UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
For the fiscal year ended April 30, 2022 OR
For
the transition period from to
Commission
file number: 001-08266
U.S.
GOLD CORP
(Exact
Name of registrant as Specified in its Charter)
(Address of Principal Executive Offices) (Zip Code)
(800)557-4550
(Registrant’s
Telephone Number, including Area Code)
SECURITIES
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, $0.001 par value USAU NASDAQ Capital Market
SECURITIES
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No
☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒
Note
– Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange
Act from their obligations under those Sections.
Indicate
by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934
(“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As
of October 31, 2021, the aggregate market value of the voting and non-voting shares of common stock of the registrant issued and outstanding
on such date, excluding shares held by affiliates of the registrant as a group, was $63,354,675. This figure is based on the closing
sale price of $9.92 per share of the Registrant’s common stock on October 29, 2021.
Number
of shares of Common Stock outstanding as of August 12, 2022: 8,349,843
DOCUMENTS
INCORPORATED BY REFERENCE
The
information called for by Part III of this Form 10-K is incorporated herein by reference from the registrant’s Definitive Proxy
Statement for its 2022 annual meeting of stockholders which the registrant intends to file pursuant to Regulation 14A not later than
120 days after the end of the fiscal year covered by this report.
U.S.
GOLD CORP
INDEX
Page
Part I
Items 1 and 2. Business and Properties 4
Item 1A. Risk Factors 21
Item 1B. Unresolved Staff Comments 32
Item 3. Legal Proceedings 32
Item 4. Mine Safety Disclosures 32
Part II
Item 6. [Reserved] 33
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36
Item 8. Financial Statements and Supplementary Data 37
Item 9A. Controls and Procedures 38
Item 9B. Other Information 39
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 39
Part III
Item 10. Directors, Executive Officers, and Corporate Governance 40
Item 11. Executive Compensation 40
Item 14. Principal Accountant Fees and Services 40
Part IV
Item 15. Exhibit and Financial Statement Schedules 41
Signatures 44
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:
● Our planned expenditures during our fiscal year ended April 30, 2023;
● Future exploration plans and expectations related to our properties;
● Our anticipation of future environmental and regulatory impacts; and
● 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 this annual report on Form 10-K, including:
● Unfavorable results from our exploration activities;
● Decreases in gold, copper or silver prices;
● Volatility in the market price of our common stock; and
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. 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.
PART
I
Items
1 and 2. BUSINESS AND PROPERTIES
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 and development 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. The Company’s CK Gold property
contains proven and probable mineral reserves and accordingly is classified as a development stage property, as defined in subpart 1300
of Regulation S-K promulgated by the Securities and Exchange Commission (“S-K 1300”). None of the Company’s other properties
contain proven and probable mineral reserves and all activities are exploratory in nature. We do not currently have any revenue-producing
activities.
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.
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, 2022
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, 2022, we had 4 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
Property
Map
For
a map showing the more precise location of each property, see the individual property descriptions set forth below.
Summary
of Mineral Properties
Quality
Assurance/Quality Control (“QA/QC”) Procedure
We
employ a rigorous QA/QC protocol on all aspects of sampling and analytical procedure. Drill core is checked, logged, marked for
sampling and sawn in half. One-half of each drill core is maintained for future reference and the other half of each drill core is
sent to ALS, an ISO 17025 accredited laboratory in Reno, Nevada to complete all sample preparation and assaying. Samples are
analyzed by employing fire assaying with atomic absorption finish for gold, and four-acid ICP-MS analysis for silver and copper. For
QA/QC purposes, certified standards, blank samples and sample duplicates are inserted into the sample stream. We also periodically
submit sample pulps to another independent laboratory for check analysis.
CK
Gold Project, Wyoming
The
CK Gold Project (the “CK Gold”) 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 (Figure 1). 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. The surface of S1⁄2 Section 25, NE1⁄4 Section 35 is privately owned. An easement agreement
providing access for exploration and other minimal impact activities has been negotiated with an adjacent landowner. The fee for this
easement is $10,000 per year, renewable each year prior to July 11. The surface of Section 36 is owned by the State of Wyoming and is
currently leased to an adjacent landowner for grazing.
The
project is entirely located on mineral rights 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 Project Boundary
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. These leases were assigned to us on June 23,
2014.
