Item 1A. Risk Factors 30
Item 1B. Unresolved Staff Comments 43
Item 2. Properties 43
Item 3. Legal Proceedings 43
Item 4. Mine Safety Disclosures 43
Part II
Item 6. [Reserved] 44
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50
Item 8. Financial Statements and Supplementary Data 51
Item 9A. Controls and Procedures 52
Item 9B. Other Information 53
Part III
Item 10. Directors, Executive Officers, and Corporate Governance 54
Item 11. Executive Compensation 56
Item 14. Principal Accounting Fees and Services 56
Part IV
Item 15. Exhibits and Financial Statement Schedules 57
Signatures 60
FORWARD-LOOKING
STATEMENTS
Some
information contained in or incorporated by reference into this Annual Report on Form 10-K may contain forward-looking statements within
the meaning of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated
results and developments in our operations in future periods, planned exploration and development of our properties, plans related to
our business and other matters that may occur in the future. These statements relate to analyses and other information that are based
on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. These statements include, but
are not limited to, comments regarding:
● the strength of the world economies,
● fluctuations in interest rates and foreign exchange rates,
● the conclusions of additional exploration programs and related studies,
● future exploration plans and expectations related to our properties,
● volatility in the market price of our common stock,
● statements concerning our financial condition,
● our anticipation of future environmental and regulatory impacts,
● our business and operating strategies,
We
use the words “anticipate,” “continue,” “likely,” “estimate,” “expect,” “may,”
“could,” “will,” “project,” “should,” “believe” and similar expressions (including
negative and grammatical variations) to identify forward-looking statements. Statements that contain these words discuss our future expectations
and plans, or state other forward-looking information. Although we believe the expectations and assumptions reflected in those forward-looking
statements are reasonable, we cannot assure you that these expectations and assumptions will prove to be correct. Our actual results
could differ materially from those expressed or implied in these forward-looking statements as a result of various factors described
in the Risk Factors in Item 1A of this Annual Report.
Many
of these factors are beyond our ability to control or predict. Although we believe that the expectations reflected in our forward-looking
statements are based on reasonable assumptions, such statements can only be based on facts and factors currently known to us. Consequently,
forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from
the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such
differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risk Factors”
below, as well as those discussed elsewhere in this Annual Report on Form 10-K. You should not unduly rely on any of our forward-looking
statements. These statements speak only as of the date of this Annual Report on Form 10-K. Except as required by law, we are not obligated
to publicly release any revisions to these forward-looking statements to reflect future events or developments. All subsequent written
and oral forward-looking statements attributable to us and persons acting on our behalf are qualified in their entirety by the cautionary
statements contained in this section and elsewhere in this Annual Report on Form 10-K.
ADDITIONAL
INFORMATION
Descriptions
of agreements or other documents contained in this Annual Report on Form 10-K are intended as summaries and are not necessarily complete.
Please refer to the agreements or other documents filed or incorporated herein by reference as exhibits. Please see the exhibit index
at the end of this report for a complete list of those exhibits.
We
are required to comply with the United States Securities and Exchange Commission (“SEC”) Industry Guide 7 under the United
States Securities Act of 1933, as amended (the “Securities Act”), with respect to disclosures related to our mineral properties.
The terms “mineralized material”, “mineralization” or similar terms as used in this Annual Report on Form 10-K
do not indicate “reserves” by SEC Industry Guide 7 standards. We cannot be certain that any part of mineralized material
or mineralization will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves”. Investors are cautioned
not to assume that all or any part of the mineralized material will ever be confirmed or converted into reserves or that mineralized
material can be economically or legally extracted.
PART
I
Item
1. BUSINESS
Overview
U.S.
Gold Corp., formerly known as Dataram Corporation (the “Company”), was incorporated under the laws of the State of Nevada
in 2016 and was originally incorporated in the State of New Jersey in 1967. Effective June 26, 2017, the Company changed its legal name
to U.S. Gold Corp. from Dataram Corporation. On May 23, 2017, the Company merged with Gold King Corp. (“Gold King”), in a
transaction treated as a reverse acquisition and recapitalization, and the business of Gold King became the business of the Company.
We are a gold and precious metals exploration company pursuing exploration opportunities primarily in Wyoming, Nevada and Idaho.
We
are an exploration company that owns certain mining leases and other mineral rights comprising the CK Gold Project in Wyoming the Keystone
and Maggie Creek Projects in Nevada and the Challis Gold Project in Idaho. None of our properties contain any proven and probable reserves
under SEC Industry Guide 7, and all of our activities on all of our properties are exploratory in nature.
Effective
as of 5:00 pm Eastern Time on March 19, 2020, the Company filed an amendment to the Articles of Incorporation to effect a reverse stock
split of the issued and outstanding shares of its common stock, par value $0.001 per share, at a ratio of one share for ten shares. All
share and per share information in this Annual Report on Form 10-K has been retroactively adjusted to reflect the reverse stock split.
Recent
Developments
COVID-19
Developments
In
December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China and reached multiple other countries,
resulting in government-imposed quarantines, travel restrictions and other public health safety measures in China and other countries.
