US Snapshot: Eight companies on the move

With a long-standing history of mining, a developed regulatory regime and prospective geology, the United States is an attractive destination for companies looking to find and develop mineral deposits. Below, we present eight companies with assets in the country.

Americas Gold and Silver

Americas Gold and Silver (TSX: USA; NYSE: USAS) is a gold and silver producer with operations in the U.S. and Mexico. On January 11, the company’s Relief Canyon heap leach mine in Nevada declared commercial production. First gold was poured at the site in February 2020 with a full ramp-up expected by mid-May. Based on a July 2018 feasibility study, this site is expected to generate approximately 90,000 gold oz. annually over a six-year initial mine life, at all-in sustaining costs of around US$800 per ounce. Relief Canyon is largely unexplored – only 20% of the 117-sq.-km land package has been explored to date.

In Idaho’s Silver Valley district, Americas Gold and Silver has a 60% interest in a joint venture at the Galena silver complex (Eric Sprott holds a 40% stake in the JV, which was announced in late 2019). A US$20 million recapitalization plan is underway at this site, to upgrade infrastructure, add new mining equipment and develop additional stopes.

With an operating history of over 50 years, Galena has produced over 250 million oz. of silver. The property includes three shafts and two processing facilities. In the fourth quarter of 2020, Galena churned out 295,000 oz. of silver and 5.8 million lb. of lead (600,000 oz. of silver-equivalent), which represents a 100% increase over the 296,500 silver-equivalent oz. generated over the same period in 2019. Americas Gold and Silver is aiming to drive silver output from the complex to the 1.8 million oz. silver to 2 million oz. silver a year range by 2022.

Drill highlights, reported in January, from the first-phase exploration program at Galena included 2.9 metres of 1,017 grams silver per tonne and 1% copper (1,121 grams silver-equivalent) and 1.5 metres of 413 grams silver per tonne and 10.2% lead (786 grams silver-equivalent).

The company also holds the Cosala operations in Mexico’s Sinaloa state. A blockade has been in place at the site since last year. This property includes a processing facility, the San Rafael underground mine and several past-producing mines and mineralized showings.

In January, the company closed a $33.9 million bought deal financing.

Americas Gold and Silver has a $382.2 million market capitalization.

Bunker Hill Mining

Bunker Hill Mining (CSE: BNKR; US-OTC: BHLL) is working to deliver a preliminary economic assessment on a restart of the Bunker Hill mine, in the Coeur d’Alene mining district of northern Idaho, early in the second quarter of this year.

Based on an update from January, the PEA will assess the use of existing infrastructure to put the site back into production. Initial work suggests potential for “low up-front capital costs” with no major development or rehabilitation work required to access initial stopes and no dewatering needs. Toll milling could also help offset initial capital during the restart period. A two-year restart timeline is currently an option.

Mine planning is ongoing with a three-stage framework. The first would mine to the 11-level, targeting resources above the water table. Stage two would then target higher grade resources that extend to the 16-level, which could be accessed either through the shaft system or by developing a new decline. A final stage would mine to the 23-level, with either shaft or ramp access.

As part of its focus on ESG, the company is assessing underground processing and tailings deposition to minimize any disturbances on surface.

In December 2020, the company released initial drill results from the exploration program at Bunker Hill. The drill highlights included 0.9 metre of 349 grams silver, 20.6% lead and 1.4% zinc and 18 metres of 18.5 grams silver, 1.6% lead and 4.6% zinc. These drill results confirmed mineralization within levels above the existing resource boundary, which is expected to “materially increase the resource base for the preliminary economic assessment.” The 4,570-metre exploration program is focused on targets in upper levels of the mine, nearby existing   infrastructure.

In September, the developer released an initial inferred resource for its namesake mine. Estimated at 8.9 million tons (8 million tonnes) grading 1.27 oz. silver per ton (43.6 grams silver per tonne), 2.31% lead and 4.97% zinc, this inventory contains 11.2 million oz. of silver, 410 million lb. of lead and 880 million lb. of zinc.

The operation historically generated over 35 million tonnes between 1885 and 1991, grading 8.76% lead, 3.67% zinc and 55 grams silver per tonne.

Bunker Hill Mining has a $53.7 million market capitalization.

