The Fire Creek mine, which Hecla acquired in July 2018, is located primarily in Lander County, Nevada, approximately 63 miles west of Elko, Nevada, overlooking Crescent Valley. The Project comprises private fee lands (both leased and owned) and unpatented lode mining claims. The land position includes approximately 15,420 acres of unpatented federal lode mining claims, 1,110 acres of private fee land and 230 acres of mineral leases. Overall, the Fire Creek land package is approximately 17,000 acres.
Fire Creek is a modern, mechanized narrow vein mine. Only the mineralized veins accessible from main development have been defined to a sufficient level of detail to categorize as reserves. Additional potential exists to extend reserves along strike in both directions and at depth as underground access is developed. As the footprint of the mine grows and the number of available mining areas grows with it, the mining rate can be increased, and cost reductions realized through economies of scale.
Ongoing mine development comprises most of the capital costs, and the ability to access multiple veins from common development greatly reduces the unit cost per ounce.
Gold mineralization at Fire Creek occurs in steeply dipping epithermal veins within Tertiary basalt flows and intrusive rocks. The mineralized basaltic rocks are a suite of mafic, extrusive rocks associated with the regional north-northwest-trending NNR structural zone. The NNR system has been documented in multiple geophysical and geological studies and is distinguished as a linear magnetic anomaly approximately 30 miles wide that extends 190 miles south-southeast from the Oregon-Nevada border to central Nevada. The NNR originates from the McDermitt Caldera in northwest Nevada and is likely related to impingement of the Yellowstone hot-spot on continental crust.
The deposit is a low-sulfidation epithermal deposit vertically-zoned within high-angle northwest striking structures, hosted in a mid-Miocene basalt package. Gold mineralization occurs as shallow structurally-controlled fault hosted gold mineralization in variably altered Tertiary basalts and as native gold in steeply dipping quartz-calcite veins or structures. A package of middle Miocene basalt and basaltic andesite flow has been cut by high-angle normal faults related to both Northern Nevada Rift (NNR) and Basin and Range extension that form grabens and half-grabens which are the structural controls for in the district.
High-grade gold mineralization has been delineated between approximately 4,900 feet and 5,700 feet AMSL and is open both up and down dip as well as along strike. Lower-grade gold mineralization occurs from the surface and mineralization is open at depth. Vein textures, gangue minerals, and alteration seen at Fire Creek are typical of low-sulfidation epithermal systems. Widespread propylitic alteration grades to argillic alteration proximal to veins and/or other structural fluid conduits. Low-grade gold mineralization is often spatially associated with the argillic alteration zone surrounding the high-grade gold. Mineralization that often occurs along discrete horizons within vein structures. An opaline silica cap is discontinuously preserved at surface above the main mineralization at Fire Creek. Mineralized faults near this opaline silica were targeted by early prospecting and later shallow drilling by previous operators in the 1980’s.
Fire Creek is defined by two major north-northwest striking vein arrays, each comprised of several en-echelon veins. Several new target areas outside of the known vein arrays have been defined by both gradient-array and dipole-dipole induced polarization surveys as well as VTEM geophysical surveys.
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Information with respect to proven and probable ore reserves; and measured, indicated, and inferred resources is set forth below.
|Underground Mineral Reserves
(As of November 30, 2017 unless otherwise noted – Reserves at US$1,200/oz Au and US$17.00/oz Ag)
- (footnotes)Reserves have been estimated using a gold price of US$1,200/ounce and a silver price of US$17.00/ounce;
Metallurgical recoveries for gold and silver are 93% and 88% respectively;
Gold equivalent ounces were calculated based on one ounce of gold being equivalent to 74.60 ounces of silver;
Mineral Reserves were estimated at a cutoff grade of 0.288 Au opt and an incremental cutoff grade of 0.09 Equivalent Au opt;
Mine losses of 5% and unplanned mining dilution of 10% have been applied to the designed mine excavations.
