Exhibit 96.1
S-K 1300 Technical Report Summary CK Gold
Project
Laramie County, Wyoming USA
Prepared for:
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|
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U.S. Gold Corp. P.O. Box 4353 Cheyenne, WY 82003 |
Prepared by:
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Gustavson Associates 200 Union Boulevard, Suite 440 Lakewood, CO 80228 | |
Project
Number: EE1305181 Report Date: December 1, 2021 |
Qualified Persons: Donald E. Hulse, P.E., SME-RM Christopher Emanuel, SME-RM Mark C. Shutty, CPG John A. Wells, SAIMM-F and CIM-RM |
Gustavson Associates, LLC | December 1, 2021 |
US Gold Corp. | i |
CK Gold Project | S-K 1300 Technical Report Summary |
1 Executive Summary
1.1 Property Summary and Ownership
Gustavson Associates, LLC (Gustavson) was commissioned by U.S. Gold Corp., (US Gold) to prepare a Preliminary Feasibility Study (PFS) for the CK Gold Project (Project). This is a Technical Report Summary (TRS) summarizing the findings of the PFS in accordance with Securities Exchange Commission Part 229 Standard Instructions for Filing Forms Regulation S-K subpart 1300 (S-K 1300). The purpose of this TRS is to report exploration results, mineral resources and mineral reserves for the CK Gold Project. The effective date of this report is November 15, 2021.
The CK Gold Project is located in Laramie County, Wyoming, in the southeastern portion of the state, approximately 20 miles west of Cheyenne. It is centered in the north half of Section 36, T14N, R70W. The property encompasses approximately 1,120 acres of mineral leases on Section 36, south half Section 25 and northeast quarter Section 35. Additionally, to accommodate the mine footprint for facilities, primarily the tailings storage facility, which cannot be accommodated on State Section 36, an option agreement for a further 712 acres on portions of Section 25 and Section 31 has been secured with the private landowner. Unless otherwise specified, all units are imperial and U.S. dollars
1.2 Mineral Resource Statement
Mark C. Shutty, CPG and Christopher Emanuel, SME-RM are the Qualified Persons responsible for the mineral resource estimation in Leapfrog and Vulcan software, relying on the geologic database accumulated over the project life. In the QPs opinion, the resources presented reasonably represent the in- situ resources for the CK Gold Project using all available data as of the effective date. Mineral Resources are reported at a gold equivalent grade (AuEq) cutoff grade, which considers metal recovery and pricing. Cutoff grade varies with expected recovery for delineated material types, but averages 0.009 ounces per short ton (oz/st) AuEq, equivalent to 0.31 grams per metric tonne (g/t) AuEq. The resource is constrained inside an optimization pit shell which, combined with the cutoff grade, represents reasonable prospects for economic extraction. Table 1-1 and Table 1-2 contain the tabulation of the Mineral Resources for the CK Gold Project on the effective date of this report.
Gustavson Associates, LLC | December 1, 2021 |
US Gold Corp. | ii |
CK Gold Project | S-K 1300 Technical Report Summary |
Table 1-1 Mineral Resource Statement
Mass | Gold (Au) | Copper (Cu) | Sliver (Ag) | Au Equivalent (AuEq) | ||||||||||||||||||||||||||||||||
Tons (000’s) | Oz (000’s) | oz/st | lbs (millions) | % | Oz (000’s) | oz/st | Oz (000’s) | oz/st | ||||||||||||||||||||||||||||
Measured (M) | 30,600 | 580 | 0.019 | 120 | 0.196 | 1,540 | 0.050 | 759 | 0.025 | |||||||||||||||||||||||||||
Indicated (I) | 51,200 | 534 | 0.010 | 160 | 0.156 | 1,670 | 0.033 | 817 | 0.016 | |||||||||||||||||||||||||||
M + I | 81,800 | 1,110 | 0.014 | 280 | 0.171 | 3,220 | 0.039 | 1,580 | 0.019 | |||||||||||||||||||||||||||
Inferred | 22,500 | 235 | 0.010 | 68.3 | 0.152 | 323 | 0.014 | 357 | 0.016 |
1Resources tabulated at a cutoff grade of (0.0107 – 0.0088) AuEq oz/st, 0.009 AuEq oz/st average
2Note only 3 significant figures shown, may not sum due to rounding
Table 1-2 Mineral Resource Statement (Metric)
Mass | Gold (Au) | Copper (Cu) | Sliver (Ag) | Au Equivalent (AuEq) | ||||||||||||||||||||||||||||||||
Tonnes (000’s) | Oz (000’s) | g/tonne | Tonnes (000’s) | % | Oz (000’s) | g/tonne | Oz (000’s) | g/tonne | ||||||||||||||||||||||||||||
Measured (M) | 27,800 | 580 | 0.649 | 54.4 | 0.196 | 1,540 | 1.729 | 759 | 0.850 | |||||||||||||||||||||||||||
Indicated (I) | 46,400 | 534 | 0.358 | 72.5 | 0.156 | 1,670 | 1.119 | 817 | 0.547 | |||||||||||||||||||||||||||
M + I | 74,200 | 1,110 | 0.467 | 127 | 0.171 | 3,220 | 1.347 | 1,580 | 0.660 | |||||||||||||||||||||||||||
Inferred | 20,400 | 235 | 0.358 | 31.0 | 0.152 | 323 | 0.492 | 357 | 0.545 |
1Resources tabulated at a cutoff grade of (0.37 – 0.30) AuEq g/t, 0.31 AuEq g/t average
2Note only 3 significant figures shown, may not sum due to rounding
The estimates of Mineral Resources may be materially affected if mining, metallurgical, or infrastructure factors change from those currently anticipated at the CK Gold Project. Estimates of Inferred Mineral Resources have significant geological uncertainty and it should not be assumed that all or any part of an inferred mineral resource will be converted to the measured or indicated categories. Mineral Resources that are not Mineral Reserves do not meet the threshold for reserve modifying factors, such as estimated economic viability, that would allow for conversion to Mineral Reserves.
1.3 Mineral Reserve Statement
Mineral Reserves are based on an open pit mine design and production schedule using reasonable design parameters. Measured Mineral Resources within the mine design and schedule convert to Proven Mineral Reserves and Indicated Mineral Resources convert to Probable Mineral Resources. Metal prices used in cutoff grade calculation and economic analysis are $1,625/oz gold, $3.25/lb. copper and $18/oz silver. The Mineral Reserves are reported at a variable cutoff grade, as recovery varies by material type. Average cutoff grade is 0.009 oz/st AuEq (0.31 g/t AuEq). Table 1-3 and Table 1-4 contain the tabulation of the Mineral Reserves for the CK Gold Project as of the effective date of this report.
Gustavson Associates, LLC | December 1, 2021 |
US Gold Corp. | iii |
CK Gold Project | S-K 1300 Technical Report Summary |
Table 1-3 Mineral Reserves Statement
Mass | Gold (Au) | Copper (Cu) | Sliver (Ag) | Au Equivalent (AuEq) | ||||||||||||||||||||||||||||||||
Tons (000’s) | Oz (000’s) | oz/st | lbs (millions) | % | Oz (000’s) | oz/st | Oz (000’s) | oz/st | ||||||||||||||||||||||||||||
Proven (P1) | 29,600 | 574 | 0.019 | 118 | 0.198 | 1,440 | 0.049 | 757 | 0.026 | |||||||||||||||||||||||||||
Probable (P2) | 40,700 | 440 | 0.011 | 130 | 0.160 | 1,220 | 0.030 | 679 | 0.017 | |||||||||||||||||||||||||||
P1 + P2 | 70,400 | 1,010 | 0.014 | 248 | 0.176 | 2,660 | 0.038 | 1,440 | 0.020 |
1Reserves tabulated at a cutoff grade of (0.0107 – 0.0088) AuEq oz./st, 0.009 AuEq Oz/st average
2Note only 3 significant figures shown, may not sum due to rounding
Table 1-4 Mineral Reserve Statement (Metric)
Mass | Gold (Au) | Copper (Cu) | Sliver (Ag) | Au Equivalent (AuEq) | ||||||||||||||||||||||||||||||||
Tonnes (000’s) | Oz (000’s) | g/tonne | Tonnes (000’s) | % | Oz (000’s) | g/tonne | Oz (000’s) | g/tonne | ||||||||||||||||||||||||||||
Proven (P1) | 26,900 | 574 | 0.664 | 53 | 0.198 | 1,440 | 1.664 | 757 | 0.876 | |||||||||||||||||||||||||||
Probable (P2) | 37,000 | 440 | 0.370 | 59 | 0.160 | 1,220 | 1.027 | 679 | 0.571 | |||||||||||||||||||||||||||
P1 + P2 | 63,800 | 1,010 | 0.494 | 112 | 0.176 | 2,660 | 1.295 | 1,440 | 0.700 |
1Reserves tabulated at a cutoff grade of (0.37 – 0.30) AuEq g/t, 0.31 AuEq g/t average
2Note only 3 significant figures shown, may not sum due to rounding
There are no known relevant factors that would materially affect the estimation of Mineral Reserves that are not discussed in this report.
1.4 Geology and Mineralization
The Silver Crown Mining District, where the Project is located, is underlain by Proterozoic rocks that make up the southern end of the Precambrian core of the Laramie Range. Metavolcanic and metasedimentary rocks of amphibolite-grade metamorphism are intruded by the approximately 1.4- billion-year-old Sherman Granite and related felsic rocks. Within the project area, foliated granodiorite is intruded by aplitic quartz monzonite dikes, thin mafic dikes and younger pegmatite dikes. Shear zones with cataclastic foliation striking N60°E to N60°W are found in the southern part of the Silver Crown district, including at CK Gold. Copper and gold mineralization at the Project occurs primarily in unfoliated to mylonitic granodiorite. The granodiorite typically shows potassium enrichment, particularly near contacts with quartz monzonite. Mineralization is associated with a N60°W-trending shear zone.
Gustavson Associates, LLC | December 1, 2021 |
US Gold Corp. | iv |
CK Gold Project | S-K 1300 Technical Report Summary |
CK Gold mineralization has been interpreted as a shear-zone controlled, disseminated and stockwork gold-copper deposit in Proterozoic intrusive rocks. Most of the mineralization is in granodiorite, with lesser amounts in quartz monzonite and thin mafic dikes. Hydrothermal alteration is overprinted on retrograde greenschist alteration and includes a central zone of silicification, followed outward by a narrow potassic zone, surrounded by propylitic alteration. Higher grade mineralization occurs within a central core of thin quartz veining and stockwork mineralization that is surrounded by a zone of lower- grade disseminated mineralization. Disseminated sulfides and native copper with stockwork malachite and chrysocolla are present at the surface, and chalcopyrite, pyrite, minor bornite, primary chalcocite, pyrrhotite, and native copper are present at depth. Gold occurs as free gold.
1.5 Metallurgical Testing
Metallurgical test work was carried out over many years by various companies, including a test work program at SGS, Canada, in 2008-2010 which established that flotation was the most suitable method to process CK Gold mineralization. In 2020, US Gold carried out a drilling program, with seven holes located across the deposit, specifically for new samples for metallurgical test work. Three composites were prepared, namely sulfide, oxide and high-grade oxide. These samples were tested at two laboratories, KCA in Reno, USA, and Base Metals in Kamloops, Canada. This work confirmed and improved upon the SGS results with gold recovery in a range of 67-74% and copper recovery of 83-88% for the majority sulfide material. Copper concentrate of 21-25%Cu was achieved with high values of gold, (50-80 g/t Au) and silver, (50-60 g/t Ag). Preliminary cyanidation of the flotation tailings suggests that gold recovery could be increased to over 90% using a two-stage flotation-cyanidation process. This will be further investigated in the Feasibility Study and may present an opportunity for the project. This work is provided in Section 10.2 of this PFS report. The test work reports by SGS, KCA and Base Metals are all available from US Gold.
1.6 Mine Design, Optimization and Scheduling
The CK Gold Project is planned as an open pit mine with a mine production life of approximately 9.5 years. Two independent mine planning and sequencing studies have been accomplished and the studies show broad agreement. Lerchs-Grossmann Pit optimization analysis was performed using reasonable design and economic parameters and the result used to guide the mine design process.
Four pit phases were designed and material movement scheduled on an annual basis. Pit design parameters are based on a geotechnical drilling program and detailed stability analysis. A contractor mining operating model is used for mine operations, tailings disposal, and site support. The Project owner operates the process plant, provide supervision of contractors, mine planning, ore control and provides general site administration (G&A). This hybrid owner/contractor model is used to leverage the regional mine contractor expertise and reduce initial project capital costs.
1.7 Mineral Processing
The Engineering design work was developed by Alquimia/Innomet in Santiago, Chile, who were selected based on their in-depth experience with flotation copper concentrators. They developed flowsheets, general arrangement drawings and capital and operating costs based on the SGS test work, and updated with the latest results from Base Metals, as well as specific comminution test work by Hazen Research in Denver, Mineralogy by FLSmidth in Salt Lake City and Thickening /Filtration test work by Pocock International, also in Salt Lake City.
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CK Gold Project | S-K 1300 Technical Report Summary |
The current process flowsheet uses a single stage crushing plant receiving run of mine (ROM) ore and stacking crushed ore on a reclaim feeder equipped stockpile. The semi-autogenous grinding (SAG) mill is fed crushed ore at a nominal rate of 20,000 short tons per day (stpd) (18,150 tonnes per day) and is in closed circuit with a ball mill, two pebble crushers and two banks of cyclones, which produces a product for flotation. A flotation circuit, with regrind after rougher flotation, will produce a bulk floatation concentrate. Tailings will be thickened and dried using filter presses for dry stack disposal. Opportunities exist to eliminate equipment and reduce capital cost through various measures, such as the elimination of ball mills from the circuit, elimination of a pebble crusher and cyclone bank and optimization of the tailings preparation, resulting in less filtration.
1.8 Environmental, Permitting and Community Impact
Current exploration activities are fully permitted through the Wyoming Department of Environmental Quality, Permit # DN0440. Planned surface disturbance of 40 acres during current exploration activities is fully bonded for reclamation purposes. US Gold conducts concurrent reclamation and practically all exploration disturbance has been reclaimed at the end of the 2021 field season. The practice of concurrent reclamation is envisioned for the proposed operation. The Project is in the process of compiling the information required for the eventual permit applications. No permit applications for mine construction or operation have been submitted to any regulators at this time.
The CK Gold Project will occupy state-owned and private land. Construction and operation of the mine will require various permits issued at the state and local levels. The agency with primary jurisdiction over development and operation of the Project is the Wyoming Department of Environmental Quality (DEQ). The applicable permits required under this agency include:
● | Permit to Mine | |
● | Air Quality Permit to Construct and Operate | |
● | Industrial Siting Construction Permit | |
● | Stormwater Permit | |
● | Permit to Construct Water Supply and Wastewater Facilities | |
● | Operator Certification for Drinking Water Systems |
Additional permits will be needed from the following agencies:
● | State Engineer’s Office Permits for Water Use and Water Related Facilities | |
● | State Historical Preservation Office | |
● | State Fire Marshall | |
● | Laramie County |
Two streams flowing through the Project site have been classified as “Waters of the United States” by the US Army Corps of Engineers (ACoE). However, none of the planned project infrastructure would impact these surface waters, therefore no major federal permitting will be required. Following the submission of a wetland survey and site inspections by the ACoE the footprint of the project was deemed non- jurisdictional in February 2021.
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US Gold Corp. | vi |
CK Gold Project | S-K 1300 Technical Report Summary |
Environmental baseline studies began in October 2020, post a pre-Application Meeting with the Wyoming DEQ, to establish the pre-mining site conditions and fulfill the information requirements of the permit application documents to be submitted to the DEQ and other applicable regulators. These studies are ongoing with a full 12-month dataset and will continue through 2022 until the permit application is submitted.
Geochemical testing of mine rock and tailings samples indicate that the tailings will not be acid generating, nor will the majority of waste rock and pit wall rock. Therefore, the risk of metal leaching from waste rock, tailings and pit walls, and associated potential impacts on water quality, are not expected to be significant. This finding will be confirmed through ongoing geochemical testing.
Waste rock and tailings generated during mining and mineral processing will be deposited on site in engineered facilities. The tailings will be filtered to extract as much moisture as feasible for water conservation and recycling back to the plant prior to their deposition. This will assist in maximizing their structural strength and avoid the need for tailings dams and their associated structural stability risks. Furthermore, fine tailings stacked in the tailing storage facility (TSF) will be contained and buttressed with coarse run-of-mine rock from open pit mine to assure long-term stability and dust control.
US Gold has also reached out and provided Project information to various additional local entities which may be affected by and/or interested in the project, including: Laramie County; City of Cheyenne; City of Laramie; neighboring residents and property owners west of the Project site; Wyoming State Parks; Wyoming Game and Fish Department; Wyoming School Boards Association; University of Wyoming; Granite Canyon Quarry, which operates an aggregate quarry 3-miles south of the Project site; and the Ferguson, Sutherland and King Ranches, cattle ranching operations on and around the Project site. There are no indigenous, Native American or Bureau of Indian Affairs lands adjacent to the Project, and no indigenous or Native American cultural sites are known to exist within the Project area.
A closure and reclamation plan will be prepared in accordance with the requirements of the DEQ’s Land Quality Division, as part of the Permit to Mine application. The closure objective as currently foreseen is to reclaim most of the site to enable the resumption of its current use of cattle grazing. Progressive reclamation will be practiced during the life of mine to reclaim portions of the Project site as soon as feasible prior to the end of mining, securing corresponding early releases in bonding obligations. Cattle grazing will continue as feasible during mining on Project areas not directly affected by mine operations. At the end of mineral processing operations, the mineral processing plant and support structures and facilities would be dismantled or demolished, and their footprints revegetated. The waste rock and tailings facilities would be regraded to the extent necessary to achieve long-term stability, covered and revegetated. Certain structures, roadways and/or wells may be left in place if requested by the landowners or State Lands Office.
