The Kinsley Mountain Gold Project (“Kinsley Mountain” or the “Property”) is located in eastern Nevada in Elko County between the towns of Ely and Wendover, Nevada. The Company’s Nevada subsidiary has the rights to a mining lease covering 141 unpatented lode mining claims on U.S. Bureau of Land Management (“BLM”) land covering an area of approximately 2,807 acres (1,136 ha). Additional staking increased the size of the Property to 513 claims plus 5 leased patents totaling 10,280 acres (4,160 hectares).
Kinsley Mountain, located near Wendover, Nevada, lies approximately 75 kilometres (45 miles) southeast of the Long Canyon property where the geological and technical team of Liberty Gold Inc. (“Liberty Gold”, formerly Pilot Gold Inc.) (TSX:LGD) defined a significant gold resource in what is now recognized as an emerging gold district.
Kinsley Mountain hosts near-surface mineralization similar to other Carlin-style, sediment-hosted gold systems, and hosts a past-producing mine with an extensive exploration database and numerous untested gold targets.
Liberty Gold carried out exploration programs at Kinsley Mountain from 2011 through 2019, and with those expenditures earned a 79.99% interest in the Property, with Nevada Sunrise owning the remaining 20.01% interest. In June 2020, Liberty Gold sold its participating interest in Kinsley Mountain to New Placer Dome Gold Corp. (“New Placer Dome”). New Placer Dome operates exploration at Kinsley Mountain through a joint venture company, Kinsley Gold LLC.
2020 Resource Estimate
In February 2020, New Placer Dome published an updated mineral resource estimate stating that Kinsley Mountain hosts Indicated Resources of 418,000 ounces of gold grading 2.63 g/t Au (4.95 million tonnes), and 117,000 inferred ounces of gold averaging 1.51 g/t Au (2.44 million tonnes)1. The Company believes there is significant upside potential for new high-grade gold discoveries and for expansion of the footprint of known mineralization and contained resources at Kinsley.
1 Technical Report and updated estimate of mineral resources on the Kinsley Project, Elko County, Nevada, U.S.A., effective January 15, 2020 and prepared by Michael M. Gustin, Ph.D., CPG, Moira Smith, Ph.D., P.Geo. and Gary L. Simmons, MMSA under New Placer Dome Gold Corp.’s Issuer Profile on SEDAR (www.sedar.com).
History of Exploration
Gold mineralization was discovered on Kinsley Mountain in 1984. Subsequent exploration defined sediment-hosted gold mineralization concentrated in the Kinsley trend, and includes at least five distinct deposits hosted in strata ranging from middle-to-late Cambrian in age. Gold mineralization occurs within a stratigraphic section of Middle to Upper Cambrian-age sedimentary rock units including limestone, dolomite and shale. This mineralization exhibits characteristics similar to other sedimentary rock-hosted “Carlin-type” gold deposits in Nevada. Gold enrichments occur in both bedding-parallel and structurally-controlled zones of disseminated mineralization within altered sedimentary rocks.
Between 1994 and 1999, Alta Gold Co. (“Alta Gold”) produced approximately 135,000 ounces of gold at 1.34 grams/tonne gold from oxide ore in a heap leach operation at Kinsley Mountain. Mining by Alta Gold was restricted to a cluster of deposits aligned along a northwest-oriented fault zone. Exploration drilling has identified several other mineralized centers, which are yet to be developed. Mining by Alta Gold ceased during a period of low gold prices.
Since the early days of land acquisition, Nevada Sunrise assembled a substantial historical archive for the Kinsley Mountain property, including records for 1,156 drill holes, with a total length of 244,900 feet (an average depth of only 212 feet).
Gold mineralization at Kinsley Mountain consists both of shallow low-grade oxide ore, which was mined and produced by Alta Gold, and deeper higher-grade refractory mineralization. This deeper mineralization was tested by a limited number of drill holes that yielded grades ranging from 0.235 ounce per ton gold on the east side of the range to 0.149 ounce per ton gold one mile to the northwest. By analogy to the better-explored gold deposits of the Carlin trend, the deeper zones of gold mineralization at Kinsley Mountain have proved to be highly prospective. Drilling by the Kinsley Mountain joint venture in 2013-2014 outlined significant high-grade gold mineralization in the Western Flank area (see “2014 Exploration Program”, below).
Development of Kinsley Mountain LLC Joint Venture
On April 8, 2010, Nevada Sunrise announced an option agreement with Animas Resources Ltd. (“Animas”) on Kinsley Mountain (the Kinsley Option”), which gave Animas the right to earn a 51% interest in Kinsley Mountain by spending US$1.5 million in exploration expenditures over three years. Animas agreed to spend US$200,000 in exploration expenditures during 2010 to maintain the Kinsley Option, and would act as operator of exploration at Kinsley Mountain.
Nevada Sunrise and Animas agreed to form a joint venture consistent with the form of the Rocky Mountain Mineral Law Foundation mining venture agreement upon Animas earning its 51% interest. After earning its 51% interest in Kinsley Mountain, Animas had the right to earn an additional 14% interest by spending US$3.0 million in exploration expenditures within five years, which would increase its interest in Kinsley Mountain to 65%.
