Preliminary Economic Assessment for the Eagle Mountain Gold Project, Guyana NI 43-101 Technical Report for Goldsource Mines Inc.	PREPARED FOR Goldsource Mines Inc. REPORT DATE March 1, 2024 EFFECTIVE DATE January 16, 2024 REFERENCE 0705407

CLIENT: Goldsource Mines Inc. PROJECT NO: 0705407

DATE: March 1, 2024

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Preliminary Economic Assessment for the Eagle
Mountain Gold Project, Guyana

NI 43-101 Technical Report for Goldsource Mines Inc.

Report Date: March 1, 2024

Effective Date: January 16, 2024

ERM Consultants Canada Ltd.

120 Adelaide Street West, Suite 2010
Toronto, ON
Canada, M5H 1T1
T +1 416 646 3608
F +1 416 642 1269

© Copyright 2024 by The ERM International Group Limited and/or its affiliates ('ERM'). All Rights Reserved.

No part of this work may be reproduced or transmitted in any form or by any means, without prior written permission of ERM. 

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1. SUMMARY

1.1 INTRODUCTION

Goldsource Mines Inc. ("Goldsource", the "Company", or the "Issuer") is a Canadian resource company engaged in exploration activities, with its headquarters situated in Vancouver, British Columbia (BC). The Company's common shares are listed on the TSX Venture Exchange (TSX-V) under the symbol "GXS" and on the OTCQX under the symbol "GXSFF". Goldsource indirectly holds a 100% interest in the Eagle Mountain Gold Project (the "Project") located approximately

200 kilometres south-southwest of Georgetown, the capital of Guyana, South America.

The Project is operated by Stronghold Guyana Inc. ("Stronghold"), a wholly-owned subsidiary of Goldsource, based in Georgetown, Guyana. Goldsource commissioned ERM Consultants Canada Ltd. ("ERM") to complete a Preliminary Economic Assessment ("PEA") and prepare a Technical Report on the Eagle Mountain Gold Project in accordance with National Instrument 43-101 and Form 43-101F1.

The Technical Report relies on project data, internal company technical reports, test work results, maps, published government reports, and public information. With respect to mineral resources, the PEA is based on the April 2022 Mineral Resource Estimate ("MRE") for the Eagle Gold Mountain Project, which used an assay cut-off date of December 31, 2021, for drill information.

All monetary units in the Report are in United States dollars (US$), unless otherwise specified. Costs are based on H2 2023 dollars.

1.2 PROPERTY DESCRIPTION AND LOCATION

The Eagle Mountain Gold Project is located in west-central Guyana, approximately 200 kilometres south-southwest of Georgetown, the capital of Guyana, between latitudes of 573,600 N and 581,500 N and longitudes of 261,000 E and 271,800 E (UTM WGS84, Zone 21N).

The Eagle Mountain Property, a 5,050-hectare area, includes Goldsource's 100%-owned Eagle Mountain Prospecting License 03/2019 ("EMPL") totaling 4,784 hectares (with the exception of certain third-party lands legally held or occupied therein) and Kilroy Mining Inc.'s ("Kilroy")

Medium-scale Mining Permit K-60/MP/000/2014 totaling 254 acres on which Stronghold has a long-term lease.

Within the EMPL there are third-party small-scale claims ("artisanal claims") that predate the Company's Property. The Artisanal Claims licensed or recommended for license total about

123 hectares (305 acres). Additionally, one medium scale permit (referred to as Bishop Growler) is in the central-eastern part of the EMPL, northeast of the Eagle Mountain resource area. This was under an option and purchase agreement by Goldsource in 2018/19 that has since expired. Two of the small-scale permits, purchased by Kilroy Mining Inc., are controlled by Goldsource. In addition, Goldsource has an option and purchase agreement to acquire a 100% interest in a third small-scale permit, the Ann Mining Claim. None of the permits outside of Goldsource's agreements contain any of the Mineral Resources as defined in the April 2022 MRE nor do they influence the proposed infrastructure. As any small or medium-scale mining permit is required under Guyana law to be held by a Guyanese national, Stronghold entered into agreements with Kilroy, a private arm's length Guyanese company, pursuant to which Stronghold and Kilroy will jointly operate the Kilroy permit area, granted in July 2014 on a 254-ha portion of the EMPL. Kilroy has granted to Stronghold the exclusive right to conduct mining operations on the medium-scale permit area and any additional areas acquired by Kilroy. Stronghold will fund all expenditures and receive 100% of all revenues, subject to applicable government royalties and a 2% net smelter return ("NSR") royalty to Kilroy. The 2% NSR royalty to Kilroy would not be applicable if the EMPL is converted to a large-scale mining license.

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Goldsource has pledged a US$206,200 and $100,000 Guyanese dollars (31 December 2022) performance bond, held by the Guyana Geology and Mines Commission ("GGMC"), for exploration permits on the Eagle Mountain Gold Project. The size of the EMPL is sufficiently large for the conceptual mine plan as well as the proposed infrastructure, including the tailings storage areas, waste disposal areas, and processing plant site.

1.3 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

The Project is located approximately 8 kilometres south of Mahdia Township, Campbelltown, and the Mahdia commercial airstrip. Mahdia has a population of approximately 3,000 inhabitants and is the administrative capital of Potaro-Siparuni Region 8. Mahdia can be accessed by road from Georgetown in five to seven hours, a distance of approximately 275 kilometres. The road is paved from Georgetown to Linden (109 kilometres). A wide laterite road extends between Linden and Mabura (122 kilometres). This section is currently being upgraded to an asphalt/concrete surface. From there an all-weather unpaved road connects Mabura to Mahdia. On this section, access can be challenging during the rainy season, and there are only limited days in the year in which travel is restricted. The Mahdia airstrip is hard surfaced and is suitable for small commercial and charter passenger aircraft. Unpaved roads and tracks from Mahdia provide access to and within the EMPL.

There is a local hospital, school, gas station, and several mechanical shops, restaurants, and two hotels/guest houses. The area is powered by diesel generated power and a recently completed solar farm. Mahdia and surrounds have cell phone coverage by both major cell phone companies in Guyana. The Amalia Falls area, approximately 50 kilometres west-northwest of the EMPL, is currently being assessed for large-scale 165 MW hydroelectric power generation.

The Company has two 500 kVA and one 120 kVA diesel generators on site, installed to provide power to the inactive gravity pilot plant and the exploration camp. Potable water is available from multiple small creeks which spring on Eagle Mountain and a few small rivers within the EMPL.

The local economy is dominated by small-scale mining activities. A labor force familiar with open- pit mining is available to draw upon for any future mining activities. Several large gold mining operations are currently active in Guyana and suitable skilled personnel should be available with limited reliance on expatriates.

Goldsource's current field activities are supported by a 65-man capacity exploration camp and offices on the Property. Supplies are partly sourced from Georgetown and partly from Mahdia.

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The camp has an established satellite internet link. Cell phone coverage is limited. Dirt tracks have been constructed to facilitate exploration and related activities.

1.4 PROJECT HISTORY

The Eagle Mountain Gold Project and adjacent Mahdia Valley areas to the north were previously held by Golden Star Resources Ltd ("GSR"). Between 1998 and 2002, GSR had an agreement with Cambior Inc. ("Cambior") to explore the Eagle Mountain Property through a joint venture company, Omai Gold Mines Ltd. ("OGML") which operated the historical Omai Gold Mine, 45 kilometres northeast of the EMPL. GSR sold its interest in OGML to Cambior in 2002. Cambior became part of IAMGOLD Corporation ("IAMGOLD") in 2006 with OGML becoming a 95%-owned subsidiary of IAMGOLD (the remaining 5% held by the Republic of Guyana). In 2010, Eagle Mountain Gold Inc. ("EMGI"), which was called Stronghold Metals Inc. (TSX-V listed entity) at that time, executed an Option Agreement with OGML and IAMGOLD to earn into EMPL subject to certain cash payments, exploration expenditure and stock issuances to IAMGOLD. In January 2012, EMGI vested at 50% in the Project and the EMPL was transferred from OGML to EMGI.

