Valuation Commentary: Straightup Resources Inc. (CSE: ST) is a new public company focused on advancing its flagship RLX and Belanger properties located in the Red Lake District of Ontario, Canada. Red Lake is one of the more prolific gold mining districts in the world with ~29 million oz gold having been produced from high-grade mines since 1925, >80% of this gold was produced from Evolution Mining's Red Lake Complex (formerly owned by Newmont). Today some of the most exciting exploration projects are ongoing in the district; e.g. Great Bear Resources is working its Dixie project just to the south of Straightup Resources' RLX Property, and Pure Gold Mining Resources is advancing to production for the end of this year.

Two years ago Great Bear was trading at ~50 cents/share, it has since experienced a >38X multiple share price appreciation (>76X over 3 years). Obviously there are some really smart people over at Great Bear, they have a track record of being able to look at the big picture of what is going on geologically in the Red Lake District and predict where huge deposits of gold might occur. In 2019 Great Bear acquired additional ground it believed to be highly prospective, of particular note is its Sobel property which is almost entirely encircled by Straightup Resources' RLX property. The RLX property of Straightup Resources is prime ground that was staked prior to Great Bear announcing its Sobel acquisition by the entity that vended both the RLX and Belanger properties into the new public company.

In short, Straightup Resources is considered to have highly favorable geology for a major gold discovery of significance in a prime Red Lake District location.

Figure 2. (above) Map of Red Lake District showing area projects/players, Straightup Resources' RLX North, RLX South, and Belanger Properties are depicted in red. Each project brings investors value in different ways;

• The RLX PROJECT is large (~10,000 ha) and offers the big elephant size gold discovery potential with D2 faults interpreted to run through, on-strike to the SE of the district’s largest gold deposit (Red Lake Gold Mines – Evolution Mining). The property is underexplored as it has overburden with little bedrock outcropping, which has limited past exploration efforts in favour of other areas in the Red Lake District. Straightup Resources' technical team will be looking to target the contact zones of the volcanic assemblages that host the gold. A past operator has already drilled one hole (DDH-160-5-1 in the 80s) on RLX North that shows the geological contact between mafic/ultramafic vs. felsic intermediate rocks is present -- a major geological contact similar to what provided a pathway for gold laden hydrothermal fluids for success at Great Bear Resources on its Dixie property.

• The BELANGER PROJECT (~2,000 ha) is more advanced, has mineralization at surface, and it brings opportunity for quick news flow with two immediate areas of interest; 1) the Hemming Showings are found in a deformation zone, tracking NE to SW near the middle of the property, that is measured to be at least 100 m wide and possibly a lot wider. The showing produced a selective grab sample which measured ~0.9 oz/t gold. There are a number of gold and base metal showings along that same line strike through the property. 2) The Williamson Showings are where three historic trenches were exposed by past operators; trench C has produced grab samples up to 25 g/t gold, trench E which is 550 m to the NE of trench C has produced selective grab samples of up to 60.44 g/t gold, selected copper grab samples were also pulled from the trenches measuring over 5% Cu. There are parallel deformation zones. Straightup Resources' technical team will be looking at the underlying controls, the big picture, how the gold and copper are distributed, and will develop a predictive model. Already, from drill holes performed by past operator Kings Bay, it is suggesting some continuity to the copper and gold mineralization; DDH 14 & 15 both intersected over 7 g/t gold over narrow intercepts within the broader gold and copper mineralized envelope.

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Project Location

Figure 3. (above) Project location map

• Ontario’s Red Lake Mining District is one of Canada’s most prolific gold mining districts, renowned for high-grade gold deposits.

• This is a mining-friendly, politically stable jurisdiction with a skilled labour force and infrastructure specifically built around meeting the needs of the mining industry. Project Location – Red Lake

• Nearly 30 million ounces of gold has now been produced from the district and gold production has been continuous since it was first discovered in the late 1920s.

• Different types of exploration work are better suited to being performed at different times of the year; prospecting and geological mapping between May and October. Winter is often better to diamond drill because frozen lakes give access to areas. Geophysics can be performed year round.

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RLX North and RLX South -- Project Overview

Figure 4. (above) RLX North and South Properties of Straightup Resources Inc. - The blue lines represent the interpretation of the D2 folds, a major controlling feature for gold mineralization in Red Lake. 'D2' stands for the 'second deformation' event that occurred in the district -- there is a lot of gold historically associated with these D2 fold structures. 90% of the historic gold production in the Red Lake District was extracted from a larger volcanic package called the Balmer assemblage at the contact of the Confederation assemblage, which is ~250 million years younger. This geological contact between mafic/ultramafic (more brittle under stress) vs. felsic intermediate rocks (more ductile under stress) is the key for creating the pathway for hydrothermal fluids -- Great Bear has a ~4km+ long gold laden sheet of it along its LP fault, part of an 11+ km gold system that also includes its Dixie fault. Important to note is that the D2 faults tracking into the RLX Project come from the direction, on-strike, of the nearby Evolution Mining Red Lake Mine.

