Overview
Location Map
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The Mt. Hamilton Property is a 3,900 acre property located at the southern end of the Battle Mountain Trend. The property is located in the western flank of the White Pine Mountains, about 40 miles west of Ely, Nevada. Significant mineralization has been identified throughout the property, containing both precious and base metal mineralization that occur within a gently folded sequence of Cambrian aged sedimentary rocks. Mineralization at Mt. Hamilton consists of skarn-hosted gold, silver, molybdenum, tungsten, and local copper occurrences.
Ely Gold and Solitario Exploration & Royalty Corp. have formed the Mt. Hamilton LLC ("MH-LLC"), a limited liability company which now holds 100% of the Mt. Hamilton project assets under an Operating Agreement. DHI-US, Ely Gold's wholly owned US subsidiary, currently has a 90% initial interest in the MH-LLC and Solitario has a 10% initial interest. Solitario can earn up to an 80% interest in the MH-LLC by completing a feasibility study, arranging project financing, and making future property, advanced royalty/royalty reduction payments/, making cash payments to DHI-US of $1,500,000, making payments to DHI-US of 300,000 shares of Solitario stock and making a private placement of $500,000 in Ely Gold common shares.
Solitario - Mt. Hamilton Earn-in Terms:
Solitario commits to fund any and all bonding obligations to place the Mt. Hamilton project into commercial production.
*Payments to Augusta Resource Corp. and Henkle-Buchannan Inc., underlying owners
Centennial Gold Deposit
The Centennial Gold Deposit is the current focus of activity on the property. This area was extensively explored by Philips Petroleum Corporation between 1960 and 1980, resulting in near-surface historical mineralized resources in a gold-silver zone as well as a tungsten-molybdenum-copper zone that is mostly on the flanks and below the gold-silver zone, with over 300 holes drilled to date.
The Centennial Gold Deposit is a development-stage project, proposed to be an open-pit mineable skarn-hosted gold and silver mineralization. Precious metal mineralization is localized along zones of retrograde alteration within skarn altered Hamburg Dolomite. Metallurgical test work to date indicates mineralization is receptive to conventional heap leach gold extraction and ADR processing. A NI 43-101 compliant Preliminary Economic Assessment (PEA) of project economics, done by SRK Consulting (US) Inc. dated May 2009 and based on recent cost and commodity pricing, produced a favorable result and recommended further project expenditure. The PEA also included an updated resource, as follows:
SRK Consulting NI 43-101 Mineral Resource Statement for Centennial Deposit:
Cut-off grade: 0.009oz/t
Highlights of SRK's Preliminary Economic Assessment include:
The Solitario/Ely Gold joint venture has an enhanced Mine Plan using data from the 2009 PEA by SRK Consulting, is working on two Plans of Operation for the project, has completed a baseline Environmental Assessment for the US Forest Service, and anticipates delivery of a bankable feasibility in Q4, 2011.
NOTES: All drill thicknesses are thought to represent at least a 90% true thickness of the mineralized
interval. Holes MH-10-01, 05 and 08 were geotechnical holes for the collection of data for pit slope
studies and were not designed to intersect mineralization. Assumed silver to gold ratio is 50:1.
EXPLORATION TARGETS
Drilling of the Centennial Gold Deposit encountered precious metal mineralization along thrusts that appear to be increasing in thickness and grade to the east along these low angle faults. It was concluded that the faults control precious metal mineralization extending the Centennial Gold Deposit eastward, and resulting in mineralization at the NE Seligman Deposits, and the Chester and Five Way Prospects.
Centennial Extension
Seligman Area, NES-5 Pit, showing un-mined ore
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Centennial Drill Plan
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Centennial Drill Section A
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Centennial Drill Section B
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This zone is the easterly, down-dip extension of the near-surface Centennial Gold Deposit. This mineralization is excluded from the current "in-pit" resource estimate. A number of drill holes encountered significant gold mineralization in this zone, including hole 96-092, intersecting 33.5 meters grading 0.067 opt Au (2.3 grams) roughly 600 feet east of the Centennial resource. The Ely Gold/Solitario joint venture will drill-test the Centennial Extension in 2011.
