Read on for a transcript of part of the first conversation between The Unknown Geologist and Mr. Bob Moriarty recorded August 24, 2017. Read on as the two go back-forth for 20 minutes on the geology of Goldboro, which may prove to be the jewel in the crown of Anaconda Mining (TSX:ANX). Watch for drill results and a PEA from the company soon!

Unknown Geologist: Hello. Please let me provide a quick run-down of my background for Bob's benefit.

I have a geology degree from St. Francis Xavier University and worked in the Nova Scotia gold field for five years. I worked mostly in at two different gold properties. One was Forest Hills, which is about 20 kilometers north of Goldboro. I worked there for about two and a half years underground mining narrow veins. And I mean really narrow –they were about three and a half centimeters up to a maximum of about a meter wide. It was high-grade, but narrow vein gold mining.

When that mine closed down, I moved down to Goldboro in 1988. I worked at Goldboro as a Project Geologist from 1988 to 1991 and served as a Director of Orex Exploration for about seven years. After my seven or so years as a Director of Orex Exploration Inc, I served as a Technical Advisor to the company. One of the reasons that I'm still beating the drum for Goldboro is based on my experience at Forest Hill: when they were mining underground, their cutoff was about six grams per tonne. When I went to Goldboro in '88, the first week I was there they were excavating the ramp down to the 250 level and cross-cutting through the 123 Belt. My jaw dropped because this 123 Belt was almost 40 feet wide. That was stunning compared to Forest Hill.

I've been underground at Caribou, I've seen Goldenville, Moose River, and Fifteen Mile Stream. After drilling and logging miles of core at Goldboro, I said "Why is no-one mining this thing?" Compared with what I've seen elsewhere in the province it seems clear that this thing should be mined.

Bob Moriarty: Let me ask some questions. I've been out there, and I may well have seen this. Is this a saddle reef deposit?

Unknown Geologist: Yep, it's an anticlinal structure that has multiple slate belts stacked one on top of the other.

Bob Moriarty: Okay, I am on board. It’s strange how Nova Scotia is really off the radar. There was a zinc producer, Acadia Mining, I believe. Did you follow them closely?

Unknown Geologist: Yes, very closely. I knew Terry Coughlan, who was one of the CEOs with Mr. Will Felderhof who was on the Board of Orex Exploration Inc.

Bob Moriarty: I went down there to see them and they thought they could mine what was an underground zinc deposit as an open pit. They went in and they started sampling the till and when they sampled the till, they found something they had never found underground. Do you have any idea what that was?

Unknown Geologist: I do not, no.

Bob Moriarty: It was gold.

Unknown Geologist: Really.

Bob Moriarty: There was gold in the till, but there was no gold in the hardrock.

Unknown Geologist: Wow.

Bob Moriarty: Where did the gold come from?

Unknown Geologist: That's bizarre because that's a completely different type of deposit than what we're looking at Goldboro. It’s a Mississippi Valley type.

Bob Moriarty: 100% different. The till was taken down by the ice age, right, so where did the gold come from?

Unknown Geologist: If you look at a map of Nova Scotia and the mineral occurrences, then there is a line to the northeast of Goldboro Project along the Chedabucto Fault that is an important divide.

Bob Moriarty: It’s a lot simpler than that. When they discovered gold in Nova Scotia, they thought they had two uniquely different vein systems, and then somebody came up and said, "No, it's really a different kind of system." They've got these saddle reefs in Australia, too.

Unknown Geologist: Right, the Bendigo and Ballarat.

Bob Moriarty: Exactly. The really interesting thing is that the gold in the till at the zinc mine, came from you guys.

Unknown Geologist: From Forest Hill, really?

Bob Moriarty: From somewhere up there, yes.

Unknown Geologist: When Forest Hill was being mined, they trucked ore 150 kilometers from Forest Hill Mine in Guysborough County to Halifax County. Gays River it was originally a lead-zinc mill, but they converted it to a gold mill and processed all the gold that they could from there. They even processing some ore from Beaver Dam as well. Then it switched back to lead-zinc under Acadia Mining, and I was at the grand opening there with them.

Bob Moriarty: An interesting situation that I had heard of to have gold in till, but no gold underground. I looked at it and said, "Guys, this is really simple. We're talking about saddle reef deposits and you've shown me some north of here. When the ice age came through, the till came from the north." I am fully on board. Nova Scotia is probably the best place in Canada that I've ever seen for exploitation, not just exploration. With those saddle reef deposits, there's no telling how many deposits could be there.

Unknown Geologist: The hair is raising on my arms when you say that because there aren’t many people that have ever said that about Nova Scotia until you, today. This is the same drum that I've been beating for years. It's basically the reason why I joined the board of Orex –how strongly I believe in the Goldboro property.

One tidbit of information here – Peter Webster of Mercator Geological Services is a gentleman from Dartmouth, Nova Scotia and has an office down the street from me. He’s about the only other person I’ve talked to about all this.

