Coronado VMS Project
The Coronado VMS Project (“Coronado”) currently consists of 133 unpatented claims totaling approximately 2,660 acres (1,074 hectares) located in the Tobin and Sonoma Range of Pershing County, Nevada, accessible by highways and roads 30 miles (48 kilometres) southeast of Winnemucca.
The centre of Coronado is approximately 2.9 miles (4.5 kilometres) to the northwest of the past-producing Big Mike copper mine (“Big Mike”), which was developed in the 1960s and mined out in 1970.
In July 2018, Nevada Sunrise pioneered the use of a Versatile Time Domain Electromagnetic (VTEM™) helicopter-borne survey at Coronado, which is a leading-edge airborne survey method developed by Geotech Ltd. of Aurora, Ontario, Canada. Interpretation of the survey results has outlined the presence of several strong electromagnetic (“EM”) anomalies that display the geophysical hallmarks of volcanogenic massive sulphide (“VMS”) deposits located along trend to the historic, past-producing Big Mike copper mine. Primary drill targets at the Coronado North and South anomalies were developed from the integration of the VTEM™ results with geological observations and geochemical data obtained from a site visit carried out in September 2018.
Results of 2019 Coronado Gravity Survey
A ground gravity survey was carried out in April 2019 over the most conductive part of the Coronado South target, with survey lines centered over a strong airborne electromagnetic (“EM”) anomaly first detected by the Company in 2018. Eighty-four gravity readings were taken at 100 metre station intervals on four lines extending 1,000 metres on either side of the interpreted conductor axis to delineate the gravity profile. An additional 84 gravity readings were also taken over the Coronado North target located approximately 1,750 metres to the north.
The 2019 gravity survey outlined zones of low gravity coincident with the Coronado North and South EM anomalies, which was an unexpected result for such highly-conductive zones with higher magnetic susceptibility. Based on specific gravity (i.e., density) measurements from samples taken within the property area, Nevada Sunrise believes that the measured gravity lows could represent the weathered caps (gossans and/or leached cappings) of flat-lying or gently dipping, VMS-style mineralization.
This interpretation is supported by field observations at the nearby Big Mike mine (“Big Mike”). Here, deep weathering and oxidation (at least 200+ feet) resulted in severe leaching of a near-surface, moderately dipping VMS lens and underlying stringer zone. As a consequence, a well-developed, siliceous and auriferous boxwork gossan zone and leached capping developed. Continued weathering activity culminated in supergene-copper-enrichment of a deeper lens.
Nevada Sunrise believes the density contrast between the upper gossan-leached capping and mafic (basaltic) volcanic host Havallah sequence could generate a gravity low similar to those detected by the survey. Further, the deeper copper-enriched massive sulfide lens at Big Mike, which was eventually mined out, would have produced a very strong EM anomaly located below the gravity low feature. A remarkably similar geophysical scenario has been identified at the Coronado anomalies. Nevertheless, an associated gravity high anomaly would be expected with the deeper supergene-enriched lens. However, such an anomaly could be too deep to detect or masked by the gravity low feature or a combination of both these conditions.
This weathering event may be in part recent, but it is more likely related to a protracted, late Permian paleoweathering episode that affected the entire Havallah sequence. Paleoweathering ended upon deposition of stratigraphically overlying Triassic volcanic formations. It would be reasonable to expect that any VMS deposit exposed along the paleoweathering surface which developed over the Havallah sequence to exhibit such geophysical characteristics.
Nevada Sunrise plans to continue testing of the strong EM conductors at Coronado North and South in an upcoming drilling program, in conjunction with downhole EM surveys designed to gather geophysical information at depth.
2018 Drilling Program
On December 6, 2018, Nevada Sunrise announced the commencement of a diamond drilling program at Coronado. The 2018 drilling program was designed to test a large EM anomaly detected in the 2018 airborne survey. Two anomalous responses, Coronado North and Coronado South, were observed from the airborne survey in the southern part of the Project. The Coronado South target has a 1400 metres x 700 metres (4,600 feet x 2,300 feet) footprint and is interpreted as a northwest-southeast striking cuboid body with estimated dimensions of approximately 900 metres x 300 metres x 150 metres (2,950 feet x 980 feet x 490 feet). The width, thickness and depth vary along strike, suggesting that the zone is broken into sections by cross-faulting.
The initial drill test at Coronado South is planned to consist of three diamond drill holes totaling approximately 2,500 feet (762 metres). The U.S. Bureau of Land Management has approved nine drill hole locations at Coronado, where each location can host multiple holes. The current drilling plan for the Coronado South anomaly calls for up to six holes totaling 5,225 feet (1,608 metres), and at the Coronado North anomaly an additional six holes are planned, totaling 4,750 feet (1,462 metres).