Corvus Gold

Corvus Gold (TSX: KOR; NASDAQ: KOR) holds the 90.5-sq.-km North Bullfrog and 36.5-sq.-km Mother Lode projects in Nevada’s Walker Lane trend.

In October, Corvus released the results of two preliminary economic assessments on standalone operations at the two properties. The studies first outline development of the ‘high margin’ North Bullfrog project, followed by a potential second operation at Mother Lode.

The North Bullfrog PEA suggested a 14-year, 43,300 tonne-per-day heap-leach operation with a grinding circuit for gravity gold recovery from one high-grade deposit. In its first seven years of operation, this project could generate 147,000 oz. annually at all-in sustaining costs of US$727 per ounce. With an initial capital cost of US$167 million, the after-tax net present value estimate for the project comes in at US$452 million, at a 5% discount rate, with a 47% internal rate of return. The study used a gold price of US$1,500 per oz. gold.

At Mother Lode, 10 km from North Bullfrog, a separate PEA outlined an eight-year, 19,600 tonne-per-day open pit mine, with a heap leach pad for the oxide mineralization and a biological oxidation mill for higher-grade sulphide mineralization. This operation would generate an average of 170,980 oz. annually. With all-in sustaining costs of US$677 per oz. in the first three years and an initial capital cost of US$406 million, the after-tax net present value estimate for this development stands at US$303 million, at a 5% discount rate and based on US$1,500 per oz. gold, with a 23% internal rate of return.

Mother Lode also features the Lynnda strip discovery, 2 km north of the Mother Lode deposit, made up of broad zones of oxide mineralization with several vein systems. Drill results reported in January from this zone included 111 metres of 0.8 gram gold per tonne and 52.6 metres of 1.39 grams gold. Drilling has traced oxide gold mineralization at Lynnda over a thickness of 300 metres.

Results from an initial reverse circulation hole, also reported in January, from the South Merlin target, approximately 500 metres west of the Lynnda Strip, included a 12.2-metre interval of 0.61 gram gold. Although this hole was stopped due to poor drill conditions, this intercept is interpreted as a connection to the Lynnda system, which would suggest a system width of 800 metres.

In the late 1980s, Mother Lode generated 34,000 gold oz. from material averaging 1.8 grams gold using heap leach gold recovery.

Corvus Gold has a $349.5 million market capitalization.

Fiore Gold

Fiore Gold (TSXV: F; US-OTC: FIOGF) is a U.S.-foucused gold producer. The company’s flagship asset is the Pan heap leach mine in Nevada. The mine lies on the Battle Mountain-Eureka gold trend and was re-started in September 2017.

In the last fiscal year (ended September 30, 2020), Pan produced 46,031 gold oz. at all-in sustaining costs of US$1,148 per ounce. This fiscal year (started October 1, 2020), the company expects to generate 44,000 to 47,000 oz. of the yellow metal at AISCs of US$1,125 to US$1,175 per ounce.

With a current nameplate capacity of 12,701 tonnes per day (14,000 tons) per day, Fiore sees potential to increase throughput to 15,422 tonnes (17,000 tons) per day. Based on a December resource and reserve update, Pan has a mine life reaching out to 2025, based on a 14,000 ton-per-day mining rate.

Measured and indicated resources at this site total 28.2 million tonnes grading 0.47 gram gold per tonne, for a total of 427,000 gold oz. with additional inferred resources of 3.4 million tonnes at 0.56 gram gold for a further 61,000 gold ounces. Fiore has also defined more than 10 exploration targets on the 43.2-sq.-km property.

Fiore also holds the federally permitted Gold Rock project, about 12 km southeast of Pan. Based on an April 2020 preliminary economic assessment, Gold Rock could be an open pit operation, sharing infrastructure and management with Pan. This project could generate an additional 55,800 oz. gold annually over a 6.5-year mine life, at all-in sustaining costs of US$1,008 per ounce. With a pre-production capital estimate of US$64.6 million, the after-tax net present value estimate for the development comes in at US$32.8 million, at a 5% discount rate and based on US$1,400 per oz. gold. A feasibility study for Gold Rock is underway and expected late this year.