The Option and Joint Venture Agreement was amended and restated in 2012 when Stronghold Metals Inc. vested at 50% interest in EMGI and changed its name to Eagle Mountain Gold Corp. ("EMGC"). In February 2013, EMGC exercised its option to acquire the remaining 50% interest in EMGI and the Project from OGML, giving EMGC 100% ownership of EMGI and the Property. Subsequently, on August 9, 2013, a new three-year prospecting license (PL20/2013) was issued to EMGC's 100% Guyanese subsidiary, Stronghold Guyana Inc., which was in turn renewed on October 18, 2019. In February 2014, an amalgamation transaction between Goldsource and EMGC was concluded, resulting in a 100% interest of EMPL by Goldsource.

Alluvial gold has been exploited in the Eagle Mountain area since at least 1884. Tunnels and shafts exploited hard-rock gold in the time period encompassing the world wars, and dredging was carried out in the Mahdia River and Minnehaha Creek up to 1948. Several phases of exploration were carried out in the Eagle Mountain area during the latter half of the 20^th century, including:

• Anaconda British Guiana Mines Ltd ("Anaconda") (1947-1948) carried out geological mapping, diamond drilling, tunnelling and shaft sinking;

• Guyana Geological Survey (1964-1965, 1970-1973, and 1980), who completed a soil geochemical sampling program, pitting and diamond drilling;

• GSR (1986-1997), who carried out a multi-element drainage sample geochemical survey, soil and auger sampling, surface geophysics, trenching, and limited diamond drilling;

• OGML/Cambior (1998-2004), who carried out diamond drilling, auger sampling and surveying; and

• OMGL/IAMGOLD (2006-2009), who compiled a digital GIS database incorporating all available historical data, a regional multi-element drainage sampling program, auger sampling and geological mapping, fixed-wing airborne radiometric and magnetometer surveys, three- dimensional (3D) induced polarization (IP) and resistivity surveys, and diamond drilling.

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MREs were previously completed by IAMGOLD Technical Services and Exploration Guyana Group (ITS) in 2009 and audited by ACA Howe International Limited ("ACA Howe") in 2010, as well as in 2012 (re-reported in 2014) by ACA Howe on behalf of EMGC, and most recently in 2021 and 2022 by CSA Global (now ERM) on behalf of the Company. These MRE reports are filed on SEDAR+ (http://www.sedarplus.ca).

1.5 GEOLOGY AND MINERALIZATION

The Eagle Mountain Gold Project occurs in the northern part of the Guiana Shield, an area of Paleoproterozoic greenstone belts and associated tonalite-trondhjemite-granodiorite ("TTG") intrusive belts, deformed in the Trans-Amazonian Orogeny which records the convergence and collision between the Archean nuclei of the Amazonian Craton and the West African Craton between 2.2 Ga and 1.9 Ga (Kronnenber et al., 2016).

The greenstone-TTG terrain is intruded by Paleoproterozoic basic intrusions of the Avanavero Large Igneous Province which postdate the Trans-Amazonian Orogeny. The northern Guiana Shield shares close similarities with the more widely explored Birimian of the West African Shield, where numerous >2 Moz gold deposits are known (Voicu et al., 1999; Bassoo and Murphy, 2018).

The Property is underlain by metavolcanic and metasedimentary rocks intruded by a composite granodiorite pluton that hosts the gold mineralization at the Eagle Mountain deposit. At the Salbora deposit, mineralization is within metavolcanic rocks adjacent to a northeast-trending monzonite dyke.

A large diabase to gabbro-norite sill, which is part of the Avanavero Suite, intrudes the granodiorite pluton and metavolcanic-sedimentary sequence and forms the ridge and cliffs at the top of Eagle Mountain. Associated dikes are oriented 120° and are estimated to be less than

10 metres thick.

The sequence has been deformed and folded in the Trans-Amazonian Orogeny and metamorphosed at greenschist facies. A system of low-angle, west-dipping thrust faults at the Eagle Mountain deposit and upright, north-south to northwest-southeast trending faults and breccias at the Salbora deposit are associated with this event and with gold mineralization. Younger northwest to north-northwest trending faults crosscut and offset the shallow dipping structures at the Eagle Mountain deposit.

The shallow-dipping faults in granodiorite at the Eagle Mountain deposit range from narrow highly silicic altered zones to broader zones of pervasive deformation and fracturing. These fault zones are silicified and chlorite altered with disseminated pyrite and associated gold mineralization. The steep breccia zones at the Salbora deposit are also affected by chloritic alteration, silicification disseminated pyrite and associated gold mineralization.

At the Eagle Mountain deposit, the mineralized fault zones vary from 1 metre to 40 metres in thickness separated by 10 to 100 metres of unmineralized granite. At the Salbora deposit, gold mineralization within steep breccia zones coalesces near surface into a broad, sub-horizontal zone of mineralization. Gold mainly occurs as very fine disseminations of native gold within and associated with pyrite. 

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The Eagle Mountain deposit is modelled as a series of tabular, sub-horizontal to shallowly dipping zones. The variable thickness of each of the mineralized zones appears to be associated with deformation zones that split into several subparallel deformation zones, thereby broadening the zone of alteration and mineralization.

At Salbora, gold mineralization occurs within and adjacent to sub-vertical, north-south trending breccia zones that are generally a few centimeters to a few metres in thickness. Near the surface, these breccia zones appear to coalesce into broad, sub-horizontal zones of brecciation with mineralization occurring over tens of metres. Breccias are developed in a tholeiitic mafic volcanic and altered granitoid adjacent to a monzonite intrusion. Mineralization is associated with silicification, chloritic alteration and pyrite.

The Eagle Mountain and Salbora areas have been affected by tropical saprolite weathering to a depth of 10 to 50 metres. Gold mineralization at the Eagle Mountain deposit (particularly Zones 1 and 2) have been heavily weathered and occurs largely within saprolite derived from granitoid-hosted deformation zone material, consisting of clay-rich material hosting very fine disseminated gold grains.

1.6 EXPLORATION

Exploration-related work carried out at the Eagle Mountain Project between 2011 and 2023 by Goldsource (including work conducted between 2011 and 2013 by EMGC) includes infrastructure improvements, environmental data collection, topographic surveys, line cutting, trench and outcrop sampling, hand auger sampling, ground geophysical surveys, and reprocessing of existing geophysical data.

Trench and outcrop channel sampling within the EMPL used samples equivalent to NQ-sized core collected at 1-metre intervals or according to identified geological intervals. Hand auger saprolite sampling programs were carried out in 2015 and 2017-2018 along cut lines at 25 metre or

50 metre pre-marked stations using a "Dutch" type hand auger with 1-metre samples collected by compositing four samples collected every 25 cm, to a maximum depth of 6 metres.

Trenching of an auger anomaly in the Salbora area resulted in an intersection of 123 metres grading 1.96 g/t gold, which was followed up with drilling two (2) diamond drill core holes that were the Salbora "discovery holes".

In 2019 and 2020, a ground geophysical survey (gradient array, pole-dipole IP, and ground magnetics) was conducted in an area of approximately 7.5 km² surrounding Salbora. Follow-up drill testing of IP/resistivity targets resulted in the discovery of several targets around the Salbora deposit.

In 2019, Goldsource retained Geophysics One Inc. of Ontario, Canada, to re-process and re- interpret a historical airborne Terraquest (fixed wing) magnetic and radiometric survey, flown by IAMGOLD in 2007. The survey covers the western half of the Eagle Mountain Prospecting License (EMPL) (inclusive of the Salbora deposit) and was flown at 100-metre line spacing. The interpretation of this dataset provided structural and lithological information for the area and defined several targets for ground follow-up exploration work. The same year, Goldsource retained Matrix Geotechnologies Inc. ("Matrix") of Ontario, Canada to complete ground geophysical surveys at the Project. The geophysical surveys covered an area of approximately 5 km² surrounding the Salbora deposit and consisted of a gradient array IP spaced at 100 metres for a total length of 39.5 kilometres, eight pole-dipole IP cross sections with a total length of 10.5 kilometres, and ground magnetics over the same grid at 25 metre spacing. During Q1, 2020, Goldsource completed an additional 62 line-km of gradient array IP, 62 line-km of high-resolution ground magnetic survey, and 10 line-km of pole-dipole IP over selected targets. 

