Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
July 2009
Prepared by
Eric Chapman
B.Sc. (Geology), M.Sc. (Mining Geology), C.Geol.
Consultant, Snowden Mining Industry Consultants
Dr. Thom Seal
Ph.D., P.E.
Principal and Chief Metallurgist, Differential Engineering Inc.
Office Locations
Perth
87 Colin Street
West Perth WA 6005
PO Box 77
West Perth WA 6872
AUSTRALIA
Tel: +61 8 9213 9213
Fax: +61 8 9322 2576
ABN 99 085 319 562
[email protected]
Brisbane
Level 15, 300 Adelaide Street
Brisbane QLD 4000
PO Box 2207
Brisbane QLD 4001
AUSTRALIA
IMPORTANT NOTICE
This report was prepared as a National Instrument 43-101 Technical
Report, in accordance with Form 43-101F1, for Midway Gold Corp. by
Snowden. The quality of information, conclusions, and estimates
contained herein is consistent with the level of effort involved in
Snowden’s services, based on: i) information available at the time of
preparation, ii) data supplied by outside sources, and iii) the
assumptions, conditions, and qualifications set forth in this report. This
report is intended to be used by Midway Gold Corp., subject to the
terms and conditions of its contract with Snowden. That contract
permits Midway Gold Corp. to file this report as a Technical Report with
Canadian Securities Regulatory Authorities pursuant to provincial
securities legislation. Except for the purposes legislated under
provincial securities law, any other use of this report by any third party
is at that party’s sole risk.
Tel: +61 7 3231 3800
Fax: +61 7 3211 9815
ABN 99 085 319 562
[email protected]
Vancouver
Suite 600
1090 West Pender Street
Vancouver BC V6E 2N7
CANADA
Tel: +1 604 683 7645
Fax: +1 604 683 7929
Reg No. 557150
[email protected]
Johannesburg
Technology House
Greenacres Office Park
Cnr. Victory and Rustenburg Roads
Victory Park
Johannesburg 2195
SOUTH AFRICA
PO Box 2613
Parklands 2121
SOUTH AFRICA
Tel: + 27 11 782 2379
Fax: + 27 11 782 2396
Reg No. 1998/023556/07
[email protected]
London
Abbey House
Wellington Way
Weybridge
Surrey KT13 0TT, UK
Tel: + 44 (0) 1932 268 701
Fax: + 44 (0) 1932 268 702
[email protected]
Website
www.snowdengroup.com
Subsidiary of Downer EDI Ltd
Issued by: Vancouver Office
Doc Ref: 090730_V624_FINAL_Golden_Eagle_TR.doc
Print Date: 4 August 2009
Number of copies
Snowden: 2
Midway Gold Corp.: 2
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
1 Summary.........................................................................................................................9 2 Introduction ...................................................................................................................16 3 Reliance on other experts .............................................................................................17 4 Property description and location..................................................................................18 4.1 Land tenure ...................................................................................................18 4.2 Agreements and royalties .............................................................................19 4.3 Environmental liabilities .................................................................................23 4.4 Permits ..........................................................................................................23 4.5 Historical mining activities .............................................................................23 5 Accessibility, climate, local resources, infrastructure and physiography ......................26 5.1 Accessibility ...................................................................................................26 5.2 Topography, elevation, climate and vegetation .............................................26 5.3 Infrastructure and local resources .................................................................26 6 History ...........................................................................................................................28 7 Geological setting .........................................................................................................34 7.1 Regional geology ..........................................................................................34 7.2 Local geology ................................................................................................34 7.3 Property geology ...........................................................................................37 7.3.1 Lithological units ..............................................................................37 7.3.2 Structural geology ...........................................................................39 7.3.3 Veins ...............................................................................................40 8 Deposit types ................................................................................................................41 9 Mineralization ................................................................................................................42 9.1 Introduction ...................................................................................................42 9.2 Description of mineralized zones ..................................................................42 9.3 Alteration .......................................................................................................43 10 Exploration ....................................................................................................................44 10.1 Introduction ...................................................................................................44 10.2 Historical exploration conducted from 1914 to 2000 .....................................44 10.3 Midway Gold exploration ...............................................................................45 10.3.1 Geological mapping.........................................................................45 10.3.2 Interpretation of exploration information ..........................................45 11 Drilling ...........................................................................................................................47 11.1 Introduction ...................................................................................................47 July 2009
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11.2 11.3 11.4 11.5 11.6 11.7 Drilling conditions ..........................................................................................47 11.2.1 Drilling by Mountain Lion Consolidated, Knob Hill Mines, and
Day Mines from 1914 and 1979 ......................................................47 11.2.2 Drilling by Crown Resources from 1984 to 1988 .............................49 11.2.3 Drilling by Hecla Mining Company from 1987 to 1994 ....................49 11.2.4 Drilling by Santa Fe Pacific Gold from 1994 to 1996.......................49 11.2.5 Drilling by Echo Bay Mines in 2000 .................................................49 Drillhole collar surveys ..................................................................................49 Downhole surveys .........................................................................................50 Extent of drilling .............................................................................................50 Midway Gold data compilation and grid conversions ....................................51 Drillhole intersections ....................................................................................52 12 Sampling method and approach ...................................................................................53 12.1 Sampling methods ........................................................................................53 12.1.1 Sampling by Mountain Lion Consolidated, Knob Hill Mines, and
Day Mines from 1914 and 1979 ......................................................54 12.1.2 Sampling by Crown Resources from 1984 to 1988 .........................54 12.1.3 Sampling by Hecla Mining Company from 1987 to 1994 ................54 12.1.4 Sampling by Santa Fe Pacific Gold from 1994 to 1996...................55 12.1.5 Sampling by Echo Bay Mines in 2000 .............................................55 12.2 Sample quality ...............................................................................................55 12.3 Sample preservation .....................................................................................55 12.4 Density determinations ..................................................................................56 12.5 Geological and geotechnical logging.............................................................56 12.6 Independent statement on sampling methods ..............................................57 13 Sample preparation, analyses, and security .................................................................58 13.1 Sample preparation, analyses, and security of samples collected by
Mountain Lion Consolidated, Knob Hill Mines, and Day Mines from
1914 and 1979 ..............................................................................................58 13.2 Sample preparation, analyses, and security of samples collected by
Crown Resources from 1984 to 1988 ...........................................................58 13.3 Sample preparation, analyses, and security of samples collected by
Hecla from 1987 to 1994 ...............................................................................58 13.4 Sample preparation, analyses, and security of samples collected by
Santa Fe Pacific Gold from 1994 to 1996 .....................................................59 13.5 Sample preparation, analyses, and security of samples collected by
Echo Bay Mines in 2000 ...............................................................................59 13.6 Quality control measures ..............................................................................59 13.6.1 Certified standard samples..............................................................59 13.6.2 Blank samples .................................................................................60 13.6.3 Duplicate samples ...........................................................................60 July 2009
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13.7 13.8 Sampling study undertaken by Hecla Mining ................................................63 Independent statement on sample preparation, analyses, and security .......63 14 Data verification ............................................................................................................65 14.1 Data verification by Santa Fe Pacific Gold ....................................................65 14.2 Data compilation and verification by Midway Gold ........................................65 14.3 Twin drillholes ...............................................................................................66 14.4 Independent site inspection May 2009 ..........................................................67 14.4.1 Independent review of mineralized intersections ............................67 14.4.2 Independent sampling of mineralized intersections ........................70 14.4.3 Independent review of drillhole collar coordinates ..........................71 14.4.4 Independent review of original assay certificates ............................71 15 Adjacent properties .......................................................................................................74 16 Mineral processing and metallurgical testing ................................................................75 16.1 Introduction ...................................................................................................75 16.2 Mineral processing and metallurgical testing by Hecla Mining Company
and Santa Fe Pacific Gold ............................................................................75 16.3 Summary of process options .........................................................................76 16.3.1 Process option 1: Whole ore flotation with cyanidation carbonin-leach of flotation tails ...................................................................77 16.3.2 Process option 2: Whole ore bio-oxidation in heaps or ground
slurry with cyanidation carbon-in-leach of the bio-oxidation tails ....79 16.3.3 Process option 3: Whole ore pressure oxidation followed by
cyanidation carbon-in-leach of the pressure oxidation tails .............81 17 Mineral resource and mineral reserve estimates ..........................................................82 17.1 Disclosure .....................................................................................................82 17.1.1 Known issues that materially affect the mineral resources .............82 17.2 Assumptions, methods, and parameters – June 2009 mineral resource
estimates .......................................................................................................82 17.3 Supplied data, data transformations, and data validation .............................83 17.3.1 Supplied data ..................................................................................83 17.3.2 Data preparation..............................................................................83 17.3.3 Data transformation .........................................................................85 17.3.4 Data validation.................................................................................85 17.4 Geological interpretation, modeling, and domaining .....................................85 17.4.1 Geological interpretation and modeling ...........................................85 17.4.2 Definition of grade estimation domains ...........................................85 17.5 Sample statistics ...........................................................................................86 17.5.1 Sample grade bias analysis ............................................................86 17.5.2 Sample compositing ........................................................................87 July 2009
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17.6 17.7 17.8 17.9 17.10 17.11 17.5.3 Extreme value treatment .................................................................88 17.5.4 Data declustering ............................................................................89 Variography ...................................................................................................89 17.6.1 Continuity analysis ..........................................................................89 17.6.2 Variogram modeling ........................................................................89 Estimation parameters ..................................................................................90 17.7.1 Kriging parameters ..........................................................................90 17.7.2 Block size selection .........................................................................90 17.7.3 Sample search parameters .............................................................90 17.7.4 Block model set up ..........................................................................91 17.7.5 Boundary conditions and grade interpolation ..................................91 Tonnage factor ..............................................................................................92 Estimation validation .....................................................................................93 17.9.1 Domain statistics, slice validation plots, and visual validation .........93 Mineral resource classification ......................................................................94 17.10.1 Geological continuity .......................................................................94 17.10.2 Data density and orientation............................................................94 17.10.3 Data accuracy and precision ...........................................................94 17.10.4 Spatial grade continuity ...................................................................95 17.10.5 Estimation quality ............................................................................95 17.10.6 Classification process......................................................................95 Mineral resource reporting ............................................................................96 17.11.1 Reasonable prospects for economic extraction ..............................96 17.11.2 Mineral resource tabulation .............................................................97 18 Other relevant data and information .............................................................................99 19 Interpretation and conclusions ....................................................................................100 20 Recommendations ......................................................................................................102 21 References..................................................................................................................105 22 Date and signatures ....................................................................................................107 23 Certificates ..................................................................................................................108 Tables
Table 1.1 Golden Eagle June 2009 mineral resources ....................................... 12 Table 2.1 Responsibilities of each co-author ...................................................... 16 Table 4.1 Golden Eagle Project land tenure details ............................................ 18 Table 4.2 Newmont gross proceeds royalty........................................................ 20 July 2009
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Table 6.1 Crown Resources’ historical (1991) unclassified resource
estimate of the South Penn Gold Project ............................................ 31 Table 6.2 Hecla’s historical (1990) unclassified resource estimate of the
Golden Eagle Project .......................................................................... 32 Table 6.3 SFPG’s historical (1997) unclassified resource estimate of the
Golden Eagle Project at a range of gold prices .................................. 32 Table 10.1 Summary of exploration programs on the Golden Eagle Property ..... 44 Table 11.1 Summary of drilling completed at the Golden Eagle Project ............... 48 Table 12.1 Sample number by drilling methodology ............................................. 53 Table 13.1 Check assay laboratories.................................................................... 63 Table 14.1 Assay certificates validated by Midway Gold ...................................... 65 Table 14.2 Mineralized drill core intersections reviewed by Snowden .................. 67 Table 14.3 Drillcore intersections unavailable for review ...................................... 68 Table 14.4 Snowden independent drill core sample assay results ....................... 70 Table 14.5 Assay certificates reviewed by Snowden ............................................ 72 Table 16.1 Summary of process options .............................................................. 77 Table 17.1 Summary of drillholes by operator used in the 2009 mineral
resource estimate ............................................................................... 84 Table 17.2 Undeclustered composite and top cut data statistics .......................... 88 Table 17.3 Variogram model parameters for gold, silver, and zinc by domain
for the 50th decile ................................................................................ 90 Table 17.4 Block model parameters ..................................................................... 91 Table 17.5 Grade interpolation methods by domain ............................................. 91 Table 17.6 Dry tonnage factors for the Golden Eagle deposit .............................. 92 Table 17.7 Tonnage factor applied by domain ...................................................... 92 Table 17.8 Comparison of mean estimated and input data grades by domain
for Indicated classified material ........................................................... 93 Table 17.9 Key pit optimization parameters .......................................................... 97 Table 17.10 Golden Eagle June 2009 mineral resources reported above a
range of gold cut-off grades ................................................................ 98 Table 20.1 Proposed budget for ongoing development at the Golden Eagle
Project ............................................................................................... 104 Figures
Figure 4.1 Location map of Golden Eagle Property ............................................. 21 Figure 4.2 Golden Eagle Project land tenure map ............................................... 22 Figure 6.1 Map of mining operations in the Eureka Mining District ...................... 29 Figure 7.1 Regional geology map ........................................................................ 35 Figure 7.2 Local geology map modified from Fieferek et al (1995) ...................... 36 July 2009
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Figure 7.3 Property geology map ......................................................................... 37 Figure 11.1 Golden Eagle drillhole location map ................................................... 51 Figure 13.1 Santa Fe Pacific Gold pulp duplicates ................................................ 61 Figure 13.2 Santa Fe Pacific Gold sample pulp re-assay results .......................... 62 Figure 14.1 Twin drillhole gold grade comparison by depth ................................... 66 Figure 17.1 Location map of validated drillholes available in the 2009 Golden
Eagle mineral resource ....................................................................... 84 Figure 17.2 Comparison by company of gold sample grades in the Sanpoil
high grade domain .............................................................................. 87 Appendices
A Significant drillhole intercepts B Drillhole collar coordinates July 2009
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1 Summary
This Technical Report refers to the Golden Eagle Project, a gold mineral exploration
project located in Ferry County, Washington State, USA, operated by Midway Gold
Corp. (Midway Gold). Midway Gold is a precious metals development and exploration
company based in White Rock, British Columbia, and listed on the NYSE Amex
(NYSE.A:MDW) and on the TSX Venture Exchange (TSX.V:MDW).
The Golden Eagle gold deposit is located in the Kettle River Range of northeast
Washington. Mineralization is hosted in the Eocene aged Sanpoil Formation. This
formation consists of a lower series of andesitic flows and an upper series of
volcaniclastics and air fall pyroclastics. The Sanpoil is overlain by the Eocene aged
Klondike Mountain Formation, a post mineral unit of lower lacustrine siltstone and
upper sandstones and conglomerates. Minor placer gold mineralization occurs in the
lower conglomerates as a result of erosion of the Golden Eagle and adjacent Knob Hill
deposits. Both units are overlain by up to 300 ft of post mineral unconsolidated glacial
till.
Gold mineralization trends roughly east-west, with a north to northeast plunge under
the overlying Klondike Formation and glacial till. Gold mineralization is associated
primarily with moderately to highly silicified volcanics that lie just beneath a sinter cap
of hot springs system. The quartz veins are epithermal, while the main Golden Eagle
gold deposit is disseminated in nature. Gold and silver mineralization occurs in arsenicrich overgrowths on pyrite. Sulfide concentration averages approximately 3%. Higher
grade gold veins lie underneath, to the west, and within the Golden Eagle
mineralization. Historical underground mining along gold-silver rich quartz veins
occurred at the Mountain Lion, Knob Hill, and the JO#3 workings, which are proximal
to Golden Eagle.
Extensive historic drilling has occurred on the property from 1940 to 2000, by both
historic producers (Knob Hill Mining, Day Mines, and the Hecla Mining Company
(Hecla)) as well as large mining corporations (Santa Fe Pacific Gold (SFPG) and Echo
Bay Mining). Small scale underground and surface production from the Mountain Lion
Mine occurred from 1900 to 1947 to the west of the Golden Eagle deposit. Additional
mining by Knob Hill Mines occurred to the east and below the Golden Eagle deposit
on the JO#3 vein set. Limited historic vein mining occurred within the Golden Eagle
deposit and has been depleted from the 2009 mineral resource estimate reported in this
Technical Report.
A total of 171,163.4 ft of drilling from 835 holes was completed between 1940 and 2000
in the Golden Eagle resource area. Sampling from reverse circulation (RC) and core
drilling at the deposit was carried out using industry standard practices and procedures
at the time the holes were drilled and/or assayed. Verified original data, totaling
140,950.8 ft from 204 drillholes have been used in the 2009 mineral resource estimate.
Verification was completed by comparison of gold sample grades on laboratory assay
certificates and drill logs obtained from historic operators of the project. Gold sample
grades that had laboratory assay certificates or drill log verification were utilized in the
resource estimate.
Mineralized grade estimation domains were established by interpretation of geological,
structural and sample assay information on sections and plans. Sample assays within the
domains were composited into 5 ft intervals. Sample search distances and directions for
resource estimation were established using spherical variogram models on the sample
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composites within the estimation domains. Extreme sample composite grades were
capped from 0.10 opt to 0.50 opt Au depending upon the domain, and sample
composite grades greater than the capping threshold were set to the capping value. Less
than 0.2% of the sample composites were affected by the capping. A density factor of
13.7 cubic feet per short ton (ft3/st) was applied to the mineralized bedrock material,
and a factor of 13.5 ft3/st to 14.3 ft3/st was applied to surrounding bedrock. A tonnage
factor of 15.1 ft3/st was applied to overlying glacial till. A three dimensional block
model was generated and composited sample grades were used to estimate gold grades
within mineralized domains using an ordinary kriging estimation methodology.
Documents detailing the metallurgical test work conducted by several unverified
laboratories and consultants on mineralized samples from the Golden Eagle deposit
were reviewed and documented by Differential Engineering Inc. (Differential
Engineering, 2009). The test work described in these reports have not yet been verified
through independent test work, and it is unknown whether the samples are
representative of the Golden Eagle deposit, however, the reported results indicate that
the Golden Eagle deposit represents a refractory gold and silver target for further
metallurgical testing, with the material types and grade similar to gold ore processed
from the Carlin Trend in Nevada.
Hecla and SFPG conducted various metallurgical tests in the 1980s and 1990s which
demonstrated that direct cyanidation is not a feasible process option for most of the
samples, that the gold is finely and homogeneously disseminated in the samples, and
that the mineralized material is generally refractory for gold extraction. Refractory gold
refers to mineralized material that is naturally resistant to gold recovery by direct
standard cyanidation and activated carbon adsorption processes.
Calculations based on estimated abundances of different types of pyrite in a
metallurgical sample suggests that about 66% of the gold could be present in solid
solution in arsenic-bearing, fine to medium grained pyrite. Gold extraction by direct
cyanidation was limited to 11.8% to 27.8%, except in one composite which exhibited
gold extraction up to 59.2% by direct cyanidation, for a composite weighted average of
22.4%. Whole ore cyanide extraction therefore does not appear to be a viable extraction
process for the bulk of the deposit.
Due to the refractory properties of most of the Golden Eagle mineralized material,
which does not exhibit any preg-rob tendencies (the adsorption of dissolved goldcyanide by organic carbon present in the gold, rather than the activated carbon used to
recover the gold), sulfide oxidation will improve gold extraction and recovery. Standard
pre-treatment options for sulfide refractory ores include chemical pre-treatment,
roasting, bio-oxidation, pressure oxidation (POX), ultra-fine grinding and concentration
by gravity or flotation. The gold in the Golden Eagle mineralized material mostly occurs
as solid solution within the pyrite matrix, which is generally impermeable to direct
cyanidation, so the gold must be liberated by oxidation of the sulfides to yield
permeable sulfates and oxides that are more readily leached. Thus the degree of sulfide
oxidation will generally correlate with the success of extracting the gold via cyanidation.
Flotation tests were able to achieve gold recoveries at 82.4% to 95% into the flotation
concentrate, which comprised 12.46% to 26.84% of the total weight. Flotation
concentrate assays ranged from 0.143 opt to 0.905 opt. This large concentrate mass with
relatively low gold grade may be challenging to transport, capitalize and process
economically. Additional metallurgical testing on the flotation concentrate for biooxidation and pressure oxidation followed by cyanidation showed overall gold
extractions using bio-oxidation at 71.7% to 82.6% and POX gold extraction at 88.5% to
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93.5%. Mather (1990) noted that bio-oxidation and pressure oxidation of the whole
samples supplied by Hecla both enabled subsequent optimal extraction of 90% or more
of the gold. The tests achieved a high degree of sulfur oxidation (>99%) and enabled
gold extractions of 94% to 98%. At sulfur POX oxidation of 92%, gold extraction
dropped to 89%.
Extensive grinding test work was performed for semi-autogenous grinding (SAG) and
rod/ball setups. The rod/ball work index was determined to be 19.5 KWhr/st and
0.25 g2 for the Bond Abrasion Index. Densities of composites samples ranged from
2.62 g/cm3 to 2.67 g/cm3. It was reported that ground slurry pulps of the Golden Eagle
material may exhibit high viscosity and difficult filtration issues.
Sample composites have been reported to contain significant quantities of arsenic, iron,
mercury, selenium, and sulfides. The arsenic was stated to be concentrated in the grain
rims, the rims ranging up to 4 um in thickness. Gold was detected in the arsenical rims
of the fine grained pyrite, the gold/silver association was observed in every grain
studied in detail, and the gold was stated to occur either as colloidal material or in solid
solution.
In addition, samples of the Golden Eagle deposit have been noted to be potential acid
generating (PAG) material. The fact that the Golden Eagle Property is a sulfidic deposit
in a “net precipitation area” means all waste rock, dumps or storage of material should
be mined and stacked in such a fashion to separate the material from the environment
and to minimize the potential acid generation potential for the material.
This Technical Report is intended to disclose the first mineral resource for the Golden
Eagle Project (Table 1.1) effective June 2009. Tons and grades have been reported
above a range of gold opt cut-off grades. To date, no analysis has been made to
determine the economic cut-off grade that will ultimately be applied to the Golden
Eagle Project.
An economic pit analysis was performed on the Golden Eagle resource model in order
to contain the resource within a reasonable pit boundary and to establish a reasonable
expectation of economic extraction using a $750 per ounce gold price and 85% gold
recovery. The parameters used in the pit optimization are detailed in Section 17.11.
No mineral reserves have been estimated at this time. Additional studies will be required
to determine technical, economic, legal, environmental, socio-economic, and
governmental factors. These modifying factors are normally included in a mining
feasibility study and are a pre-requisite for conversion of mineral resources to, and
reporting of, mineral reserves. The CIM Standards (CIM, 2005) describe completion of
a Preliminary Feasibility Study as the minimum prerequisite for the conversion of
mineral resources to mineral reserves.
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Table 1.1
Golden Eagle June 2009 mineral resources
Classification
Gold cut-off
grade (opt)
Tons (Mt)
Gold (opt)
Contained gold (Koz)
Indicated
0.01
43.0
0.045
1,915
0.02
31.4
0.055
1,744
0.03
23.4
0.066
1,545
0.04
17.9
0.076
1,355
0.05
13.8
0.085
1,173
0.01
11.6
0.024
284
0.02
5.1
0.038
192
0.03
3.0
0.047
143
0.04
1.8
0.055
100
0.05
0.9
0.066
61
Inferred
Notes:
The most likely cut-off grade for this deposit is not known at this time and must be confirmed
by the appropriate economic studies.
Historical underground workings have been depleted from the mineral resource.
Resources are reported within an ultimate pit shell generated with a $750 gold price and
85% gold recovery.
The estimated metal content does not include consideration of any other mining, mineral
processing, or metallurgical recoveries.
Tons and ounces have been rounded and this may have resulted in minor discrepancies in
the totals.
Mineral resources that are not mineral reserves do not have demonstrated economic
viability. No mineral reserves have been estimated.
The estimate of mineral resources may be materially affected by environmental, permitting,
legal, title, taxation, socio-political, marketing, or other relevant issues.
The following recommendations are made for the further advancement of the Project
and to improve confidence in the mineral resource estimate:
• Increase the number of tonnage factor measurements on existing drill core and any
new drillholes to improve the confidence in resource tons. Samples should be
selected according to a representative suite of lithologies, mineralization, and
alteration types, through spatially representative locations throughout the deposit.
The representativity can be confirmed by consulting the number of density
determinations tabulated by grade estimation domain for each deposit and
increasing the number of density samples in domains with low sample numbers
relative to the number of sample assays in the domain. Spatial representativity can
be confirmed by plotting the location of specific gravity samples on the drillhole
trace in plan and in section.
• Increase the number of twin holes at the project to confirm data obtained by
historical operators. The twin holes should test the full range of drilling campaigns
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used in the resource estimate by geology, date, company, and core diameter,
through spatially representative locations throughout the deposit.
• Undertake exploration, twin, and metallurgical sample diamond drilling to provide
samples for oxide definition, density analysis, metallurgical testing, and exploration
for additional resources on the property.
• Undertake a detailed topographic survey of the project site and compare with
drillhole collar coordinates to ensure drillholes are in the correct locations, and
validate the transformation of coordinates to move drillhole data from the historic
mine grid to the UTM grid.
• Further refine the geological interpretation by reviewing archived drillhole logs and
comparing to drillhole core.
• Conduct surface mapping of the project area to clearly define major faults and
geological controls on exposed mineralization.
• Conduct surface sampling of exposed bedrock to determine the extent and tenor of
mineralization exposed on surface.
• Update the geology and mineralization model to include information gathered from
surface mapping and sampling.
• Update the geology and mineralization model to reflect alteration and oxidation to
better define metallurgical types and the amount of oxide material on the project.
Oxide resource models should include estimates of sulfide sulfur, cyanide
amenability, and carbonates.
• Estimate silver grades in the resource model to determine if sufficient silver
concentrations exist in the deposit to allow mineral processing of silver as a byproduct.
• Undertake slope stability studies to establish the maximum slope angles for an
‘ultimate’ pit shell design and to determine the extent of neighboring additional
land required to realize the full potential of the mineral resource.
• Consider the purchase of additional land and mineral rights from Hecla Mining Co.
to obtain neighboring land and undertake appropriate environmental and
engineering studies on the extra land.
• Evaluate alternative mining technologies such as in-pit crushing and conveying
(IPCC) in comparison to standard truck and shovel mining methods for an open
pit mining scenario. IPCC has the potential to provide lower overall unit mining
costs and therefore could increase the resource base and lower the overall stripping
ratio for the Golden Eagle deposit. The low electrical rates in the project area may
make this option fairly attractive if it can be incorporated into the overall site
development plan and may reduce some project risk due to escalating diesel fuel
prices in the future.
• Evaluate the underground mining potential and timing.
• Evaluate the current processing technologies and potential alternatives that may be
applicable to the Golden Eagle deposit and develop scoping level capital and
operating costs for those technologies.
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• Investigate potential locations of tailings impoundment areas and tailings storage
options.
• Investigate potential locations for waste rock disposal.
• Evaluate the geotechnical input requirements and develop geotechnical testing
programs to provide slope design parameters for open pit mine design.
• Determine bulk sampling alternatives for bench scale and pilot scale testing.
• Verify that all data and reports from metallurgical sampling, test work, analytical
results, and quality control are valid and reliable. This includes verification of
assays, metallurgical balances and reagent calculations.
• Verify metallurgical work completed by previous operators through independent
test work conducted by project metallurgists.
• Attempt to correlate all the information from past metallurgical test work to
specific locations in the deposit and to quantify the tons associated with each
mineralized rock type.
• Undertake cost analysis of various metallurgical treatment options, developing a
flow sheet and associated costs.
• The process flowsheet selected for the treatment of the mineralized material will
require a companion economic analysis for process capital and operational costs
coupled with reagent prices and logistics for concentrate shipment if warranted.
• All samples selected for metallurgical analysis should comprise freshly collected
material (i.e., not collected from historical samples) and should be spatially and
geologically representative of the resource material.
• Conduct mineral liberation analysis (MLA) on fresh samples to determine the
minerals in the deposit as well as to determine which minerals and size fraction
contain the gold distribution. Post extraction material should also be examined to
determine the gold distribution for process optimization.
• Further test work on gravity separation of the larger sulfide fraction is needed in
any grinding flowsheet to see if the quantity of gold recovered to a gravity
concentrate warrants that relatively cheap concentration step prior to further
processing.
• Using fresh samples of representative mineralized rock from the deposit, conduct
column bio-tests to determine the change in mineralogy and gold extraction as a
function of size, time, reagent concentration and sulfide oxidation.
• Using fresh samples of representative mineralized rock from the deposit, conduct a
pilot plant test to determine the optimal recovery for gold extraction in the
flowsheet.
• The projected waste rock material should be tested for potential acid generating
(PAG) characterization, which may involve specific rock testing in humidity cells to
determine.
Snowden further recommends that Midway Gold undertake a conditional simulation
study to quantify risk associated with different portions of the deposit. The study can
also be used to quantify the optimal drillhole spacing required to achieve a range of
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estimation qualities and identify targets for infill drilling. The outcome of this approach
would be an understanding of the degree of grade estimation error associated with
particular volumes of mineralization for a range of drillhole spacing patterns. The grade
estimation error and other important aspects of the project data, as described in Section
17.10, are considered while assigning mineral resource confidence categories.
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2 Introduction
This Technical Report has been prepared by Snowden Mining Industry Consultants Inc.
(Snowden) for Midway Gold Corp. (Midway Gold), in compliance with the disclosure
requirements of National Instrument 43-101 (NI 43-101), to disclose relevant
information about the Golden Eagle Project. This information has resulted from
exploration and sample data compilation and analysis, and mineral resource estimates.
