Abstract December 8, 2014
Technical Presentation

The Geology and Exploration Potential of the Beatons Creek Gold Property,
Nullagine, Western, Australia

Quinton Hennigh

Novo Resources Corporation's Beatons Creek Gold project is situated near Nullagine, East Pilbara Shire, Western Australia, approximately 1,400 km north-northeast of Perth. Gold-bearing conglomerates were first discovered in the Fortescue Basin in 1886, the same year an Australian prospector, George Harrison, discovered a gold-bearing conglomerate (reef) near present day Johannesburg, South Africa. Harrison's discovery quickly led to the development of numerous mines of the Central Rand district, part of the Witwatersrand Basin, the world's largest gold field. Beatons Creek saw limited mining activity until World War I, but soon quickly faded as a mining camp.

Sedimentary and volcanic rocks of the Witwatersrand Basin (2.95-2.70 Ga) were deposited on 3.8-3.0 Ga granite and greenstone of the Kapvaal Craton, a block of crust underlying much of southern Africa. Similarly old granite and greenstone comprise the Pilbara Craton which underlies the 2.75-2.70 Ga Fortescue Basin. This has led to speculation that the Kapvaal and Pilbara cratons were once both part of the Earth's first "continent," Vaalbara, which would have been roughly the size of the South Island of New Zealand. If true, sedimentation and volcanism of the Fortescue Group is correlative with the waning stages of deposition on the Central Rand and Ventersdorp groups of South Africa. In fact, the high-Mg Kylena Basalt of the Fortescue Group is nearly identical in composition and age (2.72 Ga) to the lowermost Ventersdorp Lavas. Gold-bearing reefs at Beatons Creek occur in the Hardy Formation beneath the Kylena Basalt, and would therefore be time equivalent with the gold-bearing Venterdorp Contact Reef beneath the Ventersdorp Lavas.

At Beatons Creek, gold-bearing conglomerates were deposited in a near-marine fluvial and debris flow fan environment that was periodically transgressed by ocean waves producing gold-bearing heavy lag deposits (Figures 1, 2 and 3). Rift faulting along the margin of the Nullagine sub-basin likely focused sedimentation in this area

Clast sizes range from pebbles to boulders and clast composition includes vein quartz, chert, Mosquito Creek-type siliceous conglomerate, sandstone and lesser greenstone and granite. Matrix is commonly comprised of quartz sand and detrital pyrite, sometimes up to 20%. Pyrite clasts range from sub-millimeter up to 10 cm, and their presence indicates reduced atmospheric conditions at the time of deposition. Pyrite occurs as three types: 1) compact, 2) porous and 3) laminated. Compact pyrite is likely derived from weathering of basement rocks whereas porous and laminated pyrite may have local authigenic origins within the sedimentary environment.

Gold occurs as free particles ranging from a few microns to several millimeters in size. A deportment study conducted on samples of fresh conglomerate indicates >90% of gold occurs in particles >150 microns making it conducive for gravity recovery. Most gold grains are hackly rather than rounded as might be expected in an alluvial environment. Gersdorffite (NiAsS) commonly forms crusts on gold grains, an association that is enigmatic. "Fly speck" carbon particles, sometimes intergrown with uraninite, are present in gold-bearing conglomerates. This carbon has not been analyzed, but may be either kerogen or bitumen.

Although potential exists for millions of tonnes of fresh pyritic conglomerates, Novo is currently focused on exploring shallow, oxidized gold-bearing conglomerates with the intention of establishing a resource on the order of 3-4 Mt at 3-4 gpt Au that could quickly be advanced to production for low capital cost and potentially high return. Selective mining techniques and simple gravity processing are envisioned to be employed. mine to the northern-most Storm mine along the Carlin trend will be presented.
 



Figure 1: Model of deposition for the Beatons Creek gold-bearing conglomerates. Gold-bearing near-marine fluvial and debris flow
deposits are periodically transgressed by ocean waves to create gold-bearing heavy lag deposits.
 