NE Seligman Gold Deposits
The NE Seligman Deposits are about one mile north of the Centennial Deposit, on the north flank of the Seligman Stock. The deposits were mined by Rea Gold Corp. from 1995-1997; a 1994 Feasibility Study for Rea Gold identified 9.04 million tons with an average grade of .052 ounces (1.78 grams) gold per ton, containing 470,000 mineable ounces in the Seligman Deposits. The Nevada Department of Minerals and Nevada Bureau of Mines report total production of 124,000 ounces of gold and 310,250 ounces of silver from during that time. Mineralization at Seligman is hosted mainly in intrusive granodiorite and hornfels along the northern portion of the Seligman Stock while the Centennial deposit is an epithermal overprint in skarn-altered sediments along the southern contact of the Seligman stock. While both deposits are spatially close, the style and nature of mineralization are very. Rea Gold ceased operations prior to mining out the Seligman deposits and the Company is assessing any remaining potential mineable resources for inclusion in its plans going forward.
Chester Prospect
The Chester area is a geochemical anomaly identified by REA Gold Corp. in the mid 1990's and is located about one half mile south of the Centennial Deposit. The surface area of this target, defined by its 100 ppb gold in soil anomaly, is roughly four times larger in area than the Centennial Deposit. Forty reverse circulation drill holes by REA Gold in the 1990's encountered mineralization along two flat lying faults similar to Centennial with intercepts up to 40 feet grading 0.04 opt Au (1.37 grams). Outcrops in this area have returned values to .06 opt Au (2.06 grams). Near the northern end of the Chester target, nearest the Centennial deposit, an 800 ppb gold in soil anomaly remains entirely untested, largely because there were no existing drill roads there. The Chester area is quite possibly an extension of the Centennial mineralization along the same or similar structures that control the Centennial deposit.
Five Way Prospect
The Five Way area is located between and slightly east of the Centennial and NE Seligman deposits. This prospect is represented by a 500 ppb gold in soil anomaly measuring about 500 metres by 500 metres as well as rock chip sampling that returned values up to 1.26 ounces per ton gold.
MOLYBDENUM-TUNGSTEN PROSPECTS
Westside and Eastside Tungsten-Molybdenum Historical Resources
Two historical non 43-101 compliant mineralized tungsten and molybdenum resources are located below and on the flanks of the Centennial Gold Deposit. A prefeasibility study performed by Philips Petroleum in June of 1978 contained historical non-NI 43-101 Resources for the Westside deposit, consisting of 4,200,000 tons grading 0.52% MoS2, 0.37% WO3, and 0.60% copper and for the Eastside deposit, which contains 2,000,000 tons grading 0.28% WO3. The Company is not treating the historical estimate as current mineral resources or mineral reserves and the historical estimate should not be relied upon or understood to indicate the existence of reserves or resources.
Shell Zone
The Shell deposit is located to the southwest of the Centennial Zone and lies on claims that are contiguous with the entire land position. Historic exploration on this target yielded medium to high grade gold and base metal sulphide replacement style of mineralization. The molybdenum-tungsten mineralization is partially coincident with gold mineralization but also surrounds and lies under it. An historical non-NI 43-101 compliant mineralized resource of 500,000 tons, done by prior operator Union Carbide Corporation, averages 0.24 ounces (8.23 grams) of gold per ton. In addition to the gold mineralization, Union Carbide also reported an additional historical non-NI 43-101 compliant resource of 1.15 million tons of molybdenum-tungsten mineralization averaging 1.20% MoS2 and 0.12% tungsten.
The Company is not treating these historical estimates as current mineral resources or mineral reserves and the historical estimates should not be relied upon or understood to indicate the existence of reserves or resources.
After Union Carbide, WR Grace explored the property, and drilled additional holes east of the Shell deposit. These holes encountered mineralization up to 16 feet grading 0.201 ounces per ton gold (6.89 grams) and have never been modeled or included in a resource estimated for the Shell deposit. The current historical resource is open in most directions and although relatively deep, there is potential for this project to become a stand-alone project.
