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SCOPING STUDY Longstreet Gold Project, Nye County, Nevada USA
Prepared for Star Gold Inc.
May 27, 2014
A-Z Mining Professionals Limited
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Star Gold Inc. Longstreet Project Scoping Study i
Table of Contents
1 EXECUTIVE SUMMARY ........................................................................................................................... 1
1.1 Conclusions .................................................................................................................................... 6
1.2 Recommendations ........................................................................................................................ 6
2 INTRODUCTION ..................................................................................................................................... 8
3 LOCATION & HISTORY ........................................................................................................................... 9
4 GEOLOGY ............................................................................................................................................. 14
4.1 Regional Geology ......................................................................................................................... 14
4.2 Property Geology......................................................................................................................... 14
5 RESOURCES .......................................................................................................................................... 15
5.1 Resource Comparison.................................................................................................................. 15
5.2 Block Model Review .................................................................................................................... 15
5.2.1 Database .............................................................................................................................. 16
5.3 Mineral Wire Framing ................................................................................................................. 17
5.4 Sample Capture and Compositing ............................................................................................... 18
5.5 Variography and Variogram Modelling ....................................................................................... 18
5.6 Block Model Definition ................................................................................................................ 19
5.7 Estimation Search Criteria ........................................................................................................... 19
5.8 Statistical and Visual Checks of Model ........................................................................................ 20
5.9 Resource Reporting ..................................................................................................................... 21
5.10 Conclusion ................................................................................................................................... 22
5.11 Geology and resource estimate recommendations .................................................................... 22
6 GEOTECHNICAL AND HYDROGEOLOGY ............................................................................................... 23
6.1 Regional Hydrogeology ............................................................................................................... 23
6.2 Local Hydrogeology ..................................................................................................................... 23
6.3 Mine Site Hydrogeology .............................................................................................................. 25
6.4 Hydrogeology conclusion and recommendation ........................................................................ 26
6.5 Geotechnical ................................................................................................................................ 27
7 MINING ................................................................................................................................................ 28
7.1 Potentially Mineable Mineral Resource – Pit Optimization ........................................................ 28
7.2 Mining Method ............................................................................................................................ 35
7.3 Mining Schedule .......................................................................................................................... 35
7.4 Mine Closure ............................................................................................................................... 36
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Star Gold Inc. Longstreet Project Scoping Study ii
8 METALLURGICAL TESTWORK and MINERAL PROCESSING .................................................................. 38
8.1 Historical metallurgical sampling and test work ......................................................................... 38
8.2 2013 Sampling for metallurgical testwork .................................................................................. 39
8.3 Gold-Silver Mineralogy ................................................................................................................ 43
8.3.1 Sulfide Mineralogy ............................................................................................................... 43
8.3.2 Oxide Mineralogy ................................................................................................................ 43
8.4 2013 Metallurgical Test Program ................................................................................................ 43
8.4.1 Section Sample Assays ......................................................................................................... 44
8.4.2 Bottle Roll Testing ............................................................................................................... 44
8.4.3 Column Leach Testing .......................................................................................................... 46
8.4.4 Comminution Tests ............................................................................................................. 49
8.4.5 Mineral Processing Conclusions: ......................................................................................... 50
8.4.6 Mineral Processing Recommendations ............................................................................... 50
8.5 Process Engineering and Design .................................................................................................. 51
8.6 Process Description ..................................................................................................................... 55
The process of winning gold from the mined ore involves a number of individual activities,
described in detail below. ................................................................................................................... 55
8.6.1 Crushing ............................................................................................................................... 55
8.6.2 Double Deck Screen ............................................................................................................. 55
8.6.3 Lime Addition ...................................................................................................................... 55
8.6.4 Heap Leach Pad Stacking ..................................................................................................... 55
8.8.3 Leachate Distribution & Collection...................................................................................... 56
8.6.5 Solution Ponds ..................................................................................................................... 57
8.7 Adsorption, Desorption and Refining (ADR) Facility ................................................................... 57
8.7.1 Adsorption circuit ................................................................................................................ 57
8.7.2 Carbon acid washing ........................................................................................................... 58
8.7.3 Desorption circuit ................................................................................................................ 58
8.7.4 Carbon thermal regeneration.............................................................................................. 59
8.7.5 Refining ................................................................................................................................ 59
8.7.6 Water services ..................................................................................................................... 59
8.7.7 Reagents .............................................................................................................................. 60
8.7.8 Assay laboratory .................................................................................................................. 60
8.8 ADR plant manpower .................................................................................................................. 60
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Star Gold Inc. Longstreet Project Scoping Study iii
9 INFRASTRUCTURE ................................................................................................................................ 61
9.1 Site Access ................................................................................................................................... 61
9.2 Power and Power Distribution .................................................................................................... 61
9.3 Site roads ..................................................................................................................................... 61
9.4 Surface support buildings ............................................................................................................ 61
9.5 Other services .............................................................................................................................. 62
9.6 Area support services .................................................................................................................. 62
9.7 General and administrative ......................................................................................................... 62
9.7.1 Administration ..................................................................................................................... 62
9.7.2 Procurement ........................................................................................................................ 63
9.7.3 Human Resources ................................................................................................................ 63
9.7.4 Security ................................................................................................................................ 63
9.7.5 Manpower ........................................................................................................................... 64
10 HYDROLOGY .................................................................................................................................... 65
10.1 Water Sources ............................................................................................................................. 65
10.2 Water Usage ................................................................................................................................ 66
10.3 Dewatering .................................................................................................................................. 67
11 ENVIRONMENTAL AND PERMITTING .............................................................................................. 68
11.1 Permitting Process ....................................................................................................................... 68
11.1.1 US Forest Service ................................................................................................................. 68
11.1.2 Bureau of Land Management .............................................................................................. 69
11.1.3 Nevada Division of Environmental Protection (and other Agencies as noted) ................... 69
11.1.4 Other Permits ...................................................................................................................... 70
11.2 Timing of Approvals ..................................................................................................................... 70
11.3 Inventoried Roadless Area .......................................................................................................... 70
11.4 Greater Sage-grouse .................................................................................................................... 71
11.5 Cultural resources ....................................................................................................................... 74
11.6 Environmental and permitting conclusions ................................................................................ 74
12 PROJECT DEVELOPMENT SCHEDULE ............................................................................................... 75
13 CAPITAL EXPENDITURES ESTIMATES ............................................................................................... 77
13.1 Basis for estimates ...................................................................................................................... 77
13.2 Mining .......................................................................................................................................... 77
13.3 Heap leach and processing plant................................................................................................. 77
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Star Gold Inc. Longstreet Project Scoping Study iv
13.4 Infrastructure and support facilities ............................................................................................ 78
13.5 Owners costs ............................................................................................................................... 79
13.6 Total capital expenditures ........................................................................................................... 79
13.7 Sustaining capital ......................................................................................................................... 80
13.8 Closure costs ................................................................................................................................ 80
14 OPERATING COST ESTIMATES ......................................................................................................... 81
14.1 Basis for estimates ...................................................................................................................... 81
14.2 Mining .......................................................................................................................................... 81
14.3 Heap leach and gold recovery plant ............................................................................................ 81
14.4 General & Administration Costs .................................................................................................. 83
14.5 Dore transport and refining charges ........................................................................................... 85
14.6 Project total operating costs ....................................................................................................... 85
14.7 Exclusions .................................................................................................................................... 86
15 ECONOMIC ANALYSIS ...................................................................................................................... 87
15.1 Basis for analysis .......................................................................................................................... 87
15.2 Metal price derivation ................................................................................................................. 88
15.3 Financial returns .......................................................................................................................... 88
15.4 Sensitivity analysis ....................................................................................................................... 91
15.5 Economic interpretations and conclusions ................................................................................. 94
16 PROJECT RISK ASSESSMENT ............................................................................................................ 95
17 CONCLUSIONS AND RECOMMENDATIONS ..................................................................................... 96
17.1 Conclusions .................................................................................................................................. 96
17.2 Recommendations ...................................................................................................................... 97
18 REFERENCES .................................................................................................................................... 99
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Star Gold Inc. Longstreet Project Scoping Study v
LIST OF TABLES
Table 1.1 Longstreet Project Study Parameters ............................................................................................ 2
Table 1.2 Pre-production Capital Costs ......................................................................................................... 2
Table 1.3 Summary of Operating Costs ......................................................................................................... 3
Table 1.4 Longstreet Project Returns ............................................................................................................ 3
Table 5.1 Mineral Resources - Longstreet Gold Project .............................................................................. 15
Table 5.2 Comparison of Agnerian and Noland Block Models .................................................................... 16
Table 7.1 Floating cone pit optimization parameters ................................................................................. 28
Table 7.2 In-pit Mineral Resource Estimate ................................................................................................ 29
Table 7.3 Mine Schedule ............................................................................................................................. 36
Table 8.1 Metallurgical Testwork Results, (c. 1988) .................................................................................... 38
Table 8.2 Gold Head Assays and Head Grade Comparisons ....................................................................... 44
Table 8.3 Bottle Roll Test Results, 2013 ...................................................................................................... 45
Table 8.4 Summary Metallurgical Test Results ........................................................................................... 47
Table 8.5 Process Design Criteria ................................................................................................................ 51
Table 9.1 G&A Personnel Complement ....................................................................................................... 64
Table 13.1 ADR Plant Capital Expenditure Estimate ................................................................................... 78
Table 14.1 Processing Plant Operating Cost ............................................................................................... 82
Table 14.2 General and Administrative Operating Cost Components ........................................................ 84
Table 14.3 G&A Manpower Costs ............................................................................................................... 85
Table 14.4 Project Operating Cost Summary .............................................................................................. 86
Table 15.1 Cash Flow Model Inputs ............................................................................................................ 87
Table 15.2 Longstreet Gold Project Cash Flow Model ................................................................................ 90
Table 15.3 Cash Flow Summary................................................................................................................... 91
Table 15.4 Pre-Tax Sensitivity Analysis ....................................................................................................... 91
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Star Gold Inc. Longstreet Project Scoping Study vi
LIST OF FIGURES
Figure 1.1 Pre-tax IRR Sensitivities ................................................................................................................ 4
Figure 1.2 Project NPV Sensitivities ............................................................................................................... 4
Figure 1.3 Project IRR Sensitivity to Gold Price ............................................................................................. 5
Figure 1.4 Project NPV Sensitivity to Gold Price ........................................................................................... 5
Figure 3.1 Longstreet Gold Project Location ............................................................................................... 10
Figure 3.2 Longstreet Gold Project Satellite View (north to top of page) ................................................... 11
Figure 3.3 Longstreet Gold Project - Main Zone ......................................................................................... 12
Figure 3.4 Cross-section through Upper Adit .............................................................................................. 13
Figure 5.1 Sample section of Agnerian geological model ........................................................................... 17
Figure 5.2 Sample section through Noland model (same section) ............................................................. 18
Figure 5.3 Detailed section through Noland geologic model ...................................................................... 21
Figure 6.1 Great Basin Hydrogeology .......................................................................................................... 24
Figure 6.2 Water well search location recommendations .......................................................................... 26
Figure 7.1 Pit shell aerial view ..................................................................................................................... 30
Figure 7.2 Pit shell longitudinal section, 13,935,430E ................................................................................ 31
Figure 7.3 Pit shell longitudinal section 13,935,430E with topography ...................................................... 32
Figure 7.4 Pit shell cross-section 13,934,000N............................................................................................ 33
Figure 7.5 Pit shell cross-section 13,935,145N............................................................................................ 34
Figure 8.1 Location of Underground Adit Samples ..................................................................................... 41
Figure 8.2 Approximate Location of the Three Surface Sampling Pits (shown in red)................................ 42
Figure 8.3 Crush Size Versus Metal Recovery............................................................................................. 46
Figure 8.4 Surface Master composite leach kinetics .................................................................................. 48
Figure 8.5 Underground master composite leach kinetics ......................................................................... 48
Figure 8.6 Master blend composite leach kinetics ...................................................................................... 49
Figure 8.7 Flowsheet block diagram ............................................................................................................ 53
Figure 8.8 Flow sheet diagram .................................................................................................................... 54
Figure 11.1 Greater Sage-grouse habitat .................................................................................................... 73
Figure 12.1 Longstreet Gold Project engineering and development schedule ........................................... 76
Figure 15.1 Gold price trend 2006 -2014 .................................................................................................... 88
Figure 15.2 Pre-Tax IRR Sensitivities ........................................................................................................... 92
Figure 15.3 NPV10 Sensitivity Analysis ......................................................................................................... 92
Figure 15.4 Project IRR Sensitivity to Gold Price ......................................................................................... 93
Figure 15.5 Project NPV Sensitivity to Gold Price ....................................................................................... 93
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Star Gold Inc. Longstreet Project Scoping Study 1
1 EXECUTIVE SUMMARY
The mineral resources for the Longstreet Project were estimated by Agnerian Consulting Ltd.
(and reported in the NI 43-101 report entitled “Technical Report on the Longstreet Gold-Silver
Property, Nevada”, dated December 15, 2013). The geological block model developed by
Agnerian was used by A-Z Mining Professionals Ltd. (AMPL) to form the basis of the scoping
study reported herein.
This report has been prepared in Imperial units of measure. Key conversions are:
1 metric tonne = 1.1025 short tons 1 ounce Troy = 31.1035 grams 1 ounce Troy/ton = 34.3 grams/tonne
This Scoping Study has identified potentially mineable resources of 4.4 million short tons at
0.022 ounces gold per short ton and 0.53 ounces silver per short ton. The study includes
Indicated and Inferred mineral resources that would be contained in a designed open pit shell,
as allowed for studies of this nature by Canadian securities regulators. The reader is cautioned
that US SEC Industry Guide 7 disallows the economic studies of mineral properties on
mineralized material of lesser classification than Proven and Probable Reserves.
The deposit would be mined by open pit with the gold and silver extracted by heap leach and a
gold recovery plant. Infrastructure facilities would be minimized but include a small surface
shop, warehouse, office complex and water treatment facility.
The mine would operate at 1 million tons per annum and produce approximately 82,450 ounces
of gold and 348,200 ounces silver over its operating life. Based upon metallurgical testwork
conducted in 2013, gold recovery is expected to be 86% and silver recovery 15%. Recovered
(payable) silver represents only 7% of the total revenue of the mine. The parameters used in the
cashflow model are shown in Table 1.1.
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Star Gold Inc. Longstreet Project Scoping Study 2
Table 1.1 Longstreet Project Study Parameters
Component Parameter
Potentially Mineable Resource (Indicated & Inferred), including mining dilution & recovery
4.4 million tons
Estimated Mining Dilution 5 percent @ 0% grade
Average mill head grade, gold 0.022 opt
Average mill head grade, silver 0.53 opt
Payable gold 82,450 ounces
Payable silver 348,200 ounces
Average long-term gold price $1,350 per ounce
Average long term silver price $24.00 per ounce
Pre-Production Capital, including Working Capital $25.4 million
Total Sustaining Capital $0
Closure Cost $1 million
Royalty 3% NSR
Estimated Operating Costs ($/ton) $14.87
Life of Mine 4.4 Years
Metal prices were provided by Star Gold. The gold price used in the study is lower than the 3-
year trailing average price, a common long-term price indicator, and within 5% of the current
price.
A summary of estimated capital costs is presented in Table 1.2
Table 1.2 Pre-production Capital Costs
Cost Component Expenditure
($US)
Permitting $ 2,000,000
Mine $ 220,000
Heap Leach Pad Processing Plant
$ 2,250,000 $ 8,097,000
Surface Infrastructure & Mobile Equipment $ 4,000,000
EPCM, Contractor O/H & Owners Costs Contingency
$ 2,535,000 $ 2,565,000
Total Capital Expenditures $21,667,000
Working Capital $ 3,690,000
TOTAL EXPENDITURES $25,357,000
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Star Gold Inc. Longstreet Project Scoping Study 3
The heap leach pad and gold recovery plant represent 40% of the estimated total pre-
production capital expenditure. The estimate includes $4.2 million in contingency and working
capital allocations.
The estimated operating cost for mining, ore processing and general and administrative costs
are itemized in Table 1.3, expressed in US dollars per short ton processed. The operation is
expected to incur a cash cost of US$808 per ounce, exclusive of silver credits, or $760 per ounce
net of silver credits.
Table 1.3 Summary of Operating Costs
Department Cost
($US/ton)
Mine $ 9.09
Processing & Environmental $ 3.65
Surface Dept. and G&A $ 2.13
TOTAL $14.87
A 3% NSR royalty is held on the property by MinQuest, the vendor to Star Gold, and has been
factored into the cash flow model.
Economic analysis has indicated a robust return as shown in Table 1.4, with an estimated IRR of
29% and a present value of $13.3 million at a 10% discount factor, on a pre-tax basis.
Table 1.4 Longstreet Project Returns
Metric Value
Undiscounted Net Revenue $119 million
Undiscounted Cashflow $ 29 million
NPV (10%) $ 13 million
NPV (15%) $ 9 million
IRR 29%
Payback Period 2.7 years
The IRR and NPV sensitivities to variations in key parameters are depicted graphically in Figures
1.1 and 1.2. The IRR is most sensitive to variations in metal prices and mined grades and least
sensitive to operating costs. Simulated variations in the potential expected recoveries of
payable metals show limited sensitivity but the project will be economically vulnerable to a
variations in metal recovery rate.
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Star Gold Inc. Longstreet Project Scoping Study 4
Figure 1.1 Pre-tax IRR Sensitivities
Figure 1.2 Project NPV Sensitivities
The following figures isolate the sensitivity of the project to variations in the price of gold only.
0
5
10
15
20
25
30
35
40
45
50
-15% -10% -5% 0% 5% 10% 15%
IRR
(%
)
Percentage Change In Variable (%)
Metal Prices Capital Costs Operating Costs
Mined Grade Metals Recovery
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Star Gold Inc. Longstreet Project Scoping Study 5
Figure 1.3 Project IRR Sensitivity to Gold Price
Figure 1.4 Project NPV Sensitivity to Gold Price
0
5
10
15
20
25
30
35
40
45
50
-15% -10% -5% 0% 5% 10% 15%
IRR
(%
)
Percentage Change in Metal Prices (%)
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Star Gold Inc. Longstreet Project Scoping Study 6
1.1 Conclusions
Based on the study results, conclusions are:
1. The project provides positive and robust returns.
2. Longstreet is a small deposit which can be developed for production at reasonable
cost in a near-term horizon, provided regulatory approval and permits are acquired.
3. The mined grade of ore is an important variable for the success of the operation as is
mining cost. Operating management efforts during mine production must be
focussed on these two parameters.
4. The Project is most sensitive to variations in the price of gold and variations in the
mined grade of mineralized material.
5. The economics of the project would be improved with the discovery and exploitation
of economically viable satellite deposits. Once the capital investment has been
repaid by the Main Zone the operating profits from other deposits would enhance
the Project cash flow.
