The Latest from McKinley Gold Mine — July 2024

A General Message from Eric

We are pleased to share the latest updates and progress from McKinley Gold Mine. June has been a productive month, and we are making significant strides in our operations. Our team is dedicated to advancing the project efficiently and safely, and we are excited about the promising results we are seeing.

Progress in June

• Road Construction: The construction of the road to the upper portal continued, despite the challenging steep terrain. We reached the upper portal and conducted necessary blasting. The contractor will temporarily pull the crew off the project for two weeks to complete another job, but we anticipate finishing the road work in July.

• Sample Collection and Testing: Samples were collected and sent to Kappes Cassidy & Associates (KCA) for assaying and processing tests. Surface samples identified additional mineralized zones, with all seven samples showing detectable gold values. The highest value was 0.129 ounces per ton, which is very encouraging. We will explain the detailed result in later section.
• Underground Mapping: Our geologist continued with underground mapping, providing valuable data for future planning.
• Security and Infrastructure: A security gate was installed at the lower portal, and the storage shed was moved to the lower yard to make space for future milling facilities. Additionally, heaters were installed in the concentrate shop storage building and mini-split heaters/AC units in the mine office and core logging shed.

• Other Activities: Weed management, stormwater permitting, routine inspections, and overall project management continued as planned.

Metallurgical Testing

Metallurgical testing is a critical component of our project. Samples were shipped to KCA for assaying and processing tests to determine the proper grind size, gold recoveries, and final processing methods. We expect to receive the assay results soon, which will guide our next steps in optimizing the gold recovery circuit.

Test Result of surface samples collected in June

1. Overview of McKinley Mine

• Location: Idaho, United States
• Surface sample gold content: 0.129 ounces per ton

2. Classification of Gold Content and Its Significance

Background value : 0.001–0.005
Typical gold content in common rocks and soil. No mineralization. Almost no economic value.

Low anomaly : 0.005–0.02
Indicates weak gold mineralization. Suggests the need for further investigation, but low economic value.

Medium anomaly: 0.02–0.1
Clear presence of gold mineralization. Potentially economically viable for mining, warrants detailed exploration.

High anomaly 0.1 and above
Strongly suggests the presence of a significant gold deposit. Economically very promising and a target for full-scale development studies.

The surface sample from McKinley Mine (0.129 oz/ton) is classified as a “high anomaly” indicating very promising results.

3. Global Comparative Analysis

McKinley Mine Idaho, USA
Initial Surface Sample (oz/ton): 0.129
Current/Peak Average Grade (oz/ton): Under investigation

Beartrack-Arnett Idaho, USA
Initial Surface Sample (oz/ton): 0.05–0.08
Current/Peak Average Grade (oz/ton): 0.026–0.049
Largest gold mine in Idaho

Midas Mine Nevada, USA
Initial Surface Sample (oz/ton): 0.1–0.2
Current/Peak Average Grade (oz/ton): 0.5
Cumulative production of about 2.2 million oz

Fruta del Norte Ecuador
Initial Surface Sample (oz/ton): 0.18
Current/Peak Average Grade (oz/ton): 0.35
One of the largest high-grade mines in South America

Hishikari Mine Japan
Initial Surface Sample (oz/ton): 0.07–0.14
Current/Peak Average Grade (oz/ton): 1.0–1.2
Highest-grade gold mine in the world

Fosterville Australia
Initial Surface Sample (oz/ton): 0.1–0.15
Current/Peak Average Grade (oz/ton): 0.7–1.0
High-grade mine with recent rapid growth

Analysis

1. Regional Comparison: The initial results of McKinley Mine (0.129 oz/ton) significantly surpass those of the Beartrack-Arnett mine in the same state of Idaho. This suggests that McKinley Mine could be a particularly promising project within Idaho.
2. North American Comparison: Compared to the Midas Mine in Nevada, McKinley Mine’s initial results show equal or higher values. Considering that Midas Mine went on to substantial production, this indicates a very high potential for McKinley Mine.
3. International Comparison:

• South America: While not quite reaching the initial results of Fruta del Norte (Ecuador), it shows close values. Fruta del Norte is now known as one of the largest high-grade gold mines in South America.
• Japan: Surpasses the initial results of the Hishikari Mine, which later became the highest-grade gold mine in the world.
• Australia: Shows values equivalent to the initial results of the Fosterville mine, which has recently gained attention as a rapidly growing high-grade mine.

4. Deep Potential: Most of the comparison mines have shown higher grades than their initial samples as development progressed. This suggests the possibility of higher-grade veins existing at depth in McKinley Mine as well.

5. Economic Viability: The result of 0.129 oz/ton, classified as a “high anomaly,” suggests a potentially highly profitable project, considering the current gold price (around $1,800 per ounce).

4. Conclusion

The initial surface sample results from McKinley Mine are very promising from a global perspective:

1. They show results equal to or better than major gold mining projects in North America.
2. They are comparable to the initial results of world-famous high-grade mines (Hishikari, Fosterville).
3. This value is classified as a “high anomaly” in global gold classification, strongly suggesting the presence of a significant gold deposit.

These comparisons indicate that McKinley Mine has the potential to become a world-class gold mine. However, even with promising initial results, actual development requires many stages and careful evaluation.

Production Planning

Looking ahead, we have several key activities planned for July:

• Complete the road to the upper portal.
• Map surface geologic samples and interpret data for mine continuity.
• Receive assays from metallurgical samples and prepare a composite test sample.
• Run grinding, gravity, and flotation tests to determine the appropriate gold recovery circuit.
• Plan the drill program for the mineralized zones.
• Initiate drilling towards the end of July, pending access and drill availability.
• Begin core relogging activities and split the 2019 drill core for assaying.
• Digitize underground geologic mapping information to build the geologic model.
• Improve the shop bathroom facility to support general facility use and concentrate storage.

Gold Market Insights — GOLD is back!

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.

Performance and Price Trends

The spot price of gold reached several unprecedented levels earlier in the year, peaking at $2,435 per ounce on May 20th. Throughout June, gold prices stabilized around the $2,300 mark, with the spot price recorded at $2,480.25 per ounce on July 17th.

Expert Predictions and Outlook

Experts have varied opinions on the future trajectory of gold prices:

• Bullish Outlook: Some analysts predict that gold prices will continue to rise, potentially reaching new highs by the end of 2024. Factors such as expected interest rate cuts, Victory of Trump, a weakening U.S. dollar, and increased central bank purchases are seen as positive drivers for gold.
• Consolidation and Stability: Others believe that gold prices may consolidate around the current levels, with forecasts suggesting a range between $2,300 and $2,600 per ounce for the remainder of the year.
• Potential Corrections: There are also views that gold may experience short-term corrections due to profit-taking and fluctuations in investor sentiment. However, the long-term outlook remains positive, with gold expected to maintain its role as a hedge against inflation and economic uncertainties.

Conclusion

The gold market has shown robust performance from June, driven by a combination of central bank buying, rate-cut trend, geopolitical tensions, US election, and economic factors. While short-term fluctuations are expected, the overall sentiment remains positive, with experts predicting continued strength and potential new highs for gold prices in the latter half of the year. Investors are advised to stay informed and consider gold as a valuable component of their diversified portfolios.