When Osisko was drilling the property a few years back, they had a deal to take 50-70% of the company. They drilled it as a low-grade, high-tonnage open pit mine and weren't happy with the results. They were looking for a hundred-meter-wide zone, like in Malartic where they had a mine that was eventually running at something like 55,000 tonnes per day at 1.1 grams per tonne. They were looking for the same thing in Goldboro but they didn't find it. Before they walked away I said to the Orex Board of Directors, "We don't have this giant open pit, let's do a high-grade model." That's where we got Peter involved.

I look at him as a resident expert in Nova Scotia gold. When he was awarded the contract to do the technical report on Goldboro, I said to him, "If it comes up at half a million ounces of five or eight grams, then do you think that would be good?". He just looked at me and said, "you're not going find that in Nova Scotia." I said to him, "when you finish this report, I think you'll be pleasantly surprised." He said, "we'll see."

After Peter had completed the technical report, I went in to chat with him and I said, "What do you think of Goldboro now?". He said that he had no idea. He said this is by far the best thing he's seen in the province.

Bob Moriarty: The grade, the number of mineral occurrences is unbelievable.

Unknown Geologist: The interesting thing about this deposit is the history. Forest Hill is a very dangerous place to walk around in the woods because there are so many pits! When they found gold on surface back in the turn of the century, they dug 20 meters deep, pulled out, moved along strike and dug down again. There are holes everywhere and they basically hand-cobbed all the quartz material. It's common to see high-grade. The historic stuff you get in some quartz veins are running hundreds of ounces per ton, but they're only 10 centimeters thick. They just popped those out and made lots of money.

There are a couple of key aspects of the Goldboro property. The thickness of the stacked units/belts there are great. All belts plunge 25 degrees to the east and the best example of this is the Boston Richardson Mine itself, which was one belt mined from surface down to 700 feet. It had a 400-foot shaft. We drilled out to the east down to 1250 feet and it's still there. There was one sample that ran a half-ounce over five feet. That was in the deepest hole ever drilled on the property. The Boston Richardson still has high-grade gold at depth!

If you look at that one Boston Richardson belt in the saddle reef, then there's your basic model for Goldboro. Historic records document two high-grade ore chutes in the Boston Richardson mine. I did some work at Goldboro for about two or three months, just pencil and paper stuff many years ago before all this high-technology.

I have a structural control theory on why those high-grade ore chutes are there on both limbs in Goldboro, not just one like Forest Hill. When they theory is applied to the model, it lines up nicely. I've had several discussions with the Anaconda folks about my structural control theories, but I don't think they really realize what they're sitting on at the moment. They will.

Bob Moriarty: I'm looking at their stock. The market doesn’t know, either.

Unknown Geologist: No idea. And that’s just one example. They drilled one hole recently that was 485 grams over 2.6-meter core length.

Bob Moriarty: I saw that.

Unknown Geologist: That is probably a two-meter-wide belt. It was 33 meters deep. I think they are planning to do a bulk sample and I said, "Take one drill, go 25 meters to the west, and drill a hole up dip -- if you hit it again, then go 25 meters to the east and strip it off," Fifteen and a half ounces per tonne over two meters would be nice. Even if it's one ounce with dilution – 10,000 tons of that could go on one barge. Send it to the Anaconda mill and they could get most of last year’s production on that one barge! Then, you can finance further infill drilling.

When you look at the PEA, there are 800,000 ounces defined at 5 grams at a 2-gram cutoff but if you look at the model then you will see that it's not continuous. The high grade 10 to 12 gram per tonne belts in the PEA model aren't continuous. And the reason being is because how it was drilled.

When we hit anything 6 grams or better over a meter-and-a-half at Forest Hill, we moved the drill 25 meters east or west, depending on where you could move the drill, and tried to hit it again. At Goldboro, they never followed up ANY of the countless high-grade intersections. I think the reason is that they were looking for a big open pit. If you have a 250-meter-long-hole, then you're probably going to hit two or three intersections of 6 grams per tonne over considerable widths. I want to just take the model and say look, "Here's where you need holes – you don't have them there because of how it was drilled before. Chase those high grades!" This could be a spectacular high-grade mine but no-one really knows about it yet.

Again, that's why I'm here. I just want to see it happen. It's been 30 years and I'm still beating the drum. I know what I've seen and I've compared it to everything else in the Province and I call it a Beast. It's an unknown beast and the infill drilling will probably prove that out. There are approximately 800,000 ounces under existing 43-101 technical reports, but if you look at how that was drilled then you will see just how non-contiguous those high-grade ore blocks are. If you poke a few holes in the right spots, then you can say they are continuous. The Boston Richardson is a perfect model – they mined the whole thing from surface down to 700 feet before it flooded. The stopes are still full in some areas because the turn of the century couldn't manage the water. If you've got a high-grade intersection like that 485-gram hit, then it's going to extend to surface. I said, "spend a half-a-million to strip it off”. In Nova Scotia, you are only allowed to take 10,000 tonnes as a bulk sample, so they may even want to take 2,500 tonnes at first to spread the bulk sample around a bit. If they did that and produced say an ounce per tonne then that would be shocking to a lot of people. The drill numbers will tell you one thing, but the mill will probably give even higher grades. We've seen that so many times in this area –it is astronomically higher when you mill it than when you take fire assays. It's incredible.