6. Water sourcing is the largest technical risk factor, particularly to capital expenditures
and operating cost estimates. Ideally a well source will be identified and thus avoid
the added cost of piping water to the site from Five Mile Spring on Clifford Ranch,
currently the nearest identified water source, 12 miles from the Project site. It is not
known if Five Mile Spring produces adequate volume nor if the owner of Clifford
Ranch would agree the sale of water from the spring. Preliminary investigations have
identified two potential sources of well water; one mile to the NE in the Monitor
Range and approximately five miles east in Stone Cabin Valley.
7. AMPL has reviewed the permitting requirements of the US Forest Service, The
Bureau of Land Management and the Nevada Division of Environmental Protection
and estimates that, without objection during the public disclosure period of
permitting, the Longstreet Project will require from two to four years to secure the
permits required to begin constructing and operating the mine.
1.2 Recommendations
Based on the results of this Scoping Study, recommendations follow.
Geology
Recommendations for the next phase of mineral resource estimation include:
1. Consider a drilling program to explore mineralization at depth and test the nearby
Central Ridge mineral occurrence.
2. Consider further drilling to better understand the transition zone between oxide &
sulfide to determine the maximum extent of leachable gold mineralized material.
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Star Gold Inc. Longstreet Project Scoping Study 7
Mining
1. Geotechnical work for open pit slope angles optimization is recommended.
2. Firm quotations from qualified local mining contractors is advised for the next phase
of study.
Heap Leaching & Processing Plant
1. Conduct column test work on the oxide adit material to test the mineralogical variability of the deposit.
2. Conduct column leach tests using finer material in conjunction with high pressure rolls i.e. P80 ¼-inch (6.3mm) in order to maximize silver recovery.
3. Reduce column leach time to 60 days of leaching based on gold and silver recovery testwork results.
4. Conduct column tests using site water as opposed to laboratory tap water in order to determine the effects of site water on leach kinetics.
5. A HPGR (high pressure grinding rolls) evaluation should be considered to investigate improved silver recovery on the master blend composite ore (generic tests show that HPGR use often leads to the formation of micro cracks in the ore which may improve silver leaching kinetics). This would require a Static Pressure Test (SPT) to be performed.
6. Load/permeability tests are recommended on column leach residue samples to confirm permeability under compressive loading.
Infrastructure
1. A hydrological study is recommended to identify proximal water sources of adequate
volume to sustain the Longstreet operation.
Environment and Permitting
1. Initiate baseline studies as soon as possible as a precursor for applications for
permits to construct and operate the Project.
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Star Gold Inc. Longstreet Project Scoping Study 8
2 INTRODUCTION
Star Gold Inc. (Star Gold) engaged A-Z Mining Professionals Limited (AMPL) of Thunder Bay, Ontario, Canada, to undertake a scoping study of the Longstreet Gold Project, located 50 miles NE of the town of Tonopah in Nye County, Nevada, USA. This study uses the mineral resources estimate prepared by Agnerian Consulting Limited in December 2013 and reported in the NI 43-101 report entitled “Technical Report on the Longstreet Gold-Silver Property, Nevada”, dated December 15, 2013. For this study, the Qualified Persons to have visited the site include Mr. Joe Kantor (Geology),
Mr. Reinis Sipols (Mining Engineer and Environmental Specialist) and Mr. Dan Peldiak
(Metallurgical Engineer), the latter on a prior study when employed by Coffey Mining.
Star Gold has made every effort to provide access to the property and ensure that all current
and historical technical data, was available for AMPL to review. In addition, Mr. Richard Kern, a
Reno Nevada, USA, based geologist with many years association with Longstreet and vendor of
the property, was most helpful in providing access to historical documents, maps and assays as
well as hosting a site visit. AMPL appreciates the assistance of all those involved.
All measurement units in this report are Imperial unless otherwise stated.
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Star Gold Inc. Longstreet Project Scoping Study 9
3 LOCATION & HISTORY
The Longstreet Project is located in a historically prolific region of mineral production in Nye
County, Nevada, known as Walker Lane. Walker Lane hosts the well-known deposits of Round
Mountain, Mineral Ridge, Bell Mountain and Bullfrog, all current or previous producers.
The project is located approximately 170 miles northwest of Las Vegas and approximately 50
miles northeast of Tonopah, a town of approximately 2,500 people and the seat of Nye County,
in west-central Nevada. The northeast-southwest oriented property is situated within the
McCann Canyon and Georges Canyon Rim, covering 7-1/2 topographic quadrangles, and
extends approximately two miles along strike within the Monitor Range. The approximate
geographic coordinates of the central part of the property are 38° 22’ 00”N Latitude and
116° 40’ 00”W Longitude (Figure 3.1). Figure 3.2 shows an aerial view of the property from
satellite imagery.
The deposit has been known for many years and the property explored on numerous occasions.
Exploration work on the property has included pits, core drilling, RC drilling, an inclined shaft,
three adits and limited underground vertical raising. The deposit has never been mined on a
commercial scale. Figure 3.3 shows the surface plan of the property and Figure 3.4 shows the
underground accesses locations in section view.
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Star Gold Inc. Longstreet Project Scoping Study 10
Figure 3.1 Longstreet Gold Project Location
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Figure 3.2 Longstreet Gold Project Satellite View (north to top of page)
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Star Gold Inc. Longstreet Project Scoping Study 12
Figure 3.3 Longstreet Gold Project - Main Zone
(red line = Resource estimate pit shell, after Agnerian)
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Figure 3.4 Cross-section through Upper Adit
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Star Gold Inc. Longstreet Project Scoping Study 14
4 GEOLOGY
4.1 Regional Geology
The Longstreet property is located in the Monitor Range, a westward-tilted fault block elevated
by normal faults and is part of the Basin and Range Province. The ranges are topographic highs
surrounded by thick alluvium-filled valleys. The southern Monitor Range consists mainly of
Tertiary age volcanic rock related to the Big Ten Peak volcano and a nearby unnamed 29 Ma
caldera intruding and overlying Paleozoic sedimentary and metamorphic rocks.
4.2 Property Geology
The Longstreet deposit is a fossil hot-spring related gold-silver deposit hosted in Oligocene-age
weakly to moderately welded rhyolite volcanic rock (Unit Tat). Mineralization is controlled by
the east-west striking, 40° to 55° north dipping Adit Fault vein and northwest and west-
northwest striking steeply north dipping sheeted veins and fractures. The bulk of the gold-silver
mineralization, termed the Main Zone, is in steeply dipping multiple sheeted vein sets parallel
or sub-parallel to the moderately dipping Adit Fault. Mineralization is associated with quartz-
adularia, clay and pyrite with oxide, transition and sulfide zones. The end of the mineralization
cycle is expressed as a volcanoclastic and sinter member (Unit Ts) with local anomalous gold-
silver values. A barren, post-mineral volcanic unit (Trt) overlies the volcanoclastic and sinter
member. Intruding into the Tat unit are unaltered rhyolite intrusive dikes (Trp) which may be
the feeder zones to the overlying, younger post-mineral volcanic rocks.
Peripheral to the Main Zone deposit are eight target areas with anomalous structure, alteration
and/or gold-silver geochemistry. Nearly all have been explored to some extent with either
angle and vertical air track drill holes or Reverse Circulation (RC) drill holes.
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Star Gold Inc. Longstreet Project Scoping Study 15
5 RESOURCES
The basis of this Scoping Study is a resource estimate (Table 5.1) prepared by Agnerian
Consulting Limited and reported in National Instrument (NI) 43-101 format (a Canadian
reporting standard for the mineral industry). The resource estimate of record is contained in the
report, Technical Report on the Longstreet Gold-Silver Property, Nevada, dated December 15,
2013.
Table 5.1 Mineral Resources - Longstreet Gold Project
Mineral Resources – Star Gold Longstreet Project, Nevada
Category Tonnes Grade (g/t Au)
Contained Ounces Au
Grade (g/t Ag)
Contained Ounces Ag
Indicated 4,394,000 0.64 90,900 15.64 2,210,000 Inferred 304,800 0.48 4,750 14.56 142,700
From: Agnerian, Dec 2013, p65, Table 14-1
AMPL notes that the Agnerian resource estimate applied economic constraints and a
preliminary pit shell, reporting only those resources which were contained by his pit shell.
AMPL does not consider this to be best practice in that economic constraints, which are a key
variable, may inaccurately portray the totality of the mineral inventory at the resource
estimation stage.
AMPL was provided with the Agnerian geological block model, which includes the total mineral
inventory at Longstreet, and its mining engineer applied current economic parameters to
develop an optimized pit shell and thereby estimate a mineable resource.
5.1 Resource Comparison
Star Gold had commissioned two separate 43¬101 reports from different firms for the
Longstreet Property Main Zone. Each study developed different block models based on
different methodologies. The first is that of Agnerian dated Dec 15, 2013 which we have
referenced and which forms the basis of this scoping study. The second report is authored by
Paul Noland titled “Longstreet Project, Nye County, Nevada Revised Technical Review and
Resource Estimate February 16, 2014 (hereafter called the “Noland Report”). Star Gold
requested an analysis of both reports to enable this scoping study to choose the more
technically proficient and appropriate block model.
5.2 Block Model Review
Star Gold requested a Qualified Persons (QP) geologist from AMPL conduct an independent
review of geology block models created independently of each other by Agnerian Consulting
Limited and Noland Engineering, for the Longstreet deposit. The following is an evaluation of
each model, performed by Alan Aubut, P.Geo.
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Star Gold Inc. Longstreet Project Scoping Study 16
5.2.1 Database
The quality of any resource estimate is at its most fundamental level dependent on the quality
of the data used. AMPL has compared the two block models and the methods used to estimate
mineral resources therein. A summary of the key comparisons is provided in Table 5.2.
Table 5.2 Comparison of Agnerian and Noland Block Models
Elements of a Good Resource Estimate
Item Agnerian Noland
1 Mineral Envelop captures just those samples that are part of the mineral
system.
Yes No
2 Block Size is representative of envisioned Smallest Mining Unit Yes No
3 Complete Variography so that samples can be used to measure the range
(distance) over which they show some correlation. These distances can
then be used to select related samples when doing the actual estimation.
Yes No
4 Select an estimation method that is not prone to conditional bias (grade
too high and tons too low), typically a variant of Kriging.
Yes No
5 Also do a parallel model, preferably Nearest Neighbour, to establish a base
line for the global mean which can then be used as a first pass during
validation as all methods should produce essentially the same global
mean.
Yes No
6 Report Resource using only a cut-off as to do otherwise is in effect defining
Reserves which then become invalid if any of the economic criteria have
changed or are incorrect.
No ?
The source database was not provided to AMPL, therefore no specific comments can be made,
but two things should be reviewed that can have unsuitable impacts on a resource estimate:
1) Whether to use absent data rather than setting all unsampled intervals to 0 (zero)
grade; and
2) Use of grade capping.
For 1) where unsampled intervals are present in the estimated mineral domain, the block
estimate is biased high, as all samples with absent data will be ignored. The impact is that block
grades involving such samples would be too high, thus possibly over estimating the grade.
While grade capping is commonly used in the gold mining industry to try and compensate for
the nuggety nature of that type of mineralisation, in actual practice it has no statistical validity.
Thus it should not be used as it can artificially depress the true grades. One Geostatistical
method used to overcome this problem and best suited for highly skewed distributions (a low
grade peak with a long high grade tail) is Multiple Indicator Kriging. Note that this is the method
that was used by Agnerian and is considered Industry Best Practice.
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Star Gold Inc. Longstreet Project Scoping Study 17
5.3 Mineral Wire Framing
A critical element of any resource estimate is the definition of the mineral domain through the
use of wire frames. These wireframes need to isolate samples that can be considered part of
the mineralised system from samples that are not. To do otherwise introduces a serious bias.
In the case of the Agnerian model, there are five domains, one for the Main Zone and four for
the Footwall Zone. All domains are reasonably well constrained and eliminate large areas
barren of mineralisation.
On the other hand, the Noland model used a single domain that is far too large and
encompasses everything from no grade to high grade. This introduces several serious biases
including:
Allowing the spreading of grade far beyond where gold would reasonably be expected to
occur.
Allowing areas to be under estimated because too much low grade material has been
used in any one particular block estimate.
Sample sections showing the two models are presented in Figures 5.1 and 5.2.
Figure 5.1 Sample section of Agnerian geological model
Note the domains constrain the model to just those portions that are mineralised.
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Star Gold Inc. Longstreet Project Scoping Study 18
Figure 5.2 Sample section through Noland model (same section)
Note the single domain which does a poor job of constraining the model and allowing trends different than those demonstrated by the Agnerian model as shown by the heavy gray lines. Also note how, in general, the mineralized areas of the Noland model are larger.
While the Agnerian domains can be considered up to Industry Standards, the Noland single
domain cannot.
5.4 Sample Capture and Compositing
The use of 5 foot drill core composites for sampling and assaying is quite reasonable. The
Agnerian domains captured only those areas with mineralisation, except where more recent
drilling has taken place. Due to its large size the Nolan Domain rejected only a minor number of
samples.
5.5 Variography and Variogram Modelling
Variograms are the measure of similarity between samples with increasing distance from the
drill intercept point. As such, variograms allow the determination of what samples are to be
selected based on the samples themselves, rather than an arbitrary number. Likewise,
variogram models provide a means of calculating sample weights as determined by the samples
and their innate relationship between one another. The use of variograms therefore provides
the least biased method of determining sample weights when doing resource estimation.
Kriging is the one estimation method that takes full advantage of these characteristics of
variograms and as such is considered Industry Best Practice.
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Star Gold Inc. Longstreet Project Scoping Study 19
The Agnerian report provided examples of variograms for both gold and silver. Several
observations can be made:
- The variograms are well formed indicating that the drilling density and sampling was
adequate for generating reliable variograms, thus confirming there is enough data to
allow the use of Kriging.
- The variogram models are good with a reasonable nugget effect and all variograms are
indicative that Industry Standard Practice, at least, has being followed.
The Noland modelling did not use variography, instead relying on “known geologic trends at the
project site, mirroring parameters of a decade of hand-drawn resource calculations”. While this
cannot be considered a “Fatal Flaw” (an error that in itself would invalidate the estimate), it
does not meet the threshold of current Industry Standard Practice.
5.6 Block Model Definition
A term commonly applied to each individual block in a block model is Smallest Mining Unit, or
SMU. The block modelling practitioner, with advice from a mining engineer if available, must
make a decision as to what type of mining will likely take place, keeping in mind the amount of
selectivity anticipated.
The Agnerian model uses blocks that are 20 feet cubed and in line with what would be
considered the smallest mining unit for open pit mining.
While not considered a fatal flaw, the SMU used by Noland is considered too small as 10 foot
square blocks are more appropriate for underground mining where these dimensions would
approximate a single blast round. As a result the estimated grade by Noland, especially for the
higher grade blocks, is likely to be significantly higher than will be experienced in practice as the
deposit is likely to be mined by open pit methods.
5.7 Estimation Search Criteria
Any block modelling method is only as good as the search criteria used in the estimation
process. A potential source of bias is the use of samples from too few drill holes. This can be
alleviated by using an octant search methodology (the search ellipsoid is divided into 8 parts, or
“octants” based on the 3 primary planes) and then making sure samples from enough octants
are used to ensure suitable distribution in 3D space.
The Agnerian and Noland searches used similar ranges with the former being determined from
variography. Both used a nested search approach with the latter involving doubling of the
initial search ranges.
In the case of the Agnerian model too few samples were used. Only samples from a maximum
of two holes were used and a maximum of eight samples in total. The octant search method
was not used thus allowing results to be biased to isolated parts of the block.
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Star Gold Inc. Longstreet Project Scoping Study 20
At the time of writing of this review no information was available for the actual search strategy
used by Noland, other than the aforementioned search ranges.
5.8 Statistical and Visual Checks of Model
Industry Standard Practice is to conduct two estimates using two different estimation methods
as the global mean should be essentially the same no matter what method is used. A good
starting point for example is to create a Nearest Neighbour model. This method relies on using
the nearest sample for estimation and is very similar to the old polygonal method. While locally
biased it does provide a reliable source for determining the global de-clusterised mean, yet is a
method where it is difficult to make a mistake.
The Agnerian model was estimated using Kriging and Nearest Neighbour and the mean grade
for each is within 5% of one another, as would be expected, providing confidence in the
estimate.
Noland, on the other hand, only created an Inverse Distance model so there is nothing to
compare the results of this model with to ensure it meets the fundamental requirement of
maintaining the global mean. Further, it would be misleading for the reviewer to compare the
mean of the model with that of the drill holes as the latter have significant built in bias due to
clustering (too many samples in isolated pockets, typically in high grade areas).
A standard check is to make sure the block grades are reasonably spread out and honour the
grade values ascribed to the relevant drill holes. The Agnerian block model matches the
informing holes reasonably well. The Noland model shows significant bias in areas due to the
unconstrained nature of the domaining, as well as a result of using the Inverse Distance method.
These two issues combine to form “bulls eyes” in areas with poor sample availability, with the
high grade core much larger than can be supported by the available drill data (see Figure 5.3).
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Star Gold Inc. Longstreet Project Scoping Study 21
Figure 5.3 Detailed section through Noland geologic model
The section in Figure 5.3 shows: 1. poor correlation with the informing drillhole; 2. does not honour the established geologic trend due to the use of too large of a
domain; and 3. shows a serious bias as illustrated by the “bulls eye” effect common with Inverse
Distance and poorly sampled areas.
5.9 Resource Reporting
A resource estimate should be the best estimate possible using the available data. Various
mineral resource reporting codes around the world specify that a mineral resource must “have
reasonable prospects for economic extraction”. The key words here are “reasonable” and
“prospects”:
Reasonable – as much as is appropriate or fair; moderate.
Prospect - the possibility or likelihood of some future event occurring.
Note the vagueness of the two definitions! And there is good reason as there are many factors
that typically are not known at the time that an estimate is generated that will determine
whether or not economic extraction is possible. These factors include metallurgy, access to
infrastructure and metal prices, all of which can and will change with time. But a resource
estimate should be a snap shot that can stand on its own merits.
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Star Gold Inc. Longstreet Project Scoping Study 22
It is said that mines are made and not found. The same cannot be said of the resource as a
mineral resource can only be found, not manufactured; although the confidence in the resource
may be improved through the application of direct testing methods such as diamond drilling
and bulk sampling.
Thus for a mineral resource to be useful in the future, factors that are beyond the control of the
person who generates the estimate should not be applied to defining the resource – factors
such as metal price and metal recovery. To do otherwise introduces a serious bias in that the
quantities reported will be incorrect if any of these factors change.
