McKinley Gold Mine: August 2024 Updates and Progress
A General Message from Eric
I am thrilled to share with you the latest metallurgical sample results from our McKinley Mine project. These results are from formal testing conducted on samples taken from various locations using grab samples of ore from historic mining, rock hammer chip samples, and rock saw cut channels.
Progress in July
Sampling Results:
Each Sample’s Result:
Sample 561661: Jewelry Box
Rock chip and muck pile sample 11’ to 18’ northeast from MK16 on north rib and from adjacent muck pile adjacent to north rib. Sample location labeled with orange flagging.
Siderite carbonate phyllite with irregular blue carbonate pods and lenses with generally intense cubic euhedral cobaltian pyrite crystals up to 6mm diameter and minor quartz
veinlets and stringers within the alteration halo.
Sample 561662: Water Tank Bay
Rock chip and muck pile sample on northeast face. Measured approximately 15’ NE along face turning 7’ to east to reach sample location from MK15. Sampled a 6’ radius of face and adjacent muck pile. Sample location labeled with orange flagging.
Blue carbonate to siderite carbonate altered phyllite with moderate to strong euhedral cobaltian pyrite crystals to 5mm and intense quartz vein swarms and vein breccia on the face.
Sample 561663: Drop Zone
Rock chip and muck pile sample located from 5’ to 10’ southwest from MK18. Sampled muck 3’ to 5’ NW from MK18. Sampled on S face over 5’ horizontal distance.
Blue carbonate to siderite carbonate altered phyllite with moderate to strong cubic euhedral to subhedral cobaltian pyrite crystals up to 15mm in diameter. Some quartzsiderite breccia included in face samples.
Sample 561664: Pillar
Rock chip and saw cut channel samples located 10.5 to 12’ west of MK9 on south face and 14’ to 16’ west of MK9 on north face. Samples located within the main haulage drift on north side of the Pillar. Sample location labeled with orange flagging.
Blue carbonate to siderite carbonate altered phyllite hosted vein halos and quartz siderite breccia zones with strong to intense mostly subhdreal cubic cobaltian pyrite crystals up to 5 to 6 mm diameter.
Sample 561665: A Drift
Rock chip and saw cut channel samples on ribs and face at multiple locations throughout the southeast trending A Drift on both north and south ribs and face. Locations were from 6’ to 23’ southwest in A drift from MK5. Sample location labeled with orange flagging.
Blue carbonate to siderite carbonate altered phyllite hosted vein halos with moderate to strong anhedral to euhedral cubic cobaltian pyrite crystals up to 8 mm diameter, some quartz vein and vein breccia. Sample intended to represent a lower grade ore zone generally distal to the main zones sampled above.
Outstanding Sample Results
The assay results have revealed exceptionally high-grade gold mineralization:
- Sample 561661: 0.303 oz/ton ≈ 10.4 g/ton
- Sample 561662: 0.187 oz/ton ≈ 6.4 g/ton
- Sample 561663: 0.193 oz/ton ≈ 6.6 g/ton
- Sample 561664: 0.557 oz/ton ≈ 19.1 g/ton
- Sample 561665: 0.056 oz/ton ≈ 1.9 g/ton
Four out of the five samples are considered high-grade (>3 g/ton), with two samples showing remarkably high grades. Sample 561664, in particular, stands out with an impressive 19.1 g/ton, which can be considered “bonanza grade” — an industry term for exceptionally rich ore.
*What is bonanza grade?
The term “bonanza grade” is used in the mining industry to describe exceptionally high-grade ore, typically containing gold, silver, or other precious metals. While there is no strict definition, bonanza grade generally refers to ore with a metal concentration that is significantly higher than what is considered high-grade for a given deposit type.
To put this in perspective, the World Gold Council defines high-quality underground mines as having a gold ore density between 8 and 10 g/t, while low-quality underground mines have a gold ore density of 1 to 4 g/t. Typically, more than 5 g/ton is called “Bonanza Grade”.
Bonanza grade ore is rare and highly sought after by mining companies. Discovering a deposit with bonanza grade mineralization can dramatically increase the economic viability and profitability of a mining project.
The term “bonanza” has its roots in the Spanish word meaning prosperity or success. It gained prominence during the 19th-century gold rushes in the western United States, where it was used to describe exceptionally rich ore shoots or pockets within a mine.
Ongoing Metallurgical Testing
The primary objective of our current metallurgical testing program is to evaluate whether a gravity circuit alone can achieve our target gold recovery. If not, we are assessing whether flotation processing or a combination of gravity and flotation will be necessary. This verification is progressing rapidly.
Potential for Alternative Processing Methods
In a recent meeting, we discussed the following promising information:
- The sulfide content in our deposit is approximately 4%, which is lower than typical gold deposits (6–9%). * With lower sulfides, the gold may be more accessible, potentially simplifying the extraction process.
- Due to the low sulfide content, cyanidation is being considered as an alternative gold extraction method, using cyanide solution instead of mercury.
- Cyanidation has the potential to lower costs compared to traditional processing methods and is effective for recovering gold from low-grade or refractory ores.
We are currently conducting a detailed feasibility study to evaluate the technical and economic viability of cyanidation, as well as assessing its environmental impact and compliance with regulations.
Production Planning
While these additional assessments have extended our timeline, they have opened up more options for optimizing our mining process due to the better-than-expected metallurgical results.
We remain committed to releasing an initial mining plan and commencing small-scale mining operations as soon as possible.
Thank you for your continued support and trust in our project. We are excited about the immense potential of the McKinley Mine and look forward to sharing further updates with you soon.
Gold Market Insights — GOLD is strong
Gold Price Performance
Gold has shown remarkable performance in 2024, rising 12% year-to-date and outpacing other major asset classes. In July 2024, gold achieved a robust monthly gain of 4%, closing at US$2,426/oz. It then reached an all-time high of $2,531.70 in August. This July rally boosted gold’s year-to-date gain to an impressive 17.3%.
Factors Driving Gold Prices
- Lower 10-year Treasury yields and a weaker US dollar were the main drivers of gold’s price increase in July.
- Traders lifted expectations of a US rate cutting cycle beginning in September, with additional 25 basis point cuts expected at the following three meetings, supporting gold’s strength.
- Lower funding costs for holding a non-interest paying metal like gold increase its attractiveness.
Market Sentiment and Demand
- Interest rate-sensitive investors have started to warm up to gold, with the total holdings across major exchange-traded funds showing the biggest monthly increase since March 2022.
- The World Gold Council reported record demand in Q2 2024, driven by wealthy families and individuals worried about US government debt levels and uncertainty about the US presidential election outcome.
US government debt volume:
In summary, gold has demonstrated strong performance in 2024, reaching all-time highs and benefiting from lower interest rates, a weaker US dollar, and increased demand from investors seeking a safe haven amid economic uncertainties and geopolitical risks. The outlook for gold remains positive, with expectations of further price increases in the coming months and quarters, despite potential short-term volatility.
The gold market has experienced significant movements from June 1st. Throughout this period, gold prices have demonstrated resilience and strength, driven by a mix of robust investment demand, central bank purchases, and geopolitical uncertainties.
