This Preliminary Economic Assessment reports updated mineral resource estimates and processing design for the Gold Springs gold-silver project on the Nevada-Utah border.
Report context
The Gold Springs Project is an advanced exploration-stage gold project located along the Nevada-Utah border in western Iron County, Utah, and eastern Lincoln County, Nevada. This technical report, effective May 1, 2020 and issued June 22, 2020, was prepared for Gold Springs Resource Corporation. The report incorporates results from 2017 and 2019 drill programs and presents updated mineral resource estimates, metallurgical testwork results, and a conceptual processing design as part of a Preliminary Economic Assessment.
Processing route
Process overview
The recovery methods section describes a conceptual processing flowsheet comprising crushing, heap leaching, and a Merrill-Crowe plant. The conceptual design includes a crushing circuit, heap leach pad, and solution collection and processing facilities.
Crushing circuit
The conceptual flowsheet includes a crushing circuit to reduce material to specified size ranges prior to placement on the heap leach pad. The economic analysis considers two material streams: crushed ore and run-of-mine (ROM) ore, each with different cutoff grades and recovery assumptions.
Heap leach circuit
The conceptual heap leach pad design includes a liner system, solution collection system, leak detection and recovery system, and solution storage facilities. The design incorporates a storm pond, pregnant leach solution (PLS) pond, and barren tank. The liner design specifies multiple layers for containment.
Merrill-Crowe plant
The conceptual design includes a Merrill-Crowe plant for gold and silver recovery from pregnant solution. A schematic of the Merrill-Crowe system is provided in the report.
Testwork background
A series of preliminary metallurgical testwork programs were completed on the Grey Eagle and North Jumbo resources. The work consisted of gravity concentration followed by bottle roll cyanidation of gravity tailings, cyanide extraction from bottle roll tests on drill cuttings, small column tests of trench samples and drill core, and large column tests from North Jumbo drill core.
The gravity/cyanide tests produced gold cyanide recoveries ranging from 35% to 95%, with an average of 76%. Combined cyanide and gravity recoveries were all greater than 91% and averaged 97%. Between 2% and 57% of total gold recovered was from the gravity circuit.
Bottle roll leach tests on RC drill cuttings ground to 74 microns yielded average gold recoveries for North Jumbo and Grey Eagle of 85% and 93%, respectively. Silver extractions were 78% and 53%, respectively.
Additional bottle roll leach tests on coarser RC cuttings produced average gold extraction from Grey Eagle of 71% (range: 38% to 83%) for P80 of 0.07 to 0.34 inches and 88.5% (range: 88% to 89%) from North Jumbo for P80 of 0.03 to 0.14 inches. Silver extractions averaged 21% for Grey Eagle and 54% for North Jumbo.
Column testwork 2015
Six column tests were conducted using 9.5-mm crushed material from Grey Eagle trench samples (3 samples) and core from North Jumbo drill hole J-11-001C (3 samples). Material was subjected to cyanide leach tests and sampled at approximately 7-day intervals for 129 days. Recoveries ranged from 63% to 87% gold and 9% to 23% silver for Grey Eagle, and 56% to 92% gold and 37% to 58% silver for North Jumbo.
Column testwork 2016
Additional large column testing was completed with material grades varying from 1.09 g/t to 0.23 g/t gold. Material was crushed to a P80 of ¾ inches and leached over an extended time frame with rest periods included. A high cyanide dosage was employed to enhance silver extraction.
Table 1-1 from the report shows final extractions for the 2016 large column testing:
| Column | 43-day Gold % | 43-day Silver % | 84-day Gold % | 84-day Silver % | 282-day after rest Gold % | 282-day after rest Silver % | Head Gold g/t | Head Silver g/t |
|---|---|---|---|---|---|---|---|---|
| 1 | 90.1 | 25.3 | 90.6 | 28.4 | 94.3 | 34.3 | 1.09 | 24.3 |
| 2 | 62.5 | 35.4 | 62.5 | 43.3 | 66.9 | 53.4 | 0.54 | 20.6 |
| 3 | 76.8 | 39.9 | 76.8 | 48.0 | 81.9 | 59.8 | 0.23 | 11.9 |
Project website: https://goldspringsresource.com/
Project website: https://en.wikipedia.org/wiki/Gold_Springs_Resource
The leach sequence included 84 days of leaching followed by a 35-day rest, followed by 44 days of leaching, followed by a second rest period of 90 days, followed by a further 29 days of leaching. Gold recoveries increased several percent after the rest period, and silver recoveries increased significantly. Approximately 90% of gold recovery was achieved in the first 12 to 18 days.