Lease
0-40828 is a ten-year lease that expires on February 1, 2023. Lease 0-40858 is a ten-year lease that expires on February 1, 2024. Each
lease requires an annual payment of $2.00 per acre. Each lease is renewable for successive ten-year terms by submitting a renewal application
fee and paying a nominal fee of $50. We are currently in discussion with the State of Wyoming concerning the lease renewals beyond the
current expiration dates.
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
Infrastructure.
Given
the project’s proximity to Cheyenne, the state capital of Wyoming and the Front Range metropolitan area, personnel needs, delivery
of consumables, and infrastructure needs are available both locally and regionally. The area has access to a Union Pacific railroad line,
intersection of 2 major interstate highways I-80 and I-25, and a regional airport.
High
voltage powerlines are approximately 1.5 miles (2.4km) from the current project area. A connection to the local power provider and easement
for transmission lines has been identified and scoped. While there is a nearby line serving the local population, we anticipate that
a new line to the project site will be constructed. Water to meet project demand has been identified and potential well sites investigated.
Minor water sources have been identified around the project site from monitoring well locations, and additional deeper well sites will
be investigated in upcoming fields seasons with a view to securing an independent water supply. However, water is available to purchase
from the City of Cheyenne from its infrastructure running along North Crow Creek less than a mile away from the project site. Additionally,
a pipeline to access purchased water runs across the property and may provide an alternative source of water.
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, previously referred to as Copper King. 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 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.
Geology
and Mineralization
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. The mineralization style is consistent with a
porphyry gold-copper deposit of Paleoproterozoic age. 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 ring 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 and within chalcopyrite crystals.
The
CK Gold exploration property contains oxide, mixed oxide-sulfide, and sulfide rock types. At the stated cutoff grade of 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.
Mineral
Reserves and Mineral Resources
Mineral
reserve and mineral resource estimates were calculated by Gustavson Associates through the effective date of November 15, 2021 as shown
in the Technical Report Summary attached to this annual report on Form 10-K. The mineral reserve and mineral resource tabulations shown
below are based on assumed metals prices of $1,625/oz gold, $3.25/lb copper and $18.00/oz silver. These metals price assumptions are
comprised of long-term metals forecasting (33%) and the two-year trailing average (67%). Based on the actual prices of these metals at
the end of our fiscal year ($1,911/oz gold, $4.45/lb copper and $23.45/oz silver, based on the respective London Metal Exchange, we believe
that the price assumptions used in preparing our mineral reserve and mineral resource estimates at November 15, 2021 remain reasonable
and, therefore, we believe the estimates prepared by Gustavson Associates remain a reasonable estimate of our mineral resources and mineral
reserves at April 30, 2022.
CK Gold Project – Summary of Gold, Copper and Silver Mineral Resources at April 30, 2022 based on $1,625/oz gold, $3.25/lb copper and $18.00/oz silver
Mass Gold (Au) Copper (Cu) Silver (Ag) Au Equivalent (AuEq)
(1) Resources tabulated
at a cutoff grade of (0.0107 – 0.0088) AuEq oz/st, 0.009 AuEq oz/st average
(2)
Note only 3 significant figures shown, may not sum due to rounding
(3)
Estimates of mineral resources are exclusive of mineral reserves
CK Gold Project – Summary of Gold, Copper and Silver Mineral Reserves at April 30, 2022 based on $1,625/oz gold, $3.25/lb copper and $18.00/oz silver
Mass Gold (Au) Copper (Cu) Silver (Ag) Au Equivalent (AuEq)
(1)
Reserves tabulated at a cutoff grade of (0.0107 – 0.0088) AuEq oz./st, 0.009 AuEq Oz/st average
(2)
Note only 3 significant figures shown, may not sum due to rounding
Mineral
resources are reported at a gold equivalent grade (AuEq) cutoff grade, which considers metal recovery and pricing Cutoff grade varies
with expected recovery for delineated material types, but averages 0.009 short ton (oz/st) AuEq, equivalent to 0.31 grams per metric
tonne (g/t) AuEq. Gold equivalent grade (Au/Eq) is used to simplify cutoff grade to a single equivalent metal (gold). The mineral resource
is constrained inside an optimization shell which, combined with the cutoff grade, represents reasonable prospects for economic extraction.
The mineral reserve estimate lies inside of a designed mine open pit. See Section 12.1 in the Technical Report Summary incorporated by
reference in this Form 10-K for a discussion of pit optimization, cutoff grade and dilution.