Gustavson Associates, LLC | December 1, 2021 |
US Gold Corp. | vii |
CK Gold Project | S-K 1300 Technical Report Summary |
Plans have been drawn up for the eventual back-filling of the open pit, however there are compelling reasons and initial evidence to suggest that the open pit can, with some modifications, be utilized as a long-term water storage facility as part of the network feeding the city of Cheyenne. Studies suggest that due to the growth in demand for water in the area, additional water storage facilities will be required to harvest water during the months when run-off is available. The CK Gold Project open pit could provide such storage as it appears that the excavation will hold water without deleterious effects on the water circulated. This may well avoid costly and invasive expansions to the existing storage impoundment in the Curt Gowdy State Park at the Crystal and Granite Lake reservoirs, or the construction of new impoundments. For the purpose of the base project case, pit backfill is not conducted based on the reasonable assumption that the end use of the CK Gold property does not include backfill of the final excavation.
1.9 Capital Costs, Operating Costs and Financial Analysis
An after tax, discounted cash flow model was developed to assess the economic performance of the CK Gold Project. This analysis relies on the mining schedule, capital and operating cost estimates, and recovery parameters contained within this report. The model assumes 100% equity funding, a 5% discount rate, a gold price of $1,625/oz, copper price of $3.25/lb. and silver price of $18/oz. The results of the analysis are shown in Table 1-5 and Table 1-6. The positive economic outcome of the financial analysis is used to delineate the CK Gold Mineral Reserve.
Table 1-5 Economic Results
Key Project Indicator | Value | |||
Pre-Tax Economics ($ Millions) | ||||
IRR | 39.4 | % | ||
Cash Flow (Undiscounted) | $ | 500 | ||
NPV 5% Discount Rate | $ | 323 | ||
Payback (Years) | 2 | |||
After Tax Results | ||||
IRR | 33.7 | % | ||
Cash Flow (Undiscounted) | $ | 421 | ||
NPV 5% Discount Rate | $ | 266 |
Table 1-6 Project Details
Key Project Indicator | Value | |||
Gold Ounces Sold (000’s) | 678 | |||
Copper Sold (Million Lbs.) | 172 | |||
AuEq Ounces Sold (000’s) | 1,030 | |||
Initial Capital ($ Million) | $ | 222 | ||
Sustaining Capital ($ Million) | $ | 15 | ||
Avg. Cash Cost of Production ($/oz AuEq) | $ | 786 | ||
All in Sustaining Cost ($/oz AuEq) | $ | 800 |
Gustavson Associates, LLC | December 1, 2021 |
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A sensitivity analysis on metals pricing indicates additional potential for this project at higher metals pricing, Table 1-7. Additionally, the sensitivity indicates the robustness of the project with positive economic outcomes at reduced metals pricing.
Table 1-7 Metal Price Sensitivity
Metals Pricing | Pre-Tax | After Tax | ||||||||||||||||||||||||||||
Gold | Copper | NPV | IRR | Payback | NPV | IRR | Payback | |||||||||||||||||||||||
Au/oz. | Cu/lb. | M$’s | % | Years | M$’s | % | Years | |||||||||||||||||||||||
$ | 1,825 | $ | 3.65 | $ | 438 | 52.4 | % | 1.7 | $ | 384 | 44.6 | % | 1.8 | |||||||||||||||||
$ | 1,725 | $ | 3.45 | $ | 396 | 46.0 | % | 1.8 | $ | 325 | 39.3 | % | 2 | |||||||||||||||||
$ | 1,625 | $ | 3.25 | $ | 323 | 39.4 | % | 2.0 | $ | 266 | 33.7 | % | 2.2 | |||||||||||||||||
$ | 1,525 | $ | 3.05 | $ | 251 | 32.6 | % | 2.2 | $ | 205 | 27.9 | % | 2.5 | |||||||||||||||||
$ | 1,425 | $ | 2.85 | $ | 179 | 25.4 | % | 2.6 | $ | 144 | 21.7 | % | 2.9 |
1.10 Conclusions and Recommendations
1.10.1 General Recommendations
U S Gold’s CK Gold Project focuses on the historical Copper King deposit in the Silver Crown Mining district, the subject of sporadic mining activity for over 100-years. The CK Gold Project demonstrates a very low waste to ore ratio, the absence of a large pre-strip period to expose mineralization, simple low cost-mineral extraction, and proximity to key infrastructure and support services, which all favor positive project economics.
With a life of mine cash cost per equivalent gold ounce of $786/oz, the margin compared to both the study price, set at $1,625 per gold ounce and the gold price at the time of writing of approximately $1,800 per gold ounce, indicates robust project economics. The fact that the bulk of the revenue is split between sales of gold and copper suggest that the project may be less sensitive to cyclical swings in the prices of either individual metal. A unique feature of the CK Gold Project is its proximity to growing population centers and infrastructure, which may further offer opportunities to bolster revenue through the sale of waste rock as aggregate. Investigations have proven the non-mineralized rock to be of very good quality for aggregate products. Only a minor benefit for the aggregate potential has been recognized in this study, and more work is warranted to assess the full potential. To move bulk rock tonnages some additional arrangements would need to be made but there is more than 30 million tons of rock available that could retail, as crushed and clean aggregate, at between $16 and $18 per ton and this potential value has not been fully captured in this study.
U S Gold elected to focus on data capture to support a feasibility study and permit application with its 2020 and 2021 field season activities. The resource model shows that there are potential extensions to the mineralization at depth and to the southeast of the deposit and these should be investigated. Additionally, there is uncertainty as to the genesis of the mineralization with the deposit not neatly fitting a porphyry or Iron oxide copper gold (IOCG) type depositional model. The company is set to support study work with the University of Wyoming, and we recommend that efforts continue to better understand the geological setting and assess district potential.
In reviewing the Project, we conclude that the type of mining, rate of mining and mineral processing technology selected in the PFS study is appropriate. While there is evidence to suggest that improved gold recoveries can be readily obtained through the implementation of flotation, followed by cyanidation of the flotation tailings, there are other factors and considerations which make the application of such technology difficult to assess. Not least of these considerations is public perception of the use of cyanide gold recovery. With the potential to recover an additional 180,000 gold ounces with the addition of a cyanide circuit, we recommend that trade-off studies be conducted but tend to agree with US Gold management that further studies and permitting be advanced without the inclusion of a cyanide circuit, under current price assumptions.
1.10.2 Specific Work Plan
To advance the CK Gold Project it is recommended that a feasibility study is conducted to better define Project parameters and to advance engineering and planning for the CK Gold Project. The goal of the recommended Feasibility Study is to provide the directors of US Gold to make an informed decision about the development of the Project. The estimated budget to complete this Feasibility Study is $500,000 based on the work completed to date on the Project.
Gustavson Associates, LLC | December 1, 2021 |
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Table of Contents
1 | Executive Summary | i |
1.1 | Property Summary and Ownership | i | |
1.2 | Mineral Resource Statement | i | |
1.3 | Mineral Reserve Statement | ii | |
1.4 | Geology and Mineralization | iii | |
1.5 | Metallurgical Testing | iv | |
1.6 | Mine Design, Optimization and Scheduling | iv | |
1.7 | Mineral Processing | iv | |
1.8 | Environmental, Permitting and Community Impact | v | |
1.9 | Capital Costs, Operating Costs and Financial Analysis | vii | |
1.10 | Conclusions and Recommendations | viii |
1.10.1 | General Recommendations | viii | ||
1.10.2 | Specific Work Plan | viii |
2 | Introduction | 1 |
2.1 | Terms of Reference and Purpose of the Report | 1 | |
2.2 | Sources of Information | 1 |
2.3 | Qualified Persons and Details of Inspection | 1 | |
2.4 | Previous Reports on the Project | 2 |
3 | Property Description and Location | 3 |
3.1 | Property Location | 3 | |
3.2 | Mineral Titles, Claims, Rights, Leases and Options | 5 | |
3.3 | Environmental Impacts, Permitting, Other Significant Factors and Risks | 6 | |
3.4 | Royalties and Agreements | 6 |
4 | Accessibility, Climate, Local Resources, Infrastructure and Physiography | 7 |
4.1 | Topography, Elevation and Vegetation | 7 | |
4.2 | Accessibility and Transportation to the Property | 7 | |
4.3 | Climate and Length of Operating Season | 8 | |
4.4 | Infrastructure Availability and Sources | 8 |
5 | History | 9 |
5.1 | Historical Exploration and Production | 9 |
6 | Geological Setting, Mineralization and Deposit | 11 |
6.1 | Regional Geology | 11 |
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6.2 | Property Geology | 13 | |
6.3 | Deposit Types | 15 | |
6.4 | Mineralization | 16 |
7 | Exploration | 17 |
7.1 | Summary of Exploration Activities | 17 | |
7.2 | Exploration Work - Drilling | 17 |
7.2.1 | US Gold 2021 Drilling Campaign | 18 | ||
7.2.2 | US Gold 2020 Drilling Campaign | 18 | ||
7.2.3 | US Gold 2020-2017 | 18 | ||
7.2.4 | Saratoga 2007 – 2008 | 19 | ||
7.2.5 | Historical Drilling | 19 |
7.3 | Exploration Work, Non-Drilling | 20 |
7.3.1 | Geophysics | 20 | ||
7.3.2 | Geochemical | 21 |
7.4 | Geotechnical Data, Testing and Analysis | 22 | |
7.5 | Hydrogeology | 22 |
8 | Sample Preparation, Analysis and Security | 23 |
8.1 | Sample Preparation | 24 |
8.1.1 | US Gold 2021 – 2017 | 24 | ||
8.1.2 | CK Gold Bureau Veritas | 25 | ||
8.1.3 | Saratoga | 25 | ||
8.1.4 | Historical Exploration | 26 |
8.2 | Analytical Procedures | 26 |
8.2.1 | US Gold 2021 Campaign | 26 | ||
8.2.2 | US Gold 2017 – 2019 Campaign | 26 | ||
8.2.3 | 2007 - 2008 Saratoga Campaign | 27 | ||
8.2.4 | Legacy Campaigns | 28 |
8.3 | Results, QC Procedures and QA Actions | 29 |
8.3.1 | US Gold 2021 Campaign | 29 | ||
8.3.2 | US Gold 2017 – 2020 | 29 | ||
8.3.3 | 2007 – 2008 Saratoga | 31 |
8.4 | Opinion of Adequacy | 32 |
9 | Data Verification | 33 |
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9.1 | Procedures | 32 | |
9.2 | Previous Audits/Owners | 33 |
9.2.1 | Saratoga 2007 – 2008 | 33 | ||
9.2.2 | Historical Drilling | 33 |
9.3 | Data Adequacy | 34 |
10 | Mineral Processing and Metallurgical Testing | 35 |
10.1 | 2020 – 2021 Test Work | 35 |
10.1.1 | Introduction | 35 | ||
10.1.2 | Metallurgical Test Work, Summary and Objectives | 36 | ||
10.1.3 | Composite 1. High Grade Oxide, Upper Zone, Hole 4 | 36 | ||
10.1.4 | Gravity and Flotation Test Work High Grade Oxide, (KCA) | 37 | ||
10.1.5 | Cleaner Flotation (KCA) | 40 | ||
10.1.6 | Locked Cycle Test on High-Grade Oxide Composite, (KCA) | 41 | ||
10.1.7 | Tailings, Thickening and Filtration Test Work, (Pocock) | 41 | ||
10.1.8 | High-Grade Oxide Test Work at Base Metals Laboratory, (BML) | 41 |
10.2 | Composite 2, Overall Oxide, (prepared using core from holes 1,2,3,5,6 and 7) | 42 |
10.2.1 | Mineralogy | 43 | ||
10.2.2 | Gravity and Flotation Test Work, Oxide Composite (KCA) | 44 | ||
10.2.3 | Other Test Work on the Oxide Composite | 45 | ||
10.2.4 | Oxide Composite Test Work at Base Metals Laboratory, (BML) | 45 |
10.3 | Composite 3, Overall Sulfide, (prepared from holes 1-7) | 46 |
10.3.1 | Gravity and Flotation Test Work, Sulfide Composite, (KCA) | 46 | ||
10.3.2 | Sulfide Composite Test Work at Base Metals Laboratory, (BML) | 47 | ||
10.3.3 | Test Work on Sulfide Composite 2, (BML) | 51 | ||
10.3.4 | Other Test Work on the Sulfide Composite | 52 |
10.4 | Primary and Regrind p80’s | 52 |
10.4.1 | Primary Grind | 52 | ||
10.4.2 | Regrind p80 | 53 |
10.5 | Discussion | 53 | |
10.6 | Conclusions and Recommendations | 54 |
10.6.1 | Recommendations for Future Test Work | 55 |
10.7 | Risks and Opportunities | 55 |
10.7.1 | Risks | 55 |
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10.7.2 | Opportunities | 56 |
10.8 | Metallurgical Appendices and References | 57 |
11 | Mineral Resource Estimate | 58 |
11.1 | Introduction | 58 | |
11.2 | Geologic Models | 58 | |
11.3 | Oxidation Assignment | 62 | |
11.4 | Block Model Orientation and Dimensions | 62 | |
11.5 | Compositing | 63 | |
11.6 | Exploratory Data Analysis | 63 | |
11.7 | Bulk Density Determination | 67 | |
11.8 | Grade Capping/Outlier Restrictions | 69 | |
11.9 | Variography | 69 | |
11.10 | Estimation/Interpolation Methods | 71 | |
11.11 | Classification of Mineral Resources | 72 | |
11.12 | Grade Model Validation | 74 | |
11.13 | Reasonable Prospects of Eventual Economic Extraction | 77 | |
11.14 | Mineral Resource Statement | 78 | |
11.15 | Relevant Factors That May Affect the Mineral Resource Estimate | 79 | |
11.16 | Responsible Person Opinion | 80 |
12 | Mineral Reserve Estimate | 81 |
12.1 | Basis, Assumptions, Parameters and Methods | 81 |
12.1.1 | Pit Optimization | 81 | ||
12.1.2 | Cutoff Grade | 82 | ||
12.1.3 | Dilution | 82 |
12.2 | Mineral Reserves | 82 | |
12.3 | Classification and Criteria | 83 | |
12.4 | Relevant Factors | 83 |
13 | Mining Methods | 84 |
13.1 | Introduction | 84 | |
13.2 | Geotechnical Parameters | 84 | |
13.3 | Hydrogeological Parameters | 87 |
13.3.1 | Pit Water and Conceptual Model | 88 | ||
13.3.2 | Groundwater Flow Model | 91 |
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13.4 | Mine Design Parameters | 98 |
13.4.1 | Mine Parameters | 98 |
13.5 | Mine Schedule | 98 | |
13.6 | Mining Fleet Requirements | 100 |
13.6.1 | Equipment Productivity and Usage | 100 |
13.7 | Mine Personnel Requirements | 101 | |
13.8 | Mine Map | 103 |
14 | Processing and Recovery Methods | 108 |
14.1 | Introduction | 108 | |
14.2 | Comminution | 110 |
14.2.1 | Primary Crushing | 110 | ||
14.2.2 | SAG, Ball mill and Pebble Crusher circuit | 110 | ||
14.2.3 | Gravity Concentration | 112 |
14.3 | Flotation | 112 | |
14.4 | Concentrate Thickening and Filtration | 115 | |
14.5 | Tailings, Thickening and Filtration | 115 | |
14.6 | Reagents and Water | 116 |
14.6.1 | Reagent Consumption | 116 | ||
14.6.2 | Lime | 116 | ||
14.6.3 | Primary Collector, 3418 and 7150 | 117 | ||
14.6.4 | Secondary Collectors, 208 and PAX / PEX | 117 | ||
14.6.5 | Frothers | 117 | ||
14.6.6 | Alternate Reagents, Test tank | 117 | ||
14.6.7 | Flocculant | 117 | ||
14.6.8 | Water | 117 |
14.7 | Process Control Philosophy | 118 | |
14.8 | Discussion | 119 | |
14.9 | Conclusions and Recommendations | 120 | |
14.10 | Risks and Opportunities | 120 |
15 | Project Infrastructure | 121 |
15.1 | Roads | 121 |
15.1.1 | Project Access Roads | 121 | ||
15.1.2 | Ex-Pit Haul Roads | 122 |
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15.2 | Stockpile and Storage Facilities | 123 |
15.2.1 | Mineralized Material Facility | 126 | ||
15.2.2 | North Waste Rock Facility | 127 |
15.3 | Tailings Disposal | 127 | |
15.4 | Plant facility Earthwork | 137 | |
15.5 | Power and Water | 137 |
16 | Market Studies | 138 |
16.1 | Flotation Concentrates | 138 | |
16.2 | Metal Markets | 138 | |
16.3 | Contracts and Status | 138 |
17 | Environmental Studies, Permitting and Social or Community Impact | 139 |
17.1 | Introduction | 139 | |
17.2 | Environmental Studies | 141 |
17.2.1 | Land Use | 141 | ||
17.2.2 | Climatology | 142 | ||
17.2.3 | Air Quality | 143 | ||
17.2.4 | Geochemistry | 143 | ||
17.2.5 | Surface Water and Wetlands | 144 | ||
17.2.6 | Groundwater | 147 | ||
17.2.7 | Soil | 149 | ||
17.2.8 | Vegetation | 150 | ||
17.2.9 | Wildlife Desktop Study and Field Survey | 151 | ||
17.2.10 | Archeology and Paleontology | 152 |
17.3 | Requirements and Plans for Waste and Tailings Disposal, Site Monitoring, and Water Management | 153 |
17.3.1 | Waste Rock and Tailings Management | 153 | ||
17.3.2 | Site Monitoring | 155 | ||
17.3.3 | Water Management | 156 |
17.4 | Required Permits and Status | 159 |
17.4.1 | Section 404 Permit for Construction Within Waters of the US | 160 | ||
17.4.2 | Permit to Mine | 161 | ||
17.4.3 | Air Quality Permit to Construct and Operate | 162 | ||
17.4.4 | Industrial Siting Construction Permit | 162 |
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17.4.5 | Water Quality Division Permits | 163 | ||
17.4.6 | State Engineer’s Office Permits for Water use and Related Facilities | 163 | ||
17.4.7 | State Historical Preservation Office Permit | 164 | ||
17.4.8 | State Fire Marshal Permits | 164 | ||
17.4.9 | Laramie County Permits | 164 |
17.5 | Community Engagement | 165 | |