No testing has been conducted on run of mine size materials.
Proposed design recovery assumptions
For the economic analysis, the report uses gold crushed and ROM recoveries of 73% and 40% respectively, and silver crushed and ROM recoveries of 40% and 20% respectively. These recovery assumptions are design parameters used in the conceptual economic model.
Static bucket test results
Static bucket test results are reported in the metallurgical testing section.
Recommended metallurgical variables
The report includes a section on recommended metallurgical variables for future work. The recommendations section notes that additional column testing on the four resource areas will be necessary to advance the project. Core from South Jumbo, North Jumbo, Thor, and Grey Eagle should be collected for test columns, and sampling and testing should be designed to provide better spatial and grade representation across the deposits and include heap leach testing (columns) across a wider variety of material sizes.
Key reported parameters
| Parameter | Value | Basis |
|---|---|---|
| Gold recovery – crushed ore | 73% | Design assumption for economic model |
| Gold recovery – ROM ore | 40% | Design assumption for economic model |
| Silver recovery – crushed ore | 40% | Design assumption for economic model |
| Silver recovery – ROM ore | 20% | Design assumption for economic model |
| Gold payable | 98% | Design assumption |
| Silver payable | 95% | Design assumption |
| Gold price | $1,450/oz | Design assumption for economic model |
| Silver price | $16/oz | Design assumption for economic model |
| Crushing cutoff grade – Base Case | 0.20 g/t Au | Selected scenario (Case 3) |
| ROM cutoff grade – Base Case | 0.15 g/t Au | Selected scenario (Case 3) |
| Column test gold recovery range – Grey Eagle | 63% to 87% | 2015 testwork, 9.5mm crush |
| Column test gold recovery range – North Jumbo | 56% to 92% | 2015 testwork, 9.5mm crush |
| Large column gold recovery – Column 1 (282 days) | 94.3% | 2016 testwork, ¾ inch crush |
| Large column gold recovery – Column 2 (282 days) | 66.9% | 2016 testwork, ¾ inch crush |
| Large column gold recovery – Column 3 (282 days) | 81.9% | 2016 testwork, ¾ inch crush |
| Average gold recovery – bottle roll (74 micron) North Jumbo | 85% | Historical testwork |
| Average gold recovery – bottle roll (74 micron) Grey Eagle | 93% | Historical testwork |
| Average combined gravity/cyanide recovery | 97% | Historical testwork |
| Measured Mineral Resource – total (pit constrained) | 17,120,000 tonnes at 0.56 g/t Au | May 2020 estimate, $1,600/oz Au pit |
| Indicated Mineral Resource – total (pit constrained) | 18,537,000 tonnes at 0.51 g/t Au | May 2020 estimate, $1,600/oz Au pit |
| Inferred Mineral Resource – total (pit constrained) | 5,634,000 tonnes at 0.49 g/t Au | May 2020 estimate, $1,600/oz Au pit |
| After-tax NPV5 – Base Case | $153,618,000 | Economic model, Case 3 |
| After-tax IRR – Base Case | 38.9% | Economic model, Case 3 |
| Initial capital – Base Case | $83,552,000 | Economic model, Case 3 |
| Payback period – Base Case | 2.9 years | Economic model, Case 3 |
| Life of mine – Base Case | 8 years | Economic model, Case 3 |
Technical qualifications
This PEA is preliminary in nature and 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 under National Instrument 43-101. Readers are advised that there is no certainty that the results projected in this preliminary economic assessment will be realized.
No testing has been conducted on run of mine size materials.
The economic analysis uses a contract mining option.
The Qualified Persons responsible for the preparation of this Technical Report are Terre Lane, Kurt Katsura, and Todd Harvey.
Source: Gold Springs Project , 2020 Technical Report, effective May 1, 2020, issue date June 22, 2020, prepared for Gold Springs Resource Corporation. Relevant sections include Mineral Processing and Metallurgical Testing (Section 13), Recovery Methods (Section 17), Economic Analysis (Section 22), and Summary (Section 1).