Location Map
click on image to view enlarged
The Mt. Hamilton Property is a 3,900 acre property located at the southern end of the Battle Mountain Trend. The property is located in the western flank of the White Pine Mountains, about 40 miles west of Ely, Nevada. Significant mineralization has been identified throughout the property, containing both precious and base metal mineralization that occur within a gently folded sequence of Cambrian aged sedimentary rocks. Mineralization at Mt. Hamilton consists of skarn-hosted gold, silver, molybdenum, tungsten, and local copper occurrences.
Ely Gold and Solitario Exploration & Royalty Corp. have formed the Mt. Hamilton LLC ("MH-LLC"), a limited liability company which now holds 100% of the Mt. Hamilton project assets under an Operating Agreement. DHI-US, Ely Gold's wholly owned US subsidiary, currently has a 90% initial interest in the MH-LLC and Solitario has a 10% initial interest. Solitario can earn up to an 80% interest in the MH-LLC by completing a feasibility study, arranging project financing, and making future property, advanced royalty/royalty reduction payments/, making cash payments to DHI-US of $1,500,000, making payments to DHI-US of 300,000 shares of Solitario stock and making a private placement of $500,000 in Ely Gold common shares.
Solitario - Mt. Hamilton Earn-in Terms:
| Adv Royalty/ Reduction |
Property* |
Exploration |
Cash to DHI(US) |
Shares to DHI(US) |
|
|---|---|---|---|---|---|
| Initial (for 10%) | |||||
| 2010 | $300,000 | ||||
| Phase 1 (for 41%) | |||||
| 2011 | $300,000 | $525,000 | $200,000 | 50,000 | |
| 2012 | $750,000 | $1,000,000 | $300,000 | 50,000 | |
| Phase 2 (for 19%) | |||||
| 2013 | $300,000 | $500,000 | 100,000 | ||
| Phase 3 (for 10%) | |||||
| 2013 | $3,800,000 | $750,000 | |||
| 2014 | $1,800,000 | $750,000 | $500,000 | 100,000 | |
| 2015 | $1,000,000 | ||||
| Totals: | $6,500,000 | $3,775,000 | $1,000,000 | $1,500,000 | 300,000 |
Solitario commits to fund any and all bonding obligations to place the Mt. Hamilton project into commercial production.
*Payments to Augusta Resource Corp. and Henkle-Buchannan Inc., underlying owners
Centennial Gold Deposit
The Centennial Gold Deposit is the current focus of activity on the property. This area was extensively explored by Philips Petroleum Corporation between 1960 and 1980, resulting in near-surface historical mineralized resources in a gold-silver zone as well as a tungsten-molybdenum-copper zone that is mostly on the flanks and below the gold-silver zone, with over 300 holes drilled to date.
The Centennial Gold Deposit is a development-stage project, proposed to be an open-pit mineable skarn-hosted gold and silver mineralization. Precious metal mineralization is localized along zones of retrograde alteration within skarn altered Hamburg Dolomite. Metallurgical test work to date indicates mineralization is receptive to conventional heap leach gold extraction and ADR processing. A NI 43-101 compliant Preliminary Economic Assessment (PEA) of project economics, done by SRK Consulting (US) Inc. dated May 2009 and based on recent cost and commodity pricing, produced a favorable result and recommended further project expenditure. The PEA also included an updated resource, as follows:
SRK Consulting NI 43-101 Mineral Resource Statement for Centennial Deposit:
| In Pit | t | Au Grade (oz/t) | Au oz | Ag Grade (oz/)t | Ag (oz) |
|---|---|---|---|---|---|
| Measured | 760,000 | 0.039 | 29,640 | 0.130 | 98,800 |
| Indicated | 11,857,000 | 0.030 | 355,710 | 0.145 | 1,719,265 |
| Meas+Ind | 12,617,000 | 0.031 | 385,350 | 0.144 | 1,818,065 |
| Inferred | 1,491,000 | 0.012 | 17,892 | 0.122 | 181,902 |
Highlights of SRK's Preliminary Economic Assessment include:
- Average production of 36,500 ozs. of gold and 224,000 ozs. of silver per year over an 8 year mine life.
- Operating cost of US$450 per ounce of gold.
- Capital cost of US$43.95 million, using a 25% contingency.
