Firebird Nickel Project

The Firebird Nickel Project (“Firebird”) is comprised of 68 claims owned 100% by ALX totaling 20,491 hectares (50,635 acres) that are prospective for nickel, copper and cobalt (“Ni-Cu-Co”) mineralization, located in the northern Athabasca region of Saskatchewan. Firebird hosts a magmatic nickel-sulphide mineralizing system that has been underexplored by modern methods until its acquisition by ALX.

The centre of Firebird is located approximately 18 kilometres (11.2 miles) northwest of Stony Rapids, Saskatchewan within the Tantato Domain, otherwise known as the East Athabasca Mylonite Triangle, which forms a segment of the Snowbird Tectonic Zone. A long history of exploration beginning in 1929 discovered numerous Ni-Cu-Co showings within Firebird’s boundaries, including the Axis Lake deposit (“Axis Lake”), the Rea Lake deposit (“Rea Lake”) and the Currie Lake deposit (“Currie Lake”). However, no exploration was carried out from 2007 to 2019 until ALX acquired its claims by staking and subsequent purchase in 2019.

On August 24, 2020, ALX announced the signing of an option agreement (the “Agreement”) with Rio Tinto Exploration Canada Inc. (“Rio Tinto”) on the Company’s Falcon Nickel Project, located near the town of Stony Rapids at the terminus of Highway 905 in northern Saskatchewan. Due to a naming conflict with another Rio Tinto mineral exploration project located in the province of Saskatchewan, ALX and Rio Tinto have mutually agreed to change the name of the Falcon Nickel Project to the Firebird Nickel Project (“Firebird”, or the “Project”).

Terms of the Option Agreement

Rio Tinto may acquire up to an 80% interest in Firebird by incurring a total of $12.0 million in exploration expenditures over six (6) years and by making cash payments to ALX totaling $125,000, as outlined in the following summary:

• Rio Tinto may acquire a 51% interest in Firebird (the “First Option”) by solely funding $3.0 million in exploration expenditures within three (3) years of the date of the Agreement (the “Effective Date”), which includes certain other obligations, namely:

• carrying out an initial exploration program of not less than $150,000, to be completed within six months of the Effective Date;
• making a $50,000 cash payment to ALX within 45 days of the Effective Date.

• Upon Rio Tinto acquiring a 51% interest in Firebird, it may elect to form a joint venture on terms established by the parties in a separate joint venture agreement, or give notice to ALX that it wishes to pursue its right to acquire up to an 80% interest in the Project (the “Second Option”). Any excess expenditures incurred by Rio Tinto during the First Option period may be credited to the expenditures required under the Second Option;

• If Rio Tinto does not elect to form a joint venture after satisfying the obligations of the First Option, it may choose to maintain its 51% interest or it may elect to acquire an additional 29% interest in Firebird to earn an 80% interest in the Project by solely funding an additional $9.0 million in exploration over a second 3-year period for total expenditures by Rio Tinto of $12.0 million over six years, and by making a second cash payment to ALX of $75,000 for a total of $125,000 in cash payments to ALX during the option periods;

• Rio Tinto will act as operator of exploration (the “Operator”) at the Project, but may in its sole discretion appoint ALX to act as Operator at any time during the First or Second Option periods. Either party while acting as Operator may charge a 10% administrative fee on exploration expenditures, with such administration fee to be included as expenditures accrued to the First Option and Second Option periods;

• Under the agreed joint venture terms, a party whose participating interest is diluted below 10% is converted to a 1.0% net smelter returns royalty (“NSR”), capped at $20.0 million in royalties payable.

Certain claims and partial claims owned by ALX have been added to the Firebird property for the purposes of the Agreement. ALX has acquired and added area to the northwest and southwest of the original Project boundaries, and has removed claims to the southeast, thereby establishing the size of Firebird as of the Effective Date at 20,491 hectares (50,635 acres).

On October 1, 2020, ALX announced the commencement of an airborne electromagnetic survey at Firebird.

At the request of Rio Tinto, ALX acted as operator of the airborne EM survey, which would consist of approximately 1,060 line kilometres utilizing the helicopter-borne Vertical Time-Domain Electromagnetic (“VTEM™ Max”) system from Geotech Ltd. of Aurora, Ontario, Canada. The VTEM™ Max system offers a higher degree of depth penetration than the VTEM™ system previously used at Firebird in 2005, and would be carried out over the northern part of Firebird where no modern airborne EM system has ever been flown.

On November 9, 2020, ALX announced the preliminary results of the airborne EM survey completed at Firebird consisting of approximately 1,163 line kilometres utilizing the VTEM™ Max system. The VTEM™ Max survey successfully delineated several new anomalous zones of strong conductivity in the northern part of Firebird, an area never covered previously by modern airborne EM systems. The project technical team consisting of ALX and Rio Tinto personnel identified initial high-priority anomalies based on their strong conductivity and coincident high magnetic responses, which may be suggestive of the presence of sulphides. Additional processing and modelling of the final survey data is planned to better assess the depth and character of the best anomalies to determine their viability for potential drill testing.