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The ground geophysical survey defined at least five moderate-to-strong IP targets based on the signal of the Salbora deposit.

1.7 DRILLING

In 2011, 76 HQ/NQ diamond drill holes totaling 10,727 metres were focused on infill and step-out drilling at the Eagle Mountain deposit to confirm previous results and to upgrade the Inferred Resources to Indicated Resources. In 2017 and 2018, drilling focused on shallow saprolitic material using a Geoprobe® 540 direct push drill rig. A total of 257 holes (2,729 metres) were drilled during that period. Between 2018 and 2021, 449 HQ/NQ diamond drill core holes totaling 58,528 metres were completed for infill and expansion of the Mineral Resource at the Eagle Mountain deposit, as well as identification and delineation of additional deposits within the Project area. This information was included in the April 2022 MRE.

Following the cut-off date for the April 2022 MRE (December 31, 2021) and up to November 1, 2023, a total of 10,545 metres in 141 diamond holes were drilled on the Eagle Mountain Project. This drilling has not been incorporated in this study.

Core sampling procedures were similar for 2011 and 2018-2023 diamond drilling, with core retrieved using conventional wireline techniques, placed in plastic core boxes, and transported to the core facility where it was cleaned, marked, logged, photographed, and sampled to a minimum interval of 30 centimeters and a maximum of 1.5 metres. Sample details were recorded in a ticket book, one side placed in the sample bag and the second part stapled on the box.

Saprolitic samples were split with a spatula and fresh core with a core saw. Half the core was placed into sample bags with an assay tag and half returned to the core box. A quality assurance/quality control ("QAQC") sample (either a blank, a certified reference material ("CRM"), or a duplicate) was inserted every 15 samples. Core logging and sampling was completed either by or under the onsite supervision of a Goldsource geologist.

For the 2017-2018 programs, Geoprobe drill core sampling, samples were placed in core trays inside plastic tubing. Upon delivery to the core shed, the tubing was removed using a tube cutter and the sample was split by using a knife or putty knife. Each sample was 1 metre in length.

Following analysis, digital assay files provided by the laboratory were merged with a "from" and "to" interval file created by Goldsource, with the sample number linking the two files. This methodology limits data entry errors to sample numbering, as well as the "from" and "to" specifications.

Core recovery for diamond drilling and Geoprobe drilling was generally very good with an average of 91.4% in saprolite and 97.1 % in fresh rock. The Qualified Person is confident there are no sampling or recovery factors that would negatively affect the sampling procedures. Overall, core sampling methods are to industry standards for mineralization of this type. 

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Upon completion, drill hole collar coordinates and elevations were surveyed in Universal Transverse Mercator (UTM) coordinates, Zone 21N (PSAD 56 datum). The drill contractor completed downhole directional surveys on all diamond drill holes at approximately 50-metre intervals using a single shot digital survey tool.

1.8 DATA VERIFICATION, SAMPLING PREPARATION, ANALYSIS AND SECURITY

Samples from the 2011 diamond drilling program were prepared at Acme Analytical Laboratories ("Acme"), Georgetown, Guyana and sample pulps were forwarded to Acme Santiago, Chile for gold assay and to Acme Vancouver, Canada for multi-element analyses. Gold analyses were carried out using gold fire assay and AA finish. Sample preparations followed industry best practices and the analytical methods used are routine. Umpire check assays were completed at Activation Laboratories Ltd ("Actlabs") in Georgetown.

Samples from the 2017-2018 Geoprobe drilling and the 2018-2021 diamond drilling programs were prepared, and gold fire assays with AA finish were completed at Actlabs, Georgetown. Sample pulps were forwarded to the Actlabs in Ancaster, Canada for multi-element analyses using instrumental neutron activation analysis ("INAA") and inductively coupled plasma ("ICP") with atomic emission spectrometry, where necessary. Sample preparations followed industry best practices and the analytical methods used are routine. Umpire QAQC check assays were completed at MS Analytical Guyana ("MSA") in Georgetown using gold fire assay and AAS finish.

Bulk density tests (150) were carried out in 2011 on a variety of fresh and saprolitic, mineralized and non-mineralized rock types. In 2020-2021, additional bulk density tests 1,360) were carried out at MSA in Georgetown on various mineralized and unmineralized core samples. The water displacement method was used for both 2011 and 2020-21 tests and porous samples were coated with wax. A further 21 saprolite and 40 fresh rock density tests were completed during the 2022-2023 drill campaigns.

The Company is using the April 2022 MRE (assay cut-off date of December 31, 2021) for the PEA. As such, QAQC for the 2022-23 drilling programs is not included in this Technical Report.

The QAQC programs included CRM samples, blank samples, core duplicate, coarse duplicate samples, and pulp duplicate samples. During the 2011 program, CRMs were used at an average insertion frequency of 2.3%. During the 2017-2021 programs, CRMs were used at an average insertion frequency of 2.6%. Results for most CRMs show no significant negative or positive bias at the CRM grades evaluated. During the 2017-2021 programs, a total of 1,202 CRM samples were inserted at an average insertion frequency of 2.7%. Blank samples returned below the detection limit or very low values, indicating very little contamination with the exception of a few outliers. A total of 342 quarter-core field duplicates, and 478 pulp duplicates were submitted between 2017 and 2021 at an average insertion frequency of 1.9%. Duplicates showed good repeatability. An umpire lab, MSA, completed a total of 262 quarter-core duplicate analyses and a total of 481 repeat analysis of pulps at an average insertion frequency of 1.7%. For this 2017- 2021 period, QAQC samples represented 9% of all assays in the exploration database.

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Qualified Person, P. Eng. Nigel Fung, has validated drill hole positions, reviewed drill core, inspected geology, reviewed core logging, sampling and preparation facilities, and documentation related to drilling, sampling, and assaying. Specific core identified by the April 2022 MRE Qualified Person, Leon McGarry, was pulled and inspected, photographed, and filmed with verbal explanations and description given by Kevin Pickett, Chief Geologist of Goldsource for later review and reference. Analytical facilities at Actlabs and MSA in Georgetown, Guyana, were not inspected.

No samples were collected for additional laboratory verification; however, mineralized intervals were inspected and compared with assay values for confirmation of mineralization.

The quality of the assay results is considered reliable and adequate for the estimation of Mineral Resources. The data available are a reasonable and accurate representation of the Eagle Mountain Gold Project and are of sufficient quality to provide the basis for the conclusions and recommendations reached in this Technical Report.

1.9 MINERAL PROCESSING AND METALLURGICAL TESTING

Metallurgical testwork dates back to 1989. A summary of the testwork is presented in Table 1-1.

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Note:

Location of samples from 2018 and 2022 are presented in Section 13, Figure 13-1, and Figure 13-4.

In 1989, Metallurgical studies completed by GSR were limited to desliming and gravity gold recovery testwork. The preliminary results indicated that the majority of gold does not appear to be amenable to the gravity recovery method. Additional testwork showed that desliming achieves a feed volume reduction of up to 81% with a high gold recovery to the sands fraction (+90%). It was predicted that desliming could be an important pre-concentration step, but gravity recovery reached only 24%.

In 1991, GSR carried out additional gold gravity testwork at Lakefield Research using a Falcon concentrator. Nine gravity tests were completed with an average gold recovery of between 33% and 42% of the total gold content.

In 2018, testwork was completed on 22 saprolite samples from different mineralized zones at Eagle Mountain with additional samples of gravity plant tailings and the plus 2 mm stockpile. Five saprolite composites were generated together with a combined master composite. Sample characterization (assaying, sizing, mineralogy, and gold deportment) and grindability testing were followed by gravity separation and cyanidation testwork. With grinding and gravity concentration followed by cyanidation, the five saprolite composites produced elevated gold recoveries ranging from 94.8% to 97.7% with a relatively coarse grind size (p80 averaging 164 microns). The +2mm stockpile and plant tailings material produced gold recoveries of 93.6% and 87.4%, respectively.