 

Figure 2: Stacked fluvial fan type gold-bearing conglomerates. Darker bands tend to have more detrital pyrite, coarse clasts and more gold.
 


Figure 3: Transgressive lag type gold-bearing conglomerates. Bed is composed of close-packed quartz cobbles and boulders.
Note the sheet-like nature of the horizon.
 
Dr. Quinton T. Hennigh, President, CEO & Director of Novo Resources, Corp., is an economic geologist with more than 20 years of exploration experience with major gold mining firms including Homestake Mining, Newcrest Mining and Newmont Mining. Dr. Hennigh was the former director and Chief Geologist of Evolving Gold Corp., where he helped assemble a world-class portfolio of gold projects and led successful explorations resulting in three significant discoveries including the Rattlesnake Hills deposit, Wyoming. Currently, Dr. Hennigh is also a director and Technical Advisor to Gold Canyon Resources, where he helped refocus exploration at the company's Springpole Gold Project in Red Lake, Ontario. Dr. Hennigh is also currently the Chief Geologist of EurOmax Resources, the Technical Advisor and director to Prosperity Goldfields Corp., and a director to NV Gold Corp. Dr. Hennigh obtained M.Sc. and Ph.D. degrees in Geology/Geochemistry from the Colorado School of Mines. His Ph.D. thesis, which was done under the guidance of Dr. Richard W. Hutchinson, was entitled "Geology of the Tin-Rich Orebodies of the Crovo Deposit, Neves Corvo, Baixo Alentejo, Portugal".

 

Abstract November 3, 2014
Technical Presentation

Carlin-type Gold Deposits

Tommy Thompson
Economic Geology Consulting
P.O. Box 61866
Reno, NV 89506
thompsontommyt@aol.com

Much has been published about CTD's based on oxidized deposits and incorrect associated hydrothermal alteration. Although the 1961 Newmont discovery of the Carlin deposit by John Livermore and Alan Coope has been called the first deposit of "invisible gold," it was actually the third such deposit to be found after the Cortez and Getchell mines that were producing in the 1930's. In Nevada there are 5 linear trends of CTD's (Fig. 1): Carlin, Battle Mountain-Eureka (also referred to as the Cortez), Jerritt Canyon, Getchell, and Long Canyon, the latter being the most recent discovery.

CTD's are hosted in silty to massive limestone (Fig. 2), in hornfelsed rocks, in igneous rocks, and in breccias of multiple origins. The breccias may be the result of turbidite deposition, tectonic disruption, dissolution-collapse of soluble carbonate intervals, or of forceful hydrothermal breccia processes. Commonly, multiple breccia types are found in a single deposit.

Gold in CTD's is present as lattice substitutions in arsenian pyrite and/or marcasite. Trace amounts of visible gold in the deposits resulted from younger overprinting hydrothermal events. The CTD's in Nevada range in age from 36 to 42 Ma (Eocene) based on 40-39Ar, Rb-Sr, fission-track analysis of apatite, and by bracketing dike events of known ages. The hydrothermal alteration types found with CTD's include decarbonatization, argillization, and local silicification of the host rocks. At the Carlin mine more than 50% of the stratigraphic host rock section was lost due to the decarbonatization of the Roberts Mountains Formation.

Along the Carlin trend, all CTD's have been overprinted by a unique base-metal assemblage that includes Zn, Pb, Ag, Se, Te, Bi, Sn, Cu, W, and Sb-bearing minerals. A single 40-39Ar analysis on hypogene alunite at Gold Quarry with this assemblage yielded a 16.03¤0.10 Ma (Miocene) age.

Fluid inclusion analyses of ore-related CTD quartz range from 140o to 280oC, clearly an epithermal event. Thermal zoning has only been recognized at the Rain mine where up-plunge values decrease from 280oC to 180oC, and Au and barite contents range from 0.5 oz Au- <5% barite at depth to <0.1oz Au- >50% barite in the open pit, indicating substantial oxidation of the ore fluids as they tracked up-plunge.

