Home   |   Contact Us   |   Site Map

Summary:

Property size:		73 km2
Location:		Within the Long Canyon trend, straddling the Nevada/Utah border
Ownership:		Under earn-in option from Fronteer Gold (now Newmont); West Kirkland can earn 51- 60% depending on expenditures
Target:		Sediment hosted (Carlin style) gold deposits
Previous work:		Extensively drilled by previous operators, including Noranda, Western States Minerals and Fronteer Gold. West Kirkland completed an initial NI 43-101 Resource estimate on the TUG deposit, which was announced June 1, 2012.
2013 PEA:		New Resource Estimate and Preliminary Economic Assessment (PEA) by Roscoe Postle Associates USA Ltd. prepared September 13, 2013.

   

TUG Deposit, Resource Estimate

In September of 2013 a new Mineral Resource and a Preliminary Economic Assessment (PEA) was published forWest Kirkland’s TUG Project, Utah. To meet a 60% earn-in requirement with its partner, Newmont Mining Corp., West Kirkland has spent over $4 million at TUG. Subject to Newmont’s confirmation of the earn-in expenditures, the two companies are forming a joint venture to advance the project.

The following details on the TUG project are taken directly from the PEA:

The resource estimate and PEA were prepared in conformance with NI 43-101 by Roscoe Postle Associates USA Ltd. (RPA). The study predicts a 26% after-tax IRR and $9 million NPV(8%) at $1,525 gold/ $28 silver, and an in-pit indicated resource of 114,000 ounces gold plus 5.4 million ounces silver with an inferred resource of 3,000 ounces gold plus 298,000 ounces silver. Initial capital cost is projected to be $24 million. Note that all funds are stated in US$.

Highlights of the PEA

RPA’s economic assessment focused on the most economical part of the Mineral Resource, which is based on heap leach processing as outlined in Table 4.  The processing method selected for the PEA was determined by comparing the milling and heap leaching cash flow analyses.

Table 1  TUG PEA Preliminary Economic Assessment April 30, 2013
Gold Price	$1,525/oz
Silver Price	$28/oz
Total Rock	15.6 million tonnes
Waste Rock	11.4 million tonnes
Mineralized Material (non-diluted) Indicated	3.94 million tonnes
Mineralized Material (non-diluted) Inferred	0.26 million tonnes
Stripping Ratio	2.7:1 (waste to mineralized)
Average Processing Rate	3,000 tpd (heap leach)
Gold Recovery	58%
Silver Recovery	15%
Initial Capital (includes Contingency & Bonding)	$24 million
Contingency (25%)	$4.7 million
Environmental Bonding Estimate	$1.7 million
Cash Operating Cost per ounce Gold Equivalent	$902 per ounce (AuEq)
Mine Life	4 years
IRR (pre-tax)	33%
NPV (pre-tax, 8% discount rate)	$12 million
IRR (after-tax)	26%
NPV (after-tax, 8% discount rate)	$9 million

Note: Mineral Resources do not have any demonstrated economic viability and resources may never be upgraded to a higher category or be upgraded to reserves.

TUG In-Pit Resource


(Click to enlarge)

NOTE: The economic analysis is based in part on Inferred Resources and is preliminary in nature.  Inferred Resources are considered too geologically speculative to have mining and economic considerations applied to them or to be categorized as Mineral Reserves.  There is no certainty that economic forecasts on which this Preliminary Economic Assessment is based will be realized.  The complete PEA technical report on the TUG property will be filed on SEDAR within 45 days of this release.

Economic Sensitivity
RPA prepared a sensitivity analysis of IRR and NPV to gold and silver prices:

Table 2  TUG Economic Sensitivity Analysis
Sensitivities to Au/Ag Prices		Au-$1,300 Ag-$23	Base Case Au-$1,525 Ag-$28	Au-$1,700 Ag-$29
Pre-Tax IRR	%	4%	33%	45%
Pre-tax NPV at 8% discount rate	$ Million	($2)	$12	$20
After-Tax IRR	%	2%	26%	36%
After-Tax NPV at 8% discount rate	$ Million	($3)	$9	$15

TUG Project Opportunities

RPA has identified several opportunities which have the potential to improve the TUG Project.  These include:

• Drilling more twinned drill holes to investigate whether gold and silver grades are under-reported in some of the historical reverse circulation drill;
• Re-assaying pulps from some historical drill holes that have a known low bias for silver;
• RPA recommends that a comprehensive metallurgical testing program be completed for the Project which might lead to improved recoveries;
• RPA recommends improving the accuracy of capital and operating cost estimates, optimizing the mining schedule, and investigating alternative crushing processes such as high pressure grinding rolls or vibration cone crushers, all of which have the potential to improve the project economics;
• Investigate milling after the mine has operated with a heap leach, which would achieve higher gold and silver recoveries from mineralized material, potentially doubling the current economically mineable portion of the mineral resource, and allowing further recovery of gold and silver from leached material; and
• Perform work on the adjacent KB deposit and other nearby exploration targets to allow their inclusion in the TUG project.