In April 2022, 26 samples (9 saprolite and 17 fresh rock) totaling 750 kg were collected from diamond drill core from the Eagle Mountain and Salbora deposits as well as the Toucan and Powis prospects. The samples were shipped to SGS Canada Inc. ("SGS") for additional metallurgical testwork. All saprolite and fresh rock samples were submitted for grindability testwork, including Bond ball mill work index and abrasion index tests to be used for plant design work (equipment selection and sizing). Four (4) saprolite and five (5) fresh rock composites were prepared for gold recovery and grind size optimization testwork. Standard cyanide bottle roll tests were completed on gravity tailings for the saprolite and fresh rock composites. For the saprolite composites, tests were also completed on whole ore (no gravity concentration) to enable a coarse feed size in the bottle roll tests. For all saprolite composites, the testwork returned high gold recoveries, including with a coarse grind size of 80% passing 166 microns. Fresh rock gold recoveries were also high averaging 92% for the main Eagle Mountain deposit at a p80 of approximately 80 microns. At a similar grind size, the gold recoveries for the Salbora deposit and Toucan prospect averaged 85%. Higher recoveries were generated with finer grinding.

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1.10 MINERAL RESOURCE ESTIMATES

Mineral Resources are reported in adherence to National Instrument 43-101 Standards of Disclosure for Mineral Projects (Canadian Securities Administrators, 2011), and to the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards on Minerals Resources and Reserves (CIM Council, 2014). The MRE has an effective date of April 7, 2022, and is summarized by Mineral Resource category in Table 1-2.

The drill hole data used for the April 2022 MRE in this study is derived from a data export provided by Goldsource via email with a cut-off date of December 31, 2021, for 75,269 metres of core drilling (772 holes) and 533 metres of auger drilling (158 holes). Only 19% of this subset was carried out by other companies (1997-2009). The MRE includes the Eagle Mountain and Salbora deposits.

Mineral Resources are constrained by a pit shell generated using a Whittle optimization with block values estimated using the same price, metal recovery, and cost assumptions used to define the reporting cut-off grades (see Table 1-2 notes), and assuming a maximum pit slope angle of 45°.

TABLE 1-2 PROJECT MINERAL RESOURCES BY WEATHERING TYPE

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1. Numbers have been rounded to reflect the precision of the MRE. Totals may vary due to rounding.

2. Gold cut-off grade has been calculated based on a gold price of US$1,600/oz, mining costs of US$1.5/t for saprolite and US$2.0/t for fresh rock, processing costs of US$6.0/t for saprolite and US$12.0/t for fresh rock, and mine-site administration costs of US$3.0/t. Metallurgical recoveries of 95% are based on prior testwork.

3. Mineral Resources conform to NI 43-101, and the 2019 CIM Estimation of Mineral Resources & Mineral Reserves Best Practice Guidelines and 2014 CIM Definition Standards for Mineral Resources & Mineral Reserves.

4. The Company is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing or political factors that might materially affect these Mineral Resource estimates.

5. Mineral Resources are not Mineral Reserves as they do not have demonstrated economic viability. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. The quantity and grade of reported Inferred Resources in this Mineral Resource estimate are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as Indicated or Measured Resources; however, it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

1.11 MINERAL RESERVE ESTIMATE

No Mineral Reserves have been estimated for the Eagle Mountain Gold Project as per NI 43-101 guidelines. 

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Conceptual Life of Mine Plan

The conceptual Life of Mine ("LOM") plan for the Eagle Mountain and Salbora deposits proposes a phased development plan to establish gold production from shallow open pits. Phase 1, estimated at 4.5 years, considers initial gold production from saprolite mineralization during which time most of the mining will be "free dig", not requiring blasting. This is followed by Phase 2 in which gold production will be derived from a blend of fresh rock, transition rock and saprolite mineralization for an estimated 10.5 years for an estimated mine life of 15 years.

Phase 2, which considers a higher-grade subset of the April 2022 fresh rock Mineral Resources, will require drilling and blasting of the fresh rock and transition rock to facilitate mining, material handling and processing.

For both Phase 1 and Phase 2, mill feed rates are estimated at 1.815 Mtpa (5,000 tpd), with Phase 2 designed to process up to 4,250 tpd of fresh and transition rock with the balance being made up with saprolite mill feed. The conceptual mine plan is designed to maintain mill feed rates through Phases 1 and 2. The tonnes and grade of the PEA mine plan are compared to the 2022 MRE in Table 1-3.

1. Numbers have been rounded to reflect the precision of the MRE. Totals may vary due to rounding.

2. For the 2024 PEA conceptual LOM plan, transition rock Indicated and Inferred resources were grouped with fresh rock mineral resources and mined/processed in Phase 2. For the April 2022 MRE, the transition rock mineral resources were grouped with saprolite mineral resources.

3. Refer to the footnotes below Table 1-2.

Overall conversion of Mineral Resources into mill feed for the 2024 PEA conceptual LOM plan is 55%. From the 31.1 Mt of Indicated Resource and 18.4 Mt of Inferred Resource, a total of 27.2 Mt of Indicated and Inferred Mineral Resources are processed as mill feed in the LOM plan with an average grade of 1.26 g/t of gold.

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The mine production schedule, strip ratio, and mill feed grade by year are summarized in Figure 1-1. The annual tonnes of mill feed by rock type and the annual amount of gold ounces produced are presented in Figure 1-2.

FIGURE 1-1 LOM PRODUCTION SCHEDULE AND FEED GRADE

FIGURE 1-2 LOM TONNES MINED BY MATERIAL TYPE WITH MILL FEED GRADE

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The mining method will use traditional load and haul methods using hydraulic excavators, and/or wheel loaders as appropriate to the terrain and depending on the major production equipment available from the contract miner selected for the Project.

The mined material will be hauled from the bench to either the processing plant, the Run of Mine ("ROM") stockpiles, or the waste dump depending on the material type.

The haul trucks appropriate for the hilly saprolitic terrain are articulated dump trucks ("ADT"). This type of haul truck has been used on site in the past (during the pilot plant operation). The haul trucks envisioned are Caterpillar 740 (36 metric tonne) model or equivalent from alternative manufacturers.

Ancillary equipment, such as bulldozers, motor graders, and water trucks will be extensively used to maintain haul roads, ramps, and waste dumps.

Other support vehicles will include maintenance, fuel, and lube trucks to support the primary fleets.

Smaller excavators and dozers will be used to maintain ditches, berms, and culverts on and around haul roads as well as to manage surface water drainage throughout the entire mine site including around stockpiles, waste dumps and all tailings infrastructure.

In Phase 2, drill and blast operation for fresh rock will be implemented and will require open pit drill rigs.

The mine plan assumes mining costs that are aligned with truck and shovel operations of some benchmarked mines. This does not preclude the consideration of alternative methods of transporting mill feed and waste if future studies show more economical methods that are practical to implement.

ERM has made particular note of the fact that a pilot gravity separation operation was conducted for one year in 2016 at Eagle Mountain and that the processing operation was successfully fed by a saprolite slurry (mill feed) comprised of 30% to 60% solids, which was successfully transported downhill from the scrubber using a pump and assisted by gravity to the processing plant. The reported unit cost of this method in 2016 was between US$0.40/t and US$1.20/t of solids mined, as compared to US$0.90 to US$1.40 for conventional load and haul (truck and shovel) operations over the same distances during that same period.

1.12 RECOVERY METHODS

Preliminary metallurgical analyses were completed in 1989 and 2009 by Golden Star and IAMGOLD. More comprehensive analyses were conducted in 2018 and 2022 by Goldsource. The 2018 and 2022 testwork provides the basis for the PEA Design Criteria as developed by Soutex. Overall, the metallurgical testwork that was carried out is sufficient in its coverage of the Mineral Resource areas and its scope of analysis to provide confidence in the figures presented and the values selected as design criteria for a PEA-level study.

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A constant tails recovery method used for the PEA production and cash flow models predicts an average recovery for gold that is within 1.0% of the gold recovery assumption used for the pit optimization and mine scheduling analyses.

