Corvus drills toward Mother Lode PEA in Nevada

Corvus Gold (TSX: KOR; US-OTC: CORVF) is drilling its wholly owned Mother Lode gold project in Nevada’s Walker Lane gold belt to establish a resource estimate and preliminary economic assessment (PEA) later this year.

Although International Tower Hill Mines (TSX: ITH; NYSE-AM: THM) spun out Corvus in 2010 to handle its North Bullfrog gold-silver project, Corvus acquired Mother Lode in June 2017 — and it’s been the company’s focus ever since.

Mother Lode was mined in the 1980s, producing 34,000 oz. gold at an average grade of 1.8 grams gold per tonne. Low gold prices forced the mine to close and the area hadn’t seen any exploration till now.

Corvus acquired the 0.004 sq. km property from Goldcorp (TSX: G; NYSE: GG) in June 2017.

“We’d had our eye on this for several years,” Corvus president and CEO Jeffrey A. Pontius says in an interview. “It’s a unique style of mineralization that we wanted to pursue.”

A district map of Corvus’ Nevada properties. Credit: Corvus Gold.

He says the property is comprised of a sulphide zone between two oxide zones. Gold mineralization dates to the Miocene and is hosted in shallowly dipping tuffaceous volcanic sediments and sills, as well as underlying Paleozoic limestones of the Roberts Mountain formation.

“The beauty of it is that it’s all open pit, so it’s relatively straightforward from a mining standpoint,” Pontius says.

By the end of June 2017, Corvus had begun permitting. It started drilling in September, first validating the historical resource of 8.5 million tonnes grading 1.6 grams gold for 433,000 oz. gold, and then expanding it.

To date there are 172 holes on the property. The latest exploration program, which ended in mid-December, encompassed the drilling of 12,800 metres across 42 holes. Highlights include 96 metres from 120 metres downhole grading 1.35 grams gold and 1.24 grams silver, and 30 metres from 148 metres downhole at a 45-degree dip grading 2.54 grams gold and 1.92 grams silver.

“We’re not looking at anything that would be deep enough for underground mining at this point,” Pontius says. “Although we are starting a series of deeper holes looking for the feeder system to this relatively large body.

“Right now we’re projecting it to be somewhere in the neighborhood of 30 to 50 million tonnes — so it’s a big exploration target.”

Corvus intends to release its first resource estimate on Mother Lode in mid-2018. It will then complete a PEA that includes a combined mine plan for Mother Lode and North Bullfrog.

Mother Lode lies 150 km northwest of Las Vegas and 10 km east of Beatty. It’s 18 km of road from North Bullfrog.

Corvus is considering a central mill facility at Mother Lode. Pontius says there are roads on Bureau of Land Management ground that Corvus would connect with and use to move ore from Bullfrog to Mother Lode.

Corvus announced an expanded resource for North Bullfrog in October 2017. It increased the measured and indicated categories by 30% from the previous 2015 resource estimate.

In its study, Corvus will propose two phases of production. Phase one would involve a higher-grade ore mix predominantly processed by an oxide mill, but with some oxide heap-leach processing, to be mined over seven years. Phase two would feature heap-leach processing. Pontius says phase two would be scalable, with length dependent on gold prices and production desires.

Phase one accounts for 35 million measured and indicated tonnes at 0.8 gram gold and 4.86 grams silver for 904,000 oz. gold and 5.47 million oz. silver, while phase two would see 123 million measured and indicated tonnes mined at 0.22 gram gold and 0.65 gram silver for 855,000 oz. gold and 2.56 million oz. silver.

An aerial view of Corvus’ Mother Lode project in Nevada. Credit: Corvus Gold.

Pontius says Corvus has found other deep vein targets at North Bullfrog that could lead to “underground-type opportunities.” But for now, the focus is on Mother Lode.

“That’s where Corvus is spending its money right now — trying to assess the size and economic impact of this new discovery,” Pontius says.

He adds that the area where Corvus is in Nevada hasn’t been explored much over the last two or three decades, priming it for discoveries. With good infrastructure, it’s an attractive place to work for Pontius.

“Even though it has seen billions of dollars of exploration and people are frustrated with a low discovery rate in Nevada,” Pontius says, “there still are opportunities out here in unique situations where really ‘Class A’ projects can be found and developed, and moved forward.”

Since beginning its Mother Lode drill program, Corvus’ stock price has increased 113%. Shares are valued at $1.93 within a 52-week range of 60¢ to $1.99.

The company has a $201-million market capitalization.