On January 10, 2019, the Company announced results of the first diamond drill hole at Coronado. Sulphides were encountered in the hole above and below a wide fault zone, but geochemical values of metals such as copper, gold, nickel, cobalt and zinc were low, and not of economic interest. However, Nevada Sunrise believes that as a first test of the Coronado South geophysical anomaly, drill hole COR18-01 represents a “near-miss” of the best part of the target, and that further drilling is warranted at the Project.
Summary of COR18-01
Hole COR18-01 was completed at the Coronado South target to a depth of 375.73 metres (1,232 feet). Winter drilling conditions necessitated an alternate location for the initial drill hole and a site approximately 170 metres (550 feet) from the original location was chosen to test an EM anomaly detected in an airborne survey carried out by the Company in July 2018. The drill hole intersected what is believed to be the stratigraphic upper portion of the host volcanic section for the EM anomaly, which demonstrated a complex structural regime.
Downhole conditions were difficult during the program and daily drilling progress was slower than anticipated. An altered volcanic section that included argillites, basalt flows and flow breccias was intersected below 164.6 to 194.5 metres (540 feet to 638 feet) before being faulted off. This section is interpreted to be the stratigraphic hanging wall to the EM conductor. Significant hydrothermal epidote-chlorite alteration was evident in the flows and flow breccias below 188 metres (618 feet).
After intersecting the volcanic section and fault zone, the hole encountered a different structural block dominated by bedded cherts. The fault structure is believed to have disrupted the stratigraphic lower portion of the host volcanic sequence and position of the conductor by displacing it to the east. The Company’s geologists observed that the drill hole passed through at least three major fault zones. Several weakly-developed stockwork sulphide zones were encountered deeper in the hole at depth intervals from 268.2 to 274.4 metres (881 to 900 feet) and 313.1 to 316.46 metres (1027 to 1038 feet). These zones consisted of fracture-controlled, cross-cutting, and fresh to strongly oxidized pyrite veinlets and disseminations (< 1%).
In February 2019, Nevada Sunrise received a key amendment to the current drill permit from the U.S. Bureau of Land Management for a new access road at Coronado South. The proposed 2019 drilling program, consisting of at least two to three drill holes totaling up to 1,000 metres (3,280 feet), would test the Coronado South target area at its optimum location, which was not accessible to the Company during its first drilling program in December 2018 due to winter ground conditions.
Coronado is located over an interpreted trend adjacent to Big Mike that lies within the Middle Pennsylvanian to Late Permian-age Havallah volcanic-sedimentary sequence. Big Mike was discovered in the 1930s when a shallow, oxidized portion (gold-bearing gossan) of the deposit was located by prospectors.
The area was explored further in the late 1960s by Cerro Corp. and a deeper (greater than 300 feet, or 91 meters) high-grade, massive sulphide lens was discovered by diamond drilling. The deposit has been categorized as a supergene-enriched, Cyprus-type VMS occurrence.
In 1969, Cerro Corp. published a historical resource estimate of 634,000 tons grading 3.41% copper, which included 74,000 tons of massive sulphide ore grading 11.78% copper, and 380,000 tons of oxide and mixed ore grading 3.16% copper. This historical estimate, which is dated February 21, 1969, uses categories that are not consistent with National Instrument 43-101 (“NI 43-101”) and cannot be readily compared to NI 43-101 categories. A qualified person has not done sufficient work to classify the estimate as a current resource and Nevada Sunrise is not treating the estimate as a current resource estimate. A portion of the ground on which this estimate was based was subsequently mined, and thus this estimate cannot be relied upon. The estimate is relevant to guiding the Company’s exploration plans and provides geological information regarding the type of mineralization that could be present in the Coronado area.
In 1970, Ranchers Exploration and Development Company (“Ranchers”) developed the high-grade portion of the deposit with an open pit mine that produced approximately 25 million pounds of copper in 100,000 tons of ore grading 10.5% copper, which was shipped directly to smelters in West Germany and Japan. Heap leaching of lower-grade disseminated copper ore was also carried out by Ranchers; approximately 300,000 tons of mineralized rock was treated. Historical sampling also shows the presence of cobalt at Big Mike, with values in the deposit ranging up to 2,500 parts per million (0.25%) cobalt (Rye et al, Economic Geology, Vol. 79, 1984). Big Mike was mined out in 1970.
Following its 2018 geophysical exploration and due diligence program at Coronado, Nevada Sunrise exercised its right to proceed to a definitive agreement with the vendor.
Core samples from the 2018 drilling program were collected from both sulphide zones and shipped to SRC Geoanalytical Laboratories in Saskatoon, SK for multi-element analysis by ICP-OES with aqua regia digestion for certain elements, and fire assay for gold. Theodore DeMatties, CPG, PG, is the Company’s designated Qualified Person for this disclosure within the meaning of NI 43-101 and has reviewed and approved the technical information contained herein. Readers are cautioned that some of the technical information described is historical in nature; however, the information is deemed credible and was produced by professional geologists of the eras discussed. Mineralization located on adjacent properties by historical exploration may not be present on Coronado.