1.12.1 PROCESS DESIGN CRITERIA

The process plant is designed to process 5,000 tpd of gold-bearing mill feed. The operational timeline is set for 4.5 years for Phase 1 and 10.5 years for Phase 2, totaling a 15-year mine life (not including one year of pre-production).

Phase 1 involves a low capital expenditure saprolite carbon-in-leach ("CIL") plant featuring two leach tanks, five CIL tanks, scrubber, ball mill, cyclones, and a gravity concentrator, among many other components. During Phase 2, primarily fresh rock mill feed will be processed, necessitating key additional equipment such as a primary crusher, semi-autogenous grinding ("SAG") mill, thickener, and secondary cone crusher to accommodate the harder material. Coarse and bulk materials mined in Phase 1 will be stockpiled and processed in Phase 2.

1.12.2 PROCESS DESCRIPTION

The Project phases can be summarized as follows:

1.12.2.1 PHASE 1 PROCESS FLOWSHEET

Figure 1-3 presents the simplified process flowsheet for Phase 1 designed for the treatment of saprolite material only. Some of the softer transition material could be processed by the Phase 1 plant configuration. For the purpose of this study, all transition material is treated with the fresh rock in Phase 2.

Phase 1 mechanical equipment include:

• Apron Feeder;

• Grizzly;

• Scrubber;

• Double-Deck, Gravity, Trash, Safety, Loaded Carbon and Carbon Sizing Screens;

• Ball Mill;

• Cyclones;

• Gravity Concentrator;

• Gravity Table;

• Leach Tanks;

• CIL Tanks;

• Interstage Screens;

• Acid Wash Column;

• Carbon Stripping Column;

• Carbon Regeneration Kiln;

• Electrowinning Cells;

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• Gold Furnace;

• Reagent Systems; and

• All Associated Conveyors, Pumps, and Screens.

FIGURE 1-3 PROCESS FLOWSHEET: PHASE 1

1.12.2.2 PHASE 2 PROCESS FLOWSHEET

Figure 1-4 presents the simplified flowsheet for Phase 2. This includes modifications to the Phase 1 flowsheet, notably to the crushing and grinding circuits, to allow for the processing of harder fresh rock and transition material in addition to the softer saprolite material. The configuration of the Phase 2 flowsheet is capable of processing 5,000 tpd, including up to 4,250 tpd of fresh and/or transition rock with softer saprolite making up the difference. 

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FIGURE 1-4 PROCESS FLOWSHEET: PHASE 2

The Phase 2 flowsheet adds the following mechanical equipment to crush and grind transition and fresh rock mill feed down to a size suitable for the CIL process.

• Hard Rock Grizzly Feeder;

• Primary Jaw Crusher;

• Stockpile Reclaim Apron Feeder;

• SAG Mill;

• Secondary Cone Crusher;

• Additional Conveyors;

• Thickener; and

• Additional Screens.

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1.13 PROJECT INFRASTRUCTURE

The following infrastructure is proposed for the Eagle Mountain Gold Project:

• Processing Plant;

• Laboratory /Testing Facility;

• Waste Dumps;

• Tailings Storage Facilities;

• Haul Roads;

• Offices;

• Warehouse;

• Maintenance Shop, Wash Bay, and Laydown Area;

• Fuel Storage Facility;

• Water Storage and Water Treatment Facilities;

• Surface Water Management System (ditches and culverts);

• Sedimentation Ponds; and

• Accommodation Village (Camp).

Power Generation and Fuel Supply

The PEA assumes that power generation facilities will be provided by an Independent Power Producer on a power-by-the-hour basis for which the cost of mobilization and setup are estimated at US$0.17/kWh in addition to the cost of fuel required to power the generators for a total estimated cost of at US$0.37/kWh. Fuel supply for the generators and mobile equipment will need to be negotiated with local suppliers, including those currently supplying Mahdia and Campbelltown with gasoline and diesel fuel.

Mining Infrastructure

Mining specific infrastructure will consist of:

• Mine Haul Roads;

• Waste Dumps;

• Stockpile Pads;

• Tailings Storage Facilities ("TSFs");

• Equipment Maintenance Shop;

• Wash Bay;

• Parts Warehouse;

• Tire Change Area; and

• Laydown Pad. 

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Communications

Satellite internet and commercial mobile phone services are currently available at the Eagle Mountain Gold Project. The system can be easily upgraded with the installation of a simple service mast by the local telecom company.

Roads

There is access to the Project site by road from Georgetown. In the dry season, the road is adequate for transporting large equipment and plant components. The route includes one river crossing of the Essequibo River at Mango Landing, via a commercial ferry operation. The total trip by regular light vehicle can take between 6 and 9 hours depending on road conditions and ferry operations.

Roads at the mine site will require upgrading, with grading and bridge work, to support light vehicles and heavy equipment. These roads will be separate from the mine haul roads.

Mine haul roads outside of the in-pit roads will be built as needed to provide haulage connections between the mined pits and the storage dump/s as well as the processing plant.

Camp Accommodations

Camp requirements will be made available to accommodate the portion of the workforce that does not come from or live in Mahdia and/or Campbelltown, 8 kilometres to the north. The camp will provide accommodations for over 250 persons, and all necessities for their comfort (kitchen, dining hall, fitness/recreation amenities, showers/toilets, security, etc.)

The Project will favor patronizing local business and accommodations to the extent that the local community desires and permits.

Airstrip

There is a commercial airstrip 7.5 kilometres to the north of the Project in Mahdia. This airstrip provides access for domestic flights from Ogle Airport in Georgetown and smaller regional airstrips in the interior.

1.14 MARKET STUDIES AND CONTRACTS

The primary economic product of the Eagle Mountain Gold Project will be doré bars consisting of gold and certain impurities. The market for gold doré is well-developed. The PEA assumes market rates for gold refining. The entrance of new producers to the global gold markets does not materially affect the price of gold.

The current consensus long-term gold used for the discounted cash flow ("DCF") model in this PEA study is US$1,850/oz (reference: Energy, Metals, and Agriculture Consensus Report, November 2023).

At this time, Goldsource has not entered into any contracts related to project development that are material to the Company, including but not limited to mining, concentrating, refining, transportation, handling, sales and hedging, and forward sales contracts.

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1.15 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

A number of biodiversity baseline assessments were conducted by independent consultants within the relevant western half of the EMPL covering the MRE area and the proposed area for mine development. The most recent study was carried out in 2021. No endemic, rare, or threatened plants, birds, or habitats were found in the Project area. However, in 2021, several fish, mammal, amphibian and bird species were identified as "Vulnerable" or "Near Threatened". Two amphibian species were categorized as "Threatened". No "rare" species were identified. Biodiversity baseline information will be used for risk mitigation studies as part of the Environmental Management Plan ("EMP") and/or Environmental Impact Assessment Studies ("EIAS").

Water quality sampling studies were conducted in 2013, covering the entire project area. During both studies, wet and dry seasons were analyzed (see Section 20 for details). The water quality in the project area is generally representative of similar environments in Guyana, with some streams showing variable sediment loads due to seasonal rain events and, in areas, due to historical mining. However, most streams exhibit characteristics of the natural environment.

Additional studies will be required for the EIAS. The assessment of impacts will take into consideration applicable mitigation measures and follow-up programs. Goldsource will engage in formal public consultations and scoping meetings.

Goldsource will need to comply with the requirements for mine development, mine operations and mine site closure and rehabilitation, established by the regulatory authorities in Guyana.

The Qualified Person (QP) is unaware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, and political or other relevant issues that could potentially materially affect the PEA and the Eagle Mountain Project.

1.16 CAPITAL COSTS

Phase 1 and Phase 2 pre-production capex estimates for the processing plant are based on budget quotes from manufacturers for large mechanical equipment and quotes from recently constructed and under-construction projects for other plant/auxiliary equipment. Non-plant and other development capex are derived from both benchmarking analyses using comparable projects and calculation-derived estimates for certain earthmoving activities. Development capex includes a contingency of 15%.