The depth at which CTD's form is clearly shown at the Deep Star deposit where the mineralized pre-ore rhyolite is cut by a 39 Ma rhyolite dike with up to 1m of glass on its margins. Both dike systems have identical mineralogy, textures, and REE contents. The chill margin on the post-mineral rhyolite argues for a depth of formation <1.5km.

A review of selected ore systems from the southern-most Rain mine to the northern-most Storm mine along the Carlin trend will be presented.




Figure 1: Distribution of CTD in the United States
 

 

Figure 2: Stratigraphic Column in the Carlin Trend showing united that host the CTD gold.

 

 

Abstract October 6, 2014
Technical Presentation

The Bongara High-Grade Zinc Deposit (Peru):
History of Discovery, Exploration and Geology

Chris Herald, Solitario Exploration & Royalty Corp.  

The Bongara high-grade Mississippi Valley Type ("MVT") zinc deposit represents one of the highest grade undeveloped zinc deposits in the world. It was a grassroots discovery that was made by a team of Solitario geologists in mid-1996 and is still a work in progress.

Discovery
Solitario began its Bongar  exploration journey in 1993 when it optioned the Mina Grande zinc-oxide deposit in northern Peru. In 1994 and 1995, exploration pits were hand-dug, to establish a resource estimate. This effort culminated in 1995 when Solitario announced a resource estimate of 1.9 million tonnes grading 19.3% zinc and 2.2% lead. Also during 1995, Solitario discovered two zinc sulfide deposits situated approximately three kilometers northwest of the Mina Grande oxide deposit.

As a result of these new sulfide discoveries, a regional stream-sediment geochemical program was initiated over an area 65 by 30 km to assess the regional zinc potential. Four clusters of strong zinc anomalies were defined by the end of 1995. In August of 1996, Solitario geologists discovered significant high-grade zinc sulfide mineralization at surface while evaluating one of the stream sediment anomalies in the Florida Canyon area. All Solitario geologists were immediately deployed to Florida Canyon to assist in the evaluation of this new grassroots discovery. Within four months, Solitario announced a joint venture with Cominco that provided for Cominco earning a 60% interest by spending $27.5 million on exploration and paying Solitario $1.8 million over a four-year period.

Project Development
From the 1997 through 2000, Cominco drilled 82 widely-spaced core holes within a 2.0 by 1.5 km footprint. Concurrently, Cominco conducted extensive regional surface exploration to identify additional exploration targets in the region. In 2001, Cominco terminated its option to earn a 60% interest due to extremely low zinc prices. Solitario placed the project on a care-and-maintenance status for nearly five years pending higher zinc prices.

In the fall of 2006, a new joint venture was signed with Votorantim Metais, the fifth largest zinc producer in the world. Votorantim is earning a 70% interest in the project by funding all expenditures to achieve commercial production, including loaning Solitario 30% of all construction costs. To date, Votorantim has spent approximately $45 million on exploration, including completing 404 diamond drill holes which, when combined with the previous drilling of Cominco, totals 117,260 meters. In June of 2014, Solitario released the first NI 43-101 compliant resource estimate for the project.

  Tonnes Grade Contained Metal ZnEq %
  Millions Zn % Pb % Ag g/t ZnEq % Millions of lbs.
Measured 1.43 13.02 1.85 19.3 15.45 486.5
Indicated 1.35 1.51 1.71 17.1 14.75 438.8
M & I 2.78 1.77 1.78 18.2 15.10 925.3
Inferred 9.07 10.87 1.21 12.44 12.44 2487.6



Long Section looking to the NW; mineralization is approximately 2.75 kilometers long and open.

 

 

Abstract September 8, 2014
Technical Presentation

Media Luna gold-silver-copper discovery, Guerrero State, Mexico

THE PAN GOLD PROJECT, WHITE PINE COUNTY, NEVADA
Eric LeLacheur and Roger Newell
Midway Gold Corporation

The Pan gold project is situated in the core of the northern portion of the Pancake Range of east central Nevada. Midway Gold Corporation (Midway) is currently constructing an open pit mine to exploit the Pan gold deposit.

