DOS SANTOS BACKGROUND:


The Dos Santos property covers a gold exploration project located within the historic Concepcion del Oro mining district in northern Zacatecas State, Mexico. The property is located in a sparsely populated, mining friendly area of Mexico with a 500 year long mining history and in one of the most prospective areas in Mexico for large mineral deposits. It is located 35 kilometres southeast of Goldcorp’s world-class Peñasquito gold-silver-lead-zinc mine and also lies adjacent to the northern property boundary of the Camino Rojo gold discovery. The Camino Rojo project was acquired by Goldcorp in February, 2010 through an acquisition of Canplats Resources.

The property was assembled over a number of years, starting in 2007 with an option agreement on 658 hectares covering artisanal mining activity dating back to the mid 19th century. A 100% interest in these claims was earned in 2011. Additional claims were acquired by staking and through the Mexican mineral title lottery system from 2007 to 2010.

During the year ended March 31, 2012, the Company entered into a purchase agreement to acquire the surface rights to certain privately-owned lands known as Rancho Duraznillo that cover a portion of the Dos Santos project. The terms of the agreement required payments of $350,000 Pesos on signing (paid) and further monthly payments over 18 months totaling approximately $1,050,000 Pesos. The Company has completed 15 of these monthly payments and must pay the remaining $175,000 Pesos to acquire the surface rights. Payment of this amount has been temporarily postponed due to the property being included in the process of settling the estate of the seller’s wife, who had co-title to the property and passed away in 2013.
 

La Palma Target

Prior to 2009, Galore explored known gold showings at San Jose and Los Gemelos in the northern area of the property. In 2009 and 2010 the Company began exploring for a Camino Rojo-style silver-gold deposit in areas underlain by the same host rocks. Exposure is limited in these areas so a soil pH survey was used to outlined initial targets, which were then explored by an Induced Polarization (IP) and magnetometer surveys.
 
The best results were obtained on the North Grid at La Palma, where a 160 hectare area, coincident chargeability and magnetic anomalies were defined on seven lines. The chargeability anomaly is up to 1,400 metres wide, delineated over a 1,200 metre length and appears to be open to the west.

The North Grid anomaly was tested with a twelve hole, 4,973 metre diamond drilling program from October to December, 2010. The drill holes are spaced from 280 to 860 metres apart and tested locations within and outside the anomalies. Further details can be found in the Company’s news release dated April 4, 2011.

La Palma Geology and Drilling

The La Palma area is underlain by a calcareous and carbonaceous clastic sedimentary unit, which grades into an impure limestone at depth. The clastic unit is an argillite having interbeds of siltstone-sized fragments at higher levels. Centimetre-scale pyritic beds to millimeter-scale very fine grained pyrite laminations occur in this unit in all holes and increase in frequency with depth. These pyritic layers do not carry significant metal values. Deposition of the pyrite bands in the clastic unit is interpreted as syn-sedimentary, caused by an influx of iron into a starved basin environment. However, drilling also encountered a three to four metre thick marker horizon in all holes, with a unique geochemical signature, suggesting a short episode of hydrothermal discharge occurred on the sea floor during sedimentation.

Much younger, polymictic breccias (mixed angular rock types) were also encountered in all drill holes. These breccias occur in thicknesses from centimetres to several metres, parallel to and cross-cutting bedding. More importantly, breccias contain altered felsic intrusive and feldspar porphyry fragments, common to diatreme related deposits. These breccias are evidence of a high energy explosive intrusion-related event.

All anomalous concentrations of silver-lead-zinc mineralization in drill core are associated with brecciation. Geochemical evidence suggests the brecciation and mineralization are intrusion-related, although not all breccia intercepts contain igneous fragments. These features may be associated with diatreme intrusions similar to the geology found at Goldcorp’s Peñasquito mine. This led to an exploration model based on the geology of the Peñasquito deposits. Peñasquito mineralization is associated with breccia pipes, which have a lower density than their host rocks. A combined airborne gravity and magnetic survey was chosen in 2012 to explore the favourable geology on the property. A fixed wing airborne survey was initially selected but system availability and various delays resulted in choosing a helicopter-borne gravity survey system, which was working near the Dos Santos property in February, 2014.

In April, 2014, the Company received the survey results. A total of 1,233 line-kilometre (770 line-mile) Helicopter Airborne Gravity Gradiometer and High Sensitivity Magnetic Survey were flown over approximately 20,000 hectares (49,400 acres) of the Dos Santos Property and the adjacent, optioned, San Onesimo property. A preliminary target evaluation of the survey was received in May 2014. A preliminary assessment of the survey data by an independent geophysicist, revealed encouraging anomalies, which fit Galore’s exploration model. A more detailed analysis of the survey is also recommended in some areas of the property.