On September 21, 2011, Nevada Sunrise announced the purchase of the Kinsley Option from Animas by Pilot Gold Inc. (“Pilot Gold”, now Liberty Gold). In consideration for the purchase of the Kinsley Option, Animas received the following:
- US$350,000 cash and 50,000 common shares of Pilot Gold on the date hereof;
- 25,000 common shares on the first anniversary of the effective date;
- 25,000 common shares on the second anniversary of the effective date;
- 50,000 common shares upon Pilot Gold earning and vesting a 51% interest in the amended mining lease, summarized below, pursuant to the option agreement.
Pursuant to the amended terms of the Kinsley Option, Pilot Gold had the exclusive right to earn:
- A 51% interest in Kinsley Mountain through a 51% equity interest in a joint venture company to be formed at the time of such acquisition, by incurring US$1.18 million in exploration expenditures by March 30, 2013 (of which US$180,000 was spent by May 31, 2012);
- An additional 14% interest in Kinsley Mountain and in the joint venture by incurring an additional US$3.0 million in exploration expenditures within five years of meeting the initial earn-in.
In 2013, following Pilot Gold’s successful earn-in to a 65% participating interest in Kinsley Mountain, Nevada Sunrise elected to dilute its participating interest from 35% to 20.94%. In 2019, Nevada Sunrise further diluted its participating interest to 20.01%, while Liberty Gold increased to a 79.99% participating interest.
2020 Exploration Program
On April 6, 2021, Nevada Sunrise reported that New Placer Dome provided the third round of assay results for mineralized holes within fourteen (14) additional reverse circulation (“RC”) drill holes completed during 2020 at Kinsley Mountain.
The 2020 Kinsley Mountain RC and diamond drill campaign was completed in November 2020 and comprised 49 drill holes totaling 17,970 metres (58,957 feet) testing five target areas within the greater resource area, which consisted of 39 RC holes for 13,610 metres (44,652 feet) and 10 diamond drill holes for 4,360 metres (14,305 feet), with 3 holes abandoned and re-drilled from the same locations. Assay results from 13 holes are still pending, including all core holes. To date, only 20% of Kinsley Mountain has been drill tested. New Placer Dome reports that results of the 2020 drilling warrant further drilling planned in 2021 to build on multiple new discoveries and potentially increase the current indicated and inferred resources.
For example, drill hole KMR20-030 testing the Main Pit North area intersected high-grade oxide gold approximately 200 metres (656 feet) down-dip from the Main open pit that historically exploited high-grade Dunderberg shale-hosted oxide gold near surface. The KMR20-030 intercept occurs 75 metres (246 feet) outside the current resource pit shell, which provides opportunities for near pit resource expansion during 2021.
- 2.88 grams-per-tonne gold (“g/t Au”) (oxide) over 36.6 metres (“m”), including 9.83 g/t Au (oxide) over 7.6 m in KMR20-030 (Figure 1 & Table 1);
- 1.05 g/t Au gold (oxide) over 24.4 m, including 2.13 g/t Au over 9.1 m in KMR20-022 (Figure 2);
- 4.83 g/t Au (oxide) over 3.0 m, and 0.40 g/t Au (oxide) over 27.4 m in KMR20-23B (Figure 2);
- 1.20 g/t Au (sulphide) over 32.0 m, including 5.81 g/t Au over 3.1 m from a depth of 35.1 m in KMR20-027 at the KNW-Sulphide Fault target.
Figure 1. Main Pit North Oxide Target 030 Az. Drill Section
KMR20-030 / KMR20-028
- Gold mineralization occurs within Dunderberg shale and underlying Hamburg limestone at or near the contact over a 30 m stratigraphic interval, at vertical depths of less than 120 metres (394 feet);
- High-grade oxide gold values appear to occur preferentially within a limited number of inclined drill holes suggesting there is a component of steep structural control of mineralization not previously recognized;
- The current drill results have the potential to expand mineral resources through discovery of new zones of high-grade oxide gold mineralization close to current resource pit shells. New Placer Dome plans an expanded 2021 drill campaign at the Main Pit North area.
Figure 2. Main Pit North Oxide Target North-South Drill Section
KMR20-021 / KMR20-022 / KMR20-023B
Table 1. Kinsley Mountain Gold Project 2020 Significant Drill Intercepts
|Released||Zone||From (m)||To (m)||Interval (m)1||Au (g/t)*||CN Soluble
|Main Pit North
|KMR20-026 (-90)|| Released
|KMR20-007 (-75/280)||Western Flank||283.5||289.6||6.1||1.15||Sulphide|
*True widths of the mineralized intervals are interpreted to be between 60-90% of the reported lengths.
*Drill composites were calculated using a minimum cut-off of 0.20 g/t gold.
**“Sulphide” defined as CN soluble gold recovery of <50%
Drill hole KMR20-001 (-70/060), collared at the east side of the Western Flank Zone, did not intersect significant mineralization. Drill hole holes KMR20-020 (-65/010), KMR20-024 (-69/180), and KMR20-025 (-67/150) collared on the west and east sides of the Main Pit North oxide target, and drill holes KMR20-018 (-69/292) and KMR20-019 (-79/311) drilled in the KWN-Sulphide Fault area did not intersect significant mineralization.
On March 23, 2021, Nevada Sunrise reported that New Placer Dome provided the second round of assay results for mineralized holes within ten (10) reverse RC drill holes completed during 2020 at Kinsley Mountain.
