Exploration Overview: Cortez Trend
Exploration Overview: Cortez Trend
Within the Cortez Trend US Gold controls two projects known as Tonkin & Gold Bar. The properties cover 170 square miles and are situated directly south of Barrick Gold's Cortez mine area.
We believe that the Cortez Trend is one of the most exciting areas in the world for gold exploration. In addition to the Cortez Mine Area, Barrick has just put the Ruby Hill mine into production south of US Gold, which is expected to produce approximately 100,000 ounces of gold annually. Other companies in the trend include Newmont Mining which has put together an enormous land package in the northern region of the trend.
Gold Bar Project
The Gold Bar Project’s deposits were mined in the late 1980’s and early 1990’s by Atlas Gold Corporation (Atlas). Material from these deposits was processed at Atlas’ nearby Gold Bar mill, about 10 miles away (US Gold does not own or control this facility). The Gold Pick deposit produced approximately 97,000 ounces of gold from approximately 1.4 million tons of ore mined.
US Gold now controls all of the Gold Pick, Gold Ridge, Cabin Creek and Hunter resources.
Resources
On April 28, 2009 US Gold announced an updated NI 43-101 resource in the Gold Bar Project (Table 1 and 2). The new estimate increased measured and indicated resources by 64% over the resource published on December 4, 2008. A new update is scheduled for completion in the first quarter of 2010.
Metallurgy
It is apparent that the rock types in the Gold Ridge, Gold Pick and Cabin Creek resources will include well oxidized, sulfide, and siliceous components. Variable and significant amounts of carbonaceous components can be expected. The amenability of these different rock types to gold extraction is variable and care will need to be taken in the classification of rock types and in the projection of extraction percentages from them.
Exploration Results
Recent results from the Gold Bar Project have intercepted some of the best results US Gold has encountered in Nevada thus far. For details refer to the following exploration news releases:
http://www.usgold.com/news-article/281/
http://www.usgold.com/news-article/286/
Summary of drill results from 2009:
Type of Deposit
All of the mineralization found to-date at the Gold Bar Project occurs as sediment-hosted, “Carlin-type” gold deposits. The deposits are hosted in carbonate-rich sedimentary rocks, with disseminated sub-micron-sized gold, accompanied by a distinct hydrothermal alteration signature (As, Hg, Sb). The primary controls on the location and style of mineralization are structural preparation and host stratigraphy.
Carlin-type deposits are generally epigenetic, large-tonnage, low-grade (with some exceptions), sediment-hosted disseminated gold deposits. The deposits are known mainly in northern Nevada and northwestern Utah where they are arranged in clusters and belts. Carlin-type gold deposits are one of the most important types currently being mined in the western United States.
Disseminated gold deposits are hosted in Ordovician through Permian sedimentary rocks, but seem to blossom in Silurian and Devonian carbonate rocks. The Cortez Trend is also famous for a world class gold-base metal skarn deposit (Fortitude/Phoenix), and a Climax-type porphyry molybdenum deposit (Mt. Hope). Gold deposits (Buckhorn, Mule Canyon) hosted in Miocene basalt also occur in the Northern Nevada Rift.
Much of the gold mineralization in northeastern Nevada is related to the RMT, a low angle fault zone that has placed the older, upper plate rocks on top of younger lower plate rocks. The upper plate rocks, Ordovician in age, include mudstone, dark shale and siltstone, dark chert and siliceous mudstone, quartz arenite of various colors in thin to medium beds, finely-crystalline limestone that weathers to pastel shades of yellow and red, and irregular units of greenstone (pillow basalt).
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Tonkin Project
The Tonkin Project Area is located 18 miles south-southeast of Barrick Gold’s Cortez property. Cortez includes the Pipeline mine to the north, the original Cortez mine area and the Cortez Hills-Pediment discoveries to the south. Barrick is currently developing the Cortez Hills-Pediment discoveries and expect to produce 1 millions ounces of gold annually commencing in 2010.
Property
The Tonkin District lies within the Cortez Trend. This gold belt is a northwest-southeast trending alignment of mineral deposits, intrusives, and windows of lower plate carbonate rocks, and complicated structures.
The Tonkin Project includes an established mine infrastructure. It has been a producing mine for 2 periods during its life. Between 1985 and 1988 there was an oxide heap leach operation on site, and in 1989 and 1990, an integrated carbon-in-leach (CIL) / bacterial oxidation plant was commissioned. The plant and associated infrastructure was decommissioned and mothballed in June 1990.
Drilling
In 2006, US Gold initiated a development drilling program designed to expand the Tonkin Project gold resource by drilling in areas with a high probability of success, as follows:
- In-fill drilling increases the measured and indicated resource by upgrading inferred resources to measured and indicated resources.
