Item 1A. Risk Factors 23
Item 1B. Unresolved Staff Comments 34
Item 3. Legal Proceedings 35
Item 4. Mine Safety Disclosures 35
Part II
Item 6. [Reserved] 36
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 40
Item 8. Financial Statements and Supplementary Data 41
Item 9A. Controls and Procedures 42
Item 9B. Other Information 42
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 42
Part III
Item 10. Directors, Executive Officers, and Corporate Governance 43
Item 11. Executive Compensation 43
Item 14. Principal Accountant Fees and Services 43
Part IV
Item 15. Exhibit and Financial Statement Schedules 44
Signatures 48
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 planned extensions of our leases;
● Our planned expenditures during our fiscal year ended April 30, 2025;
● 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,” “we,” “our,” or “us”),
was re-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, copper and precious metals development and exploration company
pursuing exploration opportunities primarily in Wyoming, Nevada and Idaho.
While
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 Project in Nevada and the Challis Gold Project in Idaho, most of our recent activity has focused on moving the
CK Gold Project along the development pathway. The Company’s CK Gold Project’s 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 (“S-K 1300”)
promulgated by the Securities and Exchange Commission (the “SEC”). 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.
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, 2024
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 (“Exchange Act”), 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, 2024, 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 Current Mineral Properties
Summary
of Previous Mineral Properties
Quality
Assurance/Quality Control (“QA/QC”) Protocol
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 Elko, 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 protocol 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. With respect to the CK Gold Project, and as part of the examination and preparation
of a Technical Report under Reg. S-K 1300 guidelines, QA/QC protocols have been independently checked. We retain core remnants, duplicates,
pulps and rejects in one of several secured facilities.
CK
Gold Project, Wyoming
The
CK Gold Project consists of certain mining leases and other mineral rights located in the historic 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 4.0 miles of the property is provided
by public paved and maintained gravel roads. An agreement with the private landowner (The Ferguson Ranch Inc. (“Ferguson Ranch”))
provides access for the remaining distance to the main project area. The surface of S1⁄2 Section 25, NE1⁄4 Section 35 is privately
owned by the Ferguson Ranch. An easement agreement providing access for exploration and potential development 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. Currently, the surface of Section 36
is leased for grazing by the Ferguson Ranch and part of the option to lease the lands necessary for project development and operation
is compensation to the Ferguson Ranch for loss of grazing, as and when areas are impacted.
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 Project’s 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 Project’s property position consists of two State of Wyoming Metallic and Non- metallic Rocks and
Minerals Mining Leases.
Through
Gold King, the project has acquired two 35-acre parcels immediately adjacent to Section 36 in Section 35, on the western boundary of
the project area. This 70-acre landholding provides a buffer to other occupied and unoccupied parcels to the west of the project area.
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 was renewed within the past year and expires on February 1, 2033. Annual rental payments under this
lease are $3.00 per acre. Lease 0-40858 is a ten-year lease that was renewed within the current year and expires on February 1,
2034. Annual rental payments under this lease are $3.00 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 anticipate continuing to renew each lease beyond their current expiration
dates.
Effective
April 6, 2023, the Board of Directors of the Office of State Lands and Investments (“OSLI”) approved the recommendation from
the staff of the OSLI fixing the production royalty rate at a flat 2.1% of net receipts received by us once the project is in operation.
Additionally, once the project is in operation, the Board of Directors of the OSLI has the authority to reduce the royalty payable to
the State. Additionally, original lease restrictions limiting operations on the lease areas, deemed critical mule deer habitat, were
lifted by OSLI after the company came to an arrangement with The Wyoming Department of Game and Fish (“Game and Fish”) to
make a compensatory payment to Game and Fish to support habitat and conservation measures. The agreed amount to be paid by the Company
to Game and Fish once development and operational impact occur amount to $300,000.
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 both BNSF and Union Pacific
railroad lines, intersection of 2 major interstate highways, I-80 and I-25, and a regional airport.
High
voltage powerlines are approximately 2.4 km (1.5 mi) 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, catering to approximately a 30-Megawatt load will be constructed and talks have been conducted with the
local power provider (Black Hills Energy), the designated provider for the area. Indicative rates including the installation of approximately
16-miles of line from a nearby sub-station have been received and incorporated into project engineering studies.
In
February 2023, we entered into a Water Development and Purchase Agreement (“Water Agreement”) with the Board of Public Utilities
(the “BOPU”) of the City of Cheyenne. Under this Water Agreement, BOPU will provide a firm supply of up to 600 gallons per
minute for the life of the project. It is anticipated that the water to be supplied under this Water Agreement will come from the Lone
Tree well field owned by BOPU. A pipeline from the Lone Tree well field to the project will be required to be constructed. 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.
