Exploration Success Summary
To our Friends, Family and NuLegacy Shareholders/Stakeholders,
Hi Folks, I hope this finds you well. Here's an item for your 'summer' reading list!
I'm writing to draw your attention to the success of our 2014 drilling program to date (May to July). We reported the assays in three separate news releases during June and July as they were received, otherwise you would not have heard from us from May 8 (announced start of drilling) until July 22 (final batch of results reported).
This might have presented a bit of a disjointed view so I have summarized the highlights just below, and provide some context and more details further below to help you appreciate the results. The complete texts of the news releases are linked at June 23, July 8 and July 22, 2014.
- We confirmed a new South zone for the Iceberg gold deposit.
- We started filling in the 'gap' between the North and Central zones.
- We confirmed that parts of the Iceberg have significant gold in the middle Wenban-5 horizon, the same horizon that hosts the bulk of the higher grade gold in Barrick Gold's multi-million ounce Goldrush deposit adjacent to the Iceberg.
- We have indications of additional mineralized zones.
To quote my geological partner Dr. Roger Steininger, "These results confirm extensive and widespread gold mineralization in the Iceberg gold deposit. The deposit now has an apparent strike length in excess of 3,000 meters (over 10,000 feet) and is open in all directions. This phase of the 2014 drilling program confirms significant gold mineralization is present in three distinct gold horizons in the Iceberg deposit which greatly increases the possibility of delineating a threshold gold resource."
- Being in Nevada is such a blessing. Much of the open-pit heap-leach oxide gold production in Nevada is at gold grades of ½ gram/ton (and some even less).
Currently there are several such deposits under feasibility or construction with average grades of 0.5 to 0.7 grams of gold/ton. Most notable are Newmont's Emigrant mine and Midway's Pan Project, which has just been financed and is also under construction.
The Pan Project has a resource of 1.1 million ouncesi with grades of 0.5 grams/ton and a robust internal rate of return of 32% at $1,200/oz goldii...which is much better than many gold projects going into production today in less stable jurisdictions.
It points up just how favourable geology (near-surface [less than 250 meters] oxidized gold heap leach mining) and logistics (availability of qualified people and equipment) as well as political stability (no bribery costs) improve the economics of these 'sea of ½ gram plus gold ore bodies'.
The returns are good for a near-surface, oxidized gold deposit in Nevada, with its pool of mining professionals, robust mining infrastructure, and a regulatory environment that still makes sense.
- Most of the holes drilled in this program were very large step-outs (as much as 970 meters/3,200 feet) from the Iceberg gold deposit in an effort to test for the 'outer limits'...which we didn't reach.
- Prior to this round of drilling the Iceberg gold deposit was comprised of a North and Central zone that are 200 to 250 meters wide, 25 to 65 meters thick with gold grades of 0.5 grams/ton to greater than 5.0 grams/ton.
The two zones had a combined strike length in excess of 1,100 meters separated by an (until now) untested intervening gap of approximately 900 meters and form part of the Iceberg's overall potential exploration target of 90 to 100 million tonnes grading a 0.7 g/t to 1.0 g/t gold.iii
- Until now most of the gold in the Iceberg deposit is hosted in the 'contact zone' between the Horse Canyon and the upper Wenban-8 carbonate horizons at depths ranging from 75 to 125 meters. Now we are adding gold in the middle Wenban-5 formation.
A few details:
- The most significant success is the confirmation of the new South zone. We really stepped out (a full 970 meters/3,200 feet) south of the Central zone and were rewarded with two good gold intervals within the Devonian carbonates in hole RHB-27:
- 1.11 grams of gold/ton over 6.1 meters/20 feet within 0.50 grams of gold/ton over 18.3 meters/60 feet, and
- 0.40 grams of gold/ton over 12.2 meters/40 feet.
- This hole is at the southern end of a large geochemical 'gold in soil' anomaly that indicates a substantial exploration target. Additional drilling will be planned to establish the dimensions of this new South zone and see if it connects to the Central zone.
- Several holes (i.e. RHB 18, 19 and 24) have confirmed the presence of gold in the middle Wenban-5 horizon, which is the horizon that hosts much of the higher grade gold in Barrick Gold's multi-million ounce Goldrush deposit.iv
- Importantly, deeper in several of these holes, there are intervals of an intensely anomalous Carlin-type trace element suite. This suggests that this deeper horizon may host additional more favorably mineralized zones.
- We extended the Central zone of the Iceberg to the northwest with another large 200 meter (660 feet) step-out hole (RHB-26) that returned 0.18 grams of gold/ton over 47.3 meters/155 feet.
While more modest in grade than the Iceberg deposit as a whole this shows how extensive the Iceberg is, and it provides additional evidence of a lower zone of significant gold mineralization that is perhaps not directly underneath the gold mineralization in the upper 'contact' horizons of the Central and North zones of the Iceberg.
- We extended the North zone of the Iceberg to the southwest (165 feet towards the Central zone) with a drill hole (RHB-24) that had two good near-surface intervals of gold mineralization:
- 1.85 grams of gold/ton over 15.2 meters/50 feet
- 0.75 grams of gold/ton over a 7.7 meters/25 feet
Conclusion: These large step-outs have significantly expanded the footprint of the Iceberg deposit: the three on strike gold zones (North, Central and South) of the Iceberg deposit now extend over 3 kilometers and have all the classic characteristics of a well-mineralized Carlin-type gold deposit with good grades of gold in multiple horizons and multiple zones. Analysis of the results is continuing and we will provide a further update when we have determined the next step in exploring the Iceberg gold deposit.
We encourage you continue to monitor and participate in NuLegacy's exploration success as we complete the earn-in to our 70% interest in the Iceberg gold deposit from Barrick Gold Corporation.
Thank you and all the best,
Albert J. Matter | Executive Chairman, Director
NuLegacy Gold Corporation (NUG:V)
ii As reported by Midway on November 15, 2011 news release.
iii As reported on September 5, 2013, these figures are conceptual in nature and derived from a compilation of 149 historic and 16 NuLegacy drill holes in and around the Iceberg deposit. To date, there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.
iv As reported by Barrick Gold Corporation December 31, 2013, the Goldrush deposit contained a resource of 367,000 ozs gold 2,696,000 tons grading 0.136 oz/ton - measured), 8,000,000 ozs gold (63,218,000 tons grading 0.127 oz/ton - indicated) and 5,555,000 ozs gold (43,183,000 tons grading 0.132 - inferred). The close proximity of the Goldrush deposit to the Iceberg project is not necessarily indicative of the mineralization contained in the Iceberg project.