17.6 | Mine Closure | 166 | |
17.7 | Adequacy of Plans | 167 | |
17.8 | Commitments to Local Procurement or Hiring | 167 |
18 | Capital and Operating Costs | 168 |
18.1 | Operating Cost Estimate | 168 | |
18.2 | Capital Cost Estimate | 170 |
19 | Economic Analysis | 171 |
19.1 | Model Parameters | 171 | |
19.2 | Taxes, Royalties, Depreciation and Depletion | 171 | |
19.3 | Cashflow Forecasts and Annual Production Forecasts | 172 | |
19.4 | Sensitivity Analysis | 175 |
20 | Adjacent Properties | 176 |
21 | Other Relevant Data and Information | 177 |
21.1 | Aggregate production | 177 | |
21.2 | Aggregate Market Study | 177 |
22 | Interpretation and Conclusions | 178 |
22.1 | Results | 178 | |
22.2 | Significant Risks | 178 | |
22.3 | Significant Opportunities | 178 |
23 | Recommendations | 180 |
23.1 | Feasibility Study | 180 | |
23.2 | Project Development | 180 | |
23.3 | Environmental, Permitting and Social Recommendations | 180 |
23.3.1 | Environmental Studies | 180 | ||
23.3.2 | Permitting | 180 | ||
23.3.3 | Agreements and Community Engagement | 181 | ||
23.3.4 | Closure Plan | 181 |
23.3.5 | Environmental Management | 181 |
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24 | References | 181 |
25 | Reliance on Information Provided by the Registrant | 182 |
List of Tables
Table 1-1 Mineral Resource Statement | ii |
Table 1-2 Mineral Resource Statement (Metric) | ii |
Table 1-3 Mineral Reserves Statement | iii |
Table 1-4 Mineral Reserve Statement (Metric) | iii |
Table 1-5 Economic Results | vii |
Table 1-6 Project Details | vii |
Table 1-7 Metal Price Sensitivity | viii |
Table 8-1 Sample Standards | 30 |
Table 10-1 Comminution Test work Results | 37 |
Table 10-2 Rougher Flotation Test 90134, (KCA) | 38 |
Table 10-3 Mineralogical Analysis of Head and Tailings Samples | 39 |
Table 10-4 Gravity (G) + Flotation (F) v. Flotation Only, (KCA) | 39 |
Table 10-5 Cyanidation of Flotation Tailings, (KCA) | 40 |
Table 10-6 Cleaner Flotation p80-86u, Regrind p80-20u, pH-9.0, KCA | 40 |
Table 10-7 Open Circuit and Locked Cycle Test on High-Grade Oxide, (BML) | 42 |
Table 10-8 Gravity Test on High-Grade Oxide LCT Tailings, (BML) | 42 |
Table 10-9 Comminution Test Work Results, Oxide Composite | 43 |
Table 10-10 Rougher Flotation (Test 90170, KCA) | 44 |
Table 10-11 Oxide Composite Cleaner Flotation, (KCA) | 45 |
Table 10-12 Open Circuit and Locked Cycle Tests on Oxide, (BML) | 45 |
Table 10-13 Comminution Test Work Results, Sulfide Composites | 46 |
Table 10-14 Rougher Flotation Test 90173, (KCA) | 46 |
Table 10-15 Cleaner Flotation, (KCA) | 47 |
Table 10-16 Open Circuit and Locked Cycle Test on Sulfide, (BML) | 47 |
Table 10-17 Rougher “Optimization” Tests, (BML) | 48 |
Table 10-18 Variability Test Work on eight (8) Sulfide samples, (BML) | 49 |
Table 10-19 Preliminary Variability Test Work on Oxide Samples | 49 |
Table 10-20 Open Circuit and Locked Cycle Tests on Sulfide Composite 2, (BML) | 51 |
Table 10-21 Evaluation of the Primary Grind | 52 |
Table 11-1 Block Model Dimensions | 63 |
Table 11-2 Compositing Parameters | 63 |
Table 11-3 Drillhole Database Summary | 64 |
Table 11-4 Bulk Density Values by Rock Type | 68 |
Table 11-5 Capping Thresholds and Metal Loss Table | 69 |
Table 11-6 Variogram Parameter Table | 71 |
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Table 11-7 Estimation Search and Sample Parameters Table | 72 |
Table 11-8 In Pit Estimation Comparison | 76 |
Table 11-9 AuEq Definitions | 77 |
Table 11-10 Cutoff Grades | 78 |
Table 11-11 Cutoff Grade Metal Prices | 78 |
Table 11-12 Cutoff Grade Parameters by Material Type | 78 |
Table 11-13 Mineral Resource Statement | 79 |
Table 11-14 Mineral Resource Statement (Metric) | 79 |
Table 12-1 Pit Optimization Parameters | 81 |
Table 12-2 Reserve Cutoff Grade | 82 |
Table 12-3 Mineral Reserve Statement | 83 |
Table 12-4 Mineral Reserve Summary (Metric) | 83 |
Table 13-1 Basic Slope Geometry and Parameters | 85 |
Table 13-2 Recommended Slope Designs | 85 |
Table 13-3 Monitoring Sites Installed in 2020 | 87 |
Table 13-4 Mine Design Parameters | 98 |
Table 13-5 Mine Schedule | 99 |
Table 13-6 Variable Usage Equipment | 100 |
Table 13-7 Annual Schedule of Variable Usage Equipment | 100 |
Table 13-8 Fixed Usage Equipment | 101 |
Table 13-9 Project Employment | 101 |
Table 13-10 Mine Employment | 102 |
Table 13-11 Tailings Disposal Employment | 102 |
Table 13-12 Site G&A Employment | 102 |
Table 13-13 Concentrator Employment | 103 |
Table 14-1 Test Work, Concentrate Grades and Recoveries | 113 |
Table 14-2 Concentrate Grades and Recoveries | 113 |
Table 14-3 Flotation Equipment | 114 |
Table 14-4 Reagent Consumption | 116 |
Table 15-1 Access Road Costs | 122 |
Table 15-2 Haul Road Quantities | 122 |
Table 15-3 Mineralized Stockpile Quantities | 126 |
Table 15-4 WRTCF Quantities | 128 |
Table 15-5 Drain System | 129 |
Table 15-6 Plant Area Quantities | 137 |
Table 16-1 Metals Pricing | 138 |
Table 18-1 Project Operating Cost Summary | 168 |
Table 18-2 Annual Operating Costs | 169 |
Table 18-3 Mining Costs LOM Summary | 169 |
Table 18-4 Process Operating Costs LOM Summary | 170 |
Table 18-5 Initial Capital Costs | 170 |
Table 18-6 Sustaining Capital Costs | 170 |
Table 19-1 Economic Model Parameters | 171 |
Table 19-2 Economic Model Results | 172 |
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Table 19-3 Project Details | 172 |
Table 19-4 Metal Projections | 173 |
Table 19-5 Cash Flow Projections | 173 |
Table 19-6 Metal Price Sensitivity | 176 |
Table 21-1 Aggregate Cost Buildup | 177 |
Table 25-1 Information provided by US Gold | 182 |
Table 25-2 Abbreviations | 183 |
List of Figures
Figure 3-1 Regional Map | 3 |
Figure 3-2 Project Map | 4 |
Figure 6-1 Surface Geology Map | 12 |
Figure 6-2 Fault Map, Blocks indicate mineralization low metal values (green) to high values (magenta) | 15 |
Figure 7-1 Drill hole Map | 17 |
Figure 8-1 Umpire Analysis Au Correlation | 31 |
Figure 8-2 Umpire Analysis Cu Correlation | 31 |
Figure 10-1 Location of Metallurgical Holes, highlighted area represents approximate mineralized area | 37 |
Figure 10-2 Variability Samples, Au Recovery v CuOx/CuT | 50 |
Figure 10-3 Variability Samples, Copper Recovery v CuOx/CuT | 50 |
Figure 11-1 Vertical Section Looking 030deg Showing Lithologic Boundaries and Drillhole Grades (AUEQ g/t) | 59 |
Figure 11-2 Vertical Section Looking 030° Showing Oxidation Boundaries and Drillhole Weathering | 60 |
Figure 11-3 Fault Map with Drillhole Grades (≥ 1.5 g/t AUEQ) | 61 |
Figure 11-4 Vertical Section A-A’ Looking 030° Showing Location of Interpreted NE 2 Fault Zone, Oxidation Boundaries and Drillhole Grades (AUEQ g/t) | 61 |
Figure 11-5 Vertical Section Looking 030° Showing Mineralized Domain, Modeled Oxidation, Structures and Drillhole Grades (AUEQ g/t) | 62 |
Figure 11-6 Box Plot for Au g/t, Variable of Host Rock | 65 |
Figure 11-7 Box Plot for Cu%, Variable of the Host Rock | 65 |
Figure 11-8 Contact plot showing binned mean sample grades for the Au (blue) and Cu (orange) variables within a 50.0 ft distance | 66 |
Figure 11-9 Geology and Mineralization (transparent gray wireframe) with Drillhole Grades (g/t AUEQ) | 67 |
Figure 11-10 Density of Granodiorite vs Depth | 68 |
Figure 11-11 Sample Distribution | 69 |
Figure 11-12 Au Composite Points for Resource Drillholes, looking 026° at Plane of Best-fit Mineralization (green arrow indicating 100° pitch) used for Spatial Modeling (Variography) | 70 |
Figure 11-13 Cu Composite Points for Resource Drillholes, looking 026° at Plane of Best-fit Mineralization (green arrow indicating 100° pitch) used for Spatial Modeling (Variography) | 70 |
Figure 11-14 Pairwise relative variograms and modeled structures for Major (top), Intermediate (middle) and Minor axis (bottom) for AUCAP (left), CUCAP (center), and AGCAP (right) | 71 |
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Figure 11-15 Longitudinal (100 ft field of view), looking 030° through the 3D block model, showing Measured (red), Indicated (green) and Inferred (blue) class resources with a ≥ 0.3 g/t AUEQ cutoff applied. | 73 |
Figure 11-16 Cross-section slice (100 ft field of view), looking 300° through the 3D block model, showing Measured (red), Indicated (green) and Inferred (blue) class resources with a ≥ 0.3 g/t AUEQ cutoff applied. | 74 |
Figure 11-17 Model validation slices (longitudinal and cross-section), with 100 ft field of view looking 030° and 300° respectively, through the Au (top), Cu (center) and Ag (bottom) showing estimated resource block models with 10 ft composites displayed along drillhole traces. | 75 |
Figure 11-18 X (left), Y (center) and Z (right) swath plots showing mean grades and volume histograms for the AUOK/AUNN models (blue/gray, top), the CUOK/CUNN models (red/gray, middle), and the AGOK/AGNN models (green/gray, bottom) | 76 |
Figure 13-1 Pit Sectors and Recommended Slopes | 86 |
Figure 13-2 Hydrologic Features | 89 |
Figure 13-3 Surface Hydrogeologic Units | 90 |
Figure 13-4 Predicted Open Pit Inflows | 93 |
Figure 13-5 Predicted Groundwater Drawdown at End of Mining | 94 |
Figure 13-6 Predicted groundwater drawdown 100 years after mining ends | 95 |
Figure 13-7 Section A-A’ showing predicted drawdown at the end of mining and 100 years after mining ends | 96 |
Figure 13-8 Predicted Pit Lake Water Balance | 97 |
Figure 13-9 Mine Map End of Year 1 | 104 |
Figure 13-10 Mine Map End of Year 3 | 105 |
Figure 13-11 Mine Map End of Year 5 | 106 |
Figure 13-12 Mine Map End of Mine Life | 107 |
Figure 14-1 Process Flowsheet | 109 |
Figure 15-1 Project Area | 124 |
Figure 15-2 Mineralized Material and Waste Rock Facility | 125 |
Figure 15-3 WRTCF Plan View | 130 |
Figure 15-4 WRTCF Collection Drain Layout | 131 |
Figure 15-5 Facility Cross Sections | 132 |
Figure 15-6 Drain System Cross Section | 133 |
Figure 15-7 Mill and Truck Area | 134 |
Figure 15-8 Concentrator Plan View | 135 |
Figure 15-9 Proposed Powerline Alignment | 136 |
Figure 17-1 Project Surface Waters | 146 |
Figure 19-1 NPV Sensitivity | 175 |
Figure 19-2 IRR Sensitivity | 176 |
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2 Introduction
2.1 Terms of Reference and Purpose of the Report
Gustavson Associates, LLC (Gustavson) was commissioned by U.S. Gold Corp, (US Gold) to prepare a Preliminary Feasibility Study (PFS) for the Copper King Gold project (“CK Gold Project” or the “Project”). This report is a Technical Report Summary (TRS) which summarizes the findings of the PFS in accordance with Securities Exchange Commission Part 229 Standard Instructions for Filing Forms Regulation S-K subpart 1300 (S-K 1300). The purpose of this TRS is to report exploration results, mineral resources and mineral reserves. The effective date of this report is October 15, 2021.
The quality of information, conclusions, and estimates contained herein is consistent with the level of effort involved in Gustavson’s services, based on:
i) | information available at the time of preparation, |
ii) | data supplied by the client, and |
iii) | the assumptions, conditions, and qualifications set forth in this report. |
Any opinions, analysis, evaluations, or recommendations issued by Gustavson under this report are for the sole use and benefit of US Gold. Because there are no intended third-party beneficiaries, Gustavson (and its affiliates) shall have no liability whatsoever to any third parties for any defect, deficiency, error, omission in any statement contained in or in any way related to its deliverables provided under this Report.
2.2 Sources of Information
The information, opinions, conclusions, and estimates presented in this report are based on the following:
● | Information and technical data provided by U.S. Gold | |
● | Review and assessment of previous investigations | |
● | Assumptions, conditions, and qualifications as set forth in the report | |
● | Review and assessment of data, reports, and conclusions from other consulting organizations and previous property owners. |
These sources of information are presented throughout this report and in the References section. The qualified persons are unaware of any material technical data other than that presented by US Gold.
2.3 Qualified Persons and Details of Inspection
Below is a list of the qualified persons involved in the preparation of this TRS and details of their inspection of the property.
● | Mr. Donald Hulse, P.E., SME-RM V.P. and Principal Mining Engineer for Gustavson, is a Qualified Person as defined by S-K 1300. Mr. Hulse acted as project manager during preparation of this report and is specifically responsible for report Sections 6, 7, 8 and 17. Mr. Hulse is independent of US Gold. |
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Mr. Hulse conducted a site visit of the property on October 21, 2020 and July 26, 2021, where he was able to view ongoing exploration activities, geological logging and data capture. Mr. Hulse has attended the large majority of weekly coordination meetings with the principal contributors to the project. | ||
● | Mr. Christopher Emanuel, SME-RM, Senior Mining Engineer for Gustavson, is a Qualified Person as defined by S-K 1300 and is specifically responsible for Sections 2, 3, 4, 5, 9, 12, 13, 15, 16, 18 – 25. Mr. Emanuel is independent of US Gold. | |
Mr. Emanuel conducted a site visit on June 13th, 2021. During the site visit a general inspection of the site was conducted. Drill pads and collars from the 2020 exploration campaign were visited, current infrastructure consisting of access roads, water storage and environmental monitoring systems were observed. U.S. Gold’s core processing and storage facility was visited, core and Reverse Circulation (RC) chips from previous campaigns were observed. | ||
● | John A. Wells BSc. MA, SAIMM, CIM-RM, Consultant Mineral Processing, is a qualified Person as defined by S-K 1300 and is specifically responsible for Sections 10 and 14. Mr. Wells designed and oversaw the gathering of mineral sample for testing, the development of 2020-2021 test programs, and the interpretation of results. Mr. Wells also was engaged in the election of the process plant design engineering firm, overseeing the work accomplished, checking, and verifying the designs and estimates included in the study. Mr. Wells has not visited the Project, but visited facilities engaged in the test work and maintained virtual contact with the process engineering design firm. | |
● | Mark Shutty Mark C. Shutty, B.Sc. is an independent Consulting Geologist, Member of American Institute of Professional Geologists (11664), Member of Geological Society of Nevada and Member of Society of Economic Geologists. Mr. Shutty has previously held the positions of Senior Geologist and Resource Geologist. He is a Qualified Person for S-K 1300 technical reporting and mineral inventory disclosure and is specifically responsible for Section 11. He has over 16 years of combined experience in exploration, mining and resource geology, working on a variety of projects across North America, including porphyry copper-gold deposits. | |
A CK Gold Project site visit, including US Gold’s logging and core storage facilities in Cheyenne, Wyoming was conducted between July 26-27, 2021, by geologist and independent QP, Mark C. Shutty, CPG. The visit entailed a field component, including a complete property tour, inspection of outcropping mineralization in the discovery area, US Gold and historical drillhole monument/pads lead by Hard Rock Consulting LLC’s (HRC) J.J. Brown, Director, Geology & Exploration, and US Gold’s Kevin Francis, VP Exploration & Technical Services. Alford Drilling LLC was drilling hole CK21-11c at the time of the visit enabling inspection of on-site drilling, new core and sample handling. Additional time was spent with HRC’s geologists and technicians reviewing current (CK21-11c) and archived drill core (2007-7008 & 2020) and RC chips (2020), as well as logging, sampling, chain-of-custody and QAQC procedures. |
2.4 Previous Reports on the Project
This is the first TRS U.S. Gold has submitted for the CK Gold Project and authors are not aware of any other TRS submitted by prior owners of the project. However, US Gold did publish a Technical Report and Preliminary Economic Assessment for the CK Gold Project in December 2017. This previous Technical Report did disclose a mineral resource for the project under the reporting requirements of the Canadian Securities Administrators National Instrument 43-101 (NI-43-101). The CK Gold Project was formerly referred to as the Copper King Project.
