The South Orogrande Projects are located in the greater Elk City mining district of north-central Idaho which has produced more than one million ounces of gold, dominantly from placer operations1, and hosts several known historic resources including at Endomines Inc’s Friday mine, currently in production. In April 2020 EMX has executed an option agreement for the South Orogrande gold project in Idaho with Gold Lion Resources (NV) Inc., a subsidiary of Gold Lion Resources Inc. (CSE: GL; FWB: 2BC) (“Gold Lion”). The Agreements provide for share and cash payments to EMX, as well as work commitments during Gold Lion’s earn-in period for each given Project, and upon earn-in, a 3.5% net smelter return (“NSR”) royalty, annual advanced royalty payments, and milestone payments. See Company news release dated April 7, 2020 for more details.
The South Orogrande Project lies 16 kilometers south of Erickson Ridge and covers approximately 11.5 kilometers of strike length along the Orogrande Shear Zone. The Project is adjacent to, and along strike, of Endomines Inc’s Friday deposit which has historic oxide, open pit constrained measured and indicated resources at a 0.45 g/t cutoff of 20.1 Mtonnes averaging 1.00 g/t gold (647 Koz Au contained), and inferred resources of 20.8 Mtonnes averaging 0.88 g/t gold (590 Koz Au contained)2. Endomines is currently developing a higher grade, underground historic resource, and recently commissioned the Friday mine’s processing facilities3.
EMX’s primary target at South Orogrande is shear-hosted orogenic-style, as well as intrusion-related gold mineralization analogous to the Friday mine. At South Orogrande, historic surface exploration identified multiple kilometer-scale, cohesive gold in soil anomalies (2 x 5 km and 1.5 x 3 km) with coincident geophysical anomalies in areas of minimal outcrop and widespread placer gold occurrences. Reconnaissance mapping and rock chip sampling by EMX within these areas identified a number of high-grade historic prospects with 27 samples averaging 1.6 g/t gold, and assaying from 0.001 - 14.8 g/t gold. EMX has located five closely-spaced, less than 100 meter deep holes from the mid-1980s that were drilled within a small portion of one of the soil anomalies, with no record of any additional drilling across the Project area.
The Friday deposit’s lower grade, open pit constrained historic resource from 2013 (see reference2) was based upon US$1500/oz gold and 85% recovery applied to an inverse distance interpolated block model. A more recent historic resource focused on a higher grade, underground scenario at a 3.4 g/t gold cutoff that yielded measured and indicated resources of 462 Ktonnes @ 6.54 g/t Au (containing 97,200 oz Au) and inferred resources of 296 Ktonnes @ 4.91 g/t Au (containing 47,600 oz Au) which was based upon US$1300/oz gold and 94% recovery applied to an inverse distance interpolated block model4. EMX cannot verify the 2013 or 2017 historic resources, and a qualified person has not done sufficient work to classify the historic resources as current mineral resources. EMX is not treating the historic estimates as current mineral resources. It is EMX’s opinion that both the open pit and underground historic resources could be brought current with updated metal prices, cost estimates, and process recoveries, as well as confirmation drilling. An important step forward for Endomines to update the open pit resource was its acquisition of the open pit mining rights in late 20195.
The adjacent and nearby historic resources, deposits and mines referenced provide geologic context for the Projects, but this is not necessarily indicative that the Projects host similar tonnages or grades of mineralization. Based upon EMX’s independent field work, including geologic mapping and surface sampling, the historic resources and exploration results referenced are considered to be reliable and relevant.
1 Greater Elk City District Production: USGS: Koschmann and Bergendahl, 1968. Principal Gold Producing Districts of the United States. Professional Paper 610.
2 NI 43-101 Technical Report, Idaho Gold Project. Prepared by Geosim for Premium Exploration Inc. 4/8/13.
3 See Endomines news release dated February 4, 2020.
4 See Endomines news release dated March 3, 2020 and Independent Expert’s Report from AMC Consultants to Endomines AB dated January 8, 2018.
5 See Endomines news release dated December 3, 2019.
Historic soil data from Velocity Minerals Ltd. Press Release, February 29, 2012, and Premium Exploration Press Release, 9/10/2012.