Läntinen Koillismaa Project, Finland "LK Project"

Location

The palladium dominant Läntinen Koillismaa (“LK”) PGE-Ni-Cu project is located in north-central Finland, approximately 40 km north of the company’s exploration office in the town of Taivalkoski. The property is 160 km (by road) east-southeast of Rovaniemi and 190 km northeast of the port city of Oulu.

The LK Project is 100% owned by Palladium One Mining Inc.

Property Description

The LK Project area is covered by Exploration Permit renewals, new applications, and Exploration Reservation applications. Exploration Permit applications are divided into two groups; the Kaukua Group consisting of the Kaukua and Murtolampi targets (Kaukua North 1-2) and the Haukiaho Group covering the Lipeävaara and Haukiaho targets; as well as Salmivaara, which represents the eastern and western extension of Haukiaho.

The exploration permit applications cover 2,485.3 hectares, while the Exploration Reservation applications cover 1,351.5 hectares

None of the permit areas are located on nature conservation areas, however, the Exploration Permit application for Salmivaara 2-11 has approximately 2.3 km of common border with a Natura 2000 area. Natura 2000 is a nature conservation program established according to Finnish national legislation and in accordance to a directive given by the European Union.

Mineral Resource Estimate – Kaukua Target – September 2019

Highlights

  • An optimized pit-constrained Mineral Resource, at a 0.3 g/t Pd (“grams per tonne” “palladium”) cut-off, for the Kaukua Deposit includes:
    • 635,600 Pd_Eq ounces of Indicated Resources grading 1.80 g/t Pd_Eq (“palladium equivalent”) contained in 11 million tonnes, and
    • 525,800 Pd_Eq ounces of Inferred Resources grading 1.50 g/t Pd_Eq contained in 11 million tonnes
    • Metal prices assumption used in pit optimization:
Commodity Units Pit Assumption (US$)
Palladium per oz $1,100
Platinum per oz $950
Gold per oz $1,300
Copper per lbs $3.00
Nickel per lbs $7.00
      • The underlying price assumptions are conservative in the context of the current commodity price market, where for example, palladium is trading above $1,550 per ounce.
    • The Kaukua Deposit is expected to have a low capital intensity given the favourable 3:1 stripping ratio of the conceptual pit-constrained resource
  • The Kaukua South zone, located ~500 m south of the current pit constrained Mineral Resource hosts an Exploration Target Potential range of:
    • Between 0.23 and 3.0 million tonnes grading 0.7 to 1.0 g/t Pd_Eq
    • The potential quantity and grade is conceptual in nature, insufficient exploration has been performed to define a mineral resource, and it is uncertain if a mineral resource will be delineated.
    • This zone, with very limited drilling has demonstrated up to 0.74 g/t Pd, 0.24 g/t Pt, 0.07 g/t Au (1.05 g/t PGE), 0.17 % Cu and 0.13% Ni over 32.95 m in hole KAU08-035 and represents a key area for additional resource expansion
  • Future drilling at the Kaukua Deposit is planned to target zones of higher-grade PGE-Cu-Ni mineralization within the current resource that were not followed up by previous drilling. Infill drilling is also planned to upgrade inferred resources to a higher category.
  • Near term expansion of mineral resources in the Kaukua area will focus on Kaukua south, along with the eastern strike extension of the favourable basal contact (Figure 2) as well as the Murtolampi target (see press release dated August 12, 2019).
  • Additionally, future drilling is planned to target the Haukiaho Deposit, located 12 kms south of Kaukua, which hosts a 2013 historic inferred resource.
    • Haukiaho was drilled at very wide spacings. The Company believes that additional drilling is required prior to conducting a new Mineral Resource Estimate.
    • The Company also believes that grade can be increased with focused drilling targeting higher-grade pods/lenses of mineralization that were not followed up by previous drilling.

Table 1 – Pit-Constrained Mineral Resource for the Kaukua Deposit

Mineral Resource Estimate for the Kaukua Deposit – September, 2019 reported at a 0.3 g/t Pd cut-off
Classification Tonnes (kt) Pd g/t Pt g/t Au g/t PGE
(Pd+Pt+Au)

g/t
Ni % Cu % Pd_Eq5
g/t Oz
Indicated 10,985 0.81 0.27 0.09 1.17 0.09 0.15 1.80 635,600
Inferred 10,875 0.64 0.20 0.08 0.92 0.08 0.13 1.50 525,800
  1. CIM definitions have been followed for the Mineral Resources,
  2. Bulk densities of 2.9 t/m3 have been assumed for all lithologies within the block model,
  3. The optimization has used metal prices (in USD) of $1,100/oz for Pd, $950/oz for Pt, $1,300/oz for Au, $6,614/t for Cu and $15,432/t for Ni.
  4. Mining dilution and recovery factors have been assumed at 5% and 95% respectively.
  5. Pd_Eq is the weighted sum of the Pd, Pt, Au, Ni and Cu grades based on the commodity price as outlined
  6. Errors may occur due to rounding to appropriate significant figures.