Prefeasibility
Study (“PFS”)
On
December 1, 2021, we released the results of our PFS. The PFS was prepared by Gustavson Associates, LLC with an effective date of November
15, 2021.
The
following are highlights from the PFS:
● 10-year Mine Life at 20,000 short tons per day process rate
○ Average AuEq production: 108,500 ounces per year
○ First three years: 135,300 AuEq ounces per year
● Initial Capital: $221 million
○ 2-year Payback
● Economics – 39.4% IRR before tax and 33.7% IRR after tax
○ NPV (5%): $323 million and $266 million, before and after tax, respectively
○ All in Sustaining Cost (“AISC”) at $800 per AuEq ounce
○ Assumes $1,625/ounce gold price and $3.25/lb copper price
○ Highly leveraged to increasing metals prices
● Upside Potential
○ Aggregate sales from mine waste rock, proven to be excellent quality
○ FS level value engineering and plant optimization
○ Ongoing metallurgical testing to enhance recovery of gold and copper
○ Resource expansion potential at depth and to the south-east
● Permitting and Development
○ Project footprint under the jurisdiction of Wyoming agencies
● Potential to submit mine permit in 2022 and receive approval in 2023
The
economic projections in the PFS are subject to a variety of assumptions and qualifications that are described in more detail in the Technical
Report Summary incorporated by reference into this Form 10-K. In summary, the low-grade copper, silver and gold deposit located on Wyoming
State Land and under lease to US Gold Corp, is proposed as an open pit mine. The rate of extraction will be sufficient to feed minerals
to the process plant at a rate of 20,000 tons per day, involving the removal of surrounding waste material at a similar rate. The process
plant serves to crush and grind the ore into a fine particle form in a slurry, whereupon the copper, silver and gold values can be separated
from non-mineralized rock into a concentrate using froth flotation. The concentrate will be dried and shipped off site and sold to a
smelter for final metal extraction. The waste material will be filtered to recoup and recycle water back to the process plant, and the
filtered tailings will be trucked and mechanically stacked onto a tailings pile. The process facility is also on the same Wyoming State
section less than a mile away from the mineralized orebody, with the entire operation some 20-miles west of Cheyenne. The metallurgical
test work supporting the extraction methodology was initially performed by a previous owner between 2009 and 2012, but the company has
gathered additional representative sample and conducted further extensive test work between 2020 and 2022. The results of the test work
were incorporated into the prefeasibility study published on December 1st, 2021, and have continued to confirm results and
inform the feasibility study due for publication in the second half of 2022.
We
expense all mineral exploration costs as incurred. Although we have identified proven and probable mineral reserves on our CK Gold project,
development costs will be capitalized when all the following criteria have been met, (a) we receive the requisite operating permits,
(b) completion of a favorable Feasibility Study and (c) approval from our board of director’s authorizing the development of the
ore body. Until such time all these criteria have been met, we record pre-development costs to expense as incurred. The current book
value of our property is approximately $3.1 million, which is recorded in mineral properties and reflects the value that was attributed
to the purchase of CK Gold. We do not have any costs on our balance sheet related to plant or equipment as we have not incurred any such
costs.
Recent
Activities
Primarily
in support of the feasibility study presently underway, during the 2021 field season, 47 core, rotary and conventional holes were drilled
at the CK Gold Project. The primary purpose of the drilling program is to supplement the geotechnical and hydrological information.
Additional
work centered around the capture and interpretation of environmental base line data encompassing sub-surface and surface water, fauna,
flora, cultural, air quality, meteorological conditions, wetlands and socio-economic factors in the project area. Starting in September
2020 over 19 months of monitoring data have been gathered and ongoing monitoring in critical areas continues. With the data in hand,
the project impacts have been assessed and the preparation of a mine operating permit application submission is in progress for the second
half of 2022.
Additionally,
a great deal of social outreach has been conducted to familiarize the immediate population and the Wyoming, Cheyenne and Laramie governmental
and regulatory agencies.
Geological
Potential of the CK Gold Project
Potential
to expand existing resource exists primarily at depth beyond current drilling depths and to the south of the proposed pit. Numerous drill
holes end in significant mineralization. We are developing a program to evaluate a magnetic anomaly, similar to that found centered on
the CK Gold mineralization, 1⁄2 mile to the southeast of the 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 (Figures 2 and 3).