The Pancake Range is part of the Basin and Range Province, a large physiographic region characterized by a series of normal faults expressed as a sequence of north-south-trending, narrow mountain ranges separated by flat, arid valleys. The Pancake Range is approximately 85 miles long, 8 to 10 miles wide and is composed of Paleozoic carbonate and clastic sedimentary rocks, Cretaceous igneous intrusives, and Tertiary volcanic rocks.

Since acquiring the Pan property in 2007, Midway has conducted exploration using a number of different investigative techniques. Drill targets proximal to North and South Pan and additional exploration targets throughout the project area have been identified based on the results of surface geochemical surveys, chip sample analysis, geologic mapping, and geophysical surveys.

The geology of the Pan property is dominated by Devonian to Permian carbonate and clastic sedimentary rocks cut by the Pan fault, a steeply west-dipping normal fault that trends north- south. The Pan fault juxtaposes gently west-dipping sedimentary units on the west side of the fault, and steeply northeast-dipping sedimentary units on the east side. Post-mineral Tertiary volcanic rocks nonconformably overlie the faulted Devonian through Permian sedimentary units.

Pan is a Carlin-style, sediment-hosted gold system in which mineralizing fluids ascended along structural and stratigraphic pathways, interacting with preferential lithologies to create solution/hydrothermal breccias and depositing silica, iron, arsenic, barium, gold and other trace elements.

    
Regional Geology, Pancake Range by Smith R.M.,1976, Part II, Mineral Resources,    
in Geology and Mineral Resources of White Pine County, Nevada, Nevada Bureau of Mines and Geology, Bulletin 85.    

    
Conceptual Cross section of the Pan project    

Pan Resources and Reserves


Footnotes
(1) As per Independent NI 43-101 compliant Feasibility Study by Gustavson Associates, LLC (November, 2011)
(2) Includes $8.2 mm of working capital and $6.8 mm contingency

 

Abstract May 12, 2014
Technical Presentation

Media Luna gold-silver-copper discovery, Guerrero State, Mexico

Steven Bussey, Western Mining Services LLC,
Alejandro Kakarieka and Cristian Puentes, Torex Gold Resources Inc.;
Bradford Margeson and Barton Suchomel, Western Mining Services LLC

The Media Luna gold-silver-copper deposit is located 180 km southwest of Mexico City in the center of the Guerrero gold belt, an emerging regional trend of precious and base metal deposits and occurrences within the Balsas-Mezcala basin of the Guerrero terrane. Media Luna and the previously discovered El Lim¢n-Guajes deposit comprise Torex Gold's Morelos project. The total gold endowment of the Morelos Gold Property is 8.81 M oz., including resources in all categories.

At the El Lim¢n-Guajes deposit, originally discovered by Teck Corp. in 2001-2002, current measured and indicated resources are 53.8 million tonnes at 2.79 g/t gold and 4.84 g/t silver and are hosted in retrograde-altered pyroxene-garnet skarn. Open pit mine construction is currently underway at El Lim¢n-Guajes.

The Media Luna deposit, located 5 km southeast of El Lim¢n-Guajes, is a blind discovery made by Torex Gold in March, 2012. The maiden inferred resource estimate for Media Luna was released on September 16, 2013, just under 18 months from the discovery drill hole date. The Media Luna inferred resource contains 39.9 million tonnes at 2.63 g/t gold, 24.5 g/t silver and 0.97 % copper (5.84 M oz. gold equivalent at 2.0 g/t gold equiv. cut-off grade). Mineralization is open on the southeast, northwest and west margins of the area.

The Media Luna deposit occurs within the Mesozoic carbonate-rich Morelos Platform, which has been intruded by Paleocene granodiorite to tonalite stocks, sills and dikes. Skarn-hosted gold-silver-copper mineralization is developed along the contacts of the intrusive rocks and the enclosing carbonate-rich sedimentary rocks. The sedimentary rocks and their contact with the main granodiorite stock dip to the southwest at approximately 35ø. Extensive skarn alteration and mineralization formed at this contact and exhibits the same dip.