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3 Property Description and Location
3.1 Property Location
The CK Gold Project is in Laramie County, Wyoming, in the southeastern portion of the state, approximately 20 miles west of Cheyenne. It is centered in the north half of Section 36, T14N, R70W. The property footprint is approximately 453 hectares, which is subject to surface disturbance. It includes the S ½ of Section 25, the NE ¼ of Section 35, all of Section 36, and north 2/3 of Section 31. A regional and project map is shown in Figure 3-1 and Figure 3-2.
Figure 3-1 Regional Map
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Figure 3-2 Project Map
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3.2 Mineral Titles, Claims, Rights, Leases and Options
The Copper King property consists of two State of Wyoming Metallic and Non-metallic Rocks and Minerals Mining Leases which are listed below. Both mineral leases listed can be renewed for successive 10-year terms if certain conditions are met.
Lease #0-40828 for 640 acres (259 hectares) which includes all of Section 36, T14N, R70W. is a 10-year lease that expires February 1, 2023. The current annual rental is $2.00 per acre, $1,280 total. The lease is a 10-year lease that expires February 1, 2023.
Lease #0-40858 for 320 acres (130 hectares) which includes S½ Section 25 T14N, R70W and 160 acres within NE¼ Section 35, T14N, R70W. The current annual rental is $2.00 per acre, $1,280 total. The lease is a 10-year lease that expires February 1, 2023.
Surface Lease Option Agreement Section 31 and Section 25. An option agreement to lease surface rights for project development was executed in August 2021 contemplating the use of a portion of 288 hectares (712 acres) for project development activities.
The surface of S½ Section 25 and NE¼ Section 35 is privately owned. An easement agreement providing access has been negotiated with Ferguson Ranch Inc. on the S½ Section 25, T14N, R70W, and also the W½ Section 31, T14N, R69W. The original access easement was first signed in November 2006, but replaced and superseded by one effective May 1, 2009, the agreement is for a one-year period and is renewable annually for an additional four years and has been extended to cover both the 2020 and 2021 field seasons. Annual payments on the easement agreement are $5,000 for the first year and $10,000 for the next four years if the agreement is renewed. U.S Gold reports that the agreement has been renewed for the current year. Additionally, a new temporary easement preferred by the landowner was establish and celebrated in 2021. This new easement follows the same path as the proposed project access and is subject of the Option Agreement on the land lease and ROW.
The surface of Section 36 is owned by the State of Wyoming and is currently leased for agricultural use to Ferguson Ranch Inc. As part of the terms for its surface-use lease option agreement with Ferguson Ranch Inc. U.S. Gold has determined an arrangement to compensate the Ferguson Ranch for loss of grazing. Prior to mining development, upon the celebration of the Option Agreement and exercising the Lease for the land, annual payments identified in the Option Agreement would be split between the State of Wyoming and the surface lessee based on a sliding scale (per current agreement based on a formula provided by the Wyoming Office of State Lands and Investments).
The surface of Sections 25 and 35 is owned by various private owners. While the open pit expands onto a small portion of the southern part of Section 25, there is no planned activity on Section 35. At the time of writing, U.S. Gold is under contract for the purchase of 14 hectares (35 acres), The Darnell Property, and it expects to close on that purchase in November 2021. This property is immediately west of Section 36 in the NE ¼ Section of Section 35. There are no plans to incorporate this land into the project area and it is contemplated to be a buffer between the mine and other residents in the area.
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3.3 Environmental Impacts, Permitting, Other Significant Factors and Risks
During 2021, US Gold is conducting a field exploration program consisting of exploration drilling, soils, geotechnical and hydrological investigations. This program is fully permitted and the CK Gold Project currently holds a Department of Environmental Quality issued Exploration Permit # DN0440, TFN73064 which includes cumulative bonding notice to the value of $114,000 dated June 14th, 2021. In addition, an exemption of Stipulation 5 of US Gold’s mineral lease 0-40828 was obtained from the Wyoming Game and Fish Department, addressing mineral lease terms that exclude activity in sensitive mule deer habitat between November 15th and the end of April each year. Preliminary discussion with Game and Fish have been held to investigate measures that can be taken if the project proceeds to development to allow year- round activity. Discussions identified that mitigation measures are reasonable to accomplish, such as programs to install wildlife friendly fencing, invasive species (e.g. cheatgrass) mitigation, and land swaps.
Current surface disturbance from exploration activities, including roads and test sites is 40 acres. Costs associated with the reclamation of the exploration disturbance are bonded through cash payments to the state, recoverable upon inspection and release by the DEQ. U S Gold conducts ongoing reclamation and 2021 end of season reclamation is ongoing and will be measured by drone survey as operations conclude in November 2021, covering most of the exploration activities to date.
3.4 Royalties and Agreements
The CK Gold Project is subject to a production royalty of 5%, payable to the Office of State Lands for use by the State to fund appropriate education trust accounts. The royalty is calculated based upon the gross sales value of product sold less applicable deductions for costs incurred for processing, transportation and related costs beyond the point of extraction from the open pit mining operation. Once the project is in operation, the Board of Land Commissioners has the authority to reduce the royalty payable to the State. Prior to commercial production a royalty of $2.00 per acre is payable to the Office of State Lands.: In addition to the permitting requirements and associated interaction with the DEQ and other state and local agencies, development of the CK Gold Project will require certain agreements with other local entities, including: (1) Ferguson Ranch for land use rights and easements for access road, power line and water supply well(s) and pipeline; (2) City of Cheyenne Board of Public Utilities for a water supply agreement, and an agreement to relocate an existing water pipeline crossing Section 36 and easement for the power line; and (3) a power supply agreement with Black Hills Energy, a subsidiary of Black Hills Corporation.
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4 Accessibility, Climate, Local Resources, Infrastructure and Physiography
4.1 Topography, Elevation and Vegetation
The CK Gold Project is located on the eastern flank of the Laramie Range where the granite and granodiorite peaks, and rolling hills are bound to the east non-conformably by shallow eastward dipping sedimentary rocks of the White River Formation. The Laramie Range is an approximately 125-mile-long mountain range between Laramie and Cheyenne, WY that trends north from the Colorado-Wyoming border towards Casper, WY. East of the CK Gold Project area, towards Cheyenne, WY, the topography transitions to flatter plains along the western margin of the Great Plains physiographic province.
The gradually sloping sedimentary deposits on the flank of the Laramie range that is situated at the eastern edge of the Rocky Mountain Province, created what was referred to as a land bridge allowing the main east-west rail line to pass the area, avoiding difficult mountainous terrain. Elevations within the Laramie Range in the vicinity of the property reach over 8,000 ft (2,438m) above mean sea level, while the city of Cheyenne, located on the western edge of the Great Plains Province, is at an elevation of 6,100 ft (1,859m). Within the CK Gold Project property, elevations range from about 6,800ft to 7,300ft (2,073m to 2,225m) with generally low to moderate relief. The exception is the northwest portion of the property, which covers a moderate to steep, northwest facing slope that bottoms at 6,900ft. (2,103m) elevation in a northeast flowing intermittent stream drainage.
Elevations at the CK gold Project, and within the immediate mineral resource area, range from 6,950ft. to 7,175ft. (2,118m to 2,188m). The currently identified mineral resource is exposed at surface along a west- northwest trending ridge, and the topography is conducive to open-pit mining methods.
Vegetation is sparse to moderate with sagebrush and prairie grasses on the gentle south and east facing slopes and small conifers on the steeper north facing slopes.
4.2 Accessibility and Transportation to the Property
The property is located approximately 20 miles (32km) west of Cheyenne and is accessible from the paved State Road 210 to the County Crystal Lake Road, which is a maintained gravel road. The new access entryway adopted in 2021 is approximately 2 miles (3.2km) off the pavement on the Crystal Lake Road and crosses Ferguson Ranch Land, subject of the ROW Option Agreement. From the entrance the proposed access is approximately 4 miles (6.4km) of single track gravel road which will be upgraded and maintained for the project life. Alternatively, the property can be accessed from the west side by the Buford exit on the interstate 80 and taking North Buford Road and the SR-210 to Crystal Lake Road to the same turn off. Alternative routes have been investigated, envisioning a shorter route to the south to connect to the Buford Road and the Interstate 80 highway. An alternate south access would require additional agreements and right of ways to be established which may be pursued if the bulk sale of mine rock is pursued.
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4.3 Climate and Length of Operating Season
According to the NOAA 1981-2010 climate norms for Cheyenne, the area can expect an annual precipitation of 16.3”, winter temperatures averaging from 17 to 41°F and summer temperatures from 53 to 79°F. Mining operations will be viable year-round with occasional interruptions due to inclement weather. The average annual precipitation for the area is estimated to be 17.7 inches.
4.4 Infrastructure Availability and Sources
Given the proximity to Cheyenne, the state capital of Wyoming and the Front Range metropolitan area, personnel needs, delivery of consumables, and infrastructure needs are available both locally and regionally. This should not pose a material negative impact to the project, on the contrary the infrastructure allows relatively easy access to major mine supply centers, the closest being Denver, Colorado, Salt Lake City, Utah and Gillette, Wyoming. The area has access to a Union Pacific railroad line, intersection of 2 major interstate highways I-80 and I-25, and a regional airport.
High voltage powerlines are approximately 1.5 miles (2.4km) from the current project area. A connection to the local power provider, Black Hills Energy and easement for transmission lines has been identified and scoped. While there is a nearby line serving the local population discussions with Black Hills Energy contemplate a new 24.9KV line tapping off an existing sub-station transformer feeding a 16-mile (26km) overhead line to the project site, also serving a new sub-division (Whispering Hills). Water to meet project demand has been identified and potential well sites investigated. Minor water sources have been identified around the project site from monitoring well locations, and additional deeper well sites will be investigated in upcoming fields seasons with a view to securing an independent water supply. However, water is available to purchase from the City of Cheyenne from its infrastructure running along North Crow Creek less than a mile away from the project site. Additionally, a pipeline to access purchased water runs across the property and the Cheyenne Board of Public Utilities (BOPU) have been approached with a view to relocating the 100-yr old cast iron pipeline and a water supply for the early years of the project. BOPU are reluctant to commit to the suppling the mine in the longer term due to the limited availability within their system and uncertainties regarding the long-term demand for the city. Other entities have been approached with a view of securing the long-term water needs for the project, likely adding water to the BOPU system from other wells allowing raw water to be extracted upstream of the city.
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5 History
The CK Gold Project was originally known as the Copper King Mine. It was first discovered in 1881, along with the Climax and Potomac lodes, by James Adams. The deposit was developed and a 160ft (48m) shaft was sunk, along with construction of a mill and smelter by the Adams Copper Mining and Reduction Company. However, no production figures are available from this period. The Ferguson Ranch, which presently owns or leases most of the surface land in the CK Gold Project’s Project area, was homesteaded in 1874 by the first native-born children of settlers to the area (Angus Journal, 1996).
The Copper King Mine was noted as idle by the State Geologist in 1890 when Wyoming attained statehood and assumed ownership of the associated section of land (Section 36). In 1911, C.E. Jamison, the State Geologist of Wyoming, mentioned several active copper and gold mines within the Silver Crown Mining District (SCMD) and in close proximity to the CK Gold Project, including the Dan-Joe Prospect, Comstock Mine, Fairview Mine, Louise Mine, Little London Mine, Bull Domingo Prospect and several additional unnamed prospects.
Mineral rights transferred several times over the next century, starting with the Otego Mining Company in 1907, followed by the Hecla Mining Company until about 1910. By 1910, production at the Copper King Mine had reached 316st (287t tonnes), producing 27 ounces (oz) gold, 483oz silver and 25,782lbs. (11,700kg) of copper. From 1890 to 1938 there were at least 8 drilling campaigns totaling 37,500ft. (11,430m) of drilling. Excavation of numerous prospect pits as well as development of 2 adits also likely occurred during this time.
The American Smelting and Refining Company (ASARCO) acquired the property in 1938 and performed the first major drilling campaigns on the Project site. It was subsequently acquired by the Copper King Mining Company in 1952. ASARCO re-optioned the property in 1970. Henrietta Mines Ltd gained rights to the property in 1972. At some point prior to 1987, Henrietta’s interest was folded into Wyoming Gold, Inc., which was jointly owned by William C. Kirkwood and Caledonia Resources Ltd., the parent company of Henrietta. Royal Gold, Inc. entered into an option agreement to buy Wyoming Gold in 1989. Compass Minerals, Ltd. then acquired the property in 1993. Saratoga bought it in 2006. Strathmore acquired the issued and outstanding shares of Saratoga in 2012 and was subsequently purchased by Energy Fuels. Energy Fuels then sold the property to U.S. Gold in 2016.
5.1 Historical Exploration and Production
ASARCO completed 5 exploration holes for 427m in 1938, 2 of the holes yielding significant gold and copper mineralization. Copper King Mining then completed 6 more holes in 1952-54 for 802m of drilling, which was partially subsidized by the U.S. Bureau of Mines. When ASARCO took control again in 1970, they conducted soil geochemical sampling, geologic mapping, IP and aeromagnetic surveys, and 8 additional core holes totaling 874m.
Henrietta completed the first reserve and resource estimate in 1973, after they had completed an 11-hole drilling campaign for 3,766ft. (1,148m) of drilling, a control survey, geologic mapping, IP and vertical- intensity magnetic geophysical surveys, geochemical soil sampling, re-logging of historical core holes, and preliminary metallurgical studies.
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A second reserve estimate was done by John Nelson of Kirkwood Oil and Gas around 1986. It does not appear any additional drilling was done prior to this estimate; however, the company did collect 228 surface geochemical samples in 1982 and the Colorado School of Mines Research institute had done some metallurgical work on the property in 1980.
Caledonia undertook a new drilling campaign in 1987 of 25 holes for 9,980ft. (3,042m), designed to improve confidence and prove reserves within the known extents of the deposit. They also funded a three- sample preliminary metallurgical study that year. Results were used to create a preliminary resource estimate that was published in the Wyoming State Geological Survey Bulletin 70. Tenneco Minerals Company then produced a reserve estimate in 1988. In 1989 both FMC Gold Company and Royal Gold, Inc. funded metallurgical studies and produced reports that discussed a small exploration campaigns, likely completed in that year, but whose results have not been available. The FMC study was completed by Kappes, Cassiday & Associates (KCA) and references some work done to collect and test mine dump samples in 1986 and 1987. It is believed that the Royal Gold report, completed by Hazen Research, Inc in 1989., used the same metallurgical sampling composites in its study. It also includes 2 holes drilled for 154m that year, however this data is also lost.
Compass funded an aeromagnetic survey over the area and 25 new drill holes for 9,202ft (2,805m) in 1994. They also conducted two metallurgical studies in 1994 and 1996 by Metallurgy International and a preliminary resource study by Mine Development Associates (MDA).
Mountain Lake Resources then funded a ground magnetometer and VLF-EM geophysical survey, drilled 8 holes for 1,445m, including two 2 metallurgical test holes, and a metallurgical study by the Colorado Minerals Research Institute in 1998.
MDA completed a technical report for in 2006, 27 holes for 18,297ft (5,577m) were drilled during the spring and summer of 2007, and MDA created an updated report for them to include these results through October 31, 2007. Saratoga completed another 8 holes in 2008 for 2,185m.
Further work was commissioned by Saratoga focused on flotation methods to extract gold and copper, as reported in 2009 by SGS, Canada Inc. In a report dated December 8, 2010, a test program conducted on oxide material from the Copper King deposit with the objective of determining a flotation flowsheet to maximize recoveries of Au and Cu. The oxide portion of the resource is fairly minor; however, the work was completed to follow on from the successful results obtained on sulfide samples where a 26% copper concentrate was produced containing 98 grams per ton of gold. Oxide concentrate produced was reported as being expected to be marketable, however further work was identified to support these conclusions.
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6 Geological Setting, Mineralization and Deposit
Much of the text in this report section is taken directly from “Updated Technical Report and Preliminary Economic Assessment, Copper King Project” prepared by Mine Development Associates for U.S. Gold with a report date of December 5, 2017. Most of the original text appears as written with minor edits for clarity and edits to add additional commentary or interpretation. The original reference sources that Mine Development Associates relied upon are referenced in the following text.
6.1 Regional Geology
The following discussion of regional geology is taken from Hausel (1989 and 1997) and Klein (1974).
The Copper King project and the surrounding Silver Crown Mining District are situated within the southeastern foothills of the Laramie Range along the eastern edge of the Rocky Mountain Province. The Laramie Range forms an elongate, 200km-long, north-south anticlinal uplift cored by Precambrian rocks and flanked by upwarped Phanerozoic sedimentary rocks. The Precambrian rocks can be divided into a northern Archean terrane (Wyoming Province) and a southern Proterozoic terrane (Colorado Province). These terranes meet near the center of the Laramie Range, where a 906-square kilometer anorthosite batholith, dated at 1.42-1.53 billion years old (“Ga”), intrudes the projected trend of the Mullen Creek- Nash Fork shear zone (Hausel, 1997).
The Archean rocks of the Wyoming Province include gneiss, migmatite, granite, and supracrustal successions of metasedimentary and metavolcanic rocks. The gneiss and migmatites have been dated at about 2.9 to 3.0 Ga (Johnson and Hills, 1976), while the granites typically date between 2.54 and 2.65 Ga. Copper and associated base-metal mineralization within the Wyoming Province are primarily found within pendants of metasedimentary and metavolcanic rocks.
