Goldstrike |
Goldstrike is a Carlin-style, sedimentary rock-hosted (Carlin-style) gold property located in Washington County, southwest Utah (50 km northwest of St. George), with a stratigraphic and structural setting and gold mineralization similar to other Carlin-style gold systems in the Great Basin.
Goldstrike was an oxide, heap leach mine from 1988 to 1994. It produced ~209,000 ounces of gold and ~197,000 ounces silver from 8 million tonnes of ore at an average grade of 1.2 g/t gold from 12 shallow pits and closed due to low gold prices and lack of space on the leach pads.
Owner and operator
In August 2014, Liberty Gold purchased Cadillac Mining for 100% of the Goldstrike Property. Liberty Gold inherited a property with an extensive exploration database, a large number of shallow drill holes with unmined oxide gold intercepts, and numerous untested gold targets. Today, the property totals 7,261 ha in size and includes 856 owned and leased federal lode claims on Bureau of Land Management (“BLM”) land, 43 leased patented claims and private parcels, and two Utah State leased parcels.
Strong geology in established area
At Goldstrike, Cenozoic volcanic and sedimentary rocks rest unconformably on a basement of deformed middle and late Paleozoic carbonate and siliciclastic rocks. The sequence is cut by steep, arcuate oblique-slip faults that form a sequence of horsts and grabens. Mineralization is focused at the intersections of the unconformity with these faults.
Gold mineralization on surface and in shallow drill holes has been discovered over the entire property, wherever the basal unconformity of the Tertiary sequence is exposed, and particularly where it is cut by faults. Grades of up to 13 ounces per ton of gold were encountered in past drilling.
In the Paleozoic section, mineralization is related to faults, and is often open to depth.
Past producing mine
Gold mineralization was discovered in the district in the late 1890’s with early mining (1900 – 1920) focused on gold-bearing, limonitic calcite veins and “quartz ledges" (jasperoids) that outcropped in and around the present mine workings. Modern exploration began in the 1980’s with the identification of Carlin-style gold mineralization and deposit models. Surface and near-surface deposits were defined and total production was on the order of 209,000 ounces of gold and 198,000 ounces of silver. Tenneco mined oxidized, disseminated, sediment-hosted gold ore with an average grade of approximately 1.2 gram/tonne (0.035 ounce/ton) from 12 pits along a northeast-striking trend that covers a distance of approximately 6.5 kilometers (4 miles). The property was sold to USMX in 1993 and the mine was closed in 1996 and fully reclaimed.
Work Program
Since acquisition, Liberty Gold has compiled a digital database of drill holes (+1,500), blast hole samples (+100,000) and historic rock and soil samples, and has constructed a 3D model of geology and mineralization. The 2014 and 2015 fieldwork included collection of an additional 1,384 soil samples and 294 rock samples, staking of additional claims, detailed mapping and a successful ‘proof of concept’ reverse circulation drill program comprising 18 holes.
The 2016 infill and step-out drilling program was completed with the objective of targeting unmined and/or undrilled areas between and around the historic pits. The program also drill tested down-dip to the north of, and laterally beyond the 7 km long ‘Historic Mine Trend’ into areas where gold has been confirmed but not systematically drilled off. The drill program consisted of both reverse circulation (163 holes) and core drilling (10 holes). The ten core holes were used to provide sample material for metallurgical studies (including column testing) and provide samples for density measurements, which are needed for accurate resource estimation.
Final metallurgical results were released in April 2017, with a weighted average of 85.9% gold recovery from column leach tests. In addition to great recoveries that support a simple heap leach mining scenario, gold extraction has proven relatively insensitive to particle size. This supports a run of mine heap leach process. More information can be found in the following news release: April 3, 2017.
Resource Estimate
An independent maiden resource estimate for Goldstrike was announced in February 20181. The classified mineral resource estimate is quoted at a cut-off grade of 0.25 grams per tonne gold and consists of and an indicated resource of 865,000 ounces of gold at an average grade of 0.54 grams per tonne gold (49,553,000 tonnes) and an inferred resource of 274,000 ounces of gold at an averge grade of 0.52 grams per tonne gold (16,443,000).
The Goldstrike Resource estimate was subsequently restated to reflect a cut-off grade of 0.20 g/t Au (compared to 0.25 g/t Au) as a result of economic considerations discussed in the PEA and now consists of: an indicated mineral resource of 925,000 ounces of gold at an average grade of 0.50 g/t Au (57,846,000 tonnes); and an inferred mineral resource of 296,000 ounces of gold at an average grade of 0.47 g/t Au (19,603,000 tonnes)2. The effective date for the data used in the resource estimate remains February 8, 2018, and all other parameters remain the same.
