15,000 Meter Drill Program Planned to Expand Known Corridors and Discover New Corridors at Depth and Along Strike

Karus Gold Corp. announces that detailed interpretation of the 2020 drill program validates the Company’s exploration thesis that structural controls generate repeating higher-grade gold vein corridors within the previously defined Upper and Lower zones at the FG Gold Project FG Gold is part of the Company’s 1,000 square kilometer South Cariboo Gold District in British Columbia (Figure 1).

Highlights

• 2020 drilling defined two higher-grade structurally controlled vein corridors (Figure 2)
• Both corridors extend 650 m along strike and are open for extension
• Provides exploration roadmap for further upgrades and new underground grade discoveries
• Remains open at depth and on-strike for over 20 km to discover additional corridors
• Corridor 1, located 100 meters down dip of historical drilling and within the “Upper Zone”, is traced for 650 m along strike by the following intercepts:
  • 10 m of 5.5 g/t gold in FG-20-382
  • 4.5 m of 7.7 g/t gold in FG-20-383
  • 5.3 m of 10.2 g/t gold in FG-20-385
  • 6.6 m of 9.7 g/t gold in FG-20-378
  • 12.4 m of 4.3 g/t gold in FG-20-376
• Corridor 2, located 300 m down-dip of historical drilling and within the “Lower Zone”, is traced for 650 m along strike by the following intercepts:
  • 29 m of 1.5 g/t gold, including 15.5 m of 1.9 g/t gold in FG-20-380
  • 7 m of 3.1 g/t gold in FG-20-381
  • 17 m of 1.7 g/t gold, including 3 m of 5.8 g/t gold in FG-20-379
  • 14.4 m of 6.4 g/t gold in FG-20-377

Karus Gold CEO Andrew Kaip comments, “Results from the 2020 drilling program have set the stage for a 15,000 m drill program in 2021 to: 1) validate our understanding of the controls for high-grade gold mineralization; 2) further step out drilling to expand known corridors; and 3) to discover new corridors of high-grade gold mineralization below and along strike of historical drilling.”

FG Gold Structural Controls

Following a review of previously released drill results from the 2020 drill program conducted by KORE Mining Ltd., the technical team at Karus Gold has an increased confidence in the structural controls of higher-grade gold mineralization. The salient features of these high-grade gold corridors are outlined below.

• Typical of sediment hosted orogenic gold deposits, high-grade gold mineralization is localized in zones of increased quartz veining related to deformation of the sedimentary rocks that host FG Gold.
• The favourable stratigraphic unit that is the preferential host to gold mineralization at FG Gold is folded around a large-scale northwest trending synform called the Eureka Syncline shown in Figure 3. Related to, and parallel to this synform are smaller-scale fold zones called parasitic folds. These parasitic folds, or “hinge zones” effectively “thicken” gold bearing veins into the hinges, creating a series of periodic plunge lines containing increased quartz veining and higher-grade gold.
• These zones are roughly parallel to the axial plane of the Eureka Syncline and form elongate corridors oriented in a northwest/southeast direction.
• Hinge zones commonly contain a broad zone of low-grade gold mineralization cored by a higher-grade interval associated with increased quartz veining.

Given an enhanced understanding of the orientation of these high-grade gold corridors the Company believes that intercept below define newly discovered high-grade gold corridors, the dimensions of which will be fully evaluated through further confirmation drilling.

• Corridor 1 – FG-20-382 intersected 42.2 m of 2 g/t gold, including 10 m of 5.5 g/t gold and FG-20-383 returned 48.2 m of 2 g/t gold, including 4.5 m of 7.7 g/t gold, approximately 100 m below historical drilling. FG-20-385, confirms the continuity of gold mineralization 100 m along strike to the northwest and includes 17.7 m of 3 g/t gold, including 5.3 m of 10.2 g/t gold. Three hundred and fifty meters to the northwest, FG-20-378 intersected 62.3 m of 1.7 g/t gold, including 6.6 m of 9.7 g/t gold and FG-20-376, located a further 150 m to the northwest returned 47.9 m of 1.6 g/t gold, including 12.4 m of 4.3 g/t gold are interpreted to be the northwest continuation of Corridor 1. These intersections outline 600 m of strike potential with Corridor 1 open to further extension to the southeast and northwest.
• Corridor 2 – FG-20-381 of 24 m of 1.1 g/t gold, including 7 m of 3.1 g/t gold and FG-20-380, located 100 m to the northwest, of 49.9 m of 1.1 g/t gold, including 15.5 m of 1.9 g/t gold, approximately 300m below historical drilling correlate with Corridor 2. Three hundred meters to the northwest, FG-20-379 intersected 50.5 m of 0.8 g/t gold, including 3 m of 5.8 g/t gold and FG-20-377, located a further 150 meters to the northwest returned 31.4 m of 3.2 g/t gold, including 14.4 m of 6.4 g/t gold, approximately 330m below historical drilling. The intersections outline 600 m of strike potential with Corridor 2 open to further extension to the southeast and northwest.