The Colorado Province, which contains the Silver Crown Mining District, consists of Proterozoic amphibolite-grade mafic to intermediate metavolcanic and associated metasedimentary rocks that are about 1.8 Ga (Peterman and others, 1968). These rocks are intruded by 1.39 to 1.42 Ga granite, which includes the Sherman Granite and related felsic phases (Peterman and others, 1968). Steeply dipping and/or faulted Paleozoic and younger sedimentary rocks flank the eastern edge of the Precambrian rocks. Sub-horizontal Tertiary sedimentary deposits overlie the older sedimentary rocks and overlap the Precambrian core.
The Silver Crown Mining District is located in a belt of northeast-trending, foliated, intermediate- composition igneous rocks of Precambrian age which forms the eastern border of the Sherman Granite. The dominant rock type is a foliated granodiorite that exhibits significant potassium enrichment in close proximity to the Sherman Granite. Outcrops of older metasedimentary rocks, primarily quartzite and quartz-biotite schist, and amphibolitized mafic rocks, are located along the east side of the district, while an isolated area of younger hybrid felsic rocks occurs in gradational contact with the granodiorite 0.5 miles (0.8km) to the west of the Copper King Mine. Aplitic quartz monzonite dikes ranging in width from about 3ft. to 30ft. (1m to 9m) occur throughout the mining district, and there is some potassium enrichment of the granodiorite country rock along the often-gradational contact with the younger aplitic dikes. Pegmatites ranging from about 3ft. to 30ft. (1m to 9m) in width are found throughout the district
and cut all Precambrian rock types. Paleozoic and Mesozoic sedimentary rocks are in fault contact with the Precambrian rocks along the eastern border of the district. Tertiary arkosic sediments blanket a large portion of the area. The generalized geologic map of Figure 6-1 shows the general relationship of Proterozoic metasedimentary and metavolcanic rocks with the Sherman Granite on the eastern flank of the Laramie Range but does not display the extent of igneous rocks present in the Copper King area.
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Figure 6-1 Surface Geology Map
Precambrian-age shear zone tectonites occur in elongate, fairly continuous outcrops that range up to 400ft. (120m) in width and approximately 4,000ft. (1,200m) in length. The tectonites post-date almost all Precambrian rocks, although some pegmatites were apparently intruded post-tectonically. The shear zones are often expressed as topographic highs due to the greater resistance of the annealed zones. Outcrop characteristics vary with respect to the parent types. Aplitic quartz monzonite and pegmatites are sheared to a fine crystalline rock, while an intensely foliated mylonitic gneissic rock is produced from shearing of the foliated granodiorite and hybrid felsic rocks. Quartz veinlets and epidote are commonly present parallel to the cataclastic foliation. Fractures are often coated with hematite, manganese oxides and, less often, copper carbonates (Klein, 1974).
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The major structural trend in the northern two-thirds of the Silver Crown Mining District is generally N25°E, which parallels the northeast trend of the Sherman Granite boundary and the gneissic foliations observed in the granodiorite (Klein, 1974). The southern one-third of the district, in which the Copper King property is located, is characterized by shear zone cataclastic foliation trends between N60°E and N80°W. Klein (1974) states that the cataclastic foliations may be a direct result of the intrusion of the Sherman Granite or slightly later Precambrian stresses and dislocation deformation along trends of existing gneissic foliation.
6.2 Property Geology
Much of the following description is taken from Klein (1974) and Hausel (1997).
Intermediate-composition metavolcanic and associated volcanogenic metasedimentary rocks, thought to be 1.6 to 1.9 Ga, form the basement at the Copper King Mine. About 0.8 to 1.6km east of the mine along the northern boundary of Section 36 are outcrops of fine-grained, distinctly to poorly foliated quartz- biotite schist and fine- to medium-grained massive quartzite as well as rhyolite, diabase, and finely laminated epidote hornfels. They were intruded by calc-alkaline granodiorite and quartz monzonite intrusions, which host the gold-copper mineralization at Copper King. The granodiorite is fine- to coarse- grained and generally equigranular to slightly porphyritic. It grades from unfoliated to gneissic. Much of the granodiorite exhibits potassium enrichment, particularly near contacts with aplitic quartz monzonite. Weakly porphyritic, distinctively pink aplitic quartz monzonite dikes cut all crystalline rocks and can be up to about 30ft. (9m) wide and 800ft. (244m) long. Where they intrude foliated granodiorite, there are contact zones of potassium enrichment up to 12m wide. Post- mineralization pegmatite and aplite veins are also present. Many dikes of mafic composition also cut the granodiorite and are in some places cut by pegmatite dikes. Contacts between the schist or quartzite and the foliated granodiorite, pegmatite, and quartz monzonite are sharp. The entire volcanogenic suite was extensively intruded by the Sherman Granite a few kilometers west of Copper King about 1.4 Ga. According to Hausel (1997), the Copper King stock may have been emplaced at about this time. During or after emplacement of the Sherman Granite, extensive shearing produced mylonitic shear zones with generally a N60°E to N80°W trend in the vicinity of the Copper King Mine. The Copper King mineralization is controlled by a N60oW- trending shear zone.
Although the foliated granodiorite was metamorphosed to amphibolite grade, regional retrograde metamorphism resulted in greenschist alteration throughout the Silver Crown district. Later hydrothermal alteration in the form of propylitic and potassic alteration overprinted the greenschist metamorphism. The hydrothermal alteration is associated with sulfides in the district (Hausel, 1997).
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Recent work by US Gold has provided more details of the structural setting of the Copper King deposit. There is a strong west-northwest fabric to the deposit, expressed as foliation in the host granodiorite and as parallel pegmatite dikes. Downhole televiewer data from 2020 drilling, coupled with ground magnetics geophysics and surface mapping show the northern deposit margin is a west-northwest, steep northeast dipping fault zone (Northwest fault). Gold and copper mineralization is stronger to the south of this fault, and weak at best to the north. Mineralization tends to mimic the west-northwest fabric and remains open at depth and to the south.
On the east side of the deposit, the previously documented Copper King fault forms a hard boundary to mineralization. Host granodiorite occurs to the west of the fault, and unmineralized metasedimentary and metavolcanic rocks occur to the east. The fault is exposed in several prospect pits north and east of the deposit and has been defined by drillhole intersections at depth. Previous interpretations of the Copper King fault suggest the fault is normal with a down-to-the-east dip slip offset. Drillhole intercepts, however, show the Copper King fault to be steeply west dipping, though whether the offset is dip slip or oblique is not yet established. Mineralization terminates against the Copper King fault, and it is not clear if the fault is post-mineral or served as an aquitard for mineralizing fluids. Any potential offset of the mineralization and host granodiorite would be southeast of the deposit, under post-mineral White River cover in an area yet to be explored.
Mineralization on the northwest end of the deposit seems to be controlled by a northeast striking, northwest dipping fault (NE-1 fault) interpreted from RC drillholes. This fault, like the Northwest fault, confines higher-grade gold and copper mineralization to the southeast, with lower grade mineralization to the northwest. Small amounts of higher grade mineralization occur along the plunge line of the intersection between the Northwest and NE-1 faults.
A major northeast striking, southeast dipping fault (NE-2 fault) zone cuts through the middle of the deposit, separating it into two distinct concentrations of higher-grade mineralization. Gold mineralization is much lower grade along this fault zone and it also carries surface oxidation to depths of 400 feet or more below surface along its trace. It is not yet clear if this fault zone is post mineral or acted as an aquitard.
There are several other faults of lesser importance in the immediate deposit area and surrounding areas. Most of these have been interpreted from geophysical data, as much of the Copper King project area south of the deposit is covered by Tertiary White River Formation. Figure 6-2 displays the major faults within the Copper King deposit itself.
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Figure 6-2 Fault Map, Blocks indicate mineralization low metal values (green) to high values (magenta)
6.3 Deposit Types
The Copper King deposit is thought by some to be a Proterozoic porphyry gold-copper deposit (Hausel, 1992, 1997; Carson, 1998), and is included in a list of undeveloped porphyry copper deposits by Long (1995). Others (Klein, 1974) categorized the Copper King deposit as a structurally controlled base and precious metal deposit in a Precambrian shear zone.
Work to date by US Gold does not provide a lot of geochemical or physical evidence for a porphyry copper deposit model, but the intense and sometimes tightly confined shearing-foliation does lend itself to the shear zone model. Geochemically, the Copper King deposit has a geochemical signature much like an IOCG (iron oxide copper-gold) deposit, less abundant rare earth metals. US Gold has engaged the University of Wyoming to investigate further genetic studies of the Copper King deposit.
The presence of stockwork and disseminated mineralization, the uniformity of metal content in the mineralized intercepts, and the association of propylitic and potassic alteration zones do suggest a similarity to the porphyry copper model. However, the apparent lack of an associated large porphyry intrusion, the rather small size of both the mineralized and altered zones, the Proterozoic age, and the apparent structural control exerted by the associated shear zone suggest that the appropriate model may be one of shear-zone related mineralization. In determining the mineral resource for Compass Minerals in 1995, MDA had modeled higher-grade shear-zone related mineralization within a larger shell of disseminated and stockwork mineralization (Ristorcelli et al., 1995).
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While modern exploration in the Silver Crown district has focused on the Copper King gold-copper deposit, there are also several gold-copper-silver occurrences in the district that represent permeable fracture fillings and re-healed silicified generally N20°E-trending fractures (Hausel, 1997). Examples are the Comstock Mine in SW/4 Section 13, T14N, R70W and the Dan Joe prospect in N/2 Section 24, T14N, R70W (Hausel, 1997), neither of which is located on the property controlled by Saratoga. Klein (1974) noted that the Comstock-type fracture fillings and the Copper King-type shear zone deposit differ in whether the shears are open or healed and in orientation of the structures but are similar in ore and gangue mineral paragenesis and replacement features.
According to Klein (1974), there are two occurrences similar to the mineralization at Copper King in the Silver Crown district, one in the east-central portion of Section 14 and one in the SW/4 of Section 35, neither located on the property of the Issuer.
6.4 Mineralization
According to Klein (1974) Copper King is a structurally controlled base-precious metal deposit in silicified portions of a Precambrian shear zone in granodiorite. According to Soule (1955), most of the primary gold-copper mineralization is in relatively fine-grained, equigranular gneiss (foliated granodiorite) composed of quartz, orthoclase, microcline, oligoclase, biotite, and hornblende with occasional epidote, hematite, and magnetite. Although most of the mineralization is in silicified, rehealed, mylonitic granodiorite, lesser amounts of primary copper minerals are present in aplitic quartz monzonite and hybrid felsic rocks (Klein, 1974). The mineralization tends to occur proximally to the monzonite dikes (Shrake, 1988). The deposit is elongate and ovoid in shape.
According to Nevin (1973) and Hausel (1982, 1997), and visually confirmed by the Saratoga drill hole geology, alteration zoning is evident, with a central zone of quartz veinlets and silicification extending outward into a narrow zone of potassic alteration (secondary biotite and K-spar with muscovite, sericite, epidote, and sulfides), enclosed outward by a zone of propylitic alteration (secondary epidote, chlorite, sulfides, and quartz). The zone of silicified foliated granodiorite that is the primary host for mineralization is about 762m long with an average width of 152m (Hicks, 1972). It appears that the hydrothermal alteration overprinted regional retrogressive metamorphism that had produced widespread greenschist alteration in the Silver Crown district (Hausel, 1997). Carson (1998) studied the mineralogy of six rock samples from Copper King and concluded it “possesses all the features of a weakly to moderately deformed and recrystallized small, low-grade, sub-economic porphyry copper system” or that it could “represent leakage from a larger and similar but higher-grade porphyry system related to a quartz monzonite porphyry stock at depth.” Carson (1998) identified potassic, propylitic, and phyllic- argillic alteration in the samples he studied. He proposed that the potassic and propylitic alteration are related to the porphyry system, whereas the phyllic alteration is later and related to structurally controlled alteration and mineralization. Although the deposit has been deformed and recrystallized, most of the mylonitic foliation and deformation appear to be pre-mineralization (Carson, 1998). In the better mineralized areas, quartz occurs as numerous veinlets, and there is a direct quantitative relationship between the quartz veinlets, chalcopyrite, and gold content (Soule, 1955).
Mineralization is present as disseminated sulfides and quartz/sulfide stockworks with malachite and chrysocolla and native copper present at the surface and chalcopyrite, pyrite, minor bornite, primary chalcocite, pyrrhotite, and native copper at depth (Soule, 1955; Hausel, 1997; and Clark, 2008). The mineralization is low in pyrite and high in magnetite (Nevin, 1973). Spectrographic analysis identified traces of lead, zinc, tungsten, and titanium dioxide in the mineralization (Hausel, 1997). Covellite and molybdenite have also been reported by Klein (1974). Little to no molybdenum analyses exist for the project; however, those assays that do exist from early in the project history showed low values. Sphalerite is present in intervals enriched in Zinc. Precious metal concentrations are directly proportional to sulfide content, particularly chalcopyrite (Klein, 1974). Gold occurs as free gold in grains 10 to 250 microns in size (Mountain Lake Resources Inc., 1997) or as electrum grains (F.L. Schmidt, 2021). Although mineralization is in general low grade, supergene ores with rich masses of chalcocite were selectively mined in the past (Ferguson, 1965, cited in Hausel, 1997)
Oxidation occurs within the upper 100ft. (30m) below the topographic surface and a mixed zone of weak oxides and remnant sulfide, often associated with increased metal grades, occurs within the core of the deposit up to 250ft. (75m) below the oxide boundary. Chalcopyrite is the dominant sulfide mineral though chalcocite and native copper are enriched within the mixed oxide/sulfide zone and oxide zones, respectively.
The Copper King deposit consists of a near-surface, central core of high-grade (>1.71g Au/t) mineralization, 575ft. (175m) long, 160ft. (50m) wide, and 500ft. (150m) thick, associated with moderate to pervasive silicification and near-vertical thin, sulfide-bearing quartz veins and stockwork. The high- grade core is surrounded by a large envelope of low-grade disseminated mineralization, 760m long along its N60oW strike, up to 1,000ft. (300m) wide at the widest part, and over 1,100ft. (330m) in thickness. The low-grade mineralization is open along strike, both to the northwest and southeast, and also at depth, where historic core holes have encountered mineralization to a depth of at least 1,000ft. (305m). Gold and copper mineralization within the lower-grade portion of the deposit is uniformly consistent in tenor both along strike and at depth. Historic and Saratoga drill holes have intercepted > 820ft. (250m) of continuous gold and copper mineralization in which over 90% of the individual gold assays range between 0.3g Au/t and 1g Au/t. grade and the copper values range between 0.1% Cu and 0.3%Cu.
According to Klein (1974), based on drill core observation, apatite, fluorite, and calcite occur in the altered, foliated granodiorite associated with the shear zones, possibly indicating that the original magma or the hydrothermal fluids were rich in volatiles.
Noting that any hypothesis is highly speculative given the lack of direct evidence, Klein (1974) proposed that the origin of the Copper King base and precious metals could be either:
● | Deposition from residual fluids related to an intrusion introduced into a cataclastic zone, or |
● | Remobilization of metals from a previously existing deposit by cataclasis. |
He also speculated that the fluids may have come from a final phase of the Sherman granite or from a currently unexposed Precambrian intrusion. The potassic and silicic enrichment in the ore zone cannot be directly linked to intrusive fluids, but its occurrence in shear zones could link it to metamorphic recrystallization with the copper and magnetite being derived from the granodiorite and associated amphibolitized mafic rocks seen in the district (Klein, 1974). Based on similarities to other Precambrian mineralization in the Laramie Range and Front Range, Klein (1974) concluded that the Copper King deposit was a Precambrian metallic concentration of either magmatic segregation or disseminated type in which the metals were partially redistributed into adjacent sheared rocks during later Precambrian cataclasis. Hausel (1997) favored the hydrothermal/intrusive origin of a porphyry system. Mountain Lake Resources Inc. (1997) interpreted the Copper King mineralization as being hydrothermal in origin with the shear zone seen in the deposit having served as the feeder structure. They suggest that there could be additional mineral zones at depth associated with splays from the main feeder zone.
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7 Exploration
7.1 Summary of Exploration Activities
The CK Gold Project was reportedly discovered in 1881, high-graded and saw limited mining. The first exploration work reported is drilling by ASARCO in 1938. Several additional rounds of drilling have been conducted since that time. In the 1972 Henrietta Mines Ltd. acquired the property and completed a comprehensive program of exploration and development. In addition to drilling, an I.P. survey, geologic mapping, geochemical sampling, and metallurgical testing were conducted (Nevin, 1973). Drilling campaigns were conducted by Saratoga since 2006 and Strathmore since 2012, with a hiatus in drill exploration until the acquisition by US Gold for Energy Fuels in 2016, US gold conducted drilling in 2017, 2018, 2020 and is currently concluding its 2021 drilling program, focused on data collection to support post PFS and feasibility studies in 2022.
7.2 Exploration Work - Drilling
The drilling record prior to 1997 is incomplete and much of the historical core is lost. Contemporary drilling reports as well as comparisons to recent drilling have been used to support the use of the pre 1997 drilling. In 2020, historical drill hole collars were located, surveyed and the results compared closely to their location in the historical drilling database.
Figure 7-1 indicates a total of 173 holes with a total drill length of 29,997m have been drilled on the Copper King property. Figure 7 1 shows the location of all holes within the Copper King mineral resource area. An additional six historic holes totaling 1,085m are in the database but outside of the current resource area.
Figure 7-1 Drill hole Map
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7.2.1 US Gold 2021 Drilling Campaign
US Gold began a drilling campaign in July of 2021 consisting of 48 holes and 40,930ft. (12,475m), comprised of reverse circulation, rotary and core drilling. The primary purposes of this campaign are to continue to refine hydrologic and geotechnical subsurface conditions, and minor exploration immediately southeast of the proposed project. Thirteen monitoring wells totaling 5,600 feet are proposed for sub- surface groundwater studies. Results from this campaign were not available by the effective date of this report and are not included in this study and are aimed at providing data for a later feasibility study. There have been no findings or observations during the 2021 exploration and data gathering program that would materially affect the findings of this study.
