The 100% owned Green Springs property is located in the southwest
corner of the historic White Pine mining district, 35 miles west of
Ely, Nevada and 7 miles south of Mt. Hamilton. The property consists of
193 unpatented mineral claims covering an area of 3700 acres. Green
Springs is a past operating heap leach gold mine which produced
1.1 million metric tons of ore averaging 2.1 g/t gold and is prospective
for Carlin-style gold and silver mineralization. The property was
originally staked in 1979 by U.S. Minerals Exploration Company ("USMX")
who explored the property from 1980-1988. During this time they drilled
~600 RC drill holes outlining six deposits throughout the claim block.
Mining commenced on three of these deposits in 1988 and operated until
1990. It is believed that during
this time USMX extracted ~60,000 Oz of gold from three pits. Three
additional deposits were left un-mined and remain open for delineation
and future production.
Ely Gold and Minerals Inc.
(the "Company"), through its wholly owned
subsidiary DHI Minerals (US) Ltd ("DHI") acquired 100% of the Green
Springs project ("Green Springs" or the "Project") in February 2013 by
making a one-time cash payment of $350,000. The Project is located in
the southwest corner of the historic White Pine mining district, 35
miles west of Ely, Nevada and 7 miles south of the Mt. Hamilton
property owned by Waterton Global, 8 miles east of the Gold Rock project
and 17 owned by GRP Minerals LLC. The initial property consisted of 76
unpatented mineral claims
covering an area of 1500 acres is subject to a 2% NSR.
Prior to purchasing Green Springs, DHI also optioned 2 patented
mining claims (the "Cox Claims") that are within the 76 claim package
The lease on the Cox Claims has a term of 10 years with escalating
annual advance royalty payments and a 100% purchase option. The first
year advance royalty payment was $13,000 and included a significant
amount of the historic drill data and production records from USMX. This
data included over 680 reverse circulation production and exploration
drill holes. The
Company has the option to purchase the claims for an amount equal to
$200,000 less the aggregate of annual advance royalty payments made
prior to the date of exercise. These claims are subject to a 2.25% NSR
and the Company retains an option to a buy-down for 1% for $500,000.
In July 2014, Ely Gold signed a three year option agreement with
Eurasian Minerals ("EMX') to purchase a 100% interest in the Cathedral
Well project. The Cathedral Well property bounds Ely Gold's Green
Springs project area to the east and the west. Pursuant to the
Agreement, Ely Gold can earn a 100% interest in the Project by paying
EMX a total of $100,000 as follows; US$25,000 upon execution of the
Agreement and US$75,000 over the next three years. EMX will retain a
2.5% net smelter return (NSR) royalty, inclusive of an underlying 0.5%
NSR royalty. In addition, after earning the 100% interest in the
Project, Ely Gold will pay EMX annual advance royalties equal to 20
ounces of gold each year beginning year four of the Agreement. After
completion of a feasibility study, prepared in accordance with the
requirements of NI 43-101 and CIM definitions and guidelines covering
either, or both, of the Project and the adjacent Ely Gold properties,
the annual payment will increase to 35 ounces of gold each year
thereafter until commencement of commercial production from either, or
both, of the Project and the adjacent Ely Gold properties. Ely Gold may
purchase 0.5% of the EMX NSR royalty by paying Eurasian 500 ounces of
gold within 60 days after commencement of commercial production from
either, or both, of the Project and the adjacent Ely Gold properties.
There is no work commitments associated with the agreement and EMX will
not retain any royalty on Ely Gold's existing Green Springs project.
EMX acquired Cathedral Well through staking in 2008 through its
wholly owned subsidiary Bronco Creek Exploration Inc. ("Bronco"). They
immediately optioned the property to a wholly-owned subsidiary of
Eldorado Gold Corp. Bronco and Eldorado completed 30.5 line kilometers
of NSAMT and CSAMT geophysical surveys, soil and stream sediment surveys
totaling 1,597 samples, and identified seven targets that were
permitted for drill testing. Six reverse circulation drill holes
totaling 1,426 meters were completed over the western target area. The
Agreement allows for Ely Gold to retain all the EMX data. During the
option period, Ely Gold will manage the Cathedral Well with technical
assistance from the Bronco team.
Mineralization on the Green Springs property is hosted in classic
Carlin style, Devonian to Mississippian sedimentary rocks. The bulk of
gold mineralization outlined by USMX is hosted in the Lower Chainman
Shale and upper Joanna limestone units similar to Midway's Gold Rock
project and Pilot Gold's Griffon project. Of regional significance is the Pilot Shale, which lies
stratigraphically beneath the Joanna Limestone and has been noted in
drill holes at the north end of the property at depths generally less
than 300 ft. There are also several outcroppings of Pilot shale in the
northern and eastern portions of the property. The Pilot Shale hosts
other gold deposits in the region, including Midway Gold's Pan Deposit,
located 14 miles to the northwest; this unit remains relatively
under-explored throughout the property. USMX drilled several holes into
the Pilot Shale in the northern part of the property. Decalcified
samples of Pilot Shale in outcroppings assayed gold values up to 2.5
In addition to the Pilot Shale target, property wide geological
mapping by Genesis Gold in 2008 identified a large area of hydrothermal
alteration with outcropping gold mineralization and strong multi-element
geochemical anomalies in elements typical of Carlin style
mineralization (arsenic, antimony, silver, barium, mercury, and
thallium). Many of these anomalies remain untested at depth.
The Company retained SRK to compile and digitize all of the historic
data to create a modern geologic and mineralization model for the
Property to help guide future exploration on targets proximal to the
historic pits, the three un-mined mineralized zones previously outlined
by USMX as well as new exploration targets property wide.
Enviroscientists, Inc. was retained by the Company to coordinate
permitting and environmental requirements for future work on the
property. Ely Gold filed a Plan of Operations and Environmental
Assessment with the US Forest Service in 2013 covering approximately 75
acres of the combined land package. Approval for the Plan of Operations
and Environmental Assessment were granted in the fall of 2014.
The Company began an initial drill program in the fall of 2015.The
purpose of drill program was to confirm historic USMX drill holes and to
begin to test Pilot Shale targets.
Table - Highlights of historical Green Springs Reverse Circulation drill hole sampling by USMX in the 1980's
*Hole bottomed in mineralization
- All holes Reverse Circulation holes drilled by USMX in 1980's into shallow-dipping western limb of anticline. Intervals are not true thicknesses.