Over the 15-year mine life, total capital costs for the Project, including pre-production capital expenditures ("CAPEX") for Phase 1 and Phase 2, and sustaining CAPEX, are estimated at US$296 million (Table 1-4).

The pre-production capital cost for Phase 1 of the Project is estimated at US$95.6 million. It includes indirect costs, owner's costs, and working capital.

The pre-production capital cost for Phase 2, to be incurred in Years 4 and 5, is estimated at US$46.6 million and includes indirect costs, owner's costs, and working capital. 

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The total sustaining capital costs to be expended over the LOM is estimated at US$133.4 million.

The total capital cost of reclamation is estimated at US$20 million.

1.17 OPERATING COSTS

Operating costs have been determined based on benchmarking analyses using similar sized saprolite and fresh rock operations with adjustments for local conditions. For unit processing cost determinations, the average blend (ratio of fresh rock to saprolite) for the LOM was used to estimate power draw and reagent consumptions.

Total on-site operating costs over the LOM are estimated at US$786 million or US$28.88/t processed (Table 1-5).

1. The unit mining and processing costs for saprolite are estimated at US$2.10/t mined and US$11.10/t processed, respectively.

2. The unit mining and processing costs for fresh and transition rock are US$2.75/t mined and US$21.00/t processed, respectively. 

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1.18 ECONOMIC ANALYSIS

The economic analysis of the Eagle Mountain Gold Project is based on the production and cost models developed for Phase 1 and Phase 2 and LOM construction, operating, and reclamation plans. The models include the major components of each phase, including open pits, CIL processing plant, and all supporting infrastructure, such as haul roads, waste rock dumps and tailings storage facilities.

The economic analysis uses a DCF model which applies all Phase 1 pre-production capital costs at the end of Year 0, and all revenues, operating costs and sustaining capital at the end of the year in which they occur.

The annual estimates for metal sales (revenue), costs (operating and capital costs), and pre-tax free cash flow are illustrated in Figure 1-5.

FIGURE 1-5 ANNUAL ESTIMATES FOR REVENUE, COSTS, AND PRE-TAX FREE CASH FLOW (GOLD PRICE OF US$1,850/OZ)

Note: Revenue is reported net of 8% federal royalty.

The DCF's incremental and cumulative free cash flow before and after-tax are presented in Figure 1-6.

After-tax free cash flows are defined as revenues net of operating costs, royalties, capital expenditures and cash taxes. After-tax free cash flows, Net Present Value ("NPV"), and Internal Rate of Return ("IRR") exclude tax loss pools in Guyana (totaling C$37 million as of September 30, 2023), which can be carried forward to offset taxable income in future years.

This PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.

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FIGURE 1-6 INCREMENTAL AND CUMULATIVE FREE CASH FLOW PRE- AND AFTER-TAX (GOLD PRICE OF US$1,850/OZ)

The assumed gold price for the Base-Case economic analysis is US$1,850/oz.

The cumulative undiscounted free cash flow for the Project is estimated at US$605 million and US$443 million on pre-tax and after-tax bases, respectively.

The pre-tax and after-tax Net Present Value ("NPV") for the DCF at 5%, 8%, and 10% discount rates are presented in Table 1-6.

TABLE 1-6 PRE-TAX AND AFTER-TAX NPV FOR 5%, 8%, AND 10% DISCOUNT RATES (GOLD PRICE OF US$1,850/OZ)

The Project has a pre-tax Internal Rate of Return ("IRR") of 75% and an after-tax IRR of 57% as presented in Table 1-7.

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1.18.1 PAYBACK PERIOD

The estimated payback period of the Phase 1 pre-production CAPEX is 1.5 years based on the forecast after-tax cash flows at the Base Case gold price assumption of US$1,850/oz.

1.18.2 PHASE 2

After-tax cash flows in Years 1.5 to 4.0, after the Phase 1 payback period, are estimated to exceed the pre-production capital costs for Phase 2.

1.18.3 SENSITIVITY

The sensitivity of the after-tax NPV and after-tax IRR to unit operating costs for mining and processing, CAPEX, and gold price are presented in Figure 1-7 and Figure 1-8.

FIGURE 1-7 AFTER-TAX NPV5% SENSITIVITY TO CHANGE IN PARAMETERS

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FIGURE 1-8 AFTER-TAX IRR SENSITIVITY TO CHANGE IN PARAMETERS

1.19 CONCLUSIONS

The positive results of the PEA for the Eagle Mountain Gold Project, as expressed by NPV and IRR, justify its further evaluation by advancing to a pre-feasibility study. The QPs noted the following interpretations and conclusions in their respective areas of expertise, based upon the review of data available for this Project.

1.19.1 DATA VERIFICATION AND MINERAL RESOURCES

There is a good understanding of the gold mineralization's geology and the nature on the Project. Additional exploration is warranted to potentially increase the Mineral Resource base.

The sample collection, preparation, analytical, and security procedures, as well as the QAQC program as designed and implemented by Goldsource are adequate, and the assay results within the database are suitable for use in Mineral Resource estimation.

The QAQC program indicates good precision, negligible sample contamination, and potential low bias for gold at the assay laboratory.

1.19.2 METALLURGY AND RECOVERY METHODS

The metallurgical results obtained at the PEA level indicate that saprolite and fresh rock samples from the Eagle Mountain Project should result in elevated gold recoveries with a simple industrial process and with relatively low operating costs, particularly for the saprolite material. To refine the design criteria, it is recommended to pursue additional metallurgical tests during the pre- feasibility study. 

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Based on the testwork and proposed flowsheet, the overall Project metallurgical recoveries are estimated at 90.7% with an average of 95.1% in Phase 1 and 88.9% in Phase 2. The process plant design and equipment selection are tailored for the distinct requirements of Phase 1 and Phase 2. The plant is initially configured for saprolite, which provides for lower power requirements and lower-than-average capital and operating costs as hard rock crushing and grinding equipment can be deferred to Phase 2. Phase 2 operating costs are particularly sensitive to power costs. Further investigation of alternative power costs is recommended.

1.19.3 MINING METHODS

Reasonable mine plans, production schedules and capital and operating costs have been developed for this Project. Operations will start with open pit development with a fleet of 5 haul trucks and 2 loaders at maximum capacity. The Eagle Mountain Gold Project is expected to produce 27.2 Mt of mineralized material over a mine life of 15 years, with a LOM stripping ratio of

2.1. The initial mining rate is 11 ktpd and will reach a maximum mining rate of 23 ktpd towards the end of the LOM. The average mining rate over the LOM will be 15 ktpd. Mining and surface activities at the mine will be done by a contractor.

1.19.4 INFRASTRUCTURE

The mine infrastructure will include a process plant, haul roads, waste dumps, a starter TSF and a main TSF, a mine camp, mine offices, water treatment facility, water management ditches, sedimentation pond, maintenance shop, laydown area, and warehouse.

The maximum combined storage capacity of the TSF will be approximately 17 Mm³. No metal leaching nor acid rock drainage studies have been performed to date on the anticipated tailings from future operations.

1.19.5 MARKET STUDIES AND CONTRACTS

Gold markets are extremely mature global markets with trading at multiple locations around the world 24 hours a day. Gold production from the Eagle Mountain Project is expected to be sold on the spot market. The terms and conditions will be consistent with standard industry practices.

Doré bars will be shipped from site to Georgetown by air and then on to the Guyana Gold Board.

As of November 13, 2023, the consensus long-term forecast from eight recognized investment institutions was US$1,957.27. The gold price used in the parameters for both the MRE and optimized pit shell upon which the PEA mine plan is based was US$1,600/oz. The gold price used in the cash flow model built from the PEA mine plan was US$1,850/oz.

1.19.6 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

Environmental and related studies to support the Project have started. No formal consultation activities with the stakeholders have been conducted by Goldsource. At the time of this technical report, there are no environmental, permitting, legal, title, taxation, socioeconomic, marketing or other relevant issues that could potentially affect the MRE and the Eagle Mountain Gold Project.

