Hollister Nevada

The Hollister Mine (Ivanhoe Mining District), which Hecla acquired in July 2018, is located in Elko County, approximately 130 km (~80 mi.) northeast of the town of Winnemucca, Nevada and 29 km (~18 mi.) southeast of the Midas Mine.

Map - Hollister
Overview & History

The Hollister Mine is a large, very well preserved low-sulfidation, epithermal gold-silver deposit associated with mid-Miocene bimodal volcanism of the NNR. Over 115,000 ounces of volcanic-hosted, low-grade gold were extracted from 2 open pits. Later drilling led to the discovery of blind, high-grade veins in the Valmy Formation, Paleozoic basement rocks, which have produced >450,000 ounces of gold and >2.5 million ounces of silver from ore averaging ~34 g/t Au (1.00 opt) and 200 g/t Ag (5.83 opt) from cut-and-fill and longhole stoping since 2007. Typical epithermal vein textures are displayed at Hollister, most commonly massive, banded, bladed quartz, and vein breccias. Other features spatially related to the highest grades include the presence of banded quartz, bladed quartz, and alunite.

Geology

The mine is located along the Northern Nevada Rift (NNR) which is a major, north-northwest to south-southeast trending structural feature that that extends for at least 300 miles, from south-central Nevada to the Oregon-Nevada border. This is on trend with the north-western end of the Carlin Trend, which is approximately 5 miles wide and 40 miles long. Mineralization is related to the Miocene period of magmatic activity associated with the NNR while gold mineralization on the Carling Trend has been dated to late Eocene/early Oligocene magmatism.

Epithermal disseminated gold mineralization is hosted in volcanic tuffaceous units, andesites, and the Ordovician Vinini Formation. High-grade gold and silver mineralization is hosted as banded quartz veins in a group of near-vertical faults and fissures that trend west-northwest to east-west. The amount of displacement across these faults is small and their strike continuity varies between one hundred to several thousand feet. Primary lithologies in the area have been strongly altered by hydrothermal fluids with large areas of chalcedonic replacement bodies at the paleo water table in addition to sinter deposits.

Production
(years ended December 31)
2017
Silver (ounces) 47,305
Gold (ounces) 6,751
 
Reserves & Resources

Information with respect to proven and probable ore reserves, measured, and inferred resources is set forth below.

Mineral Reserves
(As of May 31, 2017 unless otherwise noted – Reserves at US$1,200/oz Au and US$17.00/oz Ag)
 Tons Au Au Ag Ag AuEq AuEq Au Ag AuEq
(k) (opt) (g/t) (opt) (g/t) (opt) (g/t) (koz) (koz) (koz)
Proven 50.8 0.553 19.0 2.90 99.6 0.580 19.9 28.1 147.5 29.5
Probable 148.8 0.552 18.9 3.20 109.7 0.582 20.0 82.2 476.2 86.6
Total P&P 199.5 0.553 18.9 3.13 107.2 0.582 19.9 110.3 623.7 116.1
 
Mineral Resources
(As of May 31, 2017 unless otherwise noted – Resources at $1400/oz Au and $19.83/oz Ag)
 Tons Au Au Ag Ag AuEq AuEq Au Ag AuEq
(k) (opt) (g/t) (opt) (g/t) (opt) (g/t) (koz) (koz) (koz)
Measured 114.3 0.537 18.4 3.05 104.7 0.565 19.4 61.4 349.0 64.6
Indicated 314.3 0.465 15.9 2.35 80.5 0.487 16.7 146.1 737.9 152.9
Total M&I 428.6 0.484 16.6 2.54 86.9 0.507 17.4 207.5 1,086.9 217.5
Inferred 176.0 0.420 14.4 2.71 92.9 0.445 15.3 73.9 476.9 78.3
 
(footnotes)
Reserves
Mineral Resource is inclusive of Mineral Reserve;
Mineral Reserves have been estimated with a gold price of $1,200/ounce and a silver price of $17.00/ounce;
Metallurgical recoveries for gold and silver are 92% and 60% respectively;
Gold equivalent ounces are calculated based on one ounce of gold being equivalent to 108.24 ounces of silver;
Mineral Reserves are estimated at a cutoff grade of 0.310 AuEq opt and an incremental cutoff grade of 0.052 AuEq opt;
Mine losses of 5% and unplanned mining dilution of 10% have been applied to the designed mine excavations;
Mineral Reserves are contained in the Mineral Resource estimate previously reported on June 21, 2017.

Resources
Mineral Resources are calculated at a gold price of US$1,400 per ounce and a silver price of US$19.83 per ounce.

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. Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.

Exploration

Exploration potential at the Hollister project is very good. The Hollister land package is in the northwestern part of Carlin trend and covers a large area of high-level low-sulfidation epithermal siliceous sinter and acid sulfate alteration. The areal extent of this sinter and alteration is quite large and indicates that the potential for several additional hydrothermal up-flow zone centers related to mineralization on the land package is extremely good.

Detailed geologic mapping to date has been completed on roughly 40% of the Hollister land package and has identified several surface expressions of multiple hydrothermal vents and hydrothermal eruptive centers. These eruptive centers are surface expressions of the hydrothermal systems occurring at depth and appear to be several distinct hydrothermal cells which could host additional economic mineralization.

At Hollister, exploration drilling in the third and fourth quarters of 2018 will be focused on expanding resources along strike of the West Gloria vein and along strike and at depth of the Hatter Graben vein system. Additional drilling will occur at the Rowena target area below the historic open pits offsetting high-grade gold drillhole intercepts that have yet to be tested.

Hatter Graben

The Hatter Graben vein system provides the next leg of growth at Hollister. This vein system is located approximately 2,500 feet east of the Mine’s underground development and has been down dropped approximately 800 feet lower than the current Mine resource. The system of mineralized veins have a known vertical extent of 1,400 feet and strike length of 2,000 feet. This East-West trending zone is open along strike to the east and west and at depth and mineralization is strengthening in the East as historic high-grade intersections occur up to 4000 feet along strike to the east.

Gold and silver mineralization is dominantly in the Ordovician quartzites, siltites and argillites. Higher grades are associated with banded quartz veins from inches to feet in width and extensive zones of quartz vein stockwork and quartz matrix breccias also contain significant mineralization. Significant mineralized drillhole intercepts include 7.8 Au oz/ton over 1.4 feet, 1.77 AU oz/ton over 2.1 feet, 1.4 Au oz/ton over 2.3 feet, 0.54 Au oz/t over 7.8 feet, and 0.47 Au oz/ton over 12.5 feet.

Additional drilling in the Hatter Graben during the 2017 surface exploration program provided positive assays, setting the groundwork for future exploration and further meaningful gold discoveries. This presents potential for improved recoveries for Hollister ore at the Midas mill, increasing production through ramp up to significantly improve costs. Adjacent exploration targets include Velvet, Gloria, and Upper Zones