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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
or
For the transition period from to
Commission file number: 001-33638
INTERNATIONAL TOWER HILL MINES LTD.
(Exact name of registrant as specified in its charter)
British Columbia, Canada
(State or other jurisdiction of incorporation or
organization)
2710-200 Granville Street,
Vancouver, British Columbia, Canada
(Address of principal executive offices)
98-0668474
(I.R.S. Employer
Identification No.)
V6C 1S4
(Zip code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
Common Shares, no par value
Securities registered pursuant to Section 12(g) of the Act: None
Registrant’s telephone number, including area code: (604) 683-6332
Trading Symbol
THM
Name of each exchange on which registered:
NYSE American
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒
Yes No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 (§ 232.405 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
Non-accelerated filer
☐
☒
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 ☒
Based on the last sale price on the NYSE American of the registrant’s Common Shares on June 30, 2021 (the last business day of the registrant’s most recently completed second fiscal quarter) of $1.05 per share, the aggregate market value of the
voting stock held by non-affiliates of the registrant was approximately $139.1 million.
As of March 1, 2022, the registrant had 194,908,184 Common Shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
To the extent specifically referenced in Part III, portions of the registrant’s definitive Proxy Statement on Schedule 14A to be filed with the Securities and Exchange Commission in connection with the registrant’s 2022 Annual Meeting of
Shareholders are incorporated by reference into this report.
Table of Contents
Part I
Item 1
Item 1A
Item 1B
Item 2
Item 3
Item 4
Part II
Item 5
Item 6
Item 7
Item 7A
Item 8
Item 9
Item 9A
Item 9B
Item 9C
Part III
Item 10
Item 11
Item 12
Item 13
Item 14
Part IV
Item 15
Item 16
SIGNATURES
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Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
[RESERVED]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers, and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Exhibits and Financial Statement Schedules
Form 10-K Summary
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FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act
of 1995 concerning anticipated results and developments in the operations of the Company in future periods, planned exploration activities, the adequacy of the
Company’s financial resources and other events or conditions that may occur in the future. Forward-looking statements are frequently, but not always, identified by
words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible” and similar expressions, or statements that events, conditions or results
“will,” “may,” “could” or “should” (or the negative and grammatical variations of any of these terms) occur or be achieved. These forward-looking statements may
include, but are not limited to, statements concerning:
the Company’s future cash requirements, the Company’s ability to meet its financial obligations as they come due, and the Company’s ability to raise the
necessary funds to continue operations on acceptable terms, if at all;
the Company’s ability to carry forward and incorporate into future engineering studies of the Livengood Gold Project updated mine design, production schedule
and recovery concepts identified during the optimization process;
the Company’s potential to carry out an engineering phase that will evaluate and optimize the Livengood Gold Project configuration and capital and operating
expenses, including determining the optimum scale for the Livengood Gold Project;
the Company’s strategies and objectives, both generally and specifically in respect of the Livengood Gold Project;
the Company’s belief that there are no known environmental issues that are anticipated to materially impact the Company’s ability to conduct mining operations
at the Livengood Gold Project;
the potential for the expansion of the estimated mineral resources at the Livengood Gold Project;
the potential for a production decision concerning, and any production at, the Livengood Gold Project;
the sequence of decisions regarding the timing and costs of development programs with respect to, and the issuance of the necessary permits and authorizations
required for, the Livengood Gold Project;
the Company’s estimates of the quality and quantity of the mineral resources at the Livengood Gold Project;
the timing and cost of any future exploration programs at the Livengood Gold Project, and the timing of the receipt of results therefrom;
the expected levels of overhead expenses at the Livengood Gold Project; and
future general business and economic conditions, including changes in the price of gold and the overall sentiment of the markets for public equity.
Such forward-looking statements reflect the Company’s current views with respect to future events and are subject to certain known and unknown risks, uncertainties and
assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that
may be expressed or implied by such forward-looking statements, including, among others:
● the demand for, and level and volatility of the price of, gold;
● conditions in the financial markets generally, the overall sentiment of the markets for public equity, interest rates, currency rates, and the rate of inflation;
● general business and economic conditions, including the effect of the COVID-19 pandemic on such conditions;
● government regulation and proposed legislation (and changes thereto or interpretations thereof);
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● defects in title to claims, or the ability to obtain surface rights, either of which could affect the Company’s property rights and claims;
● the Company’s ability to secure the necessary services and supplies on favorable terms in connection with its programs at the Livengood Gold Project and other
activities;
● the Company’s ability to attract and retain key staff, particularly in connection with the permitting and development of any mine at the Livengood Gold Project;
● the accuracy of the Company’s resource estimates (including with respect to size and grade) and the geological, operational and price assumptions on which
these are based;
● the timing of the Company’s ability to commence and complete planned work programs at the Livengood Gold Project;
● the timing of the receipt of and the terms of the consents, permits and authorizations necessary to carry out exploration and development programs at the
Livengood Gold Project and the Company’s ability to comply with such terms on a safe and cost-effective basis;
● the ongoing relations of the Company with the lessors of its property interests and applicable regulatory agencies;
● the metallurgy and recovery characteristics of samples from certain of the Company’s mineral properties and whether such characteristics are reflective of the
deposit as a whole; and
● the continued development of and potential construction of any mine at the Livengood Gold Project property not requiring consents, approvals, authorizations
or permits that are materially different from those identified by the Company.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described
herein. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statements about the
future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the
forward-looking statements due to a variety of risks, uncertainties and other factors, including without limitation those discussed in Part I, Item 1A, Risk Factors, of this
Annual Report on Form 10-K, which are incorporated herein by reference, as well as other factors described elsewhere in this report and the Company’s other reports
filed with the SEC.
The Company’s forward-looking statements contained in this Annual Report on Form 10-K are based on the beliefs, expectations and opinions of management as of the
date of this report. The Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or
opinions should change, except as required by law. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-
looking statements.
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CAUTIONARY NOTE REGARDING SIMILAR OR ADJACENT MINERAL PROPERTIES
This Annual Report on Form 10-K contains information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to
explore or mine. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or
similar properties, and any results of the mining or exploitation thereof, are not indicative of mineral deposits on the Company’s properties, or any potential results of the
mining or exploitation thereof.
The following is a glossary of certain terms that may be used in this report.
GLOSSARY OF TERMS
“alteration”
“anomalous”
“April 2017 Report”
“As”
“basalt”
“biotite”
“Board”
“chert”
“clastic”
“cm”
“common shares”
“conglomerate”
“December 2021 Report”
“deformation”
“deposit”
“diamond drill”
“dip”
“dike”
“director”
“disseminated”
“epigenetic”
“g/t”
“gabbro”
Changes in the chemical or mineralogical composition of a rock, generally produced by weathering or hydrothermal solutions
Departing from the expected or normal
The technical report entitled “Canadian National Instrument 43-101 Technical Report Pre-feasibility Study on the Livengood Gold
Project, Livengood, Alaska, USA” dated April 10, 2017 and prepared by certain Qualified Persons under NI 43-101, as filed under
the Company’s profile on SEDAR at www.sedar.com
Arsenic
A dark coloured igneous rock, commonly extrusive – the fine-grained equivalent of gabbro
A common rock forming mineral of the mica group
The Board of Directors of ITH
A microcrystalline or cryptocrystalline sedimentary rock, consisting chiefly of interlocking crystals of quartz less than about 30
microns in diameter
Pertaining to a rock or sediment composed principally of fragments derived from pre-existing rocks or minerals and transported
some distance from their places of origin; also said of the texture of such a rock
Centimeters
The common shares without par value in the capital of ITH as the same are constituted on the date hereof
A coarse grained clastic sedimentary rock, composed of rounded to sub-angular fragments larger than 2mm in diameter set in a fine-
grained matrix of sand or silt, and commonly cemented by calcium carbonate, iron oxide, silica or hardened clay
The technical report entitled “NI 43-101 Technical Report Pre-feasibility Study of the Livengood Gold Project, Livengood, Alaska,
USA” dated December 17, 2021 and prepared by certain Qualified Persons under NI 43-101, as filed on December 17, 2021 under
the Company’s profile on SEDAR at www.sedar.com
A general term for the processes of folding, faulting, shearing, compression, or extension of rocks as a result of various earth forces
A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to
contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures. Such a deposit
does not qualify as a commercially mineable ore body or as containing reserves or ore, unless final legal, technical and economic
factors are resolved
A type of rotary drill in which the cutting is done by abrasion rather than percussion. The cutting bit is set with diamonds and is
attached to the end of the long hollow rods through which water is pumped to the cutting face. The drill cuts a core of rock which is
recovered in long cylindrical sections, an inch or more in diameter
The angle that a stratum or any planar feature makes with the horizontal, measured perpendicular to the strike and in the vertical
plane
A tabular body of igneous rock that cuts across the structure of adjacent rocks or cuts massive rocks
A member of the Board of Directors of ITH
Fine particles of mineral dispersed throughout the enclosing rock
Of or relating to a mineral deposit of origin later than that of the enclosing rocks
Grams per metric tonne
A group of dark coloured, basic intrusive igneous rocks – the approximate intrusive equivalent of basalt
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“grade”
“host”
“host rock”
“hydrothermal”
“intrusion”
“intrusive”
“kg”
“km”
“lode”
“m”
“mm”
“mafic”
“magma”
“magmatic”
“massive”
“mineral reserve”
“mineral resource”
“mineralization”
“NI 43-101”
“NSR”
“NYSE American”
“ophiolite”
“RC”
“Sb”
“sedimentary”
“sill”
“strike”
To contain a particular quantity of ore or mineral, relative to other constituents, in a specified quantity of rock
A rock or mineral that is older than rocks or minerals introduced into it or formed within it
A body of rock serving as a host for other rocks or for mineral deposits, or any rock in which ore deposits occur
A term pertaining to hot aqueous solutions of magmatic origin which may transport metals and minerals in solution
The process of the emplacement of magma in pre-existing rock, magmatic activity. Also, the igneous rock mass so formed
Of or pertaining to intrusion, both the process and the rock so formed
Kilograms
Kilometers
A vein of metal ore in the earth
Meters
Millimeters
Said of an igneous rock composed chiefly of dark, ferromagnesian minerals, also, said of those minerals
Naturally occurring molten rock material, generated within the earth and capable of intrusion and extrusion, from which igneous
rocks have been derived through solidification and related processes
Of, or pertaining to, or derived from, magma
Said of a mineral deposit, especially of sulphides, characterized by a great concentration of ore in one place, as opposed to a
disseminated or veinlike deposit
The economically mineable part of a measured and/or indicated mineral resource. It includes diluting materials and allowances for
losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as
appropriate that include application of “modifying factors” (which are defined in NI 43-101 as considerations used to convert
mineral resources to mineral reserves, including but not, mining processing, metallurgical, infrastructure, economic, marketing,
legal, environmental, social and governmental factors). Such studies demonstrate that, at the time of reporting, extraction could
reasonably be justified. The reference point at which mineral reserves are defined, usually the point where the ore is delivered to the
processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable
product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. The public
disclosure of a mineral reserve must be demonstrated by a pre-feasibility study or feasibility study.
A concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and
quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and
other geological characteristics of a mineral resource are known, estimated or interpreted from specific geological evidence and
knowledge, including sampling.
The concentration of metals and their chemical compounds within a body of rock
National Instrument 43-101 of the Canadian Securities Administrators entitled “Standards of Disclosure for Mineral Projects”
Net smelter return
NYSE American (formerly, NYSE MKT and the American Stock Exchange)
An assemblage of mafic and ultramafic igneous rocks ranging from spilite and basalt to gabbro and peridotite, and always derived
from them by later metamorphism, whose origin is associated with an early phase of the development of a geosyncline
A method of drilling whereby rock cuttings generated by the drill bit are flushed up from the bit face to the surface through the drill
rods by air or drilling fluids for collection and analysis
Antimony
Pertaining to or containing sediment (typically, solid fragmental material transported and deposited by wind, water or ice that forms
in layers in loose unconsolidated form), or formed by its deposition
A tabular igneous intrusion that parallels the planar structure of the surrounding rock
The direction taken by a structural surface
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“tabular”
“Canadian Tax Act”
“TRS”
“tectonic”
“tectonics”
“TSX”
“ultramafic”
“vein”
“volcaniclastic”
Said of a feature having two dimensions that are much larger or longer than the third, or of a geomorphic feature having a flat
surface, such as a plateau
Income Tax Act (Canada)
The Technical Report Summary for the Livengood Gold Project filed as Exhibit 96.1 to this Annual Report on Form 10-K.
Pertaining to the forces involved in, or the resulting structures of, tectonics
A branch of geology dealing with the broad architecture of the outer part of the earth, that is, the major structural or deformational
features and their relations, origin and historical evolution
Toronto Stock Exchange
Said of an igneous rock composed chiefly of mafic minerals
An epigenetic mineral filling of a fault or other fracture, in tabular or sheet-like form, often with the associated replacement of the
host rock; also, a mineral deposit of this form and origin
Pertaining to a clastic rock containing volcanic material in whatever proportion, and without regard to its origin or environment
USE OF NAMES
In this Annual Report on Form 10-K, unless the context otherwise requires, the terms "we", "us", "our", "ITH", "International Tower Hill", or the "Company" refer to
International Tower Hill Mines Ltd. and its subsidiaries.
All dollar amounts in this Annual Report on Form 10-K are presented in United States dollars unless otherwise stated. References to C$ refer to Canadian currency.
CURRENCY
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ITEM 1. BUSINESS
Overview
PART I
ITH is a company engaged in the acquisition and development of mineral properties. The Company currently holds or has the right to acquire interests in a development
stage project in Alaska referred to as the “Livengood Gold Project” or the “Project”. The Company has not yet begun extraction of mineralization from the deposit or
reached commercial production. The Company has a 100% interest in its Livengood Gold Project, which as of December 31, 2021 , has a measured and indicated mineral
resource of 704.5 million tonnes at an average grade of 0.60 g/tonne (13.62 million ounces). As reported in the Technical Report Summary attached as Exhibit 96.1 to
this Annual Report on Form 10-K, a portion of the mineral resources at the Project have been converted into proven and probable reserves of 430.1 million tonnes at an
average grade of 0.65 g/tonne (9.0 million ounces) based on a gold price of $1,680 per ounce. A more complete description of the Livengood Gold Project, including
detailed presentation of resources and reserves, and the current activities is set forth in Part I, Item 2 and Part II, Item 7, Management’s Discussion and Analysis of
Financial Condition and Results of Operations of this Annual Report on Form 10-K.
From 2006 to 2008, the Company focused primarily on the acquisition and exploration of mineral properties in Alaska and Nevada by acquiring through staking,
purchase, lease or option (primarily from AngloGold Ashanti (U.S.A.) Exploration Inc. (“AngloGold”) in a transaction which closed on August 4, 2006) interests in a
number of mineral properties in Alaska (Livengood Gold Project, Terra, LMS, BMP, Chisna, Coffee Dome, West Tanana, Gilles, West Pogo, Caribou, Blackshell and
South Estelle) and Nevada (North Bullfrog and Painted Hills) that it believed had the potential to host large precious or base metal deposits. Since early 2008, the
Company’s primary focus has been the exploration and advancement of the Livengood Gold Project and the majority of its resources have been directed to that end. In
August 2010, ITH undertook a corporate spin-out arrangement transaction whereby all of its mineral property interests other than the Project were spun out as an
independent and separate company. Since the completion of that transaction, the sole mineral property held by the Company has been the Livengood Gold Project and the
Company has focused exclusively on the ongoing exploration and potential development of the Livengood Gold Project.
The head office and principal executive address of ITH is located at 200 Granville Street, Suite 2710, Vancouver, British Columbia, Canada V6C 1S4, and its registered
and records office is located at 745 Thurlow Street, Suite 2400, Vancouver, British Columbia, Canada V6E 0C5.
2021
Livengood Gold Project Developments
On January 12, 2021, the Company announced that the Board had approved a 2021 budget of $5.6 million and endorsed the associated 2021 work program to advance
the Livengood Gold Project. The key element of the 2021 work program was the completion of the Pre-Feasibility Study (the “PFS”) for the Livengood Gold Project.
The work program also advanced the baseline environmental data collection in critical areas of hydrology and waste rock geochemical characterization needed to support
future permitting, as well as community engagement.
Livengood Gold Project Pre-Feasibility Study
On November 4, 2021, the Company announced the results of the PFS for the Livengood Gold Project which are summarized in the Technical Report Summary. The
TRS details a project that would process 65,000 tons per day and produce 6.4 million ounces of gold over 21 years from a gold resource estimated at 13.6 million ounces
at 0.60 g/tonne. The study utilized a third-party review by Whittle Consulting and BBA Inc. to integrate new interpretations based on an expanded geological database,
improved geological modelling, new resource estimation methodology, an optimized mine plan and production schedule, additional detailed metallurgical work at
various gold grades and grind sizes, changes in the target grind for the mill, new engineering estimates, and updated cost inputs, all of which significantly de-risk the
Project. The TRS has estimated the capital costs of the Project at US$1.93 billion, the total cost per ton milled at US$13.12, the all-in sustaining costs at US$1,171 per
ounce, and net present value (5%) at US$1,800/oz of US$400 million.
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The Project configuration evaluated in the TRS is a conventional, owner-operated surface mine that would utilize large-scale mining equipment in a blast/load/haul
operation. Mill feed would be processed in a 65,000 tons per day comminution circuit consisting of primary and secondary crushing, wet grinding in a single semi-
autogenous (“SAG”) mill and single ball mill followed by a gravity gold circuit and a conventional carbon in leach (“CIL”) circuit.
Whittle Enterprise Optimization
Prior to beginning the PFS, the Company retained Whittle Engineering and BBA Inc. to collaborate on an enterprise optimization study (the “Whittle and BBA Study”)
to review various technologies and project configurations and to recommend the optimum configuration for the PFS. The Whittle and BBA Study reviewed secondary
crushing with SAG and ball mill, tertiary crushing with ball mill, gravity/CIL at p80 of 90 micron to 250 micron, stand-alone and auxiliary heap leach configurations,
gravity only gold recovery, gravity/flotation with pressure oxidation and CIL of flotation concentrate. These configurations were evaluated at various combinations of
project ramp up strategy, annual throughput, primary, secondary, and tertiary grind size, as well as mining fleet size and stockpile management strategies. Tailings
technologies reviewed included conventional tailings and pressure filtered tailings.
The Whittle and BBA Study determined that the gravity/CIL plant at p80 250 micron with conventional tailings provided the highest net present value, which is the
configuration detailed in the TRS.
The TRS was prepared by independent third-party consultants. The Company cautions that the PFS which is summarized in the TRS is preliminary in nature, and is
based on technical and economic assumptions which are expected to be further refined and evaluated in a full feasibility study which may be completed in the future. The
TRS is based on a mineral resource estimate effective as of August 20, 2021 using a different mineral resource model than used in the April 2017 Report. The Company
has determined that the mineral resource estimate of August 20, 2021 remains current as of December 31, 2021.
COVID-19 Pandemic
In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a global pandemic. This contagious disease outbreak, which has
continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially
leading to an economic downturn. While it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak, including as a
result of the emergence of variant strains of the virus and ongoing vaccination efforts, and its ultimate effects on the Company’s business, results of operations or ability
to raise funds at this time, as of the date of this Annual Report on Form 10-K, the COVID-19 pandemic has not had any material adverse effects on the Company.
2022
Outlook
On March 9, 2022, the Company announced that the Board had approved a 2022 budget of $3.2 million and endorsed the associated 2022 work program to advance the
Livengood Gold Project. The 2022 work program will advance the baseline environmental data collection in critical areas of hydrology and waste rock geochemical
characterization needed to support future permitting, as well as advance community engagement.
The Company remains open to a strategic alliance to help support the future development of the Project while considering all other appropriate financing options. The
size of the gold resource, the Project’s favorable location, and the Company’s proven team are some of the reasons the Company could potentially attract a strategic
partner with a long-term development horizon who understands the Project is highly leveraged to gold prices.
Regulatory, Environmental and Social Matters
All of the Company’s currently proposed exploration is in the State of Alaska. In Alaska, low impact, initial stage surface exploration such as stream sediment, soil and
rock chip sampling does not require any permits. The State of Alaska requires an APMA (Alaska Placer Mining Application) exploration permit for all substantial
surface disturbances such as trenching, road building and drilling. These permits are reviewed by related state and federal agencies that can comment on and require
specific changes to proposed work plans to minimize impacts on the environment. The permitting process for significant disturbances generally requires 30 days for
processing and all work must be bonded. The Company currently has all necessary permits with respect to its currently planned
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exploration activities in Alaska. Although the Company has never had an issue with the timely processing of APMA permits, there can be no assurances that delays in
permit approval will not occur.
ITH has established a Technical Committee, which has adopted a formal, written charter. As set out in its charter, the overall purpose of the Technical Committee is to
assist the Board in fulfilling its oversight responsibilities with respect to the Company’s continuing commitment to improving the environment and ensuring that
activities are carried out and facilities are operated and maintained in a safe and environmentally sound manner that reflects the Company’s ideals and principles of
sustainable development. The primary function of the Technical Committee is to monitor, review and provide oversight with respect to the technical aspects of the
Company’s projects as well as monitor policies, standards, and programs relative to health, safety, community relations and environmental-related matters. The Technical
Committee also advises the Board and makes recommendations for the Board’s consideration regarding health, safety, community relations and environmental-related
issues.
Although not set out in a specific policy, the Company strives to be a positive influence in the local communities where its mineral projects are located, not only by
contributing to the welfare of such communities through donations of money and supplies, as appropriate, but also through hiring local workers to assist in ongoing
exploration programs when appropriate. The Company considers building and maintaining strong relationships with local communities to be fundamental to its ability to
continue to operate in such regions and to assist in the eventual development (if any) of mining operations in such regions, and it attaches considerable importance to
commencing and fostering such relationships from the beginning of its involvement in any particular area.
Corporate Structure
ITH was incorporated under the Company Act (British Columbia) under the name “Ashnola Mining Company Ltd.” on May 26, 1978. ITH’s name was changed to
“Tower Hill Mines Ltd.” on June 1, 1988, and subsequently changed to “International Tower Hill Mines Ltd.” on March 15, 1991. ITH has been transitioned under, and is
now governed by, the Business Corporations Act (British Columbia).
ITH has three material subsidiaries:
● Tower Hill Mines, Inc. (“TH Alaska”), a corporation incorporated in Alaska on June 27, 2006, which holds most of the Company’s Alaskan mineral
properties and is 100% owned by ITH;
● Tower Hill Mines (US) LLC, a limited liability company formed in Colorado on June 27, 2006, which carries on the Company’s administrative and
personnel functions and is wholly owned by TH Alaska; and
● Livengood Placers, Inc., a corporation incorporated in Nevada on June 11, 1998, which holds certain Alaskan properties and is 100% owned by TH Alaska.
The following corporate chart sets forth all of ITH’s material subsidiaries:
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Competition
ITH is a development stage company. The Company competes with other mineral resource exploration and development companies for financing, technical expertise and
the acquisition of mineral properties. Many of the companies with whom the Company competes have greater financial and technical resources. Accordingly, these
competitors may be able to spend greater amounts on the acquisition, exploration and development of mineral properties. This competition could adversely impact the
Company’s ability to finance further exploration and to achieve the financing necessary for the Company to develop its mineral properties.
Availability of Raw Materials and Skilled Employees
All aspects of the Company’s business require specialized skills and knowledge. Such skills and knowledge include the areas of geology, drilling, logistical planning,
preparation of feasibility studies, permitting, construction and operation of a mine, financing and accounting. Since commencing its current operations in mid-2006, the
Company has found and retained appropriate employees and consultants and believes it will continue to be able to do so in the future.
All of the raw materials the Company requires to carry on its business are readily available through normal supply or business contracting channels in Canada and the
United States. Since commencing exploration activities at the Livengood Gold Project in mid-2006, the Company has been able to secure the appropriate personnel,
equipment and supplies required to conduct its contemplated programs. The Company does not believe that it will experience any shortages of required personnel,
equipment or supplies in the foreseeable future.
Human Capital Resources
At December 31, 2021, the Company had three employees. The Company also uses consultants with specific skills to assist with various aspects of project evaluation,
engineering, community engagement and investor relations, and corporate governance.
Seasonality
As the Company’s mineral exploration activity takes place in Alaska, its business is seasonal. Due to the northern climate, exploration work on the Livengood Gold
Project can be limited due to excessive snow cover and cold temperatures. In general, surface sampling work is limited to May through September and surface drilling
from March through November, although some locations afford opportunities for year-round exploration operations and others, such as road-accessible wetland areas,
may only be explored while frozen in the winter.
Available Information
ITH maintains an internet website at www.ithmines.com. The Company makes available, free of charge, through the Investors section of its website, its Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of
the Exchange Act, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC and its Annual Information Form, press
releases and material change reports and other reports filed on the System for Electronic Document Analysis and Retrieval (SEDAR). The Company’s SEC filings are
available from the SEC’s internet website at www.sec.gov, which contains reports, proxy and information statements and other information regarding issuers that file
electronically. The Company’s SEDAR filings are available from the Canadian Securities Administrators’ internet website at www.sedar.com under the Company’s
profile. The contents of these websites are not incorporated into this report and the references to the URLs for these websites are intended to be inactive textual references
only.
ITEM 1A. RISK FACTORS
You should carefully consider the following risk factors in addition to the other information included in this Annual Report on Form 10-K. Each of these risk factors
could materially and adversely affect our business, operating results and financial condition, as well as materially and adversely affect the value of an investment in our
common shares. The risks described below are not the only ones facing the Company. Additional risks that we are not presently aware of, or that we currently believe are
immaterial, may also adversely affect our business, operating results and financial condition. We cannot assure you that we will successfully address these risks or that
other unknown risks exist that may affect our business.
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Risks Related to Our Business
Our success depends on the development and operation of the Livengood Gold Project, which is our only project.
Our only property at this time is our Livengood Gold Project, which is in the development stage. The TRS indicates that the Project would generate a minimal positive
return at a gold price of $1,680 per ounce. The Company would need to see higher gold prices over a sustained period for the Project to be commercially viable. While
management is exploring opportunities identified in the Technical Report Summary for optimization and reducing Project costs, there can be no assurance that any such
efforts will be successful, that any of the optimization opportunities or cost savings will in fact be realized or that the price of gold will increase sufficiently, and be
sustained for a sufficient period, to warrant a decision to develop the Project. No assurance can be given that any level of recovery of ore reserves will be realized or that
any identified mineral deposit will ever qualify as a commercial mineable ore body which can be legally and economically exploited. If we are not able to identify
commercially viable mineral deposits or profitably extract minerals from such deposits, if the Project is not developed, or if the Project is otherwise subject to
deterioration, destruction or significant delay, we may never generate revenues and our shareholders may lose all or a substantial portion of their investment.
We have a history of losses and expect to continue to incur losses in the future.
We have incurred losses and have had no revenue from operations since inception, and we expect to continue to incur losses in the foreseeable future. We have not
commenced commercial production on the Livengood Gold Project and we have no other mineral properties. We have no revenues from operations and we do not
anticipate generating revenues from operations until we are able, if ever, to begin production at the Livengood Gold Project. We will continue to incur operating losses
until the Livengood Gold Project begins to generate sufficient revenues to fund continuing operations, which cannot be assured. The Project is currently in the
development stage and, as contemplated in the Technical Report Summary, would generate a minimal positive return at a gold price of $1,680 per ounce. Our activities
may not result in profitable mining operations and we may not succeed in establishing mining operations or profitably producing metals at the Livengood Gold Project.
We face various risks related to health epidemics, pandemics and similar outbreaks, which may have material adverse effects on our business, financial position,
results of operations and/or cash flows.
We face various risks related to health epidemics, pandemics and similar outbreaks, including the global outbreak of COVID-19. The continued spread of COVID-19 has
led to disruption and volatility in the global capital markets, which increases the cost of capital and adversely impacts access to capital. If significant portions of the
population are unable to work effectively, including because of illness, quarantines, government actions, facility closures or other restrictions in connection with the
COVID-19 pandemic, our operations will likely be impacted. In addition, our costs may increase as a result of the COVID-19 outbreak. These cost increases may not be
fully recoverable or adequately covered by insurance.
It is possible that the continued spread of COVID-19 could also adversely affect our business partners, delay our plans to advance the Livengood Gold Project or cause
other unpredictable events. We continue to work with our stakeholders to address this global pandemic responsibly. In addition, we continue to monitor the situation, to
assess further possible implications to our business, and to take actions in an effort to mitigate adverse consequences.
We cannot at this time predict the impact of the COVID-19 pandemic, but it could have material adverse effects on our business, financial position, results of operations
and/or cash flows.
We are a development stage company and have no history producing metals from our properties. Any future revenues and profits are uncertain.
We have no history of mining or refining any mineral products or metals and the Livengood Gold Project is not currently producing. There can be no assurance that the
Livengood Gold Project will be successfully placed into production, produce minerals in commercial quantities, or otherwise generate operating earnings. Advancing
properties from the development stage into commercial production requires significant capital and time and will be subject to further feasibility studies, permitting
requirements and construction of the mine, processing plants, roads and related works and infrastructure. We will continue to incur losses until such time, if ever, as our
mining activities successfully reach commercial production levels and generate sufficient revenue to fund continuing operations. There is no certainty that we will
produce revenue from any source, operate profitably or provide a return on investment in the future.
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We will require additional financing to fund exploration and, if warranted, development and production. Failure to obtain additional financing could have a
material adverse effect on our financial condition and results of operation and could cast uncertainty on our ability to continue as a going concern.
Advancing properties from exploration and development into the production stage requires significant capital and time, and successful commercial production from a
property, if any, will be subject to completing feasibility studies, permitting and construction of the mine, processing plants, roads, and other related works and
infrastructure. The Company does not presently have sufficient financial resources or a source of operating cash flow to complete the permitting process and, if a
production decision is made, the construction of a mine at the Livengood Gold Project. The completion of the permitting process and any construction of a mine at the
Livengood Gold Project will depend upon the Company’s ability to obtain financing through the sale of its equity securities, enter into a joint venture or strategic alliance
relationship, secure significant debt financing or find alternative means of financing. There is no assurance that the Company will be successful in obtaining the required
financing on favorable terms or at all. Even if the results of exploration are encouraging, the Company may not be able to obtain sufficient financing to conduct the
further exploration that may be necessary to determine whether or not a commercially mineable deposit exists.
Our ability to obtain additional financing in the future will depend upon a number of factors, including prevailing capital market conditions, the status of the national and
worldwide economy, our business performance and the price of gold and other precious metals. Capital markets worldwide have been adversely affected during the past
few years, including in 2021, by substantial losses by financial institutions and market volatility due to the onset of the COVID-19 pandemic, among other things. Failure
to obtain such additional financing on favorable terms or at all could result in delay or indefinite postponement of further mining operations or exploration and
development and the possible partial or total loss of our interests in the Livengood Gold Project.
Resource exploration is a highly speculative business, and certain inherent exploration risks could have a negative effect on our business.
Our long-term success depends on our ability to identify mineral deposits on the Livengood Gold Project and other properties we may acquire, if any, that can then be
developed into commercially viable mining operations. Resource exploration is a highly speculative business and involves a high degree of risk, including, among other
things, unprofitable efforts resulting both from the failure to discover mineral deposits and from finding mineral deposits which, though present, are insufficient in size
and grade at the then prevailing market conditions to return a profit from production. Substantial expenditures are required to establish proven and probable mineral
reserves through drilling and analysis, to develop metallurgical processes to extract metal, and to develop the mining and processing facilities and infrastructure at any
site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be
discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis. The marketability of
minerals which may be acquired or discovered by the Company will be affected by numerous factors beyond the control of the Company and cannot be accurately
predicted. These factors include market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and government
regulations, including regulations relating to prices, taxes, royalties, land use, importing and exporting of minerals and environmental protection. The exact effect of these
factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital.
Mineral resource estimates are based on interpretation and assumptions and could be inaccurate or yield less mineral production under actual conditions than is
currently estimated. Any material changes in these estimates will affect the economic viability of placing a property into production.
The mineral resource estimates included in our reports are estimates only and no assurance can be given that any particular level of recovery of minerals will in fact be
realized or that an identified reserve or resource will ever qualify as a commercially mineable (or viable) deposit which can be legally and economically exploited. The
estimating of mineral resources and mineral reserves is a subjective process and the accuracy of mineral resource and mineral reserve estimates is a function of the
quantity and quality of available data, the accuracy of statistical computations, and the assumptions used and judgments made in interpreting available engineering and
geological information. There is significant uncertainty in any mineral resource or mineral reserve estimate and the actual deposits encountered and the economic
viability of a deposit may differ materially from the Company’s estimates. In addition, the grade of mineralization ultimately mined may differ from that indicated by
drilling results and such differences could be material. Because we have not commenced actual production, mineralization estimates, including mineral resource
estimates, for the Livengood Gold Project may require adjustments or downward revisions, and such adjustments or revisions may be material.
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Until ore is actually mined and processed, mineral resources, mineral reserves and grades of mineralization must be considered as estimates only. The grade of ore
ultimately mined, if any, may differ from that indicated by any pre-feasibility or definitive feasibility studies and drill results. There can be no assurance that minerals
recovered in small scale laboratory tests will be duplicated in large scale tests under on-site conditions or in production scale operations. Extended declines in market
prices for gold may render portions or all of our mineral resources uneconomic and result in reduced reported mineralization or adversely affect the commercial viability
determinations reached by us. Material changes in estimates of mineralization, grades, stripping ratios, recovery rates or of our ability to extract such mineralization may
affect the economic viability of projects and the value of our Livengood Gold Project. The estimated resources described in our reports should not be interpreted as
assurances of mine life or of the profitability of future operations. Estimated mineral resources and mineral reserves may have to be re-estimated based on changes in
applicable commodity prices, further exploration or development activity or actual production experience. This could materially and adversely affect estimates of the
volume or grade of mineralization, estimated recovery rates or other important factors that influence mineral resource or mineral reserve estimates. Market price
fluctuations for gold, silver or base metals, increased production costs or reduced recovery rates or other factors may render any particular reserves uneconomical or
unprofitable to develop at a particular site or sites. A reduction in estimated reserves could require material write downs in investment in the affected mining property and
increased amortization, reclamation and closure charges. Mineral resources are not mineral reserves and there is no assurance that any mineral resources will ultimately
be reclassified as proven or probable reserves. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
There may be differences in U.S. and Canadian practices for reporting reserves and resources.
We currently file resource and reserve estimates with Canadian securities regulators in accordance with NI 43-101 and with the SEC in accordance with subpart 1300 of
Regulation S-K. Both sets of reporting standards have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported but
embody different approaches and definitions. While the requirements for reporting mineral resources, including subcategories of measured, indicated and inferred
resources, and mineral reserves are largely similar for NI 43-101 and S-K 1300 standards, disclosures of resources and reserves in Canada and the United States could
vary as a result of applying the applicable requirements of each jurisdiction. Our reserve and resource estimates are currently identical in our Canadian and U.S. filings,
but future disclosures of resources and reserves may not be the same across both jurisdictions, and changes in disclosure requirements in Canada or in the U.S. may cause
us to report different resources and reserves in each jurisdiction.
Increased costs could affect our ability to bring our projects into production and, once in production, our financial condition and ability to be profitable.
Management anticipates that costs at the Livengood Gold Project will frequently be subject to variation from one year to the next due to a number of factors, such as
changing ore grade, metallurgy and revisions to mine plans, if any, in response to the physical shape and location of the ore body. In addition, costs are affected by the
price of commodities such as fuel, rubber and electricity. Such commodities are at times subject to volatile price movements, including increases that could make
production less profitable or not profitable at all. A material increase in costs could also impact our ability to maintain operations and have a significant effect on the
Company’s profitability in the event that a production decision is made.
The volatility of the price of gold could adversely affect any future operations and, if warranted, our ability to develop our properties.
Even if commercial quantities of mineral deposits are discovered by the Company, there is no guarantee that a profitable market will exist for the sale of the metals
produced, if any. The Company’s long-term viability and profitability, the value of the Company’s properties, the market price of its common shares and the Company’s
ability to raise funding to conduct continued exploration and development, if warranted, depend, in large part, upon the market price of gold. The decision to put a mine
into production and to commit the funds necessary for that purpose must be made long before the first revenue from production would be received. A decrease in the
price of gold may prevent the Company’s property from being economically mined or result in the write-off of assets whose value is impaired as a result of lower gold
prices.
The price of gold has experienced significant movement over short periods of time, and is affected by numerous factors beyond the control of the Company, including
economic and political conditions, expectations of inflation, currency exchange fluctuations, interest rates, global or regional demand, sale or purchase of gold by various
central banks and financial institutions, speculative activities and increased production due to improved mining and production methods. The volatility of mineral prices
represents a substantial risk which no amount of planning or technical expertise can fully eliminate. There can be no assurance that the price of gold will be such that any
such deposits can be mined at a profit. The volatility in gold prices is illustrated by the following table, which presents the high,
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low and average fixed price in U.S. dollars for an ounce of gold, based on the London Bullion Market Association P.M. fix, over the past five years:
2017
2018
2019
2020
2021
January 1, 2022 to March 1, 2022
High
Low
Average
$
$
$
$
$
$
1,346
1,355
1,546
2,067
1,943
1,936
$
$
$
$
$
$
1,151
1,178
1,270
1,474
1,684
1,788
$
$
$
$
$
$
1,257
1,269
1,393
1,771
1,799
1,839
Our results of operations could be affected by currency fluctuations.
The Livengood Gold Project is located in the United States, with most costs associated with the Project paid in U.S. dollars, and the Company maintains its accounts in
Canadian and U.S. dollars, making it subject to foreign currency fluctuations. There can be significant swings in the exchange rate between the U.S. and Canadian dollar.
There are no plans at this time to hedge against any exchange rate fluctuations in currencies. Adverse foreign currency fluctuations may cause losses and materially affect
the Company’s financial position and results.
Resource exploration, development and production involve a high degree of risk and we do not maintain insurance with respect to certain of these risks, which
exposes us to significant risk of loss.
Resource exploration, development and production involve a high degree of risk. Our operations are, and any future development or mining operations we may conduct
will be, subject to all of the operating hazards and risks normally incident to exploring for and developing mineral properties, such as, but not limited to:
● economically insufficient mineralized material;
● fluctuation in exploration, development and production costs;
● labor disputes;
● unanticipated variations in grade and other geologic problems;
● water conditions;
● difficult surface or underground conditions;
● mechanical and equipment failure;
● failure of pit walls or dams;
● environmental hazards;
● industrial accidents;
● metallurgical and other processing problems;
● unusual or unexpected rock formations;
● personal injury, cave-ins, landslides, flooding, fire, explosions, and rock-bursts;
● metal losses;
● power outages;
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● periodic interruptions due to inclement or hazardous weather conditions; and
● decrease in the value of mineralized material due to lower gold prices.
These risks could result in damage to, or destruction of, mineral properties, facilities or other property, personal injury, environmental damage, delays in operations,
increased cost of operations, monetary losses and possible legal liability. Although the Company maintains or can be expected to maintain insurance within ranges of
coverage consistent with industry practice, no assurance can be given that the Company will be able to obtain insurance to cover all of these risks at economically
feasible premiums or at all. The Company may elect not to insure where premium costs are disproportionate to the Company’s perception of the relevant risks. The
payment of such insurance premiums and of such liabilities would reduce the funds available for exploration and production activities, if warranted. Should events such
as these that are not covered by insurance arise, they could reduce or eliminate our assets and shareholder equity as well as result in increased costs and a decline in the
value of our assets or common shares.
We may not be able to obtain all required permits and licenses to place any of our properties into production.
The current and future operations of the Company require licenses and permits from various governmental authorities. There can be no assurance that the Company will
be able to obtain all necessary licenses and permits that may be required to carry out exploration, development and mining operations at its projects, on reasonable terms
or at all. Costs related to applying for and obtaining permits and licenses may be prohibitive and could delay our planned exploration and development activities. Failure
to comply with permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be
curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Delays in obtaining, or a failure
to obtain, any such licenses and permits, or a failure to comply with the terms of any such licenses and permits that the Company does obtain, could delay or prevent
production of the Livengood Gold Project and have a material adverse effect on the Company.
Title to the Livengood Gold Project may be subject to defects in title or other claims, which could affect our property rights and claims.
There are risks that title to the Livengood Gold Project may be challenged or impugned. The Livengood Gold Project is located in the State of Alaska and may be subject
to prior unrecorded agreements or transfers or native land claims, and title may be affected by undetected defects. There may be valid challenges to the title of the
Livengood Gold Project which, if successful, could impair development or operations. This is particularly the case in respect of those portions of our properties in which
we hold our interest solely through a lease with the claim holders, as such interest is substantially based on contract and has been subject to a number of assignments (as
opposed to a direct interest in the property).
Some of the mining claims at the Livengood Gold Project are U.S. federal or Alaska state “unpatented” mining claims. There is a risk that a portion of such unpatented
mining claims could be determined to be invalid, in which case the Company could lose the right to mine any minerals contained within those mining claims. Unpatented
mining claims are created and maintained in accordance with the applicable U.S. federal and Alaska state mining laws. Unpatented mining claims are unique property
interests and are generally considered to be subject to greater title risk than other real property interests due to the validity of unpatented mining claims often being
uncertain. This uncertainty arises, in part, out of the complex federal and state laws and regulations under the provisions of the U.S. General Mining Law of 1872 (the
“U.S. General Mining Law”). Unpatented mining claims are always subject to possible challenges of third parties or validity contests by the United States federal
government or the Alaska state government, as applicable. The validity of an unpatented mining claim, in terms of both its location and its maintenance, is dependent on
strict compliance with a complex body of federal and state statutory and decisional law. Title to the unpatented mining claims may also be affected by undetected defects
such as unregistered agreements or transfers and there are few public records that definitively determine the issues of validity and ownership of unpatented mining
claims. The Company has not obtained full title opinions for the majority of its mineral properties. Not all the mineral properties in which the Company has an interest
have been surveyed, and their actual extent and location may be in doubt. Should the federal government impose a royalty or additional tax burdens on the properties that
lie within public lands, the resulting mining operations could be seriously impacted, depending upon the type and amount of the burden.
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The leases and agreements pursuant to which the Company has interests, or the right to acquire interests, in a significant portion of the Livengood Gold Project provide
that the Company must make a series of cash payments over certain time periods or expend certain minimum amounts on the exploration of the properties. Failure by the
Company to make such payments or make such expenditures in a timely fashion may result in the Company losing its interest in such properties. There can be no
assurance that the Company will have, or be able to obtain, the necessary financial resources to be able to maintain all of its property agreements in good standing, or to
be able to comply with all of its obligations thereunder, which could result in the Company forfeiting its interest in one or more of its mineral properties.
The Company may not have and may not be able to obtain surface or access rights to all or a portion of the Livengood Gold Project.
Although the Company acquires the rights to some or all of the minerals in the ground subject to the mineral tenures that it acquires, or has a right to acquire, in most
cases it does not thereby acquire any rights to, or ownership of, the surface to the areas covered by its mineral tenures. In such cases, applicable mining laws usually
provide for rights of access to the surface for the purpose of carrying on mining activities, however, the enforcement of such rights through the courts can be costly and
time-consuming. It is necessary to negotiate surface access or to purchase the surface rights if long-term access is required. There can be no guarantee that, despite having
the right at law to access the surface and carry-on mining activities, the Company will be able to negotiate satisfactory agreements with any such existing
landowners/occupiers for such access or purchase such surface rights, and therefore it may be unable to carry out planned exploration or mining activities. In addition, in
circumstances where such access is denied, or no agreement can be reached, the Company may need to rely on the assistance of local officials or the courts in such
jurisdiction, the outcomes of which cannot be predicted with any certainty. The inability of the Company to secure surface access or purchase required surface rights
could materially and adversely affect the timing, cost or overall ability of the Company to develop any mineral deposits it may locate.
We are subject to significant governmental regulations which affect our operations and costs of conducting our business.
Any exploration activities carried on by the Company are, and any future development or mining operations we may conduct will be, subject to extensive laws and
regulations governing various matters, including:
● mineral concession acquisition, exploration, development, mining and production;
● management of natural resources;
● exports, price controls, taxes and fees;
● labor standards on occupational health and safety, including mine safety;
● post-closure reclamation;
● environmental standards, waste disposal, toxic substances, explosives, land use and environmental protection; and
● dealings with indigenous peoples and historic and cultural preservation.
Companies engaged in exploration activities often experience increased costs and delays in production and other schedules as a result of the need to comply with
applicable laws, regulations and permits. Failure to comply with applicable laws, regulations and permits may result in civil or criminal fines or penalties, enforcement
actions thereunder, including the forfeiture of claims, orders issued by regulatory or judicial authorities requiring operations to cease or be curtailed, and may include
corrective measures requiring capital expenditures, installation of additional equipment or costly remedial actions, any of which could result in the Company incurring
significant expenditures. The Company may also be required to compensate third parties suffering loss or damage as a result of our mineral exploration activities and
may have civil or criminal fines or penalties imposed for violations of such laws, regulations and permits.
It is also possible that future laws and regulations could cause additional expense, capital expenditures, restrictions on or suspension of the Company’s operations and
delays in the exploration and development of the Company’s properties.
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Legislation has been proposed that would significantly affect the mining industry and our business.
In recent years, members of the United States Congress have repeatedly introduced bills which would supplant or alter the provisions of the U.S. General Mining Law. If
adopted, such legislation, among other things, could eliminate or greatly limit the right to a mineral patent, impose federal royalties on mineral production from
unpatented mining claims located on U.S. federal lands (which includes certain of the mining claims at the Livengood Gold Project), result in the denial of permits to
mine after the expenditure of significant funds for exploration and development, reduce estimates of mineral reserves and reduce the amount of future exploration and
development activity on U.S. federal lands, all of which could have a material and adverse effect on the Company’s ability to operate and its cash flow, results of
operations and financial condition.
Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations.
The activities of the Company are subject to environmental regulations in the jurisdictions in which we operate. Environmental legislation generally provides for
restrictions and prohibitions on spills, releases or emissions into the air, discharges into water, management of waste, management of hazardous substances, protection of
natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Certain types of operations require the submission and
approval of environmental impact assessments. Environmental legislation is evolving in a manner involving stricter standards and enforcement, increased fines and
penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers,
directors and employees. Compliance with environmental laws and regulations and future changes in these laws and regulations may require significant capital outlays,
cause material changes or delays in our current and planned operations and future activities and reduce the profitability of operations. It is possible that future changes in
these laws or regulations could have a significant adverse impact on the Livengood Gold Project or some portion of our business, causing us to re-evaluate those
activities at that time.
Examples of current U.S. federal laws which may affect our current operations and may impact future business and operations include, but are not limited to, the
following:
The Comprehensive Environmental, Response, Compensation, and Liability Act (“CERCLA”), and comparable state statutes, impose strict, joint and several liability on
current and former owners and operators of sites and on persons who disposed of or arranged for the disposal of hazardous substances found at such sites. It is not
uncommon for the government to file claims requiring cleanup actions, demands for reimbursement for government-incurred cleanup costs, or natural resource damages,
or for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the
environment. The Federal Resource Conservation and Recovery Act (“RCRA”), and comparable state statutes, govern the disposal of solid waste and hazardous waste
and authorize the imposition of substantial fines and penalties for noncompliance, as well as requirements for corrective actions. CERCLA, RCRA and comparable state
statutes can impose liability for clean-up of sites and disposal of substances found on exploration, mining and processing sites long after activities on such sites have been
completed.
The Clean Air Act (“CAA”) restricts the emission of air pollutants from many sources, including mining and processing activities. Our mining operations may produce
air emissions, including fugitive dust and other air pollutants from stationary equipment, storage facilities and the use of mobile sources such as trucks and heavy
construction equipment, which are subject to review, monitoring or control requirements under the CAA and state air quality laws. New facilities may be required to
obtain permits before work can begin, and existing facilities may be required to incur capital costs in order to remain in compliance. In addition, permitting rules may
impose limitations on our production levels or result in additional capital expenditures in order to comply with the regulations.
The National Environmental Policy Act (“NEPA”) requires federal agencies to integrate environmental considerations into their decision-making processes by evaluating
the environmental impacts of their proposed actions, including issuance of permits to mining facilities, and assessing alternatives to those actions. If a proposed action
could significantly affect the environment, the agency must prepare a detailed statement known as an Environmental Impact Statement (“EIS”). The U.S. Environmental
Protection Agency (“EPA”), other federal agencies, and any interested third parties will review and comment on the scoping of the EIS and the adequacy of and findings
set forth in the draft and final EIS. We are required to undertake the NEPA process for the Livengood Gold Project permitting. The NEPA process can cause delays in
issuance of required permits or result in changes to a project to mitigate its potential environmental impacts, which can in turn impact the economic feasibility of a
proposed project or the ability to construct or operate the Livengood Gold Project or other properties and may make them entirely uneconomic.
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The Clean Water Act (“CWA”), and comparable state statutes, impose restrictions and controls on the discharge of pollutants into waters of the United States. The
discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The CWA
regulates storm water mining facilities and requires a storm water discharge permit for certain activities. Such a permit requires the regulated facility to monitor and
sample storm water run-off from its operations. The CWA and regulations implemented thereunder also prohibit discharges of dredged and fill material in wetlands and
other waters of the United States unless authorized by an appropriately issued permit. The CWA and comparable state statutes provide for civil, criminal and
administrative penalties for unauthorized discharges of pollutants and impose liability on parties responsible for those discharges for the costs of cleaning up any
environmental damage caused by the release and for natural resource damages resulting from the release.
The Safe Drinking Water Act (“SDWA”) and the Underground Injection Control (“UIC”) program promulgated thereunder, regulate the drilling and operation of
subsurface injection wells. The EPA directly administers the UIC program in some states and in others the responsibility for the program has been delegated to the state.
The program requires that a permit be obtained before drilling a disposal or injection well. Violation of these regulations or contamination of groundwater by mining
related activities may result in fines, penalties, and remediation costs, among other sanctions and liabilities under the SDWA and state laws. In addition, third party claims
may be filed by landowners and other parties claiming damages for alternative water supplies, property damages, and bodily injury.
Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect
on our business.
A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the
potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us, our future partners and our
suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such
regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such
limitations. Given the emotion, political significance and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how
legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased
awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our
reputation. The potential physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic circumstances in areas in
which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These
impacts may adversely impact the cost, production and financial performance of our operations.
Land reclamation requirements for our properties may be burdensome and expensive in the future.
Land reclamation requirements are generally imposed on mineral exploration companies (as well as companies with mining operations) in order to minimize long term
effects of land disturbance. Reclamation may include requirements to:
● control dispersion of potentially deleterious effluents;
● treat ground and surface water to drinking water standards; and
● reasonably re-establish pre-disturbance land forms and vegetation.
In order to carry out reclamation obligations imposed on us in connection with the potential development activities at the Livengood Gold Project, we must allocate
financial resources that might otherwise be spent on further exploration and development programs. We plan to set up a provision for reclamation obligations on the
Livengood Gold Project, as appropriate, but this provision may not be adequate. If we are required to carry out unanticipated reclamation work, our financial position
could be adversely affected.
The mining industry is intensely competitive, and we have limited financial and personnel resources with which to compete.
The Company’s business of the acquisition, exploration and, if warranted, development and mining of mineral properties is intensely competitive. The Company may be
at a competitive disadvantage in acquiring additional mining properties because it must compete with other individuals and companies, many of which may have greater
financial resources, operational experience and technical capabilities than the Company. The Company may also encounter increasing competition from other mining
companies in efforts to hire experienced mining professionals. Increased competition could adversely affect the Company’s ability to attract necessary capital
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funding, acquire suitable producing properties or prospects for mineral exploration in the future, or attract or retain key personnel or outside technical resources.
A shortage of equipment and supplies could adversely affect our ability to operate our business.
We are dependent on various supplies and equipment to carry out our exploration and, if warranted, development and mining operations. The shortage of such supplies,
equipment and parts could have a material adverse effect on our ability to carry out our operations and therefore limit or increase the cost of production.
We are dependent on key personnel and the absence of any of these individuals could adversely affect our business. We may experience difficulty attracting and
retaining qualified personnel.
Our future success is largely dependent on the performance and abilities of our directors, officers, employees and management and on our ability to attract and retain
additional key personnel in exploration, mine development, sales, marketing, technical support and finance. In addition, the Company has relied and may continue to rely
upon consultants and others for operating expertise. There is no assurance that we will be able to maintain the services of our directors, officers, employees or other
qualified personnel required to operate our business. The loss of the services of these persons could have a material adverse effect on our business and prospects.
Recruiting and retaining qualified personnel is critical to our success and there can be no assurance we will be able to recruit and retain such personnel. The number of
persons skilled in the acquisition, exploration and development of mineral properties is limited and competition for such persons is intense. If we are not successful in
attracting and retaining qualified personnel, our ability to develop our properties could be affected, which could have a material adverse effect on our business, results of
operations, cash flows and financial condition. We do not maintain “key man” life insurance policies on any of our officers or employees.
Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations.
In general, under Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to
limitations on its ability to utilize its pre-change net operating loss carryforwards (“NOLs”) to offset future taxable income. Similarly, where control of a corporation has
been acquired by a person or group of persons, subsection 111(5) of the Income Tax Act (Canada) (the “Canadian Tax Act”), and equivalent provincial income tax
legislation restrict the corporation’s ability to carry forward non-capital losses from preceding taxation years. Our existing NOLs may be subject to limitations arising
from previous ownership changes. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under
Section 382 of the Code or an acquisition of control for the purposes of subsection 111(5) of the Canadian Tax Act, and adversely affect our ability to utilize our NOLs in
the future. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or
otherwise be unavailable to offset future income tax liabilities. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance
sheet, even if we attain profitability.
Risks Related to Our Common Shares
Our share price may be volatile and as a result you could lose all or part of your investment.
In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market price of securities of
many companies, particularly those considered exploration or development stage companies, have experienced wide fluctuations in price which have not necessarily been
related to the operating performance, underlying asset values or prospects of such companies. Any quoted market for our common shares may be subject to market trends
and conditions generally, notwithstanding any potential success we have in creating revenues, cash flows or earnings. The price of our common shares has been subject to
price and volume volatility in the past. In 2021, the price of our common shares on the TSX ranged from a low of C$0.79 to a high of C$1.92, and on the NYSE
American ranged from a low of $0.65 to a high of $1.52. From January 1, 2022 to March 1, 2022, the price of our common shares on the TSX ranged from a low of
C$0.87 to a high of C$1.44, and on the NYSE American ranged from a low of $0.69 to a high of $1.13. There can be no assurance that significant fluctuations in the
trading price of the Company’s common shares will not continue to occur, or that such fluctuations will not materially adversely impact the Company’s ability to raise
equity funding without significant dilution to its existing shareholders, or at all. As a result, our shareholders may be unable to resell their shares at a desired price.
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Future sales of our securities in the public or private markets will dilute our current shareholders and could adversely affect the trading price of our common shares
and our ability to continue to raise funds in new stock offerings.
It is likely that the Company will issue common shares or securities exercisable or convertible into common shares in the future. The Company may issue securities on
less than favorable terms to raise sufficient capital to fund its business plan. Any transaction involving the issuance of equity securities or securities convertible into
common shares would result in dilution, possibly substantial, to present and prospective holders of common shares, could adversely affect the trading prices of our
common shares and could impair our ability to raise capital through future offerings of securities.
We have never paid dividends on our common shares.
We have not paid dividends on our common shares to date, and we may not be in a position to pay dividends for the foreseeable future. Our ability to pay dividends will
depend on our ability to successfully develop the Livengood Gold Project and generate earnings from operations. Further, our initial earnings, if any, will likely be
retained to finance our operations. Any future dividends will depend upon our earnings, our then-existing financial requirements and other factors, and will be at the
discretion of the Board.
We believe that we likely were a passive foreign investment company (“PFIC”) during the fiscal year ended December 31, 2021, which may result in adverse U.S.
federal income tax consequences to U.S. holders.
We believe that we likely were a PFIC for U.S. federal income tax purposes during the fiscal year ended December 31, 2021, and we expect that we will be a PFIC in the
current year and that we may continue to be classified as a PFIC in future years. The determination of whether or not the Company is a PFIC is a factual determination
dependent on a number of factors and cannot be made until the close of the applicable tax year. Accordingly, no assurances can be given regarding the Company’s PFIC
status for the current year or any future year. If the Company is a PFIC at any time during a U.S. holder’s holding period, then certain potentially adverse tax
consequences could apply to such U.S. holder’s acquisition, ownership, and disposition of common shares. For more information, please see the discussion in “Certain
U.S. Federal Income Tax Considerations for U.S. Holders” below.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The Company is engaged in the acquisition and development of mineral properties. The Company currently holds or has the right to acquire interests in one property – a
development stage property in Alaska referred to as the Livengood Gold Project (the “Livengood Gold Project” or the “Project”).
Information concerning our mining properties in this Annual Report on Form 10-K has been prepared in accordance with the requirements of subpart 1300 of Regulation
S-K, which first became applicable to us for the fiscal year ended December 31, 2021. These requirements differ significantly from the previously applicable disclosure
requirements of SEC Industry Guide 7. Among other differences, subpart 1300 of Regulation S-K requires us to disclose our mineral resources, in addition to our mineral
reserves, as of the end of our most recently completed fiscal year both in the aggregate and for each of our individually material mining properties.
As used in this Annual Report on Form 10-K, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” “inferred mineral resource,”
“mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with subpart 1300 of Regulation S-K. Under subpart
1300 of Regulation S-K, mineral resources may not be classified as “mineral reserves” unless the determination has been made by a qualified person that the mineral
resources can be the basis of an economically viable project. You are specifically cautioned not to assume that any part or all of the mineral deposits (including any
mineral resources) in these categories will ever be converted into mineral reserves, as defined by the SEC.
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You are cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred
mineral resources are estimates based on limited geological evidence and sampling and have a too high degree of uncertainty as to their existence to apply relevant
technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Estimates of inferred
mineral resources may not be converted to a mineral reserve. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher
category. A significant amount of exploration must be completed in order to determine whether an inferred mineral resource may be upgraded to a higher category.
Therefore, you are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be the basis of an economically viable project, or that it
will ever be upgraded to a higher category. Likewise, you are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be
converted to mineral reserves.
Additionally, we are subject to the reporting requirements of the applicable U.S. and Canadian securities laws, and as a result we publicly report our mineral reserves and
mineral resources according to two different standards. U.S. reporting requirements are governed by subpart 1300 of Regulation S-K. Canadian reporting requirements
for disclosure of mineral properties are governed by the NI 43-101. Both sets of reporting standards have similar goals in terms of conveying an appropriate level of
confidence in the disclosures being reported but embody different approaches and definitions. While the requirements for reporting mineral resources, including
subcategories of measured, indicated and inferred resources, and mineral reserves are largely similar for NI 43-101 and S-K 1300 standards, disclosures of resources and
reserves in Canada and the United States could vary as a result of applying the applicable requirements of each jurisdiction.
The information that follows relating to the Livengood Gold Project is derived, for the most part, from, and in some instances is an extract from, the TRS relating to the
property attached hereto as Exhibit 96.1 and prepared in compliance with Item 601(b)(96) and subpart 1300 of Regulation S-K. Portions of the following information are
based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, incorporated herein by
reference and made a part of this Annual Report on Form 10-K.
LIVENGOOD GOLD PROJECT, ALASKA
The Company currently holds, or has rights to acquire, ownership or leasehold interests in a group of adjacent mineral properties in Alaska which are collectively referred
to as the “Livengood Gold Project.” The Livengood Gold Project is located approximately 113 km (70 miles) by road northwest of Fairbanks, Alaska and approximately
65 km (40 miles) north of the boundary of the Fairbanks North Star Borough as shown in Figure 1 below. The Project lies within the Tolovana Mining District in the
northern part of the Tintina Gold Belt. The Company owns a 100% interest in the Livengood Gold Project and the Company’s primary focus is to develop the Project
with the objective of achieving commercial production. The Company’s book value of its investment in the Livengood Gold Project is $55,375,124 as of December 31,
2021.
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Property Description and Location
Accessibility, Climate, Local Resources, Infrastructure and Physiography
Figure 1: Location of the Livengood Gold Project
The Livengood Gold Project is located approximately 113 km (70 miles) by road northwest of Fairbanks, Alaska in the Tolovana Mining District within the Tintina Gold
Belt. The Project area is centered on Money Knob, a local topographic high point located at 65 ̊30’16’’N, 148 ̊31’33’’W. This feature and the adjoining ridgelines are the
probable lode gold source for the Livengood placer deposits which lie in the adjacent valley and which have been actively mined since 1914 and have produced more
than 500,000 ounces of gold.
The Livengood Gold Project straddles and is accessed via the Elliot Highway, a paved, all-weather road linking the north slope oil fields at Prudhoe Bay to central and
southern Alaska through Fairbanks. At present there are no full-time residents in the former mining town of Livengood. A number of unpaved roads have been developed
in the area providing excellent access. A 427 m (1400-foot) runway is located 6 km (3.7 miles) to the southwest near the former Alyeska Pipeline Company Livengood
Camp and is suitable for light aircraft. The Livengood Gold Project is also adjacent to the Alyeska Pipeline corridor, which transports crude oil from Prudhoe Bay south.
This corridor contains a fiber optic communications cable utilized at the Livengood Gold Project.
Topography at the site is eroded hills and valleys with a general elevation difference of 200 m (656 feet). The valleys generally contain active streams draining into the
Tolovana River system to the west.
The site is approximately 65 km (40 miles) south of the Arctic Circle, and has a subarctic climate with long, cold winters and short, warm summers. Annual precipitation
is approximately 40 cm (16 inches). Average low temperatures in winter are -21° to -28° Celsius (-6° to -18° Fahrenheit), with records reaching as low as -55° Celsius
(-67° Fahrenheit). Exploration work on the Livengood Gold Project can be limited due to excessive snow cover and cold temperatures. In general, surface sampling work
is limited to May through September and surface drilling from March through November. Road-accessible wetland areas may only be explored while frozen in the winter.
Work to date on the site has been limited to exploration and geotechnical drilling and environmental baseline activities. The Company does not have any plant or
equipment at the site, relying on contractors to perform the work.
The nearest community to Livengood Gold Project is the village of Minto, a town with a population of approximately 177 located approximately 65 km (40 miles)
southwest by road. The Fairbanks metropolitan area has a population of approximately 100,000 people, and comprises the regional center with hospitals, government
offices, businesses and the University of Alaska, Fairbanks. The city is
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linked to southern Alaska along a north-south transportation and utility corridor that includes two paved highways, a railroad to tide water, an interlinked electrical grid,
and communications infrastructure. Fairbanks has an international airport serviced daily by up to three major airlines.
In preliminary, non-binding discussions, the local utility in Fairbanks (Golden Valley Electrical Association) has indicated that 80-100 Megawatts of power could be
available to the Livengood Gold Project. Livengood would be connected to the local grid by building an 82 km (50 miles) 230-kVA line along the pipeline corridor.
Environmental baseline studies required for the electrical line construction started in 2011.
The TRS describes the plans for the infrastructure required at the Livengood Gold Project. These include evaluating mine shops; process, water and tailing management
facilities; power; access roads; administration offices; and camp facilities.
Livengood Gold Project Lands
The Livengood Gold Project covers approximately 19,546 hectares (48,300 acres), all of which is controlled by the Company through its wholly-owned subsidiary, TH
Alaska. The Livengood Gold Project is comprised of multiple land parcels: 100% owned patented mining claims; 100% owned State of Alaska mining claims; 100%
owned federal unpatented placer claims; land leased from the Alaska Mental Health Trust (“AMHT”); land leased from holders of state and federal patented and
unpatented mining and placer claims; and undivided interests in patented mining claims. The property and claims controlled through ownership, leases or agreements are
summarized below:
100% owned patented mining claims
● U.S. Mineral Survey 1960 and 2447, located on lower Livengood Creek, subject to an agreement to allow Larry Nelson, as agent for Nelson
Mining Company, to operate a placer mine on MS 1960 and 2447 through February 2, 2023.
● U.S. Mineral Survey 1956, located on lower Gertrude Creek, subject to a reserved royalty of 5% of gross value held by Key Trust Company on
behalf of the Luther Hess Trust.
● With respect to portions of U.S. Mineral Survey 1626, located on lower Amy Creek:
100% of No. 2 Above Discovery Any Creek,
100% of No. 3 Above Discovery Amy Creek, and
100% of Up Grade Association Bench
100% owned State of Alaska mining claims
● 169 state claims acquired by purchase
● 153 state claims acquired by location
100% owned federal unpatented placer claims
● 29 federal unpatented placer claims
100% owned Livengood Placers, Inc., a private Nevada corporation that is 100% owned by TH Alaska. Livengood Placers, Inc. is the record owner of the
following:
● 29 patented claims
● 108 federal unpatented placer claims
● 24 State of Alaska mining claims
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Leased property
● Alaska Mental Health Trust Lease. A lease of the AMHT mineral rights having a term commencing July l, 2004 and extending 19 years until June
30, 2023, subject to further extensions beyond June 30, 2023 by either commercial production or payment of an advance minimum royalty equal
to 125% of the amount paid in year 19 and diligent pursuit of development. The lease requires minimum work expenditures and advance minimum
royalties (all of which minimum royalties are recoverable from production royalties) which escalate annually with inflation. A net smelter return
(“NSR”) production royalty of between 2.5% and 5.0% (depending upon the price of gold) is payable to the lessor with respect to the lands subject
to this lease. In addition, an NSR production royalty of l% is payable to the lessor with respect to the unpatented federal mining claims subject to
the lease described in the Hudson/Geraghty Lease below and an NSR production royalty of between 0.5% and 1.0% (depending upon the price of
gold) is payable to the lessor with respect to the lands acquired by the Company as a result of the purchase of Livengood Placers, Inc. in December
2011. As of December 31, 2021, there were 9,970 acres included in the AMHT lease.
● Hudson/Geraghty Lease. A lease of 20 federal unpatented lode mining claims having an initial term of ten years commencing on April 21, 2003
and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the
property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $50,000 on or before each
anniversary date for the duration of the lease (all of which minimum royalties are recoverable from production royalties). An NSR production
royalty of between 2% and 3% (depending on the price of gold) is payable to the lessors. The Company may purchase 1% of the royalty for
$1,000,000.
● Griffin Lease. A lease of three patented lode claims having an initial term of ten years commencing January 18, 2007, and continuing for so long
thereafter as advance minimum royalties are paid. The lease requires an advance minimum royalty of $20,000 on or before each anniversary date
through January 18, 2017 and $25,000 on or before each subsequent anniversary (all of which minimum royalties are recoverable from production
royalties). An NSR production royalty of 3% is payable to the lessors. The Company may purchase all interests of the lessors in the leased
property (including the production royalty) for $1,000,000 (less all minimum and production royalties paid to the date of purchase), of which
$500,000 is payable in cash over four years following the closing of the purchase and the balance of $500,000 is payable by way of the 3% NSR
production royalty. The Company has acquired a 40% interest in the mining claims subject to the lease, providing the Company with a 40%
interest in the lease.
● Tucker Lease. A lease of two unpatented federal lode mining claims and four federal unpatented placer claims having an initial term of ten years
commencing on March 28, 2007, and continuing for so long thereafter as advance minimum royalties are paid and mining related activities,
including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum
royalty of $15,000 on or before each anniversary date for the duration of the lease (all of which minimum royalties are recoverable from
production royalties). The Company is required to pay the lessor the additional sum of $250,000 upon making a positive production decision, of
which $125,000 is payable within 120 days of the decision and $125,000 is payable within a year of the decision (all of which are recoverable
from production royalties). An NSR production royalty of 2% is payable to the lessor. The Company may purchase all of the interest of the lessor
in the leased property (including the production royalty) for $1,000,000.
Patented claims (undivided interests less than 100%)
● An undivided 203/240th interest in that certain patented placer mining claim known as the “Kinney Bench” claim, included within U.S. Mineral
Survey No. 1626 on lower Amy Creek.
● An undivided 53/90th interest in that certain patented placer mining claim known as the “Union Bench Association” claim, included within U.S.
Mineral Survey No. 1626 on lower Amy Creek.
● An undivided 83/120th interest in that certain patented placer mining claim known as the “Bessie Bench” claim, included within U.S. Mineral
Survey No. 1626 on lower Amy Creek.
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● An undivided 23/60th interest in those certain patented placer mining claims known as the “War Association” claim; the “Mutual Association”
claim; and the “O.K. Fraction” claim, all included within U.S. Mineral Survey No. 2033 on lower Amy Creek.
● An undivided 2/5th interest in those certain patented lode mining claims included within U.S. Mineral Survey No. 1990.
On State of Alaska lands, the state holds both the surface and the subsurface rights. State of Alaska 40-acre mining claims require an annual rental payment by November
30th of each year of $40 per claim to be paid to the state for the first five years, $85 per year for the second five years, and $205 per year thereafter. The annual rental
rates for each 160-acre claim are $165 for the first five years, $330 for the second five years, and $825 per year thereafter. As a consequence of the annual rentals due, all
Alaska State Mining Claims have an expiry date of November 30th each year. In addition, there is a minimum annual work expenditure requirement of $100 per 40-acre
claim (due on or before noon on September 1 in each year) or cash-in-lieu thereof, and an affidavit evidencing that such work has been performed is required to be filed
on or before November 30th in each year. Excess work can be carried forward for up to four years. If the rental is paid and the work requirements are met, the claims can
be held indefinitely. The work completed by the Company during the 2021 field season was filed as assessment work, and the value of that work is sufficient to meet the
assessment work requirements through September 1, 2025 on all State of Alaska mining claims.
Holders of State of Alaska mining claims are also required to pay a production royalty on all revenue received from minerals produced on state land during each calendar
year. The production royalty rate is 3% of net income.
Holders of federal unpatented mining claims are required to pay an annual rental of $165 per 20 acres.
All of the foregoing agreements are in good standing and are transferable. The Company has taken reasonable steps to verify title to mineral properties in which it has an
interest. Except for the patented claims, none of the properties have been surveyed.
Holders of Federal and Alaska State unpatented mining claims have the right to use the land or water included within mining claims only when necessary for mineral
prospecting, development, extraction, or basic processing, or for storage of mining equipment. However, the exercise of such rights is subject to the appropriate permits
being obtained.
Geology and Mineralization
The rocks at the Livengood Gold Project are part of the Livengood Terrane, an east–west belt, approximately 240 km (149 miles) long, consisting of tectonically
interleaved assemblages of various ages. These assemblages include the Amy Creek Assemblage, a sequence of latest Proterozoic and/or early Paleozoic basalt,
mudstone, chert, dolomite, and limestone. An early Cambrian ophiolite sequence of mafic and ultramafic sea floor rocks was thrust over the Amy Creek Assemblage and
was, in turn, overthrust by a sequence of Devonian shale, siltstone, conglomerate, volcanic, and volcaniclastic rocks, which are the dominant host to the mineralization
currently under exploration at the Livengood Gold Project. The Devonian assemblage was overthrust by a second klippe of Cambrian ophiolite rocks. All of these rocks
are intruded by Cretaceous multiphase monzonitic and syenitic dikes and sills. Gold mineralization is spatially and temporally associated with these intrusive rocks.
Gold mineralization occurs in association with disseminated arsenopyrite and pyrite in volcanic, sedimentary, and intrusive rocks, and in quartz veins cutting the more
competent lithologies, primarily volcanic rocks, sandstones, and, to a lesser degree, ultramafic rocks. Three principal stages of alteration are currently recognized, an
early biotite stage, followed by albite-quartz, and a late sericite-quartz assemblage. Carbonate appears to have been introduced with and subsequent to these stages.
Arsenopyrite and pyrite were introduced primarily during the albite-quartz and sericite-quartz stages. Gold correlates strongly with arsenic and occurs primarily within
and on the margins of arsenopyrite and pyrite.
Mineralization is interpreted as intrusion-related, consistent with other gold deposits of the Tintina Gold Belt, and has a similar As-Sb geochemical association.
Mineralization is controlled partly by lithologic units, but thrust-fold architecture was key to providing pathways for intrusive and associated hydrothermal fluids.
Local fault and contact limits to mineralization have been identified, but overall, the deposit has not been closed off in any direction. The current resource and area drilled
covers the most significant portion of the area with anomalous gold in surface soil samples, but still represents only about 25% of the total gold-anomalous area.
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Among deposits of the Tintina Gold Belt, mineralization at the Livengood Gold Project is most similar to the dike and sill-hosted mineralization at the Donlin Creek
deposit, where gold occurs in narrow quartz veins associated with dikes and sills of similar composition. The age of the intrusions and the genetic link between the
mineralization and intrusive rocks are typical of those of other nearby gold deposits of the Tintina Gold Belt, which have been characterized as intrusion-related gold
systems and for these reasons the Livengood Gold Project is best classified with them.
History and Exploration
Gold was first discovered in the gravels of Livengood Creek in 1914. Subsequently, over 500,000 ounces of placer gold were produced and the small town of Livengood
was established. From 1914 through the 1970’s, the primary focus of prospecting activity was placer deposits. Historically, prospectors considered Money Knob and the
associated ridgeline the source of the placer gold. Prospecting, in the form of dozer trenches, was carried out for lode type mineralization in the vicinity of Money Knob
primarily in the 1950’s. However, to date no significant production has been derived from lode gold sources in the Livengood Gold Project area.
The geology and mineral potential of the Livengood District have been investigated by state and federal agencies and explored by several companies over the past 50-
plus years. Modern mapping and sampling investigations were initially carried out by the U.S. Geological Survey in 1967 as part of a heavy metal assessment program.
Mapping completed in the course of this program recognized the essential rock relations, thrust faulting, and mineralization associated with Devonian clastic rocks, the
thrust system and intrusive rocks. Since then, the Livengood placer deposits and the surrounding geology have featured in numerous investigations and mapping
programs at various scales by the U.S. Geological Survey and the Alaska State Division of Geological and Geophysical Surveys.
In addition to individuals prospecting the area, since the 1970’s several mining companies, including Homestake, AMAX, Placer Dome, Cambior and AngloGold, have
investigated the potential for lode gold mineralization beneath the Livengood placers and on the adjacent hillsides, including at Money Knob. Placer Dome’s work
appears to have been the most extensive, but it was focused largely on the northern flank of Money Knob and the valley of Livengood Creek.
The most recent round of exploration of the Money Knob area began when AngloGold acquired the property in 2003 and undertook an 8-hole RC program on the
Hudson-Geraghty lease. The results from this program were encouraging and were followed up with an expanded soil geochemical survey which identified gold-
anomalous zones over Money Knob and to the east. Based on the results of this and prior (Cambior) soil surveys, 4 diamond core holes were drilled in late 2004. Results
from these two AngloGold drill programs were deemed favorable but no further work was executed due to financial constraints and a shift in corporate strategy.
The Company acquired the Livengood Gold Project in 2006 from AngloGold and has advanced the soil sampling coverage, drilled surface geochemical anomalies and
conducted drilling campaigns on the Livengood Gold Project since that time.
In 2006, the Company conducted a 1,227 m, seven hole program and continued to demonstrate the presence of mineralization over a broader area. The 2007 campaign
consisted of 15 diamond drill holes for a total of 4,411 m. These holes focused on extending and defining the volcanic-hosted mineralization first recognized by
AngloGold in 2003. However, as drilling progressed, it became clear that although mineralization is strongest in the volcanic rocks, it occurs in all rock types at Money
Knob.
Based on favorable results in 2007, the 2008 program consisted of 29,150 m of RC and 2,187 m core drilling in 109 and 9 holes, respectively. The drill program was
designed to improve definition and expand the resource calculated early in 2008 based on 2007 drill data. The 2008 drill program did not identify limits to mineralization
in any direction. Instead, a thicker mineralized zone (up to 200 m) was identified. In addition, this campaign highlighted the fact that mineralization occurs in all rock
types, not just in Devonian volcanic rocks, indicating potential more widespread mineralization than envisioned prior to the 2008 drill program.
In 2009, the Company completed 12 diamond drill holes totaling 4,572 m and 195 RC holes totaling 59,757 m. Six of the diamond drill holes were drilled across the
NNW-trending Core Zone in order to better understand the structural controls and to test the depth continuity of the mineralization. This drilling confirmed that the Core
Zone is the locus of a swarm of 0.2 - 1.0 m thick southerly dipping dikes. In addition, a number of larger (+10 m thick) steeply dipping NNW-trending dikes were
observed, suggesting that ENE extension may have occurred at about the time of dike magmatism. The RC holes were primarily targeted at grid infill drilling to improve
resource estimation of the Core Zone and a step-out program that led to discovery and delineation of the Sunshine and Tower Zones.
In 2010, the Company completed 40 diamond drill holes totaling 13,631 m and 198 RC holes totaling 56,550 m. These holes, filled in between the Core and Sunshine
Zones, expanded the SW Zone and infilled to 50 m spacing in the Core and Sunshine Zones.
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Nearly all drill holes at Money Knob have been drilled in a northerly direction at an inclination of -50 degrees (RC) and -60 degrees (core) in order to best intercept the
south dipping structures and mineralized zones as close to perpendicular as possible. A few holes have been drilled in other directions to test other features and aspects of
mineralization. Most exploration holes have been spaced at 75 m apart along lines 75 m apart, subsequent infill drilling in the center of 75 m squares brings the nominal
drill spacing to 50 m for a significant portion of the deposit. Core is recovered using triple tube techniques to ensure good recovery (>95%) and confidence in core
orientation. RC holes are bored and cased for the upper 0-30 m to prevent down hole contamination and to help keep the hole open for ease of drilling at greater depths.
In 2011, the Company continued with resource definition drilling, completing 26,163 m of RC drilling and 11,468 m of diamond drilling. Two areas of the deposit, the
Core and Sunshine crosses, were selected for 15 m-spaced RC in-fill drilling on crosses with north-south and east-west legs 150 m in length. A third area, Area 50 in the
Sunshine Zone, measuring 195 m by 240 m, was drilled on a 37.5 m grid with alternating core and RC drilling. Two resources were generated for each volume using
ordinary kriging on samples composited to 10 m lengths: the first including those portions of the 50 m grid drilling within the volume; and a second using both the grid
and close-spaced drilling within the same volume. On average, the effect of the increased drilling density on tonnage, grade, and contained ounces of gold was less than
1% and confirmed the integrity of the previously reported resource estimate. In 2011, the Company broadened the scope of the field program to include 2,240 m of
exploration drilling outside the resource area, as well as 8,932 m of geotechnical drilling and 1,192 m of large diameter groundwater test wells.
In May 2012, the Company commenced an 18-hole program of condemnation drilling to either sterilize or establish the presence of significant mineralization in the area
surrounding the Money Knob deposit. The purpose of the condemnation drilling program was to determine appropriate areas for infrastructure development.
Additionally, four of these holes are also being used for hydrological studies. The program was completed in July 2012 with 3,065 m in 19 holes.
Also in May 2012, the Company commenced multi-faceted drill programs consisting of hydraulic gradient, infrastructure, borrow source identification, and large-
diameter wells for pump tests. The hydraulic gradient and infrastructure drilling consisted of 5,826 m in 49 holes utilizing core drilling. The geotechnical and borrow
source information was obtained from 2,695 m drilled in 73 holes, utilizing core, sonic, and auger drilling methods. Seven large diameter wells have been drilled for a
total of 1,031 m.
The drill program from February through October 2012 totaled 15,731 m in 199 holes.
The Company has not completed any material exploration at the Project since 2012, but has focused on engineering, metallurgical studies, and environmental baseline
activities.
The Company relies upon consultants and contractors to carry on many of its activities and, in particular, to carry out drilling programs at the Livengood Gold Project
and in connection with metallurgical test work, engineering and the preparation of technical reports on the Project (including the TRS). If ITH expands its activities in the
future, it may choose to hire additional employees rather than relying on consultants.
Sample Preparation, Analyses and Security
The Company samples all holes from surface to total depth, using defined procedures. For RC samples, pulverized material is passed through a cyclone to separate solids
from drilling fluids, then over a spinning conical splitter. The splitter is set to collect two identical splits of sample weighing 2-5 kg (4.4-11.0 pounds) each.
Representative coarse material is collected and saved in chip trays for geological description. Samples are put in pre-numbered, bar-coded bags by the drill site crew. One
sample is submitted for analysis, and one sample is kept for reference. Samples are secured on site and transported to a sample preparation facility operated by ALS
Chemex in Fairbanks.
Core materials are collected at the drill site and placed in core boxes. Run blocks, orientation blocks and depths are placed in the boxes at site. The core is transported to a
sample management facility at the Project, where it is described, then sawn in half. Half of the core is collected for assaying and half remains for reference. Core samples
are weighed before shipping.
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Internal Controls
The Company’s geologic work program at Livengood was designed and was supervised by Chris Puchner, formerly Chief Geologist of the Company and a “qualified
person” as defined in subpart 1300 of Regulation S-K. Mr. Puchner was responsible for all aspects of the work, including the quality control/quality assurance program.
The quality assurance/quality control program implemented by the Company meets or exceeds industry standards. A quality assurance/quality control program includes
insertion of blanks and standards (1/10 samples) and duplicates (1/20 samples). Blanks help assess the presence of any contamination introduced during sample
preparation and help calibrate the low end of the assay detection limits. Commercial standards are used to assess the accuracy of the analyses. Duplicates help assess the
homogeneity of the sample material and the overall sample variance. The Company has undertaken rigorous protocols to assure accurate and precise results. Among
other methods, weights are tracked throughout the various steps performed in the laboratory to minimize and track errors. A group of 2,096 metallic screen fire assays
performed in 2011 did not indicate any bias in the matching fire assays.
On-site Project personnel photograph the core from each individual borehole prior to preparing the split core. Duplicate RC drill samples are collected with one split sent
for analysis. Representative chips are retained for geological logging. On-site personnel at the Project log and track all samples prior to sealing and shipping. All sample
shipments are sealed and shipped to ALS Chemex in Fairbanks, Alaska, for preparation and then on to ALS Chemex in Reno, Nevada, or Vancouver, B.C., for assay.
ALS Chemex’s quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025:1999. Analytical accuracy and precision are
monitored by the analysis of reagent blanks, reference material and replicate samples. Quality control is further assured by the use of international and in-house
standards. Finally, representative blind duplicate samples are forwarded to ALS Chemex and an ISO compliant third-party laboratory for additional quality control.
Data entry and database validation procedures have been checked and found to conform to industry practices. Procedures are in place to minimize data entry errors.
These include pre-numbered, pre-tagged, bar-coded bags, and bar-coded data entry methods which relate all information to sample and drill interval information.
Likewise, data validation checks are run on all information used in the geologic modeling and resource estimation process. Database entries for a random sample (10%)
of drill holes used for the resource estimate were checked against the original assay certificates by one of the independent authors of the April 2017 Report and the error
rate was found to be within acceptable limits.
Analysis of assay data from core and RC sampling has been performed to check for down hole contamination of RC and to compare the data distributions produced by
the two methods. Analysis of RC data has not indicated cyclic down hole contamination. Decay analysis conducted on both core drilling and RC drilling indicates similar
patterns of monotonic grade increase or decrease. Comparison of the grade distributions between core and RC data were conducted using Quantile-Quantile plots, and
simulation of population means for different numbers of samples. The comparison indicated that the mean of all core data was 4% lower than RC data. Comparison of
core and RC data below the water table showed similar population means, suggesting that down hole contamination was not occurring.
Core and RC check samples have been collected during each drilling campaign by independent third parties. Results from these samples, as well as blanks and standards
included, are consistent with the Company’s initial results. This includes a similar increase in variance for samples at higher grades, a pattern consistent with nugget
effect. No systematic high or low bias has been observed.
Environmental Studies, Permitting and Social and Community Impacts
The Livengood Gold Project is currently operating in compliance with all environmental regulations that apply during the development stage of major mineral projects.
The Company has received all necessary exploration permits for activities such as trenching, drill road building and drilling. These permits are also reviewed by related
state and federal agencies that can comment and require specific changes to the proposed work plans to minimize impacts on the environment. The permitting process for
major exploration projects generally requires 30-60 days for processing. The Company currently has all necessary permits with respect to its exploration activities in
Alaska. Although the Company has never had an issue with the timely processing of exploration permits there can be no assurances that delays in permit approval will
not occur. Reclamation of surface disturbance associated with exploration activities is conducted concurrently where required.
The Company has been conducting extensive, multi-disciplinary environmental baseline studies in and around the Project area since 2008 in order to understand the
current environmental conditions and to allow Project design to be optimized to minimize potential environmental effects. The environmental baseline programs
conducted or currently underway at the Project include:
● surface water and hydrology;
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● groundwater hydrogeology;
● geohydrology;
● wetlands and vegetation;
● meteorology and air quality;
● aquatic life and resources;
● wildlife and habitat;
● cultural resources;
● rock characterization; and
● geochemical characteristics.
Based on review of the studies completed to date, the Company believes that there are no known environmental issues that are anticipated to materially impact the
Company’s ability to conduct mining operations at the Project.
Looking forward to potential project development, a site-specific monitoring plan and water management plan for both operations and post mine closure will be
developed in conjunction with detailed engineering and project permit planning. Development of the Livengood Gold Project will require a number of state and federal
permits. Federal permits will be issued pursuant to the National Environmental Policy Act (NEPA) and Council of Environmental Quality (CEQ). In fulfillment of the
NEPA requirements, the Livengood Gold Project will be required to prepare an Environmental Impact Statement. Although at this time it is unknown which department
will become the lead federal agency, the State of Alaska is expected to take a cooperating role to coordinate the NEPA review with the State permit process. Actual
permitting timelines are controlled by the NEPA review and U.S. Federal and State agency decisions. There are no municipal or community agreements required for the
Livengood Gold Project.
2021 Pre-Feasibility Study
On January 12, 2021, the Company announced that the Board had approved a 2021 budget of $5.6 million, with the key element of the 2021 work program being the
completion of an updated PFS on the Livengood Gold Project. The work program also advanced the baseline environmental data collection in critical areas of hydrology
and waste rock geochemical characterization as needed to support future permitting, as well as advanced community engagement.
