News release from Canrim Development

Canrim Development Pte Ltd. is a resource development company established by a team with a successful Mongolian business track record, operating in the Mongolian resources sector since 1997. Designed as a vehicle to re-enter the Mongolian resource industry in early 2014, Canrim is positioning for resurgence in minerals exploration activity in the country.

In mineral exploration the sharpest growth in the value of a grassroots property occurs when the first evidence of substantial mineralization (preferably metallic) with potential economic value is discovered on or near the property. This is the focus of Canrim, developing a portfolio of highly prospective grassroots properties on which international third parties can partner with the company.

Since the fall of 2013 Mongolia has realized the need to liberalize its economy in order to re-encourage foreign direct investment (FDI) after protectionist policies in strategic sectors were implemented in 2012. This has seen a re-drafting of the investment law, which now treats foreign and domestic investors equally, amendments to the petroleum and minerals law, whereby a more than 5-year moratorium on the issuance of exploration licenses was lifted as the life of licenses was simultaneously extended from nine to twelve years.

On January 26, 2015 the Government of Mongolia officially re-opened the application process for minerals exploration licenses. And to date Canrim has successfully applied for eleven licenses, receiving certificates for seven. The seven issued licenses, all in western Mongolia, are known as Altai, Burgast, Burkhant, Khonkhor, Khundii, Maanit and Seruun. Additionally, license applications for three additional areas (Khuren morit, Sharga morit and Khar morit) in southern Mongolia are being processed.

Canrim’s strategy for license acquisition from the Government and third parties is predicated on leveraging management’s geological archive from previous exploration activities, as well as geological databases from the Minerals Resource Authority of Mongolia (MRAM). This approach has led Canrim to focus on regions with known mineralization, but which have received little or no attention in the past.

On the company’s 2015 field season, during May and June six Canrim geologists visited sixteen active mineral exploration licenses (seven held by subsidiaries of Canrim and nine by companies with whom Canrim has developed strong relationships) in western and northwestern Mongolia. The purpose of this field trip was to carry out first-pass reconnaissance level prospecting for evidence of potential economic mineralization. The targeted areas included those with types of rock alteration known to be favorable for metallic mineralization as well as those with particular geochemical and geophysical anomalies, while additional areas were prospected if particular rock exposures attracted the team’s attention while on site.

Upon completion of field work, 221 rock and rock chip samples were submitted to the Ulaanbaatar facilities of ALS Laboratories for multi-element analysis. Of the 221 samples, 148 were collected from six of the Canrim properties and 73 were taken from six of the non-Canrim properties.

Properties visited during 2015 field season
Properties visited during 2015 field season

Results from 2015 field work

Initial field work led to excellent rock sample assay results showcasing large amounts of copper and gold mineralization on two of Canrim’s wholly owned properties, Altai and Khonkhor.

Satellite composite image with Canrim’s 7 active licenses shown in blue
Satellite composite image with Canrim’s 7 active licenses shown in blue

Altai Property, Bayan-Ulgii Province

A number of rock samples were collected from the center of the Altai exploration license area. Laboratory analysis indicated high concentrations of copper and/or gold in 4 samples. Sample AL-10 assayed 2.82% Cu and 234 ppb Au, while sample AL-517 returned 1.70% Cu. These two samples were obtained from mineralized float found 52 meters apart at the base of a major ravine formed by an eastflowing melt water stream. Outcrops with visible copper and gold-mineralization were also found approximately 600 meters upstream of samples AL-10 and AL-517.

Samples AL-2059, AL-2060 and AL2061-1 were collected from the outcrops located on the north side of the ravine, with laboratory analysis providing respective grades of 0.50% Cu, 1.01 g/t Au and 0.37% Cu. On the south side of the ravine are a number of iron-mineralized outcrops in the form of hematite.

Our senior Mongolian geologist is enthusiastic about the quantity of such a hematite occurrence on an exploration-stage property. The adjacent presence of such high concentrations of hematite to the copper-gold occurrences is of significance for the geological and economic potential of the property. The exceptional results of these few samples collected from an approximately 1 square kilometer area of the large 23.3 square kilometer Altai property indicates that the property is extremely promising and merits an extensive exploration program.

Khonkhor Property, Uvs Province

Rock samples were collected from a number of outcrops within an area of less than 1 square kilometer within the very large 154.4 square kilometer license area. Analysis has determined that a number of these outcrops contain significant concentrations of copper.

For example, rock sample 10-428 contains 1.16% Cu and 219 ppb Au and sample 10-641, collected 900 meters northwest of sample 10-428, assayed 0.19% Cu. Two other samples taken between the abovementioned locations returned grades of 0.14% Cu and 0.1% Cu. These samples were taken from locations within a strike length of 1 kilometer. Existing geological maps indicate that the host rocks extend for at least 7 kilometers and possibly for most of the width of the 15 kilometer-wide Khonkor property. These intriguing results, collected from a limited sampling area within the license and with favourable rock types indicatively shown to be distributed throughout the property, show that the property merits an intensive exploration program.

Next Steps:

The amount and style of mineralization found on these two properties in just our initial field visit has confirmed our faith in our business and exploration strategies. In the first instance, Canrim will continue with its business plan, including the program of license acquisition as previously outlined to shareholders. Additionally, the company is planning for follow up exploration programs on these and other properties in 2015 and 2016.

The field work will continue to focus on prospecting for undiscovered and undocumented occurrences of minerals of economic significance. Similar to the May/June field trips, a similar strategy of a highly mobile geological team will be implemented, as this highly effective and low cost exploration strategy has already achieved substantial results. In addition we are considering a broad based but methodical exploration program on the Altai and Khonkor properties, so as to identify and understand the geological context and efficiently pinpoint areas of interest.

Subsequent to the abovementioned strategies of license acquisition and field assessment over the winter of 2015/2016, the information will be assessed and detailed plans made for further field work to be conducted in 2016. Licenses that do not meet Canrim’s standards or expectations will then be relinquished.

We look forward to updating you again on our progress and developments in Mongolia. In the meantime, if you wish to learn more about Canrim Development, I encourage you to email us directly at canrimdevelopment@gmail.com. Our team will be delighted to speak with you and share our vision for the company’s future.

Sincerely,

Ranjeet Sundher

Director and CEO, Canrim Development Pte Ltd.

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