A plan map of the drill collars and traces is included in Figure 2, including the location of the cross sections in Figures 4 and 5, which show the above-mentioned intercepts related to the development of high-grade gold corridors.

Table of Significant Drill Results that Outline Higher-Grade Gold Corridors

1. Karus Gold has not been able to determine true width yet due to complexity of the vein structures within the mineralized zones. The 2020 drill program was designed to better understand the geometry and how the mineralized zones are related. The orientation of individual quartz veins within the mineralized zones are quite variable. Reported widths are drill indicated core length and not true width, for the reasons above. Average grades are calculated with un-capped gold assays, as insufficient drilling has been completed to determine capping levels for higher grade gold intercepts.
   2. Drilling data on the Lower Zone is currently limited and the true thickness and orientation of the zone is not firmly known. However, based on current data, it is estimated that intercept represents ~50%-65% of the true thickness of the zone.
   3. Composites are calculated using a 0.3 g/t Au cutoff, incorporating no more than 7 m downhole dilution. Higher grade composite sections are calculated using a 1 g/t and 3g/t cutoff incorporating no more than 5 m downhole dilution. Screen metallic assay data is present as it is more representative of the true sample value due to the increased sample volume processed and the multiple gold size fractions analyzed.

Regional Geology

The FG Gold property straddles the boundary between the Omineca and Intermontane tectonics belts of the Canadian Cordillera. The eastward emplacement of the Intermontane Belt onto the Omineca Belt along the Eureka Thrust Fault caused widespread regional metamorphism and structural deformation of both Belts. The regional scale, northwest trending, shallowly plunging, Eureka Syncline is the dominant resulting structure in the project area. Rocks in the core of the Eureka Syncline are comprised of basalt, augite porphyry flows, tuffs and volcanic breccias metamorphosed to a low grade; they are structurally emplaced onto metavolcanic and sedimentary rocks of the Quesnel Terrane. The Quesnel Terrane is recognized for its prevalence of copper, gold and molybdenum mines and showings such as those at Highland Valley, Boss Mountain, QR and Mount Polley.

Property Geology

The FG Gold Project is centrally located over the Eureka Syncline, strategically encompassing two limbs and the hinge zone of a gold-bearing meta-sedimentary rock unit of the Quesnel Terrane. FG Gold hosts an orogenic gold project on the northeast limb of the Eureka syncline. The gold-bearing rock, a ‘knotted’ phyllite, is the host rock for gold mineralization and has been traced for over the 3.5 km strike length by shallow drilling (see Figure 2). Past drilling averages only 93 m deep into a moderately dipping sedimentary host rock. Mineralization is open at depth and along almost the entire trend.

Surface mapping, surface geochemistry and geophysical inversion of airborne electromagnetic data suggests the knotted phyllite has a strike length of over 20 km with potentially thickened regions occurring in the Eureka Syncline hinge zone. Figure 3 is a regional view to the northwest of the host rock potential of the Eureka syncline and that extends through Eureka Ridge and highlighting the tens of kilometers of exploration potential relative to the area of historical drilling.

The FG Gold Project consists of 35 claims, totaling 13,008 hectares, in the eastern Cariboo region of central British Columbia, approximately 100 km east of Williams Lake. The project is at low elevation and accessible by forestry roads. The Project also hosts copper-gold porphyry mineralization at the Nova Zone, discovered in 2018.

FG Gold is part of Karus Gold’s 1,000 km² South Cariboo Gold District which hosts 110 km of the Eureka thrust structural trend that drives gold mineralization in the District. The Trend is highly prospective for orogenic gold deposits, some of largest in the world, and includes the Company’s Gold Creek Project. The Cariboo region is accessible with local power, well developed road network and skilled local labour from multiple current and past operating mines.

More information on the NI 43-101 technical report dated December 16, 2020 “Technical Report on the South Cariboo Gold Property” filed under Karus Gold’s Profile on SEDAR at www.sedar.com and on Karus Gold’s website at www.karusgold.com.

About Karus Gold

Karus Gold is 100% owner of the 1,000 km² South Caribou Gold District that includes the drill-stage FG Gold and Gold Creek projects in British Columbia. Karus Gold is supported by strategic investors Eric Sprott; and insiders, together with the management and Board, own approximately 59% of the basic shares outstanding.