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1.19.7 CAPITAL AND OPERATING COSTS

The total capital costs (pre-production and sustaining) for the Project are estimated at US$295.6 million. The pre-production capital costs for Phase 1 are estimated at US$95.6 million, including a US$12.5 million contingency. The pre-production capital costs for Phase 2 (to be incurred in Years 4 and 5) are estimated at US$46.6 million, including a US$5.8 million contingency. Sustaining capital costs are estimated at US$133.4 million and closure costs at US$20.0 million. The total capital costs are summarized in Table 21-1.

The total operating costs are estimated at US$786 million, or US$28.88/t processed over the LOM. The total operating costs are summarized in Table 21-17.

1.19.8 ECONOMIC ANALYSIS

The PEA indicates that the potential economic returns from the Project justify its further evaluation by advancing to a pre-feasibility study.

At a base case gold price of US$1,850/oz, the Project generates an after-tax NPV of

US$292 million at a 5% discount rate and an IRR of 57% (pre-tax NPV of US$406 million and IRR of 75%). After-tax payback on the Phase 1 pre-production capex is estimated at 18 months

(16 months pre-tax).

The Project generates cumulative undiscounted free cash flow of US$443 million on an after-tax basis, and average annual after-tax free cash flow at US$37 million over a 15-year mine life.

Defining additional future resources has the potential to increase mine life and increase NPV.

1.19.9 PROJECT RISKS AND OPPORTUNITIES

The Project is subject to risks that are typical to all mining projects as well as specific risks for this Project. These risks are described below and shall be addressed with subsequent studies at the pre-feasibility and feasibility study levels.

Geology and Mineral Resources:

• The geological models have achieved a foundational level of understanding and will evolve with additional drilling. Future infill drilling is intended to convert Inferred Resources to the Indicated classification.

• The QA/QC program supporting the sample database as executed by Goldsource is adequate; however, improvements are warranted for the QAQC protocol; and

• Mineral Resources that are not Mineral Reserves do not currently demonstrate economic viability. The increase in confirmatory drilling and drilling density will allow for the conversion of Inferred Resources to Indicated category, and the eventual establishment of Mineral Reserves.

Mining and Infrastructure:

• Information on rock mechanics, geotechnical properties and hydrogeology was not available at the time of this PEA; and

• Detailed engineering of required site infrastructure is not completed.

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Mineral Processing:

• Prospects along the north-south Salbora-Powis trend, such as Salbora and Toucan exhibit lower gold recoveries via cyanidation. Additional variability testwork should be completed to evaluate opportunities for higher recoveries via finer grinding; and

• Mill operating costs, particularly for fresh rock, are sensitive to power rates. There is an opportunity to the potential for cheaper power sources, which could result in a lower milling unit costs.

Infrastructure:

• Detailed engineering of plant infrastructure is not completed;

• Site power availability and study are to be confirmed from local power supplier;

• Tailings and water management require additional studies;

• Water balance and load balance have not been developed;

• Insufficient geochemistry data to identify sources terms;

• Tailings facility location used in PEA has not been optimized nor confirmed; and

• Groundwater and seepage flow from the tailings facility have not been modelled.

Regulatory

• The Project's realization and/or schedule is dependent upon securing the necessary permits or approvals; and

• The submittal and approval of the closure plan by the regulating authorities are conditional to the release of the mining lease and the beginning of mining operations.

Capital and Operation Costs:

• Detailed engineering and construction sequencing for the TSF has not been completed; and

• Price escalation is not included;

Rehabilitation and Closure:

• The Project waste rock is assumed to be NPAG and non-metal leaching, and no engineered cover is included in the closure cost estimate; and

• Detailed closure plans and costs are to be developed during the next study level.

1.20 RECOMMENDATIONS

1.20.1 GEOLOGY AND MINERAL RESOURCES

This Technical Report was prepared and compiled by ERM (with the support of Soutex for process plant) at the request of Goldsource, with the support of experienced and competent independent consultants and Goldsource management team, using accepted engineering methodologies and standards. It provides a summary of the results and findings from each major area of investigation, including:

• Exploration;

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• Geological modelling;

• Mineral Resource;

• Mine design;

• Metallurgy;

• Process design;

• Infrastructure;

• Environmental studies, permitting and social or community factors;

• Tailings and water management;

• Capital and operating costs; and

• Economic analysis.

The level of investigation for each of these areas is considered to be consistent with the level expected in a PEA. The mutual conclusion of the QPs is that the Project contains adequate details and information to support the positive economic outcome shown. The results of this study indicate that the Project is technically feasible and has financial merit with the Base Case assumptions considered.

In summary, the QPs recommend that the Project proceeds to the pre-feasibility study stage. It is also recommended that the environmental and permitting process continue as needed to support the Project's development plans and schedule.

ERM recommends the following additional work programs as the Project advances to a pre- feasibility study:

1.20.2 GEOLOGY AND MINERAL RESOURCES

• Improve the geological model, including updating the mineralization model to delineate zones of variable orientation within the shallow dipping mineralized zones, and to model relay veins linking the faults. The model should be supported by a detailed structural interpretation incorporating data from orientated angled drill holes.

• If Leapfrog software is to be used in future, the veins system modelling tool is recommended instead of the stratigraphic approach used for the 2022 MRE.

• Utilize the newly completed high-resolution LiDAR survey with ground truthing to improve the resolution of the topography model. An updated MRE model should be generated when a high- resolution topography model is available.

• High-resolution topography could support a detailed map of weathering features and resistive post-mineralization dikes. This information could provide the basis for a detailed review of auger data to improve the definition of mineralization trends in saprolite for drill targeting and mineralization modelling.

• A dedicated geological and mining database solution should be obtained. This will enable efficient sharing of increasingly complex Project data between the multi-disciplinary teams involved in the Project as it progresses to more advanced stages of development.

The following gold targets warrant further exploration:

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• The steep breccia zone at Toucan is open to the south. This zone should be tested by drill holes on a fence 40 metres to the south of EMD20-103, which included a 10.5 metre intercept grading 1.16 g/t Au.

• The steep breccia zones at Salbora weaken in intensity but are open to the north and south. These extensions can be tested to investigate any strengthening of the mineralized zones in both directions using a series of 40-metre drill hole fences.

• To the south of the Eagle Mountain deposit, mineralized horizons continue at depth south- westward from the Baboon deposit area. Exploration should target extensions to the mineralization encountered in EMD09-43 (6.10 metres at 2.12 g/t Au starting at a downhole depth of 141.90 metres) and EMM21052 (10.5 metres at 0.85 g/t Au starting at a downhole depth of 139.50 metres), particularly where changes in topography bring these zones closer to surface.

• Develop a geological model for the Soca area (not included in the April 2022 MRE).

• Further exploration into exploration targets distal to the Eagle Mountain deposit and Salbora- Powis north-south structural trend, including North Zion area.

1.20.3 CAPITAL AND OPERATING COSTS

• Costs for both CAPEX and OPEX to be regularly checked and updated with budget quotes, in particular with respect to energy costs, construction and contract mining costs and processing costs taking into consideration the fluctuating and generally rising costs of consumables, labor and major equipment and components.

• Whereas it is understood that there is used power generation and processing plant equipment available in country at costs significantly lower than market price for new equipment, it is recommended that contractually enforceable quotes be obtained by the sellers of this equipment in order to support the potential inclusion of this equipment in future cost estimates and DCF models that could potentially show improvement over the cost estimates used in this report.

• Pursue the availability of suitable used processing equipment, evaluate condition, and achieve contract binding costs; estimate logistics, construction and commissioning costs.

• Ongoing benchmarking of comparable projects to de-risk some cost assumptions.

• Undertake regular market studies to assess availability and labor rates for local, regional, national and international (expat) labor and professional workforce requirements to provide accurate projections for capital and operating cost assumptions.

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1.20.4 MINING AND PROCESSING

The following trade-off studies should be performed:

• Full trade-off of buying power on a power-by-the-hour basis at US$0.37/kWh against buying generators and building a power station to assess opportunities to reduce unit operating costs.

• Detailed haulage study to determine with better accuracy potential savings of downhill hauls and/or hydraulic haulage. Examine alternative renewable energy sources, such as river turbines, solar and wind power sources, or other novel technologies.

• Contract mining versus owner operator.