In July 2020, ALX carried out a low social impact prospecting and sampling program in three project areas near Stony Rapids, SK (the “Program”). ALX used a portable “back-pack” diamond drill capable of drilling 1.4 inch (3.6 cm) BQ diameter core in order to sample fresh rock below the oxidized gossans present on the properties (see drilling photo). The objectives and highlights of the Program at Firebird were as follows:

• Investigation of historical nickel-copper-cobalt showings and ground truthing of historical airborne EM anomalies within Firebird. At the Wiley Lake Nickel Showing (last documented samples circa 1982), ALX collected two core samples from a gossanous outcrop using the portable drill and four other grab samples. The six samples returned 0.04% to 2.43% nickel and 0.01% to 0.43% copper;
• The JJ Gold Showing (“JJ”), discovered in the southern part of the Project by Noranda Exploration Company, Limited in 1991. Ground follow-up along strike of an airborne EM conductor (re-interpreted by ALX as having a 1,000 metre strike length) led to the discovery of a gossanous outcrop described as a possible iron formation-style gold occurrence. Fourteen of sixteen grab samples taken by Noranda from the outcrop proved to be anomalous for gold, ranging from 50 parts per billion (“ppb”) gold to 1,430 ppb (1.43 grams/tonne) gold. Follow-up work was recommended but was not carried out at that time. ALX’s July 2020 sampling at the JJ returned gold values in core and grab samples that ranged up to 879 ppb gold.

JJ Gold Showing – Back-Pack Drilling on Outcrop

Back-Pack Drill Core from Wiley Lake Outcrop

Highlights of Firebird Nickel July 2020 Rock Sampling

Showing Name	Sample Number	Sample Type	Nickel (%)	Copper (%)	Cobalt (%)	Sulphur (%)	Gold (ppb)	Platinum (ppb)	Palladium (ppb)
Wiley Lake	146078	Grab	2.43	0.34	0.08	15.80	68	11	90
Wiley Lake	146076	Grab	1.25	0.27	0.04	7.92	205	51	43
Wiley Lake	BPWL01-01	Core	1.22	0.43	0.04	7.93	270	20	49
Wiley Lake	BPWL01-02	Core	1.31	0.36	0.05	8.33	187	15	48
JJ Gold	146012	Grab	-	-	-	-	879	-	-
JJ Gold	146020	Grab	-	-	-	-	467	-	-
JJ Gold	BPFN01-01	Core	-	-	-	-	348	8	3

Wiley Lake Back Pack Drilling

Firebird hosts a multitude of other airborne geophysical anomalies that could represent zones of magmatic sulphide mineralization. ALX’s ongoing review and interpretation of airborne and ground EM data by geophysical modeling and follow-up ground-truthing has generated a series of new drill targets at Firebird. Additional airborne geophysical surveying is planned in 2020 over areas at Firebird not previously surveyed by modern geophysical techniques.

A site visit carried out by ALX in October 2019 at the Currie Lake deposit area confirmed grades in surface rock samples of up to 3.17% nickel and 0.40% copper from historical trenches, along with anomalous grades of cobalt, gold and platinum group metals. ALX has since identified drill targets at Currie Lake located deeper than the reported historical mineralized intersections. ALX’s geophysical modeling completed in February 2020 has revealed that the historical drilling at Currie Lake, last carried out in 1957 and 1965, overshot the highly-prospective anomalies defined by the recent geophysical modeling. Other prospective targets along the northern Currie Lake trend have been developed for ALX’s inaugural 2020 drilling program, which began on March 2, 2020.

Helicopter slinging drilling equipment to first Firebird drill site

On April 15, 2020 ALX announced analytical results from the 2020 winter drilling program at Firebird. Three holes were drilled for a total of 600 metres. Nickel-bearing sulphide mineralization was intersected in two of the three holes, which were designed to test geophysical targets developed by the Company.

2020 Exploration Program

Hole FN20-002 targeted a borehole electromagnetic (“BHEM”) anomaly carried out on the first hole of the program in the V-1 target area approximately 100 metres east of the historical Currie Lake deposit. Magmatic nickel sulphide mineralization was intersected from 47.03 to 70.81 metres, averaging 0.36% nickel and 0.09% copper over the 23.78 metre interval, including 10.61 metres of 0.55% nickel and 0.14% copper from 54.01 to 64.62 metres, and 2.05 metres of 0.90% nickel and 0.19% copper from 58.95 to 61.00 metres.

A detailed ground geophysical EM survey is recommended over the V-1 area in order to better resolve the strike, character and possible connections between the multiple conductors identified to date.