On March 12, 2020, the WHO declared COVID-19 to be a global pandemic, and the COVID-19 pandemic has resulted in significant financial
market volatility and uncertainty. If the COVID-19 pandemic continues on a prolonged basis or becomes more severe, this could result
in a continuation or worsening of the levels of market disruption and volatility seen in the recent past and could have an adverse effect
on the Company’s ability to access capital, on the Company’s business, results of operations and financial condition, and
on the market price of its common stock.
The
Company, or its people, investors, contractors or stakeholders, has been prevented from free cross-border travel or normal attendance
to activities in conducting its business at trade shows, presentations, meetings or other activities meant to promote or execute its
business strategy and transactions. The Company has been prevented from receiving goods or services from contractors. Decisions beyond
the Company’s control, such as canceled events, restricted travel, barriers to entry or other factors have affected or may affect
its ability to accomplish drilling programs, technical analysis of completed exploration actions, equity raising activities, and other
needs that would normally be accomplished without such limitations. Furthermore, the Company’s exploration activities rely heavily
on outside contractors and importation of specialized equipment. The COVID-19 pandemic has caused disruptions in travel, access to parts
and machinery and accessing our exploration properties with contractors. Although travel restrictions have been lifted at certain locations,
there can be no assurance that travel and property access will resume fully in the near future.
Moreover,
the COVID-19 pandemic has made and continues to make indeterminable adverse effects on general commercial activity and the world economy,
and the Company’s business and results of operations could be adversely affected to the extent that COVID-19 or any other epidemic
harms the global economy generally.
The
Company does not yet know the full extent of potential delays or impact on its business, its relationship with its business partners,
or the global economy as a whole. However, any one or a combination of these events could have an adverse effect on the Company’s
other business operations.
Corporate
Organization Chart
The
name, place of incorporation, continuance or organization and percent of equity securities that we own or control as of July 29, 2021
for each of our subsidiaries is set out below.
Corporate
Address
The
current address, telephone number of our offices are:
U.S.
Gold Corp.
1910
E. Idaho Street, Suite 102-Box 604
Elko,
NV 89801
(800)
557-4550
We
make available, free of charge, on or through our website, at https://www.usgoldcorp.gold, our annual report on Form 10-K, our
quarterly reports on Form 10-Q and our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the U.S. Securities Exchange Act of 1934, as amended, and other information. Our website and the information contained
therein or connected thereto are not intended to be, and are not, incorporated into this annual report on Form 10-K. The SEC maintains
an Internet website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers
that file electronically with the SEC.
Employees
As
of April 30, 2021, we had 3 full-time employees and no part-time employees. In addition, we use consultants with specific skills to assist
with various aspects of our project evaluation, due diligence, corporate governance and property management.
OUR
MINERAL PROPERTIES AND PROJECTS
CK
Gold Project, Wyoming
The
CK Gold Project (the “CK Gold Project”) consists of certain mining leases and other mineral rights comprising the CK Gold,
gold and copper exploration project located in the Silver Crown Mining District of southeast Wyoming.
Location
and Access
The
CK Gold Project is located in southeastern Wyoming, approximately 20 miles west of the city of Cheyenne, on the southeastern margin of
the Laramie Range. The property covers about two square miles that include the S1⁄2 Section 25, NE1⁄4 Section 35, and all of
Section 36, T.14N., R.70W., Sixth Principal Meridian. Access to within an approximate 0.9 miles of the property is provided by paved
and maintained gravel roads. An easement agreement providing access for exploration and other minimal impact activities has been negotiated
with Ferguson Ranch Inc. on the S1⁄2 Section 25, T14N, R70W, and the W1⁄2 Section 30, T14N, R69W. The fee for this easement
is $10,000 per year, renewable each year prior to July 11.
The
CK Gold property covers approximately 1,120 acres (about two square miles) that include the S1⁄2 of Section 25, NE1⁄4 Section
35, and all of Section 36, T.14N., R.70W. The project is entirely located on land owned and administered by the State of Wyoming. There
are no federal lands within or adjoining the CK Gold land position. Curt Gowdy State Park lies northwest of the property, partially within
Section 26. The state park’s southeastern boundary is approximately 1,000 feet northwest of the property and approximately 3,000
feet northwest of the mineralized area. The CK Gold property position consists of two State of Wyoming Metallic and Non-metallic Rocks
and Minerals Mining Leases.
Figure
1 – CK Gold Project Location and Boundaries
Rights
to the CK Gold Project
Our
rights to the CK Gold Project arise under two State of Wyoming mineral leases:
1)
State of Wyoming Mining Lease No. 0-40828
Township
14 North, Range 70 West, 6th P.M., Laramie County, Wyoming:
Section
36: All
2)
State of Wyoming Mining Lease No. 0-40858
Township
14 North, Range 70 West, 6th P.M., Laramie County, Wyoming:
Section
25: S/2
Section
35: NE/4
Ownership
of the mineral rights remains in the possession of the State of Wyoming as conveyed to the State by the United States, evidenced by 1942
patents for Section 36, and 1989 Order confirming title to Section 25 and 35. The State of Wyoming issued Mineral Leases for the mineral
rights to Wyoming Gold Mining Company, Inc. (“Wyoming Gold”) in 2013 and 2014.