- 15.1 grams per tonne gold (“g/t Au”) (sulphide) over 7.6 metres (“m”), including 24.1 g/t Au (sulphide) over 4.6 m in KMR20-026 lower zone; and 9.08 g/t Au (sulphide) over 6.1 m in KMR20-026 upper zone
- 2.51 g/t Au (sulphide) over 15.2 m; including 4.16 g/t Au (sulphide) over 6.1 m in KMR20-003
- 1.78 g/t Au (oxide) over 39.6 m; including 3.63 g/t Au (oxide) over 13.7 m in KMR20-002
- The upper interval in KMR20-026 is hosted in Dunderberg Shale and is the second highest-grade Western Flank Zone Dunderberg shale intercept drilled to date, and is 200 m shallower than the bulk of the Western Flank Zone resource, demonstrating high-grade, near-surface resource expansion potential.
- The lower interval in KMR20-026 (24.1 g/t Au over 4.6 m) is the highest-grade drill interval from the top of the Secret Canyon shale to date at Kinsley Mountain, with individual assays among the top 40 of the over 1,400 holes drilled on the Project.
- High-grade gold mineralization in KMR20-026 is open to the northwest and warrants an aggressive program of follow-up drilling.
Western Flank Zone Drill Section KMR20-026 / KMR20-002 / KMR20-003
On January 11, 2021, Nevada Sunrise announced that New Placer Dome reported assay results for the initial nine (9) RC drill holes completed during 2020 at Kinsley Mountain.
Highlights of the initial nine RC drill holes are listed below:
- 2.63 g/t Au (sulphide) over 38.10 metres; including 10.22 grams/tonne gold (g/t Au) (sulphide) over 6.10 metres in KMR20-017 (see Figure 2);
- 3.38 g/t Au (oxide) over 21.34 metres; including 5.78 g/t Au over 6.10 metres in KMR20-016 (see Figure 2);
- 5.15 g/t Au (oxide) over 10.67 metres in KMR20-004 (see Figure 3);
- 4.83 g/t Au (sulphide) over 6.10 metres and 1.74 g/t Au (sulphide) over 7.62 metres in KMR20-008 (see Figure 4); and 1.15 g/t Au (sulphide) over 6.10 metres in KMR20-007 (see Figure 5);
- 1.19 g/t Au (oxide) over 16.76 metres in KMR20-005; and 0.51 g/t Au (oxide) over 18.29 metres in KMR20-006 (see Figure 6).
Western Flank Zone Drill Section KMR20-016 and KMR20-017
Western Flank Extension Target Drill Section
Western Flank Zone Drill Section KMR20-008
Western Flank Zone Drill Section KMR20-007
KNW Fault Zone Drill Section KMR20-005 and KM20-006
Methodology and QA/QC
Assaying was performed by ALS Global (“ALS”), of Vancouver Canada. ALS is an ISO-IEC 17025:2017 and ISO 9001:2015 accredited analytical laboratory that is independent of New Placer Dome, Nevada Sunrise, and their respective Qualified Persons. RC drill samples were subject to crushing to a minimum of 70% passing 2 mm, followed by pulverizing of a 250-gram split to 85% passing 75 microns. Gold determination was via standard 30-gram fire-assay analysis with atomic absorption spectroscopy (“AAS”) finish, in addition to 51 element ICP-MS. Samples returning greater than 10 g/t Au are subject to gravimetric finish. Gold values returning greater than 0.1 g/t Au are also subject to leach analysis where the sample is treated with a 0.25% NaCN solution and rolled for an hour. An aliquot of the final leach solution is then centrifuged and analyzed by AAS.
As operator at Kinsley Mountain, New Placer Dome follows industry standard procedures for the work carried out the Project, with a quality assurance/quality control (“QA/QC”) program. Blank, duplicate and standard samples were inserted into the sample sequence sent to the laboratory for analysis. New Placer Dome detected no significant QA/QC issues during review of the data. Nevada Sunrise is not aware of any drilling, sampling, recovery or other factors that could materially affect the accuracy or reliability of the data referred to herein.
The scientific and technical information contained herein has been reviewed and approved by Robert M. Allender, Jr., CPG, RG, SME and a Qualified Person for Nevada Sunrise as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Mr. Allender has examined the data disclosed, which includes his review of the sampling, analytical and test data and procedures underlying the information and opinions contained herein.
2019 Drilling Program
Nevada Sunrise and Liberty Gold approved the 2019 budget for Kinsley Mountain at US$590,000, which included administrative and holding costs. The 2019 drilling program was planned to consist of approximately 1,600 metres (5,250 feet) of reverse circulation drilling in five to six holes.
Liberty Gold completed a 3-hole reverse circulation drilling program in late 2019 for a total of 3,700 feet (1,128 metres). Drilling in 2019 targeted the Secret Canyon Shale horizon at the top of the range in the deposit area, south of the Western Flank zone at the Racetrack target, and step-out drilling on the east side of the Western Flank Zone. The results from the 2019 drilling are as follows:
• PK231: 0.715 grams/tonne (“g/t”) gold over 4.6 metres in the Hamburg Shear Zone;
• PK232: 0.90 g/t gold over 6.1 metres in the Secret Canyon Shale;
• PK233: 1.67 g/t gold over 1.5 metres in Notch Peak Breccia, and 0.41 g/t gold over 3.0 metres in Dunderberg Shale, and 0.42 g/t gold over 6.1 metres in the Hamburg Shear Zone, and 1.23 g/t gold over 3.0 metres in the Secret Canyon Shale.
