.34 YES n/a GN 189.6 1969
CMR69-34 Vertical - 418151 South Rotary 11.2 YES n/a GN 164 1969
CMR69-35 Vertical - 418151 South Rotary 12.19 YES n/a GN 161.2 1969
CMR79-101 Vertical - 418150 North Rotary 23.22 YES n/a CDRG 201.2 1979
CMR79-102 Vertical - 418151 South Rotary 6.2 YES n/a CDRGN 265 1979
CMR79-103 Vertical - 418151 South Rotary 9.62 YES n/a DGN 138.8 1979
CMR79-104 Vertical - 418151 South Rotary 4.8 NO n/a DG 140.5 1979
CMR79-106 60 250 418150 North Rotary 15.8 YES n/a DGN 54 1979
Note - Geophysical Tools
C
Caliper
D
Density
R
Resistivity
G
Gamma
N
Neutron (through pipe)
V
Deviation
T
Temperature

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