On November 4, 2021, the Company announced the results of the PFS for its Livengood Gold Project, which are summarized in the TRS. The TRS detailed a project that
would process 65,000 tons per day and produce 6.4 million ounces of gold over 21 years from a gold resource estimated at 13.6 million ounces at 0.60 g/tonne. The PFS
utilized a third-party review by Whittle Consulting and BBA Inc. to integrate new interpretations based on an expanded geological database, improved geological
modelling, new resource estimation methodology, an optimized mine plan and production schedule, additional detailed metallurgical work at various gold grades and
grind sizes, changes in the target grind for the mill, new engineering estimates, and updated cost inputs, all of which significantly de-risked the Project. The TRS
estimated the capital costs of the Project at US$1.93 billion, the total cost per ton milled at US$13.12, the all-in sustaining costs at US$1,171 per ounce, and the net
present value (5%) at US$1,800/oz of US$400 million.
The Project configuration evaluated in the TRS is a conventional, owner-operated surface mine that would utilize large-scale mining equipment in a blast/load/haul
operation. Mill feed would be processed in a 65,000 tons per day comminution circuit consisting of primary and secondary crushing, wet grinding in a single semi-
autogenous (“SAG”) mill and single ball mill followed by a gravity gold circuit and a conventional carbon in leach (“CIL”) circuit.
December 2021 Report
In December 2021, the Company filed the December 2021 Report with respect to the Livengood Gold Project. Readers are cautioned that the NI 43-101 reports filed on
SEDAR by the Company in September of 2013, October of 2016, and April 2017 are no longer considered current and should therefore no longer be relied upon by
investors.
Technical Report Summary
The TRS, current as of December 31, 2021, indicates that the Project generates a minimal positive return at a gold price of $1,680 per ounce. Readers are encouraged to
review the entire TRS Report on EDGAR, with particular emphasis on the sensitivity analyses contained therein. The TRS for the Livengood Gold Project is filed as
Exhibit 96.1 to this Annual Report on Form 10-K.
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Mineral Resource and Reserve Estimates
Table 1: Livengood Gold Project mineral resources estimate (exclusive of reserves)
Classification
Measured
Indicated
Total Measured and Indicated
Inferred
Metric tons (Mmt)
Au (g/mt)
Contained Au (Koz)
234.50
40.01
274.51
15.98
0.53
0.49
0.52
0.40
3,990.49
629.61
4,620.10
206.98
1. The Qualified Person for the mineral resource estimate is Resource Development Associates.
2. The effective date of the estimate is August 20, 2021 and the estimate is current as of December 31, 2021.
3. Mineral resources for the Project are enumerated as per §229.1302(d)(1)(iii)(A) (Item 1302(d)(1)(iii)(A) of Regulation S-K).
4. Mineral resources are not mineral reserves and do not meet the threshold for reserve modifying factors, such as estimated economic viability, that would allow
for conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
5. Open pit resources stated as contained within a potentially economically minable open pit; pit optimization was based on gold price of US$1,650 per ounce,
which was 5% over the three year rolling average as of August, 2021, variable mining and recoveries as described in Table 1C, and general and administrative
cost of US$1.55 per tonne, and a pit slope of 45 degrees.
6. Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.
7. Mineral resources are reported exclusive of mineral reserves (for a presentation of resource inclusive of mineral resources, please refer to [Section 10] of the
TRS). The reserves reported in Table 2 represent measured mineral resources and indicated mineral resources that were evaluated with modifying factors
related to open pit mining.
Table 1C: Pit constraining parameters used for resource estimates
Parameter
Mining Cost
Au Cut-off
Processing Cost
Au Recovery
Administrative Cost
Royalty
Au Selling Price
Overall Slope Angle
Table 2: Livengood Project mineral reserves
Unit
$/total mt
g/mt
$/process mt
%
$/process mt
%
$/oz
Degrees
Rock
Type 4
Rock
Type 5
Rock
Type 6
Rock
Type 7
Rock
Type 8
Rock
Type 9
1.76
0.21
9.27
84
1.55
3
1,650
45
1.74
0.20
9.15
80
1.55
3
1,650
45
1.74
0.25
9.17
71
1.55
3
1,650
45
1.68
0.25
9.50
67
1.55
3
1,650
45
1.76
0.33
9.71
55
1.55
3
1,650
45
1.76
0.33
9.71
56
1.55
3
1,650
45
Classification
Ore
Metric tons (Mmt)
Au Grade
(g/mt)
Contained Au
Koz
Proven Reserves
Rock Type 4
Rock Type 5
Rock Type 6
Rock Type 7
Rock Type 8
Rock Type 9
Probable Reserves
Rock Type 4
Rock Type 5
Rock Type 6
Rock Type 7
Rock Type 8
Rock Type 9
75.4
110.5
91.7
61.0
2.4
70.5
411.5
2.5
4.0
3.0
4.8
0.3
3.9
18.5
430.1
0.54
0.55
0.65
0.70
0.73
0.82
0.64
0.48
0.47
0.99
0.98
0.76
1.26
0.86
0.65
1,314
1,972
1,922
1,367
56
1,861
8,492
39
62
94
152
6
159
512
9,004
Total Proven Reserves
Total Probable Reserves
Total Proven and Probable Reserves
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1. The Qualified Person for the Mineral Reserve Estimate is Jeffrey Cassoff, P. Eng., of BBA USA Inc.
2. The effective date of the estimate is October 22, 2021 and the estimate is current as of December 31, 2021.
3. Mineral reserves for the Project are enumerated as per added §229.1302(e)(2) (Item 1302(e)(2) of Regulation S-K).
4. Mineral reserves are estimated using a gold price of US$1,680 per ounce, which approximated the 2 year rolling average gold price during October 2021, and
consider a 3% royalty, US$1.80 per ounce for smelting, refining, and transportation costs, and a gold payable of 99.9%.
5. Metallurgical recovery curves were developed for each rock type (“RT”), with the Mineral Reserves having the following tonnage weighted averages: 83.3% for
RT4, 79.8% for RT5, 73.5% for RT6, 66.4% for RT7, 58.7% for RT8 and 57.1% for RT9, including 22% for massive stibnite mineralization.
6. As a result of the complex metallurgical recovery equations, it is difficult to determine specific cut-off grades. The following presents the lowest gold grades for
each rock type that are processed in the life of mine plan: 0.26 g/t for RT4, 0.28 g/t for RT5, 0.31 g/t for RT6, 0.31 g/t for RT7, 0.42 g/t for RT8 and 0.42 g/t for
RT9.
7. The strip ratio for the open pit is 1.15 to 1.
8. The mineral reserves are inclusive of mining dilution and ore loss.
9. The reference point for the mineral reserves is the primary crusher.
10. Totals may not add due to rounding.
Changes in Mineral Resource and Reserve Estimates from 2020 to 2021
This is the first reporting of resources and reserves under subpart 1300 of Regulation S-K. The changes to the resource and reserve estimates shown below were the result
of complete integration of all material technical information generated by the Company since the April 2017 Report, including new geologic interpretations based on an
expanded geological database, improved geological modelling, new resource estimation methodology, new optimized mine plan and production schedule, additional
detailed metallurgical work at various gold grades and grind sizes, changes in the target grind for the mill, new engineering estimates, and updated cost and revenue
inputs. Details are provided in the TRS.
Classification
Contained Au (Koz)
2020
2021
% Change
Resources (exclusive of reserves)
Measured
Indicated
Total Measured and Indicated Resources
Inferred
Resources (inclusive of reserves)
Measured
Indicated
Total Measured and Indicated Resources
Inferred
Reserves
Proven
Probable
Total Proven and Probable Reserves
ITEM 3. LEGAL PROCEEDINGS
Not reported
Not reported
Not reported
Not reported
10,841
620
11,461
1,127
8,620
353
8,973
3,990
630
4,620
207
12,842
1,142
13,984
207
8,492
512
9,004
N/A
N/A
N/A
N/A
+18 %
+84 %
+22 %
-82%
-1%
+45 %
+0 %
We are periodically a party to or otherwise involved in legal proceedings arising in the normal course of business. Management does not believe that there is any pending
or threatened proceeding against us which, if determined adversely, would have a material adverse effect on our financial position, liquidity or results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are
required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health
requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by the U.S. Department of Labor’s Mine
Safety and Health Administration
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(“MSHA”). During the fiscal year ended December 31, 2021, the Company and its subsidiaries were not subject to regulation by MSHA under the Mine Act and thus no
disclosure is required under Section 1503(a) of the Dodd-Frank Act.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
Market Information
The common shares of the Company are listed and posted for trading on the TSX under the symbol “ITH”, on the NYSE American under the symbol “THM”, and on the
Frankfurt Stock Exchange under the symbol “-1I1-”. As at March 1, 2022, there were 194,908,184 common shares issued and outstanding, and the Company had
approximately 100 shareholders of record.
Dividends
Since its inception, ITH has not paid any dividends. ITH has no present intention of paying any dividends, as it anticipates that all available funds will be invested to
finance the growth of its business. The Board will determine if and when dividends should be declared and paid in the future after taking into account many factors,
including ITH’s financial condition, operating results and anticipated cash needs at the relevant time. There are no restrictions which prevent ITH from paying dividends.
Recent Sales of Unregistered Equity Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Exchange Controls
Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident
investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident
holders of the Company’s securities, except as discussed in “Certain Canadian Federal Income Tax Considerations for U.S. Resident Holders” below.
There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company,
except that the Investment Canada Act (Canada) may require review and approval by the Minister of Industry (Canada) of certain acquisitions of “control” of the
Company by a “non-Canadian.” The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. “Non-
Canadian” generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-
Canadians.
Certain Canadian Federal Income Tax Considerations for U.S. Resident Holders
This summary is applicable to a holder of common shares of the Company who, for the purposes of the Canadian Tax Act and any applicable treaty and at all relevant
times, is not (and is not deemed to be) resident in Canada, deals at arm’s length and is not affiliated with the Company, does not (and is not deemed to) use or hold the
common shares in, or in the course of, carrying on a business in Canada, is not a “specified shareholder” (as defined in subsection 18(5) of the Canadian Tax Act) of the
Company, is not an insurer that carries on an insurance business in Canada and elsewhere, and holds the common shares as capital property (a “Non-Resident Holder”).
This summary is based on the current provisions of the Canada-U.S. Income Tax Convention (1980), as amended (the “Canada-U.S. Treaty”), the Canadian Tax Act, the
regulations thereunder, all specific proposals to amend the Canadian Tax Act and regulations publicly announced by or on behalf of the Minister of Finance (Canada)
prior to the date hereof and the Company’s understanding of the administrative policies and assessing practices published in writing by the Canada Revenue Agency prior
to the date hereof. This summary assumes that all specific proposals to amend the Canadian Tax Act and regulations will be enacted as currently proposed, does not
otherwise take into account any change in law or administrative policy or assessing practice, whether by judicial, governmental,
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legislative or administrative decision or action, and does not take into account other federal or provincial, territorial or foreign tax consequences, which may vary from
the Canadian federal income tax considerations described herein.
This summary is of a general nature only, is not exhaustive of all Canadian federal income tax considerations, and it is not intended to be, nor should it be
construed to be, legal or tax advice to any Non-Resident Holder of common shares and no representation with respect to Canadian federal income tax
consequences to any Non-Resident Holder of common shares is made herein. Accordingly, Non-Resident Holders of common shares should consult their own
tax advisers with respect to their individual circumstances.
Dividends on Common Shares
Canadian withholding tax at a rate of 25% (subject to reduction under the provisions of any applicable tax treaty) will be payable on dividends (or amounts paid or
credited on account or in lieu of payment of, or in satisfaction of, dividends) paid or credited or deemed to have been paid or credited to a Non-Resident Holder of
common shares. Under the Canada–U.S. Treaty, the withholding tax rate is generally reduced to 15% for a Non-Resident Holder entitled to the benefits of the Canada–
U.S. Treaty who is the beneficial owner of the dividends (or 5% if the holder is a company that owns at least 10% of the common shares of the Company at such time).
Certain U.S.-resident entities that are fiscally transparent for United States federal income tax purposes (including limited liability companies) may not in all
circumstances be entitled to the benefits of the Canada–U.S. Treaty. Non-Resident Holders are urged to consult with their own tax advisors to determine their entitlement
to benefits under the Canada-U.S. Treaty based on their particular circumstances.
This summary does not deal with special situations such as the particular circumstances of traders or dealers or Non-Resident Holders who have entered into a “derivative
forward agreement” (as defined in the Canadian Tax Act) in respect of the common shares. Such Non-Resident Holder should consult their own tax advisors.
Capital Gains and Losses
Subject to the provisions of any relevant tax treaty, capital gains realized by a Non-Resident Holder on the disposition or deemed disposition of common shares held as
capital property will not be subject to Canadian tax unless the common shares are “taxable Canadian property” (as defined in the Canadian Tax Act), in which case the
capital gains will be subject to Canadian tax at rates which will approximate those payable by a Canadian resident.
Common shares of the Company generally will not be “taxable Canadian property” to a Non-Resident Holder provided that, at the time of the disposition or deemed
disposition, the common shares are listed on a designated stock exchange (which currently includes the TSX and NYSE American), unless at any time during the 60-
month period that ends at that time: (a) one or any combination of (i) such Non-Resident Holder, (ii) persons not dealing at arm’s length with such Non-Resident Holder
and (iii) partnerships in which such Non-Resident Holder or a person described in (ii) holds a membership interest directly or indirectly through one or more partnerships,
owned 25% or more of the issued shares of any class or series of the capital stock of the Company; and (b) more than 50% of the fair market value of the common shares
disposed of was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, “Canadian resource properties” (as defined
in the Canadian Tax Act), “timber resource properties” (as defined in the Canadian Tax Act), and options in respect of, or interests in, or civil law rights in, any such
properties (whether or not such property exists). In certain circumstances set out in the Canadian Tax Act, the common shares may be deemed to be “taxable Canadian
property”.
Under the Canada–U.S. Treaty, a Non-Resident Holder entitled to the benefits of the Canada–U.S. Treaty and to whom the common shares are “taxable Canadian
property” will not be subject to Canadian tax on the disposition or deemed disposition of the common shares unless at the time of disposition or deemed disposition, the
value of the common shares is derived principally from real property situated in Canada. Non-Resident Holders are urged to consult with their own tax advisors to
determine their entitlement to benefits under the Canada-U.S. Treaty based on their particular circumstances.
Currency Conversion
Generally, for purposes of the Canadian Tax Act, all amounts relating to the acquisition, holding or disposition of common shares, including dividends, adjusted cost base
and proceeds of dispositions must be determined in Canadian dollars using the daily exchange rate of the Bank of Canada on the particular date the particular amount
arose or in certain situations, such other rate of exchange as acceptable to the Canada Revenue Agency.
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Certain U.S. Federal Income Tax Considerations for U.S. Holders
The following is a discussion of certain material U.S. federal income tax consequences to U.S. Holders (as defined below) of acquiring, owning, and disposing of our
common shares. This discussion does not purport to be a comprehensive description of all of the U.S. tax considerations that may be relevant to a particular investor’s
decision to acquire the common shares, including any state, local or non-U.S. tax consequences of acquiring, owning, and disposing of common shares. This discussion
applies only to those U.S. Holders that hold common shares as capital assets for U.S. tax purposes (generally, for investment and not in connection with the carrying on
of a trade or business) and does not address all aspects of U.S. federal income tax law that may be relevant to investors that are subject to special or different treatment
under U.S. federal income tax law (including, for example, a holder liable for the alternative minimum tax or a holder that actually or constructively owns 10% or more
by voting power or value of our common shares). This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), its legislative history,
existing and proposed U.S. Treasury regulations, published rulings and other administrative guidance of the U.S. Internal Revenue Service (the “IRS”) and court
decisions, all as in effect on the date hereof. These laws are subject to change or differing interpretation by the IRS or a court, possibly on a retroactive basis. This
discussion also assumes that the Company is not, and will not become, a controlled foreign corporation (“CFC”) as defined for U.S. federal income tax purposes.
As used herein, the term “U.S. Holder” means a beneficial owner of our common shares that is:
● an individual citizen or resident of the United States;
● a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the
United States, any state or political subdivision thereof, or the District of Columbia;
● an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
● a trust (i) if a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all
substantial decisions of the trust or (ii) that has a valid election in effect to be treated as a U.S. person under applicable U.S. Treasury regulations.
If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of the common shares, the U.S. tax treatment of
a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the common shares that is a partnership and
partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of acquiring, owning, or disposing of common
shares, particularly in light of recent U.S. tax reform.
Distributions
Subject to the passive foreign investment company rules discussed below, should a distribution be made, a U.S. Holder must include in gross income as dividend income
the gross amount of any distribution paid on the common shares (including the amount of any non-U.S. taxes withheld from such amount), to the extent such distribution
is paid out of current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Distributions in excess of our current and accumulated
earnings and profits (as determined for U.S. federal income tax purposes) will first be treated as a non-taxable return of capital to the extent of the U.S. Holder’s basis in
the common shares and thereafter as gain from the sale or exchange of common shares. See “Sale, Exchange, or Other Disposition of Common Shares” below.
Dividends received by U.S. Holders that are individuals, estates, or trusts will be taxed at preferential rates if such dividends meet the requirements of “qualified dividend
income.” Dividends that fail to meet such requirements, and dividends received by corporate U.S. Holders, are taxed at ordinary income rates. In order for dividends to
qualify as “qualified dividend income,” an entity must be considered a “qualified foreign corporation” and certain other requirements must be met. While we believe the
Company is a qualified foreign corporation, a dividend received by a U.S. Holder will not be qualified dividend income if the Company is a passive foreign investment
company for the taxable year during which the dividend is paid or the immediately preceding taxable year. See the discussion below regarding our passive foreign
investment company status under “Passive Foreign Investment Company Rules.” In the case of a corporate U.S. Holder, dividends received generally will not be eligible
for the dividends-received deduction.
Dividends paid on the common shares will generally be treated as foreign source income for U.S. foreign tax credit purposes. Foreign tax credits are generally subject to
various classifications and other limitations. The rules relating to computing foreign tax credits are complex. U.S. Holders should consult their own tax advisors to
determine the foreign tax credit implications of owning common shares.
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Sale, Exchange, or Other Disposition of Common Shares
Subject to the passive foreign investment company rules discussed below, a U.S. Holder that sells or otherwise disposes of the common shares will recognize capital gain
or loss for U.S. federal income tax purposes equal to the difference between (i) the U.S. dollar value of the amount realized on the sale or disposition and (ii) the tax
basis, determined in U.S. dollars, of such common shares. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder’s holding period is greater
than one year at the time of sale, exchange, or other disposition. Long-term capital gains of individuals are generally subject to preferential maximum U.S. federal
income tax rates. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.
Passive Foreign Investment Company Rules
If the Company is considered a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes at any time during a U.S. Holder’s holding
period, then certain potentially adverse tax consequences apply to such U.S. Holder’s acquisition, ownership, and disposition of common shares. In general, a non-U.S.
corporation will be a PFIC in any taxable year in which, after applying certain look-through rules, either (1) at least 75% of its gross income for the taxable year is
passive income; or (2) at least 50% of the average value (determined on a quarterly basis) of its assets is attributable to assets that produce or are held for the production
of passive income. Passive income generally includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or
business), and the excess of gains over losses from the disposition of certain assets that produce passive income. If a foreign corporation owns at least 25% by value of
the stock of another corporation, the foreign corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation,
and receiving directly its proportionate share of the other corporation’s income.
We believe that we likely were a PFIC for U.S. federal income tax purposes during the fiscal year ended December 31, 2021, and we expect that we will be a
PFIC in the current year and that we may be a PFIC in future years. The determination of whether or not the Company is a PFIC is a factual determination
dependent on a number of factors that cannot be made until the close of the applicable tax year. Accordingly, no assurances can be given regarding the
Company’s PFIC status for the current year or any future year. The Company’s status as a PFIC can have significant adverse tax consequences for a U.S.
Holder if we are a PFIC for any year during such U.S. Holder’s holding period.
A U.S. Holder that holds common shares while the Company is a PFIC may be subject to increased tax liability upon the sale, exchange, or other disposition of the
common shares or upon the receipt of certain distributions, regardless of whether the Company is a PFIC in the year in which such disposition or distribution occurs.
These adverse tax consequences include:
(a) “Excess distributions” by the Company are subject to the following special rules. An excess distribution generally is the excess of the amount a PFIC
distributes to a shareholder during a taxable year over 125% of the average amount it distributed to the shareholder during the three preceding taxable years
or, if shorter, the part of the shareholder’s holding period before the taxable year. Distributions with respect to the common shares during the taxable year to
a U.S. Holder that are excess distributions must be allocated rateably to each day of the U.S. Holder’s holding period. The amounts allocated to the current
taxable year and to taxable years prior to the first year in which the Company was classified as a PFIC are included as ordinary income in a U.S. Holder’s
gross income for that year. The amount allocated to each other prior taxable year is taxed as ordinary income at the highest tax rate in effect for the U.S.
Holder in that prior year (without offset by any net operating loss for such year) and the tax is subject to an interest charge at the rate applicable to
deficiencies in income taxes (the “special interest charge”).
(b) The entire amount of any gain realized upon the sale or other disposition of the common shares will be treated as an excess distribution made in the year of
sale or other disposition and as a consequence will be treated as ordinary income and, to the extent allocated to years prior to the year of sale or disposition,
will be subject to the special interest charge described above.
Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.
While there are certain U.S. federal income tax elections (described below) that can be made to mitigate the adverse tax consequences described above such elections are
only available in limited circumstances and must be made in a timely manner. These rules are very complex and U.S. Holders are urged to consult their own tax advisers
regarding the potential of making an election to mitigate the adverse consequences described above of the Company being classified as a PFIC.
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Qualifying Electing Fund (“QEF”) Election. A U.S. Holder of stock in a PFIC, including the Company, may make a QEF election with respect to such PFIC to elect out
of the tax treatment discussed above. Generally, a QEF election should be made with the filing of a U.S. Holder’s U.S. federal income tax return for the first taxable year
for which both (i) the U.S. Holder holds common shares, and (ii) the Company was a PFIC. A U.S. Holder that timely makes a valid QEF election with respect to a PFIC
will generally include in gross income for a taxable year (i) as ordinary income, such holder’s pro rata share of the Company’s ordinary earnings for the taxable year, and
(ii) as long-term capital gain, such holder’s pro rata share of the Company’s net capital gain for the taxable year. However, the QEF election is available only if such
PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. There can be no
assurance that the Company will provide U.S. Holders with the information required for them to make a QEF election.
Deemed Sale Election. If the Company is a PFIC for any year during which a U.S. Holder holds common shares, but the Company ceases in a subsequent year to be a
PFIC, then a U.S. Holder may make a deemed sale election for such subsequent year in order to avoid the adverse PFIC tax treatment described above that would
otherwise continue to apply because of the Company’s having previously been a PFIC. If such election is timely made, the U.S. Holder would be deemed to have sold the
common shares held by the holder at their fair market value, and any gain from such deemed sale would be taxed as an excess distribution (as described above). The basis
of the common shares would be increased by the gain recognized, and a new holding period would begin for the common shares for purposes of the PFIC rules. The U.S.
Holder would not recognize any loss incurred on the deemed sale, and such a loss would not result in a reduction in basis of the common shares. After the deemed sale
election, the U.S. Holder’s common shares with respect to which the deemed sale election was made would not be treated as shares in a PFIC, unless the Company
subsequently becomes a PFIC.
Mark-to-Market Election. Alternatively, a U.S. Holder of “marketable stock” (as defined in the applicable Treasury regulations) in a PFIC may make a mark-to-market
election for such stock to elect out of the adverse PFIC tax treatment discussed above. If a U.S. Holder makes a mark-to-market election for shares of marketable stock,
the U.S. Holder will include in income each year an amount equal to the excess, if any, of the fair market value of the shares as of the close of the holder’s taxable year
over the holder’s adjusted basis in such shares. A U.S. Holder is allowed a deduction for the excess, if any, of the adjusted basis of the shares over their fair market value
as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the shares included in the holder’s income for
prior taxable years. Amounts included in a U.S. Holder’s income under a mark-to-market election, as well as gain on the actual sale or other disposition of the shares, are
treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the shares, as well as to any loss realized on the
actual sale or disposition of the shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such shares. A
U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. However, the special interest charge and related adverse tax consequences
described above for non-electing holders may continue to apply on a limited basis if the U.S. Holder makes the mark-to-market election after such holder’s holding
period for the shares has begun.
Because our common shares are regularly traded on TSX, the NYSE American, and the Frankfurt Stock Exchange, we anticipate that our common shares will be
classified as “marketable stock.” No assurances can be given, however, that our common shares are or will be marketable stock.
Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund). If we are a PFIC for any taxable year during
which a U.S. Holder holds common shares, such U.S. Holder will be required to file an annual information report with such U.S. Holder’s U.S. Federal income tax return
on IRS Form 8621.
The PFIC rules are complex, and U.S. Holders should consult their own tax advisors regarding the PFIC rules and how they may affect the U.S. federal income tax
consequences of the acquisition, ownership, and disposition of common shares in the event the Company is a PFIC at any time during the holding period for such
common shares.
Medicare Tax
A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax on the
lesser of (1) the U.S. Holder’s “net investment income” for the relevant taxable year and (2) the excess of the U.S. Holder’s modified gross income for the taxable year
over a certain threshold (which in the case of an individual will be $200,000 or $250,000, depending on the individual’s circumstances). A holder’s net investment
income will generally include dividend income and net gains from the disposition of common shares, unless such dividends or net gains are derived in the ordinary
course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). U.S. Holders are urged to consult their
own tax advisors regarding the applicability of the Medicare tax in respect of their investment in the common shares.
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Disclosure Requirements for Specified Foreign Financial Assets
U.S. Holders (including certain domestic corporations, partnerships, and trusts that are considered formed or availed of for the purpose of holding, directly or indirectly,
“specified foreign financial assets,” referred to as “specified domestic entities” in applicable United States Treasury regulations) that, during any taxable year, hold any
interest in any “specified foreign financial asset” generally will be required to file with their U.S. federal income tax returns certain information on IRS Form 8938 if the
aggregate value of all such assets exceeds certain specified amounts. The term “specified foreign financial asset” generally includes any financial account maintained
with a non-U.S. financial institution, which may include common shares if they are not held in an account maintained with a financial institution. Substantial penalties
may be imposed, and the period of limitations on assessment and collection of U.S. federal income taxes may be extended, in the event of a failure to comply with this
reporting and filing requirement. U.S. Holders should consult their own tax advisors as to the possible application to them of these requirements.
Foreign Currency Transactions
Generally, amounts received by a U.S. Holder in foreign currency (including distributions paid in foreign currency to a U.S. Holder in connection with the ownership of
common shares or on the sale, exchange, or other disposition of common shares) will be equal to the U.S. dollar value of such foreign currency based on the applicable
exchange rate on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). The subsequent disposition of any foreign
currency received (including an exchange for U.S. currency) will generally give rise to ordinary gain or loss in an amount equal to the difference between the U.S. dollar
value of the foreign currency on the date it was received and the date of the subsequent disposition. Each U.S. Holder should consult its own tax adviser regarding the
U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.
Information Reporting and Backup Withholding
Payments made within the United States or by a U.S. payor or U.S. middleman, of dividends on, and/or proceeds arising from the sale or other taxable disposition of,
common shares will generally be subject to information reporting and backup withholding tax (currently at a 24% rate) if a U.S. Holder (a) fails to furnish such U.S.
Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS
that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S.
Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax.
Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S.
federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. Each U.S. Holder should consult
its own tax advisor regarding the information reporting and backup withholding rules.
Acquiring, owning, or disposing of our common shares may have tax consequences under the laws of the United States and Canada that are not described in
this Annual Report on Form 10-K. Shareholders are solely responsible for determining the tax consequences applicable to their particular circumstances and
should consult their own tax advisors concerning an investment in the Company’s common shares.
ITEM 6. [RESERVED]
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current Business Activities
General
2021
Livengood Gold Project Developments
During the year ended December 31, 2021, the Company progressed on a decision to embark on a new phase for the Livengood Gold Project as a result of the
strengthening macro-economic backdrop for gold.
On January 12, 2021, the Company announced that the Board had approved a 2021 budget of $5.6 million and endorsed the associated 2021 work program to advance
the Livengood Gold Project (the “Project”). The key element of the 2021 work program was the completion of the Pre-Feasibility Study (the “PFS”) for the Livengood
Gold Project. The work program also advanced the baseline environmental data collection in critical areas of hydrology and waste rock geochemical characterization
needed to support future permitting, as well as advance community engagement.
Livengood Gold Project Pre-Feasibility Study
On November 4, 2021, the Company announced the results of the PFS for the Project. The PFS detailed a project that would process 65,000 tons per day and produce 6.4
million ounces of gold over 21 years from a gold resource estimated at 13.6 million ounces at 0.60 g/tonne. The PFS utilized a third-party review by Whittle Consulting
and BBA Inc. to integrate new interpretations based on an expanded geological database, improved geological modelling, new resource estimation methodology, an
optimized mine plan and production schedule, additional detailed metallurgical work at various gold grades and grind sizes, changes in the target grind for the mill, new
engineering estimates, and updated cost inputs, all of which significantly de-risk the Project. The PFS has estimated the capital costs of the Project at US$1.93 billion, the
total cost per ton milled at US$13.12, the all-in sustaining costs at US$1,171 per ounce, and the net present value (5%) at US$1,800/oz of US$400 million.
The Project configuration evaluated in the PFS is a conventional, owner-operated surface mine that will utilize large-scale mining equipment in a blast/load/haul
operation. Mill feed would be processed in a 65,000 tons per day comminution circuit consisting of primary and secondary crushing, wet grinding in a single semi-
autogenous (“SAG”) mill and single ball mill followed by a gravity gold circuit and a conventional carbon in leach (“CIL”) circuit.
Whittle Enterprise Optimization
Prior to beginning the PFS, the Company retained Whittle Engineering and BBA Inc. to collaborate on an enterprise optimization study (the “Whittle and BBA Study”)
to review various technologies and project configurations and to recommend the optimum configuration for the PFS. The Whittle and BBA Study reviewed secondary
crushing with SAG and ball mill, tertiary crushing with ball mill, gravity/CIL at p80 of 90 micron to 250 micron, stand-alone and auxiliary heap leach configurations,
gravity only gold recovery, gravity/flotation with pressure oxidation and CIL of flotation concentrate. These configurations were evaluated at various combinations of
project ramp up strategy, annual throughput, primary, secondary, and tertiary grind size, as well as mining fleet size and stockpile management strategies. Tailings
technologies reviewed included conventional tailings and pressure filtered tailings.
The Whittle and BBA Study determined that the gravity/CIL plant at p80 250 micron with conventional tailings provided the highest net present value, which is the
configuration detailed in the PFS.
The PFS was prepared by independent third-party consultants.
The Company cautions that the PFS is preliminary in nature, and is based on technical and economic assumptions which will be further refined and evaluated in a full
feasibility study. The PFS is based on an updated Project mineral resource estimate effective as of August 20, 2021 using a different mineral resource model than used in
the April 2017 Report.
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COVID-19 Pandemic
In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a global pandemic. This contagious disease outbreak, which has
continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially
leading to an economic downturn. While it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak, including as a
result of the emergence of variant strains of the virus and ongoing vaccination efforts, and its ultimate effects on the Company’s business, results of operations or ability
to raise funds at this time, as of the date of this Annual Report on Form 10-K, the COVID-19 pandemic has not had any material adverse effects on the Company.
2022
Outlook
On March 9, 2022, the Company announced that the Board had approved a 2022 budget of $3.2 million and endorsed the associated 2022 work program to advance the
Livengood Gold Project. The 2022 work will advance the baseline environmental data collection in critical areas of hydrology and waste rock geochemical
characterization needed to support future permitting, as well as advance community engagement.
The Company remains open to a strategic alliance to help support the future development of the Project while considering all other appropriate financing options. The
size of the gold resource, the Project’s favorable location, and the Company’s proven team are some of the reasons the Company would potentially attract a strategic
partner with a long-term development horizon who understands the Project is highly leveraged to gold prices.
Results of Operations
Summary of Quarterly Results
Net loss
Basic and diluted net loss per common share
Description
Net income (loss)
Basic and diluted net income (loss) per common share
Description
December 31,
2021
(1,015,489)
(0.01)
December 31,
2020
(1,995,576)
(0.01)
$
$
$
$
September 30,
2021
(1,648,913)
(0.01)
September 30,
2020
(1,101,763)
(0.01)
$
$
$
$
$
$
$
$
June 30,
2021
(2,178,014)
(0.01)
June 30,
2020
(1,486,464)
(0.01)
March 31,
2021
(1,137,872)
(0.01)
March 31,
2020
65,085
0.00
$
$
$
$
Significant fluctuations in the Company’s quarterly net income (loss) have mainly been the result of operating cost changes.
Year ended December 31, 2021 compared to Year ended December 31, 2020
The Company had cash and cash equivalents of $7,780,671 at December 31, 2021 compared to $13,049,293 at December 31, 2020. The Company incurred a net loss of
$5,980,288 for the year ended December 31, 2021, compared to a net loss of $4,518,718 for the year ended December 31, 2020. The following discussion highlights
certain selected financial information and changes in operations between the year ended December 31, 2021 and the year ended December 31, 2020.
Mineral property exploration expenditures were $3,517,540 for the year ended December 31, 2021 compared to $2,364,899 for the year ended December 31, 2020. The
increase of $1,152,641 is due to expenditures for metallurgical studies and engineering to complete the PFS on the Livengood Gold Project, partially offset by the
Company limiting field activities to the continuation of critical environmental baseline work while moving forward with a multi-phase metallurgical test work program.
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Share-based payment charges were $535,117 during the year ended December 31, 2021 compared to $385,531 during the year ended December 31, 2020. The $149,586
increase in share-based payment charges during the period was mainly the result of equity compensation issued or granted to certain officers and employees of the
Company at a higher issue price during the year ended December 31, 2021 as compared to the year ended December 31, 2020. The Company granted 316,795 deferred
share units (“DSUs”) of C$1.31 per DSU and 240,000 incentive stock options at an issue price of C$1.31 per option during the year ended December 31, 2021 compared
to 451,085 DSUs of C$0.92 per DSU and 255,000 incentive stock options at an issue price of C$0.92 per option during the year ended December 31, 2020. All DSUs
granted in each of these periods were fully vested upon issuance and all options vest one-third on the grant date, one-third on the first anniversary, and one-third on the
second anniversary. At December 31, 2021, there was $98,577 of unrecognized compensation expense related to non-vested options outstanding.
Share-based payment charges were allocated as follows:
Expense category:
Consulting
Investor relations
Wages and benefits
Year ended
December 31,
2021
380,878
10,282
143,957
535,117
$
$
Year ended
December 31,
2020
304,205
6,456
74,870
385,531
$
$
Excluding share-based payment charges of $380,878 and $304,205, respectively, consulting fees increased to $231,509 for the year ended December 31, 2021 from
$168,208 for the year ended December 31, 2020. The increase of $63,300 is primarily due to increased investor relations services.
Excluding share-based payment charges of $143,957 and $74,870, respectively, wages and benefits increased to $791,116 for the year ended December 31, 2021 from
$733,967 for the year ended December 31, 2020. The increase of $57,149 is primarily due to increased healthcare expenses of $12,782 and increased payroll and payroll-
related benefit accruals of $44,367 as at December 31, 2021.
Regulatory expenses were $178,264 for the year ended December 31, 2021 compared to $138,191 for the year ended December 31, 2020. The increase of $40,073 is
primarily due to costs for TSX listing fees and increased filing fees due to the Company’s increased market valuation.
Insurance costs were $179,659 for the year ended December 31, 2021 compared to $144,837 for the year ended December 31, 2020. The increase of $34,822 is primarily
due to premium increases to maintain coverage.
Excluding share-based payment charges of $10,282 and $6,456, respectively, investor relations costs were $66,974 for the year ended December 31, 2021 compared to
$50,750 for the year ended December 31, 2020. The increase of $16,224 was primarily due to contracted investor relations services of $10,072 and conference expenses
of $6,152.
Excluding share-based payments, all other operating expense categories reflected only moderate changes period over period.
Other items amounted to an expense of $64,839 during the year ended December 31, 2021 compared to an expense of $103,889 in the year ended December 31, 2020.
The Company had a foreign exchange loss of $101,818 during the year ended December 31, 2021 compared to a foreign exchange loss of $191,071 during the year
ended December 31, 2020 as a result of the impact of exchange rates on certain of the Company’s U.S. dollar cash balances. The average exchange rate during the year
ended December 31, 2021 was C$1 to US$0.7994 compared to C$1 to US$0.7461 for the year ended December 31, 2020.
Liquidity and Capital Resources
The Company has no revenue generating operations from which it can internally generate funds. To date, the Company’s ongoing operations have been predominantly
financed through sale of its equity securities by way of public offerings, private placements and the subsequent exercise of share purchase and broker warrants issued in
connection with such private placements. There are currently no warrants outstanding.
As at December 31, 2021, the Company reported cash and cash equivalents of $7,780,671 compared to $13,049,293 at December 31, 2020. The decrease of
approximately $5.3 million resulted mainly from operating expenditures on the Livengood Gold Project of approximately $5.3 million.
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Our anticipated expenditures for year 2022 are approximately $3.2 million, including $426,972 for mineral property leases and $205,720 for mining claim government
fees. Total commitments for years 2022 through 2027 for mineral property leases and mining claim government fees are $3,050,441 and $1,234,320, respectively.
As at March 8, 2022, management believes that the Company has sufficient financial resources to maintain its operations for the next twelve months.
The Company had no cash flows from financing activities during the year ended December 31, 2021.
Financing activities during the year ended December 31, 2020 included an “at-the-market” offering pursuant to which the Company issued a total of 7,334,513 common
shares at an average price of $1.40 for gross proceeds of $10.3 million. Share issuance costs included $0.5 million related to the Offering.
The Company had no cash flows from investing activities during the years ended December 31, 2021 and December 31, 2020.
As at December 31, 2021, the Company had working capital of $7,342,470 compared to working capital of $12,718,381 at December 31, 2020. The Company expects
that it will operate at a loss for the foreseeable future, but believes the current cash and cash equivalents will be sufficient for it to complete its anticipated 2022 work plan
at the Livengood Gold Project and satisfy its currently anticipated general and administrative costs through the 2023 fiscal year.
The Company will require significant additional financing to continue its operations (including general and administrative expenses) in connection with advancing
activities at the Livengood Gold Project and the development of any mine that may be determined to be built at the Livengood Gold Project, and there is no assurance
that the Company will be able to obtain the additional financing required on acceptable terms, if at all. In addition, any significant delays in the issuance of required
permits for the ongoing work at the Livengood Gold Project, or unexpected results in connection with the ongoing work, could result in the Company being required to
raise additional funds to advance permitting efforts. The Company’s review of its financing options includes pursuing a future strategic alliance to assist in further
development, permitting and future construction costs, although there can be no assurance that any such strategic alliance will, in fact, be realized.
Despite the Company’s success to date in raising significant equity financing to fund its operations, there is significant uncertainty that the Company will be able to
secure any additional financing in the current or future equity markets. See “Risk Factors – We will require additional financing to fund exploration and, if warranted,
development and production. Failure to obtain additional financing could have a material adverse effect on our financial condition and results of operation and could
cast uncertainty on our ability to continue as a going concern.” The quantity of funds to be raised and the terms of any proposed equity financing that may be undertaken
will be negotiated by management as opportunities to raise funds arise. Specific plans related to the use of proceeds will be devised once financing has been completed
and management knows what funds will be available for these purposes. Due to this uncertainty, if the Company is unable to secure additional financing, it may be
required to reduce all discretionary activities at the Project to preserve its working capital to fund anticipated non-discretionary expenditures beyond the 2023 fiscal year.
Other than cash held by its subsidiaries for their immediate operating needs in the United States, all of the Company’s cash reserves are on deposit with a major Canadian
chartered bank. The Company does not believe that the credit, liquidity or market risks with respect thereto have increased as a result of the current market conditions.
Critical Accounting Estimates
Mineral properties and exploration and evaluation expenditures
The Company’s mineral project is currently in the exploration and evaluation phase. Mineral property acquisition costs are capitalized when incurred. Mineral property
exploration costs are expensed as incurred. At such time that the Company determines that a mineral property can be economically developed, subsequent mineral
property expenses will be capitalized during the development of such property.
The Company assesses interests in exploration properties for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its
recoverable amount. Impairment analysis includes assessment of the following circumstances: a significant decrease in the market price of a long-lived asset or asset
group; a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; a significant adverse
change in legal factors or in the business climate
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that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess
of the amount originally expected for the acquisition or construction of a long-lived asset or asset group; a current-period operating or cash flow loss combined with a
history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or a
current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously
estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50%.
Stock-based compensation
The Company follows the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Section 718 “Compensation - Stock
Compensation”, which establishes accounting for equity-based compensation awards to be accounted for using the fair value method. The Company uses the Black-
Scholes option pricing model to determine the grant date fair value of the awards. Compensation expense is measured at the grant date and recognized over the requisite
service period, which is generally the vesting period.
Recently Adopted Accounting Policies
For a description of recently adopted accounting policies, please see Note 2 – Summary of Significant Accounting Policies within our Notes to Consolidated Financial
Statements in Item 8 of this Annual Report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Directors of
International Tower Hill Mines Ltd.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of International Tower Hill Mines Ltd. (the “Company”) as of December 31, 2021 and 2020, and the
related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for each of the years ended December 31, 2021
and 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years ended December 31, 2021
and 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial
reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such
opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be
communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a
whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to
which they relate.
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Assessment of impairment indicators of mineral property
As described in Note 4 to the consolidated financial statements, the carrying amount of the Company’s mineral property was $55,375,124 as at December 31, 2021.
Management applies judgment to assess the mineral property for impairment indicators that could give rise to the requirement to conduct a formal impairment test.
Internal and external factors such as (i) significant decrease in the market price of the asset, (ii) current period cash flow or operating losses combined with a history of
losses or a forecast of continuing losses associated with the use of the asset, (iii) significant changes in expected capital and operating costs, and reclamation costs,
(iv) significant adverse changes in the business climate or legal factors including changes in gold prices, and (v) current expectation that the asset will more likely than
not be sold or disposed of significantly before the end of its estimated useful life, are evaluated by management in determining whether there are any indicators of
impairment.
The principal considerations for our determination that the assessment of impairment indicators of the mineral property is a critical audit matter are that there was
judgment by management when assessing whether there were indicators of impairment for the mineral property. This in turn led to a high degree of auditor judgment,
subjectivity and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of
impairment that could give rise to the requirement to conduct a formal impairment test.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial
statements. These procedures include, among others, evaluating management’s assessment of indicators of impairment; and assessing whether there has been a significant
decrease in the market price of the asset, significant changes in the expected capital costs, operating costs, reclamation costs, and current period cash flow or operating
losses combined with a history of losses or forecasted continued losses associated with the use of the asset, by considering the current and past performance of the
mineral property including other third-party information and evidence obtained in other areas of the audit, as applicable. The procedures performed also included
(i) evaluating whether there were significant adverse changes in the business climate or legal factors including changes in gold prices by considering external market data
and industry data; and (ii) assessing the completeness of external and internal factors that could be considered as indicators of impairment of the Company’s mineral
property, including consideration of evidence obtained in other areas of the audit.
We have served as the Company’s auditor since 2017.
Vancouver, Canada
March 8, 2022
/s/ DAVIDSON & COMPANY LLP
Chartered Professional Accountants
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INTERNATIONAL TOWER HILL MINES LTD.
CONSOLIDATED BALANCE SHEETS
As at December 31, 2021 and 2020
(Expressed in U.S. Dollars)
ASSETS
Current assets
Cash and cash equivalents
Prepaid expenses and other
Total current assets
Property and equipment
Mineral property
Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable
Accrued liabilities
Total liabilities
Shareholders’ equity
Share capital, no par value; unlimited number of authorized shares; 194,908,184 shares issued and
outstanding at December 31, 2021 and 2020
Contributed surplus
Accumulated other comprehensive income
Deficit
Total shareholders’ equity
Total liabilities and shareholders’ equity
Nature of operations (Note 1)
Commitments (Note 9)
Note
December 31,
2021
December 31,
2020
$
$
$
4
5
7
$
7,780,671
141,680
7,922,351
7,465
55,375,124
13,049,293
162,079
13,211,372
7,832
55,375,124
63,304,940
$
68,594,328
$
259,648
320,233
579,881
199,026
293,965
492,991
288,032,132
35,989,922
1,828,121
(263,125,116)
288,032,132
35,454,805
1,759,228
(257,144,828)
62,725,059
63,304,940
$
68,101,337
68,594,328
$
The accompanying notes are an integral part of these consolidated financial statements.
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INTERNATIONAL TOWER HILL MINES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Years Ended December 31, 2021 and 2020
(Expressed in U.S. Dollars)
Operating Expenses
Consulting fees
Depreciation
Insurance
Investor relations
Mineral property exploration
Office
Other
Professional fees
Regulatory
Rent
Travel
Wages and benefits
Total operating expenses
Other income (expense)
Loss on foreign exchange
Interest income
Other income
Total other income (expense)
Net loss for the year
Other comprehensive income
Exchange difference on translating foreign operations
Total other comprehensive income for the year
Comprehensive loss for the year
Basic and diluted net loss per share
Note
December 31,
2021
December 31,
2020
$
7
7
4
11
7
$
612,387
367
179,659
77,256
3,517,540
33,292
17,181
210,594
178,264
135,372
18,464
935,073
(5,915,449)
(101,818)
20,260
16,719
(64,839)
472,413
7,602
144,837
57,206
2,364,899
27,590
17,774
219,268
138,191
135,762
20,450
808,837
(4,414,829)
(191,071)
76,361
10,821
(103,889)
(5,980,288)
(4,518,718)
68,893
68,893
$
$
(5,911,395)
(0.03)
$
$
185,217
185,217
(4,333,501)
(0.02)
Weighted average number of shares outstanding - basic and diluted
194,908,184
189,870,444
The accompanying notes are an integral part of these consolidated financial statements.
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INTERNATIONAL TOWER HILL MINES LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Years Ended December 31, 2021 and 2020
(Expressed in U.S. Dollars)
Balance, December 31, 2019
Stock based compensation-option
Stock based compensation-DSU
Exchange difference on translating foreign operations
At-The-Market offering
Share issuance costs
Net loss
Balance, December 31, 2020
Stock based compensation-option
Stock based compensation-DSU
Exchange difference on translating foreign operations
Net loss
Balance, December 31, 2021
Number of
shares
187,573,671
—
—
—
7,334,513
—
—
194,908,184
—
—
—
—
194,908,184
$
$
Share capital
Contributed
surplus
278,213,801
—
—
—
10,299,277
(480,946)
—
288,032,132
—
—
—
—
288,032,132
$
$
35,069,274
90,914
294,617
—
—
—
—
35,454,805
167,267
367,850
—
—
35,989,922
$
$
Accumulated
other
comprehensive
income
1,574,011
—
—
185,217
—
—
—
1,759,228
—
—
68,893
—
1,828,121
$
$
Deficit
(252,626,110)
—
—
—
—
—
(4,518,718)
(257,144,828)
—
—
—
(5,980,288)
(263,125,116)
$
$
Total
62,230,976
90,914
294,617
185,217
10,299,277
(480,946)
(4,518,718)
68,101,337
167,267
367,850
68,893
(5,980,288)
62,725,059
The accompanying notes are an integral part of these consolidated financial statements.
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INTERNATIONAL TOWER HILL MINES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2021 and 2020
(Expressed in U.S. Dollars)
Operating Activities
Loss for the year
Add items not affecting cash:
Depreciation
Stock-based compensation-option
Stock-based compensation-DSU
Changes in non-cash working capital items:
Accounts receivable
Prepaid expenses
Accounts payable and accrued liabilities
Cash used in operating activities
Financing Activities
Issuance of common shares
Share issuance costs
Cash provided by financing activities
December 31,
2021
December 31,
2020
$
(5,980,288)
$
(4,518,718)
367
167,267
367,850
18,770
1,555
86,964
(5,337,515)
—
—
—
7,602
90,914
294,617
94,795
(14,447)
156,302
(3,888,935)
10,299,277
(480,946)
9,818,331
182,276
6,111,672
6,937,621
13,049,293
Effect of foreign exchange on cash and cash equivalents
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
68,893
(5,268,622)
13,049,293
7,780,671
$
$
The accompanying notes are an integral part of these consolidated financial statements.
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INTERNATIONAL TOWER HILL MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
1. GENERAL INFORMATION, NATURE OF OPERATIONS
International Tower Hill Mines Ltd. (“ITH” or the "Company") is incorporated under the laws of British Columbia, Canada. The Company’s head office address
is 2710-200 Granville Street, Vancouver, British Columbia, Canada.
International Tower Hill Mines Ltd. consists of ITH and its wholly owned subsidiaries Tower Hill Mines, Inc. (“TH Alaska”) (an Alaska corporation), Tower
Hill Mines (US) LLC (“TH US”) (a Colorado limited liability company), and Livengood Placers, Inc. (“LPI”) (a Nevada corporation). The Company is in the
business of acquiring, exploring and evaluating mineral properties, and either joint venturing or developing these properties further or disposing of them when
the evaluation is completed. At December 31, 2021, the Company was in the exploration stage and controls a 100% interest in its Livengood Gold Project in
Alaska, U.S.A.
These consolidated financial statements have been prepared on a going-concern basis, which presumes the realization of assets and discharge of liabilities in the
normal course of business for the foreseeable future.
The Company will require significant additional financing to continue its operations in connection with advancing activities at the Livengood Gold Project and
for the development of any mine that may be determined to be built at the Livengood Gold Project. There is no assurance that the Company will be able to
obtain the additional financing required on acceptable terms, if at all.
In addition, any significant delays in the issuance of required permits for the ongoing work at the Livengood Gold Project, or unexpected results in connection
with the ongoing work, could result in the Company being required to raise additional funds to advance permitting efforts. The Company’s review of its
financing options includes pursuing a future strategic alliance to assist in further development, permitting and future construction costs.
Despite the Company’s success to date in raising significant equity financing to fund its operations, there is significant uncertainty that the Company will be able
to secure any additional financing in the current or future equity markets. The amount of funds to be raised and the terms of any proposed equity financing that
may be undertaken will be negotiated by management as opportunities to raise funds arise. Specific plans related to the use of proceeds will be devised once
financing has been completed and management knows what funds will be available for these purposes. Due to this uncertainty, if the Company is unable to
secure additional financing, it may be required to reduce all discretionary activities at the Project to preserve its working capital to fund anticipated non-
discretionary expenditures beyond the 2022 fiscal year. As at March 8, 2022, management believes that the Company has sufficient financial resources to
maintain its operations for the next twelve months.
In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a global pandemic. This contagious disease outbreak, which
has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally,
potentially leading to an economic downturn. While it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak
and its ultimate effects on the Company’s business, results of operations or ability to raise funds at this time, the COVID-19 pandemic has not had any material
adverse effects on the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
These consolidated financial statements are presented in United States dollars and have been prepared in accordance with U.S. generally accepted accounting
principles (“U.S. GAAP”). On March 8, 2022, the Board approved the consolidated financial statements dated December 31, 2021.
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Basis of consolidation
These consolidated financial statements include the accounts of ITH and its wholly owned subsidiaries TH Alaska, TH US, and LPI. All intercompany
transactions and balances have been eliminated.
Significant judgments, estimates and assumptions
The preparation of financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the period. These judgments, estimates and assumptions are regularly evaluated and are based on management’s experience and
knowledge of the relevant facts and circumstances. While management believes the estimates to be reasonable, actual results could differ from those estimates
and could impact future results of operations and cash flows.
The areas which require significant judgment and estimates that management has made at the financial reporting date, that could result in a material change to
the carrying amounts of assets and liabilities, in the event actual results differ from the assumptions made, relate to, but are not limited to the following:
Significant judgments
●the determination of functional currencies;
●quantitative and qualitative factors used in the assessment of impairment of the Company’s mineral property; and
●the analysis of resource calculations, drill results, labwork, etc. which can impact the Company’s assessment of impairment, and provisions, if any, for
environmental rehabilitation and restoration.
Cash and cash equivalents
Cash equivalents include highly liquid investments with original maturities of twelve months or less, and which are subject to an insignificant risk of change in
value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.
Property and equipment
On initial recognition, property and equipment are valued at cost. Property and equipment is subsequently measured at cost less accumulated depreciation, less
any accumulated impairment losses, with the exception of land which is not depreciated. Depreciation is recorded over the estimated useful life of the assets at
the following annual rates:
Computer equipment - 30% declining balance;
Computer software - 3 years straight line;
Furniture and equipment -20% declining balance; and
Leasehold improvements - straight-line over the lease term.
Additions during the year are depreciated at one-half the annual rates. Depreciation methods, useful lives and residual values are reviewed at each financial year-
end and adjusted if appropriate.
Mineral properties and exploration and evaluation expenditures
The Company’s mineral project is currently in the exploration and evaluation phase. Mineral property acquisition costs are capitalized when incurred. Mineral
property exploration costs are expensed as incurred. At such time that the Company determines that a mineral property can be economically developed,
subsequent mineral property expenses will be capitalized during the development of such property.
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The Company assesses interests in exploration properties for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed
its recoverable amount. Impairment analysis includes assessment of the following circumstances: a significant decrease in the market price of a long-lived asset
or asset group; a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; a
significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an adverse action
or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-
lived asset or asset group; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that
demonstrates continuing losses associated with the use of a long-lived asset or asset group; a current expectation that, more likely than not, a long-lived asset or
asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a
level of likelihood that is more than 50%.
Asset retirement obligations
The Company records a liability based on the best estimate of costs for site closure and reclamation activities that the Company is legally or contractually
required to remediate. The provision for closure and reclamation liabilities is estimated using expected cash flows based on engineering and environmental
reports and accreted to full value over time through periodic charges to income. The Company does not have any material provisions for environmental
rehabilitation as of December 31, 2021.
Impairment of long-lived assets and long-lived assets to be disposed of
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be
generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of
the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount and the fair value less costs to sell.
Income taxes
The Company accounts for income taxes under the asset and liability method. Current income taxes are the expected taxes payable or receivable on the taxable
income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous
years. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on
deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is
recognized if it is more likely than not that some portion or the entire deferred tax asset will not be recognized.
Net loss per share
Basic loss per share is calculated using the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the
potential dilution that could occur if securities or contracts that may require the issuance of common shares in the future were converted, unless the impact is
anti-dilutive. For the year ended December 31, 2021, this calculation proved to be anti-dilutive, and therefore the Company’s 2,947,049 stock options and
2,151,276 deferred share units (“DSUs”) outstanding at year-end have been excluded from the calculation.
Stock-based compensation
The Company follows the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Section 718 “Compensation -
Stock Compensation”, which establishes accounting for equity-based compensation awards to be accounted for using the fair value method. Equity-settled share-
based payment arrangements are initially measured at fair value at the date of grant and recorded within shareholders’ equity. Arrangements considered to be
cash-settled are initially recorded at fair value and classified as accrued liabilities, and subsequently re-measured at fair value at each reporting date. The
Company’s stock option plan is an equity-settled arrangement and the Company’s deferred share unit plan can be an equity or cash settled arrangement
depending on the grant date term.
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The fair value at grant date of all share-based payments is recognized as compensation expense over the period for which benefits of services are expected to be
derived, with a corresponding credit to shareholders’ equity or accrued liabilities depending on whether they are equity-settled or cash-settled. The Company
estimates the fair value of stock options granted using the Black-Scholes option pricing model and estimate the expected forfeiture rate at the date of grant. The
value of DSUs is estimated based on the quoted market price of the Company’s common shares. When awards are forfeited because non-market based vesting
conditions are not satisfied, the expense previously recognized is proportionately reversed.
Functional currency
The Company’s consolidated financial statements are presented in U.S. dollars, which is the Company’s reporting currency. The functional currency of ITH is
the Canadian (“CAD” or “C”) dollar and the functional currency of ITH Alaska, TH US and LPI is the U.S. dollar.
In accordance with ASC 830, Foreign Currency Matters, the Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing
at the balance sheet date and the statements of operations and comprehensive loss and cash flows are translated at an average rate during the reporting period.
Adjustments resulting from the translation from CAD into U.S. dollars are recorded in shareholders’ equity as part of accumulated other comprehensive income.
Foreign currency transactions are translated into the functional currency of the respective currency of the entity or division, using the exchange rates prevailing
at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-
measurement of monetary items denominated in foreign currency at period-end exchange rates are recognized in profit or loss. Non-monetary items that are not
re-translated at period end are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured
at fair value, which are translated using the exchange rates as at the date when fair value was determined. Gains and losses are recorded in the statement of
operations and comprehensive loss.
Recently adopted accounting pronouncements
Accounting Standards Update No. 2019-12—Income Taxes (Topic 740). In December 2019, the FASB issued guidance intended to simplify various aspects
related to accounting for income taxes and removes certain exceptions to the general principles and also clarifies and amends existing guidance to improve
consistent application. The Company adopted the standard on January 1, 2021 and adoption had no impact on the Company’s financial statements.
Recently issued accounting pronouncements
Accounting Standards Update No. 2016-13—Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued guidance intended to
change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt
securities, companies will be required to estimate lifetime expected credit losses and recognize an allowance against the related instruments. For available for
sale debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. The adoption of
this update, if applicable, will result in earlier recognition of losses and impairments.
Accounting Standards Update No. 2018-19—Codification Improvements to ASC 326, Financial Instruments—Credit Losses. In November 2018, the FASB
introduced guidance on an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces
the probable, incurred loss model for those assets. ASU 2018-19 is the final version of Proposed Accounting Standards Update 2018-270, which has been
deleted. Additionally, the amendments clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of
receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases.
These updates are effective beginning January 1, 2023, and the Company is currently evaluating ASU 2016-13 and ASU 2018-19 and the potential impact of
adopting this guidance on its financial reporting.
3. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents, accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these
financial instruments.
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Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputs used in
making the measurement. The three levels of the fair value hierarchy are as follows:
● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
● Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and,
● Level 3 – Inputs that are not based on observable market data.
There were no financial instruments measured at fair value.
4. MINERAL PROPERTY
The Company had the following activity related to the mineral property:
Capitalized acquisition costs
Balance, December 31, 2019
Additions
Balance, December 31, 2020
Additions
Balance, December 31, 2021
Amount
55,375,124
—
55,375,124
—
55,375,124
$
$
$
The following table presents costs incurred for exploration and evaluation activities for the years ended December 31, 2021 and 2020:
Exploration costs:
Aircraft services
Environmental
Equipment and facilities rental
Field costs
Geological/geophysical
Land maintenance & tenure
Legal
Transportation and travel
Total expenditures for the year
Properties acquired from AngloGold, Alaska
Year ended
December 31, 2021
Year ended
December 31, 2020
$
$
8,400
185,330
61,409
327,075
2,121,323
709,922
90,542
13,539
3,517,540
$
$
—
169,704
54,945
70,254
1,437,530
563,243
54,982
14,241
2,364,899
Pursuant to an Asset Purchase and Sale and Indemnity Agreement dated June 30, 2006, as amended on July 26, 2007 (the “AngloGold Agreement”), among the
Company, AngloGold Ashanti (U.S.A.) Exploration Inc. (“AngloGold”) and TH Alaska, the Company acquired all of AngloGold’s interest in a portfolio of
seven mineral exploration projects in Alaska and referred to as the Livengood, Chisna, Gilles, Coffee Dome, West Pogo, Blackshell, and Caribou properties (the
“Sale Properties”) in exchange for a cash payment of $50,000 on August 4, 2006, and the issuance of 5,997,295 common shares, representing approximately
19.99% of the Company’s issued shares following the closing of the acquisition and two private placement financings raising an aggregate of C$11,479,348.
As further consideration for the transfer of the Sale Properties, the Company granted to AngloGold a 90-day right of first offer with respect to the Sale
Properties and any additional mineral properties in Alaska in which the Company acquires an interest and which interest the Company proposes to farm out or
otherwise dispose of. Upon AngloGold’s equity interest in the Company being reduced to less than 10%, this right of first offer would then terminate.
On December 11, 2014, the Company closed a private placement financing in which AngloGold elected not to participate. As a result of the shares issued in this
private placement, AngloGold’s ownership in the Company was reduced to less than 10% and thus both AngloGold’s right to maintain its ownership percentage
interest and its right of first offer on the Company’s Alaskan properties terminated upon the closing of the December 2014 private placement.
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Details of the Livengood Property (being the only Sale Property still held by the Company) are as follows:
Livengood Property:
The Livengood property is located in the Tintina gold belt approximately 113 kilometers (70 miles) north of Fairbanks, Alaska. The property consists of
land leased from the Alaska Mental Health Trust, a number of smaller private mineral leases, Alaska state mining claims purchased or located by the
Company and patented ground held by the Company.
Details of the leases are as follows:
a)
b)
c)
d)
a lease of the Alaska Mental Health Trust mineral rights having a term commencing July 1, 2004 and extending 19 years until June 30, 2023, subject to
further extensions beyond June 30, 2023 by either commercial production or payment of an advance minimum royalty equal to 125% of the amount
paid in year 19 and diligent pursuit of development. The lease requires minimum work expenditures and advance minimum royalties (all of which
minimum royalties are recoverable from production royalties) which escalate annually with inflation. A net smelter return (“NSR”) production royalty
of between 2.5% and 5.0% (depending upon the price of gold) is payable to the lessor with respect to the lands subject to this lease. In addition, an
NSR production royalty of l% is payable to the lessor with respect to the unpatented federal mining claims subject to the lease described in b) below
and an NSR production royalty of between 0.5% and 1.0% (depending upon the price of gold) is payable to the lessor with respect to the lands
acquired by the Company as a result of the purchase of Livengood Placers, Inc. in December 2011. As of December 31, 2021, the Company has paid
$3,993,856 from the inception of this lease.
a lease of federal unpatented lode mining claims having an initial term of ten years commencing on April 21, 2003 and continuing for so long
thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent
properties controlled by the Company. The lease requires an advance minimum royalty of $50,000 on or before each anniversary date for the duration
of the lease (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of between 2% and 3%
(depending on the price of gold) is payable to the lessors. The Company may purchase 1% of the royalty for $1,000,000. As of December 31, 2021, the
Company has paid $880,000 from the inception of this lease.
a lease of patented lode claims having an initial term of ten years commencing January 18, 2007, and continuing for so long thereafter as advance
minimum royalties are paid. The lease requires an advance minimum royalty of $20,000 on or before each anniversary date through January 18, 2017
and $25,000 on or before each subsequent anniversary (all of which minimum royalties are recoverable from production royalties). An NSR production
royalty of 3% is payable to the lessors. The Company may purchase all interests of the lessors in the leased property (including the production royalty)
for $1,000,000 (less all minimum and production royalties paid to the date of purchase), of which $500,000 is payable in cash over four years
following the closing of the purchase and the balance of $500,000 is payable by way of the 3% NSR production royalty. The Company has acquired a
40% interest in the mining claims subject to the lease, providing the Company with a 40% interest in the lease. As of December 31, 2021, the
Company has paid $265,000 from the inception of this lease.
a lease of unpatented federal lode mining and federal unpatented placer claims having an initial term of ten years commencing on March 28, 2007, and
continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property
or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $15,000 on or before each anniversary date
for the duration of the lease (all of which minimum royalties are recoverable from production royalties). The Company is required to pay the lessor the
additional sum of $250,000 upon making a positive production decision, of which $125,000 is payable within 120 days of the decision and $125,000 is
payable within a year of the decision (all of which are recoverable from production royalties). An NSR production royalty of 2% is payable to the
lessor. The Company may purchase all of the interest of the lessor in the leased property (including the production royalty) for $1,000,000. As of
December 31, 2021, the Company has paid $188,000 from the inception of this lease.
Title to mineral properties
The acquisition of title to mineral properties is a detailed and time-consuming process. The Company has taken steps to verify title to mineral properties in
which it has an interest. Although the Company has taken every reasonable precaution to ensure
53
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that legal title to its properties is properly recorded in the name of the Company, there can be no assurance that such title will ultimately be secured.
5. ACCRUED LIABILITIES
The following table presents the accrued liabilities balances at December 31, 2021 and 2020.
Accrued liabilities
Accrued salaries and benefits
Total accrued liabilities
December 31,
December 31,
2021
202,982
117,251
320,233
$
$
2020
227,459
66,506
293,965
$
$
Accrued liabilities at December 31, 2021 include accruals for general corporate costs and project costs of $34,912 and $168,070, respectively. Accrued liabilities
at December 31, 2020 include accruals for general corporate costs and project costs of $51,151 and $176,308, respectively.
6. INCOME TAXES
A reconciliation of income taxes at statutory rates with the reported taxes is as follows for the years ended December 31, 2021 and 2020:
Loss before income taxes
Statutory Canadian corporate tax rate
Expected income tax (recovery)
Effect of change in tax rate
Share-based payments
Unrecognized items for tax purposes
Difference in tax rates in other jurisdictions
Adjustment to prior years provision versus statutory tax returns
Change in valuation allowance
Total income tax expense (recovery)
The significant components of the Company’s deferred tax assets are as follows:
Deferred income tax assets (liabilities):
Mineral properties
Property and equipment
Share issue costs
Net operating losses available for future periods
Valuation allowance
Net deferred tax asset
54
$
$
$
$
$
December 31,
2021
(5,980,288)
$
27.00 %
$
(1,614,678)
3,455,247
123,866
(340,304)
(85,531)
(7,996)
(1,530,604)
— $
December 31,
2020
(4,518,718)
27.00 %
(1,220,054)
—
104,093
(129,854)
(115,057)
(7,789)
1,368,661
—
December 31,
2021
December 31,
2020
$
16,711,128
10,464
83,928
55,506,072
72,311,592
(72,311,592)
— $
18,750,505
10,365
118,756
55,302,874
74,182,500
(74,182,500)
—
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At December 31, 2021, the Company has available net operating losses for Canadian income tax purposes of approximately $23,013,000 and net operating
losses for US income tax purposes of approximately $161,982,000 available for carry-forward to reduce future years’ taxable income, if not utilized, expiring as
follows:
2040
2039
2038
2037
2036
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
Canada
1,033,000
938,000
388,000
1,394,000
1,383,000
406,000
1,694,000
1,827,000
2,629,000
4,180,000
2,829,000
2,074,000
1,253,000
907,000
78,000
23,013,000
United States
8,449,000
7,743,000
8,638,000
8,800,000
8,798,000
10,703,000
12,587,000
14,208,000
16,797,000
40,825,000
18,765,000
2,973,000
1,412,000
1,284,000
—
161,982,000
$
$
$
$
The Company also has available mineral resource expenses that are related to the Company’s exploration activities in the United States of approximately
$117,054,000 which may be deductible for U.S. tax purposes. Future tax benefits, which may arise as a result of applying these deductions to taxable income,
have not been recognized in these accounts due to the uncertainty of future taxable income.
7. SHARE CAPITAL
Authorized
The Company’s share capital consists of an unlimited number of authorized common shares without par value. At December 31, 2020 and 2021, there were
194,908,184 shares issued and outstanding.
Share issuances
There were no share issuances during the year ended December 31, 2021.
On August 31, 2020, the Company entered into an At Market Issuance ("ATM") Sales Agreement with B. Riley Securities, Inc. ("B. Riley"), pursuant to which
the Company was entitled, at its discretion and from time-to-time during the term of the sales agreement, to sell through B. Riley such number of common
shares of the Company as would result in aggregate gross proceeds to the Company of up to $10,300,000 (the "Offering"). The Company would pay B. Riley a
commission of up to 3% of the gross proceeds from the sale of common shares pursuant to the ATM Sales Agreement.
During the year ended December 31, 2020, the Company issued 7,334,513 common shares pursuant to the Offering for gross proceeds of $10,299,277. Share
issuance costs were $480,946 resulting in net proceeds of $9,818,331 from the Offering.
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Stock options
The Company adopted an incentive stock option plan in 2006, as amended September 19, 2012 and re-approved by the Company’s shareholders on May 28,
2015, May 30, 2018, and May 25, 2021 (the “Stock Option Plan”). The essential elements of the Stock Option Plan provide that the aggregate number of
common shares of the Company that may be issued pursuant to options granted under the Stock Option Plan and any other share-based compensation
arrangements may not exceed 10% of the number of issued shares of the Company at the time of the granting of options. Options granted under the Stock
Option Plan will have a maximum term of ten years. The exercise price of options granted under the Stock Option Plan shall be fixed in compliance with the
applicable provisions of the Toronto Stock Exchange (“TSX”) Company Manual in force at the time of grant and, in any event, shall not be less than the closing
price of the Company’s common shares on the TSX on the trading day immediately preceding the day on which the option is granted, or such other price as may
be agreed to by the Company and accepted by the TSX. Options granted under the Stock Option Plan vest immediately, unless otherwise determined by the
directors at the date of grant.
During the year ended December 31, 2021, the Company granted a total of 240,000 incentive stock options to certain officers and employees of the Company to
purchase common shares in the capital stock of the Company at an issue price of C$1.31 per share. Of the total 240,000 stock options granted, 150,000 were
granted to Mr. Karl Hanneman, Chief Executive Officer. All of the options vest one-third on the grant date, one-third on May 25, 2022, one-third on May 25,
2023 and expire on May 25, 2027.
During the year ended December 31, 2020, the Company granted a total of 255,000 incentive stock options to employees of the Company to purchase common
shares in the capital stock of the Company at an issue price of C$0.92 per share. Of the total 255,000 stock options granted, 150,000 were granted to Mr. Karl
Hanneman, Chief Executive Officer. All of the options vest one-third on the grant date, one-third on May 27, 2021, one-third on May 27, 2022 and expire on
May 27, 2026.
A summary of the status of the stock option plan as of December 31, 2021 and 2020 and changes during the fiscal years is presented below:
Balance, beginning of the year
Granted
Exercised
Cancelled
Balance, end of the year
Year Ended
December 31, 2021
Weighted
Average
Exercise
Price (C$)
Number of
Options
2,707,049
240,000
—
—
2,947,049
$
$
$
0.94
1.31
—
—
0.97
Aggregate
Intrinsic
Value (C$)
Number of
Options
Year Ended
December 31, 2020
Weighted
Average
Exercise
Price (C$)
Aggregate
Intrinsic
Value (C$)
2,452,049
255,000
—
—
2,707,049
$
$
$
0.94
0.92
—
—
0.94
$
2,287,262
$
235,200
The weighted average remaining life of options outstanding at December 31, 2021 was 1.9 years.
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Stock options outstanding are as follows:
Expiry Date
March 25, 2022*
March 25, 2022*
March 10, 2022
March 16, 2023
March 16, 2023
June 9, 2023
March 21, 2024
February 1, 2025
August 8, 2025
May 27, 2026
May 25, 2027
Exercise
Price (C$)
$
$
$
$
$
$
$
$
$
$
$
1.11
0.73
1.11
1.00
0.50
1.00
0.61
1.35
0.85
0.92
1.31
December 31, 2021
Number of
Options
Exercisable
Exercise
Price (C$)
Number of
Options
Exercisable
December 31, 2020
510,000
270,000
120,000
580,000
130,000
30,000
374,817
250,000
187,232
255,000
240,000
2,947,049
510,000 $
270,000 $
120,000 $
580,000 $
130,000 $
30,000 $
374,817 $
250,000 $
187,232 $
170,000 $
80,000
2,702,049
1.11
0.73
1.11
1.00
0.50
1.00
0.61
1.35
0.85
0.92
—
510,000
270,000
120,000
580,000
130,000
30,000
374,817
250,000
187,232
255,000
—
2,707,049
510,000
270,000
120,000
580,000
130,000
30,000
374,817
250,000
187,232
85,000
—
2,537,049
● Expiry dates revised to March 25, 2022
A summary of the non-vested options as of December 31, 2021 and 2020 and changes during the fiscal years ended December 31, 2021 and 2020 is as follows:
Non-vested options:
Outstanding at December 31, 2019
Granted
Vested
Outstanding at December 31, 2020
Granted
Vested
Outstanding at December 31, 2021
Weighted average
Number of options
—
255,000
$
(85,000) $
$
170,000
240,000
$
(165,000) $
$
245,000
grant-date fair
value (C$)
—
0.76
0.76
0.76
0.98
0.87
0.91
At December 31, 2021, there was C$98,577 of unrecognized compensation expense related to non-vested options outstanding.
Deferred Share Unit Incentive Plan
On April 4, 2017, the Company adopted a Deferred Share Unit Plan (the “DSU Plan”). The DSU Plan was approved by the Company’s shareholders on May
24, 2017 and re-approved by the Company’s shareholders on May 27, 2020 and May 25, 2021. As at December 31, 2021, the maximum aggregate number of
common shares that could be issued under the DSU Plan and the Stock Option Plan was 19,490,818, representing 10% of the number of issued and outstanding
common shares on that date (on a non-diluted basis). As at December 31, 2021, the Company had stock options to potentially acquire 2,947,049 common shares
outstanding under the Stock Option Plan (representing approximately 1.51% of the outstanding common shares), leaving up to 16,543,769 common shares
available for future grants under the DSU Plan and under the Stock Option Plan (combined) based on the number of outstanding common shares as at that date
on a non-diluted basis (representing an aggregate of approximately 8.49% of the outstanding common shares).
During the year ended December 31, 2021, in accordance with the DSU Plan, the Company granted each of the members of the Company’s Board of Directors
(other than those directors nominated for election by Paulson & Co., Inc.) 63,359 DSUs for a total of 316,795 DSUs with a grant date fair value (defined as the
weighted average of the prices at which the common shares traded on the exchange with the most volume for the five trading days immediately preceding the
grant) of C$1.31 per DSU, representing C$83,000 per director or C$415,000 in the aggregate.
During the year ended December 31, 2020, in accordance with the DSU Plan, the Company granted each of the members of the Company’s Board of Directors
(other than those directors nominated for election by Paulson & Co., Inc.) 90,217 DSUs for a total of 451,085 DSUs with a grant date fair value (defined as the
weighted average of the prices at which the common shares
57
Table of Contents
traded on the exchange with the most volume for the five trading days immediately preceding the grant) of C$0.92 per DSU, representing C$83,000 per director
or C$415,000 in the aggregate.
The DSUs entitle the holders to receive common shares of the Company’s stock without the payment of any consideration. The DSUs vested immediately upon
being granted, but the common shares of stock underlying the DSUs are not deliverable to the grantee until the grantee is no longer serving on the Company’s
Board of Directors.
DSUs outstanding are as follows:
Balance, beginning of the year
Issued
Delivered
Balance, end of the year
Share-based payments
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Number of
DSUs
1,834,481
316,795
—
2,151,276
Weighted average
grant-date fair
value (C$)
$
$
$
0.81
1.31
—
0.88
Number of
DSUs
1,383,396
451,085
—
1,834,481
Weighted average
grant-date fair
value (C$)
$
$
$
0.77
0.92
—
0.81
During the year ended December 31, 2021, the Company granted 240,000 stock options and 316,795 DSUs. Share-based payment compensation for the year
ended December 31, 2021 total $535,117 ($167,267 related to stock options and $367,850 related to DSUs). Of the total expense for the year ended
December 31, 2021, $380,878 was included in consulting fees, $143,957 was included in wages and benefits, and $10,282 was included in investor relations in
the statement of operations and comprehensive loss.
During the year ended December 31, 2020, the Company granted 255,000 stock options and 451,085 DSUs. Share-based payment compensation for the year
ended December 31, 2020 totaled $385,531 ($90,914 related to stock options and $294,617 related to DSUs). Of the total expense for the year ended
December 31, 2020, $304,205 was included in consulting fees, $74,870 was included in wages and benefits, and $6,456 was included in investor relations in the
statement of operations and comprehensive loss.
The following weighted average assumptions were used for the Black-Scholes option pricing model of the stock options:
Expected life of options
Risk-free interest rate
Expected volatility
Dividend rate
Exercise price (C$)
Year ended
December 31,
2021
Year ended
December 31,
2020
6 years
6 years
0.99 %
81.22 %
0.00 %
1.31
$
0.40 %
80.92 %
0.00 %
0.92
$
The expected volatility used in the Black-Scholes option pricing model is based on the historical volatility of the Company’s shares.
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8. SEGMENT AND GEOGRAPHIC INFORMATION
The Company operates in a single reportable operating segment, being the exploration and development of mineral properties. The following tables present
selected financial information by geographic location:
December 31, 2021
Mineral property
Property and equipment
Current assets
Total assets
December 31, 2020
Mineral property
Property and equipment
Current assets
Total assets
Net loss for the year - Canada
Net loss for the year - United States
Net loss for the year
9. COMMITMENTS
Canada
United States
Total
— $
7,465
7,439,101
7,446,566
$
55,375,124
$
—
483,250
55,858,374
$
55,375,124
7,465
7,922,351
63,304,940
— $
7,832
12,862,068
12,869,900
$
55,375,124
$
—
349,304
55,724,428
$
55,375,124
7,832
13,211,372
68,594,328
$
$
$
$
Year ended
December 31,
2021
Year ended
December 31,
2020
$
$
(1,363,483) $
(4,616,805)
(5,980,288) $
(1,134,685)
(3,384,033)
(4,518,718)
The following table discloses, as of December 31, 2021, the Company’s contractual obligations including anticipated mineral property payments and work
commitments. Under the terms of the Company’s mineral property purchase agreements, mineral leases and the terms of the unpatented mineral claims held by
it, the Company is required to make certain scheduled acquisition payments, incur certain levels of expenditures, make lease or advance royalty payments, make
payments to government authorities and incur assessment work expenditures as summarized in the table below in order to maintain and preserve the Company’s
interests in the related mineral properties. If the Company is unable or unwilling to make any such payments or incur any such expenditures, it is likely that the
Company would lose or forfeit its rights to acquire or hold the related mineral properties. The following table assumes that the Company retains the rights to all
of its current mineral properties, but does not exercise any lease purchase or royalty buyout options:
Mineral Property
Leases(1)
Mining Claim
Government Fees
Total
$
$
2022
2023
2024
2025
2026
2027 and
beyond
Total
Payments Due by Year
426,972
$
513,715
$
519,136
$
524,625
$
530,183
$
535,810
$
3,050,441
205,720
632,692
$
205,720
719,435
$
205,720
724,856
$
205,720
730,345
$
205,720
735,903
$
205,720
741,530
$
1,234,320
4,284,761
1. Does not include required work expenditures, as it is assumed that the required expenditure level is significantly below the work for which will actually be
carried out by the Company. Does not include potential royalties that may be payable (other than annual minimum royalty payments). See Note 4.
10. RELATED PARTY TRANSACTIONS
On August 31, 2020, the Company entered into an At Market Issuance (“ATM”) Sales Agreement with B. Riley Securities, Inc. (“B. Riley”), pursuant to which
the Company was entitled, at its discretion and from time-to-time during the term of the
59
Table of Contents
sales agreement, to sell through B. Riley such number of common shares of the Company as would result in aggregate gross proceeds to the Company of up to
$10,300,000 (the “Offering”). No offers or sales of common shares were made in Canada through the facilities of the TSX or other trading markets. On
September 2, 2020, the Company announced that its existing three largest shareholders had each taken their pro-rata share of the Offering, resulting in the
issuance of 4,490,997 common shares (representing 2% of the 187,573,671 shares previously issued and outstanding) at the September 1, 2020 closing market
price of $1.40 per share for aggregate gross proceeds of $6,287,396.
11. LEASES
On December 12, 2019, the Company entered into a one-year operating lease agreement (for the lease period of January 1, 2020 through December 31, 2020) of
the Fairbanks office. After the initial one-year lease period, the agreement has continued on a month-to-month basis. Therefore, the Company has elected the
short-term lease recognition exemption for the office lease. Accordingly, office lease costs will continue to be reported as rent expense on the Consolidated
Statements of Operations and Comprehensive Loss and the Company will not recognize a right-of-use (ROU) asset and lease liability on the Consolidated
Balance Sheets.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of December 31, 2021, an evaluation was carried out under the supervision of and with the participation of the Company’s management, including the Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of
December 31, 2021, the Company’s disclosure controls and procedures were effective in ensuring that information required to be disclosed in reports filed or submitted
to the SEC under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and
(ii) accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, in a manner that allows for timely decisions
regarding required disclosures.
The effectiveness of our or any system of disclosure controls and procedures, however well designed and operated, can provide only reasonable assurance that the
objectives of the system will be met and is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating controls and
procedures and the assumptions used in identifying the likelihood of future events.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Management
evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of internal control over financial reporting as of
December 31, 2021. In conducting this evaluation, management used the framework established by the Committee of Sponsoring Organizations of the Treadway
Commission as set forth in Internal Control – Integrated Framework (2013). Based on this evaluation under the framework in Internal Control – Integrated Framework
(2013), management concluded that internal control over financial reporting was effective as of December 31, 2021.
Because of its inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must
reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The design of any system of
controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will achieve its stated objectives
under all future conditions.
This Annual Report on Form 10-K does not include an attestation report of the Company’s independent public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the Company’s independent public accounting firm pursuant to rules of the Securities and Exchange
Commission that permit the Company to provide only management’s report in this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes in internal controls over financial reporting during the fourth quarter ended December 31, 2021 that have materially, or are reasonably likely to
materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
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ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
PART III
The information required by Items 401, 405, 406, 407(c)(3), (d)(4) and (d)(5) of Regulation S-K will be included in the Company’s Proxy Statement for its 2022 Annual
Meeting of Shareholders to be filed with the SEC within 120 days after December 31, 2021 (the “2022 Proxy Statement”), and is incorporated by reference in this
Annual Report on Form 10-K.
The Company’s Code of Business Conduct and Ethics is available on the Company’s website at www.ithmines.com. We intend to post on our website any amendments
to, or waivers from our Code of Business Conduct and Ethics applicable to senior financial executives.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 402 and paragraph (e)(4) and (e)(5) of Item 407 of Regulation S-K will be contained in the Company’s 2022 Proxy Statement, and is
incorporated by reference in this Annual Report on Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by Item 201(d) and Item 403 of Regulation S-K will be contained in the Company’s 2022 Proxy Statement, and is incorporated by reference in
this Annual Report on Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 404 and Item 407(a) of Regulation S-K will be contained in the Company’s 2022 Proxy Statement, and is incorporated by reference in
this Annual Report on Form 10-K.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by Item 9(e) of Schedule 14A will be filed in the Company’s 2022 Proxy Statement, and is incorporated by reference in this Annual Report on
Form 10-K.
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ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Documents filed as part of this report
(1) All financial statements
PART IV
The report of independent registered public accounting firm (Davidson & Company LLP, Vancouver, British Columbia, Canada, PCAOB ID 731)
The consolidated statements of operations and comprehensive loss, cash flows, and changes in shareholders’ equity, and the consolidated balance sheets are included as
part of Part II, Item 8, Financial Statements and Supplementary Data.
(2) Financial statement schedules
All financial statement schedules have been omitted, since the information is either not applicable or required, or because the information required is included in the
consolidated financial statements and notes thereto included in this Form 10-K.
(3) Exhibits required by Item 601 of Regulation S-K
Exhibit Number
Description
3.1
4.1
4.2
4.3+
10.1
10.2**
10.3
10.4
Amended and Restated Articles of the Company, as amended on June 21, 2021 (filed as Exhibit 3.1 to the Company’s Quarterly Report on
Form 10-Q on August 6, 2021 and incorporated herein by reference)
Form of Common Share Certificate (filed as Exhibit 1 to the Company’s Form 8-A on August 2, 2007 and incorporated herein by reference)
Investor Rights Agreement, dated December 28, 2016, between International Tower Hill Mines Ltd. and Paulson & Co. Inc. (filed as
Exhibit 4.1 to the Company’s Form 8-K filed on January 5, 2017 and incorporated herein by reference)
Description of Securities
Mining Lease with Option to Purchase, dated January 18, 2007, between Talon Gold Alaska Inc. and Bernard E. Griffin, Donna Griffin,
Larry Kilgore, Sherry Gerbi, Jerry Griffin, Tim Miller, Lynne Miller, Robert and Marcia Miller (filed as Exhibit 11 to the Company’s
Form 20-F on December 3, 2007 and incorporated herein by reference)
Upland Mining Lease, effective July 1, 2004, between the Alaska Mental Health Trust Authority and Tower Hill Mines, Inc. (as successor to
AngloGold (U.S.A.)) (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q/A on December 10, 2013 and incorporated
herein by reference)
Addendum No. 2 to Upland Mining Lease, effective July 1, 2007, between the State of Alaska, Department of Natural Resources, Mental
Health Trust Land Office and Tower Hill Mines, Inc. (formerly Talon Gold Alaska, Inc.) (filed as Exhibit 10.2 to the Company’s Quarterly
Report on Form 10-Q on November 6, 2013 and incorporated herein by reference)
Addendum No. 3 to Upland Mining Lease, effective January 1, 2010, between the State of Alaska, Department of Natural Resources, Mental
Health Trust Land Office and Tower Hill Mines, Inc. (formerly Talon Gold Alaska, Inc.) (filed as Exhibit 10.3 to the Company’s Quarterly
Report on Form 10-Q on November 6, 2013 and incorporated herein by reference)
63
Table of Contents
10.5
10.6**
10.7*
10.8*
10.9*
10.10*
10.11*
10.12*
10.13
10.14
10.15
21.1
23.1+
23.2+
23.3+
23.4+
23.5+
24+
31.1+
Addendum No. 4 to Upland Mining Lease, effective June 27, 2013, between the State of Alaska, Department of Natural Resources, Mental
Health Trust Land Office and Tower Hill Mines, Inc. (filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q on
November 6, 2013 and incorporated herein by reference)
Addendum No. 5 to Upland Mining Lease, effective June 30, 2013, between the State of Alaska, Department of Natural Resources, Mental
Health Trust Land Office and Tower Hill Mines, Inc. (filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q on
November 6, 2013 and incorporated herein by reference)
2006 Stock Option Plan, as amended September 19, 2012 (filed as Exhibit 10.9 to the Company’s Form 10-K on March 13, 2013 and
incorporated herein by reference)
Form of Stock Option Agreement for use under the 2006 Stock Option Plan (filed as Exhibit 10.10 to the Company’s Form 10-K on
March 13, 2013 and incorporated herein by reference)
2017 Deferred Share Unit Incentive Plan (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q on August 11, 2017 and
incorporated herein by reference)
Consulting Agreement, dated May 11, 2015, between David A. Cross and International Tower Hill Mines Ltd. (filed as Exhibit 10.1 to the
Company’s Form 8-K filed on May 12, 2015 and incorporated herein by reference)
Financial and Accounting Consulting Agreement, dated May 11, 2015, between Cross Davis & Company LLP, Certified General
Accountants and International Tower Hill Mines Ltd. (filed as Exhibit 10.2 to the Company’s Form 8-K filed on May 12, 2015 and
incorporated herein by reference)
Amended and Restated Employment Agreement, dated March 12, 2018, between Karl Hanneman and Tower Hill Mines (US) LLC (filed as
Exhibit 10.16 to the Company’s Form 10-K on March 16, 2018 and is incorporated herein by reference)
Amended and Restated Mining Lease, dated November 22, 2017, between Kasey Leigh Tucker and Tower Hill Mines, Inc. to amend and
restate Mining Lease effective as of March 28, 2017, between Ronald Tucker and Talon Gold Alaska, Inc. (filed as Exhibit 10.16 to the
Company’s Form 10-K on March 15, w18 and incorporated herein by reference)
Subscription Agreement, dated March 13, 2018, between the Company and Electrum Strategic Opportunities Fund II, L.P. (filed as
Exhibit 10.1 to the Company’s Form 8-K filed on March 16, 2018 and incorporated herein by reference)
Subscription Agreement, dated March 13, 2018, between the Company and Paulson & Co. Inc. (filed as Exhibit 10.2 to the Company’s
Form 8-K filed on March 16, 2018 and incorporated herein by reference)
Subsidiaries of the Company (filed as Exhibit 21.1 to the Company’s Annual Report on Form 10-K on March 10, 2021 and incorporated
herein by reference)
Consent of Davidson & Company LLC
Consent of BBA USA Inc.
