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Limo Butte

History

The Limousine Butte Project has a long history of exploration activity dating back to the 1940’s and 50’s when the area was explored for antimony leading to the discovery of gold mineralization at Golden Butte and later Resurrection Ridge. During the years 1997 to 2019 McEwen and its predecessor US Gold (Previously Nevada Pacific Mining) compiled the historical data including extensive geologic mapping, soil and rock geochemical sampling, geophysical programs, and drill data into a digital database. The historical drilling of 887 holes including both RC and core holes totalling approximately 120,000 meters is included in the database.

In 2009 Telesto produced a NI 43-101 compliant resource for three of the main drilled targets:  Resurrection Ridge/ Golden Butte, Cadillac Valley and Coffee Mug. In addition to those three areas McEwen has defined additional areas using geochemical surveys, geophysical surveys and geological mapping at the Limousine Butte Project potentially favorable to gold targets such as EPEX, Crashed Air Plane, and Ticup.

Historical mining was conducted on the eastern flank of the Cherry Creek Range since gold was discovered in Egan Canyon in 1861.  Producing a small amount of gold, and later silver, the district became known as Gold Canyon.   In 1872, silver, and later tungsten, deposits were discovered a few kilometers north in Cherry Creek Canyon, where the Cherry Creek district was organized. Larger production from Cherry Creek caused the Gold Canyon district to be included in the former.  Mining activity decreased in 1884, but continued through 1958.   In total, 1.5 million ounces of silver and 32,000 ounces of gold were produced from the district over that period (Hose et al., 1976).

Silver King, and Pacific Silver, Amselco, Teck and Chevron began exploration in the Golden Butte area in the mid-to-late-1970’s.  Their early efforts involved geochemical sampling, geologic mapping and drilling.  The claims explored by these companies became the Golden Butte property, which was wholly owned by the Alta Bay Venture (ABV) by the mid-1980’s.

ABV began mining activity at Golden Butte with pre-stripping operations in July, 1988. The first bar of gold was poured in June, 1989 (Armbrust et al., 1989).  Mining continued until 1990. The leach pads and collection ponds were reclaimed in 2004 and 2005.

US Gold, McEwen’s predecessor contracted Telesto to undertake the preparation of a Technical Report on the Limousine Butte property in 2009. The aim of the report was to focus on the three primary exploration areas within the larger Limousine Butte property. Specifically this included Resurrection Ridge/ Golden Butte, Cadillac Valley and Coffee Mug.  The result of Telesto’s resources estimation is presented in the Historical Resource section.

Location

Geology

The deposits of the Limousine Butte Project are Carlin-type deposits, sediment-hosted, with disseminated gold.  Gold is commonly micron-sized, and is associated with hydrothermal alteration of carbonate host rocks.  Alteration commonly consists of removal of carbonate and addition of silica.  Trace elements associated with Carlin deposits include arsenic (As), antimony (Sb), mercury (Hg), thallium (Tl) and barium (Ba).

The Limousine Butte Project is located within the Basin and Range physiographic province of east-central Nevada. Paleozoic rocks deposited as sediments on the continental shelf, on what was then the western edge of North America and was later covered, and intruded, by Tertiary volcanic rocks.

Compressional faulting of the region during the Cretaceous and early Tertiary Sevier and Larminde orogenies resulted in the formation of generally north-south trending folds and thrust faults.

The Great Basin topography of the region is a result of crustal extension during the middle Tertiary forming the current north-south trending mountain ranges separated by alluvium-filled valleys. The mountain ranges consisting of Precambrian to Mississippian-age sedimentary rocks are folded and titled that have been uplifted on steeply dipping normal faults. This Tertiary extension also caused localized volcanism resulting in mafic to felsic flows capping some of the earlier sedimentary rocks.

The Southern Cherry Creek Mountains dominate the project area landscape. The Cherry Creek Mountain Range is underlain by of a package of sedimentary rocks that strikes along the north-south-trending range, and dips to the west at 25-30 degrees. Rocks range in age from the Ordovician Pogonip limestone to the Pennsylvanian Ely Formation. Tertiary jasperoids, volcanic and intrusive rocks also occur, and Tertiary and Quaternary alluvium fills the valleys and low areas.

The sedimentary sequence is overlain by Tertiary rhyodacite tuff and intruded by rhyodacite sills and dikes.   These dikes are probably related to the Cherry Creek Stock (32.8-36.1 Ma). A number of small andesite-lamprophyric dikes have been noted in the Limousine Butte area.

Mineralization

Mineralization at Resurrection Ridge and Cadillac Valley is elevated in antimony (Sb), mercury (Hg) and arsenic (As), and is largely contained within silicified host rocks.   Mississippian and Devonian calcareous shales have been hydrothermally altered; carbonate has been removed, followed by several stages of silica deposition. Gold was deposited during the latter stages of jasperoid development. Most sulfides have been converted to limonite. However, drill samples and select rock chip samples have contained pyrite, arsenopyrite, cinnabar and stibnite.  (Everson et. al, 2005)

Mineralization is localized where northwest-trending structures intersect previously fractured rock along the northeast-trending Black Metals and Exchequer faults. It is believed that the gold-bearing hydrothermal fluids travelled along the northwest-trending structures. Where the fluids encountered permeable rocks, such as fractured jasperoid, the gold was deposited along fractures. Gold mineralization was preceded by a minimum of two episodes of brecciation and silicification (Armbrust et al., 1989). The mineralized breccia is composed of silicified fragments in a matrix of massive silica.  Pyrite is locally present in the matrix with minor stibnite, stibiconite and barite.

Early Jasperoids occurring along the NE zones are offset by NW trending faults creating channel ways for mineralization within in the heavily fractured siliceous rocks.  The distribution of the jasperoids can be seen to lie at the intersections the NE-trending Exchequer and NW-trending faults. At the intersection of the two fault trends, alteration and mineralization is strongest.  Brittle jasperoid within the faults is strongly fractured, rendering it highly permeable to mineralizing fluids.  Ductile rocks (shale) between the two faults are locally argillically altered and intensely deformed.   Some of the ductile rocks contain abundant carbonaceous material (Armbrust, et al., 1989). A northwest- trending fault forms the southwest boundary of the Golden Butte deposit.

Historical Resource

The historic resource estimate is believed to be reliable and relevant and professionally-calculated under the assumptions and with the software tools available in 2009.  The current resource categorizations of Measured Indicated and Inferred were used. Other information relating to assumed metallurgical recoveries and costs are not known.  The gold recovery method assumed was heap leach.  Gold prices in 2009 averaged US$980/ounce (Source: World Gold Council).  Telesto used a cutoff grade of 0.411 g/tonne gold and a rock density of 2.48 tonnes/m3 for reporting the mineral resource for all areas.

A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources and Nevgold is not treating the historical estimate as a current mineral resource.

To upgrade the historic resources to a current resource would require additional drill data verification, and constraint of the grade block model within an open pit grade shell using updated gold prices.

Resource Area

Category

Tonnes

(000’s)

Au g/t

Au Oz

Resurrection Ridge

Measured

5,874

0.891

168,350

Resurrection Ridge

Indicated

2,263

0.477

34,730

Cadillac Valley

Indicated

1,442

0.827

38,000

   Total M & I

M & I

9,579

0.784

241,080

         

Coffee Mug

Inferred

2,255

0.699

50,700

Figures

NevGold Corp.

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