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.


2017 Klondex Reserves & Resources PDF

Exploration

Two rigs were active in the Central Hollister, East Clementine and Gwenivere areas during the third quarter of 2018.  The Central Hollister programs targeted up-dip and lateral extensions of the 141, 151, and 213 veins from 5190 level and down-dip extension of the 182 vein from 5050 level.  Drilling intersected wide zones of mineralized breccia and narrower, high-grade intersections included 1.0 oz/ton gold and 1.8 oz/ton silver over 5.1 feet (141 Vein) and 1.06 oz/ton gold and 8.09 oz/ton silver over 3 .9 feet (151 Vein), and this mineralization remains open up-dip. The drill program targeting the down-dip extension of the 182 Vein included intervals of 4.0 oz/ton gold and 12.1 oz/ton silver over 3.1 feet (including 7.9 oz/ton gold and 23.2 oz/ton silver over 0.9 feet). These drill intercepts strengthened the resource model in the area and confirm mineralization is open at depth.

The East Clementine program in the third quarter of 2018 targeted the 234, 243 and 253 veins at higher elevations near the unconformity where high-grade concentrations of gold can occur.  Multiple intervals of strongly oxidized breccias and veinlets were intercepted including 0.60 oz/ton gold and 0.10 oz/ton silver over 3.0 feet (243 Vein).  Additional drillholes are in progress to offset a historical intercept of 1.78 oz/ton gold and 7.74 oz/ton silver over 1.6 feet (233 Vein).  Assays received from the first up-dip hole of the three-hole drill program intersected 1.8 oz/ton gold and 7.5 oz/ton silver over 1.6 feet which is about 90 feet from current workings.  Mineralization remains open along strike.

In the third quarter of 2018, the Gwenivere program was designed to offset two historical surface reverse circulation (RC) intercepts including 1.3 oz/ton gold and 0.05 oz/ton silver over 10.0 feet and 1.2 oz/ton gold and 0.13 oz/ton silver over 5.0 feet.  Partial assays from the first drillhole include 1.35 oz/ton gold and 0.29 oz/ton silver over 3.0 feet. This new zone of mineralization is approximately 1,500 feet from the portal and represents the discovery of a new vein that is open in all directions.  Initial assays from recent underground drilling in the Gloria Vein, at the west end of the mine, returned narrow assays of over an ounce gold per ton including 1.10 oz/ton gold and 2.7 oz/ton silver over 0.5 feet.  Underground drifting is being extended to the west to provide a drill platform for the western extension of this high-grade mineralization.  Additional definition drilling in the Central Hollister, Gwenivere and West Gloria areas is being planned for the fourth quarter of 2018.

Surface drilling of the Rowena Vein, at the south part of the Hollister vein system, in the third quarter of 2018 intersected strongly brecciated and oxidized veining grading 0.19 oz/ton gold over 25.0 feet including 0.30 oz/ton gold over over 5.1 feet.  This style of gold is more typical of the high-grade “blanket zone” which extends along the unconformity upward into the base of the volcanic rocks.  Additional drilling could recommence after all the assay results are received.

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.

In the third quarter of 2018, the first surface holes were in progress at Hatter Graben with the intent to extend the current resource to the east and west.  Drill holes at 300-foot intervals have intersected swarms with multiple veins and mineralized breccias at the anticipated distance.  Assays are pending.