Resource World Magazine

52 www.resourceworld.com A P R I L / M A Y 2 0 1 8 A t first glance, many would say the impediments for Kore Mining to per- mit and construct two heap leach gold mines in Southern California appear unten- able, but with over 900 permitted mines already contributing $3.5 billion to the economy, California is poised for a mining renaissance. Kore Mining, a Vancouver-based junior is in the process of completing a reverse takeover with Eureka Resources [EUK-TSXV] is positioned to benefit from California's new gold rush. The company already owns two of the largest undevel- oped precious metal projects in California – Imperial and Long Valley. Imperial, the more advanced of the two projects, is near the southern California- Arizona border, 26 miles from Yuma, Arizona and within close proximity to New Gold's Mesquite gold mine. A unique characteristic of the project is that it is on public land and administered by the Bureau of Land Management, an agency within the US Department of Interior which recently relaxed some regulatory obstacles for mining on public lands. Over the years, under the ownership of Goldfields then Glamis Gold and Goldcorp USA, the Imperial Project has had 195,000 feet of drilling between 1982-1996, and in 2012, a historical positive Preliminary Economic Assessment (PEA). At the time of the PEA, there were inferred resources of 1,298,000 ounces gold averaging 0.0174 oz/ton and indicated resources of 879,000 ounces averaging 0.0154 oz/ton. The PEA recommended an open pit, heap leach operation at 25,000 tonnes/day with a mine life of 10 years and a break- even gold price of US $1,035/oz using a 7% discount rate. Once Kore Mining completes a fund- raising that is underway, the next step for the company is to complete the permitting study updates and the community engage- ment necessary before making applications to the Bureau of Land Management and the County to resume the environmental permitting process. During the past round of environmental permitting the challenge facing open pit miners in California was the cost of back- fill regulations introduced in the Surface, Mining and Reclamation Act (2003). These regulations require all open pit mines to be backfilled as a routine element of reclamation. To lower costs associated with back- fill and improve the project's economics, Kore Mining is investigating the option of keeping the same mine plan as previously proposed but partnering with an aggregate miner to sell the overburden of gravel and sand for industrial use and thus lowering the backfill requirement in the open pit. An updated PEA and mine plan is in the works for the Imperial Project and is expected to be complete in 2018-19. The Long Valley Project is earlier stage project than Imperial but still advanced with a PEA and extensive environmental, cultural and engineering work completed, mostly by Royal Gold in the 1990s. Resource estimates completed in the 2008 PEA have the measured and indicated gold at 1.211 million ounces averaging 0.018 oz/ton and inferred resources at 571,500 ounces averaging 0.017 oz/ton. The PEA suggests, using 2008 prices, that at a gold rate of US $800/oz, the Internal Rate of Return Pre-Tax will be 63.2%. This year, Kore Mining plans to com- plete 7,500 metres of additional drilling to confirm the resources and modernize the company's understanding of the structure and geology. Concurrently, management plans to update the environmental, bio- logical studies and begin community engagement and consultations. Kore has completed an updated NI 43-101 qualifying report on the Long Valley property (which should be released within weeks of this magazine's publication) along with an 80-station mag- netotelluric survey to test for mineralized structures at depth and along the Hilton Creek fault, the main gold, silver zone which currently has a strike length mea- sured over 10 kilometres. "The project has a profitable near- surface oxide mineable resource, with a positive PEA that has been confirmed by recent internal studies. This is a large proj- ect with much potential to be unlocked through inexpensive and limited required drilling," says Adrian Rothwell, Chief Executive Officer of Kore Mining. Kore Mining is confident with com- munity and government engagement throughout the mine permitting process they will gain the necessary social license to operate in the region. "We believe in open communication when it comes to our approach to commu- nity. Mining, when done right, adds real sustainable value to communities and the State. Eureka has interests in gold projects in the Yukon, British Columbia and a lithium project in Nevada. n California Gold Rush 2.0 by Robert Simpson MINING Mick Gavrilovic, Manager, Project Development (Americas) GR Engineering, left, and James Hynes, Chairman and COO of Kore Mining at the Imperial gold project in southeastern California. Photo courtesy Kore Mining.

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