2018 Drilling Program
The 2018 drilling program began in April 2018 and was budgeted at US$560,000 by the Kinsley Mountain joint venture.
The 2018 program targeted possible extensions of the Western Flank deposit, which was discovered by Liberty Gold in 2014. Subsequent drilling has outlined a sulphide resource estimate, using multiple cut-offs1 of 284,000 Indicated ounces of gold grading 6.04 grams per tonne (“g/t”) and 39,000 Inferred ounces grading 2.41 g/t gold (see Nevada Sunrise news release dated November 5, 2015).
1 Cut-off grades assume an open-pit mining scenario, using a pit floor elevation generated using Whittle software, reasonable assumptions for mining and milling costs, and a US$1,300/ounce gold price.
A total of seven reverse circulation holes were started in the 2018 program, with five holes completed and two lost at shallow depths due to voids and fault zones encountered. Total meterage was approximately 1,830 metres (6,005 feet).
Highlights of the 2018 drilling program were as follows:
- PK228 intersected 5.42 g/t gold over 9.1 metres from 275.8 metres to 285.0 metres, including 7.77 g/t gold over 6.1 metres from 277.4 metres to 283.5 metres, at the Secret Canyon-Geddes contact, 50 metres east of 2017 hole PK221, which intersected 5.30 g/t over 29 metres. This new intercept in PK228 represents a significant step out in the Western Flank Zone (“WFZ”) east extension exploration. Liberty Gold has recommended follow up in subsequent drill programs.
- PK229 and PK229A were drilled to intersect the Secret Canyon shale beneath the Ridge Pit area. Both of these holes were cut short due to drilling problems related to voids and fault zones in the shallow units. However, these holes did provide valuable data in specific fault zone locations and mineralized breccia zones near the faults. Of note, PK229A returned 1.15 g/t gold over 15.2 metres from 91.4 metres to 106.7 metres, in brecciated Notch Peak and Hamburg Dolomite adjacent to the KNW fault zone. This is very encouraging for follow-up testing of the lower units in this vicinity, as it indicates strong hydrothermal fluid flow during the local mineralization event.
- PK226 was the first hole of the program in the WFZ east extension area, targeted to test a modelled east-west trending zone between the WFZ and the historical PK200/PK215 intercepts about 170 metres east of the WFZ high-grade zone. This hole returned multiple mineralized intercepts, including 1.54 g/t gold over 6.1 metres from 135.6 metres to 141.7 metres in the Dunderberg Shale, and 0.77 g/t gold over 7.6 metres from 249.9 metres to 257.6 metres in the Secret Canyon Shale.
The first hole of the 2018 program, PK225 was drilled into the Anticline Target, an area with no previous drilling, to test the Secret Canyon Shale southeast of the Western Flank Zone and returned a lower-grade interval of 0.45 g/t gold over 1.5 metres in the shallow Notch Peak limestone. Hole PK227 was drilled to test the Secret Canyon-Geddes contact and returned a lower-grade interval in the Dunderberg Shale of 0.55 g/t gold over 6.1 metres from 141.7 metres to 147.8 metres. The last hole of the program, PK230, encountered voids and fault zones, but showed no significant results.
Drill composites were calculated using a minimum cut-off of 0.20 g/t gold. Drill intersections are reported as drilled thicknesses. True widths of the mineralized intervals vary between 30 and 100 percent of the reported lengths due to varying drill hole orientations, but are typically in the range of 60 to 80 percent of true width. Drill samples were assayed by ALS Limited in Reno, Nevada for gold by Fire Assay of a 30 gram (1 assay ton) charge with an AA finish, or if over 5.0 g/t were re-assayed and completed with a gravimetric finish. For these samples, the gravimetric data were utilized in calculating gold intersections. For any samples assaying over 0.200 ppm an additional cyanide leach analysis is done where the sample is treated with a 0.25% NaCN solution and rolled for an hour. An aliquot of the final leach solution is then centrifuged and analyzed by AAS. Metallic screen techniques may be employed where the presence of coarse free gold is suspected. Approximately 1000 grams of coarse reject material are pulverized and screened. Two splits of the fine fraction are assayed, as well as all material that does not pass through the screen (the coarse fraction). The final gold assay reported is a weighted average of the coarse and fine fractions. QA/QC for all drill samples consists of the insertion and continual monitoring of numerous standards and blanks into the sample stream, and the collection of duplicate samples at random intervals within each batch.
2017 Drilling Program
Nevada Sunrise and Pilot Gold approved the 2017 budget for Kinsley Mountain at US$528,000. Four reverse circulation holes totaling approximately 1,400 metres (4,590 feet) were planned in two prospective target areas. Three holes were planned to test the eastern extension of the Western Flank gold deposit. A fourth hole was added to the 2017 program in the eastern extension area.
The fourth hole targeted the southeast part of the project on the eastern flank of the Kinsley range where a surface geochemical anomaly had been identified over promising structures, in an area with sparse shallow drilling and no tests of the Secret Canyon Shale at depth.