Agnerian has used an approach that introduces a serious time sensitive bias (though also used
by other consultants in open pit resource estimates). The Agnerian report is based on the
application of a pit “shell” design that in itself is based on metal prices and recoveries that will
most certainly change. The resulting “in-pit” resource thus gives an unclear measure of the
entirety of the mineralization – information that is very important if there is a change in
commodity prices or gold recovery techniques.
This review did not encounter information in the Noland resource report that would indicate
the methods employed, or constraints applied, for the resource estimate methodology,
therefore no comment is made thereon.
5.10 Conclusion
The Agnerian model in general applied Standard to Best Industry Practice methodology. While it
is deficient in some areas, specifically the search strategy employed, none of the deficiencies
are considered Fatal Flaws that would invalidate the estimate.
A number of serious issues were found in the methodology used and the application of block
modelling techniques by Noland. These issues include lack of the application of variography, use
of Inverse Distance estimation and improper domaining. While none of the issues can be
considered a Fatal Flaw in that it resulted in a gross error of the estimate, they do result in a low
confidence in the estimate which would relegate the mineral resources to the Inferred category,
in the opinion of AMPL.
5.11 Geology and resource estimate recommendations It is recommended that any mine design work be conducted using only the Agnerian model:
1) The table of resources should not use any control other than a grade cut-off, as to do
otherwise introduces a time sensitive bias.
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Star Gold Inc. Longstreet Project Scoping Study 23
6 GEOTECHNICAL AND HYDROGEOLOGY
6.1 Regional Hydrogeology
The Longstreet Mine is located in the Monitor Range of the Great Basin section of the Basin and
Range physiographic region. The Basin and Range is largely an arid region encompassing the
majority of the western United States; its topography is characterized by alternating narrow
faulted mountain ranges and flat fault bound valleys (basins). The Great Basin, as a section of
the Basin and Range region, follows the same topographic characteristics with notable internal
surface and subsurface hydrologic drainage.
The aquifer system within the Great Basin generally comprises aquifers in unconsolidated
alluvial fill, sedimentary and volcanic deposits in fault bounded basins, and in various bedrock
lithologies of the mountain ranges that drain into the separate basins. The mountain range
bedrock units often underlie the basins. The basic hydrogeologic model is illustrated in Figure
6.1. The mountain range consists of consolidate bedrock with limited unconsolidated alluvial fill.
The bedrock in the mountain ranges generally is less porous and permeable rocks compared to
the basins’ bedrock. These rocks are characterized by fractured flow conditions. The resulting
lower permeability impedes groundwater flow and the fractured flow conditions in many cases
limit the groundwater volume available as a resource. (3)
One of the limiting factors for water availability in the Great Basin is the low water recharge to
the local aquifers due to the limited precipitation in the area (3,4). The Great Basin resides in
the rain shadow of the Sierra Nevada Mountains thus precipitation is limited and irregular; the
least precipitation occurs in the valleys and the greatest in the mountains (2, 3, 5). Winter
precipitation generally consists of snow, and summer precipitation is characterized by localized
high intensity rain (4). Geologic evidence and recorded history indicate the intense rain storms
may result in flooding of the major rivers and the “dry” washes (4), and due to the arid
conditions the evaporation rate is high. Precipitation that does not evaporate either percolates
into the subsurface or moves as surface runoff into the valley basins (2, 5) thereby the basin
aquifers are recharged. As illustrated in Figure 6.1, both the surface runoff, and the
groundwater in the ranges flow into the valley basins, therefore the valleys are the best sources
of water.
6.2 Local Hydrogeology
Limited information is available regarding the actual water resources that exist within the
Monitor Range where the Longstreet project is located. Three springs are mapped on the
eastern edge of the Monitor Range: the Painted Rock Spring, Side Hill Spring, and Four Mile
Spring. All of the springs are relatively close to the Longstreet deposit. They are located at or
near the topographic transition between the Monitor Range and the Stone Cabin Valley. The
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Star Gold Inc. Longstreet Project Scoping Study 24
Figure 6.1 Great Basin Hydrogeology
existence of springs indicate potential exploitable groundwater in the bedrock, and/or the
alluvium of the ephemeral streams that flow east out of the Monitor Range. The volume of
water flowing from the springs, and any seasonal variation, is not known. The Side Hill Spring is
the closest; it is located approximately 1.5 miles east of the Longstreet mine.
The greatest potential source of groundwater is Stone Cabin Valley. The valley has a drainage
area of 961 square miles with a net recharge to the basin of 16,000 acre feet of water per year.
In 1962, the cumulative ‘loss/use’ via evapotranspiration and reclamation was estimated to be
2,000 acre feet per year (2). Since 1962 no significant development has occurred to alter this
‘loss/use’ estimate. This difference between recharge and discharge rates indicate this
groundwater resource could supply a substantial amount of water without significantly
lowering the groundwater levels or negatively affecting existing groundwater use within the
valley.
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Star Gold Inc. Longstreet Project Scoping Study 25
Stone Cabin Valley is principally utilized as livestock range. The Clifford Ranch is the only
identified active ranch in Stone Cabin Valley. The ranch is located approximately 12 miles south-
south east of the mine site. Five Mile Spring is located at this ranch.
At Mud Lake, Stone Cabin Valley surficially drains into Ralston Valley. A well field exists in the
Ralston Valley supplying water to the City of Tonopah. The water from this field is transported
the 15 miles to Tonopah by pipe.
6.3 Mine Site Hydrogeology
No information is currently available regarding the presence of water at the mineral project site.
Preliminary interpretation regarding the potential availability of water can be predicated with
the existing geological maps created by previous mine owners. The maps indicate that the
Longstreet property is underlain predominantly by Oligocene Epoch moderately–to poorly-
welded tuffs with common lithic and pumice fragments. Four lithologic units have been
described at the Site (1):
“Welded Ash Flow Tuff (Tat) -This rock is buff to grey, and contains <10% fine-to medium-
grained quartz phenocrysts, 15% fine-to medium-grained feldspar phenocrysts, 5% to 15%
medium to coarse-grained pumice, and 5% to 20% other “exotic” fragments in an aphanitic
groundmass. The rock displays horizontal bedding and may be up to 3,000 feet thick. It exhibits
pervasive hydrothermal alteration consisting of argillic alteration (bleaching and clay mineral
development), silicification (quartz flooding and/or networks of numerous quartz veinlets), and
potassic alteration (adularia in quartz veinlets). Supergene limonitic and goethite alteration
overprint the hydrothermal alteration.
Rhyolitic Porphyry Dike (Trp) - Rhyolitic porphyry dikes of various orientations intrude the Tat
unit, and may be associated with the heat source of the mineralizing fluids at Longstreet.
Siliceous Sedimentary Rock (Ts) - A thin unit of white, yellowish and grey, volcaniclastic and
siliceous rock (including sinter) intermittently overlies the Tat unit. Silicic alteration is evidenced
by sheeted quartz veins.
Welded Tuff (Trt) - Black to brown, strongly welded tuff occurs along ridges and overlies the Tat
and Ts units. This unit is 330 feet to 400 feet thick and has a distinctive thin (approximately 3
ten-feet) vitrophyre zone near its base.”
This indicates the welded tuffs have a limited capacity to store water (porosity), or allow water
to flow (permeability). The welded strength of the tuff affects porosity and permeability: the
greater the welding, the lower the porosity and permeability. Therefore the strongly Welded
Tuffs, by definition, have low porosity and permeability (6). The Welded Ash flow tuff and the
Welded Tuff are interpreted to be dense and relatively impervious rocks. The Siliceous
Sedimentary Rock offers a potential porous media for groundwater however its thickness may
limit the volume of water that it can store. No information is available regarding the presence of
water in these lithologic units.
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Star Gold Inc. Longstreet Project Scoping Study 26
Suggested locations for potential well sites are identified in Figure 6.2.
Figure 6.2 Water well search location recommendations
Well Location Option 1 is approximately 0.7 miles from the Longstreet Project. Water is
expected but volume and sustainability is unknown. The location is chosen because the surface
drainage is at the intersection of three sub-watersheds.
Well Location Option 2 is approximately 5 miles from the Longstreet Project. Water is expected
with the necessary volume and sustainability. This location is at the valley centre and assumed
to be the best location for water production. Other locations can be identified between this
site and the entrance to Windy Canyon that could potentially supply the volume and long term
sustainability requirements of the Project.
6.4 Hydrogeology conclusion and recommendation
Water sourcing is the largest technical risk factor, particularly to capital expenditures and
operating cost estimates. Ideally a well source will be identified and thus avoid the added cost
of piping water to the site from Five Mile Spring on Clifford Ranch, currently the nearest
identified water source, 12 miles from the Project site. It is not known if Five Mile Spring
produces adequate volume nor if the owner of Clifford Ranch would agree the sale of water
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Star Gold Inc. Longstreet Project Scoping Study 27
from the spring. Preliminary investigations have identified two potential sources of well water;
one mile to the NE in the Monitor Range and approximately five miles east in Stone Cabin Valley.
A hydrological study is recommended to identify proximal water sources of adequate volume to
sustain the Longstreet operation.
6.5 Geotechnical
Geotechnical descriptions of the rock at the Longstreet Property were not available for review.
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7 MINING
7.1 Potentially Mineable Mineral Resource – Pit Optimization
The potentially economic mineral resources were defined as those blocks falling within an
optimized pit shell derived from the economic parameters shown in Table 7.1. The unit costs
used in the pit optimization process were based on preliminary estimates and general
knowledge of mining, processing and general and administration costs for similar type
operations. The pit optimization was conducted using Mintec MineSight Economic Planner
2.60-00 pit optimization software.
Table 7.1 Floating cone pit optimization parameters
Parameter Value used in Floating Cone Pit Optimization
Gold price $1,350/ troy ounce
Gold recovery 86%
Gold transport and refining charge $4 /troy ounce
Silver price $24
Silver recovery 15%
Waste mining cost $3.00 / ton
Mineralized material mining cost $3.50 / ton
Heap leach crush and place cost $3.50 / ton
Processing cost $3.65 / ton
General and Administration cost $2.01 / ton
Assumed pit slope angle 50°
Base cone radius 40 feet
The potentially mineable mineralization was determined using a breakeven cut-off where
revenue is equivalent to marginal costs. The $9.16/ton breakeven cut-off, derived from the
sum of the estimated processing and G&A costs, does not include mining costs as all material
contained within a shell is considered mined and sent either to the waste dump or the leach
pad.
The 50° pit slope angle has been assumed and is based on the experiences of other mining
operations in the region. There may be an opportunity to steepen the pit slope but this would
need to be demonstrated by a geotechnical investigation and assessment as part of future
studies.
The geological block model developed by Agnerian Consulting Ltd. as reviewed by A. Aubut of
AMPL was found suitable for use in this internal scoping study – see also Mining Conclusions
and Recommendations.
The in-pit potentially mineable mineral resources estimate is shown in Table 7.2 and may be
materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing
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Star Gold Inc. Longstreet Project Scoping Study 29
or other relevant issues. The mineral resources estimate takes geologic, mining, processing and
economic constraints into account, are confined within a pit shell, and are classified in
accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves.
Table 7.2 In-pit Mineral Resource Estimate
Mineral Resource Category
Short Tons Au (oz / ton)
Ag (oz / ton)
Indicated 3,982,339 0.0219 0.5207
Inferred 225,455 0.0189 0.6076 1. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
2. The quantity and grade of reported Inferred Resources in this estimation is uncertain in nature and there has
been insufficient exploration to define these Inferred Resources as an Indicated or Measured mineral resource,
and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral
resource category.
3. The mineral resources are reported within the optimized pit shell that was used to assess reasonable
prospects of economic extraction. The mineral resources estimate excludes external dilution and mining
losses.
Plans and sections of the pit shell are shown in Figures 7.1 to 7.5.
The in-pit potentially mineable mineral resources estimate was prepared using Mintec
MineSight Economic Planner pit optimization software, and the geological block model for the
Longstreet Star Gold deposit received on January 6, 2014.
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Figure 7.1 Pit shell aerial view
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Figure 7.2 Pit shell longitudinal section, 13,935,430E
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Figure 7.3 Pit shell longitudinal section 13,935,430E with topography
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Figure 7.4 Pit shell cross-section 13,934,000N
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Figure 7.5 Pit shell cross-section 13,935,145N
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Star Gold Inc. Longstreet Project Scoping Study 35
7.2 Mining Method
The topography at Longstreet is advantageous for open pit mining in that there is very little
waste rock that must be stripped prior to the commencement of production mining operations.
Year 1 of the mining schedule will deliver the scheduled ROM tonnes and excavate necessary
waste rock. There is no requirement for a capital allocation to pre-strip the planned open pit
mine.
Pre-production work would include establishing the main haul road to the heap leach and
surface road to mine facilities including explosives magazines.
The open pit would be mined using conventional mining equipment and technologies.
Mineralized material and waste rock would be blasted, excavated, loaded and hauled to either
the waste rock management area or the heap leach crusher. It is assumed that a contractor
would develop and operate the pit, crush the mineralized material, place and spread the
mineralized material on the leach pad and prepare the surface of the stacked material using a
ripper. The type of equipment used would depend upon the contractor’s equipment
preferences and available fleet. It is envisaged that 20 foot benches would be used in the pit
and that the contractor would use conventional mining equipment such as a track-mounted drill,
hydraulic excavator, wheel loader, 40-ton class trucks and bulldozers. It is expected that the pit
would operate 350 days per year and the mining fleet sized accordingly.
It is assumed that the pit would be dry and that a conventional diesel-powered pump would
only be required from time to time to dewater the pit sump.
This study considers that the mining contractor would supply its own equipment and shop and
that the pit access road and minor pre-stripping would be done concurrent with the
construction of the leach pad.
It has been assumed that the mine owner would manage the project and provide technical
services.
7.3 Mining Schedule
The mine schedule is based on the optimized pit plus mining dilution (5%) and losses allowances.
The total tons of material that would be mined from a designed pit would be expected to add
marginally to the strip ratio. The impact on the economics of the operation are minimal.
Mining activities have been planned and scheduled to address pre-stripping of waste rock, ore
and waste rock mining throughout the life-of-mine (LOM). The design team selected a run-of-
mine (ROM) ore production rate of one million short tons per year, forming the basis for the pit
design and the processing systems. The mineral resources incorporated into the pit shell are
adequate for 4.4 years of ROM production. The LOM strip ratio is a favorable 0.7 tons waste : 1
ton ore.
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Star Gold Inc. Longstreet Project Scoping Study 36
The mine schedule shown in Table 7.3 makes use of Inferred Mineral Resources. The scoping
study is preliminary in nature and includes Inferred mineral resources that are considered too
speculative geologically to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no certainty that the results
indicated in the scoping study will be realized.
Table 7.3 Mine Schedule
Item Year LOM
-1 1 2 3 4 5
Leach pad feed
(k ton)A
Au (oz / ton)B
Ag (oz / ton) B
1,000
0.0217 0.5254
1,000
0.0217 0.5254
1,000
0.0217 0.5254
1,000
0.0217 0.5254
418
0.0217 0.5254
4,418
0.0217 0.5254
Waste rock
(k ton)
697
697
697
697
291
3,081
Strip ratio 0.7
A Leach pad tonnage includes a net 5% allowance for mining dilution and mining losses. B Average grade assumed delivered to leach pad over LOM.
7.4 Mine Closure
The regulatory requirements for mine closure and site reclamation are well established in
Nevada. A tentative permanent closure plan would need to be submitted at the time of the
application for a Water Pollution Control Permit, and the final permanent closure plan would
need to be submitted two years before the anticipated closure of the site. The final closure
report must be submitted to the Nevada Division of Environmental Protection, Bureau of
Mining Regulations and Reclamation following the completion of closure to demonstrate that
the Waters of the State will not be degraded, and propose the post-closure monitoring program
to regulators.
The Longstreet Project is still at the conceptual stage and a tentative permanent closure plan
has not yet been developed. The plan would be expected to encompass but not be limited to
the collection and responsible treatment and/or the permitted disposal of process solutions,
reagents and hazardous wastes, used oil, and non-hazardous materials and wastes; the orderly
removal and/or demolition of process equipment and buildings; closure works to ensure that
the pit and stockpiled mine materials are left in physically and chemically stable conditions; the
access road would be reclaimed; controls would be put in place to prevent inadvertent access
into the mined-out pit; run-on interception and diversion ditches; contact water interception
and management; dust control measures; and other measures to protect human health and the
ecology over the long term; and a monitoring program to provide data to demonstrate the
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Star Gold Inc. Longstreet Project Scoping Study 37
effectiveness of the closure works and site reclamation. The cashflow model for the project
includes a closure and reclamation cost allowance.
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8 METALLURGICAL TESTWORK and MINERAL PROCESSING
8.1 Historical metallurgical sampling and test work
A pre-feasibility study was conducted on the Longstreet project in 1988 by Mining Engineering
Services. Metallurgical test work was performed in support of the pre-feasibility study, which
consisted of bench scale bottle roll tests on 10 samples composited from 31 drill hole
composites. These samples were crushed to -10 Mesh (Tyler Series) and used in the bottle roll
tests. Results from the test work indicated that a gold recovery between 82.1% to 87.2% could
be achieved along with a silver recovery which ranged between 28.3% to 57.9%.
In addition, a large bulk sample was collected from three surface pit sites and four underground
sites. It is not known as to how the underground samples were collected. The bulk sample was
screened and split into six individual samples for further metallurgical testing. Test work was
carried out on +3 inch (+76mm) material for bucket tests, -3 inch material for column tests and -
1/4 inch (6.35mm) material for column tests. Test results indicated that gold recovery for the +3
inch material ranged from 50% to 63%, gold recovery for the -3 inch material ranged from 68%
to 87%, and gold recovery for the -1/4 inch material ranged from 86% to 90%. Results are listed
in the Table 8.1.
Table 8.1 Metallurgical Testwork Results, (c. 1988)
For material similar to that tested, Kappes, Cassiday & Associates (KCA) estimated field heap
leach recoveries to be 85% for gold and 20% for silver using ¼-inch material.
In April of 2012, Paul D. Nol and KCA published a Technical Review and Resource Estimate for
Star Gold, in which they reported results obtained from a previous test work program by Harron
(2003) and MDA (1988). The test program involved compositing numerous oxide drill intercept
cuttings in which bottle roll tests were performed on 10 samples. Average gold recovery results
for -10 Mesh samples were 85.4% gold and 37.9% silver recovery in 72 hours. KCA then
conducted column tests on three samples to test the responses of low, medium and high grade
material from underground. After crushing to -3/4 inch (19 mm) the samples averaged 82% gold
Size Days Leached
Au g/t Ag g/t Au Ag
+76 mm(s) 44 0.342 11.51 63.6 <1.0
+76 mm(u) 44 0.995 41.06 50.0 4.6
-76 mm(u) 45 1.275 37.01 87.8 10.9
-76 mm(s) 45 0.778 16.48 68.0 15.1
-6.35 mm(s) 42 0.684 14.93 86.4 25.0
-6.35 mm(u) 42 1.026 33.90 90.9 23.9
(s) -surface
(u)- underground
% RecoveryCalculated Head
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Star Gold Inc. Longstreet Project Scoping Study 39
and 29% silver recovery. Crushing to -6 mesh 0.132 inches (3.6 mm) increased recovery to 93%
for gold and 52% for silver. According to the test work conducted those are the expected
recoveries for an open pit heap-leach operation at Longstreet. The data was generated 25 years
ago, on underground samples only.