Hole FN20-003 targeted a 1,400 metre-long electromagnetic (EM) conductor first detected by a 2005 VTEM™ airborne survey, known as the V-3 target (“V-3”). In order to better define this conductor a ground EM survey was carried out, which defined two distinct conductive bodies, “V-3A” and “V-3B”. The V-3A conductor, which displayed modelled high conductance and a strike length of approximately 580 metres, was selected for drilling. The drill hole intersected stringer-type magmatic nickel sulphide mineralization in two narrow intervals, with a peak value of 0.13% nickel and 0.11% copper over 0.65 metres from 235.27 to 235.92 metres. A follow-up borehole electromagnetic (“BHEM”) survey was carried out and after reviewing the modelled BHEM data, ALX concluded that the targeted high-conductance body was not intersected and that the drill hole passed under the bottom edge of the body by approximately 10 metres.

Due to the possible encroachment of the COVID-19 epidemic into the Stony Rapids district, ALX suspended the winter drilling program in late March 2020. The drill was secured on-site at V-3 and drilling can be restarted at such time as ALX deems appropriate for the safety of its workers and the local communities.

Firebird drill site for FN20-001 and FN20-002

ALX geologist surveying drill hole location

In January 2020, ALX completed a helicopter-supported Spatiotemporal Geochemical Hydrocarbon (“SGH”) survey from the surface ice of Konkol Lake, which is located over the eastern end of the Currie Lake East airborne conductor trace. ALX collected 45 lake sediment samples from a grid consisting of nine lines spaced 150 to 200 metres apart. Results from the SGH survey are expected in late February 2020 and will be integrated into the targeting matrix for ALX’s 2020 drilling program.

Lake Sediment Sampling on Konkol Lake, January 2020

On January 16, 2020, ALX announced the results of a reconnaissance soil sampling program and a new geophysical interpretation study carried out on Firebird. The integration of the new exploration data with the known geology mapped at the Project has led to the definition of a compelling new target area for drilling in the winter of 2020.

The Currie Lake East (“CLE”) airborne conductor was modelled by Condor Consulting, Inc. of Lakewood, Colorado (“Condor”) as part of a detailed interpretation of historical digital data from three airborne surveys flown over the Firebird area between 1991 and 2008. Condor is recognized internationally as expert in the field of airborne electromagnetics. The CLE conductor was first detected by a 2005 Versatile Time Domain Electromagnetic (VTEM) airborne survey, but the results were not processed with modern computer modelling techniques until ALX commissioned its 2019 study. Condor describes the CLE conductor as a deeper, late-time, high-priority EM conductor approximately 1.2 kilometres in length that is associated with a magnetic anomaly. This conductor is located approximately 4 kilometres north of the historic Axis Lake East nickel-copper-cobalt deposit and ranks as one of the most significant geophysical anomalies described in the Condor interpretation report to ALX.

In October 2019, ALX collected a total of 45 soil samples from a land-based grid aligned over the surface trace of the CLE conductor which were submitted to Activation Laboratories Ltd. (Actlabs) in Ancaster, Ontario for conventional and Spatiotemporal Geochemical Hydrocarbons (“SGH”) analysis. This initial soil survey program represents ALX’s first test of the SGH process, which is reported to detect buried mineralization at depths up to 500 metres. A nickel-copper anomaly was detected within the grid over the western end of the CLE conductor trace. According to the SGH report, the results could indicate the presence of a “Redox zone”, which may be associated with the presence of nickel-copper mineralization beneath this anomaly. The nickel and copper anomalies at Firebird directly coincide with one another, giving further confidence that this result might represent a surface indication of nickel-copper type mineralization.

On November 20, 2019, ALX announced additional analytical results from rock samples collected during a reconnaissance prospecting program in October 2019. Samples taken from historical trenches and from outcrops in the northern part of the Project returned values of up to 3.17% nickel and 0.402% copper, along with anomalous values of cobalt, gold, platinum and palladium.

In October 2019, ALX carried out a site visit with two objectives: (1) to sample historical trenches at the Currie Lake nickel-copper-cobalt deposit, known for its higher grades of nickel, and (2) ground truthing of certain geophysical anomalies identified in a 2005 airborne survey that were never followed up. Sixteen rock samples containing up to 50% to 60% sulphides were collected from three historical trenches, seven outcrop samples were collected near the surface traces of high-priority geophysical conductors, and 45 soil samples were collected over the surface trace of a conductor. The trench samples returned the higher nickel values and the results of the samples that returned over 1.0% nickel are shown in the table below:

Table 1 Additional Analytical Results of Firebird Nickel Project Surface Rock Samples

Firebird hosts three shallow magmatic nickel sulphide deposits, one of which, Axis Lake, can be seen from the air due to its distinctive gossanous (oxidized) appearance. ALX believes that the higher grades of nickel found at the northernmost Currie Lake deposit may represent the near-surface expression of a higher-grade section of the mineralizing system at Firebird. Through its geophysical review and modelling of historical airborne survey data, which is still underway, the Company is seeking to locate magmatic conduits and feeder systems that could represent the sources of the known deposits at the Project, and provide additional mineralized zones.