Lease
0-40828 was renewed by Wyoming Gold in February 2013 for a second ten-year term and Lease 0-40858 was renewed by Wyoming Gold for its
second ten-year term in February 2014. Each lease requires an annual payment of $2.00 per acre. These leases were assigned to us on June
23, 2014.
The
following production royalties must be paid to the State of Wyoming, although once the project is in operation, the Board of Land Commissioners
has the authority to reduce the royalty payable to the State:
FOB Mine Value per Ton Percentage Royalty
History
of Prior Operations and Exploration on the CK Gold Project
Limited
exploration and mining were conducted on the CK Gold property in the late 1880s and early 1900s. Approximately 300 tons of material was
reported to have been produced from a now inaccessible 160-foot-deep shaft with two levels of cross-cuts. A few small adits and prospect
pits with no significant production are scattered throughout the property.
Since
1938, at least nine historic (pre-Strathmore Minerals Corp.) drilling campaigns by at least seven companies plus the U.S. Bureau of Mines
have been conducted at CK Gold. The current project database contains 91 drill holes totaling 37,500 feet that were drilled before Wyoming
Gold acquired the property. All but six of the drill holes are within the current resource area. Other work conducted at CK Gold by previous
companies has included ground and aeromagnetic surveys as well as induced polarization surveys along with geochemical sampling, geologic
mapping, and a number of metallurgical studies.
Wyoming
Gold conducted an exploration drill program in 2007 and 2008. Thirty-five diamond core drill holes were completed for a total of 25,500
feet. The exploration permit, 360DN, has been terminated and the bond released. The focus of that work was to confirm and potentially
expand the mineralized body outlined in the previous drill campaigns, increase the geologic and geochemical database leading to the creation
of the current geologic model and mineralization estimate, and to provide material for further metallurgical testing. The CK Gold historic
assay database for some 120 holes contains 8,357 gold assays and 8,225 copper assays. At least 10 different organizations or individuals
conducted metallurgical studies on the gold-copper mineralization at the request of prior operators between 1973 and 2009. It was concluded
that the process with the highest potential to yield good extractions of gold and copper would likely be flotation, followed by cyanidation
of the flotation tailings.
Geological
Summary of the CK Gold Project
The
CK Gold Project is underlain by Proterozoic rocks that make up the southern end of the Precambrian core of the Laramie Range. Metavolcanic
and metasedimentary rocks of amphibolite-grade metamorphism are intruded by the 1.4-billion-year-old Sherman Granite and related felsic
rocks. Within the project area, foliated granodiorite is intruded by aplitic quartz monzonite dikes, thin mafic dikes and younger pegmatite
dikes. Shear zones with cataclastic foliation striking N60°E to N60°W are found in the southern part of the Silver Crown district,
including at CK Gold. The granodiorite typically shows potassium enrichment, particularly near contacts with quartz monzonite. Copper
and gold mineralization occur primarily in unfoliated to mylonitic granodiorite. The mineralization is associated with a N60°W-trending
shear zone and disseminated and stockwork gold-copper deposits in the intrusive rocks. Some authors have categorized it as a Proterozoic
porphyry gold-copper deposit. Hydrothermal alteration is overprinted on retrograde greenschist alteration and includes a central zone
of silicification, followed outward by a narrow potassic zone, surrounded by propylitic alteration. Higher-grade mineralization occurs
within a central core of thin quartz veining and stockwork mineralization that is surrounded by a zone of lower-grade disseminated mineralization.
Disseminated sulfides and native copper with stockwork malachite and chrysocolla are present at the surface, and chalcopyrite, pyrite,
minor bornite, primary chalcocite, pyrrhotite, and native copper are present at depth. Gold occurs as free gold.
The
CK Gold exploration property contains oxide, mixed oxide-sulfide, and sulfide rock types. At the stated cutoff grade 0.015oz AuEq/ton,
approximately 80% of the resource is sulfide material with the remaining 20% split evenly between the oxide and mixed rock types. There
is consistent distribution of gold and copper, albeit generally low-grade, throughout this potential open-pit type deposit.
U.S
Gold Corp. CK Gold Exploration Activities
In
2017, we performed two geophysical surveys at CK Gold. A district-wide ground magnetic survey was completed in June 2017 and an induced
polarization study was completed in October 2017. In addition, a complete compilation of the historic drilling database was done. The
compilation was critical to verifying the northwest extension target. After the detailed geophysical studies were completed and interpreted,
we developed exploration drill targets. The exploration drill program was completed in the fall of 2017.
Preliminary
Economic Assessment – CK Gold Property, WY
A
Preliminary Economic Assessment (“PEA”) for the historic CK Gold deposit was updated by Mine Development Associates (MDA)
and reported January 11, 2018. This PEA was prepared in accordance with Canadian National Instrument 43-101 – Standards of Disclosure
for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)
– CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the “CIM
Definition Standards”), which differ from SEC Industry Guide 7. This PEA is preliminary in nature and should not be considered
to be a pre-feasibility or feasibility study, as the economic and technical viability of the CK Gold Project have not been demonstrated
at this time. Therefore, there can be no certainty that the estimates contained in the PEA will be realized. None of our properties contain
any proven and probable reserves under SEC Industry Guide 7, and all of our activities on all of our properties are exploratory in nature.