Unless otherwise stated, information and data contained in this report or used in its
preparation has been provided by Midway Gold. This Technical Report has been
compiled from sources cited in the text by Mr. Eric Chapman, C.Geol., Consultant with
Snowden, and under the supervision of Snowden by Mr. Don Harris, CP.Geo., Vice
President of Advanced Projects for Midway Gold, and by Dr. Thom Seal, PE, Principal
and Chief Metallurgist of Differential Engineering. Mr. Chapman, Mr. Harris, and
Dr. Seal are Qualified Persons as defined by NI 43-101. Mr. Chapman visited the
Golden Eagle Project in May 2009, and is independent of Midway Gold as defined by
NI 43-101. Mr. Harris accompanied Mr. Chapman to the Project in May 2009. The
responsibilities of each author are provided in Table 2.1.
Table 2.1
Responsibilities of each co-author
Author
Responsible for section/s
Dr. Thom Seal
16: Mineral processing and metallurgical testing
Eric Chapman
All other sections
This report is intended to be used by Midway Gold subject to the terms and conditions
of its contract with Snowden. That contract permits filing this report as a Technical
Report with Canadian Securities Regulatory Authorities pursuant to provincial securities
legislation. Except for the purposes legislated under provincial securities laws any other
use of this report by any third party is at that party’s sole risk.
Reliance on the report may only be assessed and placed after due consideration of
Snowden’s scope of work, as described herein. This report is intended to be read as a
whole, and sections or parts thereof should therefore not be read or relied upon out of
context. Any results or findings presented in this study, whether in full or excerpted,
may not be reproduced or distributed in any form without Snowden’s written
authorization.
The following unit conventions have been used in this report:
1 foot (ft) = 0.3048 metres (m)
1 inch (in) = 0.0254 m
1 US short ton (t) = 0.9072 metric tonne
1 troy ounce per short ton (opt) = 34.2857 parts per million (ppm)
Au = Gold.
Ag = Silver
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3 Reliance on other experts
There has been no reliance on experts who are not Qualified Persons in the preparation
of this report, except for information regarding the land agreements, options and claims
as well as the accuracy of title, where the authors have relied on the accuracy of the
opinion of Mr. R.J. Smith of Midway Gold Corp.
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4 Property description and location
The Golden Eagle Property is located in Ferry County, Washington State, USA,
approximately three miles north-northwest of the town of Republic, Washington
(Figure 4.1). The Property is situated in the Eureka Mining District, one mile west of
the Knob Hill Mine (active from 1896 to 1998) and proximal to the Mountain Lion
Mine (active from 1904 to 1947).
The Project is located on the United States Geological Survey (USGS) Republic,
Washington 1:100,000 scale, 30 × 60 minute series topographic map and the USGS
Storm King Mountain 1:24,000 scale, 7.5 minute series quadrangle map. It is centered at
latitude 48° 40’ North and longitude 118° 45’ West. The principal area of known
mineralization on the Golden Eagle Property is located within the northwest quarter of
Section 27, Township 37 North, Range 32 East (T37N, R32E), Willamette Meridian
(W.M.). Mineralization also occurs at the South Penn target in Section 28, Township 37
North, Range 32 East (T37N, R32E), W.M. The main areas of mineralization covered
by drilling are shown in Figure 4.2.
4.1 Land tenure
The Golden Eagle Property encompasses an area of approximately 339.56 acres (137.41
ha). The Project consists of ten patented lode mining (some of which have been
subdivided) and millsite claims, nine contiguous fee parcels, and three unpatented lode
mining claims covering portions of Sections 22, 27 and 28, T37N, R32E, W.M (Figure
4.2).
Taxes payable to the Ferry County Treasurer on patented claims and fee parcels are due
annually by May 1st if paid in full, or the first half by May 1st and the second half by
November 1st for the current tax year. Unpatented claim assessment fees payable to the
Bureau of Land Management are due annually by August 31st for the following
assessment year. A complete listing of all patented claims, fee parcels and unpatented
claims is provided in Table 4.1.
The Project is located within surveyed Townships. All of the property claims are located
in Township 37 North, Range 32 East, W.M. Parcel boundaries are defined using
aliquot parts, public mineral surveys and privately conducted property surveys on file
with the Ferry County Assessor’s office. No public mineral surveys of the unpatented
claims have been filed or are necessary.
Table 4.1
Source
Golden Eagle Project land tenure details
Surface Minerals Sec.
Serial No.
Description
Acres
EB, HL
100%
100%
27
-
Mountain Lion Lode, M.S.
402-A
20.66
EB, HL
100%
100%
27
-
Flat Iron Lode, M.S. 402-A
7.589
EB, HL
100%
100%
27
-
Last Chance Lode, M.S.
402-A
20.66
EB, HL
100%
100%
27
-
Mountain Lion Mill Site,
M.S. 402-B
5.00
EB, HL
100%
100%
27
-
Gopher Lode, M.S. 509
19.72
EB, HL
100%
100%
27
-
Government Lot 1
41.13
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Source
Surface Minerals Sec.
Serial No.
Description
Acres
EB, HL
100%
100%
27
-
Government Lot 2
6.80
EB, HL
100%
100%
27
-
Government Lot 3
0.46
EB, HL
100%
100%
27
-
Government Lot 4, less Tax
Lot 4
7.26
EB, HL
100%
100%
27
-
N½NE¼, less Tax Lot 1202
PL
100%
100%
27
-
Government Lot 8
8.80
EB
100%
100%
28
-
Government Lot 1
36.00
PL
100%
100%
28
-
South Penn Lode, M.S.
664, less Tax Lot 8
12.88
PL
100%
100%
28
-
South Penn Fraction Lode,
M.S. 664
3.27
PL
100%
100%
28
-
Government Lot 4, less Tax
Lot 9
10.88
PL
100%
-
28
-
Tax Lot 5
PL
100%
-
28
-
Vulcan No. 2 Lode, M.S.
606
PL
100%
100%
28
-
Tax Lot 8
2.54
PL
100%
100%
28
-
Tax Lot 9
3.27
PL
100%
100%
28
-
Mormon Lode, M.S. 584
PL
100%
100%
28
-
Government Lot 5
BLM
100%
100%
28
ORMC164710,
County 273914
GEH 1 (unpatented lode
claim)
GEH 2 (unpatented lode
claim)
GEH 3 (unpatented lode
claim)
77.36
2.61
19.53
13.44
13.9
5.38
BLM
100%
100%
28
ORMC164711,
County 273915
BLM
100%
100%
22
ORMC164712,
County 273916
0.42
EB: Echo Bay Exploration Inc.
HL: Hecla Limited (formerly known as Hecla Mining Company)
PL: Private landholder(s)
BLM: Department of Interior, Bureau of Land Management
4.2 Agreements and royalties
On August 9, 1995, Santa Fe Pacific Gold Corporation (SFPG) and Hecla Mining
Company (Hecla) entered into an earn-in agreement granting SFPG the right to earn a
70% undivided interest in Hecla’s holdings in the Republic district (approximately 4,732
gross acres, or 1,915 ha), exclusive of limited surface inholdings and certain
environmental exclusion areas. The agreement was later amended and restated to allow
SFPG to earn a 75% interest in the same properties. SFPG completed the required
obligations to earn a 75% interest in approximately 204.29 acres comprising the Golden
Eagle Property (the “Property”) on September 5, 1996 and was granted the properties
by means of a warranty deed effective of that date. The parties concurrently executed an
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agreement (the “Operating Agreement”) governing their respective interests in the
Property which provides for joint funding of exploration and development
expenditures, an area of interest provision, and pre-emptive rights in certain
circumstances.
On February 15, 2000, SFPG merged and was acquired by Newmont Mining Company
(Newmont). On July 7, 2000, Newmont sold its interest in the Property and assigned its
rights and responsibilities under the Operating Agreement to Echo Bay Exploration
Inc. (Echo Bay) in exchange for Echo Bay’s interest in the Kuranakh project in Russia.
At that time, the property was burdened with a sliding-scale gross proceeds royalty
(Table 4.2) payable to Newmont.
Table 4.2
Newmont gross proceeds royalty
Spot price per troy ounce gold
Percentage
Less than $350
0.000
$350 to $400
0.375
Greater than $400
0.750
On November 8, 2006, Hecla Mining Company changed its name to Hecla Limited.
Midway Gold acquired Echo Bay and Hecla’s interest in the Operating Agreement
under the terms set forth below.
On May 28, 2008, Midway Gold entered into an agreement to acquire Echo Bay’s 75%
interest in the Property, Operating Agreement, and an additional 36 acre parcel (100%
owned) for a total purchase price of US$1,500,000. The terms of the agreement granted
Echo Bay a 2% Net Smelter Returns royalty and a right of first refusal to toll mill any
ore produced from the Property at their Kettle Mill facility. Closing was subject to a 60day pre-emptive right in favor of Hecla Limited under the terms of the Operating
Agreement. Hecla waived their right on July 17, 2008, and Midway Gold’s whollyowned Washington subsidiary Golden Eagle Holding Inc. (GEH) closed the transaction
on July 31, 2008.
On July 1, 2008, MGC entered into an agreement to acquire Hecla Limited’s 25%
interest in the Property and Operating Agreement for a total purchase price of
US$483,333. Closing was subject to a 60-day pre-emptive right in favor of Echo Bay
under the terms of the Operating Agreement. Echo Bay waived their right on
July 3, 2008, and GEH closed the transaction on August 1, 2008. Hecla did not reserve
a royalty interest.
On April 22, 2009, GEH acquired 27.02 acres of fee lands comprising 100% surface
and mineral interest known as the South Penn project and contiguous with the Golden
Eagle Property for a sum of US$30,000 from a private landholder. No royalty interest
was reserved.
On May 22, 2009, GEH acquired 64.09 acres of fee lands comprising 22.14 acres of
100% surface (the mineral interest is held by a private party and is not considered
material to the resource area) and 41.95 acres of 100% surface and mineral interest
contiguous with the Property for a sum of US$105,750 from a private landholder. No
royalty interest was reserved.
Midway Gold has represented that the Golden Eagle Project is not subject to any other
royalties, back-in rights, payments, agreements, or encumbrances. Snowden has not
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reviewed the land tenure situation and has not independently verified the legal status or
ownership of the properties or any agreements that pertain to the Golden Eagle Project.
Land tenure and agreements have been provided by Midway Gold; Snowden has
reviewed the information and believes it is reliable.
Figure 4.1
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Location map of Golden Eagle Property
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Figure 4.2
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Golden Eagle Project land tenure map
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4.3 Environmental liabilities
Historical surface and underground mining activities occurred on the property between
1896 and 1995 and the possibility exists of unidentified environmental issues. However,
an environmental impact review by Hecla in 1990 (Hecla, 1990) identified no fatal flaws
with the Golden Eagle Project. SFPG conducted an extensive environmental review in
1995 prior to completing their earn-in at Golden Eagle and signing of an option and
sub-lease agreement at South Penn and identified a number of sites as exclusion areas in
the Hecla land holdings. None of these exclusion areas are contained within Midway
Gold’s current landholdings. The underground portal to the Mountain Lion Mine was
sealed by Hecla in the mid 1990s and the surface mine workings re-contoured, reseeded and allowed to be reclaimed naturally.
No environmental liability is known to exist at this time.
Mud Lake, located to the south-southeast of the project is a shallow pond that could
potentially be impacted by operations at Golden Eagle. No hydrology studies have been
completed at this time, but this area would be sensitive, with any wetlands loss requiring
replacement.
4.4 Permits
Exploration activities on lands with no direct ownership or other encumbrances by
federal agencies fall under the jurisdiction of the State of Washington and Ferry County
agencies.
Midway Gold’s exploration activities are permitted under the Washington Surface
Mining Act (Chapter 78.44 RCW). A reclamation permit is required when mineral
prospecting or exploration activities result in:
• More than three acres of disturbed area.
• Surface mined slopes greater than 30 ft high and steeper than 1 ft horizontal to 1 ft
vertical; or
• More than one acre of disturbed area within an eight acre area, when the disturbed
area results from mineral prospecting or exploration activities.
The Washington Department of Natural Resources (DNR) has primary jurisdiction
over reclamation permits under the State Environmental Policy Act (SEPA). It is not
anticipated that the activities recommended in Section 20 of this report would require a
reclamation permit with the DNR.
All development and earth-moving activities requiring a local permit must be conducted
in consultation with the Ferry County Planning and Building Department.
Historically, water for drilling purposes was obtained from Hecla mine wells, which are
no longer accessible. In the future, Midway Gold’s activities would require acquisition
of water from municipal or third party sources.
4.5 Historical mining activities
Mining operations in the Eureka Mining District’s 100 year history produced nearly
three million ounces of gold at an average grade of 0.58 opt Au. A plan of mining
operations is shown in Figure 6.1.
The Mountain Lion claim, on the Golden Eagle Property, was located in March 1896.
There were reported to be three parallel veins at the surface, but only one had
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commercial grade ore. The productive vein was followed downward for 800 ft from the
surface. The Mountain Lion mine was developed with a tunnel 1,260 ft into the
mountain, and a shaft sunk to 700 ft. The company built a 100 ton per day mill that
used amalgamation and cyanide. This mill recovered only 64% of the gold, and the
company shut the operation down in 1900. In 1902, the Mountain Lion Company
installed a new cyanide circuit in their mill but again experienced unsatisfactory recovery
rates and closed the mill, and shipped ore directly to smelters via new railroads. By
1910, the Mountain Lion was one of the principle producers in the district. Around
1914, the Mountain Lion underground mine shut down.
The first significant production from the Knob Hill vein, immediately east of the
Golden Eagle Property, began in 1911. Production increased in 1918 when a new shaft
allowed development of the 200 level. Small scale mining continued into the early
1930s.
Thomas Murray purchased the Mountain Lion claim on the Golden Eagle Property in
1927 and resumed operations. An explosion and fire in 1927 destroyed the surface
facilities and allowed flooding of the mine to the 300 level. Murray pumped out to the
600 level the following spring and production resumed. Lessees operated the mine from
1930 to 1936 and made periodic shipments of ore to smelters. It was reported that 80%
of the ore coming from the Republic area in 1936 came from the Mountain Lion, with
3,000 t shipped monthly. The mine shut down in mid-1937.
The Mountain Copper Company came to Republic when they acquired an option to
purchase the Mud Lake claim southeast of Mountain Lion and west of Knob Hill in
1935. Mountain Copper vacated their lease in April 1936, removed their equipment, and
surrendered their option.
Knob Hill Mining took over the Mud Lake Claims in September 1936. Knob Hill
Mining built a 400 ton per day mill and brought in the first power line to the district.
The mill utilized a fine grind and cyanide to recover 92% to 96% of the gold. Knob Hill
mined the Mud Lake disseminated deposit as an open pit from 1937 to 1939 and
discovered the smaller Stewart breccia deposit nearby. In 1939 the company discovered
the high grade South Cross breccia vein in old underground workings at Knob Hill. The
high grades discovered in the South Cross resulted in a switch from open pit to shaft
mining. The termination of open pit mining was the result of a change in the dip of the
deposit and “other natural restraints” (increasing strip ratio). The final Mud Lake pit
was 80 ft deep on its south end. Production from the Knob Hill open pits was
48,623 oz gold (with an average grade of 0.1 opt Au) and 424,738 oz silver (with an
average grade of 0.85 opt Ag). This production was later covered by tailings associated
with the Knob Hill Mine.
Production from the Mountain Lion resumed in 1938. Operators mined the Mountain
Lion using open pit methods from 1939 to 1945. On the adjacent Trevitt-Pierce
property, open pit mining continued until 1947. Production from the Mountain Lion
and Trevitt-Pierce has been estimated (Hecla, 1985) at 9,000 oz gold with an average
grade of 0.12 opt Au and 18,750 oz silver, with an average grade of 0.25 opt Ag, by
open pit methods and 16,300 oz gold with an average grade of 0.21 opt Au and
155,200 oz silver, with an average grade of 2 opt Ag, by underground methods.
Ore mined and developed from Mountain Lion open pits between 1937 and 1947
equaled the total district production from 1896 to 1937 (Wright, 1947).
From 1958 through 1967, Knob Hill Mines and Day Mines drove the lower levels (7 to
13) of the Knob Hill mine to the north to mine the JO#3 vein (Full, 1960). At their
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northern limit, they were mining veins beneath the Golden Eagle deposit, but the mine
did not connect with the Mountain Lion workings. Total production from the JO#3
vein is not known at this time.
Day Mines was incorporated in 1947 and the company acquired Republic area
properties when it merged with Aurum Mining Company in 1950. In 1953, Day Mines
leased the Gold Dollar claim to Knob Hill Mines. When Knob Hill Mines closed
operations in 1978, Day Mines acquired the company and re-opened the mine. This
consolidated the Eureka District under one owner for the first time. In 1981, Day
Mines, the fifth largest silver producer in America, was taken over by Hecla Mining
Company, the second largest silver producer.
The Republic unit was Hecla’s only significant gold operation. Faced with declining
reserves, the narrow, high grade Bailey vein was discovered in 1981, which extended
mine life for two years. The Golden Promise gold deposit was discovered in 1983, and
Hecla operations continued until 1998.
While Hecla was discovering and defining the Golden Eagle deposit, Crown Resources
and Glamis Gold had identified a heap leachable gold deposit on their South Penn
property south of the old Trevitt-Pierce/Mountain Lion open pits. The South Penn
Gold Project now comprises the southern portion of the Golden Eagle Project. In
1987, Glamis Gold, through their subsidiary Chemgold, and Crown Resources mined
33,000 t of 0.03 opt Au from the South Penn pit and processed it on a small heap leach.
No other mining activity has taken place on the Golden Eagle Property since 1995.
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5 Accessibility, climate, local resources, infrastructure and physiography
5.1 Accessibility
The Golden Eagle Property is situated on the western edge of the Republic Graben
within the Okanogan Highlands and is accessed from the south from Republic, WA via
the Knob Hill-Trout Creek Road from North Clark Avenue (Washington State
Highway 20). This paved county road, approximately 3 miles long, serves as the main
access to the historic Knob Hill Mine (formerly operated by the Hecla Mining
Company) and surrounding lands.
The nearest town to the property is Republic, Washington, which is situated at the
intersection of Highways 20 and 21 and hosts a population of 954 (Census 2000 data).
The greater Ferry County area hosts a population of 7,260 (Census 2000 data). The
nearest city is Spokane, Washington, approximately 130 miles by road to the southeast,
which hosts a population of 451,200 (2007 Washington Census Estimate).
5.2 Topography, elevation, climate and vegetation
The Golden Eagle Project is located within a set of low rolling hills associated with the
Kettle River Range of northeast Washington. The hills slope away from the project to
the east towards the Knob Hill Mine, and drops off to the west along North Fork
Creek. Elevation at the Property ranges from 2,950 ft to 3,930 ft above mean sea level,
and the topographic relief can be characterized as moderate.
The vegetation covering the property includes grass, and birch and pine trees typical of
the northeastern Washington area.
The climate in the Golden Eagle area is typical for northeastern Washington. Average
monthly high temperatures range from 57.2° F to 81.4° F in summer (May through
September) with low temperatures ranging from 15.1° F to 30.2° F in the winter. Yearly
precipitation, in the form of rain and snowfall averages approximately 16.5 in per year,
with an average annual snow fall of 50.3 in per year. December through February
receives the bulk of the snowfall.
Exploration is possible year around, with access to the property via a plowed, paved
County road. Snow levels in winter and wet conditions in spring can make travel within
the property difficult at times.
5.3 Infrastructure and local resources
The Golden Eagle Project is large enough to host an open pit mining operation and/or
underground operation. The project would include an open pit, process plant, waste
dumps, and tailings impoundment, should they be necessary. Midway Gold has secured
the surface rights for the immediate area associated with the project. Additional land
will need to be acquired if the full depth of the resource is to be extracted by an open
pit operation. Power is available at the nearby (< 1 mile) Knob Hill Mine and sufficient
water is potentially available as indicated by near surface water intersected by drilling.
Local resources necessary for the exploration and possible future development and
operation of the Golden Eagle Project are located in Republic and surrounding area, as
well as the nearby cities of Spokane, WA, Coeur d’Alene, ID, and Wenatchee, WA. The
Republic area has a long mining history, and Kinross Gold Corporation currently
operates the Buckhorn underground mine to the north. It is anticipated that personnel
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and resources for operations at Golden Eagle would be available from Republic and
surrounding communities.
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6 History
All of the resource estimates referred to in this section are historical in nature and have
not been verified by a Qualified Person, and do not comply with the disclosure
requirements of NI 43-101. They are mentioned here for completeness only and should
not be relied upon.
The Golden Eagle Property is located at the northern end of the Eureka Mining District
(Figure 6.1), which covers an area six miles long and about one mile wide. Mining
operations over its 100 year history produced nearly three million ounces of gold at an
average grade of 0.58 opt Au. The Golden Eagle Property is located near the historic
Mountain Lion and Knob Hill mines.
The first claims in the district were made in 1896 after the Colville Indian Reservation
was opened to mineral entry. Veins formed prominent outcrops, so many of the
important veins were staked in the first weeks of prospecting. Initial samples from the
veins showed weak to moderate gold values. That first summer, high grade
mineralization was discovered on the Lone Pine vein that ran $320/t (16 opt Au).
The Mountain Lion claim, on the Golden Eagle Property, was located in March 1896
and the Mountain Lion Gold Mining Company formed in 1898. There were reported to
be three parallel veins at the surface, but only one had commercial grade mineralization.
The productive vein was followed downward for 800 ft from the surface. The Mountain
Lion mine was developed with a tunnel 1,260 ft into the mountain, and a shaft sunk to
700 ft. The company built a 100 t per day mill that used amalgamation and cyanide. This
mill recovered only 64% of the gold, and the company shut the operation down in
1900.
Following the arrival of two railroads in Republic in the summer of 1902, the Mountain
Lion Company installed a new cyanide circuit in their mill. Recovery was still not
satisfactory so the mill was shut down and ore shipped directly to smelters via the new
railroads. By 1910, the Mountain Lion was one of the principle producers in the district.
Around 1914, the Mountain Lion underground mine shut down.
The first significant production from the Knob Hill vein, immediately east of the
Golden Eagle Property, began in 1911. Production increased in 1918 when a new shaft
allowed development of the 200 level. Small scale mining continued in the early 1930s.
Thomas Murray purchased the Mountain Lion claim on the Golden Eagle Property in
1927 and resumed operations. An explosion and fire in 1927 destroyed the surface
facilities and allowed flooding of the mine to the 300 level. Murray pumped out to the
600 level the following spring and production resumed. Lessees operated the mine from
1930 to 1936 and made periodic shipments of ore to smelters. It was reported that 80%
of the ore coming from the Republic area in 1936 came from the Mountain Lion, with
3,000 t shipped monthly. The mine shut down in mid-1937.
The Mountain Copper Company came to Republic when they acquired an option to
purchase the Mud Lake claim southeast of Mountain Lion and west of Knob Hill in
1935. They were drawn by reports of a wide, low grade quartz zone that previous
operators had found but did not exploit. They discovered a lower grade disseminated
gold deposit 100 ft wide by 1,800 ft to 2,000 ft long, at a higher than expected grade
($6/t or approximately 0.17 opt Au). However, Mountain Copper vacated their lease in
April 1936, removed their equipment, and surrendered their option.
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Figure 6.1
July 2009
Map of mining operations in the Eureka Mining District
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Knob Hill Mining took over the Mud Lake Claims in September 1936. Knob Hill
Mining built a 400 t per day mill and brought in the first power line to the district. The
mill utilized a fine grind and cyanide to recover 92% to 96% of the gold. Knob Hill
mined the Mud Lake disseminated deposit as an open pit from 1937 to 1939 and
discovered the smaller Stewart breccia deposit nearby. In 1939 the company discovered
the high grade South Cross breccia vein in old underground workings at Knob Hill. The
high grades discovered in the South Cross resulted in a switch from open pit to shaft
mining. The termination of open pit mining was the result of a change in the dip of the
deposit and “other natural restraints” (such as an increasing strip ratio). The final Mud
Lake pit was 80 ft deep on its south end. Production from the Knob Hill open pits was
48,623 oz gold (with an average grade of 0.1 opt Au) and 424,738 oz silver (with an
average grade of 0.85 opt Ag). This pit was later covered by tailings associated with the
Knob Hill Mine.
Production from the Mountain Lion resumed in 1938. Operators mined the Mountain
Lion using open pit methods from 1939 to 1945. On the adjacent Trevitt-Pierce
property, open pit mining continued until 1947. Production from the Mountain Lion
and Trevitt-Pierce has been estimated at 9,000 oz gold with an average grade of 0.12 opt
Au and 18,750 oz silver by open pit methods and 16,300 oz gold with an average grade
of 0.21 opt Au and 155,200 oz silver by underground methods (Hecla, 1985).
Ore mined and developed from Mountain Lion open pits between 1937 and 1947
equaled the total district production from 1896 to 1937 (Wright, 1947).
From 1958 through 1967, Knob Hill Mines and Day Mines drove the lower levels (7 to
13) of the Knob Hill mine to the north to mine the JO#3 vein (Full, 1960). At their
northern limit, they were mining veins beneath the Golden Eagle deposit, but the mine
did not connect with the Mountain Lion workings. Total production from the JO#3
vein is not known at this time.
Breccia-hosted disseminated gold mineralization, similar to that from the Mud Lake pit,
was recognized over the years by various workers. Disseminated mineralization was
reported at the Mountain Lion by Kingman in 1943 and Wright in 1947. Exploration
drilling from 1967 to 1968 from the 11th and 13th levels of the Knob Hill identified a
wide zone of veinlets and disseminated gold in the hangingwall of the JO#3 vein.
Day Mines was incorporated in 1947 and the company acquired Republic area
properties when it merged with Aurum Mining Company in 1950. In 1953, Day Mines
leased the Gold Dollar claim to Knob Hill Mines. For several years, this lease was the
largest source of income for Day Mines. When Knob Hill Mines closed operations in
1978, Day Mines acquired the company and re-opened the mine. This consolidated the
Eureka District under one owner for the first time. In 1981, Day Mines, the fifth largest
silver producer in America, was taken over by Hecla Mining Company, the second
largest silver producer.
The Republic unit was Hecla’s only significant gold operation. Faced with declining
reserves, the narrow, high grade Bailey vein was discovered in 1981, which extended
mine life for two years. The Golden Promise gold deposit was discovered in 1983, and
Hecla operations continued until 1995.
When Day Mines took over Knob Hill Mines in 1978, they drilled 15 holes in the
Mountain Lion area. Four years later, Hecla consultant D. Nielson evaluated the
Mountain Lion for near-surface disseminated gold potential. As a result of that study,
Hecla drilled 15 vertical holes in late 1982. Intercepts included 188 ft of 0.069 opt Au in
drillhole ML-8 and 145 ft of 0.085 opt Au in drillhole ML-6. No further exploration
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work was done on the area until E. Braun recommended a bulk mineable exploration
program in 1985.
A two hole drill program in 1986 was unsuccessful, as only one hole was drilled to
bedrock. Drillhole ML-17 encountered 175 ft of 0.061 opt Au and 25 ft of
0.158 opt Au, associated with the Golden Eagle deposit. The following year, three holes
were drilled to obtain metallurgical test material and to expand mineralization in the
hanging wall of the JO#3 vein. Only one hole hit mineralization and had an intercept of
150 ft of 0.096 opt Au in drillhole 87-102. In 1988, the first hole of the year was drilled
to test the hanging wall of the JO#3 vein and to follow up on underground drilling
from the 1960s. Drillhole 88-111 encountered 158 ft of 0.087 opt Au in a black
chalcedonic breccia with no quartz veining. This hole has been referred to as the
discovery hole for Golden Eagle. Step out drilling that year completed 18 holes in the
Golden Eagle resource. An additional 19 holes were drilled in 1989.
While Hecla was discovering and defining the Golden Eagle deposit, Crown Resources
and Glamis Gold had identified a heap leachable gold deposit on their South Penn
property south of the old Trevitt-Pierce/Mountain Lion open pits. The South Penn
Gold Project now comprises the southern portion of the Golden Eagle Project. From
1985 to 1986 a total of 73 holes were completed and the project identified 278,000 t of
0.078 opt Au at a 0.04 opt Au cut-off grade (containing 21,680 oz gold) of oxide
mineralization. In 1987, Glamis Gold, through their subsidiary Chemgold, and Crown
Resources mined 33,000 t of 0.03 opt Au from the South Penn pit and processed it on a
small heap leach. Recovery was expected at 900 oz gold (with a recovery of 91%) over a
two year mine life.
In November 1991, Crown Resources hired Western Services Engineering to complete
a resource appraisal on the South Penn Gold Project, which forms the southern portion
of the Golden Eagle deposit (Western Services Engineering, 1991). Historical in-situ
geological resources were estimated and are shown in Table 6.1.
Table 6.1
Crown Resources’ historical (1991) unclassified resource estimate of the South
Penn Gold Project
Gold cutoff grade
(opt)
Tons
Gold
grade
(opt)
Silver
grade
(opt)
Contained
gold
ounces
Contained
silver ounces
0.020
607,550
0.058
0.237
35,240
143,990
0.050
279,330
0.084
0.366
23,460
102,230
Note* These are historical figures only and should not be relied upon.
Based on these results a small open pit was designed, containing 186,650 t grading
0.094 opt Au and 0.45 opt Ag. No further action was taken by Crown Resources.
Cominco Engineering Services (CESL) completed a Prefeasibility study on the Golden
Eagle Project for Hecla in March 1990 (CESL, 1990) that concluded the project was not
economically viable with the reserves and mine plan at that time.
Hecla drilled an additional 30 core holes that year and completed an internal
Prefeasibility study in December 1990 (Hecla, 1990). The assumptions used in the study
included a gold price of $400, a silver price of $6.25, milling costs of $15.00/t, mining
costs of $0.90/t, general and administrative costs of $3.40/t, an economic cut-off grade
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of 0.042 opt Au, a process cut-off grade of 0.054 opt Au, and process recoveries of
89.1% for gold and 50% for silver. The unclassified resources reported from this study
above a range of cut-off grades are shown in Table 6.2. This study concluded that the
ore had very homogenous grades but was refractory and could not be run in the existing
oxide mill. They explored several options for gold recovery with recovery results
ranging from 50% to 80%. Costs to treat the refractory ore were deemed uneconomic
at a $400 gold price. Hecla shelved the project but recommended exploration for deep
vein potential. In October 1994, Hecla announced closure of the Republic unit and
stockpiled ore was processed until Jan 1995.
