Note re conclusions of Granada technical report filed Feb. 13, 2019

Please note that the mineral resource estimate filed in a technical report by Granada on Feb. 13, 2019, as prepared by SGS Canada Inc., is only for the open-pit and is based on past drilling results up to and including 2017. It doesn’t include the potential resources accessed via underground mining or 2018 drilling results (which showed high-grade intercepts).

Technical report is attached in PDF format. It has been filed at Sedar.

Below are two excerpts from the summary section of the 118-page technical report that address the open-pit numbers and also SGS’s recommendations for future exploration on the property. Note their optimism about an underground resource.

 “Highlights of the Granada deposit Mineral Resource Estimate are as follows:  The open pit mineral resource includes, at a base case cut-off grade of 0.4 g/t Au, 762,000 ounces of gold (22.3 million tonnes at an average grade of 1.06 g/t Au) in the Measured and Indicated category, and 455,000 ounces of gold (6.9 million tonnes at an average grade of 2.04 g/t Au) in the Inferred category.”

“The Authors consider that the Granada deposit contains a significant open pit Mineral Resource that is associated with a well-defined gold mineralized trend and model. The current Mineral Resource Estimate has shown that the Deposit can likely be mined by conventional open pit mining method. Deeper drilling recently completed also demonstrates that the Property has the potential for an underground resource.

“The Authors consider the Property to have significant potential for delineation of additional Mineral Resources and that further exploration is warranted. Granada Gold’s intentions are to continue to drill the Deposit in 2019 and plan to direct their exploration efforts towards resource growth (in-pit and underground), with a focus on extending the limits of known mineralization along strike and at depth, as well as infill drill the existing deposit in order to convert portions of Inferred mineral resources into Indicated or Measured.

“Given the prospective nature of the Property, it is Author’s opinion that the Property merits further exploration and that a proposed plan for further work are justified. A proposed work program by SGS will help advance the Deposit towards a pre-development stage and will provide key inputs required to evaluate the economic viability of a mining project (open pit and underground) at a pre-feasibility level.

“SGS is recommending Granada Gold conduct further exploration, subject to funding and any other matters which may cause the proposed exploration program to be altered in the normal course of its business activities or alterations which may affect the program as a result of exploration activities themselves. For 2019, a total of 45,000 metres of drilling is proposed to continue to focus on expanding and extending mineral resources, upgrading existing Inferred resources as well as exploring the Deposit at depth. The total cost of the recommended work program is estimated at C$10,625,000 million.”

Please let me know any questions you may have.

Best regards,

Wayne