Consent of NewFields Mining Design & Technical Services, LLC
Consent of JDS Energy & Mining Inc.
Consent of Resource Development Associates Inc.
Power of Attorney (see signature page)
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
64
Table of Contents
31.2+
32.1+
32.2+
96.1+
101
104+
*
**
+
Certification of Principal Financial and Accounting Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
Certification of the Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
Technical Report Summary for the Livengood Gold Project
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at December 31, 2021 and 2020, (ii) the
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2021 and 2020, (iii) the Consolidated
Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2021 and 2020, (iv) the Consolidated Statements of Cash
Flows for the Years Ended December 31, 2021 and 2020, and (v) the Notes to the Consolidated Financial Statements
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
Management contract or compensatory plan or arrangement
Certain portions of this exhibit have been omitted by redacting a portion of the text (indicated by asterisks in the text). This exhibit has been filed separately with
the Securities and Exchange Commission pursuant to a request for confidential treatment.
Filed or furnished herewith
The information required by Section (a)(3) of Item 15 is set forth on the Exhibit Index that follows the signatures page of this Form 10-K.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
65
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SIGNATURES
International Tower Hill Mines Ltd.
By:
/s/ Karl L. Hanneman
Karl L. Hanneman
Chief Executive Officer
Date: March 9, 2022
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Karl. L. Hanneman as his attorney-in-fact,
with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By:
/s/ Karl L. Hanneman
Karl L. Hanneman
Chief Executive Officer and Director
(Principal Executive Officer)
Date: March 9, 2022
By:
/s/ David Cross
David Cross
Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: March 9, 2022
By:
/s/ Anton J. Drescher
Anton J. Drescher
Director
Date: March 9, 2022
By:
/s/ Stuart A. Harshaw
Stuart A. Harshaw
Director
Date: March 9, 2022
By:
/s/ Marcelo Kim
Marcelo Kim
Director
Date: March 9, 2022
By:
/s/ Stephen A. Lang
Stephen A. Lang
Director
Date: March 9, 2022
By:
/s/ Christopher Papagianis
Christopher Papagianis
Director
Date: March 9, 2022
By:
/s/ Thomas S. Weng
Thomas S. Weng
Director
Date: March 9, 2022
66
EXHIBIT 4.3
DESCRIPTION OF INTERNATIONAL TOWER HILL MINES COMMON SHARES
The common shares, no par value (the “common shares”), of International Tower Hill Mines Ltd. (the “Company”) are the Company’s only class of securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The following description of our common shares is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our
Articles of the Company, as amended and restated (the “Articles”), which are filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q on August 6, 2021
and incorporated herein by reference. We are incorporated in the Province of British Columbia, Canada and are subject to the Business Corporations Act (British
Columbia).
Authorized Capital Shares
The Company’s share capital consists of an unlimited number of authorized common shares of which 194,908,184 are issued and outstanding as of March 1, 2022. The
outstanding common shares are fully paid and nonassessable. No other classes of shares are currently authorized.
Voting Rights
Holders of common shares are entitled to receive notice of and to attend any meetings of shareholders of the Company and at any meetings of shareholders to cast one
vote for each common share held. Holders of common shares do not have cumulative voting rights. A simple majority of votes cast on a resolution is required to pass an
ordinary resolution; however, if the resolution is a special resolution two-thirds of the votes cast on the special resolution are required to pass it.
Dividend Rights and Liquidation Rights
Holders of common shares are entitled to receive dividends as and when declared by the board of directors of the Company at its discretion from funds legally available
therefor and to receive a pro rata share of the assets of the Company available for distribution to the shareholders in the event of the liquidation, dissolution or winding-
up of the Company after payment of debts and other liabilities, in each case subject to the rights, privileges, restrictions and conditions attached to any other series or
class of shares ranking senior in priority to or on a pro-rata basis with the holders of common shares with respect to dividends or liquidation.
Other Rights and Preferences
There are no pre-emptive, subscription, conversion or redemption rights attached to the common shares nor do they contain any sinking or purchase fund provisions.
Considerations for Non-Resident Holders
There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company or
affecting the remittance of dividends, interest and other payments to non-residents, except that the Investment Canada Act (Canada) may require review and approval by
the Minister of Industry (Canada) of certain acquisitions of “control” of the Company by a “non-Canadian.” See “Certain Canadian Federal Income Tax Considerations
for U.S. Holders” and “Certain U.S. Federal Income Tax Considerations” in the Form 10-K under Part II. Item 5. Market For Registrant’s Common Equity, Related
Stockholder Matters And Issuer Purchases Of Equity Securities for additional information.
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-240276) and Forms S-8 (No. 333-174617,
333-158533 and 333-141353) of International Tower Hill Mines Ltd. of our report dated March 8, 2022, relating to the consolidated financial statements
of International Tower Hill Mines Ltd., which appears in Form 10-K of International Tower Hill Mines Ltd. dated March 8, 2022.
Vancouver, British Columbia
March 8, 2022
(Signed) DAVIDSON & COMPANY LLP
Chartered Professional Accountants
CONSENT – BBA USA INC.
EXHIBIT 23.2
In connection with the International Tower Hill Mines Ltd. Annual Report on Form 10-K for the year ended December 31, 2021 and any amendments or supplements
and/or exhibits thereto (collectively, the “Form 10-K”), the undersigned consents to:
(i)
(ii)
(iii)
(iv)
the filing and use of Chapters 2, 3, 10 (except Section 10.5.16.7), 12 (except Section 12.3.3.1), 13, 14, 15 (except Sections 15.14, and 15.19), 16, 17,
18, 19, 21, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the technical report summary titled “Pre-feasibility Study of the Livengood
Gold Project, Alaska, USA” (the “TRS”), with an effective date of October 29, 2021, as an exhibit to and referenced in the Form 10-K;
the incorporation by reference of Chapters 2, 3, 10 (except Section 10.5.16.7), 12 (except Section 12.3.3.1), 13, 14, 15 (except Sections 15.14, and
15.19), 16, 17, 18, 19, 21, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS in the Registration Statements of International Tower
Hill Mines Ltd. on Form S-3 (No. 333-240276) and Form S-8 (Nos. 333-174617, 333-158533, and 333-141353) (the “Registration Statements”);
the use of and references to our name, including our status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K
promulgated by the Securities and Exchange Commission), in connection with Chapters 2, 3, 10 (except Section 10.5.16.7), 12 (except Section
12.3.3.1), 13, 14, 15 (except Sections 15.14, and 15.19), 16, 17, 18, 19, 21, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS,
Form 10-K and the Registration Statements; and
any extracts or summaries of Chapters 2, 3, 10 (except Section 10.5.16.7), 12 (except Section 12.3.3.1), 13, 14, 15 (except Sections 15.14, and 15.19),
16, 17, 18, 19, 21, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS included or incorporated by reference in the Form 10-K and
the Registration Statements, and the use of any information derived, summarized, quoted or referenced from the Chapters 2, 3, 10 (except Section
10.5.16.7), 12 (except Section 12.3.3.1), 13, 14, 15 (except Sections 15.14, and 15.19), 16, 17, 18, 19, 21, and the relevant portions of Chapters 1, 22,
23, 24 and 25 of the TRS, or portions thereof, that were prepared by us, that we supervised the preparation of, and/or that were reviewed and
approved by us, that is included or incorporated by reference in the Form 10-K and the Registration Statements.
Dated: February 23, 2022
By: /s/ Signed “BBA USA Inc.”
Name: BBA USA Inc.
CONSENT – NEWFIELDS MINING DESIGN & TECHNICAL SERVICES, LLC
In connection with the International Tower Hill Mines Ltd. Annual Report on Form 10-K for the year ended December 31, 2021 and any amendments or supplements
and/or exhibits thereto (collectively, the “Form 10-K”), the undersigned consents to:
EXHIBIT 23.3
(i)
(ii)
(iii)
(iv)
the filing and use of Sections 10.5.16.7, 15.14, 15.19, and the relevant portions of Chapters 1, 18, 22, 23, 24 and 25 of the technical report summary
titled “Pre-feasibility Study of the Livengood Gold Project, Alaska, USA” (the “TRS”), with an effective date of October 29, 2021, as an exhibit to
and referenced in the Form 10-K;
the incorporation by reference of Sections 10.5.16.7, 15.14, 15.19, and the relevant portions of Chapters 1, 18, 22, 23, 24 and 25 of the TRS in the
Registration Statements of International Tower Hill Mines Ltd. on Form S-3 (No. 333-240276) and Form S-8 (Nos. 333-174617, 333-158533, and
333-141353) (the “Registration Statements”);
the use of and references to our name, including our status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K
promulgated by the Securities and Exchange Commission), in connection with Sections 10.5.16.7, 15.14, 15.19, and the relevant portions of Chapters
1, 18, 22, 23, 24 and 25 of the TRS, Form 10-K and the Registration Statements; and
any extracts or summaries of Sections 10.5.16.7, 15.14, 15.19, and the relevant portions of Chapters 1, 18, 22, 23, 24 and 25 of the TRS included or
incorporated by reference in the Form 10-K and the Registration Statements, and the use of any information derived, summarized, quoted or
referenced from the Sections 10.5.16.7, 15.14, 15.19, and the relevant portions of Chapters 1, 18, 22, 23, 24 and 25 of the TRS, or portions thereof,
that were prepared by us, that we supervised the preparation of, and/or that were reviewed and approved by us, that is included or incorporated by
reference in the Form 10-K and the Registration Statements.
Dated: February 23, 2022
By: /s/ Signed “NewFields Mining Design & Technical Services, LLC”
Name: NewFields Mining Design & Technical Services, LLC
CONSENT – JDS ENERGY & MINING INC.
EXHIBIT 23.4
In connection with the International Tower Hill Mines Ltd. Annual Report on Form 10-K for the year ended December 31, 2021 and any amendments or supplements
and/or exhibits thereto (collectively, the “Form 10-K”), the undersigned consents to:
(i)
(ii)
(iii)
(iv)
the filing and use of Section 12.3.3.1, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the technical report summary titled “Pre-feasibility
Study of the Livengood Gold Project, Alaska, USA” (the “TRS”), with an effective date of October 29, 2021, as an exhibit to and referenced in the
Form 10-K;
the incorporation by reference of Section 12.3.3.1, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS in the Registration
Statements of International Tower Hill Mines Ltd. on Form S-3 (No. 333-240276) and Form S-8 (Nos. 333-174617, 333-158533, and 333-141353)
(the “Registration Statements”);
the use of and references to our name, including our status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K
promulgated by the Securities and Exchange Commission), in connection with Section 12.3.3.1, and the relevant portions of Chapters 1, 22, 23, 24
and 25 of the TRS, Form 10-K and the Registration Statements; and
any extracts or summaries of Section 12.3.3.1, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS included or incorporated by
reference in the Form 10-K and the Registration Statements, and the use of any information derived, summarized, quoted or referenced from the
Section 12.3.3.1, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS, or portions thereof, that were prepared by us, that we
supervised the preparation of, and/or that were reviewed and approved by us, that is included or incorporated by reference in the Form 10-K and the
Registration Statements.
Dated: February 23, 2022
By: /s/ Signed “JDS Energy & Mining Inc.”
Name: JDS Energy & Mining Inc.
CONSENT – RESOURCE DEVELOPMENT ASSOCIATES INC.
EXHIBIT 23.5
In connection with the International Tower Hill Mines Ltd. Annual Report on Form 10-K for the year ended December 31, 2021 and any amendments or supplements
and/or exhibits thereto (collectively, the “Form 10-K”), the undersigned consents to:
(i)
(ii)
(iii)
(iv)
the filing and use of Chapters 4, 5, 6 ,7 ,8, 9, 11 and 20, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the technical report summary
titled “Pre-feasibility Study of the Livengood Gold Project, Alaska, USA” (the “TRS”), with an effective date of October 29, 2021, as an exhibit to
and referenced in the Form 10-K;
the incorporation by reference of Chapters 4, 5, 6 ,7 ,8, 9, 11 and 20, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS in the
Registration Statements of International Tower Hill Mines Ltd. on Form S-3 (No. 333-240276) and Form S-8 (Nos. 333-174617, 333-158533, and
333-141353) (the “Registration Statements”);
the use of and references to our name, including our status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K
promulgated by the Securities and Exchange Commission), in connection with Chapters 4, 5, 6 ,7 ,8, 9, 11 and 20, and the relevant portions of
Chapters 1, 22, 23, 24 and 25 of the TRS, Form 10-K and the Registration Statements; and
any extracts or summaries of Chapters 4, 5, 6 ,7 ,8, 9, 11 and 20, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS included or
incorporated by reference in the Form 10-K and the Registration Statements, and the use of any information derived, summarized, quoted or
referenced from the Chapters 4, 5, 6 ,7 ,8, 9, 11 and 20, and the relevant portions of Chapters 1, 22, 23, 24 and 25 of the TRS, or portions thereof, that
were prepared by us, that we supervised the preparation of, and/or that were reviewed and approved by us, that is included or incorporated by
reference in the Form 10-K and the Registration Statements.
Dated: February 23, 2022
By: /s/ Signed “Resource Development Associates Inc.”
Name: Resource Development Associates Inc.
I, Karl L. Hanneman, certify that:
1. I have reviewed this Annual Report on Form 10-K of International Tower Hill Mines Ltd.;
CERTIFICATION
EXHIBIT 31.1
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Date: March 9, 2022
By:
/s/ Karl L. Hanneman
Karl L. Hanneman
Chief Executive Officer
(Principal Executive Officer)
I, David Cross, certify that:
1. I have reviewed this Annual Report on Form 10-K of International Tower Hill Mines Ltd.;
CERTIFICATIONS
XHIBIT 31.2
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Date: March 9, 2022
By:
/s/ David Cross
David Cross
Chief Financial Officer
(Principal Financial and Accounting Officer)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
EXHIBIT 32.1
In connection with the Annual Report on Form 10-K of International Tower Hill Mines Ltd. (the “Company”), for the period ended December 31, 2021, as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), I, Karl L. Hanneman, Chief Executive Officer of the Company, hereby certify pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
Date: March 9, 2022
By:
/s/ Karl L. Hanneman
Karl L. Hanneman
Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
EXHIBIT 32.2
In connection with the Annual Report on Form 10-K of International Tower Hill Mines Ltd. (the “Company”), for the period ended December 31, 2021, as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Cross, Chief Financial Officer for the Company, hereby certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
Date: March 9, 2022
By:
/s/ David Cross
David Cross
Chief Financial Officer
(Principal Financial and Accounting Officer)
Exhibit 96.1
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
DATE AND SIGNATURE PAGE
This report is effective as of the 29th day of October 2021 and is current as of December 31, 2021 for S-K 1300 purposes:
“Original signed on file”
BBA USA Inc.
“Original signed on file”
NewFields Mining & Design & Technical Services, LLC
“Original signed on file”
JDS Energy & Mining Inc.
“Original signed on file”
Resource Development Associates Inc.
February 23, 2022
Date
February 23, 2022
Date
February 23, 2022
Date
February 23, 2022
Date
FEBRUARY 2022
BBA Document No.: 3661012-000000-40-ERA-0002-R00
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
TABLE OF CONTENTS
1.
Executive Summary
1.1 Introduction
1.2 Contributors
1.3 Key Project Outcomes
1.4 Property Description, Location and Access
1.5 Land Tenure
1.6 Property History
1.7 Mineralization
1.8 Mineral Processing and Metallurgical Testing
1.9 Mineral Resource Estimate
1.10 Mineral Reserve Estimate
1.11 Mining Methods
1.12 Recovery Methods
1.13 Local Resources and Project Infrastructure
1.13.1 Local Resources
1.13.2 Project Infrastructure
1.14 Environmental and Permitting
1.15 Socioeconomic Conditions
1.16 Capital Cost and Operating Cost Estimates
1.16.1 Capital Costs
1.16.2 Operating Costs
1.17 Project Economics
1.18 Project Schedule
1.19 Interpretations and Conclusions
1.20 Recommendations
2.
Introduction
2.1 Overview
2.2 Basis of the Technical Report Summary
2.3 Study Contributors
2.4 Report Responsibility
2.5 Personal Inspection of the Livengood Property
2.6 Effective Dates and Declaration
2.7 Sources of Information
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
2.7.1 General
2.7.2 BBA
2.7.3 JDS
2.7.4 NewFields
2.8 Currency, Units of Measure, and Calculations
2.9 Important Notice
2.10 Acknowledgements
3.
Property Description and Location
3.1 Property Description
3.1.1 100% Owned Patented Mining Claims
3.1.2 100% Owned State of Alaska Mining Claims
3.1.3 100% Owned Federal Unpatented Placer Mining Claims
3.1.4 100% Owned by Livengood Placers, Inc.
3.1.5 Leased Property
3.1.6 Patented Mining Claims (Undivided Interests Less Than 100%)
3.1.7 Other Land Obligations
3.1.8 Permits
3.1.9 Environmental Liabilities
3.2 Location
4.
Accessibility, Climate, Local Resources, Infrastructure and Physiography
4.1 Accessibility
4.2 Climate
4.3 Local Resources and Infrastructure
4.3.1 Local Resources
4.3.2 Infrastructure
4.4 Project Area
4.5 Physiography
History
5.1 General History
Geological Setting and Mineralization and Deposit
6.1 Geological Setting and Mineralization
6.1.1 Regional Geology
6.1.2 Mineralization and Alteration
6.1.3 Massive Stibnite Veins
6.1.4 Antimony Mineralization Halo
5.
6.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
6.2 Deposit
7.
Exploration
7.1 Exploration History
7.2 Drilling
7.2.1 Reverse Circulation vs Core Drilling
7.2.2 Resource Verification Drilling
8.
Sample Preparation, Assaying and Security
8.1 Sample Collection, Procedures and Security
8.2 Lab Procedures
8.3 QA/QC Procedures and Results
8.4 Data Collection, Entry and Maintenance
9.
Data Verification
10. Mineral Processing and Metallurgical Testing
10.1 Introduction
10.2 FS – Sample Selection and Preparation
10.3 FS – Mineralogy and Gold Deportment Study
10.4 Comminution Testing
10.4.1 FS – Comminution Testing
10.4.2 2017 PFS – Comminution Testing
10.4.3 Testwork Summary for Crushing and Grinding Circuit Design
10.4.4 Project Throughput Estimation
10.4.5 Comminution Circuit Simulations and Design Summary
10.5 Metallurgical Testwork
10.5.1 FS – Metallurgical Testwork
10.5.2 FS – Optimization Test Program
10.5.3 FS – Variability Test Program
10.5.4 FS – Solid / Liquid Separation Testwork
10.5.5 FS – Cyanide Detoxification Tests
10.5.6 2017 PFS – Metallurgical Testwork
10.5.7 2017 PFS – Continuous Testwork
10.5.8 2017 PFS – Phase 7 - Assay Procedures and Water Source Testing
10.5.9 2017 PFS – Phase 8 - Grind, Recovery, Gravity, Flotation Testing
10.5.10 2017 PFS – Phase 9 - SGS and FLS-Curtin University Test Program
10.5.11 2017 PFS – Phase 10 - Stirred Tank Reactor (STR) Leach Tests
10.5.12 2021 PFS – Metallurgical Testwork
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
10.5.13 2021 PFS – Phase 9a - Cyanide Leach Testing
10.5.14 2021 PFS – Phase 9b - Gravity, Grind, Leaching, STR and Flotation Testing
10.5.15 2021 PFS – Phase 11
10.5.16 2021 PFS – Phase 12
10.5.17 2021 PFS – Phase 13
10.6 Recovery Equations
10.6.1 2017 PFS Recovery Equations – Grind Sizes of 90 µm and 180 µm
10.6.2 2021 PFS Recovery Equations – Grind Size of 50-250 µm
10.7 Flowsheet Development
10.7.1 2017 PFS Comparative Studies
10.7.2 2021 PFS Comparative Study
10.7.3 Flowsheet Development Summary
10.8 Opportunities for Further Investigation
11. Mineral Resource Estimates
11.1 Mineral Resource Estimation Methodology
11.2 Data Used
11.3 Data Analysis
11.4 Grade Capping – Handling of Outliers
11.5 Compositing
11.6 Declustering
11.7 Contact Profile Analysis
11.8 Anisotropy
11.9 Block Model
11.10 Grade Estimation
11.11 Model Validation
11.12 Resource Classification
11.13 Qualified Person Opinion – Further Work
11.14 Mineral Resource Summary
11.15 Grade Sensitivity Analysis
11.16 Sensitivity of Mineralization to Gold Price
12. Mineral Reserve Estimates
12.1 Introduction
12.2 General Parameters Used to Estimate the Mineral Reserves
12.2.1 Topographical Data
12.2.2 Mineral Resource Block Model
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12.2.3 Bulk Density
12.2.4 Moisture Content
12.2.5 Swell Factor
12.3 Modifying Factors That Affect the Mineral Reserves
12.3.1 Mine Dilution
12.3.2 Open Pit Optimization
12.3.3 Open Pit Design
13. Mining Methods
13.1 Introduction
13.1.1 Geotechnical Pit Slope Parameters
13.1.2 Hydrogeology
13.2 Phase Designs
13.2.1 Starter Pit
13.2.2 Phase Design Results
13.3 Waste Rock Storage Facility and Stockpile Designs
13.3.1 Growth Media Stockpiles
13.3.2 Overburden Stockpile
13.3.3 Waste Rock Storage Facility
13.3.4 Low Grade Ore Stockpile
13.3.5 Emergency Ore Stockpile
13.3.6 Acid Rock Drainage
13.4 Mine Production Plan
13.5 Mine Equipment Fleet
13.5.1 Operating Schedule
13.5.2 Equipment Utilization Model
13.5.3 Drilling and Blasting
13.5.4 Loading
13.5.5 Hauling
13.5.6 Auxiliary Equipment
13.5.7 Mine Dispatch System
13.5.8 Mine Dewatering
13.6 Mine Workforce
14. Recovery Methods
14.1 Introduction
14.2 Process Plant Production Schedule
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
14.3 Conceptual Process Flow Diagram
14.4 Plant Operating Design Parameters
14.5 Process Plant Facilities Description
14.5.1 Primary Crushing
14.5.2 Crushed Ore Stockpile
14.5.3 Secondary Crushing (Pre-Crushing)
14.5.4 Grinding and Pebble Crushing
14.5.5 Gravity and Intensive Leaching
14.5.6 Carbon in Leach
14.5.7 Adsorption, Desorption and Recovery (ADR)
14.5.8 Pre-Detox Thickening and Cyanide Detoxification
14.6 Consumables
14.7 Ancillary Facilities
14.8 Process Plant Controls
14.9 Process Water
14.10 Energy Requirements
14.11 Process Plant Arrangement
14.12 Process Plant Personnel
15. Project Infrastructure
15.1 Introduction
15.2 General Site Arrangement
15.3 Power Demand
15.4 Power Supply
15.4.1 O’Connor Creek Substation
15.4.2 GVEA Transmission System Upgrades
15.4.3 230 kV Transmission Line
15.5 Site Electrical Distribution
15.5.1 Emergency Power
15.6 Site Access
15.7 Site Roads
15.7.1 Light Vehicle Roads
15.7.2 Mine Haul Roads
15.8 Explosives Storage Facilities
15.9 Process Plant
15.10 Administration and Mine Services Facility
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Livengood Gold Project Pre-feasibility Study
15.10.1 Lube Storage and Distribution
15.10.2 Warehouse and Storage
15.10.3 Mechanical Workshop
15.10.4 Administration Offices
15.10.5 Employee Dry
15.11 Other Structures
15.12 Communications / Information Technology (IT)
15.13 Fire Protection
15.14 Fresh Water
15.15 Construction Camp
15.16 Personnel Transportation
15.17 Fairbanks Infrastructure
15.17.1 Integrated Remote Operation Centre (IROC)
15.18 Waste Rock Storage Facility (WRSF) and Stockpiles
15.18.1 Growth Media Stockpiles
15.18.2 Overburden Stockpile
15.18.3 Waste Rock Storage Facility (WRSF)
15.18.4 Low Grade Ore Stockpile
15.18.5 Emergency Ore Stockpile
15.19 TMF and Water Management
15.19.1 Tailings Management Facility
15.19.2 Water Management
16. Market Studies and Contracts
16.1 Introduction
16.2 Market Studies
16.3 Gold Price Projections
16.4 Contracts
17. Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups
17.1 Environmental
17.1.1 Historical Project Activities and Permitting
17.1.2 Baseline Studies
17.1.3 Environmental Management Strategies
17.2 Closure Plan
17.2.1 Closure Activities
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Livengood Gold Project Pre-feasibility Study
17.2.2 Post Closure Activities
17.3 Permitting
17.3.1 Project Permitting Requirements
17.3.2 Status of Permit Applications
17.4 Requirements for Performance or Reclamation Bonds
17.5 Mine Closure Requirements and Costs
17.6 Socioeconomic Conditions
17.6.1 Regional Economy
17.6.2 Recreational and Subsistence Resources
17.6.3 Socioeconomic and Project Consequences
17.6.4 Support Services
17.6.5 Employment and Training
18. Capital and Operating Costs
18.1 Capital Cost Summary and Basis
18.1.1 Accuracy
18.1.2 Assumptions
18.1.3 Exclusions
18.2 Initial Capital Costs
18.2.1 Open Pit Mine
18.2.2 Mine Development
18.2.3 Mining Equipment
18.2.4 Power Supply
18.2.5 Process Plant
18.2.6 Infrastructure Facilities
18.2.7 Indirect and Owner’s Costs
18.2.8 Contingency
18.3 Sustaining Capital Costs
18.4 Operating Cost Summary and Basis
18.4.1 Electricity, Diesel and LNG
18.4.2 Project Personnel
18.4.3 Open Pit Mine
18.4.4 Process Plant
18.4.5 General and Administration (G&A)
18.5 Royalties
18.6 Transportation and Refining
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Livengood Gold Project Pre-feasibility Study
19. Economic Analysis
19.1 Introduction
19.2 Assumptions and Basis
19.3 Royalties
19.4 Third Party Smelting, Refining and Transportation
19.5 Taxes
19.6 Closure Costs
19.7 Working Capital
19.8 Gold Production
19.9 Operating, All-in Sustaining, and All-in Costs
19.10 Financial Analysis
19.11 Sensitivity Analysis
20. Adjacent Properties
20.1 Producing Properties
20.2 Exploration Projects
21. Other Relevant Data and Information
21.1 Execution Plan and Schedule
21.2 Logistics and Transportation
21.2.1 Introduction
21.2.2 Freight Options Considered
21.2.3 Recommended Base Routes
22.
Interpretation and Conclusions
22.1 Overview
22.2 PFS Improvements
22.3 Key Outcomes
22.4 Indicative Economics
22.5 Project Risks and Opportunities
23. Recommendations
23.1 Summary
23.2 Sampling Program to Obtain Fresh Core
23.3 Metallurgical Testwork
23.4 Feasibility Study
23.5 Environment
24. References
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
24.1 General Project
24.2 Geology and Resources
24.3 Mining
24.4 Mineral Processing and Metallurgy
24.5 Infrastructure
24.6 TMF and Water Management
25. Reliance on Information Provided by Registrant
APPENDICES
Appendix A: Properties and Claims
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
LIST OF TABLES
Table 1-1: PFS contributors
Table 1-2: Average gold recovery (Gravity+CIL) estimated for each rock type
Table 1-3: Constraining parameters used for the Livengood Gold Project
Table 1-4: Livengood Gold Project mineral resource estimate (exclusive of mineral reserves)
Table 1-5: Livengood Gold Project mineral resource estimate (inclusive of mineral reserves)
Table 1-6: Livengood Gold Project Mineral Reserves, October 22, 2021 – BBA USA Inc.
Table 1-7: Environmental baseline studies (2008-2021)
Table 1-8: Initial capital and sustaining capital costs by major area
Table 1-9: Total operating cost breakdown (LOM average)
Table 1-10: Financial model inputs
Table 1-11: Summary of pre-feasibility study results
Table 1-12: Key project activities (preliminary)
Table 2-1: Primary PFS contributors
Table 2-2: Chapter/Section responsibility by Consulting Firm
Table 7-1: Comparison of modeled gold grades between core and RC drilling by stratigraphic unit
Table 7-2: Calculated resources for Area 50 by drill sample type
Table 7-3: Calculated resources for the Core Cross, Sunshine Cross and Area 50
Table 10-1: Livengood gold ore sample selection weights (kg) used in the FS test programs
Table 10-2: Definition of Livengood rock types (FS)
Table 10-3: Comminution data (FS)
Table 10-4: Average JK drop weight parameters by rock type (FS)
Table 10-5: SMC testwork statistical analysis (2017 PFS)
Table 10-6: Comminution test statistical analysis by rock type
Table 10-7: Comminution test statistics using all FS and 2017 PFS testwork data
Table 10-8: Grinding circuit design values
Table 10-9: SAG and ball mill design criteria for simulations
Table 10-10: Throughput estimations for each scenario in metric tons per day (mt/d)
Table 10-11: Specific energy calculations for each scenario at design (80th percentile) A×b
Table 10-12: Comminution simulations summary
Table 10-13: Optimization composites used for testwork
Table 10-14: Comparison of gravity test results
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Livengood Gold Project Pre-feasibility Study
Table 10-15: Gold recovery resulting from the combination of gravity, flotation and CIL (FS)
Table 10-16: Gold recovery resulting from whole ore leaching (FS)
Table 10-17: Overall gold recovery of optimization samples for both process options (FS)
Table 10-18: Variability sample gold recovery (FS)
Table 10-19: Gold head assay
Table 10-20: Composite naming and weights for Phase 9 (2017 PFS) test program.
Table 10-21: ICP Analysis of the CIL feed from the continuous testwork for each rock type
Table 10-22: Comparison of cyanide addition in Phase 9 versus Continuous
Table 10-23: Intensive leach results
Table 10-24: Kinetic results from Phase 9
Table 10-25: Phase 10 results (2017 PFS)
Table 10-26: Reproducibility of cyanidation tests on the Livengood Gold Project
Table 10-27: Test conditions (2021 PFS – Phase 9a)
Table 10-28: Test results for all Rock Types (2021 PFS – Phase 9a)
Table 10-29: Average gold gravity recovery results for each rock type
Table 10-30: Phase 9 and Phase 9b recovery results comparison
Table 10-31: Result summary of the second pass gravity test at 180 µm
Table 10-32: Result summary of the second pass gravity test at 135 µm
Table 10-33: Result summary of the second pass gravity test at 90 µm
Table 10-34: Flotation testwork results
Table 10-35: Overall recovery comparison
Table 10-36: Composition of blend composites
Table 10-37: Effect of ore blend on CIL recovery, leach residue, flotation recovery and mass pull
Table 10-38: STR leach matrix conditions
Table 10-39: Average STR testwork results
Table 10-40: Knelson concentrate intensive leach results
Table 10-41: Knelson tailings CIL results
Table 10-42: Composites characteristics
Table 10-43: Gravity separation results
Table 10-44: 10kg Bulk results from Phase 11
Table 10-45: Composites characteristics
Table 10-46: Gravity separation results
Table 10-47: Average CIL testwork results
Table 10-48: Flotation testwork results
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Table 10-49: Flotation concentrate leach results
Table 10-50: Overall recovery comparison when using POX
Table 10-51: Enhanced gravity followed by POX/CIL results
Table 10-52: Index and Strength testing results (all samples)
Table 10-53: Permeability testing (select samples)
Table 10-54: Massive Stibnite shell recovery estimation
Table 10-55: Average gold recovery estimated for each rock type
Table 10-56: Average gold recovery estimated for each rock type (2021 PFS)
Table 10-57: Summary of recovery results from different testwork programs
Table 10-58: Simulated gold recoveries for the WOL vs Flotation trade-off
Table 10-59: Annual operating cost comparison
Table 11-1: Historical drilling and sampling
Table 11-2: THM resource drilling and sampling
Table 11-3: Density determinations
Table 11-4: Au assay statistics for Livengood
Table 11-5: Capping statistics
Table 11-6: Model extents
Table 11-7: ID3 Estimation Parameters
Table 11-8: Livengood deposit massive stibnite grade estimates
Table 11-9: Comparison of ID3 to NN estimates to evaluate for biases in the 2021 MRE
Table 11-10 Sources and Degree of Uncertainty
Table 11-11: Pit constraining parameters used for the Livengood Gold Project
Table 11-12: Livengood Gold Project mineral resource estimate (exclusive of mineral reserves)
Table 11-13: Livengood Gold Project mineral resource estimate (inclusive of mineral reserves)
Table 11-14: Sensitivity of block model to cut-off grade
Table 11-15: Sensitivity of mineralization inventory contained in pit shells
Table 12-1: Livengood Project mineral reserves (October 22, 2021- BBA USA Inc.)
Table 12-2: Lowest grades processed
Table 12-3: Block model specifications
Table 12-4: Block model item list
Table 12-5: Rock type numbering
Table 12-6: Bulk dry densities
Table 12-7: Processing throughput capacities by rock type
Table 12-8: Fixed costs by area
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Table 12-9: Pit optimization cost inputs ($/mt)
Table 12-10: Revenue parameters
Table 12-11: Mill recoveries (OSX = 1)
Table 12-12: Mill recoveries (OSX = 2)
Table 12-13: Mill recoveries (OSX = 3)
Table 12-14: Average mill recoveries by rock type (%) (1)
Table 12-15: Pit optimization results
Table 12-16: Distributions of RMR (Bienawski, 1989) per engineering unit
Table 12-17: Distributions of UCS per engineering unit
Table 12-18: Overall slope stability analysis results for the ultimate pit
Table 12-19: Pit slope design recommendations for ultimate pit
Table 12-20: Pit wall configuration
Table 13-1: Mineral reserves by phase
Table 13-2: WRSF slope configuration
Table 13-3: Mine production schedule
Table 13-4: Mill feed by rock type
Table 13-5: Mine equipment fleet
Table 13-6: Mine equipment KPIs
Table 13-7: Fixed drilling time per hole
Table 13-8: Blast patterns (ore)
Table 13-9: Blast patterns (waste)
Table 13-10: Mine workforce
Table 14-1: General process design criteria
Table 14-2: Reagents and area of use
Table 14-3: Grinding media and area of use
Table 14-4: Process plant power demand by area
Table 14-5: Process plant salaried manpower
Table 14-6: Process plant hourly manpower
Table 15-1: Estimated total project power demand
Table 16-1: Refining and pricing assumptions
Table 17-1: Environmental baseline studies (2008-2016)
Table 17-2: Summary of environmental baseline studies
Table 17-3: Project permit requirements
Table 18-1: Capital cost estimate contributors
FEBRUARY 2022
12-8
12-9
12-10
12-10
12-10
12-11
12-13
12-16
12-16
12-18
12-18
12-20
13-2
13-8
13-11
13-12
13-18
13-20
13-21
13-22
13-22
13-25
14-3
14-10
14-11
14-13
14-15
14-16
15-3
16-2
17-1
17-2
17-7
18-1
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Table 18-2: Initial capital and sustaining capital costs by major area
Table 18-3: Open pit mine initial capital costs
Table 18-4: Mining equipment initial capital costs
Table 18-5: Power supply capital costs by major area
Table 18-6: Process plant capital costs by major area
Table 18-7: Infrastructure capital costs by area
Table 18-8: Indirect and Owner’s costs by area
Table 18-9: Contingency by major area
Table 18-10: Sustaining capital costs by major area
Table 18-11: Operating cost estimate contributors
Table 18-12: Total operating cost breakdown (LOM average)
Table 18-13: Project peak personnel (Year 6)
Table 18-14: Average annual and life of mine operating costs – by activity
Table 18-15: Average annual and life of mine operating costs – by consumable
Table 18-16: Average annual and life of mine operating costs – process plant
Table 18-17: Average LOM media wear and consumption rates
Table 18-18: Average annual and life of mine operating costs – general and administration
Table 18-19: G&A employee list
Table 19-1: Financial model criteria
Table 19-2: Operating, All-in Sustaining, and All-in costs (pre-tax)
Table 19-3: Financial analysis summary (pre-tax and after-tax)
Table 19-4: Simplified cash flow table
Table 19-5: Project sensitivity analysis – after-tax IRR and NPV
Table 21-1: Key project activities (preliminary)
Table 21-2: Preferred base route legs and distances
Table 22-1: Project risks (preliminary risk assessment)
Table 22-2: Project opportunities (preliminary opportunity assessment)
Table 23-1: Cost estimate for feasibility study recommendations
FEBRUARY 2022
18-2
18-3
18-4
18-5
18-5
18-7
18-8
18-9
18-9
18-10
18-11
18-13
18-14
18-14
18-16
18-16
18-19
18-20
19-2
19-6
19-7
19-8
19-10
21-1
21-5
22-4
22-7
23-1
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LIST OF FIGURES
Figure 1-1: Project location map
Figure 1-2: Map illustrating the company’s Livengood Gold Project land holdings
Figure 1-3: Simplified process flow diagram
Figure 1-4: Gold production schedule (oz/year)
Figure 1-5 After-tax sensitivity analysis for project net present value (NPV @ 5% discount rate)
Figure 1-6 After-tax sensitivity analysis for project internal rate of return (IRR %)
Figure 3-1: Map illustrating the company’s Livengood Gold Project land holdings
Figure 3-2: Project location map
Figure 6-1: Terrane map of Alaska showing Livengood Terrane (LG: red arrow)
Figure 6-2: Generalized geologic map of the Money Knob area based on geologic work by THM
Figure 6-3: Cross section through the deposit
Figure 6-4: Caption 3D view of MSV and >2,500 ppm Sb assays
Figure 6-5: Caption 3D view of MSV and >2,500 ppm Sb assays
Figure 6-6: 3D view of the Sb_100ppm grade shell generated from preferential linear alignments
Figure 6-7: 3D view of the Sb_100 ppm grade shell
Figure 6-8: Cross section view of the Sb_100 ppm grade shell (meshed solid)
Figure 7-1: Plot of gold values in soil samples
Figure 7-2: Distribution of resource / delineation drill holes in Money Knob area over time
Figure 7-3: Map showing location of areas of detailed drilling
Figure 7-4: Models for RC, Whole PQ, and Sawn HQ from Area 50
Figure 10-1: FS Design comminution sample preparation flowsheet (SGS report)
Figure 10-2: FS Variability comminution sample preparation flowsheet
Figure 10-3: Cumulative A × b (DWT + SMC) results for the Livengood Gold Project
Figure 10-4: Cumulative BWi results for the Livengood Gold Project
Figure 10-5: SABC with pre-crushing (secondary crusher) circuit configuration
Figure 10-6: Gold gravity concentration grind-recovery relationships
Figure 10-7: Effect of primary grind on gold rougher flotation test Kinetics
Figure 10-8: Flotation concentrates CIL test gold leach kinetics for different rock types (FS)
Figure 10-9: Effect of grind on gold extraction kinetics for RT4, RT5, RT6 and RT9 (FS)
Figure 10-10: Mozley gravity tailings CIL test kinetics for different rock types (FS)
Figure 10-11: Gold gravity recovery box plots (FS)
FEBRUARY 2022
1-5
1-6
1-17
1-18
1-28
1-28
3-3
3-7
6-2
6-3
6-4
6-5
6-5
6-6
6-7
6-8
7-1
7-2
7-5
7-6
10-4
10-4
10-11
10-11
10-12
10-21
10-23
10-24
10-26
10-27
10-31
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Figure 10-12: Gold in Residues from CIL testwork vs P80 for each rock type (FS)
Figure 10-13: 2017 PFS (Phase 9) testwork outline
Figure 10-14: 2017 PFS (Phase 9) gravity recovery for all tock types
Figure 10-15: Livengood GRG results vs FLS/Curtin database (source Curtin report)
Figure 10-16: Livengood GRG results vs FLS/Curtin database (source Curtin report)
Figure 10-17: Livengood GRG results vs FLS/Curtin database (source Curtin report)
Figure 10-18: Livengood GRG results vs FLS/Curtin database (source Curtin report)
Figure 10-19: Livengood GRG results vs FLS/Curtin database (source Curtin report)
Figure 10-20: Intensive leach of Mozley concentrate
Figure 10-21: 2017 PFS (Phase 9) - Leach kinetics analyses according to rock type
Figure 10-22: 2021 PFS (Phase 9a) testwork outline
Figure 10-23: RT4 Average CIL and CIP residue grades at a P80 of 112 µm
Figure 10-24: RT5 Average CIL and CIP residue grades at a P80 of 111 µm
Figure 10-25: RT6 Average CIL and CIP residue grades at a P80 of 99 µm
Figure 10-26: RT7 Average CIL and CIP residue grades at a P80 of 120 µm
Figure 10-27: RT9 Average CIL and CIP residue grades at a P80 of 113 µm
Figure 10-28: Leach kinetics results for RT4, RT5, RT6, RT7 and RT9
Figure 10-29: % Au gain preg-robbing level
Figure 10-30: 2021 PFS (Phase 9b) testwork outline
Figure 10-31: Leach kinetics of the Knelson concentrate
Figure 10-32: CIL residue grade according to grind size
Figure 10-33: Deportment of gold by leach form and carrier
Figure 10-34: Diagnostic leach result distribution
Figure 10-35: Leach kinetics 16 vs 24 hours
Figure 10-36: 2021 PFS (Phase 11) testwork outline
Figure 10-37: Gravity recovery vs calculated head by rock type
Figure 10-38: Overall gold recovery according to location inside or outside the 100 ppm Sb shell
Figure 10-39: Overall gold recovery according to grind size
Figure 10-40: Gravity recovery vs calculated head by rock type
Figure 10-41: Overall gold recovery according to location inside or outside the 100 ppm Sb shell
Figure 10-42: Overall gold recovery according to calculated head grade
Figure 10-43: 2021 PFS (Phase 13) testwork outline
Figure 10-44: Overall recovery related to the antimony concentration
Figure 10-45: 2017 PFS (Phase 9) - RT7 gold recovery vs head grade
FEBRUARY 2022
10-32
10-39
10-41
10-42
10-43
10-43
10-44
10-44
10-46
10-49
10-54
10-56
10-57
10-57
10-58
10-58
10-59
10-60
10-62
10-64
10-66
10-71
10-72
10-75
10-78
10-80
10-83
10-85
10-89
10-92
10-94
10-103
10-104
10-106
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Figure 10-46:2017 PFS (Phase 9) - RT9 gold recovery vs head grade
Figure 10-47: 3D representation of the overall Au recovery versus Au grade and P80 (2021 PFS)
Figure 11-1: Uncapped gold grade distribution by stratigraphic unit
Figure 11-2: Capped quartile statistics
Figure 11-3: Capped composite statistics
Figure 11-4: Cell declustering chart demonstrates sample clustering is not a factor for the deposit
Figure 11-5: Contact profile of RT6 and RT7. Grades converge at the contact. Soft boundary
Figure 11-6: RT6 and RT9. Grades converge at contact. Soft boundary
Figure 11-7: RT7 and RT9 Grades converge at the contact. Soft boundary
Figure 11-8: Cambrian stratigraphy search ellipse
Figure 11-9: Upper Sediments North search ellipse
Figure 11-10: Type 679 search ellipse
Figure 11-11: Section A-B looking west. Geologic models used to flag the Livengood block model
Figure 11-12: Intersection of massive stibnite veins on cross section A-B
Figure 11-13: Cross section A-B showing the 100 ppm antimony halo for Livengood
Figure 11-14: Visual comparison of composite database with estimated Au grades for Section A-B
Figure 11-15: Scattergram comparing global estimated Au grade to composite database Au values
Figure 11-16: Swath plot through Section A-B
Figure 11-17: Livengood grade vs tonnage relationship
Figure 12-1: Pit optimization results
Figure 12-2: Location of geotechnical drill holes
Figure 12-3: Critical slope stability sections for the (2013) ultimate pit
Figure 12-4: Pit Slope Design Sectors for the Ultimate Pit
Figure 12-5: Haul road configuration
Figure 12-6: Final bench access
Figure 12-7: Open pit design
Figure 13-1: Phase designs
Figure 13-2: Phase 1 design
Figure 13-3: Phase 2 design
Figure 13-4: Phase 3 design
Figure 13-5: Phase 4 design
Figure 13-6: Phase 5 design
Figure 13-7: Phase 6 design
Figure 13-8: Gold production
FEBRUARY 2022
10-107
10-111
11-4
11-6
11-7
11-8
11-9
11-9
11-10
11-11
11-11
11-12
11-13
11-14
11-15
11-19
11-20
11-21
11-28
12-12
12-15
12-17
12-19
12-21
12-22
12-23
13-3
13-4
13-4
13-5
13-5
13-6
13-6
13-13
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Figure 13-9: Mill feed
Figure 13-10: Material mined (ROM)
Figure 13-11: Low grade ore stockpile balance
Figure 13-12: Massive stibnite tonnages milled
Figure 13-13: End of preproduction
Figure 13-14: End of Year 05
Figure 13-15: End of Year 10
Figure 13-16: End of Year 15
Figure 13-17: Equipment utilization model
Figure 14-1: Conceptual process block flow diagram
Figure 14-2: Conceptual process flowsheet
Figure 14-3: Process plant general arrangement
Figure 15-1: Livengood property – conceptual infrastructure arrangement drawing
Figure 16-1: Gold spot price on a monthly basis since November 2018
Figure 18-1: Annual operating cash costs ($/oz)
Figure 18-2: Operations Personnel
Figure 19-1: Annual gold production schedule
Figure 19-2: Life-of-mine cash flow projection (pre-tax and after-tax, discount rate: 5%)
Figure 19-3: After-tax sensitivity analysis for project net present value (NPV @ 5% discount rate)
Figure 19-4: After-tax sensitivity analysis for project internal rate of return (IRR %)
Figure 21-1: Summary project execution schedule
Figure 21-2: Primary route, Livengood logistics plan (Google Earth)
FEBRUARY 2022
13-13
13-14
13-14
13-15
13-16
13-16
13-17
13-17
13-19
14-2
14-6
14-14
15-1
16-2
18-11
18-12
19-5
19-9
19-10
19-10
21-3
21-6
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Abbreviation
Description
TABLE OF ABBREVIATIONS
AARL
ADR
Ag
AGA
Ai
AISC
AMHT
amsl
ANFO
Anglo American Research Laboratories
Adsorption, desorption and reactivation
Silver
AngloGold Ashanti
Abrasion index
all-in sustaining costs
Alaska Mental Health Trust
above mean sea level
Ammonium Nitrate Fuel Oil
APDES
Alaska Pollution Discharge Elimination System
APR
ARD
Au
B
BBA
BWi
C
CaO
CCTV
CEQ
CIL
CIM
CIP
CN
CND
CNT
CNWAD
CSS
Cu
CuSO4
CWi
DEF
DOT
DTH
DWT
EC
EIS
Annual Percentage Rate
Acid Rock Drainage
Gold
Billion
BBA Inc.
Bond Work index
Carbon
Calcium oxide (quicklime)
closed-circuit television
Council of Environmental Quality
Carbon in leach
Canadian Institute of Mining
Carbon in pulp
Cyanide
Cyanide detoxification
Cyanide (total)
Cyanide (weak acid dissociable)
Contact Support Services
Copper
Copper sulphate
Crusher Work index
Diesel exhaust fluid
Department of Transportation
down-the-hole
JK Drop Weight Test
Engineer’s compliance
Environmental Impact Study
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Abbreviation
Description
TABLE OF ABBREVIATIONS
EO
EPA
EPCM
EPS
et al.
FNSB
FOB
FS
G&A
GCL
GOH
GRG
GVEA
HCI
Hg
ICP
ID2
ID3
IDW
ILR
IROC
IRR
IT
ITH
JDS
K
KPI(s)
LLC
LLDPE
LNG
LOM
LPI
M
MACRS
ML
MMBTU
MPSO
Enterprise Optimization
United States Environmental Protection Agency
Engineering, Procurement, Construction Management
Electric Power Systems, Inc.
and others
Fairbanks North Star Borough
Freight on board
Feasibility Study
General and Administration
Geosynthetic clay liner
Gross operating hours
Gravity recoverable gold
Golden Valley Electrical Association
Hydrochloric acid
mercury
Inductively coupled plasma
Inverse Distance square
Inverse Distance cube
Inverse Distance Weighting
Intensive Leach Reactor
Integrated remote operating center
Internal Rate of Return
Information Technology
International Tower Hill Mines, Ltd.
JDS Energy and Mining Inc.
Thousand
Key performance indictors
Limited Liability Company
Linear low density polyethylene
Liquefied natural gas
Life of mine
Livengood Placers, Inc.
Million
Modified Accelerated Cost Recovery System
Metal leaching
Metric Million British thermal units
MinePlan Schedule Optimizer
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Livengood Gold Project Pre-feasibility Study
Abbreviation
Description
TABLE OF ABBREVIATIONS
MS
MSV
MWMP
Na2S2O5
NaCN
NAD
NaOH
NEPA
NewFields
NHPA
NN
no.
NOH
NPI
NPV
NSR
O2
OCS
OK
PAG
PbNO3
PEP
PFS
PLT(s)
POF
QA/QC
QP(s)
QSV
RC
RCM
RCRA
RDA
RMR
ROM
ROW
RT
RWi
Mineral survey
massive stibnite veins
Meteoric Water Mobility Potential
Sodium Metabisulfite
Sodium cyanide
North American Datum (Topographical Surveying)
Sodium hydroxide
National Environmental Policy Act
NewFields Mining Design & Technical Services, LLC
National Historic Preservation Act
Nearest neighbor
Number
Net operating hours
Net Profits Interest
Net Present Value
Net Smelter Return
Oxygen
O’Connor Creek Substation
Ordinary Kriging
Potentially Acid Generating
Lead nitrate
Project execution plan
Pre-feasibility Study
Point load test(s)
Probability of failure
Quality Assurance/Quality Control
Qualified Person(s)
Quartz-stibnite-vein
Reverse Circulation
Reliability-Centred Maintenance
Resource Conservation and Recovery Act
Resource Development Associates Inc.
Rock Mass Rating
Run of mine
Right of way
Rock type
Rod Work index
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Abbreviation
Description
TABLE OF ABBREVIATIONS
S
SABC
SAG
Sb
sg
SHPO
SMC
SO2
SPCC
SPI
SRIL
SRK
SVC
SWPPP
TAPS
TBC
THM
TMF
TRS
TSF
UCS
US
USD
USGS
UTM
VPSA
WOL
WRSF
XRF
YT
Sulfur
Comminution circuit consisting of a SAG mill, ball mill and pebble crusher
Semi-Autogenous Grinding
Antimony
Specific gravity
State Historic Preservation Office
SAG Mill Comminution
Sulfur dioxide
Spill Prevention, Control and Countermeasure Plan
SAG Power Index
SR International Logistics
SRK Consulting (Canada and US) Inc.
Static VAR Compensator
Storm Water Pollution Protection Plan
Trans-Alaska Pipeline
To be confirmed
Tower Hill Mines, Inc.
Tailings management facility
Technical Report Summary
Tailing storage facility
Uniaxial Compressive Strength
United States
United States dollars
United States Geological Survey
Universal Transverse Mercator Coordinate System
Vacuum pressure swing adsorption
Whole ore leach
Waste rock storage facility
X-ray Fluorescence
Yukon-Tanana
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TABLE OF ABBREVIATIONS – UNITS OF MEASUREMENT
Unit
$ or USD
$/mt
$/t
%
a
A
˚C
˚F
µm
cm
cm3
d
deg or o
F80
ft
ft2
g
g/g
g/L
g/mt
gal
gpm
h
ha
hp
Hz
in
k
kg
kg/m2
kg/mt
km
km/h
kW
kWh/mt
kWh/t
Description
United States dollar
Dollars per metric ton
Dollars per ton
Percent
Annum (year)
Ampere
Degrees Celsius
Degrees Fahrenheit
micron
centimeter
cubic centimeter
day (24 hours)
angular degree
80% passing - Feed
feet (12 inches)
square feet
gram
grams per gram
gram per Liter
grams per metric ton
gallon
(US) gallons per minute
hour (60 minutes)
hectare
horsepower
Hertz
inch
kips (1,000 pounds)
kilogram
kilograms per square meter
kilograms per metric ton
kilometer
kilometers per hour
kilowatt
kilowatt hour per metric ton
kilowatt hour per ton
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TABLE OF ABBREVIATIONS – UNITS OF MEASUREMENT
Unit
L
L/m
lb
lb/ft
lb/t
m
m2
m3
m3
m3/h
mesh
mi
mil
min
mm
mm
Mmt
mph
mt
Mt
mt/d
mt/h
MW
oz
oz/y
P100
P80
ppm
t
t/d
t/h
V
wt%
y
yd
yd3
Description
liter
liters per minute
pound
pounds per foot
pounds per ton
meter
square meter
cubic meter
cubic meter
cubic meters per hour
US Mesh
mile
one thousandth of an inch
minute (60 seconds)
millimeter
millimeter
Million metric ton
miles per hour
metric ton (1,000 kg)
Million ton
metric ton per day
metric ton per hour
Megawatt
Troy ounce
Troy ounces per year
100% passing - Product
80% passing - Product
parts per million
ton (2,000 lbs)
(short) ton per day
(short) ton per hour
Volt
weight percent
year (365 days)
yard (36 inches)
cubic yard
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1.
EXECUTIVE SUMMARY
1.1
Introduction
The Livengood Gold Project (herein also referred to as “the Project”) is a gold exploration project located 70 mi (113 km) northwest of Fairbanks, Alaska,
USA. The Project is in an active mining district that has been mined for gold since 1914.
This Technical Report Summary (the “TRS”) was prepared and compiled by BBA USA Inc. at the request of International Tower Hill Mines Ltd. (ITH)
through its wholly owned subsidiary Tower Hill Mines, Inc. (THM). The purpose of the TRS is to summarize the results of the Pre-feasibility Study (PFS)
for the Livengood gold deposit on the THM property. This TRS has been prepared in accordance with §§229.1300 through 229.1305 (subpart 229.1300 of
Regulation S-K). The TRS supports the ITH November 4, 2021 news release “International Tower Hill Mines Announces Pre-Feasibility Study Results on
13.6 Million Ounce Gold Resource” announcing the results of the study. This TRS also supports the mineral resource, mineral reserve and property
disclosures in ITH’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, in addition to the November 4, 2021 release.
The PFS and this TRS are based on an updated resource estimate, effective as of August 20, 2021, and has an optimized Project configuration of
65,000 t/d. The Project configuration in this TRS remains a conventional, owner-operated surface mine that will utilize large-scale mining equipment in a
blast/load/haul operation. Mill feed would be processed in a 65,000 t/d (59,000 mt/d) comminution circuit consisting of primary and secondary crushing,
wet grinding in a single semi-autogenous (SAG) mill and single ball mill, followed by a gravity gold circuit and a conventional carbon in leach (CIL) circuit.
As a result of the changes to the Project as summarized in this TRS, including differences in the mineral resource estimation methodology and changes to
the economic parameters applied to the geologic block model (gold price, recovery, CAPEX, and OPEX), all of which resulted in a change in the mineral
resources, the Project as evaluated in the 2017 PFS is no longer considered current and the 2017 PFS should therefore not be relied upon by investors.
This TRS assumes that the Livengood Gold Project will be constructed using imperial units. Therefore, to the maximum extent practicable, all design work
and equipment descriptions were completed and reported in imperial units, with metric units shown in parentheses. Every effort has been made to clearly
display the appropriate units being used throughout this TRS. However, it is important to note that both the Livengood Gold Project drill hole database and
the block model were originally created in metric units and have been consistently maintained in metric units. Therefore, some tables and figures in this
TRS may be presented in metric units only to minimize the risk of data unit conversion errors.
For financial modeling, ore tonnage is reported in short tons (t), with all costs reported in $/t.
Certain other testwork, such as comminution results and unconfined compressive strength tests, are reported in metric units.
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Livengood Gold Project Pre-feasibility Study
All monetary units are in United States dollars ($), unless otherwise specified. Costs are based on third quarter (Q3) 2021 dollars.
1.2
Contributors
The independent PFS was prepared through the collaboration of a number of industry-recognized consulting firms “Contributors”, including BBA USA Inc.
(“BBA”, Montreal, Quebec, Canada), NewFields Mining Design & Technical Services, LLC (“NewFields”, Lone Tree, Colorado, USA), JDS Energy and
Mining Inc. (“JDS”, Denver, Colorado, USA), and Resource Development Associates Inc. (“RDA”, Highlands Ranch, Colorado, USA). Qualified Persons
as defined in S-K 1300 guidelines from these firms provided resource estimates, design parameters and cost estimates for mine operations, process
facilities, major equipment selection, waste and tailings storage, reclamation, permitting, operating and capital expenditures. A summary of contributors to
the PFS is included in Table 1-1.
Table 1-1: PFS contributors
Consulting Firm
BBA USA Inc.
NewFields Mining Design & Technical Services, LLC
JDS Energy and Mining Inc.
Resource Development Associates Inc.
1.3
Key Project Outcomes
General overview of responsibilities
■ Mineral reserve estimation
■ Mine engineering
■ Mine CAPEX and OPEX
■ Mineral processing and metallurgical testing
■ Process engineering and process plant OPEX
■ Process plant and infrastructure CAPEX
■ G&A OPEX
■ Environmental Studies and Permitting
■ Financial model
■ Overall PFS TRS integration
■ Geotechnical engineering
■ Waste rock and water management
■ Tailings Management Facility (TMF) engineering and CAPEX
■ Mine pit wall slope stability
■ Geology
■ Drilling
■ Resource estimation.
The reader is advised that the results of the PFS summarized in this TRS are intended to provide an initial, high-level review of the proposed optimized
project configuration and revised design options. The PFS mine plan, execution plan and economic model include numerous assumptions. There is no
guarantee that the Project economics described herein will be achieved.
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The key outcomes of this PFS are the following:
■ The Livengood Gold Project Mineral Resource (exclusive of reserves) is estimated at 234.5 M Measured metric tons at an average grade of 0.53 g/mt
(3.99 Moz) and 40.01 M Indicated metric tons at an average grade of 0.49 g/mt (0.63 Moz), for a total (Measured and Indicated) of 274.5 M metric
tons at an average grade of 0.52 g/mt (4.62 Moz). Inferred Mineral resources total 16.0 M metric tons at an average grade of 0.40 g/mt (0.21 Moz).
■ The Livengood Gold Project Mineral Resource (inclusive of reserves) is estimated at 646.0 M Measured metric tons at an average grade of 0.60 g/mt
(12.48 Moz) and 58.5 M Indicated metric tons at an average grade of 0.61 g/mt (1.14 Moz), for a total (Measured and Indicated) of 704.5 M metric
tons at an average grade of 0.60 g/mt. Inferred Mineral resources total 16.0 M metric tons at an average grade of 0.40 g/mt (0.21 Moz).
■ Defined and estimated Proven Mineral Reserves of 411.5 M metric tons at an average grade of 0.64 g/mt (8.5 Moz contained) and Probable Mineral
Reserves of 18.5 M metric tons at an average grade of 0.86 g/mt (0.5 Moz contained), for a total of 430.1 M metric tons at an average grade of
0.65 g/mt (9.0 Moz contained). To access these mineral reserves, 496.1 M metric tons of overburden and waste rock must be mined, resulting in a
strip ratio of 1.15:1
■ The mine plan developed for the PFS provides sufficient ore to support an annual production rate of approximately 317,000 oz/y over an estimated
20.3-year mine life, producing a total of approximately 6.4 Moz of gold.
■ The material mined from the open pit peaks at 66 Mt (60 Mmt) per year and averages 57 Mt (52 Mmt). A total of 105 Mt (95 Mmt) of ore is sent to the
low-grade ore stockpile over the life of the mine, with an average gold grade of 0.38 g/mt. The maximum size of the low-grade ore stockpile is 88 Mt
(88 Mmt).
■ The peak mine fleet requirements have been estimated at 18 x 320 t haul trucks, 2 x 40 yd3 hydraulic shovels, 2 x 40 yd3 wheel loaders and 5-
production drills.
■ Metallurgical testwork has confirmed the preferred flowsheet consisting of primary crushing, secondary crushing, and a comminution circuit (SABC
configuration) producing a final grind size of 250 µm (P80), with gravity recovery followed by whole ore leaching of the gravity tailings. LOM gold
recovery is estimated to be 71.4% based on the rock types tested and mine plan.
■ The initial capital cost (-20% / +25% accuracy) of the open pit mine, 65,000 t/d (59,000 mt/d) process plant and general site infrastructure is estimated
at $1.93B, including a contingency of $220M.
■ LOM project sustaining capital costs total $658M, excluding reclamation costs of $317M.
■ The mining cost is estimated at $2.05/t mined, process plant operating cost is estimated at an average of $7.72/t ore processed, and general and
administrative costs of $1.35/t ore processed.
■ All-in sustaining cost of production of 1,171 $/oz over LOM, including sustaining capital and before reclamation expenses, royalties, mining, and
income taxes.
■ Base case ($1,680/oz) positive Project NPV of $45M at a 5% discount rate and an IRR of 5.3% after mining and income taxes. Payback period is
10.4 years.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
1.4
Property Description, Location and Access
The Livengood property is located approximately 70 mi (113 km) by road (47 mi (75 km) by air) northwest of Fairbanks, Alaska in the Tolovana Mining
District within the Tintina Gold Belt. The deposit area is centered near Money Knob, a local topographic high point. This feature and the adjoining ridge
lines are the probable lode gold source for the Livengood placer deposits that lie in the adjacent valleys. These placer deposits have been actively mined
since 1914 and have produced more than 500,000 oz of gold.
The property lies in numerous sections of Fairbanks Meridian Township 8N and Ranges 4W and 5W. Money Knob, the principal geographic feature within
the known deposit, is located at 65 ̊30’16’’N, 148 ̊31’33’’W.
The property straddles Highway 2 (also known as the Elliott Highway), a paved, all-weather highway linking the North Slope oil fields to Fairbanks, and
adjoins the Trans-Alaska Pipeline (TAPS) corridor, which transports crude oil from the North Slope south and contains the fiber optic communications
cable that may be used at the Project site (see Figure 1-1). Locally, a number of unpaved roads lead from the Elliott Highway into and across the deposit.
A 3,000 ft (914 m) runway is located 3.73 mi (6 km) to the southwest of the Project and is suitable for light aircraft.
The site is approximately 40 mi (64 km) south of the Arctic Circle. The climate in this part of Alaska is continental with temperate and mild conditions in
summer with average lows and highs in the range of 44°F to 72°F (7°C to 22°C). Winter is cold with average lows and highs for December through March
in the range of -17°F to 23°F (-27°C to -5°C). The lowest temperatures are about – 40°F (-40°C). Annual precipitation is approximately 15.7 in (400 mm)
water equivalent. Winter snow pack depth is approximately 26 in (66 cm).
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
1.5
Land Tenure
Figure 1-1: Project location map
The Livengood Gold Project property covers approximately 48,300 acres (19,546 hectares), all of which is controlled by ITH through its wholly-owned
subsidiaries, THM and Livengood Placers, Inc. (LPI). The Livengood Gold Project is comprised of multiple land parcels: 100% owned patented mining
claims, 100% owned State of Alaska mining claims, and 100% owned federal unpatented placer claims, land leased from the Alaska Mental Health Trust
(AMHT), land leased from holders of state and federal patented and unpatented lode and placer mining claims, and undivided interests in patented mining
claims. The property and claims controlled through ownership, leases or agreements are shown in Figure 1-2.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 1-2: Map illustrating the company’s Livengood Gold Project land holdings
(As at September 30, 2021, by tenure type, referenced to the Fairbanks Meridian Township, range and section grid.)
1.6
Property History
Gold was first discovered in the gravels of Livengood Creek in 1914 (Brooks, 1916) and led to the founding of the Town of Livengood. Subsequently, more
than 500,000 oz of placer gold has been produced. From 1914 through the 1970s, the primary focus of prospecting activity was placer deposits.
Historically, prospectors considered Money Knob and the associated ridgeline the source of the placer gold. Prospecting, primarily in the 1950s and in the
form of dozer trenches, was carried out for lode type mineralization in the vicinity of Money Knob. However, no significant lode production has occurred to
date.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Since the 1970s, the property has been prospected and explored by several companies. Geochemical surveys by Cambior Inc. in 2000 and AngloGold
Ashanti (U.S.A.) Exploration Inc. (AGA) in 2003 and 2004, outlined a 1.0 × 0.5 mi2 (1.6 × 0.8 km2) area with anomalous gold in soil. Scattered anomalous
samples continue along strike for an additional 1.2 mi (2 km) to the northeast and 1 mi (1.6 km) to the southwest. Eight reverse circulation (RC) holes
were drilled by AGA in 2003 and a further four diamond core holes were drilled in 2004 to evaluate this anomaly. Favorable results from these holes
revealed wide intervals of gold mineralization (BAF-7: 455 ft (138.7 m) @ 1.07 g/mt Au; MK-04-03: 181.4 ft (55.3 m) @ 0.51 g/mt Au) along with lesser
intervals over a broad area. In 2006, AGA sold the Livengood Gold Project to ITH. In the same year, THM drilled a 4,026 ft (1,227 m), seven-hole core
program. The success of that program led to the drilling of an additional 14,432 ft (4,400 m) in 15 diamond core holes in 2007 to test surface anomalies,
expand the area of previously intersected mineralization, and advance geologic and structural understanding of the deposit. Subsequent programs have
continued to expand the resource, leading to consideration of development of the deposit. Concomitant programs have included geotechnical,
engineering, and metallurgical work, along with the collection of environmental baseline data. As of the end of 2014, completed exploration and
delineation drilling totals 574,599 ft (175,138 m) in 621 RC holes and 140.854 ft (42,932 m) in 151 core drill holes.
Beginning in 2009, technical studies were performed to generate preliminary surface mine designs, to generate metallurgical data for process definition,
and to develop pre-conceptual information on the location and capacities of potential tailings management, overburden management, water reservoir and
mill process facilities. A pre-feasibility study was begun in 2011, but was not completed, as advancing technical studies indicated major changes to the
flowsheet and project configuration warranted a shift to the feasibility study, which was completed in August 2013.
From 2013 through 2016, additional metallurgical testwork was performed, along with various techno-economic trade-off studies, to form the basis for the
project configuration that was presented in the 2017 PFS.
The 2017 PFS work indicated that the project economics are sensitive to recovery, grind size, reagent consumption and test conditions. Further testwork
was executed from 2017 through 2021, along with an Enterprise Optimization (EO) study (the “Whittle and BBA Study’’) to confirm the project
configuration as well as the process conditions that are presented in this PFS.
1.7
Mineralization
Gold mineralization is associated with disseminated arsenopyrite and pyrite in volcanic, sedimentary, and intrusive rocks, and in quartz veins cutting the
more competent lithologies, primarily volcanic rocks, sandstones, and to a lesser degree, ultramafic rocks. Three principal stages of alteration are
currently recognized. In order from oldest to youngest, these are characterized by biotite, albite, and sericite. Carbonate was introduced with and
subsequent to these stages. Arsenopyrite and pyrite were introduced primarily during the albite and sericite stages. Gold correlates strongly with arsenic
and occurs primarily within and on the margins of arsenopyrite and pyrite.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Mineralization is interpreted to be intrusion-related, consistent with other gold deposits of the Tintina Gold Belt and has a similar arsenic-antimony (As-Sb)
geochemical association. Mineralization is controlled partly by stratigraphic units, but thrust-fold architecture is apparently key to providing pathways for
magma (dikes and sills) and hydrothermal fluid.
1.8
Mineral Processing and Metallurgical Testing
Several phases of testwork, along with an enterprise optimization study (the “Whittle and BBA Study’’), have been completed since the 2017 PFS was
issued.
A new round of simulations was completed at different grind sizes to determine the maximum achievable throughput using the recommended 2017 PFS
configuration, which is a single line SABC circuit with pre-crushing, generating data that was used in the Whittle and BBA Study. The result of the work
was a maximum throughput of 65,000 t/d (59,000 mt/d), operating to a target grind size of 250 µm (P80). The design relies upon an optimized drill & blast
strategy to achieve the rated throughput with a SAG mill (D × L) 36 ft × 20 ft with 15 MW of installed power and a ball mill (26 ft × 40.5 ft) with 15 MW of
installed power. The SAG mill is operated in closed circuit with a pebble crusher and the ball mill is operated in closed circuit with hydrocyclones.
The back end of the plant, all that follows comminution, was optimized as a result of this PFS work, which included a detailed analysis of previous work,
completed by BBA, as well as the completion of five new rounds of testwork, completed since the issue of the 2017 PFS. The various test programs
(Phases 9a, 9b, 11-13) were conducted to expand on knowledge developed through the course of the FS optimization, FS variability and 2017 PFS test
programs. In the process of completing the five rounds of this PFS testwork, several key conclusions were drawn:
■ Carbon in leach (CIL) methodology was retained over the carbon in pulp (CIP) of whole gravity tails (WOL). This decision was based on the 2017
PFS comparative study and on testwork results from this PFS, showing that better recoveries were obtained on RT6 and RT7 with CIL, while the
other rock types appeared insensitive to CIL vs CIP.
■ There are no significant adverse recovery issues introduced by mixing the chemical and physical properties of the ore types.
■ Increasing the target particle size from a P80 of 180 to 250 µm resulted in a decrease in gold recovery of between 1% and 7%, depending upon rock
type and head grades. The benefit of the coarser grind, which outweighs the recovery loss, is the higher throughput that facilitates a higher daily gold
production.
■ The effectiveness of gravity recovery was further confirmed because of this PFS testwork, using samples generated from both drill core and RC rig
drill chips.
■ Depending upon rock type, gold recovery is slightly related to location, either inside or outside the 100 ppm antimony shell.
■ The overall gold recovery does not appear to be highly sensitive to either lead nitrate (0-200 ppm) or cyanide (0.4-0.8 kg/t) concentration.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
After the 2017 PFS, a focused effort was made to better understand the gold recovery implications of antimony concentration in the orebody. The data
collected during Phases 11, 12 and 13 were used to develop linear recovery equations for each of the five rock types, both inside and outside the
100 ppm antimony shell, and as a function of antimony concentration, grind size and gold grade. A linear equation was developed for the composites
having an antimony grade above 200 ppm, regardless of whether they were in or out of the 100 ppm antimony shell. Gold recoveries (Gravity+CIL) were
established for each of the Livengood ore rock types at a grind size of 250 µm (P80) and are presented in Table 1-2.
Table 1-2: Average gold recovery (Gravity+CIL) estimated for each rock type
Rock Type
Au Recovery
(%)
RT4
RT5
RT6
RT7
RT9
83.3
79.8
73.5
66.4
57.1
The Whittle and BBA Study reviewed various technologies and project configurations with the objective of recommending an optimum configuration for
this PFS. This study determined that the gravity/CIL plant at a grind size of 250 µm (P80) with conventional tailings provided the highest NPV.
1.9
Mineral Resource Estimate
The Livengood mineral resource (Effective date August 20, 2021) was estimated using Inverse Distance Weighting (IDW) interpolation techniques. A
database comprising 776 drill holes containing 125,450 assays was the basis of the estimate. Assays were composited to nominal 10-meter lengths,
yielding 20,806 individual samples that were used for the estimation of mineralization.
Three sources of volumetric determination were used for the resource model. One was a three-dimensional (3D) stratigraphic model used to assign rock
type codes to the block model. The second was an implicit model that interpolated a 100-ppm antimony halo or “shell” for the mineral deposit, with blocks
flagged as either inside or outside this halo. The third was 54 individually interpreted massive stibnite veins that were used to determine the volume
percentage and grade of veins within each model block that is intersected by the veins. Gold contained within each block was estimated using Inverse
Distance cubed (ID3) parameters.
Mineral resources must demonstrate reasonable prospects for eventual economic extraction. The deposit gold is amenable for open pit extraction. To
determine the quantities of material meeting the “reasonable prospects” test by an open pit, the author used the Lerchs-Grossman © economic algorithm
to determine economic pit limits.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Economic parameters used in the analysis are based on the average gold price ($1,650/oz) at effective date of August 20, 2021. Pit optimization
parameters are shown in Table 1-3. Gold recoveries are tonnage-weighted and include the recovery from massive stibnite of 22%.
Parameter
Mining Cost
Gold Cut-off
Processing Cost
Gold Recovery
Administrative Cost
Royalty
Gold Selling Price
Overall Slope Angle
Table 1-3: Constraining parameters used for the Livengood Gold Project
Unit
$/total mt
g/mt
$/process mt
%
$/process mt
%
$/oz
Degrees
Rock
type 4
1.76
0.21
9.27
84
1.55
3
1,650
45
Rock
type 5
1.74
0.20
9.15
80
1.55
3
1,650
45
Rock
type 6
1.74
0.25
9.17
71
1.55
3
1,650
45
Rock
type 7
1.68
0.25
9.50
67
1.55
3
1,650
45
Rock
Type 8
1.76
0.33
9.71
55
1.55
3
1,650
45
Rock
Type 9
1.76
0.33
9.71
56
1.55
3
1,650
45
The mineral resource estimate for the Livengood Gold project is shown in Table 1-4 (Exclusive of Reserves) and Table 1-5 (Inclusive of Reserves).
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 1-4: Livengood Gold Project mineral resource estimate (exclusive of mineral reserves)
(2021 MRE), August 20, 2021 – Resource Development Associates Inc.
Classification
Measured
Indicated
Inferred
Total Measured and Indicated (M & I)
Ore
Metric tons (Mmt)
Au Grade
(g/mt)
Contained Au
(Koz)
234.50
40.01
274.51
15.98
0.53
0.49
0.52
0.40
3,990.49
629.61
4,620.10
206.98
1. The effective date of the estimate is August 20, 2021.
2. Mineral resources for the Project are enumerated as per §229.1302(d)(1)(iii)(A) (Item 1302(d)(1)(iii)(A) of Regulation S-K).
3. Mineral resources are not mineral reserves and do not meet the threshold for reserve modifying factors, such as economic viability, that would allow for conversion to
mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
4. Open pit resources stated as contained within a potentially economically mineable open pit; pit optimization was based on an assumed price for gold of US$1,650/oz.,
variable mining and recoveries, general and administrative costs of US$1.55/t and a pit slope angle of 45 degrees.
5. Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.
6. Mineral resources are reported exclusive of mineral reserves. The reserves disclosed in the TRS represent measured mineral resources and indicated mineral
resources that were evaluated with modifying factors related to open pit mining.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 1-5: Livengood Gold Project mineral resource estimate (inclusive of mineral reserves)
(2021 MRE), August 20, 2021 – Resource Development Associates Inc.
Classification
Measured
Indicated
Inferred
Total Measured and Indicated (M & I)
Ore
Metric tons (Mmt)
Au Grade
(g/mt)
646.00
58.51
704.51
15.98
0.60
0.61
0.60
0.40
Contained Au
(Koz)
12,482.49
1,141.61
13,624.10
206.98
1. The effective date of the estimate is August 20, 2021.
2. Mineral resources for the Project are enumerated as per §229.1302(d)(1)(iii)(A) (Item 1302(d)(1)(iii)(A) of Regulation S-K).
3. Mineral resources are not mineral reserves and do not meet the threshold for reserve modifying factors, such as economic viability, that would allow for conversion to
mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves.
4. Open pit resources stated as contained within a potentially economically mineable open pit; pit optimization was based on an assumed price for gold of US$1,650/oz.,
variable mining and recoveries, general and administrative costs of US$1.55/t and a pit slope angle of 45 degrees.
5. Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.
6. Mineral resources are reported inclusive of mineral reserves. The reserves disclosed in the TRS represent measured mineral resources and indicated mineral
resources that were evaluated with modifying factors related to open pit mining.
1.10 Mineral Reserve Estimate
Mineral reserves have been estimated for the Project by BBA USA Inc., using a gold price of $1,680/oz. The mine design and mineral reserve estimate
have been completed to a level appropriate for a PFS. The mineral reserve estimate stated herein is consistent with the S-K 1300 requirements and is
suitable for public reporting. As such, the mineral reserves are based on Measured and Indicated Mineral Resources, and do not include any Inferred
Mineral Resources.
Development of the mine production plan included pit optimization, pit and phase designs, mine scheduling and the application of modifying factors to the
Measured and Indicated Mineral Resources. The Qualified Person is not aware of any legal, political, or other risks that could materially affect the
development of the mineral reserve.
Table 1-6 presents the mineral reserves for the Project, which include 411.5 Mmt of Proven Mineral Reserves at an average gold grade of 0.64 g/mt, and
18.5 Mmt of Probable Mineral Reserves at an average gold grade of 0.86 g/mt for a total of 430.1 Mmt of Proven and Probable Mineral Reserves at an
average gold grade of 0.65 g/mt. To access these mineral reserves, 496.1 Mmt of overburden and waste rock must be mined, resulting in a strip ratio of
1.15:1.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 1-6: Livengood Gold Project Mineral Reserves, October 22, 2021 – BBA USA Inc.
Classification
Proven
Probable
1. The effective date of the estimate is October 22, 2021.
Proven and Probable Totals
Ore
Metric tons (Mmt)
411.5
18.5
430.1
Au Grade
(g/mt)
0.64
0.86
0.65
Contained Au
Koz
8,492
512
9,004
2. Mineral reserves are estimated using a gold price of US$1,680 per ounce, and consider a 3% royalty, 1.80/oz for smelting, refining, and transportation costs, and a
gold payable of 99.9%.
3. Metallurgical recovery curves were developed for each rock type, with the Mineral Reserves having the following tonnage weighted averages: 83.3% for RT4, 79.8%
for RT5, 73.5% for RT6, 66.4% for RT7, 58.7% for RT8 and 57.1% for RT9, including 22% for massive stibnite mineralization.
4. As a result of the complex metallurgical recovery equations, it is difficult to determine specific cut-off grades. The following presents the lowest gold grades for each
rock type that are processed in the life of mine plan: 0.26 g/t for RT4, 0.28 g/t for RT5, 0.31 g/t for RT6, 0.31 g/t for RT7, 0.42 g/t for RT8 and 0.42 g/t for RT9.
5. The strip ratio for the open pit is 1.15 to 1.
6. The mineral reserves are inclusive of mining dilution and ore loss.
7. The reference point for the mineral reserves is the primary crusher.
8. Totals may not add due to rounding.
1.11 Mining Methods
The Livengood deposit will be mined using conventional open pit mining methods consisting of drilling, blasting, loading, and hauling with large-scale
mining equipment. Vegetation, topsoil, and overburden will be stripped and stockpiled for future reclamation use. The ore and waste rock will be drilled
and blasted with 32.8 ft (10 m) high benches and loaded into haul trucks with a fleet of diesel-powered hydraulic excavators and front-end wheel loaders.
The processing flowsheet consists of primary crushing, secondary crushing, and a comminution circuit (SABC configuration) producing a final grind size
of 250 μm (P80), with gravity recovery followed by whole ore leaching (CIL) of the gravity tailings. The mill has been designed with a nominal throughput of
65,000 t/d (59,000 mt/d). Tailings will be stored in a conventional slurry tailings facility.
Material mined from the open pit that is not directly hauled to the primary crusher will be placed in several storage facilities across the Livengood site.
These facilities include growth media stockpiles, an overburden stockpile, a waste rock storage facility (WRSF), and a low-grade ore stockpile. Waste rock
will also be used as construction material both during preproduction and to raise the height of the TMF dike as the mine life progresses.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
To maximize the NPV of the Project, a total of six mining phases (pushbacks) have been designed and incorporated into the mining sequence to bring
higher grade material forward and to defer waste rock stripping. The mining phases include a starter pit that will be mined during the three years of
preproduction, during which a total of 89 Mt (81 Mmt) of waste rock has been estimated to be required for the construction of certain infrastructure such
as the TMF starter dike, mine haul roads, site access roads, and platforms for the processing facilities and other buildings. Ore mined during
preproduction will be stockpiled and processed after mill start-up.
A mine production plan has been prepared using the MinePlan Schedule Optimizer (MPSO) tool in the Hexagon MinePlan 3D software. Provided with
economic input parameters and operational constraints such as phase sequencing, maximum bench sink rates, and mining and milling capacities, the
software determines the optimal mining sequence and low-grade ore stockpiling strategy, which maximizes the NPV of the mine production plan. The
mine plan has been prepared quarterly for the first two years of production and annually thereafter.
The mine production plan resulted in a 20.3-year mine life plus 3 years of preproduction development. A contractor will operate the pit during the first year
of preproduction to develop the first benches in the Phase 1 starter pit and construct the network of mine haul roads. By the second year, the owner’s fleet
of equipment will be on-site and assembled and will take over from the contractor.
The total material mined from the open pit peaks at 66 Mt (60 Mmt) from Year 2 to Year 5 and averages 55 Mt/y (50 Mmt/y) between Year 1 and Year 17.
A total of 105 Mt (95 Mmt) of ore is sent to the low-grade ore stockpile over the life of the mine, with an average gold grade of 0.38 g/mt. A total of 84% of
the low-grade ore is rehandled and sent to the mill during the final five years of production, with smaller amounts rehandled in earlier years.
During the life of mine (LOM), a total of 271 Mt (246 Mmt) is hauled to the TMF for dike construction, representing 52% of the total waste rock.
The average gold grade for ore to the mill is fairly consistent on a year to year basis, ranging from 0.58 g/mt to 0.93 g/mt when the open pit is in operation,
and drops to 0.36 g/mt during stockpile rehandling at the end of the mine life.
A peak gold production of 482 koz is achieved in Year 3, when higher grades will be fed to mill, which also coincides with higher mill recoveries. Gold
production averages 342 koz per year between Year 1 and Year 17 and 154 koz per year during stockpile rehandling.
The mine will be operated with an owner fleet, 365 days per year, 24 hours per day, running two 12-hour shifts per day. For equipment calculations, a total
of five days of lost production time has been considered for poor weather conditions.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Production drilling will be done with a fleet of autonomous diesel-powered down-the-hole (DTH) drills that will drill 9.8 inch (251 mm) diameter holes on
32.8 ft (10 m) high benches with drill patterns varying for ore and waste and by rock type. Blasting will be done using primarily Ammonium Nitrate Fuel Oil
(ANFO) and with bulk emulsion during wet conditions. A total of five production drills and one secondary drill for pre-splitting and secondary blasting are
required during most of the mine life.
Loading will be done using a mix of diesel-powered hydraulic shovels and frontend wheel loaders, both equipped with 40 yd3 (31 m3) buckets. During
peak production, the fleet will include two shovels and two wheel loaders.
Hauling will be done with 320 t (291 mt) rigid frame haul trucks and the fleet requirements were estimated for each period of the mine production plan
using a haulage network developed and loaded into the MS Haulage tool of MinePlan 3D. The truck fleet peaks at a total of 18 trucks.
The mine workforce has been estimated for each period of the mine plan, which includes management and supervisory personnel, mine technical
services, mine operations, and mine maintenance personnel. The mine workforce peaks at 221 employees.
1.12 Recovery Methods
The recovery methods for the Project were established based on previously noted laboratory-scale testwork programs, information from equipment
suppliers and on BBA’s experience on similar projects. Many of the significant process plant configuration changes implemented within the 2017 PFS
were retained, including the addition of secondary crushing ahead of the SAG mill for more efficient use of power, inclusion of a single line SAG/ball mill
configuration, and simplification of the mill foundation and pebble re-grind circuit. Recent metallurgical testwork completed has also resulted in the grind
size being further coarsened from 180 to 250 µm (P80) with a design leach retention time of 24 hours. With relatively minor changes to equipment
selection, this has permitted a significant increase in the nominal throughput.
The nominal Livengood process plant capacity at 93% is 65,000 t/d (59,000 mt/d) resulting in an annual capacity of 23.7 Mt/y (21.5 Mmt/y). Run of mine
ore is transported to the primary gyratory (60×89) crusher, where it is crushed and stockpiled in a covered pile, then conveyed to the secondary crushing
(1,250 hp) building. Crushed product (1.65 in (42 mm)) will then be conveyed and processed in a comminution circuit (SABC) consisting of wet grinding in
a single semi-autogenous (SAG) mill ((D×L) 36 ft × 20 ft /20,115 hp) in closed circuit with a pebble crusher (932 hp) and a single ball mill (25.4 ft × 40 ft /
20,115 hp). The ball mill is in closed circuit with hydrocyclones. A pulp stream will be bled from a portion of the ball mill discharge and treated with a bank
of eight centrifugal gravity gold separators. The gravity tails will be pre-treated with oxygen and lead nitrate, and then leached in a conventional CIL circuit
(2 rows of 7 tanks). The gravity gold will be intensively leached from the gravity concentrate with two intensive leach reactor (ILR) systems.
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Gold from the leach circuit will be recovered by an adsorption-desorption-recovery (ADR) circuit, where the final product will be doré. Two thickeners (213
ft / 65 m diameter) (Pre-leach and Pre-Detox) will be used to maximize water and cyanide recovery. The Inco SO2/air cyanide detoxification method will
be used to reduce the cyanide content of the process tailings to acceptable concentrations prior to being discharged to the tailings management facility
(TMF). A preliminary water balance indicates that approximately 233 gpm (53 m3/hr) of fresh water will be required during operations.