Table 6.2
Hecla’s historical (1990) unclassified resource estimate of the Golden Eagle
Project
Gold
cut-off
grade
(opt)
Tons
Gold
grade
(opt)
Silver
grade
(opt)
Contained
gold
ounces
Contained
silver ounces
0.050
28,208,364
0.084
0.393
2,369,503
11,085,887
0.070
16,265,596
0.103
0.461
1,675,356
7,498,440
0.100
7,036,458
0.128
0.560
900,667
3,940,416
Note* These are historical figures only and should not be relied upon.
In 1995 and 1996, SFPG completed an earn-in to a 75% interest in a joint venture with
Hecla for the Golden Eagle Project. SFPG believed that their proprietary nitrogen
flotation process would treat the refractory ore and they saw the potential to enlarge the
deposit. The company completed 10 RC holes and 46 core holes in 1995 and 1996 and
did an extensive metallurgical testing program. They re-assayed sample pulps from
previous drilling campaigns and assayed un-sampled core intervals from the Hecla
drilling. SFPG acquired the South Penn property from Crown Resources in November
1995. A Prefeasibility scoping study was completed in 1996 (SFPG, 1996a). SFPG
drilling doubled the size of the resource to an estimated 32.19 Mt grading 0.069 opt Au.
In 1997 SFPG completed a gold resource estimate using Lerch-Grossman pit
optimizations (Table 6.3, SFPG, 1997). Cost assumptions used were gold prices
between $150 and $600, mining costs of $0.80/t, processing costs of $7.46/t, general
and administrative costs of $1.23/t, an economic cut-off grade of 0.024 opt Au, a
process cut-off grade of 0.030 opt Au, and a process recovery of 77%.
Table 6.3
Gold Price
SFPG’s historical (1997) unclassified resource estimate of the Golden Eagle
Project at a range of gold prices
$150
$200
$250
$300
$350
$400
$600
Ore tons (Mt)
0.15
7.08
13.79
16.03
18.35
21.90
32.19
Gold grade (opt)
0.087
0.090
0.083
0.081
0.079
0.075
0.069
Contained gold ounces
12,779
636,912
1,144,695
1,298,703
1,449,731
1,642,277
2,221,198
Recovered gold ounces
9.853
491,059
882,560
1,001,300
1,117,743
1,266,196
1,712,544
Waste tons (Mt)
0.024
26.67
56.04
66.86
82.48
104.97
245.08
0.2
3.8
4.1
4.2
4.5
4.8
7.6
Strip ratio
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Gold Price
$150
$200
$250
$300
$350
$400
$600
Cash cost/recovered
ounce
$143
$180
$199
$205
$215
$230
$293
Note* These are historical figures only and should not be relied upon.
Newmont Mining acquired SFPG in 1997. No further work was done by Newmont,
and the 75% share was traded to Echo Bay in 2000. During 2000, Echo Bay drilled four
RC and two core holes, before deciding to focus on the K2 discovery. In 2003, Echo
Bay was acquired by Kinross Gold Corp., and there appears to be no further work
completed on the property. In 2008, Midway Gold acquired 75% of the property from
Kinross and the remaining 25% from Hecla.
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7 Geological setting
7.1 Regional geology
The Republic region is located at the south end of the Omineca crystalline belt (Figure
7.1). This belt is characterized by metamorphic core complexes and intrusion of the
Colville Batholith. Near Republic, the Okanogan and Kettle gneiss dome complexes are
separated by a set of en echelon grabens filled with Eocene-age volcanics. The Republic
Graben is the largest of these north-northeast trending grabens. Rocks in the graben
include Mesozoic-age meta-sediments overlain by 47 Ma to 54 Ma volcanic and
volcaniclastic rocks. Intrusion of the Colville Batholith occurred late in the gneiss dome
uplift development, at a time of east-west extension that also formed the grabens.
Intrusive rocks occur along and are cut by graben bounding faults. Eruption of
volcanics in the grabens is nearly contemporaneous with intrusion of the batholith.
Local basins likely developed as a result of extensional faulting at a time of waning
volcanism. Hydrothermal activity driven by deep heat sources and channeled through
structural conduits deposited mineral deposits near the paleosurface which were
subsequently covered by lake bed sediments. The deposits were uncovered again by
Pleistocene glacial scouring.
7.2 Local geology
A map of the local geology is shown in Figure 7.2. The Republic Graben is 50 miles
long and 5 miles to 6 miles wide. It is bounded on the west by the Bacon Creek Fault
and on the east by the Sherman Fault. Eocene volcanics in the graben have been
divided into the older tuffs of the O’Brien Creek Formation, overlain by thick
porphyritic andesite lava flows with interbedded flow breccias, epiclastic breccias, and
sediments of the Sanpoil Formation. Hypabyssal intrusive feeder dikes of the Scatter
Creek Formation intrude the Sanpoil. An angular unconformity separates the Sanpoil
from overlying lake bed sediments of the Klondike Mountain Formation. Klondike
Mountain sediments include conglomeratic deltaic sequences and fine grained, layered
lake-bed mud and siltstones with abundant carbon. Post-mineral amygdaloidal basalt
dikes and sills intrude both the Sanpoil and Klondike Mountain Formations.
Pleistocene-age glacial till is common over much of the region.
The bulk of the district’s historical production has been from gold bearing quartz veins
that cross cut the Sanpoil Volcanics. This production is also associated with the
northwest trending Eureka Fault zone, with most historic workings in the east
(hangingwall) of the fault. Evidence suggests that the fault system developed
contemporaneously with gold and silver mineralization.
The Golden Eagle deposit is located near the western margin of the Republic Graben,
with the margin demarked by the Bacon Creek Fault. Rocks exposed to the west are
Paleozoic- and Mesozoic-age metamorphic rocks from the Okanagan gneiss dome
complex.
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Figure 7.1
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Regional geology map
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Figure 7.2
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Local geology map modified from Fieferek et al (1995)
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7.3 Property geology
A property geology map is shown in Figure 7.3.
Figure 7.3
Property geology map
The Golden Eagle deposit is a tabular, steeply dipping hydrothermal breccia body
hosted in Sanpoil Volcanics and overlain by the Klondike Mountain Formation and
recent glacial gravels. The deposit is mostly covered by gravels, with outcropping
mineralization on the south and west margins.
7.3.1
Lithological units
Eocene O’Brien Creek Formation
The O’Brien Creek Formation is the lower most lithological unit at the property. The
formation underlies the Sanpoil, and is represented as bedded crystal lithic tuffs, and
tuffaceous sandstone and shales with volcanic and metasediment fragments. Little work
has been done on this unit, and it appears to be represented in only a small portion of
the drilling at the base of the deposit. The maximum thickness is indicated at 3,900 ft
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(Holder and Gaylord, 1989). Age dates in northeastern Washington yield a K-Ar biotite
age of 54.5 Ma (Pearson and Obradovich, 1977).
Eocene Sanpoil Volcanics
The Sanpoil Volcanics are Eocene-age andesitic to dacitic lava flows, flow breccias,
tuffs, and tuff breccias, and volcaniclastics. The Sanpoil can be divided into a lower
series of massive andesite flows and flow breccia textured rocks, a middle fragmental
unit of tuff breccias, and an upper volcaniclastic to conglomerate zone. This is the
primary mineralization host at the Golden Eagle Project, and alteration is dominantly
propylitic, argillic, and silicification. Correlation between individual beds and flows
intersected in drillholes is difficult due to alteration and different geology logging criteria
used by geologists working between 1940 and 2000. The thickness of the Sanpoil
exceeds 8,200 ft, and is greater than 3,000 ft locally (Holder and Gaylord, 1989). K-Ar
dates range from 53.8 Ma to 49.6 Ma (Pearson and Obradovich, 1977).
The primary host of mineralization at Golden Eagle is the 20° to 30° east-dipping
Sanpoil Formation. Within the area of drilling, a lower massive bedded andesite
porphyry flow is overlain by a middle fragmental unit of tuff breccia, conglomerates,
and epiclastic sediments. This is topped by an upper transition zone of dark matrix,
heterolithic conglomerate up to 200 ft thick. The dark matrix may be carbon-rich. The
andesite porphyry has phenocrysts of plagioclase, biotite, and local hornblende, and
becomes more intensely flow banded with depth. Discontinuous interbedded sediments
occur locally.
Eocene Scatter Creek Dikes
Several dikes of rhyodacitic composition have been noted in the drill logs, and assigned
to the Scatter Creek Unit. These dikes and sills cross cut the Sanpoil and O’Brien Creek
lithologies and are thought to be of similar age to the Sanpoil (Holder and Gaylord,
1989), but appear to be older than the Klondike Mountain Formation. The relationship
to mineralization is unknown, as the area of noted Scatter Creek dikes does not contain
any gold mineralization.
Eocene Klondike Mountain Formation
The Klondike Mountain Formation consists of thinly bedded lacustrine silts and
mudstones with abundant fossil and organic matter that grades upwards into sandstones
and conglomerates. This unit overlies the Sanpoil, and is post mineralization. Some
‘placer type’ mineralization occurs as the result of erosion of the Golden Eagle and
Knob Hill deposits, resulting in the inclusion of mineralized clasts in the lower parts of
the formation. The Klondike is between 0 and 400 ft thick across the deposit. The
Formation thickens to the east, where it has been down dropped along the Mud Lake
Fault. The total thickness of the Klondike is estimated at 3,000 ft, although a full
section is not present on the property as a result of erosion. K-Ar dates are
inconclusive, but suggest a deposition date of between 50.4 Ma and 42.4 Ma (Pearson
and Obradovich, 1977).
At Golden Eagle the Klondike Mountain Formation has a lower “rubble” unit of
conglomerate with rounded clasts in a sand to mud matrix. Clasts of gold bearing vein
material have been observed in the rubble unit. An upper unit of distinctive thin
bedded, varved lacustrine silts and mudstone with abundant carbon and fossils grades
upward into sandstones and conglomerates. The sediments are capped by glassy basalt
flows. The lake beds strike N20-30W and dip 20° to 30° east. At Golden Eagle, the
thickness of the Klondike Mountain Formation ranges from absent to up to 400 ft
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thick. The thickest part is to the east where rocks have been down-dropped by the Mud
Lake Fault.
Tertiary un-named dikes
Four major Tertiary aged dikes have been noted cross cutting both the Sanpoil and
Klondike Mountain, and appear to be post mineralization. SFPG classified these based
on visual appearance, but no dating or detailed whole rock analysis has been completed.
These dikes are trachyandesite to basalt in composition, with amygdaloidal textures.
Logging has identified amygdaloidal, basalt, and dacite dikes, which appear to fit into
this unnamed dike classification. Thicknesses range from inches up to 200 ft.
Glacial till
The deposit is covered by Pleistocene glacial till deposits up to 300 ft thick comprising
an unconsolidated mix of boulders, gravels, sand, and clays.
7.3.2
Structural geology
The district is dominated by northeast trending fault zones related to the edge of the
Republic Graben. The graben bounding Bacon Creek Fault is 1,500 ft west of Golden
Eagle. Sub-parallel faults such as the Mud Lake, Mountain Lion, and Flat Iron faults
divide the area into discrete structural blocks. These faults cross cut sets of westnorthwest, northwest, and north trending faults and veins. Detailed mapping in the
underground workings show the Mud Lake and Mountain Lion faults are wide zones of
multiple fractures.
The northeast trending faults consistently offset the other fault and vein sets. Fifarek et
al. (1995) reports that for most of the district, displacement is right lateral with little dip
displacement. In the underground mine workings along the JO#3 vein, the
displacement appears to be left lateral. At Golden Eagle, there appears to be a
significant vertical movement as well. The Mud Lake and Mountain Lion faults dip
steeply to the northwest. The Bacon Creek Fault dips to the southeast. In earlier
reports, the Mountain Lion Fault was identified as a west-northwest trending fault on
the 300 level of the Mountain Lion mine. Eventually, the name became associated with
a large northeast trending fault that displaces the JO#3 vein in the underground
workings. The original Mountain Lion Fault is now considered part of the South Penn
fault system.
A set of northwest and west-northwest trending faults and veins that are cut by the
northeast faults includes the South Penn Fault. The South Penn Fault consists of
multiple structures trending west-northwest at the south end of the Golden Eagle
deposit. It was exposed at the surface in the old Trevitt-Pierce open pit and in the
underground workings of the Mountain Lion mine. The Eureka Fault associated with
gold deposits further to the southeast projects toward the Golden Eagle area but has
not been identified west of the Mud Lake Fault.
The Golden Eagle deposit is cut by two major fault systems and terminates against the
western margin of the Republic Graben. Most of the faulting appears to be related to
the formation of the Republic Graben, with major trends at N20W and N40E.
The Bacon Creek Fault forms the western margin of the Republic Graben, and is
located immediately to the west of the deposit. This fault follows the main drainage that
borders the property, and emplaces granitic pluton rock against Sanpoil Volcanics. The
Golden Eagle deposit outcrops prior to the fault, and appears to be younger in age.
The Mud Lake Fault does not have any surface expression, but bounds the deposit on
the east side. The Mud Lake Fault strikes north-south, dips approximately 70° to 80° to
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the east, and is a wide (between 50 ft and 100 ft) structural zone. Golden Eagle appears
to be offset by this fault, with both gold mineralization and Tertiary dikes offset by the
fault. Movement is normal, with approximately 300 ft of throw.
The Mountain Lion/South Penn Fault system strikes N70W to N70E and dips from
30° to 70° northeast. The fault terminates against the Mud Lake Fault and also appears
to form a boundary along the southern portion of the deposit. The deposit may be
offset in the footwall of the fault zone. Movement appears to be strong right lateral,
with minor reverse movement.
There are also several oblique structures running N60-80W that parallel the Tertiary
dikes. Offset distances range from 10 ft to 100 ft, with apparent left lateral offset noted
in quartz veins. These oblique faults are truncated by the Mud Lake and Mountain Lion
faults.
7.3.3
Veins
The JO#3 vein is parallel to the South Penn Fault but was only exposed in the
underground workings of the Knob Hill mine. The JO#3 vein has an average width of
4.6 ft and dips from 45° to 85° to the northeast. The vein is broken into three main
structural blocks by the Mud Lake and Mountain Lion faults and is displaced by
numerous cross faults with left lateral offsets of between 5 ft to 50 ft. To the northwest,
the vein steepens and rotates to a north-northwest strike.
The Mountain Lion vein strikes north-south and is steeply dipping. Historic mine maps
show three to four low angle faults with displacements of 50 ft to 100 ft to the east.
There is a vertical gap of 600 ft between underground development of the JO#3 vein
on the 10 level and that on the Mountain Lion vein at the 700 level.
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8 Deposit types
Gold mineralization at the Golden Eagle deposit occurs in epithermal veins and
hydrothermal breccias developed from near-surface hot springs activity in the Eocene.
Sinter and breccias have been identified at or near the paleosurface, indicating that the
hot springs were venting to the surface. The hydrothermal breccias and stockwork vein
zones are believed to grade downward and laterally into epithermal quartz veins.
Pressure release as rising hydrothermal waters approached the surface resulted in boiling
of the fluids and deposition of gold in epithermal quartz veins. Hydro-fracturing and
brecciation at and above the boiling horizon resulted in deposition of gold in
hydrothermal breccias and stockwork quartz veins. In this type of deposit, very high
grades often occur at the boiling horizon.
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9 Mineralization
9.1 Introduction
The Golden Eagle deposit is associated with epithermal hot springs that have produced
both high grade gold- and silver-rich quartz veins and a lower grade silicified
hydrothermal breccia. The bulk of the Golden Eagle deposit consists of a strong to
moderately silicified hydrothermal breccia. Black chalcedonic quartz supports silica
flooded host rock fragments of Sanpoil Volcanics, with occasional vein clasts.
Fragments are sub-rounded to angular and from 0.1 ft to 2 ft in diameter. Less than
10% of the deposit is composed of highly bleached and argillized Sanpoil Volcanics.
This material can contain carbon-rich fracture fillings that helped concentrate gold.
Gold is associated with arsenic-rich pyrite, with total sulfide content averaging 3% to
4%. Gangue minerals consist of chalcedony, white quartz, minor calcite, and green
fluorite. The fine grained texture of the black chalcedony and the pyrite are suggest a
shallow depth of formation, at or near the surface.
The Golden Eagle deposit is flat lying and trends N80E, with a strike length of
approximately 2,500 ft, a variable width up to approximately 1,000 ft and depth of
approximately 2,000 ft, as defined by three dimensional modeling of drillhole sample
grades above cut-off grades of 0.006 opt Au, 0.030 opt Au, and 0.100 opt Au.
Mineralization outcrops on the west and southwest portions and plunges between 15°
to 20° under post mineralization cover to the east and north. The deposit has a well
defined shape as the result of post-mineralization faulting along the South Penn,
Mountain Lion, and Mud Lake faults.
Quartz veins are defined primarily at the Mountain Lion and JO#3 workings which are
to the west and underlie the Golden Eagle deposit respectively. The Mountain Lion
strike and dip direction, as recorded from underground mapping and three dimensional
modeling, is N10W to N10E, and is near vertical. The vein is offset by low angle faults
by 10 ft to 100 ft to the east at depth. Production grades averaged 0.210 opt Au, which
has been confirmed with limited exploration drilling on extensions of the vein. The
mined portion of the vein was 550 ft long and 600 ft vertically and outcropped on the
surface. The JO#3 vein strike and dip direction, as recorded from underground
mapping and three dimensional modeling, is N50W, 80-85NE. The vein has been offset
by large north-northwest trending faults, and has not been tracked farther west than the
South Penn Fault system. Grade was typically greater than 0.50 opt Au, with grades up
to 4.3 opt Au noted in the drilling. The mined portion of the vein was 1,500 ft long and
850 ft high.
9.2 Description of mineralized zones
Discrete veins have been identified at JO#3 workings and the Mountain Lion Mine.
There are also numerous veins indicated in the geological logging drillholes in the
Golden Eagle deposit. Veins range from less than 1 in to 10 ft thick and contain gold
and silver grades up to 4 opt Au and 20 opt Ag. These veins account for <1% of the
deposit volume, but should be modeled appropriately for resource estimation, to
prevent the spread of high grade values to other portions of the model. Veins appear to
have formed prior to the main deposit, as evidenced by vein fragments within the black
chalcedonic breccia, and black chalcedonic stringers cross cutting veins.
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The majority of the Golden Eagle deposit is hosted in moderate to strongly silicified
hydrothermal breccias. Distinct black chalcedony supports silica flooded Sanpoil rock
fragments and occasional vein clasts. This unit is high in sulfide (3%), except where
surface oxidation has reduced and/or removed the sulfide content.
According to a SFPG due diligence report (1995) approximately 10% of the deposit is
composed of strongly bleached and argillized material, with little or no silica. These
zones also contain organic carbon, which may have influenced gold location.
Placer type gold has been identified in the Klondike Mountain Formation. Mineralized
fragments of veins and silicified breccias have been identified in the lower
conglomeratic units, and small zones of mineralization can be identified. This represents
<5% of the deposit.
9.3 Alteration
Strong silica flooding is common in the black breccia zones, but the degree of
silicification does not correlate with the gold content. Peripheral from the silica rich
zone are strongly bleached and argillized volcanics with little or no silica. These zones
have thin carbon-rich fracture fillings that carry gold both as free gold and in the
carbon. According to a SFPG due diligence report (1995), approximately 10% of the
deposit is composed of this strongly bleached and argillized material. Distal alteration
includes propylitic alteration with disseminated pyrite in the andesite and local
silicification of fine grain sediments. Hecla also recognized geochemical depletion
haloes in major oxide elements around mineralized vein systems.
No known surface geochemistry is available.
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10 Exploration
10.1 Introduction
Exploration on the Golden Eagle Property has been a comprehensive effort using a
number of different methodologies, including:
• Surface and underground geological mapping.
• Drilling within the resource area.
• Drilling on vein exploration targets at Mountain Lion and JO#3.
• Underground mining at the Mountain Lion and JO#3 Mines that bracket the
Golden Eagle deposit.
• Small scale surface mining at the Mountain Lion on the west margin of the deposit.
10.2 Historical exploration conducted from 1914 to 2000
Exploration work carried out by previous operators is summarized in Table 10.1. The
work includes primarily exploration drilling, with underground mapping of the
Mountain Lion and JO#3 workings that border the Golden Eagle deposit. Surface
geological mapping has also been completed. Only limited surface geochemical and
rock chip samples have been located at this time.
A total of 835 drillholes, totaling 171,472.8 ft were completed at the Property by
Mountain Lion Consolidated, Knob Hill and Day Mines, Hecla, SFPG, and Echo Bay
from 1940 to 2000. No further drilling of the deposit has taken place since 2000. Of the
835 holes completed, 543 are blast holes related to the surface workings at Mountain
Lion Mine.
Table 10.1
Year
Company
Summary of exploration programs on the Golden Eagle Property
Activity
Description
1914-1917,
and 19401942
Mountain Lion
Consolidated
Mining
Underground and surface mining at the Mountain Lion Mine. Poor
production records exist. Estimated 77,600 t at 0.211 opt Au mined
from underground, and 75,145 t at 0.120 opt Au mined from surface.
543 blastholes completed for 7,262 ft.
1940
Knob Hill Mines
Drilling
Three surface churn holes completed at Mountain Lion Mine for 135 ft.
1946-1947
Knob Hill Mines
Drilling
14 underground core holes for 1,611 ft and 13 surface churn holes for
1,661.5 ft completed from Mountain Lion Mine workings.
1960-1964
Knob Hill Mines
Drilling, Mining
19 underground core holes for 7,709.3 ft completed from the JO#3
workings (between the 800 and 1,100 levels) that traverse under the
Golden Eagle Project. Mining activity on the JO#3 vein, accessed via
Knob Hill Mine, with secondary access via Mountain Lion Mine.
1973-1974
Knob Hill Mines
Drilling
Two surface exploration holes were completed to the north of the
Golden Eagle project, 855 ft rotary and 1,037 ft core.
Drilling
Surface exploration was conducted by Day Mines at the Mountain
Lion Mine. Drilling completed on the project includes 13 pre-collars
completed with churn drilling (1,611 ft) and core tails (9,769 ft), as well
as two surface core holes for 1,753 ft.
1978-1979
Day Mines
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Year
Company
Activity
Description
1982-1994
Hecla
Drilling
Surface exploration completed on Golden Eagle Project, discovery of
Golden Eagle Project deposit and definition drilling completed in 91
holes. 16 churn holes for 3,180 ft were completed at Mountain Lion
Mine, while 62 pre-collars were completed with rotary/reverse
circulation methods for 9,150 ft and completed with core tails for
57,598.5 ft. An additional 13 core holes from surface for 5,692 ft were
completed.
1985 - 1986
Crown
Resources
Drilling
Crown Resources completed 73 exploration holes for 9817.6 ft on the
project. The records are incomplete.
1995-1996
SFPG
Drilling,
Metallurgy
Surface exploration completed on Golden Eagle Project. Deposit
drilled to 100 ft to 150 ft nominal centers, 9 RC holes for 5,940 ft, 35
pre-collars for 5,020 ft with core tails for 28,701.8 ft, and 12 core holes
from surface for 8,687.7 ft. An extensive metallurgical program was
also conducted.
2000
Echo Bay Mines
Drilling
Surface exploration completed on project. For metallurgical testing,
drilling left largely uncompleted, four RC holes for 2,010 ft, two RC
pre-collars for 530 ft with core tails for 1,432 ft.
10.3 Midway Gold exploration
Midway Gold acquired the Golden Eagle Property in the 3rd quarter of 2008; since this
time and to the date of this report, exploration activities have been restricted to
assembling and compiling historic surface and drilling data, and undertaking the 2009
mineral resource estimate.
10.3.1 Geological mapping
Surface mapping has been carried out primarily by Knob Hill and Hecla geologists
between 1960 and 1990. This mapping has been compiled into a surface geological map
(Figure 7.2) by Midway Gold using MapInfo software.
Underground mapping at the Mountain Lion and JO#3 workings was completed by
Mountain Lion Consolidated, Knob Hill and Hecla geologists between 1940 and 1990,
at 1 inch to 25 ft and 50 ft scales. This mapping has been digitally compiled by Midway
Gold for use in three dimensional modeling, and covers the main drifts, but not the
stoping areas of the mine.
10.3.2 Interpretation of exploration information
Midway Gold has identified the following as potential exploration targets:
• The Golden Eagle deposit remains open at depth and to the north. The bulk of the
exploration drilling on the north portion of the deposit is on the east side of the
Mud Lake Fault, while the deposit itself is almost entirely on the west side of the
fault.
• Offset portions of the deposit along both the Mud Lake and Mountain Lion Faults.
Both faults abruptly terminate higher grade portions of the deposit.
• Vein targets both contained within the Golden Eagle deposit and associated with
the defined Mountain Lion Vein (to the north and at depth) are not drilled by
previous exploration efforts.
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• Vein target connecting the JO#3 to the Mountain Lion vein. Between the ML 700
level and the Knob Hill 900 Level there is an un-mined gap of 400 vertical ft in the
vein.
• Hecla reports indicate potential vein targets north of drillholes 88-118 and 89-136,
which contained abundant quartz stringers and widespread alteration. Only one
hole was completed between these two holes (CGE-0015) in the later years of
exploration.
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11 Drilling
11.1 Introduction
There are a total of 835 drillholes on the Golden Eagle Property for 171,163.4 ft of
drilling, completed between 1940 and 2000. Of this total, 543 holes for 7,262 ft are
blastholes completed during surface mining at the Mountain Lion Mine. No assay
certificates are available for samples selected from the Mountain Lion blastholes. An
additional 73 holes were completed by Crown Resources, believed to be reverse
circulation (9817.6 ft) which also have no historic records. A summary of the known
drillholes are shown in Table 11.1.
11.2 Drilling conditions
Surface topography at Golden Eagle is level to rolling terrain. Historic disturbances
from surface mining remains, but all drill sites and exploration roads have been
reclaimed. Drilling generally requires pre-collaring with reverse circulation through
glacial till (covering 0 to 400 ft), with core or reverse circulation completion to depth.
The majority of drilling (72%) at the Golden Eagle Project was conducted using
diamond drilling methods. Core drilling was carried typically carried out using 2.5 in
diamond bits, with reduction to 1.875 in diameter as drilling conditions warranted. Core
recovery has been reported at generally between 95% and 100%, with low recovery
zones typically associated with hole collaring, old workings, and fault zones. All core
holes from surface were generally pre-collared through glacial till using reverse
circulation or rotary methods. The bulk of the core drilling was carried out from surface
(115,286.9 ft), with a minor amount (9,214 ft) carried out from the underground
workings at Mountain Lion and JO#3.
Reverse circulation holes were generally drilled using 5 ¼ in hammers. Most reverse
circulation drilling was designed as pre-collars for deeper core tails. Reverse circulation
comprises 14% of the drill footage (24,530 ft).
Based on water level readings in four RC drillholes completed in 1995, the bedrock
ground water is between 250 ft and 650 ft below the surface and is associated with the
fractured lava flows of the lower Sanpoil. For the Santa Fe effort, Golder Engineering
estimated that natural inflows to the mine workings (JO#3 and Knob Hill) were on the
order of 18 gallons per minute (Santa Fe Pacific Gold, 1997). Very little water data is
included in old drill records.
11.2.1 Drilling by Mountain Lion Consolidated, Knob Hill Mines, and
Day Mines from 1914 and 1979
Shallow surface drilling and underground core drilling was completed by Day Mines,
Knob Hill Mines, and Mountain Lion Consolidated between 1940 and 1979. Drill
records have not been well kept.
Between 1940 and 1942, Mountain Lion Consolidated completed 543 blastholes using a
churn drill in support of open pit mining activity.
Between 1940 and 1947 Knob Hill Mines completed a number of surface churn holes
and underground core holes from the Mountain Lion workings/area. Drill records
including geology and sample assay values were located in the Hecla files. No further
data was located for these drillholes.
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Table 11.1
Operator
Summary of drilling completed at the Golden Eagle Project
Year
Mountain Lion Consolidated
Drill hole type
1914 - 1942
Surface blastholes
Surface churn holes
Number of holes
Length of holes (ft)
543
7,262
3
135
Knob Hill Mines
1940
Knob Hill Mines
1946 - 1947
Underground core holes
14
1,611
Knob Hill Mines
1946 - 1947
Surface churn holes
13
1,661.5
Knob Hill Mines
1960 - 1964
Underground core holes
19
7,709.3
Knob Hill Mines
1973 - 1974
Surface rotary hole
1
855
Knob Hill Mines
1973 - 1974
Surface core hole
1
1,037
Day Mines
1978 - 1979
Surface rotary holes with core tails
13
1,611 ft rotary, 9,769 ft core tails
Day Mines
1978 - 1979
Surface Core Holes
2
1,753
Crown Resources
1985 - 1986
Churn holes
73
9,817.6
Hecla
1982 - 1994
Surface churn holes
16
3,180
Hecla
1982 - 1994
Surface rotary/RC holes with core tails
62
9,150 ft rotary/RC, 57,598.5 ft core tails
Hecla
1982 - 1994
Surface Core Holes
13
5,692
SFPG
1996 - 1996
Surface RC
9
5,940
SFPG
1996 - 1996
Pre-collars/core tails
35
5,020 ft pre-collars, 28,701.8 ft core tails
SFPG
1996 - 1996
Surface core holes
12
8,687.7
Echo Bay Mines
2000
Surface RC
4
2,010
Echo Bay Mines
2000
Surface RC/core tails
2
530 ft RC pre-collar, 1,432 ft core tails
835
171,163.4
Total
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Between 1960 and 1964 Knob Hill Mines completed 19 underground core holes from
the JO#3 workings looking for extensions of the JO#3 vein and the Mountain Lion
vein. These holes were completed using NX diameter core. Drill logs containing
geology and sample assay values were located in the Hecla files, but no further data was
located for these holes.