January’s drill results from Gold Rock included 18.3 metres of 0.84 gram gold starting at 170.7 metres; 19.8 metres of 1.33 grams gold from 129.5 metres; and 12.2 metres of 1.75 grams gold starting at 147.8 metres.

In May, Fiore tabled an updated resource estimate for the Golden Eagle project, which lies within the Republic-Eureka mining district in Washington. Measured and indicated resources total 45.4 million tonnes grading 1.38 grams gold and 6.44 grams silver. Additional inferred resources feature 5.4 million tonnes, at 0.9 gram gold and 4.43 grams silver. Kinross’ (TSX: K; NYSE: KGC) 1,800-tonne-per-day Kettle River mill, on care and maintenance, is 10 km away from the project.

Fiore Gold has a $121.6 million market capitalization.

Nevada Copper

Nevada Copper (TSX: NCU; US-OTC: NEVDF) is focused on ramping up its Pumpkin Hollow underground copper mine in Nevada, 12 km outside of Yerington. The mine is expected to reach steady-state production of 5,000 tonnes per day by mid-2021.

In late December, the miner also completed the materials handling system for the main shaft – the milestone is expected to allow hoisting rates to increase to 5,000 tonnes per day (from 1,000 tonnes per day at the time of the update) once commissioning and ramp-up are completed. By the first week of January, with electrical and instrumentation components of the main hoist complete, the hoist operated at its full production speed. Lateral development for December also increased by 37% over the prior month.

In January, the company also closed a $38 million bought deal – US$5 million from the proceeds is expected to be used to fund a cost overrun facility for the ramp-up of Pumpkin Hollow. At the end of December, Nevada Copper closed an amendment to its US$115 million senior credit facility, with a US$15 million increase to the loan amount and a US$26 million deferral of debt service until 2023. At the time of the amendment, the company drew down the full amount of the loan increase.

Based on a 2019 prefeasibility study, a 13.5-year underground operation at Pumpkin Hollow would produce an average of 50 million lb. copper, 8,000 oz. gold and 150,000 oz. silver annually, at AISCs of US$1.96 per lb. copper. The resulting post-construction after-tax net present value estimate, at a 5% discount rate, is US$301 million, with a 25% internal rate of return.

The study also suggested a potential 19-year open pit mine, 4 km west of the underground site, which could extract an additional 350 million tonnes at 0.5% copper-equivalent over its life. With a pre-production capital cost estimate of US$672 million, this project would generate US$829 million in after-tax net present value, at a 7.5% discount rate, with a 21% internal rate of return.

Nevada Copper has a $253 million market capitalization.

NuLegacy Gold

NuLegacy Gold (TSXV: NUG; US-OTC: NULGF) is focused on exploration in Nevada’s Eureka county. The company’s 108-sq.-km Red Hill project includes the 7-sq.-km Rift Anticline target, with prospective Carlin-system geology. The property is at the intersection of the Battle Mountain trend with the Northern Nevada rift. The Rift Anticline is on trend, and adjacent to, the Pipeline, Cortez Hills and Goldrush Carlin-type gold deposits within the Nevada Gold Mines joint venture.

According to NuLegacy, the Rift Anticline target is analogous to the Goldrush project, 11 km to the northwest. Results of a geophysical survey completed over the anticline suggest several high-angle faults, intersected by low-angle thrust faults within the favourable Wenban5 formation. Gold is typically found in this stratigraphic horizon, around intersections of the two sets of faults.

Based on NuLegacy’s corporate presentation, the Rift Anticline target is approximately 6 km long, 700 to 1,200 metres wide, with an estimated thickness of approximately 175 metres for the Wenban5 formation.

In December 2020, NuLegacy announced details of the first four holes completed as part of an initial, 16-hole, 11,500-metre reconnaissance drill program at the Rift Anticline. Two of the holes returned “numerous intercepts of anomalous gold.” Assays for two holes are pending. All four intercepts hit high and low angle faults and splays within strongly altered sections of the Wenban5 stratigraphy. Once additional results are available, the explorer plans to update its geological model and vector in the next four to six holes for the site as part of its 2020-2021 work program.

Prior drilling – completed in 2018 and 2019 – at the Serena and Western Slope targets returned 8.7 metres of 16.9 grams gold and 5.1 metres of 9.6 grams gold,respectively. Serena is about 2,500 metres east of the Rift Anticline.