Bob Moriarty: Right. Pretium had that problem in the Golden Triangle. When you have gold at that grade, the only way you can really tell the grade is to process it. You're not going to know till you mine.

Unknown Geologist: There was a technical report done on Goldboro that talks about two small bulk samples that were taken from the underground ramp area. I was the one that directed the blasting underground. It was 1988 or ’89, I can't remember, but there were two samples with 5,000 or 6,000 tonnes and I went down there personally after each blast and bagged up well over 100 samples from each blast location. I just grabbed samples before anything was washed down, which would make it so that I couldn't see what I was grabbing. We sent the hundreds of samples to the lab for fire assay. The average grade of the fire assay samples from one blast came back at about two grams and the other was just over one gram. This was not expected based on drilling and visual occurrences of visible gold. We risked it and trucked the mini bulk samples to a mill for processing. Lo and behold it came back at three and four grams per tonne in those areas.

Bob Moriarty: Anytime you have very high-grade gold you're going to run into that.

Unknown Geologist: You get it. Hooray! Somebody understands it.

Bob Moriarty: Here's my question: What can I do for you? It’s an incredible story. I've been there – I haven't been to Goldboro, but I've been in that area. There was a company run by French-Canadians out of Quebec in that area and I kept telling them, " raise some money and go into production. Don't spend money on drilling – get into production." Of course, they weren't about to listen to me. But I know the story. I know the area. The numbers on this are incredible. What can I do to help?

Unknown Geologist: Back in 2000, when Orex did some follow-up work on it I reached out to them and said, "I can help." Then, I joined the Board. It was unfortunate that all the people on the Board didn't really know what they had. They raised a lot of money and got Osisko in there to look, which helped them gather a lot of information, but they didn't find what they were looking in terms of a big open pit. Nobody followed up on all these high-grade intersections, even though I was beating the drum for this. "Let's go, let's go!" They seemed more concerned with paying rent for their office rent and making $250,000 a year, than really focusing on addressing what this deposit could be.

I have two press releases in my hand right now from Osikso when I was on the Board. I took them to the Board meeting and said, "Is Osisko still with us? Look at these holes. When we mined at Forest Hill, six grams per tonne over a meter-and-a-half was economic. Look how many intersections of six grams per tonne you have in these Osisko holes! We need to do a high-grade model. Please, let's just do a high-grade model because it's obvious this big open pit is not there." Nobody moved on it. Nobody. It was frustrating.

I am still here now. I'm really happy that Anaconda is actually listening now because this thing has never been drilled to make a model for a high-grade mine. The infill drilling numbers are going to be incredible with so many intersections of over 1,000 grams per tonne. Those are the key targets – those are high-grade ore chutes. You could be mining at one to two ounces per tonne in those areas.

The ribbon model for this deposit is shaped like a long cigar. There are 20-30 meters of these really high-grade areas, but you have to understand the structure behind those areas. I have a theory for that, which I did on paper and pencil back in '89. It has some validity to it based on all the work that I did and the limited information we had at the time. I don’t want to get into the detail of that right now, but I do want to mention it because it is something that I believe could help with exploration today.

Another point I'd like to make here is Dolliver Mountain, which is about 2.5 kilometers to the west of the main part of the Boston Richardson area. Osisko drilled five holes out there and, unfortunately, didn't hit anything. That was due to poor planning and execution. I went to the site to look at a couple of the holes and when they laid out just one hole for me I could see that they never hit any belts at all. It was all greywacke. When I looked at the core from the entire hole, I was shocked. I said, "You never came close to the anticline." They geologists from Osisko said, "What do you mean?" It was tough, but I carried on with the conversation. I said, "Well, look at the exsolution cleavage in the core – it's all the same angle." They had been drilling perpendicular to the anticline (where the thicker pay belts are), but never intersected it. A beautiful thing about the geology here is that you can tell within a box or two exactly where you are on the anticline based on the exsolution cleavage in the core.

Bob Moriarty: I am astonished that you didn't manage to convey this. None of what you say is a new theory and none of what you're doing is anything other than basic geology. If you understand saddle reef and Nova Scotia, then you would look at their stock price and think "This is crazy!"

Unknown Geologist: Unbelievable.


Find more on Bob Moriarty online at http://321gold.com/.

Please note that The Unknown Geologist, Mr. David Hatchette is affiliated with the company but he does not represent the company.