In 1973, Knob Hill Mines completed two surface exploration holes north of the Golden
Eagle deposit using rotary drilling with HQ core tails. Drill logs with sample assay
values hand posted in opt gold were located in the Hecla files, but no further data was
located for these holes.
From 1978 to 1979 Day Mines completed ten surface rotary holes with core tails. Drill
logs with hand posted sample assay data were located in the Hecla files, but no further
information was noted.
11.2.2 Drilling by Crown Resources from 1984 to 1988
Crown Resources joint ventured the South Penn portion of the property to Glamis
Gold between 1982 and 1988. During this period 73 reverse circulation holes were
drilled by Crown Resources, however Midway Gold has been unable to locate any of
the drillhole sample assay certificates. Glamis produced approximately 1,000 oz gold
from a small scale heap leach facility, but did not apparently complete any known
drilling. No further records of this effort have been located.
11.2.3 Drilling by Hecla Mining Company from 1987 to 1994
Hecla employed Boyles Christiansen for core drilling. NC (2.4”) diameter rods were
primarily used, and reduced to NX (1.875”) diameter when poor drilling conditions
were encountered.
11.2.4 Drilling by Santa Fe Pacific Gold from 1994 to 1996
SFPG employed Boart Longyear for core drilling at Golden Eagle. HQ (2.5”) diameter
rods were used from surface, with pre-collars completed using reverse circulation
through overlying glacial till. A limited number (10%) of holes were reduced to NQ
diameter (1.875”) rods when poor drilling conditions or old mine workings were
encountered. For reverse circulation work, SFPG employed Eklund Drilling using track
mounted rigs with 10 ft rods and 5.25” drill bits.
11.2.5 Drilling by Echo Bay Mines in 2000
Echo Bay Mines completed four reverse circulation holes for 2,010 ft, and two core tail
holes with RC collars for 530 ft of RC pre-collar and 1,432 ft of core tails. There is no
further record of these holes.
11.3 Drillhole collar surveys
A digital database of collar locations for the 543 blastholes completed during open pit
mining at the Mountain Lion mine was provided to Midway Gold by SFPG. No
laboratory assay certificates could be located, and none of the information obtained
from these drillholes has been used in the current resource estimation.
Surface churn holes were completed by Knob Hill Mines between 1940 and 1947.
Collar locations are noted on drill logs to an accuracy of the nearest 0.1 ft, although it is
unknown how the collars were surveyed.
Underground core holes were completed by Knob Hill Mines from 1946 to 1947 and
from 1960 to 1964. Collar locations are noted on drill logs to an accuracy of the nearest
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0.1 ft. Locations were also tied to underground working maps, which show the drillhole
location. It is unknown how the locations noted on the drill logs were collected.
Day Mines completed 13 surface holes with core tails between 1978 and 1979 as well as
two surface core holes. Collar locations are noted on drill logs to the nearest 0.01 ft in
the Knob Hill Mines grid coordinates, but it is unknown how this data was collected.
Crown Resources completed 73 holes on the South Penn portion of the property. No
documentation of collar locations could be found, so these holes were not used in the
current resource estimation.
Hecla completed 91 holes on the property. Drill logs show northing and easting
coordinates with accuracy to the nearest foot and elevation to the nearest 0.01 ft. This
data was collected by the Knob Hill Mine survey department.
SFPG completed 56 holes on the property. Collar locations are noted on drill logs to
the nearest 0.10 ft. This data was collected by a registered surveyor from Republic, WA.
Echo Bay completed 6 holes on the project. Collar locations were noted on a survey
sheet to the nearest 0.001 ft. This data was collected by a registered surveyor from
Republic, WA.
11.4 Downhole surveys
Downhole surveys are available for 75 drillholes completed on the project.
Records of Hecla drilling show that single shot surveys were taken from between 1987
and 1989 (which remain on file in the Hecla office in Republic). Downhole surveys
were taken by Boyles Brothers between 1988 and 1989, and by Hecla drillers between
1989 and 1994.
SFPG employed Silver State Surveys between 1995 and 1996 to complete downhole
surveys using borehole tools. Echo Bay utilized International Directional Services in
2000 for downhole surveys.
The use of a track mounted rig by SFPG in difficult drilling conditions presents
concerns about drillhole deviation. However, the majority of SFPG drilling was
downhole surveyed to accurately locate the hole. Historical deviations in azimuth and
dip are low, generally less than ± 2° for successive readings down the hole. Downhole
survey measurements are generally taken at either 50 ft or 100 ft intervals, in accordance
with industry best practice. For un-surveyed holes, Midway Gold entered the azimuth
and dip noted on the drill log files into the drillhole database.
11.5 Extent of drilling
The surface drillhole spacing ranges from 100 ft to over 400 ft, but is generally on
nominal 100 ft centers. The azimuth and inclination of drillholes vary greatly. The
majority of the surface drilling is focused in an area with an east-west trend that is
approximately 2,500 ft long and 1,000 ft wide. A plan of existing drillholes on the
Golden Eagle Property is shown in Figure 11.1.
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Figure 11.1
Golden Eagle drillhole location map
11.6 Midway Gold data compilation and grid conversions
The drillhole collar and down hole survey information was compiled from digital and
hardcopy information provided by Kinross, Hecla, and Newmont. This information
included original drill logs with collar data, survey sheets with collar data, and a digital
database compiled by SFPG containing collar and downhole survey information.
Midway Gold verified collar information from the digital database compiled by SFPG
against drill logs and/or survey sheets where available. Most of the original drilling was
surveyed in the Day Mines or Knob Hill Mines coordinate systems.
These coordinates were converted to UTM Feet, NAD 27 coordinates by a Licensed
Surveyor of Granite Creek Survey and Mapping of Republic, Washington, who was
retained to provide accurate field survey control. The surveyor located and surveyed
three known points (HMC 11, 26, and 28) in the field. These three points are mine grid
control points with known mine grid coordinates used by Hecla at Knob Hill. The
surveyor also located the Mud Lake GPS survey control point placed by the USFS in
1990. This point was surveyed in both the Mine grid and UTM Feet coordinates using
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total station methods. Stolp also examined elevations related to two different vertical
datum (~5 ft difference).
With the four points known in both UTM coordinates and mine grid coordinates,
Midway Gold developed a grid conversion using both translation and rotation using
MapInfo software. This collar information, along with older Knob Hill Mine
coordinates, is maintained in the Golden Eagle database. The accuracy of the
conversion is estimated at + 30 ft, but cannot be verified because all historic drill collars
have been reclaimed.
11.7 Drillhole intersections
Significant drillhole intercepts (greater than 20 ft and greater than 0.02 opt Au) are listed
in Appendix A. This table includes all drillholes associated with the Golden Eagle
Deposit. True thickness is +10% of the stated drill hole thickness, as the deposit is
relatively flat lying and most drillholes were completed from surface at or along the
strike of the mineralization. Underground holes may have been drilled from within the
mineralized zones and therefore intersection thicknesses may not have intersected the
entire mineralized zone.
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12 Sampling method and approach
Core, churn, rotary, and reverse circulation drilling methods were employed from 1946
to 2000, and various sample protocols, techniques, and laboratories were utilized over
this period. The sample spacing ranges from 100 ft to over 400 ft, but was generally on
nominal 100 ft centers. Sample numbers by drill type are shown in Table 12.1. The
sample numbers include unsampled downhole intervals which are more common in the
reverse circulation pre-collar holes.
Churn drilling represents 12.8% of the drilling footage (22,056 ft); the bulk of which is
from short blast holes associated with the open pit mining in the 1940s. Sample assay
certificates for this data have not been located and sample data from the churn holes
has not been used in the current resource estimate.
The extensive use of core drilling has minimized the potential for downhole sample
contamination for this project, given the water table depth (approximately 250 ft to
650 ft below surface). As noted by SFPG, downhole sample contamination appears to
be limited to drilling conducted by Crown Resources in the South Penn area. However,
no assay or logging data could be located for these holes and this data has not been
used in the current resource estimate.
Table 12.1
Sample number by drilling methodology
Drilling Method
Number of Samples
Churn
3,264
Rotary/RC
2,327
Core
14,001
12.1 Sampling methods
Diamond drill core was sampled in intervals up to 5 ft while honoring geological
contacts where appropriate. The preferred sample interval was 5 ft and this was also the
specified maximum sample length. Geological contacts or features were used as sample
boundaries wherever possible. The core was cut in half with a saw if the rock was
competent or broken in half with a mechanical splitter if it was fractured or friable.
Reverse circulation drilling at the Project was performed wet as the water table is
typically 250 ft to 650 ft below the surface, according to data collected during drilling by
SFPG. Water flow tests were only documented for five reverse circulation holes, and
are not considered an accurate measure of the water table at this time. Water flow in the
five holes tested varied between 5 gallons and 30 gallons per minute, with the higher
flows generally found near surface (<700 ft) and lower flows at depth (700 ft to 800 ft).
However, this data is limited and is not considered inclusive. Wet reverse circulation
drilling increases the potential for downhole sample contamination. Most of the deeper
drilling was conducted using diamond drilling methods.
Reverse circulation cutting samples were collected by a designated and trained sampler.
Cuttings from each 5 ft sample interval were passed through a cyclone and into a rotary
splitter with 16 openings. RC drill rods were 10 ft to 20 ft long, and drill samples were
collected at 5 ft to 10 ft intervals. A representative split from the discharge material was
placed into a plastic RC chip tray for geological logging. The chip tray was marked with
the drillhole name and downhole depth interval.
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12.1.1 Sampling by Mountain Lion Consolidated, Knob Hill Mines, and
Day Mines from 1914 and 1979
Shallow surface drilling and underground core drilling was completed by Day Mines,
Knob Hill Mines, and Mountain Lion Consolidated between 1940 and 1979. Drill
records have not been well kept, although geological logs with hand posted sample
assay values were located for most of the underground drilling.
Between 1940 and 1942 Mountain Lion Consolidated completed 543 blastholes totaling
7,262 ft using a churn drill in support of open pit mining activity. The entire length of
the blasthole, generally 5 ft to 10 ft long, was sampled as a single sample. This data was
digitally captured by SFPG, but could not be validated with assay certificates or drilling
logs. While historically interesting, this data has not been used in the 2009 mineral
resource estimate.
Between 1940 and 1947 Knob Hill Mines completed a number of surface churn holes
and underground core holes from the Mountain Lion workings/area. Drill records
including geology and sample assay values were located in the Hecla files. Drillholes
were generally sampled at 5 ft intervals. Sample assay values were hand posted in dollar
values, using $35 gold and $0.905 silver prices. No further data was located for these
drillholes.
Between 1960 and 1964 Knob Hill Mines completed 19 underground NX sized core
holes from the JO#3 workings, looking for extensions of the JO#3 vein and the
Mountain Lion vein. Sample intervals vary considerably from 0.5 ft to over 10 ft. Drill
logs containing geology and sample assay values were located in the Hecla files,
validated by Midway Gold and used in the 2009 mineral resource estimate. Assay values
were hand posted in opt gold and silver. No further data was located for these holes.
In 1973, Knob Hill Mines completed two surface exploration holes north of the Golden
Eagle deposit using rotary drilling and HQ core tails. Sample intervals are generally five
ft in length. Drill logs with sample assay values hand posted in opt gold were located in
the Hecla files. Only four assay values could be verified by Midway Gold and therefore
these drillholes have not been used in the 2009 mineral resource estimate. No further
data was located for these holes.
During 1978 to 1979 Day Mines completed thirteen surface rotary holes with core tails
totaling 11,380 ft and an additional two surface diamond holes totaling 1,753 ft. Sample
intervals vary considerably from 0.1 ft to 50 ft. Drill logs with hand posted sample assay
data were located in the Hecla files, but no further information was noted. This data has
not been used in the 2009 mineral resource estimate.
12.1.2 Sampling by Crown Resources from 1984 to 1988
Crown Resources provided their sample assay database to SFPG but no sample assay
certificates or drill records could be located for their drilling campaign. Drilling methods
are unknown but based on their age are thought to be churn drilling. The drillholes
were generally sampled at 5 ft or 10 ft intervals but the sampling technique is unknown
at this time. SFPG noted problems with downhole sample contamination and excluded
sample assays deeper than 100 ft from their resource estimates. No data from the
Crown Resources drill campaign has been used in the 2009 mineral resource estimate.
12.1.3 Sampling by Hecla Mining Company from 1987 to 1994
Hecla employed a variety of methods of core sampling, but were focused on veins and
much of the core was only sporadically sampled. Hecla took rock chip samples of drill
core intersections showing promising alteration and vein types to determine if more
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rigorous sampling was justified. Any visually promising zones or chip samples of the
core returning good assay results were marked by the Hecla geologist and split in a jaw
splitter. Sludge sampling of cuttings from the drill rig were used for zones of poor core
recovery. However, zones of low recovery are very limited, so this poor sampling
technique has a minimal impact to the project.
Hecla typically only sampled veins and alteration zones associated with the vein
margins. SFPG completed sampling of remaining core during their tenure on the
project. Core intervals were generally sampled on less than 5 ft intervals. Samples
undertaken by Hecla have been used in the 2009 mineral resource estimate.
12.1.4 Sampling by Santa Fe Pacific Gold from 1994 to 1996
Reverse circulation drillholes were sampled continuously from surface to depth on 5 ft
intervals. Drillholes were drilled with water injection from the surface and a 1/8th split
was collected from a rotary wet splitter into an olefin (polypropylene) bag. Only one
SFPG reverse circulation drillhole encountered substantial ground water flows while
drilling. Drillhole DGE-0004 was abandoned when oxide rock fragments were noted
below the redox boundary, suggesting possible downhole contamination.
Diamond drill core sample intervals were based on alteration and lithology, with average
sample lengths ranging from 1 ft to 10 ft, and averaging 5 ft. Approximately half of the
sample intervals were split with a hydraulic splitter, while the remainder was cut with a
saw. Samples were bagged for shipment to various assay laboratories. Samples
undertaken by SFPG have been used in the 2009 mineral resource estimate.
12.1.5 Sampling by Echo Bay Mines in 2000
Reverse circulation drillholes were sampled from surface to depth on 5 ft intervals.
Drillholes were completed with water injection from the surface, and samples were
collected using a rotary wet splitter.
Diamond drill core sample intervals were based on alteration and lithology boundaries
with sample lengths ranging from 1 ft to 10 ft, averaging 5 ft. It is unknown how the
core was split for assay, and no core or RC samples have been located from this
program. Six drillholes from Echo Bay Mines have been used in the 2009 mineral
resource estimate.
12.2 Sample quality
Sample quality for drilling completed by Mountain Lion Consolidated, Day Mines,
Crown Resources, and Knob Hill Mines is unknown. No core samples remain to
evaluate cutting procedures.
Hecla’s reverse circulation/rotary samples were limited to pre-collars only. Core
samples were split using a hydraulic splitter. Observation of the core cut with the
hydraulic splitter indicates typically unequal sample splits and loss of fine material.
SFPG core samples were split using either a hydraulic splitter or a core saw.
Observation of remaining core indicates that half core samples cut with the hydraulic
splitter typically resulted in unequal sample splits and loss of fines. Samples cut with the
saw resulted in a more representative sample for analysis.
12.3 Sample preservation
Hecla has maintained a core storage facility at the Knob Hill Mine where Hecla and
SFPG core and some underground core from Mountain Lion are located. The Hecla
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and SFPG core is kept inside the facility, stored in wax impregnated boxes that are well
marked and ordered. The Mountain Lion core is stored in wood boxes outside. This
material is not protected from weather and is in poor condition. Sample pulps from
reverse circulation drilling completed by SFPG are stored on pallets inside the
warehouse. The pulps appear to be in good order and stored by certificate number from
the Chemex Laboratory. Chip trays containing drill cuttings from SFPG reverse
circulation drilling are also stored inside the warehouse and appear to be in good order.
No other material has been identified or located for re-logging or sampling.
12.4 Density determinations
A total of 1,171 whole boxes of core were measured and weighed by SFPG laboratory
technicians to determine wet tonnage factors (TFs) for various alteration and rock types
at the Golden Eagle deposit (SFPG, 1996b). Of these, 353 boxes were oven dried for
three days at a temperature of 125° F and re-weighed, yielding a measured dry TF. A
wet to dry conversion factor was calculated and applied to the remaining wet data set to
establish calculated dry TFs.
The data for the calculated and measured TFs were then divided by three lithological
supergroups, and subdivided by relative degree of clay alteration. The averages for the
calculated and measured TFs within these subgroups were used to apply tonnage factor
values.
There are a number of potential sources of error when determining tonnage factors
using whole box methods. Snowden recommends that Midway Gold select a significant
number of whole core samples for tonnage factor determinations from spatially and
geologically representative areas of the resource for use in future mineral resource
estimations.
12.5 Geological and geotechnical logging
Geological logs were completed for each drillhole, both historically and through a relogging campaign undertaken by SFPG. Approximately 60% of the geological logging
database is from SFPG logs, 30% from Hecla log, and 10% from Knob Hill and Day
Mines logs. Both the SFPG and Hecla geological logs were completed using consistent
geological codes, although these codes differ between companies. A correlation
between lithology and formations between these two companies was possible and
utilized to develop the deposit geology model.
However, the older Knob Hill and Day Mines logs were completed using a different
logging system and a correlation to lithology and formations to the SFPG and Hecla
logs were generally not feasible. Drill logs have been obtained for all completed
drillholes except for the Crown Resources campaign at South Penn, and Midway Gold
has digitally captured logging codes for rock formation and lithology. Information also
exists on the geology logs for alteration and oxidation; however this remains in hard
copy only at this time.
Various geotechnical data has been collected for 81 core holes drilled on the property
including sample recovery, rock quality designator (RQD), fracture frequency, rock
mass rating (RMR), discontinuity type and angle to core axis, descriptions of
discontinuity roughness and filling materials, and point load test results.
Hecla engaged Howard Consultants, Inc. (HCI) to complete a geotechnical evaluation
at Golden Eagle in 1989 (Howard Consultants, 1989). HCI completed the majority of
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the geotechnical logging and point load testing on the 1989 core. HCI also completed
two detailed mapping lines at the old Mountain Lion surface workings to obtain detailed
information about rock discontinuities. The report also incorporated geological
mapping from the Knob Hill Mine maps of level 12 and 13, which underlie the Golden
Eagle deposit. The results of this study were focused primarily on underground ground
support recommendations. Midway Gold has digitally captured the sample recovery,
RQD, and point load test results in an Access database.
12.6 Independent statement on sampling methods
Snowden was unable to verify historical drilling and sampling practices, but are of the
opinion that drillhole logging and sampling procedures used for the project are
sufficient to support the estimation of Inferred and Indicated resources. The Hecla and
SFPG drillhole core is stored in cardboard boxes with the drillhole number and sample
interval clearly marked on the exterior in permanent marker. The core boxes are stored
in racks in a secure compound. The core examined by Snowden corresponded to the
geological descriptions and recoveries reported in the drillhole database, although the
core is highly oxidized and is likely to be inappropriate for metallurgical testing. Drill
core identified as Mountain Lion drillholes are located in wooden boxes outside, under
cover. The boxes were in a poor state of repair and selection of sample intervals for
examination was not possible. Samples from Knob Hill Mines, Day Mines, Echo Bay,
and Crown Resources drilling campaigns have not been located and were not available
for review during Snowden’s site visit.
Sample availability, conditions of existing core, quality of the sample type, and tonnage
factor measurements have been taken into consideration when applying resource
classification categories.
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13 Sample preparation, analyses, and security
Sampling has taken place by six different companies at the Golden Eagle Project,
spanning the years from 1914 to 2000, and each sampling campaign utilized different
sample preparation, analyses, and security protocols. Three primary laboratories have
been utilized over the life of the project, including Silver Valley Labs Inc. of Kellogg,
Idaho, Silver Valley Labs of Republic, WA (which later became Custom Analytical
Services Inc.), and Chemex Laboratories of Vancouver, Canada and of Sparks, Nevada.
No sampling has occurred since the 2000 campaign.
13.1 Sample preparation, analyses, and security of samples collected by
Mountain Lion Consolidated, Knob Hill Mines, and Day Mines from
1914 and 1979
Mountain Lion Consolidated drilling consisted of blasthole drilling using churn drills.
No information has been located for sample preparation, analysis, or security of these
samples.
Knob Hill Mines completed a number of surface churn holes and underground core
holes on the project. Gold analysis results for both drillhole types were hand posted on
drill logs. No information has been located for laboratory, sample preparation, analysis,
or security of these samples.
Day Mines completed surface rotary holes with core tails on the project. Most of the
assay information is hand posted on drill logs, with the exception of hole D-2. This
drillhole was sampled by SFPG at Chemex in 1996, and an assay certificate is on file.
No other information has been located for laboratory, sample preparation, analysis, or
security of these samples.
13.2 Sample preparation, analyses, and security of samples collected by
Crown Resources from 1984 to 1988
Crown Resources submitted drillhole samples to Silver Valley Labs Inc. of Kellogg,
Idaho for analysis. Samples were analyzed for gold and silver using fire assay methods.
No assay certificates for the Crown Resource samples have been located at the time of
this report.
13.3 Sample preparation, analyses, and security of samples collected by
Hecla from 1987 to 1994
Hecla submitted split core samples to Silver Valley Labs of Republic, WA, and Custom
Analytical Services Inc. All samples were analyzed for gold and silver using fire assay
methods, and selected intervals were later submitted for multi-element analysis
methods. Paper copies of most assay certificates for the Hecla work has been located
and is currently on file with Midway Gold. However, due to the age of the samples, no
assay certificates could be obtained directly from the laboratory for the Hecla samples.
Silver Valley Labs did not keep copies of data dating back to 1987 to 1990 and Custom
Analytical Services is no longer in operation.
Two twinned drillholes were also completed by Hecla on the project. Drillholes 90-196
and 90-197 were completed as twin holes by Hecla and analyzed at Silver Valley
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Laboratory. The holes were twinned with drillholes ML-4 and ML-6, also completed by
Hecla, and were either assayed at the local mine lab or at Silver Valley Laboratories.
13.4 Sample preparation, analyses, and security of samples collected by
Santa Fe Pacific Gold from 1994 to 1996
Chemex Laboratories of Vancouver, Canada and of Sparks, Nevada and Custom
Analytical Services Inc. of Republic, WA collected drill core samples taken by SFPG
from the project site and prepared and analyzed the samples. Approximately 40% of the
core and 80% of the reverse circulation samples were submitted to Custom Analytical.
Samples were analyzed for gold and silver using 1 assay ton fire assay methods. Trace
element composites of 20 ft nominal length for all drillholes were submitted to Chemex
for TR-11 multi-element ICP analysis. This element suite includes Ag, As, Sb, Hg, Cu,
Pb, Zn, Mo, Cd, Bi, and Se.
Samples from each SFPG drillhole containing gold values greater than 0.030 opt Au
were composited to 10 ft nominal lengths and analyzed for carbon and sulfur by
Chemex and American Assay (in Reno, Nevada) using LECO furnace methods. This
information generates total sulfide, carbon, and carbonate totals for waste
characterization and metallurgical determination.
A limited amount of hot cyanide soluble gold analyses were completed on samples
containing visible iron oxides, and on samples with greater than 0.010 opt Au, and on
two to five samples below the last interval coded as oxide.
SFPG geologist re-logged and re-sampled un-split intervals from the Hecla drill core
and submitted the samples to the laboratories for gold fire assay and trace element work
using the same methodologies described for SFPG’s drill core.
Two twinned drillholes were also completed by SFPG on the project. Drillholes CGE0045 and CGE-0047 were completed as twin holes by SFPG and analyzed at Custom
Analytical Laboratories. The holes were twinned with drillholes SPR8-6 and SPR8-8,
completed by Crown Resources, and analyzed at Silver Valley Laboratory, although no
assay certificates were located.
13.5 Sample preparation, analyses, and security of samples collected by
Echo Bay Mines in 2000
Custom Analytical Services of Republic, WA collected reverse circulation and drill core
samples taken by Echo Bay Mines from the project site and prepared and analyzed the
samples for the Echo Bay drilling. Samples were analyzed for gold and silver using
1 assay ton fire assay methods. No further information is available on sample security.
13.6 Quality control measures
The routine insertion of certified standards, blanks, and field duplicates with sample
submissions as part of a sample assay quality assurance/quality control (QAQC)
program is current industry best practice, but was not the case historically. Analysis of
QAQC data is made to assess the reliability of sample assay data and the confidence in
the data used for the resource estimation.
13.6.1 Certified standard samples
Certified standard samples are used to measure the accuracy of analytical processes and
are composed of material that has been thoroughly analyzed to accurately determine its
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grade within known error limits. No certified standards have been submitted with the
Golden Eagle Project samples, and therefore there is no available measure of the
accuracy of the analytical process.
13.6.2 Blank samples
Blank samples are composed of material that is known to contain grades that are less
than the detection limit of the analytical method in use. Analysis of blank samples is
useful for determining if cross-contamination of samples is occurring in the sample
preparation or analysis process. No blank samples have been submitted with the
Golden Eagle Project samples, and therefore there is no available data to determine
whether cross-contamination of samples had occurred.
13.6.3 Duplicate samples
There are a number of different duplicate sample types which can be used to determine
the precision of the entire sampling, sample preparation, and analysis process, or a part
of the entire process.
Field duplicate samples are duplicate samples taken at the primary sampling point. If
half diamond drillhole core is sampled, then a field duplicate is taken by submitting the
remaining half of the core. If RC chips are sampled using a rotary splitter, then the
rejected half of the sample is selected as the field duplicate. This type of duplicate
sample measures the precision of the entire sampling, sample preparation, and analysis
process, and also provides a measure of the inherent variability of the mineralization
(the nugget effect).
Duplicate samples can also be taken of coarse reject or pulp samples from the
laboratory. Coarse reject samples provide a measure of the sample precision from the
sample crushing, pulverizing, and analysis stages of the process while pulp samples
provide a measure of the sample preparation from the sample pulverizing and analysis
stages of the process.
Midway Gold has identified 879 pulp duplicate samples (approximately 6% of the
sample population) on the project. Most of these sample pulps were submitted by
SFPG and prepared by Custom Analytical Services, who collected a pulp duplicate
sample during the sample preparation process, using the protocol described below.
Three of the duplicate pulp samples are from high grade vein intervals associated with
the Mountain Lion and JO#3 and returned assays in excess of 0.500 opt Au, and have
been excluded from the duplicate sample analysis as they were not considered
representative of the Golden Eagle deposit. Of the remaining 876 samples, 403 were
duplicate pulps prepared by Custom Analytical, 338 were pulps re-assayed by Custom
Analytical during the initial analysis, 88 were re-assayed at different laboratories, and 48
were re-analyzed by Custom Analytical as part of their internal QAQC protocol, but
using unknown techniques.
Samples submitted by SFPG to Custom Analytical were typically check assayed on
nominal 25 ft to 50 ft intervals. Starting with the first check assay sample, two sample
pulps were prepared for analysis for every second drillhole sample. These sample pulps
were identified with a duplicate tag on the assay certificates. The original pulp of the
remaining sample was re-assayed and identified as a re-assay on the assay certificate. In
total there are 403 duplicate pulp samples and 338 re-assayed pulp samples included in
the program.
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Pulp duplicates
Overall comparison of assay results in the 0.005 opt Au to 0.500 opt Au range indicate a
very good correlation between the samples (Figure 13.1). Quantile-quantile and
probability-probability plots indicate a close correlation of sample grades for all grade
ranges with minimal bias and acceptable levels of precision in pulp preparation and
analysis for these samples.
Figure 13.1
Santa Fe Pacific Gold pulp duplicates
a b c d Note: a) Normal scatter plot; b) precision pair plot; c) log Q‐Q plot; d) P‐P plot
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Re-assay duplicates
Custom Analytical also completed re-analysis on the alternate duplicate samples and this
resulted in 338 sample pairs (Figure 13.2). Overall comparison of assay results in the
0.005 to 0.500 opt range indicate a very good correlation between the samples. The reassayed pulp duplicates display good precision with no significant bias.
Figure 13.2
Santa Fe Pacific Gold sample pulp re-assay results
a b c d Note: a) Normal scatter plot; b) precision pair plot; c) log Q‐Q plot; d) P‐P plot
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Umpire laboratories
Field duplicate samples, coarse reject samples, and pulp samples can also be submitted
to an alternative or umpire laboratory to gain a measure of any sample grade bias
between laboratories.
Midway Gold has identified 88 sample pulps prepared by the original laboratory that
have been re-assayed by an umpire laboratory. These pulps were submitted to the
umpire laboratory by SFPG during the 1995 to 1996 drilling campaign. Original
laboratories included Custom Analytical, Chemex, and Silver Valley Labs with check
laboratories including Barringer (in Reno, Nevada), Custom Analytical and Silver Valley
Labs (Table 13.1).
Table 13.1
Check assay laboratories
Original Lab
Check Lab
Sample Numbers
Percentage of
check samples
Custom Analytical
Barringer
13
14.8
Chemex
Barringer
48
54.5
Chemex
Custom Analytical
22
25.0
Chemex
Silver Valley Labs
3
3.4
Silver Valley Labs
Barringer
2
2.3
88
100
Total
A comparison of the 88 sample pairs did not identify any significant bias between
original assays and check assays and indicates an acceptable level of precision. However,
the data set comprises less than 100 samples, and may not contain enough sample pairs
to be statistically valid or to be spatially representative of the deposit. Comparison
between Custom Analytical to other labs (Chemex and Barringer), indicate that Custom
results maybe slightly elevated by 1% to 4%, while comparison between Chemex and
Barringer were within 0.06%.
13.7 Sampling study undertaken by Hecla Mining
Francis Pitard (1990), an independent sampling and quality control consultant,
completed a study of the heterogeneity of gold in the Golden Eagle Deposit for Hecla.