Additional studies and investigations are recommended:

• Opportunity to backfill pits with waste and/or tailings once they are mined out and condemned from possible re-opening at higher gold prices.

• Optimization plan for dump heights and locations to minimize visibility from the main road and the villages of Mahdia and Campbeltown. Options include looking at a larger dump at lower elevation as well as relocating one or more dumps to the south of the pits (or other locations).

• Stockpiles management (include low, medium and high-grade stockpiles for saprolite; and the same three sub-categorized stockpiles for transition and fresh rock mill feed).

1.20.5 INFRASTRUCTURE AND TAILINGS FACILITY

• Trade-off study for the construction of an on-site camp vs. using resources and infrastructure available in the nearby communities. It will require community consultation to ensure that the final decision on this matter is supported by the local communities as the best option for them.

• Geotechnical investigations on candidate sites for the processing plant and other infrastructure to determine scale of foundation work required.

• Evaluation of locations and sizes of possible borrow pits for the construction of the starter and main tailings dams.

• Hydrology/Hydrogeological studies (improve understanding of water availability, water limitations, water balance needs for the processing plant, tailings, and other operational needs).

• Locating an area or areas where TSF can be located without requiring a dam or dams greater than 40 m in height.

• Investigate alternative/novel tailings storage strategies to effectively manage precipitation and run-off during the wet season.

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1.20.6 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY FACTORS

It is recommended that the environmental and social assessment requirements, including permitting to meet Guyana regulations, be confirmed with relevant agencies and be completed. Goldsource should engage with the public and Indigenous groups.

1.20.7 RECOMMENDED WORK PROGRAM AND BUDGET

ERM proposes the following work program to advance the Project to pre-feasibility study as described in Table 1-8. Several investigations and trade-off studies (as described above) will be required prior to the completion of the pre-feasibility study.

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2. INTRODUCTION

2.1 ISSUER

Goldsource is a Canadian resource company engaged in exploration activities, with its headquarters situated in Vancouver, BC. The Company's common shares are listed on the TSX-V under the symbol "GXS" and on the OTCQX under the symbol "GXSFF". Goldsource indirectly holds a 100% interest in the Eagle Mountain Gold Project located approximately 200 kilometres south-southwest of Georgetown, the capital of Guyana, South America.

The Project is operated by Stronghold Guyana, a wholly-owned subsidiary of Goldsource, based in Georgetown, Guyana.

2.2 TERMS OF REFERENCE

Goldsource commissioned ERM to complete a PEA and prepare a Technical Report on the Eagle Mountain Gold Project in accordance with National Instrument 43-101. The Technical Report relies on project data, internal company technical reports, testwork results, maps, published government reports, and public information. With respect to Mineral Resources, the PEA Technical Report is based on the April 2022 MRE for the Eagle Mountain Gold Project, which used an assay cut-off date of December 31, 2021, for drill information.

This Technical Report was completed in accordance with disclosure and reporting requirements set forth in National Instrument 43-101 - Standards for Disclosure for Mineral Projects (NI 43-101), Companion Policy 43-101CP, and Form 43-101F1.

The principal author of the PEA is Mr. Nigel Fung, P.Eng., ERM's Partner and Principal Mining Engineer. Mr. Fung has more than 20 years' experience in mining and over 11 years in mine planning and engineering for open pit gold mines and is a Qualified Person according to NI 43-101 standards.

The 2022 MRE was prepared in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves (10 May 2014) as per NI 43-101 requirements. The April 2022 MRE was prepared in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves (2014) as per NI 43-101 requirements. There are no Mineral Reserves defined on the Project. The principal author of the April 2022 MRE was Mr. Leon McGarry, P.Geo, ERM's Associate Resource Geologist. Mr. McGarry has more than five years' experience in the field of structurally controlled gold deposits and is a Qualified Person according to NI 43-101 standards.

Mr. Antoine Berton, P.Eng., Assistant Director - Africa & Europe / Senior Metallurgist at Soutex is the Qualified Person responsible for sections 13 and 17 of the Technical Report regarding the metallurgical testing, recovery, and processing plant and its associated capital and operating costs (incorporated in Section 21).

The Qualified Persons and the sections they are responsible for are presented in Table 2-1.

The Company has reviewed this Technical Report for factual errors. No alterations were made to the interpretations and conclusions reached by ERM. Therefore, the statements and opinions expressed in this document are given in good faith and in the belief that such statements and opinions are not false and misleading at the date of this Technical Report.

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2.3 PRINCIPAL SOURCES OF INFORMATION

This Technical Report is based, in part, on internal Goldsource technical reports and maps, consultants' reports, and public information as listed in Section 27 (References) of this Technical Report. This study includes information from the previous NI 43-101 Technical Report - Eagle Mountain Gold Project, by CSA Global (now ERM) with an effective date of April 5, 2022.

The authors have not conducted detailed land status evaluations, and have relied upon previous reports, public documents, and statements by Goldsource regarding Project status and legal title to the Eagle Mountain Gold Project.

The authors also had discussions with the management and consultants of the Issuer, including:

• Mr. Steve Parsons (Chief Executive Officer, Goldsource) regarding the tenure of the Property, technical aspect of the Project, including metallurgy and the phased development plan, and the Guyana tax and royalty structure;

• Mr. Ioannis (Yannis) Tsitos (President and Director, Goldsource) regarding the Project and exploration history, tenure, environmental and community affairs;

• Mr. Eric Fier, CPG, P.Eng. (Executive Chair and Director, Goldsource) regarding technical aspects of the Project;

• Mr. Kevin Pickett (Chief Geologist, Goldsource) regarding the geology, drilling, sampling, and assays carried out on the Property, and the Project history;

This report includes technical information that requires calculations to derive subtotals, totals and weighted averages, which inherently involve a degree of rounding and, consequently, introduce a margin of error. Where this occurs, the authors do not consider it to be material.

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* Leon McGarry was employed by CSA Global at the time of the 2022 MRE. The MRE was published under the CSA Global name, which ceased to be used following the acquisition of CSA Global by ERM.

The authors are Qualified Persons with the relevant experience, education, and professional standing for the portions of the Technical Report for which they are responsible.

ERM conducted an internal check to confirm that there is no conflict of interest in relation to its engagement in this Project or with Goldsource and that there is no circumstance that could interfere with the Qualified Persons' judgement regarding the preparation of this Technical Report.

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2.5 QUALIFIED PERSON SITE INSPECTIONS

A three-day visit to the Eagle Mountain Gold Project was completed by Nigel Fung (QP) from October 25-27, 2023, as detailed in Section 12.1.

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3. RELIANCE ON OTHER EXPERTS

The authors and ERM have relied upon Goldsource and its management for information related to the Eagle Mountain Prospecting License (EMPL) and the Kilroy Mining Inc. (Kilroy) Mining Permit location and status, and underlying contracts and agreements pertaining to the acquisition of the Prospecting License and the Mining Permit (Section 4). The status of the tenements and Company agreements was confirmed in a legal opinion provided by Robert H.O. Corbin and Associates, Attorneys-at-Law of Georgetown, Guyana, dated June 30, 2023.

The Property description presented in this Technical Report is not intended to represent a legal, or any other opinion as to title. 

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4. PROPERTY DESCRIPTION AND LOCATION

4.1 LOCATION OF PROPERTY

The Eagle Mountain Project is located approximately 200 kilometres south-southwest of Georgetown, the capital of Guyana, South America (Figure 4-1). The Property comprises an area of approximately 4,896 ha (12,098 acres) and is located between the Potaro, Konawaruk and Essequibo rivers in Guyana's Administrative District VIII (Potaro-Siparuni) and in Mining District 2 (Potaro). It lies within the Kaieteur 1:50,000 scale topographic map sheets 43NE and 43SE, approximately bounded by latitudes 573,600 N and 581,500 N and longitudes 261,000 E and 271,800 E (UTM WGS84, Zone 21N).

FIGURE 4-1 LOCATION OF THE EAGLE MOUNTAIN PROPERTY (RED RECTANGLE) RELATIVE TO TOWNS AND VILLAGES