2017
Drill Results – CK Gold Property, WY
On
January 30, 2018, we announced the results of our 2017 exploration drill program at CK Gold. Hole CK17-01rc was a western step out hole
from the historic deposit. The hole encountered mineralization of gold, copper, silver and zinc. Permitting and bonding for drilling
at CK Gold through a “Notification of Intent to Explore for Noncoal Minerals” was approved by the State of Wyoming Department
of Environmental Quality based in Cheyenne, Wyoming. Assay results and interval thicknesses obtained in CK17-01rc were similar in value
and character to assay intervals encountered in the CK Gold deposit “main zone.” Assay results and characteristics of mineralization
in this hole indicated the presence of a heretofore previously undiscovered zone of significant mineralization on the CK Gold project.
2018
Drill Results – CK Gold Property, WY
In
October 2018, we announced the results of our 2018 eight-hole reverse circulation exploration drill program at CK Gold. The eight holes
indicated that the CK Gold mineralization extended to the west, at least 200 meters, and maintains the historically measured and reported
widths and depth to the deposit.
Drill
Hole Analysis at CK Gold Property, WY
On
February 21, 2019, we announced that Datamine of Denver, CO, completed a comprehensive drill hole analysis of our CK Gold gold-copper-silver-zinc
deposit. Datamine included all of the historic drilling database and the step-out drill programs conducted by us in 2017 and 2018.
The
Datamine study was designed to:
● Provide wireframe, closed, shapes and grade shells for the deposit; and
● Provide indications, if any, for locations of additional discovery.
The
Datamine updated exploration model indicates that the deposit potentially remains open to the southwest and also to the southeast
and appears to have a curved configuration as opposed to a more confined, previous west-northwestward tabular configuration. The Datamine
exploration model also illustrates various isoshells for gold, copper, silver and zinc.
We
plan to use this new digital exploration model to assist with a future potential exploration drilling program that we believe could provide
an opportunity to discover additional prospective ore extensions. We also plan to further explore for and characterize the high-grade
target zones of mineralization within the deposit. We have reviewed the conclusions from the Datamine exploration model and have developed
additional exploration programs based upon the results. We are also re-examining all existing regional exploration data for the purpose
of identifying additional new target opportunities in the vicinity of CK Gold.
For
fiscal 2020, the majority of our efforts focused on advancing the CK Gold project further towards an eventual production decision. This
work of advancement continued in our fiscal 2021. Multiple outside contractors have been engaged for additional metallurgical, environmental,
baseline and hydrological studies.
CK
Gold Quality Control Procedures for Drilling, Sampling and Assaying
The
CK Gold PEA outlines the drilling procedures; sample preparation, analysis and security; and data verification for historic drilling
at CK Gold. MDA concludes that “data verification procedures support the geological interpretations and confirm the database quality.
Therefore, the CK Gold database is adequate for estimating a potential mineral resource.” We continue to apply industry standard
practices for drilling and sampling at CK Gold.
Specifically,
drilling carried out in 2017 and 2018 by AK Drilling of Butte, Montana using a reverse circulation (“RC”) drill rig, followed
industry standards. RC cuttings were run through a rotary splitter on the drill as drilling advanced, which is industry standard, and
a representative sample collected from the discharge point of the splitter. Chip samples were bagged and labeled by the drillers and
then shipped to Bureau Veritas Mineral Laboratories (“BV Labs”) in Sparks, NV for analysis. BV Labs crushed, split and pulverized
250g of rock to 200 mesh and fire assayed the samples. Assay certificates were received, analyzed, summarized and reported by our geologic
team. As standard practice, certified blanks and standards were inserted into the sample stream at the lab on regular intervals, by us
and BV Labs. As assay results were received the analyzed assay values for given blanks or standards were visually compared to the expected
assay values, and if they fell within the expected range of deviation as provided by the blank-standard provider, they were considered
“passed” and the assay results can be relied upon. If the analyzed results did not fall within the expected range of deviation,
the blank or standard was considered “failed” and BV Labs was asked to re-run the blank or standard for gold fire-assay,
along with the preceding two drill hole samples and the two proceeding the failed blank or standard. When re-run assay results were received,
they were compared with the original results and deemed acceptable or not. All results to date have met our acceptability using the above-mentioned
protocols.
On
May 26, 2020, we announced our intention to advance the CK Gold Project towards the Pre-Feasibility Study level. Highlights of
the anticipated activities included:
● Remodeling of resources to incorporate new drilling and silver
● Analysis of silver on overall economics
● Analysis of processing rate
● Commencement of baseline studies
● Hydrology studies
● Mine plan engineering and permitting advancement
On
September 9, 2020, we announced an exploration update and drilling commenced on September 3, 2020. We also announced a relogging of all
the historic core and commencement of baseline environmental, geotechnical and hydrological studies.
On
November 5, 2020, we announced a Pre-Feasibility update including:
● August initiated PFS Study for the CK Gold Project with associated consultants
● September 5th kick-off meeting with diamond drill crew at project site
On
December 2, 2020, we announced an end of field season update for the CK Gold Project.
Highlights
of Field Activities:
● 11,655 man-hours worked with no lost time or medical reportable injuries
● No COVID-19 related cases reported
● No environmental incidents reported
On
December 16, 28 and 29, 2020, we announced drilling results from the CK Gold Project for four metallurgical holes. Highlights included
78.3 meters (257 feet) of 5.708 g/t gold equivalent from surface for hole CK20-04cB.