On November 12, 2019 ALX announced initial analytical results from a reconnaissance prospecting program at Firebird. Three of the rock samples were submitted on a rush basis to SRC Geoanalytical Laboratories in Saskatoon, SK, and returned the following values shown in Table 2 below:

Table 2. November 12 Analytical Results of Firebird Nickel Project Surface Rock Samples

ALX has produced a preliminary 3D geologic model for Firebird, which is being expanded to better understand the controls on the known zones of nickel-copper-cobalt mineralization hosted by the Project.

ALX received an exploration permit for geophysical surveying and diamond drilling at Firebird and is currently developing drill targets for an exploration program for the winter of 2020.

• On June 12, 2019, ALX announced its first acquisition of claims at Firebird totaling approximately 7,414 hectares (18,322 acres). The Company staked 25 claims during a staking rush in late May 2019 in the historic Axis Lake area, and added to its land position by purchasing a single claim from an arms-length vendor at the Rea Lake deposit located southeast of Axis Lake.

• On October 7, 2019, ALX announced the acquisition of additional claims prospective for Ni-Cu-Co mineralization at Firebird through a purchase agreement with Eagle Plains Resources Ltd. (“Eagle Plains”) for a 100% interest in 31 claims totaling approximately 5,064 hectares (12,513 acres) located in the historic Axis Lake area.

• On October 24, 2019, ALX announced it had increased its land position at Firebird through a purchase agreement with an arm’s length vendor for a 100% interest in 9 additional claims totaling approximately 7,508 hectares (18,553 acres) located in the northern Axis Lake area.
  

Firebird is located approximately 20 kilometres southwest of ALX’s Flying Vee Nickel Project, and near recent staking by Kobold Metals, a private U.S. company exploring for energy metals. Of the three known deposits present on the property, Axis Lake is the most significant Ni-Cu-Co deposit within the Firebird area.

Axis Lake Deposit

Ni-Cu-Co mineralization at Axis Lake appears semi-continuous over at least a 5 kilometre strike length parallel to the regional east-striking structural trend. Mineralization is comprised of a south-dipping, sulphide-rich layer varying 1½ to 10 metres thick and is hosted by strongly deformed, granulite facies mafic rocks (Geology of the Axis Lake East Zone Nickel-Copper Deposit, Tantato Domain, Northern Saskatchewan, Normand, 2015). Primary magmatic sulphide mineralization consists of pyrrhotite, pyrite, chalcopyrite and pentlandite ranging from finely disseminated to coarsely disseminated or semi-massive network to massive (Vivian and Lo, 2007). Preliminary analysis of published geochemical data of mineralized samples from the eastern part of the deposit shows remarkable similarities between this deposit and the world-class Voisey’s Bay nickel deposit in Labrador (Normand, 2015).

Rea Lake Deposit

Rea Lake is located approximately 1.6 kilometres southeast of Axis Lake. Rea Lake occurs within granulite facies garnetiferous felsic gneisses, iron formation and banded mafic rocks close to the apex of a major southwesterly plunging synform. Mineralization is hosted by an upper metaquartzite and a lower nortite and consists of nickeliferous pyrrhotite, pyrite and chalcopyrite disseminated throughout the country rock. The mineralized zone trends east-west and dips to the south. Rea Lake is estimated to be approximately 2,700 metres long, 90 to 240 metres wide and 30 metres thick (SMDI 1627). Significant proportions of the sulphides in this deposit are remobilized and contain more pyrite and chalcopyrite as compared to Axis Lake (Technical Report on Operations, April 1 to March 31, 2006, Fond du Lac Project, Red Dragon Resources Corporation, Hull, 2006).

Currie Lake Deposit

Currie Lake is located approximately 5.4 kilometres northwest of Axis Lake. Two parallel zones of mineralization consisting of disseminations and fracture fillings of pyrrhotite, pyrite and chalcopyrite hosted by sheared norites are separated by 15 metres of metaquartzites and metagreywackes. Two mineralized zones have been identified: the Upper Zone varies from 3½ to 30 metres in width and the Lower Zone varies in width from 1½ to approximately 60 metres (SMDI 1585).

The technical information on this web page has been reviewed and approved by Sierd Eriks, P.Geo., President and Chief Geologist of ALX, who is a Qualified Person in accordance with the Canadian regulatory requirements set out in NI 43-101. Readers are cautioned that the technical information described is historical in nature; however, the information is deemed credible and was produced by professional geologists in the years discussed.