Figure
2 – Location of Keystone, Maggie Creek and Gold Bar North Projects and Major Gold Trends in Nevada
Figure
3 – Keystone Project Claim Boundaries
The
Keystone Project is accessible via unpaved roads. Navigation through the interior of the project is by off-road vehicle on exploration
tracks.
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.
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, dated May 25, 2016, under which we acquired the claims, we had the right to buy down 1%
of the NSR owed to Nevada Gold Ventures LLC at any time through the fifth anniversary of the closing date, May 25, 2021, 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, May 25, 2024, for $5,000,000. At April 30, 2022, 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
do not currently anticipate making 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.
Geology
and Mineralization
To
date, a technical report has not been prepared on the Keystone Project. Keystone is positioned on the prolific Cortez gold trend. 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.
Infrastructure
and Facilities
The
Keystone Project does not currently include any significant facilities. The Keystone Project sits some 10 miles to the southwest of
Nevada Gold mines Cortez Complex. The Cortez Complex, consisting of surface and underground mines, is served by roads and power,
while water in the area is extracted from sub-surface water resources. The Keystone Project is served by paved and unpaved roads,
which extend down trend from the Cortez Complex to the north and additional road and infrastructure to the north-east. The whole
area is some 30 miles to the south of the I-80 interstate corridor between the towns of Battle Mountain and Winnemucca, with Elko,
Nevada being the dormitory town for the majority of the workforce and support services.
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 $4.5 million in exploration and development expenditures (“Initial
Earn-in”) and payment to Renaissance Exploration, Inc. (“Renaissance”), now Orogen Royalties, Inc. (OGN: TSX-V), the
grantor, of $250,000. Orevada may elect within 60 days after making the $250,000 payment, to increase its interest by an additional 20%
(total interest of 70%) by producing a feasibility study by the end of the ninth year of the Option Agreement.
Location
The
Maggie Creek Project lies on the eastern margin of the Lynn-Carlin window, adjacent to the giant Gold Quarry deposits. U.S.
Gold controls approximately three-square miles of unpatented mining claims on the Carlin Trend (Figure 4).
Figure
4 – Location of Maggie Creek Project and Major Gold Trends in Nevada
Figure
5 – Maggie Creek Project Claim Boundaries
History
of Prior Operations and Exploration on the Maggie Creek Project
The
Maggie Creek claims have been subjected to multiple exploration programs between 1974 and 2000, including geologic mapping, geochemical
and geophysical surveys, and much shallow drilling. Parties who worked on the project include: USGS-Radtke, Campbell Trust, Amselco,
Freeport, Western States, Getty Oil, Cordex, USMX, Fischer Watt, Barrick, Newmont and Teck. Of the 241 holes drilled historically, only
22 are deeper than 1,000 feet. Since 2000, Timberline Resources, Renaissance Gold and Orevada Metals held the property, completed limited
data review and compilation, but completed no drilling or field work.
Geology
and Mineralization
Maggie
Creek is located along the eastern side of the Carlin gold belt, directly northeast of Newmont Mining’s Gold Quarry mine. Mineralized
northeast trending faults from Gold Quarry project onto the Maggie Creek claims, at surface and below the post-mineral Carlin Formation.
The Gold Quarry mine is localized at the intersection of the northeast faults (Chukar-Alunite-Gold Quarry fault zone) with the west-northwest
trending Good Hope fault. Good Hope parallel, gold-bearing west-northwest trending faults have been mapped on the Maggie Creek claims
(Cress fault), some of which contain gold bearing, altered felsic dikes which have been poorly mapped to date. Northeast and west-northwest
fault zone intersection zones in the Maggie Creek claims are most prospective for ore deposition.
Favorable
Roberts Mountains Formation carbonate rocks exposed at surface consist of thrust slices. At drillable depth, below the thrusts, in-place
Lower Plate Rodeo Creek, Popovich, Roberts Mountains and Hanson Creek rocks are present. Detailed structural mapping where exposures
allow will help define targets within these deeper units.
U.S
Gold Corp. Maggie Creek Exploration Activities
On
April 7, 2021, we announced new targets for a Maggie Creek exploration drilling program including:
- We drilled two holes totaling 4,400 feet.