In January, the company closed a $12.5 million non-brokered private placement.

NuLegacy Gold has a $70.6 million market capitalization.

Revival Gold

Revival Gold (TSXV: RVG; US-OTC: RVLGF) is working to restart the Beartrack-Arnett gold project in Idaho. The company is looking to develop a first-phase open-pit heap leach operation within 58-sq.-km property, using existing infrastructure.

A November 2020 preliminary economic assessment for the project outlined an initial 12,000 tonne per day, seven-year heap leach mine producing an average of 72,000 gold oz. a year at all-in sustaining costs of US$1,057 per ounce. With a pre-production capital cost estimate pegged at US$100 million, the after-tax net present value estimate for the development comes in at US$88 million, at a 5% discount rate and based on US$1,550 per oz. gold, with a 25% internal rate of return.

The early-stage study looked at the mining of oxidized and partially oxidized mineralization. This oxide inventory represents less than a third of the total mineralized material at Beartrack-Arnett – the project also includes sulphide resources. Permitting is now underway ahead of a potential construction decision by the end of 2022.

Total measured and indicated resources at the project stand at 36.6 million tonnes grading 1.15 grams gold per tonne, for a total of 1.4 million gold oz. with additional inferred resources of 47.1 million tonnes at 1.08 grams gold for a further 1.6 million oz. of gold.

According to Hugh Agro, Revival’s president and CEO, the past-producing nature of the project should translate into shorter permitting timelines and lower the technical risks. Over the next two years, Revival plans to continue growing the Beartrack-Arnett resource base while it advances the heap leach development and evaluates the potential for a second-phase sulphide development at the site.

The known mineralized trend at the project extends for over 5 km, with an additional five to six km of unexplored strike. In January, Revival released final drill results from 2020 drilling in the Haidee target area; the program was aimed at upgrading and expanding resources. All of the 30 holes in the program hit near-surface oxide gold. Highlights include 28.3 metres of 0.93 gram gold per tonne and 48.5 metres of 0.86 gram gold. Haidee extends for over 600 metres of strike and projects for about 400 metres up-dip.

The Beartrack portion of the project operated as a 13,600 tonnes per day heap leach between 1994 and 2000, producing approximately 600,000 oz. of gold.

Revival Gold has a $49.8 million market capitalization.

Viva Gold

Viva Gold (TSXV: VAU; US-OTC: VAUCF) is advancing its road-accessible 35.6-sq.-km Tonopah gold project on western Nevada’s Walker Lane gold trend.

Results from a May 2020 PEA suggest a 6-year open pit heap leach development at the site. This mine would generate an average of 38,000 gold oz. annually, at all-in sustaining costs of US$1,075 per ounce. With an initial capital cost pegged at US$58 million, the after-tax net present value estimate comes in at US$36.3 million, based on US$1,400 per oz. gold and using a 5% discount rate, with a 22% internal rate of return.

With the PEA results in hand, Viva plans to advance the Tonopah asset through to a feasibility study and into the permitting stage.

In November 2020, Viva released the final assay results from an 11-drillhole reverse circulation program at Tonopah, which, according to President and CEO James Hesketh, showed that the mineral trend at Tonopah remains open. Highlights from the program included 29.5 metres of 0.7 gram gold (first announced in October 2020) and 9.8 metres of 2.7 grams gold (released in September 2020).

After receiving the RC results, Viva started a five-hole core drilling program at the site. After assay, the core samples will be used for metallurgical optimization, geotechnical analysis and environmental characterization. In December, consultants to the company completed a prefeasibility level geotechnical study.

On the exploration front, the company started a review last year of past exploration work completed on the west side of the property. Viva also re-reviewed historic rock chip sampling programs completed over the site. The sample assays are now being added to the project geological model. This year, Viva plans to use historic exploration data, together with additional field work, to develop additional exploration targets.

Based on an April update, measured and indicated resources at the site total 12.8 million tonnes grading 0.79 gram gold per tonne for 326,000 gold ounces. Additional inferred resources feature 8.4 million tonnes grading 0.67 gram gold for a further 181,000 gold ounces. The deposit at Tonopah is a low-sulphidation epithermal gold system.

Viva Gold has a $9 million market capitalization.