Kinsley Mountain 2017 Western Flank Drilling
2017 Drilling Program Results
On July 13, 2017, Nevada Sunrise announced the results from drilling at the Western Flank East Extension Target.
Highlights from the Western Flank East Extension Target include:
• From the Secret Canyon Shale Zone (lower host):
o 5.30 g/t gold over 29.0 metres including 7.84 g/t gold over 16.8 metres in hole PK221
o 3.68 g/t gold over 3.0 metres in hole PK224
• From the Dunderberg Shale Zone (upper host):
o 12.4 g/t gold over 4.6 metres including 35.1 g/t gold over 1.5 m in PK221
o 6.84 g/t gold over 7.6 metres including 12.8 g/t gold over 3.0 m in PK224
The Western Flank East Extension Target is located immediately east of the Western Flank deposit, which was discovered in late 2013.
2016 VTEM Airborne Survey
On December 15, 2016, Nevada Sunrise announced the completion of a helicopter-borne VTEM and magnetic survey over Kinsley Mountain.
The VTEM survey consisted of 854 line kilometres, flown at 200 metre spacing over the northern area of the Property, and at 100 metre line spacing over the southern half, which includes the area where the Western Flank gold discovery was made in 2014. VTEM is known for its ability to detect sulphides at depths exceeding 300 metres, and can assist in defining mineralized trends. Interpretation of the survey will utilize the geophysical signature of the Western Flank Zone to assist in identifying further drill targets. Proposed drilling is primarily focused on the Secret Canyon Shale horizon, a newly-identified host horizon for high grade, Carlin-style gold mineralization lying approximately 200 metres below the historic Kinsley Mountain open pit mine.
2016 Drilling Program
Drill targets were developed by Liberty Gold for the 2016 drilling program using 3-D modeling software, including the integration of new and historical geological, geochemical and geophysical data as detailed below. One drill target southwest of the Kinsley Main historic pit was tested with four reverse circulation holes in 2016. The target contained similar attributes to the Western Flank deposit, including:
• The intersection of the NW-striking Kinsley fault zone with a swarm of NE-striking steep faults
• A broad, deep historical induced polarization chargeability anomaly
• Anomalous pathfinder element geochemistry in surface soil and rock samples
All four of the 2016 drill holes intersected the target Secret Canyon Shale host horizon at the expected depth in the anticipated structural environment. All holes contained areas of moderate to strong jasperoid alteration, clay alteration and strong iron oxide and/or disseminated pyrite alteration, consistent with what is observed in the Western Flank zone. However, only anomalous gold content was encountered.
New Target Areas
Twelve new target areas have been developed for Kinsley Mountain, some of which have been confirmed to be gold-bearing based on compilation by Liberty Gold of historical drill results. The new targets have been developed within the following exploration model:
• The Secret Canyon Shale is interpreted to underlie the entire Project, encompassing over a 20 square kilometre target area.
• Gold is concentrated along NW-striking and NE-striking steep faults, and fault intersections.
• The Secret Canyon Shale has potential to host several zones of high-grade gold mineralization, similar in nature to the Western Flank Zone, and has been tested in 10 locations by widely-spaced holes over an initial 10 square kilometre area, with anomalous gold detected in all holes. Exploration is now focused primarily on this specific stratigraphic interval.
In addition to the Western Flank deposit area, Kinsley Mountain has yielded 4 additional target areas with significant intercepts of greater than 1.0 g/t gold, including:
• Western Flank East Extension: 3.46 g/t gold over 18.3 metres in PK208 (see Nevada Sunrise news release dated June 23, 2015).
• Secret Spot: 1.34 g/t gold over 25.9 metres, 1.09 g/t gold over 13.7 m and 3.02 g/t gold over 6.1 metres in PK153 (see Nevada Sunrise news release dated September 10, 2014).
• Racetrack: 1.25 g/t Au over 10.7 metres in PK180 (see Nevada Sunrise news release dated September 10, 2014).
• Central Kinsley Trend: 1.58 g/t Au over 4.6 metres in historical hole K-425 (Pilot Gold exploration files).
2015 Resource Estimate
On November 5, 2015, Pilot Gold Inc. reported the first independent resource estimate for Kinsley Mountain. The resource estimate defined a significant high-grade zone at the Western Flank along with near-surface oxide ounces. Gold mineralization at Kinsley Mountain hosts sedimentary rock-hosted, similar to that mined in Nevada’s Carlin and Cortez trends. The potential for resource expansion is excellent due to widespread alteration, prospective geology and gold at surface, and over 80% of the Property is untested by drilling. All dollar amounts quoted are in US dollars.
The 2015 resource estimate for all mineralization types, using multiple cut-offs, is:
Table 1. Kinsley Mountain Mineral Resource Estimates
|Mineralization||oz Au||g/t Au||Tonnes||oz Au||g/t Au||Tonnes||Cutoff (g/t Au)|
|Secret Canyon Shale sulphide||284,000||6.04||1,461,000||39,000||2.41||508,000||1.0|
|Dunderberg Shale sulphide and transitional||45,000||2.67||520,000||37,000||2.44||470,000||1.3|
Mineralization hosted in the Secret Canyon Shale in the Western Flank zone includes 284,000 Indicated ounces at an average grade of 6.04 g/t gold. At a 3.0 g/t cut-off grade, most of the resource remains, delineating 248,000 Indicated ounces at an average grade of 9.15 g/t gold (see Sensitivity Table below). The grade improves 51%, while the gold content is only reduced by 13%. Metallurgical testing of mineralized material from this zone suggests that it is amenable to production of a flotation concentrate with grades up to 312 g/t gold and recovery of up to 95% using a flowsheet including cyanidation of the tails (see Nevada Sunrise news releases dated January 19, 2015 and July 13, 2015). The metallurgical response indicated by testing to date allows for consideration of lower cut-off grades than might ordinarily be used in modeling Carlin-type sulphide material.