On
January 27, 2021, we announced a CEO update on its CK Gold Project advancements including:
● Update on 2020 field activities at the CK Gold Project in Wyoming
● Announcement of encouraging initial project drill results
● Advancement of the CK Gold Project to the Pre-Feasibility Study
On
February 23, 2021, we announced the CK Gold Project showed community support in Wyoming. On March 8, 2021, we announced an update on
CK Gold Project metallurgy. On March 30, 2021, we announced a CK Gold Project update and additional drill results.
On
May 4, 2021, we announced our plans for our summer 2021 field season activities at the CK Gold Project.
Keystone
Project, Cortez Trend, Nevada
Location
The
Keystone Project consists of 650 unpatented lode mining claims situated in Eureka County, Nevada. The claims making up the Keystone Project
are situated in Eureka County, Nevada in Sections 2-4 and 9-11, Township 23 North, Range 48 East, and Sections 22-28, and 33-36 Township
24 North, all Range 48 East of the Mount Diablo Meridian.
Figure
2 – Location of Keystone Project and Major Gold Trends in Nevada
Figure
3 – Keystone Project Claim Boundaries
The
Keystone Project is accessible via dirt roads. Navigation through the interior of the project is by off-road vehicle.
Title
and Ownership for Keystone Project
The
Keystone Project consists of unpatented mining claims located on federal land administered by the U.S. Bureau of Land Management
(“BLM”). An annual maintenance fee of $165 per claim per year must be paid to the Nevada BLM by September 1 of each
year, and failure to make the payment on time renders the claims void.
In
addition, the State of Nevada requires the claimant to file an Affidavit and Notice of Intent to Hold in the appropriate county by November
1 of each year. However, the failure to timely record an Affidavit does not affect a forfeiture of the claims, as does the failure to
pay the federal claim maintenance fees by September 1. Instead, in the event of a conflict with a junior locator, the senior claimant
must prove his intent to maintain the claims. This can generally be accomplished by producing a receipt showing payment of the federal
claim maintenance fees to the BLM.
The
federal claim maintenance fees are prospective and are paid for the ensuing assessment year. For example, payments made in August
2019 relate to the 2019-2020 assessment year running from September 1, 2019 to September 1, 2020. By comparison, the Nevada filings are
retrospective, describing the assessment year just ended or about to end.
Congress
has extended the claim maintenance requirements indefinitely. It will therefore be necessary for us to perform the following acts in
order to maintain the claims in 2019-2020 and each year thereafter: (1) on or before September 1 of each year, we must pay a
maintenance fee of $165 per claim to the Nevada BLM, and (2) on or before November 1 of each year we must record an Affidavit and
Notice of Intent to Hold in Eureka County.
We
acquired the mining claims comprising the Keystone Project on May 27, 2016 from Nevada Gold Ventures, LLC and Americas Gold Exploration,
Inc. (“Americas Gold”). Some of the Keystone claims are subject to pre-existing net smelter royalty (“NSR”) obligations.
In addition, Nevada Gold Ventures, LLC retained additional NSR rights of 0.5% with regard to certain claims and 3.5% with regard to certain
other claims. The unpatented mining claims comprising the Keystone Project, with applicable NSR obligations, are as follows:
27
unpatented lode mining claims situated in Eureka County, Nevada, in Sections 33 and 34, Township 24 North, Range 48 East, and Sections
3, 4, 9, and 10, Township 23 North, Range 48 East, Mount Diablo Base Line and Meridian.
13
unpatented lode mining claims situated in Eureka County, Nevada, in Sections 27, 28 and 35, Township 24 North, Range 48 East, and Sections
2 and 3, Township 23 North, Range 48 East, Mount Diablo Base Line and Meridian.
28
unpatented lode mining claims situated in Eureka County, Nevada, in Sections 2 & 11, Township 23 North, Range 48 East, Mount Diablo
Base Line and Meridian.
216
unpatented lode mining claims, alphabetically ordered, situated in Eureka County, Nevada, in Sections 22, 23, 24, 25, 26, 27, 28, 33,
34, 35 & 36, Township 24 North, Range 48 East, Mount Diablo Base Line and Meridian.
Under
the terms of the Purchase and Sale Agreement, we may buy down 1% of the NSR owed to Nevada Gold Ventures LLC at any time through the
fifth anniversary of the closing date for $2,000,000. In addition, we may buy down an additional 1% of the NSR owed to Nevada Gold Ventures,
LLC anytime through the eighth anniversary of the closing date for $5,000,000. At April 30, 2021, we have not bought down any portion
of the NSR. The decision to make a buy down payment would be driven by our progress in identifying an economic mineral resource, coupled
with financial factors, such as available cash or an expressed interest by larger producing companies to enter into joint ventures or
development arrangements. We are not in a position to make such a buy down payment at this time.
