Sub-parallel intermittent footwall and hanging wall zones occur proximal to the Main Zone. One hanging wall zone (HM1) (named HW Zone in the Mineral Resource Estimate) lies approximately 5 metres to the hanging wall of the Main Zone.  A footwall zone (FM1) (named FW Zone in the Mineral Resource Estimate) zone lies approximately 5 metres to the footwall of the Main Zone.  Other zones include a second hanging wall zone (HM2) that lies approximately 20 metres to the hanging wall of the Main Zone, and a second footwall zone (FM2) that lies approximately 20 metres to the footwall of the Main Zone (Mineral Resources have not been defined on these secondary zones). 

The Yellowjacket Zone is silver-lead-zinc-rich, and is composed of multiple parallel siliceous sphalerite-galena bearing zones. The individual zones making up the Yellowjacket Zone occur as lenticular bodies each up to 8 metres thick at the contact between alternating units of volcanics and limestone. The Yellowjacket Zone sub parallels and is in the immediate hanging wall of the Main Zone. The Yellowjacket Zone has higher silver, lead and zinc values than the Main Zone but no notable gold. 

Underground bulk samples have been taken from the Main Zone to conduct metallurgical test work. The Main Zone is a complex polymetallic deposit high in arsenic values which create a challenge in the production of saleable zinc and lead concentrates and the economic recovery of gold. Extensive metallurgical testing between the mid 1980’s and 2014 have considered various options and have produced numerous effective options for acceptable recoveries of gold, silver, zinc and lead by making 3 separate concentrates, including using heavy media separation. Based on the current envisioned circuit and corresponding laboratory test response, the overall process recoveries for the Main Zone are expected to be approximately 93% Au, 70% Ag, 74% Pb, and 80% Zn.  Limited metallurgical test work from drill core has been performed on the Yellowjacket Zone, which appears to have less complex metallurgy than the Main Zone. The expected process recoveries for the Yellowjacket Zone are 94% Ag, 88% Pb, and 93% Zn.

On February 6, 2018, Golden Dawn reported that a legal action has arisen between Armex Mining Corp. (“Armex”) and Huakan whereby Armex claims that it has a valid letter of intent with Huakan covering Huakan’s J&L property. Huakan has notified the Company that it intends to defend the Armex action.  The legal action has not been resolved at this time. Huakan has filed a compelling defense and has initiated a substantial counter claim. Huakan’s legal counsel Dentons LLC and Golden Dawn’s legal counsel are confident of a favourable outcome for Huakan International Mining Inc.

Assuming a resolution in Huakan’s favour, Huakan and Golden Dawn could proceed with the recommended Phase 1 program.  Subsequent to the May 2012 PEA, 45 additional drill holes were completed resulting in a sizeable increase to the Mineral Resource Estimate. The metal prices and US$ exchange rate have changed considerably since the May 2012 PEA as well.  It is therefore justifiable and recommended to update a PEA for J&L. The cost of updating a PEA is estimated at $250,000. Once completed, the results can drive the next steps of advancing the Project.  Assuming the results of the updated PEA are favourable, a Phase 2 program to advance the J&L project through a Pre-Feasibility Study would be appropriate at an estimated cost of $800,000. Associated with the Pre-Feasibility Study additional recommended work includes metallurgy, geotechnical site assessment drilling and some currently incomplete environmental studies. These additional studies are estimated to cost an additional $800,000. A drifting and drilling campaign to expand Mineral Resources would be a sizable program and could cost several million dollars.   

Conditional on a resolution in Huakan’s favour, Golden Dawn is committed to updating the Preliminary Economic Assessment (PEA) to fulfil the first phase of the terms of its option agreement. The Company has no further significant obligations under the terms of the option agreement until a decision is made to proceed with a Pre-Feasibility Study. Golden Dawn intends to manage the J&L Project on a stand-alone basis and finance it on the foundation of an economically robust Pre-Feasibility Study. 

DISCUSSION:

In other news, the Greenwood Precious Metals Project milestones are being met in a timely manner. As recently reported (news release January 18, 2018), de-watering of the Lexington Mine is now complete and current work is progressing towards start-up of operations within the next few months.

Technical disclosure in this news release has been approved by Eugene Puritch, P.Eng., FEC, CET of P&E Mining Consultants Inc., who is a Qualified Person as defined by NI 43-101 and is independent of Golden Dawn Minerals Inc.

On behalf of the Board of Directors,
GOLDEN DAWN MINERALS INC.

Wolf Wiese, President & CEO

For further information, please contact:

Corporate Communications
604-221-8936

allinfo@goldendawnminerals.com

This press release was prepared by management, who take full responsibility for its contents. Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This document contains certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under the Company’s control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance, or achievements implied by these forward looking statements. We seek safe harbor.