The gyratory crushing, secondary crushing and main process plant will operate 24 hours per day and 7 days per week. The operating teams will work on
a schedule of two 12-hour shifts. The main process plant will be stopped periodically to perform preventive maintenance on equipment for which there is
no standby unit. The process plant is designed to operate with an availability of 93%.
Process plant reagents, including cyanide, lime, elemental sulfur, hydrochloric acid, lead nitrate, carbon, and flocculants, will be delivered to site by
transport truck as required and stored in the process facility.
Figure 1-3, a simplified process flow diagram, describes the conceptual process flow from the ore delivery to the crusher through to doré production and
tailings management. The average gold head grade for plant feed will be 0.65 g/mt with an overall gold recovery of 71.4% based on the LOM plan.
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Figure 1-3: Simplified process flow diagram
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
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The following Figure 1-4 shows the process plant feed grade and gold production per year based on the LOM mine plan. Annual gold production will
average 317,000 oz/y over the LOM.
The process plant facilities include a wet laboratory, mill offices, a mill dry and maintenance shops. A total of 140 employees are required in the process
plant, including 26 salaried staff and 114 hourly workers.
Figure 1-4: Gold production schedule (oz/year)
1.13
Local Resources and Project Infrastructure
1.13.1 Local Resources
The Fairbanks North Star Borough (FNSB), which has a population of approximately 100,000 people, has a hospital, government offices, businesses,
military bases and the University of Alaska, Fairbanks. Fairbanks is linked to southern Alaska by a north-south transportation and utility corridor that
includes two paved highways, a railroad, an interlinked electrical grid and communications infrastructure. The city has an international airport serviced by
up to three major airlines and has demonstrated capacity to serve as the primary employment and service base for the Project.
The paved, all weather State Highway 2 (Elliott Highway) runs north from Fairbanks to the North Slope oilfields at Prudhoe Bay, and passes within one
mile of the Money Knob deposit. Communications infrastructure (fiber optic) has been extended to the North Slope along the TAPS, which parallels the
Elliott Highway and passes just west of the Livengood Project site.
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1.13.2 Project Infrastructure
To the extent practicable, the infrastructure facilities for the Project have been designed for optimum construction access and operational efficiency as
well as to take advantage of the existing roads and infrastructure.
Surface Infrastructure
The Project envisions construction of the following key infrastructure facilities:
■ O’Connor Creek substation and 50 miles (80 km) of new 230 kV transmission line;
■ Access light vehicle and mine haulage roads;
■ Process plant and ancillary buildings;
■ Administration, dry, maintenance, and warehouse complex;
■ Mine truck wash and fueling facilities;
■ Bulk fuel storage and delivery system;
■ Water and sewage treatment;
■ Fresh water pumping and distribution system;
■ Waste rock, ore and growth media stockpiles;
■ Surface water management diversion ditches;
■ Tailings and Waste Rock Management Facilities;
■ Temporary construction camp;
■ Fairbanks Integrated Remote Operations Center (IROC);
■ Fairbanks employee parking area.
Site Power
The total power demand of the Project (LOM average) is estimated to be approximately 57.8 MW, including network losses of 3% and represents the
LOM average. An electrical load list was created based on a detailed mechanical equipment list that included the major power draw contributors. Minor
power consumers and power for auxiliary systems were benchmarked based on BBA’s past project experience. The projected annual electrical energy
use is estimated to be approximately 450.9 GWh including the network losses.
A study completed by Electric Power Systems has determined that the local utility in Fairbanks (Golden Valley Electric Association) can provide the power
required for the Project. The Project would be connected to the local grid by building a 50-mi (80 km) 230-kVa transmission line along the pipeline
corridor. A new 138/230 kV substation at O’Connor Creek (OCS) will be required to connect the transmission line to the GVEA system.
Emergency power systems (4.16 kV and 600 V) are planned for the purpose of supplying the critical installations when the main power is lost. Critical
loads will be grouped into different categories, where some will be attended to automatically and others controlled manually.
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Communications and IT
A site-wide telecommunication infrastructure will be installed to provide internet access, an IP phone system, a security access system, interconnection of
the fire detection system, surveillance and process video cameras, as well as a mobile radio system for personnel and site vehicles.
Tailings, Mine Waste Rock and Water Management Facility
The tailings management facility (TMF) has been designed to provide safe and secure storage of approximately 486 Mt (441 Mmt) of mill tailings along
with a supernatant pond. The TMF has sufficient area to expand up to 529 Mt (480 Mmt) capacity, dependent on future modifications that would be
required at the freshwater reservoir.
The TMF is situated within Livengood Valley and is formed by two cross-valley embankments, the west embankment and the east embankment. Both
TMF embankments and the impoundment area in between are geomembrane-lined and designed to be constructed in phases. The TMF embankments
require the removal of some native materials within the embankment footprints to improve stability characteristics of the foundation. These materials will
be excavated and transported to growth media stockpiles in the general area, for use during reclamation of the Project site. The impoundment area will be
covered with a layer of mine waste rock to provide a stable foundation for the installation of the geomembrane.
Solution management systems at the TMF include a groundwater drainage system and a tailings underdrain system. The groundwater drainage system
will be located below the impoundment geomembrane and positioned within the main drainages. This drain system will capture near surface groundwater
flow and convey it to sumps located downstream of the TMF west embankment. The collected water will be pumped into the TMF impoundment and
used in the processing of ore at the mill. The tailings underdrain system is located above the impoundment geomembrane and will collect process
solutions draining from the deposited tailings mass. This system will return the collected solutions to the supernatant pond for recycling back to the mill.
The TMF east embankment will also form an embankment for the fresh water reservoir. This reservoir will be used as a make-up water supply for the
project. Excess water captured by the reservoir will be conveyed, via gravity through a flow-through drain, to Livengood Creek downstream of the TMF
west embankment. The flow-through drain consists of multiple large diameter pipes positioned below the impoundment geomembrane and near the main
groundwater drainage system.
Non-economic mine waste rock, produced by mining activities at the Livengood site, will either be incorporated into the construction of site facilities, such
as the TMF, or hauled and stockpiled in Gertrude Creek valley. The current design of the waste rock storage facility is for 105 Myd3 (80 Mm3). An
embankment constructed at the mouth of the Gertrude Creek valley will serve as a buttress for the waste rock storage facility in addition to providing
containment for tailings within the TMF.
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Low grade ore will also be stockpiled within the upper reaches of the Gertrude Creek valley. The current design of the stockpile is sufficient to store
45 Myd3 (34 Mm3) of material. The stockpile can be expanded, as needed, by modifying the design of the waste rock storage facility.
The surface water management structures required to support the project primarily include minor stormwater diversion channels and roadside ditches.
1.14 Environmental and Permitting
THM has been conducting environmental baseline studies at the Project since 2008, as part of their overall goal of providing environmentally relevant and
supportable data for environmental permitting, engineering design and a basis for permit-required monitoring during construction, mining and closure of
the Project. These studies include surface water, hydrology, hydrogeology, wetlands & vegetation, meteorology & air quality, aquatic resources, rock
characterization, wildlife, cultural resources and noise studies.
Baseline Study
Surface Water
Surface Water Quality
Sediment Quality
Hydrology
Surface Water Flow and Snow
Hydrogeology
Groundwater Quality
Hydrogeological Modeling
Permafrost Studies
Wetlands & Vegetation
Wetlands Delineations
Meteorology & Air Quality
Meteorological Data
Precipitation
Ambient Air
Aquatic Resources
Bio-monitoring
Resident Fish Surveys
Rock Characterization
Static ML/ARD Testing
Kinetic ML/ARD Testing
On-Site Kinetic Testing
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Table 1-7: Environmental baseline studies (2008-2021)
2008
2009
2010
2011
2012
2013
2014
2015
2016
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Baseline Study
Wildlife Studies
Habitat Mapping
Mammal Surveys
Avian Surveys
Cultural Resources
Cultural Site Surveys
Socioeconomics (Section 17.6)
Noise Studies
Noise Surveys
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017-
2021
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In early 2011, project engineers identified a 50 mi (80 km) power transmission corridor with a terminus at Livengood. Baseline investigations along this
corridor have included: surface water quality, wetlands & vegetation, wildlife, aquatic resources, and cultural resources. The results of these programs
have been used, in part, to select the transmission alignment.
Based on a review of the studies completed to date, there are no known environmental issues that are anticipated to materially impact the Project’s ability
to extract the gold resource.
Since development of the Project will require several federal permits, the National Environmental Policy Act (NEPA) and Council of Environmental Quality
(CEQ) Regulations will govern the federal permitting portion of the Project. The NEPA process requires that all elements of a project and their direct,
indirect and cumulative impacts be considered. A reasonable range of alternatives are evaluated to assess their comparative environmental impacts,
including consideration of feasibility and practicality. In fulfillment of the NEPA requirements, it is anticipated that the Project will be required to prepare an
Environmental Impact Statement (EIS). Upon completion of the EIS and the associated Record of Decision by the lead federal agency, the federal and
state agencies will then complete their own permitting actions and decisions. The State of Alaska is expected to take a cooperating role to coordinate the
NEPA review with the state permitting process. Actual permitting timelines are controlled by the federal NEPA review and federal and state agency
decisions.
Actual permitting timelines are controlled by the Federal NEPA review and federal and state agency decisions. There have been no permit applications
submitted for project construction.
1.15 Socioeconomic Conditions
Livengood lies within the Yukon-Koyukuk Census Area, which encompasses a nearly 150,000 square mile (mi2) (388,000 km2) swath of Interior Alaska
from the Canadian border to the lower Yukon River. In 2020, the Census Area held a total population of 5,343 widely dispersed residents in 38
communities, of which approximately 70% were Alaska Natives. Both Minto, which is approximately 40 mi (64 km) from Livengood, and Manley Hot
Springs, approximately 80 mi (129 km) away from the Project, have road access to Fairbanks.
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The Fairbanks area is the service and supply hub for Interior and Northern Alaska. Construction of the Trans-Alaska Pipeline System (TAPS) resulted in
an economic boom in Fairbanks from 1975 to 1977. The oil industry remains an important part of the local economy, with Fairbanks providing logistical
support for the North Slope activity, operation of a local refinery and the operation and maintenance of TAPS. Today, the University of Alaska, the
Fairbanks Memorial Hospital, and the Fort Knox and Pogo gold mines are some of the Fairbanks area’s largest employers. The Fairbanks North Star
Borough (FNSB) economy included 37,400 non-agricultural wage and salary jobs in 2019, accounting for $2.24B in annual payroll.
Most of the small communities in rural interior Alaska are largely dependent on subsistence. Seventy-five percent (75%) of the Native families in Alaska’s
smaller villages acquire 50% of their food through subsistence activities (Federal Subsistence Board, 1992). For families that do not participate in a cash
economy, subsistence can be the primary direct means of support; for others, it contributes indirectly to income by replacing household food purchases.
The PFS estimates a total of 3.8 M man-hours during Project construction at Livengood, with a peak construction workforce of 800. The average wage of
those workers is estimated at $50.00/hr. During the three years of preproduction mine development, the Owner’s crew will be approximately 170
employees on average. During operations, the average number of employees is estimated at 331 peaking in year 6 at 430. Total annual wages paid
during operations is estimated to be $38M based on an annual average wage of approximately $115,000/y.
The labor force in the communities nearest the mine is very small. The total population of Minto, Manley Hot Springs and Livengood combined is 312
residents in 2020. Skilled and unskilled labor to support mine development and operations will come primarily from the Fairbanks area, with a total labor
force of nearly 40,000 workers. The training plan for the Project will be designed to promote safety, environmental stewardship, efficient production, and
local hire.
1.16 Capital Cost and Operating Cost Estimates
1.16.1 Capital Costs
The total estimated preproduction capital cost (-20% / +25%) to design, procure, construct and commission the Livengood Gold Project facilities, including
funding of reclamation activities, is estimated to be $1.93B. The estimated sustaining capital cost required by the Project is $658M. This estimate includes
the addition of certain contingencies and indirect costs. The cumulative LOM capital expenditure (preproduction and sustaining capital) is estimated to be
$2.852B. Table 1-8 summarizes the initial capital and sustaining capital costs by major area.
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Table 1-8 summarizes the initial capital and sustaining capital costs by major area.
Table 1-8: Initial capital and sustaining capital costs by major area
($ Millions)
Initial ($M)
Sustaining ($M)
Cost Item/Area
Mine Equipment
Mine Development
Process Facilities
Infrastructure Facilities
Power Supply
Owners Costs
Contingency
Sub-total before Reclamation
Spare parts, consumables, and initial fills (1)
Funding of Reclamation Trust Fund (2)
200
230
433
459
87
296
220
1,925
40
23
Total
$1,989M
139
514
5
658
245
$903M
Note: Rounding of some figures may lead to minor discrepancies in totals.
(1) The $40M spent on spare parts, consumables and initial fills in preproduction are recaptured in the final year of operations (Year 21).
(2)
Includes initial funding, total $317M estimated costs. The difference of $49M is projected trust fund earnings.
1.16.2 Operating Costs
The operating cost estimate for the Livengood Gold Project includes all expenses incurred to operate the mine and process plant from the start of Year 1
through Year 21 at a daily average production rate of 65,000 t/d (59,000 mt/d). The expected accuracy for the operating cost estimate is that of a pre-
feasibility study level (+/- 20%) and does not contain any allowances for contingency or escalation beyond Q3 2021. Any ore excavated during the
preproduction period is considered as a capital expense. The average operating cost including royalties and smelting/refining fees over the life of mine is
estimated to be $13.82/t ($15.23/mt). The average total number of personnel over the LOM will be approximately 331.
The total and unit operating cost estimate summaries are shown below in Table 1-9 for the three major operating cost areas: mining, processing, and
general and administrative (G&A). The unit costs areas are shown in terms of total cost LOM per ore ton milled and total cost per troy ounce of gold
produced.
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Table 1-9: Total operating cost breakdown (LOM average)
Cost Item / Area
Mining (including stockpile reclaim)
Processing
General and Administration
On-site Mine Operating Costs
Royalties
Smelting, Refining and Transport
Sub-total before Reclamation
Funding of Reclamation Trust Fund
Total
($M)
1,910
3,659
639
6,208
323
22
6,553
317
Total
$6,893M
Average
($/t mined)
2.05
-
-
-
-
-
-
-
-
Average
($/t milled)
Average
($/oz)
OPEX
(%)
4.03
7.72
1.35
13.09
0.68
0.05
13.82
0.67
297
569
99
965
50
3
1,019
49
29
56
10
95
5
0.3
100
0
$14.50$/t
$1,068/oz
100%
1.17 Project Economics
A financial analysis for the Project was carried out using a discounted cash flow approach. The internal rate of return (IRR) on total investment was
calculated based on 100% equity financing even though THM may decide in the future to finance part of the Project using alternative sources of capital.
The net present value (NPV) was calculated from the cash flow generated by the Project based on a discount rate of 5%. The payback period based on
the undiscounted annual cash flow of the Project was also indicated as a financial measure.
No inflation or escalation exists in the economic model. THM compiled the taxation calculations for the Project with assistance from third-party taxation
experts. The Livengood Gold Project is subject to three levels of taxation, including federal income tax, Alaska State income tax, and an Alaska State
mining license tax. The model calculates pre-tax and after-tax returns, and is based on the current US tax system applicable to mineral resource income.
The model applies 3% royalties on net smelter returns over the life of the Project, based on an average royalty calculation. The model includes provisions
for doré transportation, insurance, refining and payable charges. The major inputs and assumptions used for the development of the financial model are
listed in Table 1-10.
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Table 1-10: Financial model inputs
Execution Plan
Construction Period
Mine Life (after preproduction)
LOM Ore Tons (millions)
LOM Gold Grade (g/mt Au)
Average Annual Process Gold Production Rate (oz)
Metal Pricing
Gold Price ($/oz)
Cost and Tax Criteria
Estimate Basis
Inflation/Currency Fluctuation
Leverage
Income Tax
Royalties
Royalty on Net Smelter Return (NSR)
Gold Transportation and Insurance, Refining, and Payable Charges
Gold ($/oz)
Payable Terms
Gold
36 months
20.3 years
430.1
0.65
317,000
1,680
Q3 2021
None
100% Equity
AK State, Federal
3%
3.48
99.90%
Table 1-11 below presents the results of the pre-feasibility study.
Table 1-11: Summary of pre-feasibility study results
Production Metrics
Mill Throughput
Head Grade – LOM
Gold Recovery
Mine Life
Total oz Produced
Average Annual Production – LOM
Total Ore Processed
Total Waste Rock (not including preproduction)
Annual Mining Rate
Low grade stockpile size (maximum)
Value
65,000
0.65
71.4
20.3
6,430,178
317,000
474
463
52
88
Unit
Dry tons/day
g/mt
%
Years
oz
oz
Million tons
Million tons
Million tons
Million tons
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Capital and Operating Costs
CAPEX – Initial
CAPEX – Sustaining
Reclamation & Closure
OPEX – Mining - LOM
OPEX – Processing - LOM
OPEX – G&A - LOM
OPEX – Operating Cost – LOM
All-In Cost Pre-Tax (CAPEX+OPEX) – LOM
Pre-Tax Financial Metrics
Pre-Tax NPV (@ 5%)
Pre-Tax IRR
Pre-Tax Payback
After-Tax Financial Metrics
After-Tax NPV (@ 5%)
After-Tax IRR
After-Tax Payback
Value
1.93
658
317
2.05
7.72
1.35
1,068
1,512
168
6.1
9.8
45
5.3
10.4
Unit
$Billion
$Million
$Million
$/t mined
$/t ore
$/t ore
$/oz
$/oz
$M
%
Years
$M
%
Years
The pre-tax internal rate of return (IRR) is 6.1% and the pre-tax net present value (NPV) using a 5% discount rate over the life of mine is $168M. The
after-tax IRR is 5.3% and the pre-tax NPV using a 5% discount rate over the life of mine is $45M.
The results of the after-tax sensitivity analysis performed are summarized in Figure 1-5 and Figure 1-6. This sensitivity analysis shows that both gold price
and recovery variations cause the greatest and almost equivalent impact on project value. A 30% increase in the gold price to $2,184/oz would yield an
IRR of 14.1% and a NPV of $1,493M. A 30% decrease in the gold price to $1,176/oz would yield a reduced IRR of -22.5% and NPV of $-1,647M. The
impact of variations in operating and capital cost on both financial metrics is similar with the operating cost changes resulting in marginally larger project
returns than capital cost changes, meaning reducing operating expenses would benefit the Project more than reducing capital costs by the same
percentage.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 1-5 After-tax sensitivity analysis for project net present value (NPV @ 5% discount rate)
Figure 1-6 After-tax sensitivity analysis for project internal rate of return (IRR %)
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1.18 Project Schedule
A hypothetical execution schedule for permitting, engineering, pre-development and construction of the Project was developed as part of the pre-
feasibility study. The plan is conceptual in nature and contingent on the eventual completion of the positive feasibility study, during which it will be adjusted
and refined. The major project activity milestones are presented in Table 1-12.
Table 1-12: Key project activities (preliminary)
Activity
Environmental Impact Statement and Permitting
Engineering Studies in Support of Permitting
Process Plant Detailed Engineering
Project Authorization
Pit Pre-Stripping / Waste Rock Supply for Construction
Tailings Management Embankment Construction
Process Plant Construction
Process Plant Dry Commissioning Completed
Start Process Plant Ramp-up to Commercial Production
1.19
Interpretations and Conclusions
Start date
Q1 Year -7
Q1 Year -7
Q1 Year -3
Q3 Year -3
Q3 Year -3
Q4 Year -3
Q1 Year 1
Completion
date
Q3 Year -3
Q3 Year -3
Q3 Year -2
Q3 Year -3
Q4 Year -1
Q4 Year -1
Q4 Year -1
Q1 Year 1
Duration
(months)
48
48
21
30
30
27
This TRS was prepared to demonstrate the economic viability of an open pit mine and process plant complex based on the reserves estimated for the
Livengood Gold Project. The process plant capacity is planned to be 65,000 t/d (59,000 mt/d).
This TRS provides a summary of the results and findings from each major area of investigation to a level that is equivalent and normally expected for a
PFS of a resource development project. Standard industry practices, equipment and processes were used in this study. The Project contributors, on the
date of publication, are not aware of any unusual or significant risks or uncertainties that could materially affect the reliability or confidence in the Project
or development of the mineral reserves based on the information available.
The results of the PFS indicate that the proposed Project is technically feasible and marginally viable at the base case gold price of $1,680/oz. It is
recommended to advance the Project to the feasibility study level including the completion of additional metallurgical testwork and various confirmatory
studies to improve the Project’s economics, study potential opportunities and reduce overall implementation risk. The decision and timeline to pursue the
feasibility study is at the discretion of THM.
An analysis of the results of the investigations has identified a series of risks and opportunities associated with each of the technical aspects considered
for the development of the Project.
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The key risks include:
■ Large earthwork quantities required to construct the Project;
■ Management of waste rock could be more expensive than assumed;
■ Impact of climate change on project design,
■ Evolving ESG practices and governmental regulations.
The key opportunities include:
■ Conducting grind/recovery metallurgical testing at coarser than 250 µm (P80).
1.20 Recommendations
Based on the full list of recommendations presented in Chapter 23, it is estimated that the full feasibility study, including the recommended field activities,
metallurgical testwork and environmental studies, would cost approximately $10.2M, including a 20% contingency.
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2.
INTRODUCTION
2.1
Overview
This Technical Report Summary (the “TRS”) was prepared and compiled by BBA USA Inc. in cooperation with a number of consulting firms at the request
of International Tower Hill Mines Ltd. (ITH) through its wholly owned subsidiary Tower Hill Mines, Inc. (THM). BBA USA Inc. is an independent engineering
consulting firm headquartered in Montreal, Quebec, Canada.
The purpose of the TRS is to summarize the results of the Pre-feasibility Study (PFS) for the Livengood gold deposit on the THM property. This TRS has
been prepared in accordance with §§229.1300 through 229.1305 (subpart 229.1300 of Regulation S-K).
The TRS supports the ITH November 4, 2021 news release “International Tower Hill Mines Announces Pre-Feasibility Study Results on 13.6 million
ounce Gold Resource”. This TRS also supports the mineral resource, mineral reserve and property disclosures in ITH’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2021, in addition to the November 4, 2021 release.
This TRS was prepared based on contributions from BBA USA Inc., JDS Energy and Mining Inc., NewFields Mining Design & Technical Services, LLC,
and Resource Development Associates Inc.
The Livengood property (65 ̊30’16’’N, 148 ̊31’33’’W) is located approximately 70 mi (113 km) northwest of Fairbanks, Alaska in the Tolovana Mining
District within the Tintina Gold Belt. The property straddles Highway 2 (also known as the Elliott Highway), a paved, all-weather highway linking the North
Slope oil fields to Fairbanks, and adjoins the Trans-Alaska Pipeline System (TAPS) corridor, which transports crude oil from the North Slope south.
2.2
Basis of the Technical Report Summary
This TRS is based on an updated resource estimate effective, as of August 20, 2021, and has an optimized Project configuration of 65,000 t/d (59,000
mt/d).
This TRS presents a summary of the results of the PFS for the development of the Livengood Gold Project. THM requested engineering consulting group
BBA USA Inc. (BBA) to lead and perform the PFS, including contributions from a number of independent consulting firms including JDS Energy and
Mining Inc. (JDS), NewFields Mining Design & Technical Services, LLC (NewFields), and Resource Development Associates Inc. (RDA).
This TRS was prepared at the request of Mr. Karl Hanneman, Chief Executive Officer of Tower Hill Mines, Inc. As of the date of this TRS, ITH is an
exploration and development company trading on the Toronto
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Stock Exchange (TSX) under the trading symbol (ITH) and the New York Stock Exchange (NYSE.MKT) under the trading symbol (THM).
The THM corporate office is situated at:
Address: 506 Gaffney Road, Suite 200
Fairbanks, AK, USA 99701
Telephone: (907) 328-2800
Fax: (907) 328-2832
2.3
Study Contributors
A summary of the PFS contributors and their general areas of input are presented in Table 1-1.
Consulting Firm
BBA USA Inc.
Table 2-1: Primary PFS contributors
Scope of Services
■ Mine engineering
■ Mine capital and operating costs
■ Mineral reserve estimation
■ Surface infrastructure design and capital costs
■ Metallurgical testwork analysis and process plant design
■ Process plant capital and operating costs
■ Environmental studies and permitting
■ General and administration operating costs
■ Financial analysis
■ Overall TRS integration
JDS Energy & Mining Inc.
■ Rock mechanics and open pit slope stability
NewFields Mining Design & Technical Services, LLC
Resource Development Associates Inc.
2.4
Report Responsibility
■ Geotechnical engineering
■ Waste rock and water management
■ Tailings management facility (TMF) design and capital costs
■ Closure plan and costs
■ Geological modeling and mineral resource estimation
■ Mineral resource classification
The consulting firms listed in Table 2-2, are responsible for the TRS and are independent of ITH and THM. These firms have employees which are
considered to be Qualified Persons (QPs) by virtue of their employee’s education, experience and memberships in good standing with professional
associations.
The consulting firms have supervised the preparation of this TRS and take responsibility for the contents of the TRS as set out in Table 2-2. Each
consulting firm has also contributed relevant figures, tables and
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portions of Chapters 1 (Summary), 22 (Interpretation and Conclusions), 23 (Recommendations), 24 (References) and 25 (Reliance on Information
provided by the Registrant).
Table 2-2: Chapter/Section responsibility by Consulting Firm
Consulting Firm
Site Visit
Chapter/Section Responsibility
BBA USA Inc.
August 15, 2016
Chapters 2, 3, 10 (except Section 10.5.16.7), 12 (except Section
12.3.3.1), 13, 14, 15 (except Sections 15.14, and 15.19), 16, 17, 18,
19, 21, and the relevant portions of Chapters 1, 22, 23, 24 and 25.
NewFields Mining Design &
Technical Services, LLC
JDS Energy & Mining Inc.
March 1-2, 2012
Sections 10.5.16.7, 15.14, 15.19, and the relevant portions of
Chapters 1, 18, 22, 23, 24 and 25.
June 20-22, 2012
Section 12.3.3.1, and the relevant portions of Chapters 1, 22, 23, 24
and 25.
Resource Development Associates
Inc.
August 2, 2011
Chapters 4, 5, 6 ,7 ,8, 9, 11 and 20, and the relevant portions of
Chapters 1, 22, 23, 24 and 25.
2.5
Personal Inspection of the Livengood Property
The Consulting firm’s QPs inspected the Livengood Property on the dates shown in Table 2-2 above.
2.6
Effective Dates and Declaration
This TRS supports the ITH news release “International Tower Hill Mines Announces Pre-Feasibility Study Results on 13.6 million ounce Gold Resource”
dated November 4, 2021 announcing the results of the PFS. This TRS also supports the mineral resource, mineral reserve and property disclosures in
ITH’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, in addition to the November 4, 2021 release. The TRS has a number of
effective dates as follows:
■ Date of metallurgical testwork completion: April 15, 2021;
■ Date of the Mineral Resource Estimate: August 20, 2021;
■ Date of the Mineral Reserve Estimate: October 21, 2021;
■ Date of Financial Analysis: October 29, 2021.
The overall effective date of the TRS is taken to be the date of the financial analysis and is October 29, 2021.
As of the effective date of this TRS, the Consulting firms are not aware of any known litigation potentially affecting the Livengood Gold Project. The
Consulting firms did not verify the legality or terms of any
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underlying agreement(s) that may exist concerning the permits, royalties or other agreement(s) between third parties.
The results of this TRS are not dependent upon any prior agreements concerning the conclusions to be reached, nor are there any undisclosed
understandings concerning any future business dealings between THM and the consulting firms. The consulting firms are being paid a fee for their work in
accordance with the normal professional consulting practice.
The opinions contained herein are based on information collected throughout the course of the investigations by the consulting firms, which in turn reflect
various technical and economic conditions at the time of writing. Given the nature of the mining business, these conditions can change significantly over
relatively short periods of time. Consequently, actual results can be significantly more or less favorable.
2.7
Sources of Information
The reports and documentation listed in Chapter 24 (References) and Chapter 25 (Reliance on Information Provided by Registrant) of this TRS were used
to support the preparation of this TRS. Additional information was sought from THM personnel where required. Sections from reports authored by other
consultants may have been directly quoted or summarized in this TRS and are so indicated, where appropriate.
2.7.1 General
This TRS has been completed using the aforementioned sources of information, as well as available information contained in, but not limited to, the
following reports, documents and discussions:
■ Technical discussions with THM personnel;
■ QPs’ personal inspections of the Livengood gold property;
■ Reports detailing mineralogical, metallurgical and grindability characteristics of the Livengood deposit, conducted by industry recognized metallurgical
testing laboratories on behalf of THM;
■ Geological block model received on June 4, 2021 with the file name: 210526_rda_model.bmf;
■ A conceptual process flowsheet developed by BBA based on the specific Project testwork and similar operations;
■ Internal and commercially available databases and cost models;
■ Various reports covering site hydrology, hydrogeology, geotechnical and geochemistry;
■ Internal unpublished reports received from THM; and
■ Additional information from public domain sources.
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2.7.2 BBA
The following individuals provided specialist input to BBA:
■ Jorge Torrealba, PhD (BBA), André Allaire, PhD, P. Eng. (BBA) and Derek Blais (BBA) provided input to the comminution and metallurgical data
interpretations as summarized in the TRS (Chapters 10 and 14).
■ Denise Herzog, ITH Manager of Environmental Affairs provided input on recent environmental activities and current permitting status as summarized
in the TRS (Chapter 17).
■ Christopher Chung (BBA) provided input to the civil and geotechnical design of the general site infrastructure (Chapter 15).
■ Guillaume Richer-Rochon (BBA) provided electrical designs for the site and process plant (Chapters 14 and 15).
■ Bertrand Fortin (BBA) and Steven Perron (BBA) provided the designs for the process plant (Chapter 14).
■ Jean-Francois Beaulieu and Laura Mottola (BBA) provided the operating philosophies, designs and costs for the Integrated Remote Operations
Centre (IROC) as described in Chapter 15.
■ Jocelyn Marcoux (BBA) provided input on the process plant and infrastructure capital costs (Chapter 18) as well as input on the Project construction
strategies as summarized in the TRS (Chapter 21).
■ Claude Catudal (BBA) provided input on the Project execution strategy and schedule as summarized in the TRS (Chapter 21).
These specialists are not considered as QPs for the purposes of this S-K 1300 TRS.
2.7.3 JDS
The following specialist reports were used by JDS:
■ Knight Piesold Consulting, Technical Memorandum No. 3: Preliminary Seismic Hazard Assessment, May 5, 2011.
■ SRK Consulting Inc., 2010 and 2012 Hydrogeological Investigations and Modeling Results, Livengood Project dated February 2011 and April 2013,
respectively.
■ Carew, T.J, Pennstrom, M.A., Bell, R.J., Klerk, Q., November 2010 Summary Report on the Livengood Project, Tolovana District, Alaska. November 1,
2010 provided geologic background information for the site.
These specialists are not considered as QPs for the purposes of this S-K 1300 TRS.
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2.7.4 NewFields
The following individuals provided specialist input to NewFields:
■ Joseph Compton (NewFields) provided input to the civil and geotechnical design of the TMF as well as input on the capital costs (Chapter 18).
■ Joseph Hickey (NewFields) provided input on the TMF capital costs (Chapter 18).
■ Troy Thompson (Ecological Resource Consultants) provided input to the water balance and water management design (Chapter 15).
These specialists are not considered as QPs for the purposes of this S-K 1300 TRS.
2.8
Currency, Units of Measure, and Calculations
This TRS assumes that the Livengood Gold Project will be constructed using imperial units. Therefore, to the maximum extent practicable, all design work
and equipment descriptions were completed and reported in imperial units, with metric units shown in parentheses. Every effort has been made to clearly
display the appropriate units being used throughout this TRS.
However, it is important to note that both the Livengood Gold Project drill hole database and the block model were originally created in metric units and
have been consistently maintained in metric units. Therefore, some tables and figures in this TRS may be presented in metric units only to minimize the
risk of data unit conversion errors.
Unless otherwise specified or noted, this TRS uses the following assumptions and units:
■ Currency is in US dollars (USD or $);
■ All ounce units are reported in troy ounces, unless otherwise stated: 1 oz (troy) = 31.1 g;
■ All metal prices are expressed in US dollars (USD or $);
■ For financial modeling, ore tonnage is reported in short tons (t), with all costs reported in $/t;
■ All cost estimates have a base date of the third quarter (Q3) of 2021.
This TRS includes technical information that required subsequent calculations to derive subtotals, totals and weighted averages. Such calculations
inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, the QPs consider them immaterial.
2.9
Important Notice
This TRS is intended to be used by International Tower Hill Mines Ltd. subject to the terms and conditions of its agreements with BBA USA Inc. and the
relevant consulting firms. Such agreements permit International Tower Hill Mines Ltd. to file this TRS as a Technical Report Summary with the SEC’s new
mining rules under subpart 1300 and item 601 (96)(B)(iii) of the Regulation S-K (SK-1300). Any other use of this TRS by any third party is at that party’s
sole risk. The user of this document should ensure that this is the most recent TRS for the property as it is not valid if a new TRS has been issued.
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2.10 Acknowledgements
The authors would like to acknowledge the general support provided by the THM management and Alaska development team personnel during this
assignment. The TRS benefitted from the knowledge and specific input of the following individuals:
■ Karl L. Hanneman – Chief Executive Officer
■ Debbie L. Evans – Corporate Controller
■ Denise A. Herzog – Environmental Affairs Manager
Their commitment, contributions and teamwork are gratefully acknowledged and appreciated.
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3.
PROPERTY DESCRIPTION AND LOCATION
3.1
Property Description
The Livengood Gold Project covers approximately 48,300 acres (19,546 hectares), all of which is controlled by the Company through its wholly-owned
subsidiary, Tower Hill Mines, Inc. (THM) (Figure 3-1). The Livengood Gold Project is comprised of multiple land parcels: 100% owned patented mining
claims, 100% owned State of Alaska mining claims, 100% owned federal unpatented placer mining claims; land leased from the Alaska Mental Health
Trust (AMHT); land leased from holders of State of Alaska mining claims, patented claims, federal unpatented lode and placer mining claims, and
undivided interests in patented mining claims. The property and claims controlled through ownership, leases or agreements are summarized below. All of
the agreements are in good standing and are transferable. THM has taken reasonable steps to verify title to mineral properties in which it has an interest.
Except for the patented mining claims and the federal unpatented mining claims of the Hudson/Geraghty lease, none of the properties have been
surveyed.
3.1.1 100% Owned Patented Mining Claims
■ U.S. Mineral Survey 2447, located on lower Livengood Creek, subject to an agreement to allow Larry Nelson, as agent for Nelson Mining Company,
to operate a placer mine on MS 2447 through February 2, 2023.
■ U.S. Mineral Survey 1956, located on lower Gertrude Creek, subject to a reserved royalty of 5% of gross value held by Key Trust Company on behalf
of the Luther Hess Trust. With respect to portions of U.S. Mineral Survey 1626, located on lower Amy Creek:
-
-
-
100% of No. 2 Above Discovery Amy Creek,
100% of No. 3 Above Discovery Amy Creek, and
100% of Up Grade Association Bench.
3.1.2 100% Owned State of Alaska Mining Claims
■ 169 State of Alaska mining claims acquired by purchase. (Appendix A, Table A1);
■ 153 State of Alaska mining claims acquired by location. (Appendix A, Table A2).
3.1.3 100% Owned Federal Unpatented Placer Mining Claims
■ 29 federal unpatented placer mining claims. (Appendix A, Table A3).
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3.1.4 100% Owned by Livengood Placers, Inc.
Livengood Placers, Inc. (LPI), a private Nevada corporation that is 100% owned by THM, is the record owner of the following:
■ 29 patented mining claims. (Appendix A, Table A4);
■ 108 federal unpatented placer mining claims. (Appendix A, Table A5);
■ 24 State of Alaska mining claims. (Appendix A, Table A6).
3.1.5 Leased Property
Alaska Mental Health Trust Lease. A lease of the AMHT mineral rights having a term commencing July 1, 2004, and extending 19 years until June 30,
2023, subject to further extensions beyond June 30, 2023, by either commercial production or payment of an advance minimum royalty equal to 125% of
the amount paid in Year 19 and diligent pursuit of development. The lease requires minimum work expenditures and advance minimum royalties, which
escalate annually with inflation. A net smelter return (NSR) production royalty of between 2.5% and 5.0% (depending upon the price of gold) is payable to
the lessor with respect to the lands subject to this lease. In addition, an NSR production royalty of 1% is payable to the lessor with respect to the
unpatented federal mining claims subject to the lease described in the Hudson/Geraghty Lease below and an NSR production royalty of between 0.5%
and 1.0% (depending upon the price of gold) is payable to the lessor with respect to the lands acquired by THM as a result of the purchase of LPI. in
December 2011. As of December 31, 2020, there were 9,970 acres (4.035 hectares) included in the AMHT lease.
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Figure 3-1: Map illustrating the company’s Livengood Gold Project land holdings
(As at September 30, 2021, by tenure type, referenced to the Fairbanks Meridian Township, range and section grid.)
■ Hudson/Geraghty Lease. A lease of 20 federal unpatented lode mining claims having an initial term of ten years commencing on April 21, 2003, and
continuing for so long thereafter as advance minimum royalties are paid and mining-related activities, including exploration, continue on the property
or on adjacent properties controlled by THM. The lease requires an advance minimum royalty of $50,000 on or before each anniversary date (all of
which minimum royalties are recoverable from production royalties). An NSR production royalty of between 2% and 3% (depending on the price of
gold) is payable to the lessors. THM may purchase 1% of the royalty for $1,000,000. (Appendix A, Table A7).
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■ Griffin Lease. A lease of U.S. Mineral Survey 1990 having an initial term of ten years commencing January 18, 2007, and continuing for so long
thereafter as advance minimum royalties are paid. The lease requires an advance minimum royalty of $20,000 on or before each anniversary date
through January 18, 2017, and $25,000 on or before each subsequent anniversary (all of which minimum royalties are recoverable from production
royalties). An NSR production royalty of 3% is payable to the lessors. THM may purchase all interests of the lessors in the leased property (including
the production royalty) for $1,000,000 (less all minimum and production royalties paid to the date of purchase), of which $500,000 is payable in cash
over four years following the closing of the purchase and the balance of $500,000 is payable by way of the 3% NSR production royalty.
■ Tucker Lease. A lease of two unpatented federal lode mining claims and four federal unpatented placer mining claims having an initial term of 10
years commencing on March 28, 2007, and continuing for so long thereafter as advance minimum royalties are paid and mining-related activities,
including exploration, continue on the property or on adjacent properties controlled by THM. The lease requires an advance minimum royalty of
$15,000 on or before each anniversary date (all of which minimum royalties are recoverable from production royalties). THM is required to pay the
lessor the sum of $250,000 upon making a positive production decision, $125,000 payable within 120 days of the decision and $125,000 within a year
of the decision (all of which are recoverable from production royalties). An NSR production royalty of 2% is payable to the lessor. THM may purchase
all of the interest of the lessor in the leased property (including the production royalty) for $1,000,000. (Appendix A, Table A8).
3.1.6 Patented Mining Claims (Undivided Interests Less Than 100%)
■ An undivided 5/6th interest in that certain patented placer mining claim known as the “Kinney Bench” claim, included within U.S. Mineral Survey No.
1626 on lower Amy Creek.
■ An undivided 5/9th interest in that certain patented placer mining claim known as the “Union Bench Association” claim, included within U.S. Mineral
Survey No. 1626 on lower Amy Creek.
■ An undivided 1/6th interest in that certain patented placer mining claim known as the “Bessie Bench” claim, included within U.S. Mineral Survey No.
1626 on lower Amy Creek.
■ An undivided 1/3rd interest in those certain patented placer mining claims known as the “War Association” claim, the “Mutual Association” claim, and
the “O.K. Fraction” claim, all included within U.S. Mineral Survey No. 2033 on lower Amy Creek.
■ An undivided 2/5th interest in those certain patented lode mining claims known as the “Yukon” claim, the “Mastodon” claim, and the “Piedmont” claim,
all included within U.S. Mineral Survey No. 1990.
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3.1.7 Other Land Obligations
State of Alaska Mining Claims
On State of Alaska lands, the state holds both the surface and the subsurface rights. State of Alaska 40-acre mining claims require an annual rental
payment of $40 per claim to be paid to the state (by November 30th of each year) for the first five years, $85 per year for the second five years, and
$205 per year thereafter. These rental rates are multiplied by four for each 160-acre claim. As a consequence of the annual rentals due, all State of
Alaska mining claims have an expiry date of November 30th each year. In addition, there is a minimum annual work expenditure requirement of $100 per
40-acre claim and $400 per 160-acre claim (due on or before noon on September 1st each year) or cash in lieu of labor. An affidavit evidencing that such
work has been performed is required to be filed on or before November 30th each year. Excess work can be carried forward for up to four years. If the
rental is paid and the work requirements are met, the mining claims can be held indefinitely. The work completed by THM during the 2021 field season
was filed as assessment work, and the value of that work is sufficient to meet the assessment work requirements through September 1, 2025, on all State
of Alaska mining claims.
Holders of State of Alaska mining claims are also required to pay a production royalty on all revenue received from minerals produced on state land
during each calendar year. The production royalty rate is 3% of net income.
Federal Unpatented Mining Claims
Holders of federal unpatented mining claims are required to pay an annual claim maintenance fee of $165 per 20 acres payable in advance on or before
August 31 of each year.
Water and Land Use Considerations
Holders of State of Alaska and federal unpatented mining claims have the right to use the land and water included within mining claims only when
necessary for mineral prospecting, development, extraction, or basic processing, or for storage of mining equipment. However, the exercise of such rights
is subject to the appropriate permits being obtained.
3.1.8 Permits
THM has all of the necessary permits for exploration, geotechnical, and baseline data collection activities at the Project. These permits are active and
include Alaska Department of Natural Resources (hard rock exploration, temporary water use), U.S. Bureau of Land Management (plan of operations),
U.S. Corps of Engineers (Section 404 and nationwide wetlands), Alaska Department of Environmental Conservation (Section 401, storm water), and
Alaska Department of Fish and Game (fish habitat) authorizations. Permits required to support project development are discussed in Chapter 17.
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3.1.9 Environmental Liabilities
With over 100 years of placer mining activity and sporadic prospecting and exploration in the region, there is moderate to considerable historic
disturbance on the property. Some of the historic placer workings are now overgrown with willow and alder. The old mining town of Livengood is now
abandoned except for more modern road maintenance buildings at the town site. THM does not anticipate any significant obligations for recovery and
reclamation of historic disturbance and there are no known significant existing environmental liabilities.
3.2
Location
The Livengood property is located approximately 70 mi (113 km) northwest of Fairbanks, Alaska in the Tolovana Mining District within the Tintina Gold
Belt. The deposit area is centered near Money Knob, a local topographic high point. This feature and the adjoining ridge lines are the probable lode gold
source for the Livengood placer deposits that lie in the adjacent valleys that have been actively mined since 1914 and produced more than 500,000 oz of
gold.
The property lies in numerous sections of Fairbanks Meridian Township 8N and Ranges 4W and 5W. Money Knob, the principal geographic feature within
the known deposit, is located at 65 ̊30’16’’N, 148 ̊31’33’’W.
The property straddles Highway 2 (also known as the Elliott Highway), a paved, all-weather highway linking the North Slope oil fields to Fairbanks, and
adjoins the TAPS corridor, which transports crude oil from the North Slope south and contains the fiber-optic communications cable that may be used at
the Livengood site (see Figure 3-2).
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Figure 3-2: Project location map
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4.
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
4.1
Accessibility
The Livengood property is located approximately 70 mi (113 km) northwest of Fairbanks, Alaska in the Tolovana Mining District, within the Tintina Gold
Belt. The property straddles Highway 2, a paved, all-weather highway linking the North Slope oil fields to Fairbanks, and adjoins the TAPS corridor.
Locally, a number of unpaved roads lead from the highway into and across the deposit. A 3,000-ft (914 m) runway is located 3.7 mi (6 km) to the
southwest near the former TAPS Livengood Camp and is suitable for light aircraft.
4.2
Climate
The site is approximately 40 mi (64 km) south of the Arctic Circle. The climate in this part of Alaska is continental with temperate and mild conditions in
summer with average lows and highs in the range of 44°F to 72°F (7°C to 22°C). Winter is cold with average lows and highs for December through March
in the range of -17°F to 23°F (-27°C to -5°C). The lowest lows are in the -40°F (-40°C) range. Annual precipitation is in the order of 15.7 in (400 mm)
water equivalent. Winter snowpack depth is approximately 26 in (660 mm).
4.3
Local Resources and Infrastructure
4.3.1 Local Resources
The community of Minto (2012 population 223) is approximately 40 mi (64 km) southwest of the Project, and Manley Hot Springs (2012 population 116) is
approximately 80 mi (129 km) southwest of the Project area at the western terminus of the Elliott Highway. The Fairbanks North Star Borough has a
population of approximately 100,000 people, and comprises the regional center with hospitals, government offices, businesses, and the University of
Alaska - Fairbanks. The city is linked to southern Alaska by a north-south transportation and utility corridor that includes two paved highways, a railroad,
an interlinked electrical grid, and communications infrastructures. The city has an international airport serviced by major airlines. Fairbanks services both
the Fort Knox and Pogo gold mines, which operate year round. Skilled and unskilled labor to support mine development and operations will come
primarily from the Fairbanks area, with a total labor force of over 40,000 workers.
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4.3.2 Infrastructure
A study completed by Electric Power Systems has determined that the local utility in Fairbanks (Golden Valley Electric Association) can provide the
55 MW of power required for the Project. The Project would be connected to the local grid by building a 50-mi (80 km) 230 kVa transmission line along the
pipeline corridor.
SRK Consulting completed a regional hydrology study and determined that the average annual precipitation at the Livengood site, at project elevation of
1,400 ft (427 m) amsl, is 15.7 in (400 mm). A water balance study was completed by Ecological Resource Consultants (ERC) based on available and
collected data. The study indicates that the site has an adequate water supply for the Project as designed.
Two independent fiber optic communication cables currently extend from Fairbanks to the North Slope, one along the TAPS, the other parallel to the Elliott Highway,
both of which pass less than 2 mi (3.2 km) west of the Project.
4.4
Project Area
The 48,300 acres (19,500 hectares) of the Livengood Gold Project property has sufficient area to support the required Project facilities, including tailings,
waste rock storage facilities and processing plant sites.
4.5
Physiography
The Project area consists of rolling terrain of the Yukon-Tanana Uplands with a maximum elevation of 2,622 ft (800 m) at Livengood Dome. Upper and
mid slopes are occupied by mature black spruce (Picea mariana), white spruce (P. glauca), paper birch (Betula neoalaskana), and quaking aspen
(Populus tremuloides) forests. Low-lying areas and floodplains are dominated by poorly drained shrub and black spruce woodland communities often
underlain by permafrost. Few lakes or ponds occur in the Project area. Land disturbance from previous mining activity is conspicuous, particularly in
Livengood Creek and lower Goldstream Creek.
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5.
HISTORY
5.1
General History
Gold was first discovered in the gravels of Livengood Creek in 1914 (Brooks, 1916) and led to the founding of the town of Livengood. Subsequently, over
500,000 oz of placer gold were produced. From 1914 through the 1970s, the primary focus of prospecting activity was placer deposits. Historically,
prospectors considered Money Knob, a topographic high within the currently known gold deposit, and the associated ridgeline to be the source of placer
gold. Prospecting, primarily in the 1950s and in the form of dozer trenches, was carried out for lode mineralization in the vicinity of Money Knob. However,
no significant lode production has occurred to date.
Modern corporate exploration for lode gold mineralization in the vicinity of Money Knob and the Livengood placer deposits was initiated in 1976, continued
intermittently though 1999, and included extensive soil sampling, trenching and 25 shallow drill holes. The most recent round of exploration of the Money
Knob area began when AngloGold Ashanti (AGA) acquired property in 2003 and undertook an 8-hole RC program. The results from this program were
encouraging and AGA followed up with an expanded soil geochemical survey, which identified gold-anomalous zones in the Money Knob area. Based on
these results, prior soil surveys, and geological concepts, four diamond core holes were drilled in late 2004. The two drill programs intersected broad and
extensive zones of gold mineralization, but no further work was executed due to financial constraints and a shift in corporate strategy. In 2006, AGA sold
the Livengood Gold Project to ITH. In the same year, THM drilled a 4,026 ft (1,227 m), 7-hole core program. The success of that program led to the drilling
of an additional 14,436 ft (4,400 m) in 15 core holes in 2007 to test surface anomalies, expand the area of previously intersected mineralization, and
advance geologic and structural understanding of the deposit. Subsequent programs have continued to expand the resource, leading to consideration of
development of the deposit. Concomitant programs have included geotechnical, engineering and metallurgical work, along with the collection of
environmental baseline data. As of the end of 2014, AGA and THM completed exploration and delineation drilling totaling 575,078 ft (175,284 m) in 604
RC holes and 138,726 ft (42,284 m) in 149 core drill holes.
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6.
GEOLOGICAL SETTING AND MINERALIZATION AND DEPOSIT
6.1
Geological Setting and Mineralization
6.1.1 Regional Geology
The Livengood deposit is hosted by rocks of the Livengood Terrane (Figure 6-1), an east–west belt, approximately 150 mi (240 km) long, consisting of
tectonically interleaved assemblages, which include: i) the Amy Creek assemblage, a sequence of latest Proterozoic and/or early Paleozoic basalt,
mudstone, chert, dolomite, and limestone; ii) a Cambrian ophiolite sequence of mafic and ultramafic sea floor rocks thrust over the Amy Creek
Assemblage, in turn overthrust by; iii) a sequence of Devonian clastic sedimentary, volcanic, and volcaniclastic rocks (Athey et al., 2004). The Devonian
rocks are the dominant host to the mineralization at Livengood and have been informally subdivided into “Upper Sediments” and “Lower Sediments”
stratigraphic units, separated by volcanic rocks (“Volcanics” or “Main Volcanics”, Figure 6-2). The Devonian assemblage was overthrust by a second
klippe of Cambrian ophiolite and structurally intercalated cherty sedimentary rocks (“Money Knob”, Figure 6-2). All of these rocks are intruded by post-
thrusting, Cretaceous (91.7-93.2 My; Athey, Layer, and Drake, 2004) multiphase monzonitic and syenitic dikes; gold mineralization is spatially and
temporally associated with these intrusive rocks.
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Figure 6-1: Terrane map of Alaska showing Livengood Terrane (LG: red arrow)
The heavy black line north of the Livengood Terrane is the Tintina Fault. The heavy black line to the south of the Livengood and Yukon-Tanana Terrane (YT) is the Denali
Fault. The Tintina Gold Belt lies between these two faults (after Goldfarb, 1997)
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6.1.2 Mineralization and Alteration
Gold mineralization is associated with disseminated arsenopyrite and pyrite in volcanic, sedimentary and intrusive rocks, and in quartz veins cutting the
more competent lithologies, primarily volcanic rocks, sandstones, and to a lesser degree, ultramafic rocks. Mineralization appears to be contiguous over a
map area approximately 2.5 km2 (Figure 6-2); a 0.1 g/mt grade shell averages 920 ft (280 m) thick and drilling has not closed off the deposit at depth. The
stronger zones of mineralization are associated with areas of more abundant dikes. South of the Lillian Fault (Figure 6-2 and Figure 6-3) individual
mineralized envelopes are tabular and follow stratigraphic units, particularly the Devonian volcanics, or lie in envelopes that dip up to 45° to the south,
mimicking the structural architecture and attitude of the diking. On the north side of the Lillian fault, mineralization is similar in style and orientation and
hosted primarily in steeply dipping Upper Sediments. Three principal stages of alteration are currently recognized; in order from oldest to youngest, these
are characterized by biotite, albite, and sericite. Arsenopyrite and pyrite were introduced primarily during the albite and sericite stages. Gold correlates
strongly with arsenic and occurs primarily within and on the margins of arsenopyrite and pyrite grains. Carbonate was introduced with and subsequent to
these stages. Dating of the sericite alteration (Athey, Layer, and Drake, 2004) indicates that mineralization and alteration were contemporaneous with the
emplacement of the dikes.
Figure 6-2: Generalized geologic map of the Money Knob area based on geologic work by THM
(Red outline is the surface projection of the gold deposit)
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Figure 6-3: Cross section through the deposit
(Blue numbers indicate possible sequence of structural events: 1) Fold thrust development in the Permian (?); 2) NE-trending cross faults; 3) Thrust emplacement of
Cambrian sheet; 4) Extensional collapse, all of which pre-date dike emplacement and coeval mineralization.)
6.1.3 Massive Stibnite Veins
Interpretations of the occurrence of massive stibnite veins (MSV) was interpreted using Leapfrog software. MSV host high concentrations of the element
antimony (Sb). Sb is known to have an inverse relationship to Au metallurgical recoveries. Fifty-four individual occurrences of MSV have been identified
within a corridor of Sb mineralization within the Livengood deposit. Figure 6-4 and Figure 6-5 display oblique view of the interpreted veins in relation to
drill holes. Drilling shows other high grade Sb intercepts in the deposit.
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Figure 64: Caption 3D view of MSV and >2,500 ppm Sb assays-
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6.1.4 Antimony Mineralization Halo
Model iterations were evaluated to estimate the Sb distribution within the Livengood deposit.
Implicit models of the Sb distribution were generated in late 2017 using the overall Sb assay data available. The implicit contouring was conditioned by
“vectors”, reflecting visual trends of continuity, and detected preferential alignments that guided the construction of the resulting Sb grade shells at a cut-
off grade of 100 ppm.
The 100 ppm Sb shell volumetrics approximately reflect the proportion of Sb material reported to be above 100 ppm in the assay database, which
suggests that about 20% of the overall mineral resources at Livengood are appreciably tainted by Sb.
It is to be noted that the modeling of the overall Sb distribution was not constrained by any of the rock units/ solids stratigraphic interpretation. Instead, the
Sb distribution appears to be linked to structurally controlled domains, either some massive stibnite vein occurrences or zones of quartz-stibine veinlets
reflecting, it is thought, some preferential vectors of continuity that could be related to post-mineralization structural features.
Figure 6-6: 3D view of the Sb_100ppm grade shell generated from preferential linear alignments
and chosen metallurgical composite samples spatial distribution
Note the green RT8 volcanic cross-cutting unit, for reference
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Detailed review of the structural data and measurements specifically related to the Quartz-Stibnite-Vein (QSV) domain, as recorded over time, suggest
the prevalence of structural trends within that particular QSV domain, which were modeled as structural form interpolants using Leapfrog.
The so-called “form interpolants”, shown as flowing sheets/ribbons (Figure 6-7), in return were used to guide the construction of grade shells while
implicitly interpolating the Sb distribution. The resulting 100 ppm Sb shell appears as the meshed blue solid, truncated in Figure 6-8.
Figure 67: 3D view of the Sb_100 ppm grade shell-
derived from structurally controlled “form interpolant/sheets” guiding the implicit modeling with Leapfrog
Note the green RT8 volcanic dike unit, for reference
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Figure 6-8: Cross section view of the Sb_100 ppm grade shell (meshed solid)
derived from structurally controlled “form interpolant/sheets” shown as ribbons
To the right, note the green RT8 volcanic cross-cutting unit, for reference
6.2
Deposit
Among gold deposits of the Tintina Gold Belt, Livengood mineralization is most similar to the dike and sill-hosted mineralization of the Donlin Creek
deposit, where gold occurs in narrow quartz veins associated with dikes of similar composition (Ebert, et al., 2000). The age of the intrusions and the
coincidence of mineralization and intrusive rocks are typical of those of other nearby gold deposits of the Tintina Gold Belt, which have been characterized
as intrusion-related gold systems (Newberry et al., 1995; McCoy et. al., 1997). For these reasons Livengood is best classified with these deposits.
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7.
EXPLORATION
7.1
Exploration History
Multiple companies have explored the Livengood area as outlined in Chapter 6. Among them, Cambior Inc. was chiefly responsible for outlining the
sizeable area of anomalous gold in soil samples, which THM expanded between 2006 and 2010 (Figure 7-1) by collecting an additional 843 surface
samples. These samples helped improve definition of anomalous gold in soil on the southwest side of Money Knob and to the northeast from Money
Knob. The THM and Cambior samples were collected where C horizon material was available; the -80 mesh fraction was analyzed for gold and a multi-
element package. The currently known deposit is defined by the most coherent and strongest gold anomaly, but represents detailed evaluation of only
about 25% of the total gold-anomalous area.
During 2011, THM completed an IP/Resistivity survey covering the deposit and gold-anomalous soil geochemistry to the northeast, where loess and
frozen ground have prevented complete geochemical coverage. The objective of the survey was to establish the geophysical signature of the deposit and
identify similar signatures elsewhere in the district to prioritize exploration drilling.
Figure 7-1: Plot of gold values in soil samples
(The surface projection of the known deposit is outlined in blue in the lower left corner of the figure)
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7.2
Drilling
THM conducted drilling programs on the Livengood property from 2006 through 2012 (Figure 7-2) utilizing both core and reverse circulation (RC) drilling.
These programs initially outlined mineralization in the Core Zone south of the Lillian fault in 2006 and subsequently in the Sunshine Zone area north of the
fault, beginning in 2009, through step-out drilling and drill testing of areas with anomalous values in surface soil samples. Through completion of the
delineation drilling at the end of the 2012 season, THM and others have completed a total of 717,435 ft (218,674 m) of exploration and delineation drilling,
of which 574,599 ft (175,138 m) was RC drilling and 140,854 ft (42,932 m) was core drilling.
Figure 7-2: Distribution of resource / delineation drill holes in Money Knob area over time
(All holes completed after 2004 were drilled by THM. Drilling illustrated through 2011 dedicated to exploration and delineation; 2012 holes shown are geotechnical.)
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Nearly all resource drill holes at Livengood have been drilled in a northerly direction at an inclination of -50° (RC) and -60° (core), to best intercept the
south-dipping structures and mineralized zones as close to perpendicular as possible. A few holes have been drilled in other directions to test other
features and aspects of mineralization. Initial grid drill holes were spaced at 246 ft (75 m) along lines and 246 ft (75 m) apart; subsequent infill drilling in
the center of the 246 ft (75 m) square brings the nominal drill spacing to 164 ft (50 m) for a significant portion of the deposit.
Reverse circulation holes are bored and cased for the upper 0-100 ft (0-30 m) to prevent downhole contamination and to help keep the hole open for ease
of drilling at greater depths. Recovery of sample material from RC holes is done via a cyclone and a dry or wet splitter, according to conditions. Drill
cuttings are collected over the course of each 5 ft (1.52 m) interval and captured for a primary sample, an equivalent secondary sample (“met” sample)
and a third batch of chips for logging purposes.
Diamond core holes represent 24% of the footage (meterage) drilled. Core is recovered using triple tube techniques to ensure good recovery (>92%) and
confidence in core orientation. The core is oriented using either the ACTTM or the EZMarkTM tools.
Below the surface, drill hole locations are determined by sub-meter differential GPS surveys at the drill collar. The initial azimuth of drill holes is measured
using a tripod mounted transit compass in conjunction with a laser alignment device mounted on the hole of the collar. Downhole surveys of RC drill holes
and most core holes are completed using a gyroscopic survey instrument manufactured by Icefield Tools Corporation. Some core holes have been
surveyed using the Reflex EZ ShotTM system. Results of surveys and duplicate tests show normal minor deviation in azimuth and inclination for drill
holes (Brechtel, et al., 2011).
7.2.1 Reverse Circulation vs Core Drilling
On other projects, the use of reverse circulation (RC) drilling beneath the water table has resulted in inaccurate assay data, due to cyclicity and/or
downhole contamination. As THM has used both RC and core drilling above and below the water table, THM has conducted a detailed evaluation of the
RC data and comparison of the gold data for the two drilling techniques to check the accuracy of the RC data and evaluate any potential bias between the
two drilling methods.
During RC drilling, cyclic contamination can occur if the driller fails to clean the drill hole prior to the addition of drill rods, which can be detected by grade
spikes that occur with the addition of rods. Examination of the RC database indicated potential cyclic contamination in portions of six holes and one entire
drill hole (Brechtel et al., 2011). The data for the affected intervals have been removed from the database used for resource calculation.
Detectable migration of mineralized material downhole, when drilling beneath the water table, can occur following penetration of a high-grade intersection
and is manifested by a monotonic grade decrease for samples below the intersection. The frequency of monotonic decreases beneath high-grade
intersections in both core and RC drill holes is statistically comparable; significant downhole contamination is not indicated for the RC drilling (Brechtel, et
al., 2011).
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Early in 2011, THM modeled the distribution and mean of gold grades for both types of drilling (Brechtel, et al., 2011). Table 7-1 compares the mean
values by stratigraphic unit. The data suggests that, on average for the deposit, core gold grades (split HQ) are 4% lower than RC grades. The most
notable contrast occurs in the Sunshine Zone above the water table, where the core grade is 20% lower than the RC grade.
Table 7-1: Comparison of modeled gold grades between core and RC drilling by stratigraphic unit
Unit
Core vs RC Difference
Kint (dikes)
Cambrian
Main Volcanics
Sunshine Zone Upper Sediments above water table
Sunshine Zone Upper Sediments below water table
All Data
-6%
-3%
-3%
-20%
+6%
-4%
Based on this work, an area in the Sunshine Zone (Area 50, Figure 7-3) and above the water table was selected for detailed drilling to further evaluate the
relationship between core and RC results, where the discrepancy was the greatest. Area 50 was drilled out to nominal 123 ft (37.5 m) spacing to the
water table (approximately 492 ft (150 m) below surface). The drilling included a mix of HQ core (7 drill holes sawn in half for sampling), PQ core (23
holes sampled whole), and RC drilling (28 holes), providing the opportunity to re-examine the difference between core and RC samples. All Area 50
samples were composited to 16.4 ft (5 m) lengths and grades modeled. The results are illustrated in Figure 7-4. For Area 50, the modeled mean PQ
grade is 92% of that calculated for RC drilling, and the modeled HQ grade is 71% of the RC grade and 77% of the PQ grade, indicating that sawn HQ
core recovers significantly less gold than either whole PQ core or RC sampling; PQ sampling is closer to RC sampling, but still lower. Ordinary kriging of
the resource within the Area 50 volume by sample type bears out this relative relationship (contained gold based on PQ core is 94% of that based on RC;
for HQ the contained gold is 80% of that calculated using RC) (Table 7-2).
Because the gold at Livengood is relatively coarse, the relative sample volume (e.g. RC with a 5-in (127 mm) diameter, whole PQ core with a 3.3 in
(83 mm) diameter, and HQ core with a 2.4-in (61 mm) diameter that has been halved) is likely the root cause of the grade discrepancies between core
and RC, due to the nugget effect. Split HQ core comprised 13% of the composites used to calculate the August 2011 resource. Based on the results
above, it can be concluded that the resource is not significantly overstated and may be slightly understated.
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Figure 7-3: Map showing location of areas of detailed drilling
(Area 50, Sunshine Cross and Core Cross)
In addition, the mineralization in the Sunshine Zone (Area 50) is characterized by quartz-carbonate-sulfide veinlets that have a significantly higher
proportion of associated coarse gold relative to the remainder of the deposit. Where the mineralized material is partially oxidized, the carbonate and
sulfide are leached out, rendering the veinlets friable with the core often breaking along them. The most probable explanations for the greater
discrepancies in grade in the Sunshine Zone above the water table are: i) loss of gold due to less than 100% core recovery (average 92%), and
ii) progressive loss of gold with increased handling of the sample material, e.g. the HQ core was boxed, then taken from the boxes and sawn in half
lengthwise then bagged (most handling), the PQ core was boxed, then transferred whole directly into sample bags (less handling), and the RC samples
were bagged directly on the rig (no handling). This effect would be most pronounced in oxidized zones of the deposit, but could also occur in unoxidized
rocks if they are badly broken and core recovery is less than 100%.
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Table 7-2: Calculated resources for Area 50 by drill sample type
(Ordinary kriging of 32.8 ft (10 m) composites, 0.25 g/mt cut-off)
Drill Sample Type
RC drilling
PQ drilling, PQ/RC ratios
HQ drilling, HQ/RC ratios
HQ/PQ ratios
Metric Tons
(Mmt)
Tonnage
Ratio
Au
Grade (g/mt)
16.73
15.95
15.14
0.575
0.566
0.510
0.953
0.905
0.949
Grade
Ratio
0.984
0.887
0.901
Au
(oz)
309,114
289,981
248,061
Au
Ratio
0.938
0.802
0.855
Figure 7-4: Models for RC, Whole PQ, and Sawn HQ from Area 50
(Based on 869 RC Composites, 753 PQ Core Composites, and 203 HQ Core Composites (all composited to 16.4 ft (5 m)). The modeled grade means for the RC, PQ and
HQ composites in Area 50 are 0.597, 0.549 and 0.424 g/mt gold, respectively.)
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7.2.2 Resource Verification Drilling
Two areas of the deposit, the Core and Sunshine crosses, were selected for 49 ft (15 m) spaced reverse circulation (RC) in-fill drilling on crosses with
north-south and east-west legs 492 ft (150 m) in length (Table 7-3) to demonstrate continuity of grade and, thereby, confidence in the resource based on
the wider spaced grid drilling defining the resource. A third area, Area 50, measuring 640 ft (195 m) by 787 ft (240 m) at the surface, was drilled on a
123 ft (37.5 m) grid with alternating core and RC drilling. Two resources were generated for each volume using ordinary kriging on samples composited to
33 ft (10 m) lengths: the first including those portions of the 164 ft (50 m) grid drilling (May 2011 resource) within the volume; and a second using both the
grid and close-spaced drilling within the same volume. On average, the effect of the increased drilling density on tonnage, grade, and contained ounces of
gold is negligible (less than 1%; see Table 123), indicating that current grid spacing adequately defines the resource.
Table 7-3: Calculated resources for the Core Cross, Sunshine Cross and Area 50
(Ordinary kriging, 0.25 g/mt cut-off)
Area, Drill Hole Spacing (1)
Core Cross, 50 m grid & 15 m infill
Core Cross, 50 m grid drilling only
Sunshine Cross, 50 m grid & 15 m infill
Sunshine Cross, 50 m grid drilling only
Area 50, all drilling (37.5 m)
Area 50, 50 m grid drilling only
All areas (averages)
Note: 1 m = 3.28 ft
Metric
Tons
(Mmt)
15.67
15.37
9.82
9.81
16.04
16.13
Tonnage
Ratio
(all/grid)
1.020
1.001
0.994
1.005
Au
Grade
(g/mt)
0.481
0.477
0.553
0.566
0.562
0.550
Grade
Ratio
1.008
0.977
1.022
1.002
Au
(oz)
242,401
235,715
174,647
178,556
289,685
285,136
Au Ratio
(all/grid)
1.028
0.978
1.016
1.007
The author is unaware of any sampling or recovery factors that could materially impact the accuracy and reliability of the drilling results for the Livengood
Gold Project.
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8.
SAMPLE PREPARATION, ASSAYING AND SECURITY
8.1
Sample Collection, Procedures and Security
THM samples all holes from surface to total depth. Since 2009, core from the deposit is quick-logged in the split tube at the drill site, then boxed and
transported by the geologist to the core logging facility in camp for detailed logging and sample markup. Samples lengths, based on geologic criteria,
range from 1 ft (0.3 m) to 5 ft (1.52 m). After logging, the core is sawn in half longitudinally and sampled on the specified intervals into bags. Past
procedures, largely similar, are documented in Brechtel et al. (2011).
RC samples (an “original” and a duplicate) are collected at the rig, as described in Chapter 10, directly into bar-coded bags, which are printed and coded
with the hole number and sample interval. The samples are transported by project personnel from the drill site to camp, where they are logged in using a
bar code reader slaved to a portable Thermo Fisher Scientific NITONTM XRF analyzer (used to collect geochemical data on all the RC samples).
When all samples for a drill hole are accounted for, a sample shipment is assembled by adding control samples for quality assurance and quality control
(QA/QC). One standard (certified gold content) purchased from RockLabs or Geostats and one blank (below detection limit for gold) are added for every
18 drill samples in the shipment. Shipment paperwork is prepared for the lab and includes instructions for the preparation of prep duplicates (1 per 20 drill
samples). All core samples are weighed and the weights recorded. The shipment is bagged in sealed containers and the seal numbers are recorded on
the sample submittal form. The shipments are picked up at the Project site by ALS USA, Inc. (ALS) lab personnel, who acknowledge receipt and custody
of the samples by signing a copy of the submittal form, which is retained in the Project files.
8.2
Lab Procedures
Drill samples were weighed upon receipt at the ALS prep lab in Fairbanks. RC samples are then dried and re-weighed. The samples are crushed (-10
mesh) and a 1 kg fraction is pulverized. Aliquots for analysis and the coarse rejects are also weighed. The tracking of weights from the field through the
sample preparation process permits the detection of sample switches and/or number transcription errors. ALS forwards pulps from the Fairbanks prep lab
to Vancouver or Nevada for analysis. Samples are analyzed by standard 50 g fire assay/AA finish for the gold determinations. All core samples and select
RC drilling samples are also submitted for multi-element ICP-MS analyses using a 4-acid digestion technique. These are standard analyses for the
exploration industry and are performed to a high standard. ALS is accredited by the Standards Council of Canada, NATA (Australia) and also has ISO
17025 and 9001 accreditations.
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8.3
QA/QC Procedures and Results
ALS analytical reports are reviewed when received to: i) verify shipped vs received weights for core and dry weights against coarse rejects plus sample
aliquots for all samples to check for weight loss or gain that indicates sample mixing, switches or transcription errors; and ii) blanks and standards with
“out-of-range” values (±10% for standards and 3x detection limit for blanks). Errors are flagged and reported to ALS for resolution. If required, samples
with questioned results and the surrounding 10 samples are re-analyzed. Upon satisfactory resolution of any discrepancies, new analytical certificates are
issued by ALS.
In addition, duplicate gold pulp analyses and check assays with a second lab are requested on an annual basis. These analyses, and those for field
duplicates and prep duplicates, are examined to evaluate the laboratory prep and analytical process. These data indicate no systematic bias introduced in
the sample prep or gold assaying procedures, but do show scatter in the gold data, particularly at higher grades, which is interpreted as the product of
nugget effect, typical for deposits with free gold. Results and detailed analysis of the data for 5,466 prep duplicates, 5,173 pulp duplicates, standard
materials, and check assays are reported in Brechtel, et al., 2011.
As a further check on the integrity of gold assaying, 2,096 samples were selected for 1 kg screen fire assays for comparison to the standard 50 g fire
assay/AA finish results routinely used by THM (Brechtel, et al., 2011). The mean gold grade for the samples is very similar for both data sets (within
0.1%). In detail, the data suggest that the standard fire assays are lower or equal to the screen fires at gold grades up to 9 g/mt. At grades over 9 g/mt,
the 50 g assays may over-represent the gold grade, but at Livengood the number of samples at these grades is very small (<0.2% of the sample
population).
8.4
Data Collection, Entry and Maintenance
Two master Project databases are maintained in Microsoft™ Access by THM: i) a drill hole database containing all the data collected in the field, including
drill hole locations, downhole surveys, geologic logging, NITON™XRF geochemistry and sample interval data; and ii) an assay database that is the
repository of all laboratory generated analytical data.
Data gathered electronically in the field is uploaded daily to the drill hole database utilizing custom queries. These data include RC drill logs and
NITON™XRF geochemistry, collar locations and gyroscopic downhole survey data. Core logging and sampling information is collected on paper and hand
entered. Once data is entered, database internal subroutines check the data for errors (i.e. gaps and overlaps in logging or sampling intervals) and data
format consistency. Analytical data from ALS is received electronically, uploaded to the assay database and merged with the sample interval data read
from the drill hole database. Customized queries check blank and standard analyses and flag out of range values.
The databases and all raw data are stored on a hard drive in the field office, which is copied automatically daily to the server in the Fairbanks office,
where tape backup of the server is conducted nightly with rotation of tapes into offsite storage.
In the opinion of the author, the sample preparation, sample security and analytical procedures are adequate for the Livengood Gold Project.
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9.
DATA VERIFICATION
When the QP from RDA visited the Project, they were given unfettered access to the core logging facility and witnessed firsthand the procedures that
were in place. No limitations were placed on the QP for any reason. In the opinion of the QP, the data at Livengood is adequate for the purposes of grade
estimation for the Project.
The QP examined core during the site visit. Observations were that drill logs, cross sections and maps were done to a high quality. From 2006 through
2009, Dr. Paul Klipfel annually, and independently, collected a total of 80 samples from outcrops (2006), and both RC and core drill holes for gold
analysis. Comparison of the results to THM’s original gold assays indicates a scatter due to the nugget effect, but no systematic bias in the data (detailed
discussion in Brechtel, et al., 2011). The QP reviewed the results of the 2009 verification sampling and agrees with the conclusions regarding accuracy,
precision and lack of bias. Additionally, in 2010, 39 drill samples were collected for verification. The 2010 samples show a good overall correlation with the
results reported by THM, with precision similar to or better than the analyses reported by the author in 2011 (Brechtel, et al., 2011). The QP has not
verified all sample types or material reported, but to the best of their knowledge, THM has been diligent in their sampling procedures and efforts to
maintain accurate and reliable results.
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10.
MINERAL PROCESSING AND METALLURGICAL TESTING
10.1
Introduction
This chapter presents the pertinent results from the testwork leading up to the 2013 feasibility study (FS), the post-FS test results that were obtained
leading up to the 2017 pre-feasibility study (2017 PFS), as well as the post-2017 PFS test results that were obtained leading up to the 2021 PFS. The
chapter begins with an outline of sample selection and preparation for the FS test programs (Section 10.2). This is followed by a discussion on the
mineralogy and gold deportment of the Livengood gold ore rock types (Section 10.3), work that had been completed for the FS. Design work and
equipment descriptions in this Chapter are reported in imperial units, with metric units shown in parentheses. Every effort has been made to clearly
display the appropriate units being used throughout this TRS, certain tables show results in metric units only.
Comminution testing and the results of grinding simulations as they relate to mill circuit design and throughput estimation are covered in Section 10.4.
Comminution testing was conducted in the following test programs:
■ FS – Design Comminution Test Program;
■ FS – Variability Comminution Test Program;
■ PFS – SMC Testwork (2015-2016).
Metallurgical testing results and how these relate to back-end (post-comminution) plant design are discussed in Section 10.5. Metallurgical testing was
performed in the following test programs:
■ FS – Optimization Test Program;
■ FS – Variability Test Program;
■ 2017 PFS – Continuous Test Program;
■ 2017 PFS Phase 7 – Assay procedures and water source testing;
■ 2017 PFS Phase 8 – Grind, leach recovery, gravity, flotation testing;
■ 2017 PFS Phase 9 – SGS and FLS / Curtin University test program, grind, leach recovery, gravity testing;
■ 2017 PFS Phase 10 – Stirred tank reactor (STR) testing of rock types RT7 and RT9.
■ 2021 PFS Phase 9a – Cyanide leach testing;
■ 2021 PFS Phase 9b – Gravity recovery, stirred tank reactor (STR), gold deportment, diagnostic leach and flotation testing;
■ 2021 PFS Phases 11 and 12 – Gold grade/recovery and grind size/recovery relationships both inside and outside the 100 ppm antimony shell.
■ 2021 PFS Phase 13 – antimony concentration/gold recovery relationships.
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The metallurgical testwork chapter includes discussion on gravity recovery, flotation, leach pre-conditioning, CIL, intensive leach (IL) testing, settling,
cyanide detoxification and other topics as they relate to plant design. Phases 9, 9a, 9b and 11 and portions of Phase 13 represent the test programs that
used RC rig duplicate rock chips in composite samples. All other test programs were based on drill core composite samples.
The chapter closes with a discussion on recovery equations (Section 10.6) and consolidates all testwork conclusions and a number of trade-offs as they
relate to process flowsheet development (Section 10.7); potential opportunities for future testwork are then given (Section 10.8).
10.2
FS – Sample Selection and Preparation
As part of the work leading up to the FS, samples were selected by THM and RPA (Altman, K. 2013) and submitted to SGS for design and variability
comminution composite preparation (Tajadod, J. and Lang, J., 2013).
Sample selection focused on the preparation of large bulk composite samples, which were used for flowsheet optimization testing and comminution
testing. A number of variability samples were selected to test the variation in the orebody and to examine how the metallurgical response changes based
on the feed grade for each of the rock types.
A mine production schedule that was developed prior to the 2013 FS was used to establish average gold grade targets to help guide the sample
selection.
SGS Vancouver received two shipments in February and March 2012, originating from the Livengood property and submitted by THM. The material that
was shipped was composed of approximately 3,000 individual samples, which were used for the optimization, design comminution and variability testing
(Table 10-1).
Table 10-1: Livengood gold ore sample selection weights (kg) used in the FS test programs
FS Test Program
Optimization
Design comminution
Variability
Sample weight (kg)
4,800
2,700
3,000
The Livengood rock types were identified on the basis of their lithology. The six rock types identified in Table 10-2 below accounted for 100% of the
reserve at that time.
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Table 10-2: Definition of Livengood rock types (FS)
Rock Type
Description
RT4
RT5
RT6
RT7
Bleached
RT8
RT9
Cambrian
Upper Sediments – Sunshine Zone
Upper Sediments
Lower Sediments – South of Lillian Fault
Volcanics – North of Lillian Fault
Volcanics – South of Lillian Fault
(1) Proven & Probable
% Ounces
(of P&P) (1)
% Tons
13.1
23.5
19.5
13.5
1.9
28.5
13.9
28.2
18.4
12.1
2.0
25.4
During the FS, rock type RT7 was further designated as “bleached” or “unbleached” material to account for the differences in the alteration and other
factors of the samples. RT7 unbleached was not included in potential ore. The sample compositing instructions did contain some errors, so some of the
RT7 samples were mixed up and in other cases bleached and unbleached material was combined.
For the design comminution test program, each sample interval was selected and added to the composite, blended, and homogenized. From each
composite, 20 rocks (-3 /+2 in) were selected for the Bond low-energy impact (CWi) test. Each composite was then crushed to 100% minus 2½ in and
65 kg was split for the JK Drop Weight (DWT) test. The remaining sample was crushed to nominal 1¼ in and 5 kg was split for the Bond abrasion (Ai)
test. The remaining sample was stage-crushed to ½ in and 15 kg was split for the Bond rod mill grindability (RWi) test. Finally, the remaining sample was
stage-crushed to 6 mesh and 10 kg was split for the Bond ball mill grindability (BWi) test. The FS Design comminution sample preparation flowsheet is
illustrated in Figure 10-1.
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Figure 10-1: FS Design comminution sample preparation flowsheet (SGS report)
For the comminution portion of variability testing, each sample interval was selected and added to the composite, blended and homogenized. Every
sample was crushed to nominal 2½ in and 10 kg was split for the SPI test. The remaining sample was stage-crushed to nominal 6 mesh, blended, and a
10 kg portion was split for the BWi test. The comminution variability sample preparation flowsheet is illustrated in Figure 10-2.
Figure 10-2: FS Variability comminution sample preparation flowsheet
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Both the design comminution and variability samples were selected from the major rock types (RT4, RT5, RT6 and RT9). Rock types RT7-Bleached, RT7-
Unbleached and Stibnite were also tested in the comminution variability test program. RT8 was not tested in any of the test programs. RT7-Bleached and
RT7-Unbleached labels were later removed and sample results were combined and renamed RT7.
10.3
FS – Mineralogy and Gold Deportment Study
SGS (Wang, Z. and Prout, S., (2013)) undertook a high definition mineralogical examination of the Livengood samples that were used for the FS
metallurgical testwork. Examination of four samples, which were identified as RT4, RT5, RT6, and RT9, was carried out using X-ray diffraction (XRD),
QEMSCAN, Electron Microprobe Analysis (EMPA), optical microscopy, and chemical analysis. The purpose of this test program was to determine the
overall mineral assemblage, the liberation/association of the iron sulfides and gold-bearing minerals, as well as to complete a mass balance of
microscopic gold.
The RT4 sample consisted of carbonates (22.5%), talc (18.6%), quartz (16.0%), feldspars (13.1%), chlorite (11.0%), micas (6.4%), and other silicates
(mainly amphibole, pyroxene, garnet and epidote) (4.7%), clays (2.5%), oxides (1.8%), along with trace (<1%) apatite and other minerals. Arsenopyrite
accounted for 1.9% and pyrite for 0.9%. Gold minerals were tentatively quantified in the sample at less than 0.001%.
The RT5, RT6 and RT9 samples consisted of quartz (33.0-40.2%), micas (11.8-16.9%) feldspars (21.7%-27.7%), carbonates (3.7-7.2%), and oxides (1.5-
2.1%), along with trace (<1%) talc, apatite and other minerals. Pyrite accounted for 2.9-10.5%, arsenopyrite (1.0-1.4%). Gold minerals were tentatively
quantified in the samples at less than 0.001%.
In the four samples, gold occurred mainly in its native form (defined as Au 75-100%), and carried an average of 90.8-93.5 wt% Au, while all other
elements were less than 1.0 wt%.
The results of the gold deportment characterization demonstrated that RT5, RT6 and RT9 all exhibited broadly similar characteristics. Rock types RT6
and RT9 demonstrated poor correlation with chemical assays, suggesting that the contribution of finer gold populations may be more significant in these
ore domains. Rock type RT4 showed significant variation in both mineralogical composition and identified gold populations. It would be anticipated that
RT4 may cause difficulties in recovery for a process tailored to the other ore domains.
Rock types RT5 and RT6 had pyrite as the dominant sulfide mineral over arsenopyrite. Rock type RT9 maintained this trend, but with <10% arsenopyrite
(relative to pyrite) present. Generally, solid solution gold could be expected to be hosted with arsenopyrite and consequently the potential contribution of
solid solution gold to the overall gold balance should not be expected to be significant in these rock types.
Rock type RT4 showed arsenopyrite to be the dominant sulfide mineral. However, the abundance of sulfide minerals was generally lower in this rock type,
once again suggesting that solid solution gold should not be a major factor in process development.
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Comparison of the four rock types examined for the Project demonstrated a consistent trend for the majority of gold to be present as free gold within the
gravity concentration size range. The majority of gold grains that were not within the gravity recoverable range were identified as fine exposed gold grains
and should be readily amenable to recovery by CIL leaching of the gravity tailings.
10.4 Comminution Testing
Comminution testwork programs were completed as part of the 2013 FS and the 2017 PFS. In both cases, the objective was to generate the information
needed to size the crushing and grinding circuits for the Project.
10.4.1 FS – Comminution Testing
Comminution testing was performed on samples that comprised part of the optimization samples, as well as the variability samples. Samples were
selected based on the potential mill supplier’s recommendations
Design comminution samples were prepared in accordance with Figure 10-1. A total of 12 DWTs were performed on rock types RT4, RT5, RT6, RT7-
Bleached, RT7-Unbleached and RT9. Priority was given to the DWT, due to limitations in the availability of PQ core.
A total of 36 samples were prepared for comminution testing, including: Bond Work index (BWi), Rod Work index (RWi), Crusher Work index (CWi) and
Abrasion index (Ai). These indexes were applied in the crusher and mill sizing calculations as well as for determination of consumables, such as balls and
liners.
Additional SAG power index (SPI) and BWi tests were completed using variability samples. The total number of BWi tests was 136.
The average BWi, RWi, CWi and Ai for each of the above rock types are presented in Table 10-3.
Rock Type
RT4
RT5
RT6
RT7
RT9
Total Number of tests
Table 10-3: Comminution data (FS)
Work Index Metric (kWh/mt)
BWi
12.3
11.9
14.4
14.1
14.3
136
RWi
13.1
15.7
17.3
14.5
16.3
26
CWi
13.3
14.1
14.4
7.7
7.4
48
Ai
0.14
0.15
0.12
0.17
0.35
48
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JK Drop Weight (DWT) tests were performed on selected rock type samples. The data obtained was analyzed to determine the JKSimMet comminution
parameters. These parameters were combined with equipment details and operating conditions to analyze and/or predict grinding circuit performance.
While the A and b values of the DWT are not independent and cannot be used for direct comparison between ore types, their product (A×b) provides a
good parameter for comparison. Lower A×b values indicate a higher resistance to abrasion breakage and also a greater resistance to impact breakage.
Table 10-4 below, shows the average A and b values for each rock type. The results indicated that RT4 and RT7 would require less comminution energy
than the other rock types. The numbers are indicative of a medium hard rock type.
Table 10-4: Average JK drop weight parameters by rock type (FS)
Rock Type
Number of Tests
RT4
RT5
RT6
RT7
RT9
Total tests
2
2
2
4
2
12
A
62.1
67.6
50.7
55.4
60.5
b
0.83
0.50
0.64
0.89
0.58
A×b
51.5
33.8
32.5
49.3
35.4
10.4.1.1 FS – JKSimMet Simulations
Analysis of the JK Drop Weight parameters was performed by Mark Richardson of CSS using JKSimMet, a software package used to analyze the
grinding circuit, which was comprised of a single (D×L) 40 ft × 25 ft SAG mill, followed by two (D×L) 28 ft × 45 ft ball mills, with a pebble crusher operated
in closed circuit with the SAG mill. Following optimization, the JKSimMet results led to the conclusion that the selected circuit would process about 92,600
t/d (84,000 mt/d).
It should be noted that one vendor recommended the use of a (D) 42 ft. SAG mill to achieve the target throughput. Consideration was given to this size of
mill, but it was decided that a “first of its kind” (D) 42 ft SAG was not warranted, due to a lack of reference sites with proven track record in the industry at
the time of the FS.
After further consultation, the JKSimMet model was rerun using the following new parameters:
■ Circuit target grind of 90 µm (P80);
■ Daily throughput of 100,000 t/d (90,718 mt/d);
■ BWi (14.3 kWh/mt) corresponding to the 75th percentile of LOM hardness.
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The simulation resulted in a circulating load of 15% through the pebble crusher and a circulating load of 350% running through the ball mill circuit. The
proposed circuit used a single (D × L) 40 ft × 26 ft SAG mill with 27 MW of installed power and two 28 ft × 46 ft ball mills with 29.5 MW of installed power
each.