Regional Geology of the Koillismaa Layered Igneous Complex

The KLIC of north central Finland is part of the 2.5-2.4 Ga Fennoscandian Early Palaeoproterozoic layered complexes that were emplaced as part of a globally recognized episode of igneous activity that introduced layered intrusions and mafic dyke swarms worldwide.

These igneous formations have been found to have potential for Cr, Cu-Ni-PGE sulphide, PGE and Fe-Ti-V oxide mineralization. Examples of well-known economic deposits of these types are the ones hosted by the South- African Bushveld, Russian Monchegorsk and Finnish Tornio-Näränkävaara belt of intrusions (Iljina and Hanski 2005).

The KLIC makes up the eastern most portion of the TNB and consists of two main sectors, the Näränkävaara Intrusion in the east and the Western Intrusion. These two intrusions are likely connected by an unexposed connecting dyke, which is indicated by a strong magnetic and gravity anomaly (Alapieti, 1982).

The Western Intrusion is thin despite its greater surface area with an average vertical thickness for the three major blocks of only 1-3 km, but the exposed igneous stratigraphy is as much as 3 km. The Western Intrusion is overlain with felsic volcanic rocks that have recrystallized to form a granophyre unit up to 1 km in thickness. In contrast, the footwall granite gneisses at the base of the intrusion have been partially melted and pervasively metasomatically altered to albite-quartz rock. Gabbroic igneous rocks, chemically different than the layered sequence, form the footwall locally such as underneath the Porttivaara, Tilsa, and Kaukua Blocks.

The Western Intrusion has been uplifted and broken into a number of blocks due to multiphase tectonic events. The Western Intrusion has been folded slightly and possibly even collapsed during the earliest, extensional, tectonic regime to form a synclinal structure between the Kuusijärvi and Lipeävaara Blocks (Karinen, 2010). The supracrustal sequence deposited along this structure is known as the Kuusijärvi synform. The igneous layering of the intrusive blocks to the south of the synform, dips to the north, (Tilsa to the NW) while the northern blocks dip to the south (Kaukua and Murtolampi).

The cumulus stratigraphy of the Western Intrusion is divided into the Marginal Series and the overlying Layered Series. The Marginal Series can be up to a couple of hundred metres in thickness and be made up of differentiated cumulates ranging from gabbros and pyroxenites to peridotites. The Marginal Series can be repeated on surface due to tectonic movements at Porttivaara and Tilsa Blocks, in particular. The Layered Series is composed entirely of mafic cumulates.

Access

The LK Property is located in the municipality of Posio, Finland between the towns of Posio and Taivalkoski. All target areas are accessible by public roads and private roads. Public roads (paved or gravel) are kept open all year round and the private gravel roads are maintained only during periodic logging activities. The main road between Posio and Taivalkoski is paved.

Local Resources and Infrastructure

The nearest major city is Oulu (some 200,000 inhabitants), which is about 190 km away by road. The cities of Rovaniemi and Kuusamo are located about 160 and 90 km from the property areas, respectively. All three centers have airports with daily scheduled flights to Helsinki, the capital of Finland. The nearest major railway station is located in Rovaniemi. High voltage power line cross the Haukiaho and Lipeävaara properties and run 4.5 km from the western side of the Kaukua mineralized body.

Technical Information and Qualified Person

The Mineral Resources in this estimate were independently prepared by Mr Alexei Sokolov a Qualified Person as defined by the National Instrument 43-101 and an Associate of Mining Plus Pty Ltd, Dr. Markku Iljina (EurGeol) a Qualified Person as defined by National Instrument 43-101 verified the drillhole database and other input data supporting the Mineral Resource estimation.Verification included four (4) site visits.

The technical information in this release has been reviewed and verified by Neil Pettigrew, M.Sc., P. Geo, Vice President of Exploration and a director of the Company and the Qualified Person as defined by National Instrument 43-101.


Figure 1 – Location map of LK Project in Finland


Figure 2. Near Term potential for Resource expansion at Kaukua


Figure 3. Historic Haukiaho Resource expansion potential


Figure 4. Three dimensional model of the Kaukua Deposit showing main lithological units in isometric view


Figure 5 – Plan view of the 3D model of the Kaukua Deposit with the separation into the four mineralized zones. Coordinate system is the old Finnish KKJ Zone 3 (ESPG 2393) coordinate system.


Figure 6 – Kaukua Resource classification plan view. Coordinate system is the old Finnish KKJ Zone 3 (ESPG 2393)


Figure 7 – Kaukua Resource plan view showing block and drill hole grades for Pd. Coordinate system is the old Finnish KKJ Zone 3 (ESPG 2393)


Figure 8 – Cross Section at 3,553,810 mE showing block model and drillhole grades for Pd. Coordinate system is the old Finnish KKJ Zone 3 (ESPG 2393)


Figure 9 – Cross Section at 3,553,610 mE showing block model and drillhole grades for Pd. Coordinate system is the old Finnish KKJ Zone 3 (ESPG 2393)

Maps