History
of Prior Operations and Exploration on the Keystone Project
No
comprehensive, modern-era, model-driven exploration has ever been conducted on the Keystone Project. Newmont drilled 6 holes in the old
base metal and silver Keystone mine area in 1967 and encountered low grade (+/- 0.02 opt) gold intercepts. Chevron staked the property
in 1981-1983 and drilled 27 shallow drill holes, continued by an agreement with USMX that drilled an additional 19 shallow holes; significant
amounts of low grade and anomalous gold were intersected, but results were considered uneconomic, and the project was dropped. In 1988
and 1989, Phelps Dodge acquired a southern portion of the district and drilled 6 holes, one of which contained gold mineralization in
its total depth and was subsequently deepened in 1990 resulting in over 200’ of low-grade gold mineralization. About this time
Coral Resources acquired a northern portion of the property and drilled 21 shallow holes to follow-up previous drill intercepts. 1995-1997,
Golden Glacier, a junior company, acquired the north end of the district, and Uranerz a portion of the southern area; 6 holes were drilled
in the north and only 2 holes in the south, respectively. The entire district was dropped by all parties.
In
2004, with the discovery of Cortez Hills and escalating gold prices, Nevada Pacific Gold, Great American Minerals (Don McDowell), and
Tone Resources (Dave Mathewson) competed in claim staking the entire district. Subsequently, Don McDowell, founder of Great American
Minerals approached Placer Dome (prior to Barrick acquisition) who discovered Pipeline and Cortez Hills, and who correctly recognized
the Keystone district potential. Placer Dome entered into separate joint venture agreements with Nevada Pacific and Great American. The
following year Barrick Gold bought Placer Dome and dropped all Placer Dome’s Nevada exploration projects and joint ventures, including
Keystone. In 2006, Nevada Pacific and Tone were purchased by McEwen Mining. McEwen Mining, drilled 35 holes mostly near the north end
of the district; targeting the range front pediment and the historic Keystone Mine. McEwen Mining dropped their Keystone claims and quit
claimed them to Dave Mathewson and NV Gold Ventures. NV Gold Ventures and American Gold staked their own additional claims in the district.
This expanded group of claims was acquired in the original Keystone Purchase Agreement. We have staked additional claims in the district,
such as Potato Canyon, since acquiring the project.
Geological
Potential of the Keystone Project
To
date, a technical report has not been prepared on the Keystone Project. Keystone is positioned on the prolific Cortez gold trend, one
of the world’s leading gold producing regions. The Keystone Project is centered on a granitic intrusion that warped the local Paleozoic
stratigraphy into a dome, allowing for exposure of highly favorable Devonian, Carboniferous (Mississippian-Pennsylvania) and Permo-Triassic
rocks including key likely host rocks for mineralization, the silty carbonate strata of the Horse Creek Formation and the Wenban limestone,
as well as possible sandy clastic units of the Diamond Peak Formation. The Horse Canyon and Wenban rocks are the primary host rocks at
the nearby Cortez Hills Mine and Gold Rush deposit currently operated by Barrick Gold.
Keystone
Plan of Operations (POO) Approval and Fall 2018 Drill program
On
September 7, 2018 the U.S. Federal Government’s Department of the Interior, BLM approved the previously filed Environmental Assessment
(EA) and Plan of Operations (POO) for our Keystone Project on Nevada’s Cortez Gold Trend. The POO was subject to additional oversight
and approval from the Nevada Department of Environmental Protection (NDEP), which was received at the end of October 2018. Exploration
related disturbance and reclamation bonding is possible in multiple phases of up to 50 acres each up to a total of 200 acres. On October
10, 2018, we received a letter from the BLM giving notice to proceed with our previously filed 2018 exploration plan. In September 2018,
we advanced an additional reclamation bond payment of $319,553 for the first 50-acre disturbance. Total reclamation bond balance on the
Keystone project total $355,347. After receiving all final permits and sign offs for road work, drill pad and surface disturbance, in
November 2018, we commenced our Autumn 2018 drilling program at Keystone.
Master
of Science Thesis – Keystone Property, NV
Gabriel
E. Aliaga (“Gabriel”) is a Geology major at the University of Nevada, Reno, studying under Dr. Michael W. Ressel. Over the
past two years, Gabriel worked on the Keystone project under a sponsorship by us. Gabriel worked directly with Dave Mathewson, our former
Vice President of Exploration, and Tom Chapin, Senior Consulting Geologist.
Gabriel
completed his Master of Science Thesis in Geology (“Master Thesis”) entitled, “Igneous Geology of the Keystone Window,
Simpson Park Mountains, Eureka County, Nevada: Age, Distribution Composition and Relationship to Carline-style Gold Mineralization”,
dated December 2018.
Gabriel’s
Master Thesis focused on the geology of the Keystone project. Before his work there was relatively little quality historical information
data generated in the Keystone district. Gabriel’s work increased our overall understanding of the geology and opportunity of the
Keystone district and resulted in important understandings of the district geology and age dating of the intrusives and associated hydrothermal
gold systems at Keystone. It also provided some valuable timing information and mineral association characterization ranging from skarn
mineralization to the broad, pervasive, epithermal-style mineralization.
We
believe we are exploring a complex early Tertiary gold system comparable in size and character to many of the known large gold systems.