The decision was made to accept the vendor recommendation, but to also install a bypass after the pebble crusher, to allow the option to shift some of the
SAG load downstream to the ball mill circuit as a way to balance the power draw in the circuits.
10.4.2 2017 PFS – Comminution Testing
BBA completed a review of the FS comminution testwork (“Comminution testing of samples from the Livengood Property”. SGS report 50223-001-Phase
III, com Report 3. February 26, 2013). Based on the review, BBA made the recommendation to carry out additional comminution testwork (SMC testing) to
increase the level of confidence in the parameters used to design the grinding circuit and gain further insights into the variability of the Livengood gold
ore’s comminution properties.
10.4.2.1 2017 PFS – SMC Testwork Program (2015-2016)
SMC testwork was performed in January 2016 at SGS Vancouver to increase understanding of the ore variability by rock type in support of the grinding
circuit development.
Ten composites were prepared for each rock type. Each composite was made up of several drill core intervals. The composite weights ranged from 12 to
26 kg. The samples making up a composite were all properly bagged and labeled according to the rock type (e.g. RT4) and composite number (1-10), i.e.
RT4-1, RT4-2, up to RT4-10. The samples that made up the composites were bagged and labelled according to drill hole number and sample number. All
samples within a composite came from a single drill hole.
BBA requested that Stephen Morrell (SMC Testing®) be engaged to assist in calibrating the SMC test results using the DWT data from the 2013 FS. This
procedure is a required step in BBA’s practices to ensure that the calibration of the SMC results is performed using data from DWT tests from the same
deposit and ore types as opposed to using generic databases available through JKTech (owners of JKSimMet). The calibration of the SMC results for
each of the rock types (RT4, RT5, RT6, RT7, and RT9) was completed using the DWT data that corresponded to each specific rock type.
Table 10-5 shows the average as well as the 50th and 80th percentile results of the SMC testwork. Based on BBA’s experience and internal database, the
RT5 and RT9 ore could be classified as hard, as the 50th percentile (50th) of the A×b data is in the low 30s. On this same basis, rock types RT6 and RT7
would be considered medium hard (50th in the 40s), and RT4 would be considered the softest of the rock types present in the Livengood deposit (50th =
73).
It is important to note that for most of the rock types there is only a small difference between the 50th and 80th A×b values. With the exception of RT4, the
results suggest that there will not be significant grinding
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throughput variability from one rock type to another. In the case of RT4, ore blending with other rock types should be considered to moderate this issue.
When comparing the comminution results from the 2017 PFS to the 2013 FS, the 50th A×b results for the RT4 rock type was lower (the ore was softer)
than the average of the DWT results from the FS. The 50th A×b results for rock types RT5, RT6, and RT9 were of the same order as the average of the
DWT results from the FS. In the case of RT7, the 50th was slightly harder than the average of the DWT results from the FS.
Table 10-5: SMC testwork statistical analysis (2017 PFS)
Number of
tests
Samples ID
A×b average
A×b
50th percentile
A×b
80th percentile
10
10
10
10
10
50
RT4-1 to 10
RT5-1 to 10
RT6-1 to 10
RT7-1 to 10
RT9-1 to 10
75.0
36.7
44.4
47.9
37.9
73.1
33.4
38.5
40.1
36.7
57.1
29.3
31.3
33.8
31.8
RT
4
5
6
7
9
Total
10.4.3 Testwork Summary for Crushing and Grinding Circuit Design
A database was prepared with all available results from both the FS and 2017 PFS comminution testwork. Table 10-6 and Table 10-7 present the results
of a statistical analysis by rock type using the results from the FS and 2017 PFS programs.
Table 10-6: Comminution test statistical analysis by rock type
Percentile
Rock Type
RT4
RT5
RT6
RT7
RT9
ALL
50th
80th
SG
(g/cm3)
2.73
2.68
2.73
2.71
2.74
2.77
JK Drop Weight Parameters
(DWT and SMC test)
A × b
65.2
33.4
36.7
42.7
36.0
32.0
ta
0.72
0.36
0.41
0.41
0.38
0.61
CWi
RWi
BWi
kWh/
mt
kWh/
mt
kWh/
mt
14.5
14.2
15.1
7.9
6.9
15.5
13.4
15.7
17.6
14.2
16.3
17.1
12.0
12.0
13.0
12.1
13.7
13.7
Ai
g
0.13
0.15
0.10
0.15
0.29
0.25
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Table 10-7: Comminution test statistics using all FS and 2017 PFS testwork data
Statistic
SG
(g/cm3)
Max
90%
80%
75%
50%
25%
10%
Min
Average
2.87
2.79
2.77
2.76
2.71
2.66
2.57
2.39
2.70
JK Drop Weight Parameters
CWi
RWi
BWi
A × b
23.8
28.9
32.0
33.0
41.0
52.9
78.6
121.0
47.1
ta
1.26
0.79
0.61
0.58
0.41
0.32
0.28
0.23
0.49
kWh/mt
kWh/mt
kWh/mt
19.7
17.0
15.5
14.3
9.4
7.2
5.8
4.8
10.8
19.1
17.9
17.1
16.4
14.9
13.1
11.6
11.2
14.8
14.9
14.3
13.7
13.4
12.6
11.7
11.1
10.2
12.6
Ai
g
0.59
0.33
0.25
0.20
0.16
0.10
0.08
0.05
0.18
Crushing circuit simulations used the 80th percentile of the Crusher Work index (CWi) (Table 10-7)
Originally, the 80th percentiles of the DWT and BWi of the hardest ores (RT5 and RT9) were used by BBA to estimate the initial grinding circuit design
parameters. This was because SMC data was not available at the time. The final grinding circuit design parameters (Table 10-8) were taken from the data
point (RT6 sample ID DC5) that was closest to the 80th percentile of the A×b values of rock types RT5 and RT9. For design purposes, those results were
considered the 80th percentile. Note that this same test sample’s BWi value was also used for design purposes (13.1 kWh/mt).
Figure 10-3 (A×b for DWT and SMC) and Figure 10-4 (BWi) show the cumulative distributions from the comminution testwork programs. Figure 10-3
indicates the preliminary A×b design point as (Design_RT5&RT9_DWT). Similarly, Figure 10-4 indicates the preliminary BWi design point as
(Design_RT5&RT9_DWT).
Table 10-6 shows the 50th percentile of the Abrasion index (Ai) for each rock type. The Ai values are classified as medium-low in abrasiveness and were
used to calculate media consumption
Table 10-8: Grinding circuit design values
Percentile
Rock Type
A × b
80th
Design Value DWT
RT5+RT9
RT6
29.6
29.3
ta
-
0.58
RWi
BWi
kWh/mt
17.1
11.9
13.1
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Figure 10-3: Cumulative A × b (DWT + SMC) results for the Livengood Gold Project
Figure 10-4: Cumulative BWi results for the Livengood Gold Project
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10.4.4 Project Throughput Estimation
Three scenarios were simulated for the 2017 PFS:
1. Scenario A was a circuit based on two lines (SABC, Figure 10-5) with pre-crushing and a final product of 90 µm (P80). SABC stands for a
comminution circuit consisting of a semi-autogenous grinding mill (SAG), ball mill and pebble crusher.
2. Scenario B was a circuit based on one line of the same configuration as Scenario A, but with a final product of 180 µm (P80).
3. Scenario C was based on the same circuit configuration as Scenario B, but with optimized blasting, resulting in a finer (F80) feed.
The grind of 90 µm (P80) that was used in Scenario A was based on the FS design criteria. The selection of 180 µm (P80) in Scenarios B and C was the
result of integrating the gold leaching results, which indicated at most a 2% difference in leaching recovery between 90 µm and 180 µm.
The grindability results from historical testwork contained in the BBA database were used to benchmark grinding circuit configurations. Crusher and mill
specifications were extracted from recent projects from the BBA database.
Bruno (version 3.62) modeling software was used for the crushing simulations and JKSimMet (version 5.3) was used for the grinding simulations.
Figure 10-5: SABC with pre-crushing (secondary crusher) circuit configuration
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10.4.4.1 Specific Energy and Throughput Estimations
Preliminary power calculations were completed using Moly-Cop Tools (Moly-Cop v3) and JKMRC Estimator (Power Draw Estimation Spreadsheet tools
for JKSimMet V5.3). The input parameters used by the two software packages are presented in Table 10-9.
Table 10-9: SAG and ball mill design criteria for simulations
Nominal Dimensions (D×L)
Effective Diameter
Effective Length
Mill Critical Speed
Charge Filling
Balls Filling
Percent Solids in Mill
Ore Density
Losses
Ball Density
Feed Cone Angle
Discharge Cone Angle
Trunnion diameter
Units
ft × ft
SAG Mill
36 × 20
Ball Mill
26 × 40.5
ft
ft
%
%
%
%
mt/m3
%
mt/m3
(°)
(°)
ft
35.3
17.5
74.5
28
15
75
2.72
5
7.75
15
15
8.2
25.5
39.5
74.8
30
30
76.4
2.72
5
7.75
24.3
24.3
6.6
The design tonnage is estimated by an iterative process using Excel’s “goal and seek” function, where the installed power is the target of the function and
is based on known mill specifications. The mill tonnage is varied until the estimated power consumption matches the installed power. The result is the
design tonnage of the grinding circuit.
Table 10-10 presents the results of the simulations, completed using the 80th percentile of the grindability results, which are used for calculating the
grinding equipment design throughput. The table also presents the 50th percentile of the grindability results for each rock type, which is used for
calculating the average throughput used to design the back end (post-comminution) portion of the plant. The average plant throughput was calculated as
a weighted average of the throughput for each rock type multiplied by the percentage of each rock type in the deposit, based on the latest LOM summary
by rock type, reference “160614 LVG 355k Prod 45M TPA Max Unlimited Stockpile RT9 67%.xlsx”.
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Table 10-10: Throughput estimations for each scenario in metric tons per day (mt/d)
50th Percentile
80th Percentile
Throughput, mt/d
Scenario A – SABC × 2 + Pre-crusher 90 µm (P80)
RT4
RT5
RT6
RT7
RT9
Weighted average of each rock type
All rock types combined
Scenario B – SABC × 1 + Pre-crusher 180 µm (P80)
RT4
RT5
RT6
RT7
RT9
Weighted average of each rock type
All rock types combined
Scenario C – SABC × 1 + Pre-crusher (Optimized Blasting)180 µm (P80)
RT4
RT5
RT6
RT7
RT9
Weighted average of each rock type
All rock types combined
78,163
72,952
69,331
74,189
66,814
71,801
-
47,914
46,059
43,498
46,721
41,510
44,877
-
51,181
49,128
46,081
49,570
44,160
47,745
-
-
-
-
-
-
-
66,284
-
-
-
-
-
-
41,577
-
-
-
-
-
-
44,756
The estimated throughputs highlighted in bold were the values used for trade-off analysis and for design purposes for the 2017 PFS. The 80th percentile
A×b parameter taken from the cumulative plot of all rock types (combined) was used to generate the 80th percentile throughput. This value represents the
achievable throughput when the feed to the mill ranks in the 80th percentile (A×b) of all rock types. The 80th throughput value is used to design the
comminution circuit.
The 50th percentile throughputs for each scenario are based on a weighted average throughput of the estimated throughputs for each rock type, which
were generated through simulation using the 50th percentile A×b values that are associated with each rock type. The weighted average (50th) value is
used to design the back end of the plant, which encompasses all elements of the process that follow comminution.
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Table 10-11: Specific energy calculations for each scenario at design (80th percentile) A×b
Series
Parameter
Units
Scenario A (90 µm)
Scenario B (180 µm)
Scenario C (180 µm + Opt. D&B)
SAG Mill
Ball Mill
SAG Mill
Ball Mill
SAG Mill
Ball Mill
Number of grinding lines / Number of units per line
2/1
2/1
1/1
1/1
1/1
1/1
Nominal dimension (D × L)
ft × ft
36.0 × 20.0
26.0 × 40.5
36.0 × 20.0
26.0 × 40.5
36.0 × 20.0
26.0 × 40.5
Inside liner dimension (D × L)
m × m
10.77 × 5.33
7.77 × 12.04
10.77 × 5.33
7.77 × 12.04
10.77 × 5.33
7.77 × 12.04
Mill Characteristics
% of critical speed
Cone angle
Grinding Steel
Ball charge
Mill Power per Line
Total Circuit Power
Required power
Installed power
Required power
Installed power
Specific Energy
Motor output
74.5
15.0
15.0
13,846
18,568
14,000
18,774
27,797
37,276
28,000
37,549
8.4
%
degree
% volume
kW
HP
kW
HP
kW
HP
kW
HP
kWh/t
Total
kWh/mt
74.7
24.3
30.0
14,960
20,061
15,000
20,115
29,446
39,488
30,000
40,231
9.5
75
15
14.7
13,846
18,568
14,000
18,774
13,846
18,568
14,000
18,774
6.7
74.6
24.3
30
14,949
20,046
15,000
20,115
14,949
20,046
15,000
20,115
7.6
75
15
14.7
13,846
18,568
14,000
18,774
13,846
18,568
14,000
18,774
6.2
74.6
24.3
30
14,950
20,048
15,000
20,115
14,950
20,048
15,000
20,115
7.0
17.9
14.3
13.2
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
10.4.5 Comminution Circuit Simulations and Design Summary
10.4.5.1 2017 PFS Simulations
The simulations for Scenarios A, B and C were completed by BBA using the same SAG and ball mill design criteria described in Table 10-9. The SAG and
ball mill specifications are based on an operation with a slightly higher ore hardness, where BBA has previously conducted design, commissioning, as
well as technical support over the course of several years.
As part of BBA best practices, simulations were performed to balance the power draw in the SAG and ball mills to avoid mill throughput bottlenecks. The
estimated power consumptions in Table 10-11 include adjustments for motor/drive efficiency (96%) and also ore variability factors, for which a value of
90% was assumed for the SAG mill and 95% for the ball mill.
Scenario A simulations concluded that the selected circuit (two lines SABC + pre-crusher) would process approximately 79,145 t/d (71,800 mt/d), which is
based on each line having a throughput of 39,573 t/d (35,900 mt/d) (P80 of 90 µm).
New leaching results became available at the time that the comminution work was being conducted. The new results indicated that approximately an
average 2% improvement in leaching recovery was realized at (P80) 90 versus 180 µm. A new scenario was modeled (Scenario B) to explore the
throughput gain by relaxing the grind size. The Scenario B simulations led BBA to conclude that the selected circuit, based on a single line, would have a
weighted average throughput of 49,470 t/d (44,877 mt/d) at the coarser target grind size of 180 µm.
The final optimization simulations were run by BBA using the following parameters:
■ Circuit target grind of 180 µm (P80);
■ Finer feed (F80) assumed as a result of optimized blasting.
The simulation resulted in a 27% circulating load through the pebble crusher and the ball mill circuit running at 250% circulating load, generating a 180 µm
(P80) product.
10.4.5.2 2017 PFS Design Recommendations
■ The recommended configuration for the Project is a single line SABC circuit with pre-crushing, and considers that the crushing and grinding plant will
be fed by ore that has been treated with optimized blasting techniques. The conclusion is based on analysis of simulation results as well as CAPEX
and OPEX calculations. The circuit that was selected was the configuration with the lowest specific energy consumption.
■ The proposed circuit uses a single (D × L) 36 ft × 20 ft SAG mill with 14 MW of installed power and one 26 ft × 40.5 ft ball mill with 15 MW of installed
power.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
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■ Based on the information analyzed, the grinding circuit is designed to process 49,334 t/d (44,756 mt/d) when the ore is at the 80th percentile of all
grindability results.
■ Based on the information analyzed, the grinding circuit is designed to process 52,630 t/d (47,745 mt/d) when a weighted average of the 50th
percentile grindability results for each rock type are assumed as the mill feed. This is the throughput used for sizing the back-end circuit.
■ Coarsening of the grind from 90 to 180 µm (P80), coupled with optimized blasting, which generates a finer (F80) feed material, explains the increase in
per line throughput between Scenarios A and C. For a single line, Scenario C is 33% higher (52,630 t/d (47,745 mt/d) vs 39,572 t/d (35,900 mt/d)),
which has a direct impact on daily gold production.
■ Similarly, the coarser grind and optimized blasting are also the basis for the reduction in specific energy between Scenarios A and C. Scenario C is
26% lower (13.2 vs 17.9 kWh/t), which translates into a lower per metric ton operating cost for electricity.
10.4.5.3 2021 PFS Simulations and design recommendations
Five simulations using the 2017 PFS recommended configuration, which is a single line SABC circuit with pre-crushing, were modeled by BBA. The Bruno
simulation software (crushing) and the JKSimMet (SAG and ball milling) were used applying the SAG and ball mill design criteria shown in Table 10-9 to
determine the maximum achievable throughput at different grind sizes including 50, 90, 180, 215 and 250 µm (P80). The simulations were performed to
balance the power draw in the SAG and ball mills to avoid mill throughput bottlenecks. The results of these simulations were used to support the Whittle
optimization study that is discussed in Section 10.7.2.1.
A summary of the simulations is presented in Table 10-12. The weighted averages were calculated by multiplying the throughput by the percentage of
each rock type in the deposit, based on the latest mine production plan. The following are the major conclusions:
■ Coarsening the grind from 180 to 250 µm (P80) allowed to achieve a higher throughput (64,265 t/d (58,300 mt/d) vs 59,360 t/d (53,850 mt/d)).
■ The finer grinds, 50 and 90 µm (P80), required more milling capacity such as ball mills.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
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Table 10-12: Comminution simulations summary
(2021 PFS)
Rock Type
Grind size
- P80
(µm)
Throughput
(mt/d)
Primary
crusher power
demand
(kW)
Secondary
crusher power
demand
(kW)
Pebble crusher
power demand
(Kw)
SAG mill power
demand
(kW)
Ball mill power
demand
(kW)
Total power
demand
(MW)
RT4
RT5
RT6
RT9
RT7
Weighted average
RT4
RT5
RT6
RT9
RT7
Weighted average
RT4
RT5
RT6
RT9
RT7
Weighted average
FEBRUARY 2022
250
215
180
64,253
57,408
57,850
57,408
54,979
58,300
57,960
54,096
52,109
55,752
49,901
53,848
52,550
50,232
47,141
50,563
45,816
49,224
432
378
405
209
176
320
390
357
365
203
160
295
354
331
330
184
147
269
1,160
1,023
1,071
739
664
918
1,069
985
987
733
616
859
1,104
1,041
1,016
756
643
885
400
477
500
447
486
513
330
437
436
426
432
451
304
412
401
387
438
381
12,828
14,059
14,036
14,038
14,028
14,019
13,300
14,037
13,944
14,024
13,879
14,048
12,377
13,084
12,939
13,200
12,162
13,755
14,709
13,707
14,796
13,823
14,813
14,782
14,875
14,238
14,815
14,818
14,860
14,824
14,835
14,814
14,807
14,867
14,754
14,795
29.5
29.6
30.8
29.3
30.2
30.6
30.0
30.1
30.5
30.2
29.9
30.5
29.0
29.7
29.5
29.4
28.1
30.1
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S-K 1300 – Technical Report Summary
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Rock Type
Grind size
- P80
(µm)
Throughput
(mt/d)
Primary
crusher power
demand
(kW)
Secondary
crusher power
demand
(kW)
Pebble crusher
power demand
(Kw)
SAG mill power
demand
(kW)
Ball mill power
demand
(kW)
Total power
demand
(MW)
90
50
52,550
50,232
47,141
50,563
45,816
49,224
52,550
50,232
47,141
50,563
45,816
49,224
354
331
330
184
147
269
354
331
330
184
147
269
1,104
1,041
1,016
756
643
885
1,104
1,041
1,016
756
643
885
304
412
401
387
438
381
304
412
401
387
438
381
12,377
13,084
12,939
13,200
12,162
13,755
12,377
13,084
12,939
13,200
12,162
13,755
22,610
22,610
22,610
22,610
22,610
22,610
31,986
31,986
31,986
31,986
31,986
31,986
RT4
RT5
RT6
RT9
RT7
Weighted average
RT4
RT5
RT6
RT9
RT7
Weighted average
FEBRUARY 2022
36.7
37.5
37.3
37.1
36.0
37.9
46.1
46.9
46.7
46.5
45.4
47.3
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
10.5 Metallurgical Testwork
10.5.1 FS – Metallurgical Testwork
As part of the FS, metallurgical testwork was completed to evaluate the appropriate gold recovery process. Standard recovery trade-offs, such as; whole
ore leach vs flotation and CIL vs CIP were explored. The initial work was carried out to establish reagent consumption, leach residence time, and to
determine the optimum leach feed particle size (P80). The phases of testwork are outlined as follows:
■ Optimization testing to establish preliminary ore design parameters;
■ Variability testing to assess leaching response on selected gold grades and rock types;
The nature of the testwork and resulting conclusions are presented in the sections below.
10.5.2 FS – Optimization Test Program
Feasibility study optimization composites of the major rock types were prepared as indicated in Table 10-13. The assayed direct gold head grades for
each of these samples are also summarized.
Table 10-13: Optimization composites used for testwork
Rock Type
Composite
Au (g/mt)
RT4
RT5
RT6
RT9
RT7
Optimization Composite 2 (RT4)
Optimization Composite 1 (RT5)
Optimization Composite 3 (RT6)
Optimization Composite 4 (RT9)
Mini optimization composite (RT7)
1.21
0.89
0.98
1.09
1.43
10.5.2.1 Gravity Recovery
Various grinds, from 100 to 225 µm (F80), were tested to optimize the grind for gravity recovery from each ore type (Figure 10-6). Analysis of the results
indicated that a primary grind of 180 µm (P80) was suitable for all of the ore types tested. Figure 10-6 also presents the results of GRG testwork
conducted for each rock type. The GRG results are greater than 60% for RT4, RT5 and RT6 and greater than 55% for RT9. Typical gold operations
recover 50% to 65% of the gold associated as GRG. It is observed in Figure 10-6 that the results of the batch gravity tests are in all cases greater than
50% of the GRG.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
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Figure 10-6: Gold gravity concentration grind-recovery relationships
for RT4, RT5, RT6 and RT9 (FS)
Note from Figure 10-6, “Grav Rec_MC” is the gravity recovery to Mozley concentrate and GRG refers to the gravity recoverable gold of the optimization
testwork.
Table 10-14: Comparison of gravity test results
for different rock types (FS)
Test
Rock Type
Optimization
Composite
Product
G 1
10 kg
G 4
10 kg
RT5
Sunshine
Upper
Sediments
RT9
Volcanics
FEBRUARY 2022
Opt Comp 1
Opt Comp 4
Mozley Concentrate
Final Tails
Calculated Head
Direct Head
Mozley Concentrate
Final Tails
Calculated Head
Direct Head
Mass
%
0.04
99.96
-
0.04
99.96
-
Grade
g/mt
Au
860
0.48
0.86
0.89
1816
0.61
1.36
1.09
Rec.
%
Au
44.1
55.9
-
55.3
44.7
-
Gravity
Tail K80
µm
193
190
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Test
Rock Type
Optimization
Composite
Product
G 7
10 kg
G 10
10 kg
RT6
Upper
Sediments
RT4
Cambrian
10.5.2.2 Flotation Option
Opt Comp 3
Opt Comp 2
Mozley Concentrate
Final Tails
Calculated Head
Direct Head
Mozley Concentrate
Final Tails
Calculated Head
Direct Head
Mass
%
0.06
99.94
-
0.06
99.94
-
Grade
g/mt
Au
710
0.52
0.92
0.98
745
0.46
0.90
1.21
Rec.
%
Au
43.5
56.5
-
49.0
51.0
-
Gravity
Tail K80
µm
202
185
One of the options tested was to generate a flotation concentrate from the gravity tailings and leach only the concentrate. This would be compared to a
second option of direct leaching of the gravity tailings.
Flotation testing examined the effect of grind, reagent dosage, and reagent selection. Optimization of the cyanidation of the flotation concentrate and of
the gravity tailings required that the effects of grind, cyanide concentration, and residence time be considered.
The RT4 rock type contained significant quantities of talc, which was difficult to separate and would increase the bulk of the potential flotation concentrate.
Talc flotation cells were considered as a process option, but the decision to go to direct cyanidation leaching of the gravity tails, on the basis of the
complete test results for the other three rock types, rendered this option moot.
Various grinds were tested to optimize the grind for rougher recovery from each ore type. The grind recovery data, represented below in Figure 10-7,
indicated that a grind of 90 µm (P80) was suitable for all of the ore types tested. The RT4 rock type did not respond well to flotation. At 12% rougher
flotation mass pull, the projected rougher gold recoveries were 78%, 74%, 75% and 50% for RT5, RT9, RT6 and RT4, respectively.
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Figure 10-7: Effect of primary grind on gold rougher flotation test Kinetics
for RT4, RT5, RT6 and RT9 (FS)
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Flotation concentrates from RT5, RT6 and RT9 were subsequently leached (CIL) to determine recoveries. Figure 10-8 shows the gold recovery relative to
time for these three rock types. Based on an analysis of the results, it became evident that the recovery of gold would be higher by applying CIL on the
entirety of the gravity tails. Therefore, it was decided not to conduct any further flotation testing and CIL tests on flotation concentrate for RT4 were
dropped.
Figure 10-8: Flotation concentrates CIL test gold leach kinetics for different rock types (FS)
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10.5.2.3 Flotation Option Recovery Summary
The results derived for each rock type in this test series are summarized in Table 10-15.
Table 10-15: Gold recovery resulting from the combination of gravity, flotation and CIL (FS)
Au Recovery (%)
Rock Type
RT4
RT5
RT6
RT9
Arithmetic AVG
Gravity
49.0%
44.1%
43.5%
55.3%
47.7%
Flotation
50%
78.3%
75.0%
74.0%
69.8%
CIL
-
73.0%
56.3%
57.8%
62.4%
Total
-
76.1%
67.4%
74.4%
70.5%
10.5.2.4 Whole Ore Leach (WOL) Option
The WOL option was also investigated, in which the Livengood process would consist of gravity and CIL leach of the gravity tails. Various grinds were
tested to optimize the grind for the CIL leach recovery from each ore type. The grind recovery data, represented below in Figure 10-9, indicated that a
grind of 90-100 µm (P80) was suitable for CIL leaching of all of the rock types.
The observations regarding Figure 10-9 are as follows:
■ The incremental gold recovery at 72 hours (vs 24 hours) for RT5 and RT6 is less than 2.5%. For RT4 and RT9, it is less than 1%;
■ There were no samples collected between 5 and 24 hours;
■ The gold recovery variation (for each rock type) at the particle size range from 60 to 180 µm (P80) was inconclusive given the single test at each grind
size.
These observations were taken into consideration in the course of developing the optimized leaching conditions during the PFS.
FEBRUARY 2022
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Figure 10-9: Effect of grind on gold extraction kinetics for RT4, RT5, RT6 and RT9 (FS)
FEBRUARY 2022
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Figure 10-10: Mozley gravity tailings CIL test kinetics for different rock types (FS)
The above graph illustrates the very flat leach recovery curves for the gravity tail leach, indicating little (if any) increased extraction beyond 24 hours of
leach time. Similar to the observation made for Figure 10-9, the leaching rate after 24 hours was very slow and it was decided to explore shorter leaching
retention times in future testwork.
10.5.2.5 WOL Option Recovery Summary
The analysis that was completed with the optimization samples led to the conclusion that the preferred flowsheet was gravity followed by CIL of the
gravity tails. The gravity plus CIL leaching of the gravity tails produced a 9-12% improved gold recovery for all rock types compared to gravity plus
flotation with CIL of flotation concentrate. The overall results of whole ore leaching can be seen below in Table 10-16.
FEBRUARY 2022
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Table 10-16: Gold recovery resulting from whole ore leaching (FS)
Rock Type
RT4
RT5
RT6
RT9
Arth. AVG (RT4 to RT9 only)
RT7 (bleached) (1)
Au Recovery (%)
Gravity
49.0%
44.1%
43.5%
55.3%
48.0%
24.3%
CIL
69.0%
78.0%
58.7%
66.0%
67.9%
44.8%
Total
84.2%
87.7%
76.7%
84.8%
83.3%
58.2%
(1) RT7 (bleached) was tested in a mini-program after the other rock types.
The CIL testwork demonstrated that cyanide consumption is not overly sensitive to grind. On a weighted average basis by rock type over the life of mine,
the ore required 5.75 lb/t (2.88 kg/mt) of lime and 1.74 lb/t (0.87kg/mt) of sodium cyanide in the gold leach.
10.5.2.6 WOL vs Flotation
The overall gold recoveries achieved by both process options are summarized in Table 10-17 below.
Table 10-17: Overall gold recovery of optimization samples for both process options (FS)
Rock Type
Gravity + CIL
Gravity + Flotation + CIL
RT4
RT5
RT6
RT9
RT7
84.2%
87.7%
76.7%
84.8%
58.2%
-
76.1%
67.4%
74.4%
-
The important conclusions that are drawn from the FS optimization testing include:
■ All rock types responded well to gravity separation, with 44 to 55% of the gold recoverable in the gravity circuit. At a grind of approximately (P80)
180 µm, these gravity recoveries were achieved at a 1% mass pull;
■ Rougher flotation works reasonably well for RT5, RT6 and RT9, although the mass recovery was variable. Rougher flotation does not work well for
RT4, due to the noted significant presence of talc;
■ Rock type RT4 is quite different from the other rock types. It is softer, contains significantly more talc than the other samples, and contains more total
carbon, Total Organic Carbon (TOC), and carbonate;
■ Overall gold extraction was increased 9 to 12% by the leaching the gravity tails as compared to the leaching flotation concentrate.
FEBRUARY 2022
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A detailed analysis of the testwork results post FS by BBA indicated that there were additional opportunities to explore, such as reducing the leach
retention time and targeting a coarser grind.
10.5.3 FS – Variability Test Program
Following on the optimization testing, the FS test program moved into a variability testing phase. The goal was to determine the variation that existed in
the ore and to test the geological extremes of each rock type. In addition to the samples tested in the optimization phase, rock type RT7 and a rock type
known as Stibnite was included in the variability testing program. The RT7 rock type, which contains varying levels of antimony (Sb) in the form of stibnite
and jamesonite, was not evaluated in the initial optimization testing as it did not have a large presence in the early period of the mine life and only
represented 12.1% by weight of the LOM reserve. The RT7 rock type was originally split into two sub-types, RT7-Bleached and RT7-Unbleached, as
these sub-types exhibited different metallurgical responses. The Stibnite rock type represented a very small fraction of the mine’s ore, but had multiple
g/mt head grades.
The most favorable process conditions that were established in the optimization phase were used for variability testing. The variability test results showed
an overall lower average gold recovery than what was achieved in the optimization phase, which is reflective of the extremes of the deposit, rather than
the more representative optimization samples. The average overall gold recovery resulting from multiple tests for each rock type is summarized below in
Table 10-18.
FEBRUARY 2022
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Table 10-18: Variability sample gold recovery (FS)
FEBRUARY 2022
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Figure 10-11: Gold gravity recovery box plots (FS)
FEBRUARY 2022
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Figure 10-12: Gold in Residues from CIL testwork vs P80 for each rock type (FS)
The columns in Figure 10-12 represent the gold grade ranges in g/mt and the rows correspond to the different rock types.
Analysis of the results suggested that the RT4, RT5 and RT6 rock types did not show a correlation with grade, RT9 showed a weak correlation with grade,
while RT7 presented a strong correlation to stibnite content and grade.
FEBRUARY 2022
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A post FS analysis led to the conclusion that the RT5 results suggested opportunities to increase gold recovery with finer grind. The red boxes associated
with RT5 in Figure 10-12 highlight the lower gold in residues at the finer P80(s). Similar observations have been made for RT4 and RT6. This was not
observed for RT7 and RT9. BBA analyzed the information on testwork methodology that was available and a lack of consistency was observed in the
residence time as well as the level of monitoring of dissolved oxygen (DO) levels during testwork preconditioning and leaching. This result was critical,
because low dissolved oxygen levels during the initial hours of a leaching test will have an important and detrimental effect on the gold leaching
performance. This observation was used during Phase 9 PFS testwork to standardize the O2 preconditioning (4 hours) as well as monitoring and
maintaining the DO levels (8 ppm).
Important follow-up observations from the analysis of the variability testwork include:
■ The opportunity to lower the gold in residues by using finer grind (P80) (RT5, Figure 10-11).
■ The need to more closely monitor and control preconditioning and DO levels as these will have an impact on CN consumption
10.5.4 FS – Solid / Liquid Separation Testwork
As part of the FS, Livengood gold ore samples were submitted to Pocock Industrial, Inc. for solid liquid separation (SLS) testing. Pre-leached and leached
samples from the optimized testwork were submitted to Pocock for each of the primary rock types (RT4, RT5, RT6, RT7 Bleached, and RT9). The current
flowsheet contains a total of two thickeners; one pre-leach thickener, and one tailings (pre-detox) thickener.
The Project design criteria use a high rate thickening rise rate of 1.64 gpm/ft² (4.0 m3/m²h) for both the pre-leach thickener and the tailings thickener at a
design P80 of 90 µm. Additional savings on reagents (flocculant) are expected for the present scenario, where the P80 is 180 µm, but further settling
testwork will be required for confirmation.
10.5.5 FS – Cyanide Detoxification Tests
10.5.5.1 FS – Cyanide Detoxification Testwork
The CIL tailings generated from the leaching testwork was used for cyanide detoxification testing. The INCO SO2/air process was used to remove cyanide
and base metal complexes from the CIL tailings generated from each rock type. The objective of this phase of testing was to optimize cyanide
detoxification (CND) of the CIL tailings. The “Interim Test Program” used a 10 kg sample of each rock type (RT4, RT5, RT6, RT7 and RT9).
FEBRUARY 2022
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The feed pulp density to cyanide detoxification was between 31-39%. The results showed that it was possible to treat the CIL tailings using the INCO
process to bring both weak acid dissociable cyanide (CNWAD) and total cyanide (CNT) levels below 1 mg/L. The test conditions indicate that a pH of 8.5-
8.6 coupled with a retention time of 94-147 minutes is ideal. The reagent consumptions from the Phase 1 testing are 8.2-14.7 g/g CNWAD of equivalent
SO2, 4.9-8.9 g/g CNWAD of lime, and 0.27-0.57 g/g CNWAD of Cu.
The design application rates were assumed to be:
■ Lime = 0.82 lb/t;
■ Copper sulfate = 0.08 lb/t;
■ Sodium metabisulfite = 1.65 lb/t.
10.5.5.2 Observations Made Regarding Cyanide detoxification
In the lead-up to the PFS, BBA reviewed the design of the cyanide detoxification system that was presented in the FS. The objective was to look for gaps
and opportunities. The following are the major conclusions:
■ The use of a sulfur burner to generate SO2 instead of sodium metabisulfite was identified as an opportunity to lower the OPEX. Details are presented
in the flowsheet development in Section 10.7.
■ A model was developed to estimate the amount of cyanide that is recirculated to the leaching process via the pre-detox thickener. The result is less
cyanide reporting to cyanide detoxification.
10.5.6 2017 PFS – Metallurgical Testwork
Five additional phases (Continuous, 7, 8, 9 and 10) of testwork were completed after the FS for the 2017 PFS. Testwork was conducted to explore
possible opportunities established through BBA’s analysis of the FS testwork and/or to clarify certain questions regarding gold leach performance and
reagent consumptions. The phases of testwork are outlined as follows:
■ Continuous: Processing FS Optimization composites using recycled process solutions;
■ Phase 7: Assay procedures and water source testing;
■ Phase 8: Exploratory testing on selected rock types;
■ Phase 9: SGS / FLS Curtin University testwork: Exploratory testing on selected rock types using reverse circulation (RC) drill chip composites;
■ Phase 10: Stirred tank reactor (STR) controlled leach testwork, with focus on two problematic rock types (RT7 and RT9).
The nature of the testwork and resulting conclusions are discussed below.
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10.5.7 2017 PFS – Continuous Testwork
Continuous testwork was conducted using 60 kg composites taken from the optimization master composites prepared for the FS. The objective of the
continuous testwork was to evaluate the impact of recirculating streams as well as generating leach residues (CIL tailings) for the cyanide detoxification
testwork. The continuous testwork conditions were developed from the optimization and variability testwork.
One of the important conclusions to be drawn from the continuous testwork is that the results indicated that using lower CN additions had a minimal
impact on gold leaching performance, except on RT9, where cyanide starvation conditions were observed. The continuous results were used to estimate
the addition of lead nitrate and cyanide for the Phase 9 test program (see Section 10.5.10).
10.5.8 2017 PFS – Phase 7 - Assay Procedures and Water Source Testing
The Phase 7 testwork was conducted on 20 kg composites of RT4, RT5, and RT9. The objective of the Phase 7 testwork was to remove uncertainty
related to the water source used for testing: SGS Vancouver water versus water that was sourced from the mine and to confirm the procedures necessary
for improving assay repeatability. To improve assay repeatability, all samples had gravity recoverable gold removed prior to leaching by a combination of a
centrifugal concentrator followed by gravity table, leaching was performed in triplicate, and all pulps were fire screen assayed in triplicate.
CIL testing with air sparging using both Vancouver and mine-sourced water was performed on Mozley gravity tails to compare the extractable gold using
similar reagent conditions.
Gravity tail leach recoveries for duplicate samples were within 2% of each other for all three rock types using Vancouver and mine-sourced water and
likely within the precision of the testwork. Cyanide consumption increased 0.3% with mine water and lime consumption decreased 8%.
Important conclusions from the Phase 7 testwork include:
■ The results indicated that the gold recovery was not particularly sensitive to water source;
■ Phase 7 results confirmed that performing triplicate screen metallic assays on gravity tail leach residue was the protocol required for precise work.
10.5.9 2017 PFS – Phase 8 - Grind, Recovery, Gravity, Flotation Testing
The Phase 8 testwork program was comprised of several sub-phases and all work was conducted on 75 kg core samples. The objectives of the program
were to explore CIL gold recovery sensitivity to particle size.
The sub-phases are described as follows:
■ Gravity testing on 180 and 250 µm (P80) samples;
■ CIL sensitivity testwork on 90, 180 and 250 µm (P80) samples;
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■ At 90 µm (P80), CIL of gravity tails was compared to CIL of only a flotation concentrate generated from the gravity tails.
Phase 8a
■ CIL testing was extended down to 60 and 75 µm (P80):
-
Knelson and Mozley tails 250 µm (P80) samples from the Phase 8 testwork program were combined and reground to 60 and 75 µm (P80).
■ Carbon handling protocols were compared:
-
The carbon handling protocol was explored. No significant difference was found between adding new carbon and retaining the original carbon for
the duration of the testwork.
■ Dissolved oxygen (DO) and CN consumption were evaluated:
-
Phase 8a was the first attempt to normalize the DO levels and CN additions between different tests. There had been indications of inconsistent
preconditioning in previous testwork.
Phase 8b
■ Evaluated gravity and leach sensitivity at 90, 180 and 250 µm (P80);
■ At 90 µm (P80), CIL of gravity tails was compared to CIL leaching of only a flotation concentrate generated from the gravity tails.
Phase 8c
■ Completed intensive leach (IL) of flotation concentrate.
Phase 8d
■ Tested flotation with sulfidization at 180 µm (P80).
-
Phase 8d was designed to study the response of flotation to sulfidization at a grind of 180 µm (P80). Only two rock types were tested.
The important conclusions to be drawn from the Phase 8 test program include the following:
■ Flotation gold recoveries did not improve with slurry sulfidization;
■ Gold recovery did not improve with a grind of 60 µm (P80);
■ CN consumption was reduced by the pre-oxidation;
■ The carbon handling protocol did not affect the gold recovery performance.
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10.5.10 2017 PFS – Phase 9 - SGS and FLS-Curtin University Test Program
The Phase 9 SGS / FLS-Curtin University test program was conducted on 500 kg composites made according to rock type. It was the first work
conducted using reverse circulation (RC) drill chips.
The objectives of the Phase 9 test program were:
■ To compare the performance of gravity recovery at 180 and 250 µm (P80);
■ To study the impact of lead nitrate addition on intensive leach and CIL;
■ To confirm and/or revise the cyanide addition to CIL;
■ To study the impact of particle size on gold leaching at 75, 90, 135, 180 and 250 µm (P80).
The Phase 9 program processed a large quantity of mass for each sample to confirm the process flowsheet developed in Phase 8, and to avoid having
nugget effects influence the metallurgical recoveries.
The objectives of the FLS/Curtin University testwork were:
■ To conduct gravity recoverable gold (GRG) testing and to perform an Integrated Liberation and Leaching Model (ILLM) characterization on the
Livengood gold ore types.
Rock type splits of 100 kg each were sent to FLSmidth/AMIRA (Curtin University, Australia).
10.5.10.1 Phase 9 Metallurgical Composite Sample Selection Methodology
The Project resource has been defined by approximately 800 drill holes, about 80% of which are reverse circulation (RC) and 20% are core. Prior to the
Phase 9 test program for the PFS, all of the metallurgical testwork had been completed using individual core samples or core sample composites. The
Phase 9 samples were the first to be composited from RC rig duplicate rock chips. The Phase 9 samples are bulk composites prepared for each of the
five major rock types to represent the average grade and approximate grade distribution of the 2013 FS Reserve.
The RC rig duplicates (rock chips), which originated from an earlier phase reported under SGS project CAVM-50223-006, were received at SGS in June
2015. The gold head assays, determined by screened metallics, are presented in Table 10-19.
.
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Table 10-19: Gold head assay
Rock type composite
Au, g/mt
RT4
RT5
RT6
RT7B
RT9
0.64
0.72
0.81
0.89
0.68
Composites were prepared from samples received in super sacks that had been sorted according to their rock type. The composites were labelled as
follows with the following weights (Table 10-20):
Table 10-20: Composite naming and weights for Phase 9 (2017 PFS) test program.
Composite Name
RT4 June 2015 Composite
RT5 June 2015 Composite
RT6 June 2015 Composite
RT7B June 2015 Composite
RT9 June 2015 Composite
Mass (kg)
453.6
468.0
472.8
475.0
477.5
Each composite was stage crushed to 100% minus 10 mesh, blended, and split to obtain two 100 kg splits and one bulk split as identified below:
■ 100 kg forwarded to FLSmidth for GRG tests and leach tests performed at Curtin University;
■ 100 kg stored in a freezer at SGS;
■ Bulk split retained at SGS for use in the current testwork program.
Figure 10-13 illustrates the testwork that was conducted.
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Figure 10-13: 2017 PFS (Phase 9) testwork outline
In an effort to minimize the differences found between calculated and direct head grades (possibly due to nugget effect), Phase 9 testwork was conducted
following a different approach using larger samples (30 kg) versus the normal 2 kg samples used in the previous testwork.
10.5.10.2 Phase 9 – Cyanide and Lead Nitrate Addition
The ICP analysis of the leach feed composites had not been available at the time that the leaching testwork was being completed. Instead of waiting for
this information, BBA recommended that the lead nitrate addition be based on the Sb content from the ICP analysis of each rock type from the continuous
testwork program (Table 10-21).
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Table 10-21: ICP Analysis of the CIL feed from the continuous testwork for each rock type
(2017 PFS)
Rock Type
Au
Ag
Cu
Fe
Ni
S
As
Pb
Sb
Te
RT4
RT5
RT6
RT7
RT9
0.5
0.4
0.5
0.6
0.7
0.4
0.4
0.5
0.5
45.1
51.5
75.3
62.8
36.6
5.29
1008
4.2
3.87
4.12
4.60
121
146
206
69
0.60
0.97
1.25
1.98
2.54
4748
2800
3360
3973
3995
21.6
14.4
29.4
15.4
24.1
64.0
19.9
62.3
176.5
101.8
0.18
0.1
0.17
0.20
0.13
Hg
4.3
0.4
1.4
0.7
3.1
Proposed Lead Nitrate
addition, g/mt
150
100
150
250
250
Table 10-22: Comparison of cyanide addition in Phase 9 versus Continuous
(2017 PFS)
Rock Type
CN addition used during Continuous
testwork kg/t
Proposed CN addition for Phase 9,
kg/mt
RT4
RT5
RT6
RT7
RT9
0.52
0.71
0.51
0.67
0.57
0.71
0.71
0.8
1
1
10.5.10.3 Phase 9 – Gravity / Intensive Leach Testwork
Phase 9 gravity testwork was performed on two particle sizes, 180 and 250 µm (P80), at SGS Vancouver. It was observed that similar average results
were realized for RT7 and RT9. On the other hand, RT4 and RT5 show higher gravity results at 180 µm (P80), and RT6 shows higher gravity recovery at
the coarser grind size. In general, however, the gravity results were lower than those obtained in previous work.
Figure 10-14 summarizes the gravity testwork results of Phase 9 (180 and 250 µm); the GRG results by FLS/Curtin University, along with the results
obtained from the FS optimization test program.
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Figure 10-14: 2017 PFS (Phase 9) gravity recovery for all tock types
(GRG presented as the 3rd stage of GRG)
The GRG results from the FLS/Curtin University testwork are comparable to the results of the optimization GRG testwork, presented earlier in Figure 10-
6, which is an important conclusion for a few reasons:
■ The rock types tested represent 98.2% of the ore body;
■ Two independent labs have produced these complementary results;
■ The FS optimization testwork made use of drill core composites, whereas the FLS/Curtin testwork used RC drill chip composites, implying that two
independent sample batches have been tested.
The gravity gold recovery in Phase 9, which followed the Knelson+Mozley table methodology, was lower compared to previous testwork; compare these
results, for example, to those of Figure 10-11. BBA is placing less emphasis on these particular results. In future testwork, this method of testing will be
applied. However, BBA recommends that a systematic review of the testing protocols be performed.
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A series of benchmark graphs (Figure 10-15 to Figure 10-19) were prepared by FLS/Curtin University that compare the results of Livengood gold ores to
the Curtin gravity testwork database. Figure 10-15 shows the high percentage of GRG of Livengood gold ore (60 to 80%) compared to the FLS/Curtin
University database (15 to 55% for the same gold head grade).
Figure 10-15: Livengood GRG results vs FLS/Curtin database (source Curtin report)
(2017 PFS)
Figure 10-16 plots the % GRG vs the gold recovered in stage 1 (of 3 stages) (P80 = 850 µm) of gravity testwork, showing that the results fall within the
range of data contained in the full FLS/Curtin University database. This observation supports the good gravity recoverable potential of the Livengood gold
ore.
A good agreement was also found between the % GRG and the gold recovery of stage 1 vs feed size (F80) of the gold particles and the FLS/Curtin
University database (Figure 10-17 and Figure 10-18).
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Figure 10-16: Livengood GRG results vs FLS/Curtin database (source Curtin report)
(2017 PFS)
Figure 10-17: Livengood GRG results vs FLS/Curtin database (source Curtin report)
(2017 PFS)
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Figure 10-18: Livengood GRG results vs FLS/Curtin database (source Curtin report)
(2017 PFS)
Figure 10-19 shows the benchmarking of the results of Livengood versus two operations with similar % GRG. The operations processing ores “sample B”
and “sample D” typically recover gravity gold in the order of 45 to 55%. FLS/Curtin University indicates that operations typically should achieve recoveries
in the order of 50 to 66% of the plant feed GRG.
Figure 10-19: Livengood GRG results vs FLS/Curtin database (source Curtin report)
(2017 PFS)
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10.5.10.4 Phase 9 – Intensive Leach Kinetic Testwork
Intensive leach testwork was conducted on Mozley concentrates. Table 10-23 presents the results of the testwork.
Gravity
K80
Intensive
Leach K80
Test ID
µm
180
250
180
250
180
250
180
250
180
250
IL-1
IL-2
IL-3
IL-4
IL-5
IL-6
IL-7
IL-8
IL-9
IL-10
µm
180
250
180
250
180
250
180
250
180
250
Table 10-23: Intensive leach results
(2017 PFS)
NaCN
CaO
Au in
Residue
Add
kg/mt
Cons
kg/mt
kg/mt
kg/mt
g/mt
72.5
61.7
74.0
66.8
73.6
80.2
72.5
78.2
74.7
74.4
31.5
25.2
30.5
35.0
30.7
29.9
30.3
27.8
31.6
35.4
2.29
1.84
1.84
1.51
0.74
0.88
1.36
1.66
1.18
0.80
0.81
<1
0.65
0.59
<1
<1
0.28
0.24
<1
0.8
8.20
10.1
9.64
10.9
9.16
13.2
8.68
9.01
7.53
7.32
Calc
Head
g/mt
477
369
369
295
393
536
389
331
190
215
Au
Recovery
%
98.3
97.3
97.4
96.3
97.7
97.5
97.8
97.3
96.0
96.6
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Figure 10-20: Intensive leach of Mozley concentrate
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S-K 1300 – Technical Report Summary
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10.5.10.5 Phase 9 – Leach Kinetic Testwork
Following observations from the FS optimization test program, the decision was taken to add extra sampling times (12 and 18 hours) to the leach testwork
to better characterize the gold leaching kinetics for each rock type. Figure 10-21 shows the results of kinetics tests from gravity tails at 180 µm (P80).
Results using 250 µm (P80) gravity tails presented similar trends.
The leaching kinetics results were analyzed and it was found that for each rock type, after 18 hours of leach time, there was no extra recovery or the
increment was not sufficient to justify the addition of an extra leach tank.
The latter observation was used to reduce the leaching retention time from 32 to 21 hours. The reduction in the leaching retention time translates into
lower cyanide and lime consumption. An example of the analysis is presented on Table 10-24.
The important conclusions to be drawn from the Phase 9 and the FLS/Curtin testwork include:
■ A high gravity recoverable gold content was confirmed;
■ Improved leach results were obtained from Curtin on all samples (pH 10);
■ The first intensive leach of gravity concentrates achieved excellent gold recoveries on gravity concentrates from all rock types ranging from 96 to
98%;
■ Pre-conditioning and lead nitrate led to a reduction in leaching time;
■ A reduction in CN consumption and required leach time were realized.
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Rock type
Item
Au head grade, g/mt
Au residue, g/mt
RT4
Au Recovery, %
CN consumption, kg/mt
CaO consumption, kg/mt
Au head grade, g/mt
Au residue, g/mt
RT5
Au Recovery, %
CN consumption, kg/mt
CaO consumption, kg/mt
Au head grade, g/mt
Au residue, g/mt
RT6
Au Recovery, %
CN consumption, kg/mt
CaO consumption, kg/mt
Au head grade, g/mt
Au residue, g/mt
RT7B
Au Recovery, %
CN consumption, kg/mt
CaO consumption, kg/mt
Au head grade, g/mt
Au residue, g/mt
RT9
Au Recovery, %
CN consumption, kg/mt
CaO consumption, kg/mt
Table 10-24: Kinetic results from Phase 9
(2017 PFS)
90 µm
Leaching time, hours
180 µm
Leaching time, hours
Phase 9
18
0.07
83.0
0.26
2.29
0.09
81.1
0.20
1.75
0.18
67.5
0.29
1.59
0.28
47.0
0.48
1.86
0.29
53.0
0.39
1.58
24
0.44
0.07
83.2
0.28
2.56
0.50
0.09
81.8
0.24
1.77
0.55
0.18
67.5
0.32
1.68
0.53
0.28
47.2
0.51
2.17
0.62
0.29
53.1
0.40
1.70
32
0.07
83.2
0.34
2.51
0.09
82.0
0.31
1.75
0.18
67.5
0.38
1.62
0.28
47.2
0.53
2.14
0.29
53.1
0.47
1.67
18
0.08
83.9
0.19
2.14
0.12
81.6
0.19
1.77
0.20
64.9
0.27
1.46
0.35
53.8
0.36
1.73
0.31
43.5
0.27
1.32
24
0.52
0.08
84.5
0.23
2.35
0.65
0.11
82.7
0.24
1.78
0.57
0.20
65.1
0.31
1.55
0.75
0.34
55.2
0.41
2.05
0.55
0.30
44.9
0.36
1.34
32
0.08
84.6
0.32
2.30
0.11
83.0
0.31
1.74
0.20
65.2
0.35
1.52
0.33
55.7
0.51
2.02
0.30
45.5
0.43
1.30
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Figure 10-21: 2017 PFS (Phase 9) - Leach kinetics analyses according to rock type
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10.5.11 2017 PFS – Phase 10 - Stirred Tank Reactor (STR) Leach Tests
Phase 10 was conducted under the direction of Guy Deschênes (former BBA employee), owing to his expertise on leaching gold ores containing
antimony (Sb). The test program included the use of lead nitrate and control of dissolved oxygen levels under controlled leach conditions. This approach
had previously been demonstrated effective at the Fort Knox Mine to control the adverse effects of antimony.
The objective of the Phase 10 test program was to determine whether antimony minerals were responsible for some low gold extractions experienced by
rock types (RT7 and RT9). The antimony content of the RT7 sample tested (590 ppm) is an order of magnitude higher than that of RT9 (60 ppm or less).
Phase 10 included testing using 20 kg composites of RT7 and RT9.
The gold content in samples RT7-GR11, RT9-GR14 and RT9-V86, V89 were 0.46 g/t, 0.72 g/t and 0.50 g/t respectively. The RT7 sample contained
0.016% Cu, 4.7% Fe, 0.026% Zn and 2.0% S (STot), whereas RT9 contained 0.014% Cu, 5.3% Fe, 0.013% Zn and 2.0% S (STot).
Tests were conducted in stirred tank reactors (STR) under controlled conditions of the following variables; agitation, temperature, pH, free cyanide and
dissolved oxygen (DO). The leaching conditions that were applied were those used for processing orebodies containing antimony minerals.
The results were compared to baseline conditions (0.5 h pre-treatment, pH 10.7, DO 4 ppm; 32 h leaching, 200 ppm NaCN, pH 10.7, DO 8 ppm). Test
results for the RT7 and RT9 composite samples indicated only a modest improvement in gold extraction of 2-5%, when calculated on the basis of gold
balance developed around the leach solution and residues, i.e. gold recovery based on leach testwork results. This improvement resulted from a pre-
treatment of four hours, with the addition of 100 g/mt lead nitrate and oxygen. However, if the interpretation is based upon the gold content of the leach
residues only, which may be valid because the assayed (direct) head grades are the same for each rock type, it suggests no improvement.
The leaching profiles of the baseline conditions and new conditions using lead nitrate are comparable, which would indicate no sign of passivation of
antimony minerals. The lack of interference by antimony minerals might be explained by no or insufficient liberation during grinding, or that surface
passivation had already taken place in the prior treatment of the samples. Other explanations for a lack of improvement may be that the gold is not
liberated at the particle size selected, or that the gold is refractory, i.e. gold is in solid solution with the mineral. Seven tests with repeats indicated good
reproducibility of the results.
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Feed
CN
Pre-aeration
Leach
Reagent Cons.
Residual
Au Extraction (%)
Table 10-25: Phase 10 results (2017 PFS)
e
l
p
m
a
S
Size
P80,
µm
Test
No.
Time
(h)
pH
DO
(ppm)
Pb(NO3)2
(g/mt)
s
t
a
e
p
e
r
:
B
7
T
R
7
T
R
:
9
-
7
,
3
-
1
:
1
1
R
G
9
T
R
4
1
R
G
)
9
8
V
&
6
8
V
(
9
T
R
4
1
R
G
1
2
3
7
7R
8
8R
9
9R
4
5
6
10
10R
11
11R
12
12R
0.5
10.7
4
4
2
2
4
4
4
4
0.5
4
4
2
2
4
4
4
4
9.8
9.8
10.0
10.0
10.1
10.1
10.1
10.0
10.2
10.2
10.2
10.2
10.0
10.1
10.2
9.9
10.0
4
8
6
9
6
8
16
6
7
4
8
7
9
8
12
16
8
9
90
86
62
-
-
100
100
100
100
100
200
200
-
-
100
100
100
100
100
200
200
pH
10.7
9.9
9.9
10.2
10.3
10.2
10.2
10.2
10.2
10.6
9.9
9.9
10.2
10.0
10.2
10.2
10.1
10.1
D. O.
mg/L
NaCN
(kg/mt)
CaO
(kg/mt)
NaCN
g
8
8
8
8
8
16
19
8
7
8
8
8
8
7
16
15
8
8
0.67
0.68
0.71
0.74
0.65
0.65
0.61
0.63
0.53
0.47
0.62
0.60
0.76
0.63
0.59
0.47
0.52
0.52
0.9
0.6
0.5
0.3
0.4
0.2
0.3
0.1
0.4
0.7
0.4
0.3
0.1
0.4
0.1
0.3
0.2
0.4
0.11
0.22
0.20
0.13
0.15
0.13
0.17
0.18
0.19
0.16
0.20
0.21
0.12
0.16
0.16
0.16
0.15
0.20
2h
14
8
7
14
11
15
19
15
18
37
38
41
53
52
55
54
50
49
FEBRUARY 2022
Residue
grade
Head grade (g/mt
Au)
5h
24h
32h
Au, g/mt
Calc
Direct
20
8
28
20
20
23
21
21
22
55
40
49
55
49
57
56
52
51
35
14
28
30
47
25
30
27
28
58
52
50
59
37
57
52
54
53
21.5
26.5
27.1
23.5
28.3
23.9
25.7
25.4
21.5
44.8
46.3
50.2
54.7
42.0
53.9
55.5
54.0
55.4
0.40
0.36
0.39
0.38
0.39
0.39
0.38
0.40
0.40
0.34
0.32
0.32
0.21
0.29
0.22
0.20
0.22
0.21
0.51
0.49
0.54
0.50
0.55
0.52
0.52
0.53
0.50
0.62
0.60
0.64
0.46
0.49
0.48
0.46
0.48
0.47
0.46
0.72
0.50
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S-K 1300 – Technical Report Summary
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Sample
number
RT 7 and
RT7B
RT9
Table 10-26: Reproducibility of cyanidation tests on the Livengood Gold Project
(2017 PFS)
CN
Reagent Cons.
Test No.
NaCN
(kg/mt)
CaO
(kg/mt)
Gravity
Tail Leach
Extraction
(% Au)
Residue
Grade Au,
g/mt
7
7R
8
8R
9
9R
10
10R
11
11r
12
12R
0.74
0.65
0.65
0.61
0.63
0.53
0.76
0.63
0.59
0.47
0.52
0.52
0.3
0.4
0.2
0.3
0.1
0.4
0.1
0.4
0.1
0.3
0.2
0.4
23.5
28.3
23.9
25.7
25.4
21.5
54.7
42.0
53.9
55.5
54.0
55.4
0.38
0.39
0.39
0.38
0.40
0.40
0.21
0.29
0.22
0.20
0.22
0.21
Head grade
(g/mt Au)
Calc
0.50
0.55
0.52
0.52
0.53
0.50
0.46
0.49
0.48
0.46
0.48
0.47
Important conclusions that can be drawn from the Phase 10 test program include:
■ For the samples tested, there was no clear evidence of passivation in the leaching profiles using conditions that are efficient for ores containing
antimony minerals;
■ Given the level of antimony and arsenic minerals that are present, this is a very unusual response. Either these minerals did not interfere, perhaps
because they were not liberated, or the samples tested were altered by the previous grinding/gravity tests that were performed on them. Ageing may
have also been a contributing factor;
■ The response runs counter to the good recovery results of RT9 in the FS optimization, where the average gravity tail leach extraction was 62.9%. It
also runs counter to the RT7 mini-optimization testwork that resulted in an average gold recovery of 53.6%. Both of these sets of tests were run on
fresh core, where the impact of antimony should have been quite pronounced, but yet gold recoveries were higher than the Phase 10 testwork.
Particle size cannot be used to explain the differences in the Phase 10 tests, because the P80 of 60-90 µm was similar to that used in the FS
optimization tests;
■ The results reinforce the need to consider detailed gold deportment analysis of gravity and leaching products in the next phase of testwork;
■ Seven tests with repeats indicated a good reproducibility of the results;
■ Lead nitrate addition may have increased the gold leaching kinetics.
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10.5.12 2021 PFS – Metallurgical Testwork
Five additional phases (9a, 9b, 11, 12, with addenda 1-5, and 13) of testwork have been completed since the 2017 PFS. These testwork were conducted
to explore possible opportunities established through BBA’s analysis of the FS and 2017 PFS testwork, to clarify certain questions regarding gold leach
performance and reagent consumptions and to confirm the process flowsheet. Phase descriptors with a common numeric identifier mean that those
programs were completed on replicate splits of the same large composites for each of the different rock types. For example, all the work for Phases 9, 9a,
and 9b was completed on replicates of the same RC chip composites. Similarly, all the work for Phase 12, including addenda 1-5, was completed on
replicates of the same core composites. The new phases are outlined as follows:
■ Phase 9a: Cyanide leach testing on all rock types using reverse circulation (RC) drill chip composites;
■ Phase 9b: Gravity recovery improvement, flowsheet optimization, STR testwork, ore blends testing, gold deportment, diagnostic leaching on two
problematic rock types (RT7 and RT9) and flotation testing;
■ Phase 11: Testing using RC rig duplicates to assess impact of the ore body location in relation with the 100 ppm antimony shell on the gold recovery
and improvement of the understanding of the gold grade/recovery and grind size/recovery relationships;
■ Phase 12: Original objectives are the same as Phase 11 but using core samples rather than RC rig duplicates; followed by Phase 12, Addenda 1-5 as
described below;
■ Phase 13: Testing using a blend of core and RC rig duplicates to assess impact of the ore body location and antimony concentrations of 200 ppm and
above on gold recovery.
The nature of the testwork and resulting conclusions are discussed below.
10.5.13 2021 PFS – Phase 9a - Cyanide Leach Testing
The Phase 9a was conducted by SGS Vancouver on approximately 50 kg of product rejects from the Phase 9 composites processed by FLSmidth/AMIRA
and returned to SGS in 2015 where each sample had previously been prepared from reverse circulation rig duplicates (rock chips).
The objectives were to confirm the process flowsheet developed in Phase 8, to avoid nugget effects from influencing the projected metallurgical
recoveries and to determine the effect of leach conditions using samples taken from a homogenous feed composite.
The Phase 9a testwork were completed in triplicate on 1 kg splits to compare different leach tests conditions:
■ CIL vs CIP;
■ Lead nitrate addition at PFS concentration vs no lead nitrate;
■ Sodium cyanide concentration at 0.4 kg/t vs 0.8 kg/t;
■ pH 10 vs pH 10.5.
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The composite sample selection was described previously in the section 10.5.10.1. Figure 10-22 illustrates the testwork that was conducted.
Figure 10-22: 2021 PFS (Phase 9a) testwork outline
Table 10-27 presents the test conditions and Table 10-28 present the gold recoveries obtained for each rock type. The average gold recovery were similar
when using CIL or CIP methodologies for Rock Types 4, 5 and 9 while better gold recovery was obtained when using CIL methodology for Rock Types 6
and 7.
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Table 10-27: Test conditions (2021 PFS – Phase 9a)
Lead Nitrate
concentration
(g/mt)
Sodium cyanide
dosage
(kg/mt)
Test pH
100
100
100
100
0
0
0
0
100
100
100
100
0
0
0
0
0.4
0.8
0.4
0.8
0.4
0.8
0.4
0.8
0.4
0.8
0.4
0.8
0.4
0.8
0.4
0.8
10
10
10.5
10.5
10
10
10.5
10.5
10
10
10.5
10.5
10
10
10.5
10.5
Test ID
CIL-1
CIL-2
CIL-3
CIL-4
CIL-5
CIL-6
CIL-7
CIL-8
CIP-1
CIP-2
CIP-3
CIP-4
CIP-5
CIP-6
CIP-7
CIP-8
Table 10-28: Test results for all Rock Types (2021 PFS – Phase 9a)
RT4
Au recovery
(%)
RT5
Au recovery
(%)
RT6
Au recovery
(%)
RT7
Au recovery
(%)
RT9
Au recovery
(%)
78.1
77.4
73.7
75.3
76.8
75.3
74.2
72.2
72.8
73.9
72.0
68.9
72.5
56.9
58.8
64.3
64.1
62.9
61.3
56.3
57.8
43.9
40.6
36.8
43.9
41.3
38.1
35.6
46.7
47.9
49.1
47.6
46.6
46.8
43.8
Test ID
CIL-1
CIL-2
CIL-3
CIL-4
CIL-5
CIL-6
CIL-7
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Test ID
CIL-8
CIP-1
CIP-2
CIP-3
CIP-4
CIP-5
CIP-6
CIP-7
CIP-8
RT4
Au recovery
(%)
RT5
Au recovery
(%)
RT6
Au recovery
(%)
RT7
Au recovery
(%)
RT9
Au recovery
(%)
78.4
75.6
75.5
73.9
75.6
78.9
74.9
73.9
76.1
65.7
71.8
69.3
71.8
74.3
66.5
70.2
59.6
66.4
56.5
56.0
55.5
58.8
53.7
52.8
52.0
43.8
54.2
39.6
32.4
34.4
33.8
35.3
31.0
35.3
32.1
33.7
45.6
50.2
51.6
45.5
46.7
46.8
49.7
44.4
45.8
Figure 10-23 to Figure 10-27 show the residue averages of three replicates at each test condition. These conditions are identified in the legend of each
figure with the four variables being CIL or CIP, concentration of lead nitrate added (ppm), initial cyanide concentration (kg/t) and pH.
The residue grades were the same in the CIL and CIP for Rock Types 4, 5 and 9. Lower residual gold grades were obtained for Rock Types 6 and 7 when
using the CIL. These results confirm that CIL seems to be the better methodology compared to CIP.
Figure 10-23: RT4 Average CIL and CIP residue grades at a P80 of 112 µm
(2021 PFS – Phase 9a)
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Figure 10-24: RT5 Average CIL and CIP residue grades at a P80 of 111 µm
(2021 PFS – Phase 9a)
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Figure 10-25: RT6 Average CIL and CIP residue grades at a P80 of 99 µm
(2021 PFS – Phase 9a)
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S-K 1300 – Technical Report Summary
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Figure 10-26: RT7 Average CIL and CIP residue grades at a P80 of 120 µm
(2021 PFS – Phase 9a)
Figure 10-27: RT9 Average CIL and CIP residue grades at a P80 of 113 µm
(2021 PFS – Phase 9a)
The gold leach kinetic profiles of the CIP test replicates are presented in Figure 10-28 for each conditions listed in Table 10-27 and for each rock type.
The plots suggest that gold recovery plateaued after 18 hours of leaching for all rock types. RT4, RT7 and RT9 appeared to reach maximum gold
dissolution by 12 hours.
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Figure 10-28: Leach kinetics results for RT4, RT5, RT6, RT7 and RT9
(2021 PFS – Phase 9a)
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The potential preg-robbing level of each rock type was determined by the analysis Au31 and Au31a performed in quadruplicate. The preg-robbing levels
for each rock type are shown in Figure 10-29. Values approaching 0% have low potential for preg-robbing while negative values near -40% have a
significant potential for preg-robbing.
Figure 10-29: % Au gain preg-robbing level
(2021 PFS – Phase 9a)
The important conclusions to be drawn from the leach residue assay interpretation of Phase 9a are as follow:
■ RT7 and RT6 showed better recovery both with CIL. The other rock types appeared insensitive to CIL vs CIP;
■ Leach residue grades were consistently as low as what was obtained during previous testwork at SGS for all rock types;
■ None of the five rock types (RT4, RT5, RT6, RT7 and RT9) were sensitive to the addition of lead nitrate at PFS concentration at the test condition at
pH 10;
■ None of the five rock types were sensitive to the leach variable of cyanide concentration at either 0.4 kg/t vs 0.8 kg/t;
■ RT5, RT6, RT7 and RT9 showed better results at pH 10 without lead nitrate. However, the variance is slightly above 0.02 g/t of the method detection
limit, which indicates that this is not significant;
■ RT4 appeared insensitive to either pH 10 or pH 10.5 or with and without lead nitrate addition;
■ Geochemical analysis of the samples showed all rock types with low preg-robbing levels of 5% or less.
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10.5.14 2021 PFS – Phase 9b - Gravity, Grind, Leaching, STR and Flotation Testing
The Phase 9b was conducted by SGS Vancouver on the remaining 100 kg of the 500 kg June 2015 reverse circulation Phase 9 composites from each
rock type. The key objectives of this phase were to:
■ Attempt to demonstrate improved gravity recovery on a bulk sample to the level predicted by previous E-GRG testwork;
■ Develop reliable grind and recovery data by completing five data points at six grind sizes between 90 and 250 microns;
■ Complete additional screening flotation work;
■ Develop additional kinetic and reagent consumption data to optimize the flowsheet;
■ Test representative ore blends to assess impact on recovery and reagents;
■ Complete additional gold deportment and diagnostic leach work on RT7 and RT9 leach residues;
■ Complete stirred reactor testing in attempt to assess and reduce antimony impacts on recovery.
The composite sample selection was described previously in the Section 10.5.10.1. Figure 10-30 illustrates the testwork that were conducted.
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Figure 10-30: 2021 PFS (Phase 9b) testwork outline
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10.5.14.1 Phase 9b – Gravity / Intensive Leach Testwork
Phase 9b gravity testwork was performed at a grind of 250 µm (P80). One 100 kg composite by rock type was processed in a single pass through a
Knelson concentrator at 40% solids. The entire gravity concentrate was intensive leached, and the tailings were assayed to determine the gold
deportment of the gravity products. The results presented in the Table 10-29 demonstrates that the gravity recovery modeled by FLSmidth/AMIRA and the
Feasibility Study E-GRG work can be achieved.
Table 10-29: Average gold gravity recovery results for each rock type
(2021 PFS – Phase 9b)
Rock type
Calc. head
(Au g/mt)
RT4
RT5
RT6
RT7
RT9
0.70
0.63
0.71
0.78
0.69
Phase 9
FLSmidth/AMIRA
Stage 1
% GRG recovery
P100 – 850 µm
38%
44%
46%
35%
33%
SGS Vancouver
Gravity recovery
with Mozley
P80 – 250 µm
24%
16%
25%
16%
10%
Phase 9b
SGS Vancouver
Gravity recovery
without Mozley
P80 – 250 µm
49%
64%
53%
38%
36%
Calc. head
(Au g/mt)
0.68
0.63
0.76
0.81
0.73
Table 10-30 shows higher gravity recovery of each rock type obtained during Phase 9b testwork leading to an improvement in the overall recovery as
compared to splits from the same composites in Phase 9. The gravity recovery improvement in Phase 9b appears to have removed leachable gold from
the pulp and resulted in lower CIL recovery than Phase 9. The early gravity recovery of otherwise leachable gold could result in reductions in CAPEX and
OPEX in the leach circuit.
Table 10-30: Phase 9 and Phase 9b recovery results comparison
(2021 PFS – Phase 9b)
Rock type
Average
gravity
recovery
Average
CIL
recovery
Overall
recovery
Average
tails
(Au g/mt)
Average
gravity
recovery
Phase 9
Phase 9b
Average CIL
recovery
Overall
recovery
RT4
RT5
RT6
RT7
RT9
24%
16%
25%
16%
10%
78%
77%
64%
43%
48%
83%
80%
72%
52%
53%
0.10
0.11
0.18
0.31
0.29
49%
64%
53%
38%
36%
69%
62%
51%
37%
41%
84%
86%
77%
61%
62%
FEBRUARY 2022
Average
tails
(Au g/mt)
0.11
0.10
0.17
0.31
0.32
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The Knelson concentrate from each rock type was intensive leached to determine the recoverable gold. Gold recoveries exceeding 98% were achieved
for all rock types. The leach rates of the Knelson concentrates are shown in Figure 10-31. The leach kinetics of all rock types were substantially
completed after 8 hours of leaching and reached 99% by 24 hours.
Figure 10-31: Leach kinetics of the Knelson concentrate
(2021 PFS – Phase 9b)
10.5.14.2 Phase 9b – CIL Tests on Knelson Tailings
A total of 345 standard bottle roll tests were performed on Knelson tailings to determine the extractable gold for each rock type as a function of different
parameters: grind size, preconditioning, pH, and cyanide dosage.
Figure 10-32 shows the CIL residue grades for each rock type at different grind sizes, between 90 µm and 250 µm. Between five and seven data points
are represented at each grind size for the single pass gravity results and ten data points for the double pass gravity results.
Some observations that can be drawn from this testwork are the following:
■ Slightly better recoveries were obtained with the double pass gravity;
■ Some of the residues have the same assay and plot on top of each other. The well clustered data are interpreted to reflect an improvement in the test
protocol as a consequence of gravity recoverable gold not reporting to conventional leaching and potentially impacting the repeatability of leach
residue assays;
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■ The results of overall recovery versus grind size do not show any inflection point neither for single pass gravity nor for the second pass gravity, which
can suggest that there is an opportunity to conduct testwork on coarser sizes in the future;
■ There was no correlation shown between cyanide consumption and grind size.
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Figure 10-32: CIL residue grade according to grind size
(2021 PFS – Phase 9b)
10.5.14.3 Phase 9b – Regrind and Gravity Separation Testing
A total of 46 regrinds were performed at six different grind sizes, including 215, 180, 150, 135, 120 and 90 µm (P80) for all rock types and blend
composites. After regrinding, a total of 15 gravity tests were carried out on each rock type at 180, 135 and 90 µm (P80). The Knelson concentrates were
split in half; one half was forwarded to intensive leach and the other was returned with the Knelson tailings. The second pass gravity as well as the
intensive leach results are presented in Table 10-31 to Table 10-33.
The results show that regrinding followed by gravity separation and intensive leach can recover more gold than a single pass in gravity followed by CIL.
The increased amount gain average from 0.02 to 0.04 g/t. These results reflect the same opportunity identified in the gold deportment and diagnostic
leach work that is discussed in Section 10.5.14.6. Enhanced gold recovery is possible by intensive leaching, but improved grinding and/or gravity, or even
whole ore intensive leach may be required.
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Table 10-31: Result summary of the second pass gravity test at 180 µm
(2021 PFS – Phase 9b)
Rock
type
2nd pass grav.
con. calc. head
(Au g/mt)
Residue
after IL
(Au g/mt)
Au
recovery
from con.
(%)
2nd pass grav.
Au into con.
(Au g/mt)
Net Au
possible
2nd pass grav.
(Au g/mt)
1st pass grav.
CIL tail
(Au g/mt)
2nd pass grav.
CIL tail
(Au g/mt)
Difference
1st to 2nd pass
(Au g/mt)
RT4
RT5
RT6
RT7
RT9
7.29
6.04
9.62
6.11
6.24
2.82
2.29
3.53
3.56
2.42
61.3
62.1
63.3
41.7
61.2
0.07
0.05
0.09
0.05
0.05
0.04
0.03
0.06
0.02
0.03
0.11
0.11
0.18
0.32
0.33
0.10
0.10
0.17
0.31
0.30
0.01
0.01
0.01
0.01
0.03
Table 10-32: Result summary of the second pass gravity test at 135 µm
(2021 PFS – Phase 9b)
Rock
type
2nd pass grav.
con. calc. head
(Au g/mt)
Residue
after IL
(Au g/mt)
Au
recovery
from con.
(%)
2nd pass grav.
Au into con.
(Au g/mt)
Net Au
possible
2nd pass grav.
(Au g/mt)
1st pass grav.
CIL tail
(Au g/mt)
2nd pass grav.
CIL tail
(Au g/mt)
Difference
1st to 2nd pass
(Au g/mt)
3.58
2.75
4.01
3.73
3.41
68.7
64.8
51.3
49.6
40.1
0.11
0.07
0.08
0.07
0.05
0.08
0.05
0.04
0.04
0.02
0.10
0.10
0.16
0.30
0.31
0.08
0.09
0.16
0.29
0.30
0.02
0.01
0.00
0.01
0.01
RT4
RT5
RT6
RT7
RT9
11.4
7.81
8.23
7.40
5.69
FEBRUARY 2022
Gravity
intensive
leach gain
(Au g/mt)
0.03
0.02
0.05
0.01
0.00
Gravity
intensive
leach gain
(Au g/mt)
0.06
0.04
0.04
0.03
0.01
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Table 10-33: Result summary of the second pass gravity test at 90 µm
(2021 PFS – Phase 9b)
Rock
type
2nd pass grav.
con. calc. head
(Au g/mt)
Residue
after IL
(Au g/mt)
Au
recovery
from con.
(%)
2nd pass grav.
Au into con.
(Au g/mt)
Net Au
possible
2nd pass grav.
(Au g/mt)
1st pass grav.
CIL tail
(Au g/mt)
2nd pass grav.
CIL tail
(Au g/mt)
Difference
1st to 2nd pass
(Au g/mt)
RT4
RT5
RT6
RT7
RT9
10.3
7.44
12.0
10.3
8.36
3.06
3.04
4.91
3.61
3.58
70.3
59.1
59.1
64.8
57.2
0.09
0.07
0.13
0.11
0.09
0.07
0.04
0.07
0.07
0.05
0.10
0.10
0.16
0.30
0.31
0.08
0.08
0.14
0.27
0.29
0.02
0.02
0.02
0.03
0.02
Gravity
intensive
leach gain
(Au g/mt)
0.05
0.02
0.05
0.04
0.03
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10.5.14.4 Phase 9b – Flotation Testwork
Flotation testwork was completed on three replicates of each rock type and on three replicates from ore blends representative of Year 1, Year 2, Year 4
and LOM at a grind size of 180 µm (P80). The test conditions for all rock types were based on previously optimized flotation conditions for RT7 and RT9.
The intent was to achieve a 15% mass pull. Table 10-34 shows the averages of the replicate results for each sample. Table 10-35 presents the
comparison of the overall recovery by test condition. As shown in this table, overall recovery for gravity followed by flotation was 3% to 12% lower
compared to recovery for gravity followed by CIL. These poor results eliminated the flotation in the selected process flowsheet.
Table 10-34: Flotation testwork results
(2021 PFS – Phase 9b)
Sample
Mass Pull
Flotation recovery
RT4
RT5
RT6
RT7
RT9
Y1
Y2
Y4
LOM 180
LOM 135
LOM 90
27%
12%
15%
16%
16%
16%
12%
12%
18%
18%
17%
46%
44%
34%
32%
30%
38%
32%
42%
36%
38%
38%
Table 10-35: Overall recovery comparison
(2021 PFS – Phase 9b)
Rock
Type
RT4
RT5
RT6
RT7
RT9
Gravity
recovery
CIL
recovery
Gravity CIL
recovery
Flotation
recovery
49%
64%
53%
38%
36%
69%
62%
51%
37%
41%
84%
86%
77%
61%
62%
46%
44%
34%
32%
30%
Gravity
flotation
recovery
72%
77%
67%
58%
53%
Difference
12%
8%
9%
3%
8%
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10.5.14.5 Phase 9b – Effect of Ore Blend
A series of blend composites was prepared for the first time to evaluate potential impacts of mixing the chemical and physical properties of the ore types
on recovery and reagent consumptions. The composition of the blends is presented in Table 10-36.
Table 10-36: Composition of blend composites
(2021 PFS – Phase 9b)
Rock type
Blend Year 1
Blend Year 2
Blend Year 3
Blend LOM
RT4
40%
9%
9%
15%
RT5
27%
9%
82%
23%
RT6
27%
45%
9%
23%
RT7
0%
0%
0%
15%
RT9
7%
36%
0%
23%
The effect of ore blend on recoveries and mass pull are presented in the Table 10-37. The results show that there are no significant adverse recovery
issues introduced by mixing ore types. The difference between measured and projected data were varying between -7% to 1% for the CIL recovery,
flotation recovery and mass pull. There was no statistically significant difference in measured CIL residue grades as compared to predicted grades.
Table 10-37: Effect of ore blend on CIL recovery, leach residue, flotation recovery and mass pull
(2021 PFS – Phase 9b)
Rock Type
Projected tails (Au g/mt)
Measured tails (Au g/mt)
Difference (measured-projected)
Projected CIL recovery
Measured CIL recovery
Difference (measured-projected)
Projected float recovery
Measured float recovery
Difference (measured-projected)
Projected mass pull
Measured mass pull
Difference (measured-projected)
Year 1
blend
0.14
0.13
-0.01
61%
56%
-5%
41%
38%
-3%
19%
16%
-3%
Year 2
blend
Year 4
blend
LOM blend
0.21
0.21
0.00
50%
44%
-6%
34%
32%
-2%
16%
12%
-4%
0.11
0.11
0.00
61%
59%
-3%
43%
42%
-1%
14%
12%
-2%
0.20
0.19
-0.01
52%
45%
-7%
37%
37%
0%
17%
18%
1%
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10.5.14.6 Phase 9b – Residue Characterization
AMTEL completed a gold deportment study on three replicate samples selected from the Phase 9b RT7 and RT9 gravity/CIL leach residues from the 105
µm metallic screen undersize. The gold deportment study demonstrated that approximately 17% of gold in these samples was recoverable from both rock
types by intensive leaching. Some of the gold in the tailings was observed to have developed a coating, interpreted as silver and silver oxide developed in
part by gold depletion during leaching. Figure 10-33 shows the gold deportment.
Figure 10-33: Deportment of gold by leach form and carrier
(2021 PFS – Phase 9b)
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SGS completed six diagnostic leach tests on triplicates of both RT7 and RT9 gravity/CIL residues at a grind size of 120 µm from the 105 µm metallic
screen undersize to diagnose the presence of gold encapsulated by other minerals. The diagnostic leach work indicates that 14.7% of the gold in RT7
residues and 18.1% of the gold in the RT9 residues is recoverable by intensive leach at this particle size. This result corroborates the AMTEL gold
deportment work shown previously. Figure 10-34 shows the average diagnostic leach results for RT7 and RT9.
Figure 10-34: Diagnostic leach result distribution
(2021 PFS – Phase 9b)
10.5.14.7 Phase 9b – Stirred Tank Reactor (STR) Leach Tests
A stirred tank reactor testwork program was completed under the direction of BBA. The program was initiated at SGS Vancouver in British Columbia.
Samples were shipped to BBA laboratory in Hamilton, Ontario. Leaching products were assayed at SGS Lakefield in Ontario. The test program included
the use of lead nitrate to study the influence of passivation of the gold surfaces during grinding and leach sample preparation. Phase 9b included testing
of six aliquots, all weighing approximately 1 kg from each rock type (RT4, RT5, RT6, RT7 and RT9).
The objectives of the testwork program were to:
■ Compare the leaching performance at 16 and 24 hours;
■ Assess whether controlled leaching conditions could improve Au recovery;
■ Search opportunities to reduce the leaching time and reagent consumptions.
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The test program was conducted on Knelson gravity tails at a grind size of 180 µm (P80). Tests were conducted in stirred tank reactor (STR) under
controlled conditions of the following variables: temperature, agitation, pH, oxidation reduction potential (ORP), free cyanide, and dissolved oxygen (DO).
Table 10-38 shows the matrix conditions. To study possible passivation of the Au surface during the leaching testwork, the use of DO in the 12-14 ppm
range instead of 6-8 ppm was used for one of the aliquots for each rock type.
Table 10-38: STR leach matrix conditions
(2021 PFS – Phase 9b)
Lead nitrate
Rock Type
During re-
grinding
(g/mt)
During pre-
cond.
(g/mt)
pH
DO pre-
cond.
(ppm)
DO during
leaching
(ppm)
Initial NaCN
dosage
(kg/mt)
NaCN during
leach
(kg/mt)
Leaching
time
RT4
RT5
RT6
RT7
RT9
100
50
100
200
200
25
18
25
50
50
10.2
6 - 8
6 - 8
0.4
0.2
16 & 24
Table 10-39 presents a summary of the average results of the STR testwork program. Some observations that can be drawn from this table are listed
below:
■ The Au residue was similar (within the experimental error of 0.02 g/t) for the 16 and 24-hour tests, for all rock types;
■ The Au recovery based on the carbon adsorption was higher in all cases at 16-hour vs 24-hour tests, except RT7;
■ The Au recovery based on the residue was higher in RT4, RT6 and RT9 at 16-hour vs 24-hour, except RT5 and RT7.
■ Higher DO (range 12 to 14 ppm O2 instead of 6 to 8 ppm O2) did not have an impact on Au leaching;
■ The NaCN consumptions were between 0.25 and 0.40 kg/t with an average of 0.33 kg/t. Since the STR testwork are closer to the reality than the
bottle roll tests, it can be expected that the NaCN consumption will be lower than what was used in the testwork of the other phases;
■ The NaCN consumptions were lower for all rock types at 16-hour vs 24-hour, except for RT5. It could be explained by the lower lead nitrate addition
for this rock type;
■ The CaO consumptions were between 0.74 to 1.09 kg/t with an average of 0.87 kg/t. Since the STR testwork are closer to the reality than the bottle
roll tests, it can be expected that the CaO consumption will be lower than what was used in the testwork of the other phases;
■ The CaO consumptions were higher for all rock types at 16 hours, except RT5;
■ These controlled leach tests were not able to reduce leach residue assays below the bottle roll results from SGS shown previously in Figure 10-32 at
a grind size of 180 µm.
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Table 10-39: Average STR testwork results
(2021 PFS – Phase 9b)
Rock
Type
RT4
RT5
RT6
RT7
RT9
Leach
time
(hours)
Reagent
consumption
NaCN
(kg/mt)
CaO
(kg/mt)
Residue
grade
(Au g/mt)
Head grade
Au recovery
Calculated
(Au g/mt)
Direct
(Au g/mt)
Carbon ads
(%)
Residue
(%)
24
16
24
16
24
16
24
16
24
16
0.40
0.32
0.25
0.33
0.37
0.27
0.36
0.34
0.34
0.29
0.91
1.05
0.82
0.77
0.74
0.84
0.88
1.09
0.76
0.81
0.12
0.11
0.09
0.11
0.19
0.21
0.31
0.32
0.33
0.32
0.36
0.37
0.25
0.28
0.34
0.38
0.51
0.49
0.50
0.52
0.35
0.23
0.36
0.47
0.47
67.7
71.2
60.7
61.3
43.3
46.8
42.2
37.7
36.5
39.4
66.3
70.0
62.5
61.2
42.4
43.5
38.7
35.2
34.6
37.6
Figure 10-35 shows kinetic plots of Au leaching residue vs time. Similar kinetic rates can be observed in both the 16-hour and 24-hour. These tests
confirm Phase 9a work showing that the leach kinetics appeared to reach maximum gold dissolution by 12 hours as shown previously in Figure 10-28.
