Key Highlights:
- NI 43-101 compliant mineral resource estimate of 956,800 AuEq (oz) measured and indicated, 266,340 AuEq (oz) inferred (see resource estimate summary below)
- Additional resource definition drill program currently underway to increase resources adjacent to proposed pits and for data use in mine design and planning - targeting an additional 250,000 AuEq (oz)
- Low strip ratio in initial mining areas possible
- Amenable to low cost, heap leach, open pit mining
- Major stockwork vein system outcropping at surface for 5,000 feet
- Metallurgical test-work underway
- 3 Phase model now in place for mine development (to minimize initial capital expenditures and to ensure technical and economic objectives are met prior to proceeding with subsequent phases)
- Application for Aquifer Protection Permit for 90,000 tonne Pilot Phase I quarry/leach pad will be submitted to Arizona Department of Environmental Quality (DEQ) by month end
- Phase II production target, 5,000 tpd
- Phase III production target 10,000 tpd
- Preliminary Economic Assessment (PEA) underway and expected to be completed by early 2013
Description and Location of the Moss Property:
The Moss property is located within the historic Oatman Mining District in Mojave County, Arizona which is 10 miles east of Bullhead City, Arizona and approximately 70 miles southeast of Las Vegas, Nevada. The Moss deposit is a low-sulfidation epithermal deposit having grade consistency and homogeneity along its 2 km strike length and remains open down dip. The Moss deposit is a mineralized quartz-calcite vein and stockwork up to 45 feet wide; it strikes approximately N70 degrees W and dips 65-75 degrees SW; the outcropping surface trace has a strike length of 5000 feet. The Moss property hosts low sulphidation epithermal vein-type gold mineralization.
Exploration Program Update:
A comprehensive resource definition drilling program is currently underway in the starter open pit mine area with a focus on two central hills with significant vein outcropping at surface. Drill results will be utilized in testing the extensions of the known mineralization, in mine modeling, to streamline the initial mine design of the starter pit and to add additional resources to the planned Phase 2 Mine Plan. Drilling to expand the resource is expected to continue into 2014 and also target increasing the resources available for the Phase 3 Mine Plan. The internal target is to add 250,000 ounces of gold equivalent adjacent to the currently planned pit areas thereby extending the mine life by three years or enabling expansion of the current design capacity from 10,000 tpd to 13,300 tpd.
Surrounding property exploration program - A drilling program is expected to commence in early 2014 and will be ongoing throughout the first few years of mine operation. This will be a property wide program aiming to add a million ounces to the resource statement. The target for the Moss property as a whole will be 2 million ounces of gold equivalent.
Moss Project Current Resource:
In a recent news release dated October 31, 2012, Patriot Gold reported the final updated NI 43-101 compliant mineral resource estimate report for the Moss property. These results were reviewed and compiled by Scott E. Wilson Consulting Inc. The table below shows the final technical report resource estimate.
* Gold equivalency is based on a silver:gold ratio of 50:1 and assumes 100% recovery of all metals.
* Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves estimate.
* Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
* Resources were based on 28,871 m of drilling in 330 exploration drill holes and 590 meters of channel sampling from surface and underground trenches and cross-cuts. There were a total of 5,872 drill composite samples and 269 rock channel samples used in the estimation of gold and silver. SEWC used Inverse Power Distance (ID3) as the preferred estimation technique for the Moss project.
3 Phase Mine Development Plan:
This plan is designed to sequentially progress the project from conceptual design and laboratory test work to pilot plant testing in the field and, if this is successful, to secure financing and permitting approval for building a 5000 tonnes per day mine initially and, if this is successful, then move to 10,000 tonnes per day ultimately. The mine, should it proceed to production, will be a classic heap leach operation.
The business plan has been specifically designed to take advantage of the natural attributes of the Moss deposit while minimizing the capital required to get into production and minimizing the lead time in doing so, thereby reducing project development risk and capital risk.The immediate goal is the completion of a Preliminary Economic Assessment (PEA) which will incorporate mine, processing and heap leach designs. This will also include estimates of capital and operating costs and pre-tax cash flows for Phases I and II. A scoping level analysis will be subsequently prepared for Phase III. The PEA is expected to be completed in early 2013.
Phase I is a pilot plant operation with operations expected to commence in Q2 2013. Phase II operations are expected to commence in Q1 2014 at a rate of 5,000 tpd. Phase III operations are expected to commence in Q4 2017 at a rate of 10,000 tpd. These numbers are being used as the basis of the PEA now underway and are subject to review.
The proposed development schedule is below:
The employment plan to execute on the 3 Phase Development Plan is to support local communities and businesses wherever possible for both employment and mine supplies and services. Preliminary estimates of direct and indirect employment for each mining phase are listed below and utilize a multiplier effect of 3:1.
The independent technical report, entitled "Technical Report Northern Vertex Mining Corp. Moss Mine, Mohave County, Arizona, USA," dated October 25, 2012, was completed by Mr. Scott E. Wilson, C.P.G. of Scott E. Wilson Consulting Inc. and independent qualified resource evaluators; this estimate has an effective date of September 10, 2012, and complies with National Instrument 43-101 for the Standard of Disclosure for Mineral Projects as adopted by the Canadian Securities Regulators. A copy of the full report is available on the Company's website at: www.patriotgoldcorp.com/NI43-101TechReport.pdf
Patriot Gold is a 100% owner in the historic Moss Gold-Silver property located in Mohave County, Arizona, which is subject to certain royalties and an earn-in option agreement for 70% interest. The earn-in optionee/operator, Northern Vertex Mining Corp., has the right to earn a 70% interest in the project by completing an $8.5 million investment and a bankable feasibility study. Subsequent to the optionee/operator earn-in, financing of the project will be on a proportional basis.
Disclaimer: This announcement may contain forward-looking statements which involve risks and uncertainties that include, among others, limited operating history, limited access to operating capital, factors detailed in the accuracy of geological and geophysical results including drilling and assay reports; the ability to close the acquisition of mineral exploration properties, and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. More information is included in the company's filings with the Securities and Exchange Commission, and may be accessed through the SEC's web site at http://www.sec.gov.