KCA also conducted agitated cyanide tests on pulverized material and obtained 92% gold and
81% silver recovery. These are the recoveries expected in a conventional mill utilizing a fine
grind.
Column leach tests were also conducted on behalf of Bacon-Donaldson Engineering on -2 inch
(50 mm) material. Recoveries varied from 85% to 90% for gold and 9% to 28% for silver, with
underground samples being more amenable to leaching than surface samples. It appears the
oxide zone of the Main deposit has reasonable leaching characteristics for gold although silver
recovery is poor.
The current resource estimate identifies two main types of mineralization near surface: “oxide”
mineralization associated with limonitic pseudomorphs of pyrite, and “sulphide” mineralization
associated with disseminated pyrite. The oxide mineralization was the focus of the 1988 pre-
feasibility study which achieved recoveries of approximately 90% for gold and 25% for silver
based on column leach tests utilizing a feed size of ¼ inch (6 mm). Later tests on coarser oxide
material of -2 inches (50 mm) resulted in recoveries of 90% for gold and 28% for silver indicating
high gold recoveries can be achieved using coarse material. These results contradict current
findings as results obtained in lab bottle roll tests indicate that crush size does not have a
significant impact on silver recoveries and that current adit samples used in column tests
exhibited inferior leaching kinetics as compared to surface test samples.
8.2 2013 Sampling for metallurgical testwork
Joseph A. Kantor of JAK Exploration Services, LLC supervised the collection of approximately
1,720 pounds (780 kg) of mineralized samples for the Longstreet project, compliant with NI 43-
101 QA/QC guidelines. The samples that were collected were used for the 2013 metallurgical
test program at McClelland Laboratories in Sparks, Nevada.
Eighteen large surface samples were collected from three historic test pits (six samples from
each). In addition, a total of 13 horizontal and 6 vertical channel samples were collected from
the underground Upper Adit. Geologically, the underground and surface samples represent
two distinct geological structural domains. One structural domain includes the Longstreet vein
(coincident with the Adit Fault) and its hanging wall. The second structural domain is the
footwall of the Longstreet vein. The current resource is hosted in both structural domains.
Underground sampling started about 180 feet in from the Upper Adit portal. Refer to Figure 8.1
for a diagram of adit sample locations. Horizontal samples are shown in Figure 8.1 as long
pencilled lines (along the northwest to southeast drift) and vertical samples shown as short
pencilled lines on east-west drift. Continuous 10-foot long horizontal channel samples were
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Star Gold Inc. Longstreet Project Scoping Study 40
collected from 180 feet to 310 feet. A series of 6 vertical channel cuts, each approximately 6
vertical feet in length were collected every 10 feet along the vein in the westward drift.
A tungsten carbide-tipped saw was used to cut two parallel to sub-parallel two-inch to three-
inch deep slices in the adit wall. A sledge hammer and chisel were then used to take a
representative channel sample. Horizontal samples were labelled with the footage interval,
starting with 180 to 190 feet. From 180 to 270 feet, all samples were collected from the
western face of the adit. From 290 feet to 310 feet, sampling continued on the eastern face.
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Star Gold Inc. Longstreet Project Scoping Study 41
Figure 8.1 Location of Underground Adit Samples
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Star Gold Inc. Longstreet Project Scoping Study 42
The 13 continuous horizontal samples are each 10 feet long and the six vertical samples are
about six feet long from the back (top) of the drift (tunnel) to the floor of the drift.
Surface pit samples #1, #2 and #3 consisted of approximately 70%, 50% and 10% respectively,
from in-place pit walls with the remainder from loose blocks. These three pits were the source
of the original surface metallurgical samples used during the 1987 KCA testing. Based upon the
excavation outline in the pit walls, it appears that the original metallurgical samples consisted of
the silicified material with the high-clay content material avoided. For this 2013 bulk sampling
campaign, the pit #1 and pit #2 samples included high-clay content material in an amount about
equal to the bedrock exposure. Pit # 3 hosted very little clay-rich rock. Except for the clay-rich
samples, all samples collected were at least four inches to a maximum of about 10 inches in at
least one dimension. The mix of rocks collected at each pit was generally random and is
considered representative of the bedrock exposure. Refer to Figure 8.2 for location of surface
samples.
Figure 8.2 Approximate Location of the Three Surface Sampling Pits (shown in red)
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Star Gold Inc. Longstreet Project Scoping Study 43
All of the bulk samples collected were either from surface exposures or at an approximate
maximum of 130 feet below the Upper Adit. No bulk samples were obtained from areas that
would be considered as the transitional or mixed oxide-sulphide zone.
8.3 Gold-Silver Mineralogy
An extensive search using Scanning Electron Microscopy/Energy Dispersive Spectroscopy
SEM/EDS indicates silver phases are present in both head and tail samples, however, gold was
not identified. Silver sulfide is the main silver phase and occurs as irregularly shaped inclusions
in quartz, pyrite and goethite pseudomorphs after pyrite. Cube-like grains are also seen in
quartz and likely represent pseudomorphs of acanthite after argentite. Grain size of the silver
sulfide is very fine with measurements that range from 0.5μm up to approximately 5μm. Silver
sulfide is also seen as thin rinds around pyrite and as small inclusions in jarosite. Much of the
jarosite in these samples analyzed by EDS contains low but detectable silver. The jarosite
contained in the samples is potassium jarosite, however, vague bright areas in large masses are
discernable using backscatter imaging. These areas are silver rich and likely represent
argentojarosite intimately mixed with the more abundant potassium variety. One small grain
having a chemistry of Hg, Br, Cl and Ag was identified as an inclusion in quartz with a
measurement just over 1 μm (one millionth of a meter). This phase may represent capgaronnite
or possibly iltisite. The primary reason for low silver recovery in this material appears to be due
to the very fine grained nature of the silver sulfide, which should leach easily if liberated or
exposed. In contrast, silver bearing jarosites tend to be refractory and are usually unaffected by
leaching.
8.3.1 Sulfide Mineralogy
Sulfides are present as a trace with pyrite as the main sulfide. Pyrite occurs as minute cubes and
drop-like grains that vary in size from <1μm up to approximately 20μm. Most grains are
unaltered but a small population wear thin goethite jackets. A trace of chalcopyrite is present
and shows no apparent decay.
8.3.2 Oxide Mineralogy
Both samples contain low amounts of iron oxide with hematite and goethite as the main iron
minerals. Hematite occurs as small rosettes, thin strings and small pockets. Goethite is generally
seen as euhedral pseudomorphs after pyrite. Yellow limonitic iron oxide is in the form of
irregularly shaped masses or intermixed with kaolinite. Secondary rutile forms small aggregates
and honey colored prisms in quartz.
8.4 2013 Metallurgical Test Program
The 2013 metallurgical test work program was conducted by McLelland Laboratories under the
direction of a QP metallurgical engineer contracted by Star Gold. The program included bottle
roll tests, column tests and comminution tests and mineralogical examination.
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Star Gold Inc. Longstreet Project Scoping Study 44
8.4.1 Section Sample Assays
A total of 65 underground adit samples weighing 816 pounds (370kg) and three surface samples
weighing 904 pounds (410kg) were collected for metallurgical testing. Each of these samples
were crushed to 100% -2 inches (50mm) and assayed for gold and silver in duplicate. Assay
results are listed in Table 8.2. Samples were combined to generate surface and underground
composites, as well as a blended master composite. Triplicate direct assays were conducted on
each composite. Standard deviations between triplicate head assays were high, particularly for
the surface master composite. The agreement between the triplicate splits was not good,
however the average of the triplicate assays is close to what was expected, based on the
section assays. It was noted that the Quality Control samples all checked out as well, which
indicates that the assays are good and the gold occurrence in the potentially economic
mineralization is just a little “spotty”.
Table 8.2 Gold Head Assays and Head Grade Comparisons
Longstreet Composites
SMC, g/mt
UMC, g/mt
BMC, g/mt
Determination Au Ag
Au Ag
Au Ag
Direct Assay, Init. 0.21 17
0.70 67
0.57 40
Direct Assay, Dup. 0.67 34
0.82 63
0.66 41
Direct Assay, Trip. 0.37 21
1.09 53
0.77 50
Average 0.42 24
0.87 61
0.67 44
Std. Deviation 0.23 9
0.20 7
0.10 6
A total of twenty pieces of rock from both underground and surface were selected for
comminution testing. The remainder of the samples were separately stage crushed to 100% -2-
inches (-50mm). Each of the underground and surface samples were then blended to form a
master composite representing both the underground and surface samples. The blended
sample was then split to generate a third master composite. Samples were collected for bottle
roll tests. All composites were then further crushed to 80% -3/4 inch (19mm), blended, then
split into 75kg lots for column testing.
Selection sample assay results and detailed blending procedures are provided in the Appendix
to this report.
8.4.2 Bottle Roll Testing
A bottle roll test was conducted on each of the three composites at an 80% -10 Mesh (1.7mm)
feed size to determine lime requirements for column leach testing. Gold and silver recoveries
were similar for all three composites. Gold recoveries ranged from 80.6% to 81.9% and silver
recoveries ranged from 17.5% to 20.0%.
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Star Gold Inc. Longstreet Project Scoping Study 45
Additional bottle roll tests, at a cyanide concentration of 1.0g NaCN/L were conducted on the
blended master composite at feed sizes of 100% -2 inches (50mm), 80% -3/4 inches (19mm) and
80% -1/4 inch (6.3mm) to determine sensitivity to feed size. The blended master composite
showed a moderate sensitivity to feed size with respect to gold and silver recovery. Recovery
was 18.4% higher for gold, and 13.9% higher for silver, at a feed size of 80% -1/16 inches
(1.7mm) than at a feed size of 100% -2 inches (50mm).
Silver recovery, for each bottle roll test conducted, was low. In order to investigate the cause of
the low silver recovery, three additional bottle roll tests were conducted on the blended master
composite to determine response to increased cyanide concentration (5.0g NaCN/L) at typical
heap leach (80% -3/4 inches, 80% -1/4 inches) and milled (80% -200 Mesh (75µm)) feed sizes.
Results showed that increasing the cyanide concentration did not significantly increase silver
recovery at heap leach feed sizes, however, silver recovery increased substantially when feed
was finely ground. Silver recovery was 60.6% from the bottle roll test conducted on 80% -200
mesh material. Gold recovery was also moderately higher when fine grinding was employed.
Mineralogical analysis of head and tail samples of the blended master composite confirm that
the primary reason for low silver recovery is due to the very fine grained nature of the silver
sulfide, which when exposed, is readily leachable. The silver leach rate at 200 mesh was
extremely fast. Silver recovery was complete within the first two hours, which suggests that the
silver mineralization is very fast leaching once liberated. In contrast, silver-bearing jarosites tend
to be refractory and are usually unaffected by leaching regardless of the grind size.
Summary results from bottle roll testing are given in Table 8.3. Detailed bottle roll test data including leach rate figures, are provided in the attached spreadsheet.
Table 8.3 Bottle Roll Test Results, 2013
Both gold and silver recoveries are slightly improved with increased crush size, the increase in recovery is more pronounced in the silver as compared to gold when a fine grind is applied. Figure 8.3 illustrates this. It is important to keep in mind that in order to reduce the particle size to 80 % passing 75 microns a conventional comminution circuit employing crushing and grinding would be required.
NaCN Au Ag
Feed Conc. Recovery, Calculated Head Recovery, Calculated Head
Composite Size g/L % Extracted Tail Head Assay % Extracted Tail Head Assay NaCN Cons. Lime Added
SMC 80%-1.7mm 1.0 80.6 0.25 0.06 0.31 0.42 20.0 5 20 25 24 0.08 2.1
UMC 80%-1.7mm 1.0 81.9 0.68 0.15 0.83 0.87 18.9 10 43 53 61 0.13 3.4
BMC 100%-50mm 1.0 62.9 0.44 0.26 0.70 0.67 3.6 2 54 56 44 0.07 1.3
BMC 80%-19mm 1.0 67.1 0.51 0.25 0.76 0.67 12.8 5 34 39 44 0.07 2.1
BMC 80%-6.3mm 1.0 77.9 0.53 0.15 0.68 0.67 13.6 6 38 44 44 <0.07 3.0
BMC 80%-1.7mm 1.0 81.3 0.52 0.12 0.64 0.67 17.5 7 33 40 44 0.13 2.5
BMC 80%-19mm 5.0 76.4 0.55 0.17 0.72 0.67 14.6 6 35 41 44 0.48 1.0
BMC 80%-6.3mm 5.0 77.6 0.45 0.13 0.58 0.67 14.0 6 37 43 44 0.67 1.0
BMC 80%-75µm 5.0 88.7 0.47 0.06 0.53 0.67 60.6 20 13 33 44 0.91 1.3
kg/mt ore
Table 1. - Summary Metallurgical Results, Bottle Roll Tests, Longstreet Mine Composites
Reagent RequirementsgAu/mt ore gAg/mt ore
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Star Gold Inc. Longstreet Project Scoping Study 46
Figure 8.3 Crush Size Versus Metal Recovery
8.4.3 Column Leach Testing
Column leach test were conducted on each of the master composites, utilizing a feed size of
80% -3/4 inch (19 mm) in order to determine gold and silver recoveries, recovery rates and
reagent requirements under simulated heap leach conditions. Lime additions were based on
bottle roll tests. Test columns were sized at 15 cm diameter by 3 meters high using PVC piping
with material stacked in the leaching columns in a manner in which to minimize particle
segregation and compaction. Leaching was conducted by applying a cyanide solution of 1.0g
NACN/L over the charge at a feed rate of 12 Lph/m2 of column cross sectional area. After
leaching, fresh water rinsing was conducted to remove residual cyanide and to recover
dissolved gold and silver values.
Detail column leach tests data, including screen analysis of the feed and tails and drain down
rates can be found in the Appendix, identified as McLelland Report No. 3829 entitled Heap
Leach Cyanidation Testing Longstreet Project, dated April 6, 2014.
All three composites were leached for 190 days. Gold and silver extractions for the surface
master composite (SMC) reached 88.9 % and 20.0 %, respectively. Gold and silver extraction for
the underground master composites (UMC) was 84.6 % for gold and 15.4 % for silver. The
master blend composite (MBC) achieved gold and silver recoveries of 86.3 and 16.7 respectively.
Summary results from column leach testing are provided in Table 8.4. Detailed results, including
leach rate figures are provided in the Appendix.
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Star Gold Inc. Longstreet Project Scoping Study 47
Table 8.4 Summary Metallurgical Test Results
Recovery results by size fraction for all three master composites indicates that finer crushing
would not substantially improve gold recovery. Gold recovery was similar throughout the
various size fractions with only a slightly elevated recovery in the finest size fraction (-75
microns). Silver recovery on the other hand would benefit from a finer particle size and would
require fine grinding in order to maximize recovery.
Overall metallurgical results indicate that the Longstreet master composites are readily
amenable to simulated heap leach treatment at 80 % -19 mm feed size. Gold recoveries for all
three composites were similar and ranged from 84.6 % to 88.9 % in 190 days of leaching and
rinsing. Silver recoveries were similar for all three samples, with recoveries ranging from 15.4 %
to 20.0%.
It is important to note that although the column tests were conducted over a period of 190 days,
gold extraction was essentially completed in the first 30 days of leaching. Silver leach rates, on
the other hand, were very slow and it is not expected that they would improve beyond the 190
day cycle.
Cyanide consumption rates were high and ranged from 1.56 to 1.93 kg NaCN/t of ore. This was
due in part to the long leach times. Cyanide consumption rates in a commercial operation are
typically much lower.
Figures 8.4, 8.5 and 8.6 diagramatically illustrate the leach rates and results for gold and silver.
Summary Metallurgical Results, Column Percolation Leach Tests, Longstreet Mine Composites,
80%-19mm Feed Size
Sample
I.D.
Test
No.
Leach/rinse
Time, days
mt/mt
ore
g Au/mt ore
Extracted
Average
Head
g Ag/mt ore
Extracted
Average
Head
NaCN
consumed
kg/mt ore
Lime
added
kg/mt ore
SMC P-1 153 4.8 0.32 0.38 5 24 1.45 1.7
UMC P-2 158 5.3 0.59 0.85 7 60 1.90 2.7
BMC P-3 158 5.2 0.63 0.68 8 45 1.78 2.0
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Star Gold Inc. Longstreet Project Scoping Study 48
Figure 8.4 Surface Master composite leach kinetics
Figure 8.5 Underground master composite leach kinetics
0
10
20
30
40
50
60
70
80
90
100
0 30 60 90 120 150 180 210
Cu
mu
lati
ve
Rec
over
y,
% o
f T
ota
l
Leach Time, days
Gold and Silver Leach Rate Profiles, Column Leach Test,
Longstreet Mine, Surface Master Composite, 80% -19mm Feed Size
Au Ag
0
10
20
30
40
50
60
70
80
90
100
0 30 60 90 120 150 180 210
Cu
mu
lati
ve
Rec
over
y,
% o
f T
ota
l
Leach Time, days
Gold and Silver Leach Rate Profiles, Column Leach Test,
Longstreet Mine, Underground Master Composite, 80% -19mm
Feed Size
Au Ag
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Star Gold Inc. Longstreet Project Scoping Study 49
Figure 8.6 Master blend composite leach kinetics
8.4.4 Comminution Tests
Sample Preparation
A total of twenty competent pieces of rock were taken from the 22 samples for comminution
testing. Half of the 20 rock pieces were selected from the underground adit samples, and half
were taken from the surface samples. The rock pieces were combined and then submitted for
crusher work index and abrasion index testing.
No preparation was required for the crusher test sample. Pieces were natural rock and
fragments were used for the abrasion test. The abrasion test sample was crushed and screened
to extract a ¾ inch x ½ inch size fraction.
Crusher Work Index Test
The crusher work index test was conducted on natural rock pieces according to test protocol.
Sample CWi (kW-hr/st) CWi (kW-hr/mt)
Crusher Work Index 10.08 11.11
Abrasion Index Test
An abrasion index test was conducted on a -3/4 inch +1/2 inch fraction of the sample according
to test protocol yielding a Sample Abrasion Index of 0.2431.