Gold-silver-copper mineralization at Media Luna is primarily associated with sulfidized pyroxene-garnet-magnetite exoskarn and with zones of massive magnetite-sulfide, which developed at the contact of granodiorite with marble. Mineralization does occur within endoskarn but is much less significant.
Sulfidation of skarn assemblages is closely related to retrograde alteration. This alteration consists of amphibole, phlogopite, chlorite, calcite ñ quartz ñ epidote. The retrograde mineral assemblage can occur as pervasive replacement of skarn minerals, sometimes preserving garnet and pyroxene outlines, or as veinlets with black chlorite or amphibole halos cutting massive skarn.

Magnetite in massive bands is black to steel grey, equigranular and 2-4 mm in diameter. Some massive magnetite contains interstitial pyrite, pyrrhotite, chalcopyrite, arsenopyrite and/or bright green phlogopite. Part of the retrograde alteration process includes sulfidation of magnetite. There are very clear examples of magnetite being replaced by pyrrhotite and pyrrhotite in turn being replaced by arsenopyrite and chalcopyrite. Increasing sulfide content (especially chalcopyrite) and amphibole-calcite appear to correlate with increasing gold content.

Gold typically occurs with elevated levels of bismuth, cobalt and tellurium. Polished sections from some high-grade gold intervals show an association of gold with cobaltite, native bismuth and bismuth-telluride minerals. The age and paragenesis of mineralization at Media Luna is currently being investigated.

Torex's exploration success since acquisition of the Morelos project is based on careful assembly and analysis of historical data combined with a willingness to drill deep holes to test concepts.

 

 

Abstract April 7, 2014
Technical Presentation

Colorado Potash Project

Jon P. Thorson, Ph.D.
Consulting Geologist AIPG CPG#10994
3611 South Xenia Street Denver, Colorado 80237
(303) 805-2502 jonpthorson@gmail.com

The industrial mineral commodity "potash" refers to a suite of naturally occurring potassium minerals and manufactured products that are primarily used for fertilizer. Potassium is one of three most important plant nutrients. The global demand for potash for fertilizer is projected to have significant future growth as population increases and demands a higher standard of living. The United States imports about 80% of the 4.5 million tonnes of potash used each year.

Colorado Potash Project is an exploration project for sylvite (KCl) in the evaporitic Paradox Formation in San Miguel and Dolores Counties, Colorado. The Paradox Formation was deposited largely as salt and gypsum during the Pennsylvanian Period when the Paradox Basin became isolated and evaporitic. Salt beds deposited during periods of extreme evaporation contain sylvite (KCl), carnalite (KMgCl3.6H2O), and other more rare potassium minerals. Because of their potassium content, potash minerals are recognizable in petroleum electric logs by elevated gamma ray response in salt beds. Potash response was discovered in 2009 in numerous petroleum logs along the crest of the Dolores Anticline in SW Colorado, about 15 miles north of Dove Creek, near the town of Egnar.

RM Potash (RMP) was formed in 2010 as the US subsidiary of Red Metals Ltd., Sydney, Australia, to explore the Dolores anticline discoveries. At present RMP controls about 40,000 acres of Federal potash exploration permits and applications for permits. A scoping study conducted for RMP has confirmed the presence of billions of tons of potash in the project area. RMP has conducted an environmental assessment, and filed an exploration plan to drill one or more "proof of concept" drill holes from 5 approved sites. Pending further evaluation of the economics of the project, drilling is proposed to begin in 2014. Drill holes will be drilled to about 5,500 feet with conventional petroleum tools and water-based mud; below the top of the Paradox salt, drilling will be by coring with oil-based mud.

Exploitation of an economic potash deposit, should one be confirmed, is proposed to be through in situ dissolution similar to the processes used at the potash mine near Moab, Utah.


