Kilgore Project

Details

The Kilgore project is caldera-related epithermal gold deposit with current Indicated Resource of 44.6 million tonnes at 0.58 g/t Au for 825,000 ounces Au and an Inferred Resource of 9.4 million tonnes at 0.45 g/t Au for 136,000 ounces Au. The property includes historical mine workings dating back to the early 1900s with further drilling in the 1980s that revealed the potential for mineralization well outside of the existing resource area, with limited follow up to date. Kilgore displays similar characteristics to Kinross Gold’s Round Mountain Mine, which has produced over 14 million ounces of gold to date.

In 2019 a preliminary economic assessment was completed that supports the potential for a low capital intensity, low operating cost, open-pit, heap-leach mining operation:

ASSUMPTIONS
Gold Price $1,300/oz
PRODUCTION PROFILE
Total Leach Tons Mined 54.0 million
Total Waste Tons Mined 60.0 million
Head Grade - Crushed 0.72 g/T (0.02 opt)
Head Grade - ROM 0.24 g/T (0.007 opt)
Mine Life 5.0 years
Tons per Day Mined - Crushed 15,000 tons per day
Tons per Day Mined - ROM 15,300 tons per day
Strip Ratio (Waste:Mineralized Material) 1.1:1
Average Au Recovery – Crushed / ROM 82% / 50%
Total Gold Ounces Mined 752,200
Total Gold Ounces Recovered 558,700
Average Annual Gold Production 111,700 oz
Peak Annual Gold Production 119,600 oz in year 1
UNIT OPERATING COSTS
Total Operating Cash Costs $780/oz
All-In Sustaining Cost $832/oz
KEY ECONOMIC MEASUREMENTS
Royalties 0%
Initial Cap-ex $81 million
Pre-tax NPV5%/ After-tax NPV5% $144.0 million/$110.4 million
Pre-tax IRR/ After-tax IRR 40.6%/34.0%
Undiscounted Operating Pre-tax Cash Flow/ After-tax Cash Flow $193.3 million/$151.8 million
After-tax Payback Period 3.0 years

 

NPV 5% in US $M Discount Rate
5.0% 7.0% 9.0%
  $1,100 32.4 23.2 15.1
$1,300 110.4 96.8 84.6
$1,500 185.5 167.6 151.4
$1,600 223.0 203.0 185.0
$1,700 259.5 237.3 217.3

 

  Gold Price / oz
$1,100 $1,300 $1,500 $1,600 $1,700
Post-tax IRR 13.4% 34.0% 53% 63.0% 71.5%

 

Multiple opportunities exist to enhance the project, including significant exploration potential.  

The Kilgore project is scalable in size and throughput and is open for expansion to the north, south and west. Opportunities for step-out drilling exist around the current area of mineralization. Immediately to the north of the deposit 16OKR-338 intersected 85.4 metres of 2.50 g/t Au near surface in the volcanic sequence, an area of the deposit that requires follow up along strike. Additionally, drilling has identified significant mineralization in the Aspen formation, a permeable sedimentary unit lying below the volcanic package that has seen minimal drilling with multiple holes ending in mineralization. Drill results from the Aspen formation include:

  • 56.4 m of 2.05 g/t Au in 15OKR 304;
  • 59.5 m of 3.79 g/t Au in 15OKR-305;
  • 50.3 m of 4.24 g/t Au in 15OKR-308;
  • 94.5 m of 4.21 g/t Au in 15OKR-309; and
  • 30.5 m of 5.37 g/t Au in 16OKR-315.

Drilling at the Kilgore Project in 2020/21 will be performed under a Plan of Operations approved by the U.S. Forest Service. Results from this work will be incorporated into an updated resource estimate. Work is underway to improve understanding of the controls on high- grade mineralization and the underlying structural framework of the deposit. These are believed to represent the feeders of the mineralizing system, and to further define the receptive volcanic and sedimentary rock units that make up the bulk of the current resource. These units are open beyond the current resource. These assessments are designed to create new targets for expansion in 2020.

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