He concluded from tests on a large composite sample that the gold was finely and
homogeneously disseminated in the mineralized rock. His recommendations were to
simplify the existing sample protocol at Silver Valley Laboratories, and advised that
metallic screen assays were unnecessary, and that 15 g fire assays were appropriate.
Pitard also preferred whole core sampling for assay, although this protocol was not
followed.
13.8 Independent statement on sample preparation, analyses, and
security
The historical nature of the preparation, analyses, and security of samples from the
Golden Eagle Project make it difficult to reliably assess whether the sample grades are
suitable for use in mineral resource estimates. The lack of QAQC samples other than
limited numbers of duplicate pulp sample assays and check re-assays prevents an
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assessment of the reliability of the sample assays, and Snowden has considered this
during the classification of mineral resources. Samples from 613 drillholes were
excluded from the 2009 mineral resource estimate due to a lack of QAQC information
and the inability to verify the assays from assay certificates.
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14 Data verification
14.1 Data verification by Santa Fe Pacific Gold
According to SFPG’s Prefeasibility report (1996a), SFPG did not undertake a typical
check assay program of existing samples at the project at the time of their report.
SFPG identified a total of 225 sample intervals assayed by Acme, Silver Valley, and the
Republic laboratories which could be directly compared as check assays, and noted a
good correlation between most of the samples. These samples appear to be pulps
(analyzed by Acme and Silver Valley) and/or half core (analyzed by Republic) for use in
the check assay. Midway Gold has been unable to obtain valid assay certificates from
Acme, the primary check laboratory. Acme Labs is based out of Vancouver, BC, while
the Republic Lab is in reference to the onsite Hecla Mine Lab, located at the Knob Hill
Mine, Republic, WA. The mine lab did produce signed assay certificates, but no
measure of the lab quality is included in report documentation.
14.2 Data compilation and verification by Midway Gold
Midway Gold acquired the Golden Eagle Property in 2008, and obtained the SFPG
digital database from Newmont Mining Corporation and Kinross Gold in early 2009.
This database contained geology codes for rock formation, lithology, and alteration, and
sample assays for gold, silver, multi-elements, and LECO data.
Midway Gold was unable to determine a useful correlation between the numeric
geology codes in the digital database and the physical paper geology logs. As a result,
Midway Gold re-entered all formation and lithology information into the database for
all drillholes with logging information.
Midway Gold has converted drillhole collar coordinates from local mine coordinates to
UTM coordinates using the methodology described in Section 11.6.
Midway Gold has validated a proportion of the drillhole samples through checking of
assays entered in the database with original assay certificates where they are available;
however assay certificates do not exist for all assays. Table 14.1 details the results of the
assay certificate validation.
Table 14.1
Assay certificates validated by Midway Gold
Gold assays
absent
Gold assays
validated
846
0
0
0
1,085
229
856
100
457
149
23
7
Crown Resources
1,554
52
0
0
Hecla
8,265
431
6,474
83
SFPG
9,182
141
9,039
100
464
0
464
100
Company
Mountain Lion
Knob Hill
Day Mines
Echo Bay
July 2009
Number of
assays
Percentage
validated
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14.3 Twin drillholes
Four shallow twinned drillholes have been completed on the Golden Eagle Project to
verify the results of the original drillholes. Original holes were completed by Knob Hill
Mines (ML-4 and ML-6), and Crown Resources (SPR8-6 and SPR8-8) with twin holes
completed by Hecla (90-196 and 90-197), and Santa Fe (CGE-0046 and CGE-0047).
Results of hole to hole comparisons are shown in Figure 14.1. Samples from the top
30 ft of drillhole SPR8-8 were eliminated from the comparison because no samples
were collected from 0 to 15 ft in the twin hole CGE-0047, and a vein was intersected
from 15 ft to 35 in drillhole SPR8-8 that was not encountered in CGE-0047.
Figure 14.1
Twin drillhole gold grade comparison by depth
Comparison of ML-4 and 90-196
Comparison of ML-6 and 90-197
Comparison of SPR8-6 and CGE-0045
Comparison of SPR8-8 and CGE-0047
The gold grades display a good general correlation between all drillhole twins (with the
exception of ML-4 to 90-196) with similar high and low grades observed in twin pairs
down the hole. However, the ML assay data tends to be consistently lower in grade than
the twin sample assays, whereas the SPR assays tend to be consistently higher in grade
than the twin CGE assays. Midway Gold has attributed the difference to the alternative
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sample preparation and analyses techniques. Snowden recommends additional twin
drilling to provide sufficient samples for a meaningful comparison. The twin holes
should be representative of the full range of drillhole samples used in the resource
estimate, including by geology, date, company, sample type, and core diameter, through
spatially representative locations throughout the deposit.
14.4 Independent site inspection May 2009
Mr. Chapman of Snowden conducted a site inspection of the Golden Eagle Project
from 11 May to 14 May 2009. Mr. Chapman was accompanied on site by Mr. Harris of
Midway Gold and undertook the following activities:
• Reviewed selected diamond drillhole logs and diamond drill core intersections.
• Selected mineralized intersections for independent analyses.
• Visited drillhole core and sample pulp storage facilities at the exploration site.
• Confirmed the approximate locations of major features on site by GPS.
Only drillhole core from the Hecla and SFPG drilling campaigns were available for
review at the drillhole core storage facilities. Snowden confirmed drillhole core from the
Hecla and SFPG drilling campaigns is stored under cover at the core storage facilities at
the Project. Drillhole core obtained by Mountain Lion was also available; however, the
drill core has been stored outside adjacent to the core storage shed and is in a poor state
of repair making identification of sample intervals difficult. Pulps of reverse circulation
intervals drilled by SFPG were available within the warehouse. As the pulps have been
organized by Chemex job number and not by drillhole numbers, retrieval of specific
intervals was not possible at the time of Snowden’s visit.
14.4.1 Independent review of mineralized intersections
Mr. Chapman examined mineralized intersections in 25 drillholes from the Golden
Eagle Project (Table 14.2). A number of samples selected for review were no longer
available (Table 14.3). These missing intervals were selected by SFPG during an
extensive metallurgical sampling campaign conducted on the remaining half core
samples. Alternative samples were selected by Snowden for independent analysis.
Snowden selected samples to obtain a representative population based on operator,
drilling year, spatial location, lithology, and sample grades.
Drill core is stored in cardboard boxes with the downhole depth interval denoted in
marker pen on the exterior of the boxes and sample intervals marked with small blocks
of wood. The core shed, although in a poor state of repair, was generally water tight and
any water leaks did not impact directly on the core boxes. Snowden recommends that
Midway Gold transfer the core to wooden boxes and affix a metal plate to the exterior
of the box indicating the drillhole number, box number and downhole depth interval.
Snowden also noted that some of the core had been sampled using a hydraulic splitter
resulting in an uneven core splits which will form an unrepresentative sample. Snowden
recommends that any other drill core samples selected from existing drill core should
comprise whole core samples, and that any samples selected from future drilling
campaigns should be cut in half with a diamond bladed saw, to reduce the potential of
sample bias.
Table 14.2
Mineralized drill core intersections reviewed by Snowden
Hole number
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Company
From (ft)
To (ft)
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Hole number
Company
From (ft)
To (ft)
88-123
Hecla
1,454
1,455
88-125
Hecla
1,041
1,045
88-126
Hecla
1,907.4
1,909
89-147
Hecla
982.5
984.5
90-205
Hecla
153.8
155
90-213
Hecla
401
402.2
90-215
Hecla
425
430
90-217
Hecla
346.3
347.4
90-221
Hecla
590
594
90-226
Hecla
450
452
CGE-0012
SFPG
113
118
CGE-0019
SFPG
855
860.7
CGE-0025
SFPG
666.3
671.5
CGE-0026
SFPG
231
236
CGE-0026
SFPG
387.5
392
CGE-0028
SFPG
735.7
740.9
CGE-0029
SFPG
789.5
795
CGE-0030
SFPG
775
780
CGE-0031
SFPG
565
570
CGE-0034
SFPG
1,454
1,460.3
CGE-0035
SFPG
76
81
CGE-0038
SFPG
462
467
CGE-0038
SFPG
413
418
CGE-0042
SFPG
864
869
Table 14.3
Drillcore intersections unavailable for review
Hole number
Company
CGE-0017
SFPG
SPR8-8
South Penn
DH-11-1-6
Knob Hill Mines
88-128
Hecla
DH-11-1-8
Knob Hill Mines
CGE-0022
SFPG
CDH-25
Knob Hill Mines
89-139
88-118
July 2009
From (ft)
To (ft)
840
900
20
40
500
520
1,380
1,400
0
20
230
250
0
20
Hecla
1,180
1,200
Hecla
1,090
1,110
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Hole number
Company
From (ft)
To (ft)
GEOO-10
Echo Bay
660
680
89-150
Hecla
170
190
CD76B
Knob Hill Mines
0
20
89-150
Hecla
410
430
CGE-0003
SFPG
500
520
DGE-0001
SFPG
90
110
90-205
Hecla
320
340
CGE-0001
SFPG
450
470
DH-11-1-15
Knob Hill Mines
140
160
90-208
Hecla
50
70
DH-8-1-7
Knob Hill Mines
760
780
90-204
Hecla
10
30
88-123
Hecla
1,786
1,806
89-139
Hecla
1,169
1,174
89-139
Hecla
1,040
1,044
89-150
Hecla
240
569
89-150
Hecla
218
222
CGE-0001
SFPG
431
442
509.2
515.5
CGE-0001
SFPG
CGE-0003
SFPG
490
495
CGE-0003
SFPG
520
565
CGE-0022
SFPG
466
473
CGE-0022
SFPG
550
555.3
CGE-0001
SFPG
321.7
326.3
CGE-0003
SFPG
700
705
CGE-0002
SFPG
364
400+
CGE-0002
SFPG
570
1115
CGE-0004
SFPG
623
627.5
CGE-0004
SFPG
639.8
644.3
CGE-0022
SFPG
365
370
CGE-0022
SFPG
240
245
88-127
Hecla
828
831
89-137
Hecla
630
632
90-202
Hecla
352
356
90-208
Hecla
0
330
89-149
Hecla
243
248
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Hole number
Company
From (ft)
To (ft)
89-149
Hecla
402
406
89-149
Hecla
355
361
90-197
Hecla
148
150
90-210
Hecla
493
498
CGE-0011
SFPG
1,036
1,041
89-154
Hecla
439
446
89-134
Hecla
438
440
CGE-0020
SFPG
498
502
CGE-0009
SFPG
561.5
566.5
14.4.2 Independent sampling of mineralized intersections
Mr. Chapman collected 25 independent half core duplicate samples from 23 drillholes
(Table 14.4) to verify the presence of mineralized intersections. Because of the limited
number of samples, the variable nature of mineralization, and different sample
preparation and analysis techniques used by the alternate laboratory, independent
samples may indicate poor precision. The purpose of independent samples is to verify
the presence and magnitude of mineralization, rather than act as a QAQC sample.
The 25 independent half core samples were shipped to Vancouver, where the samples
were submitted to ALS Laboratories of North Vancouver, Canada. The samples were
crushed to 70% passing -2 mm or better, and then a one kilogram crushed sample was
pulverized to 85% passing 75 µm or better. A 30 g charge was digested then analyzed by
fire assay with atomic absorption finish.
The results of the analyses are shown in Table 14.4. Snowden considers that the results
of the independent samples are acceptable for duplicate samples for the style of
mineralization.
Table 14.4
Hole Name
Snowden independent drill core sample assay results
Year
Duplicate
gold (opt)
To (ft)
88-123
1,454
1,455
Hecla
1988
0.308
0.239
88-125
1,041
1,045
Hecla
1988
0.118
0.086
88-126
1,907.4
1,909
Hecla
1988
0.293
0.330
89-147
982.5
984.5
Hecla
1989
0.258
0.243
90-205
153.8
155
Hecla
1990
0.106
0.025
90-213
401
402.2
Hecla
1990
0.742
0.790
90-215
425
430
Hecla
1990
0.352
0.312
90-217
346.3
347.4
Hecla
1990
0.444
0.630
90-221
590
594
Hecla
1990
0.230
0.268
90-226
450
452
Hecla
1990
0.238
0.239
July 2009
Company
Original
gold (opt)
From (ft)
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Company
Year
Original
gold (opt)
Duplicate
gold (opt)
Hole Name
From (ft)
To (ft)
CGE-0012
113
118
SFPG
1995
0.121
0.111
CGE-0019
855
860.7
SFPG
1995
0.321
0.222
CGE-0025
666.3
671.5
SFPG
1996
0.054
0.043
CGE-0026
231
236
SFPG
1996
0.139
0.117
CGE-0026
387.5
392
SFPG
1996
0.104
0.098
CGE-0028
735.7
740.9
SFPG
1996
0.263
0.273
CGE-0029
789.5
795
SFPG
1996
0.205
0.150
CGE-0030
775
780
SFPG
1996
0.078
0.064
CGE-0031
565
570
SFPG
1996
0.430
0.059
CGE-0034
1,454
1,460.3
SFPG
1996
0.280
0.341
CGE-0035
76
81
SFPG
1996
0.143
0.085
CGE-0038
462
467
SFPG
1996
0.404
0.420
CGE-0038
413
418
SFPG
1996
0.244
0.231
CGE-0042
864
869
SFPG
1996
0.128
0.126
CGE-0044
732
736
SFPG
1996
0.098
0.062
14.4.3 Independent review of drillhole collar coordinates
Mr. Chapman visited the Golden Eagle Project site and the approximate locations of
drillhole collars. Due to natural reclamation from soil and vegetation and disturbance
from surface operations, it was not possible to validate precise collar coordinates.
Snowden recommends that for future drilling campaigns, Midway Gold affix cement
collar blocks with a durable metal tag stamped with the drillhole information on every
drillhole. In the period between the end of drilling the hole and installing the permanent
cement collar blocks, Midway Gold should identify the drillhole number on the collar
using a permanent marker pen.
Snowden undertook a comparison of the surveyed topographic surface and the drillhole
collar coordinates entered into the database and noted numerous elevation
discrepancies ranging up to 20 ft. The level of error is generally less than 2 ft. It was not
possible to identify whether the error is in the topographic survey or the collar
coordinate. Snowden recommends Midway Gold undertake a more detailed survey of
the site using total station or differential GPS methods to more accurately define the
collar coordinates.
14.4.4 Independent review of original assay certificates
Original assay certificates were emailed directly to Snowden from the Chemex
laboratory in Reno, Nevada for comparison against the database. Snowden reviewed 22
certificates for 3,428 drillhole core sample assays, and no discrepancies were noted.
Details of the assay certificates reviewed are shown in Table 14.5.
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Table 14.5
Work
order
Assay certificates reviewed by Snowden
Date
Drillhole intersection
Number of
samples
A9529501
22/09/1995
CGE-004 (100 ft to 218.5 ft)
14
A9529507
22/09/1995
CGE-001 (55, 60, 65, 70)
4
A9529509
22/09/1995
CGE-003 (100, 105, 110, 115)
4
A9529510
22/09/1995
CGE-004 (45, 50, 55, 60, 65, 70, 75, 80,
85, 90, 95, 100)
12
CGE-005 (25, 30, 35, 40, 45, 50, 55, 60,
65, 70, 75, 80, 85, 90, 95, 100)
16
CGE-006 (120, 125, 130, 135, 140, 145,
150)
7
A9529511
A9529512
22/09/1995
22/09/1995
A9529514
22/09/1995
CGE-008 (95, 100)
2
A9529517
22/09/1995
CGE-011 (135, 140, 145, 150, 155, 160)
6
A9529518
22/09/1995
CGE-001 (84 ft to 883 ft)
142
A9530680
03/10/1995
CGE-003 (245 ft to 730 ft)
94
A9531057
07/10/1995
CGE-003 (730 ft to 860 ft)
26
A9531059
07/10/1995
CGE-004 (218.5 ft to 1067.6 ft)
164
A9531061
07/10/1995
CGE-005 (101ft to 560 ft)
91
A9531249
11/10/1995
88-126 (1420 ft to 1490 ft)
6
A9531764
18/10/1995
88-133 (126.3 ft to 1480 ft)
80
A9531812
18/10/1995
CGE-005 (560 ft to 805 ft)
46
A9531818
18/10/1995
CGE-008 (100 ft to 185.5 ft)
16
A9531994
20/10/1995
CGE-005 (805 ft to 970 ft)
32
A9531996
20/10/1995
CGE-006 (150 ft to 400.5 ft)
45
A9532001
20/10/1995
88-133 (1480 ft to 1630 ft)
18
A9532302
24/10/1995
CGE-006 (400.5 ft to 620.5 ft)
42
A9532307
24/10/1995
CGE-005 (970 ft to 1116 ft)
29
A9532313
24/10/1995
88-116 (20 ft to 164 ft)
19
A9532314
24/10/1995
CGE008 (185.5 ft to 536 ft)
62
A9532533
27/10/1995
88-116 (164 ft to 566 ft)
50
A9532536
27/10/1995
CGE-006 (620.5 ft to 911.6 ft)
55
A9532751
31/10/1995
CGE-008 (536 ft to 817 ft)
54
A9532999
03/11/1995
CGE-008 (817 ft to 1050 ft)
44
A9533001
03/11/1995
CGE-011 (160 ft to 456.5 ft)
60
A9533005
03/11/1995
88-116 (566 ft to 840 ft)
33
A9533147
03/11/1995
CGE-017 (110 ft to 130 ft)
4
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Work
order
Date
Drillhole intersection
Number of
samples
A9533149
03/11/1995
CGE-018 (80 ft to 125 ft)
9
A9533453
09/05/1995
88-116 (566 ft to 1532 ft)
90
A9533458
09/11/1995
CGE-011 (456.5 ft to 1119 ft)
142
A9533928
16/11/1995
CGE-011 (1119 ft to 1264.4 ft)
30
A9533930
16/11/1995
88-127 (150 ft to 332.5 ft and 1062 ft to
1066 ft and 1127 to 1155 ft)
30
A9534329
21/11/1995
CGE-018 (120 ft to 916.7 ft)
160
A9534333
21/11/1995
CGE-017 (125 ft to 606 ft)
100
A9534805
28/11/1995
CGE-018 (916.7 ft to 1300 ft)
76
A9534813
28/11/1995
CGE-018 (606 ft to 1176 ft)
110
A9535381
05/12/1995
CGE-018 (1300 ft to 1459.2 ft)
32
A9535383
05/12/1995
88-127 (1155 ft to 1380 ft)
30
A9535384
05/12/1995
CGE-017 (1176 ft to 1286 ft)
22
A9535691
08/12/1995
CGE-021 (24 ft to 643 ft)
115
A9535694
08/12/1995
88-120 (731 ft to 1186 ft and 1342 ft to
1645 ft)
97
A9535701
08/12/1995
CGE-003 (121 ft to 245 ft)
16
A9535702
08/12/1995
88-127 (1390 ft to 1629 ft)
24
A9535996
12/12/1995
CGE-023 (6 ft to 651 ft)
108
A9536000
12/12/1995
88-128 (215 ft to 1250 ft and 1339 ft to
1355 ft and 1494 ft to 1741 ft)
131
89-147 (14ft to 197.5 ft and 212.5 ft to
428.5 ft and 591 ft to 798.4 ft and 801 ft to
897.5 ft and 901 ft to 918.5 ft and 984.5ft to
1100 ft)
122
88-118 (256 ft to 312 ft and 411 ft to 420.8
ft and 616 to 627 ft and 900 ft to 931.5 ft
and 1007 ft to 1018 ft and 1085 ft to 1109 ft
and 1171 ft to 1200 ft and 1228 ft to 1346
ft)
37
A9536249
A9536254
15/12/1995
15/12/1995
A9536256
15/12/1995
89-167 (20 ft to 32 ft and 70.5 ft to 94 ft and
174.5 ft to 185 ft and 325 ft to 401 ft)
A9610704
16/01/1996
CGE-027 (5 ft to 1000 ft)
195
A9610986
20/01/1996
CGE-024 (455 ft to 735 ft)
52
A9612076
09/02/1996
CGE-040 (10 ft to 146 ft)
24
A9612472
16/02/1996
CGE-040 (146 ft to 765.2 ft)
101
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15 Adjacent properties
There are no known activities on adjacent properties significant to the Golden Eagle
Project. The historic operations at Knob Hill, Mud Lake, and Mountain Lion mines are
currently inactive. The Mud Lake open pit was used for the Knob Hill tailings
impoundment. Hecla sealed the Mountain Lion underground mine, although the open
pits remain accessible, but they are generally small and reclaimed naturally.
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16 Mineral processing and metallurgical testing
16.1 Introduction
Differential Engineering Inc. reviewed reports and data detailing the metallurgical test
work conducted by several unverified laboratories and consultants on mineralized
samples from the Golden Eagle deposit (Differential Engineering, 2009). The test work
described in these reports have not yet been verified through independent test work,
and it is unknown whether the samples are representative of the Golden Eagle deposit,
however, the reported results indicate that the Golden Eagle deposit represents a
refractory gold and silver target for further metallurgical testing, with material types and
grades similar to gold ore processed from the Carlin Trend, Nevada.
16.2 Mineral processing and metallurgical testing by Hecla Mining
Company and Santa Fe Pacific Gold
Hecla conducted various metallurgical tests in the 1980s, and SFPG core drilled for
metallurgical samples in the Golden Eagle deposit during the fall and winter of 1995 to
1996.
A heterogeneity test performed on a large composite sample is reported to clearly
demonstrate that gold is finely and homogeneously disseminated in the sample. A
significant portion of the gold was considered by Mather (1990) to be refractory.
Refractory gold refers to a naturally resistant mineralized material to recovery by direct
standard cyanidation and activated carbon adsorption processes. Calculations based on
estimated abundances of different types of pyrite in the Golden Eagle sample suggest
that about 66% of the gold could be present in solid solution in arsenic-bearing, fine to
medium grained pyrite. Gold extraction by direct cyanidation was limited to 11.8% to
27.8%, except in one composite which exhibited gold extraction up to 59.2% by direct
cyanidation, for a composite weighted average of 22.4%. Whole ore cyanide extraction
does not appear to be a viable extraction process for the bulk of the deposit.
Phase 2 metallurgical test work was undertaken in 1996 at Hazen Metallurgical Inc.
(Hazen) on metallurgical composite sample types from drillhole MC 0-6 to confirm the
refractory nature of the rock and to test other extraction alternatives. Gold recoveries
were 27.4% from direct standard cyanide leaching in a carbon-in-leach (CIL) on ground
mineralized rock (P80 of ≈ 80 um). This preliminary scoping metallurgical test work at
Hazen showed that direct cyanidation is not a feasible process option for most of the
samples, thus the mineralized rock is generally refractory for gold extraction (Oberg and
Gathie, 1996).
The SFPG composites from the 1995 to 1996 drill campaign have been reported to
contain significant quantities of arsenic, iron, mercury, selenium, and sulfides. The main
constituents of the Golden Eagle samples are silicate gangue (largely quartz) and pyrite.
A small amount of clay minerals and possibly some organic material also was present.
Other minerals that are present in trace amounts include arsenopyrite, stibnite,
sphalerite, galena, pyrargyrite, barite, and native gold. Pyrite was observed in two
distinct size populations, 0.25 µm to 10 um and 1 mm to 2 cm. Most of the pyrite
occurred in the fine fraction as framboidal particles in sericite or quartz. Both pyrite
populations are arsenical with higher concentrations of arsenic in the finer fraction. The
arsenic was stated to be concentrated in the grain rims, the rims ranging up to 4 um in
thickness. Gold was detected in the arsenical rims of the fine grained pyrite, the
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gold/silver association was observed in every grain studied in detail, and the gold was
stated to occur either as colloidal material or in solid solution (excerpted from Jenkins,
1990).
In addition, samples of the Golden Eagle deposit have been noted to be potential acid
generating (PAG) material, with a negative net carbonate value (NCV) of -5.41. The fact
that the Golden Eagle Property is a sulfidic deposit in a “net precipitation area” means
all waste rock, dumps or storage of material should be mined and stacked in such a
fashion to separate the material from the environment and to minimize the acid
generation potential for the material. In addition, the material contains significant
quantities of deleterious elements that potentially have an environmental impact to
water and dust, which should be managed.
Extensive grinding test work was performed by McPherson Consultants for semiautogenous grinding (SAG) and rod/ball setups. The rod/ball work index was
determined to be 19.5 KWhr/st and 0.25 g2 for the Bond Abrasion Index. The density
of the composite SFPG samples determined by Hazen ranged from 2.62 g/cm3 to
2.67 g/cm3. It was reported that ground slurry pulps of the Golden Eagle material may
exhibit high viscosity and difficult filtration issues.
Due to the refractory properties of most of the Golden Eagle mineralized material,
which does not exhibit any preg-rob tendencies, sulfide oxidation will improve gold
extraction and recovery. Standard pre-treatment options for sulfide refractory ores
include chemical pre-treatment, roasting, bio-oxidation, pressure oxidation (POX),
ultra-fine grinding and concentration by gravity or flotation. The gold in the Golden
Eagle mineralized material mostly occurs as solid solution within the pyrite matrix,
which is generally impermeable to direct cyanidation, so the gold must be liberated by
oxidation of the sulfides to yield permeable sulfates and oxides that are more readily
leached. Thus the degree of sulfide oxidation will generally correlate with the success of
extracting the gold via cyanidation.
The following process options were addressed by the metallurgical test work on the
Golden Eagle material conducted by Hecla and SFPG:
• Most of the metallurgical test work centers on three processes including flotation
with cyanidation of the flotation tails, bio-oxidation, and pressure oxidation.
• Hecla’s metallurgical tests on the mineralized material by atmospheric chemical
pre-treatment of the mineralized rock only marginally improved the gold
extractability compared to direct cyanidation.
• Limited gravity concentration test work was conducted by Hecla and needs to be
revisited in future bench and pilot plant test work.
• It is conceivable that a small roasting plant could be built and operated
economically, however, permitting of a roasting plant may present problems, so no
significant metallurgical roasting test work was conducted on the drill composites.
16.3 Summary of process options
Due to the challenging economic events today, with capital and energy cost escalation
and a locally uncertain market for gold concentrates, a specific process flowsheet
derived from the reviewed metallurgical test work could include one of the following:
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• Whole ore flotation with cyanidation carbon-in-leach (CIL) of the flotation tails.
The concentrate can then be bio-oxidized, pressure oxidized or shipped for
processing.
• Whole ore bio-oxidation in heaps or ground slurry with cyanidation CIL of the biooxidation tails.
• Whole ore pressure oxidation (POX) followed by cyanidation CIL (CN-CIL) of the
POX tails.
Table 16.1 outlines a summary of recoveries for each process option.
Table 16.1
Summary of process options
Golden Eagle Composite
SFGC – GE95 LG/HG MC 0-6
%W t.
Recovery
Recovery
Opt Au
%Au
%Ag
%Au
%Ag
0.0673
27.4
29.0
27.4
29.0
0.269
86.5
86.3
86.5
86.3
Whole ore CN-CIL
Process 1 : Flotation Concentration
Total Cal.
Recovery
Assays
23.29
Add Flotation Tails Cyanidation – CIL
89.4
91.9
%Au
%Ag
Flotation Concentrate Oxidation-Neut-CN
%Au
%Ag
Conc. POX – complete sulfide oxidation CN
93.3
4.9
84.4
4.2
Conc. Biox. Using CSTR’a-90% Sulfide Oxidation-CN
91.2
70.0
82.6
85.7
Conc. Heap Biox. at 80% Sulfide Oxidation@Geobiotics-CN
88.5
70.0
80.2
66.3
Conc. And Whole Ore Heap Biox. at 80% Sulfide Oxidation-CN
88.5
65.7
75.1
62.0
75.5
65.7
94
?
Process 2: Whole or ore bio-oxidation, neutralization, CN-CIL
Process 3: Whole ore POX (Hecla Study), neutralization, CN-CIL
16.3.1 Process option 1: Whole ore flotation with cyanidation carbonin-leach of flotation tails
Flotation test work at Hazen Research Inc. on the 1995 to 1996 SFPG drill core
metallurgical composites indicated that fine grinding would be required to achieve
acceptable levels of gold recovery via flotation. The average flotation rougher grind size
was P80 of 74 um to 80 um; the scavenger feed was re-ground to an average P80 of
33.4 um. Flotation tests were reported to achieve gold recoveries at 82.4% to 95% into
the flotation concentrate, which comprised 12.46% to 26.84% of the total weight.
Flotation concentrate assays ranged from 0.143 opt Au to 0.905 opt Au. This large
concentrate mass with relatively low gold grade may be challenging to transport,
capitalize and process economically. The flotation test work was conducted using
standard reagents and fine grinding with the work conducted in nitrogen and air
atmosphere. The flotation tails were then leached by cyanidation in CIL. The cyanide
leach bottle roll test work was conducted using standard methods and up to 24 hours
leach time.
Metallurgical testing undertaken at Hazen on the Phase 2 combined metallurgical
composites (MC 0-6) showed the potential for overall gold extraction of 89.37% and
silver at 91.94% with grinding of fresh mineralized rock to a P80 of ≈ 80 um, followed
by flotation and cyanide leaching via CIL of the flotation tails. Because of the finely
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disseminated nature of the mineralized rock it is believed that it will be difficult to
achieve both high gold grades and recoveries in concentrates. Generally flotation works
well to collect sulfides in the 20 um to 625 um range. The two types of sulfides in this
mineralized material are greater or less than this optimal size and thus fine or ultra fine
grinding is needed to liberate and collect the fine sulfides.
A gravity concentration step could be included in the grinding circuit to collect the
larger sulfides minerals with residual gold to a marketable concentrate before the next
mineral extraction step. This would remove the larger sulfides that are difficult to
remove in standard flotation and would also identify the gold concentration in the larger
sulfide mineral fraction by assay.