- Step-out drilling increases the size of the currently defined deposits by drilling on the margins of the known deposits in areas where mineralization has not been closed-off by barren drill holes.
- Deeper drilling adds new resources by drilling below the currently defined deposits into areas where mineralization has been shown, but where there is too little drilling for the mineralization to be included in the resource estimate.
Exploration drilling also focused on discovering the source of the mineralization at Tonkin initializing a model derived from observations made at the Cortez property to the north where a surface deposit existed, but was later discovered to host a deep deposit of significant size and grade.
While drilling was successful in expanding the resource at Tonkin, no significant mineralized pathway (feeder structure) was discovered below the existing deposit.
Resources
In May 2008 US Gold updated the Tonkin 43-101 compliant resource estimate. The measured + indicated gold resource for the Tonkin Project has increased to 1,447,000 ounces of gold contained in 35.6 million tons with an average grade of 0.041 oz Au/t. In addition, the inferred resource has increased to 311,000 ounces contained gold in 9.3 million tons averaging 0.033 oz Au/t from 153,000 ounces contained gold in 3.5 million tonnes averaging 0.044 oz Au/t.
The most significant factors in these increases include:
1) The geological interpretation has been completely revised based on new field mapping, age dating of rock samples, much better geologic information at depth from a number of new core holes, relogging of historical drill holes, and compilation of the geologic data into a much more accessible, computerized geologic database.
2) The improved geologic interpretation was used to build more accurate three- dimensional models of the mineralized zones. In addition, because of the better geologic interpretation, more confidence can be placed on the mineral zone interpretations and grade estimations.
3) Over 200 new drill holes have been added to the drill-hole database since the previous estimates, which were done in 1996. One hundred of the new holes were core holes drilled in 2006-2007 by US Gold. These new core holes more than doubled the information from previous holes and provided important new information to increase the geologic understanding of the property. In addition, the new drilling decreased the drill hole spacing and improved the reliability of the resource estimates.
The updated resource estimate for 2008 is summarized and compared to the previous resource estimate from the 2006 below:
Metallurgy
Metalurgical testing at Tonkin indicates that only about 20% of the gold is recoverable by direct cyanidation. The remaining 80% requires sulphide oxidation, prior to gold extraction. The diagnostic leach test work also indicates the presence of a slight preg-robbing component due to organic carbon.
Within the Cortez Trend US Gold controls two projects known as Tonkin & Gold Bar. The properties cover 170 square miles and are situated directly south of Barrick Gold's Cortez mine area.
We believe that the Cortez Trend is one of the most exciting areas in the world for gold exploration. In addition to the Cortez Mine Area, Barrick has just put the Ruby Hill mine into production south of US Gold, which is expected to produce approximately 100,000 ounces of gold annually. Other companies in the trend include Newmont Mining which has put together an enormous land package in the northern region of the trend.
Gold Bar Project
The Gold Bar Project’s deposits were mined in the late 1980’s and early 1990’s by Atlas Gold Corporation (Atlas). Material from these deposits was processed at Atlas’ nearby Gold Bar mill, about 10 miles away (US Gold does not own or control this facility). The Gold Pick deposit produced approximately 97,000 ounces of gold from approximately 1.4 million tons of ore mined.
US Gold now controls all of the Gold Pick, Gold Ridge, Cabin Creek and Hunter resources.
Resources
On April 28, 2009 US Gold announced an updated NI 43-101 resource in the Gold Bar Project (Table 1 and 2). The new estimate increased measured and indicated resources by 64% over the resource published on December 4, 2008. A new update is scheduled for completion in the first quarter of 2010.
Metallurgy
It is apparent that the rock types in the Gold Ridge, Gold Pick and Cabin Creek resources will include well oxidized, sulfide, and siliceous components. Variable and significant amounts of carbonaceous components can be expected. The amenability of these different rock types to gold extraction is variable and care will need to be taken in the classification of rock types and in the projection of extraction percentages from them.
Exploration Results
Recent results from the Gold Bar Project have intercepted some of the best results US Gold has encountered in Nevada thus far. For details refer to the following exploration news releases:
http://www.usgold.com/news-article/281/
http://www.usgold.com/news-article/286/
Summary of drill results from 2009:
Type of Deposit
All of the mineralization found to-date at the Gold Bar Project occurs as sediment-hosted, “Carlin-type” gold deposits. The deposits are hosted in carbonate-rich sedimentary rocks, with disseminated sub-micron-sized gold, accompanied by a distinct hydrothermal alteration signature (As, Hg, Sb). The primary controls on the location and style of mineralization are structural preparation and host stratigraphy.
