Bell Mountain Mine - Gold Royalty
Churchill County, Nevada, USA
Property Description and Location
The Bell Mountain property consists of 54 lode claims covering an area of 651 ha located on Bureau of Land Management ground in Churchill County, Nevada, approximately 82 km southeast of the city of Fallon and 102 km southeast of Reno. The property includes a water well and the right to use said water for mining purposes. The claims are wholly owned by Globex Nevada, Inc., a subsidiary of Globex. The property was acquired from N.A. Degerstrom, Inc. which retains a 2% net smelter return royalty. Globex Nevada has the option to buy-out the NSR by paying US$167,000. The property is currently under a Globex royalty being workd by Eros Resources Corp.
An historic mineral resource of 2.1 million tonnes grading 1.33 gpt gold and 37.55 gpt silver was calculated on the property in 1992. This resource is historical and should not be relied upon as it was not prepared under NI 43-101..
Amended and Restated NI-43-101 Technical Report for the Bell Mountain Project, Churchill County, Nevada
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The property was originally staked in 1914. In 1918, Tonopah Mining Co. conducted underground development and sampling with some additional sampling conducted in 1948. A 270 m long adit was driven in the 1970's. In 1978, Bell Mountain Mining Co., a subsidiary of American Pyramid Resources Inc., did a substantial underground sampling program including driving the 180 m Varga adit along the Stockton Vein (Spurr). A comprehensive feasibility study was completed in 1981, which returned positive metallurgical test results. In 1984, Santa Fe Mining Co. drilled 51 reverse circulation holes principally in the Varga area and 10 holes in the Sphinx area. In 1985, Alhambra Mines reopened and re-sampled the underground workings. Metallurgical tests were undertaken and 18 drill holes completed in the Spurr adit area. Between 1988 and 1993, N.A. Degerstrom drilled 104 holes, completed a technical feasibility study and permitted the property for open-pit mining and heap leaching on the Varga, Spurr and Sphinx zones. Falling metal prices resulted in abandonment of the project.
In 1996, ECU Inc. completed a first phase drill program on the Bell Mountain property. ECU drilled five holes in three zones for a total of 728 m. Best results were returned from hole 96-5 which hit a 58 m long mineralized interval of 1.03 gpt Au equivalent (Au + Ag), including a section grading 1.99 Au equivalent over a length of 25 m.
The property is underlain by siliceous pyroclastic rhyolites. Two major epithermal quartz-adularia vein (low sulphidation) systems have been identified. The veins contain gold and silver as electrum and silver as chlorargyrite and argentite. The vein systems cover a cumulative area of 2.3 km2 of which only 4% has been tested by drilling to an average depth of 25 m, leaving a large area open to exploration. The mineralization occurs in the prolific Walker Lane structural province of West Central Nevada which hosts the main gold producing district in the State.
Exploration and Development
IIn 2004, Globex optioned the property to Platte River Mines who undertook a program of surface and underground sampling followed in late 2004 by diamond drilling. This drilling intersected the gold localizing structure, but failed to expand the resource and the option was dropped.
In 2010, Globex optioned the property to Laurion Mineral Exploration Inc. Laurion can earn a 100% interest in Bell Mountain subject to total cash payments of $40,000, the issuance of 3.7 M Laurion shares and exploration expenditures totaling $3,000,000 on the property over a period of five (5) years. Once the option is exercised the property is subject to sliding-scale Gross Metal Royalty (“GMR”) on all mineral production (gold, silver, etc.) benchmarked against the price of gold (1% GMR at a gold price under US$500/troy oz, 2% GMR at a gold price between US$500 and US$1,200/troy oz and 3% GMR at a gold price over US$1,200/troy oz), in favor of Globex.
In 2010, Laurion completed a 56 hole drill program totaling 4,343 m to confirm previous results and to test for mineralization below current mineralized zones. The reader is referred to the 2011 Annual Information Form filed on SEDAR (www.sedar.com) and on the Globex website (www.globexmining.com) for details of the significant drill intercepts from this initial drill program.
In 2011, Laurion examined an additional historic gold zone referred to as the East Ridge located 1.5 km east of Varga and where historic intercepts returned best values of 2.75 gpt Au/2.75 m (hole CC-2), 2.62 gpt Au/1.8 m (hole CC-7), 1.8 gpt Au/3.66 m (hole CC-10) and 3.13 gpt Au/3.66 m (hole CC-12). The objective was to determine whether this zone could eventually be incorporated as additional mineral resources on the property. Telesto Nevada Inc. was commissioned by Laurion and Globex to estimate a resource on 3 of the properties mineralized zones using historic information and new drill information generated by Laurion. The estimate evaluated the mineral resource in terms of being operated as a low cost, open pit, heap leach operation. The initial mineral resource estimate calculated by Telesto was 9.76 Mt grading 0.526 gpt Au, 17.63 gpt Ag hosting 165 thousand ounces gold, 5.5M ounces silver. The estimate was based on 16,671 m of drilling, using a pit cut-off grade of 0.192 gpt Au, assuming 80% gold recovery and 51% silver recovery. The NI 43-101 Technical Report and resource estimate was filed by Laurion on SEDAR (www.sedar.com) on May 4, 2011.