TUG Conceptual Surface Layout

(Click to enlarge)

Mineral Resource Estimate

RPA’s Mineral Resource estimate is based on an open pit mining scenario. A potentially minable Mineral Resource is reported at a $17/tonne net smelter return (NSR) cut-off within a preliminary Whittle pit shell.

Table 3 - Mineral Resource Estimate – April 30, 2013
Category	Tonnes	Gold	Silver	Gold	Silver
	t (000)	(g/t)	(g/t)	(oz)	(oz)
Indicated	4,846	0.84	40.4	131,000	6,297,000
Inferred	4,400	0.79	30.3	111,000	4,271,000

Notes:

1. Mineral resources that are not mineral reserves do not have demonstrated economic viability
2. CIM definitions are followed for classification of Mineral Resources
3. Mineral Resources are estimated using a gold price of $1,700 per ounce and a silver price of $29 per ounce
4. Gold and silver recovery factors of 90% and 60% respectively are used
5. High grade assays are capped at 10 g/t Au and 500 g/t Ag
6. Tonnage factor for mineralization was 2.55 t/m³
7. Resources are constrained by a Whittle shell and reported at a $17/t NSR cut-off
8. Totals may not represent the sum of the parts due to rounding
9. The Mineral Resource Estimate was prepared by Luke Evans, M.Sc, P.Eng, RPA, April 30, 2013

Table 4 - economically assessed Resource – April 30, 2013
Category	Tonnes	Gold	Ag	AuEq*	Gold	Ag
	t (000)	(g/t)	(g/t)	(g/t)	(oz)	(oz)
Indicated	3,944	0.90	42.8	1.69	114,000	5,427,000
Inferred	255	0.42	36.32	1.09	3,000	298,000

Notes:

1. CIM definitions are followed for classification of Mineral Resources within the pit used for the economic analysis
2. Mineral Resources are estimated using a gold price of $1,700 per ounce and a silver price of $29 per ounce
3. Heap Leaching gold and silver recovery factors of 58% and 15%, respectively are used
4. Tonnage factor for mineralization was 2.55 t/m³
5. No dilution applied to mineral resources, 97% mining recovery used
6. Resources are constrained by a Whittle shell and reported at a $8.05/t NSR cut-off for heap leaching
7. Totals may not represent the sum of the parts due to rounding
8. The Mineral Resource Estimate used in the economic analysis was prepared by Luke Evans, M.Sc, P.Eng, RPA, April 30, 2013
9. AuEq was calculated using the following formula: AuEq = Au grade + Ag Grade * 0.0183

Background to the TUG Property

The TUG property comprises an outcropping gold and silver deposit in the Long Canyon Trend, north-west Utah. The deposit has structural features similar to those at Newmont’s nearby 2.6 million ounce Long Canyon property. TUG was discovered and extensively drilled in the 1980s and 1990s by various owners including Noranda and Western States Minerals Corporation. West Kirkland optioned TUG in 2010 from Fronteer as part of a large land package in the Long Canyon Trend.

Adjacent Properties

West Kirkland holds two large scale option positions in the Long Canyon Trend of Nevada and Utah from Newmont and Rubicon Minerals. Included in the Newmont Option agreement is the adjacent KB Property which features a historic mineral resource containing 40,000 ounces of gold in 1.73 million tonnes grading 0.72 g/t Au with a 0.34 g/t Au cut-off.  The reader is cautioned that a qualified person has not done sufficient work to classify the historical estimate as current mineral resources and the issuer is not treating the historical estimate as current mineral resources.   Additional work is required to make this estimate current. The Company intends to assess the KB deposit to determine its impact on the economic potential of the TUG project.  The 12 Mile and Bandito drill targets held within the Rubicon option agreement area intersected oxide gold mineralization near surface similar to the TUG deposit and warrant further exploration. Surface exploration within the Rubicon option area is ongoing and further drilling will be considered as part of an overall TUG deposit and Long Canyon strategy that the Company has planned for the months ahead.

(Click to enlarge)

Authors and Qualified Persons Statement

*The PEA and Mineral Resource Estimate were prepared in conformance with NI 43-101 by Roscoe Postle Associates USA Ltd (RPA). The report, titled “Technical Report on the Tecoma Utah Gold Project Utah, USA” was prepared September 13, 2013 by Stuart Collins, P.E., Kathy Altman, P.E., Ph.D., and Luke Evans, P.Eng, each an independent "Qualified Person" under NI 43-101. Input for the PEA was provided by Newfields (civil and heap leach), Gault Group (environmental & permitting), and Hansen Allen & Luce (hydrogeology).

Michael G. Allen, Vice President of Exploration for West Kirkland, and a qualified person as defined by NI 43-101, has reviewed and approved the technical information stated above other than the inferred mineral resource estimate, including but not limited to the plans of the Company. He is the non-independent qualified person for the purpose of the information contained on this web page.

Updated February 20, 2014