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
0 30 60 90 120 150 180 210
Cu
mu
lati
ve
Rec
over
y,
% o
d T
ota
l
Leach Time, days
Gold and Silver Leach Rate Profiles, Column Leach Test,
Longstreet Mine, Blended Master Composite, 80% -19mm Feed Size
Au Ag
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Star Gold Inc. Longstreet Project Scoping Study 50
8.4.5 Mineral Processing Conclusions:
AMPL concludes the following from the results of metallurgical testwork and analysis:
Cyanide consumption was high and ranged from 1.56 to 1.93 kg/t, in part due to the long leach time (190 days) used in the column test. Typical cyanide consumption for a heap leach operation would be 25% to 40% of the consumption observed in column leach tests.
Cyanide consumption rates were significantly lower for the bottle roll tests.
Due to the coarse crush size and low amount of generated fines it can be assumed the ore will respond well to permeability testing during the next phase of column tests, thus eliminating the need for agglomeration. However if a finer crush size is tested then it may require incorporating cement in the agglomeration mix.
Column tests indicate that gold dissolution is rapid with very little additional recovery achieved after 30 days of leaching. Silver leach kinetics were slow and continued to increase slightly even after 120 days of leaching.
Results indicate that gold recovery is not particularly sensitive to feed size, given a sufficient leach cycle time.
Each of the three master composite samples exhibited amenability to simulated heap leaching at a particle size of 80% minus ¾-inch (19mm). Gold recoveries in this size fraction ranged from 84.6% to 88.9%.
Column test silver recoveries were low, ranging from 15.4% to 20.0%.
The crusher work index for the ore indicates it to be of low hardness and slightly abrasive.
Increasing cyanide consumption from 1 g/L to 5 g/L in bottle roll tests had little impact on both gold and silver recovery at varying crush sizes.
8.4.6 Mineral Processing Recommendations
Further column test work on the oxide adit material should be performed in order to test the variability of the deposit.
Further column leach tests should be conducted using finer material in conjunction with high pressure rolls i.e. P80 ¼-inch (6.3mm) in order to maximize silver recovery.
As the leach kinetics for gold are fairly rapid and the silver recovery did not increase dramatically after 190 days of leaching, it is recommended to reduce the column leach time to 60 days for the next phase of the test work.
Further column tests should be carried out using site water as opposed to laboratory tap water in order to determine the effects of site water on leach kinetics.
To investigate improved silver recovery on the master blend composite ore, a HPGR (high pressure grinding rolls) evaluation should be considered as HPGR’s lead to the formation of micro cracks in the ore which may improve silver leaching kinetics. This would require a Static Pressure Test (SPT) to be performed.
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Star Gold Inc. Longstreet Project Scoping Study 51
Load/permeability tests are recommended on column leach residue samples to confirm permeability under compressive loading.
8.5 Process Engineering and Design
The process layout and equipment selected for the Longstreet heap leach study is based on the
2013 metallurgical test program which was limited to several bottle roll tests, percolation tests,
hardness and abrasion index determinations and column tests conducted on three composite
sample. AMPL also referenced previous metallurgical results from the 1988 pre-feasibility study.
The process plant design, which includes the leach pad, ADR plant, electro-winning circuit and
refinery is based on a nominal five year mine life. In order to maximize project efficiencies and
minimize capital and operating costs, a plant utilizing modular components should be
considered.
The proposed crushing facility and leach pad stacking would be operated by an independent
contractor with the crushing plant consisting of a two-stage modular design and haul trucks
used to stack material on the leach pad. For the sole purpose of this conceptual study, the heap
leach pad and processing plant for the Longstreet Project is designed to process 2,800 t/d of
low grade gold and higher grade silver run-of-mine (ROM) material. Both the crushing and
stacking areas will operate 16 hours per day, seven days per week at 90% availability.
The adsorption-desorption-refining (ADR) facility should also be of modular design in order to
minimize capital cost and reduce the construction schedule. The life of mine recovery rate for
gold is estimated at 86% while silver recovery is estimated at 15%. The metals recovery plant
(ADR) facility is designed to treat a solution flow rate of 770 gpm (175 m3/h) of pregnant leach
solution which will produce approximately 18,700 ounces of gold and 78,800 ounces of silver
per year. The ADR plant will operate on a 24 hour per day basis, seven days per week at 90%
availability.
A summary of the design criteria for the heap leach and ADR facilities is presented in Table 8.5.
Table 8.5 Process Design Criteria
Design Criteria Design Parameters
Ore to leach pad 1,000,000 tpy
Maximum rock size to crusher Minus 24 inch
Nominal crushing rate 210 t/h
Design crushing rate 240 t/h
Crusher Work Index 10.08 kWh/short ton
Abrasion Index 0.2431
Ore moisture content 3%
Ore moisture content during leaching 12%
Final crush size to leach pad 80% -3/4 inch
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Star Gold Inc. Longstreet Project Scoping Study 52
Annual operating days 365
Crusher availability 90%
Crushing – hours per day 16 h/d
Stacking – hours per day 24 h/d
ADR plant – operating hours per day 24 h/d
AR plant availability 90%
Carbon tons per column 4.4
Number of CIC columns 5
Tons of carbon transferred per day 2.2
Heap configuration – starter pad 3 lifts – 26 feet per lift
Starter pad – Number of cells per year 4
Tons per cell 246,575
Leach cycle – primary and secondary cells 180 days
Solution flow to ADR plant 776 USGPM
Solution flow to primary leach cell 810 USGPM
Solution flow to secondary leach cell 810 USGPM
PLS pond capacity – live volume 972,150 US gal
BLS pond capacity – live volume 2,138,737 US gal
Solution application rate to leach pad 0.27 US gal/h/ft2
Gold recovery, estimated 86%
Silver recovery, estimated 15%
A simplified block diagram of the process is shown in Figure 8.7. The heap leach plant will
employ two stage crushing with a jaw and a cone crusher. Crushed product will be trucked to
the heap leach where cyanide solution will be added. Pregnant leach solution will percolate
through the heap and eventually be pumped to the ADR plant which will consist of a series of
carbon contactors, elution column, acid column and rotary kiln. The recovery plant will house
an electro-winning cell along with a bullion furnace.
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Star Gold Inc. Longstreet Project Scoping Study 53
Figure 8.7 Flowsheet block diagram
A simplified overall flow sheet of the process is illustrated in Figure 8.8.
Flowsheet Block Diagram
Crushed Ore
P100= 500 mm
Oversize material
Undersize material
Undersize material Heap Leach Pad Feed
F100 < 19 mm
Lime Addition
Cyanide Addition
Barren
Solution
Loaded Carbon Barren Carbon
Pregnant Solution
Barren Solution
High Grade Sludge
Dore Bars
Crusher Hopper Stationary
Grizzly
Pregnant SolutionPond
Heap Leach Pad
Jaw CrusherPrimary
Double Deck Screen
Cone Crusher Secondary
ElectrowinningCircuit
Carbon Elution Circuit
Carbon Regeneration
Circuit
Barren SolutionPond
Refinery Includes:Calcine Dryer &
Bullion Furnace
CIC Circuit
Grizzly Feeder
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Star Gold Inc. Longstreet Project Scoping Study 54
Figure 8.8 Flow sheet diagram
Run of mine ore
Oversize + 600 mm
Crusher Feed Rock Breaker
Hooper
Grizzly Feeder Primary Jaw Crusher
Magnet
Double Deck Screen
Transfer Conveyor
Screen Feed Conveyor
Lime Addition Secondary Cone Crusher
Screen Product Conveyor Crusher Discharge Conveyor
Pregnant Solution Pond Pumps
Barren Solution Pond Pregnant Solution Pond
To Atmosphere
Storm Pond
Loaded Carbon Loader Carbon Recovery Screen Furnace and Dryer off
Gas Scrubber
Carbon Elution Column Calcine Oven
Acid Wash Calumn Barren Solution Tank
Pregnant Solution
Ellectrowinning Cell High Grade
Rotary Kiln Slugde
Barren Carbon Dore Bar
CIC Tank # 1 Bullion Furnace
CIC Tank # 2 Carbon Quench Tank
Regenerated & Fresh Carbon
Fresh Carbon
CIC Tank # 3
Carbon Sizing Screen
CIC Tank # 4
CIC Tank # 5
Carbon Safety Screen
Barren Solution from Electrowinning Cell
Cyanide Solution
Barren Solution Tank
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Star Gold Inc. Longstreet Project Scoping Study 55
8.6 Process Description
The process of winning gold from the mined ore involves a number of individual activities,
described in detail below.
8.6.1 Crushing
It is recommended that the crushing plant be a two-stage closed circuit crushing
facility. The crushing facility should be specified to receive ore at 24-inch (600 mm) top
size and crush it to 80% passing ¾ inch (19 mm). The design crusher feed rate is based on
processing an average of 1,000,000 tons per annum, operating 16 hours per day, 365 day per
year, for an operating availability of 90%, which equates to 210 tons per operating hour.
The remaining eight hours of the day will be used for maintenance.
ROM material will be dumped by haulage trucks into a hopper equipped with a grizzly and
rockbreaker (for oversize) or placed in a stockpile situated close to the hopper for reclaim to the
hopper by front end loader.
8.6.2 Double Deck Screen
Below the hopper a vibrating feeder will feed a double deck screen located above a jaw
crusher. Double deck screens are strongly recommended for the crushing circuit due too
the high recirculating load and the wide size distribution of material fed to the screen.
The screen will divert finer ore away from the jaw crusher to the final product conveyor
belt, thus improving crusher efficiency. Screen oversize material will feed a short-head
cone crusher for further size reduction and then be recirculated back to the double deck
screen.
The bottom deck screen undersize is the final crushed product, which is conveyed to the
crushed ore stockpile. The bottom deck is sized to produce a heap leach feed size which is
specified as 80 percent of the ore being less than ¾ inches in size.
8.6.3 Lime Addition
Lime will be stored in a silo adjacent to the belt conveyor where it will be added to the crusher
plant output conveyor, where it will be thoroughly mixed with the ore. Lime is used to
agglomerate the ore and for pH control in the heap leach.
8.6.4 Heap Leach Pad Stacking
The ore is stacked on the pad, using the open pit haul trucks, in a number of lifts in a
pyramid type layout. Each lift will have a 26 foot (8 m) setback all around the previous lift.
This setback allows a safety berm to catch material that may slough off the lifts placed
above and minimizes the risk of spills of cyanide-containing solutions and cyanide
soaked ore or spent ore from the containment system. It is estimated that the ultimate
heap leach pad will have a foot print of approximately 1,600 feet by 790 feet (490 m by
240 m) and measure approximately 160 feet (48 meters) in height. Pad dimensions need to be
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Star Gold Inc. Longstreet Project Scoping Study 56
verified for the next phase of the project.
The starter pad will take two years to complete and consist of approximately 2 million tons of
ore. Each successive lift will be placed on top of the previous lift and will be setback from
the crest inside edges of toe and perimeter berms to provide corridors for solution
application pipelines and access. This will provide the second lift and all future lifts with a safe
access for heavy equipment while providing extra room in case there is any slumping of the lifts.
Initially crushed waste rock would be placed onto the pad to provide a protective layer of
material on the pad liner for equipment to operate on, eliminate expansion and contraction of
the synthetic liner and prevent damage that may occur due to weather conditions such as
sun damage or ripping by winds.
Perforated pipe will be placed on the top of the crushed protective layer to aid in the flow of
pregnant solution from underneath the leach pad to the solution collection ditches. Heap
leach ore is then stacked onto the pad.
Stacking will occur in cells which are approximately 270 feet (82 m) in width. Each cell is 790
feet (240 m) in length and represents approximately three months of stacking, assuming 26 feet
(8 m) high lifts. As the stacking of the ore retreats from the stacked face and the entire
length of the pad has been stacked, ore is again transported to the far end of the leach
pad and a second cell or strip of ore is stacked adjacent to the completed cell.
8.8.3 Leachate Distribution & Collection
A barren leachate solution distribution line will run along the side of the leach pad. A
series of headers with valves will run from the barren line up onto the leach pad. The drip
emitters (apply leachate to the ore) will then be connected to the headers (in each
direction) and extended across the ore to distribute barren solution over the entire area
of the leach pad, for leaching of the precious metals from the ore. Blocks of ore are stacked
with lengths equal to the distance between headers on the barren solution distribution line.
As soon as a block of ore is stacked, the ore will be placed under leach. Getting ore under
leach as quickly as possible is key to maintaining production in a heap leaching operation.
As each cell is stacked the headers are extended and fresh ore is placed under leach.
Drip emitters are well suited for dry climates as they reduce water losses by evaporation.
Barren solution lost to evaporation is replenished with makeup water containing cyanide.
Minimizing water consumption is an important aspect of this project. Drip emitters have
the added advantages of providing good solution flow rate control, excellent solution
penetration of the heap and, generally, more even solution distribution than other
methods of solution application.
The disadvantage of drip emitters is the susceptibility to blockage by suspended particulates or
possible scale formation. Anti-scalant is added to prevent or minimize scale formation. If scale
formation from evaporation becomes a problem, the drip emitters can be buried below
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Star Gold Inc. Longstreet Project Scoping Study 57
the surface of the stacked ore.
Once ore has been under leach for the assumed 180 day leach cycle, it will be removed from
leach as additional new ore is placed under leach. In this manner, a constant volume of
ore will be under leach at one time and the optimum solution application rate can be
maintained. This stacking and piping sequence is continued until the entire leach pad is
covered with the first lift of ore. A similar stacking and piping sequence will be followed until
the entire pad reaches its ultimate design height.
8.6.5 Solution Ponds
A pregnant solution pond will be constructed near the lowest point of the pad to store leachate
solution containing gold and silver and storm runoff flows from the pad. The pond will have a
bottom corner sump and a leak detection system between the geomembranes and connect to a
corner leak detection sump and well system. Solution from the pregnant solution pond will be
pumped to the ADR by two pregnant solution pumps, one operating and one spare. Total pond
capacity is estimated at approximately 1.3 million USG (5000 m3) of solution.
A barren solution pond will also be constructed near the lowest point of the pad to store
leachate solution and storm runoff flows from the pad. The pond will have a bottom corner
sump and a leak detection system similar to the pregnant solution pond. Solution from the
barren solution pond will be pumped to the heap leach. Total pond capacity is estimated to be
approximately 2.6 million USG (10,000 m3) of solution.
An emergency pond will be constructed adjacent to the pregnant solution pond, to facilitate a
major storm event emergency. The storm pond also increases the capacity of the stored
solution within the pad area. During storm conditions, all storm water and heap liquor is
retained in a closed circuit thus preventing spillage and subsequent solution losses to the
environment. This pond would not be used under normal operating conditions.
8.7 Adsorption, Desorption and Refining (ADR) Facility The winning of gold from the pregnant solution occurs in the ADR plant. The steps in the gold-winning
process are:
8.7.1 Adsorption circuit
The carbon adsorption circuit is based on a five-stage, upflow CIC system, Solution from the
pregnant solution pond is fed to the ADR plant. The carbon columns are designed for 100%
carbon bed expansion. The carbon adsorption circuit consists of a series of five cascading
carbon columns. Each column is designed to contain four tonnes of activated carbon. Solution
enters the circuit at the first carbon column and flows counter-current to the flow of carbon.
Solution overflows the final column onto the stationary carbon safety screen to catch any
entrained carbon.
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The counter current flow allows the carbon in the first adsorption tank to reach optimum metal
loading. Design loadings are 3,500 g/t gold and silver, but actual loadings will be a function of
the solution grades reporting to the ADR circuit. Two tonnes of loaded carbon are advanced per
day from the first CIC tank to the acid wash circuit.
The barren solution that discharges from the final carbon column drains to the carbon column
surge tank via a carbon safety screen. From this tank, barren solution is pumped back to the
barren solution pond of the leach pad.
Loaded carbon is passed over a loaded carbon recovery screen prior to entering the acid wash
tank, allowing the solution to return to the CIC circuit. Fresh and regenerated carbon will be
introduced into the CIC circuit via the last carbon column at the same rate the loaded carbon is
removed, thus maintaining a constant carbon inventory.
8.7.2 Carbon acid washing
Loaded carbon is passed over the loaded carbon recovery screen into the acid wash tank where
any scale buildup on the surface of the carbon is removed. A 3% w/w hydrochloric acid (“HCI”)
solution is circulated through the vessel at a rate of two bed volumes per hour for 120 minutes.
Upon completion of the acid rinse, the carbon is soaked in the HCI solution for an additional 60
minutes. After soaking, the spent acid and carbon are neutralized with sodium hydroxide
(NaOH) solution. The spent acid solution is sent to the CIC circuit, and the acid washed carbon is
pumped to the carbon elution column.
8.7.3 Desorption circuit
A barren strip solution (used to remove gold and silver from the carbon) is heated to
approximately 80°C in a diesel-fired single-pass indirect solution heater. Enough sodium
cyanide and sodium hydroxide is added to the heated barren solution so that a 1% by weight
sodium cyanide and 1% by weight sodium hydroxide solution is obtained. The barren strip
solution temperature is then increased to approximately 115°C, prior to entering an elution
column where metals stripping is completed. In order to enhance the desorption of the gold
and silver from the loaded carbon, the loaded carbon is also soaked 30 minutes in the 1%
sodium cyanide and 1% sodium hydroxide solution. After soaking, the carbon and solution are
sent to the elution column. During the metals stripping process, 40-bed volumes are passed
through the bed of loaded carbon in the elution column. During the stripping cycle, the loaded
strip solution is continuously circulated from the elution column to the electro-winning circuit.
It will take approximately 21.5 hours to complete one strip cycle which includes carbon
transfers, acid washing, carbon stripping and electro-winning. The final stage of elution
will include an unheated wash water cycle that will displace the last bed volume of
pregnant strip solution and, in turn, cool off the barren carbon.
The pregnant strip solution is sent to electro-winning cells for further processing. The cooled
carbon is transferred to the horizontal rotary kiln for thermal regeneration.
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Star Gold Inc. Longstreet Project Scoping Study 59
8.7.4 Carbon thermal regeneration
The carbon regeneration circuit is sized to handle a carbon transfer rate of 2 tonnes per day,
with all barren carbon thermally regenerated prior to reuse in the CIC circuit. Carbon is
dewatered with a static sieve bend screen before entering the drying kiln at a rate of
approximately 330 lbs (150 kg) per hour. The horizontal kiln is designed to have a retention
time of 20 minutes and a bed temperature of 1560°F (850°C). The majority of organic
compounds fouling the barren carbon will be removed in this process. When the
regenerated carbon exits the kiln, it is immediately deposited below water in the carbon
quench tank.
Regenerated and fresh carbon are transferred back to the CIC circuit. All carbon is screened
prior to reuse in the CIC circuit in a static sieve bend screen located over top of the No. 5
CIC tank. Under sized barren carbon is collected in a barrel for recycling.
8.7.5 Refining
Pregnant strip solution, stored in the loaded solution tank, is pumped to a single
electro-winning cell. Each electro-winning cell has eleven 316 stainless steel wool cathodes
and twelve 304 stainless steel sheets to be used as the anodes. Gold and silver are plated onto
the steel wool cathodes in the electro-winning cell.