- Pre-tax net present value (NPV) of US$28.84 million at a 5% discount rate with an 18.8% internal rate of return and payback over 5.26 years, using an average gold price of US$750 per ounce. At an average gold price of US$900 per ounce, the NPV increases to US$59.30 million with payback over 3.23 years and an internal rate of return of 31.3%.
The Solitario/Ely Gold joint venture has an enhanced Mine Plan using data from the 2009 PEA by SRK Consulting, is working on two Plans of Operation for the project, has completed a baseline Environmental Assessment for the US Forest Service, and anticipates delivery of a bankable feasibility in Q4, 2011.
| 2010-2011 Centennial Drill Results | |||||||
|---|---|---|---|---|---|---|---|
| Drill Hole | From (ft) | To (ft) | Interval (ft) | Gold (opt) | Silver (opt) | Interval (m) | Gold Equiv (g/tn) |
| MH10-02 | 27.4 | 98.7 | 71.3 | 0.024 | 0.88 | 21.7 | 1.10 |
| MH10-03 | 317.5 | 341.5 | 24.0 | 0.016 | 0.61 | 7.3 | 0.89 |
| 367.3 | 376.7 | 9.4 | 0.042 | 1.54 | 2.9 | 1.76 | |
| 426.0 | 453.9 | 27.9 | 0.017 | 0.62 | 8.5 | 0.96 | |
| 393.8 | 514.0 | 20.2 | 0.045 | 1.67 | 6.2 | 2.27 | |
| MH10-04 | 373.6 | 484.5 | 110.9 | 0.044 | 1.61 | 33.8 | 1.83 |
| MH10-06 | 257.5 | 276.1 | 18.6 | 0.026 | 0.17 | 5.7 | 1.10 |
| 312.7 | 372.3 | 59.6 | 0.014 | 0.11 | 18.2 | 0.60 | |
| MH10-07 | 191.0 | 208.4 | 17.4 | 0.044 | 0.16 | 5.3 | 1.74 |
| 337.8 | 399.0 | 61.2 | 0.027 | 0.48 | 18.7 | 1.33 | |
| MH10-09 | 346.7 | 613.2 | 266.5 | 0.050 | 0.20 | 81.2 | 1.93 |
| incl | 490.0 | 542.0 | 52.0 | 0.110 | 0.86 | 15.8 | 4.36 |
| MH11-01 | 238.5 | 574.7 | 336.2 | 0.026 | 0.23 | 102.5 | 1.13 |
| incl | 396.3 | 574.7 | 179.4 | 0.036 | 0.31 | 54.7 | 1.55 |
| MH11-02 | 394.2 | 594.1 | 199.9 | 0.043 | 0.26 | 60.9 | 1.66 |
| incl | 411.2 | 492.8 | 81.6 | 0.092 | 0.53 | 24.9 | 3.52 |
| 577.8 | 606.8 | 29.0 | 0.017 | 0.62 | 8.8 | 1.10 | |
NOTES: All drill thicknesses are thought to represent at least a 90% true thickness of the mineralized
interval. Holes MH-10-01, 05 and 08 were geotechnical holes for the collection of data for pit slope
studies and were not designed to intersect mineralization. Assumed silver to gold ratio is 50:1.
EXPLORATION TARGETS
Drilling of the Centennial Gold Deposit encountered precious metal mineralization along thrusts that appear to be increasing in thickness and grade to the east along these low angle faults. It was concluded that the faults control precious metal mineralization extending the Centennial Gold Deposit eastward, and resulting in mineralization at the NE Seligman Deposits, and the Chester and Five Way Prospects.
Centennial Extension
Centennial-Seligman Area
Mt. Hamilton Targets
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Mt. Hamilton Targets
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Seligman Area, NES-5 Pit, showing un-mined ore
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Centennial Drill Plan
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Centennial Drill Section A
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Centennial Drill Section B
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This zone is the easterly, down-dip extension of the near-surface Centennial Gold Deposit. This mineralization is excluded from the current "in-pit" resource estimate. A number of drill holes encountered significant gold mineralization in this zone, including hole 96-092, intersecting 33.5 meters grading 0.067 opt Au (2.3 grams) roughly 600 feet east of the Centennial resource. The Ely Gold/Solitario joint venture will drill-test the Centennial Extension in 2011.