 

Abstract March 10, 2014
Technical Presentation

Awakening of the Sleeper Deposit

Nancy J. Wolverson, Project Manager, Consulting Geologist
Glen Van Treek, VP Exploration & COO, Paramount Gold and Silver

The Sleeper deposit, located in the Slumbering Hills, Humboldt County, Northern Nevada, USA, is a low-sulfidation, high-grade Au+Ag deposit acquired by Paramount in 2010. The mine was in production from 1986 to 1996, operated by AMAX and produced 1.7 million ounces of gold. Since acquiring Sleeper, Paramount has been aggressively expanding the known deposit and exploring new targets. The Sleeper property includes 2,582 unpatented lode mining claims on BLM land covering a total of 20,898 hectares.

The Slumbering Hills comprise Mesozoic metasedimentary and intrusive rocks, overlain unconformably by Tertiary volcanic rocks. The historic high-grade Au + Ag mineralization occurs west of the range-front fault, beneath Quaternary sand and gravel. Gold and silver were produced from high-grade, low sulfidation, quartz-sulfide veins hosted in rhyolite, along with disseminated mineralization in silicified, acid to intermediate volcanic flows and tuffs. Sleeper is located along one of the large-scale, deep-seated, arcuate structures of the Northern Nevada Rift, which are known to host precious metal deposits in Nevada. The local structural setting is dominated by extensional tectonics: NNE-trending range-front and parallel faults, along with several sets of NW and EW faults.

The historic mineralization was predominately hosted by rhyolite, with lesser intermediate and basic volcanic rocks. Recent exploration has defined widespread, disseminated, near-surface, lower grade gold and silver mineralization in argillized and silicified intermediate to mafic volcanic rocks in the eastern portion of the deposit, known as the Facilities Zone. The south and southwestern portions of the deposit host higher grade Au + Ag mineralization in the Wood and West Wood zones, where gold occurs in steeply-dipping to vertical, silicified, sulfide-rich zones in rhyolite and intermediate volcanic rocks. Silica+sulfide dominate in a complex sequence of breccias, along with quartz veins with local areas of over 100 g/T Au. The West Wood and Wood mineralization likely coalesce at depth. Paramount has been drilling the newly discovered South Sleeper area, where Au+Ag mineralization occurs in silicified, brecciated basalt.

Paramount completed a Resource Model over the entire deposit in 2011 and a Preliminary Economic Assessment (PEA) in mid-2012. Scott E. Wilson Consulting group, completed the Preliminary Economic Assessment which defined an In-Pit Resource of 2.88 MOz Au and 31.9 MOz Ag in the measured+indicated category, plus an Inferred resource of 1.196 MOz Au, 12.9 MOz Ag.

The PEA Base Case scenario incorporates a large-scale, heap leach with a processing rate of 81,000 Tonnes per day. Metallurgical recoveries defined with column leach and bottle roll tests vary from 78% for gold and 10% for silver in oxide material to 55% for gold and 10% for silver in sulfide-bearing material. The mine plan is for an annual production of 172,000 oz Au each year over a 17-year mine life, with US$5.50 operating costs per Tonne of ore at a life-of-mine cash cost of US$749 per ounce of gold.


West Wood Cross-Section

 

Abstract February 3, 2014
Technical Presentation

The invention of the Qualified Person ("QP") and How it Employs Geologists;
This and Other Perspectives of a "Bankable Reserve Man" ("Geostatistician")

Rex Bryan, Ph.D., MBA, QP
Senior Geostatistician
Tetra Tech, Inc.
720-375-1857(cell)
Rex.Bryan@TetraTech.com

 

Geologists generally love what they do. How else can one explain the continued striving to be a geologist and to make a living?

This talk will explore the effect of the infamous Bre-X fraud and how it created a fascinating avenue of geologic employment. The presentation will revolve around the invention of the QP, i.e., "Qualified Person", and a set of Canadian regulations called the NI43-101. It will explain why the mining industry is very interested in employing QP's as employees and as consultants. More specifically, it will address how:

        1. a QP can be young with advanced skills in computer modelling
        2. a QP can be older with grey hairs and critical geologic knowledge
        3. to become a QP
        4. the term "45-days" is important
        5. to explore current 43-101 reports to see how they are structured
        6. to access SEDAR and what it is
        7. to understand the stages of the 43-101 reports as it progresses from discovery to mine(?)
        8. JORC and SAMREC regulation has a CP which is similar to a QP.