Permitting
Mine
Operating Permit and Closure Plan (“MOP”)
In
September 2022, we filed our mine operation and reclamation plan (“MOP”) with the WDEQ – Land Division (the “WDEQ”).
In November 2022, we received notification from WDEQ that our MOP was deemed complete and that it was under technical review. In April
2023, we received a first round of technical comments and worked with the WDEQ to fully respond to their initial review. In May 2024,
WDEQ issued us a letter of approval for the MOP. Per WDEQ’s letter of approval there were three conditions to the MOP: (1) acceptance
of a reclamation bond, in the amount of $5,010,000; (2) receipt of a water discharge permit from WDEQ and (3) receipt of the WDEQ Air
Quality Division permit. To date, the Company has received acceptance of the reclamation bond and obtained the water discharge permit.
The Company expects to obtain the WDEQ Air Quality permit this calendar year.
Industrial Siting Permit (“ISP”)
In February 2023, we submitted our ISP with the Industrial Siting Division
of the WDEQ. An ISP is required for all projects within the state of Wyoming when the projected capital costs are anticipated to exceed
$253.9 million. This threshold includes costs we may incur as well as costs incurred from other parties. The ISP’s intent is to
ascertain the regional impacts during construction and mine operation and release state funds to local governments to offset anticipated
impacts. Subsequent to the permit submission, a hearing was held with the Industrial Siting Commission in May 2023 whereby our ISP was
approved. In June 2023, we received official notification from the state of Wyoming that our ISP was granted.
History
of Prior Operations and Exploration on the CK Gold Project
Limited
exploration and mining were conducted on the CK Gold Project’s 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 Project’s property, 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 the CK Gold Project’s property 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 Project’s 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 Project’s 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 LLC (now WSP USA, Inc.) 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 LLC remain a reasonable estimate
of our mineral resources and mineral reserves at April 30, 2024.
CK
Gold Project – Summary of Gold, Copper and Silver Mineral Resources at April 30, 2024 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, 2024 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
For
comparison, below are our mineral resources and mineral reserves at April 30, 2023:
CK
Gold Project – Summary of Gold, Copper and Silver Mineral Resources at April 30, 2023 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, 2023 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 prefeasibility study (“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
○ Feasibility study 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
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 2023. The results of the test work
were incorporated into the prefeasibility study published on December 1, 2021. We expect to update the prefeasibility study by the end
of the third quarter of 2024 and finalize the feasibility study sometime thereafter.
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 Directors (our “Board”) 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 the CK Gold Project. 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
We
submitted both of our major permit applications during the year-ended April 30, 2023, the MOP and Industrial Siting Permit (the “ISP”).
We were granted our ISP in June 2023 providing local governments the ability to receive state funds to mitigate impacts from the anticipated
construction and operation of our CK Gold Project. In May 2024, we received approval of the MOP subject to three conditions (reclamation
bond approval, water discharge permit and air quality permit). Two of the three conditions have been met (reclamation bond approval and
water discharge permit) and we expect to meet the third condition (air quality permit) in calendar 2024.
Primarily
in support of the feasibility study presently underway, during the 2021 field season, 47 core, reverse circulation rotary and conventional
rotary 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. Since September 2020,
over 3 1/2 years of monitoring data have been gathered and ongoing monitoring in critical areas continues.
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 the 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. A geophysical anomaly to the southeast supports the trend extending from the proposed
open pit as identified by step-out drilling from the current reserve boundary; however, to date exploration has not pinpointed mineralization
that might be associated with the anomaly further to the southeast in what is thought to be fairly complex geologic conditions.
Keystone
Project, Cortez Trend, Nevada
Location
The
Keystone Project consists of 601 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 Project 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 $200 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 to the annual maintenance fee paid to the Nevada BLM, a $12 per claim fee is
due to the Eureka County (NV) Clerk’s office as a record fee.
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. We did not buy down any portion of the NSR.
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.
In
2022, a hyperspectral survey was conducted on the property identifying evidence of potential mineralization. Numerous anomalies often
associated with mineralization were identified. Field investigation of the anomalies commenced during the 2023 field season. In September
2023, we announced completion of a hyperspectral study, which yielded the discovery of multiple high priority targets requiring further
investigation and adding to the targets identified from the Company’s prior work at the project.
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.
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 BLM office in Boise. An annual maintenance fee of $200 per claim per year must be paid to
the BLM by September 1 of each year, and failure to make the payment on time renders the claims void. In addition to the annual maintenance
fee, $20 is due to the Lemhi County (ID) Recorder’s office as a notice of intent to hold fee.