The cathodes are removed periodically from the electro-winning cells and the gold and
silver sludge is washed off using a high pressure spray. Sludge collected from washing the
cathodes and from the bottom of the electro-winning cells is first passed through a plate and
frame filter press in order to remove excess water and then dried in an oven.
The dried sludge is mixed with flux and charged into a diesel fired melting furnace for smelting.
The dore is poured out of the tilting furnace and collected in four cascade style molds. The slag
exits the melting furnace first and is later displaced by the heavier gold and silver dore. The
slag ultimately collects in the slag pot which is placed below the cascading molds.
The mineralogy report indicated an absence of mercury in the sampled material. Therefore a
mercury retort furnace is not required.
Electro-winning tails solution is returned to the barren strip solution tank with barren strip
solution is periodically bled from the barren strip solution tank and replaced with fresh
solution. This controls impurity levels in the barren strip solution. The barren strip solution
is returned to the carbon columns circuit.
8.7.6 Water services
Raw water will be pumped from wells to the water tank prior to distribution throughout the plant. Potable water will be sourced from the RO plant. The total raw water consumption will depend on seasonal evaporation rates which can range from 4% to 10%.
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Star Gold Inc. Longstreet Project Scoping Study 60
8.7.7 Reagents
All applicable safety considerations will be made, including separation of acids and cyanide,
provision of safety showers and eye wash stations, and designated sump pumps.
Hydrochloric acid will be delivered to site in 50-gallon (200L) drums and diluted with water in a
tank. Sodium hydroxide will be delivered to site in 50 pound bags and mixed with raw water in
a tank. Cyanide will be delivered to site as solid briquettes of sodium cyanide in 1 tonne bulk
bags. Cyanide will be stored in the dry reagent storage area prior to mixing with water in a tank
to obtain a 20% w/w solution.
Activated carbon will be delivered in 500kg bulk bags and will be emptied into the carbon
quench tank to be mixed with raw water and newly regenerated carbon. Hydrated lime will be
delivered to site in 20 tonne trucks and transferred to a lime silo for storage.
8.7.8 Assay laboratory
It is assumed that all exploration and process plant samples will be sent to an external
laboratory for analysis.
8.8 ADR plant manpower
The process plant will require 15 people including maintenance personnel. Contractors are not included in the total man power requirement.
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9 INFRASTRUCTURE
The Longstreet Gold Project lies in a relatively remote region of Nevada with sparse human
population and few towns, highways or power lines.
9.1 Site Access
The project site has a reasonable gravel road access adequate for an exploration project but
will have to be upgraded if the project advances to production. A paved county road runs E-
W approximately 27 miles south of the Project, connecting the site to the nearest town of size,
Tonopah, which lies 48 miles to the southwest.
Most of the Longstreet Exploration Project is located within the Georges Canyon Inventoried
Roadless Area (IRA), which topic is discussed in Section 11, below.
9.2 Power and Power Distribution
At present, there is no electric power, telephone or internet service on or close to the site.
Therefore, required electrical power will have to be generated with diesel-powered
generators. Approximately 700 kW installed power is required for the proposed heap leach
operation. A single 1.0 MW heavy fuel oil (“HFO”) driven generator would be able to supply the
heap leach and ADR plant. It is assumed that the power for the crushing plant will be supplied
by the contractor. Electricity will be distributed across the complete site via 6.6 kV overhead
power lines.
Power is not distributed to the water well intake pumps due to the distance from the power
plant. Mobile generators will be used for powering this facility.
9.3 Site roads
An allowance for site roads connecting surface support facilities at the open pit and heap leach
site have been included. The roads would be built from open pit waste rock, gravel top covered
and wide enough to accommodate 2 way vehicle traffic.
A haul road from the open pit top the heap leach pad would be constructed from open pit
waste rock with a gravel cover and wide enough to accommodate 2 way haul truck traffic.
9.4 Surface support buildings
Office space for the limited technical, surface support and administrative staff of the company
would be housed in several office trailers placed on site and provided with electricity, water and
sewage services. Conference room and washroom facilities would also be provided for the
office space.
A prefabricated building or converted shipping containers with concrete floors would be
equipped as a mine equipment maintenance shop and warehouse for servicing the project.
An explosives magazine for powder and detonators will be constructed at acceptable distance
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from the mining operations and other surface buildings and facilities.
All entry and exit from the property would be via a security trailer located bythe office complex.
It would house an area with turnstiles, a room for searching people to minimize theft and a first
aid room.
9.5 Other services
Telephone and internet communication infrastructure will have to be constructed and utilize
satellite communications systems. The site will be provided with computer servers and desktop
or laptop computers.
A fuel storage area equipped with diesel tanks and storage for oils will be constructed near to
the open pit.
Garbage will be hauled by contractor to the nearest licenced disposal site.
For this study water supplies have assumed to be from wells. The area is known to contain
springs and water at depth. Project water requirements need to be estimated and the source
of the required water determined, as this will be critical to project advancement.
Water management will include collection ditches and ponds and a water treatment plant.
Sewage will be processed in a septic and filtration system.
9.6 Area support services
Tonopah exhibits some support infrastructure for an open pit mining operation, including a
local workforce, some support contractors, shipping facilities, etc. Other required services
can be sourced within the region.
9.7 General and administrative
General and administrative (G&A) costs are those primarily associated with the general
management and administration of the project. G&A is associated with surface facilities and
personnel not included under the mining, product preparation or maintenance groups and in
addition to the surface department comprise of: administration; procurement; human
resources; and security.
9.7.1 Administration
Administration comprises senior and general management, accounting, third party
environmental support and information technology functions. In addition to employee salaries
and benefits, other components include employee relocation, travel expenses for business
away from the property, insurance (property and business interruption), permits and licences,
fees for mining rights, professional fees, and operating surface vehicles for the personnel.
Accounting functions include payroll, accounts payable, accounts receivable, budgeting,
forecasting and other corporate cost accounting.
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Star Gold Inc. Longstreet Project Scoping Study 63
Information technology comprises all components associated with operating and maintaining
the telephone, computer network, internet, fax and radio systems for the mine site.
Allowances for long distance telephone charges are also included.
Environmental costs are associated with monitoring of the mine’s environmental performance
and reclamation work.
9.7.2 Procurement
Procurement encompasses all functions associated with on and off site procurement of
materials and supplies; warehousing and inventorying; transportation from point of origin to
site and other associated support services. Actual freight costs for items required by the mine,
processing plant and maintenance departments are included in those department’s costs.
The main cost components are comprised of employee salaries and benefits and warehouse
supplies (such as personal protective equipment). Also included is small equipment (pallet
lifters, forklifts, etc.) and parts used for warehousing, purchasing and logistics. Surface support
includes loading and unloading of trailers and shipping containers, movement of materials on
site and maintenance of the warehouse and associated facilities.
9.7.3 Human Resources
Human resources encompass all functions associated with personnel, union relations, health
and safety, training and community relations. Personnel and industrial relations costs include
salaries and benefits for employees to recruit required personnel, manage Company salary and
benefits policies, manage hourly employees and oversee the Company’s policies and
procedures. Health and safety includes salaries, benefits, on-site first aid personnel, first aid
supplies and vehicles required by this group.
Community relations costs include funds to aid in supporting local community efforts and
facilities.
9.7.4 Security
Mine site security is provided on a contract basis by a third party security firm. Security
surveillance equipment will be provided to the security firm by the mine. Other minor security
equipment for the security personnel (such as metal detectors, etc.) would be provided by the
contractor. Thesecurity facility would be constructed at the entrance to the mining areas and
by the office complex,to prevent inadvertent access to the mine site. All personal vehicles will
be parked at security and transportation by bus will be provided to the mine site for the work
force.
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Star Gold Inc. Longstreet Project Scoping Study 64
9.7.5 Manpower
The G&A manpower required for the mine after commercial production starts is estimated to
be 13 employees with the cost structure based on expected salaries paid in the US mining
industry. The G&A manpower is presented in Table 9.1.
Table 9.1 G&A Personnel Complement
Position Complement
Mine manager 1
Senior engineer 1
Accountant 1
Engineering/Geology technicians 2
Purchasing/warehouse manager 1
Environmental co-ordinator 1
Medical contract 1
Security guard 4
Site services 1
Total 13
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10 HYDROLOGY
10.1 Water Sources
Due to the limited information on the available water within the Monitor Range and at the
Longstreet Project site, a hydrogeologic evaluation of water availability from sources both on
and off the Project site is strongly recommended.
The hydrogeologic evaluation would consist of three sections:
1) Onsite hydrogeologic evaluation
2) Offsite hydrogeologic evaluation
3) Stone Cabin Valley hydrogeologic evaluation
The proposed outline of the hydrogeologic evaluation follows:
1) The onsite hydrogeologic evaluation will include at a minimum:
a. Perform detailed structural mapping of fracture, fault and/or joint system(s)
associated with each of the lithologic units described in Section 4 of this
document.
b. The rock quality designation (RQD) determined of the diamond cores from
previous mineral investigations to measure the degree of jointing or fracture in
the various lithologies.
c. Utilize structural mapping to create a hydrogeologic model of the mine site to
predict potential locations for groundwater.
d. Install test wells to perform pumping tests to evaluate the volume of available
water at the mine site; and predict the available volume of water for sustained
mine and plant operation.
e. Sampling the groundwater to establish a water quality baseline, and confirming
the quality for mine and plant operation.
2) The offsite hydrogeologic evaluation will include at a minimum:
a. Geologic/hydrogeologic mapping to evaluate possible production well locations
within 1.5 miles of the Longstreet Mine site.
b. Evaluate the Side Hill Spring area; including if the water source is the
unconsolidated alluvium or the bedrock.
c. Install a test well at Side Hill Spring to perform a pumping test to evaluate what
effects pumping the spring would have.
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Star Gold Inc. Longstreet Project Scoping Study 66
d. Sample the spring water and the groundwater to establish a water quality
baseline, and confirm the suitability for mine and plant operations.
e. If, in the course of these evaluations, other potential water sources are
identified, the same evaluations should be applied.
3) The Stone Cabin Valley hydrogeologic evaluation will include at a minimum:
a. Identify potential well(s) locations.
b. Permit requirements.
c. Test well installation and pumping test to ascertain the number of wells
necessary to provide water for the mine and plant operation.
d. Detailed cost estimate of well installation, operation, and pipeline installation.
The estimated cost to perform the necessary hydrogeologic evaluation ranges from US$200,000
to $325,000. It is dependent upon the number of wells installed, tested, and sampled.
Current information indicates that Stone Cabin Valley is the only known source available for
long term groundwater use. Due to the Valley’s distance from the mine, it may be the most
expensive option. The location of the well(s) is an important factor to evaluating costs; it is also
critical to secure long term water production that is not affected by variations in annual
recharge. The location for the first test/production well(s) in Stone Cabin Valley is the centre of
the valley; this is approximately 5.5 miles from the mine site. The hydrogeologic study and the
testing may indicate that a production well is feasible approximately 1 to 2 miles closer to the
mine site: An obvious reduction in pipeline construction costs, and maintenance. The estimate
for the installation of a pump station (2), well, pump, electrical supply, storage tank and pipeline
ranges from $1.4 m to $2.65 m depending on the distance from the mine (3 miles to 5.5 miles).
10.2 Water Usage
Water usage at a mine comprises mine operations (drilling, dust control, core shack, equipment
cleaning, etc.) use, plant operations use, and human consumption (drinking, showers and
toilets) use. Currently no demand estimates have been provided for mine operations or human
consumption use; the estimate provided for plant operations use follows: The water
demand for the heap leach plant operation is estimated to range from 20 to 45 m3/hour
(includes reagent requirements and make up water). The operation and maintenance costs for
pumping and transporting water include energy, operator and equipment from Stone Cabin
valley is estimated to be $230/day or a range of $0.21 to $0.48/m3.
Addition information is required for a complete water demand costs.
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Star Gold Inc. Longstreet Project Scoping Study 67
10.3 Dewatering
The available information indicates that mine water management and dewatering does not
appear to be an issue at the Project site.
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11 ENVIRONMENTAL AND PERMITTING
Star Gold has staked and maintains 75 unpatented mineral exploration claims on United States
Forest Service (USFS) and Bureau of Land Management (BLM) lands. The Company had an
active Plan of Operations for its recent exploration work which included core drilling, surface
prospecting and gathering of bulk samples. The company is in the process of applying for a new
Plan of Operations for future exploration activity. Permits have yet to be applied to facilitate
full mining operations.
Past engineering work had proposed to locate the required leach pads on claims in a small
canyon adjacent or in close proximity to three potential ore zones. These claims are on USFS
lands. It has been noted that permitting on USFS lands is generally considered more difficult
versus BLM lands. Additionally water and pregnant solution management is more difficult in
the canyon versus flat terrain. To mitigate these potential hurdles, Star Gold staked a series of
claims on adjacent BLM lands that are flat and could be used for the leach pads if necessary.
This provides Star Gold with two possible options for leach pad location and we have assumed
this operating scenario in discussing the permitting process for the Longstreet Project.
11.1 Permitting Process
The Star Gold project is of modest size and the area where it is located is largely undisturbed or
has naturally reclaimed itself from past man-made disturbance. There are no pre-existing
environmental issues or liabilities on the site.
To assist the permitting process for mining and exploration activities in Nevada, a
Memorandum of Understanding (MOU) exists between the Nevada Division of Environmental
Protection (NDEP), the USDA Forest Service (USFS) and the US Bureau of Land Management
(BLM). It has been in place since 2008 and helps to coordinate the responsibilities of the
Agencies pertaining to the administration and reclamation of lands disturbed by exploration or
mining operations. Although this agreement expired in November 2013, AMPL has investigated
and been assured by the Bureau Chief of Mining Regulation and Reclamation of NDEP that the
various agencies are working on a renewal of this agreement and that any changes are expected
to be minor.
The following permits will be required from the USFS, BLM and NDEP for the mine to go into
production:
11.1.1 US Forest Service
Approval of a Plan of Operations;
Approval for upgrading access roads;
Approval of a reclamation plan for USFS lands with notice to NDEP (the
reclamation plan is part of the Plan of Operations);
Approval of a reclamation cost estimate for USFS lands for bonding purposes;
and
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An Environmental Impact Statement (EIS) (triggered by a request for the above
approvals). It is presumed that the BLM would be a Cooperating Agency or a
joint Lead Agency.
11.1.2 Bureau of Land Management
Approval of a Plan of Operations;
Approval for upgrading existing roads or granting rights-of way for new roads;
Approval of a reclamation plan (part of Plan of Operations) in a format that has
been developed jointly with NDEP;
An Environmental Impact Statement (EIS) (triggered by a request for the above
approvals). The EIS should be prepared in cooperation with the USFS as noted
above;
Approval of a reclamation cost estimate for bond purposes. (The cost estimate is
separately reviewed by NDEP); and
If a single bond is to be issued, the MOU noted above states that “…an interagency
agreement may be executed as necessary.”
11.1.3 Nevada Division of Environmental Protection (and other Agencies as noted)
Water Pollution Control Permit. This is a major permit in Nevada, required
whether or not there is any water discharge contemplated. Much of the
information required for Federal EIS purposes will serve as input for the
application for this permit. Analysis of the acid generating potential of all types of
rock to be disturbed is an important part of this permit. Also required for the
permit application are descriptions of the geological and hydrogeological
conditions, proposed operating plans, proposed monitoring plans, detailed
descriptions of leach pads and ponds, etc.;
Reclamation Permit. This permit application must utilize guidelines prepared by
NDEP and BLM (the USFS has its own guidelines). Cost estimates for carrying out
the plan by a contractor will be used to determine bond amounts. As noted
above, this is usually done in conjunction with the BLM and USFS. Bonding must
be obtained before construction can begin;
Storm Water Permit. This permit is a general permit requiring only application to
obtain coverage, but requires preparation of a Storm Water Pollution Prevention
Plan;
Air Quality Operating Permit. As pertaining to the Longstreet Gold Project, this
permit covers emissions from diesel generators, rock crushing and mining
operations;
A permit to appropriate water must be obtained from the Nevada Division of
Water Resources; and
An Industrial Artificial Pond Permit must be obtained from the Nevada
Department of Wildlife.
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11.1.4 Other Permits
There are several other permits which would be expected to be issued rather routinely with
minimal input from the applicant, as opposed to the above-listed permits, most of which will
require significant scientific and engineering input.
Other required permits include:
Permits to store explosives and cyanide;
Permits to treat sanitary waste and dispose of plant and office trash on-site;
Permit if a drinking water system is to be installed;
County permits such as business license and building permits; and
Registration with various agencies.
Once mining commences, a Toxic Release Inventory must be filed annually with the US EPA and
the Nevada State Emergency Response Commission.
11.2 Timing of Approvals
Based on some recent permitting in Nevada the time required to secure permits prior to the
construction of facilities and mine pre-stripping is estimated as two-to-four years from the
beginning of the environmental baseline studies. This assumes no significant objections are
raised by members of the public including indigenous peoples, environmental groups or other
government agencies (note that the US EPA conducts a review of all environmental impact
statements). It also assumes that no significant issues arise with respect to cultural resources or
endangered or sensitive species. (Note that no endangered or threatened species or cultural
resource issues were identified in site surveys conducted to receive USFS approval for the
exploration drilling program, although some restrictions were imposed due to the possibility of
the presence of sage-grouse. The sage-grouse issue is discussed further on in this section.)
11.3 Inventoried Roadless Area
According to the USFS Decision Memo of August, 2011, most of the Longstreet Exploration
Project is located within the Georges Canyon Inventoried Roadless Area (IRA). While noting that
the project area is open to entry under the mining laws, the USFS states that effects to the IRA
and its potential wilderness values are protected because no new roads are to be built and
minimal overland travel will occur. In a discussion with the USFS Geologist in their Tonopah
office he could only say that any decision to approve a mining plan would be made in
Washington. The project site has good existing road access but currently any approval of new
roads within the IRA would be a significant issue.
The entire subject of Roadless Areas has given rise to a great deal of litigation over the past
several years, which may have ended in October 2012 with the Supreme Court refusing to hear
an appeal brought by the state of Wyoming and the Colorado Mining Association which sought
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Star Gold Inc. Longstreet Project Scoping Study 71
to have the entire Roadless Area designation overturned because the Forest Service had
created de facto wilderness areas, which was argued could only be enacted by Congress.
We have researched the issue of mines approved in IRAs in recent years, and so far have found
none that have been approved or denied, although a number of exploration projects have been
approved including some in Nevada (almost always referred to in news articles as “mining
projects”). It is important that the Company deal with this issue in a proactive manner and
begin the process to build support for the project locally and at the state level. Developments
regarding this issue should be monitored as it has the potential of becoming an obstacle to USFS
approval of a plan of operations.