7.2.2 US Gold 2020 Drilling Campaign
In October of 2020, US Gold was carrying out a drill program at the Project. Part of that work included surveying new drill hole collars and historical drill hole collars U.S. Gold was able to locate in the field and flag.
All historical collar coordinates (pre-2020) were loaded into a handheld GPS unit and visited in the field. Those that were clearly identifiable (cement, tags, drill pipe, etc) were flagged with a lath and flagging, with the hole name written on the lath. These collars were then surveyed at the same time as the 2020 holes, on October 21st, 2020.
Surveying was completed by Topographic Land Surveyors of Casper, WY and the results certified by Professional Land Surveyor Aaron Money, #14558. Survey method was Real Time Kinematic GPS using a Trimble R10 GNSS GPS system.
Drill hole collars from each of the historical programs dating back to 1938 were identified in the field and resurveyed confirming the locations recorded in the drilling database.
Comparison of the new collar surveys with the old coordinates showed small variability in X and Y coordinates, typically less than 5 feet and around 25 ft at most, and a bit more in elevation (around 25 ft at most).
Two permanent survey control points were placed on the project for future use.
7.2.3 US Gold 2020-2017
US Gold completed two RC drilling programs in 2017 and 2018. RC drilling was comprised of four holes in 2017 and eight holes in 2018, totaling 12,040ft. (3,670m). Both programs were designed to investigate magnetic and IP anomalies generated by geophysical surveys. Drilling was completed by AK Drilling of Butte, Montana using a Foremost MPD 1500 RC drill. Samples were collected on 5ft. (1.5m) intervals from the discharge of a rotary splitter attached to the drill. A chip tray was also filled from cuttings for geologic logging and archived. Samples were delivered to Bureau Veritas of Sparks, Nevada for analysis.
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A rotary, reverse circulation and diamond core drill program was begun in September 2020, and 30 drill holes totaling 21,810ft. (6,647m) were completed by early December 2020. Core drilling totaled 10,561ft. (3,219m) and rotary drilling totaled 10,538ft. (3,312m). The focus of US Gold’s work was to generate metallurgical composites, collection of geotechnical data and mineral resource expansion.
Core drilling was completed by Alford Drilling using an LF90 drill rig. HQ core was recovered using a split tube core barrel system to minimize core damage. Holes are monumented using braided steel cable and tag embedded in a concrete pad at the drill hole collar.
7.2.4 Saratoga 2007 – 2008
The focus of Saratoga’s drilling campaign was to expand the mineralized body outlined in previous campaigns, provide material for metallurgical testing and future geotechnical studies. The diamond drill program began in 2007, paused over winter and completed in 2008, 35 holes were completed for a total length of 25,462ft (7,760m). Logan Drilling, based in Nova Scotia, Canada, was the drilling contractor, and a Longyear Fly 38 skid rig drilling NQ-size core (4.76cm diameter) was used.
7.2.5 Historical Drilling
There is limited information on drilling and sampling procedures for the ASARCO, Copper King Mining, and the USBM drill programs. The original geology logs are not available although Nevin (1973) provides summary geology logs for all but the ASARCO 1938 drilling and assay sheets for all of these drill programs. The assay sheets include collar coordinate information, bearing and dip of hole, sample intervals and Au, Ag and Cu assay data. Defense Minerals Exploration Administration documents (0647_DMA) include identical logs for the ASARCO which only contain assays and recoveries for ASARCO diamond drill holes A-1 through A-5 and state they were assayed by Federal Mining and Smelting Co Wallace Testing Plant in Wallace, Idaho.
Previous attempts to locate the drill core from ASARCO’s, and the U.S. Bureau of Mines (“USBM”) drill programs that had been housed at the USBM in Denver were unsuccessful. According to Mountain Lake Resources Inc. (1997), the core from Henrietta’s holes was destroyed.
Soule (1955) reported that drilling by the USBM was done by contract and that all three holes were core holes, but no further information was provided in his report.
Henrietta Mines drilled seven rotary holes for a total of 482m and 6 core holes for 666m. Several of the holes were started as rotary and finished as core. Boyles Brothers Drilling Company of Golden, Colorado was the drilling contractor.
Compass Minerals drilled 21 rotary holes and five diamond core holes. Hole CCK-16 was drilled rotary to a depth of 152m and then cored with NX core to a total depth of 341m. Notes on the geologic log indicate the core was split before logging. Hole CCK-19 was cored for its entire length with HQ core. Holes CCK-24 and CCK-25 were both started with RVC drilling, changing to NX core at 136m and, 136m, respectively. Hole CCK-26 was cored completely with NX core. There are no further details about Compass’s drilling program.
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There are few details on the Caledonia or Mountain Lake drill programs. No drill logs are available for the Caledonia holes; the collar locations were taken from a map. The Caledonia holes ranged from 220ft (65m) to 550ft. (170m) in depth and were intended to confirm the results of prior drilling. A report by Gemcom (1987) describes the Caledonia drilling as spaced 50ft (15m) apart through the mineralization, sampled every 10ft. (3m) and assayed for gold. Gemcom entered and verified the Caledonia drilling data. Drill logs of the Mountain Lake holes are available which do contain collar and drill orientation data. Summary geology from the Mountain Lakes drill holes were entered into the database.
Besides Henrietta’s core hole H-1, as mentioned above, has no evidence that any of the other holes drilled on the Copper King property were down-hole surveyed.
There is inherent risk associated with these legacy drilling programs (pre 2007 drilling) with limited available information. These risks are errors in collar location, downhole orientation, assay grade precision and accuracy, and database transcription errors. Comparisons to recent infill drilling continue to support the use of the legacy holes. In order to acknowledge the risk, no legacy holes are used in the classification of measured resources.
7.3 Exploration Work, Non-Drilling
7.3.1 Geophysics
Magnetic and two induced polarization (I.P.) surveys were completed in the early 1970’s. The magnetic survey measured vertical intensity using a Jalander instrument on 200ft. (60m) line spacing and stations. Two significant positive anomalies are present. One, about 800ft. (245m) wide and 1,500ft. (460m) long in a northwest direction and a magnitude of 500 gammas above background coincides with the principal mineralization direction. The anomaly is believed to be caused by the presence of magnetite in the mineralized rock.
The initial I.P. survey showed a resistivity high extending northeast through the CK deposit following a trend of thin overburden and chargeability high of 18 ms against a background of 6 ms. The second I.P. survey was by McPhar Geophysics Inc using a Scintrex I.P. R-7 unit over the principal mineralized area. Line spacing was 300 to 800 ft. (90m to 240m). Five north-south lines and two east-west lines were run. Dipole spacing was 200ft. (60m). An anomaly, principally a moderate to shallow metal factor anomaly, was detected trending east-northeast to the principal mineralized area. Both I.P. surveys established that the ore itself does not respond well to I.P. Chargeabilities and frequency effects for the two methods are low and do not duplicate each other as expected.
In 1994, an aeromagnetic survey was conducted on the property for Compass Minerals by Pearson, deRidder & Johnson, Inc. Flight lines were flown at a nominal altitude of 300ft. (90m) above ground level, with north-south lines spaced 660ft. (200m) apart and east-west lines spaced 1320ft. (400m) apart. Several major magnetic trends and features were observed. The primary mineralized area around the Copper King Mine is identified as a magnetic high.
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In 1997, Gilmer Geophysics, Inc. supervised and interpreted a ground magnetic survey and a VLF-EM survey. The ground survey was laid out using GPS and total survey technologies with principal directions oriented N33E and N57W. This orientation was chosen in order to cross mapped features at right angles. Line spacing was 200ft (60m) between the N33E lines. Total field ground magnetometer data were obtained using two GEM Systems GSM-19 units used in “walking mag” mode obtaining data every 2 seconds resulting in station spacings of 2ft. to 10ft. (0.5m to 3m) along survey lines. The VLF-EM data was obtained using an IRIS T-VLF instrument.
In June 2017, Magee Geophysical Services, supervised by Jim Wright of Wright Geophysics, completed a ground magnetic survey over the Copper King project. 70 line-miles (113km) of magnetic data were surveyed, using real-time corrected differential GPS and Geometrics Model G-858 magnetometers. Lines were spaced 160ft. (50m) apart and oriented N30E across the project. Magnetometers were mounted on a backpack with data collected every two seconds. Data interpretation by Jim Wright essentially duplicated the 1997 Gilmer survey. A strong magnetic anomaly was demonstrated over the Copper King deposit along with several magnetic anomalies to the east and south of the deposit. A prominent anomaly at the southeast corner of the project, called the Fish Anomaly, was tested by RC drilling in 2017, along with a couple others to the east of the Copper King deposit.
In October 2017, an induced polarization (IP) survey was completed over the Copper King project area by Zonge International and interpreted by Wright Geophysics. A total of eleven lines were completed using a standard 9-electrode dipole-dipole array with a dipole length (a-spacing) of 1,082ft. (330m) as designed by Wright Geophysics. Data were acquired in the time-domain mode using a 0.125 Hz, 50 percent duty- cycle transmitted waveform. Data were acquired along eleven lines oriented north-south. Stations were located using a Garmin hand-held GPS, model GPSMAP 64CSx. The GPS data were differentially corrected in real-time using WAAS corrections. Accuracy of the GPSMAP 60CSx typically ranges from 6ft. to 16ft. (2m to 5m) Line control in the field utilized UTM Zone 13N NAD27 datum. Measurements were made for continuous line-coverage at n-spacing of 1 through 7. Data were acquired in the time- domain mode using a 0.125 Hz, 50 percent duty-cycle transmitted waveform. Chargeability values (IPm) represent the Newmont Window with integration from 450 to 1100 milliseconds after transmitter turnoff. A discussion of the time-domain acquisition program is presented with the digital data release. IP anomalies identified to the west of the Copper King deposit were tested by RC drilling in 2018.
7.3.2 Geochemical
Nevin (1973) reports the results of soil geochemistry. Forty-four soil geochemical samples were taken on 100ft. and 200ft. (30m and 60m) centers in widely separated traverses as a pilot study. All were analyzed for copper and arsenic and some were analyzed for gold, zinc, silver and mercury. Three copper populations were sampled. Absolute background has values of about 20 ppm; a high background population in proximity to the mineralized rock has values of about 500 ppm; four samples taken in thin soil directly over the mineralized rock returned values of more than 1,000 ppm. Gold values appear to be a useful indicator of mineralization. Zinc, silver and arsenic had little contrast between mineralized and unmineralized areas. Mercury was found to have good contrast and was recommended for further investigation.
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7.4 Geotechnical Data, Testing and Analysis
Prior to 2020, no previous geotechnical work was completed at the Project. US Gold retained Piteau Associates of Reno, Nevada to design, complete and analyze a geotechnical program that included field outcrop mapping, on-site geotechnical core logging, rock testing and sampling, televiewer data validation and interpretation. Four days were spent reviewing existing drill core and mapping surface outcrops at the CK Gold project. Surface mapping focused on joint and fracture set characterization for integration with sub-surface derived data.
Five geotechnical core holes were completed (CK20-16c to 20c) totaling 4,685 ft (1,428 m). Core from these holes was logged on-site, run by run, in a designed-for-purpose logging trailer by Piteau staff or consultants. Geologists completing the geotechnical logging also completed needed rock characterization testing and selected geomechanical samples for third party testing. Logging parameters included core recovery, hardness, RQD, RMR, fracture frequency, joint condition and angle, degree of breakage and degree of alteration.
Point load index (PLI) testing was completed in the field by Piteau staff on the five geotechnical core holes and two metallurgical holes (CK20-06c and 07c). A total of 1,065 PLI tests were completed on whole core during geotechnical logging.
Geomechanical samples were collected at chosen intervals by Piteau staff during the course of logging. These samples were utilized for characterization of the intact rock strength. 13 samples were collected for uniaxial compressive strength, 15 for triaxial compressive strength, 11 for indirect tensile strength and 25 for discontinuity direct shear testing. Sample testing was completed at the Wood Group, PLC Rock Mechanics Laboratory in Hamilton, Ontario, Canada. In addition, one fault gouge sample from CK20-16c was taken and tested at Golder Associates Geotechnical Laboratory in Denver, Colorado. Piteau Associates integrated the results of this testing into their mine design recommendations.
Piteau Associates also validated, processed and interpreted down-hole televiewer data from 13 holes completed in 2020, including the five geotechnical core holes and holes CK20-01c, 03c, 04cB, 05c to 07c, 09rc and 21c. Initial processing and structure picking was completed by Ken Coleman with US Gold for major faults and contacts, followed by Piteau work for joint and fracture set characterization. As stated previously in Section 7.7, televiewer surveys were completed by either COLOG or DGI Geoscience.
7.5 Hydrogeology
Prior to 2020, no previous hydrogeologic work was completed at the Project. During its 2020 drilling program, US Gold and its consultants Neirbo Hydrogeology and Dahlgren Consulting completed a limited water characterization and hydrogeology program. Several designed for purpose drill holes were completed and data were collected from holes designed primarily for other uses.
Seven water characterization wells (MW-xx series) were drilled and completed in 2020, five by DrillRite Drilling of Spring Creek, Nevada and two by McRady Drilling of Cheyenne, Wyoming. DrillRite drilling was completed using reverse-circulation methods and McRady work was completed using conventional rotary methods. A total of 2,755 ft (840 m) were drilled and completed. Holes were completed as water wells, screened and cased at proper intervals with a locking cover and monuments placed at surface. These wells are checked regularly for water levels and water quality.
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Eight core and RC holes designed for metallurgical, resource expansion and geotechnical purposes were also utilized for hydrogeologic purposes. These holes totaled 7,511 ft (2,289 m) and consisted of two metallurgical core holes, one RC resource expansion hole, and five geotechnical core holes. The two metallurgical core holes (CK20-04cB and CK20-06c) were kept open, cased and capped similar to the water characterization wells. These two holes are utilized for water quality sampling and obtaining water levels. Televiewer surveys were completed in these two holes as well to aid in hydrologic and geotechnical studies.
Three geotechnical core holes (CK20-17c, 18c, 19c) and one RC hole (CK20-09rc) had vibrating wire piezometers (VWPs) installed in them. Packer testing was also completed on the core holes, along with televiewer surveys for all. The two remaining geotechnical core holes, CK20-16c and 20c, had only packer testing completed along with televiewer surveys.
Packer testing was completed by Alford Drilling under the supervision of a Neirbo Hydrogeology consultant. VWP installation was completed and supervised by Call & Nicholas, Inc. of Tucson, Arizona. Televiewer surveys were completed by staff of either COLOG or DGI Geoscience at the same time as downhole gyroscopic surveying at the end of drilling each hole. Additional details on the current program are available in Section 13.3.1.
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8 Sample Preparation, Analysis and Security
8.1 Sample Preparation
8.1.1 US Gold 2021 – 2017
Ordinarily core was collected by the geologist 4 times per 24-hour shift and returned to the core logging facility. The core processing steps were as follows:
● | Core is washed and scrubbed |
● | Core is aligned in the box to represent the original condition of the core as accurately as possible (i.e. all fractured/broken ends are matched an rotated to fit back together) |
● | Core is washed and scrubbed again |
● | Beginning and ending depths are marked on top of the inside core boxes while core dries |
● | When core is dry we mark it top to bottom with blue and red orientation lines, blue on the left, red on the right, depths are marked and labelled in black on one-foot increments |
● | Core is logged for recovery, RQD, and fracture frequency per-run, and this information is recorded on the log sheet, along with any structural features significant enough to be recorded at the resolution of the log sheet |
● | Gross lithology breaks are identified and recorded in the graphic lithology log column |
● | Core is inspected in greater detail as sample intervals are selected on a nominal 5-foot sample interval within consistent lithologies, and sample breaks on lithologic (or other appropriate, i.e. significant variation in alteration type or intensity) contacts with a minimum sample interval of 1 ft. |
● | Assay sample intervals are marked in green, with a line perpendicular to the core axis indicating the top and bottom of the interval, and the sample ID marked on the core (if possible) parallel to core axis. |
● | Sample ID’s are scribed on silver sample tags, which are stapled to the core box on the left hand side of the core |
● | Detailed information is recorded for each sample interval on the core log sheet (rock type, oxidation, alteration, mineralization, sulfide content, mineral content, veins, fracture, etc. |
● | Magnetic susceptibility meter measurements |
● | Assay samples are recorded on the assay sample inventory form for the lab. Core boxes in which each assay interval is contained is indicated on the log sheet (sample intervals often cross box boundaries) |
● | Logged core is transferred from the logging table to the photo station, re-wetted, and photographed |
● | Photographed core boxes are reunited with their lids and moved either to the back of a waiting truck for transport to the pick-up area at the back of the lot, or to a secondary staging area near the garage entrance to be moved to the back of the lot at a later time. |
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8.1.2 CK Gold Bureau Veritas
RC samples collected in 2017 and 2018 were collected on five-foot intervals from the discharge of a rotary splitter attached to the drill. Samples were then delivered to Bureau Veritas lab in Sparks, Nevada for analysis. QAQC samples were prepared and also delivered to Bureau Veritas by US Gold staff.
A red cut line was drawn along the midline of the core by geologist and a blue line which indicates core direction was drawn next to it. The core was sawn by Bureau Veritas in Reno, NV and the half core containing the blue line was sampled. Sample tags were affixed to the inside of each core box and the sample number written on the core. Typically, samples were 5ft. (1.5m) long, broken at lithologic or important geologic feature contacts.
Ordinarily core was collected by the geologist 4 times per 24-hour shift and returned to the core logging facility. The core was housed in the garage of a residential home in Cheyenne, WY or placed in the backyard prior to shipping. Shipping was by a commercial carrier using chain of custody documents and delivered to Bureau Veritas in Reno, NV.