Further metallurgical testing was done by McPherson Consultants on the Hazen
composites samples for the grindability of the mineralized rock, which showed an
average abrasion index of 0.25 g2 and a rod mill index of 13.6 and Ball mill at 18.5
[KWhr/st]. Thus this mineralized material is relatively hard to grind and will require
extensive grinding and energy to obtain a P80 of ≈ 80 um for flotation. In addition it is
mentioned that the ground pulp exhibits high viscosity. This should be investigated to
correlate grind size as pulp viscosity and flotation concentrate gold recovery.
Following Process option 1, flotation of the mineralized rock followed by cyanidation
of the flotation tails has reported to recover up to 86.5% of the gold and 86.3% of the
silver. Cyanidation of the flotation tails and slimes increases the total reported calculated
gold and silver recovery p to 89.4% and 91.9% respectively. The flotation concentrate
must be sold or else oxidized, neutralized, and subjected to cyanidation. It is reported
that POX recovers up to 93.3% of the gold in the flotation concentrate and only 4.9%
of the silver in post oxidation CN-CIL. Bench scale bio-oxidation is reported to recover
up to 91.2% of the gold in the flotation concentrate and 70.0% of the silver in post
oxidation CN-CIL.
There appears to be three potential processes for gold extraction of the flotation
concentrates:
• Ship the concentrates offsite for processing at smelters, roasters or autoclaves.
There is currently a market in Nevada and possibly in Utah for sulfide concentrates
due to the lack of sulfide sulfur for roasting and autoclave operations.
• POX of the flotation concentrates, neutralization, then cyanidation-CIL of the
residue on site with the flotation slimes and tails. However, pressure oxidation
plants are expensive to build and operate. If a used autoclave can be obtained then
there could be a good opportunity to use this process. A detailed capital and
operating cost analysis is needed prior to selecting this process as a mass of nearly
25% of the mineralized rock could report to a flotation concentrate. Some of the
head ore could be mixed successfully with the flotation concentrate to increase
POX tonnage throughput if required by the sizing of the autoclave. It appears this
POX process had low silver recovery.
•
Bio-oxidation of the flotation concentrates, neutralization, then cyanidation-CIL
of the residue on site with the flotation slimes and tails. Bio-oxidation of the
flotation concentrate achieved gold extraction of 71.7% to 82.6%. The overall gold
extraction appears low, but a pilot plant could optimize the operation to maximize
oxidation and gold extraction.
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Seven POX tests conducted at temperatures of 150°C to 210°C to investigate the
relationships between autoclave temperature, sulfide sulfur oxidation, and subsequent
CIL gold extraction were undertaken on the Hazen Flotation concentrate. The
cyanidation CIL extractions were between 90.8% and 95.4% and the leach residues
assayed 0.003 opt to 0.006 opt, showing no advantage for using temperatures higher
than 180°C, which gave a gold extraction of 94.1% (Oberg, Gathie, and Hazen, 1996).
In Dr. Seal’s experience with flotation concentrate bio-oxidation plants, this mineralized
material and respective flotation concentrate appears to be a prime candidate for the
technology. The process takes up to 200 hours, depending on pyrite size and the degree
of bio-oxidation, and requires large stirred, aerated tanks with temperature control. Care
is needed to operate at the highest percent solids to increase retention time and sulfur
oxidation. In addition, a water treatment plant is a necessary capital requirement, and
due to the high As values present in the mineralized rock, permit requirements must be
addressed. The use of large quantities of lime and cyanide is also a primary operational
cost driver that should be reviewed.
Further study is required to evaluate the economics of this process, the success of biooxidation compared to POX, and to determine whether differences in percent oxidation
and gold recovery noted in the two techniques are not due to differences in analytical
techniques, sampling, variable sample types, and general calculation techniques. A pilot
plant on fresh mineralized rock is warranted due to the unknown ageing factor in the
SFPG work.
16.3.2 Process option 2: Whole ore bio-oxidation in heaps or ground
slurry with cyanidation carbon-in-leach of the bio-oxidation tails
Whole ore bio-oxidation and pressure oxidation were also investigated by Hecla in 1988
to 1989 on unknown aged samples, which indicate that bio-oxidation may be the best
choice for gold extraction on the project. Golden Eagle samples supplied by Hecla were
found to be highly amenable to bio-oxidation with gold extractions of 93% at only 70%
overall sulfide oxidation. In general, gold extractions recoveries of around 90% can be
expected on bio-oxidation. Following Process 2, whole ore heap bio-oxidation followed
by grinding and neutralization then CN-CIL had a reported gold recovery up to 75.5%
and silver at 65.7%.
Whole ore bio-oxidation followed by cyanidation increases gold extraction and
decreases cyanide consumption. This process option would involve construction of
heaps of crushed ore through which bacteria carrying solution is passed. After a period
of time (on the order of six to 12 months), when oxidation is optimized, the material is
neutralized, then cyanide solution is applied on the heaps or else ground with post bioore for CN-CIL (Siddle, 1988). A concentrate step may be required to recover the gold
values associated with the large sulfide grains. This bio-oxidation pretreatment is
reported to show promising results, enabling a bench scale gold extraction of up to 82%
after oxidation of 39% of the sulfur. Optimal oxidation of 69% of the sulfur can
enhance the gold extractability to about 89%. Bio-oxidation can be conducted directly
on ore with, at most, only modest requirements for acid makeup (Mather, 1990).
Significant neutralization reagents and a water treatment plant may be required. It
appears that no bio-oxidation columns were undertaken in the Hecla or SFPG test
work.
The direct whole ore bio-oxidation flow sheet can be developed into two distinct
processes:
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• Whole ore heap bio-oxidation, neutralization, grinding, gravity or flotation
concentration of large pyrite and then cyanidation-CIL of the bio-oxidation residue
on site.
• Whole ore grinding, gravity concentration, tank bio-oxidation, neutralization then
cyanidation-CIL of the residue on site.
In Dr Seal’s experience with a whole ore crushing, inoculation, then heap bio-oxidation
operation (at Newmont on the Carlin Trend), using a cut-off grade of approximately
0.05 opt, six months were required to obtain sulfide oxidation of approximately 30%.
Large areas are required to create pads to a maximum height of 45 ft. Care should be
taken to stack the ore with conveyors, and a water treatment plant is also required.
Good quality fresh metallurgical samples should be tested in columns to model the
recovery and time required and to determine if the selected crush size will allow
oxidation of the fine sulfides. The process if optimized, and if the mineralogy allows,
neutralization then heap cyanidation could be a possibility, but doubtful with the
smaller sulfides being encapsulated.
The best recoveries could be obtained by offloading the post bio-oxidation ore, then
neutralizing in grinding, and recovering any large sulfides in a gravity concentrate, or a
bulk flotation, then using cyanidation in a carbon-in-leach. Considering the significant
differences in gold recovery projected from the Hazen work on heap bio-oxidation
(63.9% to 74.6%) and the earlier Hecla work on direct bio-oxidation with projected
gold recovery of 93%, these actual recoveries obtained should be resolved in column
bio-oxidation leach tests, neutralization, then cyanide leach tests.
Whole ore grinding, gravity concentration or bulk flotation, then stirred tank bioreactors could be a good alternative. The gravity concentrate or bulk flotation could
remove most of the large sulfide fraction for either regrind or off property sale. The
large sulfides take a long time to bio-oxidize. This process flow sheet will be % solid
limiting for tank size capital requirements and appears to reach above 90% extraction.
In addition a water treatment plant is required. Post bio-oxidation neutralization and
then cyanidation-CIL could achieve acceptable 90% recovery. Test work on new fresh
mineralized material is warranted to explain the differences in projected recovery
obtained between Hecla and Hazen.
Elemental sulfur may build up to a significant concentration to affect the reagent usage
in the cyanidation step for gold recovery. While it has been difficult to discern and
quantify this issue in the available documentation, bio-oxidation test work did expose
two bio-oxidized flasks to determine if treatment with elemental sulfur oxidizing
bacteria lowers cyanide consumption of the bio-oxidized concentrate. It is unclear from
the test work if success was achieved because the solids were finally dried and shipped
to Hazen where cyanidation was undertaken, and the test work was stopped by SFPG.
According to Oberg, Gathie, and Hazen (1996), reagent dosages were 4.6 lb NaCN/st
to 12 lb NaCN/st, which is considered a high value. Two more samples arrived, labeled
90% and 5% bio-oxidized, but no further work was undertaken before the test work
was stopped.
Ferrous iron and elemental sulfur are released during acid dissolution of pyrrhotite, and
although the formation of elemental sulfur is reversed by the bacteria present in the
culture, abnormally high pyrrhotite content and the formation of excessive elemental
sulfur cannot be accommodated in the plant, which may increase cyanide requirements
and result in lower gold recoveries (Van Aswegen, Van Niekerk and Olivier, 2007).
There is no mention of significant quantities of pyrrhotite, but this issue should be
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investigated in future test work and mineralogy, quantifying the quantity of elemental
sulfur as a byproduct of flotation concentrate bio-oxidation and its affect on
cyanidation.
16.3.3 Process option 3: Whole ore pressure oxidation followed by
cyanidation carbon-in-leach of the pressure oxidation tails
Pressure oxidation batch tests were conducted on whole mineralized samples of
unknown age supplied by Hecla to both Lakefield Research Laboratories and Dawson
Metallurgical Laboratories. The reported tests achieved a high degree of sulfur oxidation
(>99%) and enabled gold extractions of 94% to 98%. At sulfur oxidation of 92% the
gold extraction dropped to 89% (Mather, 1990). Bio-oxidation of the whole mineralized
sample achieved 69% sulfide oxidation while pressure oxidation was able to reach near
complete sulfide oxidation.
Based upon Hecla’s and SFPG metallurgical test work, autoclave pressure oxidation of
the whole mineralized sample appears to have the best overall gold recovery, with
extractions in the 88.5% to 98% range. Silver extraction appeared to not be tracked
well. This whole ore oxidation process followed by neutralization then cyanidation-CIL
of the residue on site would be capital expensive. If a used autoclave can be found then
this flowsheet development will need to be examined closely. The sulfide sulfur is low
in the whole mineralized sample and will need additional sulfide concentrates, or extra
heat must be added. A detailed capital and operation cost study should be undertaken
and compared with the previous flowsheets.
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17 Mineral resource and mineral reserve estimates
17.1 Disclosure
Mineral resources reported in this section were prepared by Mr. Eric Chapman,
C. Geol., a Consultant of Snowden and a Qualified Person as defined under NI 43-101.
The work was reviewed by Ms. P. De Mark, P. Geo., a Senior Consultant of Snowden.
Snowden is independent of Midway Gold as defined under NI 43-101.
Mineral resources that are not mineral reserves do not have demonstrated economic
viability. No mineral reserves are reported in the Technical Report.
This report uses definitions from and follows the guidelines of the CIM Definition
Standards for Mineral resources and mineral reserves and NI 43-101 Form F1. The
Project has no defined mine design at this time.
17.1.1 Known issues that materially affect the mineral resources
The June 2009 mineral resource estimate has been constrained within an ‘ultimate’ pit
shell as detailed in Section 17.11. This ultimate pit shell extends outside Midway Gold’s
present property boundary into property owned by Hecla. The full extent of the pit
shell will be dependent on the slope angles of the pit walls, and a slope stability study
should be undertaken to establish the maximum possible slope angles.
Midway Gold has entered into discussions for the potential purchase of the additional
land and mineral rights with Hecla. Historical workings and tailings dumps are located
in the area of the additional land, and should be considered for any environmental and
engineering issues.
Snowden is unaware of any further issues that may materially affect the mineral
resources in a detrimental sense. These conclusions are based on the following:
• Midway Gold has represented that there are no outstanding legal issues; no legal
action, and injunctions pending against the Project.
• Midway Gold has represented that the mineral claims and surface rights have
secure title and are in good standing.
• There are no known marketing, political, or taxation issues.
• There are no known infrastructure issues.
17.2 Assumptions, methods, and parameters – June 2009 mineral
resource estimates
The estimates were prepared in the following steps:
• Compilation and verification of drillhole data, including independent data
verification, and database verification. Data validation was undertaken by Midway
Gold and reviewed by Snowden.
• Analysis of drillhole sample QAQC data.
• Verification of Midway Gold’s geology and mineralization models against drillhole
information.
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• Coding of drillhole data within mineralized estimation domains.
• Sample length compositing.
• Analysis of extreme data values and application of top cuts, where necessary.
• Exploratory analysis of gold grades within mineralized estimation domains.
• Variogram analysis and modeling.
• Derivation of kriging plan and boundary conditions.
• Creation of block models and application of density values.
• Estimation of gold grades into blocks using ordinary kriging (OK) and inverse
power of distance (IPD).
• Validation of estimated block grades against input sample composite grades.
• Confidence classification of estimates with respect to CIM guidelines.
• Application of appropriate mining and milling costs and revenue assumptions
agreed to by Midway Gold; optimization and selection of the pit shell to best
represent the economically viable resource.
• Resource tabulation and resource reporting.
17.3 Supplied data, data transformations, and data validation
17.3.1 Supplied data
Midway Gold supplied raw drillhole data in Microsoft Access database format. Data
stored in the database includes collar coordinates, downhole surveys, geology, and assay
data. All assays from the assay laboratories were reported as gold in units of either opt
or parts per billion (ppb). The ppb assays were stored in a separate column and
converted to troy ounces per short ton as the database was being constructed. The
conversion factor used by Midway Gold for the conversion of ppb to opt is:
34,285.7 ppb = 1 opt
Drillhole intervals without assay values were coded in the database with the value of
-2 Au opt. All assays below detection limits of the analytical machine in use were set to
a value of minus the detection limit. For example, an assay reported as < 10 ppb was
recorded in the database as -10, which converts to -0.0003 opt Au.
Topography data was supplied in AutoCAD DXF format and geology, faults, and
mineralized estimation domain wireframes in Surpac mining software format. Midway
Gold also supplied relevant technical documentation including QAQC data, tonnage
factor measurements, metallurgical reports, and geological reports.
17.3.2 Data preparation
Snowden prepared desurveyed drillholes from collar, survey, lithology, and validated
assay data provided by Midway Gold. A proportion of the historical sample grades have
been validated by Midway Gold through checking of assays entered in the database with
original assay certificates; however not all assays have been validated in this way, as
discussed in Section 14.2.
All samples have been used for the interpretation of the geological model, but not all
samples have been used for the estimation of grades in the resource model. Samples
from drillhole campaigns which have a high percentage of assays that cannot be verified
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by original assay certificates have been excluded from the June 2009 mineral resource
estimate, as Snowden and Midway Gold believe the accuracy and validity of the sample
data from the non-validated holes cannot be reliably assessed. The majority of samples
used in the 2009 mineral resource estimate are from the more recent drill programs
undertaken by Hecla and SFPG. In addition to the lack of assay certificates, no QAQC
data exists for the historical drillholes, no detailed procedures of the sample preparation
and analyses methods exists, and none of the drill core is available for validation test
work.
204 validated drillholes for 140,950.8 ft are available for use in the resource estimate. A
location map of these drillholes is shown in Figure 17.1, and a list of the drillhole collar
locations is detailed in Appendix B.
Figure 17.1
12 16500 E
12 16000 E
12 15500 E
12 15000 E
12 14500 E
12 14000 E
12 13500 E
12 13000 E
17695 000 N
Location map of validated drillholes available in the 2009 Golden Eagle mineral
resource
17695000 N
17694 500 N
17694500 N
17694 000 N
17694000 N
17693 500 N
17693500 N
17693 000 N
17693000 N
Golden Eagle Project - Midway Gold Corp.
1:15000
0
200
400
600
800
Drawn by
Snowden
12 16500 E
Date: 27/05/09
12 16000 E
12 15500 E
12 15000 E
12 14500 E
12 14000 E
12 13500 E
12 13000 E
Plan of drillhole locations
17692 500 N
17692500 N
Scale 1:15000
A summary of the drillholes and footage by operator is detailed in Table 17.1.
Table 17.1
Summary of drillholes by operator used in the 2009 mineral resource estimate
Operator
No. of Drillholes
Percentage of
total footage
Footage
Knob Hill Mines
51
13,008.8
9
Hecla
91
75,620.5
54
SFPG
56
48,349.5
34
6
3972
3
204
140,950.8
100
Echo Bay
TOTAL
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17.3.3 Data transformation
The surface drillhole spacing ranges from 100 ft to over 400 ft, but is generally on
nominal 100 ft centers. The azimuth and inclination of drillholes vary greatly. The
majority of the surface drilling is focused in an area with an east-west trend that is
approximately 2,500 ft long and 1,000 ft wide. Midway Gold rotated all data from mine
coordinates to UTM grid coordinates and supplied Snowden with the data in UTM
coordinates.
Snowden converted non-sampled intervals identified by a -2 Au opt value to a default
value of 0 opt Au unless the entire drillhole had no gold assays, in which case the assays
were left as absent. Sample intervals greater than 55 ft in the mineralized domains were
assumed to be non-sampled and removed from the estimate; this affected a total of 14
samples. Samples with assays below detection limit were converted to 0 opt Au.
No other transformations or rotations have been performed by Snowden on the data or
the models.
17.3.4 Data validation
Validation checks in Datamine mining software included searches for overlaps or gaps
in sample and geology intervals, inconsistent drillhole identifiers, and missing data. A
number of errors were noted and corrections were made by Midway Gold.
Snowden also performed an analysis of the precision of drillhole collar surveys and an
analysis of the number of downhole surveys available for each drillhole. Snowden
considers the precision of the drillhole location during application of mineral resource
confidence categories.
17.4 Geological interpretation, modeling, and domaining
17.4.1 Geological interpretation and modeling
Snowden verified Midway Gold’s three dimensional geological models of the major
lithological units present at the Golden Eagle Project. Major faults have also been
modeled and taken into consideration during modeling. Geological and structural
models are used to improve grade estimation domains and for the application of
tonnage factors to the geological model.
For estimation of mineral resources, Midway Gold digitized mineralized domains
around spatially continuous areas of mineralization greater than approximately
0.006 opt Au. Snowden notes that the boundary of the mineralized domain is distinct
and well defined. The sensitivity of the mineralized domain to additional information
has been considered while applying mineral resource confidence categories.
Alteration domains have not been modeled. Because mineralisation at the Golden Eagle
deposit is associated with lithology and hydrothermal alteration, Snowden recommends
that a model of alteration domains is used in future resource estimations.
17.4.2 Definition of grade estimation domains
Grade estimation domains, which are subsets of sample data based on grade
populations, ensure that samples used for estimating a block grade are from the same
population as the point of estimation. A grade population may be defined by attributes
such as spatial location, lithology, mineralization style, and structural boundaries.
Mineralization at the Golden Eagle deposit is associated with lithology and
hydrothermal alteration, and because no alteration model exists, estimation domains
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were modeled based on lithology and gold grade. A mineralized cut-off grade of
0.006 opt Au was used based on drillhole sample grades and grade distribution. The
process identified eight domains including glacial till, Klondike, Sanpoil (high grade),
Sanpoil (low grade), Dike 1, Dike 2, Mountain Lion Dike, and Spenn Dike. The Sanpoil
high grade domain contains the most significant gold mineralization, represents the
largest volume of the deposit, and has the greatest density of sampling. The Klondike,
Dike 1, and Sanpoil low grade domains also exhibit some elevated gold concentrations.
All other domains are barren of gold mineralization and are regarded as waste domains.
17.5 Sample statistics
17.5.1 Sample grade bias analysis
Samples from the Golden Eagle Project have been collected by a variety of drilling
programs from numerous companies over a 60 year time span, using different drilling
techniques, drill core diameters, sampling methodologies, and laboratories. The location
and number of drillhole samples also differs between companies.
Snowden analysed the validated sample grades by company within the Sanpoil high
grade domain for grade bias, and notes that sample grades vary between the different
companies (Figure 17.2). Due to the different sampling techniques used by each of the
companies, as well as their spatial location, it is not possible to identify if a sampling
bias between companies exists. Due to the lack of information available for the Knob
Hill and Echo Bay samples there is a lower confidence in these samples compared to
the Hecla and SFPG samples, and this has been reflected in the resource categorization.
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Figure 17.2
Comparison by company of gold sample grades in the Sanpoil high grade domain
17.5.2 Sample compositing
Snowden composited drillhole sample lengths to ensure that the samples used in
statistical analyses and estimations have a similar support (i.e., length). Due to the long
history and the number of companies that have selected samples at the Golden Eagle
Project, samples interval lengths vary depending on the length of intersected geological
features, and whether the sample is believed to be in mineralized or non-mineralized
material. In geologically similar units within the mineralized domain, samples have
generally been taken at 5 ft lengths. In geologically similar units outside the mineralized
domain, samples have generally been taken at either 5 ft or 10 ft lengths.
Validated sample lengths within the mineralized envelopes were composited according
to the most frequently sampled length interval. The most frequently sampled length
interval within the mineralized domain is 5 ft, (45% of the samples) therefore all
samples were composited to 5 ft lengths to avoid excessive splitting of samples (which
artificially increases grade continuity between samples down the hole, resulting in an
artificially lowered nugget). Several sample intervals in the mineralized domain are
greater than 50 ft in length, however, the gold grades for these intervals are absent and
therefore do not affect grade continuity. The composited and raw sample data were
compared to ensure no sample length loss or metal loss had occurred.
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The Datamine COMPDH downhole compositing process was used to composite the
samples within the estimation domains (i.e., composites do not cross over the domain
boundaries). The COMPDH parameter MODE was set to a value of 1 to allow
adjusting of the composite length while keeping it as close as possible to the composite
interval (5 ft). This is done to minimize sample loss and to ensure equal sample support.
Core recovery treatment
Drillhole core recovery values (which range from 0% to 100% of the drillhole sample
recovered) are used when considering the reliability of the assay and how to assign
grades to any missing sample portions. If sample recoveries are noted for each sample,
then a correlation analysis may be performed on the recoveries and grades to evaluate
whether a bias is present and how best to assign grades to missing samples.
Drillhole core recovery has been generally recorded on a drilling run basis (every 5 ft to
10 ft) and the average drillhole recovery is excellent at 98%. Snowden found no bias
between drillhole recovery and sample grade and applied the grade of the existing
sample portion (the portion that was assayed) to the missing portion of any sample with
less than 100% recovery.
17.5.3 Extreme value treatment
Whenever an estimation domain contains an extreme grade value, this extreme grade
will overly influence the estimated grade. The influence of the extreme grade is
controlled by resetting the extreme grade to a more stable grade.
Snowden has estimated resources using ordinary kriging and inverse power of distance,
both of which requires the application of top cuts to reduce extreme variability in the
domain. Snowden examined gold composite grades to identify the presence and nature
of extreme grade values. This was done by examining the sample histogram, log
histogram, log-probability plot, and by examining the spatial location of extreme values.
If required, top cut thresholds were determined by examination of the same statistical
plots and by examination of the effect of top cuts on the mean, variance, and coefficient
of variation (CV) of the sample data. Composite data statistics and top cut data statistics
are shown in Table 17.2. Top cutting affected less than 0.1% of the composites in each
of the domains.
Table 17.2
Domain
Undeclustered composite and top cut data statistics
Number of
samples
Composited data
Top cut
grade
Mean
(Au opt)
(Au opt)
CV
Top cut data
Mean
(Au opt)
Decrease %
Mean
(Au opt)
CV
CV
Glacial Till
2,009
-
0.001
5.8
-
-
-
-
Klondike
2,761
0.3
0.006
3.8
0.005
3.7
1
2
Sanpoil (low grade)
10,622
0.2
0.004
5.3
0.003
4.0
8
28
Sanpoil (high grade)
11,046
0.5
0.046
1.2
0.045
1.1
0.4
7
Dike 1
214
0.15
0.034
1.5
0.032
1.4
7
11
Dike 2
94
-
0.003
1.8
-
-
-
-
Mountain Lion Dike
502
0.1
0.010
2.6
0.009
2.4
8
10
Spenn Dike
235
-
0.001
2.8
-
-
-
-
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The effects of extreme grade values and mixed data populations can be mitigated
through the use of multiple indicator kriging as a grade interpolation technique. Using
multiple indicator kriging, variograms at a range of cut-off or threshold grades are
calculated and modeled, preserving values in the higher grade ranges. Snowden has used
multiple indicator kriging as a validation of the ordinary kriged estimates in the
mineralized envelope.
17.5.4 Data declustering
Descriptive statistics of sample populations within a domain may be biased by
clustering of sample data in particular areas of the domain. To reduce any bias caused
by clustering of sample data, Snowden declustered the input sample data using a nearest
neighbor estimate. Declustered data statistics are used when comparing estimated grade
values and input sample grades during model validation.
17.6 Variography
17.6.1 Continuity analysis
Continuity analysis refers to the analysis of the spatial correlation of grade values
between sample pairs to determine the direction of the major axis of spatial continuity.
Snowden undertook continuity analysis for the Sanpoil high grade, Sanpoil low grade,
and Klondike mineralized domains. Average grades were applied to the remaining
domains and therefore no variogram analysis was required.
Horizontal, across strike, and dip plane continuity directions for gold were determined
by examining variogram maps and their underlying variograms. Grade continuity in the
Sanpoil high grade domain is greatest in an east-west direction with a shallow plunge of
25° towards the east and dipping steeply at 63° toward the southwest. The grade
continuity of the Sanpoil low grade domain is greatest in a near vertical northeastsouthwest direction. The Klondike domain exhibits greater variability, with grade
continuity highest along strike in a northeast-southwest direction, with similar
continuity displayed down dip and across strike.
Indicator variograms of the Sanpoil high grade domain were also analysed for multiple
indicator kriging (MIK) as a validation of the ordinary kriged estimates. The indicators
for the multiple indicator kriging estimation were selected using cut-off grades
representing deciles and the 95th, 97th and 99th percentile for gold composite grades.
Global variograms for gold of the Klondike and Sanpoil low grade domains were
analysed for the ordinary kriged estimation. A normal score transformation was
undertaken on the variograms for the Klondike and Sanpoil low grade domains to
improve the variogram quality.
Snowden has a high level of confidence in the variogram models for the Sanpoil high
grade domain due to the high quality of the variogram. Variogram quality is lower in the
other domains, which is considered during application of mineral resource confidence
categories.
17.6.2 Variogram modeling
Directional variograms were modeled for the three principal directions for gold based
on the directions chosen from the variogram fans. Variograms were comprised of two
structure nested spherical models for all domains. The nugget variance is very low at 6%
of the total variance in the Sanpoil high grade domain. Ranges for the major axes of
continuity vary from approximately 360 ft to 720 ft whereas the semi-major and minor
axis varied between 190 ft to 310 ft.
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Once modeling was complete, Snowden back transformed any normal score
transformed variograms and recorded the variogram model parameters for kriging.
Table 17.3 gives details of the variogram model parameters used in the estimation.
Table 17.3
Domain
Variable
Variogram model parameters for gold, silver, and zinc by domain for the 50th
decile
Major axis
orientation
Semi-major
axis
orientation
Minor axis
orientation
C0
§
C1
§
Ranges (ft)†
C2
§
Ranges (ft)†
Klondike
Au opt
03→036
-20→124
-70→315
0.18
0.43
160, 160,15
0.39
360, 190, 190
Sanpoil
low grade
Au opt
76→345
-10→300
-10→032
0.17
0.53
60, 220, 200
0.30
720, 300, 210
Sanpoil
High
grade
Au opt
-25→085
-10→350
-63→240
0.06
0.28
250, 40, 170
0.66
570, 310, 280
Note: § variances have been normalized to a total of one; † ranges for major, semi-major, and minor axes, respectively;
structures two and three are modeled with a spherical model
17.7 Estimation parameters
17.7.1 Kriging parameters
Kriging neighbourhood analysis (KNA) was performed to determine the optimum
kriging parameters. KNA is the process of undertaking multiple ordinary kriged
estimates using a variety of block sizes and search neighbourhood parameters (such as
minimum and maximum sample numbers) and comparing the slope of regression,
kriging efficiency, and kriging variance values produced from the estimates1. Kriging
parameters were selected through examination of the results of the estimates in terms of
slope of regression, kriging efficiency, kriging variance, and Snowden’s experience with
similar deposits.
17.7.2 Block size selection
Snowden considers the average drillhole spacing, the results of the KNA, the
dimensions of the mineralized envelopes, and anticipated mining selectivity when
determining the block model cell size. Midway Gold has not determined the mining
method and mining selectivity at this time. Snowden selected a block model size of 40 ft
Easting, 40 ft Northing, and 20 ft Elevation.
17.7.3 Sample search parameters
The following sample search strategy was selected from the results of the KNA and
from trial grade estimates:
• A primary search ellipse equal to approximately 90% of the variogram range.
1
Krige (1996) considers that kriging efficiency (KE) and regression slope (R) can be used to
establish confidence in block estimates. KE=(BV-KV)/BV and R=(BV-KV+ │µ│)/(BVKV+│2µ│), where BV= the theoretical variance of blocks within the domain (block
variance), KV= the variance between the kriged grade and the true (unknown) grade (kriging
variance), and µ = LaGrange multiplier obtained from kriging. A perfect estimation would
return KV=0, KE=100%, and R=1.
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• A maximum selection of four samples per drillhole.
• A minimum of ten samples and a maximum of 16 samples per estimate.
A dynamic search ellipse involving two additional search passes was used to ensure the
majority of cells within the mineralized wireframe returned an estimate if insufficient
samples were encountered in the first search. The secondary search ellipse is 1.5 times
the size of the primary search ellipse, and the tertiary search ellipse is three times the
size of the primary.
17.7.4 Block model set up
Table 17.4 details the block model parameters for the Golden Eagle mineral resource
model. Block cells were sub-celled from the parent cell size (the block size increment)
wherever necessary to fill the wireframes without loss of resolution. Grades were
estimated within parent cells only.