Carlin-type deposits are generally epigenetic, large-tonnage, low-grade (with some exceptions), sediment-hosted disseminated gold deposits. The deposits are known mainly in northern Nevada and northwestern Utah where they are arranged in clusters and belts. Carlin-type gold deposits are one of the most important types currently being mined in the western United States.
Disseminated gold deposits are hosted in Ordovician through Permian sedimentary rocks, but seem to blossom in Silurian and Devonian carbonate rocks. The Cortez Trend is also famous for a world class gold-base metal skarn deposit (Fortitude/Phoenix), and a Climax-type porphyry molybdenum deposit (Mt. Hope). Gold deposits (Buckhorn, Mule Canyon) hosted in Miocene basalt also occur in the Northern Nevada Rift.
Much of the gold mineralization in northeastern Nevada is related to the RMT, a low angle fault zone that has placed the older, upper plate rocks on top of younger lower plate rocks. The upper plate rocks, Ordovician in age, include mudstone, dark shale and siltstone, dark chert and siliceous mudstone, quartz arenite of various colors in thin to medium beds, finely-crystalline limestone that weathers to pastel shades of yellow and red, and irregular units of greenstone (pillow basalt).
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Tonkin Project
The Tonkin Project Area is located 18 miles south-southeast of Barrick Gold’s Cortez property. Cortez includes the Pipeline mine to the north, the original Cortez mine area and the Cortez Hills-Pediment discoveries to the south. Barrick is currently developing the Cortez Hills-Pediment discoveries and expect to produce 1 millions ounces of gold annually commencing in 2010.
Property
The Tonkin District lies within the Cortez Trend. This gold belt is a northwest-southeast trending alignment of mineral deposits, intrusives, and windows of lower plate carbonate rocks, and complicated structures.
The Tonkin Project includes an established mine infrastructure. It has been a producing mine for 2 periods during its life. Between 1985 and 1988 there was an oxide heap leach operation on site, and in 1989 and 1990, an integrated carbon-in-leach (CIL) / bacterial oxidation plant was commissioned. The plant and associated infrastructure was decommissioned and mothballed in June 1990.
Drilling
In 2006, US Gold initiated a development drilling program designed to expand the Tonkin Project gold resource by drilling in areas with a high probability of success, as follows:
- In-fill drilling increases the measured and indicated resource by upgrading inferred resources to measured and indicated resources.
- Step-out drilling increases the size of the currently defined deposits by drilling on the margins of the known deposits in areas where mineralization has not been closed-off by barren drill holes.
- Deeper drilling adds new resources by drilling below the currently defined deposits into areas where mineralization has been shown, but where there is too little drilling for the mineralization to be included in the resource estimate.
Exploration drilling also focused on discovering the source of the mineralization at Tonkin initializing a model derived from observations made at the Cortez property to the north where a surface deposit existed, but was later discovered to host a deep deposit of significant size and grade.
While drilling was successful in expanding the resource at Tonkin, no significant mineralized pathway (feeder structure) was discovered below the existing deposit.
Resources
In May 2008 US Gold updated the Tonkin 43-101 compliant resource estimate. The measured + indicated gold resource for the Tonkin Project has increased to 1,447,000 ounces of gold contained in 35.6 million tons with an average grade of 0.041 oz Au/t. In addition, the inferred resource has increased to 311,000 ounces contained gold in 9.3 million tons averaging 0.033 oz Au/t from 153,000 ounces contained gold in 3.5 million tonnes averaging 0.044 oz Au/t.
The most significant factors in these increases include:
1) The geological interpretation has been completely revised based on new field mapping, age dating of rock samples, much better geologic information at depth from a number of new core holes, relogging of historical drill holes, and compilation of the geologic data into a much more accessible, computerized geologic database.
2) The improved geologic interpretation was used to build more accurate three- dimensional models of the mineralized zones. In addition, because of the better geologic interpretation, more confidence can be placed on the mineral zone interpretations and grade estimations.
3) Over 200 new drill holes have been added to the drill-hole database since the previous estimates, which were done in 1996. One hundred of the new holes were core holes drilled in 2006-2007 by US Gold. These new core holes more than doubled the information from previous holes and provided important new information to increase the geologic understanding of the property. In addition, the new drilling decreased the drill hole spacing and improved the reliability of the resource estimates.
The updated resource estimate for 2008 is summarized and compared to the previous resource estimate from the 2006 below:
Metallurgy
Metalurgical testing at Tonkin indicates that only about 20% of the gold is recoverable by direct cyanidation. The remaining 80% requires sulphide oxidation, prior to gold extraction. The diagnostic leach test work also indicates the presence of a slight preg-robbing component due to organic carbon.