At over 10,000 hectares, RLX North and RLX South Projects represent a district-scale exploration opportunity.

 
 The RLX North and RLX South Projects are well-positioned:

• On-strike to the SE of the district’s largest gold deposit (Red Lake Gold Mines – Evolution Mining).

• Inferred presence of major lithological contacts and structural controls.

• The project almost surrounds Great Bear Resources’ Sobel Project. Great Bear also appears to have interpreted the presence of these significant regional-scale structural controls that track into the project area (see GBR news release dated March 11, 2019 note: they too show similar D2 fault lines in the image accompanying their release).

• Highly accessible, the southern property boundary is only 8 km from the paved highway into Red Lake and can be accessed by forest service roads which traverse throughout the properties.

2020 Exploration Program for the RLX Projects - Science-Based Exploration and Decision-Making
 

Historical data Review, compilation and interpretation;

• Compile historical property and regional data from government surveys.

• Analyze and reinterpret data.

Examine historical drill core (ENDM Core Library, Red Lake);

• Selectively re-sample primarily for primitive-mantle normalized trace element geochemistry. Primitive-mantle normalized trace element geochemistry was used recently by Great Bear Resources and Bounty Gold Corp on their Red Lake exploration projects.

Geological mapping and sampling;

• Using field observations and geochemistry to map Balmer-Confederation Assemblages. SGH soil sampling has been used recently by Great Bear Resource, BTU Metals and GoldON on their Red Lake exploration projects.

• Re-interpret property geology.

Geophysical surveys;

• High-resolution airborne magnetics.

• Induced Polarization.

• LIDAR. LIDAR was used recently by Pacton Gold on their Red Lake exploration project.

“Value is created in the ‘juniors’ in exploration by answering a series of unanswered questions“ – Rick Rule

Figure 5. (above) Opportunity at the RLX Project (source: Straight Up Resources Corporate Presentation)

Straightup Resources Inc. had the following synopsis of its RLX Project on its corporate website:

The RLX North and RLX South property package is located within the Red Lake Greenstone Belt of Northwestern Ontario. Collectively the RLX North and RLX South properties form a contiguous land package of over 10,000 hectares surrounding Great Bear Resources’ Sobel property.
 
The primary distinction between the two properties (RLX North and RLX South) is with the interpreted geology underlying each, with RLX North interpreted to be underlain primarily by the 2.96-2.99 Ga Balmer Assemblage, and RLX South interpreted to be underlain primarily by the 2.73-2.75 Ga Confederation Assemblage. The contact between these two metavolcanic packages is highly prospective for economic deposits of gold in the Red Lake mining camp. The majority of historic gold production from the district has been mined from within a few hundred meters of this important geological contact, making it a high priority exploration target.
 
The exact boundaries and the contact between the two metavolcanic packages, and the surrounding felsic intrusives are not accurately mapped owing to the presence of thick overburden. The lack of rock exposure (less than 1%) has also resulted in limited historical exploration, and the property is underexplored in comparison to other areas of favourable stratigraphy within the Red Lake Greenstone Belt. This represents an exploration opportunity, to answer previously unanswered questions about the underlying geology of the area.
 
While historic exploration has been limited, particularly in the areas of preliminary interest on the property, sufficient exploration has been done to provide some useful data to be reinterpreted. Selco diamond drill hole 160-5-1 drilled in 1980, for example, was collared in the northeastern portion of the RLX North property. Based on government geological maps, this drill hole was collared several hundred meters into the surrounding felsic intrusives. However, an examination of the drill core logs reveals that the drill hole remained in metavolcanics or metasediments for its entire 300 ft length. This hole was interesting and may warrant follow-up work because the top portion of the hole, which is almost exclusively mafic-ultramafic and metasedimentary, is consistent with lithology typical of the Balmer Assemblage, while the lower portion of the hole, which is almost exclusively felsic to intermediate, is consistent with lithology typical of the Confederation Assemblage. It is possible that this hole may have transected the Balmer-Confederation contact in an area previously interpreted to be felsic intrusives.
 
Based on mapped geology and regional geophysical surveys, the project area can be interpreted to be a possible extension of the geology and structures hosting Evolution Mining’s Red Lake Gold Mines which are located approximately 10-17 km to the northwest of the RLX South and RLX North properties, respectively. Historic geophysical surveys have identified the possible presence of D2 folds and east plunging anticlines on property, which may be important structural controls on mineralization.

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Belanger -- Project Overview

Figure 6. (above) Map of the Belanger Project.

• Historical exploration work (mechanical stripping, diamond drilling) on the 2,000-hectare property has identified a significant Au-Ag-Cu showing that is exposed on surface in three trenches along ~600 meters of strike:

• Gold values up to 60.44 g/t Au, copper values up to 5.47% Cu in selective grab samples.

• 7 grab samples collected from Trench “C” in 2012 averaged 6.8 g/t Au (range 1.01 g/t Au to 25.0 g/t Au) – notably, this trench has never been drill tested.