Table 17.4
Direction
Block model parameters
Minimum (ft)
Maximum (ft)
Increment (ft)
Number of
blocks
Easting
1212000
1217520
40
138
Northing
17691500
17695500
40
100
Elevation
800
4000
20
160
17.7.5 Boundary conditions and grade interpolation
Domain boundaries were treated as hard. Samples coded as lying within a domain were
used to estimate grades within that domain, and no other, to prevent smearing of
grades. Grade interpolation was by ordinary kriging (OK) for the Klondike and Sanpoil
high grade and low grade domains. In domains where insufficient samples are present
for meaningful variogram analysis, grade interpolation was by inverse power of distance
(IPD) with a power of two. In waste domains the mean sample grade was assigned to
the block cell. Grade interpolation methods and mean values assigned in waste domains
are detailed in Table 17.5.
Table 17.5
Grade interpolation methods by domain
Domain
Grade interpolation method
Glacial Till
Mean value (0.001 opt Au)
Klondike
Ordinary kriging
Sanpoil (low grade)
Ordinary kriging
Sanpoil (high grade)
Ordinary kriging
Dike 1
Inverse power of distance
Dike 2
Mean value (0.003 opt Au)
Mountain Lion Dike
Mean value (0.009 opt Au)
Spenn Dike
Mean value (0.001 opt Au)
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A multiple indicator kriging (MIK) estimate was undertaken to validate grades estimated
by OK in the Sanpoil high grade domain. Additionally, a nearest neighbor estimate was
undertaken to validate all domains. Kriging efficiency, kriging variance, and regression
slope were recorded in the OK model to assist with resource confidence classification
and estimation optimization.
17.8 Tonnage factor
A total of 1,171 whole boxes of core were measured and weighed by SFPG in house
laboratory technicians to determine dry tonnage factors (TFs) for various alteration and
rock types at the Golden Eagle deposit, using methods described in Section 12.4. The
data for the calculated and measured TFs were then divided by three lithological
supergroups, and subdivided by relative degree of clay alteration (ARG1, ARG2, ARG3,
and ARG4). The averages for the calculated and measured TFs within these subgroups
are summarized in Table 17.6.
Table 17.6
Dry tonnage factors for the Golden Eagle deposit
Subgroup
Supergroup
ARG1
ARG2
ARG3
ARG4
No.
Cu ft/st
No.
Cu ft/st
No.
Cu ft/st
No.
Cu ft/st
Sediments
117
14.3
99
14.5
61
15.1
21
16.1
Volcanics
241
13.4
389
13.7
74
14.5
11
16.2
Dikes
97
13.5
-
-
-
-
-
-
A strong correlation between lithology and the tonnage factor and a strong inverse
correlation between density and clay content within the supergroups is evident.
Tonnage factors become similar with high levels of alteration.
Tonnage factors are used for determining the in situ resource tons and vary according
to lithology, the nature and intensity of alteration, mineralization, and sulfidation, and
other factors. A significant number of measurements made of a representative suite of
lithologies in representative portions of the mineral resource are required for reliable
estimation of tons. Snowden recommends that Midway Gold considerably increase the
number of tonnage factor determinations of whole drill core samples from spatially
representative locations throughout the project, through representative suites of
lithology, mineralization, and alteration types, for more reliable estimation of tons. The
quantity and representivity of tonnage factor determinations are considered by Snowden
during application of mineral resource confidence categories.
Snowden applied the tonnage factors detailed in Table 17.7 to the resource model.
Table 17.7
Tonnage factor applied by domain
Domain
Tonnage Factor
Glacial Till
15.1
Klondike
14.3
Sanpoil – low grade
13.7
Sanpoil – high grade
13.7
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Domain
Tonnage Factor
Dike 1
13.5
Dike 2
13.5
Mountain Lion Dike
13.5
Spenn Dike
13.5
17.9 Estimation validation
Snowden validated the Golden Eagle model using three techniques:
• Comparison of global mean declustered sample statistics with the mean estimated
grade, by domain.
• Visual inspection of block and sample composite grades in section, plan, and in
three dimensions, by domain.
• Generation of slice validation plots of declustered sample composite grades with
estimated block grades by domain, to compare sample and estimated grade trends.
17.9.1 Domain statistics, slice validation plots, and visual validation
Snowden validated the Golden Eagle model by comparing the estimated grades by
domain with the declustered input samples (Table 17.8) within proportions of the
resource classified as Indicated. Discrepancies between input samples grades and
estimated grades are higher for the Klondike because of the low global grades, which
result in larger percent differences. Snowden considers that the estimated gold grades in
domains categorized as Indicated are within acceptable limits of the declustered input
sample grades.
Snowden created slice validation plots of estimated block grades and declustered input
sample grades for the mineralized Sanpoil high grade domain (the most important
domain) by easting, northing, and elevation to validate the estimates on a local scale.
Estimated gold block grades generally correspond to input sample grades with the
expected degree of smoothing from the kriging interpolation. Snowden also undertook
visual inspection of block and sample composite grades in section, plan, and in three
dimensions for all domains. No discrepancies were noted during visual validation, with
estimated grades honoring the input sample grades with the expected degree of
smoothing.
Table 17.8
Comparison of mean estimated and input data grades by domain for Indicated
classified material
Domain
Variable
Mean
declustered
input grade
Mean
estimated
grade
% difference
Klondike
Gold opt
0.008
0.009
13
Sanpoil – low grade
Gold opt
0.006
0.006
5
Sanpoil – high grade
Gold opt
0.045
0.045
0
Dike 1
Gold opt
0.033
0.032
-2
All domains
Gold opt
0.030
0.030
0
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17.10 Mineral resource classification
The resource confidence classification process considers a number of aspects affecting
confidence in the resource estimation, such as:
• Geological continuity, including geological understanding and complexity.
• Data density and orientation.
• Data accuracy and precision.
• Grade continuity, including spatial continuity of mineralization.
• Estimation quality.
17.10.1 Geological continuity
Drillholes have been logged in detail including textural, alteration, structural,
mineralization, geotechnical, and lithological properties. Confidence in geological
continuity is good in most cases and could be increased by refining the geological
interpretation, including an alteration model, and incorporating surface mapping
information.
17.10.2 Data density and orientation
Geological confidence and estimation quality are closely related to data density and this
is reflected in the classification of resource confidence categories. The data density is
considered sufficient to indicate geological and grade continuity. The Golden Eagle
deposit has been drilled on a pattern ranging from 30 ft up to 200 ft along strike. The
majority of the mineralized envelope is informed with a grid of drillholes approximately
90 ft apart with a greater density of drilling to the southwest, and this region of the
resource has been classified with a higher level of confidence.
17.10.3 Data accuracy and precision
Classification of resource confidence categories is also influenced by the accuracy and
precision of the available data. The accuracy and precision of the assay and density data
may be determined through QAQC programs and through an analysis of the methods
used to measure the data.
Sample accuracy is unknown as no standard or blank samples have been submitted.
Assay precision has been measured for some samples with the submission of pulp
duplicates to the laboratory and check laboratories, but the submission numbers are
much lower than current industry best practice of submitting one sample duplicate for
every 20 samples.
Confidence classifications could be increased through the following means:
• Selecting a significant number of core samples for tonnage factor measurements
through a range of representative lithologies in spatially representative areas
throughout the prospects, particularly in the mineralized zone.
• Submitting additional duplicate drillhole core samples to measure the precision of
the entire sampling, sample preparation, and analysis process, and to provide a
measure of the inherent variability of the mineralization. This may not be possible
due to missing core intervals and the high level of degradation and oxidation of the
available historical core.
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• For future drilling campaigns Snowden recommends that field duplicates, coarse
rejects, and pulp duplicates are submitted to the laboratory at a rate of 1 in 20 to
quantify precision.
• Increasing the number of twin holes at the project to validate the results of
historical data. The twin holes should test the full range of drilling campaigns used
in the resource estimate by geology, date, company, core type, core diameter,
through spatially representative locations throughout the deposit.
• Submitting blank and standard samples in future drilling campaigns, on the order
of one for every 20 geological samples, particularly through the prospective
mineralized zone.
• Undertaking a detailed topographic survey and comparing the results to drillhole
collar coordinates to ensure a high level of confidence in the location of the
drillholes on the UTM grid.
17.10.4 Spatial grade continuity
Spatial grade continuity, as indicated by the variogram, has been considered when
assigning resource confidence classifications. Variogram characteristics strongly
influence estimation quality parameters such as kriging efficiency and regression slope.
The nugget and short range variance characteristics of the variogram are the most
important measures of continuity. The variogram nugget effect of the mineralized
Sanpoil is very low at 6% of the population variance, indicating a good correlation
between samples at short distances.
17.10.5 Estimation quality
Estimation quality is influenced by the variogram (specifically the nugget and the range),
the scale of the estimation, and the data configuration. Measures such as kriging
efficiency, kriging variance, and regression slope provide an indication of the quality of
the local estimations.
Snowden used the estimation quality measures to aid in the assignment of resource
confidence classifications.
17.10.6 Classification process
The mineral resource confidence classification of the Golden Eagle resource has
incorporated the confidence in the drillhole data, the density and location of tonnage
factor measurements, the level of geological interpretation, geological continuity, data
density and orientation, spatial grade continuity, and estimation quality. The resource
model has been categorized by the generation of three dimensionally continuous
wireframes representing Inferred and Indicated classification based on kriging
efficiency, kriging variance, regression slope, drill density and geological continuity. Due
to higher levels of uncertainty of the samples taken by Knob Hill and Echo Bay,
resource blocks in areas of sampling undertaken by only these two companies have
been categorized as Inferred.
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17.11 Mineral resource reporting
17.11.1 Reasonable prospects for economic extraction
Historical underground workings have been modeled by 3D wireframes using historical
level plans and volumes within these wireframes have been excluded from the mineral
resource estimate.
The Golden Eagle deposit appears to be amenable to extraction by open pit, truck and
shovel mining methods and the deposit model was evaluated using this assumption. No
evaluation of underground mining potential or resources was undertaken.
An economic pit analysis was performed on the Golden Eagle resource model to
constrain the resource within a reasonable pit boundary and to establish a reasonable
expectation of economic extraction. Gemcom Software International’s Whittle 4.2
Strategic mine planning software was used to perform this analysis. Table 17.9 gives key
economic parameters applied to the analysis.
A long-term average open pit mining unit cost of $1.25 per ton of material mined was
used as an overall long-term mining cost. This cost was not adjusted for depth or
haulage distance, but is instead applied as a long term average. At this stage of the
project the location of waste rock facilities is unknown and therefore actual haulage
productivities and costs are unknown.
The Golden Eagle deposit would be mined on 20 ft benches using typical open pit
mining equipment and some degree of ore loss and dilution is expected to occur. The
Whittle pit analysis has assumed a 5% ore loss and a 5% ore grade dilution for the pit
evaluation and resource boundary pit.
Overall pit slopes for the pit analysis used a 35° slope in the Glacial Till rock type and
45° in the harder volcanics although most of the Glacial Till material is mined out in
most cases resulting in 45° final walls in most cases. Pit walls were not adjusted for inpit ramps at this level of analysis.
The Golden Eagle deposit is a refractory gold deposit and as such requires one of
several alternative processing methods that involve oxidation of the sulfide minerals
prior to standard cyanide leaching, carbon absorption, and gold recovery. Three
different processing scenarios were evaluated in the pit analysis in order of increasing
unit processing costs:
• Standard flotation recovery (FLOT).
• Stirred tank bio-oxidation (BIO).
• Whole ore pressurized oxidation (POX).
All produced economic pit shells for a range of gold prices. A significant amount of test
work has been performed on the Golden Eagle deposit and some good process
recovery information has been established. Most of this work is summarized in the
metallurgical review report compiled by Differential Engineering (Differential
Engineering, 2009) and provides the basis for metallurgical recoveries used in the pit
analysis.
A gold recovery of 85% was used for the base case BIO process; 90% gold recovery for
the FLOT process and 92% gold recovery for the POX case.
A long term life-of-mine gold price was selected at $750/troy ounce, but pit shells were
run between $200 to $1,500 to view the incremental pits and to determine the effect of
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higher and lower gold prices on the pit shell resources. As of the date of this Technical
Report, gold is trading near $1,000 per ounce; therefore, the $750 gold price is
somewhat conservative.
Table 17.9
Key pit optimization parameters
Parameter
Value
Description
Unit mining cost
USD $1.25 /ton
LOM average mining cost assuming a
typical truck-shovel mining operation with
drill and blast operations; no adjustment
made for haulage distance or mining
depth.
Unit processing cost
(inc. general and
admin costs)
USD $15.00 /ton
Assumes creation of a flotation
concentrate and bio-oxidation in stirred
tank reactor. Gold recovery by carbon
adsorption in CIL/CIP followed by electrowinning and creation of a doré product.
Long term gold price
USD $750 / t. oz
Gold selling costs
USD $7.00 / t. oz
Mining recovery
95%
Mining dilution
5%
Process recovery
85%
Slope angles
(overall)
35° in Glacial Till;
45° elsewhere
Slope angles not adjusted for pit ramping
and not based on a design pit shape.
All mineral resources were used in the pit optimization process. A mine life of slightly
over ten years was achieved for the base case $750 pit using a processing rate of 3.2
Mtpa, which amounts to a total material movement of approximately 16 Mtpa to 18
Mtpa from an open pit.
17.11.2 Mineral resource tabulation
Mineral resource estimates as of June 2009 for the Golden Eagle prospect are reported
within an ultimate pit shell above a range of gold opt cut-off grades in Table 17.10. To
date no analysis has been made to determine the economic cut-off grade that will
ultimately be applied to the Golden Eagle Project.
No mineral reserves have been estimated at this time. Additional studies will be required
to determine technical, economic, legal, environmental, socio-economic, and
governmental factors. These modifying factors are normally included in a mining
feasibility study and are a pre-requisite for conversion of mineral resources to, and
reporting of, mineral reserves. The CIM Standards (CIM, 2005) describe completion of
a Preliminary Feasibility Study as the minimum prerequisite for the conversion of
mineral resources to mineral reserves.
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Table 17.10
Golden Eagle June 2009 mineral resources reported above a range of gold cut-off
grades
Classification
Gold cut-off
grade (opt)
Tons (Mt)
Gold (opt)
Contained gold (Koz)
Indicated
0.01
43.0
0.045
1,915
0.02
31.4
0.055
1,744
0.03
23.4
0.066
1,545
0.04
17.9
0.076
1,355
0.05
13.8
0.085
1,173
0.01
11.6
0.024
284
0.02
5.1
0.038
192
0.03
3.0
0.047
143
0.04
1.8
0.055
100
0.05
0.9
0.066
61
Inferred
Notes:
The most likely cut-off grade for these deposits is not known at this time and must be
confirmed by the appropriate economic studies.
Historical underground workings have been excluded from the mineral resource.
Resources are reported within an ultimate pit shell generated with a $750 gold price and
85% gold recovery
The estimated metal content does not include any consideration of mining, mineral
processing, or metallurgical recoveries.
Tons and ounces have been rounded and this may have resulted in minor discrepancies in
the totals.
Mineral resources that are not mineral reserves do not have demonstrated economic
viability. No mineral reserves have been estimated.
The estimate of mineral resources may be materially affected by environmental, permitting,
legal, title, taxation, socio-political, marketing, or other relevant issues.
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18 Other relevant data and information
Snowden is not aware of any other relevant data or information concerning the Golden
Eagle Project to report.
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19 Interpretation and conclusions
The Golden Eagle deposit is an early stage gold mineral exploration project located in
Republic, Washington State, USA and operated by Midway Gold Corp. The area is
associated with a long history of mining, and the Golden Eagle project has been
operated by numerous mining companies over the last seventy years.
The deposit occurs in epithermal veins and hydrothermal breccias developed from nearsurface hot springs activity in the Eocene. The Golden Eagle deposit is a tabular,
steeply dipping hydrothermal breccia body hosted in Sanpoil volcanics and overlain by
the Klondike Mountain Formation. The deposit is mostly covered by recent glacial
gravels, with outcropping mineralization on the south and west margins. Four major
Tertiary-aged dikes have been noted cross cutting both the Sanpoil and Klondike
Mountain formations and appear to be post mineralization. Thicknesses of the dikes
range from inches to 200 ft. The geological model used for the mineral resource
estimate comprises eight separate lithological domains, one of which, the Sanpoil, has
been divided into high and low grade domains.
The deposit geological model has been defined using historical drillhole information
from 835 drillholes. Some of the sample assay values within the drillhole database could
not be verified by Midway Gold. To improve the confidence in the estimation of
grades, unverified drillholes comprising 537 blastholes completed by Mountain Lion
Consolidated and 73 holes completed by Crown Resources have been removed for use
in the 2009 mineral resource estimate. Samples from a total of 204 drillholes from
drilling campaigns conducted by Knob Hill Mines (1940 to 1974), Hecla (1982 to 1994),
SFPG (1995 to 1996), and Echo Bay (2000) were used for the estimation of grades.
Mineral resource estimates are reported at the Golden Eagle Project in Table 17.10.
Tons and grades have been reported above a series of gold opt cut-off values related to
a range of gold prices as, at present, no analysis has been made to determine the
economic cut-off grade that will ultimately be applied to the Golden Eagle Project. The
resource is reported above an ‘ultimate pit’ to ensure reasonable prospects for eventual
economic extraction.
The reported mineral resource has the potential to be expanded depending on long
term gold prices and future in-fill and expansion drilling. Using some reasonable quality
information developed during previous ownership regimes, an economic pit analysis
was performed that showed the potential for an economic mining operation even at
relatively conservative gold prices.
The resource appears to be of sufficient quality and quantity to support further drilling,
metallurgical testing and study, and the deposit is located in a fairly pro mining
community with a history of mining culture. In addition, Kinross has had success in
permitting the nearby Buckhorn Mountain operations.
Historical metallurgical test work on samples from the Project was undertaken by Hecla
and SFPG in the late 1980s to the mid 1990s. These analyses determined that gold
recoveries were low (approximately 27%) using direct standard cyanide leaching in a
carbon-in-leach on ground mineralized material. Therefore direct cyanidation is not a
feasible process option and the mineralized material is refractory for gold extraction.
Three potential process flowsheets have been identified, including whole ore flotation
with cyanidation carbon-in-leach of the flotation tails, whole ore bio-oxidation in heaps
or ground slurry with cyanidation carbon-in-leach of the bio-oxidation tails, or whole
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ore pressure oxidation followed by cyanidation carbon-in-leach of the pressure
oxidation tails.
Bio-oxidation appears to hold the most promise and should probably be the base
assumption until further scoping level analyses can be performed to provide refinement
of this assumption. Care must be taken to select fresh, spatially and geologically
representative samples for further metallurgical test work. The process flowsheet
selected for this ore will need a companion economic analysis for process capital and
operational costs coupled with reagent prices and logistics for concentrate shipment if
warranted.
Sample composites were found to have a negative net carbonate value of -5.41, and so
the mineralized material is potential acid generating (PAG). Care must be made in the
mine planning to potentially contain the waste rock material from the environment. In
addition, the material contains significant quantities of deleterious elements that could
potentially have an environmental impact to water and dust, which should be managed.
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20 Recommendations
The following recommendations are made for the further advancement of the Project
and to improve confidence in the mineral resource estimate:
• Increase the number of tonnage factor measurements on existing drill core and any
new drillholes to improve the confidence in resource tons. Samples should be
selected according to a representative suite of lithologies, mineralization, and
alteration types, through spatially representative locations throughout the deposit.
The representativity can be confirmed by consulting the number of density
determinations tabulated by grade estimation domain for each deposit and
increasing the number of density samples in domains with low sample numbers
relative to the number of sample assays in the domain. Spatial representativity can
be confirmed by plotting the location of specific gravity samples on the drillhole
trace in plan and in section.
• Increase the number of twin holes at the project to confirm data obtained by
historical operators. The twin holes should test the full range of drilling campaigns
used in the resource estimate by geology, date, company, and core diameter,
through spatially representative locations throughout the deposit.
• Undertake exploration, twin, and metallurgical sample diamond drilling to provide
samples for oxide definition, density analysis, metallurgical testing, and exploration
for additional resources on the property.
• Undertake a detailed topographic survey of the project site and compare with
drillhole collar coordinates to ensure drillholes are in the correct locations, and
validate the transformation of coordinates to move drillhole data from the historic
mine grid to the UTM grid.
• Further refine the geological interpretation by reviewing archived drillhole logs and
comparing to drillhole core.
• Conduct surface mapping of the project area to clearly define major faults and
geological controls on exposed mineralization.
• Conduct surface sampling of exposed bedrock to determine the extent and tenor of
mineralization exposed on surface.
• Update the geology and mineralization model to include information gathered from
surface mapping and sampling.
• Update the geology and mineralization model to reflect alteration and oxidation to
better define metallurgical types and the amount of oxide material on the project.
Oxide resource models should include estimates of sulfide sulfur, cyanide
amenability, and carbonates.
• Estimate silver grades in the resource model to determine if sufficient silver
concentrations exist in the deposit to allow mineral processing of silver as a byproduct.
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• Undertake slope stability studies to establish the maximum slope angles for an
‘ultimate’ pit shell design and to determine the extent of neighboring additional
land required to realize the full potential of the mineral resource.
• Consider the purchase of additional land and mineral rights from Hecla Mining Co.
to obtain neighboring land and undertake appropriate environmental and
engineering studies on the extra land.
• Evaluate alternative mining technologies such as in-pit crushing and conveying
(IPCC) in comparison to standard truck and shovel mining methods for an open
pit mining scenario. IPCC has the potential to provide lower overall unit mining
costs and therefore could increase the resource base and lower the overall stripping
ratio for the Golden Eagle deposit. The low electrical rates in the project area may
make this option fairly attractive if it can be incorporated into the overall site
development plan and may reduce some project risk due to escalating diesel fuel
prices in the future.
• Evaluate the underground mining potential and timing.
• Evaluate the current processing technologies and potential alternatives that may be
applicable to the Golden Eagle deposit and develop scoping level capital and
operating costs for those technologies.
• Investigate potential locations of tailings impoundment areas and tailings storage
options.
• Investigate potential locations for waste rock disposal.
• Evaluate the geotechnical input requirements and develop geotechnical testing
programs to provide slope design parameters for open pit mine design.
• Determine bulk sampling alternatives for bench scale and pilot scale testing.
• Verify that all data and reports from metallurgical sampling, test work, analytical
results, and quality control are valid and reliable. This includes verification of
assays, metallurgical balances and reagent calculations.
• Verify metallurgical work completed by previous operators through independent
test work conducted by project metallurgists.
• Attempt to correlate all the information from past metallurgical test work to
specific locations in the deposit and to quantify the tons associated with each
mineralized rock type.
• Undertake cost analysis of various metallurgical treatment options, developing a
flow sheet and associated costs.
• The process flowsheet selected for the treatment of the mineralized material will
require a companion economic analysis for process capital and operational costs
coupled with reagent prices and logistics for concentrate shipment if warranted.
• All samples selected for metallurgical analysis should comprise freshly collected
material (i.e., not collected from historical samples) and should be spatially and
geologically representative of the resource material.
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• Conduct mineral liberation analysis (MLA) on fresh mineralized samples to
determine the minerals in the deposit as well as to determine which minerals and
size fraction contain the gold distribution. Post extraction material should also be
examined to determine the gold distribution for process optimization.
• Further test work on gravity separation of the larger sulfide fraction is needed in
any grinding flowsheet to see if the quantity of gold recovered to a gravity
concentrate warrants that relatively cheap concentration step prior to further
processing.
• Using fresh samples of representative mineralized rock from the deposit, conduct
column bio-tests to determine the change in mineralogy and gold extraction as a
function of size, time, reagent concentration and sulfide oxidation.
• Using fresh samples of representative mineralized rock from the deposit, conduct a
pilot plant test to determine the optimal recovery for gold extraction in the
flowsheet.
• The projected waste rock material should be tested for potential acid generating
(PAG) characterization, which may involve specific rock testing in humidity cells to
determine.
Snowden further recommends that Midway Gold undertake a conditional simulation
study to quantify risk associated with different portions of the deposit. The study can
also be used to quantify the optimal drillhole spacing required to achieve a range of
estimation qualities and identify targets for infill drilling. The outcome of this approach
would be an understanding of the degree of grade estimation error associated with
particular volumes of mineralization for a range of drillhole spacing patterns. The grade
estimation error and other important aspects of the project data, as described in Section
17.2.17, are considered while assigning mineral resource confidence categories.
The proposed budget for the ongoing development of the Golden Eagle Project is
detailed in Table 20.1. This budget is estimated over three years, with the intention to
complete a scoping study in 2009, and includes ongoing work in 2010 and 2011 for the
completion of a prefeasibility study.
Table 20.1
Proposed budget for ongoing development at the Golden Eagle Project
Activity
Scoping study including surface mapping and sampling,
density analysis and geological modelling.
Year
Cost ($USD)
2009
200,000
Exploration/twin/metallurgical drilling (20 holes – 1,500 to
2,000 ft length with 150 ft pre-collar and core tail.
Assaying gold, silver and LECO)
2010-2011
3,000,000
Metallurgical study verification and cost analysis
2010-2011
40,000
Permitting
2010-2011
200,000
Waste/Ore characterization
2010-2011
150,000
Total
July 2009
3,590,000
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21 References
Author
Title
CIM, 2005.
CIM Definition Standards – For Mineral Resources and Mineral Reserves.
Prepared by the CIM Standing Committee on Reserve Definitions.
Adopted by CIM Council on December 11, 2005.
Cominco Engineering Services Ltd., 1990
Prefeasibility Study Golden Eagle Project, Volume 1 and 2. Internal study
prepared for Hecla Mining Company, Project No. HMB20.1, 32 p.
Differential Engineering., 2009
Metallurgical Review of existing reports, test work and analytical data on
the Golden Eagle Property NE Washington State for Midway Gold Corp.
Fifarek, R.H., Devlin, B.D., and
Tschauder, R.J., 1995
Au-Ag mineralization at the Golden Promise Deposit, Republic District,
Washington: Relation to graben development and hot spring process. In
Coyner, A.R., and Fahey, P.L., eds, Geology and Ore Deposits of the
American Cordillera: Geological Society of Nevada Symposium
Proceedings, April 1995, vol. 2, p. 1063-1088.
Full, 1960.
Geologic Study of the No. 3 Vein, Knob Hill No. 2 Mine, Republic
Washington, internal Knob Hill Mines report, Dec 27, 1960
Gaylord et al., 1996,
Depositional History of the Uppermost Sanpoil Volcanics and Klondike
Mountain Formation in the Republic Basin, Washington Geology, vol. 24,
no. 2, p15.
Pearson, R., and Obradovich J., 1977
Eocene Rocks in northeast Washington, Radiometric ages and correlation,
U.S.G.S. Bulletin 1433, 41p.
Hecla Mining Company, 1985
Republic District Production 1896-1993, Internal table prepared by Hecla
Mining Company
Hecla Mining Company, 1990
Golden Eagle Project, Prefeasibility Study. Internal study prepared by
Hecla Mining Company, December 1990, 34p
Holder, R., and Gaylord, D., 1989
Plutonism, Volcanism, and Sedimentation Associated with Core Complex
and Graben Development in the Central Okanogan Highlands,
Washington, Washington Division of Geology and Earth Resources
Information Circular 86, p189-196.
Howard Consultants Inc., 1989
Summary of HCI Geotechnical Engineering Activities, July-August, 1989,
Hecla Golden Eagle Project, Internal report prepared by Howard
Consultants for Hecla Mining Company, August 1989, 3p.
Jenkins, R., 1990
Preliminary Mineralogical Study: Golden Eagle Gold Ore, Interoffice
Memo.
Mather, J., 1990
Golden Eagle Refractory Ore, Sherrit Technology.
Oberg, K.C., and Gathie, J.C., 1996
Hazen Research Inc., 4601 Indiana St., Golden Colorado, “Metallurgical
Testing of a Gold Ore Sample from the Golden Eagle Property”, Sample ID
HRI 47922, HRI Project 8582-01, November 19, 1996.
Oberg, K.C., Gathie, J.C., and Hazen, N.,
1996
Metallurgical Testing of Gold Ore Samples from the Golden Eagle
Property, Phase 2 – Draft, HRI Project 8582-01.
Pitard, F., December, 1990
Study of the Heterogeneity of Gold in the Golden Eagle Deposit. Internal
report prepared for Hecla Mining Company, 5p.
Santa Fe Pacific Gold, 1995
Golden Eagle Due Diligence. Internal report prepared by Santa Fe Pacific
Gold, 21p.
Santa Fe Pacific Gold, 1996a
Golden Eagle Prefeasibility Report. Internal report prepared by Santa Fe
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Author
Title
Pacific Gold, June, 1996, 69p.
Santa Fe Pacific Gold, 1996b
Tonnage Factor Analysis, Golden Eagle Property. Internal report prepared
by Santa Fe Pacific Gold, 11p.
Santa Fe Pacific Gold, April 1997
Golden Eagle Project Summary. Internal report prepared by Santa Fe
Pacific Gold, April, 1997, 87p
Siddle, J., 1988
Mt Lion Investigations, Internal Memorandum to Ralph Noyes, Hecla
Mining Company, 4p, February 10, 1988.
Van Aswegen, P.C., Van Niekerk, J.,
Olivier, W., 2007
The BIOX Process for the Treatment of Refractory Gold Concentrates,
Biomining, 2007.
Western Services Engineering, 1991
The South Penn Gold Project, A Resource Appraisal and Ultimate Pit
Design. Internal report completed for Crown Resources Corporation,
November 1991, 85p.
Wright, 1947
AIMME Technical Publication No 2197.
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22 Date and signatures
Technical Report
Midway Gold Corp.: Golden Eagle Project,
Washington State, USA
July 2009
Issued by:
Midway Gold Corp.
[signed]
Eric N. Chapman
Date
30th July 2009
[signed]
Date
Thom Seal
30th July 2009
[signed]
Date
July 2009
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23 Certificates
CERTIFICATE of QUALIFIED PERSON
(a) I, Eric N. Chapman, Consultant of Snowden Mining Industry Consultants Inc.,
600-1090 W. Pender St, Vancouver, BC, V6E 2N7 Canada; do hereby certify
that:
(b) I am the co-author of the technical report titled Midway Gold Corp.: Golden
Eagle Project, Washington State, USA, dated July 2009 (the “Technical
Report”).
