ADAMERA MINERALS – Feb. 23, 2018

Symbols: ADZ.V & DDNFF

Gordon W. Rodgers

SHARES OUTSTANDING (fully diluted):  Approx. 150 million (149,926,595)

SHARE PRICE:  Price on 2/23/2018 was around C$0.175 (US$0.138)

JURISDICTION:  N.E. Washington State (near Kettle Falls, approx. 100 miles NW of Spokane)

DRILL PERMITS:  Permits were held up for the entire year of 2017 by a Forest Service person who believed the area should be protected from mining. In December of 2017 at a mining investment conference in Reno, Nevada, John Kaiser showed President Mark Kolebaba a booth for the U.S. Corps of Engineers, at which a number of government geologists who worked in the Washington State area were present. Mark explained all the environmental studies he had been forced to do and explained that the latest was for a Goshawk Survey and that he was not being issued with the vital drilling permits he needed. These guys got him in touch with the right folks and permits were issued on Jan. 29, 2018, including a permit for Adamera’s highest priority target, SE-01 at Cooke Mountain, located 4 km (about 2.5 miles) from the Kettle River Mill (which was in operation in 2017 until Kinross Gold Corp finished mining out the nearby Buckhorn Mine). The mill is currently mothballed and is “on care and maintenance” for next 5 years, but can be quickly brought online when needed.

PRIME TARGET SE-01:  After being issued the drill permit on 1/29/2018, drilling began on Feb. 5, 2018.  A “Fact Sheet” on Adamera’s web site states that this drill target is “over a strike length of 500 meters.” The target was selected based on airborne electro-magnetic surveying to find electro-magnetic signatures similar to that of the nearby Buckhorn Mine. The SE-01 target had one of the largest signatures similar to that mine. Next, ground magnetic surveying was done.  Then soil sampling was done. The soil samples at Target SE-01 were high in copper and arsenic (which are often found in association with gold).  Additionally, there were gold anomalies in the soil that tested between 18 and 350 ppb (i.e., “parts per billion”).

DRILL RESULTS:  On Feb. 14, 2018 a press release stated that a hole was drilled perpendicular to the strike length at a -55 degree angle. From 60 meters below surface all the way down to 180 meters the “hole intersected a thick zone with both semi-massive and disseminated sulfides over a 120 meter core length. Mineralization consists of variable amounts of sulfides, magnetite and silica alterations from 60 to 180 metres depth downhole. The core is currently being logged and cut prior to gold fire assaying.”

The press release further states: “Both sulfide and magnetite content in the core range from approximately 3% to 80%. Intense silica alteration and silica replacement as well as local sericite alteration accompany the sulfides and magnetite from 68.5 meters to 121.4 metres. Much of the interval displays complex fracturing and sulfide veining.”

The President was quoted as saying: “The intensity of hydrothermal alteration and the proximity of the mineralization to the Republic Graben margin gives me very reason to be optimistic about the potential outcome.”

NEARBY FORMER MINES:  It is worth noting that the former Flag Hill Mine, that was 12 km from the Kettle River Mill, is within the Republic Gold District, which is “an epithermal vein system which produced 3 million ounces of gold” with an average grade of 20 g/t (i.e., grams per tonne) and 16 million ounces of silver at an average grade of 110 g/t.  The K2 Mine, which is a bit further away, being about 32 km from the Kettle River Mill, is also within the Republic Gold District, and produced 1 million ounces of gold.

JOHN KAISER’S ASSESSMENT: An internet radio interview of John Kaiser took place on Feb. 16, 2018 on a radio show called “Discovery Watch” on www.howestreet.com and was posted on www.youtube.com at this address: https://www.youtube.com/watch?v=O28A9kkstRk . I ran across it reading the bullboards for Adamera Minerals on www.stockhouse.com .  Kaiser is a respected investment analyst focused on mineral exploration companies, and one can subscribe to his investment newsletter for $800.00 per year. He explained that by using high school trigonometry, one could calculate the width of the first hole drilled to be 69 meters. He also said that if the follow up hole showed that the deposit was dipping to the west, then the true width of the deposit would end up being thicker (but if the dip was to the east, the true width of the deposit would end up being not as thick).[1] Kaiser said the strike was 250 meters (which disagrees with the earlier representation by the company that the strike is 500 meters). Kaiser may have simply been mistaken on this detail. Kaiser said that the gold grades taken from the Buckhorn Mine by Kinross ran between 5 and 10 g/t gold and were, like this mineralization, disseminated in magnetite, sulfides and silica and the gold was, therefore, not visible to the eye. He estimated that this ore body was, based on the one drill result and the magnetic survey, about 25 to 30 million tons.  Of course, if Kaiser figured this based on 250 meter strike length (instead of 500 meters) the deposit could be twice that.  Also, if the grades are more like the closer mines (which averaged 20 g/t gold and 120 g/t silver), then the grades could be considerably higher.

DOING THE MATH:  Let’s use Kaiser’s lowest estimate for the tonnage of mineralization, 25 million tonnes.  If we multiply that by the Kaiser’s lowest grade of gold estimated at 5 g/t gold, then we come up with a total of 125,000,000 grams of gold. A troy ounce of gold is 31.1 grams.  So, dividing the total grams in the deposit by 31.1, we learn that there are 4,019,293 ounces of gold in the deposit. If you multiply the gold ounces by $1,300/oz gold price, we learn that the entire deposit is worth, conservatively, $5.225 Billion.  If you divide that by 150,000,000 shares outstanding, you learn that each share owns about $34.83 of gold in the ground. A conservative price for which senior miners are willing to buy gold ore bodies is at 10% of the in situ (i.e., still in the ground, not yet mined) value, which comes to, using the most conservative numbers, $3.48 per share value.  All of this is assuming that when the assays for the drill cores come back from the labs in about 4 or 5 weeks, that the average grade is at least 5 g/t over 100 meters.  If the deposit is twice as big as Kaiser said (based on strike length) then double that figure.  If the grades average twice as high, then double that figure again.  If the grades are similar to the nearby mines, averaging 20 g/t gold, then double that figure again.