Table 2: Sensitivity Table
|(g Au/t)||Tonnes||g Au/t||oz Au||(g Au/t)||Tonnes||g Au/t||oz Au|
|Mixed + Unoxidized Mineralization|
|(g Au/t)||Tonnes||g Au/t||oz Au||(g Au/t)||Tonnes||g Au/t||oz Au|
|Secret Canyon Mineralization|
|(g Au/t)||Tonnes||g Au/t||oz Au||(g Au/t)||Tonnes||g Au/t||oz Au|
The resource estimate, effective October 15, 2015, included three separate cut-off grades, reflecting depth from surface, oxidation, and metallurgical considerations. These include shallow oxidized rock (0.2 g/t Au cut-off); shallow transitional and sulphide mineralization, primarily hosted in the Dunderberg Shale (1.3 g/t Au cut-off), and Secret Canyon Shale-hosted sulphide and transitional mineralization (1.0 g/t Au cut-off). Cut-off grades assume an open-pit mining scenario, using a pit floor elevation generated using Whittle software, reasonable assumptions for mining and milling costs, and a $1,300/ounce gold price.
The 2015 Kinsley Mountain resource estimate was completed by Michael Gustin, Ph.D, CPG, of Mine Development Associates, Inc. (“MDA”) of Reno, Nevada, an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. Estimation methods are summarized below. Further details of the estimation methods and procedures are available in a NI 43-101 technical report, co-authored and released by MDA, dated December 16, 2015 and filed on SEDAR (www.sedar.com) .
The 2015 Kinsley Mountain resource estimate was based on results from 77,097 metres of historical drilling in 1,158 drill holes (9 core and 1,149 reverse circulation or rotary), as well as 59,852 metres in 222 holes, including 74 core holes and 148 reverse circulation holes drilled by Liberty Gold. Quality-control data generated during the various drill programs conducted at Kinsley were independently verified by MDA as part of the project review. The resource model consists of a detailed three-dimensional geological model including lithological, structural and gold domains derived from 25 metre-spaced sections. The low, medium and high-grade gold domains, in turn, were used to constrain the interpolation of gold grades. Blocks measure 5 x 5 x 5 metres. A total of 10,016 individual assay intervals averaging 1.527 metres in length were composited into a total of 10,037 composite intervals of 1.524 metre length. Gold assay data was reviewed statistically and visually to determine appropriate grade capping levels by domain. A total of 21 gold assays were capped prior to compositing based on the evaluation of probability plots by gold domain. In addition to the capping of assay data, the impact of anomalously high gold values was controlled by restricting their range of influence in the estimation process. Gold grades were interpolated using inverse distance to the third power (ID3).
For mineralization to be classified as Indicated, the following criteria were used:
- Indicated (Secret Canyon Shale): minimum of three composites; minimum of 2 holes within an average distance of 25 metres from the block;
- Indicated (All Other Mineralization): minimum of three composites; minimum of 2 holes within an average distance of 20 metres from the block;
All remaining estimated blocks that were not classified as indicated and that meet the elevation critieria summarized below were classified as inferred.
To ensure reasonable prospects of economic extraction, the project resources were limited to elevation levels as defined by Whittle pit shells. A pit optimization was run using a $1,300/oz gold price and parameters applicable to: (i) oxidized, potentially heap-leachable mineralization – $2.50/t processing cost, $1.41/t General and Administrative (“G&A”) cost, and a gold recovery of 75%; (ii) mixed and unoxidized mineralization that could potentially be processed by flotation, leaching of the flotation tails, and custom oxidation by roaster or autoclave – $32.00/t processing cost, $7.04/t G&A cost, and 85% recovery; and (iii) mineralization hosted within the Secret Canyon Shale, which potentially could also be processed by flotation, leaching of the flotation tails, and custom oxidation by roaster or autoclave – $28.30 processing cost, $7.04/t G&A cost, and 95% recovery. The pits were used to define the following maximum depths below the topographic surface for the potential open-pit resources at Kinsley Mountain – 125 meters below the topographic surface on the east side of the Kinsley Range and 350 meters below the surface on the western side.
Tonnage estimates are based on 129 bulk specific gravity determinations completed by ALS Laboratories for Liberty Gold, as well as historical data, which were used to assign average values to oxidation domains of the block model. Liberty Gold drill samples were assayed by ALS Laboratory in Vancouver, B.C. for gold by Fire Assay of a 30 gram (1 assay ton) charge with AAS finish, or if over 5.0 g/t, were re-assayed and completed with a gravimetric finish. QA/QC included the insertion and continual monitoring of numerous standards and blanks into the sample stream, and the collection of duplicate samples at random intervals within each batch.