On
June 30, 2021, we announced the successful interception of the Popovich Formation, the host of the majority of gold mine in the northern
Carlin trend. A presumed hangingwall structure above the Popovich contained sooty pyrite and orpiment in a hydrothermal breccia (Figure
6). Assays were anomalous in gold, arsenic, mercury and thallium with a high of 165 ppb gold. The second hole was terminated within the
upper plate Vinini sandstone at 1,503 ft. The hole is cased and secured for reentry, permitting completion of the hole into the Popovich
in the near future.
Infrastructure
and Facilities
The
Maggie Creek project does not currently include any significant facilities The property is located within two to three miles of the Nevada
Gold Mines Gold Quarry Mine. The area is reached via the I80 interstate and the turn-off to the site is at Carlin some 5-miles south
of the Maggie Creek Claims. The Maggie Creek property sits on the prolific Carlin Trend which host some of the largest gold mines in
the State of Nevada. As such, significant paved road and power infrastructure pass withing 2-miles of the Maggie Creek Property.
The
Challis Gold Project, Idaho
Location
The
Challis Gold property is situated in the Salmon River Mountains, approximately 40 km (25 mi) southwest of the town of Salmon, Idaho,
and 69 km (43 mi) north of the smaller town of Challis (Figure 7). The project area is considered to be within the Cobalt Mining District,
as the past-producing Blackbird Cobalt Mine is located 9.3 km (5.75 mi) north-northwest of the property. The nearly-abandoned town of
Cobalt, a previous company town for the Blackbird Mine, is along Panther Creek 9.7 km (6 mi) northeast of the property. Meridian Gold’s
Beartrack Mine, the closest of the larger gold mines in the region, is 24 km (15 mi) northeast of the Challis Gold Project. The central
portion of the property is located at approximately 45o 2’ North Latitude and 114o 20’ West Longitude. The claims
are situated in the south-central portion of unsurveyed Township T20N, R18E.
- Figure 7: The Challis Gold Project Location in Idaho
Title
and Ownership for Challis Gold Project
All
of the mining claims comprising the Musgrove property are unpatented lode mining claims that have been recorded in the Lemhi County Court
House in Salmon, Idaho and filed with the US Bureau of Land Management office in Boise.
History
of Prior Operations and Exploration
Early
mining dates to the late 1880’s when gold was discovered at the nearby Yellow Jacket Mine and copper and cobalt was discovered
north of the project area at the Blackbird Mine. Small scale intermittent mining was conducted in the project area from 1908 through
the 1930’s at the Musgrove Mine and at the Smith-Gahan Mine.
In
the mid-1980’s, alteration and quartz veining was identified located along the ridge north of Musgrove CreekA large block of claims
covering the area was staked by an independent geologist and then leased to Atlas Minerals. Atlas completed an extensive sampling program
and, in 1991, drilled nine reverse circulation holes resulting in the discovery of significant mineralization at the Johny’s Point
deposit.
The
project was acquired by Newmont in 1992 as part of the Grassy Mountain Deposit acquisition. Newmont conducted an extensive exploration
program between 1992 and the fall of 1995 consisting of mapping and rock chip sampling. Twenty-seven core holes were completed consisting
of nine holes in the Johny’s Point area and 18 holes testing targets along strike from Johny’s Point. Newmont concluded that
the project did not meet the potential for their size criteria and the project was dropped.
In
1996, Meridian Gold acquired the property and drilled an additional 20 core holes and three reverse circulation drill holes. The property
was subsequently returned to the owner due to declining gold prices.
In
2003, Wave Exploration leased the property and completed a GIS compilation of the surface and drill hole data. Wave subsequently commissioned
a technical report. In 2004, Wave drilled two confirmation drill holes and two step out holes and completed a soil geochemical program
northwest of Johny’s Point.
In
2005, Wave optioned the property to Journey Resources. In 2006 and 2007, Journey drilled nine reverse circulation drill holes and five
core holes northwest of Johny’s Point.
There
is no documented exploration activity from 2008 until 2018. On September 1, 2018, Journey Resources failed to pay the required claim
payments to the Bureau of Land Management and the claims were forfeited. Subsequently, Northern Panther Resources Corporation located
or acquired new claims covering the project. In 2020, we acquired Northern Panther Resources. In 2020, we contracted with Wright Geophysics
to conduct a ground magnetic geophysical over the current claim block. This survey identified a prominent low magnetic linear feature