In November 2011, Laurion completed a 1,219 m drill program testing the Sphinx zone (823 m) and the Varga zone (396 m). Best intercepts in the Sphinx zone returned; 0.527 gpt Au, 14.2 gpt Ag/6.1 m (hole Spx-2), 0.418 gpt Au, 8.6 gpt Ag/13.7 m (hole Spx-3) and 0.356 gpt Au, 8.5 gpt Ag/12.19 m (hole Spx-4). Metallurgical test work, baseline studies for the Environmental Assessment permit and the initial pit analysis were also completed.
In September 2012, Laurion Mineral Exploration negotiated a sales agreement with Vancouver-based Lincoln Mining Corporation (“Lincoln”) whereby the contractual obligations required to complete Laurion’s option under the existing Laurion/Globex agreement were delegated to Lincoln. In order for Lincoln Mining to acquire a 100% interest in the Bell Mountain Property through its agreement with Laurion, it must expend the balance of the $1.755M in work commitments made to Globex and honor the two previously mentioned royalty obligations; (2% NSR) to N. A. Degerstrom and (sliding scale 1-3% GMR) to Globex (ref. Lincoln Mining Corp. press release dated November, 28, 2012).
In 2013, Lincoln Mining carried out an infill, metallurgical and geotechnical drilling program of 35 drill holes using both reverse circulation and diamond drilling.
Also in 2013, Lincoln announced that advancement of field work on all of its projects in the United States would be put on hold until Lincoln Mining was able to meet certain conditions placed upon it by the Committee on Foreign Investment in the United States. These conditions related to an investment by Procon Resources Inc. (“PRI”) in Lincoln. Pursuant to this development, Lincoln and PRI committed to the regulatory authority that PRI will divest of its entire investment in Lincoln to a third party investor that was acceptable to the Committee on Foreign Investment. On March 3, 2014, Lincoln announced that they had been advised by PRI that they had completed the divestment of its interests in Lincoln Mining by selling 46M common shares of Lincoln, through a private sale, to Mr. Ronald K. Netolitzky, a Canadian mining entrepreneur. As a result, there are no more operational or financial ties between PRI and Lincoln.
On February 2, 2015, Laurion announced in a press release that it had terminated, for non-payment by Lincoln Mining Corporation (“Lincoln”), the purchase and sale agreement dated November 28, 2012, as amended (the “Purchase Agreement”). Pursuant to the Purchase Agreement, Lincoln was to pay Laurion a cash purchase price of $2,350,000 according to a prescribed payment schedule as consideration for the acquisition of certain mining claims, and an option to earn a 100% interest in the Bell Mountain property.
On February 25, 2015 Laurion announced that it had entered into a non-binding Letter of Intent (“LOI”) with Boss Power Corp. (TSX.V: BPU) ("Boss Power") dated February 20, 2015, to acquire legal and beneficial right, title and interest in the Bell Mountain Project. On signing of the LOI, Boss Power paid a non-refundable deposit of $200,000 to Laurion as partial payment of the purchase price.
On May 15 2015, Boss Power announced it had filed an amended and restated NI 43-101 technical report dated May 6, 2015 prepared by Welsh Hagan Associates (formerly Telesto Nevada, Inc.) titled “Amended and Restated NI 43-101 Technical Report for the Bell Mountain Project, Churchill County, Nevada.” The resource estimate quoted in the Boss Power Press release and the Technical Report has an effective date of May 3, 2011. The report is filed under Eros’ disclosure on SEDAR (www.sedar.com) and accessible through Eros and Globex web pages.
In June 2015, Boss Power formally advised Globex that it had completed the expenditure earn-in obligations to Globex. Globex has advised Boss Power that under the agreement it has deemed that June 15, 2015 is the date of the Exercise of the Option and that the Advanced Royalty Payment of $20,000 due under the Agreement will be payable on each anniversary of the Exercise of the Option starting on June 15, 2016. In July, 2015, Boss Power announced that it had changed its name to Eros Resources Corp.
Environmental studies continued at the property during the year in preparation for permitting.