Michael M. Gustin, Ph.D., CPG, of MDA, and located in Reno, Nevada, is an Independent Qualified Person within the meaning of NI 43-101 and is responsible for the Resource and its technical content and has reviewed and verified that such information is accurate and approves of written disclosure of same.
John R. Kerr, P.Eng., is the Company’s designated Qualified Person within the meaning of NI 43-101 and has reviewed and approved the technical information contained herein.
2015 Exploration Program
On June 23, 2015, Nevada Sunrise announced initial drill results from the 2015 drill program at Kinsley Mountain. Drilling within an area approximately 150 metres northeast of the high-grade Western Flank intercepted high-grade gold in two key stratigraphic horizons, indicating the presence of a new mineralized zone that remains open to the east and west.
Drill highlights include:
- PK208: 2.34 g/t gold over 9.1 metres (Dunderberg shale host), and 3.46 g/t gold over 18.3 metres
- (Secret Canyon Shale host);
including 13.7 g/t Au over 3.0 metres;
- PK208: 2.34 g/t gold over 9.1 metres (Dunderberg shale host), and 3.46 g/t gold over 18.3 metres
- PK210: 2.95 g/t Au over 13.7 metres (Secret Canyon Shale host).
The initial 2015 field program at Kinsley Mountain was budgeted at US$2.0 million, including up to 10,000 metres of reverse circulation and 1,000 metres of diamond drilling. 4,300 metres were completed in 9 holes and one lost hole, including three that were drilled for the purpose of conducting an induced polarization geophysical survey. Exploration of this nature is drill-intensive and sequential; the program was continually evaluated in light of data and interpretations from each and every drill hole.
On the basis of the results the 2015 exploration program was modified to potentially expand and connect the new zone to the Western Flank and target the “high-grade” northwest trending structures in the historical mine trend.
2014 Exploration Program
2014 was a landmark year at Kinsley Mountain, with the discovery of the high-grade zone at the Western Flank, and subsequent recognition of the property-wide potential for gold mineralization in the Candland Shale and Secret Canyon formations. The 2014 drilling program consisted of 27,191 metres in 81 holes, including a water test hole, as part of a US$6.64 million exploration program.
Highlights from infill drilling at the Western Flank include:
- 10.1 g/t gold over 39.6 metres in PK186C, including
- 17.4 g/t gold over 21.6 metres (Secret Canyon Shale host)
- 6.05 g/t gold over 30.5 metres in PK187C (Secret Canyon Shale host)
- 4.39 g/t gold over 29.2 metres in PK188C (Secret Canyon Shale host)
- 6.88 g/t gold over 6.1 metres in PK177C, including
- 11.0 g/t gold over 3.0 metres (Candland Shale zone)
The Racetrack zone is located 1,200 metres south of the Western Flank along a potential parallel NNE trending structure where surface mineralization in the Candland Shale was intersected over a 250 metre by 300 metre area by prior operators. Six holes were drilled, with PK180 returning mineralization in both the shallow oxide Candland Shale unit and the deeper Secret Canyon Shale.
Highlights from the Racetrack area include:
- 2.69 g/t gold over 7.6 metres (Shallow oxide in the Candland Shale host) and
- 1.25 g/t Au over 10.7 metres (Secret Canyon Shale host) in PK180
Pilot Gold reported that gold mineralization at Kinsley Mountain is widespread in two stratigraphic units, the Secret Canyon and Candland Shales, with both emerging as viable property-wide targets, and that the latest results not only demonstrate continuity of the high grade at the Western Flank target, but also its broader potential as gold was detected in widely-spaced drill holes over the Western Flank trend.
Other targets tested along the Western Flank in 2014 include the Right Spot, where shallow, oxide gold mineralization was intersected in multiple drill holes; and the Secret Spot, where shallow, oxide mineralization, and deep mineralization in the Secret Canyon Shale were encountered. Gold was also encountered in the area between the Western Flank and the historical mine in three stratigraphic units.
Recent highlights from the Secret Spot include:
- 2.03 g/t gold over 7.6 metres (shallow oxide in the Candland Shale) in PK182
Permitting: Kinsley North
An amendment to the Kinsley Mountain Plan of Operations for conducting surface drilling and other activities was approved by the U.S. Bureau of Land Management. The amendment permits up to 20.5 acres (8.3 hectares) of drill roads and pads in the northern two-thirds of the property, with access to a number of high-priority targets defined by geochemically anomalous pathfinder elements in surface samples and intersections of NNE and NW-trending faults. The “Kinsley North” claims are underlain by the same highly prospective geology and structural framework as the Kinsley Mine and the Western Flank, and have never been drilled.
Surface mapping and sampling, continued modeling of historical blast hole and drill data, and drilling in 2014 refined Pilot Gold’s targeting efforts as operator to find additional gold mineralization at Kinsley Mountain. Pilot Gold believes that the Secret Canyon Shale, host to the high-grade mineralization in the Western Flank, is a viable target, with gold values greater than 1.0 g/t over significant widths also drilled in the Secret Spot and Racetrack areas up to two kilometres to the south. Over the length of the property this horizon is virtually untested, and it is unlikely that the Western Flank is the only high-grade zone. Data support the concept that gold is concentrated at the intersections of NW to WNW and NNE to north-trending, high-angle structures. The principle target is interpreted to be the intersections of faults of these orientations with the Candland Shale and Secret Canyon Shale horizons.