The addition of lead nitrate during regrind and pre-conditioning did not improve Au leaching kinetics or Au leaching tails. A lead nitrate optimization
program is suggested to study the impact of the addition of lead nitrate in Au leach kinetics and cyanide consumption.
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Figure 10-35: Leach kinetics 16 vs 24 hours
(2021 PFS – Phase 9b)
10.5.14.8 Phase 9b – Reprocessing of CIL Residues
Various CIL tailing metallic screen undersize residues, after being pulverized to approximately 50 µm (P80) from different particle sizes, were reconstituted
to make up a sample for each rock type. These samples were reprocessed through a gravity concentrator in a single pass. The concentrates were
forwarded to intensive leaching and the gravity tails were sent to CIL to determine if the liberated gold identified by AMTEL and SGS diagnostic leach can
be recovered significatively.
Table 10-40 presents the results of the concentrate regrinding followed by intensive leaching. Modest improvement in tail residue grades and recoveries
were obtained. The 3.5% and 3.0% values for RT7 and RT9 (as a percentage of gold in the CIL tails) compares to the 15%-17% obtained by AMTEL and
SGS diagnostic leach, which means that the liberated gold appears to be too small to be recovered by gravity circuit.
Table 10-40: Knelson concentrate intensive leach results
(2021 PFS – Phase 9b)
Sample ID
KnelCon of RT4 Residues
KnelCon of RT5 Residues
KnelCon of RT6 Residues
KnelCon of RT7 Residues
KnelCon of RT9 Residues
Residue grade
(Au g/mt)
Au recovery
(%)
0.09
0.10
0.17
0.33
0.30
14.9
8.14
5.35
3.52
3.05
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Reprocessing the Knelson tailings by the CIL methodology liberated additional leachable gold and obtained tail residue grades and recovery shown in
Table 10-41. The 16.9% and 23.8% recovery improvement for RT7 and RT9 (as a percentage of gold in the CIL tails) compares favorably to the 15%-17%
obtained by AMTEL and SGS diagnostic leach. The overall recovery increase by rock type is shown in the right column. These data warranted a re-
examination of the grind/recovery characteristics, which was completed in Phases 11 and 12, following the success at improving the gravity circuit test
protocols.
Table 10-41: Knelson tailings CIL results
(2021 PFS – Phase 9b)
Sample ID
RT4 Knelson Tail of CIL residues
RT5 Knelson Tail of CIL residues
RT6 Knelson Tail of CIL residues
RT7 Knelson Tail of CIL residues
RT9 Knelson Tail of CIL residues
Residue grade
(Au g/mt)
Au recovery in CIL
tails
(%)
Au overall recovery
increase
(%)
0.06
0.06
0.13
0.24
0.23
29.1
35.8
16.9
16.9
23.8
4.9
3.4
4.0
6.4
12.4
10.5.15 2021 PFS – Phase 11
The Phase 11 was conducted by SGS Vancouver on 100 kg composites prepared from the RC rig duplicates store at Livengood site since 2012 drilling
from each of the five rock types. The objectives of this phase were to:
■ Assess whether gold recovery is dependent upon orebody location in relation to the 100 ppm antimony shell;
■ Improve the understanding of the gold grade/recovery and grind size/recovery relationships.
The samples were based on rock type, oxide/sulfide zone type, gold concentration, antimony concentration and location with respect to the antimony 100
ppm shell. The samples were composited to achieve three targeted grades; resource average grade (RTXX-1), average grade plus cut-off (RTXX-2) and
average grade plus two times cut-off (RTXX-3). When adequate samples were available for compositing, three composites for each targeted grade were
prepared from outside the 100 ppm antimony shell (RTXO-X) and three composites from inside the 100 ppm antimony shell (RTXS-X). The antimony shell
is a complex 3D solid modeled to include the areas of highest antimony concentration in the orebody. All composites were selected to have less than 100
ppm antimony so as to determine whether mere proximity to generally higher antimony levels resulted in an impact on gold recovery, even at
approximately similar antimony concentrations of the composites themselves. Rock types RT4 and RT5 did not have sufficient samples to prepare the
“inside the 100 ppm antimony shell” composites. Table 10-42 presents some characteristics of the composites.
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Samples were ground to a grind size of 250 µm (P80), processed twice in a gravity concentrator, the tailings were split and reground to grind sizes of 180
µm and 50 µm (P80). The gravity concentrates from both passes for a given rock type were combined and intensive leached while the gravity tailings were
CIL leached according to the same protocol as Phase 9b. Figure 10-36 illustrates the metallurgical test procedures that were conducted.
Table 10-42: Composites characteristics
(2021 PFS – Phase 11)
Sample ID
Drill assay head grade
(Au g/mt)
Arsenic concentration
(As ppm)
Antimony concentration
(Sb ppm)
RT4O-1
RT4O-2
RT4O-3
RT5O-1
RT5O-2
RT5O-3
RT6S-1
RT6S-2
RT6S-3
RT6O-1
RT6O-2
RT6O-3
RT7S-1
RT7S-2
RT7S-3
RT7O-1
RT7O-2
RT7O-3
RT9S-1
RT9S-2
RT9S-3
RT9O-1
RT9O-2
RT9O-3
0.64
0.99
1.38
0.59
0.93
1.31
0.72
0.97
2.48
0.70
1.05
1.41
0.80
1.45
1.84
0.77
1.20
1.69
0.84
1.20
1.69
0.83
1.21
1.61
5 159
3 227
1 800
1 944
3 301
4 286
4 327
2 271
2 730
2 447
3 171
3 772
5 418
4 776
4 677
3 077
3 144
3 440
4 859
12 001
6 871
6 446
7 855
8 642
28
28
27
24
27
27
55
48
76
26
32
30
58
57
59
37
40
31
51
71
57
47
43
43
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Figure 10-36: 2021 PFS (Phase 11) testwork outline
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10.5.15.1 Phase 11 – Gravity / Intensive Leach Testwork
Phase 11 gravity testwork was performed at a grind of 250 µm (P80). The results obtained from the two-stage gravity test are presented in the Table 10-
42. Phase 9b and Phase 11 make two consecutive test programs with gravity results near those predicted by AMIRA for the Phase 9 composites. These
results confirm the gravity circuit performance and demonstrate the need for a robust gravity circuit. As shown in Figure 10-37, gravity recovery does not
appear to be a function of head grade.
Table 10-43: Gravity separation results
(2021 PFS – Phase 11)
Composite Name
Calculated head
(Au g/mt)
1st pass grav.
recovery
(%)
2nd pass grav.
recovery
(%)
Total gravity
recovery
(%)
Gravity tail
(Au g/mt)
RT4O-1
RT4O-2
RT4O-3
RT5O-1
RT5O-2
RT5O-3
RT6S-1
RT6S-2
RT6S-3
RT6O-1
RT6O-2
RT6O-3
RT7S-1
RT7S-2
RT7S-3
RT7O-1
RT7O-2
RT7O-3
RT9S-1
RT9S-2
RT9S-3
RT9O-1
RT9O-2
RT9O-3
0.54
1.02
0.75
0.63
1.03
1.23
0.95
0.74
1.74
0.74
0.91
0.99
1.12
1.24
1.04
0.91
1.01
1.12
0.92
1.27
1.16
1.09
1.44
1.18
47.9
53.0
44.0
45.7
49.7
33.3
54.1
46.0
50.6
42.7
40.9
38.9
54.5
51.2
44.4
57.0
58.6
70.7
46.0
31.0
44.8
41.0
42.0
29.3
3.9
8.8
13.3
5.3
7.6
7.6
4.2
9.3
21.4
3.4
11.9
6.8
5.3
8.7
3.8
5.7
4.0
3.4
3.0
3.5
5.5
2.4
4.8
7.1
51.8
61.8
57.3
51.0
57.3
40.9
58.3
55.3
72.0
46.1
52.8
45.7
59.8
59.9
48.2
62.7
62.6
74.1
49.0
34.5
50.3
43.4
46.8
36.4
0.26
0.39
0.32
0.31
0.44
0.73
0.40
0.33
0.49
0.40
0.43
0.54
0.45
0.50
0.54
0.34
0.38
0.29
0.47
0.83
0.58
0.62
0.77
0.75
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Figure 10-37: Gravity recovery vs calculated head by rock type
(2021 PFS – Phase 11)
The 1st pass Knelson concentrate and the 2nd pass Knelson concentrate were forwarded separately for intensive leach cyanidation. High gold recoveries
exceeding 94% to 99% were achieved by 1st pass concentrates and gold recoveries of 73% to 98% were achieved by 2nd pass concentrates.
10.5.15.2 Phase 11 – CIL Tests on Knelson Tailing Leach Testwork and Overall Recovery
A total of 720 bottle roll tests on the 24 variability samples were conducted to determine the extractable gold from the Knelson tailing as a function of grind
size. For each variability sample, ten replicate bottle roll tests were performed at three different grind sizes, 250, 180 and 50 µm (P80).
Figure 10-38 presents the overall recovery related to the antimony concentration. The results show that, if related to only one parameter, RT6 and RT7
recoveries seem to be not dependent on the sample location being inside or outside the 100 ppm antimony shell. RT9 has one composite that showed
reduced recovery that could be related to location, antimony concentration or other factors. RT4 and RT5 did not have composites from within the
antimony shell. However, a statistical analysis that is discussed in Section 10.6.2, demonstrated in a 3D model that gold recoveries appear to be slightly
dependent on the sample location being inside or outside the 100 ppm antimony shell when they are related to grind size and head grades.
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Figure 10-38: Overall gold recovery according to location inside or outside the 100 ppm Sb shell
(2021 PFS – Phase 11)
Figure 10-39 shows the overall gold recovery according to the grind size. Coarsening the grind to 250 µm (P80) results in gold recovery losses between
1% and 4% depending on the rock type. However, similar to the results of Phase 9b, these results do not show any inflection point between 250 and 180
µm, which can suggest that there is an opportunity to conduct testwork on coarser sizes in the future.
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Figure 10-39: Overall gold recovery according to grind size
(2021 PFS – Phase 11)
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10.5.15.3 Bulk CIP Tailings Production
A series of six bulk regrind and cyanidation leach tests were performed to produce fresh leach tailings slurry for off-site geotechnical testing. Three leach
feed composites, RT4O, RT5O, and RT9S, were prepared in duplicate by blending 1 kg of Knelson tailings and grinding to a target P80 of 50 µm or 180
µm. The entire ground slurry was then forwarded for carbon-in-pulp (CIP) testing. Table 10-44 shows the obtained results, which yielded similar gold
recovery to the 1 kg CIL bottle roll tests; however, a slight increase in residual gold grade may be evident in the CIP tests. The geotechnical
characteristics of these leach residues are discussed in Section 10.5.16.7.
Table 10-44: 10kg Bulk results from Phase 11
(2021 PFS)
Target leach
P80
(µm)
50
180
50
180
50
180
Au grade
(Au g/mt)
0.32
0.32
0.49
0.49
0.63
0.63
Rock type
RT4O
RT5O
RT9S
Au leach
recovery
(%)
73.7%
64.6%
53.3%
49.2%
47.7%
40.1%
Important conclusions that can be drawn from the Phase 11 test program include:
■ The good results obtained with the gravity testwork confirm the gravity circuit performance and demonstrate the need for a robust gravity circuit;
■ Depending on the rock type, gold recovery is slightly related to the location either inside or outside the 100 ppm antimony shell.
10.5.16 2021 PFS – Phase 12
The Phase 12 was completed by SGS Vancouver on 100 kg composites prepared from split core from each of the five major rock types. Two new
composites with higher antimony concentration were added during this phase. The objectives were the same as Phase 11:
■ To assess whether gold recovery is dependent upon orebody location in relation to the 100 ppm antimony shell;
■ To improve the understanding of the gold grade/recovery and grind size/recovery relationships.
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The main differences were that Phase 12 was completed on core samples rather than RC rig duplicates and the availability of core allowed for a more
specific selection of sample location and grade distribution. The samples were based on rock type, gold concentration, antimony concentration and
location with respect to the antimony 100 ppm shell. The samples were composited to achieve three targeted grades, same as described in Section
10.5.15 and were processed as shown in Figure 10-36 from this same section. Table 10-45 presents some characteristics of the composites.
Table 10-45: Composites characteristics
(2021 PFS – Phase 12)
Sample ID
Drill assay head grade
(Au g/mt)
Arsenic concentration
(As ppm)
Antimony concentration
(Sb ppm)
CRT4O-1
CRT4O-3
CRT5O-1
CRT5O-2
CRT5O-3
CRT6S-1
CRT6O-1
CRT6O-2
CRT6O-3
CRT7S-1
CRT7S-2
CRT7S-3
CRT7O-1
CRT7O-2
CRT7O-3
CRT9S-1
CRT9S-2
CRT9S-3
CRT9O-1
CRT9O-2
CRT9O-3
CRT6 300
CRT6 Kin300
0.61
2.46
0.61
0.93
1.25
0.45
0.69
1.03
1.40
0.75
1.18
1.94
0.77
1.19
1.60
0.83
1.17
2.03
0.84
1.21
1.60
0.84
1.20
3 682
11
2 513
3 723
2 744
2 285
3 699
3 934
2 649
3 310
3 934
4 129
2 393
2 302
3 503
5 831
6 672
8 484
6 231
6 743
4 729
4 859
12 001
37
35
18
19
17
58
33
33
21
55
45
45
28
25
38
60
67
61
44
42
35
51
71
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10.5.16.1 Phase 12 – Gravity / Intensive Leach Testwork
Phase 12 gravity testwork was performed at a grind of 250 µm (P80). The results obtained from the two-stage gravity test are presented in the Table 10-
46. Phase 12 confirmed the robust gravity recovery of Phases 9b and 11. As shown in Figure 10-40, gravity recovery increased as a function of head
grade for all rock types. This may be explained by the larger spread in grades tested.
Table 10-46: Gravity separation results
(2021 PFS – Phase 12)
Composite
Name
Calculated head
(Au g/mt)
1st pass grav.
recovery
(%)
2nd pass grav.
recovery
(%)
Total gravity
recovery
(%)
Gravity tail
(Au g/mt)
CRT4O-1
CRT4O-3
CRT5O-1
CRT5O-2
CRT5O-3
CRT6S-1
CRT6O-1
CRT6O-2
CRT6O-3
CRT7S-1
CRT7S-2
CRT7S-3
CRT7O-1
CRT7O-2
CRT7O-3
CRT9S-1
CRT9S-2
CRT9S-3
CRT9O-1
CRT9O-2
CRT9O-3
CRT6 300
CRT6 Kin300
FEBRUARY 2022
0.76
3.20
0.77
0.99
1.38
0.49
0.76
1.03
2.70
0.78
1.06
2.36
0.90
0.82
1.55
0.98
1.11
2.25
1.03
1.44
2.03
0.67
0.89
34.7
38.8
46.8
40.7
54.7
25.6
31.3
42.2
74.6
25.3
42.0
60.0
38.7
37.4
58.0
17.2
15.1
42.9
25.0
27.7
45.0
18.6
23.5
4.0
5.7
2.6
4.9
4.0
4.6
13.3
5.5
3.2
11.7
5.6
5.3
8.2
7.7
5.3
1.5
1.9
4.3
2.6
2.8
2.4
5.0
4.3
38.7
44.5
49.4
45.6
58.7
30.2
44.6
47.7
77.8
37.0
47.6
65.3
46.9
45.1
63.3
18.7
17.0
47.2
27.6
30.5
47.4
23.6
27.8
0.47
1.78
0.39
0.54
0.57
0.34
0.34
0.54
0.60
0.49
0.56
0.82
0.48
0.45
0.57
0.80
0.92
1.19
0.75
1.00
1.07
0.52
0.65
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Figure 10-40: Gravity recovery vs calculated head by rock type
(2021 PFS – Phase 12)
The 1st pass Knelson concentrate and the 2nd pass Knelson concentrate were forwarded separately for intensive leach cyanidation. High gold recoveries
exceeding 70% to 99.6% were achieved by the 1st pass concentrates and gold recoveries of 36% to 97% were achieved by the 2nd pass concentrates.
10.5.16.2 Phase 12 – CIL Tests on Knelson Tailing Leach Testwork and Overall Recovery
A total of 665 bottle roll tests on the 23 variability samples were conducted to determine the extractable gold from the Knelson tailing as a function of grind
size. For each variability sample, ten replicate bottle roll tests were performed at three different grind sizes, 250, 180 and 50 µm (P80).
Figure 10-41 presents the overall recovery related to the antimony concentration. The results show that, if related to only one parameter, recoveries seem
to be not dependent on the sample location being inside or outside the 100 ppm antimony shell. RT4 and RT5 did not have composites from within the
antimony shell. However, a statistical analysis that is discussed in Section 10.6.2, demonstrated in a 3D model that gold recoveries appear to be slightly
dependent on the sample location being inside or outside the 100 ppm antimony shell when they are related to grind size and head grades.
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Figure 10-41: Overall gold recovery according to location inside or outside the 100 ppm Sb shell
(2021 PFS – Phase 12)
Figure 10-42 shows that RT5O, RT6(O&S), RT7S and RT9(O&S) revealed a positive gold recovery according to calculated head grade relationship, while
RT4O and RT7O revealed a negative relationship.
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Figure 10-42: Overall gold recovery according to calculated head grade
(2021 PFS – Phase 12
10.5.16.3 Phase 12 – Solid-Liquid Separation
Solid-liquid separation and geotechnical testing was conducted by SGS Canada, Burnaby laboratory on all five rock types at three grind sizes, 50 µm, 180
µm and 250 µm (P80). A total of 15 charges were prepared representing five composites in triplicate to perform flocculant scoping, static and dynamic
thickening, underflow rheology, pressure filtration and geotechnical testing. The objective was to obtain the solid-liquid separation and pressure filtration
data from different grind sizes necessary to evaluate the trade-off between thickener/slurry tailings and thickener/pressure filtration/dry stack tailings. This
trade-off was part of the Whittle optimization study and is discussed in Section 10.7.2.1 while the geotechnical results are discussed in Section 10.5.16.7.
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10.5.16.4 Phase 12 – Impact of Lead Nitrate on Gold Recovery
A total of 80 cyanide bottle roll leach tests on Knelson tailings were performed to evaluate the impact of lead nitrate and cyanide concentrations in the CIL
circuit on overall gold recovery of the five rock types at a grind size of 180 µm (P80), at resource average grade and based on the source location, i.e.,
outside or inside the Sb 100 ppm shell.
The results shown in Table 10-47 confirmed earlier testwork which indicated that the overall gold recovery does not appear to be highly sensitive to either
lead nitrate (0-200 ppm) or cyanide (0.4-0.8 kg/t) concentrations. These data were used to support the Whittle optimization study that is discussed in
Section 10.7.2.1.
Sample ID
Lead nitrate
conc.
(g/mt)
CRT4O
CRT4O
CRT5O
CRT5O
CRT6O
CRT6O
CRT6S
CRT6S
CRT7O
CRT7O
CRT7S
CRT7S
CRT9O
CRT9O
CRT9S
CRT9S
0
50
0
100
0 - 50
100
0 - 50
100
0 - 100
200
0 - 100
200
0 - 100
200
0 - 100
200
NaCN
dosage
(kg/mt)
0.80
0.60
0.80
0.60
0.60 – 0.80
0.40
0.60 – 0.80
0.40
0.60 – 0.80
0.40
0.60 – 0.80
0.40
0.60 – 0.80
0.40
0.60 – 0.80
0.40
Table 10-47: Average CIL testwork results
(2021 PFS – Phase 12)
NaCN
cons.
(kg/mt)
CaO cons.
(kg/mt)
Au residue
grade
(Au g/mt)
Au calc.
head
(Au g/mt)
Au
recovery
(%)
0.20
0.32
0.21
0.17
0.18
0.15
0.20
0.18
0.19
0.19
0.22
0.15
0.20
0.16
0.21
0.17
1.82
1.85
0.77
0.81
0.89
0.94
0.53
0.58
0.85
1.17
0.88
0.81
0.73
1.16
1.16
1.18
0.08
0.08
0.13
0.14
0.20
0.20
0.25
0.26
0.21
0.47
0.39
0.33
0.38
0.63
0.47
0.62
0.44
0.43
0.36
0.38
0.48
0.51
0.32
0.34
0.43
0.54
0.47
0.80
0.71
1.02
0.77
0.94
79.9
80.7
59.8
60.8
59.1
61.3
23.6
24.9
50.7
12.8
18.3
59.1
45.9
38.6
39.6
34.0
10.5.16.5 Phase 12 – Flotation Testwork
Flotation concentrates were prepared from unprocessed gravity tails for two rock types, RT7 and RT9, that had previously been ground to 250 µm (P80).
These gravity tails were reground to a grind size of 90 µm (P80) and processed through five stages of flotation using optimal flotation condition from
Phases 8 and 8b. The concentrates were then reground to 9 µm prior to be split into four equal parts. One part was processed by CIL, one part by hot
alkaline leach (HAL), one by pressure oxidation (POX) and the last one was preserved.
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The results from five stages of flotation presented in Table 10-48 shows that 20% to 25% mass pull can be achieved and that 88% to 91% of the gold
contained in the gravity tailings reported to the flotation concentrate.
Table 10-48: Flotation testwork results
(2021 PFS – Phase 12)
Sample ID
RT7S-1
RT7S-2
RT9S-1
RT9S-2
Calculated
head
(Au g/mt)
0.38
0.43
0.75
0.88
Mass pull
(%)
22
21
25
20
Au from gravity tails
into concentrate
(%)
Concentrate
grade
(Au g/mt)
90
91
88
88
1.56
1.88
2.67
3.87
Flotation
tails grade
(Au g/mt)
0.05
0.05
0.12
0.13
The results presented in Table 10-49 show that ultra-fine grinding (UFG) followed by CIL recovered 38% to 49% of the gold from the flotation concentrate,
while UFG followed by POX recovered 86% to 92% and UFG followed by HAL recovered 39% to 72%.
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Table 10-49: Flotation concentrate leach results
(2021 PFS – Phase 12)
Sample ID
NaCN add’n
(kg/mt)
NaCN cons.
(kg/mt)
CaO add’n
(kg/mt)
CaO cons.
(kg/mt)
S2- residue
grade
(%)
Au residue
grade
(g/mt)
Au calc.
Head
(g/mt)
Au recovery –
carbon
adsorption
(%)
Au recovery –
leached from
residue
(%)
1.18
1.09
1.08
1.31
1.04
1.02
1.10
1.48
1.46
1.28
2.10
1.33
0.95
0.74
0.71
1.07
0.57
1.02
1.05
1.25
1.20
1.23
1.77
1.11
1.0
7.4
0.8
1.3
3.4
0.7
1.3
21.9
2.3
1.4
43.0
2.7
1.0
7.4
0.8
1.3
3.3
0.7
1.3
21.9
2.3
1.4
42.7
2.7
5.8
0.2
3.3
5.3
0.7
2.6
11.9
1.9
10.4
14.9
1.0
13.6
1.00
0.16
0.72
1.11
0.18
0.40
1.27
0.32
0.72
2.10
0.28
1.66
1.63
1.95
1.18
1.92
2.60
1.18
2.52
2.39
2.60
3.40
3.70
3.74
37.6
90.9
37.5
42.0
92.3
58.1
49.4
85.7
71.8
38.0
92.0
55.2
RT7S-1-CIL-UFG
RT7S-1-CIL-POX
RT7S-1-CIL-HAL
RT7S-2-CIL-UFG
RT7S-2-CIL-POX
RT7S-2-CIL-HAL
RT9S-1-CIL-UFG
RT9S-1-CIL-POX
RT9S-1-CIL-HAL
RT9S-2-CIL-UFG
RT9S-2-CIL-POX
RT9S-2-CIL-HAL
FEBRUARY 2022
38.6
91.6
38.7
42.4
92.9
65.8
49.7
86.8
72.3
38.2
92.3
55.6
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Table 10-50 shows overall recoveries when the flotation concentrate is reground, then POX/CIL on the reground concentrates and CIL on the flotation
tails compared to the same flowsheet without POX. The results show that an average increase of 32% can be achieved on the overall recovery when
using POX.
Table 10-50: Overall recovery comparison when using POX
(2021 PFS – Phase 12)
Gravity/Flotation/UFG/POX/CIL
+ CIL float tails
overall recovery
(%)
Gravity/Flotation/UFG/CIL
+ CIL float tails
overall recovery
(%)
89.9
92.8
87.7
88.7
58.0
65.4
59.7
46.9
Sample ID
RT7S-1
RT7S-2
RT9S-1
RT9S-2
Average
Difference
(%)
31.9
27.4
28.0
41.8
32.3
10.5.16.6 Phase 12 – Enhanced Gravity and POX/CIL Testwork
Enhanced gravity concentrates were prepared from Phase 12 unprocessed gravity tails for two rock types, RT7 and RT9, that had previously been ground
to 250 µm (P80), processed twice through a Knelson gravity concentrator, split into 1 kg aliquots, processed through CIL leach and pulverized to pass a
105-micron screen for metallic screen assay of the CIL residues. These residues were processed four times through a Knelson concentrator to obtain a
5% mass pull. This concentrate was then ground at a grind size of 9 µm (P80) and then POX/CIL leached.
Table 10-51 presents the obtain results. These enhanced gravities and POX/CIL recoveries resulted in overall recoveries varying between 66% to 86%
representing an increase of 24% compared to the previous Phase 12 recoveries presented in Section 10.5.16.2.
Table 10-51: Enhanced gravity followed by POX/CIL results
(2021 PFS – Phase 12)
Sample ID
RT7S-1
RT7S-2
RT9S-1
RT9S-2
FEBRUARY 2022
Calculated
head grade
(Au g/mt)
Mass pull
(%)
0.44
0.41
0.49
0.63
4.1
4.1
5.3
5.6
Au from gravity
tails into
concentrate
(%)
45.7
44.3
43.6
35.4
Concentrate
grade
(Au g/mt)
Four pass
gravity tails
(Au g/mt)
POX
recovery
(%)
4.92
4.43
3.98
4.00
0.25
0.24
0.29
0.43
87.9
91.5
92.8
98.3
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10.5.16.7 Phase 12 – Geotechnical Testwork
Geotechnical testing was conducted by SGS Canada, Burnaby laboratory and by Knight Piésold, Denver, Colorado laboratory on all five rock types at two
grind sizes, 50 µm and 250 µm (P80). Testing included particle size analysis, Atterberg limits, laboratory compaction (Proctor), strength (consolidated-
undrained triaxial compression), and permeability on a total of 10 samples. The objective was to obtain data from different grind sizes necessary to
evaluate the trade-off between thickener/slurry tailings and filtration/dry stack tailings. This trade-off was part of the Whittle optimization study and is
discussed in Section 10.7.2.1. Table 10-52 and Table 10-53 present the results of the testing completed.
Index and strength testing show that material properties change with grind size. The finer grind (50 µm) results in tailings with a lower sand content and a
higher clay content, as expected. This difference in particle size results in tailings material that achieves a lower compacted density and a slightly lower
effective stress. When evaluating the dry stack tailings facility alternative, it was determined that the coarser grind tailings (250 µm) provided a better
product for compaction, stability and overall capacity efficiency.
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Table 10-52: Index and Strength testing results (all samples)
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Table 10-53: Permeability testing (select samples)
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Hydraulic conductivity (permeability) testing was performed on two rock types (RT5 and RT7) at the two grinds (50 µm and 250 µm) to determine if grind
size effected the permeability characteristics of the samples. It was determined that when the samples were compacted to similar criteria (3% over
optimum moisture and 92% compaction) there was minimal difference. Therefore, it was determined that when considering seepage and draindown of the
dry stack tailings, grind size was not a critical factor.
Important conclusions that can be drawn from the Phase 12 test program include:
■ The good results obtained with the gravity testwork confirm the gravity circuit performance and demonstrate the need for a robust gravity circuit;
■ Coarsening the grind to 250 µm (P80) results in gold recovery losses between 1% and 7% depending on the rock type and head grades. However,
similar to the results of Phases 9b and 11, these results do not show any inflection point between 250 and 180 µm, which can suggest that there is an
opportunity to conduct testwork on coarser sizes in the future;
■ Depending on the rock type, gold recovery is slightly related to the location either inside or outside the 100 ppm antimony shell;
■ Overall gold recovery does not appear to be highly sensitive to either lead nitrate (0-200 ppm) or cyanide (0.4-0.8 kg/t) concentrations;
■ The good results obtained with the POX and enhance gravity testwork demonstrate that there is an opportunity to increase recovery. However, the
Whittle optimization work did not demonstrate this would add value. Additional enhanced gravity testwork could be conducted.
10.5.17 2021 PFS – Phase 13
The Phase 13 was conducted by SGS Vancouver on approximately 100 kg composites (a total of 1,940 kg), prepared from a blend of core and RC rig
duplicates. The objective was to obtain overall gold recovery data from all five rock types at antimony concentrations of approximately 250, 750, and
+1,000 ppm. Figure 10-43 illustrates the testwork that was conducted.
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Figure 10-43: 2021 PFS (Phase 13) testwork outline
Figure 10-44 shows that composites having an antimony grade above 200 ppm, regardless of whether they are in or out of the 100 ppm antimony shell,
achieved an overall recovery as shown by the linear equation presenting on the chart.
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Figure 10-44: Overall recovery related to the antimony concentration
(2021 PFS – Phase 13)
As explained in Chapter 15, massive stibnite will not be separated from the host country rock during mining. An average recovery for the diluted massive
stibnite tonnage was estimated based on the 2013 feasibility study stibnite recovery results as shown in Table 10-54. The results presented in Figure 10-
44 support the equations that are discussed in Section 10.6.2, which will be applied if antimony is above 200 ppm.
Table 10-54: Massive Stibnite shell recovery estimation
Sample
Pure massive stibnite
Country rock
Au grade
(g/mt)
8.07
0.90
Sb grade
(ppm)
18,000
4,000
Estimated average recovery in
massive stibnite shell
(%)
22
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10.6 Recovery Equations
10.6.1 2017 PFS Recovery Equations – Grind Sizes of 90 µm and 180 µm
Recovery equations were developed using the results of the optimization, variability, continuous, and Phase 9 and Phase 10 test programs.
Table 10-55 presents the average recovery estimated for each of the five rock types within the Livengood gold deposit. With the exception of RT9, the
gold recovery results include a 2% reduction for coarser grind at 180 µm (P80)
Table 10-55: Average gold recovery estimated for each rock type
Rock type
RT4
RT5
RT6
RT7
RT9
Au Recovery
(%)
78.4
84.5
76.3
62.0(1)
69.2(2)
(1) Weighted average based on recovery correlation to quartz – stibnite + jamesonite
(2) Weighted average based on grade/frequency distribution of the 15 × 15 ×10 meter block model.
The data from all of the testwork programs was analyzed using several criteria to discard possible testwork with less-than ideal or erroneous conditions
(i.e. tests with low DO or low CN level, wrong particle size, etc.). The filtered data (“qualified data”) of tests including all grind sizes was used to develop a
recovery estimates for all rock types based on calculated head grade. For example, the optimization and Phase 9 results were averaged and each
testwork program contributed one point to the data set. It was understood that this was the most appropriate treatment, especially considering that both
optimization and Phase 9 testwork was conducted on a master composite of each rock type.
Rock Types: RT4, RT5 and RT6
The results from the entire body of testwork were analyzed with the objective of developing relationships to characterize the gold leaching performance of
rock types RT4, RT5 and RT6. It was not possible to develop a gold grade vs gold recovery model(s), based on the available data for these rock types.
An average gold recovery for each rock type was estimated from the results of the different testwork programs. A 2% recovery reduction was applied
when converting leach test results from 90 to 180 µm (F80).
The cyanide and lime consumptions were estimated as an average of the reagent consumptions observed from both the continuous and Phase 9
testwork programs. Variability or optimization results were not used, because when comparing testwork results, it was found that the higher cyanide
additions did not improve the gold recovery results.
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Rock Types: RT7 and RT9
Testwork results were analyzed to characterize the most important gold recovery drivers for the RT7 and RT9 rock types. A strong relationship between
quartz - stibnite + jamesonite and grade was found for RT7, which is depicted in Figure 10-45. Stibnite and jamesonite are antimony-bearing minerals.
Figure 10-45: 2017 PFS (Phase 9) - RT7 gold recovery vs head grade
at different Quartz-Stibnite+Jamesonite levels
The RT9 testwork results were examined using advanced statistical techniques (R/ggplot2 software) in a number of ways in an attempt to establish the
most defensible relationship to estimate gold recovery.
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Figure 10-46:2017 PFS (Phase 9) - RT9 gold recovery vs head grade
In the case of rock type RT9, a head grade/recovery relationship was found (Figure 10-46), but it is probable that there is a quartz - stibnite + jamesonite
or antimony relationship as well. However, the current available data suggests that the quartz - stibnite + jamesonite index is under 0.1 and it is not
possible to establish a strong relation showing any detrimental effect on gold leaching.
Given that the curve for rock type RT9 was developed using all qualified data, including grinds of between (P80) 80 and 250 µm, it was decided not to
apply a deduction in gold recovery to compensate for a coarser grind of product (P80 of 180 µm). For the other rock types, a 2.5% reduction was
considered appropriate.
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10.6.2 2021 PFS Recovery Equations – Grind Size of 50-250 µm
Subsequent to the 2017 PFS, a focused effort to better understand the implications of antimony concentrations in the orebody on gold recovery was
performed. BBA constructed a Leapfrog geologic model with antimony shells at different antimony concentrations. The antimony shell of 100 ppm was
selected to test a metallurgical recovery hypothesis based on approximately 25% of the orebody being within this shell. Phases 11 and 12 composites
were selected based on the 100 ppm antimony shell location, being inside or outside, and tested for metallurgical recovery based on different grind sizes
and gold grades. Phase 13 composites were selected to test the implication of high antimony at approximate levels of 250, 750, and +1,000 ppm on gold
recovery and to develop a specific recovery equation, which is presented on Figure 10-44 and that will be applied to the proportion of the projected blocks
that are massive stibnite.
The data collected during Phases 11, 12 and 13 were processed using R/RStudio to estimate linear recovery equations for each of the five rock types,
both inside and outside the 100 ppm antimony shell, as a function of antimony concentration, grind sizes and gold grade as well as to develop 3D
representations that are presented in Figure 10-47. These recovery equations were incorporated into the block model by the BBA mining team using a
grind size of 250 µm (P80) and were used for the Whittle optimization that is discussed in Section 10.7.2.1.The linear recovery equations are shown below
and the methodology to apply these equations into the block model and the coefficient values are described in Section 12.3.2.
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Figure 10-47: 3D representation of the overall Au recovery versus Au grade and P80 (2021 PFS)
Table 10-56 presents the average gold recoveries per rock type as well as the blended overall recovery when applying the 2021 PFS recovery equations
at a grind size of 250 µm and the methodology described in Section 12.3.2 into the block model.
Rock type
RT4
RT5
RT6
RT7
RT8
RT9
Tonnage weighted average mill
recovery (%)
Table 10-56: Average gold recovery estimated for each rock type (2021 PFS)
Au Recovery -
Outside the 100
ppm antimony shell
(%)
Au Recovery -
Inside the 100 ppm
antimony shell
(%)
Au recovery -
Antimony grade
above 200 ppm
(%)
Average Au
recovery
(%)
83.4
79.9
76.4
72.8
59.3
60.0
75.1
-
-
63.9
64.0
52.0
55.1
60.4
74.0
74.8
48.9
48.5
43.5
48.9
50.1
83.3
79.8
73.5
66.4
58.7
57.1
71.4
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In summary, the models were developed for each rock type and location, being inside or outside the 100 ppm antimony shell, based on the results of the
metallurgical testwork of Phases 11 and 12. A specific recovery equation was developed for the massive stibnite, higher than 200 ppm, based on the
Phase 13 testwork results.
■ The models indicate that the overall gold recovery is a function of gold head grade and grind size (P80);
■ No equation was developed for RT4 and RT5 for the inside 100 ppm antimony shell since very little antimony is present in these zones;
■ In general, for rock types with samples outside and inside of the 100 ppm antimony shell:
-
-
The difference in gold recovery between outside and inside the shell is bigger at lower Au head grades;
At higher Au head grades the Au recovery is in the same order for samples outside and inside the shell.
10.7
Flowsheet Development
10.7.1 2017 PFS Comparative Studies
10.7.1.1 Comminution Optimization with Drilling and Blasting (D&B)
Establishing Run-of-Mine (ROM) particle size distribution (PSD) estimates represents an important step for developing a baseline for mineral processing
costs. Given that the drilling and blasting process is typically regarded as the first stage of comminution, its efficiency will directly impact the subsequent
activities, namely crushing and grinding. To assess and quantify these impacts for the Project, various blast design scenarios were compiled and
simulated for each ore-bearing geological domain, namely RT4 (Cambrian), RT5 and RT6 (Upper and Lower Seds), and RT9 (Volcanics).
The first step towards generating ROM PSD curve estimates consists of compiling all available geological and geo-mechanical parameters. These
parameters were then imported into a break radius modeling software (AEGIS), which estimated the degree of breakage and area of influence of a typical
blast hole charge. Based on the resultant break radii, preliminary burden and spacing values were then determined for each rock type and/or explosive
charge.
After determining burden and spacing values, the remaining blast design and geo-mechanical parameters were compiled and integrated in a JKMRC
Fragmentation (software) model. The software will use the inputs to generate PSD curves for the ROM material produced by various blast designs, in the
different geological domains. This is referred to as a drill & blast (D&B) analysis.
The results of the D&B exercise were used in conjunction with comminution design software (Bruno and JKSimMet) to study the impact of the PSD on
throughput and specific energy.
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The impact of the D&B in the 2017 PFS was an increase of 6.4% in the average throughput of the Project from 49,468 to 52,630 t/d (or 44,877 to
47,745 mt/d).
Future work
With regards to the Volcanics domain, it must be noted that geo-mechanical test results were not available and were therefore assumed. To confirm the
resulting ROM PSD values obtained for the Volcanics (RT9) domain, a re-iteration of the simulation work is recommended once geo-mechanical testing is
completed.
10.7.1.2 Comminution Optimization with Pre-crushing
Simulations were conducted during the 2017 PFS to study the opportunities to increase throughput by adding a pre-crusher. The simulations indicate that
a 25% to 30% increase in tonnage can be achieved by including a pre-crushing step.
10.7.1.3 Throughput Studies
The higher tonnage comminution circuit from the 2013 FS was challenged during the development of the 2017 PFS via an extensive throughput
rationalization study. The 2017 PFS investigated the impact of grinding circuit configuration, ROM particle size, pre-crushing and target particle size would
have on equipment size, power efficiency, overall throughput, OPEX and CAPEX. The scenarios that were investigated include the following:
■ Pre crushing + single line SABC Circuit;
■ Dual line pre crushing + SABC Circuit;
■ SAG mill motor type (Twin Pinon versus wrap around);
■ Grinding circuit product size target of 90 µm vs 180 µm;
■ Impact of drill and blast (Finer ROM) on throughput.
Analysis of the leaching testwork conducted in parallel to the throughput studies, indicated that the gold recovery was relatively insensitive to grind in the
range of 90 to 180 µm (P80). Based on this observation, it was decided to coarsen the grind to 180 µm (P80), which resulted in a significant throughput
increase of 25%, which more than compensated for the gold losses of 2%.
Due to the significantly reduced capital cost and lower Project execution risk, a single line (SABC + pre-crushing) circuit was adopted for further
development and use as the base case for the 2017 PFS even though its throughput capability would be lower than the circuit proposed by the 2013 FS
study. The final configuration also assumes additional throughput by applying optimized drill and blast techniques to produce a finer ROM product for the
primary crusher.
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10.7.1.4 Leach Time, Lead Nitrate, and Pre-oxidation
Testwork evidence also indicates that the gold recovery kinetics slow down significantly after 21 hours of leaching time. The gain/loss in gold recovery
(estimate = +/- 1% Au recovery) does not justify the addition of extra leaching tanks (21 to 32 hours represent an addition of 6 leach tanks).
Pre-oxidation was normalized to four hours in the course of completing Phases 8 and 9 testwork from the 2017 PFS and it showed that by combining lead
nitrate and O2 during the pre-conditioning stage, it was possible to reduce the leaching time and also reduce the cyanide consumption as a result of
reducing leach time and by oxidizing any sulfides that could consume cyanide.
10.7.1.5 2017 PFS WOL vs Flotation
A trade-off study was conducted during the 2017 PFS between a whole gravity tails CIL configuration (WOL) and a flotation configuration (Flotation or
FLOT), where gravity tails float concentrates undergo CIL.
The result of the trade-off study supported the decision to select gravity, followed by CIL of the gravity tailings as the design process.
Recovery – WOL vs Flotation
The summarized results of WOL and Flotation testing from both the FS and Phase 8 (2017 PFS) are presented in Table 10-57. At the bottom of the table
the differences in recovery between the WOL and Flotation options are also presented. Due to different composites being used in the FS as compared to
the Phase 8 testwork, the differences calculated for the Phase 8b and Phase 8d results were calculated not against the WOL recovery results from the
FS, but against corresponding WOL results from the same samples of Phase 8 test program. Some results suggested slightly higher recoveries for the
Flotation option, but generally, the WOL option resulted in a significantly higher recovery.
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Table 10-57: Summary of recovery results from different testwork programs
Testwork Program
FS
Phase 8a
Phase 8b
Phase 8b
Phase 8d
Configuration
P80 (µm)
Rock types
RT4
RT5
RT6
RT7
RT9
WOL
90
84.2
87.7
76.7
58.2
78.1
FLOT
90
-
76.1
67.4
-
66.8
WOL
60/75
FLOT
90
FLOT
180
FLOT
180
Au Recovery (%)
-
82
-
-
62
-
81
-
-
68
-
68
-
-
65
Rock types
Au Recovery difference compared to WOL (%)
RT4
RT5
RT6
RT7
RT9
-
-
-
-
-
-
-11.6
-9.3
-
-11.3
-
-
-
-
-
-
-1
-
-
5
-
-14
-
-
2
-
72.6
-
-
67.4
-
-9.4
-
-
4.4
In the absence of consistent comparable between WOL and Flotation between the different composites, the decision was taken to assume a recovery
difference (Flotation – WOL) for each rock type that was likely to be favorable to the Flotation option. In the case of rock types RT4, RT5, and RT6, a
relative difference of -5% was assumed, which was generally less than what had been observed, at least for RT5 and RT6. In the case of RT7 and RT9,
the recovery difference was assumed to be +5%, implying a higher recovery for the Flotation option as compared to the WOL option. These assumptions
were developed as a means of evaluating the Flotation option in the best light for the purpose of conducting the trade-off (Table 10-58). If the WOL option
delivered higher NPV than the Flotation option, even under these assumptions, it would validate the selection of the WOL flowsheet. Using these
assumed recovery differences, weighted average recoveries were calculated for both options, with the results of 76 wt% avg. gold recovery for WOL and
74 wt% avg. gold recovery for flotation.
Table 10-58: Simulated gold recoveries for the WOL vs Flotation trade-off
Rock types
Relative difference
RT4
RT5
RT6
RT7
RT9
-5%
-5%
-5%
5%
5%
Wt. Avg.
WOL
78%
85%
76%
62%
69%
76%
FLOT
73%
80%
71%
67%
74%
74%
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Capital Cost Estimate
The 2017 PFS crushing and grinding configuration produces a particle size (P80) of 180 µm that is fed to each of the configurations (WOL or FLOT). Both
process configurations are equipped with the same gravity circuit.
In the FLOT configuration, a flotation concentrate (12% mass pull) is produced and is fed to a CIL circuit that is substantially smaller than the CIL circuit in
the WOL configuration. Additionally, the equipment required for cyanidation detoxification is smaller.
In the WOL configuration, a greater volume of slurry would need to go through thickening and detoxification prior to going to the tailings management
facility (TMF). The cyanide detoxification tanks are smaller in the FLOT than WOL configurations due to the smaller volumetric flow of CIL tails in the
FLOT configuration. On the other hand, the CN concentration in the FLOT configuration is higher than WOL, meaning that the unit requirements of SO2
are higher in the Detox system of the FLOT configuration.
All equipment costs for the WOL and FLOT configurations were estimated using equipment cost information from BBA’s projects database. Total CAPEX
indicates an increase of $11.7M by adopting the WOL option.
Operating Cost Estimate
Operating cost estimates were prepared for both alternatives. The WOL option indicated a slight increase in operating cost over the Flotation option
$7.44/t ($8.21/mt) vs $7.13/t ($7.86/mt).
Cash flow analysis
Discounted cash flow models (5% discount rate and $1,250/oz gold) where developed to determine the Net Present Value (NPV) for each alternative
based on the revenues, capital costs and operating costs. The weighted average distribution of rock types from the 2017 PFS LOM plan was used to
determine the overall gold recovery for each alternative.
The NPV values were very similar for both configurations: $5,322M for WOL and $5,200M for Flotation with the WOL alternative being slightly more
profitable (+$120M). Since the WOL and Flotation alternatives have similar capital costs, this result could be explained by the WOL having a better gold
recovery while the Flotation alterative having lower operating costs.
10.7.1.6 CIL vs CIP
The review of the underlying geology has allowed for a better understanding of the preg-robbing nature and distribution of the deposit. Using the preg-
robbing index, the main observation is that the volcanics typically present very low preg-robbing values, while both sediment rock types (upper and lower)
present a higher level of preg-robbing. This can be classified as a very systematic behavior. On that basis, the Livengood resources are probably best
processed using carbon in leach (CIL), instead of Carbon in Pulp (CIP). Furthermore, the sediment rock types are important contributors to the gold
resource and will likely have to
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be mined concurrently to the main volcanics. As well, in some cases there is the inclusion of sediments cutting through the volcanics that will induce preg-
robbing.
10.7.1.7 Sulfur Burner
In the 2013 FS, sodium metabisulfite (SMBS) was used to supply SO2 to the cyanide detoxification process at a rate of 1.63 lb/t (0.82 kg/mt). At 100,000
t/d (90,718 mt/d) and based on a price of $0.37/lb, the total annual operating cost for producing SO2 with SMBS was approximately $22.0M. Upon review
of the SMBS consumption estimate, BBA concluded that an opportunity to reduce the cost of SO2 was highly probable.
A trade-off was conducted by BBA comparing the available options on the basis of their operating and capital costs. This comparative study evaluated
three possible options for the production or supply of SO2: 1) mixing of sodium metabisulfite (base case); 2) burning of elemental sulfur using a sulfur
burner; and 3) direct injection of liquid SO2.
Key Assumptions
The following list contains the assumptions used in conducting this study:
■ The throughput of the process plant for all options was 100,000 t/d (90,718 mt/d) or the plant throughput of the 2013 FS;
■ SO2 to CN ratio was determined by testwork (SGS post feasibility testwork program - Project report 50223-002 – December 2013);
■ This trade-off study covers only the cost (capital and operating) for the supply of SO2 for the cyanide detoxification process. Any other costs outside of
this scope are not covered, including mining, front-end process, infrastructure, tailings pond and tailings management. These other costs are
neglected in the analysis, since they would not impact the selection of the SO2 supply;
■ Equipment pricing was determined through updated budget quotes for the major equipment or historical prices. The other equipment costs were
determined using BBA’s equipment cost database and were based on the required equipment size;
■ A quotation has been recently obtained from the supplier for elemental sulfur and sodium metabisulfite. The cost of liquid SO2 was estimated based
on BBA’s pricing database;
■ When using a sulfur burner with less than 100% availability, SMBS is used as a back-up during operation downtime.
Feasibility Study Versus Trade-Off Cost Comparison
Table 10-59 presents the annual operating cost and the cost of the reagent.
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Sodium metabisulfite
Elemental sulfur
Liquid SO2
Table 10-59: Annual operating cost comparison
Annual Cost
(M$/y)
Reagent Cost
($/t)
22.0
5.4
34.0
820
552
1,830
Reagent Reference
2013 Feasibility Study
2016 Supplier Quote
BBA Estimate
Even using the 2013 FS consumption numbers, burning of elemental sulfur to produce SO2 would have been advantageous. The yearly operating cost for
the Project would have been approximately $17.0M less.
Conclusions and Recommendations
Based on the cash flow analysis, the liquid SO2 option is the costliest followed by the SMBS option. Although the highest initial capital cost expenditure is
required, burning of elemental sulfur in a sulfur burner presents the lowest cost method to produce SO2 over the LOM. Even at 50% sulfur burner
availability and SMBS compensating for the difference, the sulfur option is the most economical with over $100M in savings over the LOM.
The sensitivity analysis on the price of sulfur also demonstrates that the sulfur burner option is the most attractive. Payback of the equipment is within one
year even at double the sulfur price.
The QP recommends that THM pursue the sulfur burner option for the Livengood Gold Project.
10.7.2 2021 PFS Comparative Study
10.7.2.1 Whittle Enterprise Optimization
At the onset of the 2021 PFS, ITH retained Whittle Consulting and BBA to collaborate on an enterprise optimization study (the “Whittle and BBA Study”) to
review various technologies and project configurations with the objective of recommending an optimum configuration for the 2021 PFS. The Whittle and
BBA Study compared different scenarios such as secondary crushing with SAG and ball mill, tertiary crushing with ball mill, gravity/CIL at a grind size of
90 µm to 250 µm (P80), a stand-alone and an auxiliary heap leach configuration, gravity only gold recovery, gravity/flotation with pressure oxidation and
CIL of flotation concentrate. These configurations were evaluated at various combinations of project ramp up strategies, annual throughput, primary,
secondary, and tertiary grind size, as well as mining fleet size and ore stockpile management strategies. Several tailings technologies were reviewed
including conventional tailings and pressure filtered tailings.
The starting base case was the 2017 PFS mine plan and flowsheet that was input into the optimizer to verify that it was properly calibrated. The base
case was then re-run with a new ID3 block model and all CAPEX and OPEX costs were updated from 2017 to reflect Q4 2020 pricing. Mill recovery
equations were also adjusted using the latest metallurgical testwork results. A gold price of $2,000 US per ounce was used for the financial optimization.
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Grind Size Scenarios
A grind size throughput recovery model was generated from comminution power data and grind recovery curves for each rock type. The model
incorporated five grind sizes from 90 µm to 250 µm (P80) to obtain the best financials for the base case flowsheet of two stage crushing, SABC circuit and
CIL process. It was observed that the IRR and NPV increases with the grind size due to increased throughput albeit a slight drop in gold recovery.
Increasing the grind size from 180 µm (2017 PFS) to 250 µm increases the throughput of the grinding circuit from 55,000 mt/d to 62,000 mt/d. The
additional CAPEX required to debottleneck the rest of the installations and the mine was included in the analysis. The operating costs were recalculated
for each of the grinding sizes. It was concluded that 250 µm was the financially best grind size and was therefore recommended for the 2021 PFS.
Heap Leach Scenario
Since the Livengood deposit has 50 million metric tons of oxidized gold mineralization close to surface that is amenable to heap leaching, an option for
heap leaching as a first phase of the Project was investigated. The capital costs for the three-stage crushing as well as the operating costs and recovery
equations were developed as inputs to the Whittle optimization software. The simulations showed that it was not economic to include a first phase of heap
leaching due to the lower gold recoveries and relatively high operating costs.
Flotation, Ultra-fine Grinding, and Pressure Oxidation Scenarios
Several flotation cases were developed, and the POX option was run as a final case. None of the cases improved the Project financials. Although the
POX option showed improved gold recoveries, this option was not favorable due to the increase in capital and operating costs of the grinding and the
POX reagents including oxygen. Sensitivity analyses were done assuming improved flotation conditions (lower mass pull of flotation concentrate and
correspondingly higher gold grade); however, the results did not add value.
Gravity Only Scenario
A case was developed for a gravity only circuit at a grind size of 90 µm (P80). This option had lower CAPEX and OPEX, but due to the lower gold
recoveries this scenario did not improve the financials of the Project.
Dry Stack Tailings/Commingled Waste Facility
A dry stack tailings option, commingled in a single facility with waste rock, was developed. This included a pressure filtration plant for the tailings and new
phasing due to the reduced tailings impoundment construction material requirements. This case has a lower NPV than the slurry tailings case and would
be conceivable only if near pit co-disposal areas with waste rock were available. This scenario should be evaluated further since it potentially reduces the
environmental footprint of the Project.
Observations and Recommendations from the Study:
■ The Whittle and BBA Study determined that the gravity/CIL plant at a grind size of 250 µm (P80) with conventional tailings provided the highest NPV,
which is the configuration recommended and detailed in the 2021 PFS.
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■ Grinding above 250 µm should be investigated, since it is possible to separate the activated carbon from the pulp at coarser grind sizes.
■ Many options were identified as being unfavorable and should not be further pursued. These options include; heap leaching of near surface
mineralization, flotation, ultra-fine grinding, and pressure oxidation.
10.7.2.2 Gravity Concentration
A gravity recovery modeling was performed by FLSmidth during the 2021 PFS to confirm the number and size of Knelson concentrators and Acacia. The
modeling included the results of E-GRG testing by Curtin University on five ore samples corresponding to RT4, RT5, RT6, RT7 and RT9 and the results
from SGS on RT4, RT5, RT6 and RT9.
The gravity modeling confirmed that the Livengood ores tested are highly amenable to gravity recovery. The GRG is “coarse to very coarse” on the
AMIRA classification scale, which is highly favorable for gravity recovery. To achieve the better recovery, a gravity circuit with two parallel lines, each with
four Knelson concentrators (KC-QC70) with one Acacia (CS10000) per line is recommended.
10.7.3 Flowsheet Development Summary
Livengood gold ore has demonstrated that it is very amenable to gravity concentration as a substantial proportion of the gold is free and liberated at a
reasonably coarse grind. GRG results confirmed the great potential for gravity recoverable gold.
The fact that Livengood gold ores contain coarser gold particles makes analytical measurement of samples more difficult. Ultimately, on the basis of
mineralogical observation and of practical assaying knowledge, larger sample sizes were chosen (1 kg) and the coarser gold particles screened out and
weight averaged back into the undersize assays to smooth the effect of the erratic gold dispersion in the low grade deposit.
The effect of these erratic assays made initial metallurgical results difficult to interpret, in part because the mass balances were often further apart than
the effect of the test changes. Under these circumstances, it was difficult to determine whether test condition changes were making improvements to the
process. The program at SGS in Vancouver made the initial choice to go with screen fire assays, allowing better gold averages for samples and improving
gold mass balances.
Gold deportment studies indicated that a substantial amount of the finer gold had at least a 25% or greater exposure, allowing it to be recovered by
cyanidation.
However, some of the exposed gold was not contained in sulfide aggregates and was therefore less amenable to sulfide flotation. A considerable amount
of testing of flotation with cyanidation of the flotation concentrate compared to direct cyanidation verified the mineralogical observations.
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On the basis of the substantial testwork conducted on the major rock types and trade-off study (WOL vs Flotation), the results warranted the selection of
directly leaching the gravity tails versus the leaching of the flotation concentrate.
The incorporation of activated carbon in the cyanide leach was utilized to obviate the gold robbing presence of some organics in the ore at Livengood.
The activated carbon removes solubilized gold before the naturally occurring organics can rob it from solution. The daily tonnage proposed for milling at
Livengood is large and the resulting amount of carbon in the leach circuit will also be large.
The mineralogical studies indicating that silver is only a minor contributor to the precious metals at Livengood further justified the choice of carbon.
Livengood gold ore contains some soluble copper minerals. The copper that does solubilize will load onto carbon in the CIL leach and as a result will
increase the required amount and advance frequency of carbon. The copper is removed from the carbon in a desorption process by using a cold strip
prior to stripping the gold from the carbon. The stripped copper will be used to reduce the copper requirements for the cyanide destruction process.
Analysis of leaching (CIL) kinetic tests with preconditioning with O2 (4h) and lead nitrate has shown that the gold is leached within 24 hours of retention
time. The reduction of leaching time from 32 hours in the 2013 FS to 24 hours impacts the CAPEX (fewer leach tanks) and OPEX (lower CN
consumption).
The incorporation of pre-crushing was recommended by BBA to enhance the operation of the SAG mill, by providing a narrower feed particle size, thereby
reducing variability, which will translate into increased efficiency. The estimated increase in throughput from the addition of pre-crushing is 25% to 30%.
Grinding simulations of a single line SABC + pre-crushing circuit has shown that there is a 19% increase in throughput if the grind size is relaxed from 180
µm to 250 µm (P80) and by using optimized drill and blast techniques.
Sulfur dioxide (SO2) produced by a sulfur burner will significantly reduce the OPEX costs for cyanide detoxification.
Based on the metallurgical testwork results from SGS and Pocock, BBA developed a Process Design Criteria and Process Flow Diagrams as described in
Chapter 14.
10.8 Opportunities for Further Investigation
Product Grind Size (P80)
The QP recommends performing new testwork using the optimized conditions of Phases 12 and 13 but at a grind size (P80) higher than 250 µm. The
recoveries obtained during Phases 9b, 11 and 12 did not show any inflection point between 250 µm and 180 µm, which may suggest that there is an
opportunity for testwork on coarser sizes to add value.
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Solid / Liquid Separation Testwork
Flocculant testwork on tailings were performed at a product size of 250 µm (P80) for the Project before the samples went for geotechnical testing. The QP
recommends performing further settling testwork: static as well as dynamic settling testwork. The static work can be used to screen potential flocculant
suppliers for the Livengood mill feed. Dynamic settling testwork by vendors is recommended as part as the equipment sizing and bidding process.
Cyanide Detoxification Testwork
For cyanide detoxification, the following reagent consumptions were assumed for the 2021 PFS:
■ Lime = 0.62 lb/t (0.28 kg/mt);
■ Copper sulfate = 0.09 lb/t (0.045 kg/mt);
■ S (elemental) = 0.52 lb/t (0.26 kg/mt);
■ Sodium metabisulfite = 0.38 lb/t (0.19 kg/mt).
Confirmatory detoxification testwork with a particle size distribution target of 250 µm (P80) is recommended. Potential reagent savings are expected as a
result of lower liberation of detrimental metals that could otherwise consume cyanide reagents.
Stirred Tank Reactor (STR) Optimization
Further stirred tank reactor (STR) testwork should be conducted with fresh drill cores with and without lead nitrate to optimize the lead nitrate, sodium
cyanide and lime consumptions.
Carbon Loading Testwork and Simulation (CIL)
Both a qualified laboratory and equipment vendor(s) should be approached to undertake carbon loading testwork and simulation work of the proposed CIL
carbon handling system to confirm the assumptions made in this study. This work will lead to the selection of the most appropriate carbon elution system
(high pressure ZADRA vs AARL).
Oxygen Uptake Tests
The QP recommends that oxygen uptake tests be performed by more than one service supplier to confirm the oxygen consumption for the Livengood
Gold Project.
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11.
MINERAL RESOURCE ESTIMATES
11.1 Mineral Resource Estimation Methodology
The global mineral resource estimate was prepared based on a resource model constructed using Vulcan Geomodeller ® and Whittle ® scientific
software programs. The Livengood mineral resource was estimated using Inverse Distance Weighting (IDW) interpolation techniques.
Three sources of volumetric determination were used for the resource model. One was a three-dimensional (3D) stratigraphic model used to assign rock
type codes to the block model. The second was an implicit model that interpolated a 100-ppm antimony halo or “shell” for the mineral deposit, with blocks
flagged as either inside or outside this halo. The third was 54 individually interpreted massive stibnite veins that were used to determine the volume
percentage and grade of veins within each model block that is intersected by the veins.
Gold contained within each block was estimated using Inverse Distance cubed (ID3). The block model was flagged with the stratigraphic models using a
block majority coding method except for blocks that intersected the combination of bedrock and overburden or blocks that intersected the combination of
bedrock and massive stibnite veins. This was necessary to better calculate individual block densities due to significantly variable specific gravity
measurements in those rock types. Grade discontinuities at stratigraphic contacts were evaluated to determine hard and soft boundaries for the
estimation of mineralization within the stratigraphic domains of the mineral deposit.
Note that the resource modeling work described and the analytical measures reported in this chapter are done using metric units. Where it is deemed
pertinent (i.e. to support summary production statistics), the equivalent measure in imperial units have been provided.
The estimates of mineral resources may be materially affected if mining, metallurgical, or infrastructure factors change from those currently assumed at
Livengood. Estimates of inferred mineral resources have significant geological uncertainty and it should not be assumed that all or any part of an inferred
mineral resource will be converted to the measured or indicated categories. Mineral resources that are not mineral reserves do not meet the threshold for
reserve modifying factors, such as estimated economic viability, that would allow for conversion to mineral reserves.
11.2 Data Used
The total Livengood drilling and sampling datasets are shown in Table 11-1. Drilling performed by THM is shown in Table 11-2. Of the 797 listed sampling
locations, 776 are directly related to the 2021 mineral resource estimate (2021 MRE). The historical data (pre-2006) represent approximately 2% of the
total information used. The use of historical data is based on its statistical consistency with current data and the small portion of the total data represented
as shown in past technical reports (Klipfel and Giroux, 2008a, 2008b, and 2009; Klipfel et al., 2009a and 2009b). For data validation purposes, in 2011,
SRK checked the
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assay data on a representative subset of drill holes (10%) used for the resource estimate against the original assay certificates (Carew, 2011). An error
rate of less than 1% was identified and is well within acceptable standards for accuracy and use in mineral resource estimates. These minor errors have
been addressed in the mineral estimation procedures. Lechner (2017) and Carew (2011) identified minor assaying concerns related to potential assay
value cyclicity in RC drilling. These have been addressed in the 2021 MRE such that there is not a material impact on the estimation of gold throughout
the Livengood mineral deposit.
The topographic surface used is based on a 4 m Digital Elevation Model derived from 2008 aerial photography.
Densities used in the resource are based on 98 determinations from core and RC chip samples, and are shown in Table 11-3. Based on empirical
observations, massive stibnite vein density was estimated at 2.86, country rock density was estimated at 2.7 and overburden density was estimated at 2.
Table 11-1: Historical drilling and sampling
Year
1976
1981
1989
1990
1997
2003
2004
2004
Company
Homestake
Occidental
AMAX
AMAX
Placer Dome
AngloGold
AngloGold
AngloGold
Method
Percussion
Percussion
Trench
RC
Core
RC
Trench
Core
Number of Sites
5
6
2
3
8
8
8
4
Feet
994
988
525
1,050
3,467
4,968
892
2,500
Total
44
15,384
Meters
303
301
160
320
1,057
1,514
272
762
4,689
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Year
2006
2007
2008
2008
2008
2009
2009
2010
2010
2011
2011
2012
Table 11-2: THM resource drilling and sampling
Company
Method
Number of Sites
Feet
Meters
THM
THM
THM
THM
THM
THM
THM
THM
THM
THM
THM
THM
Core
Core
Core
Trench
RC
Core
RC
Core
RC
RC
Core
Core
Total
7
15
9
4
109
12
195
38
195
111
53
5
753
Table 11-3: Density determinations
4,027
14,471
7,185
261
93,402
15,003
196,243
43,472
184,717
94,219
44,260
6,469
703,730
1,227
4,411
2,190
80
28,469
4,573
59,815
13,250
56,302
28,718
13,490
1,972
214,497
Lithology Unit
Money Knob Rock type 2 (RT2)
Cambrian Rock type 4 (RT4)
Upper Sediments North Rock type 5 (RT5)
Upper Sediments South Rock type 6 (RT6)
Lower Sediments Rock type 7 (RT7)
Main Volcanics Rock type 8 (RT8)
Main Volcanics Rock type 9 (RT9)
Country Rock
Overburden
Density
2.67
2.82
2.68
2.68
2.74
2.72
2.72
2.70
2.00
11.3 Data Analysis
A statistical summary of Au and Sb above detection limit is shown in Table 11-4. The elements of concern for the 2021 mineral resource are gold and
antimony distributions. These elements are of major interest and drive the mining, metallurgical and economic considerations for the Livengood mineral
deposit, with gold adding positive value and antimony having a negative correlation with gold recovery.
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Table 11-4: Au assay statistics for Livengood
Element
Au
Sb
Unit
ppm
ppm
N
147,658
90,090
Mean
0.36
122
Maximum
Std. Dev.
76.5
174,000
1.12
1,821
C.V.
3.07
15
Each of the database assay intervals were logged for lithology, stratigraphy, alteration and mineralization. Disseminated mineralization displays varying
average grades of gold controlled by the stratigraphy of the deposit (Figure 11-1). Sampled assay values have high coefficients of variation due to high
grade outliers, which skew the mean average grades above the third quartile. Evaluation of the following graph suggests that capping the gold grades by
stratigraphy is required to estimate the contained metal content of the deposit. A coefficient of variation (C.V.) below 2.00 is desirable to assist in
estimating the recoverable ounces for the mineral deposit.
Figure 11-1: Uncapped gold grade distribution by stratigraphic unit
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11.4 Grade Capping – Handling of Outliers
Treatment of outliers is generally a perplexing problem. There is no generally accepted solution of handing outliers; however, diligence needs to be
exerted with the assay database to ensure the ability to estimate the true average grade of the mineral deposit. Therefore, a generally accepted practice
of capping grades at the 90th through 99th percentile has been employed to limit the impact of high-grade outliers for the deposit.
Table 11-5 summarizes the capping statistics. Figure 11-2 shows the resulting box plot quartile statistics after subsequent capping with the extreme
outliers reduced to the capping levels listed in Table 11-1.
Antimony grades were not capped. Antimony is a deleterious element in which it is industry standard practice not to perform grade capping.
Table 11-5: Capping statistics
Stratigraphy
Uncapped
Grade
Number of Capped
Assays
Capped
Grade
Number Samples
Capped
RT 2
RT 4
RT 5
RT 6
RT 7
RT 8
RT 9
0.05
0.28
0.38
0.39
0.36
0.42
0.63
6,266
25,220
41,119
22,367
29,125
2,649
15,789
0.04
0.21
0.37
0.38
0.35
0.40
0.61
8
67
20
9
12
8
19
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Figure 11-2: Capped quartile statistics
11.5 Compositing
Compositing reduces the impact of short assay intervals and helps to better estimate the average grade of the deposit. Compositing incorporates a
certain amount of dilution into the raw assay data prior to estimation. The open pit mining operation envisioned for the Project will be at a larger scale than
the assays intervals sampled for the deposit. The selective mining unit for the Project is expected to be 10 m, therefore, the assays for the database have
been composited to 10 m. Composites are length weighted down hole composites of the capped Au assay values.
Figure 11-3 details the final composite statistics, by stratigraphy, that have been used for the mineral resource estimate; C.V.(s) are within acceptable
ranges, high grade outliers have been accounted for. and average Au values are within acceptable ranges. The manipulation from assays to composites
has been carried out using industry accepted practices and RDA recommends that the final composite database can be used for mineral resource
estimation of the Livengood deposit.
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Figure 11-3: Capped composite statistics
11.6 Declustering
Cell declustering was evaluated to ensure more densely drilled out portions of the deposit that are not biased by a large sample set of high grades
localized to one area. Figure 11-4 demonstrates that the mean values do not show a minimum, followed by a maximum, as the cell size increases.
Therefore, cell declustering was not used in the 2021 MRE.
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Figure 11-4: Cell declustering chart demonstrates sample clustering is not a factor for the deposit
11.7 Contact Profile Analysis
The Au values of the individual stratigraphic units of the deposit were evaluated to determine whether the mineralization of the units is separate and
distinct from every other unit. If mineralization is continuous or convergent across stratigraphic contacts, then it is possible to estimate mineralization from
both assay populations. The average grades of the units do not need to be similar. If the grades appeared graphically to converge at the contact, then
these units were to be estimated as one unit. The upper sediments (RT6), lower sediments (RT7), and the main volcanics (RT9) show convergence at the
boundaries and were estimated as one domain. All other stratigraphic units were estimated as separated domains, using no assay values from other
domains.
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Figure 11-5: Contact profile of RT6 and RT7. Grades converge at the contact. Soft boundary
Figure 11-6: RT6 and RT9. Grades converge at contact. Soft boundary
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Figure 11-7: RT7 and RT9 Grades converge at the contact. Soft boundary
11.8 Anisotropy
Anisotropy of mineralization was evaluated with Sage spatial modeling software to determine appropriate search ellipses for grade estimation.
Mineralization at Livengood can be considered fairly homogeneous across the extents of the deposit, which is typical of many of the large disseminated
deposits throughout the world. Drilling across the deposit has been developed on a fairly regular grid in many cases due to the large size of the mineral
footprint. Evaluations with spatial modeling software yield fairly large search ellipses, which suggest low variances of gold grades across large distances.
Search ellipses were developed for the Cambrian RT4, Upper Sediments North of the Lillian Fault RT5, Upper Sediments South of the Lillian Fault RT6,
Lower Sediments RT7, Devonian Volcanics RT8 Main Volcanics RT9. RT6, RT7 and RT9 use the same anisotropic search distances.
Search ellipse regions are displayed in Figure 11-8, Figure 11-9 and Figure 11-10.
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Figure 11-8: Cambrian stratigraphy search ellipse
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Figure 11-9: Upper Sediments North search ellipse
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Figure 11-10: Type 679 search ellipse
All other sedimentary and rock types within the deposit were estimated using the 679 search parameters. Massive stibnite vein grades are modeled
explicitly as explained later in this chapter.
11.9 Block Model
A 3D block model was constructed to encompass the drilling data and the interpreted geologic models for the Project. Block model dimensions are shown
in Table 11-6. All coordinates are in the UTM NAD27 Alaska coordinate system. All units are metric.
Table 11-6: Model extents
Minimum (m)
Maximum (m)
Extent (m)
Block Size (m)
No. of Blocks
East
North
Elevation
427,600
7,264,310
-290
430,850
7,266,710
610
3,250
2,400
510
10
10
900
325
240
90
The Livengood block model has been coded with several interpreted shapes that are representative of the deposit. These include topography,
stratigraphy, massive stibnite veins and the implicit 100 ppm antimony shell. Figure 11-11 to Figure 11-13 show a representative view, south to north
looking west. These show the physical attributes of the model on a representative section of the geology of the mineral deposit.
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Figure 11-11: Section A-B looking west. Geologic models used to flag the Livengood block model
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Figure 11-12: Intersection of massive stibnite veins on cross section A-B
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Figure 11-13: Cross section A-B showing the 100 ppm antimony halo for Livengood
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11.10 Grade Estimation
Gold grades for the mineral resource are estimated using Inverse Distance Weighting. Inverse distance methods are a suite of weighted average
estimation methods. These result in estimates that are smoothed versions of the original sample data. Inverse distance methods are based on calculating
weights for the samples based on the distance from the samples to the centroid of a model block. This is essentially a linear estimate where sample
weights are assigned to composite values for all composites used in the estimate. The calculation of the weights is based on the inverse of the distance
between the composite and the center of the block being estimated. Sample weights are standardized to a sum of 1 to ensure there is not a globally
biased estimate. In the mining industry there are two common exponents used, Inverse Distance squared (ID2) and Inverse Distance cubed (ID3). ID3 is
used when large weights are desired for the closest composites. This is applicable when the variable being estimated is erratic and the current data
spacing is large relative to the data that would be available for mineral boundary decision making. Such as with open pit gold grade distributions. ID3
methodologies are widely used in the mining industry and have proven through the decades to be an acceptable and reliable methodology for the
estimation of gold distributions in large scale low grade disseminated gold deposits.
Gold grades have been interpolated throughout the block model. They are stored as a grade in each model block based on the estimation parameters
associated with each stratigraphic unit. Five individual estimation domains were run on the model; Type 2, Type 4, Type 5, Type 8 and Type 679. Only
samples and blocks matching the stratigraphic criteria were used in each of the five estimation runs. This honors the hard and soft boundaries identified
by the contact profile analysis. Antimony (Sb) grades have been interpolated using the same parameters as gold. Antimony grades within the veins were
not used in the determination of the block interpolated grades.
Table 11-7: ID3 Estimation Parameters
Estimation
ID
Minimum
Samples
Max
Samples
Max Samples
Allowed per Hole
Sample
Rock Type
Block Rock
Type
Number of
Blocks Estimated
2
4
5
8
679
5
5
5
5
5
8
8
8
8
8
2
2
2
2
2
2
4
5
8
2
4
5
8
6, 7 or 9
6, 7 or 9
43,618
106,552
361,056
2,466
682,830
Gold grades for the massive stibnite veins have been explicitly modeled based on the average gold grade of the composites that are intersected by the
veins. Gold and antimony grades for each of the 54 interpreted grades are identified in Table 11-8. These values have been directly applied to their
respective percentages of the associated model blocks.
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Vein
Au Grade (ppm)
Sb Grade (ppm)
Vein
Au Grade (ppm)
Sb Grade (ppm)
Table 11-8: Livengood deposit massive stibnite grade estimates
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
1.520
2.025
1.038
7.397
1.608
4.223
2.533
1.767
1.685
1.409
1.682
4.806
3.392
1.749
1.165
1.495
0.196
1.168
1.875
2.317
0.960
2.270
0.570
3.432
7.180
3.924
8.278
49,340
6,840
7,323
10,210
12,247
18,250
15,167
7,428
9,065
6,679
2,977
16,746
4,583
15,362
5,339
9,865
26
2,547
6,410
20,349
7,325
2,190
53,473
10,731
46,537
11,885
51,332
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
23
54
1.835
1.259
1.100
1.100
4.430
0.965
3.740
3.020
13.925
1.778
1.614
1.280
0.516
0.153
1.200
2.804
1.180
1.380
3.853
1.000
1.480
1.250
9.530
1.000
1.040
4.495
1.000
10,440
20,869
10,700
3,378
53,750
7,995
10,580
1,467
69,550
18,362
10,914
16,220
4,769
79
0
10,276
117
3,737
16,476
16,700
40,800
13,350
19,667
5,480
5,940
24,900
3,607
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11.11 Model Validation
Block model validation can be quantified numerically in certain aspects and in many cases is visual and sometimes subjective. Many locations throughout
the mineral deposit have been checked for biased estimates. One such validation is to compare the ID3 estimate against the nearest neighbor (NN)
estimation. A NN estimate should have a globally higher grade and higher variance than the NN estimation. Bias can be surmised visually if high grades
of mineralization have been estimated over known low grade areas of the deposit. A comparison of estimated mineralization should mimic the same
visual characteristics as seen against an overlay of the composites used for the estimation as in Figure 11-14. Another visual characteristic to ensure no
bias is that there are no obvious streaks of high grade, which can be an indicator of high-grade bias in the estimate. The blocks on Section A-B
demonstrate that the estimate of mineralization compares well with the Livengood exploration drilling data.
Table 11-9 compares the global ID3 estimate against the global NN estimate at a 0.00 g/t Au cut-off grade. The same conditions and criteria used for the
ID3 interpolation were used for the NN interpolation. Variance, standard deviation and coefficient of variance should display the same behavior, i.e. higher
than the ID3 estimation. Model Au grade variance, standard deviations and coefficients of variation are also presented in the Table 11-9. These
comparisons satisfy the QP that there is no global bias in the 2021 MRE. An acceptable smoothing of the original assayed grades of the deposit has been
achieved.
Table 11-9: Comparison of ID3 to NN estimates to evaluate for biases in the 2021 MRE
ID3 Model Grade vs. NN Model Grade
ID3 Global Resource Estimate
NN Global Resource Estimate
Variance
Unit
(g/t)
(g/t)
%
Au
0.254
0.255
0.393
Au Variance
Std. Dev.
0.017
0.204
-91
0.266
0.452
-41
C.V.
1.047
1.775
-41
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Figure 11-14: Visual comparison of composite database with estimated Au grades for Section A-B
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A scattergram comparing the composite Au grades to the modeled Au grades is shown in Figure 11-15. The highest grade is in the composite data, which
is expected. The highest variance is in the composites as expected. The mean average grade is identical as expected. The QP is confident that there are
no biases in the 2021 MRE for the Livengood Gold Project. The Livengood 2021 MRE can be relied upon for economic analyses.
Figure 11-15: Scattergram comparing global estimated Au grade to composite database Au values
One final validation of the model is summarized in Figure 11-16. Here is displayed the grades from south to north on 10-meter increments. This chart is a
swath plot; often referred to as a drift analysis. This is used to verify that there is no local bias to the estimation of gold grades. The light dotted line
represents the nearest composite grades that were used to estimate the block grades. A visual check shows that the sample grades are most erratic,
which is indicative of the highest variance. The blue solid line represents the NN estimate, which is smoother than the sample grades yet less smooth
than the ID3, which is represented by the solid red line. These results indicate that there is no bias in the local estimation of grades for Livengood.
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Figure 11-16: Swath plot through Section A-B
11.12 Resource Classification
Mineral resources are classified in accordance with §229.1302(d)(1)(iii)(A) (Item 1302(d)(1)(iii)(A) of Regulation S-K). Mineralization at Livengood has
been categorized as Inferred mineral resources, indicated mineral resources and measured mineral resources, based upon increasing levels of
confidence in various physical characteristics of the deposit. Drill hole spacing, search neighborhoods, metallurgical characterization, geological
confidence and many other factors were used to give the QP confidence in the mineral resource estimate for the Project (2021 MRE). RDA is satisfied
that the geological modeling for Livengood honors the geological information and knowledge of the mineral deposit. The location of the samples and the
assay data are sufficiently reliable to support resource evaluation.
Classification of mineral resources for Livengood are based on the distance to the nearest samples used to derive the gold grade for each individual block
in the deposit. Massive stibnite veins are classified as Indicated mineral resources. No massive stibnite veins have been classified as Measured mineral
resources. RDA has classified the mineral resources according to Table 11-10 which summarizes the sources and degree of uncertainty considered by
RDA.
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In reference to Table 11-10, sources and degree of uncertainty in the categories and are defined as follows:
■ Measured Resources – Measured mineral resources are limited to areas where in opinion of RDA the quality and quantity of the grade and tonnage
are based on low levels of uncertainty. Only areas within the model where the criteria and uncertainty correspond to the Low Degree of Uncertainty
column in Table 11-10 have been used to classify this category of resource.
■ Indicated Resources - RDA has limited the Indicated part of a mineral resource for which in RDA’s opinion the quantity and grade are estimated on
the basis of adequate geological evidence and sampling. This includes all the sources of data used in under the Measured category. The main
controlling feature on the uncertainty is considered to be the drill spacing with a minimum of 2 holes within 60m – 120m used within different domains,
to determine an adequate level of grade uncertainty. The criteria and uncertainty correspond to the Medium Degree of Uncertainty column in Table 11-
10.
■ Inferred Resources - RDA has limited the Inferred part of a mineral resource for areas in the geological model where the quantity and grade are
estimated on the basis of limited geological evidence and sampling. RDA considers this to have the highest levels of uncertainty with limited drilling
information resulting in grades not being able to be estimated with adequate confidence between drill holes for the application of modifying factors for
mining. These areas of the model represent the lowest drilling density (wide spaced), which are beyond the ranges where valid estimates can be
assigned with confidence. RDA considers these areas of the mineral resource will require additional exploration drilling prior to mining. The criteria
and uncertainty correspond to the High Degree of Uncertainty column in Table 11-10.
Source
Low
Medium
High
Table 11-10 Sources and Degree of Uncertainty
Degree of Uncertainty
Drilling
Sampling
Sample Preparation/ Assay
QA-QC
FEBRUARY 2022
Exploration - no significant issues identified.
Protocols consistent with industry standards.
Industry standard sampling utilized for core and RC
drilling
Sample handling, preparation and analysis methods
at accredited, independent laboratories meet current
industry standards.
Sample preparation and analysis procedures for
Livengood meet current industry standards, assay
results suitable for use in resource estimation.
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Source
Low
Medium
High
Degree of Uncertainty
Data Verification
Density and clustering of drilling has been
demonstrated to have little-to-no impact on estimates
mineralization volumes.
Database
Location, analytical and geological data in the
database were verified to the QP's satisfaction.
Geologic Modeling
Geologic models have been reviewed and conform
with the geological interpretations of the deposit
Bulk Density
Grade Estimation
Grade model verification in terms of visual
verification, comparative statistics and swath plots
indicate that estimated grades are largely visually
representative, unbiased and within acceptable
tolerances.
Measurements based on only 98
determinations. Massive stibnite
veining based on empirical
observations.
Drill Spacing and Estimation
Criteria
Model blocks estimated with a minimum of five
samples and a minimum of three drillholes. Limit of
two samples per hole. Distance within 60m of
nearest drill hole.
Model blocks estimated with a
minimum of five samples and a
minimum of three drillholes. Limit of
two samples per hole. Distance to
nearest hole > 60m and <= 120m.
Model blocks estimated with a
minimum of five samples and a
minimum of three drillholes. Limit of
two samples per hole. Distance to
nearest hole > 120m.
Continuity of Classification
Volumes
Smoothing applied to re-classify isolated volumes
(groups of blocks) to ensure reasonable continuity of
Measured and Indicated categories, using implicit
modeling techniques. Also adjusted for depth
consistent with high confidence drill density near
surface.
Massive stibnite vein mineral
estimates classified only as indicated
mineralization even in very close
proximity to geological drilling
intercepts.
11.13 Qualified Person Opinion – Further Work
The qualified person is of the opinion that, with consideration of the recommendations listed in Section 23.1, that any issues relating to all applicable
technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.
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11.14 Mineral Resource Summary
Mineral resources must demonstrate reasonable prospects for eventual economic extraction. The “reasonable prospects” test generally implies that the
quantity and grade estimates meet certain economic thresholds and modifying factors that that take into account extraction scenarios and processing
recoveries. The deposit gold mineralization is amenable for open pit extraction. To determine the quantities of material meeting the reasonable prospects
of eventual economic extraction by an open pit, RDA used the Lerchs-Grossman © economic algorithm, which constructs lists of related blocks that
should or should not be mined. The final list defines a surface pit shell that has the highest possible total value, while honoring the required surface mine
slope and economic parameters.
Economic parameters used in the analysis are based on an average gold price of $1,650/oz on the date of August 20, 2021. Pit optimization parameters
are shown in Table 11-11. Gold recoveries are tonnage-weighted and include the recovery from massive stibnite of 22%.
Table 11-11: Pit constraining parameters used for the Livengood Gold Project
Parameter
Unit
Mining Cost
Au Cut-off
Processing Cost
Au Recovery
Administrative Cost
Royalty
Au Selling Price
Overall Slope Angle
$/total mt
g/mt
$/process mt
%
$/process mt
%
$/oz
Degrees
Rock
Type
4
1.76
0.21
9.27
84
1.55
3
1,650
45
Rock
Type
5
1.74
0.20
9.15
80
1.55
3
1,650
45
Rock
Type
6
1.74
0.25
9.17
71
1.55
3
1,650
45
Rock
Type
7
1.68
0.25
9.50
67
1.55
3
1,650
45
Rock
Type
8
1.76
0.33
9.71
55
1.55
3
1,650
45
Rock
Type
9
1.76
0.33
9.71
56
1.55
3
1,650
45
The parameters listed in Table 11-11 above define a realistic basis to estimate the mineral resource for the Livengood Gold Project and are representative
of similar mining operations throughout North America. The mineral resource has been limited to mineralized material that occurs within the pit shells and
that could be scheduled to be processed based on the defined cut-off grade by rock type. All other material within the defined pit shells, other than the six
predominant mineralized sedimentary units, was characterized as non-mineralized material. The QP used the gold selling price of $1,650/oz which is
based a 5% premium on the three-year trailing average gold selling price of $1585/oz at August 2021. The QP applied the premium to the gold price to
recognize the continued upward trend of metal prices entering in to the fourth quarter of 2021.
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
The reader is cautioned that the results from the pit optimization are used solely for reporting the reasonable prospects for eventual economic extraction
by an open pit and do not represent an economic study, using modifying factors that could convert mineral resources to mineral reserves. RDA considers
that blocks located within a conceptual pit shell are amenable for open pit extraction and can be reported as the mineral resource for the Project.
The mineral resource estimate for the Project (2021 MRE) is summarized in Table 11-12. Mineral resources are reported at various cut-off grades to
reflect the throughput factors and varying costs by rock type for processing at Livengood as shown in Table 11-11. Mineral resources are not mineral
reserves and do not meet the threshold for reserve modifying factors, such as estimated economic viability, that would allow for conversion to mineral
reserves.
This TRS discloses mineral reserves in Chapter 12. The mineral resources disclosed in Table 11-12 are exclusive of the mineral reserves disclosed in
Chapter 12. Table 11-13 discloses the Livengood mineral resource estimate inclusive of mineral reserves.
Table 11-12: Livengood Gold Project mineral resource estimate (exclusive of mineral reserves)
(2021 MRE), August 20, 2021 – Resource Development Associates Inc.
Classification
Measured
Indicated
Inferred
Metric tons (Mmt)
Au (g/mt)
Contained Au (Koz)
Total M & I
234.50
40.01
274.51
15.98
0.53
0.49
0.52
0.40
3,990.49
629.61
4,620.10
206.98
1. The effective date of the estimate is August 20, 2021.
2. Mineral resources for the Project are enumerated as per §229.1302(d)(1)(iii)(A) (Item 1302(d)(1)(iii)(A) of Regulation S-K).
3. Mineral resources are not mineral reserves and do not meet the threshold for reserve modifying factors, such as estimated economic viability, that would allow for
conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves;
4. Open pit resources stated as contained within a potentially economically minable open pit; pit optimization was based on an assumed price for gold of US$1,650/oz,
variable mining and recoveries as described in Table 11-11, and G&A cost of US$1.55/t, and a pit slope of 45 degrees;
5. Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding;
6. Mineral resources are reported exclusive of mineral reserves. The reserves reported in Chapter 12 represent measured mineral resources and indicated mineral
resources that were evaluated with modifying factors related to open pit mining.
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 1113: Livengood Gold Project mineral resource estimate (inclusive of mineral reserves)-
(2021 MRE), August 20, 2021 – Resource Development Associates Inc.
Classification
Measured
Indicated
Inferred
Metric tons (Mmt)
Au (g/mt)
Contained Au (Koz)
Total M & I
646.00
58.51
704.51
15.98
060
0.61
0.60
0.40
12,482.49
1,141.61
13,624.10
206.98
1. The effective date of the estimate is August 20, 2021.
2. Mineral resources are not mineral reserves and do not meet the threshold for reserve modifying factors, such as estimated economic viability, that would allow for
conversion to mineral reserves. There is no certainty that any part of the mineral resources estimated will be converted into mineral reserves;
3. Open pit resources stated as contained within a potentially economically minable open pit; pit optimization was based on an assumed price for gold of US$1,650/oz,
variable mining and recoveries as described in Table 11-11, and G&A cost of US$1.55/t, and a pit slope of 45 degrees;
4. Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding;
5. Mineral resources are reported inclusive of mineral reserves. The reserves reported in Chapter 12 represent measured mineral resources and indicated mineral
resources that were evaluated with modifying factors related to open pit mining.