The multiple and clustered intrusives and extrusives at Keystone range in composition from intermediate to very siliceous. All of the
dates from numerous samples of these intrusive and extrusive rock units are early Tertiary (Eocene) in age and range from about 36 to
34.5Ma (million years ago). Age dating of illite alteration of andesite dikes at Keystone, believed to be associated with a major gold-epithermal
event, provided dates of 35.71+/- 0.12Ma, and 35.54+/- 0.06Ma. These Keystone dates compare very closely with reported mineralization-related
age dates from the major Cortez Hills gold deposit to the north, ranging from 35.70 +/-0.14 to 35.31 +/-0.37Ma (Arbonies, DG, Creel,
KD, and Jackson, ML, 2010, Geological Society of Nevada Symposium Volume p.457).
In
addition, Keystone has an important and large aeromagnetic expression of about 25sq km; this geophysical anomaly is comparable in size
to those of the central and south Carlin and Battle Mountain District aeromagnetic expressions. Our geologists believe the hydrothermal
gold system at Keystone is roughly comparable in size to those within the Twin Creeks, Battle Mountain, Carlin Trend, and Cortez Districts.
On
July 8, 2019, U.S. Gold Corp. announced that two new technical updates for the Keystone Project have been uploaded to their website.
An updated Keystone Technical Presentation analysis is a follow up to the previous December 2017 Keystone Technical Presentation.
In
addition, U.S. Gold Corp. announced it received an updated report from Thomas Chapin. Tom has been U.S. Gold Corp.’s Senior Consulting
Geologist and has worked diligently over 3 years mapping the entire Keystone district.
2019
Drill Program at Keystone Property, NV
On
June 6, 2019, we announced the commencement of the 2019 drilling program at the Keystone Project. The program was designed to test several
drill targets in areas previously inaccessible with a drill because of permitting limitations and follow up on encouraging results from
late 2018 drilling. Identification and qualification of these targets has been in progress since the onset of the exploration program
almost 4 years ago. This targeting effort has included iterative detailed gravity surveys, detailed geological mapping and associated
prospecting, rock sampling and detailed gridded soil surveys, in addition to prior scout hole drilling. 2016-2018 scout-type drill holes,
comprised of 34 individual holes drilled from 15 total drill sites, have importantly added to the knowledge of, and geological understandings
of the permissive lithologies and favorable stratigraphy of the project. Scout drilling encountered thick sections of permissive host
rocks, including Comus, Horse Canyon, Wenban, and Roberts Mountains Formations (similar host rock packages to the sizeable deposits at
the north of the Cortez Trend), hosting anomalous to multiple gram gold intervals associated with very anomalous and thick intervals
of pathfinder metals. The 2019 drilling program provided a first test to some of the most compelling targets on the Keystone project.
On
November 12, 2019, U.S. Gold Corp. announced results of its 2019 drilling program and receipt of all the drill-hole assay results from
the 20 square mile Keystone project, in Nevada’s Cortez Trend. This program was comprised of six reverse circulation target assessment
holes, and one core hole to follow up on the encouraging results from last year in hole Key18-09rc. The seven holes comprise a total
of 13,177 feet (4,016 m), testing specific drill targets within four target areas, including the Sophia, Tip Top, Sophia South and Nina
Skarn target areas (see the map below).
Five
of the seven holes intersected significant gold assays, highlighted by Key19-05rc, the first ever drill-hole test of the Nina Skarn target,
a +700m long coincident gold-bismuth-tellurium rock and soil anomaly defined by surface sampling in 2018. Key19-05rc encountered
two thick intervals of strong, mostly oxide gold mineralization: 67.06m of 0.194 gpt from 12.2m and 76.2m of 0.224 gpt from
150.9m (see the photo below).
Of
note, anomalous gold mineralization is present throughout the entire thickness of skarn altered Upper and Lower Plate rocks drilled,
from surface to 414.5m. Cyanide solubility assays were run on selected intervals and demonstrate as much as 90% of the contained gold
is cyanide soluble within one hour, suggesting this style of mineralization is amenable to cyanide extraction. Detailed intercepts for
Key19-05rc are given below in Table 1. The entire assay sequence of the hole, including visual metallurgical and cyanide soluble characteristics,
is attached below to better illustrate grade continuity (see link below: Figure 4: Key19-05rc Gold Assays and Metallurgical Characteristics),
along with a cross section of the drill-hole (see link below: Figure 5: Key19-05rc Cross-section). True thicknesses are unknown at this
time.
The
potential to expand upon mineralization encountered in Key19-05rc along the +700m Nina Skarn anomaly is good, with overall additional
potential for 2km strike-length along the Walti stock contact. To the north of Nina Skarn, near the old Keystone mine, rock chip samples
of skarn with +27 gpt Au assays are present, and to the south of Key19-05rc, 6m of 1.13 gpt Au was encountered last year in Key18-09rc,
hosted in Comus skarn. See the attached figure below, which illustrates these points and surface Au-Bi-Te anomalies relative to Key19-05rc
(Figure 6. Gold Skarn Potential Areas of Keystone).
