GAGNON EXPLORATION HISTORY

The Gagnon Holdings are adjacent and in close proximity to Arcelormittal’s Mont Reed property which encompasses the Mont Reed Mine deposit. On December 19, 2013, the Company reported the completion of a National Instrument 43-101 compliant Mineral Resource Estimate (“MRE”) for the Penguin Lake Project, authored by Abder Ladidi, P. Geo., an independent Qualified Person of MRB & Associates (“MRB”) of Val d’Or, Quebec. Based on 10 drill holes totaling 3,315 m, the MRE reported 531 million tones (“Mt”) grading 33.1% Total Iron (“FeT”) of In-pit Inferred Resources at a 15% FeT cut-ff grade. The global in-situ mineral resource of 534.8 Mt grading 33.1% FeT was subject to a Whittle pit optimization to estimate the portion of in-situ Mineral Resource within the pit shell. P&E Mining Consultants of Brampton, ON were contracted by MRB to run the pit shell using a 1.05:1.00 $CDN:$US exchange rate, a mining cost of $2.50/Tonne, and a charge of $18.10/Tonne for the total processing, G&A, and freight costs. The process recovery, estimated to be 82%, an iron ore price of $1.77/dmtu, and a 48º overall pit-slope, were used to complete the Whittle pit optimization. The sensitivity of the resource estimates is demonstrated by comparing the proportion of the mineral resources that may be economically exploited within the optimized pit shell to the global in-situ resource. A summary of the Global In-Situ Mineral Resource Estimate is presented in Table 2 and the results of the In-Pit Mineral Resource are presented in Table 3. Table 2: Global In-situ Mineral Resource Estimate, Penguin Lake Project Global Inferred Resources* Below Cut-off Cut-off Grade Tonnes (millions) Grade Tonnes Grade FeT% CaO% MgO% (millions) FeT% CaO% MgO% 15% 534.8 33.1 3.1 2.8 0.0 0.0 0.0 0.0 20% 534.7 33.1 3.1 2.8 0.1 15.4 2.1 1.7 25% 531.4 33.2 3.0 2.8 3.4 23.2 4.7 3.0 30% 466.4 33.9 2.9 2.8 68.4 28.2 4.1 2.7 3 Table 3: In-Pit Mineral Resource Estimate, Penguin Lake Project In-Pit Inferred Resources* Below Cut-off Cut-off Grade Tonnes (millions) Grade Tonnes (millions) Grade FeT% CaO% MgO% FeT% CaO% MgO% 15% 531.2 33.1 3.1 2.8 0.0 0.0 0.0 0.0 20% 531.1 33.1 3.1 2.8 0.0 15.4 2.1 1.7 25% 527.8 33.2 3.0 2.8 3.4 23.2 4.7 3.0 30% 463.9 33.9 2.9 2.8 67.3 28.2 4.1 2.7 * The quantity and grade of the reported Mineral Resources within the Project are categorized as Inferred Mineral Resources. Inferred Mineral Resources are that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from drill core. There is no guarantee that further exploration will upgrade the Inferred Mineral Resources to Indicated or Measured Mineral Resources. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Inferred Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. The 10 drill holes that define the MRE drilled only the southern portion of the deposit. The deposit occurs in the form of a multiply refolded tightly overturned synform that produces a bowl-like shape of shallow dipping iron formation host rock. No recent drilling has been completed in the northern portion of the deposit however, the strong correlation of magnetic response to where iron formation surfaces and a historic drill hole located in the NW portion of the deposit allow for projection of the modelled iron formation and an estimate of the exploration target potential1. The interpreted 3D model of iron formation includes an additional 700 to 900 million tonnes of similar grade as suggested by the current Inferred Resource, predominantly in the undrilled portion of the deposit to the north and northwest where additional resources might be identified. A comparison of the current global in-situ mineral resource and in-pit mineral resource demonstrates the amenable geometry of the deposit to open-pit mining with 99+% of the in-situ resource occurring within the optimized pit shell. Furthermore, it is apparent that a natural geological cut-off grade exists for the modelled high-grade iron oxide deposit that is above the economic cut-off grade. As can be seen by the quantity and grade of below cut-off grade material at the higher cut-off grades, the natural cut-off grade of the deposit is near 25% FeT where only 0.6% of the material is below cut-off at an average grade of 23.2% and well above the economic cut-off grade of 15% FeT. The current resource reported in the MRE comprises less than half of the modelled bowl-shaped deposit and makes the Penguin Lake deposit the largest iron resource in the southern Gagnon Terrane. Through 2016 and 2017, the Company completed metallurgical testwork studies and investigated base-case process flowsheet aspects for the Penguin Lake deposit. Metallurgical test results announced by the Company on April 28, 2015, indicate that the iron at the Penguin Lake deposit will be most efficiently liberated by a 2-stage process designed to yield iron-fines to produce a final sinter product. The metallurgical tests were targeted towards producing a concentrate of 65% iron (Fe) and 4.5% silica (SiO2) from an average sample-grade of 30% Fe. Stage-1 gravimetric separation tests by Wilfley Table on 18 samples returned average grades of 65.3% Fe, 4.5% SiO2 and 1.1% MgO. Iron concentrate of similar grade (65% Fe / <4.5% SiO2) will be sought from the second-stage regrinding and magnetic separation process. Additional tests to determine the process model for optimal second-stage iron recovery are on-going. Overall iron recoveries of >80% are targeted for the 2-stage circuit. The maximum 4.5% SiO2 content for the Penguin Lake concentrate is a value imposed by the Company, guided by today’s selective-market requirement for the highest-quality iron concentrate. The Company will evaluate the exploration programs at the Gagnon Holdings while managing its capital resources to ensure it has sufficient capital to support its ongoing operations. Further exploration and development of the Company’s properties 1 Exploration Target Potential is not a Mineral Resource. There is insufficient work completed to estimate the quantity and grade or quality of the exploration target on the basis of geological evidence and sampling. There is no guarantee that further exploration will define additional mineral resources from any portion of the exploration target potential. 4 are contingent upon the Company raising an adequate amount of financing.