11.15 Grade Sensitivity Analysis
Mineralization at Livengood is sensitive to the selection of the reporting cut-off grade. To illustrate this sensitivity, the block model quantities and grade
estimates within the constraining pit are presented in Table 11-14 at linear increases in the cut-off grades for Measured, Indicated and Inferred mineral
mineralization at Livengood. The same results are presented graphically in Figure 11-17. The reader is cautioned that Table 11-14 should not be
misconstrued as a mineral resource. The reported quantities and grades are only presented as a sensitivity of the resource model to the selection of cut-
off grade. Mineral resources are not mineral reserves and do not meet the threshold for reserve modifying factors, such as economic viability, that would
allow for conversion to mineral reserves.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 11-14: Sensitivity of block model to cut-off grade
Measured
Indicated
Measured & Indicated
Inferred
Cut-off
Au g/mt
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Metric
Tons (000)
Grade Au
g/mt
Au oz
(000)
Metric Tons
(000)
Grade Au
g/mt
816,569
626,843
464,710
332,891
234,524
164,938
117,098
83,825
61,474
0.53
0.61
0.71
0.81
0.92
1.03
1.15
1.26
1.38
13,914
12,293
10,608
8,669
6,937
5,462
4,329
3,396
2,727
73,263
55,069
37,347
25,437
17,976
13,645
10,648
8,372
6,479
0.53
0.63
0.76
0.91
1.06
1.19
1.31
1.44
1.58
Au oz
(000)
1,248
1,115
913
744
613
522
448
388
329
FEBRUARY 2022
Metric Tons
(000)
Grade Au
g/mt
Au oz
(000)
Metric Tons
(000)
Grade Au
g/mt
Au oz
(000)
889,832
681,912
502,057
358,328
252,500
178,583
127,746
92,197
67,953
0.53
0.61
0.71
0.82
0.93
1.04
1.16
1.28
1.40
15,162
13,409
11,520
9,413
7,549
5,984
4,778
3,783
3,057
20,423
13,359
6,017
2,142
1,079
614
335
180
59
0.37
0.43
0.52
0.65
0.75
0.84
0.92
0.98
1.04
243
185
101
45
26
17
10
6
2
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 11-17: Livengood grade vs tonnage relationship
11.16 Sensitivity of Mineralization to Gold Price
The sensitivity of mineralization defined by the evaluation of the mineralization inventory at different gold prices was performed for gold prices of $984/oz
(-20%), $1,320/oz (resource base case) and $1,980/oz (+20%). The input parameters defined in Table 11-11 above were used in the analysis. Table 11-15
lists the amount of the mineralization contained within the pit shells that could be scheduled to process.
Table 11-15: Sensitivity of mineralization inventory contained in pit shells
defined by WhittleTM Analyses at different gold prices within pit shells
WhittleTM Pit Gold Price
Classification
Metric Tons (Mmt)
Au (g/t)
Contained Au (Koz)
$1,320
$1,650
$1,980
FEBRUARY 2022
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Total M & I
Total M & I
Total M & I
423.84
24.35
448.19
2.02
646.00
58.51
704.51
15.98
845.60
108.98
954.58
31.97
0.70
0.85
0.71
0.55
0.60
0.61
0.60
0.40
0.54
0.49
0.53
0.37
9,496.30
666.13
10,162.43
35.93
12,482.49
1,141.61
13,624.10
206.98
14,668.81
1,717.27
16,386.08
377.99
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
12.
MINERAL RESERVE ESTIMATES
12.1
Introduction
The Livengood deposit will be mined using conventional open pit mining methods consisting of drilling, blasting, loading, and hauling with large-scale
mining equipment. The processing flowsheet consists of primary crushing, secondary crushing, and a comminution circuit (SABC configuration) producing
a final grind size of 250 μm (P80), with gravity recovery followed by whole ore leaching (CIL) of the gravity tailings. The mill has been designed with a
nominal throughput of 65,000 t/d (59,000 mt/d). Tailings will be stored in a conventional slurry tailings facility.
The mine production plan and subsequent mineral reserves are based on a gold price of $1,680/oz. The mineral reserves for the Livengood Project were
prepared by BBA USA Inc. and have an effective date of October 22, 2021.
Development of the mine production plan included pit optimization, pit and phase designs, mine scheduling and the application of modifying factors to the
Measured and Indicated Mineral Resources. The reference point for the mineral reserves is the feed to the primary crusher. The tonnages and grades
reported are inclusive of mining dilution and operational mining losses.
The mine design and mineral reserve estimates have been completed to a level appropriate for a PFS. The mineral reserve estimate stated herein is
consistent with the S-K 1300 requirements and is suitable for public reporting. As such, the mineral reserves are based on Measured and Indicated
Mineral Resources, and do not include any Inferred Mineral Resources. The Qualified Person is not aware of any legal, political, or other risks that could
materially affect the development of the mineral reserve.
Table 12-1 presents the mineral reserves for the Project, which include 411.5 Mmt of Proven Mineral Reserves at an average gold grade of 0.64 g/mt, and
18.5 Mmt of Probable Mineral Reserves at an average gold grade of 0.86 g/mt for a total of 430.1 Mmt of Proven and Probable Mineral Reserves at an
average gold grade of 0.65 g/mt. To access these mineral reserves, 496.1 Mmt of overburden and waste rock must be mined, resulting in a strip ratio of
1.15:1.
The mill recoveries developed for the Project, discussed in further detail in Section 12.3.2, depend on the rock type and are calculated using linear
equations that are a function of antimony concentration, grind size and gold grade. As a result, it is not possible to calculate a cut-off grade for the mineral
reserves that can be uniformly applied across each resource block. The determination of ore and waste was done by evaluating the recovery and
economics of each block. For Measured and Indicated blocks within the open pit, if the revenue less the processing and general and administration cost is
positive, the block is considered as ore. Table 12-2 presents the lowest grades processed by rock type in the LOM.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 12-1: Livengood Project mineral reserves (October 22, 2021- BBA USA Inc.)
Classification
Ore
Metric tons (Mmt)
Au Grade
(g/mt)
Contained Au
Koz
Proven
RT4
RT5
RT6
RT7
RT8
RT9
Probable
RT4
RT5
RT6
RT7
RT8
RT9
Total Proven
Total Probable
Proven and Probable Totals
1.
The effective date of the estimate is October 22, 2021.
75.4
110.5
91.7
61.0
2.4
70.5
411.5
2.5
4.0
3.0
4.8
0.3
3.9
18.5
430.1
0.54
0.55
0.65
0.70
0.73
0.82
0.64
0.48
0.47
0.99
0.98
0.76
1.26
0.86
0.65
1,314
1,972
1,922
1,367
56
1,861
8,492
39
62
94
152
6
159
512
9,004
2. Mineral reserves for the Project are enumerated as per added §229.1302(e)(2)(iii)(A) (Item 1302(e)(2)(iii)(A) of Regulation S-K).
3. Mineral reserves are estimated using a gold price of US$1,680 per ounce, and consider a 3% royalty, 1.80/oz for smelting, refining, and transportation costs, and a
gold payable of 99.9%.
4. Metallurgical recovery curves were developed for each rock type, with the Mineral Reserves having the following tonnage weighted averages: 83.3% for RT4, 79.8%
for RT5, 73.5% for RT6, 66.4% for RT7, 58.7% for RT8 and 57.1% for RT9, including 22% for massive stibnite mineralization.
5.
6.
7.
8.
9.
As a result of the complex metallurgical recovery equations, it is difficult to determine specific cut-off grades. The following presents the lowest gold grades for each
rock type that are processed in the life of mine plan: 0.26 g/t for RT4, 0.28 g/t for RT5, 0.31 g/t for RT6, 0.31 g/t for RT7, 0.42 g/t for RT8 and 0.42 g/t for RT9.
The strip ratio for the open pit is 1.15 to 1.
The mineral reserves are inclusive of mining dilution and ore loss.
The reference point for the mineral reserves is the primary crusher.
Totals may not add due to rounding.
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S-K 1300 – Technical Report Summary
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Table 12-2: Lowest grades processed
Rock Type
Au Grade
g/mt
RT4
RT5
RT6
RT7
RT8
RT9
0.26
0.28
0.31
0.31
0.42
0.42
12.2 General Parameters Used to Estimate the Mineral Reserves
The following section discusses the geological information that was used for the mine design and mineral reserve estimate. This information includes the
topographic surface, the geological block model and the material properties for ore, waste rock and overburden.
The mine design and mine planning were done using Hexagon’s MinePlan 3D software Version 15.8 (formerly known as MineSight). The mine design
work was completed using the UTM NAD27 coordinate system, in metric units, to be aligned with the geology and mineral resource work.
12.2.1 Topographical Data
The topographic information used for the Project originates from a file called “Aero_Elev_Contours_2m_NAD27.dwg”. These contours contain an
adequate resolution deemed appropriate for a PFS level.
There are no lakes or rivers in the Project area that are of importance for the mine design. The creeks are easily identifiable using the topographic
information available.
12.2.2 Mineral Resource Block Model
The mineral resource block model was provided to BBA by Resource Development Associates Inc. on June 4, 2021, in a Vulcan format block model file
called “210526_rda_model.bmf”, which BBA then imported into the MinePlan 3D. Table 12-3 presents the block model specifications and Table 12-4
presents the items that were provided with the block model. The block model does not have a rotation applied.
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
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Table 12-3: Block model specifications
Item
Model Origin (min)
Model Extent (max)
Block Dimension
Number of Blocks
Unit
m
m
m
X
Y
Z
427,600
430,850
10
325
7,264,310
7,266,710
10
240
-290
610
10
90
Item
CRAU
CRSB
MSVAU
MSVSB
AU
SB
CLASS
MSVP
DENS
RTYPE
Table 12-4: Block model item list
Description
Au grade of country rock before combination with Massive Stibnite (g/mt)
Sb grade of country rock before combination with Massive Stibnite (ppm)
Au grade of Massive Stibnite before combination with country rock (g/mt)
Sb grade of Massive Stibnite before combination with country rock (ppm)
Average Au grade considering country rock and Massive Stibnite (g/mt)
Average Sb grade considering country rock and Massive Stibnite (ppm)
Resource Classification (1 = Measured, 2= Indicated, 3 = Inferred)
Massive Stibnite percentage in block
Block density based on rock type
Rock type (see Table 12-5)
A surface representing the overburden/bedrock contact was provided by the BBA geology team as a triangulated surface called “OVB__F200917.dxf”.
Overburden is classified as loess, colluivum, and weathered bedrock that lies above the bedrock. Blocks have been coded as overburden if a majority of
the block is above this surface. The QP is of the opinion that no further precision is required for the overburden quantities and is comfortable using this
“whole block” approach for the PFS.
The overburden thickness within the open pit area for the Project averages 30 ft (9 m), ranging from 6 ft to 80 ft (2 m to 24 m). The majority of the pit area
has less than 16 ft (5 m) of overburden, while the only area that has considerable thickness is in the northeast corner of the pit.
Table 12-6 presents the rock code numbering system that was used. It is important to note that only the Cambrian, Upper and Lower Sediments as well
as the Volcanics contain potentially economic mineralization.
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S-K 1300 – Technical Report Summary
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An average topsoil thickness of 12 inches (30 cm) was assumed for mine design purposes. This material will be stripped and placed separately in growth
media stockpiles to be used for closure and reclamation activities.
Table 12-5: Rock type numbering
Rock type
Overburden
Money Knob
Cambrian
Upper Sediments North of the Lilian Fault
Upper Sediments South of the Lilian Fault
Lower Sediments
Volcanics North of the Lilian Fault
Volcanics South of the Lilian Fault
Background (outside of modeled areas)
Rock code
1
2
4
5
6
7
8
9
99
The Livengood deposit contains a rock type called Massive Stibnite that has very high head grades but a very low gold recovery in the mill. A DXF file
containing solids that represent the Massive Stibnite zones was provided by the BBA geology team in a file called “GM_InterpretationSb_20200824.dxf”.
The value “MSVP” was coded in the block model to represent the percentage of Massive Stibnite for each block. It is important to note that the Massive
Stibnite represents approximately 0.3% of the mineralized material in the deposit. Gold and antimony grades have been interpolated separately for the
Massive Stibnite and country rock portions of each block containing Massive Stibnite. The block densities, however, represent a combination of the
country rock and Massive Stibnite densities. Densities are discussed in Section 12.2.3.
A DXF file called “SB_ PPM QtzStibVns Trended_NO MSV_100 ppm.dxf” was provided by the BBA geology team containing a series of triangulated
solids representing areas of the deposit where the antimony grades are generally above 100 ppm. These solids were used to calculate mill recoveries,
which is discussed in further detail in Section 12.3.2.
12.2.3 Bulk Density
Bulk density is an important measurement that converts volumes modeled by the geologists into tonnages and contained ounces of gold. It is also used to
estimate mine equipment requirements. The densities used for the PFS have been measured using 98 different samples from diamond drill cores and
reverse circulation (RC) chip samples and are presented by rock type in Table 12-6.
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S-K 1300 – Technical Report Summary
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Table 12-6: Bulk dry densities
Bulk dry density
(mt/m3)
2.00
2.67
2.82
2.68
2.74
2.72
2.86
Rock type
RT1
RT2
RT4
RT5 / RT6
RT7
RT8 / RT9
Massive Stibnite
12.2.4 Moisture Content
Mineral resources and mineral reserves are reported as in situ dry metric tons. The mill process reports wet metric tons, which include the moisture
content. The moisture content reflects the amount of water present within the rock formation. It affects the estimation of haul truck requirements and must
be considered during the payload calculations. The moisture content is also a contributing factor for the process water balance. A moisture content of 4%
has been used for all rock types, which is based on crushing simulation work completed for the Project. A moisture content of 10% has been used for
overburden.
12.2.5 Swell Factor
The swell factor reflects the increase in volume of the material from its in situ state to its state after it has been blasted and loaded into the haul trucks.
The swell factor is an important parameter that is used to determine the loading and hauling equipment requirements, as well as the rock pile and
stockpile designs. A swell factor of 30% was used for all rock types and 20% overburden, which are typical values for these material types. Once the rock
is placed on the rock pile, the swell factor is reduced by 10% due to compaction.
12.3 Modifying Factors That Affect the Mineral Reserves
The following section presents the modifying factors that were applied to convert mineral resources into mineral reserves for the Project, as well as the pit
optimization analysis and open pit design. The mineral reserves for the Livengood Project could be materially affected by changes to the modifying factors
such as a decrease in the estimated mill recoveries, a decrease in the gold price, or an increase to the operating costs.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
12.3.1 Mine Dilution
In every mining operation, it is impossible to perfectly separate the ore and waste due to the large scale of the mining equipment and the use of drilling
and blasting. For the Livengood Project, a diluted grade was calculated for every block by considering an amount of 5% from each of the four neighboring
blocks in plan view. The value of 5% represents a width of 1.6 ft (0.5 m), which is considered reasonable considering the size of the loading equipment
and nature of the deposit. Only the grades have been diluted, the tonnages remain intact since it is just a transfer of tons from one block to another. After
calculation of dilution, the in situ grade within the ultimate pit design drops from 0.653 g/mt to 0.649 g/mt.
Considering the nature of the deposit and the methodology used to estimate mining dilution, the mining recovery has been set at 100% for the PFS.
12.3.2 Open Pit Optimization
A pit optimization analysis has been completed to determine the extent of the deposit that can be mined and processed economically. The pit optimization
was done using the pseudo-flow algorithm in the Project Evaluator module of MinePlan 3D. The algorithm determines the economic limits of the open pit
at a range of selling prices based on input of mining and processing costs, revenue per block, and operational parameters such as the mill recovery, pit
slopes and other imposed physical constraints. The pseudo-flow algorithm provides similar results as the Lerch-Grossman algorithm with the benefit of
shorter computing times. Since this study is at a PFS level, Inferred Mineral Resources have been considered as waste rock in the pit optimization and
mine plan.
The pit optimization considered the activity-based costing methodology that distinguishes fixed costs from variable costs. Fixed costs are time related with
no direct production drivers while variable costs are directly related to a production driver in the system. The total fixed costs per year are then allocated
to the system bottleneck, which, for the Project, is the SAG mill processing capacity. Table 12-7 presents the hourly processing throughputs by rock type
that were developed for the Project by the BBA process team.
Table 12-7: Processing throughput capacities by rock type
Rock type
Processing throughput
capacities
(t/h)
RT4
RT5
RT6
RT7
RT8 / RT9
3,208
2,866
2,888
2,866
2,745
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S-K 1300 – Technical Report Summary
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Table 12-8 presents the fixed costs for the operation that were developed by BBA at the start of the PFS, representing those of a 65,000 t/d (59,000 mt/d)
milling operation and a 61 Mt/y (55 Mmt/y) mining operation.
Table 12-8: Fixed costs by area
Area
Mine
Process Plant
General & Administration
Total Fixed Costs
Fixed costs
(M$/y)
24.2
33.5
27.0
84.7
The fixed costs are then divided by the SAG mill hours of operation, which are estimated to be 7,949 hours per year, resulting in a bottleneck cost of
$10,655 applied to every hour of milling.
The variable cost parameters for the pit optimization analysis were developed at the start of the PFS and are based on previous studies on the Project
and BBA’s relevant experience. These costs are presented in Table 12-9. The mining cost represents drilling, blasting, loading and hauling at a reference
elevation of 420 m (bottom of bench). The mining cost is incremented by $0.02/mt for every 10 m drop in elevation to account for longer haulage times.
Benches above the 420 m reference elevation are assigned the base mining costs. The costs vary by rock type due to the different hardness and rock
characteristics. The processing costs consider the power cost, consumable cost and tailings cost and are based on an electricity cost of $0.16/kWh. The
table also includes the bottleneck cost for each rock type, which is equal to the annual bottleneck cost of $10,655/h divided by the processing throughput
(Table 12-7).
Table 12-9: Pit optimization cost inputs ($/mt)
Rock type
Mining cost
(ore)
Mining cost
(waste)
Processing
cost
Bottleneck
cost
RT1
RT2
RT4
RT5
RT6
RT7
RT8 / RT9
n/a
n/a
1.32
1.30
1.30
1.24
1.32
0.86
1.34
1.34
1.32
1.32
1.26
1.34
n/a
n/a
7.34
7.22
7.24
7.57
7.78
n/a
n/a
3.66
4.10
4.07
4.10
4.28
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S-K 1300 – Technical Report Summary
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Table 12-10 presents the revenue parameters that were used for the pit optimization. A gold price of $1,650/oz was used, in line with the 3-year trailing
average. Note that the financial analysis for the PFS was completed at a slightly higher gold price of $1,680/oz.
Table 12-10: Revenue parameters
Item
Unit
Value
Selling Price
Conversion Factor
Smelting, refining and transport
Gold Payable
Royalty
Net Gold Price
$/oz
$/oz
%
%
$/oz
1,650
31.1035
1.80
99.50
3.00
1,591
Table 12-11, Table 12-12, and Table 12-13 present the mill recovery formulas developed by the BBA process team at the start of the PFS. The recoveries
depend on the rock type and are calculated using linear equations, which are a function of antimony concentration, grind size and gold grade. The blocks
have been flagged with an item called “OSX” according to the following rules:
■ Blocks that are outside of the 100 ppm antimony shell are coded as “1”;
■ Blocks that are inside the 100 ppm antimony shell are coded as “2”;
■ Blocks that have an antimony grade above 200 ppm, regardless of whether they are in or out of the 100 ppm antimony shell are coded as “3”.
The tables present the formulas and also include either a minimum recovery (floor) or maximum recovery (ceiling) where applicable. Note that all
calculated recoveries including the floor and ceiling are multiplied by 0.997 to reflect a carbon efficiency factor.
Also note that the Cambrian (Rock Type 4) and Upper Sediments North of the Lilian Fault (Rock Type 5) were only coded with an OSX value of either “1”
or “3” since no recovery formula was developed for these rock types if the antimony grade was above 100 ppm. This was deemed acceptable since there
are very few of these occurrences in the block model.
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Table 12-11: Mill recoveries (OSX = 1)
Rock code
4
5
6
7
8 / 9
Formula (1)
b x 250 + n
b x 250 x n
a x Au + b x 250 + n
a x Au + b x 250 + n
a x Au + b x 250 + n
a
b
n
Ceiling
-0.011
-0.038
-0.024
-0.020
-0.049
86.65
89.56
76.15
77.98
67.27
n/a
n/a
96.12
84.67
79.39
8.04
0.53
5.73
(1) The gold (Au) grade is in g/mt
Table 12-12: Mill recoveries (OSX = 2)
Rock code
4 / 5
6
7
8 / 9
Formula (1)
n/a
a x Au + b x 250 + n
a x Au + b x 250 + n
a x Au + b x 250 + n
a
b
n
Ceiling
15.05
19.55
13.00
-0.017
-0.007
-0.035
56.27
48.01
50.84
n/a
89.98
91.33
77.12
(1) The gold (Au) grade is in g/mt
Rock code
4 / 5
6 / 7 / 8 / 9
(1) The antimony (Sb) grade is in ppm
Table 12-13: Mill recoveries (OSX = 3)
c
b
n
Floor
Formula (1)
n
c x Sb + b x 250 + n
-0.008
75.00
55.33
n/a
20.00
For blocks that contain Massive Stibnite, due to the large size of the mining equipment and general narrow thickness of the Massive Stibnite veins, it was
decided that the Massive Stibnite will not be separated from the host country rock during mining. An average mill recovery was therefore calculated for
each block in the model, which considers the mill recovery of the country rock and a mill recovery of 22% for the Massive Stibnite portion. The average
mill recovery for the block is mass weighted.
Table 12-14 presents the average mill recoveries for each rock type within the ultimate pit design.
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Table 12-14: Average mill recoveries by rock type (%) (1)
Rock type
RT4
RT5
RT6
RT7
RT8
RT9
Tonnage Weighted Average Mill Recovery
(1) Including massive stibnite at 22% mill recovery.
(2) Grams weighted.
1
OSX
2
3
Average (2)
83.4
79.9
76.4
72.8
59.3
60.0
75.1
63.9
64.0
52.0
55.1
60.4
74.0
74.8
48.9
48.5
43.5
48.9
50.1
83.3
79.8
73.5
66.4
58.7
57.1
71.4
An overall pit slope of 37 degrees was considered in the pit optimization. The slope is shallower than the 42 degree inter-ramp angle that has been
recommended in the geotechnical study, discussed in Section 12.3.3.1, since it accounts for the future addition of access ramps and geotechnical berms
during the pit design process.
A minimum offset of 25 m has been considered from the Livengood property limit.
Using the cost, revenue, and operating parameters, a series of nested pit shells was generated by varying the gold price (revenue factor). The software
then generated best-case and worst-case mining sequences using the series of shells and produced two net present values (NPV) for each revenue
factor. The best-case scenario considered that mining will be sequenced using each of the nested shells while the worst-case scenario considered that
mining will be done without phasing. The NPVs have been generated using a discount rate of 5%.
Figure 12-1 and Table 12-15 present the results for each of the revenue factor pit shells along with their associated best-case and worst-case NPVs. The
0.7 revenue factor pit shell was selected as a guide for the ultimate pit design. This pit contains 439 Mmt of resources at an average diluted grade of
0.66 g/mt and has a strip ratio of 1.3:1.
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Figure 12-1: Pit optimization results
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Table 12-15: Pit optimization results
Revenue
Factor
Mineral
Resources
(Mmt)
Au Grade
(g/mt)
Recovered
Ounces
(oz)
Waste Rock
(Mmt)
Strip Ratio
Incremental
Strip Ratio
Mine Life
(yrs)
Best-Case
NPV
(M$)
Worst-Case
NPV
(M$)
18.8
58.9
86.5
136.6
306.8
358.4
438.6
449.1
464.5
477.1
490.2
510.1
521.5
543.1
558.3
573.6
583.5
600.4
609.8
654.2
682.8
716.1
742.9
754.3
0.400
0.450
0.500
0.550
0.600
0.650
0.700
0.725
0.750
0.775
0.800
0.825
0.850
0.875
0.900
0.925
0.950
0.975
1.000
1.050
1.100
1.150
1.200
1.250
FEBRUARY2022
0.79
0.72
0.73
0.70
0.68
0.67
0.66
0.66
0.66
0.65
0.65
0.64
0.64
0.64
0.63
0.63
0.63
0.62
0.62
0.61
0.61
0.60
0.59
0.59
368,293
1,032,340
1,508,170
2,240,991
4,746,964
5,434,880
6,508,236
6,638,791
6,825,639
6,972,121
7,126,148
7,359,540
7,492,819
7,734,885
7,902,338
8,079,758
8,185,086
8,361,830
8,457,497
8,923,982
9,218,524
9,565,917
9,861,747
9,972,314
90.7
115.3
151.3
190.6
411.5
455.2
570.7
581.3
598.3
613.0
629.7
666.5
686.1
720.0
745.8
782.6
800.0
832.9
850.2
970.8
1,058.0
1,177.0
1,306.0
1,350.7
4.83
1.96
1.75
1.40
1.34
1.27
1.30
1.29
1.29
1.28
1.28
1.31
1.32
1.33
1.34
1.36
1.37
1.39
1.39
1.48
1.55
1.64
1.76
1.79
4.83
0.61
1.30
0.78
1.30
0.85
1.44
1.02
1.10
1.17
1.27
1.85
1.73
1.57
1.70
2.40
1.76
1.94
1.85
2.71
3.06
3.57
4.80
3.95
0.9
2.9
4.3
6.8
15.3
17.9
21.9
22.5
23.2
23.9
24.5
25.5
26.1
27.2
27.9
28.7
29.2
30.0
30.5
32.7
34.1
35.8
37.1
37.7
330
499
994
1,273
2,270
2,431
2,616
2,635
2,658
2,675
2,690
2,709
2,719
2,734
2,743
2,750
2,753
2,756
2,757
2,752
2,745
2,730
2,716
2,708
330
453
974
1,164
2,095
2,209
2,312
2,320
2,326
2,319
2,317
2,293
2,289
2,275
2,261
2,246
2,237
2,209
2,197
2,115
2,050
1,977
1,909
1,883
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12.3.3 Open Pit Design
Using the results of the pit optimization analysis, an operational pit was designed, which is the basis of the LOM. This pit design uses the selected pit shell
as a guide and includes smoothing the pit wall, adding ramps to access the pit bottom and ensures that the pit can be mined safely and efficiently. The
following section provides the parameters that were used for the open pit design and presents the results.
12.3.3.1 Pit Slope Geotechnical Evaluation
The following information summarizes the findings of the SRK (2013a) feasibility pit slope evaluation as well as supplemental stability analyses completed
for the interim pit phase designs by SRK (2016).
Data Collection
A field data collection program was designed and carried out for the Project with the primary objective of rock mass characterization and defining the
dominant discontinuity orientations. Field data collection consisted of geotechnical core logging and discontinuity orientation, point load testing and
laboratory strength testing. The Livengood site has very minimal outcrop exposure and, consequently, geotechnical mapping could not be carried out to a
significant degree.
Tower Hill Mines (THM) technicians logged geotechnical data for all of the 2010 resource drill holes providing the first geotechnical data for mine design;
17 of the 2010 holes (totaling 22,227 ft (6,470 m)) were located within the proposed open pit area and were considered in the development of the
geotechnical model. Based on the 2010 information, two supplemental geotechnical specific drilling campaigns were undertaken in 2011 (three holes
totaling 2,700 ft (823 m)) and in 2012 (four holes totaling 4,508 ft (1,374 m)). Core from these geotechnical specific holes was logged by SRK personnel
at the drill rig on a 24-hour basis. The locations of the 24 combined geotechnical drill holes are shown on Figure 12-2.
A total of 107 core samples were selected from the geotechnical core for laboratory testing including 68 uniaxial compressive strength, 15 triaxial
compressive strength, 19 Brazilian tensile strength, and 29 direct shear tests.
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Figure 12-2: Location of geotechnical drill holes
Geotechnical Model
The Project is located within a geologically complex environment composed of interlayered sediments and volcanics that have undergone intense
thrusting and faulting. Results of the data collection programs support this, showing heavily fractured, weak to moderate strength rock with various types
of alteration.
The field and laboratory data were used to calculate rock mass rating (RMR) values according to the Bieniawski (1989) system for each core run or
shorter intervals where conditions varied within a run. This data was used as the primary means of evaluating the overall quality of the various rock types
and stratigraphies encountered.
It was determined from data analysis that the materials within each of the main lithologies (i.e. Money Knob Sequence, Upper Sediments, Main Volcanics,
Lower Sediments (including the Lower Sand) and Cambrian units) are geotechnically similar and that the data within each could be grouped to form
individual engineering units for pit slope analysis. Given that nearly all of the Sunshine area geologic materials are believed to be within the Upper
Sediments unit and demonstrated similar geotechnical characteristics, the materials were classified together as one engineering unit, i.e., Sunshine Upper
Sediments. RMR statistics for each engineering unit are summarized in Table 12-16.
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Table 12-16: Distributions of RMR (Bienawski, 1989) per engineering unit
Engineering Unit
Money Knob
Cambrian
Main Volcanics
Upper Seds (Core Zone)
Lower Seds
Upper Seds (Sunshine)
No.
106
166
64
211
190
193
Mean
Std. Dev.
54
55
52
56
53
62
10
14
13
14
13
14
In order to develop a large population of uniaxial compressive strength (UCS) data for statistical analysis, a total of 1,923 valid point load tests (PLTs)
were multiplied by correlation factors to estimate a UCS value for each PLT. A correlation factor was developed for each individual engineering unit
according to ASTM standards by pairing each laboratory UCS test with adjacent PLTs, which generally resulted in linear relationships between the two
variables. Table 12-17 contains a statistical summary of the overall UCS data per engineering unit.
Table 12-17: Distributions of UCS per engineering unit
Engineering Unit
Money Knob
Cambrian
Main Volcanics
Upper Sediments (Core Zone)
Lower Sediments
Upper Sediments (Sunshine)
No.
65
227
106
249
290
808
Mean
Std. Dev.
20
88
69
32
36
59
15
172
47
34
26
42
Slope Stability Analyses
SRK evaluated both inter-ramp/overall and bench scale stability using probabilistic methods of analysis. Representative inter-ramp/overall slope models
were analyzed for a total of six critical design sections as shown on Figure 12-3 to confirm stability of ultimate pit slopes. The critical sections were
selected to represent the anticipated most adverse stability conditions such as where the slope height is at its maximum, pit wall materials are low
strength and/or pore water pressures may be the highest. The 2012 Livengood three-dimensional stratigraphic and structural models were used to
generate the two–dimensional cross sections for modeling. The analyses were conducted using limit equilibrium methods using the Hoek-Brown (2002)
rock mass shear strength criteria and the end of mining groundwater surface was developed as part of the SRK (2013b) hydrogeologic model.
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Figure 12-3: Critical slope stability sections for the (2013) ultimate pit
Based on accepted engineering experience, inter-ramp/overall slope designs subject to probabilities of failure (POF) ranging from 20% to 30% for slopes
with low failure consequences and approximately 5% to 10% for high failure consequences are considered appropriate by SRK for most open pit mines.
Slopes of high failure consequence are generally those slopes that are critical to mine operations, such as those on which major haul roads are
established, those providing ingress or egress points to the pit, or those underlying infrastructure such as processing facilities or structures. Given the
relatively high variability in rock quality and groundwater levels, a maximum POF of 20% was considered acceptable for the non-critical slopes. Results of
the analyses are summarized in Table 12-18. While Section C demonstrates a slightly higher POF than targeted, it was considered acceptable due to the
short slope length and the flexibility to re-design the ramp should an instability occur.
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Table 12-18: Overall slope stability analysis results for the ultimate pit
Section
Probability
of Failure
Mean Factor
of Safety
Recommended Geotechnical Berm Elevations
A
B
C
D
E
F
3%
3%
22%
8%
14%
18%
1.7
1.9
1.2
1.4
1.3
1.3
NA
NA
NA
Elev. 220, 320
Elev. 220
Elev. 120, 220, 320
Geotechnical berms were incorporated into the design to reduce the overall slope angles, where necessary, to achieve acceptable POF. The geotechnical
berms are designed at a total width of 82 ft (25 m).
Pit Slope Design Recommendations for the Ultimate Pit
The final pit slope design recommendations for the ultimate pit are summarized in Table 12-19 with corresponding sectors shown on Figure 12-4.
Table 12-19: Pit slope design recommendations for ultimate pit
Pit Sector
A
B
Remaining Areas
Max.
Overall
Slope Angle
Max.
Inter-ramp
Slope Angle
40
41
42
42
42
42
25 m
Geotech.
Berms
(Approx. Elev.)
220, 320
220, 320
N/A
Bench
Height
(m)
20
20
20
Bench (1)
Width
(m)
12/14.9
12/14.9
12/14.9
Bench (1)
Face
Angle
63/70
63/70
63/70
(1)The 42° inter-ramp may be achieved by either 14.9 m width with 70° bench face angles or 12 m width with 63° bench face angles.
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Figure 12-4: Pit Slope Design Sectors for the Ultimate Pit
Recommendations were provided for both 63º and 70º bench faces angle configurations. The 63º bench face angle represents the lowest risk of local
bench instabilities, particularly for the Sunshine pit north wall, where bedding will dip shallowly into the pit; however, depending on the mining equipment
selected and on operational considerations, excavation of 70º bench face angles may be more practical. Considering the relatively wide catch benches
(14.9 m) that would be required to achieve the 42º inter-ramp angle, localized bench sloughing that may occur with the 70º bench face angles is expected
to be retained by the catch bench beneath. Regardless of which bench configuration is selected, inter-ramp slope angles should not be increased over
42°.
Pit Slope Design Recommendations for Early Mine Phase Interim Pit Walls
Subsequent to the initial SRK (2013a) feasibility pit slope study, additional analyses were completed by SRK (2016) to optimize interim pit wall angles,
minimizing waste handling during the critical payback period. A total of six critical slope stability sections were analyzed for the interim slopes with the
maximum inter-ramp slope heights ranging between 120 m and 160 m.
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The average properties were used for the deterministic analyses to represent the rock mass strength inputs for each of the primary rock types (Table 12-
16 and Table 12-17). Groundwater surfaces were estimated for each model based on the SRK (2013b) hydrogeologic model. Acceptability criteria for the
work included a 1.3 safety factor and a 5% to 10% maximum POF (high failure consequence slopes) due to the proximity of the haul roads to the interim
slopes analyzed. The analyses indicated safety factors between 1.5 and 2.4 for the optimized slopes with probabilities of failure ranging between 1 % and
10 %.
The results of the interim slope stability analyses indicated that stability of lower, interim slope heights will be controlled primarily by achievable bench
face angles and, to a lesser extent, the stability of high inter-ramp and overall slopes. Calculated safety factors could be considered relatively high for
typical open pit slope designs. However, steepening of the inter-ramp slope angles beyond 47° would require steeper bench face angles or reducing the
design catch bench width, which is not recommended at the feasibility level due to the lack of rock exposure and actual geologic structural information.
With detailed geotechnical bench face mapping and good quality wall control blasting practices, opportunity may exist to steepen the inter-ramp angles
based on more accurate information acquired during pit development.
Based on the (SRK, 2013a) feasibility study geotechnical characterization and subsequent slope stability analyses (SRK, 2016) described above, SRK
recommends that a maximum inter-ramp slope angle of 47° be used for inter-ramp slope heights of less than 160 m.
12.3.3.2 Pit Wall Configuration
Table 12-20 presents the pit wall configurations that were used by BBA for the PFS pit and phase designs.
Table 12-20: Pit wall configuration
Description
Bench Height
Bench Configuration
Bench Face Angle
Catch Bench Width
Inter-ramp Angle
Unit
Initial Phases
Later Phases
ft
ft
deg
deg
65.6
Double
70
37.4
47
65.6
Double
70
48.9
42
The pit design includes an 82 ft (25 m) wide berm at the 250 m elevation in the southwest part of the pit, as per the geotechnical recommendation.
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With respect to the pit wall configuration in the overburden, the pit slope report states the following: “At Livengood, overburden soil cover is generally thin,
thereby limiting permafrost melting and flowing to a mostly operational issue. In response, extra-wide berms or access points should be left within or at
the base of overburden materials to provide catchment and to permit clean-up of sloughing areas if necessary”. Since the overburden thickness in the pit
area is very limited, as discussed in Section 12.2.2, especially along the final pit walls, the QP has not considered a modified pit wall configuration in the
overburden nor a catchment berm since this was deemed to have a very small overall impact on the stripping ratio. The next level of study would warrant
more detail in the pit design related to the overburden slopes.
12.3.3.3 Haul Ramp Design
The haul ramps within the pit have been designed for haulage with 320 t (291 mt) sized rigid frame mining trucks, with an overall width of 112 ft (34 m).
For double lane traffic, industry practice indicates the running surface width to be a minimum of three times the width of the largest truck.
The overall width of a 320 t rigid frame mining truck is 30 ft (9.1 m), resulting in a running surface of 89.6 ft (27.3 m). The allowance for berms and ditches
increases the overall haul road width to 112 ft (34 m). Single-lane traffic has been considered for the final 4 benches (40 m in elevation), reducing the
overall ramp width to 85 ft (26 m). Figure 12-5 presents the haul road configuration for 2-way traffic. A maximum ramp grade of 10% has been
considered.
Figure 12-5: Haul road configuration
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12.3.3.4 Minimum Mining Width
A minimum mining width of 165 ft (50 m) has been considered for the pit design. This width must be respected to ensure that a 320 t haul truck, which has
a turning radius of 105 ft (32 m), can safely enter the mining area and make a 180° turn to be positioned for loading.
12.3.3.5 Final Bench Access
In order to reduce the stripping ratio as much as is feasibly safe and efficient, the access ramp has not been designed to the bottom of the lowest
benches. When mining the final bench, the haul trucks will be positioned on the bench crest rather than on the bench toe. Figure 12-6 illustrates this
operating scenario, commonly referred to in the industry as a good-bye cut. This final bench has been designed at a height of 16.4 ft (5 m) high.
Figure 12-6: Final bench access
12.3.3.6 Open Pit Design Results
The open pit that has been designed for the Project is approximately 7,500 ft (2,300 m) long and 3,900 ft (1,200 m) wide at surface. The total surface area
of the pit is roughly 220 ha. The pit ramp on the final wall enters at the 380 m elevation on the north east side. The ramp branches off into two segments
at the 370 m elevation, a first one to access a small area on the far east side of the pit, and a second one that runs along the north wall towards the west.
At the 290 m elevation, the main ramp branches off again into two segments, a first one to access the central part of the pit and a second one that
accesses the west part of the pit. The deepest part of the pit is at the 85 m elevation, 985 ft (300 m) below surface.
FEBRUARY 2022
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Accounting for mining dilution, the open pit includes 453.6 Mt (411.5 Mmt) of Proven Mineral Reserves at an average gold grade of 0.64 g/mt and 20.4 Mt
(18.5 Mmt) of Probable Mineral Reserves at an average gold grade of 0.86 g/mt for a total of 474.1 Mt (430.1 Mmt) of Proven and Probable Mineral
Reserves at an average gold grade of 0.65 g/mt. In order to access these mineral reserves, 546.9 Mt (496.1 Mmt) of overburden and waste rock must be
mined, resulting in a strip ratio of 1.15:1. There are only a few hundred thousand metric tons of Inferred Mineral Resources in the open pit. The pit
contains 1.2 Mt (1.1 Mmt) of Massive Stibnite at an average gold grade of 2.93 g/mt.
Figure 12-7 presents an isometric view of the open pit design.
Figure 12-7: Open pit design
FEBRUARY 2022
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13.
MINING METHODS
13.1
Introduction
The Livengood deposit will be mined using conventional open pit mining methods consisting of drilling, blasting, loading, and hauling with large-scale
mining equipment. Vegetation, topsoil, and overburden will be stripped and stockpiled for future reclamation use. The ore and waste rock will be drilled
and blasted with 32.8 ft (10 m) high benches and loaded into haul trucks with a fleet of diesel-powered hydraulic excavators and front-end wheel loaders.
13.1.1 Geotechnical Pit Slope Parameters
The geotechnical pit slope parameters were presented in Section 12.3.3.1.
13.1.2 Hydrogeology
A hydrogeological investigation was completed by SRK on the Livengood Project in 2012, and summarized in a report titled, “2012 Hydrogeological
Investigations and Modeling Results – Draft 3” (SRK, 2013b). The study included numerical groundwater flow modeling to evaluate pit water inflows
during mining operations and to understand the formation of the pit lake after mining ceases. The results of the study showed that the maximum amount
of groundwater expected to enter the pit will be in the range of 2,406 m3/d. This quantity of water is manageable with dewatering pumps, which are
discussed in Section 13.5.8.
13.2 Phase Designs
To maximize the NPV of the Project, mining phases (pushbacks) have been designed and incorporated into the mining sequence to bring higher-grade
material forward and to defer waste rock stripping.
13.2.1 Starter Pit
During the preproduction phase of the Project, a total of 89 Mt (81 Mmt) of waste rock has been estimated to be required for the construction of certain
infrastructure such as the tailings management facility (TMF) starter dike, mine haul roads, site access roads, and platforms for the processing facilities
and other buildings. It has been assumed that all waste rock types will be acceptable as construction material except for overburden.
A starter pit, also referred to as Phase 1, was designed on the eastern side of the open pit, which targets the waste rock requirements and minimizes the
amount of ore that would have to be stockpiled during preproduction. A trade-off study was carried out early in the Project, which evaluated a starter pit on
the westside of the open pit. The western starter pit targeted an area that would expose ore quicker but was not used in the PFS due to the longer haul
distances relative to the eastern starter pit.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
The Phase 1 starter pit contains 5.6 Mt (5.1 Mmt) of overburden, 91.4 Mt (82.9 Mmt) of waste rock and 5.4 Mt (4.9 Mmt) of ore. The bottom of the starter
pit is at the 385 m elevation, and the total depth of the starter pit is 328 ft (100 m).
13.2.2 Phase Design Results
The phase designs were guided by the lower revenue factor pit shells from the pit optimization analysis. A total of five phases have been designed in
addition to the starter pit. To ensure the phases can be mined safely and efficiently with the selected fleet of mining equipment, a minimum width of 400 ft
(122 m) has been considered between each phase. Narrower widths down to 130 ft (40 m) have been allowed for short segments.
For all phases, the haul ramp exits have been located on the northside of the pit to avoid haul road construction requirements on the south side, which
would negatively impact the visual effects of the Project.
Table 13-1 presents the mineral reserves for each phase and Figure 13-1 presents a plan view showing the limits of each phase.
Table 13-1: Mineral reserves by phase
Phase
Ore
(Mt)
Au Grade
(g/mt)
Overburden (Mt)
Waste Rock (Mt)
Strip
Ratio
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
Phase 6
Total (1)
5.6
35.8
76.5
45.1
118.3
192.7
474.0
0.45
0.60
0.75
0.57
0.60
0.68
0.65
5.6
2.2
4.4
1.1
3.1
6.9
23.4
91.3
7.8
68.0
31.4
106.5
218.7
523.7
17.3
0.3
0.9
0.7
0.9
1.2
1.2
(1) Numbers may not add up due to rounding.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 13-1: Phase designs
Phase 2 targets an area on the east side of the pit with a very low strip ratio of 0.3 to 1. The bottom of Phase 2 is at the 305 m elevation, and the total
depth of Phase 2 is 540 ft (165 m).
Phase 3 targets a high grade area on the west side of the pit with an average grade of 0.75 g/mt. The stripping ratio is relatively low at 0.9 to 1.0. The
bottom of Phase 3 is at the 210 m elevation, and the total depth of Phase 3 is 920 ft (280 m). Both Phase 2 and Phase 3 will be mined at the same time to
separate the equipment fleet, which will allow for higher productivities.
Phase 4 is an expansion of Phase 2. The bottom of Phase 4 is at the 245 m elevation, and the total depth of Phase 4 is 820 feet (250 m).
Phase 5 mines the pit to its final limits on the east side and Phase 6 mines the pit to its final limits on the west side. Since the Phase 5 ramp cuts off
access to the remaining benches above the 350 m elevation, a ramp has been included in the northwest corner of the pit in Phase 6 to access this
material.
Figure 13-2 to Figure 13-7 present the designs for each phase.
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 13-2: Phase 1 design
FEBRUARY 2022
13-4
Figure 13-3: Phase 2 design
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 13-4: Phase 3 design
FEBRUARY 2022
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Figure 13-5: Phase 4 design
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 13-6: Phase 5 design
FEBRUARY 2022
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Figure 13-7: Phase 6 design
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
13.3 Waste Rock Storage Facility and Stockpile Designs
Material mined from the open pit that is not directly hauled to the primary crusher will be placed in several storage facilities across the Livengood site.
These facilities, discussed in further detail below, include growth media stockpiles, the overburden stockpile, the waste rock storage facility (WRSF), the
low grade ore stockpile, and an emergency ore stockpile. Waste rock will also be used as construction material both during preproduction, as discussed in
Section 13.2.1, and to raise the height of the TMF dike as the mine life progresses. Note that trees will be cleared prior to placing material in these piles.
13.3.1 Growth Media Stockpiles
As discussed in Section 12.2.2, a topsoil thickness of 12 inches (30 cm) has been assumed for mine design purposes. This material will be stripped and
placed separately in growth media stockpiles to be used for closure and reclamation activities. Several growth media stockpiles will be strategically
located around the site. Depending on the mining sequence and closure activities, topsoil may be hauled directly to certain areas if they are available for
reclamation, thus reducing costs by limiting re-handling activities.
13.3.2 Overburden Stockpile
Overburden will be stripped and hauled to the overburden stockpile located in the Gertrude Creek Valley to the east of the plant site. The overburden
stockpile will be built on the side of the hill, has a footprint area of 67 ha and a capacity of 15.7 Myd3 (12 Mm3). The bottom of the overburden stockpile is
at the 420 m elevation and the top is at the 540 m elevation for a total height of 395 feet (120 m). The overburden stockpile has been designed with 150 ft
(45 m) wide catch benches every 100 ft (30 m) in elevation and has an overall slope of 18.4 degrees.
13.3.3 Waste Rock Storage Facility
Waste rock not used for construction will be hauled to the WRSF located in the Gertrude Creek Valley to the east of the plant site, below the overburden
stockpile. The PFS considers the same design parameters for the WRSF that were prepared by AMEC for the 2013 FS and presented in the report titled
“Geotechnical Design Report August 6, 2013.pdf” (AMEC, 2013).
Since the WRSF will be built along the side of a hill, a buttress called the “Gertrude Creek Embankment” will be built at the base of the WRSF to provide
additional stability. The buttress will separate the TMF and the WRSF. Stacking of the waste rock will begin at the base of the pile, against the Gertrude
Creek Embankment, and advance up the slope in a “bottom-up” sequence. Access to each lift will be from the haul road that will be built to the east of the
plant site to access the TMF. Table 13-2 presents the slope configuration for the WRSF.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 13-2: WRSF slope configuration
Description
Lift Height
Overall Slope
Bench Face Angle
Berm Width
Unit
deg
deg
ft
ft
Value
100
18.4 (3H:1V)
33.7
150
The WRSF was designed with a footprint area of 215 ha and a capacity of 163 Myd3 (125 Mm3). The bottom of the WRSF is at the 330 m elevation and
the top is at the 420 m elevation for a total height of 295 ft (90 m). The PFS requires 105 Myd3 (80 Mm3) of storage capacity in the WRSF and will be built
to the 390 m elevation.
A trade-off study was completed to evaluate the merits of placing waste rock in mined-out areas of the pit. Although the mine sequencing does allow for
in-pit dumping, it was determined that too much potential mineralization would be sterilized by in-pit dumping.
13.3.4 Low Grade Ore Stockpile
To maximize the NPV of the Project, lower grade ore will be placed in a stockpile so that higher grade ore can be accessed and sent to the process plant
earlier in the mine life. The lower grade ore is then reclaimed at the end of the life of the mine. The low grade ore stockpile is located to the east of the
open pit on the ridge above Gertrude Creek. Material placed in the stockpile will be classified into low grade (< 0.5 g/mt), medium grade (> 0.5 g/mt and
< 0.7 g/mt) and high grade (> 0.7 g/tm), with each category being placed in a different part of the pile.
The peak low grade ore stockpile balance from the mine plan, presented in Section 13.4, is 87.7 Mt (79.6 Mt), resulting in a capacity requirement of
45 Myd3 (34 Mm3). The low grade stockpile will also be built on the side of the hill and has a footprint area of 100 ha. The bottom of the low grade
stockpile is at the 300 m elevation and the top is at the 570 m elevation for a total height of 886 ft (270 m) at its highest point. The low grade stockpile has
been designed with 150 ft (45 m) wide catch benches every 100 ft (30 m) in elevation and has an overall slope of 18.4 degrees.
13.3.5 Emergency Ore Stockpile
To ensure the primary crusher can be fed when the mine will be shut down during extreme weather events, an emergency ore stockpile has been located
on the run of mine (ROM) pad. The emergency ore stockpile has a 65,000 t (58,967 mt) capacity to provide 24 hours of crusher feed. The emergency ore
stockpile has a height of 16 ft (5 m) and a surface area of 65,000 ft2 (6,040 m2). Ore from this stockpile will be rehandled with wheel loaders that will either
dump directly into the hopper of the primary crusher or load haul trucks that will haul and dump into the hopper.
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
13.3.6 Acid Rock Drainage
SRK previously completed a report on the acid rock drainage (ARD) potential of the Livengood waste rock, titled “Metal Leaching and Acid Rock Drainage
Assessment, Livengood Project, Alaska. Progress Report 3 - Final” (SRK, 2012)., The SRK study concluded that the Volcanic and Lower Sediment rock
types have the greatest potential to produce ARD. These rock types represent approximately 15% of the waste rock within the open pit and should easily
be mixed with the non-potentially ARD rock types when placed in the WRSF. The QP recommends that the design and sequencing of placement of ARD
material into the WRSF be updated for the next phase of study.
13.4 Mine Production Plan
The mine production plan has been prepared using the MinePlan Schedule Optimizer (MPSO) tool in the Hexagon MinePlan 3D software. Provided with
economic input parameters and operational constraints such as phase sequencing, maximum bench sink rates, and mining and milling capacities, the
software determines the optimal mining sequence and low grade ore stockpiling strategy, which maximizes the NPV of the mine production plan.
The mine plan has been prepared quarterly for the first 2 years of production and annually thereafter. The mine plan also includes a period of
preproduction that has been scheduled annually over 3 years. The purpose of the preproduction period is for the mine to provide waste rock for
construction material and to prepare the pit for mining operations.
The mine plan has been prepared using cuts that are 200 m x 200 m x 10 m high. Partial mining was not allowed so cuts are mined in their entirety within
a given period.
The mine plan considers a maximum bench sink rate of eight benches per year per phase, for a maximum vertical sink of 262 ft (80 m) per year per
phase.
For low grade stockpile rehandling, since the low grade ore stockpile will be quite large and can be reclaimed from many sides, the mine plan considers
“average grade” reclaim strategy.
The mine plan targets the nominal mill throughput capacity of 65,000 t/d (58,967 mt/d) and varies based on the blend of ore by rock type. Table 15-7 in
Section 12.3.2 presenting the mill throughput rates in t/h for each rock type have been considered in the mine plan. The mine plan also considers an
overall mill utilization of 93%, which results in 8,147 hours per year of operation.
The mine plan accounts for the following process plant utilization ramp-up prior to achieving 93%, at the start of Year 2. This results in an average plant
utilization of 75% for the first year of operation, which falls between Class 1 and Class 2 of the McNulty start-up benchmarking curves.
■ Q1: 45%;
■ Q2: 75%;
■ Q3: 80%;
■ Q4: 95%.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
The Livengood Project has a 20.3-year mine life plus 3 years of preproduction development. A contractor will operate the pit during the first year of
preproduction to develop the first benches in the Phase 1 starter pit and construct the network of mine haul roads. By the second year, the owner’s fleet of
equipment will be on-site and assembled and will take over from the contractor.
Mining of Phases 2 to 6 is planned as follows:
■ Phase 2 – Mined between Year 1 and Year 2;
■ Phase 3 – Mined between Year 1 and Year 4;
■ Phase 4 – Stripping begins in Year 3 and will be completely mined out in Year 7;
■ Phase 5 – Mining begins in Year 4 and completes in Year 10;
■ Phase 6 – Mining begins in Year 6 and completes in Year 17.
The total material mined from the open pit peaks at 66 Mt (60 Mmt) from Year 2 to Year 5 and averages 55 Mt/y (50 Mmt/y) between Year 1 and Year 17.
A total of 105 Mt (95 Mmt) of ore is sent to the low grade ore stockpile over the life of the mine, with an average gold grade of 0.38 g/mt. A total of 84% of
the low grade ore is rehandled and sent to the mill during the final five years of production, with smaller amounts rehandled in earlier years.
During the life of mine, a total of 271 Mt (246 Mmt) is hauled to the TMF for dike construction, representing 52% of the total waste rock.
The average gold grade for ore to the mill is fairly consistent on a year to year basis, ranging from 0.58 g/mt to 0.93 g/mt when the open pit is in operation,
and drops to 0.36 g/mt during stockpile rehandling at the end of the mine life.
A peak gold production of 482 koz is achieved in Year 3, when higher grades will be fed to mill, which also coincides with higher mill recoveries. Gold
production averages 342 koz per year between Year 1 and Year 17 and 154 koz per year during stockpile rehandling.
Table 13-3 presents the mine production schedule (summarized by year) and Table 13-4 presents the mill feed by rock type (summarized by year).
Figure 13-8 to Figure 13-12 present various charts which display the mine production schedule and Figure 13-13 to Figure 13-16 present the pit advances
for at the end of Preproduction, Year 05, Year 10, and Year 15.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 13-3: Mine production schedule
Year
Unit
-3
-2
-1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Total
Mill Feed
Mt
0.0
0.0
0.0
18.0
24.4
24.3
23.2
23.6
23.6
23.6
23.4
23.5
24.2
23.9
23.8
23.4
23.1
23.2
23.2
23.4
23.8
23.8
23.8
6.8
474.0
Gold Grade
g/mt
0.00
0.00
0.00
0.76
0.69
0.93
0.93
0.61
0.61
0.64
0.64
0.69
0.58
0.61
0.72
0.77
0.77
0.71
0.73
0.65
0.36
0.36
0.36
0.37
0.65
Ounces Rec.
koz
0
0
0
321
388
482
437
314
328
340
329
357
306
296
336
339
322
308
316
293
188
188
188
54
6,430
Mill Recovery
ROM to Mill
%
Mt
0%
0%
0% 80% 79% 73% 69% 74% 78% 77% 75% 76% 75% 70% 67% 65% 62% 64% 64% 66% 75% 75%
75% 74%
71%
0.0
0.0
0.0
16.7
23.3
24.3
22.9
22.4
23.6
23.6
23.4
23.5
15.8
19.6
23.8
23.4
23.1
23.2
23.2
13.4
0.0
0.0
0.0
0.0
369.2
Gold Grade
g/mt
0.00
0.00
0.00
0.76
0.70
0.93
0.94
0.61
0.61
0.64
0.64
0.69
0.67
0.66
0.72
0.77
0.77
0.71
0.73
0.86
0.00
0.00
0.00
0.00
0.73
ROM to Stkp
Gold Grade
Stkp to Mill
Mt
Mt
Mt
1.2
2.7
1.1
16.1
8.1
12.1
17.0
6.6
6.6
3.3
3.3
3.3
3.3
3.3
3.3
3.3
3.3
3.3
3.3
0.3
0.0
0.0
0.0
0.0
104.8
0.47
0.45
0.44
0.38
0.34
0.40
0.40
0.33
0.34
0.35
0.36
0.35
0.33
0.35
0.44
0.38
0.41
0.40
0.38
0.40
0.00
0.00
0.00
0.00
0.38
0.0
0.0
0.0
1.3
1.1
0.0
0.3
1.3
0.0
0.0
0.0
0.0
8.4
4.3
0.0
0.0
0.0
0.0
0.0
10.0
23.8
23.8
23.8
6.8
104.8
Gold Grade
g/mt
0.00
0.00
0.00
0.73
0.45
0.62
0.75
0.59
0.00
0.00
0.00
0.00
0.42
0.36
0.00
0.00
0.00
0.00
0.00
0.38
0.36
0.36
0.36
0.37
0.38
OB to Stkp
Waste to
WRSF
Waste to TMF
Total Material
Moved
Total Material
Mined (ROM)
Mt
Mt
Mt
Mt
Mt
3.9
1.5
0.2
4.7
1.6
0.8
1.6
2.0
0.6
1.5
1.4
1.4
1.7
0.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
23.3
11.2
3.2
2.6
2.5
8.7
15.2
10.9
21.4
20.4
22.8
23.1
23.0
31.5
31.1
9.6
8.0
3.1
3.0
1.0
0.0
0.0
0.0
0.0
0.0
252.5
2.4
27.8
31.5
24.4
24.4
13.8
13.8
13.8
9.4
9.4
9.4
9.4
11.6
11.6
11.6
11.6
10.7
10.7
10.7
3.0
0.0
0.0
0.0
0.0
271.1
18.8
35.2
35.3
65.6
67.3
66.1
66.5
67.4
60.6
60.6
60.6
60.6
72.3
70.4
48.4
46.3
40.2
40.3
38.3
26.6
23.8
23.8
23.8
6.8
1,125.7
18.8
35.2
35.3
64.3
66.1
66.1
66.1
66.1
60.6
60.6
60.6
60.6
63.9
66.1
48.4
46.3
40.2
40.3
38.3
16.6
0.0
0.0
0.0
0.0
1,020.9
Strip Ratio
14.8
12.3
31.8
1.0
1.1
0.8
0.7
1.3
1.0
1.2
1.3
1.3
2.4
1.9
0.8
0.7
0.5
0.5
0.4
0.2
0.0
0.0
0.0
0.0
1.2
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 13-4: Mill feed by rock type
Year
Unit
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Total
18.0
24.4
24.3
23.2
23.6
23.6
23.6
23.4
23.5
24.2
23.9
23.8
23.4
23.1
23.2
23.2
23.4
23.8
23.8
23.8
Tonnes
RT4
RT5
RT6
RT7
RT8
RT9
Mt
Mt
Mt
Mt
Mt
Mt
Mt
4.0
12.9
1.0
0.1
0.0
0.0
9.3
9.3
5.6
0.0
0.1
0.0
9.7
0.4
9.7
0.0
0.0
4.5
0.6
2.9
2.8
2.8
2.0
2.8
5.9
10.8
14.8
11.1
11.2
12.3
7.7
2.3
0.3
6.3
7.4
0.9
0.3
1.4
4.5
0.7
0.4
0.4
7.7
0.8
0.1
1.2
3.9
2.9
0.2
3.3
0.5
5.2
0.6
2.2
8.2
3.8
5.7
3.9
0.3
2.2
7.7
2.0
7.0
0.4
0.0
6.6
8.0
0.0
5.6
0.8
0.0
4.7
0.0
5.9
2.2
0.0
2.3
0.0
4.0
0.7
0.0
4.7
0.0
0.0
3.2
1.8
3.3
3.0
4.2
12.8
16.8
10.8
9.5
10.7
12.5
0.0
0.0
5.0
0.0
3.2
0.1
4.4
4.7
8.7
5.2
2.3
0.1
2.7
4.7
8.7
5.2
2.3
0.1
2.7
4.7
8.7
5.2
2.3
0.1
2.7
6.8
1.3
2.5
1.5
0.7
0.0
0.8
474.0
85.8
126.3
104.4
72.6
2.9
82.1
Gold Grade
g/mt
0.76
0.69
0.93
0.93
0.61
0.61
0.64
0.64
0.69
0.58
0.61
0.72
0.77
0.77
0.71
0.73
0.65
0.36
0.36
0.36
0.37
0.65
RT4
RT5
RT6
RT7
RT8
RT9
g/mt
0.78
0.58
0.73
0.58
0.58
0.79
0.51
0.53
0.58
0.50
0.55
0.51
0.64
0.49
0.61
0.00
0.31
0.31
0.31
0.31
0.31
0.54
g/mt
0.75
0.73
0.65
0.68
0.52
0.54
0.63
0.59
0.66
0.45
0.36
0.48
0.00
0.00
0.00
0.00
0.36
0.36
0.36
0.36
0.36
0.55
g/mt
0.78
0.82
1.05
0.90
0.73
0.67
0.70
0.67
0.58
0.55
0.54
0.72
0.67
0.69
0.59
0.60
0.43
0.37
0.37
0.37
0.37
0.66
g/mt
0.71
0.54
0.64
0.89
0.76
0.54
0.55
0.63
0.75
0.88
0.49
0.86
0.80
0.78
0.73
0.73
0.82
0.36
0.36
0.36
0.36
0.72
g/mt
0.78
0.58
0.77
0.88
0.72
0.75
0.85
0.65
0.97
0.63
0.45
0.53
0.00
0.00
0.00
0.00
0.45
0.45
0.45
0.45
0.45
0.73
g/mt
0.00
0.00
1.15
1.26
0.68
1.00
0.69
0.89
0.78
0.64
0.84
0.90
0.87
0.85
0.79
0.85
0.76
0.46
0.46
0.46
0.46
0.84
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 13-8: Gold production
FEBRUARY 2022
13-13
Figure 13-9: Mill feed
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 13-10: Material mined (ROM)
FEBRUARY 2022
13-14
Figure 13-11: Low grade ore stockpile balance
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Figure 13-12: Massive stibnite tonnages milled
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
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Figure 13-13: End of preproduction
Figure 13-14: End of Year 05
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Figure 13-15: End of Year 10
Figure 13-16: End of Year 15
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
13.5 Mine Equipment Fleet
The following section discusses equipment selection and fleet requirements to carry out the mine plan. The mine will be operated by an owner fleet with
the peak requirements presented in Table 13-5. The table identifies the Komatsu trucks, shovel, loader, and support equipment as well as the Epiroc drill
to give the reader an appreciation for the equipment size. It is important to note that the specific equipment selection will be done during the procurement
phase of the Project.
Table 13-5: Mine equipment fleet
Equipment
Haul Truck
Hydraulic Excavator
Wheel Loader
Production Drill
Secondary Drill
Track Dozer (Small)
Track Dozer (Large)
Road Grader
Water Truck
Utility Excavator (Small)
Utility Excavator (Large)
Small Loader (Stemming)
Lighting Plant
Explosives Truck
Fuel & Lube Truck
Mechanic Service Truck
Welding Truck
Flatbed with Crane
Lowboy
Tire Handler
Mobile Crane (Small)
Mobile Crane (Medium)
Mobile Crane (Large)
Pickup Truck
Transport Bus
Dewatering Pump
FEBRUARY 2022
Model
Komatsu 930E-5
Komatsu PC5500-11
Komatsu L1850
Epiroc PV-231
Epiroc D65
Komatsu D375A-8
Komatsu D475A-8
CAT 16M3
Komatsu HD1500-8
Komatsu PC490LC-11
Komatsu PC800LC-8
CAT430
n/a
n/a
CAT 740
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Description
Payload – 320 t
Bucket Payload – 40 yd3
Bucket Payload – 40 yd3
n/a
n/a
Net Power – 609 hp
Net Power – 890 hp
Net Power – 259 hp
Capacity – 37,000 gal
Net Power – 359 hp
Net Power – 363 hp
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Godwin HL260
Net Power – 600 hp
Units
18
2
2
5
1
3
3
4
2
2
2
1
12
2
2
3
2
2
2
1
1
1
1
20
4
4
13-18
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13.5.1 Operating Schedule
The mine will be operated with an owner fleet, 365 days per year, 24 hours per day, running 2-12-hour shifts per day. For equipment calculations, a total
of five days of lost production time has been considered for poor weather conditions.
13.5.2 Equipment Utilization Model
Figure 13-17 presents the equipment utilization model that is used to understand the key performance indictors (KPI) that govern the fleet requirements.
The definitions for each time component are presented below using haul trucks as an example.
Figure 13-17: Equipment utilization model
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■ Scheduled Time – full calendar year less unplanned shutdowns;
■ Down Time – the unit is inoperable due to either a scheduled maintenance or an unplanned breakdown;
■ Available Time – scheduled time less down time;
■ Standby Time – the unit is available mechanically but not being used (the engine will typically be shut off while the unit is on standby);
■ Utilized Time – available time less standby time. This time is also referred to as the Gross Operating Hours (GOH);
■ Operating Delays – the unit is available and not on standby but not effectively producing (the engine will be running during the operating delays);
■ Operating Time – utilized time minus operating delays. This time is also referred to as the Net Operating Hours (NOH).
The following KPIs can be calculated from the different time components using the formulas below:
■ Availability – (NOH + Op. Delays + Standby) / (NOH + Op. Delays + Standby + Down);
■ Use of Availability – (NOH + Op. Delays) / (NOH + Op. Delays + Standby);
■ Machine Utilization – (NOH + Op. Delays) / (Scheduled Time);
■ Operating Efficiency – (NOH) / (NOH + Op. Delays);
■ Effective Utilization – (NOH) / (Scheduled Time).
Table 13-6 presents the KPIs and time assumptions that were used for the fleet of trucks, shovels, loaders, and drills.
Table 13-6: Mine equipment KPIs
Description
Units
Trucks
Shovels /
Loaders
Drills
Availability
Use of Availability
Machine Utilization
Operating Efficiency
Effective Utilization
Scheduled Time
Down Time
Standby Time
Operating Delays
Utilized Time (GOH)
Operating Time (NOH)
%
%
%
%
%
h/y
h/y
h/y
h/y
h/y
h/y
85.0
86.3
73.3
85.6
62.8
8,760
1,314
1,024
922
6,422
5,500
85.0
86.3
73.3
85.6
62.8
8,760
1,314
1,024
922
6,422
5,500
80.0
96.2
77.0
91.4
70.4
8,760
1,752
264
581
6,745
6,163
FEBRUARY 2022
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Livengood Gold Project Pre-feasibility Study
13.5.3 Drilling and Blasting
Production drilling will be done with a fleet of autonomous diesel-powered down-the-hole (DTH) drills that will drill 9.8 inch (251 mm) diameter holes on
32.8 ft (10 m) high benches. Drilling productivities have been calculated per rock type based on an instantaneous drill penetration rate of 82 ft/h (25 m/h)
and the fixed time drilling components presented in Table 13-7.
Table 13-7: Fixed drilling time per hole
Description
Steel Retract
Jack Up
Tramming
Jack Down
Collar
Bit Change
Total
Unit
min
min
min
min
min
min
min
Value
0.40
0.30
2.50
0.50
3.00
0.30
7.00
The drill productivities have been applied to the number of holes drilled per year to determine the annual hours of drilling and number of units required. In
addition to the number of holes, which is based on the blast patterns presented in Table 13-8 and Table 13-9, an additional 2% will be considered for
holes that will require re-drilling.
Blasting will be carried out using Ammonium Nitrate Fuel Oil (ANFO). Although ANFO has a lower explosive density than emulsion products, which
therefore requires a tighter drill pattern to achieve the same fragmentation, a trade-off study was carried out and demonstrates that the lower cost for
ANFO in the region outweighs the additional drilling requirements. The ANFO used will have a density of 0.031 lb/in3 (0.85 g/cm3). Table 13-8 and
Table 13-9 present the blast patterns for ore and waste rock for each rock type that were developed in order to achieve the desired fragmentation.
Blasting will be done using electric detonation and drill holes will be double primed (two detonators and two boosters per hole). Emulsion was considered
for 10% of the holes to account for wet conditions.
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Table 13-8: Blast patterns (ore)
Description
Unit
RT4
RT5 / RT6
RT7
RT8 / RT9
Burden
Spacing
Subdrilling
Stemming
Powder Factor
ft
ft
ft
ft
lb/ft
19.4
19.4
3.3
11.5
0.68
20.0
20.1
3.3
11.5
0.66
21.3
21.3
3.3
11.5
0.58
19.4
19.4
3.3
11.5
0.68
Table 13-9: Blast patterns (waste)
Description
Unit
RT2 / RT4
RT5 / RT6
RT7
RT8 / RT9
Burden
Spacing
Subdrilling
Stemming
Powder Factor
ft
ft
ft
ft
lb/ft
21.7
21.7
3.3
11.5
0.50
22.3
22.3
3.3
11.5
0.48
24.6
24.6
3.3
11.5
0.42
21.7
21.7
3.3
11.5
0.50
Pre-split blasting will be done on the final pit walls using 45 mm diameter packaged emulsion with explosive densities of 0.043 lb/in3 (1.20 g/cm3). Pre-
split blasting will be double benched (65.6 ft) using 5 in (127 mm) diameter holes, with 3.3 ft (1 m) of sub-drilling. The pre-split holes will be spaced
5 ft (1.5 m) apart, resulting in a power factor of 0.24 lb/ft2 (1.16 kg/m2).
A total of five production drills and one secondary drill for pre-splitting and secondary blasting are required during most of the mine life.
Explosives products and accessories will be delivered to site by a local explosives supplier and stored in a facility that will be located to the east of the pit,
south of the low grade ore stockpile. The facility will include two, 100-t ammonium nitrate silos as well as a smaller silo for emulsion. The explosives
products will be mixed with diesel fuel at this facility to produce the explosives that will be transported to the blast patterns and loaded into the holes by
the Livengood blasting team. Approximately 15,430 t (14 million kg) of explosives will be used every year.
FEBRUARY 2022
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13.5.4 Loading
Loading will be done on 32.8 ft (10 m) benches using a mix of diesel-powered hydraulic shovels and frontend wheel loaders, both equipped with 40 yd3
(31 m3) buckets. Productivities have been calculated considering shovel bucket swing times of 35 seconds and loader cycle times of 50 seconds. A 90%
fill factor has been considered for both machines.
During peak production, the fleet will include two shovels and two wheel loaders.
13.5.5 Hauling
Hauling will be done with 320 t (291 mt) rigid frame haul trucks. Haul productivities have been calculated considering effective payloads of 317 t (288 mt),
which have been reduced from the nominal payloads to account for a carryback of 1%.
A haulage network was established in MPSO that considers the hauls for each mining cut to each potential dumping destination. Using rimpull curves
provided by the truck manufacturers, MPSO calculated the travel times for each haul. The travel times were then added to the fixed haulage cycle times
to arrive at the total cycle times. The fixed cycle times consider 55 seconds for truck spotting, 35 seconds for each shovel bucket (50 seconds for the
front-end loaders), and 90 seconds for spotting and dumping at the destination. It is assumed that the shovel/loader will be waiting for a truck with a
loaded bucket 50% of the time, resulting in a 5-second first bucket pass in those instances. A total of five buckets is required to load each truck, resulting
in an average total fixed cycle time of 305 seconds. In addition to these haulage parameters, the truck productivity calculations consider a 3% rolling
resistance, a maximum speed of 25 mph (40 km/h) and a downhill maximum speed of 15 mph (25 km/h).
A total of 12 trucks are required in preproduction, ramping up to 18 in Year 1. Truck requirements remain constant between 15 and 18 for most of the
mine life, ramping down when the operation is limited to stockpile rehandle.
The following are the average one-way haul distances for the open pit over the life of mine:
■ Ore to the crusher: 1.6 miles (2.6 km);
■ Ore to the low grade stockpile: 2.1 miles (3.4 km);
■ Overburden to the overburden stockpile: 3.4 miles (5.4 km);
■ Waste rock to the WRSF: 3.1 miles (5.0 km);
■ Waste rock to the TMF: 4.4 miles (7.1 km);
■ Stockpile rehandle: 0.9 miles (1.4 km).
FEBRUARY 2022
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13.5.6 Auxiliary Equipment
A fleet of support equipment has been included for haul road maintenance, drill pad preparation, material placement on the WRSF, and cleaning around
the loading face. Material spreading on the tailings dike has been accounted for in the TMF construction costs. The fleet of support equipment includes
dozers, graders, water trucks, and utility loaders and excavators.
A fleet of service equipment such as fuel and lube trucks, lowboys to transport the tracked equipment, personnel buses, maintenance vehicles, and pick-
up trucks is also included.
13.5.7 Mine Dispatch System
A mine dispatch system has been included to optimize the use of the loading and hauling fleets.
13.5.8 Mine Dewatering
Mine water will be collected in in-pit sumps that will be strategically located on the lower benches of the pit. Water collected in the sumps will be pumped
to surface using electrically powered pumps and will be discharged into the site drainage network for treatment and clarification prior to discharge into the
environment. A total of four pumps have been included in the equipment fleet during peak production.
13.6 Mine Workforce
The mine workforce has been estimated for each period of the mine plan, which includes management and supervisory personnel, mine technical
services, mine operations, and mine maintenance personnel.
All workers will be bussed to site from Fairbanks daily. Mine operations and mine maintenance personnel who will work on shift will be part of a 4-crew
system to provide 24 h/d coverage and staff workers will be on site 5 days per week.
The mine workforce during peak production totals 221 employees, comprising 165 in mine operations, 42 in mine maintenance, and 14 in mine technical
services. The workforce for the mine has been categorized into Mine Operations. Table 13-10 presents the workforce requirements for the open pit during
peak production.
FEBRUARY 2022
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Table 13-10: Mine workforce
Description
Number
Mine Operations
Mine Manager
Mine Operations Superintendent
Mine Operations Foreman
Mine Clerk
Mine Trainer
Shovel Operator
Loader Operator
Truck Operator
Blaster
Blast Helper
Driller
Dozer Operator
Grader Operator
Water Truck Driver
Utility Operator
Mine Maintenance
Maintenance Superintendent
Maintenance Foreman
Maintenance Planner
Mechanics
Mine Technical Services
Mine Technical Superintendent
Mining Engineer
Geologist
Surveyor
Sampler
Geotechnical Engineer
Total
1
1
8
1
4
7
7
62
2
2
6
24
16
8
16
1
12
2
27
1
4
2
2
4
1
221
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
14.
RECOVERY METHODS
14.1
Introduction
The recovery methods for the Livengood Gold Project were established on the basis of laboratory-scale testwork as described in Chapter 10, equipment
information from suppliers, and BBA’s experience on similar projects. The resulting flowsheet reflects the results of this testwork and forms the basis for
the plant design, capital costs and operating costs developed in this study. Design work and equipment descriptions in this Chapter are reported in
imperial units, with metric units shown in parentheses. Every effort has been made to clearly display the appropriate units being used throughout this
TRS, certain tables show results in metric units only.
14.2 Process Plant Production Schedule
The mine is scheduled to deliver an average tonnage of approximately 65,000 t/d (59,000 mt/d) of ore to the primary crusher and process plant on a 365-
day-per-year basis. The process plant is designed to operate with an availability of 93%. The primary crusher and main process plant will operate
24 hours per day and 7 days per week. The operating teams will work on a schedule of two 12-hour shifts. The main process plant will be stopped
periodically to perform preventive maintenance on equipment, for which there is no standby unit. The operations and maintenance teams will be
supported by an Integrated Remote Operating Control Center (IROC) to be located in Fairbanks. More information on the IROC is given in Chapter 15.
The overall gold recovery of the proposed circuit is estimated at 71.4% based on the rock types to be processed according to the LOM plan. Average
annual gold production is estimated to be 388,600 oz/year for the first 5-years and approximately 317,000 oz/year life of mine.
14.3 Conceptual Process Flow Diagram
The processing plant consists of primary crushing, ore reclaiming, pre-crushing, grinding, gravity recovery, carbon in leach (CIL) with adsorption,
desorption and reactivation (ADR) circuits, cyanide detoxification, water and tailings management, and reagent preparation circuits geared to produce
gold doré for delivery to the refinery. Figure 14-1 describes the conceptual process flow from the ore delivery to the crusher to doré production and tailings
and water management.
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Figure 14-1: Conceptual process block flow diagram
14.4 Plant Operating Design Parameters
The design criteria to determine sizing of the equipment is based on a nominal daily processing plant throughput capability of 65,000 t/d (59,000 mt/d)
with a 93% availability factor. A design factor of 1.15 was typically considered for areas where flow rates are not affected by the feed grades of the ore
processed. Table 14-1 presents an overview of the main design criteria factors employed and sizes of the most significant process equipment.
FEBRUARY 2022
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Table 14-1: General process design criteria
Criterion
General Design Data
Process Plant Operating Life
Overall Process Plant Availability
Operating Hours Per Year
Design Factor
Production Rates
Life of Mine
Annual
Daily
Process Plant Feed
Gold Grade (LOM Average)
Feed Size (ROM, F80)
Primary Crushing
Crusher Type / Size - (Gyratory (60' × 89'))
Utilization
Product Size (P80)
Hourly Throughput (nominal)
Stockpile Retention Time (Live)
Secondary Crushing (Pre-crushing)
Crusher Type / Size - Cone
Number of Secondary Crushers
Utilization
Product Size (P80)
Hourly Throughput (nominal)
Grinding and Pebble Crushing
Hourly Throughput
Number of SAG Mills
SAG Mill Size
Scalping Screen Transfer Size (T80)
SAG Circuit Product Size (P80)
SAG Mill Specific Energy (motor output)
SAG Mill (Installed Power)
Pebble Crusher Type / Size - Cone
Pebble Crusher Product Size (P80)
FEBRUARY 2022
Unit
y
%
h
Mt (Mmt)
Mt/y (Mmt/y)
t/d (mt/d)
g/mt
in (mm)
hp (kW)
%
in (mm)
t/h (mt/h)
h
hp (kW)
no.
%
in (mm)
t/h (mt/h)
t/h (mt/h)
no.
D × L, ft
in, (µm)
in (µm)
kWh/t (kWh/mt)
hp (kW)
hp (kW)
in (mm)
Value
21
93
8,147
1.15
474 (430)
23.7 (21.5)
65,000 (59,000)
0.65
31.5 (800)
1,000 (746)
65
5.4 (138)
4,167 (3,780)
12
1,250 (932)
1
90.8
1.65 (42)
1,612 (1,463)
2,912 (2,642)
1
36 x 20
0.11 (2,800)
0.06 (1,500)
4.74 (5.22)
20,115 (15,000)
(1,250) 932
0.55-0.63 (14-16)
14-3
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Criterion
Number of Ball Mills
Ball Mill Size
Ball Mill (Installed Power)
Ball Mill Specific Energy (motor output)
Ball Mill Product Size (P80)
Ball Mill Circulating Load
Gravity Circuit
Screens
Gravity Concentrator Size (Diameter)
Number of Gravity Concentrators
Intensive Leach Reactor (ILR)
Cyanide Leaching and ADR
Pre-Leach Thickener diameter
Pre-Conditioning Tank Dimension
Number of Pre-Conditioning Tanks
Pre-Conditioning Retention Time
CIL Slurry Volume – per line
CIL Tank Dimension
Number of CIL Tanks
CIL Retention Time
pH
Carbon Concentration
Carbon Tonnage per tank
Carbon Transfers per Day
Average Carbon Loading
Carbon Stripping Capacity
Cyanide Detoxification
Pre-Detox Thickener Diameter
CIL Discharge Cyanide Concentration
Detoxification Tank Dimension
Detoxification Circuit Retention Time
Sulfur Burner Capacity
Detox Circuit Discharge Target (WAD Cyanide)
Tailings Slurry Density
Unit
no.
D × L, ft
hp (kW)
kWh/t (kWh/mt)
in (µm)
%
no.
in
no.
no.
ft (m)
D x H, ft
no.
h
m3 (yd3)
D x H, ft
no.
h
-
g/L (lb/gallon)
t (mt)
no.
g/mt (lb/t)
t/day (mt/day)
ft (m)
ppm (mg/L)
D x H, ft
h
mt SO2/d
ppm
%
Value
1
26.0 × 40.5
20,115 (15,000)
4.9 (5.4)
0.01 (250)
300
8 (1 / gravity concentrator)
127
8 (2 lines x 4 units)
2
213 (65)
47 x 61
4 (2 lines x 2 tanks)
4.04
57,939 (75,784)
63 x 79
14 (2 lines × 7 tanks)
24
10.5
20 (0.17)
157 (143)
1
500 (1.02)
79 (72)
213 (65)
150
47 x 58
1.5
40
22
50
FEBRUARY 2022
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14.5 Process Plant Facilities Description
The Livengood process facilities will consist of a comminution circuit (one SAG and one ball mill) followed by a gravity concentration circuit. The tailings
from the gravity concentration circuit will be fed to a CIL circuit. Gold will be recovered by an adsorption, desorption and recovery (ADR) circuit, where the
final product will be doré. Process tailings will be thickened, treated to detoxify cyanide, and discharged to the tailings management facility (TMF). The
gravity gold will be intensively leached from the gravity concentrate. Figure 14-2 presents a schematic process flow diagram while the following
subsections describe the selected flowsheet in more detail.
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FEBRUARY 2022
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Figure 14-2: Conceptual process flowsheet
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S-K 1300 – Technical Report Summary
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14.5.1 Primary Crushing
The primary crushing system is a single stage open circuit (60 × 89) gyratory crusher (1,000 hp, 746 kW). The crusher selection is based upon a feed
(F80) size of 31.5 in (800 mm) and a product (P80) of 5.4 in (138 mm), with an expected utilization of 65% at 65,000 t/d (59,000 mt/d). The live capacity of
the feed and discharge hoppers to the gyratory crusher are designed for slightly over two truckloads, assuming a nominal payload of 320 t (291 mt). The
gyratory crusher’s instantaneous throughput is 4,167 t/h (3,780 mt/h) and the system is equipped with a sacrificial conveyor.
14.5.2 Crushed Ore Stockpile
The crushed ore storage pile is designed for a live capacity corresponding to approximately 12 hours of crushing or 34,946 t (31,703 mt). The total
capacity of the storage pile (live + dead) is 113,961 t (103,384 mt). The coarse ore stockpile is covered by a dome.
14.5.3 Secondary Crushing (Pre-Crushing)
Ore reclaim from the stockpile is fed from a reclaim tunnel. The reclaim tunnel is equipped with three apron feeders that feed a secondary cone crusher
installed in an open circuit. Two screens 12 ft × 27 ft (3.7 m × 8.2 m) receive the gyratory crusher product, which directs oversize material to a cone
crusher (1,250 hp, 932 kW) that crushes the oversize to a P80 of 1.65 in (42 mm). The screen undersize and secondary crusher product is subsequently
fed to the SAG mill. The secondary crusher is equipped with a by-pass chute to maintain high plant availability.
14.5.4 Grinding and Pebble Crushing
A SAG mill / ball mill, in a SABC configuration has been selected (Figure 13-5) for the Livengood Gold Project; this configuration provides increased
efficiency for competent to medium hard ores. In a SABC circuit, the SAG mill operates in closed circuit with a pebble crusher. The SAG mill is equipped
with pebble ports, which evacuate the hard, critical size pebbles that are then conveyed to the pebble crusher, before being returned to the SAG mill. The
ball mill operates in closed circuit with hydrocyclones. The required SAG mill power is estimated at 4.7 kWh/t (5.2 kWh/mt), while the required ball mill
power is estimated at 4.9 kWh/t (5.4 kWh/mt), for a combined total of 9.6 kWh/t (10.6 kWh/mt) at the pinion, excluding the pebble crusher and secondary
crusher power. The grinding circuit product used to design the mill power is 250 µm (P80). The total power required to grind from primary crusher to final
ball mill product is 10.2 kWh/t (11.3 kWh/mt). Note that all estimated power values cited are based on the motor output.
The grinding circuit is based on one grinding line, which is comprised of a SAG mill (D×L: 36 ft × 20 ft,) with installed power of 20,115 hp (15,000 kW) and
a ball mill (26 ft × 40.5 ft) with installed power of 20,115 hp, (15,000 kW).
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The product from the SAG mill will fall onto a classification screen. The oversize from the scalping screen will be conveyed to a single cone (pebble)
crusher (1,250 hp (932 kW)), the product of which is returned to the SAG mill. A scalping screen undersize product of 2,800 µm (P80) is discharged into
the cyclone feed pumpbox, from which the slurry is pumped to two hydrocyclone clusters. The cyclone underflow is fed to the ball mill. The product is
discharged into the gravity feed pumpbox which feeds the gravity circuit. The overflow of the gravity feed pumpbox is returned to the cyclone feed
pumpbox along with the tails of the gravity circuit. The feed to the gravity circuit (93,600 t/d (84,910 mt/d)) goes to a distributor that feeds eight gravity
screens (four per line), each of which feeds its own gravity concentrator (127 in). The gravity screen oversize and gravity concentrator tails are returned to
the cyclone feed pumpbox. The gravity concentrate, amounting to approximately 0.05 wt% mass pull, is sent to the intensive cyanidation (ILR) system.
Pebble lime will be added continuously at the ball mill to maintain ball mill discharge pH above 9.0 to promote sodium cyanide leaching downstream and
limit the amount of conditioning required prior to CIL.
14.5.5 Gravity and Intensive Leaching
The Livengood gold ore contains significant amounts of free gold, which responds well to gravity concentration. The gravity circuit consists of two parallel
lines composed of four Knelson concentrators each fed by a portion of the ball mill discharge. Based on testwork and simulations conducted by FLSmidth,
the design gold recovery of the gravity circuit is estimated to be 30% for an average feed blend.
A batch intensive cyanidation system composed of two units will be used to process the gravity concentrate. The extraction performance of gold from the
gravity concentrate by the intensive cyanidation system is designed at 98%. The pregnant solution will be pumped to a tank in the gold room, followed by
electrowinning in a dedicated cell.
14.5.6 Carbon in Leach
The hydrocyclone overflow product will be pumped to a trash screen, before discharging into the pre-leach high rate thickener with a diameter of 213 ft
(65 m). This thickener will thicken the slurry to 60 wt% in the thickener underflow stream. The thickener overflow will report to the process water tanks.
The underflow from the thickener will feed CIL lines 1 and 2 at the pre-conditioning stage.
Pre-conditioning with oxygen and lead nitrate will be conducted in four large tanks. The designed retention time is four hours when the plant operates at
65,000 t/d (59,000 mt/d). Lead nitrate will be added to the pre-conditioning tank based on the concentration of antimony in the feed. When the
concentration is sufficiently low, no lead nitrate will be added to the pre-conditioning circuit.