11.4 Greater Sage-grouse
Another issue that potentially could have a significant impact on the permitting schedule and
costs, and in the worst case might prevent USFS and/or BLM approval of the Plan of Operations
is the potential listing of the Greater Sage-grouse as an endangered species.
The greater sage-grouse has been for several years subject to efforts by environmental groups
to see that this it is placed on the Endangered Species List. At this time the environmental
groups appear to be nearing success. In March, 2013 the US Fish and Wildlife Service
announced the availability of a final report dated February, 2013 entitled Greater Sage-grouse,
Conservation Objectives: Final Report. In this announcement the following statement is made:
“After a thorough analysis of the best available scientific information, the Fish and
Wildlife Service has concluded that the Greater Sage-grouse warrants protection under
the Endangered Species Act. However, the Service has determined that proposing the
species for protection is precluded by the need to take action on other species facing
more immediate and severe extinction threats.”
This statement recites the same finding made in the Federal Register March 23, 2010. (This
Federal Registry entry discusses the sage-grouse situation extensively in 105 pages.) The Fish
and Wildlife Service is not moving expeditiously on this finding but may formally propose the
listing in 2014 or 2015.
The US BLM issued a document in November 2013 entitled Nevada and Northeastern California
Greater Sage-Grouse Draft Land Use Plan Amendments and Draft Environmental Impact
Statement. (Notice of availability published in the November 1, 2013 Federal Register). If this
Land Use Plan were to be adopted as proposed, severe restrictions would be placed on mineral
development in Nevada and many projects now contemplated would be unable to obtain
needed governmental approvals. The American Exploration and Mining Association (formerly
the Northwest Mining Association) is preparing extensive comments on numerous technical and
legal aspects of this document. If sufficient changes are not made by BLM, litigation is expected.
This issue should be closely monitored by Star Gold.
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Star Gold Inc. Longstreet Project Scoping Study 72
The Nevada Department of Wildlife (NDOW) has produced a map entitled Greater-sage grouse
Habitat Categorization which as nearly as can be determined on a map of this scale
(approximately 1 inch = 39 miles on the copy below) places the Longstreet Project near habitat
areas classified as Habitat of Moderate Importance or Low Value Habitat/Transitional Range.
Depending on the exact project location it may be just outside the Population Management
Unit (PMU) boundary. A downloaded copy of this map is attached (a much better copy is
available on the internet as noted in the key on the page following the map.)
The site specific baseline studies of the Longstreet site will better define the actual population
of sage-grouse (if any) and suitability of habitat, it is important that early contact be made with
NDOW to see if any more information has been developed for the Longstreet Project region and
to be sure that the baseline study design meets with their approval. Early discussions of the
sage-grouse issue should also be held with the BLM and USFS, again to review study design.
At this stage of the development the Greater Sage-grouse issue appears to not have a
significant impact on the project. No other endangered, or proposed-to-be-endangered,
species are known to exist on the Longstreet site.
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Star Gold Inc. Longstreet Project Scoping Study 73
Figure 11.1 Greater Sage-grouse habitat
Longstreet
Project
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Star Gold Inc. Longstreet Project Scoping Study 74
No warranty is made by the Nevada Department of Wildlife as to the accuracy, reliability, or
completeness of these data for individual use or aggregate use with other data.
This map is available for download at www.ndow.org/wild/conservation/sg
11.5 Cultural resources
The site of the Star Gold claims has seen previous mining operations dating back to
approximately 1904 and concluding in 1929. Small scale milling operations were conducted on
the site and a small community is known to have existed in close proximity to the old mine.
Little remains of the past operations or community but there are the ruins of a cabin thought to
have belonged to the original prospector, Mr. Longstreet, within the project boundaries. There
are also some non-significant Native American camp locations and artefacts within the project
boundaries. If the cultural resources assessment designates any of these areas as worthy of
preservation the proposed mining and leaching activities will not be impacted.
11.6 Environmental and permitting conclusions
The permitting of mining operations within the United States is never a simple process and is
always time consuming and expensive. Nevada is considered one of the most favourable
jurisdictions to permit a heap leach gold operation due to the long history of operations in the
state. Given the current information regarding this project it is estimated that the permitting
timeline for this project could be two to four years. This is largely due to having to permit
operations on USFS and BLM lands, which may be mitigated somewhat by the modest size of
the proposed operation.
The permitting timeline can be reduced by proactively proceeding with the likely required
baseline studies that include hydrology, flora and fauna and cultural resources. These studies
could largely be accomplished during the continued advanced exploration and engineering
phase of the project. The USFS and BLM as well as local experts should be consulted on specific
studies and their scope before work is undertaken so as to optimize this effort. The IRA issue
needs to also be proactively dealt with to get clarity on what developments will or will not be
allowed to occur on the site.
AMPL concludes that there are no recognized potential environmental or permitting fatal flaws
regarding this project.
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Star Gold Inc. Longstreet Project Scoping Study 75
12 PROJECT DEVELOPMENT SCHEDULE
The schedule for developing a mine at Longstreet remains uncertain. Figure 13.1 provides a
timeline for additional engineering studies, the EIS and permit acquisition, project construction
and commissioning to reach commercial production in three years. Opportunities exist to fast-
track the Project.
This Scoping Studywould be followed by a Preliminary Feasibility Study which would necessitate
additional data collection, broader field investigations and more detailed engineering, to
address the major issues identified in this study, while ensuring study expenditures are
optimized. A PFS for a project of the scope of Longstreet can be expected to require 6-12
months, depending on the amount of data that is required to be collected.
Following the delivery of a positive PFS, time and funding must be sought to complete a
Feasibility Study to the standards demanded by mine financiers. The Feasibility Study could take
from six months to a year to complete.
Processing equipment lead times will be on the critical path of constructing the ADR plant thus
consideration should be given to ordering long-lead time items as early as possible.
Investigation of a modular ADR plant to suit the processing throughput criteria of the
Longstreet Project is recommended
The construction period for the Longstreet Project will be relatively short. Main construction
components would be earthworks (site road construction, leach pad foundation, pond dams,
ROM pad). Additional construction activities will include the mining equipment maintenance
facility (by the mining contractor), office structures, services, installation of the leach pad liner
and the ADR plant.
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Study 76
Figure 12.1 Longstreet Gold Project engineering and development schedule
Year Year 1
Activity Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37Initiate PFSPFS study
In-fill core drillingSample & assay programRevise resource estimate
Geotechnical drillingGeotechnical testing
Metallurgical testworkProcess engineering
TSF designMining study
EIAEIS filed with Regulators
PFS reportPFS completeFinance DFSFS studyFS deliveredExecution financingProject constructionCommisioning periodCommercial production
Year -1Year -2Year -3
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Star Gold Inc. Longstreet Project Scoping Study 77
13 CAPITAL EXPENDITURES ESTIMATES
13.1 Basis for estimates
The capital expenditures estimates are based on budget pricing from suppliers for critical components, consultants, contractors and a review of other projects. Smaller equipment and
facilities component costs were factored based on industry norms for the type of facility being
constructed and, where possible, adjusted to reflect local conditions.
Capital expenditure estimates have an accuracy of +- 50%.
All expenditure estimates are in 2014 constant US Dollars.
13.2 Mining
Mine capital expenditures are primarily related to mine services. The total mine pre-production expenditures are expected to be approximately $US0.22 million. These expenditures are
included in the mine and surface services infrastructurecosts as they are mainly related to site
roads and power. No pre-stripping expenditures are included as the initial mineralized material can be accessed directly. All mining equipment and related facilities would be provided by a
contractor.
No mine sustaining capital expenditures are envisaged because of the short mine life.
A contingency of 15 percent is included in the capital expenditures estimate.
13.3 Heap leach and processing plant
The processing capital cost estimate covers the design and construction of the heap leach and
ADR plant, together with certain on-site and off-site infrastructure.
A contingency of 15% was incorporated into the total cost of the project for the pre-production
expenditures.
The initial heap leach pad construction capital expenditures total $US2.25 million. The
expenditures would be for the heap pad and liner, initial drip piping, pregnant solution
collection and water diversion and collection ditches around the base of the pad. The
construction of a gold recovery plant would require capital expenditures of approximately
$8.10 million. Table 13.1 presents the ADR plant capital expenditures.
For the processing plant, equipment pricing is based on the equipment list, which is generated
from the process flow diagram.
Other direct costs (eg. earthworks, concrete, structural, piping, electrical, instrumentation, etc.)
were factored based on the total installed cost of process equipment
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Star Gold Inc. Longstreet Project Scoping Study 78
Table 13.1 ADR Plant Capital Expenditure Estimate
13.4 Infrastructure and support facilities
The costs for the infrastructure are primarily allowances based on in-house experience from
other similar projects. The cost in the estimate is based on the assumption of a 2-year starter
pad. This area needs input from a specialist geotechnical company at the next stage of the
project to develop more accurate costs.
Total pre-production capital expenditures for project infrastructure and surface department are
estimated to be approximately $US4.2 million. Table 13.2 provides the infrastructure and
support services capital expenditures breakdown. Major expenditure components are for
water supply, power generation and an office/shop/warehouse complex.
Area TOTAL
($US)
Lime Bin $175,000
Carbon Absorption $1,189,364
Elution & Carbon Regeneration $2,183,381
Electrowinning & Refinery $357,388
Reagents $185,000
Services, Air & Water, Tanks, RO Plant $314,620
Processing Plant Equipment Sub-total $4,404,753
Factored Direct Costs Sub total $3,692,124
Total ADR Expenditures $8,096,877
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Star Gold Inc. Longstreet Project Scoping Study 79
Table 13.2 Infrastructure Capital
13.5 Owners costs
Project in-directs are all estimated expenditures for the project (such as EPCM and project
management personnel) borne directly by Star Gold in completion of the project construction.
These estimated expenditures total $US4.54 million (including US$2.00 million for permitting)
over the 1 year pre-production period. Owner`s costs also include all equivalent General and
Administration costs which would be incurred during the construction phase.
13.6 Total capital expenditures
The estimated project pre-production capital expenditure, inclusive of contingencies and
working capital, is approximately $US25.4 million. The total expenditures include EPCM,
contractor overheads and a 15% contingency on all estimated expenditures. A summary of
project pre-production capital expenditures is presented in Table 13.3. A working capital allowance of $US3.7 million, representing 3 months operating costs, is estimated to be required.
Component Total Cost
($US million)
Site Preparation 0.097
Access Roads 0.162
Process Water 2.000
Water Reclaim 0.202
Power Supply 0.900
Fuel Storage & Distribution 0.081
Water & Sewage Treatment 0.081
Service Complex Buildings 0.324
Water Supply & Distribution 0.162
Mobile Equipment/Power Supply 0.162
Communication 0.049
Total Infrastructure Expenditures $4.220
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Star Gold Inc. Longstreet Project Scoping Study 80
Table 13.3 Project Pre-Production Capital Expenditures
Cost Component Expenditure
($US)
Permitting $ 2,000,000
Mine $ 220,000
Heap Leach Pad Processing Plant
$ 2,250,000 $ 8,097,000
Surface Infrastructure & Mobile Equipment $ 4,000,000
EPCM, Contractor O/H & Owners Costs Contingency
$ 2,535,000 $ 2,565,000
Total Capital Expenditures $21,667,000
Working Capital $ 3,690,000
TOTAL EXPENDITURES $25,357,000
The capital estimates include the following conditions and exclusions:
• The crushing plant and supporting infrastructure capital expenditures are not
included in the capital cost estimate as it will be provided by the mining contractor;
• Qualified and experienced construction labour will be available at the time of
execution of the project;
• There is no detailed geotechnical and drainage assessment of the site, therefore no
allowance for special ground preparation has been made;
• A water supply capable of supplying the required demand of the processing plant is
assumed to be available;
• No extremes in weather have been anticipated during the construction phase; and
• No allowances have been included for construction-labor stand-down costs.
13.7 Sustaining capital
No sustaining capital expenditures are estimated because of the relatively short mine life.
13.8 Closure costs
Closure costs have been estimate at $1 million at the end of the project life, shown on the cash
flow model as a reduction in working capital credit.
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Star Gold Inc. Longstreet Project Scoping Study 81
14 OPERATING COST ESTIMATES
14.1 Basis for estimates
Operating costs are based on US and other country norm prices from suppliers and other similar type projects, for consumables and parts. The cost of power is based on diesel generated power. Critical operating cost components are based on the following costs:
The diesel fuel price is assumed to be $0.94 / litre.
The electrical power cost is assumed to be $0.22 per kWh. Labour costs for the operating period are based on the manpower schedules presented for each
department and the associated labour costs. The costs include a burden component of
approximately 35 percent. Labour rates are based on local rates where available and/or
contractor costs in the region and country, for similar types of work. Where costs were either
not available or irrelevant, costs from other similar projects were used. The rates used include
all cost and profit components payable to contractors.
All costs are quoted in constant 2014 US Dollars.
14.2 Mining
The mine operating cost estimates were developed from a cost base of similar types of projects and conditions. The average total mine operating costs are estimated to be $US9.09 per ton of potentially economic mineralization. Potentially economic mineralization unit mining costs are estimated to be $US7.00 per ton, which includes trucking to and dumping at the heap leach pad and waste unit mining costs are approximately $3.00 per ton.
14.3 Heap leach and gold recovery plant
The heap leach operating cost includes crushing, stacking the leach pad, installation and repair of drip piping, reagents for leaching and collection and pumping of pregnant solution to the gold recovery plant. The gold recovery plant costs comprise gold absorption from pregnant solution systems, gold electro-winning and refining costs, carbon regeneration and return of cyanide solution to the heap leach operation. The total operating cost would be approximately $US3.65 per ton of potentially economic mineralization. A breakdown of the cost is presented in Table 14.1 and includes labour, consumable supplies, electrical power usage, maintenance supplies, and other applicable costs.
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Star Gold Inc. Longstreet Project Scoping Study 82
Table 14.1 Processing Plant Operating Cost
Function Unit OPEX
($US/t)
Labour – Metallurgy & Production 0.81
Labour - Maintenance 0.28
Power 0.68
Maintenance Materials 0.24
Reagents & Consumables 1.33
Miscellaneous 0.31
TOTAL $3.65
The operating costs for the processing plant are based on the following criteria:
Labour: Around the clock operations are based on a two shift rotation of 12-hour
shifts using a 7 days on, 3 days off, 7 days on 4 days off cycle. Non-shift labour is
based on a 40-hour work week, working 5-8 hour shifts.
The man power costs for this Project were estimated using other mining projects
in Western United States, based on labour rates and payroll burdens (35% overhead).
Commodity usage rates were developed from recent test work. Unit pricing for
commodities was taken from a data base of similar projects. No premium or transportation fees on the costs of consumables were added. This will need to be
investigated and discussed with reagent vendors during the next phase of the project.
Electrical power consumption and estimates were based on equipment connected
loads. A factor of 80% was used to estimate the operating load from the connected load.
Maintenance supplies for stationary equipment are based on 3.5% of installed
mechanical and electrical equipment costs. For piping, electrical, and instrumentation, a factor of 1.5% was used to estimate maintenance supplies.
Factor rates are based on experience.
The crushing plant will be operated by contractors who will be responsible for
providing electrical power, staffing and consumables required for operating the
plant. As such the estimated operating costs do not incorporate any costs associated with the crushing plant.
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Star Gold Inc. Longstreet Project Scoping Study 83
14.4 General & Administration Costs
The estimates for G&A costs encompass all operating costs associated with operating the offices and providing materials and supplies for staff functions. Administration operating costs
include costs and taxes for maintaining the property in good standing, land taxes, and resource usage fees (water, etc.).
The total yearly G&A costs are estimated to be approximately $2.0 million (presented in Table 14.2), of which approximately $1.0 million is for salaries and benefits. Employee burdens
account for approximately 35% of the total salary for each employee.
Annualized site G&A costs are estimated at $2.01 per ton of ore processed. However, the life-
of-mine G&A cost will be $2.13 per ton as a result of the partial final year of operations and
fixed costs to maintain production.
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Star Gold Inc. Longstreet Project Scoping Study 84
Table 14.2 General and Administrative Operating Cost Components
Component Annual
Cost
($US)
Salaries & Overhead $951,000
Training $10,000
Safety Equipment $5,000
Medical, Health & Safety $50,000
Government Relations $20,000
Power $296,000
Travel & Accommodations $20,000
Marketing $25,000
Legal and Accounting $30,000
Consultants $150,000
Shipping, Courier and light freight $30,000
Communications $25,000
Office Supplies $15,000
Computer Supplies $20,000
Light Vehicles Operation $25,000
Roads and Yards Maintenance $30,000
Insurance $100,000
Human Resources $30,000
Bank Costs $10,000
Surface ITC $50,000
Buildings Maintenance $5,000
Electrical Distribution Repair $5,000
Water Supply & Water Treatment $50,000
Office Equipment Leases $12,000
Security Supplies $5,000
Cleaning contract $20,000
Dues & Subscriptions $5,000
PR $20,000
TOTAL G&A COSTS $2,014,000
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Star Gold Inc. Longstreet Project Scoping Study 85
The mine management and administration roster and costs have been estimated in Table 14.3. A total of 13 people will be employed in this area, most of which will be staff positions. They will be responsible for the management, administration, personnel, accounting, purchasing needs, and distribution of material to the operation, site security, health and safety, and environmental issues. The total costs for G&A labour is US$0.95 per ton of ore processed.
Table 14.3 G&A Manpower Costs
14.5 Dore transport and refining charges
Transport and refining costs of $US4.00 per ounce gold have been included in the cashflow model and are based on relative norms.
14.6 Project total operating costs
The estimated total average operating cost (excluding smelting and refining) for the mine is approximately $14.87 per ton of potentially economic mineralization. Table 14.4 presents a summary table of life of mine average operating costs for each department on a cost per ton of potentially economic mineralization.
Position Complement Annual Fringe Total
Salary Benefits Cost
($US) 35% ($US)
Mine Manager 1 125,000 35% $169,000
Senior Engineer 1 66,600 35% $90,000
Accountant 1 52,000 35% $70,000
Eng/Geo technicians 2 55,000 35% $149,000
Purchasing/Warehouse Manager 1 70,000 35% $95,000
Environmental Coordinator 1 62,400 35% $84,000
Medical Contract 1 52,000 35% $70,000
Security Guard 4 31,200 35% $168,000
Site Services 1 41,600 35% $56,000
Grand Total 13 $951,000
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Star Gold Inc. Longstreet Project Scoping Study 86
Table 14.4 Project Operating Cost Summary
Department Cost
($US/t Mined)
Mine $ 9.09
Processing & Environmental $ 3.65
Surface Dept. and G&A $ 2.13
TOTAL $14.87
14.7 Exclusions
For the purpose of this study, value added taxes and other taxes, along with import duty costs, have not been included. Crushing costs along with transportation and refining charges for gold
bullion bars are not included in the operating costs but are considered in the financial model as
are rehabilitation costs (included in deferred capital schedule), land tenure and claim fees,
exploration costs and all costs associated with areas beyond the property limits.