8.1.3 Saratoga
The core from the 2008 drill program was logged in the spring/summer of 2008, contemporaneous with the drilling, though sampling was delayed until fall 2009 due to budgetary constraints.
Saratoga sampled the 2007 and 2008 drill core on approximate 5ft. (1.5m) intervals, although sample intervals did range from 1 to 10ft. (0.3 to 3m) as warranted by the geology. Due to the pervasive alteration and potential for mineralization observed throughout all drill holes, the core was continuously sampled with no gaps in the sample sequence. The samples were collected principally by sawing the core in half, though some intervals, due either to the hardness of the rock or the unavailability of the saw, were split with a hydraulic splitter. In those cases where the sample intervals were fractured and many of the core pieces were too small to either saw or split, the sample technician sampled the core using a trowel, a small shovel, or by hand. One half of the core was bagged and sent for assay, while the remaining half was placed back into the core box and put into storage.
The geologic logging process for the first 15 core holes of the 2007 drill program included core photography and geotechnical rock quality (“RQD”) measurements along with structural and lithologic determinations. Missing from the logging process was the recordation of core-recovery data.
For the remaining 2007 core holes and all of the 2008 drill holes, core photography, RQD and core- recovery measurements, geologic logging, and sampling were conducted in an open-sided shed. Some of the core was exposed to the weather due to limited covered space.
The proposed drill hole locations were located in the field by Western Research and Development (“Western”), a professional survey company based out of Cheyenne, Wyoming. Western used a LYCA XLS 1200 GPS survey instrument, which has a <0.5ft (0.15m) accuracy. Upon completion of the drill program, Western returned to the project site and re-surveyed the actual drill collars.
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8.1.4 Historical Exploration
According to Soule (1955) and the photocopied data provided to MDA, the ASARCO 1938 core samples were sampled on 5ft (1.52m) intervals while the Copper King core holes were sampled on 10ft (3.1m) intervals. The 1970 ASARCO sampling was variable though most sample lengths were 10ft (3.1m).
Soule’s (1955) report briefly described the USBM’s sampling procedures. For their three holes, all core and necessary sludge samples were delivered to the USBM’s engineer. All core samples were logged and split, with one split half sent to the USBM‟s Salt Lake City laboratory for analysis. Sludge samples were taken when core recovery was less than 85-90%. All sludge samples from holes B-1 and B-2 were saved until the end of the project; most from hole B-1 were analyzed, but only a few from hole B-2 were analyzed. No sludge samples from B-3 were saved because core recovery was generally excellent. The USBM drill holes were sampled on variable length intervals ranging from approximately 3ft to 16ft (1m to 5m) with most sample lengths between 6ft and 10ft (2m and 3m).
Henrietta’s drill holes were sampled and assayed on about 10ft (3.1m) intervals for gold and copper and occasionally for silver and acid soluble copper (Nevin, 1973). The core was split with one half sent for assay and the other half stored on site. For the dry intervals of the rotary holes, a box and cyclone in series were used for sampling with splitting by a Jones riffle. Nevin (1973) estimated that about 1 to 2% of the sample was lost as very fine dust. For the wet drilling, cuttings were split in a long, metal sluice box equipped with a longitudinal baffle set to retain about a 10% fraction for assay. Rejects were stored on site.
According to (Clarke, 1987), Caledonia’s drill holes were sampled every 3m and assayed for gold, but the historic data included only composite intervals that ranged from 3m to >50m.
The Compass RVC holes were samples on 5ft (1.5m) intervals while the core holes were sampled on 10ft (3.1m) intervals. The Mountain Lake drill holes were all samples on 5ft (1.5m) intervals. MDA has no further information on the Compass or Mountain Lakes drill sampling.
8.2 Analytical Procedures
8.2.1 US Gold 2021 Campaign
For the 2021 drilling campaign Hard Rock Consulting (HRC), sub-contracted through Gustavson, conducted field activities, logging, core sawing and initial sample selection. ALS were selected to conduct assaying and selected samples along with standards and blanks were sent off to the laboratory by HRC. The assay result that will eventually be received will not be incorporated into the 2021 PFS study. The program was initiated to provide additional data to support a feasibility study and included the test necessary for both the hydrological and geotechnical studies. There have been no material findings to date which would support a departure from the finding in the PFS.
8.2.2 US Gold 2017 – 2019 Campaign
2020 samples were logged and sample intervals selected and passed along with cut sheets to Bureau Veritas (BV). BV cut the core and analyzed a sample from the half core, with the other half returned to the core boxes for storage and reference. The retained half core and sample rejects were initially stored in warehouse at BV while assaying was conducted and have been subsequently moved for storage in a facility in Cheyenne near to the Project. During the sample submission process a contract geologist, M. C. Newton, was on hand at the BV facility to receive core, discuss and inspect procedures, on an intermittent basis as part of the chain of custody and QA/QC check procedures.
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BV inserted commercial blanks and standard reference materials from cut sheets determined by US Gold. Throughout 2017 - 2020 BV of Reno, NV was the primary laboratory responsible for cutting the core, sampling, preparation and assaying. Some compromises were needed during the 2020 COVID outbreak as access to the BV lab and personnel was restricted. Video and careful consultation with laboratory staff satisfied the role of the consulting geologist in verifying correct handling and procedure was followed.
8.2.3 2007 - 2008 Saratoga Campaign
The Saratoga core samples from the 2007 drill program were shipped to ALS Chemex (“Chemex”) in Elko, Nevada for sample preparation and then on to the Chemex facility in Sparks, Nevada, for analysis for gold and a 33-element geochemical suite. Final results were received in December 2009. The Chemex sample preparation and analysis methods requested by Saratoga were “AA23” for gold and “ME-ICP61” for the geochemical suite. Both methods employ the same sample preparation methods, which include crushing the whole sample to 70 percent passing -2mm and then pulverizing 250g to 85 percent less than 75 microns (-200 mesh). The “AA23” gold analysis consists of a splitting out a 30g pulp sample and then using fire assay techniques followed by an AA finish. The detection level for this analysis is 5 ppb Au, while the upper precision level is 10 ppm Au. Samples assaying over 10 ppm are re-assayed using a fire assay with gravimetric finish technique (Chemex lab code “Au-GRA21”), which has an upper precision level of 1,000 ppm Au. The “ME-ICP61” analytical procedure consists of a four-acid digestion and analysis by inductively coupled plasma (“ICP”) followed by atomic emission spectroscopy (“AES”). The reported range for copper values using this technique is between 1 and 10,000 ppm Cu. Samples with initial values over 10,000 ppm Cu are re-run using the same analytical techniques optimized for accuracy and precision at high concentrations (Chemex lab code “CU-OG62” with an upper precision of 40 percent Cu).
The core samples from the 2008 drill program were shipped in the fall of 2009 to American Assay Laboratories (“American Assay”) in Sparks, Nevada for sample preparation and analysis for gold and copper only. The final results were received in September 2009. The American Assay sample preparation and analysis methods requested by Saratoga were “FA30” for gold and “D2A” for copper. Both methods employ the same sample preparation methods, which include crushing the whole sample to 70 percent passing -2mm and then pulverizing 300g to 85 percent less than 105 microns (-150 mesh). The “FA30” gold analysis consists of a splitting out a 30g pulp sample and then using fire assay techniques. The detection level for this analysis is 3 ppb Au, while the upper precision level is 10 ppm Au. Samples assaying over 10 ppm are re-assayed using a fire assay with gravimetric finish technique (American Assay lab code “Au-GRAV”), which has an upper precision level of 1,000 ppm Au. The “D2A” analytical procedure for copper consists of an aqua regia digestion and analysis by atomic absorption (“AA”). The reported range for copper values using this technique is between 1 and 10,000 ppm Cu. Samples with initial values over 10,000 ppm Cu are re-run using the same analytical techniques optimized for accuracy and precision at high concentrations (lab code “Cu Ore Grade”) with an upper precision of 40 percent Cu.
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After completion of analyses and temporary storage at Chemex, all of the pulps and selected coarse reject samples from mineralized intervals were retrieved by Saratoga and are currently in storage in Elko, Nevada.
The drill crew, upon filling a core box, placed a wooden top over the core, and the box was secured using strapping tape. At the end of each drill shift, the core was transported by the drill crew into Cheyenne, WY, a distance of about 20 miles (32km), and placed in a locked commercial storage unit. The storage unit is located within a secure, gated facility. About once per week, the core was transported on a trailer to the logging and sampling facility in Casper, Wyoming, a distance of 200 miles (320km).
Logging and sampling of the first 13 core holes drilled in 2007 were completed in a large, converted garage located on leased private property outside of Casper, Wyoming. The property was fenced off and kept securely locked when personnel were not on-site. After being logged and sampled, the remaining half-core was placed in a locked storage unit within a secure, commercial storage facility in Casper.
Saratoga’s lease on the Casper logging facility ended on August 31, 2007, and the remaining 2007 core holes were transported 200 miles (320km) to Dubois, Wyoming, for storage and further core processing. Sampling was conducted within in an open-sided ranch shed on private property owned by Norm Burmeister, an officer with Saratoga. The core facility was within a fenced area. After sampling was complete, the core was transported to a commercial storage facility and stored on racks in a locked storage unit. These same procedures were used for the 2008 drilling.
The half-core samples to be shipped to the lab were given non-referential sample ID numbers. The individual bagged samples were placed into larger shipping bags, which were securely closed using heavy wire ties and kept inside the logging facility awaiting shipment via a commercial trucking company to Chemex in 2007 and Chemex and American Assay in 2008.
8.2.4 Legacy Campaigns
Very little is known about the sample preparation, assaying and analytical procedures of the sampling at the CK project except as described below. A table summarizing pre-1998 drilling on the property (Mountain Lake Resources Inc., 1997) gives detection limits for gold and copper assays for six of the drill campaigns. For both the 1938 and 1970 assays by ASARCO, the detection limits were 0.001oz Au/ton (0.034g Au/t) and 0.01% Cu (Mountain Lake Resources Inc., 1997). For Copper King Mining’s assays, the detection limit for gold was 0.01oz Au/ton (0.343g Au/t), and the detection limit for copper was thought to be 0.10% (Mountain Lake Resources Inc., 1997).
For the three holes drilled by the USBM, analysis was done by the USBM’s Salt Lake City laboratory (Soule, 1955). The detection limits were 0.005oz Au/ton (0.171g Au/t) and 0.05% Cu as indicated by Mountain Lake Resources Inc. (1997). The USBM also prepared composite samples of the core from their three holes and analyzed them for molybdenum, tungsten, nickel, and for most of them, titanium. In addition, the USBM ran multi-element spectrographic analyses on five composite samples from hole B-1, and Copper King Mining ran the same on five composite samples from hole C-7 and one sample from hole C-8; results of these spectrographic analyses are reported in Soule (1955).
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Assaying of Henrietta samples was conducted by Skyline Laboratories Inc. and Hazen Research Inc., both of Denver, Colorado (Nevin, 1973). The detection limits for the gold and copper assays were 0.005oz Au/ton (0.171g Au/t) and possibly 0.001% Cu (Mountain Lake Resources Inc., 1997).
Little information exists regarding Caledonia’s drill program other than that drill samples were only assayed for gold (Clarke, 1987).
MDA (2010) found assay certificates for Compass holes CCK-19 and CCK-24 that showed the assays were performed by Barringer Laboratories Inc., in Reno, Nevada, using fire assay with an atomic absorption (“AA”) finish for gold and AA for copper. It was not evident from the data reviewed by MDA whether Barringer assayed all of Compass’s holes. The detection limits for Compass’s assays were 2 ppb gold and 5 ppm copper (Mountain Lake Resources Inc., 1997).
Assaying of the samples for Mountain Lake was performed by Barringer Laboratories Inc. in Reno, Nevada. MDA has seen no assay certificates for Mountain Lake’s drill holes but did find a spreadsheet with the assays, which were entered into the database for Mountain Lake’s eight drill holes. The detection limits were 2 ppb gold and 5 ppm copper (Mountain Lake Resources Inc., 1997). Metallurgical testing of bulk composite samples from holes MLRM-1 and MLRM-2 was conducted by the Colorado Minerals Research Institute of Golden, Colorado.
8.3 Results, QC Procedures and QA Actions
8.3.1 US Gold 2021 Campaign
As described above, the data emanating from the 2021 drilling program that commenced in August 2021 was not in-hand in time to support the PFS study which relies on 2020 and historical data. The purpose of the 2021 data collection is to support further study toward a feasibility study for completion in 2022. However, there have been no material observations which would affect the PFS study as written.
8.3.2 US Gold 2017 – 2020
US Gold’s QA/QC program implemented for the 2017, 2018 and 2020 drilling campaigns included the analysis of CRMs, blanks, coarse reject and pulp duplicates were inserted regularly into the sample stream, and a random selection of samples from mineralized intervals were submitted to an umpire laboratory.
US Gold geologists evaluated the control sample results and when control samples returned values outside of acceptable limits, the assay laboratory was contacted and the batch of samples was reassayed.
Gustavson compiled and reviewed the 2020 control sample results and found assay accuracy and precision to be acceptable for purposes of resource estimation. No significant bias was observed in the CRM results for gold, copper or silver. Check assays showed no significant bias between Bureau Veritas original assays and ALS check assays. No significant carryover contamination was observed in the blank results.
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Three standards were used for the 2020 drilling program, CDN-CM-43 and CDN-CM-38 from CDN Resource Laboratories Ltd., and MEG-Au.17.01 and MEG-Au.17.10 from MEG, Inc. The recommended values and standard deviations for Au, Cu and Ag are found in Table 8-1.
Table 8-1 Sample Standards
Standards | g Au/t | Au_2SD | % Cu | Cu_2SD | g Ag/t | Ag_2SD | ||||||||||||||||||
CDN-CM-38 | 0.942 | ±0.072 | 0.686 | ±0.032 | 6.0 | ±0.4 | ||||||||||||||||||
CDN-CM-43 | 0.309 | ±0.040 | 0.233 | ±0.012 | - | - | ||||||||||||||||||
MEG-Au.17.1 | 0.382 | ±0.015 | 0.0723 | ±0.0019 | 6.525 | ±0.203 | ||||||||||||||||||
MEG-Blank.17.10 | <0.003 | - | 0.00015 | - | 0.9 |
A commercial 99% quartz sand standard MEG-Blank.17.10 was used during the 2020 drilling campaign. Results are reasonable and blank assays results exceed 90% less than two times the detection limit of
.005ppm gold. The blank has a reported average of less than 0.003g/t. The same blank has a reported average of 1.5ppm copper and although not a blank, it showed carryover on 5 occasions but well below any economic consideration. Silver was below detection 100% of the time. The blank samples demonstrate that the laboratory has reasonable control over sample cross contamination.
Duplicate pulp performance of 64 pairs greater than 5 times the gold detection limit exceeded 90% of the pairs being within a grade difference of 5%. Duplicate pulp performance of 64 pairs greater than 5 times the gold detection limit exceeded 90% of the pairs being within a grade difference of 5%. These results are reasonable.
A subset of 110 randomly selected samples collected during the 2020 drilling campaign were submitted to ALS for umpire assay analysis. The paired Au and Cu data were analyzed and found to agree with the ALS checks. The correlation coefficient (r) of the raw data is 0.97 for Au, Figure 8-1, and 0.997 for Cu, Figure 8-2.
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Figure 8-1 Umpire Analysis Au Correlation
Figure 8-2 Umpire Analysis Cu Correlation
8.3.3 2007 – 2008 Saratoga
Details on QA/QC programs for the 2007 and 2008 drill campaigns can be found in Tietz (2010) Saratoga’s QA/QC program implemented for the 2007 and 2008 drilling included 1) analytical standards and blanks inserted into the drill-sample stream, 2) duplicate assaying of selected coarse-reject samples by the primary assay laboratory, and 3) re-assaying of selected original pulps by an umpire laboratory. American Assay was used as the umpire laboratory for the 2007 drill program in which Chemex was the primary laboratory, while the roles were reversed for the 2008 drilling.
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A total of 169 standard samples were submitted to Chemex and American Assay. One standard sample was inserted into the sample stream at an approximate rate of one standard for every 40 drill samples. Standards were also used in the duplicate pulp and pulp re-assay check assay programs at a higher rate, ranging from one standard per 10 to one standard per 25 samples. Five unique analytical standards were used. The standards were inserted into the drill core sample stream with the same sample ID designation, though as pulps they were not blind to the lab.
Tietz found that the check assay analyses show good agreement between the Chemex duplicate pulp analyses on the original Chemex coarse rejects and also between the Chemex pulp re-assays of the original American Assay samples. No significant biases or assay variability issues were found within these data. There are concerns, primarily within the copper analyses, with the December 2009 American Assay pulp duplicate and pulp re-assay check analyses. Further examination and follow-up analytical work is warranted to determine the specific problem within these data though any resolution of these issues would not materially affect the resource model or stated resource.
8.4 Opinion of Adequacy
The QP believe that the procedures used in the sampling are adequate for mineral estimation purposes and reporting of mineral resources and reserves.
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9 Data Verification
9.1 Procedures
Site visits by the Qualified Persons (QP) authoring this report were conducted at various times during the 2020-2021 exploration campaign and pre-feasibility study. The project site, and geology office in Cheyenne was visited.
At the project site, drill pads were observed from the 2020 drilling campaign, collar locations were clearly marked. Surface geology was observed, obvious mineralization was observed in and around the disturbed rock at several of the drill pads which is consistent with the current geologic interpretation of the project.
At the geologic office, QP observed core storage area, historic core storage area and the core processing and logging facility.
Hard Rock Consulting performed a re-logging of core logged from the 2017 and 2018 campaigns. Thus further validating current geological observations and notations with previous work.
Verification samples were not collected. Drilling and sampling conditions were observed to be consistent with industry standards.
9.2 Previous Audits/Owners
9.2.1 Saratoga 2007 – 2008
Data verification of exploration activities before 2007 is not well documented, with no independent verification of the exploration, sampling or laboratory procedures.