1 See the “Independent Technical Report and Resource Estimate for the Goldstrike Project, Washington County, Utah, USA” effective February 8, 2018 and signed March 21, 2018 authored by Independent Qualified Persons David Rowe, CPG, of SRK Consulting (Canada) Inc., James N. Gray, P.Geo, of Advantage Geoservices and Gary Simmons, MMSA of GL Simmons Consulting LLC, and is in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects. The report is available under the Company’s profile at www.sedar.com and is also available on the Company’s website at www.libertygold.ca.
2 See the “Preliminary Economic Assessment and Independent Technical Report for the Goldstrike Project, Washington County, Utah USA”, effective February 8, 2018 and dated July 16, 2018 co-authored by Independent Qualified Persons Bob McCarthy, P.Eng. Valerie Sawyer, SME, David Rowe, CPG and Neil Winkelmann, FAusIMM of SRK Consulting (Canada) Inc.; Gary Simmons, MMSA of GL Simmons Consulting, LLC; James N. Gray, P.Geo. of Advantage Geoservices Ltd; George Lightwood, SME, Russell Browne, P.E. and Michael Bidart, P.E. of Golder Associates Inc..
Goldstrike Preliminary Economic Analysis
A PEA at Goldstrike was published on July 10, 2018 providing a strong, base-case economic scenario upon which to expand the scope and scale of the project with ongoing drilling. The PEA confirms the potential for a modest capital intensity, low operating cost, open-pit, run-of-mine, heap-leach operation, with a 7.5-year mine life and highly attractive economics.
The PEA is preliminary in nature and includes inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that PEA results will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Important project metrics are presented in the following tables:
| Assumptions | |
| Gold Price | $1,300/oz |
| Production Profile | |
| Total Tonnes of Mineralized Material Mined and Processed | 59.3 million tonnes |
| Total Tonnes Waste Mined | 70.6 million tonnes |
| Head Grade | 0.48 grams per tonne (“g/t”) |
| Mine Life | 7.5 years |
| Tonnes per Day Mineralized Material Mined | 22,500 tonnes per day |
| Strip Ratio (Waste: Mineralized Material) | 1.2:1 |
| Average Gold Recovery | 78% |
| Total Gold Ounces Mined | 915,516 troy ounces (“oz”) |
| Total Gold Ounces Recovered | 713,000 oz |
| Average Annual Gold Production | 95,000 oz |
| Peak Annual Gold Production | 117,855 oz |
| Unit Operating Costs | |
| Life of Mine (“LOM”) Average Cash Cost1 | $642/oz |
| LOM Average Adjusted Cash Cost2 | $675/oz |
| LOM Cash Cost plus All-in Sustaining Cost (“AISC”)3 | $793/oz |
| Project Economics | |
| Royalties (estimate; royalties differ slightly by location and gold price) | 2.50% |
| Pre-tax NPV5% / After-Tax NPV5% | $176.2 million/$129.5 million |
| Pre-tax IRR/ After-Tax IRR | 34.8%/29.4% |
| Undiscounted Operating Pre-Tax Cash Flow/After-Tax Cash Flow | $259.3 million/$195.5 million |
| After-Tax Payback Period | 2.3 years |
1Includes mining cost, mine-level G&A, leaching and refining cost; 2Includes the above plus royalties; 3Includes the above plus sustaining and closure costs.
| Capital Requirements | Initial | LOM |
|---|---|---|
| Mining Capital | $23.50 million | $61.30 million |
| Total Infrastructure Capital | $31.40 million | $35.10 million |
| Total Processing Capital | $48.30 million | $68.40 million |
| Closure Costs | - | $20.00 million |
| Owners Costs | $10.00 million | $10.00 million |
| Total Capital Costs | $113.20 million | $194.80 million |
The PEA Study utilizes open pit mining with mine planning based on economic pit shells generated by mine planning software. Mine production is planned at 22,500 tonnes per day or 8.2 million tonnes per year of leach feed (mineralized) material. With an average waste to leach feed material strip ratio of 1.2 to 1, the average mining rate is approximately 50,000 tonnes per day of leach feed and waste material. The open pit mining at Goldstrike was designed utilizing an owner-operated, conventional mine fleet of front-end loaders and trucks.
