Hollister

Overview

The 6,900 ha Hollister gold property is located in Elko County, Nevada, USA.

The property is located along the Carlin structural trend and lies midway between the Ken Snyder Mine and the Goldstrike Mine.

The presence of gold mineralization was recognized early-on, but it was not considered to be economically viable due to the limitations of the then-available extraction technologies and the then-prevailing gold prices. The mineral deposit is owned by Great Basin Gold; Newmont has a 5% royalty on certain mineral claims.

Hollister is goinfng to be an underground gold mining operation that over the 8 years LOM will mine 1,048,900 stope tons and will recover 906,900 equivalent Au oz.

In 2010, the company started trial mining at Hollister, transport and processing at Esmeralda, production of doré bars.

Location

The Hollister gold project is located in Elko County, Nevada, USA.

The property area may readily be accessed from Winnemucca, NV (the largest local community). The distance by road is approximately 121 kilometers (approximately 75 miles) and it takes approximately 1.5 hours by vehicle.

It is located in the Great Basin physiographic province of western USA. The Great Basin is characterized by basin and range topography (for example, low-rolling hills typify the general landscape that has elevations that vary between approximately 1,640 and 1,830 meters (approximately 5,380 to 6,000 feet) amsl.

The dominant vegetation consists of high- desert sagebrush and bunch grasses. The flora supports both indigenous fauna (antelope, deer, bighorn sheep, badgers, coyotes, etc.) as well as seasonal cattle grazing. Land use in the area surrounding the project is limited to cattle grazing.

The climate in the general area of Hollister Property is arid, high desert. During the generally long winters temperatures can reach minus 34 degrees Celsius (minus 30 degrees Fahrenheit); during summers they can approach 40 degrees Celsius (104 degrees Fahrenheit). Annual precipitation averages 20 to 25 centimeters (8 to 10 inches); it occurs as snow in the winter and early spring months and as sporadic rain throughout the remainder of the year. Snow can fall from October through March and it can remain on the mountain- and hill-tops until May.

The local exploration field season usually extends from April through to the end of November. Mining operations continue year round.

Geology and Mineralization

The Hollister Property is located at the north-western end of the Carlin Trend that is approximately eight kilometers (five miles) wide and approximately 64 kilometers (40 miles) long.

The rift represents a period of erosion or non-deposition that is probably associated with an extension period. The event is interpreted to have induced higher crustal temperatures and pressures that produced numerous hot springs along the suture zone. Several episodes of post-collision, sub-surface magmatism are known to also have occurred, during which activity hot springs brought dissolved minerals
towards surface. The minerals, including gold and silver, were precipitated along open fissures and shear zones that today are recognized as epithermal gold veins and disseminated gold mineralization.

The main pulse of gold mineralization on the Carlin Trend has been dated at about 38 Ma, which is coeval with late Eocene/early Oligocene magmatism.

Total Proven & Probable reserves were estimated at 951,546t at 27.08 g/t gold and 162.85g/t silver for 1.74Moz gold equivalent.

Mining & Operation

The vertical-dipping gold-bearing veins at Hollister will be accessed by mechanised means and exploited by conventional methods. From the main decline, laterals will be developed on an east-west strike towards mineable vein blocks. From the laterals, man-ways or draw point headings will be developed perpendicular to strike to intersect the veins. Where multiple veins may be mined from the same level,
lateral accesses (generally heading in a north or south direction) may also be developed. From the man-ways or draw points, a raise is developed vertically into the vein to establish the first horizontal mining cut, which would be advanced using hand-held jack-leg drills. This raise may also be developed as an Alimak raise where appropriate. 

A sill pillar will be left between cuts on different levels where ground conditions or mining sequencing dictates. This mining method is based on the selected Overhand Drift (cut) and fill method

A minimum stoping width of 0.91 meters (36 inches) was assumed for purposes of Mineral Reserve estimation, along with dilution defined as waste tonnes (or tons) carrying zero grade and 100 percent in-stope extraction. An analysis by the Company‟s technical staff confirms that no systematic, in-stope pillars will be required because of the cut-and-fill trial mining method now being utilized. Based on the results of trial stoping and grade reconciliation studies, where vein widths of 0.76 meters (30 inches) or greater were considered, a total of 0.15 meters (six inches) of hanging wall dilution and 0.15 meters (six inches) of footwall dilution was applied. Where appropriate, other average dilution rates were applied.

Using the updated Mineral Reserve estimate, an average production profile of 110,000 Au (eqv) oz over 8 years was projected with the estimated cash cost, inclusive of royalties, amounting to US$527 per Au (eqv) oz recovered over the LOM.

A target of 11,000 ore tons per month essentially drove the production schedule. The mine will operate on a 7-day week basis, with two production shifts per day.Over the LOM Hollister Gold Mine will mine 1,048,900 stope tons and will recover 906,900 equivalent Au oz.

From 2018, production will reduce as the lower mine levels are accessed as current mineral reserves are being depleted.

The 'Blanket Zone', depth extensions to the existing veins, and the location of new veins could provide an increase in mineral reserves and therefore an extension of the life-of-mine period.

Processing

The anticipated long lead times for permitting and constructing dedicated, on-site processing and tailings storage facilities, coupled with the estimated capital cost of building such facilities at the Hollister Gold Mine, led to the company‟s decision to pursue alternative strategies, including toll treatment and purchasing of an offsite processing facility. The Company continued with toll treatment in 2009 and
2010, during which time two bulk samples (39,370 tonnes or 43,105 short tons) were supplied to two different Carlin Trend processing facilities.

The company has also purchased the Esmeralda processing facility and the company is now processing all run-of-mine (“ROM”) mineralized material from Hollister Gold Mine at the refurbished and upgraded Esmeralda facility. A total of 93,128 tons has been treated at the Esmeralda Plant to date of which 84,999 tons has been treated in 2010. All the components of the Esmeralda processing facility have now been refurbished, the final phase of operational optimisation is underway.

The Esmeralda facility is now fully operational and treating the ROM mineralized material from Hollister Gold Mine. The final optimisation is now being undertaken by installing acid wash and carbon regeneration as the necessary permit has been granted; optimizing the plant operation through operational experience; and evaluating additional processing options such as upfront gravity recovery.

The company has compiled detailed mine infrastructure plans, inclusive of an underground mine shop, underground rescue stations, groundwater and mine water pumping systems, water discharge systems, primary and secondary mine ventilation systems, compressed air systems, mine communication systems and electricity supply.

Environment & Community

Hollister Gold Mine is and will be an underground operation that is situated in a remote location and that will cause only a small amount of surface disturbance. All of the current surface facilities and infrastructure, and most of the planned future surface facilities and infrastructure, are and will be contained in areas previously disturbed by historical surface mining.

Water that currently is, and will in future be, intercepted in the underground workings is pumped and routed to a de-silting facility where it is cleaned and polished. It is then routed to a series of rapid infiltration basins (RIBs) located some 7.2 kilometers (approximately 4.5 miles) from the Hollister Gold Mine area.

Water that percolates through the Tertiary volcanics into the decline tend to have high sulphate and low pH values, with the result that the water is routed to a lime precipitation and reverse osmosis plant for treatment, before being sent to the RIBs.

Both waste rock and mineralized material have very high potential to generate ARD so they would be placed in a lined waste rock disposal facility and fluid collection system.