Within this framework, the presentation will also provide some "geostatistical" perspectives as it relates to the following:

        - why a geostatistician becomes a "nexus" of experts
        - the difference between "conventional" and "in-situ-leach" geostatistical modeling (in general)
        - the nugget effect problem (e.g., the Pretium saga in BC, which is pitting Strathcona against Snowden)
        - geostatistical modeling state-of-the-art trends (e.g., CT Scan technology), which threaten to reduce geologic input as has happened in the past.

 

Abstract January 6, 2014
Technical Presentation

Seabridge Gold Inc.'s KSM Project,
Northwest British Columbia
William E. Threlkeld
Senior Vice President of Seabridge Gold, Inc.

Seabridge Gold's advance stage KSM Project is located in northwest B.C., 30 km southwest of Hwy. 37A and the Northwest Transmission Line, which is currently under construction. KSM contains one of the largest undeveloped gold and copper reserves in the world.

The KSM mining district preserves an entire porphyry mineral system and contemporaneous epithermal deposits. Composite intrusive complexes host four large gold-copper porphyry deposits with direct genetic links to epithermal vein deposits. Proven and Probable mineral reserves, completed in 2012, total 2,164 M tonnes with contained metal of 9,888 M pounds of copper and 38.2 M ounces of gold. A 2012 PFS study of KSM prepared by Tetra Tech proposes a 55-year mine life with an average daily rate of 130,000 tonnes of ore milled, based on a 2,164 M tonnes reserve, with an 11.5% internal rate of return (IRR), and a 6.2-year payback of US $5,256 M in initial capital.

Prospecting for load deposits at KSM was first reported in the 1930's. Modern exploration began in the 1960's, and deposits began to develop in the late 1980's and early 1990's. Political uncertainty and low commodity prices in the late 1990's limited exploration expenditures on the property and in B.C. generally. Between 2000 and 2004, modest expenditures were made on the property and by 2006, aggressive drilling was underway, which led to the reserve base now known. The project is currently undergoing a joint harmonized provincial and federal environmental assessment review.

The KSM Mesozoic porphyry and epithermal mining district has undergone severe deformation as the rocks that host the deposits were welded onto the North American continent during Cretaceous time. As a consequence, many of the original geometric arrangements and mineralogical clues common in porphyry systems have been modified. Most of the work conducted at KSM concentrated on the intact upper porphyry system, because both the shallow and deeper parts of those systems were thought to have been significantly displaced by thrust faulting. In 2012, two deep drill holes in the Kerr zone contained evidence of near magmatic mineralizing conditions, indicating the likely presence of high temperature and pressure core zones in close proximity to the known porphyry deposits. Core zones typically report much higher grades than the broader stockwork systems surrounding them. Consequently, the exploration focus was shifted to finding core zones. Results from current exploration drilling have confirmed the presence of a bornite-bearing core zone with exceptional copper and gold grades.

Exploration drilling in 2012 also uncovered a down-thrown block of vein-type mineralization. The style of alteration and the sulfide and gange mineralogy are indicative of an epithermal mineral system. This discovery provides a more complete understanding of other vein-controlled native gold, base metal sulfide and sulfosalt occurrences elsewhere in the district.
With the discovery of the core zone and epithermal mineral systems, Seabridge Gold has confirmed the preservation of a complete Mesozoic island arc-related porphyry Cu-Au system with at least four independently-developed hydrothermal cells and potential for additional buried or "blind" cells. The well-developed near-magmatic bornite-chalcopyrite-pyrite deposits are overlain by voluminous stockwork chalcopyrite-pyrite ores, which are in turn linked to base and precious metal sulfosalts in veins.