|Underground Mineral Resources
(As of November 30, 2017 unless otherwise noted – Resources at US$1,400/oz Au and US$19.83/oz Ag)
- (footnotes)Mineral resources have been estimated at a gold price of US$1,400/troy ounce and a silver price of US$19.83per troy ounce;
Mineral resources have been estimated using metallurgical recoveries for gold and silver of 94% and 92% respectively;
Mineral resources have been estimated at a grade thickness cut-off grade of 0.974 Au equivalent opt-feet and a diluted Au equivalent cut-off grade of 0.228opt;
Gold equivalent ounces were calculated based on one ounce of gold being equivalent to 72.12 ounces of silver;
The minimum mining width is defined as four feet or the vein true thickness plus two feet, whichever is greater;
Mineral resources include dilution to achieve mining widths and an additional 7% unplanned dilution;
Mineral resources include allowance for 5% mining losses;
Mineral resources are inclusive of mineral reserves;
Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant factors;
The quantity and grade of reported inferred mineral resources in this estimation are uncertain in nature and there is insufficient exploration to define these inferred mineral 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;
The underground Mineral Resource is exclusive of the open pit Mineral Resource.
|Open Pit Mineral Resources
(As of November 30, 2017 unless otherwise noted – Resources at US$1,400/oz Au and US$19.83/oz Ag)
- (footnotes)Mineral resources are calculated at a gold price of US$1,400 per ounce and a silver price of US$19.83 per ounce;
Metallurgical recoveries for gold and silver are 65% and 30%, respectively for oxide mineralization and 60% and 25% respectively for mixed mineralization;
One ounce of gold is equivalent to 152.94 ounces of silver;
Mineral Resources include 10% dilution and 5% mining losses;
Cut off grades for the Mineral Resources are 0.01opt AuEq opt;
Mineral Resources which are not Mineral Reserves have not yet demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues;
The quantity and grade of reported Inferred Resources in this estimation are 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;
The open pit Mineral Resource is exclusive of the underground Mineral Resource.
2017 Klondex Reserves & Resources PDF
There were two drill rigs operating underground at Fire Creek in the third quarter of 2018. The first drill rig has recently started to evaluate the upper portions of Spiral 3 along the Karen and Hui Wu structures where a number of very high-grade headings suggest the mineralization extends beyond the current resource. The second drill rig has completed four of seven holes designed to test the up-dip extent of Spiral 4 including the Joyce and 06 veins. Additional definition drilling in the Spiral 2 and Spiral 4 areas is expected to extend mine life by defining and upgrading new resources. Other high-grade mineralized areas occur between Haulage 3 and Spiral 2 and will be the focus of future drilling. Underground drift development is advancing Haulage 9 to provide an exploration drill platform by early next year. This platform will enable exploration drilling of the Spiral 9 veins with the goal of expanding them to the north and south.
Three surface exploration rigs operated at the Fire Creek Mine in the third quarter of 2018 with the goal of extending current high-grade, gold-bearing structures. The drills are focused on two targets including: 1) two drills at the Zeus target northwest of the mine and 2) one drill at the Far View target southeast of the mine. The first six surface holes drilled at the Zeus target have intersected a continuous structure with strong argillic alteration and mineralization typical of high-grade mineralization in this area. Recent results, including intersections of 1.67 oz/ton gold over 1.2 feet and 0.46 oz/ton gold over 12.0 feet at the margins of the basaltic dikes, confirm our positive opinion of this target. Drilling continues to extend the resource to the south and at depth. Drilling of the Guard Shack southeast of the mine encountered structures with strong argillic alteration typical of the gold-bearing structures in the area and suggests the mineralization carries further to the south. West of the Guard Shack target is a geophysical, resistivity-high target that is believed to be a linking structure between the Joyce and Titan zones and will be tested later this year.
In the third quarter of 2018, an Induced Polarization (IP)/resistivity geophysical survey was completed to the south along the known structural corridor, in the South Notice area. The survey is designed to help refine targets scheduled to be drilled later in the year and next year. The survey identified a target which is interpreted to be either a silica cap or sinter which is often associated with gold mineralization. In addition, three north-south striking chargeability highs were identified in the South Notice target area. Anomalies like these could correspond to sulfide feeder structures where gold mineralization may be found.