• Early exploration work will focus on validating historical sampling results and following the occurrence along strike with a view to better understanding the nature and controls on mineralization.

• Only 2 km north of Infinite Ore’s Garnet Lake - Arrow Zone Zn-Cu-Ag-Au deposit, and 9 km northeast of Infinite Ore’s Copperlode “A” Cu-Ag deposit.

• Excellent forest road access from the town of Ear Falls.

2020 Exploration Program – Belanger Project

Historical data Review, compilation and interpretation;
   ▪ Compile historical property and regional data from government surveys.
   ▪ Analyze and reinterpret data.
 
Re-examine areas of mechanical stripping and bedrock trenching;
   ▪ Resample to validate historical assays.
   ▪ Interpret geological and structural controls on mineralization.
   ▪ Prospect for strike extensions.
 
Geological mapping and sampling;
   ▪ Property-wide mapping and sampling.
   ▪ Re-interpret property geology.
 
Geophysical surveys;
   ▪ High-resolution airborne magnetics.
   ▪ Induced Polarization.
   ▪ LIDAR.

Straightup Resources Inc. had the following synopsis of its Belanger Project on its corporate website:

The 2,100 hectare Belanger property is located within the 2.73-2.75 Ga Confederation Assemblage. The property is located 9 km northeast of Infinite Ore’s polymetallic Copperlode “A” deposit, 2.2 km north of Infinite Ore’s polymetallic Garnet/Arrow deposit and 6 km southwest of the historic South Bay Mine VMS deposit.
 
Historic exploration on the property in the 1990’s identified three significant surface exposures of gold, copper and silver mineralization in the southern portion of the property, referred to as the Williamson Occurrences. These three surface showings, referred to as trenches “C”, “D” and “E” would appear to be on-strike of each other, with approximately 550-600 meters separating trenches “C” and “E”.
 
Historic grab samples from Trench "C" have returned up to 25.0 g/t Au, and up to 5.47% Cu and seven grab samples collected from this trench in 2012 averaged 6.8 g/t Au (range 1.01 to 25.0 g/t Au) and 0.446% Cu (range 0.114 to 0.820% Cu). Trench C has yet to be tested by diamond drilling.
 
Historic grab samples from Trench "D" have returned up to 3.41 g/t Au and up to 3.85% Cu. A limited diamond drilling program completed in 2002 also returned significant intercepts, such as 1.10 g/t Au, 6.6 g/t Ag and 0.69% Cu over 10 ft (including a narrower higher grade intercept of 7.66 g/t Au and 2.06% cu over 1 ft) in drill hole GL-14, drilled by King's Bay Gold Corporation.
 
Historic grab samples from Trench "E" have returned up to 60.44 g/t Au. A limited diamond drilling program completed in 2002 also returned significant intercepts beneath Trench E, including 2.20 g/t Au over 5.8 ft (GL-03).
 
As each of the three trenches has been mechanically stripped of overburden in the 1990’s, there exists an opportunity to further study and interpret the underlying structural controls on gold-copper mineralization with the intent of targeting zones of higher grade along strike and at depth.
 
Several other gold or base metal occurrences occur throughout the property, including the Hemming Occurrences, which are located within the northeast trending Confederation Lake Narrows Deformation Zone. A property examination by the Red Lake Resident Geologist in 1997 suggested the showings associated with the Hemming Occurrences are found within a 060o trending shear zone that is potentially more than 100 m wide and extensively silicified.
 
In 1992, three separate surface exposures, referred to as the No. 1, No. 2 and No. 3 showings were described.
 
The No. 1 or Main showing consists of a large trench sunk on an 8 to 12 inch wide quartz vein trending 030/70SE. The vein contains abundant chlorite stringers and minor amounts of disseminated galena and fine visible gold. Two grab samples taken by A.P. Pryslak from the quartz vein at the No. 1 showing assayed 0.11 ounce Au per ton and 0.13 ounce Ag per ton; and 0.59 ounce Au per ton and 0.41 ounce Ag per ton.
 
The No. 2 showing is located about 2000 feet southwest of the Main showing. The No. 2 showing consists of a small trench sunk on a massive, white, quartz vein striking 040/90 along an exposed strike length of 35 feet. The vein is 9 feet wide at its northeast end and branches into 2 separate veins, which are 5 and 12 feet wide, at its southwest end. The vein contains chloritic inclusions of wall rock and minor amounts of galena. The vein occurs at a gabbro/tuff contact which is on strike with the No. 1 showing.
 
The No. 3 showing is situated about 3400 feet east-northeast of the No. 1 showing and is located on the north shore of a small lake. The showing consists of a 1 to 7-foot wide quartz vein which has been traced along a gabbro/tuff contact for 82 feet. G. Hemming reported that a diamond drill hole targeted on the quartz vein at the No. 3 showing intersected 0.10 ounce Au per ton across 3 feet (Pryslak 1975).

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