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Star Gold Inc. Longstreet Project Scoping Study 87
15 ECONOMIC ANALYSIS
15.1 Basis for analysis
The expected base case cash flow estimates have been made using a forecast long-term gold price of $US1,350 per ounce. A summary of the expected parameters used for the financial analysis is presented in Table 15.1.
Table 15.1 Cash Flow Model Inputs
Component Parameter
Potentially Mineable Resource (Indicated & Inferred), including mining dilution & recovery
4.4 million tons
Estimated Mining Dilution 5 percent @ 0% grade
Average mill head grade, gold 0.022 opt
Average mill head grade, silver 0.53 opt
Payable gold 82,450 ounces
Payable silver 348,200 ounces
Average long-term gold price $1,350 per ounce
Average long term silver price $24.00 per ounce
Pre-Production Capital including Working Capital $25.4 million
Total Sustaining Capital $0
Royalty 3% NSR
Closure Cost $1 million
Estimated Operating Costs ($/ton) $14.87
Life of Mine 4.4 Years
The cash flow analysis has been conducted on the assumption of 100% equity investment and excludes any element or impact of financing arrangements. All exploration and acquisition
costs incurred prior to the production decision are also excluded from the cash flows.
Capital expenditures, as shown in the capital section, would be incurred over a one year period,
which is reflected in the discounted cash flow calculations. The cash flows include sustaining capital and capital expenditures contingency of approximately 15%.
Revenue is based on payments for gold by gold refiners. Costs for metal sales and shipping are
included in the deductions that the refiner makes.
The expected cash flow analysis used the metal prices indicated above. The discounted cashflow analysis has been based on 2014 Constant US Dollar values.
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Star Gold Inc. Longstreet Project Scoping Study 88
15.2 Metal price derivation It is common practice to consider the long-term average price of gold when deriving a price to evaluate a
mineral deposit. Neither AMPL nor Star Gold are able to forecast the price of gold.
The price of gold has exhibited strong variability for some years, rising until mid-2011, fluctuating above
$1,600 per ounce until the end of 2012, then eroding to its current level in the $1,300 - $1,400 per ounce
range. The trends and 36 month moving average gold price (red line in graph) shown in Figure 15.1
present the gold price variability since 2006 and underscore the selection of a US$1,350 price per ounce
of gold for this evaluation of the Longstreet Project.
Figure 15.1 Gold price trend 2006 -2014
Courtesy Kitco
15.3 Financial returns
The levels of accuracy for this study are +/- 30% to 50%. This Scoping Study relies on Indicated
Mineral Resources but also Inferred Mineral Resources. Inferred Mineral Resources are
considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves.
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Star Gold Inc. Longstreet Project Scoping Study 89
The summary cashflow model for the Longstreet project is presented in Table 15.2 using the expected project parameters.
The expected investment and returns based on the estimated cash flow for the Project are shown in Table 15.3.
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Star Gold Inc. Longstreet Project Scoping Study 90
Table 15.2 Longstreet Gold Project Cash Flow Model
Description Unit Unit Rate Total
-1 1 2 3 4 5
Mineable Resources
Start of Period tons 4,418,183 4,418,183 3,418,183 2,418,183 1,418,183 418,183
Mined tons 0 1,000,000 1,000,000 1,000,000 1,000,000 418,183 4,418,183
End of Period tons 4,418,183 3,418,183 2,418,183 1,418,183 418,183 0
Production
Mineralization Mined tons 1,000,000 1,000,000 1,000,000 1,000,000 418,183 4,418,183
Stripping Ratio 0.7 0.7 0.7 0.7 0.7
Waste Mined tons 697,351 697,351 697,351 697,351 291,620 3,081,023
Mineralization to Leach Pad tons 0 1,000,000 1,000,000 1,000,000 1,000,000 418,183 4,418,183
Grade gold gpt Au 0.022 0.022 0.022 0.022 0.022 0.02
Grade silver gpt Ag 0.53 0.53 0.53 0.53 0.53 0.53
Heap Leach/ADR Gold Recovery % 86% 86% 86% 86% 86% 86% 86%
Heap Leach/ADR Silver Recovery % 15% 15% 15% 15% 15% 15% 15%
Gold Produced Ounces 0 13,997 18,662 18,662 18,662 12,470 82,452
Silver Produced Ounces 0 59,108 78,810 78,810 78,810 52,659 348,197
Revenue
Gold price $/oz $1,350 $1,350 $1,350 $1,350 $1,350 $1,350 $1,350
Silver price $/oz 24.00 $24 $24 $24 $24 $24 $24
Gold Revenue $ $18,895,000 $25,194,000 $25,194,000 $25,194,000 $16,834,000 $111,311,000
Silver Revenue $ $1,418,580 $1,891,440 $1,891,440 $1,891,440 $1,263,827 $8,356,727
Transport & Refining $/oz $4.00 $0 $56,000 $75,000 $75,000 $75,000 $49,878 $330,878
Net Revenue $ $0 $20,257,580 $27,010,440 $27,010,440 $27,010,440 $18,047,949 $119,336,849
Operating Costs
Mine - O/P Ore $/t $7.00 $0 $7,000,000 $7,000,000 $7,000,000 $7,000,000 $2,927,000 $30,927,000
Mine - O/P Waste $/t $3.00 $2,092,000 $2,092,000 $2,092,000 $2,092,000 $875,000 $9,243,000
Heap Leaching & Gold Recovery $/t $3.65 $0 $3,653,000 $3,653,000 $3,653,000 $3,653,000 $2,440,871 $17,052,871
General & Administration $ $2,014,000 $2,014,000 $2,014,000 $2,014,000 $2,014,000 $1,345,720 $9,401,720
Total Operating Cost $ $0 $14,759,000 $14,759,000 $14,759,000 $14,759,000 $7,588,591 $66,624,591
Operating Profit $0 $5,498,580 $12,251,440 $12,251,440 $12,251,440 $10,459,358 $52,712,258
Royalty - MinQuest 5 3% $0 $164,957 $367,543 $367,543 $367,543 $313,781 $1,581,368
EBITDA $0 $5,333,623 $11,883,897 $11,883,897 $11,883,897 $10,145,577 $51,130,890
Capital Expenditures
Permitting $ $2,000,000 $2,000,000 $2,000,000
Mine & Surface Services Infrastructure $ $2,219,791 $0 $2,219,791
Process Water $ $2,000,000 $2,000,000 $2,000,000
Indirects & Project Management $ $2,535,093 $0 $2,535,093
Heap Pad Construction $ $2,249,562 $2,249,562
Gold Recovery Plant $ $8,096,877 $8,096,877
Contingency $2,565,198 $2,565,198
Working Capital $ $3,689,750 -$3,689,750 $0
Mine Closure $ $1,000,000 $1,000,000
Total Capital Expenditures $ $21,666,522 $3,689,750 $0 $0 $0 -$2,689,750 $22,666,522
Project Pre-Tax Cashflow $ -$21,666,522 $1,643,873 $11,883,897 $11,883,897 $11,883,897 $12,835,327 $28,464,368
Project Cumulative Cashflow $ -$21,666,522 -$20,022,649 -$8,138,752 $3,745,144 $15,629,041 $28,464,368
IRR 29%
NPV 5% $19,788,000
10% $13,331,000
15% $8,469,000
Year
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Star Gold Inc. Longstreet Project Scoping Study 91
Table 15.3 Cash Flow Summary
Undiscounted Net Revenue $119 million
Undiscounted Cashflow $ 29 million
NPV (10%) $ 13 million
NPV (15%) $ 9 million
IRR 29%
Payback Period 2.7 years
15.4 Sensitivity analysis
Sensitivity analysis was performed for metal prices, capital expenditures, operating costs, mined grades and heap leach recoveries using 15 percent positive and negative variations, except for recoveries which were limited to +/- 5% (as this is realistically the range that recoveries could be expected to vary). The project is very sensitive to changes in metals prices and reasonably sensitive to changes in all the other variables. The results of the sensitivity analysis are presented in Table 15.4.
Table 15.4 Pre-Tax Sensitivity Analysis
The IRR and NPV sensitivities to variations in key parameters are depicted graphically in Figures
15.1 and 15.2. The IRR is most sensitive to variations in metal prices and mined grades and least
sensitive to operating costs. Potential expected metals recoveries variations show limited
Variable Variation NPV @
10% ($millions)
IRR (%)
Metal Prices +15% 25 46
Metal Prices -15% 1 12
Capital Expenditure +15% 10 24
Capital Expenditure -15% 16 36
Operating Costs +15% 6 19
Operating Costs -15% 20 40
Mined Grades +15% 25 45
Mined Grades -15% 1 12
Metals Recovery +5% 17 35
Metals Recovery -5% 9 24
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Star Gold Inc. Longstreet Project Scoping Study 92
sensitivity but should the recoveries fall to a greater percentage the viability of the operation
could quickly be rendered uneconomic.
Figure 15.2 Pre-Tax IRR Sensitivities
Figure 15.3 NPV10 Sensitivity Analysis
An isolation of the effect of gold price variability on the Longstreet Project provides a clear picture of the
impact of this variable, as shown in Figures 15.4 and 15.5.
0
10
20
30
40
50
60
-15% -10% -5% 0% 5% 10% 15%
IRR
(%
)
Percentage Change In Variable (%)
Metal Prices Capital Costs Operating Costs
Mined Grade Metals Recovery
-5
0
5
10
15
20
25
30
35
-15% -10% -5% 0% 5% 10% 15%
NP
V (
$U
S m
illio
ns)
Percentage Change In Variable (%)
Metal Prices Capital Costs Operating Costs
Mined Grade Metals Recovery
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Star Gold Inc. Longstreet Project Scoping Study 93
Figure 15.4 Project IRR Sensitivity to Gold Price
Figure 15.5 Project NPV Sensitivity to Gold Price
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Star Gold Inc. Longstreet Project Scoping Study 94
15.5 Economic interpretations and conclusions
Based on the study results, conclusions are:
1. The Project provides positive and robust returns. 2. Longstreet is a small deposit which can be developed for production at reasonable
cost in a near-term horizon, providing regulatory permits are achieved.
3. The Project is most sensitive to variations in the price of gold and variations in the mined grade of mineralized material.
4. Increasing the tonnage delivered to the heap leach pad by discovering and mining
economic satellite deposits also has a significant positive impact on project returns.
The initial capital investment will be repaid by the Main Zone and almost all of the
operating profits from other deposits would report to the cashflow line.
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Star Gold Inc. Longstreet Project Scoping Study 95
16 PROJECT RISK ASSESSMENT
The Longstreet Project is technically uncomplicated because of the near surface nature of the deposit and relatively simple open pit mining. The heap leach system is well proven for these
types of gold mineralization in Nevada and should achieve good gold recoveries. Infrastructure
requirements are also relatively risk free as the mine is in an area of other economic activity with many regional services.
The main risks to project success would be:
Gold price variations, particularly if gold price drops by more than 15% from the
$1,350 per ounce level;
Water supply is a major component which requires further work to identify
sources and adequate volume;
The confidence in the mineral resource represents a risk to the project. Steps
should be taken to upgrade Inferred Resources to at least Indicated Resource
category;
Environmental risks, particularly the ability of the project proponent to secure
permits for road building in an area deemed to be a Roadless Area;
Pre-production capital expenditures represent a relatively low risk as the mine
development and surface infrastructure required to commence production are not overly extensive. Regional communities provide much of the support services for
employees and the mine.
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Star Gold Inc. Longstreet Project Scoping Study 96
17 CONCLUSIONS AND RECOMMENDATIONS
17.1 Conclusions
This Scoping Study has identified a potentially mineable resources of 4.4 million short tons at
0.022 ounces Au per short ton and 0.53 ounces Ag per short ton. The deposit would be mined
by the open pit mining method with gold and silver extracted by heap leach and a gold recovery
plant. The mine site infrastructure facilities would be minimized but include a small surface
shop, warehouse, office complex and water treatment facility.
The mine would operate at 1 million tons per annum and produce approximately 18,700 ounces
of gold and 78,800 ounces silver. Gold and silver recoveries would be 86 percent and 15
percent respectively.
Economic analysis has indicated a robust return depicted by a positive NPV and an Internal Rate
of Return estimated at 29%.
The IRR is most sensitive to variations in metal prices and mined grades and least sensitive to
operating costs. Potential expected metals recoveries variations show limited sensitivity but
should the recoveries fall to a greater percentage the viability of the operation could quickly be
rendered uneconomic.
Based on the study results, the conclusions of AMPL are:
1. The project provides positive and robust returns.
2. Longstreet is a small deposit which can be developed for production at reasonable
cost in a near-term horizon, provided regulatory approval and permits are acquired.
3. The mined grade of ore is an important variable for the success of the operation as is
mining cost. Operating management efforts during mine production must be
focussed on these two parameters.
4. The Project is most sensitive to variations in the price of gold and variations in the
mined grade of mineralized material.
5. The economics of the project would be improved with the discovery and exploitation
of economically viable satellite deposits. Once the capital investment has been
repaid by the Main Zone the operating profits from other deposits would enhance
the Project cash flow.
6. Water sourcing is the largest technical risk factor, particularly to capital expenditures
and operating cost estimates. Ideally a well source will be identified and thus avoid
the added cost of piping water to the site from Five Mile Spring on Clifford Ranch,
currently the nearest identified water source, 12 miles from the Project site. It is not
known if Five Mile Spring produces adequate volume nor if the owner of Clifford
Ranch would agree the sale of water from the spring. Preliminary investigations have
identified two potential sources of well water; one mile to the NE in the Monitor
Range and approximately five miles east in Stone Cabin Valley.
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Star Gold Inc. Longstreet Project Scoping Study 97
7. AMPL has reviewed the permitting requirements of the US Forest Service, The
Bureau of Land Management and the Nevada Division of Environmental Protection
and estimates that, without objection during the public disclosure period of
permitting, the Longstreet Project will require from two to four years to secure the
permits required to begin constructing and operating the mine.
17.2 Recommendations
Based on the results of this Scoping Study, recommendations follow:
Geology
Recommendations for the next phase of mineral resource estimation include:
1. Consider a drilling program to explore mineralization at depth and test the nearby
Central Ridge mineral occurrence.
2. Consider further drilling to better understand the transition zone between oxide &
sulfide to determine the maximum extent of leachable gold mineralized material.
Mining
1. Undertake geotechnical work for open pit slope angles optimization.
2. Obtain firm quotations from qualified local mining contractors
Heap Leaching & Processing Plant
1. Conduct column test work on the oxide adit material to test the mineralogical variability of the deposit.
2. Conduct column leach tests using finer material in conjunction with high pressure rolls i.e. P80 ¼-inch (6.3mm) in order to maximize silver recovery.
3. Use 60 days column leach time for the next phase of testwork as the leach kinetics for gold are fairly rapid and the silver recovery did not increase dramatically even after 190 days of leaching.
4. Conduct column tests using site water as opposed to laboratory tap water in order to determine the effects of site water on leach kinetics.
5. A HPGR (high pressure grinding rolls) evaluation should be considered to investigate improved silver recovery on the master blend composite ore (generic tests show that HPGR use often leads to the formation of micro cracks in the ore which may improve silver leaching kinetics). This would require a Static Pressure Test (SPT) to be performed.
6. Load/permeability tests are recommended on column leach residue samples to confirm permeability under compressive loading.
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Star Gold Inc. Longstreet Project Scoping Study 98
Infrastructure
1. A hydrological study is recommended to identify proximal water sources of adequate
volume to sustain the Longstreet operation.
Environment and Permitting
1. Initiate baseline studies as soon as possible as a precursor for applications for
permits to construct and operate the Project.
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Star Gold Inc. Longstreet Project Scoping Study 99
18 REFERENCES
1) Agnerian, H, Routledge, R. E., and Gharapetian, R, December 2013, Technical Report On
The Longstreet Gold-Silver Property, Nevada, Prepared For Star Gold Corporation by Agnerian
Consulting LTD, North York, Ontario, Canada
2) Eakin, T. E, 1962, Groundwater Appraisal of Ralston and Stone Cabin Valleys, Nye
County, Nevada, Groundwater Resources-Reconnaissance Series-Report 12, U.S. Department of
the Interior, U.S. Geological Survey and State of Nevada Department of Conservation and
Natural Resources
3) Heilweil, V.M. and Brooks, L. E, editors, 2010, Conceptual Model of the Great Basin
Carbonate and Alluvial Aquifer System, Scientific Investigations Report 2010–5193, U.S.
Department of the Interior, U.S. Geological Survey.
4) Price, J. G., 2003, Geology of Nevada, Preprint from Castor, S.B., Papke, K.G., and
Meeuwig, R.O., eds., 2004, Betting on Industrial Minerals, Proceedings of the 39th Forum on the
Geology of Industrial Minerals, May 19–21, 2003, Sparks, Nevada: Nevada Bureau of Mines and
Geology Special Publication 33.
5) Rush, F.E. and Everett, D.E. 1964, Groundwater Appraisal of Momitor, Antelope and
Kobeth Valleys, Nye County, Nevada, Groundwater Resources-Reconnaissance Series-Report 30,
U.S. Department of the Interior, U.S. Geological Survey and State of Nevada Department of
Conservation and Natural Resources
6) Smyth, R. C. and Sharp, J.M., 2006, The hydrology of Tuffs, Special Paper 408, Geologic
Society of America.
7) Noland, P., February 16, 2014, Longstreet Project, Nye County, Nevada Revised
Technical Review and Resource Estimate
8) Kantor, J.A., 2014, Longstreet Gold Project Exploration Potential, Star Gold Study, 2014
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Star Gold Inc. Longstreet Project Scoping Study 100
APPENDIX I
2013 Metallurgical Testwork Report
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Star Gold Inc. Longstreet Project Scoping Study 101
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Star Gold Inc. Longstreet Project Scoping Study 102
APPENDIX II
SITE WATER BALANCE
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Study 103
Longstreet Project Water Balance evaporation
precipitation assumed 5 % = 21 m3/h
make up water 184 m3/h
required 21 m3/h 184 m3/h
evaporation
Mine fresh water consumption
? m3/h LEACH PAD
Mine Pit
Surface Pit
Water Water
evaporation
Solution loses 10.5 m3/h
Pit dewatering Environment ? precipitation
cell Solution loses 10.5 m3/h
evaporation Makeup water
21 m3/h
seepage ? precipitation evaporation
368 m3/h
PLS Pond BLS Pond
Event Pond
173.5 m3/h
ADR Plant173.5 m3/h
Total Fresh Water Demand
make up water - 21 m3/h
booster pump Potable water - 1 m3/h
Reagents - 1 m3/h
Dust supression - 1 m3/h
Well # Well # Well #
BLS Tank
Process water Tank
Reverse Osmosis