The PEA examines the effect on NPV5% of up to a 40% increase or decrease in capital and operating expenditures. NPV5% is strongly influenced by the price of gold. The following tables show the effect of gold price on the IRR and NPV. The base case is shaded grey.
| Post-tax IRR in % | Gold Price/oz | |||||
| $900 | $1,100 | $1,300 | $1,500 | $1,700 | ||
| Operating Cost | -40.0% | 19.5% | 32.9% | 44.5% | 55.2% | 64.9% |
| -20.0% | 9.2% | 24.6% | 37.3% | 48.5% | 58.9% | |
| 0.0% | -3.7% | 15.2% | 29.4% | 41.5% | 52.4% | |
| 20.0% | N/A | 3.8% | 20.7% | 34.0% | 45.6% | |
| 40.0% | N/A | -13.3% | 10.5% | 25.8% | 38.3% | |
| Base Case NPV5% of $129.5M | Gold Price/oz | |||||
| $900 | $1,100 | $1,300 | $1,500 | $1,700 | ||
| Capital Costs | -40.0% | $21.4 | $102.6 | $183.7 | $264.7 | $344.8 |
| -20.0% | ($6.5) | $75.5 | $156.6 | $237.7 | $318.7 | |
| 0.0% | ($35.2) | $48.1 | $129.5 | $210.6 | $291.7 | |
| 20.0% | ($67.7) | $20.4 | $102.3 | $183.5 | $264.6 | |
| 40.0% | ($101.4) | ($7.8) | $74.8 | $156.4 | $237.5 | |
Activities since the PEA was published
Phase 2 metallurgical drilling and column testing provided additional support for a simple heap leach mining scenario. Gold extractions from 29 column tests from holes drilled in the western and northern portions of the deposit were rapid and >80% of the leachable gold was extracted within 10 days, with final column leach gold extractions ranging up to 95%. The Phase 2 metallurgical testing brings the total number of oxide column tests for the property to 49. Phase 3 metallurgy includes an additional 21 metallurgical samples that are currently in progress.
The 2018 and 2019 RC drill programs demonstrated that mineralization in the resource model is open to infill and extension. Preliminary work is currently underway to update the Goldstrike resource estimate, incorporating drill data from 2018-2022.
The 2022 RC drill program focused on infill drilling to upgrade Inferred blocks in the resource model to Indicated, and step-out drilling in areas that are still open for expansion.
Outlook
At Goldstrike, our 2023 budget totals $1.755 million, with our goal to advance metallurgical, geotechnical and hydrologic studies. An updated resource study will also be completed. The intent is to complete these key resource and engineering programs this year, in preparation for the commencement of a formal pre-feasibility study in 2024, followed by a mine plan of operations permit submission.
Liberty is closely monitoring the 2023 Utah State Legislative actions as they pertain to the proposed land exchange between the Utah State Institutional Lands Trust Administration (“SITLA”) and the Federal Government. This land exchange proposes to exchange up to 130,000 acres of SITLA lands within the current Bears Ears National Monument Boundary for federal lands (mostly BLM) throughout the State of Utah. The Goldstrike property would be included in this exchange, transferring ownership of mineral right from the BLM to the State. If this land exchange proceeds it would significantly improve permitting timelines as the State approval process is much more streamlined than the Federal NEPA process.
The 2023 budget includes funds for:
- An extensive hydrology program including drilling two test wells in an effort to identify additional water resources near the mine area.
- Completion of an agreement with the local water authority for a water lease and cooperative funding of the water study.
- Completion of the on-going metallurgical testing.
- Variability composites for 10 Sonic Drill samples from the historic leach pads and waste dumps.
- Variability composites for 11 surface bulk samples taken from throughout the main deposit area.
- Geotechnical data acquisition through completion of an updated structural model, additional rock strength testing and pit fracture mapping.
QUALIFIED PERSON
Peter Shabestari, P.Geo., Vice-President Exploration, Liberty Gold, is the Company's designated Qualified Person for this news release within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and validated that the information contained in the release is accurate.
Cautionary Note Regarding Goldstrike PEA:
The Preliminary Economic Assessment at Goldstrike (“PEA”) is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves at this time, and as such there is no certainty that the preliminary assessment and economics set forth in the PEA will be realized. The authors of the Technical Report believe that Goldstrike should be taken to the next level of engineering study and economic assessment, typically a Pre-Feasibility Study. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Further information on the Goldstrike Project can be found in the NI 43-101 technical report entitled “Preliminary Economic Assessment and Independent Technical Report for the Goldstrike Project, Washington County, Utah USA”, effective February 8, 2018 and signed July 16, 2018 prepared by SRK Consulting (Canada) Inc., of Vancouver, British Columbia (“SRK”), Golder Associates Inc. of Reno, Nevada (“Golder”), Kappes Cassiday and Associates of Reno, Nevada (“Kappes”), Advantage Geoservices of Osoyoos, British Columbia and GL Simmons Consulting LLC of Larkspur, Colorado. Both of these documents are filed under Liberty Gold’s Issuer Profile on SEDAR at www.sedar.com