LGDTF: US
LGD: CA

kinsley

Kinsley Mountain is a Carlin-style, sediment-hosted gold property located south of Newmont Mining’s Long Canyon deposit, with a stratigraphic, structural setting and gold mineralization similar to other sediment-hosted gold systems in the underexplored area east of the Carlin Trend in northeast Nevada.  Located in southeast Elko County, Nevada, approximately 90 km from Long Canyon, Kinsley is host to a past-producing mine with an extensive exploration database and numerous, untested gold targets.

Building on the high grade discovery at the Western Flank target and ‘proof of concept’ of Liberty Gold’s exploration model, the 2015 exploration program identified additional areas of high-grade mineralization in the Secret Canyon Shale horizon. 

Drill results from an area approximately 150 metres northeast of the high-grade Western Flank intercepted high-grade gold in two key stratigraphic horizons, indicating the presence of a new mineralized zone that remains open to the east and west.

Drill highlights include:

  • 2.34 grams per tonne (“g/t”) gold over 9.1 metres (Dunderberg shale host), AND
    • 3.46 g/t gold over 18.3 metres (Secret Canyon Shale host) in PK208 including
    • 13.7 g/t Au over  3.0 metres
  • 2.95 g/t Au over 13.7 metres (Secret Canyon Shale host) in PK210

The new intercepts are from the Dunderberg (Candland) Shale and the Secret Canyon Shale units which contain most of the known gold mineralization at Kinsley and are believed to underlie a significant portion of the Kinsley property.

High-grade gold resource estimate
In December 2015, Liberty Gold recently completed an independent resource estimate that defines a significant high-grade zone at the Western Flank, along with near-surface oxide ounces. Mineralization hosted in the Secret Canyon Shale in the Western Flank zone includes 284,000 Indicated ounces at an average grade of 6.04 g/t gold. At a 3 g/t cut-off grade, most of the resource remains, delineating 248,000 Indicated ounces at an average grade of 9.15 g/t gold. The potential for resource expansion is excellent due to widespread alteration, prospective geology and gold at surface, and over 80% of the property is untested by drilling.

Metallurgy
Initial metallurgical test results at Kinsley Mountain demonstrate the amenability of high-grade mineralization from the Secret Canyon host rock to produce a high-grade concentrate amenable to flotation processing, with grades up to 312 g/t gold and recoveries up to 95%. Additional metallurgical results from the Dunderberg (Candland) Shale at Kinsley Mountain, demonstrate that Kinsley’s main host rocks can produce medium to high-grade concentrates with very good to excellent gold recoveries, and the potential of low capital cost options for possible mining and processin.

Strong geology in established area
Strata at Kinsley Mountain range from middle Cambrian to upper Ordovician.  Most of the mineralization discovered and mined in the past is hosted in the middle Cambrian Candland Shale and overlying Notch Peak Formation, the latter a host at Long Canyon.  Receptive potential host strata lying above and below this zone (Lower Ordovician Pogonip Formation – host at Long Canyon, and middle Cambrian Secret Canyon shale – host at Bald Mountain and Eureka) were never tested.  The structural setting is also similar to Long Canyon, with evidence of Mesozoic contractional deformation overprinted by Tertiary normal faulting.

Past producing mine
Gold mineralization was discovered on Kinsley Mountain in 1984. Alta Gold Company purchased the property in 1994 and started open-pit mining in 1995, producing about 138,000 ounces of gold at grades of 1.4 g/t gold through 1999 (depending on source) from a series of six small pits aligned in a NW-SE direction. The mine closed when Alta Gold declared bankruptcy during a period of very low gold prices.

The mine produced oxidized disseminated gold ore for heap-leach recovery and processed the ore on a heap-leach pad.

Majority owner and operator
In September 2011, Liberty Gold purchased the option to earn a controlling interest in the Kinsley Mountain Property. At present, Liberty Gold has a 79% interest in Kinsley Mountain and is project operator. Intor Resources Corporation, a subsidiary of Nevada Sunrise Gold Corporation, owns the remaining 21%. The property consists of 469 claims and 9,570 acres (3,853 hectares) on U.S. Bureau of Land Management (BLM) land.

Our focus today
Our exploration strategy is focused on identifying additional areas of high-grade mineralization in the Secret Canyon Shale horizon, especially targeting the Kinsley North claims which have never before been drilled. Our strategy employs compilation and 3D analysis of a wealth of historic data, detailed geologic mapping and analysis, aggressive drilling and deposit modeling. Unlike previous work that emphasized a NW-trending structure and a single stratigraphic host, our model, similar to Long Canyon, predicts the presence of mineralization in shallowly N to NE-plunging ore shoots at multiple stratigraphic intervals. 

In 2014, we received an amendment to the Plan of Operations to expand exploration activities in the northern half of the property.

In 2015, our focus was on extending the Western Flank discovery and identifying additional areas of high-grade mineralization in the Secret Canyon Shale horizon.

The upper stratigraphic unit hosting the gold in the Western Flank zone rises to the surface, 500 metres to the south at the newly identified Right Spot target. Mapping and rock sampling at the Right Spot demonstrate a 250 metre north-northeast zone of surface jasperoids returning 1-5 g/t gold in grab samples. These features suggest that the Right Spot surface mineralization may result in a gold mineralized zone stretching more than one kilometre in length.

Step-out drilling at the Western Flank has continued to target high-grade mineralization in the Secret Canyon / Clark Springs formations, and the near-surface Candland Shale unit. The high-grade Western Flank footprint now covers 250 by 200 metres and remains open to the south, north-northeast and southeast. Mineralization in the Candland Shale trends north-northeast and is open to the south. Drilling at the Western Flank has not encountered any groundwater, which may simplify permitting in a development scenario.

Drilling at the Secret Spot target, located two kilometres to the south of the Western Flank target, resulted in the discovery of a thick zone of gold mineralization in the Secret Canyon shale, which is the same host for high-grade mineralization in the Western Flank.  The existence of gold mineralization in the same unit two kilometres from the Western Flank suggests that mineralization could be wide-spread in this unit; follow up drilling is planned to test the extent of gold mineralization in this area.

The discovery of significant surface oxide mineralization brought early success to the Right Spot area, where new targets are being developed based on this drilling and additional surface work. Initial drill tests for deep mineralization under the existing pits returned anomalous gold and elevated pathfinders in the Secret Canyon shale. A follow-up program to vector towards higher grades is being developed for this area.

There are no assurances that the geological similarities to Newmont Mining’s Long Canyon project or other projects along the Long Canyon Trend will result in the establishment of similar resource estimates at Kinsley, or that the Kinsley Project can be advanced in a similar timeframe. 

The resource estimate for Kinsley was completed by Michael Gustin, Ph.D, CPG, of Mine Development Associates, Inc. (MDA) of Reno, Nevada, an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended.  Estimation methods are summarized below. Further details of the estimation methods and procedures are available in a NI 43-101 technical report filed on SEDAR (www.sedar.com).

Moira Smith, Ph.D., P.Geo., VP Exploration and Geoscience, Liberty Gold, is the Company's designated Qualified Person within the meaning of NI 43-101 and has reviewed and validated that the information contained herein is accurate.