NE Seligman Gold Deposits
The NE Seligman Deposits are about one mile north of the Centennial Deposit, on the north flank of the Seligman Stock. The deposits were mined by Rea Gold Corp. from 1995-1997; a 1994 Feasibility Study for Rea Gold identified 9.04 million tons with an average grade of .052 ounces (1.78 grams) gold per ton, containing 470,000 mineable ounces in the Seligman Deposits. The Nevada Department of Minerals and Nevada Bureau of Mines report total production of 124,000 ounces of gold and 310,250 ounces of silver from during that time. Mineralization at Seligman is hosted mainly in intrusive granodiorite and hornfels along the northern portion of the Seligman Stock while the Centennial deposit is an epithermal overprint in skarn-altered sediments along the southern contact of the Seligman stock. While both deposits are spatially close, the style and nature of mineralization are very. Rea Gold ceased operations prior to mining out the Seligman deposits and the Company is assessing any remaining potential mineable resources for inclusion in its plans going forward.
Chester Prospect
The Chester area is a geochemical anomaly identified by REA Gold Corp. in the mid 1990's and is located about one half mile south of the Centennial Deposit. The surface area of this target, defined by its 100 ppb gold in soil anomaly, is roughly four times larger in area than the Centennial Deposit. Forty reverse circulation drill holes by REA Gold in the 1990's encountered mineralization along two flat lying faults similar to Centennial with intercepts up to 40 feet grading 0.04 opt Au (1.37 grams). Outcrops in this area have returned values to .06 opt Au (2.06 grams). Near the northern end of the Chester target, nearest the Centennial deposit, an 800 ppb gold in soil anomaly remains entirely untested, largely because there were no existing drill roads there. The Chester area is quite possibly an extension of the Centennial mineralization along the same or similar structures that control the Centennial deposit.
Five Way Prospect
The Five Way area is located between and slightly east of the Centennial and NE Seligman deposits. This prospect is represented by a 500 ppb gold in soil anomaly measuring about 500 metres by 500 metres as well as rock chip sampling that returned values up to 1.26 ounces per ton gold.
MOLYBDENUM-TUNGSTEN PROSPECTS
Westside and Eastside Tungsten-Molybdenum Historical Resources
Two historical non 43-101 compliant mineralized tungsten and molybdenum resources are located below and on the flanks of the Centennial Gold Deposit. A prefeasibility study performed by Philips Petroleum in June of 1978 contained historical non-NI 43-101 Resources for the Westside deposit, consisting of 4,200,000 tons grading 0.52% MoS2, 0.37% WO3, and 0.60% copper and for the Eastside deposit, which contains 2,000,000 tons grading 0.28% WO3. The Company is not treating the historical estimate as current mineral resources or mineral reserves and the historical estimate should not be relied upon or understood to indicate the existence of reserves or resources.
Shell Zone
The Shell deposit is located to the southwest of the Centennial Zone and lies on claims that are contiguous with the entire land position. Historic exploration on this target yielded medium to high grade gold and base metal sulphide replacement style of mineralization. The molybdenum-tungsten mineralization is partially coincident with gold mineralization but also surrounds and lies under it. An historical non-NI 43-101 compliant mineralized resource of 500,000 tons, done by prior operator Union Carbide Corporation, averages 0.24 ounces (8.23 grams) of gold per ton. In addition to the gold mineralization, Union Carbide also reported an additional historical non-NI 43-101 compliant resource of 1.15 million tons of molybdenum-tungsten mineralization averaging 1.20% MoS2 and 0.12% tungsten.
The Company is not treating these historical estimates as current mineral resources or mineral reserves and the historical estimates should not be relied upon or understood to indicate the existence of reserves or resources.
After Union Carbide, WR Grace explored the property, and drilled additional holes east of the Shell deposit. These holes encountered mineralization up to 16 feet grading 0.201 ounces per ton gold (6.89 grams) and have never been modeled or included in a resource estimated for the Shell deposit. The current historical resource is open in most directions and although relatively deep, there is potential for this project to become a stand-alone project.