Drilling data from the 2007-2008 Saratoga drill programs was directly input from original sources. The original collar survey data files and the down hole survey driller’s note books had been provided by Saratoga, while the assay data were digital data direct from the laboratories. After compiling, these data were audited against the original sources by randomly checking values and specifically checking down hole survey data that appeared anomalous. Six individual down hole surveys were removed from the database due either to uncertain depths or atypical azimuth values. In all cases, the atypical azimuth values coincided with anomalously high magnetic field readings.
9.2.2 Historical Drilling
There was virtually no original historic data available to audit the database. Gustavson did verify the drill- hole locations and values of those samples from ASARCO’s holes A-1 through A-5, Copper King’s holes C-6 through C-11, and the USBM’s holes B-1 through B-3 by crosschecking values in the database with those reported in Soule (1955), but no original assay certificates were available for these or any other drill holes except Compass’s holes CCK-19 and the cored portion of CCK-24. Gustavson verified the assay values in the database for Compass’s holes CCK-19 and CCK-24 by crosschecking the values in the database with those shown on the assay certificates, and no errors were found. Gustavson verified gold values for the best gold intercepts in the holes drilled by Henrietta by crosschecking assays included on geologic logs against values in the database. Gustavson did find spreadsheets with assays said to be from Barringer Labs for Mountain Lake’s eight drill holes and confirmed their values in the drilling database.
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In 1996, Mountain Lake ran check assays on selected mineralized intervals from 12 of Compass’s holes. The check analyses were conducted by Barringer Laboratories, Inc. Gold was analyzed by fire assay with an AA finish, and copper was analyzed by AA. A preliminary evaluation of the Mountain Lake check assay results by MDA in 2006 indicated general agreement between the original and the check assay Au values. The mean grades of gold and copper for the original and check assays are as follows: 3.46g Au/t and 0.465% Cu and 3.29g Au/t and 0.570% Cu, respectively. The absolute percent difference between the 185 check assays and originals averaged 16% with a standard deviation of those absolute differences of 29%. Of the 20 check sample assays that showed a 30% (one standard deviation) or greater difference from the original assay, 14 were in the lower half of the grade range (<3.36g Au/t) indicating greater variability within the lower-grade mineralization. In non-absolute terms, the average difference between the check and original assays was -1%.
9.3 Data Adequacy
Gustavson considers that the drill data are generally adequate for resource estimation. There are no additional limitations to the exploration data, analysis or exploration database for use in Resource modeling and declaration of mineral resources and reserves.
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10 Mineral Processing and Metallurgical Testing
This section was prepared by John Wells, (henceforth ‘Wells’), an Independent Consulting Metallurgist and qualified person. The full report produced by Wells contains some appendences referenced in this Section but are not included in this TRS, see Section 10.8 and Section 24. Many test work programs were carried out prior to this PFS, including the 2008-2010 test work at SGS. Although Wells was not involved with that work, he has reviewed the reports and generally concurs with the conclusions. This work is summarized in the Metallurgical Appendices and References. In 2020, US Gold carried out a drilling program to generate sufficient material for a new test work program, that commenced in December 2020 at Kappes, Cassiday and Associates (KCA) Laboratory in Reno, Nevada. Additional test work was carried out at Base Metals Laboratory (BML) in Kamloops, Canada between May and November 2021. Wells has been actively involved in this work. Section 10.2 of this PFS Study describes and discusses this 2020- 2021 drilling and test work program.
Engineering design of the process plant commenced in January 2021. It was initially decided to base this principally on the 2008-2010 SGS test work. However, results from the 2021 test work have been incorporated, that has allowed completion of the PFS by year end. The principal areas where new work has been used are comminution, (using Hazen results), tailings thickening and filtration, (Pocock Industrial results) and open-circuit and locked cycle tests at BML.
10.1 2020 – 2021 Test Work
10.1.1 Introduction
During 2020, US Gold carried out a major drilling campaign, that included seven (1-7) holes specifically to provide core for metallurgical test work. These holes provided 4,652 feet of mineralization and 1,100 sample intervals. This core was delivered to Bureau Veritas Analytical in Reno, where it was sawn, to provide material for both assay and metallurgical test work. Following receipt of the assay data and an inspection of the core by US Gold personnel and Wells, three (3) major composites were prepared as follows:
● | Composite 1. 300kg of High-grade Oxide, Upper Zone, Hole4 (5.1 g/t Au, 0.98% Cu). | |
● | Composite 2. 200kg of Overall Oxide Zone from Holes 1-3 and 5-7 (1.2 g/t Au, 0.3% Cu). | |
● | Composite 3. 200kg of Overall Sulfide Zone from Holes 1-7 (1.1 g/t Au, 0.3% Cu). Note, this composite included the small amount of material identified as “mixed”, that exists between the oxide and sulfide zones. |
A second Sulfide composite was provided to Base Metals Laboratory in June 2021.
The high-grade oxide half-core was sent to KCA Laboratory in November 2020, also in Reno. Assaying of the other holes continued through January 2021 and the half-core was delivered to KCA in February 2021.
From previous test work reports, US Gold and Wells were able to develop a good understanding of the Project material. It was anticipated that flotation of the Sulfide would be conventional, but that more work was required to optimize the treatment of the Oxide material and this this was initially given priority.
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From visual inspection of the high-grade oxide core, it was evident that significant copper was present as native copper, much of which was coarse grained. Thus, the testing program on high-grade oxide commenced on the basis of using both gravity and flotation.
The initial test work on the High-Grade Oxide composite produced recoveries and concentrate grades that exceeded expectations, based upon the SGS results. However, during April 2021 it became apparent that KCA were unable to reproduce the SGS results on the Oxide and Sulfide composites. As a result, a second test program was initiated at Base Metals Laboratory in Kamloops, Canada. Their work was immediately able to duplicate and later improve upon the SGS results.
10.1.2 Metallurgical Test Work, Summary and Objectives
The metallurgical test work commenced in December 2020 and continued through the third quarter of 2021. The PFS initially used the SGS test work as its basis, however this was continually updated and revised as new data from the 2020-2021 program became available. The main objectives of the program were:
● | Confirmation of, and where possible to improve the results of the SGS test work. | |
● | To find a process that would improve upon the SGS results, (specifically gold and copper recovery and concentrate grade) for the Oxide and Sulfide Zones. | |
● | In general, to complete sufficient work to support a PFS and increase confidence in the results. |
This work included:
● | Mineralogy to better understand the deposit, especially the non-sulfide minerals and native copper, as well as the deportment of the gold. | |
● | Optimization of the primary grind and re-grind. | |
● | A more thorough investigation of flotation conditions and reagents. | |
● | Variability work, to ascertain the impact of depth, area, lithology and grade. Fifty (50) variability samples were selected. Some preliminary work was carried out in the third quarter of 2021 at BML. This work will provide data for the Feasibility Study to develop geo-metallurgical models. | |
● | A more detailed evaluation of gravity recovery. The SGS test work had not been successful in producing a gravity concentrate. However, SGS concluded that this required more work. Observation of the new core showed significant visually observable native copper in the high- grade oxide and the recovery of this might justify the inclusion of gravity in the flowsheet. |
10.1.3 Composite 1. High Grade Oxide, Upper Zone, Hole 4
Hole 4, located in the central part of the deposit, see Figure 10.1, has an oxide zone, approximately 80ft. deep, with average grades of 5.1 g/t Au, 0.98% Cu and less than 0.1% S, (assays of individual core sections). All of the half core, plus some assay reject material, was used to provide 600lb of sample required for Composite 1 test work. Below 80ft, the gold and copper grades remained high, but the sulfur grade increases to an average of 0.5% S.
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Figure 10-1 Location of Metallurgical Holes, highlighted area represents approximate mineralized area
The half core and assay reject material was crushed and blended to provide the Composite. Prior to crushing, some half core was collected as a sub-sample and sent to Hazen Research in Denver, for comminution test work, summarized in Table 10-1.
Table 10-1 Comminution Test work Results
Parameter | Value | |
A x b | 37 | |
Bond ball mill wi | 14 kWh/t (12.7 kWh/st) | |
SG | 2.6 | |
SAG circuit specific energy | 10.1 kWh/t (9.2 kWh/st) |
10.1.4 Gravity and Flotation Test Work High Grade Oxide, (KCA)
One of the issues identified by SGS was to determine whether gravity might be of value in increasing overall recovery of copper and gold. Thus, at the outset of test work, a gravity test using a bench scale Knelson centrifugal concentrator was carried out on a 40 lb sample. This produced a gravity concentrate with a weight recovery of 1.6%, containing 51.5 g/t Au and 14.6% Cu, with recoveries of 15.4% Au and 22.7% Cu. The gravity tailings were stored for later flotation test work, (in order to ascertain combined recoveries to a gravity and a flotation concentrate).
A number of samples were then prepared from the composite for flotation test work. Over twenty flotation tests were carried out, investigating:
● | Grind Size, p80. |
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● | Reagent suites, (types and addition rates). | |
● | Pulp pH and pH modifier, (CaO and Soda Ash). | |
● | Sulfidization (using NaSH). |
These results are reported in the KCA Report, Copper King Test work for US Gold, dated July 2021.
The results consistently show copper recoveries of 55-60% and gold recoveries of 65-70% to the rougher concentrates. Test 90134 gave a gold recovery of 70% with a low pH of 9.0 using high reagent consumption and these test conditions were applied to the cleaner flotation test work, Table 10-2.
Table 10-2 Rougher Flotation Test 90134, (KCA)
Parameter | Value | |
P80 | 106μ | |
pH | 9.0 | |
CaO | 153 g/tonne | |
NaSH | ||
F507 (frother) | 31 g/tonne | |
PAX | 75 g/tonne | |
407 | 50 g/tonne |
Test 90134 achieved gold and copper recoveries of 70% and 57% respectively. Reagent addition was high.
Another of the issues that required further investigation was mineralogy. Head and Tailings samples from rougher flotation, plus the tailings from the gravity plus flotation test were provided to the FLSmidth company in Salt Lake City for mineralogical evaluation. From Quemscan analysis, many copper minerals were identified, shown in Table 10-3.
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Table 10-3 Mineralogical Analysis of Head and Tailings Samples
Mineral | Potential for recovery | Head | 90131 Tails (G+F) | |||
Native Copper | Y | 0.346 | 0.001 | |||
Cuprite | Y | 0.012 | 0.000 | |||
Chalcopyrite | Y | 0.086 | 0.001 | |||
Bornite | Y | 0.041 | 0.000 | |||
Chalcocite | Y | 0.198 | 0.003 | |||
Covellite | Y | 0.004 | 0.000 | |||
Cu/As/Sb sulfides | Y | 0.002 | 0.000 | |||
Cu bearing clays | N | 0.024 | 0.022 | |||
Cu / chlorite | N | 0.005 | 0.007 | |||
Cu / biotite | N | 0.004 | 0.003 | |||
Cu / muscovite | N | 0.009 | 0.007 | |||
Cu wad | N | 0.001 | 0.001 | |||
Fe oxides | N | 0.158 | 0.174 | |||
Fe oxide / chrysocolla | N | 0.018 | 0.025 | |||
Chrysocolla | N | 0.179 | 0.192 | |||
Other copper | N | 0.010 | 0.009 | |||
Total | 1.049 | 0.445 |
This analysis provides an excellent understanding of the oxide mineralogy. It illustrates that the best copper recovery by gravity and flotation would be about 60%, which is close to the actual test results.
Flotation test work was carried out on the gravity tailings, to determine if a Gravity plus Flotation circuit would provide better recoveries than by flotation alone. The results of this work are summarized in Table 10-4.
Table 10-4 Gravity (G) + Flotation (F) v. Flotation Only, (KCA)
Circuit | G+F | F | ||
Gravity Concentrate | 15.5 g/t Au | - | ||
14.6% Cu | - | |||
Recovery to Gravity Concentrate | 15.4% Au | - | ||
22.7% Cu | ||||
Overall Recovery | ||||
Gold | 70% | 70% | ||
Copper | 60% | 57% |
The gravity test yielded recoveries of 15.4% gold and 22.7% copper. It was thought that this would generate higher recoveries for a gravity + flotation circuit. However, the gold recovery (at 70%) was the same. It is concluded that gold recovered by gravity would be recovered in the flotation circuit. The increase in copper recovery was 3%.
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At the outset of engineering, a gravity circuit (one centrifugal concentrator and two tables) was included in the comminution flowsheet. However, test work on the oxide and sulfide composites showed no benefit from gravity concentration. Also, as the geological work continued, it became apparent that this high- grade oxide comprised less than 1% of the deposit. Thus, a gravity circuit has been excluded from the flowsheet.
Two cyanidation tests were carried out at two cyanide strengths, on the test 90139 tailings. These resulted in around 70% extraction of gold, with relatively low reagent consumption, as shown in Table 10-5.
Table 10-5 Cyanidation of Flotation Tailings, (KCA)
Test | P80 | NaCN g/t |
Head g/t Au | Extraction | Leach Time (h) | NaCN consumption Kg/t |
Ca(OH)2 Kg/t |
Estimated extraction % | ||||||||
90139A | 87 | 1.0 | 1.92 | 1.32 | 24 | 0.88 | 0.60 | 69 | ||||||||
90139B |
85 |
1.0 |
1.56 |
1.00 |
24 |
1.06 |
0.60 |
70 | ||||||||
90139A |
87 |
5.0 |
1.92 |
1.22 |
24 |
1.46 |
0.60 |
64 | ||||||||
90139B | 85 | 5.0 | 1.56 | 1.14 | 24 | 1.67 | 0.60 | 73 |
10.1.5 Cleaner Flotation (KCA)
Cleaner flotation tests commenced in mid-February and used the optimized rougher flotation conditions achieved in Test 90134, Table 10-2. A total of twelve (12) cleaner tests were carried out, investigating the regrind p80 and a variety of reagents and addition rates. The optimized result was obtained in test 90160 which was repeated to confirm the result. The results are shown in Table 10-6.
Table 10-6 Cleaner Flotation p80-86u, Regrind p80-20u, pH-9.0, KCA
Ro Recovery | Cleaner 1 | Cleaner 2 | ||||||||
Test | % Au | g/tonne Au | % Recovery | g/tonne Au | % Recovery | |||||
90160 | 72 | 140 | 69 | 185 | 68 | |||||
90161 | 72 | 121 | 69 | 188 | 68 |
The rougher reagent suite used in this test is shown in Table 10-2. Reagents CMC and Na2SiO3 and NaSH were not found to be of benefit. The only reagent used in cleaning was a small frother addition. The grade of the second cleaner concentrate was 25% Cu, 185 g/t Au and 90 g/t Ag. Recovery to this concentrate was 53% Cu, 72% Au and 35% Ag.
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10.1.6 Locked Cycle Test on High-Grade Oxide Composite, (KCA)
Based on the results of Test 90160, an unsuccessful locked cycle test (LCT) was carried out at KCA. The test was unable to produce a copper concentrate of 20%Cu. As a result, open circuit rougher and cleaner tests and an LCT were carried out by the Base Metals Laboratory in Kamloops, Canada. These tests achieved concentrate grades in excess of 30% copper, containing over 500g/t Au and 300 g/t Ag. These are discussed in Section 10.1.8 and summarized in Table 10-7. Analysis of the KCA test indicated that the most likely reason for the failure of their LCT was the addition of too much collector reagent, resulting in over-promotion and a subsequent inability to reject low grade middlings.
BML generally used 20-25% of the collector reagent used at KCA (i.e., “starvation” addition). As a result, samples were transferred to BML for the remainder of the test work program.
10.1.7 Tailings, Thickening and Filtration Test Work, (Pocock)
A sample of tailings from the Locked Cycle Test was provided to Pocock Industrial Inc, in Salt Lake City. Pocock are specialists in liquid-solids separation technology and testing. Their scope of work was to investigate flocculants, gravity sedimentation, pulp rheology, vacuum and pressure filtration. The reader is referred to their reports, available from U.S. Gold. The objective of this test work was to provide the necessary data that could be used in the selection and sizing of the tailings thickener and filters.
Pocock carried out a sizing of the tailings and established the p80 to be 65 µm. This is much finer than the primary grind used at KCA of 86 µm but is explained to some extent by the inclusion of the reground cleaner tailings.
Initial work focused on screening of potential flocculants. An anionic polyacrylamide was found to be suitable for overflow clarity, decantation rate and underflow slurry viscosity. The determination of pulp rheology allows calculation of the shear stress and shear rate.
Two test methods were used for settling, (thickening), namely static tests in 2L cylinders and dynamic tests in a bench scale continuous unit. Pocock conclude that a conservatively sized hi-rate thickener, using 55-60 g/t flocculant, with a heavy-duty rake mechanism and adequate feedwell dilution will be appropriate for Copper King, producing an underflow slurry density of 62% solids.
Pocock investigated both vacuum and pressure filtration. The vacuum tests produced filter cakes with over 20% moisture. The pressure filtration tests achieved cakes with 12.8% moisture and on this basis plate and frame filters are recommended for Copper King.
10.1.8 High-Grade Oxide Test Work at Base Metals Laboratory, (BML)
On receipt of the composite samples, BML initially carried out an open circuit rougher-cleaner test. BML reduced the collector additions to “starvation” levels as compared to the KCA tests. This increased the concentrate grade to over 60% copper. These test conditions were then applied to an LCT test. The results are shown in Table 10-7.
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Table 10-7 Open Circuit and Locked Cycle Test on High-Grade Oxide, (BML)
Open Circuit Test | P80 Primary Grind: 90µm; p80 regrind: 20µm; grind time: 20min; collector addition: 8 g/t PAX & 10 g/t 208; Frother addition: 21 g/t MIBC | |||||||
% Cu | g/t Au | Recovery Cu | Recovery Au | |||||
Product 1 | 62.2 | 1416 | 12.9 | 49.9 | ||||
Product |