(c) I graduated with a Bachelor of Science (Honours) Degree in Geology from the
University of Southampton (UK) in 1996 and a Master of Science (Distinction)
Degree in Mining Geology from the Camborne School of Mines (UK) in 2003.
I am a Chartered Geologist of the Geological Society of London (Membership
No. 1007330). I have worked as a mining and mineral resource geologist for a
total of eight years since my graduation from university.
I have read the definition of ‘qualified person’ set out in National Instrument 43101 (“the Instrument”) and certify that by reason of my education, affiliation with a
professional association and past relevant work experience, I fulfill the requirements
of a ‘qualified person’ for the purposes of the Instrument.
(d) I am responsible for the preparation of the sections of the Technical Report as
detailed in Table 2.1.
(e) I am independent of the issuer as defined in section 1.4 of the Instrument.
(f) I have had no prior involvement with the Property that is the subject of the
Technical Report.
(g) I have read the Instrument and Form 43-101F1, and the Technical Report has
been prepared in compliance with that instrument and form.
(h) As of the date of this certificate, to the best of my knowledge, information and
belief, the Technical Report contains all the scientific and technical information
that is required to be disclosed to make the Technical report not misleading.
Dated at Vancouver, BC, this 30th day of July 2009.
[signed]
Eric N. Chapman, M.Sc., C. Geol.
July 2009
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CERTIFICATE of QUALIFIED PERSON
(a) I, Thom Seal, am a current professional mining-mineral process engineer in the
State of Nevada # 15291. I am the principal owner of Differential Engineering
Inc., a corporation registered in Nevada and Oregon.
(b) I am the co-author of the technical report titled Midway Gold Corp.: Golden
Eagle Project, Washington State, USA, dated July 2009 (the “Technical
Report”).
(c) I am a registered member of the Society of Mining & Metallurgical Engineers
(SME), located in Denver Colorado. I graduate with a master degree in
Metallurgical Engineering in 1988 and a Ph.D. in Mining Engineering –
Metallurgy, from the University of Idaho in 2004. I have practiced my
profession for over 20 years. I have been directly involved in metallurgicalmineral processes in North and South America, and in South Africa, including
deposit evaluation, process test work, evaluation, design, construction and
operation. I retired from Newmont Mining Corp. after more than 12 years of
process metallurgy acting as a senior and manager of metallurgy. I have
extensive refractory gold extraction experience including bio-oxidation, roasting
and flotation. As a result of my experience and qualifications, I am a Qualified
Person as defined in National Instrument 43-101 Standards of Disclosure of
Mineral Projects (NI 43-101, Part 10.1 on 12/30/05).
I have read the definition of ‘qualified person’ set out in National Instrument 43101 (“the Instrument”) and certify that by reason of my education, affiliation with a
professional association and past relevant work experience, I fulfill the requirements
of a ‘qualified person’ for the purposes of the Instrument.
(d) I am responsible for the preparation of the sections of the Technical Report as
detailed in Table 2.1.
(e) I am independent of the issuer as defined in section 1.4 of the Instrument.
(f) I have had no prior involvement with the Property that is the subject of the
Technical Report.
(g) I have read the Instrument and Form 43-101F1, and the Technical Report has
been prepared in compliance with that instrument and form.
(h) As of the date of this certificate, to the best of my knowledge, information and
belief, the Technical Report contains all the scientific and technical information
that is required to be disclosed to make the Technical report not misleading.
Dated at Elko, Nevada, this 30th day of July 2009.
[signed]
Thom Seal, Ph.D., P.E., Q.P.
July 2009
109 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
A Significant drillhole intercepts
July 2009
110 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
10-47
0.056
0
95
95
Underground Hole
11-47
0.061
0
102
102
Underground Hole
12-47
0.054
0
100
100
Underground Hole
1-46
0.059
0
98.5
98.5
Underground Hole
1-47
0.029
45
90
45
Underground Hole
1-47
0.025
140
240
100
2-46
0.039
0
106
106
Underground Hole
3-46
0.052
0
109.5
109.5
Underground Hole
4-46
0.044
0
106
106
Underground Hole
5-47
0.079
0
54
54
Underground Hole
6-47
0.042
0
96
96
Underground Hole
7-47
0.068
0
33
33
Underground Hole
8-47
0.063
0
24
24
Underground Hole
9-47
0.062
0
84
84
Underground Hole
87-102
0.028
0
25
25
87-102
0.088
45
269
224
87-96
0.113
5
25
20
87-96
0.023
65
108
43
87-96
0.027
125
155
30
88-111
0.090
542
694
152
88-111
0.026
715
735
20
88-111
0.029
853
930
77
88-113
0.049
576
964
388
88-116
0.026
520
545
25
88-116
0.069
960
1028
68
88-116
0.040
1052
1206
154
88-116
0.078
1230
1266
36
88-118
0.055
480
1165
685
88-118
0.086
1200
1233
33
88-120
0.064
1174
1347
173
88-120
0.046
1586
1618
32
88-121
0.042
293
316
23
88-121
0.049
1495
1559
64
88-121
0.038
1591
1636.5
45.5
88-121
0.038
1711
1751
40
88-123
0.030
1332
1460
128
July 2009
Comment
111 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
88-123
0.050
1620.5
1700
79.5
88-124
0.026
1740
1799.3
59.3
88-125
0.055
1029.5
1050
20.5
88-127
0.101
332.5
1074
741.5
88-128
0.029
480
570
90
88-128
0.090
1270
1489
219
88-129
0.093
499.3
621
121.7
88-130
0.073
416
442
26
88-130
0.083
590
668
78
88-130
0.038
763
1238.5
475.5
88-130
0.026
1298.2
1325
26.8
88-131
0.034
210
264
54
88-131
0.044
340
435
95
88-131
0.052
481
781
300
88-131
0.031
816
845
29
88-131
0.028
890
924
34
88-132
0.022
530
594
64
88-132
0.055
803.5
1203
399.5
88-134
0.131
372
729
357
89-136
0.041
625
660
35
89-136
0.042
742
1225.5
483.5
89-136
0.080
1260.5
1305
44.5
89-136
0.026
1360
1410
50
89-137
0.089
324
883
559
89-139
0.040
270
1174
904
89-144
0.035
317.5
340
22.5
89-144
0.105
400
1040
640
89-146
0.072
291
701.3
410.3
89-147
0.033
20
223
203
89-147
0.037
285
570
285
89-149
0.085
228
450
222
89-150
0.156
178
569
391
89-153
0.485
79
132
53
89-154
0.098
330
950
620
89-155
0.043
168
248.5
80.5
89-162
0.023
63
135
72
July 2009
Comment
112 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
89-164
0.067
200
225
25
89-164
0.073
257
685.6
428.6
89-165
0.052
110
145
35
89-165
0.096
139
568
429
89-167
0.040
377
401
24
89-168
0.074
90
243
153
89-169
0.029
90
120
30
89-169
0.084
246.5
448
201.5
89-169
0.077
484
555
71
89-170
0.046
290
550
260
89-170
0.061
595
750
155
90-181
0.031
1220
1287
67
90-196
0.036
0
45
45
90-196
0.031
70
192
122
90-196
0.037
234.5
290
55.5
90-197
0.077
0
280
280
90-197
0.027
340
385
45
90-199
0.076
10
139
129
90-200
0.026
45
78
33
90-201
0.105
0
189
189
90-202
0.062
40
466
426
90-203
0.067
60
299
239
90-203
0.074
346.8
448.6
101.8
90-204
0.063
10
110
100
90-205
0.024
50
246
196
90-205
0.084
315
376
61
90-208
0.096
40
350
310
90-210
0.045
70
375
305
90-210
0.042
452.8
514
61.2
90-211
0.076
62
480
418
90-212
0.093
90
402
312
90-213
0.090
230
690.3
460.3
90-214
0.099
180
625.5
445.5
90-215
0.153
132
434
302
90-217
0.055
240
685
445
90-218
0.133
166
414.5
248.5
July 2009
Comment
Hole terminated in mineralization
113 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
90-220
0.027
270
305.4
35.4
90-220
0.041
400.7
435.9
35.2
90-221
0.062
290
750
460
90-223
0.097
265
649.8
384.8
90-224
0.047
140
175
35
90-225
0.130
200
300
100
90-225
0.055
340
390
50
90-226
0.147
302
589
287
90-256
0.053
256.5
280
23.5
CD70
0.045
175
205
30
CD71
0.020
165
185
20
CD72
0.030
110
170
60
Hole terminated in mineralization
CD73
0.052
25
110
85
Hole terminated in mineralization
CD74
0.064
0
125
125
Hole terminated in mineralization
CD75
0.079
0
105
105
Hole terminated in mineralization
CD76B
0.074
0
42.5
42.5
Hole terminated in mineralization
CD77
0.091
0
100
100
Hole terminated in mineralization
CD78
0.080
0
87.5
87.5
Hole terminated in mineralization
CD79
0.087
0
77.5
77.5
Hole terminated in mineralization
CD80
0.045
0
60
60
Hole terminated in mineralization
CDH-25
0.112
0
43
43
Hole terminated in mineralization
CDH-26
0.063
0
38
38
Hole terminated in mineralization
CDH-27
0.055
0
50
50
Hole terminated in mineralization
CGE-0001
0.114
315.8
584.3
268.5
CGE-0002
0.041
356
395
39
CGE-0002
0.057
430
1115
685
CGE-0003
0.126
299
585
286
CGE-0003
0.060
680
720
40
CGE-0004
0.022
440
481
41
CGE-0004
0.025
586
660
74
CGE-0004
0.100
735.2
980.8
245.6
CGE-0005
0.085
379
613
234
CGE-0006
0.031
347.8
407
59.2
CGE-0006
0.031
489
520.4
31.4
CGE-0006
0.059
545
806.5
261.5
CGE-0007
0.059
485.6
710
224.4
July 2009
Comment
114 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
CGE-0008
0.040
291
438
147
CGE-0008
0.064
536
771
235
CGE-0009
0.048
84
131
47
CGE-0009
0.055
216.5
341.5
125
CGE-0009
0.047
531.5
768
236.5
CGE-0011
0.039
365
456.5
91.5
CGE-0011
0.037
655
710
55
CGE-0011
0.054
815
1187.7
372.7
CGE-0012
0.067
106.5
138
31.5
CGE-0013
0.045
11
44
33
CGE-0013
0.038
74.5
273.5
199
CGE-0013
0.045
337
374
37
CGE-0013
0.043
412
617.5
205.5
CGE-0013
0.031
661.5
748
86.5
CGE-0015
0.028
435
514
79
CGE-0017
0.041
348
376.2
28.2
CGE-0017
0.039
1246
1286
40
CGE-0018
0.044
100
162.8
62.8
CGE-0018
0.036
362.9
392
29.1
CGE-0018
0.045
1173.6
1214.1
40.5
CGE-0019
0.024
244.5
311
66.5
CGE-0019
0.047
815.7
1003
187.3
CGE-0020
0.040
333
395
62
CGE-0020
0.039
548
880
332
CGE-0021
0.130
24
67
43
CGE-0021
0.060
120
325
205
CGE-0022
0.039
5
129
124
CGE-0022
0.044
183
477
294
CGE-0022
0.063
535
583
48
CGE-0023
0.064
497.5
556
58.5
CGE-0024
0.028
573
617
44
CGE-0025
0.031
591.6
675
83.4
CGE-0025
0.035
734.5
800
65.5
CGE-0026
0.071
159.5
464.3
304.8
CGE-0027
0.032
5
49
44
CGE-0027
0.048
114
144
30
July 2009
Comment
Hole terminated in mineralization
115 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
CGE-0027
0.064
195
460
265
CGE-0028
0.094
681.4
801.5
120.1
CGE-0029
0.027
145
187
42
CGE-0029
0.059
217.4
261.9
44.5
CGE-0029
0.049
320
410
90
CGE-0029
0.062
745
915
170
CGE-0030
0.023
120
185
65
CGE-0030
0.044
585
865
280
CGE-0031
0.073
340
379
39
CGE-0031
0.064
444
927
483
CGE-0031
0.099
987
1055
68
CGE-0034
0.047
473
498
25
CGE-0034
0.028
1005
1065.5
60.5
CGE-0034
0.024
1095
1130
35
CGE-0034
0.051
1275
1372.5
97.5
CGE-0034
0.080
1423.7
1460.3
36.6
CGE-0035
0.047
37.5
177
139.5
CGE-0037
0.031
110
155
45
CGE-0037
0.025
383.5
416.5
33
CGE-0038
0.109
308
691
383
CGE-0039
0.047
119.3
190
70.7
CGE-0040
0.035
146
193.2
47.2
CGE-0041
0.034
366
424
58
CGE-0041
0.053
580
620
40
CGE-0041
0.057
765
1133
368
CGE-0042
0.038
746
771
25
CGE-0042
0.064
834
926.5
92.5
CGE-0042
0.031
986
1228
242
CGE-0044
0.031
9
90
81
CGE-0045
0.074
9
75
66
CGE-0046
0.030
79
149.3
70.3
CGE-0046
0.028
285
315
30
CGE-0046
0.043
784
825
41
CGE-0047
0.064
14
60
46
D-17
0.028
194
239.5
45.5
DGE-0001
0.074
0
130
130
July 2009
Comment
Hole terminated in mineralization
116 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
DGE-0003
0.036
100
165
65
DGE-0003
0.037
265
320
55
DGE-0003
0.024
375
445
70
DGE-0003
0.052
675
740
65
DGE-0004
0.025
80
135
55
DGE-0004
0.055
175
290
115
DGE-0005
0.043
355
375
20
DGE-0006
0.028
105
210
105
DGE-0006
0.045
320
515
195
DGE-0006
0.054
575
820
245
DGE-0007
0.037
90
125
35
DGE-0007
0.043
355
420
65
DGE-0008
0.076
5
90
85
DGE-0009
0.025
40
95
55
DH-11-1-6
0.467
499
522
23
Underground Hole
DH-8-1-1
0.041
0
34
34
Underground Hole
DH-8-1-1
0.176
243.5
285
41.5
DH-8-1-5
0.059
173.5
196
22.5
Underground Hole
DH-8-1-6
0.203
227
249
22
Underground Hole
DH-8-1-7
0.172
292.5
312.5
20
Underground Hole
GE00-04
0.032
5
30
25
GE00-04
0.072
295
750
455
Hole terminated in mineralization
GE00-09
0.098
345
900
555
Hole terminated in mineralization
GE00-10
0.100
406
965
559
Hole terminated in mineralization
ML-1
0.022
160
200
40
Hole terminated in mineralization
ML-10
0.042
0
145
145
ML-10
0.032
230
250
20
ML-11
0.047
25
195
170
Hole terminated in mineralization
ML-17
0.073
0
200
200
Hole terminated in mineralization
ML-2
0.051
0
70
70
ML-2
0.036
160
195
35
Hole terminated in mineralization
ML-3
0.021
75
100
25
Hole terminated in mineralization
ML-4
0.027
20
85
65
Hole terminated in mineralization
ML-5
0.046
0
225
225
Hole terminated in mineralization
ML-6
0.078
0
200
200
Hole terminated in mineralization
ML-7
0.038
0
55
55
July 2009
Comment
117 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
ML-8
0.067
0
185
185
Hole terminated in mineralization
SP-1
0.042
0
45
45
Hole terminated in mineralization
SP-13
0.054
0
25
25
Hole terminated in mineralization
SP-14
0.066
0
35
35
Hole terminated in mineralization
SP-16
0.032
0
50
50
Hole terminated in mineralization
SP-17
0.025
20
50
30
Hole terminated in mineralization
SP-20
0.134
0
60
60
Hole terminated in mineralization
SP-21
0.103
0
57
57
Hole terminated in mineralization
SP-22
0.116
0
50
50
Hole terminated in mineralization
SP-23
0.106
0
50
50
Hole terminated in mineralization
SP-24
0.066
0
40
40
Hole terminated in mineralization
SP-25
0.042
0
50
50
Hole terminated in mineralization
SP-26
0.038
0
30
30
Hole terminated in mineralization
SP-27
0.128
0
40
40
Hole terminated in mineralization
SP3-1
0.051
4
104
100
Hole terminated in mineralization
SP3-10
0.044
3
53
50
SP3-10B
0.045
5
145
140
SP3-11B
0.025
20
80
60
SP3-15B
0.049
5
145
140
SP3-17B
0.067
45
75
30
Hole terminated in mineralization
SP3-19
0.043
70
100
30
Hole terminated in mineralization
SP3-20
0.072
5
75
70
Hole terminated in mineralization
SP3-21
0.042
0
100
100
Hole terminated in mineralization
SP3-22
0.049
0
75
75
Hole terminated in mineralization
SP3-23
0.047
0
90
90
Hole terminated in mineralization
SP3-24
0.028
55
95
40
SP3-2B
0.030
5
100
95
Hole terminated in mineralization
SP3-3B
0.054
0
60
60
Hole terminated in mineralization
SP3-4
0.046
4
81
77
Hole terminated in mineralization
SP3-5B
0.088
0
80
80
Hole terminated in mineralization
SP3-6
0.084
35
55
20
Hole terminated in mineralization
SP3-6B
0.086
5
75
70
Hole terminated in mineralization
SP3-7
0.058
21
111
90
Hole terminated in mineralization
SP3-8
0.023
80
125
45
Hole terminated in mineralization
SP-8
0.347
0
50
50
Hole terminated in mineralization
SP-9
0.116
0
50
50
Hole terminated in mineralization
July 2009
Comment
118 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
Drillhole I.D.
Au
(opt)
From (ft)
To (ft)
Thickness (ft)
SPR8-1
0.052
55
195
140
SPR8-10
0.031
80
110
30
SPR8-10
0.024
150
195
45
SPR8-16
0.045
0
40
40
SPR8-17
0.022
30
75
45
SPR8-19
0.086
0
90
90
SPR8-2
0.046
45
190
145
SPR8-21
0.033
0
130
130
SPR8-5
0.073
0
175
175
SPR8-6
0.077
0
100
100
SPR8-7
0.040
0
75
75
SPR8-8
0.283
0
80
80
SPR8-9
0.054
0
125
125
July 2009
Comment
119 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
B Drillhole collar coordinates
July 2009
120 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
BHID
Easting
Northing
Elevation
CDH-25
1213575.00
17693664.02
3102.5
CDH-26
1213572.92
17693614.08
3102.5
CDH-27
1213524.99
17693666.16
3102.5
CD68
1214726.55
17693189.89
3069.7
CD69
1214609.97
17693094.03
3075.1
CD70
1214595.22
17693459.19
3093.6
CD71
1214475.98
17693765.77
3100.8
CD72
1214388.43
17694085.73
3105.0
CD73
1213529.37
17693512.11
3130.9
CD74
1213581.77
17693573.89
3128.4
CD75
1213504.10
17693593.46
3108.0
CD76B
1213455.62
17693527.88
3095.4
CD77
1213415.68
17693718.66
3100.7
CD78
1213407.52
17693758.43
3088.0
CD79
1213449.52
17693755.57
3082.0
CD80
1213388.88
17693683.27
3104.5
CGE-0001
1214527.39
17693496.61
3095.0
CGE-0002
1214647.64
17693929.69
3104.0
CGE-0003
1214713.31
17693595.31
3087.0
CGE-0004
1214915.62
17694053.52
3067.0
CGE-0005
1215112.98
17693614.16
3059.0
CGE-0006
1214312.69
17693718.42
3099.9
CGE-0007
1214245.94
17693686.96
3098.0
CGE-0008
1214047.41
17693763.48
3074.0
CGE-0009
1213924.16
17693758.31
3074.0
CGE-0010
1214935.50
17693597.23
3056.0
CGE-0011
1214457.10
17694004.05
3107.0
CGE-0012
1213553.42
17693883.79
3085.0
CGE-0013
1213855.10
17693666.91
3077.0
CGE-0014
1215221.14
17693484.77
3063.0
CGE-0015
1215037.50
17694223.71
3082.0
CGE-0016
1214577.97
17693312.58
3089.0
CGE-0017
1214460.62
17694163.97
3105.0
CGE-0018
1214236.70
17694133.11
3081.0
CGE-0019
1214357.25
17693833.37
3105.0
CGE-0020
1214494.06
17693682.28
3098.0
July 2009
121 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
BHID
Easting
Northing
Elevation
CGE-0021
1213468.65
17693574.77
3104.0
CGE-0022
1213695.41
17693828.54
3085.0
CGE-0023
1213554.40
17693882.76
3085.0
CGE-0024
1215321.81
17693736.31
3063.0
CGE-0025
1215101.24
17693985.27
3074.0
CGE-0026
1213837.87
17693565.34
3077.0
CGE-0027
1213568.97
17693630.46
3099.0
CGE-0028
1213889.46
17693912.08
3068.0
CGE-0029
1214110.81
17693962.00
3072.0
CGE-0030
1214193.87
17693869.11
3086.0
CGE-0031
1214615.54
17693835.45
3099.0
CGE-0032
1214373.54
17693299.25
3092.0
CGE-0033
1215168.65
17693732.82
3059.9
CGE-0034
1214724.72
17694065.90
3067.0
CGE-0035
1213292.00
17693601.80
3093.0
CGE-0036
1212854.43
17693570.81
2993.0
CGE-0037
1214240.04
17693966.04
3089.0
CGE-0038
1214687.54
17693470.97
3085.0
CGE-0039
1213159.13
17693662.83
3059.9
CGE-0040
1213035.43
17693703.65
3025.0
CGE-0041
1215119.64
17693957.86
3074.0
CGE-0042
1215300.63
17694130.66
3067.0
CGE-0043
1214356.68
17693989.36
3104.0
CGE-0044
1213285.08
17693791.94
3068.0
CGE-0045
1213040.82
17693562.55
3003.0
CGE-0046
1213821.15
17693993.65
3064.0
CGE-0047
1213133.03
17693519.45
3040.0
DGE-0001
1213459.04
17693778.95
3093.0
DGE-0002
1214010.80
17693370.48
3081.0
DGE-0003
1213766.00
17693943.91
3070.0
DGE-0004
1213169.31
17693670.59
3059.9
DGE-0005
1213864.98
17694121.65
3075.0
DGE-0006
1214112.97
17693831.97
3075.0
DGE-0007
1214114.20
17694116.93
3062.0
DGE-0008
1214114.20
17694116.93
3062.0
DGE-0009
1213443.86
17693400.40
3017.0
July 2009
122 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
BHID
Easting
Northing
Elevation
DH-11-1-10
1214465.00
17693459.00
1765.0
DH-11-1-11
1213839.00
17694025.00
1765.0
DH-11-1-12
1213903.00
17693875.00
1765.0
DH-11-1-13
1213901.00
17693876.00
1765.0
DH-11-1-14
1214106.00
17693757.00
1765.0
DH-11-1-15
1214106.00
17693757.00
1765.0
DH-11-1-16
1213903.00
17693875.00
1765.0
DH-11-1-6
1214399.00
17693556.00
1765.0
DH-11-1-7
1214364.00
17693610.00
1765.0
DH-11-1-8
1214364.00
17693610.00
1765.0
DH-11-1-9
1214328.00
17693681.00
1765.0
DH-8-1-1
1214841.62
17693118.44
2188.1
DH-8-1-2
1214844.54
17693114.87
2188.1
DH-8-1-3
1214865.87
17693129.37
2188.1
DH-8-1-4
1215068.86
17692811.62
2185.9
DH-8-1-5
1215066.90
17692813.16
2185.9
DH-8-1-6
1214841.13
17693118.95
2188.1
DH-8-1-7
1214847.10
17693117.81
2188.1
DH-8-1-8
1214845.57
17693116.35
2188.1
GE00-03
1214399.68
17693434.97
3094.3
GE00-04
1214622.97
17693570.35
3095.4
GE00-05
1214735.77
17693419.91
3080.6
GE00-06
1214934.63
17693541.32
3053.7
GE00-09
1214915.38
17693696.54
3058.6
GE00-10
1214985.60
17693694.84
3053.3
ML-1
1213423.08
17693922.77
3052.0
ML-10
1213382.62
17693717.71
3072.0
ML-11
1213352.41
17693570.43
3095.0
ML-12
1213411.35
17693285.19
3135.0
ML-13
1213505.08
17693129.15
3160.0
ML-14
1213546.45
17692912.39
3175.0
ML-15
1213702.89
17693157.63
3135.0
ML-17
1213774.32
17693450.83
3094.0
ML-2
1213659.87
17693944.35
3073.0
ML-3
1213803.81
17693933.05
3068.0
ML-4
1213791.44
17693778.34
3082.0
July 2009
123 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
BHID
Easting
Northing
Elevation
ML-5
1213786.65
17693557.51
3091.0
ML-6
1213768.60
17693372.00
3098.0
ML-7
1213544.90
17693721.00
3105.0
ML-8
1213547.37
17693510.99
3120.0
ML-9
1213534.13
17693315.38
3130.0
P-1
1216216.42
17694803.58
3175.0
P-1-RC
1216216.42
17694803.58
3175.0
10-47
1213755.46
17693628.90
2934.1
11-47
1213754.90
17693626.11
2934.1
12-47
1213756.03
17693632.08
2934.5
1-46
1213659.83
17693651.28
2928.1
1-47
1214067.61
17693918.50
2887.5
2-46
1213660.37
17693653.27
2928.1
2-47
1214068.03
17693914.99
2887.5
3-46
1213659.16
17693647.69
2928.1
4-46
1213607.76
17693512.11
2935.7
5-47
1213606.70
17693509.34
2935.7
6-47
1213607.60
17693513.91
2935.7
7-47
1213602.81
17693514.43
2937.2
87-102
1213660.53
17693512.41
3117.0
87-95
1213896.97
17693337.09
3092.0
87-96
1213439.49
17693708.41
3097.0
88-111
1215373.88
17693872.05
3072.0
88-113
1215373.88
17693872.05
3071.0
88-116
1215424.27
17694021.85
3066.0
88-118
1214807.05
17694131.80
3070.3
88-120
1215939.76
17694425.32
3125.0
88-121
1214462.73
17694486.99
3069.7
88-122
1215547.34
17694600.00
3085.0
88-123
1215547.34
17694600.00
3084.0
88-124
1215834.20
17694717.40
3119.0
88-125
1216133.77
17694821.50
3154.3
88-126
1214327.29
17694657.19
3037.0
88-127
1214737.04
17693853.66
3096.0
88-128
1214602.81
17694301.71
3104.0
88-129
1215026.98
17693886.00
3060.0
July 2009
124 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
BHID
Easting
Northing
Elevation
88-130
1215227.26
17693982.38
3064.0
88-131
1214495.34
17693831.21
3101.0
88-132
1214581.40
17694012.20
3103.0
88-133
1215508.67
17693726.03
3085.0
89-134
1214882.62
17693694.39
3059.0
89-135
1215001.17
17693490.79
3065.0
89-136
1215156.75
17694140.97
3072.0
89-137
1214628.14
17693685.51
3100.4
89-138
1214794.07
17693523.50
3066
89-139
1214860.18
17693918.52
3059.9
89-144
1214991.19
17693761.87
3056.2
89-146
1214460.20
17693571.71
3096.4
89-147
1213730.66
17693745.74
3090.9
89-148
1215490.57
17693365.71
3114.6
89-149
1214582.39
17693453.98
3093.0
89-150
1214321.71
17693445.34
3090.0
89-154
1214882.22
17693694.50
3059.1
89-164
1214221.75
17693542.57
3090.6
89-165
1214184.87
17693343.82
3088.8
89-166
1214048.63
17693485.05
3091.5
89-167
1213852.41
17693547.91
3082.0
89-168
1213833.35
17693408.21
3090.8
89-169
1214052.09
17693597.63
3079.2
89-170
1214223.55
17693629.10
3093.5
8-47
1213602.78
17693513.43
2937.2
90-174
1215803.04
17694003.15
3145.0
90-180
1216931.15
17693614.84
3156.4
90-194
1218443.95
17694941.01
3729.8
90-196
1213790.19
17693757.37
3077.6
90-197
1213759.62
17693391.70
3095.2
90-198
1213421.04
17693646.74
3115.0
90-199
1213361.38
17693559.23
3106.1
90-200
1213447.32
17693458.19
3086.6
90-201
1213566.01
17693479.78
3131.7
90-202
1213888.00
17693485.93
3098.4
90-203
1213768.65
17693498.74
3088.3
July 2009
125 of 126
Midway Gold Corp.: Golden Eagle Project, Washington State, USA
Technical Report
BHID
Easting
Northing
Elevation
90-204
1213669.65
17693379.05
3115.1
90-205
1213279.90
17693653.67
3080.0
90-206
1213832.54
17693297.09
3099.9
90-207
1214617.23
17693381.93
3088.7
90-208
1213968.96
17693420.41
3082.2
90-209
1214071.59
17693303.23
3086.8
90-210
1213930.50
17693612.50
3074.5
90-211
1214001.58
17693539.60
3077.7
90-212
1214118.92
17693416.98
3080.0
90-213
1214436.74
17693547.05
3078.8
90-214
1214104.20
17693480.99
3082.3
90-215
1214272.29
17693400.59
3093.3
90-217
1214152.17
17693610.24
3087.0
90-218
1214401.06
17693385.77
3093.7
90-219
1214476.66
17693323.88
3091.9
90-220
1213964.86
17693949.35
3082.5
90-221
1214390.54
17693640.17
3098.6
90-222
1214652.39
17693388.22
3085.9
90-223
1214379.19
17693528.98
3096.2
90-224
1214331.57
17694154.64
3095.3
90-225
1214519.04
17693394.47
3093.1
90-226
1214451.43
17693460.26
3094.5
94-258
1214667.42
17693135.79
3070.3
9-47
1213606.19
17693509.15
2935.7
July 2009
126 of 126