2013 Exploration Program
In July 2013, Pilot Gold commenced a 20,000 metre drilling program as a follow-up to the 2012 campaign that defined and expanded gold mineralization over a 2.2 kilometre-long trend. Pilot Gold tested high-priority targets within a core group of claims, including the Western Flank, Candland Canyon and extensions trending NNE and SW of the historical pits.
The 2013 drilling showed that significant gold also occurs within a lower zone of silty limestone below the Candland Shale. This host horizon was neither identified nor tested by previous operators. Core drilling suggested that the tabular zones of mineralized, favourable host rock are cut by one or more high-angle structures causing collapse breccia zones where the mineralization becomes thicker and higher-grade. Drill hole PK091CA contains high-grade collapse breccia zones similar to those seen by Pilot Gold’s team at Newmont Mining’s Long Canyon project.
Assay results from the Western Flank target, located 550 metres northwest of the past-producing pits at Kinsley, also expanded the area of high-grade gold mineralization and demonstrated the potential for Kinsley to host significant high-grade gold mineralization. Drill hole highlights include:
- 8.53 g/t Au over 36.6 metres in PK091CA, including 29.43 g/t Au over 7.6 metres
- 15.6 g/t Au over 3.0 metres in PK083C
- 2.21 g/t Au over 10.7 metres in PK073
- 1.65 g/t Au over 24.4 metres in PK074
- 2.51 g/t Au over 16.8 meters in PK102
From the south edge of the Western Flank target, mineralization is open and becomes shallower to the south over a distance of 500 meters to the Wrong Spot target, a 350-metre long NNE-trending exposure of surface jasperoids returning 1-3 g/t Au in grab samples.
2012 Exploration Program
Over the course of the 2012 program, 12,000 metres of infill and step-out core & RC drilling were completed to define and expand the mineralized zones identified by previous operators. In conjunction with drilling, a comprehensive regional effort to identify new targets was completed, encompassing both the original 141 claims, as well as 128 claims staked by Pilot Gold to the north in a largely unexplored area. Through this work, a new mineralized zone was intersected in drilling (Candland Canyon) and the Western Flank Zone was expanded to now cover an area 600 metres by 100 metres. Drill highlights from the 2012 program include:
- 6.03 g/t gold over 13.7 metres in hole PK06, including 15.18 g/t gold over 4.6 metres
- 5.48 g/t gold over 20.4 metres in hole PK014C, including 16.43 g/t gold over 5.5 metres
- 2.30 g/t gold over 19.8 metres in hole PK057
A three-dimensional model of geology and mineralization was created in order to aid in the selection of new, high-grade drill targets. Surface soil and rock samples show anomalous pathfinder geochemistry extending seven kilometres to the north of the historic open pits, consistent with the presence of a large mineralized system. A Plan of Operations was submitted to the U.S. Bureau of Land Management to allow for property-wide drilling in 2013 throughout the southern claim block.
2011 Exploration Program
On February 10, 2012, Nevada Sunrise announced the initial results of 2011 drilling by Pilot Gold at Kinsley Mountain, which returned impressive intervals of gold mineralization. Pilot Gold’s first work program included 1,250 metres in 6 holes of diamond drilling designed to confirm mineralization in historical reverse circulation holes near the margins of open pits at the past-producing Kinsley Mountain mine.
Drill highlights from the 2011 program include (full results in table below):
- 5.91 g/t gold over 18.4 metres, including 11.93 g/t gold over 7.8 metres in hole PK-04;
- 6.75 g/t gold over 7.5 metres, including 13.52 g/t gold over 3.2 metres in PK-03;
- 6.23 g/t gold over 8.7 metres, including 12.05 g/t gold over 3.0 metres in hole PK-02.
The six holes drilled in 2011 were near-twins of existing holes in two locations, one to the north of the main pit and one located between two satellite pits to the southeast. These initial drill results provided confidence that historical drilling accurately quantified the gold endowment at Kinsley Mountain.
Technical information regarding Kinsley Mountain has been reviewed and approved by Robert M. Allender, Jr., CPG, RG, SME, the Company’s designated Qualified Person within the meaning of NI 43-101 who has reviewed and approved the technical information contained herein. As of June 30, 2015 drill composites were calculated using a cut-off of 0.20 g/t. Drill intersections are reported as drilled thicknesses. True widths of the mineralized intervals are interpreted to be between 30-90% of the reported lengths. Drill samples were assayed by ALS Chemex (ISO9001:2000) in Reno, Nevada for gold by fire assay of a 30 gram (1 assay ton) charge with an AA finish, or if over 5.0 g/t were re-assayed and completed with a gravimetric finish. For these samples, the gravimetric data were utilized in calculating gold intersections. For any samples assaying over 0.200 ppm an additional cyanide leach analysis is done where the sample is treated with a 0.25% NACN solution and rolled for an hour. An aliquot of the final leach solution is then centrifuged and analyzed by AAS. QA/QC for all drill samples consists of the insertion and continual monitoring of numerous standards and blanks into the sample stream, and the collection of duplicate samples at random intervals within each batch. Selected holes are also analyzed for a 51 multi-element geochemical suite by ICP-MS.