Lucky Shot Project
Lucky Shot is located approximately 75 miles (121 km) north of Anchorage, Alaska, in the Willow Creek mining district. Historically, this area is the third-largest lode-gold producing district in Alaska, having produced 667,000 oz of gold from the early 1900s until 1942 when mining was halted by World War II. The contiguous project claim block includes 76 patented and 62 State of Alaska lode mining claims covering a total area of approximately 8,700 acres (3,520 hectares). Lucky Shot is reported to be free milling with greater than 80% recovery by gravity alone and recoveries up to 95% from gravity and flotation processing.
Previous drilling campaigns identified a significant unmined up-dip extension of a high-grade gold zone in a faulted vein segment called the Coleman zone. Miranda Gold completed a 43-101 compliant resource estimate for the Upper Coleman Deposit which identifies a Measured and Indicated Resource of 62,100 troy ounces at an average grade of 24.6 grams per tonne. An additional 4,100 troy ounces are Inferred. A high-grade gold intercept, (0.5m) at 2.3 oz Au/t (77.2 g Au/t) sixty-five feet below the Hogan stope, a historic producer of 252,000 ounces, also indicates gold potential for an extension of this mineralization. Additionally, the project indicates potential for extension and discovery of northeast raking ore-shoots both up and down-dip of the immediate area of the mines. The vein also continues to the east and the west in other faulted vein segments. Limited drilling to the east intersected values in a blind down-dropped vein segment up to 1.6 oz Au/t (55 g Au/t) at 820 ft (250 m) below the workings of the district.
In March 2016, an updated Canadian NI43-101 standard mineral resource estimate was completed on the Project by Hard Rock Consulting, LLC ("HRC") resulting in 121,500 ounces of gold contained in 206,500 tonnes grading an average of 18.3 grams per tonne ("g/t") gold classified as measured and indicated mineral resources. An additional 35,150 ounces of gold contained in 59,000 tonnes grading an average of 18.5 g/t gold are classified as inferred mineral resources, all based on a 5.0 g/t cutoff.
In July 2016, a NI 43-101 preliminary feasibility study (the "PFS") was completed by HRC resulting in 93,274 ounces of gold contained in 207,000 tonnes grading an average of 14.0 g/t, classified as proven and probable mineral reserves. The PFS includes a mine plan and cost estimate with annual gold production of approximately 25,000 ounces of gold per year (after pre-production and build-up) at a underground mining rate of 200 tonnes per day. The mine plan includes a total of 87,612 ounces gold contained in 174,500 tonnes and a recovery plant head grade of 15.6g/t at an all-in sustaining cash cost of $675.00 per ounce of gold produced. The gold recovery plant utilizes gravity-only gold recovery methods, without chemical treatment, and produces no toxic tails. The plant is designed to capture coarse visible gold contained in the mesothermal quartz vein material by crushing and screening the material into multiple size fractions and then separating the gold using jigs, spirals and tables.
Past historical on-site gold production occurred prior to World War II and records show that gravity methods achieved some 89% recovery. Independent test work completed on the quartz material as part of the PFS confirmed gravity-only gold recovery. Historical production records indicate that between 1918 and 1942 some 667,000 ounces of gold were produced from the project area at an average grade of 1.2 oz/ton (37.5 g/t). Historical records, geologic evidence and recent drilling also indicate that the gold is deposited in deep-seated mesothermal quartz veins that plunge at about 30 degrees to depth with continuation of mineralization to at least the mines' deepest points. The Project has had no down-dip exploration.
The existing Project infrastructure includes approximately 500 meters of underground access via the Enserch adit; lessor-owned man-camp, facilities and used equipment to support mining; and road access. The Project also has a 30-acre mill site on private land adjacent to line electrical power and we plan to transport the high-grade ore from the mine to the plant via a 26-mile road using 27-ton highway haul trucks.
The development plan is to initiate gold production based on the PFS and not based on a full feasibility study of the mineral reserves demonstrating that level of economic and technical viability. Readers are cautioned that there is increased uncertainty and higher risk of economic and technical failure associated with such production decisions.