Galore has prepared an exploration plan and budget to test these anomalies. Management is currently working on raising the money to carry out this plan.
 

El Álamo Target

The El Álamo claim was acquired by Galore through a Mexico government claim lottery and is 100% owned by Galore. In September, 2010 the Company began a systematic trenching and mapping program. The main trenches ranged in length from 34 to 80 metres. The program included 512 continuous chip and channel rock samples taken from 10 trenches totalling 1,020 in length. Samples were taken in a north-south direction, across steeply dipping, east-west trending, altered limestone beds. Six of the trenches, which ended in gold- bearing mineralization, were extended by 212 metres. The best results include 12 meters of 0.96 g/t gold, adding to more significant intervals in the main trenches. It is now interpreted that the main area of gold mineralization at El Álamo measures over 500 metres long and up to 110 metres wide. The mineralization remains open at depth and in at least two directions.

From December 2011 to January 2012, the Company carried out a shallow percussion drill sampling program on the claim. Drilling was done at 30 metre spacing using a conventional track-mounted percussion drill to minimize construction of road access in steep terrain. The results demonstrate that mineralization exposed in the trenches extends to depth. No recent work, other than the airborne survey, has been carried out on this target.

 
San Jose Target

Previous work in the San Jose area included rock sampling of hand-trenches, numerous artisanal pits and several abandoned underground workings. Gold assays range from trace to 208 gm/tonne over 0.5 metres. Gold values are associated with anomalous arsenic, mercury, antimony and thallium concentrations, which are known pathfinder elements associated with high-level epithermal gold mineralization. All samples lie within a one-kilometre diameter circular carbonate and silica-alteration anomaly, which is evident on an ASTER satellite image of the area.

In July, 2009, the Company completed a thirteen hole, 3,500 metre reverse-circulation drilling program. Anomalous gold and gold pathfinder elements occur throughout all holes. The best intercepts were returned from three holes. Holes 2S-07, 2S-08 and 2S-10 returned 1,880 ppb gold (1.88 gm/tonne) over 2 metres, 1,019 ppb gold (1.02 gm/tonne) over 2 metres and 962 ppb gold (0.96 gm/tonne) over 2 metres respectively. Intercept depths range from 40 to 149 metres. Results indicate that the San Jose epithermal target is underlain by an extensive mineralized system that is gold bearing. Trace elements, associated with gold mineralization and alteration at San Jose, show a west to east trend, suggesting the San Jose mineralization system extends to the west on the El Álamo claim.

In April, 2014 this area was covered by the Helicopter Airborne Gravity Gradiometer and Magnetic Survey.


Los Gemelos Target

At Los Gemelos, two small hills crop out above the surrounding pediment; dozens of surficial mines and prospects have been worked by artisanal miners for the production of free gold associated with abundant calcite veins which cut calc-silicate altered carbonate rocks. Galore’s 2008 program tested the bulk mining potential of the area by excavating a number of hand trenches in bedrock, which typically measured 20 metres in length and were sampled with continuous two metre long chip samples.

Gold assays from the Los Gemelos samples range from trace to 33.70 gm/tonne over 1.7 metres. The lack of outcrop surrounding this area merits geophysical methods to confirm the extent of skarn mineralization immediately beneath the shallow alluvium. In April, 2014 the Helicopter Airborne Gravity Gradiometer and Magnetic Survey outlined a higher density area, which may have implications for skarn-related gold mineralization.


San Onesimo Target

In June, 2014 the Company signed an Option Agreement to acquire three claims totaling 5,603 hectares known as the San Onesimo property. These claims are located south and contiguous to Galore’s Dos Santos property in northern Zacatecas State, Mexico. Previous work on the San Onesimo property confirmed that the favourable host rocks the Company is exploring on Dos Santos, underlie the San Onesimo claims. This is an early stage, underexplored property and a suitable target for applying Galore’s Dos Santos exploration model. The San Onesimo claims were covered by the 2014 Heli-Falcon gravity magnetic survey flown over the Dos Santos property.

 Under the San Onesimo Agreement, Galore may earn a 100% interest in the property by making escalating cash payments totalling US$508,000 (US$28,000 paid) over 5 years and issuing 1 million common shares of the Company by the contract completion date in 2019. The property optionors retain a 2% Net Smelter Royalty (NSR) from gold and silver production and 1% NSR from all other mineral production. These royalties may be purchased by Galore for US$ 1 million for each 1% NSR on or before the option completion date in 2019.