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 Creek A 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
that trends from the Musgrove Mine north-northwest for over two miles.
Geology
and Mineralization
The
project is located within the Trans-Challis Fault System, a prominent NE-trending fault zone which crosscuts central Idaho and hosts
numerous gold deposits. Host rocks consist of quartzites and phyllites of the Precambrian Apple Creek Fm with minor mineralization within
the Eocene Challis Volcanics. The Musgrove Mine – Johny’s Point mineral trend is within and adjacent to the Musgrove Fault,
a northwest-trending fault that brings the Challis Volcanics into contact with the Precambrian rocks. This is a major structural zone
that forms the northern edge of the Panther Creek Graben.
Gold
mineralization occurs within epithermal quartz veins, quartz vein stockworks, and silicified breccia. The mineralization displays the
characteristics of a low sulfidation epithermal gold system. The Musgrove Mine – Johny’s Point mineral trend has been defined
by a broad soil and rock chip gold and arsenic anomaly that extends a distance 3000 feet and is up to 800 feet wide. Approximately 600
feet of this zone has been drilled with the remainder tested by wide spaced drilling.
Infrastructure
and Facilities
The
Challis Gold project does not currently include any significant facilities. The Challis property is located in the Salmon-Challis National
Forest and served by paved and unpaved roads. There are historic workings in the area and there has been recent mining activity in the
area. The site is somewhat remote from grid power and power lines would have to be extended into the area, or onsite power generation
used to support an eventual operation. There is water in the area from both surface and sub-surface sources. The Bear Track operation,
now closed but under renewed exploration, is some 16 miles as the crow flies to the northeast of the property. Historic mining was conducted;
however, the facilities have been abandoned decades ago and the nearest habited area is a forest ranger station near Forney some 5-miles
from site.
Competition
We
do not compete directly with anyone for the exploration or removal of minerals from our property as we hold all interest and rights to
the claims. Readily available commodities markets exist in the U.S. and around the world for the sale of minerals. Therefore, we will
likely be able to sell minerals that we are able to recover. We will be subject to competition and unforeseen limited sources of supplies
in the industry in the event spot shortages arise for supplies such as explosives or large equipment tires, and certain equipment such
as bulldozers and excavators and services, such as contract drilling that we will need to conduct exploration. If we are unsuccessful
in securing the products, equipment and services we need, we may have to suspend our exploration plans until we are able to secure them.
Compliance
with Government Regulation
We
will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration
of minerals in the United States generally. We will also be subject to the regulations of the BLM and the US Forest Service (“Forest
Service”) with respect to mining claims on federal lands.
Future
exploration drilling on any of our properties that consist of BLM or Forest Service land will require us to either file a Notice of Intent
(NOI) or a Plan of Operations, depending upon the amount of new surface disturbance that is planned. A Notice of Intent is required for
planned surface activities that anticipate less than 5.0 acres of surface disturbance, and usually can be obtained within a 30 to 60-day
time period.
Environmental
Permitting Requirements
Various
levels of governmental controls and regulations address, among other things, the environmental impact of mineral mining and exploration
operations and establish requirements for reclamation of mineral mining and exploration properties after exploration operations have
ceased. With respect to the regulation of mineral mining and exploration, legislation and regulations in various jurisdictions establish
performance standards, air and water quality emission limits and other design or operational requirements for various aspects of the
operations, including health and safety standards. Legislation and regulations also establish requirements for reclamation and rehabilitation
of mining properties following the cessation of operations and may require that some former mining properties be managed for long periods
of time after mining activities have ceased.
Our
activities are subject to various levels of federal and state laws and regulations relating to protection of the environment, including
requirements for closure and reclamation of mineral exploration properties. Some of the laws and regulations include the Clean Air Act,
the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Emergency Planning
and Community Right-to-Know Act, the Endangered Species Act, the Federal Land Policy and Management Act, the National Environmental Policy
Act, the Resource Conservation and Recovery Act, and related state laws in Nevada. Additionally, much of our property is subject to the
federal General Mining Law of 1872, which regulates how mining claims on federal lands are located and maintained.
The
State of Nevada, where we focus mineral exploration efforts, requires mining projects to obtain a Nevada State Reclamation Permit pursuant
to the Mined Land Reclamation Act (the “Nevada MLR Act”), which establishes reclamation and financial assurance requirements
for all mining operations in the state. New and expanding facilities are required to provide a reclamation plan and financial assurance
to ensure that the reclamation plan is implemented upon completion of operations. The Nevada MLR Act also requires reclamation plans
and permits for exploration projects that will result in more than five acres of surface disturbance on private lands.
The