Key19-05rc From (m) To (m) Length (m) Au intercept (gpt)
Table
1. Key19-05rc Gold Intercepts
Figure
4. Key19-05rc Gold Assays and Metallurgical Characteristics
Figure
5. Key19-05rc Cross Section
Figure
6. Gold Skarn Potential Areas of Keystone
Nearly
all of the holes drilled in Phase One encountered moderate to thick intervals of anomalous gold with moderate to locally very strongly
associated pathfinder metals, within both Carlin-style and skarn style mineralization. Essentially all significant gold intercepts are
hosted in one or more of several previously defined prospective Upper Plate and Lower Plate host rock environments, where favorable structures
are also present. These host areas include: Lower Valmy-Comus units, along the Roberts Mountains Thrust (Upper Plate-Lower Plate contact),
Devonian Horse Canyon-Wenban contact, and Wenban Unit 5. Holes that intersected significant gold assay intervals greater than 0.300 gpt
are provided in Table 2 below, along with visual metallurgical characteristics.
Table of Intercepts for 2019 Keystone Core-RC drilling Au >0.300 gpt
Table
2. Keystone 2019 Phase One Significant Gold Intercepts
We
continue to analyze the 2019 Keystone drilling results in context with all of the prior drilling, geophysical surveys, mapping and geochemistry.
On
May 20, 2020, we announced a proposed 2020 Keystone exploration program, subject to us obtaining additional financing.
On
August 25, 2020, we announced the publication of a technical report on the Keystone project by the Geological Society of Nevada.
On
May 19, 2021, we announced we received Bureau of Land Management (BLM) approval for an additional 50 acres of disturbance under the effective
Plan of Operations (POO) for Keystone. We advanced the required reclamation bond. We also announced potential interest in the Keystone
project from various industry partners for potential joint venture opportunities.
Quality
Control Procedures for Keystone
We
apply industry standard practice to quality control of drilling, sampling and assaying. Drilling at Keystone was carried out in 2019
by Envirotech Drilling LLC of Winnemucca, NV using a reverse circulation drill rig. RC cuttings were run through a rotary splitter on
the drill as drilling advanced, which is industry standard, and a representative sample collected from the discharge point of the splitter.
Chip samples were bagged and labeled by the drillers and then picked up from the site by a Bureau Veritas Minerals Laboratories Technician
and taken to their Elko prep facility. Samples were prepped in Elko and then the pulps were shipped by BV to their lab in Sparks, NV
for analysis. BV Labs crushed, split and pulverized 250g of rock to 200 mesh and fire assayed the samples. Assay certificates were received,
analyzed, summarized and reported by our geologic team. As standard practice, certified blanks and standards were inserted into the sample
stream at the lab on regular intervals, by us and BV. As assay results were received the analyzed assay values for given blanks or standards
were visually compared to the expected assay values, and if they fell within the expected range of deviation as provided by the blank-standard
provider, they were considered “passed” and the assay results can be relied upon. If the analyzed results did not fall within
the expected range of deviation, the blank or standard was considered “failed” and BV was asked to re-run the blank or standard
for gold fire-assay, along with the preceding two drill hole samples and the two proceeding the failed blank or standard. When re-run
assay results were received, they were compared with the original results and deemed acceptable or not. All results to date have met
our acceptability using the above-mentioned protocols.
Gold
Bar North Project, Cortez Trend, Nevada
In
August 2017, we closed on a transaction under a purchase and sale agreement executed in June 2017 with Nevada Gold Ventures LLC, pursuant
to which we purchased all right, title and interest in the Gold Bar North Property, a gold exploration project located in Eureka County,
Nevada. The purchase price for the Gold Bar North Property was: (a) cash payment in the amount of $20,479 which was paid in August 2017
and (b) 1,500 shares of our common stock which were issued in August 2017. Gold Bar North consists of 49 unpatented lode mining claims
situated in Eureka County, Nevada. We do not consider the Gold Bar North Property as a material property and are currently focusing the
majority of our limited resources on exploration activities at the CK Gold, Keystone and Maggie Creek properties.
After
an internal geological review of the Gold Bar North claims in 2020, we decided not to renew the GBN claims for 2021 and dropped the claims
at the end of August 2020. This decision was based on allocation of our limited exploration budget to its other higher potential projects.
Accordingly, we fully wrote-off the value of the Gold Bar claims and recorded an abandonment expense for the year-ended April 30,
2021.
Maggie
Creek Project, Nevada
On
September 10, 2019, we, 2637262 Ontario Inc., a corporation incorporated under the laws of the Providence of Ontario (“NumberCo”)
and all of the shareholders of the NumberCo (the “NumberCo Shareholders”), entered into the Share Exchange Agreement, dated
September 10, 2019 (the “Agreement”), pursuant to which, among other things, we agreed to issue to the NumberCo Shareholders
200,000 shares of our common stock in exchange for all of the issued and outstanding shares of NumberCo, with NumberCo becoming a wholly
owned subsidiary.
NumberCo
owns all of the issued and outstanding shares of Orevada Metals Inc. (“Orevada”), a corporation under the laws of the state
of Nevada. At the time of acquisition, we acquired from NumberCo cash of $159,063, and assumed liabilities consisting of accounts payable
totaling $125,670. As a result, we acquired Orevada’s right to an option agreement dated in February 2019 (the “Option Agreement”).
The Option Agreement grants Orevada the exclusive right and option to earn-in and acquire up to 50% undivided interest in a property
called Maggie Creek, located in Eureka County, Nevada by completing a $4.5 million in exploration and development expenditures (“Initial