The CIL circuit is comprised of two lines of seven large CIL tanks each and all within their own concrete containment areas. Overflow from the pre-detox
thickener is added to the first CIL tanks of each line to adjust the slurry percent solids to 50%. The designed retention time is 24 hours when the plant
operates at 65,000 t/d (59,000 mt/d). The design carbon loading is 800 g/mt, but is to be confirmed by additional CIL testwork and simulation.
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The slurry will flow counter-currently to the carbon from tank 1 through to tank 7. Fresh carbon will be added to tank 7 and flow to tank 1, by way of the
carbon advance pumps located in each CIL tank. Slurry will exit tank 7 over the carbon safety screens, before heading to the pre-detox thickener. Loaded
carbon exiting tank 1 will report to the carbon stripping system (ADR) for recovery of the adsorbed metals.
14.5.7 Adsorption, Desorption and Recovery (ADR)
Loaded carbon from the CIL tanks reports to the loaded carbon stripping circuit, where gold will be stripped, and the carbon reactivated for recycle to the
CIL circuit. Based on the information available, it is assumed that one strip per day will be sufficient to recover the gold loaded onto the carbon.
The ADR circuit includes an acid wash stage (two vessels) and High Pressure “modified” Zadra process for gold stripping from the loaded carbon. The
Zadra stripping circuit (four vessels) is considered “modified”, as the electrowinning is done in-line, with no pregnant tank between stripping and
electrowinning. The barren solution is collected in two 20,236 gal (76.6 m3) barren tanks. The stripping cycle will be two stages, in which copper is
stripped first, followed by gold. The stripped copper is converted to copper sulfate for use in the cyanide detoxification circuit downstream.
The stripped carbon will flow to the carbon regeneration kilns (2) possessing the same carbon capacities and conservatively include provision for 100%
regeneration of the carbon. The regenerated carbon will be combined with fresh carbon, making up for carbon losses that occur through the process. This
regenerated/fresh carbon mixture will maintain an adequate supply to the CIL circuits.
The flow of pregnant solution from the Zadra circuit and the gravity ILR is split to feed a total of seven electrowinning cells. The refining equipment is
designed to handle both the gold from the stripping circuit and from the gravity recovery system. The electrowinning sludge is filtered, dried, and mixed
with fluxes, before being smelted in an induction furnace.
14.5.8 Pre-Detox Thickening and Cyanide Detoxification
Thickener overflow reports to the process water tank and will be used for water needs upstream and to dilute the slurry prior to cyanide detoxification. The
underflow of the pre-detox thickener (213 ft (65 m) diameter) is diluted to 50% from 60%.
The selected cyanide detoxification process is the Inco SO2/air process. A sulfur burner will be used to produce SO2. Cyanide detoxification was designed
with 1.5 hours of retention time in two tanks. The tailings slurry will be pumped at 50 wt% solids coming out of the cyanide detoxification unit.
Water recovered by the reclaim barge pumps from the settled tailings will be returned upstream to meet process water requirements.
All cyanide process tanks are provided with appropriately sized secondary containments and all process solution pipelines are contained within the mill
complex (mill building, CIL/leach tank farm, and detoxification plant) and are provided with secondary containment in association with the major tanks that
they serve.
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14.6 Consumables
The main consumables for the processing plant are represented by the grinding media and liners for the SAG and ball mills, as well as the reagents used
in the leaching, gold recovery and cyanide detoxification circuits.
All process reagents are contained in a separate area within the process plant building to prevent any contamination of any surrounding areas in case of a
spill. Safety showers are provided in the different reagent mixing and utilization areas for safety, in case of contact with the reagents. HCN monitors will be
installed in appropriate locations to ensure the safety of the employees. Grinding media will be in pits located indoors, close to usage points.
The primary reagents used in the process include sodium cyanide (NaCN), lime (CaO), oxygen (O2), elemental sulfur (S), sodium hydroxide (NaOH),
hydrochloric acid (HCl), carbon, copper sulphate (CuSO4), lead nitrate (Pb(NO3)2) and flocculant. Consumption rates are mostly based on results from
bench-scale testwork, with reductions as deemed applicable to recycle streams and implementation of control strategies at industrial scale.
Table 14-2 and Table 14-3 list all reagents, media, areas of usage and their purpose.
Table 14-2: Reagents and area of use
Reagent
Area
Use
Consumption
(mt/y)
Lead nitrate (PbNO3)
Pre-treatment ahead of carbon in leach and
intensive leach
Surface passivation
Sodium cyanide (NaCN)
Carbon in leach and carbon elution
Dissolution of gold and elution
Oxygen (O2)
Carbon (C)
Quicklime (CaO)
Carbon in leach
Carbon in leach
Ball mills
Carbon in leach
Cyanide detoxification
Sodium hydroxide (NaOH)
Acid wash and Carbon elution
Hydrochloric acid (HCl)
Elemental sulfur (S)
SMBS (Na2S2O5)
Copper sulphate (CuSO4)
Flocculant
Carbon elution
Cyanide detoxification
Cyanide detoxification
Cyanide detoxification
Pre-leach thickener
Pre-detox thickener
Dissolution of gold
Gold adsorption
pH control
Neutralization of acid
and elution
Acid wash
Cyanide detoxification
Cyanide detoxification (backup)
Catalyst cyanide detoxification reaction
Flocculate solids to assist in solid/liquid
separation
1,028
7,357
54,913
526
30,410
1,250
696
5,127
399
965
1,287
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Table 14-3: Grinding media and area of use
Media
5-in forged steel ball
3-in forged steel ball
Area
SAG mill
Ball Mill
Consumption (mt/y)
3,472
7,304
Carbon is consumed regularly through abrasion in the CIL tanks and in transfer pumps, and by thermal disintegration from regeneration, etc. Carbon will
be delivered by truck in 1,100 lb (500 kg) bulk super sacks. Before it can be used in the process, fresh carbon must be wetted and abraded in an attrition
tank.
Caustic soda (50%) and hydrochloric acid (31.5%) will be used in the carbon stripping process. Caustic soda will be supplied by bulk tanker and the acid
will be delivered in rubber-lined ISO containers. The individual feed lines will be equipped with flow meters and control valves to ensure that the
appropriate dosages are achieved.
Sodium cyanide (NaCN), used in the cyanide leaching (CIL and ILR) and carbon stripping processes, will be delivered in briquette form in ISO tanks. The
briquettes will be dissolved in water and the solution will be stored in a tank, from which it will be distributed by pumps to the appropriate process areas.
Oxygen is fundamental for gold leaching. Based on the previous trade-off studies by BBA, the implementation of a vacuum pressure swing adsorption
(VPSA) oxygen production plant was selected to meet the oxygen requirements of the Project. Oxygen will then be bottom-sparged to the pre-treatment
tank and CIL tanks. A liquid oxygen back-up system will be available when the VPSA plant is not in operation.
Flocculant will be required for the pre-leach and pre-detox thickeners. It will be delivered in solid form and dissolved in batches in a mixing tank using
process water. The batch will then be pumped to a storage tank, from where the reagent will be continuously metered into the thickener feed slurry.
Copper sulphate (CuSO4) will be delivered in solid form in 2,756 lb (1,250 kg) super sacks and dissolved in batches in a mixing tank using fresh water.
The batch will then be pumped to a storage tank, from which the reagent will be continuously pumped to the cyanide detoxification tank.
Quicklime (CaO) is used in the cyanide detoxification and cyanide leaching processes (pre-aeration and CIL tanks). It will be delivered by truck in bulk
containers and transferred pneumatically to a lime storage silo. A screw conveyor will transfer the quicklime from the silo to the lime slaker, where it will be
wetted with water. The slaked lime will pass through grit separators and into the quicklime mixing tank, to which more water will be added to create slurry
of the appropriate density. Grit will be removed from the separator and disposed of using a screw conveyor. The hydrated lime slurry will be pumped
continuously from the mixing tank to the appropriate process areas.
Lead nitrate (PbNO3), used in cyanide leaching, will be delivered in 2,200 lb (1,000 kg) bulk super sacks. Lead nitrate is dissolved in batches in a mixing
tank. The solution will then be pumped to a holding tank, from which the reagent will be continuously pumped to the pre-conditioning tanks.
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The Inco SO2/air process will be used for cyanide detoxification. The sulfur dioxide (SO2) will be generated using a sulfur burner that will burn elemental
sulfur delivered to site in 2,200 lb (1,000 kg) bulk super sacks, which will be transferred to a storage silo. The SO2 will be produced on demand and will be
delivered to the cyanide detoxification tanks.
Sodium Metabisulfite (Na2S2O5) will be the back-up source of SO2 when the sulfur burner plant is under maintenance. Sodium metabisulfite will be
received in 2,200 lb (1,000 kg) super sacks. Each sack will be emptied into the sodium metabisulfite mix tank and mixed with fresh water to 20 wt% and
then transferred to the sodium metabisulfite solution holding tank. Sodium metabisulfite solution will be pumped by the sodium metabisulfite distribution
pump to the cyanide detox reactor tanks.
Copper sulphate (CuSO4) and quicklime (CaO) will be added to control the chemical reaction at the cyanide detoxification reactors. The detoxified slurry
will then be pumped to the TMF.
Refining flux will be delivered to site in bags or buckets. Pre-mixed fluxes are mixed with the dried electrowinning sludge to adjust the chemistry of the
material for refining. The proper flux mix and quantity, based on the electrowinning sludge chemistry, will be established by the smelting flux supplier
during the first months of operation.
14.7 Ancillary Facilities
The process plant building will house various maintenance facilities including shops for mechanical, electrical and instrumentation repairs. Equipment
requiring specialized maintenance or major rebuilds will either be dispatched to shops in the Fairbanks area or back to their suppliers.
Other facilities within the process plant building include a centralized control room located near the grinding area, metallurgical and sample preparation
laboratory, change-rooms (dry), lunchroom, as well as offices, conference and training rooms.
14.8 Process Plant Controls
A plant control system with open architecture and a unique platform will be used. The main communication backbone will be provided by redundant
Ethernet fiber optic cables. Where equipment is supplied as a packaged unit, the vendor packages will have standardized controllers that will
communicate with and be controlled by the plant network.
The control system will include operator workstations with historian software to enable reporting of plant data, calculations, statistical analysis of process
data, and to allow for metallurgical optimization of the plant operations.
An information system and an information management system will allow certain staff to monitor the process and the variables from their PCs, connected
to the management information platform.
Monitors will be installed for a closed-circuit television (CCTV) system, a calling and searching system, fire protection systems, centralized panels, and
other dedicated systems that require monitoring or controlling by the operator.
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14.9 Process Water
Process water is distributed throughout the processing facility to dilute streams to the necessary solids pulp density that is required in each unit operation.
The majority of the process water is reclaimed from the CIL thickener overflow stream and from the tailings pond via the reclaim pumps. The fresh water
required for the process is taken from the wells located on the north side of Livengood Valley. Based on the mass and water balance, fresh make-up
requirements will be approximately 233 gpm (53 m3/h)
14.10 Energy Requirements
The total operating power demand for the process plant will be approximately 53 MW. The crushing and grinding circuit represent approximately 57% of
the total operating power used by the plant. The processing power demand is shown in Table 14-4.
Table 14-4: Process plant power demand by area
Area
Power Demand (MW)
Primary Crushing
Stockpile
SAG Mill
Secondary Crushing and Pebble Crushing
Ball Mill
Gravity and ILR
Leaching
ADR and Gold Room
Detox and Plant Tailings
Reagents
Plant Services
Total Power Demand
1.8
2.0
18.4
0.6
15.8
2.2
5.3
0.7
3.1
2.4
1.3
53.5
Liquefied natural gas will be used for heating within the process plant building.
14.11 Process Plant Arrangement
The proposed Livengood process plant and ancillary facilities will be located approximately midway between the open pit mine to the south-east and the
TMF to the north. The process plant comprises four main buildings: the primary crushing building, the covered stockpile area, the secondary/pebble
crushing building and the main process plant building. Secondary process facilities such as the thickeners, reagent silos, oxygen plant and sulfur burner
are in proximity to the main process building. A general arrangement of the process plant area is presented in Figure 14-3.
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Figure 14-3: Process plant general arrangement
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14.12 Process Plant Personnel
A total of 140 employees are required in the process plant, including 26 salaried staff and 114 hourly workers divided into management and technical
services, operations and maintenance departments.
Table 14-5 and Table 14-6 present the salaried and the hourly manpower requirements, respectively, for the processing plant.
Table 14-5: Process plant salaried manpower
Position
Mill manager
Mill secretary / clerk
Mill operations supervisor
Safety trainer & coordinator
Chief metallurgist
Metallurgist
Chief assayer
DCS engineer
Process data analyst
Mill maintenance superintendent
Electrical superintendent
E&I supervisor
Electrical engineer
Electrical maintenance planner
Mechanical engineer
Mill maintenance supervisor
Mill maintenance planner
Crusher supervisor
Tailings supervisor
Number of Employees
1
1
4
1
1
2
1
1
1
1
1
2
1
1
1
2
2
1
1
Total – Salaried
26
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Table 14-6: Process plant hourly manpower
Position
Mill Operations
Primary crushing operator
Crusher / conveyor helper
Mill control room operator
Grinding operator
Grinding helper
Gravity operator
Gravity helper
Leach / CIL operator
Stripping operator
Refiner
Detox operator
Tailing operator
Reagents operator
Metallurgical technician
Assayer
Sampler
Mill Maintenance
Millwright
Mechanic / welder
Elect. / Inst.
Electrician
Instrument technician
Number of Employees
4
4
4
4
4
4
4
8
4
4
4
4
4
2
4
4
66
20
16
4
4
4
48
114
Sub-total
Sub-total
Total – Hourly
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15.
PROJECT INFRASTRUCTURE
15.1
Introduction
The Livengood Gold Project area is located approximately 70 mi (113 km) by road (47 mi (75 km) by air) northwest of Fairbanks and is accessed by state
Highway 2 (Elliott Highway), which provides paved, year-round access from Fairbanks. The property is adjacent to the Trans-Alaska Pipeline System
(TAPS) corridor, which transports crude oil from the North Slope south and contains a fiber optic communications cable. A second fiber optic cable runs
parallel to the Elliott Highway. Locally, a number of unpaved roads lead from the Elliott Highway into and across the deposit. A 3,000 ft (914 m) runway is
located 3.7 mi (6 km) to the southwest of the Project and is suitable for light aircraft (see Figure 15-1).
Figure 15-1: Livengood property – conceptual infrastructure arrangement drawing
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15.2 General Site Arrangement
To the extent practicable, the infrastructure facilities for the Project have been designed to avoid or minimize impacts to wetlands by avoiding direct use of
the Tolovana River watershed and by establishing a footprint as compact as possible within the historically mined Livengood Creek basin. The Project site
has been configured for optimum construction access and operational efficiency as well as to take advantage of the existing roads and infrastructure.
The Project envisions construction of the following key infrastructure items:
■ Temporary construction camp;
■ Light vehicle access and mine haulage roads;
■ O’Connor Creek substation and 50 miles of new 230 kV transmission line;
■ Process plant and ancillary buildings;
■ Administration and mine dry building
■ Maintenance garage, truck wash, warehousing and explosive storage facilities;
■ Bulk fuel storage and refueling station;
■ Water and sewage treatment;
■ Site wide electrical distribution and emergency power generators;
■ Fresh water pumping and distribution system;
■ Waste rock, overburden, ore and growth media stockpiles;
■ Communications and information technology networks;
■ Mine tailings and water management facilities;
■ Fairbanks Integrated Remote Operations Center (IROC);
■ Fairbanks employee parking area.
15.3 Power Demand
The total power demand of the Project is estimated to be approximately 57.8 MW, including network losses of 3%. An electrical load list was created
based on a detailed mechanical equipment list that included the major power draw contributors. Minor power consumers and power for auxiliary systems
were benchmarked based on BBA’s past project experience. Based on this load list, the power demand was calculated taking into account the nominal
operating loads (load factor), efficiency factors and a diversity factor. Table 15-1 shows the estimated power demand breakdown by area. The power
demand presented represents the LOM average. The yearly nominal power demand will vary based on the rock type blend as the specific grinding energy
varies per rock type. The projected annual electrical energy use is estimated to be approximately 450.9 GWh including the network losses of 3%.
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Table 15-1: Estimated total project power demand
Area
Power Demand
(MW)
Open Pit Mine and Mine Garage
Process Plant
Administration Building and General Infrastructure
Tailings and Water Management
Network Losses
Site total
0.3
53.5
0.3
2.0
1.7
57.8
% Site
1
93
1
3
3
100
15.4 Power Supply
Golden Valley Electric Association (GVEA), a member-owned cooperative, provides the only regulated electrical service to customers connected to the
rail belt power grid north of the Alaska Range. Historic peak winter demand on the GVEA system is approximately 210 MW. GVEA is connected to South
Central Alaska via a single 138 kV transmission line that has a capacity to import approximately 75 MW into the GVEA service area.
In 2012/2013, to support the 2013 FS, Electric Power Systems, Inc. (EPS) conducted a power supply study and determined that the GVEA system, with
modifications, is capable of providing the Project with up to 100 MW of power, if required. To supply the 58 MW required for the PFS configuration, the
additions and modifications to the electrical system that will be required include:
■ A new substation at O’Connor Creek;
■ GVEA transmission system upgrades;
■ 50 mi (80 km) 230 kV transmission line up to the Livengood Project substation.
15.4.1 O’Connor Creek Substation
A new 138/230 kV substation at O’Connor Creek (OCS) will be required to connect the Livengood transmission line to the GVEA system. The OCS will
contain two 100/150 MVAR transformers, each of which will be capable of transmitting the Livengood load. GVEA has obtained a lease from the
Fairbanks North Star Borough for the land parcel required for the substation. The substation will be a 3-ring bus configuration and will step up the voltage
from 138 kV to 230 kV for transmission to Livengood. The network stability study performed by Dryden & LaRue in 2013 determined that a 10 Mvar Static
Var Compensator (SVC) will be required at the O’Connor Creek substation.
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15.4.2 GVEA Transmission System Upgrades
GVEA currently provides 138 kV service to the Fort Knox mine through the Fort Knox transmission line that connects to the grid at the Gold Hill
substation. The OCS will be built adjacent to and connect to the Fort Knox transmission line. Since a large part of the GVEA generation will be coming
from their facilities near North Pole, Alaska, located approximately 15 mi (24 km) southeast of Fairbanks, upgrades to the GVEA transmission system will
be required. Upgrades to the GVEA transmission system include double circuiting approximately 15 mi (24 km) of existing line and replacing 18 mi
(29 km) of various sections of 69 kV and 138 kV lines with new 138 kV transmission line.
15.4.3 230 kV Transmission Line
Dryden & LaRue completed the design for the 50 mi (80 km) 230 kV transmission line. The route generally consists of flat to gently rolling terrain. It
follows the Trans-Alaska Pipeline (TAPS) for the first 42.5 mi (68.4 km) from O’Conner Creek substation, crossing it three times. The route then traverses
north and east away from the TAPS corridor for 7.25 mi (11.7 km) to the Livengood mine site substation.
The preliminary design is based on constructing the 230 kV transmission line with wood H-frame structures with guyed angle and dead-end structures.
Wood poles will be directly embedded with native backfill where favorable soils exist. Where ice-rich permafrost or swampy conditions exist, driven pile
foundations will be used to support the wood poles. The transmission line would be permitted in conjunction with the Project, would be constructed by
THM, and operated by GVEA. EPS determined that a 25 MVAR SVC is required at the Livengood mine site substation to modulate the transient effects of
the Project to GVEA specifications.
In the current study, the 25 Mvar SVC has been replaced by two Synchronous Condensers, which will provide the same benefit and will also contribute to
the short-circuit capacity at the Livengood interconnection.
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15.5 Site Electrical Distribution
The main substation at the plant site will consist of one 230 kV incoming circuit breaker and two 230 – 13.8 kV, 450/65/80 MVA, outdoor transformers,
each with a 230 kV disconnect switch and a 230 kV circuit breaker on the primary side. The substation will distribute power to the plant at 13.8 kV, 60 Hz
from a main switchgear installed in a pre-fabricated building located in the main substation. The main loads, each at 13.8 kV, are dedicated to the SAG
and ball mills. This equipment will be driven by low-speed synchronous motors that will be run by a variable frequency drives complete with their own
dedicated transformers. Two remote substations will be required. One 13.8-4.16 kV, 3 MVA substation at the tailing pond will feed the fresh water pumping
station and one 13.8-4.16 kV, 1.5 MVA substation near the mining pit will feed the mine dewatering pumps. The electrical distribution to the site
infrastructure (security gate, mine garage/administration complex and other facilities) will consist of a dedicated 13.8 kV overhead line distribution
network. Approximately 3.7 mi (6 km) of aerial lines will supply all the infrastructure loads around the site.
15.5.1 Emergency Power
Two 2,000 kW diesel engine driven generators will serve as the emergency electrical power source for the whole plant. The generator sets will provide
backup power to the plant for selected process loads that need emergency power to allow an orderly shutdown of the process in case of a main power
failure or to simply maintain them in operation if they are critical. They will also provide backup power to the plant control system, critical remote 480 V
loads and the security system. One of these generators will provide power at 4.16 kV while the other will provide power at 480 V.
Other smaller generators (480 V) may be considered for remote consumers when using the main generators is not practical.
Generators purchased for the construction camp will be used as backup generators for the infrastructure area once the operations phase commences. No
emergency power capacity is planned for the open pit mine area.
15.6 Site Access
The main road and security gate to access the site will be located near the existing Alaska Department of Transportation facilities. Site access will be
controlled with a guard/security house located at the entrance to the site on the main access road. The guard house will be a modular, pre-fabricated
wood-frame building, with separate entrance and exit doors, potable water cooler (bottled), and a small toilet and sink connected to a pumpable holding
tank. Visitor car, and bus and truck parking bays will be provided after passing the guard house. The security gate will be manned full time and is
equipped with a weigh scale to monitor delivery of all bulk items required by the operation.
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15.7 Site Roads
The Project site is very well situated and will make use of existing roads when possible. Project site roads will consist of both light vehicle access roads
and mine truck haul roads. These roads will be constructed during the initial construction of the Project with adjustments to the alignments and profiles
during the operational years as facilities change in size and shape. The on-site roads will be constructed of crushed waste rock available from site and
other available materials. A dedicated mobile aggregate crushing plant will be utilized for the entire life of Project, including the period post ex-pit
operation, when stockpiles are being reclaimed, to provide aggregate for continually resurfacing haul roads.
15.7.1 Light Vehicle Roads
Site roads are light vehicle access roads located throughout the Project site. Approximately 5 mi (8 km) of new site roads are planned to be constructed.
These roads are designed to provide access to the administration complex, mine equipment assembly and truck shop/wash area, substation, diesel and
LNG storage area, fresh water wells, process plant facilities, and the explosives storage facilities. These site roads have been designed with a two-way
travel width of 26 ft (8 m) and 3 ft (1 m) high safety berms along each road shoulder. If necessary, transit of these roads by large vehicles will be by
controlled one-way traffic.
15.7.2 Mine Haul Roads
Mine haul roads will be built to connect the open pit to the primary crusher, emergency ore stockpile pad, mine truck shop/wash area, mine equipment
assembly area, refueling station, tailings management facility, overburden stockpile, waste rock storage facility, and low grade ore stockpile. The haul
roads have been designed for a two-way travel width of 105 ft (32 m) and 6.5 ft (2.0 m) high safety berms along each road shoulder, which is suitable for
the 320 t (291 mt) class trucks planned for Project use. Over the life of the mine, approximately 13.7 mi (22 km) of haul roads (ex-pit) will be built, of which
1.25 mi (2.3 km) will be built over the planned waste rock stockpile.
15.8 Explosives Storage Facilities
The explosives storage facilities have been located roughly 0.4 mi (700 m) to the east of the open pit and directly south of the low grade ore stockpile.
Minimum distance requirements to mining activity and infrastructure have been respected. The explosives storage facilities include silos to store Emulsion
and ANFO, as well as magazines to store the explosives accessories.
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15.9 Process Plant
The process plant area consists of the primary crushing facility, covered stockpile, secondary/pebble crushing and main process plant building. The main
process plant enclosed structure is approximately 165 ft (50 m) wide by 656 ft (200 m) long, and will house the grinding area (SAG and ball mills), carbon
stripping, electrowinning, refining and reagent preparation areas as well as tailings pumps, mechanical services, maintenance areas, offices and the
metallurgical laboratory. The pre-leach thickeners, CIL leach tanks, pre-detox, detox cyanide destruction tanks, and lime and sulfur burner facility are to
be located outside, around the process building. The process building will be heated with liquefied natural gas (LNG).
15.10 Administration and Mine Services Facility
The administration offices and mine dry will be in a building with approximate dimensions of 295 ft (90 m) long by 197 ft (60 m) wide and will be located on
the same pad as the substation north of the process plant. However, the mine fleet shop will be located on the same pad as the mine equipment
assembly area.
The mine fleet shop will be designed as a permanent building with an expandable maintenance bay structure that will accommodate the addition of mining
vehicles over time. A symmetrical design allows for repair bays to be added in pairs. The fleet bay dimensions, bay door sizing and overhead crane lifting
capacities (70 t / 63 mt) are all based on a fleet of 320 t (291 mt) class mining trucks. All vehicle bays will have the same dimensions to allow for
operations flexibility. As with the process facilities, this building will be heated with LNG.
15.10.1 Lube Storage and Distribution
The mine fleet shop will be equipped with an enclosed lube storage and distribution system for mine fleet maintenance. The storage area will consist of
multiple vertical steel tanks sized according to their consumption rate and located within a containment dike. The storage area will be placed alongside
the mine garage facility, and the large used oil and coolant tanks will be located outdoors for ease of access and servicing. A long-range overhead
dispensing and evacuation system for transfer of oil, grease, transmission fluids, cooling fluids, windshield washer, service water and compressed air is
planned for the mine fleet shop.
15.10.2 Warehouse and Storage
The warehouse storage facility is located adjacent to the mine fleet shop, with direct access between the sections, to facilitate heavy component transfer
and increased productivity. Warehouse storage requirements will be defined according to the type of storage required. The assumption is made that only
one set of major components will be housed at the site and sufficient “rolling” storage will be provided. Moreover, an exterior cold storage area has been
allocated adjacent to the building.
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15.10.3 Mechanical Workshop
The mechanical workshop will also serve as a light vehicle maintenance bay, and be equipped with a 10 t (9 mt) overhead crane and small bay doors. An
allowance for equipment has been included in the capital cost estimate.
15.10.4 Administration Offices
The mine offices will include sufficient closed offices and workstations to accommodate the mining operations, mine maintenance, and environmental and
technical services. Additional offices are foreseen in the warehouse as well as in the concentrator building for process personnel, maintenance group and
administration groups.
15.10.5 Employee Dry
The mine dry facilities will consist of locker rooms and shower facilities for both men and women. Each mine employee will be assigned two distinct
lockers. The shower facilities will be sufficient to handle the shift crossover.
15.11 Other Structures
The following additional surface infrastructure facilities are located at various locations on site and are described below. The mine services facilities will be
positioned on the pad to ensure free and safe movement of the heavy vehicles and will include a “ready line” parking area for the mine haul trucks. These
additional facilities include the following:
■ Truck Wash Facility:
- The truck wash facility will accommodate the mine trucks and auxiliary vehicles. This facility will have a specialized truck wash system, which will
include a mud settling basin, oil separator, and water filtration and recirculation system to reduce overall water consumption. The truck wash
facility will be located adjacent to the truck shop in the open pit mine area.
■ Diesel Fuel Storage:
- Diesel storage will consist of ten 13,000 gal (50,000 L) tanks located along the eastern edge of the process plant pad, providing up to an average
of seven-day storage capacity, based on 24 hrs/d operation for the LOM. The tanks are double-walled and self-contained with leak detectors.
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■ Fuel Island:
- The fuel dispensing system for mine fleet vehicles will be located near the fuel storage area and will consist of an open-ended pre-engineered
building with high speed dispensers and hose reels. A concrete pad will be installed under the enclosure and will be equipped with a spill
catchment. The fuel dispensing area will also serve as a top-off area for engine coolant, oil, grease and windshield washer fluid. For safety and
practical reasons, a separate fuel dispensing station for light vehicles will be located nearby. Gasoline usage is minor and will be satisfied by
purchase from local retail suppliers. The mine’s light vehicle fleet is expected to consist primarily of diesel pickup trucks.
■ Sewage Treatment Plant:
- A skid mounted sewage treatment plant will treat sewage from the administration building and process plant. Sludge from the sewage treatment
plant will be collected by a vacuum truck and may be transported off site for disposal. The sewage treatment plant will be located adjacent to the
administration building.
■ Potable Water Treatment Plant:
- A skid mounted potable water treatment plant is planned to supply water to the administration building, mine services facility and process plant.
The treatment process consists of filtration, chlorination and UV sterilization units to produce potable quality water. The potable water treatment
plant will be located adjacent to the administration building.
■ Emergency services building:
- The emergency services building will be connected to the administration building and is a modular and pre-fabricated wood-frame building. It
contains two offices, an examination room, a treatment room, and a waiting room. Within the same complex, a covered garage houses the
ambulance and fire truck.
15.12 Communications / Information Technology (IT)
The internet and phones services will be provided for the Project by a regional internet service provider, utilizing one of the existing networks currently
installed near the TAPS corridor. A redundant fiber optic network will interconnect critical site areas including the gate house, administration and mine
services facility and the process plant. Telecommunication services for non-critical remote locations will be provided by a wireless network. A hand-held
radio system will be used for voice communication between personnel in the field. The site-wide fiber optic network will be utilized by the following
systems:
■ Process plant control system (process control network and electrical systems);
■ Corporate IT (phone and data);
■ Operations, maintenance and warehouse management systems;
■ Fire detection;
■ Video surveillance and access control systems.
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The mining operation plans to use mobile mine radios with base stations to communicate between equipment operators and the mine staff. Some
equipment will also be equipped with GPS technology to provide accurate location information through Wi-Fi communication.
15.13 Fire Protection
An underground fire water distribution network of 14-in pipe, feeding sprinkler systems, with 6-in hydrants will be installed around the process plant and
the administration and mine services facility. The network will be supplied by a combined fresh/fire water tank and a dedicated fire water pump with
sufficient water to meet demand for two hours.
Each facility will also be protected by manual fire alarm systems and will have portable fire extinguishers located at strategic points throughout.
15.14 Fresh Water
Fresh water for potable and process plant use will be sourced from an aquifer system located on the north side of the Livengood valley. Pumping tests
and hydrological studies conducted in 2015 (Cope, L., SRK 2016) of the Amy Carbonate unit indicate that the aquifer could support five to ten water
supply wells each, producing 500 to 1,000 gpm (1,900 to 3,800 L/m). It has been assumed that eight wells will be able to support the process plant start-
up and operations requirements. Water from the wells and the fresh water reservoir will be pumped via a heat traced pipeline to the process plant pad for
further distribution to other areas as required.
15.15 Construction Camp
A temporary 800 person construction camp will be mobilized for the construction phase of the Project. The camp would have single occupancy rooms in a
common bathroom arrangement. The construction camp is planned to include a kitchen, dining complex, offices, recreation room, and laundry and gym
facilities. Once construction activities are completed, the construction camp will be removed and sold.
15.16 Personnel Transportation
As a permanent camp is not planned for the operations phase of the Project, all personnel will be transported between Fairbanks and the mine site by
charter buses. Multiple buses will be required to operate on different schedules to accommodate varying work schedules. All costs related to personnel
transportation are covered by the General & Administration operating cost estimate.
15.17 Fairbanks Infrastructure
A prefabricated guard house, bus waiting building, small receiving area and parking lot for 300 vehicles are planned to be located in the city of Fairbanks.
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15.17.1 Integrated Remote Operation Centre (IROC)
An IROC is planned to be established in the city of Fairbanks on a leased basis in an existing commercial building. The integration of operations is an
essential addition in the implementation of new projects and offers an approach for reconciling people (culture), process and technology in the
development of an efficient operating model in production mode. Outlined below are some of the programs that are planned to be established as part of
the overall integrated operations strategy for the Livengood Gold Project:
■ Operational Excellence (OE) and Lean Mining® Program;
■ Asset Management Program;
■ Reliability-Centred Maintenance (RCM) Program;
■ Supply Chain Management;
■ Human Factors Engineering;
■ High-Performance Teams;
■ Sustainability Program;
■ Leveraging Technology.
15.18 Waste Rock Storage Facility (WRSF) and Stockpiles
Material mined from the open pit that is not directly hauled to the primary crusher will be placed in several storage facilities across the Livengood site.
These facilities, discussed in more details below, include growth media stockpiles, overburden stockpile, WRSF, low grade ore stockpile, and an
emergency ore stockpile.
15.18.1 Growth Media Stockpiles
Growth media (topsoil) material will be stripped and placed separately in growth media stockpiles to be used for closure and reclamation activities.
Several growth media stockpiles will be strategically located around the site. Depending on the mining sequence and closure activities, topsoil may be
hauled directly to certain areas if they are available for reclamation, thus reducing costs by limiting re-handling activities.
15.18.2 Overburden Stockpile
Overburden will be stripped and hauled to the overburden stockpile located in the Gertrude Creek Valley to the east of the plant site. The overburden
stockpile will be built on the side of the hill, has a footprint area of 67 ha and a capacity of 15.7 Myd3 (12 Mm3). The bottom of the overburden stockpile is
at the 1,378 ft (420 m) elevation and the top is at the 1,772 ft (540 m) elevation for a total height of 395 feet (120 m). The overburden stockpile has been
designed with 150 ft (45 m) wide catch benches every 100 ft (30 m) in elevation and has an overall slope of 18.4 degrees.
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15.18.3 Waste Rock Storage Facility (WRSF)
Waste rock not used for construction will be hauled to the WRSF located in the Gertrude Creek Valley to the east of the plant site, below the overburden
stockpile. The PFS considers the same design parameters for the WRSF that were prepared by AMEC for the 2013 FS and presented in the report titled
“Geotechnical Design Report August 6, 2013.pdf” (AMEC, 2013).
Since the WRSF will be built along the side of a hill, a buttress called the “Gertrude Creek Embankment” will be built at the base of the WRSF to provide
additional stability. The buttress will separate the TMF and the WRSF. Stacking of the waste rock will begin at the base of the pile, against the Gertrude
Creek Embankment, and advance up the slope in a “bottom-up” sequence. Access to each lift will be from the haul road that will be built to the east of the
plant site to access the TMF. The WRSF has been designed with an overall slope of 18.4 degree (3H:1V).
The WRSF was designed with a footprint area of 215 ha and a capacity of 163 Myd3 (125 Mm3). The bottom of the WRSF is at the 1,083 ft (330 m)
elevation and the top is at the 1,378 ft (420 m) elevation for a total height of 295 ft (90 m). The PFS requires 105 Myd3 (80 Mm3) of storage capacity in the
WRSF and will be built to the 1,280 ft (390 m) elevation.
15.18.4 Low Grade Ore Stockpile
To maximize the NPV of the Project, lower grade ore will be placed in a stockpile so that higher grade ore can be accessed and sent to the process plant
earlier in the mine life. The lower grade ore is then reclaimed at the end of the life of the mine. The low grade ore stockpile is located to the east of the
open pit on the ridge above Gertrude Creek. Material placed in the stockpile will be classified into low grade (< 0.5 g/mt), medium grade (> 0.5 g/mt and
< 0.7 g/mt) and high grade (> 0.7 g/mt), with each category being placed in a different part of the pile.
The peak low grade ore stockpile balance from the mine plan is 87.7 Mt (79.6 Mt), resulting in a capacity requirement of 45 Myd3 (34 Mm3). The low
grade stockpile will also be built on the side of the hill and has a footprint area of 100 ha. The bottom of the low grade stockpile is at the 984 ft (300 m)
elevation and the top is at the 1,870 ft (570 m) elevation for a total height of 886 ft (270 m) at its highest point.
The low grade stockpile has been designed with an overall slope of 18.4 degrees. Runoff from the low grade ore stockpile will be collected and
discharged into the TMF.
15.18.5 Emergency Ore Stockpile
To ensure the primary crusher can be fed when the mine will be shut down during extreme weather events, an emergency ore stockpile has been located
on the run of mine (ROM) pad. The emergency ore stockpile has a 65,000 t (58,967 mt) capacity to provide 24 hours of crusher feed. The emergency ore
stockpile has a height of 16 ft (5 m) and a surface area of 65,000 ft2 (6,040 m2). Ore from this stockpile will be rehandled with wheel loaders that will either
dump directly into the hopper of the primary crusher or load haul trucks that will haul and dump into the hopper.
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15.19 TMF and Water Management
15.19.1 Tailings Management Facility
The TMF has been designed as a fully lined facility to provide safe and secure storage of approximately 486 Mt (441 Mmt) of mill tailings along with a
supernatant pond for ore processing solutions. The TMF has expansion potential up to 529 Mt (480 Mmt). Expansions would require evaluations and
design modifications to the Gertrude Creek embankment and fresh water reservoir.
The TMF is situated across the Livengood Creek valley and is formed by two cross-valley embankments, the west embankment and the east
embankment. Both TMF embankments and the impoundment area between them are geomembrane lined. The TMF embankments require the removal
of some native materials within the embankment footprints to improve stability characteristics of the foundation. These materials will be excavated and
transported to growth media stockpiles in the general area for use during reclamation of the Project site. The embankments will then be constructed in
phases beginning with starter dams, followed by a succession of five raises (six phases in total) to the final crest elevation. In addition to the phased
embankment expansions, the basin of the TMF will also be expanded in phases. The embankment and basin expansions will be constructed concurrently,
with the first expansion being constructed during the first two years of operation. The remaining five expansions will take approximately three years each
to construct and will be completed every four years. After completion of the six TMF phases, the west embankment will have an ultimate height of
approximately 450 ft (137 m) and the east embankment will have an ultimate height of 220 ft (67m).
The TMF embankments will be constructed with earth and rock fill materials generated from the open pit mine or borrowed from within the Project limits.
The design of the embankments includes a 60 mil linear low-density polyethylene (LLDPE) geomembrane on the interior slope, underlain with Transition
Zones, Select Rockfill and Rockfill material zones. The starter embankments also include a geosynthetic clay liner (GCL) below the LLDPE
geomembrane. The GCL will further reduce the potential for seepage through the embankments during the initial years of operation when the supernatant
pond will be located adjacent to the west embankment. The interior slope of the embankments is proposed to be 3H:1V (horizontal:vertical). Reclaim pipe
benches are provided at each raise crest elevation. The downstream (exterior) slope of the west embankment is designed at a 2.5H:1V for the initial
phases and steepening to a 1.8H:1V by Phase 6. The exterior slope of the east embankment is designed at a 2.5H:1V for all embankment phases.
A TMF groundwater drainage system will be installed within the major drainages in the Livengood Creek valley and will be located below the 60-mil
LLDPE TMF impoundment geomembrane. These drains are designed to capture near surface groundwater flow and seepage from the fresh water
reservoir and convey it to the underdrain collection sumps located immediately downstream of the TMF west embankment. Toe drains located along the
downstream toe of the TMF west embankment will also be incorporated into this drain system. Water collected in the TMF groundwater drainage system
sumps will be pumped into the TMF impoundment for reclaim.
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A tailings underdrain collection system will be provided above the impoundment geomembrane to reduce the hydraulic head on the geomembrane and
improve consolidation of the tailings. This underdrain system will collect solution that drains from the tailings and convey it to a collection sump located
near the TMF west embankment south abutment. The collected solution will then be pumped into the TMF impoundment for reclaim. Mill tailings will flow
by gravity to the TMF. The tailings pipeline will follow the road on the south side of the valley (road to access Gertrude Creek embankment) and along the
two embankments to spigot tailings along the face of the embankments to minimize seepage potential. A reclaim barge will be utilized to recycle reclaim
water to the mill. The barge will operate on the north side of the Livengood valley, keeping the deepest portions of the supernatant pond away from the
TMF embankments.
15.19.2 Water Management
15.19.2.1 Contact Water Management
All contact water flowing on the mine site will be directed to the TMF via a series of ditches and culverts. Ditches will generally follow the roads until
discharging to the TMF. The channels are sized to convey the storm events.
15.19.2.2 Management of Non-Contact Water to TMF
Non-contact surface water management consists of a fresh water reservoir located immediately east of the TMF. It is formed by the TMF east
embankment. In addition to being used to manage non-contact water, this reservoir will be used as a fresh water supply facility. Excess water captured by
the reservoir will be conveyed via a gravity flow-through drain to a discharge location in Livengood Creek located downstream of the TMF west
embankment. The flow-through drain consists of dual 48-inch pipes to convey the flow and a vertical inlet structure. Similar to the TMF embankment, the
freshwater reservoir embankment requires the removal of some native materials within the embankment footprint to improve stability characteristics of the
foundation. These materials will be excavated and transported to growth media stockpiles in the general area for use during reclamation of the Project
site. An injection grout curtain will then be installed along the embankment upstream toe to reduce seepage from the reservoir. The embankment will be
constructed with earth and rock fill materials generated from the open pit mine or borrowed from within the Project limits. The design of the embankment
includes a 60 mil LLDPE geomembrane on the upstream slope, underlain by a GCL, filter, drainage, and transition zones. Above the LLDPE, the
geomembrane is composed of an overliner layer, geotextile, and riprap materials to protect the geomembrane and GCL liner system. At the upstream toe
of the embankment, the LLDEP and GCL are connected to the grout curtain with a concrete plinth.
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16.
MARKET STUDIES AND CONTRACTS
16.1
Introduction
It was assumed in this PFS and TRS that the Livengood Gold Project will produce gold in the form of doré bars. The market for doré is well established
and accessible to new producers. The doré bars will be refined in a certified North American refinery—of which there are many in the United States and
Canada—and the gold will be sold on the spot market.
16.2 Market Studies
No market studies have been conducted by Tower Hill Mines (THM) nor its consultants on the gold doré that will be produced at Livengood. Gold is a
freely traded commodity on the world market for which there is a steady demand from numerous buyers. The gold market is very liquid with many buyers
and sellers active at any given time. Gold production is expected to be sold on the spot market.
Due to its widely traded nature, it is not difficult to determine the market value of gold at any particular time. Gold doré bullion is typically sold through
commercial banks and metals traders with sales price obtained from the World Spot or London fixes. These contracts are easily transacted, and standard
terms apply. BBA expects that the terms of any sales contracts would be typical of, and consistent with, standard industry practices and would be similar
to contracts for the supply of doré elsewhere in the world.
16.3 Gold Price Projections
Figure 16-1 shows the gold spot price on a monthly basis since November 2018. As of October 29, 2021, the trailing three-year gold price average was
US$1,630/oz and the trailing two-year gold price average was US$1,760/oz.
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Figure 16-1: Gold spot price on a monthly basis since November 2018
For this TRS, a gold price of US$1,680/oz (base case) was assumed within the financial model (Chapter 19) to estimate revenue from the Project. The
forecasted gold price is kept constant and is meant to reflect the average metal price expectation over the life of the Project. It should be noted that metal
prices can be volatile and that there is the potential for deviation from the LOM forecasts. Refining and pricing assumptions are presented in Table 16-1.
Table 16-1: Refining and pricing assumptions
Assumption
Gold Payable
Gold Refining Charge (including Insurance and Transport)(1)
Gold Price
Unit
%
$/oz
$/oz
Value
99.9
1.80
1,680
(1) Gold refining charge including insurance, transport and gold payability = $3.48/oz
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16.4 Contracts
There are no refining agreements or sales contracts currently in place for the Project that are relevant to this TRS. It is expected that terms contained
within any sales contract that could be entered into would be typical of and consistent with standard industry practices and be similar to contracts for the
supply of gold elsewhere in the world.
There are several large 3rd party gold refineries with well-established industry relationships in North America. Among the more notable ones are:
■ Metalor Technologies USA; North Attleboro, Massachusetts;
■ Johnson Matthey; Salt Lake City, Utah;
■ Canadian Mint; Ottawa, Ontario.
None of the aforementioned companies have been contacted by THM to provide a competitive treatment bid.
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17.
ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL
INDIVIDUALS OR GROUPS
17.1 Environmental
17.1.1 Historical Project Activities and Permitting
Livengood Creek and the creeks draining Money Knob are mineralized and have been placer mined for over 100 years. Portions of the resource area on
Money Knob have also hosted intermittent hard rock mineral exploration activities. The Project area contains federal mining claims (Bureau of Land
Management), state mining claims (Department of Natural Resources), state leases (Alaska Mental Health Trust Land), and private land (as described in
Chapter 3). THM has received all appropriate authorizations required to conduct exploration, geotechnical and baseline data collection activities.
17.1.2 Baseline Studies
THM has been conducting environmental baseline studies at the Livengood Gold Project since 2008 as part of THM’s overall goal of providing
environmentally relevant and supportable data for environmental permitting, engineering design and a basis for permit-required monitoring during
construction, mining and closure of the Project. These investigations are summarized in Table 17-1 and Table 17-2.
Baseline Study
Surface Water
Surface Water Quality
Sediment Quality
Hydrology
Surface Water Flow and Snow
Hydrogeology
Groundwater Quality
Hydrogeological Modeling
Permafrost Studies
Wetlands & Vegetation
Wetlands Delineations
Meteorology & Air Quality
Meteorological Data
Precipitation
Ambient Air
FEBRUARY 2022
Table 17-1: Environmental baseline studies (2008-2016)
2008
2009
2010
2011
2012
2013
2014
2015
2016
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Baseline Study
2008
2009
2010
2011
2012
2013
2014
2015
2016
Aquatic Resources
Bio-monitoring
Resident Fish Surveys
Rock Characterization
Static ML/ARD Testing
Kinetic ML/ARD Testing
On-Site Kinetic Testing
Wildlife Studies
Habitat Mapping
Mammal Surveys
Avian Surveys
Cultural Resources
Cultural Site Surveys
Socioeconomics (Section 17.6)
Noise Studies
Noise Surveys
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2021
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Baseline Study
Program Summary
Table 17-2: Summary of environmental baseline studies
Surface Water Quality
Hydrology
Groundwater Quality
FEBRUARY 2022
Surface water quality samples have been collected since 2009 over a wide range of hydrologic conditions. The network
includes 20 stations in and around the Project area and 4 stations along the power line corridor. All samples have been
analyzed for a comprehensive suite of analytes and include QC sample collection. Monitoring continued 2013-2017 at three
stations located on the Tolovana River and the West Fork of the Tolovana River. While there are apparent local and seasonal
spikes among some analytes, these are deemed to be mostly natural and, in part, a reflection of placer mining activity and
regional mineralization.
The Project region is characterized by large areas of permafrost that limit groundwater recharge into local streams. As a
result, many streams are ephemeral during periods of low precipitation. The USGS has maintained stream gauges in the
Project area since 2010. Snow surveys have been completed in a variety of aspects, elevations, and vegetation types in late
spring 2010-2021. Three years of surface flow data have been collected from Lower Amy Creek and the fifth year of data
collection from Livengood Creek in the vicinity of the ADOT maintenance facility is underway. Regional data sources were
used to characterize average, extreme drought, and flood conditions at the Project site, enabling the development of a long-
term synthetic record of estimated monthly precipitation at the Project site, which forms the basis of the water balance
model.
THM has sampled 54 groundwater wells throughout the Project area. Water chemistry data indicates that groundwater varies
locally and is controlled by geology and permafrost. Groundwater is most mineralized in the vicinity of the deposit;
groundwater distal to the deposit has the least mineralization.
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Baseline Study
Program Summary
Hydrogeological
Modeling
Permafrost Studies
Wetlands and Vegetation
Meteorology & Air Quality
Resident Fish Surveys
Bio-monitoring
FEBRUARY 2022
Compilation of average static water levels collected from the site piezometer network and pump tests indicates that the
groundwater surface generally follows topography, indicating groundwater flows from higher elevations to lower elevation
areas. Groundwater recharge to the deposit area is from the ridge to the northeast of the resource area. The hydraulic
conductivities observed down-gradient from the proposed pit and in the rocks of the Livengood Valley are relatively high. The
lowest hydraulic conductivity values were observed to the north and east of the resource area. Groundwater is confined
under permafrost. Predictive numerical simulations for project groundwater have been conducted for passive pit inflow
conditions and indicate that the pit will take several hundred years to fill.
Thermal analysis has been performed to provide a site-wide understanding of permafrost conditions and a basis for
engineering design. In general, the permafrost beneath the Livengood Gold Project area is extensive, but relatively warm
(>-2ºC) and discontinuous. Permafrost depths at the Project have been measured to reach nearly 600 ft (183 m) below
ground surface.
A 62,000-acre (25,090 ha) wetlands map of the Project area and power line corridor was completed in December 2013. This
mapping will form the basis for wetlands minimization, avoidance, and mitigation during mine design and permit application
preparation. Approximately half of the mapped area has been delineated as wetlands, the majority of which are dominated
by black spruce forests and near-surface permafrost.
Despite the fairly wide distribution of 13 invasive species found within the study area, most of the populations are relatively
small. The control and containment of these species will be considered during the development of project management and
reclamation plans.
Two meteorological stations were installed in late 2010 for use in dispersion modeling, air quality permitting, facility design,
and other baseline studies. One station is located on Gertrude Ridge, northeast of the resource area, and has collected data
including temperature, year-round precipitation, wind direction and speed, and relative humidity. The other station is located
to the southwest of the resource area at a lower elevation and has collected the same meteorological parameters as well as
seasonal evaporation data. Two fine particulate matter (PM2.5) meters were co-located with this station to monitor ambient
air quality in 2011. In 2013, an all-season precipitation gauge was installed at the ADOT maintenance facility in the
Livengood Creek Valley.
As the most populous fish in the Project area, young of the year Arctic Grayling were targeted for full-body tissue analysis.
Fish tissue sampling was conducted from 2009-2012. Tissues of the resident fish in the area contain detectable metals
concentrations, as do many regional streams in naturally mineralized areas. The 2010 program included a summer fish
presence/absence survey, a May Arctic Grayling spawning survey, a May Northern pike metals analysis, and a fall Whitefish
otolith study. In 2011, a fish overwintering investigation was completed as well as a data gap analysis along the power line
corridor. Survey results indicate that there are grayling overwintering in the West Fork of the Tolovana River and the old
placer pond located in the Livengood Creek Valley. No salmon species have been found in the Project area. The three major
drainages (Chatanika, Tatalina, and Tolovana Rivers) and their tributaries along the power line corridor are identified as fish-
bearing.
Macro-invertebrate sampling was conducted in 2009-2012; periphyton sampling was conducted in 2009-2017. The Project
area supports a robust benthic population of less sensitive species, as would be expected in streams that have hosted long-
term placer mining.
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Baseline Study
Program Summary
Rock Characterization
Habitat Mapping
Mammal Surveys
Avian Surveys
Cultural Resources
In 2010, composites of various resource rock types, alterations, and oxidation were created and tested for metal content,
sulfur speciation and acid rock drainage (ARD) potential. This work has since been expanded to include static and kinetic
testing on selected samples obtained from the entire resource area data package, the resource dataset screened for gold
grades less than 0.3 g/mt, ore composites, tailing samples, regional rock types, and overburden. The sample selection
process included screening for rock type as well as sulfur, arsenic, mercury, selenium, and antimony content. Seventy-five
humidity cell tests have undergone multi-year testing. Samples from the datasets have also been tested for meteoric water
mobility potential (MWMP) and sequential MWMP. Twenty-eight 550 lb (250 kg) barrels of resource and regional materials
are also undergoing on-site multi-year testing to establish scalability factors.
The data indicates that certain stratigraphic units are potentially acid generating (PAG), while other rock types are non-PAG.
Several rock types have metal leaching (ML) potential, with arsenic, antimony, and selenium being of primary interest.
Mineral content and ARD potential tend to decrease outside the resource area. Management of these materials is discussed
in Section 17.1.3.
Wildlife studies were initiated in 2011 and included a review and synthesis of existing data in the Project area, GIS mapping
of wildlife habitats and field surveys for key wildlife species. There are currently no threatened and endangered wildlife
species known in the Project area. The majority of the wildlife habitats in the study area comprise black-spruce dominated
upland open needle leaf forests.
Aerial surveys of moose were conducted in the Project area to determine the population density and late winter distribution.
During the survey, a total of 51 moose within 13 surveyed sample units were sighted.
In the Project area and the power line corridor, less than a third of the raptor nests were found to be occupied. Eight species
of land birds that are considered high priority species for conservation were recorded in the Project area in 2012, although
none of these species were confirmed to be nesting.
Cultural resource surveys have been completed on nearly 16,000 acres (6,475 ha) of the Project area and 5,000 acres
(2,023 ha) of the power line corridor. To date, 124 historic features and 21 prehistoric sites have been identified. The majority
of these historic features are remains of historic placer camps and workings. The majority of prehistoric sites contain surface
and subsurface lithic materials. During the Project permitting process, all features will be reviewed by the State Historic
Preservation Office (SHPO) and federal agencies working under Section 106 of the National Historic Preservation Act
(NHPA). Mitigation plans will be developed as needed.
Noise Studies
Winter and summer noise monitoring was completed in March 2013 and July 2013, respectively. Seven locations were
monitored employing two different techniques (short term and 24 hour).
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17.1.3 Environmental Management Strategies
Tailings Management Facility – The TMF has been designed to safely contain process plant tailings and fluids through the use of a geosynthetic liner and
a cross-valley embankment on the west end of the Livengood Valley. A rock fill underdrain system will be constructed in the basin to collect near surface
groundwater and any seepage that may occur from the overlying liner system. During operations, seepage from the underdrain will be collected and
pumped into the TMF. Modeling and pump tests suggest that permafrost underlying the basin isolates the TMF and restricts communication with the deep
groundwater.
Mine Waste Rock Facility – To minimize ARD potential and achieve an ideal blend of PAG and non-PAG materials, the facility will be constructed in lifts to
facilitate blending. If needed, rocks demonstrating high relative levels of ARD or metal leaching (ML) will be specifically managed within the waste rock
facility. Underdrains will collect meteoric water that infiltrates the waste rock and carry it to a lined sump at the up-gradient base of the embankment
constructed along the bottom of the Gertrude Creek basin. From there, the collected water will be pumped into the TMF. The Gertrude Creek basin is
underlain by permafrost that restricts communication with the deep groundwater.
17.2 Closure Plan
A key to the successful closure of the Project is to incorporate as many environmental considerations into the initial design process as possible. These
considerations are reflected in the PFS design and include the characterization studies of the mine waste rock and overburden, process plant tailings and
water that have been underway since 2009.
The closure plan presented is conceptual and may not represent the executed closure plan should this Project advance to an operational facility. The plan
will extend over a 36-year period, starting in production Year 17 with the construction of a water treatment plant, and ending in Year 52 with the
decommissioning of the water treatment plant. The facility closure plan is divided into two main phases: closure and post-closure.
A reclamation and closure plan will be submitted to the relevant government agencies during the permitting process and will discuss the final outcome of
the Project, including a final land use plan, re-grading, long-term water quality monitoring and management, test vegetation plots, the closure design,
removal of facility components and financial assurances. In addition, the Project will need to prepare a U.S. Army Corps of Engineers Compensatory
Mitigation Plan for mitigating unavoidable wetlands impacts that will include input from many reclamation and mitigation banking experts. It may require
the setting up of mitigation banks with third parties.
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17.2.1 Closure Activities
Closure will involve initial reclamation and salvage activities and will take approximately five years to complete.
Water Treatment Plant
A 5,500 gpm (1,249 m3/h) water treatment plant will be constructed during Mine Year 20 and 21 to treat water removed from the TMF supernatant pond
and seepage from the TMF underdrain system and the mine waste rock stockpile sump. Geochemistry and groundwater sampling suggest that the
arsenic, selenium and antimony contained in pond, seepage and sump water will be treatable. The water treatment plant will be of modular construction,
consisting of 500 gpm (114 m3/h) units, so that over time, as the treatment requirements reduce, modules can be taken out of service.
Tailings Management Facility
A dry closure of the TMF has been incorporated into its design. The supernatant pond will be removed and treated. Four years will be required to place a
3 ft (0.92 m) thick layer of mine waste rock over the entire tailings surface. A 1.5 ft (0.46 m) layer of growth media will then be placed over the rock. The
capped tailings surface will be seeded and fertilized. Diversion channels will be constructed along the perimeter of the tails basin; the flow will be diverted
past the embankment through drop structures.
Surface Mine
At the end of mine life, active dewatering of the surface mine will cease and the pit will be allowed to naturally fill with groundwater. Groundwater modeling
indicates that the pit will take several hundred years to fill.
Mine Waste Rock and Ore Stockpiles
The mine waste rock stockpile has been designed to minimize the impacts from potentially acid-generating waste rock. During closure, the waste rock will
be contoured, covered with 1.5 ft (0.46 m) of growth media, seeded and fertilized. The ore stockpile area will be ripped prior to placement of growth
media, seed, and fertilizer. The interface area between the graded stockpile toe and the natural ground will be riprapped to prevent erosion of the
stockpile toe in areas where there will be concentrated runoff flows. Any runoff flow will be directed to the TMF diversion channels. Once flows to the
sump have decreased, the pumps and other equipment will be salvaged.
Roads, Foundations, Buildings, and Equipment
During closure, buildings will be removed from their foundations, with the exception of the water treatment plant and other closure support buildings. All
work pads and roads not needed for site access will be dozer ripped, covered with growth media, seeded and fertilized. Pre-construction drainage
patterns will be restored or enhanced to minimize storm water impacts. Safety berms will be dozed over the road slope or into road ditches to further
enhance drainage.
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17.2.2 Post Closure Activities
The post closure period includes six years of site stabilization and maintenance after closure is complete, and a subsequent 20 years of water treatment
and monitoring.
17.3 Permitting
17.3.1 Project Permitting Requirements
The Project will require numerous federal and state permits and authorizations. Table 17-3 lists the permits likely to be required based on the conditions at
the time of this TRS. This list is based on government agency guidance and past Alaskan mining project development experience.
Since development of the Project will require a number of federal permits, the National Environmental Policy Act (NEPA) and Council of Environmental
Quality (CEQ) Regulations will govern the federal permitting portion of the Project. The NEPA process requires that all elements of a project and their
direct, indirect and cumulative impacts be considered. A reasonable range of alternatives are evaluated to assess their comparative environmental
impacts, including consideration of feasibility and practicality. In fulfillment of the NEPA requirements, it is anticipated that the Project will be required to
prepare an Environmental Impact Statement (EIS). Upon completion of the EIS and the associated Record of Decision by the lead federal agency, the
federal and state agencies will then complete their own permitting actions and decisions. The State of Alaska is expected to take a cooperating role to
coordinate the NEPA review with the state permitting process. Actual permitting timelines are controlled by the federal NEPA review and federal and state
agency decisions.
Agency
Federal
U.S. Army Corps of Engineers
Table 17-3: Project permit requirements
Authorization
CWA Section 404 Permit (wetlands dredge and fill)
Section 106 Historical and Cultural Resources Protection
Spill Prevention, Control and Countermeasure Plan (SPCC)
U.S. Environmental Protection Agency
EPA Air Quality Permit Review
National Marine Fisheries Service
Threatened and Endangered Species Act Applicability Consultation
Section 7 Threatened and Endangered Species Act Consultation
EPA Hazardous Waste Generator ID Resource Conservation and Recovery Act (RCRA)
U.S. Fish and Wildlife Service
Bald Eagle Protection Act Clearance
Migratory Bird Protection
Fish and Wildlife Coordination Act
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Agency
U.S. Bureau of Land Management
U.S. Bureau of Alcohol, Tobacco & Firearms
Mine Safety and Health Administration
Federal Aviation Administration
Federal Communication Commission
U.S. Department of Transportation
U.S. Regulatory Commission
State
Alaska Department of Natural Resources
Division of Mining, Land & Water
Authorization
Plan of Operations Approval
Decision Record
Bond Approvals
Permit & License for Use of Explosives
License to Transport Explosives
Notification of Legal Identity
Training of Miners Plan
Notice of Controlled Firing Area (Blasting)
Structure Warning Lights
Radio Station License
Approval to Transport Hazardous Materials
Material License for Geotechnical Studies
Miscellaneous Land Use Permits
Plan of Operations
Reclamation Plan Approval
Reclamation Bond
Mining License
Land Use Permits and Leases
Certificate of Approval to Construct a Dam
Certificate of Approval to Operate a Dam
Dam Safety Certification
Material Sale (for construction material borrow areas)
Temporary Water Use Permit (if not acquiring water rights)
Water Appropriation Permits
Road Right of Way/Access
Power Line Right of Way
Cultural Resource Protection
Archeology Study Permits
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Agency
Authorization
Alaska Department of Environmental Conservation
Plan Review and Construction Approval for Domestic Wastewater System
Alaska Pollution Discharge Elimination System (APDES)
Section 401 Water Quality Certification (SWA 404 Permit)
Storm Water Pollution Prevention Plan (SWPPP) Review Approval
Oil Discharge Prevention and Contingency Plan Review Approval
Plan Review and Approvals to Construct and Operate a Public Water Supply System
Solid Waste Management Permit
Food Establishment Permit
Air Quality Construction Permit (first 12 months)
Air Quality PSD Permit
Air Quality Title V Operating Permit
Alaska Department of Fish & Game
Fish Collection, Habitat, and Passage permits
Alaska Department of Transportation & Public Facilities
Controlled Firing Area for Blasting
Notification of Blasting for Road Closure
Alaska Department of Public Safety-FP
Alaska Department of Labor and Workforce Development
Right of Way/Access/Driveway
Fire Marshal Plan Review
Certificate of Inspection for Fired & Unfired Pressure Vessels
Employer Registration
Alaska Department of Health and Social Services
Health Impact Assessment
Other Entities
Alyeska Pipeline
Trans- Alaskan Pipeline System (TAPS) Right of Way (ROW) access/crossing approvals
The proposed preliminary project execution plan for the development and construction of the Livengood Gold Project summarized in Chapter 21
incorporates the permits previously noted in Table 17-3.
17.3.2 Status of Permit Applications
There have been no permit applications submitted for project construction.
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17.4 Requirements for Performance or Reclamation Bonds
There are two State of Alaska agencies that require financial assurance in conjunction with approval and issuance of large mine permits. The Department
of Natural Resources Division of Mining, Land and Water and the Department of Environmental Conservation require financial assurance, both during and
after operations, and to cover short and long-term water treatment, if necessary, as well as reclamation and closure costs, monitoring and maintenance
needs. The financial assurance amounts will be estimated in conjunction with development of the Reclamation and Closure Plan.
17.5 Mine Closure Requirements and Costs
A mine closure plan featuring dry closure of the tailings management facility has been developed. Closure costs track reclamation and closure expenses
from Year 17 through Year 52. The reclamation and stabilization effort occurs from Year 22 through Year 28 and includes deconstruction of the facilities
and closure of the tailings management facility, mine waste rock facility, roads and water storage reservoirs as described in Section 17.2. These costs
total $226.4M, including contractor indirect costs. Subsequent post-closure costs incurred during Year 29 through Year 52 include pumping, water
treatment, maintenance and post-closure monitoring. These costs total $76.7M. Year 52 is the last year with planned closure expenses.
The total closure cost is $316.9M, which is applied to the cash flow in Year 21. This cost, which includes indirect costs, includes closure of the mine waste
rock stockpile, tailings management facility, solid waste landfill and ancillary facilities.
Closure cost funding will flow from a closure trust fund financed by mine cash flow. Annual contributions to the closure trust fund are included in the cash
flow model. The annual contribution is $11.7M during Year 2 through Year 21. The model includes trust fund earnings at 3.0% annual percentage rate
(APR), applied to the fund balance until closure is complete in Year 52.
17.6 Socioeconomic Conditions
The Livengood Mining District has a history of cyclical employment and development dating back to 1914, when placer gold mining became the primary
economic activity in the area. The district has produced over 500,000 oz of placer gold, with two-thirds of that production coming prior to World War II. In
2021, there were two placer operations active in the Livengood area. Today, there are no year-round residents in the town-site, with only a handful of
abandoned structures still standing.
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17.6.1 Regional Economy
Livengood lies within the Yukon-Koyukuk Census Area, which encompasses a nearly 150,000 -square mile (m2) (388,000-km2) swath of Interior Alaska
from the Canadian border to the lower Yukon River. In 2020, the Census Area held a total population of 5,343 widely dispersed residents in 38
communities, of which approximately 70% were Alaska Natives. Both Minto, which is approximately 40 mi (64 km) from Livengood, and Manley Hot
Springs, approximately 80 mi (129 km) away from the Project, have road access to Fairbanks.
The Fairbanks area is the service and supply hub for Interior and Northern Alaska. Construction of the Trans-Alaska Pipeline System (TAPS) resulted in
an economic boom in Fairbanks from 1975 to 1977. The oil industry remains an important part of the local economy, with Fairbanks providing logistical
support for the North Slope activity, operation of a local refinery and the operation and maintenance of TAPS. Today, the University of Alaska, the
Fairbanks Memorial Hospital, and the Fort Knox and Pogo gold mines are some of the Fairbanks area’s largest employers. The Fairbanks North Star
Borough (FNSB) economy included 37,400 non-agricultural wage and salary jobs in 2019, accounting for $2.24B in annual payroll.
17.6.2 Recreational and Subsistence Resources
The State of Alaska Tanana Area Basin plan designates mining as the primary land use for the Project area. The plan identifies recreation as a secondary
use in the Project area. It will be important to consider both the present and likely future recreational uses of the area and how mining projects can
cohabitate successfully.
Most of the small communities in rural interior Alaska are largely dependent on subsistence. Seventy-five percent of the Native families in Alaska’s
smaller villages acquire 50% of their food through subsistence activities (Federal Subsistence Board, 1992). For families who do not participate in a cash
economy, subsistence can be the primary direct means of support; for others, it contributes indirectly to income by replacing household food purchases.
17.6.3 Socioeconomic and Project Consequences
Developing the Livengood Gold Project into a mine would offer residents and families from the surrounding communities the opportunity of year-round
stable wage paying jobs. Continuing local hire efforts by THM will be a key focus of the Project. Training programs such as the Drill Helper Training
Program conducted in May of 2011, a partnership with the State Department of Labor, will be used to attract, train and retain an Alaskan workforce for the
various construction and operating jobs available.
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The PFS estimates a total of 3.8 M man-hours during Project construction at Livengood, with a peak construction workforce of 800. The average wage of
those workers is estimated at $50.00/hr. During the three years of preproduction mine development, the Owner’s crew will be approximately 170
employees on average. During operations, the average number of employees is estimated at 331 peaking in year 6 at 430. Total annual wages paid
during operations is estimated to be $38M based on an annual average wage of approximately $115,000/y.
17.6.4 Support Services
A 2011 study of the economic impact of the Fort Knox Mine on the Fairbanks North Star Borough determined that 62% of the mine’s goods and services
spending were with businesses located in the FNSB. For purposes of this TRS, we have assumed a local purchase volume of 50% for the Project. Using
that assumption, the result would be an annual local expenditure of approximately $200M on consumables, supplies and purchases.
17.6.5 Employment and Training
The labor force in the communities nearest the mine is very small. The total population of Minto, Manley Hot Springs and Livengood combined is 312
residents in 2020. Skilled and unskilled labor to support mine development and operations will come primarily from the Fairbanks area, with a total labor
force of nearly 40,000 workers. The training plan for the Project will be designed to promote safety, environmental stewardship, efficient production, and
local hire.
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18.
CAPITAL AND OPERATING COSTS
The capital and operating cost estimates presented in this study are based on the development, construction and start-up of an open pit mine, process
plant and tailings management facility capable of processing on average 65,000 t/d (59,000 mt/d) of gold bearing material. All capital and operating cost
estimates cited in this TRS are referenced in nominal third quarter 2021 United States dollars. No provisions have been included to offset future
escalation. Units presented in this chapter are presented as imperial unless otherwise stated.
18.1 Capital Cost Summary and Basis
THM engaged various consultants to provide estimate support for various cost portions of the Project that fall within their specialized scope of work (see
Table 18-1). BBA consolidated the cost information from all sources to determine the overall project capital cost.
Table 18-1: Capital cost estimate contributors
Scope / Responsibility
Mine Equipment and Development
Process Plant & Ancillary Facilities
Surface Infrastructure and Buildings
Waste Rock and Tailings Management Facility
Electrical Line and Substations
Indirect Cost
Owner's Cost
Reclamation and Remediation
Contingency
Contributor(s)
BBA
BBA
BBA
NewFields
BBA
BBA
BBA
Newfields
All
The total estimated preproduction capital cost (-20% / +25%) to design, procure, construct and commission the Livengood Gold Project facilities is $1.93B
including $220M in contingency funds. When spare parts/consumables/initial fills ($40M) and funding of the closure trust fund is included ($23M), the
overall cost is estimated to be $1.99B. The estimated sustaining capital cost required by the Project is $658M not including reclamation trust funding,
which totals $245M. The sustaining capital estimate includes the addition of certain contingencies and indirect costs. The cumulative life of mine (LOM)
capital expenditure (preproduction and sustaining capital) is estimated to be $2.85B. Table 1-8 summarizes the initial capital and sustaining capital costs
by major area.
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Table 18-2: Initial capital and sustaining capital costs by major area
($ Millions)
Cost Item/Area
Mine Equipment
Mine Development
Process Facilities
Infrastructure Facilities
Power Supply
Owners Costs
Contingency
Sub-total before Reclamation
Spare parts, consumables, and initial fills(1)
Funding of Reclamation Trust Fund(2)
Initial ($M)
Sustaining ($M)
200
230
433
459
87
296
220
1,925
40
23
139
514
5
658
245
$903M
Note: Rounding of some figures may lead to minor discrepancies in totals.
Total
$1,989M
(1) The $40M spent on spare parts, consumables and initial fills in preproduction are recaptured in the final year of operations (Year 21).
(2)
Includes initial funding, total $317M estimated costs. The difference of $49M is projected trust fund earnings.
18.1.1 Accuracy
The overall capital cost estimate developed in this study generally meets the AACE Class 4 requirements and has an accuracy range of -20% and +25%.
Estimate accuracy ranges are projections based upon cost estimating methods and are not a guarantee of actual project costs. The capital cost estimate
of this pre-feasibility study (PFS) forms the basis for the approval of further development of the Project by means of a feasibility study (FS).
18.1.2 Assumptions
The capital cost estimate is based on the following assumptions:
■ Reflects general accepted practices in the cost engineering profession;
■ Assumes contracts will be awarded to reputable contractors on a lump sum basis;
■ Craft all-in rates are trade union rates calculated based on an assumed 60-hour work week with 10-hour shifts worked daily. Rotation for craft and
supervision personnel is 20 days on and 10 days off;
■ Waste rock generated during the mine pre-stripping will be of suitable quality and quantity to be used as backfill material to construct the tailings
management facility and other infrastructure facilities;
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■ Construction will consist of a mixture of contracted work and work performed by mine personnel;
■ The following activities will be performed by the THM owners team (mine personnel) to support the construction of the tailings management facility
and other geotechnical facilities:
- Crushing and screening of waste rock for construction aggregate;
-
Load, haul and placement (spreading and compaction) of rock fill from mine;
■ Soil conditions will not require special foundation designs such as piling;
■ All excavated material will be disposed of on site;
■ Project will adhere to the schedule in construction execution plan as detailed in Chapter 21;
■ The estimate assumes that the contingency will be spent.
18.1.3 Exclusions
General exclusions from the capital estimate are as follows:
■ Sunk costs (costs prior to a production decision);
■ Land acquisition, permitting, licensing costs;
■ Allowance for special incentives (schedule, safety, etc.);
■ Interest and financing costs;
■ Escalation beyond Q3 2021;
■ Taxes and import duties;
■ Salvage value, except for sale of construction camp;
■ Risk due to labor disputes, permitting delays, weather delays or any other force majeure occurrences;
■ Issues beyond the control of the Owner.
18.2
Initial Capital Costs
18.2.1 Open Pit Mine
The initial capital cost for mine development activities and the acquisition of mining equipment is $430M and summarized in Table 18-3.
Table 18-3: Open pit mine initial capital costs
($ Millions)
Cost Item/Area
Mine Development
Mine Equipment
Initial ($M)
230
200
$430M
Total
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18.2.2 Mine Development
Mine development for the open pit will be carried out over a 3-year period. A contractor will be used during the first year of mine development, which will
include tree clearing, pioneering work as well as haul road construction. The total cost for the contractor has been estimated to be $68M, which considers
a unit rate of $3.62/t. Years 2 and 3 of mine development will be carried out using the owner’s fleet of mining equipment and personnel. The owner’s cost
for mine development, plant road construction and temporary facilities has been estimated to be $162M, which considers workforce salaries,
consumables, and the cost to operate the equipment fleet. The overall initial cost for mine development is estimated to be $230M.
18.2.3 Mining Equipment
Open pit mining mobile and ancillary equipment costs were estimated based on recent supplier quotations and BBA’s in-house database. The initial mine
equipment requirements are based on operating hours and production needs as described in Chapter 13. The mobile support equipment consists of
dozers, graders, water trucks, fuel trucks and cranes required to support the mining operation. The initial mine equipment requirements along with the
capital costs, which total $200M, are detailed in Table 18-4.
Table 18-4: Mining equipment initial capital costs
($ Millions)
Cost Item / Area
Haul Truck (Payload - 291 mt)
Hydraulic Excavator (Bucket Payload – 31 m3)
Wheel Loader (Bucket Payload – 31 m3)
Production Drill
Secondary Drill
Mobile Support Equipment
GPS and Dispatch System
No.
18
2
1
5
1
-
1
Initial ($M)
113
22
10
14
1
38
2
Total
$200M
18.2.4 Power Supply
The capital costs related to the electrical transmission line, O’Connor Creek substation and the Golden Valley Electrical Association (GVEA) system
upgrade were estimated by specialized local firms (Dryden & LaRue, and Electric Power Systems) in 2013, escalated to 2021 and integrated into the
estimate by BBA. The main on-site substation was estimated by BBA based on other recent projects of similar size, power rating and layout. Table 18-5
summarizes the initial capital cost estimate for the off-site and on-site electrical facilities.
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Table 18-5: Power supply capital costs by major area
($ Millions)
Cost Item / Area
230 KV Transmission Line
O’Connor Creek Substation
GVEA Transmission System Upgrades
Primary Substation and Site Distribution
Initial ($M)
32
11
23
21
Total
$87M
18.2.5 Process Plant
The design and capital costs of the crusher area, the crushed ore stockpile area and the process plant has largely been based on BBA’s experience on
recent projects. To estimate the capital cost of the process plant, BBA used its project cost database, which includes as-built capital costs for a number of
similar large gold processing facilities. Based on the proposed plant capacity, preliminary general arrangement layouts and project location, the capital
costs were adjusted to match the requirements of the Project. For the major process and mechanical equipment packages, equipment datasheets and
summary specifications were prepared, and budget pricing obtained from qualified suppliers. Regional data from Northern Canada and Alaska was
compared to assess and adjust the labor and crew rates and productivity factors for Alaska based on BBA’s standard estimating spreadsheet. The
process plant preproduction capital costs are detailed by area in Table 18-6:
Table 18-6: Process plant capital costs by major area
($ Millions)
Cost Item / Area
Process Building
Primary Crushing
Stockpile, Pre-Crushing and Pebble Crushing
Primary and Secondary Grinding
Gravity Separation
Leaching
Carbon Stripping and Gold Room
Cyanide Destruction and Tailings
Reagents
Common Services
Initial ($M)
52
46
67
121
9
88
16
25
5
4
(1) Spare parts, consumables and initial fills are not included.
Total(1)
$433M
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18.2.6 Infrastructure Facilities
The capital cost of infrastructure facilities required by the Project was estimated by BBA and NewFields. BBA estimated the initial capital costs based on
the site/building layout drawings, specific project requirements and its in-house database for the following site infrastructure facilities:
■ Site preparation and common underground services;
■ Site security and main access gate;
■ Mine haul and site access roads;
■ Mine garage, dry, warehouse and administration complex;
■ Mine truck wash and fuel/lubrication facility;
■ Office, garage and warehouse equipment;
■ Site communications and emergency power;
■ Water and sewage treatment;
■ Fresh water wells, pumping station and piping;
■ Process plant tailings and water reclaim systems;
■ Fairbanks Integrated Operations Center (IROC) equipment;
■ Fairbanks guardhouse, storage and employee parking area (off-site).
NewFields developed the preliminary designs and estimated material quantities for the tailings management facility, fresh water reservoir and related
infrastructure such as:
■ Livengood Valley and Gertrude Creek TMF starter embankments (lined facility with 47.7 Mt (43.3 Mmt) storage capacity equivalent to approximately
two years of production);
■ Water reservoir flow through drain system;
■ TMF North access road and pipe corridor;
■ Surface water diversion ditches;
■ Ground water collection systems;
■ Growth media, waste rock and ore stockpiles.
The general approach of utilizing mine waste rock from the surface mine delivered by the mine operations to satisfy the major fill requirements for the
TMF was employed to maximize savings in construction costs. Based on recent project experience in Northern Canada, BBA assisted NewFields in
developing earthwork unit costs and overhead costs using a mixture of contracted work and work performed by mine personnel. To support the TMF cost
estimate, budgetary quotes for the supply of the principal purchased materials, such as geosynthetics and piping, was obtained from potential vendors.
Table 18-7 summarizes the initial infrastructure capital costs by area.
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 18-7: Infrastructure capital costs by area
($ Millions)
Cost Item / Area
Site Preparation and Common Services
Main Control Gate and Access Roads
Truck Shop and Administration Building
Mine Truck Wash
General Infrastructure Buildings and Temporary Facilities
Fuel and Explosives Facilities
Tailings, Waste Rock and Water Management Infrastructure
Site Communications
Electrical Substation
Initial ($M)
13
24
47
9
12
2
305
13
33
Total
$459M
18.2.7 Indirect and Owner’s Costs
For the Project, indirect costs included within the preproduction capital cost estimate, an itemized list of elements has been used to generate factored
estimates. The Owner’s costs were calculated using BBA’s database, data from the 2013 Feasibility Study, THM requirements and adjusted to meet the
requirements of the Project. The following costs have been covered within the estimate:
■ Indirect costs:
- Construction camp (800 rooms) procurement (including resale) and operations;
- Engineering, procurement and construction management (EPCM);
- Construction quality assurance, third party testing and surveying;
- Construction of temporary facilities, erection and operation;
-
Land and ocean freight;
- Pre-operational verifications, commissioning and start-up support;
- Relocation costs to move the Alaska Department of Transport (DOT) Garage Facilities;
- Vendor representatives during construction.
■ Owner’s costs:
- Construction insurance;
- Preproduction employment and training;
- Corporate services and site support operations;
- Environmental monitoring and community development;
- Right of Way (ROW) and land acquisition;
-
Legal permits.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 18-8 provides a breakdown of the indirect and Owner’s costs by area:
Table 18-8: Indirect and Owner’s costs by area
($ Millions)
Cost Item / Area
Initial ($M)
Construction Camp (including resale)
Construction Operations Costs
Alaska DOT Garage Relocation Costs
EPCM Services
Sub-Consultants and Third-Party Services
Land and Ocean Freight
Vendor Representatives
Construction Mobile Equipment
Owner's Costs
Offsite and Other
40
52
20
70
5
37
3
6
55
8
Total
$296M
It should be noted that costs related to mine and mill initial fills, commissioning spares, start-up and capital spares totaling $40M, normally shown as
indirect costs, are not included.
18.2.8 Contingency
Contingency provides an allowance to the capital cost estimate for undeveloped details within the scope of work covered by the estimate. Contingency is
not intended to take into account items such as labor disruptions, weather-related impediments, changes to the scope of the Project from what is defined
in the study, nor does contingency take into account price escalation or currency fluctuations.
To establish an adequate contingency estimate, BBA along with the other contributors, reviewed the overall capital cost estimate and categorized the
major project work items in terms of level of definition and the nature of how the costs were established for labor, materials and equipment. Depending on
the level of confidence, contingencies were allocated to each of the work items. Table 18-9 provides a summary of the contingency by major work area.
The total contingency cost for the Livengood Gold Project is estimated to be $220M or approximately 12% of the Project’s overall direct and indirect costs.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
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Table 18-9: Contingency by major area
($ Millions)
Cost Item / Area
Mine Equipment and Preproduction Work
Process Plant, Surface Facilities and Project Indirect Costs
Tailings, Waste Rock and Water Management Facilities
Initial ($M)
10
157
53
Total
$220M
18.3 Sustaining Capital Costs
The total estimated sustaining capital cost for the Livengood Gold Project is $658M (not including reclamation trust funding) and was developed by BBA
and NewFields. This is the estimated expense required to maintain operations over the proposed 20.3-year mine life. Including the reclamation trust fund
payments of $245M, the sustaining capital costs total $903M. Sustaining capital costs included are as follows:
■ Open pit mining equipment (new and replacements), equipment rebuilds and spare parts;
■ Phased (2 through 6) tailings management facility and water management system upgrades to achieve their ultimate capacity based on the design
provided by NewFields;
■ Lengthening and relocation of the process plant tailings pumping and pipeline systems;
■ Purchase of site mobile equipment and light vehicles;
■ Contingency related to the previously listed activities;
■ Annual funding of the reclamation trust fund for eventual site closure beginning in Year 21.
Table 18-10 summarizes the sustaining capital requirements over life of mine.
Table 18-10: Sustaining capital costs by major area
($ Millions)
Cost Item / Area
Infrastructure Facilities
Mine Equipment
Mobile Equipment and Light Vehicles
Sub-total before Reclamation
Funding of Reclamation Trust Fund
Sustaining ($M)
514
139
5
658
245
Total
$903M
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
18.4 Operating Cost Summary and Basis
The operating cost estimate for the Livengood Gold Project includes all expenses incurred to operate the mine and process plant from the start of Year 1
through Year 21 at a daily average production rate of 65,000 t/d (59,000 mt/d). Units presented in this chapter are presented as imperial unless otherwise
stated. The expected accuracy for the operating cost estimate is that of a pre-feasibility study level (+-/ 20%) and does not contain any allowances for
contingency or escalation beyond Q3 2021. Any ore excavated during the preproduction period is considered as a capital expense. Life of mine averages
presented in this section take into account all years of production, including the year of ramp-up and stockpile reclaim years at the end of the LOM.
Table 18-11: Operating cost estimate contributors
Scope / Responsibility
Mine Operations
Process Plant Operations
Contributor(s)
BBA USA Inc.
BBA USA Inc.
General and Administration (G&A)
THM and BBA USA Inc.
THM engaged various consultants to provide estimation support for various operating cost areas of the Project that fall within their specialized scope of
work (see Table 18-11). Operating costs were estimated using cost models, laboratory testwork, budgetary quotations from suppliers, general knowledge
and recent experience on similar projects. THM, in consultation with BBA, provided a list of personnel, based on mining, process plant and administrative
requirements, along with the salaries benefits and bonuses associated with each position.
The three major operating costs (on-site) areas are mining, processing, and general and administration (G&A). Table 1-9 provides the breakdown of the
projected operating costs for the Project. The unit cost areas including royalties and smelting, refining and transport costs are shown in terms of total cost
LOM per ton mined, per ore ton processed and total cost per ounce of gold produced. The average operating cost, including royalties and
smelting/refining fees (but not including reclamation fund payments), over the LOM is estimated to be $13.82/t ($15.23/mt) milled.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 18-12: Total operating cost breakdown (LOM average)
Cost Item / Area
Mining (including stockpile reclaim)
Processing
General and Administration
Onsite Mine Operating Costs
Royalties
Smelting, Refining and Transport
Sub-total before Reclamation
Funding of Reclamation Trust Fund
Total
($M)
1,910
3,659
639
6,208
323
22
6,553
317
Total
$6,893M
Average
($/t mined)
2.05
-
-
-
-
-
-
-
-
Average
($/t milled)
Average
($/oz)
OPEX
(%)
4.03
7.72
1.35
13.09
0.68
0.05
13.82
0.67
297
569
99
965
50
3
1,019
49
29
56
10
95
5
0.3
100
0
$14.50/t
$1,068/oz
100%
The operating cash costs per ounce of gold vary significantly, depending on the mill feed grade, rock type composition, mine strip ratio and stockpiling
activities. The annual variation in operating costs per ounce of gold produced can be seen in Figure 18-1. It should be noted that due to the processing of
lower grade stockpile material (between 0.3 and 0.4 g/t), the overall operating costs per ounce increase significantly during the later years.
FEBRUARY 2022
18-11
Figure 18-1: Annual operating cash costs ($/oz)
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
18.4.1 Electricity, Diesel and LNG
The cost of electrical power for the Project was estimated based on the GVEA 2-year trailing average industrial rate of $0.16 / kWh provided by THM. A
diesel fuel unit cost of $2.40 / gal was used for estimating the operating costs of the mine and infrastructure mobile equipment. Liquefied natural gas
(LNG) is planned to be used as the heat source for the process and ancillary facilities. At present, LNG is being supplied to Fairbanks and it is assumed
that LNG will be available in sufficient quantities at the time mine operations commence. A supply unit rate of $21 / MMBTU has been used for LNG in this
estimate.
18.4.2 Project Personnel
The mine and mill are planned to operate 365 days per year, primarily with two 12-hour shifts per day. Various crew schedules will be employed, including
crews with 4 days on, 4 days off rotation, crews with 14 days on, 14 days off rotation, and staff with 4 days on, 3 days off. Most General and
Administration personnel will work 12-hour day shifts with 4 days on, 3 days off rotation. Personnel will be transported to site from Fairbanks on a daily
basis by third party contract highway coach.
The number of employees required by the Project during the production phase (Years 1 to 21) consists of personnel from the open pit mine, process plant
and site administration (G&A). On average, over the life of mine, the total number of personnel will be approximately 355. As shown in Figure 18-2, the
process plant and general and administrative employees remain fairly constant throughout the mine life, while the mine employees vary on an annual
basis due to changes in operations and maintenance personnel requirements. The mine personnel requirements drop significantly in Year 17, due to the
end of open pit mining and all process plant feed requirements being met with 100% stockpile material.
Figure 18-2: Operations Personnel
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
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The total personnel for the Livengood Gold Project peaks in Year 6 at 430 employees as shown in Table 18-13.
Table 18-13: Project peak personnel (Year 6)
Area
Open Pit Mine
Process Plant
General and Administration
Total
No. of
Employees
221
140
69
430
18.4.3 Open Pit Mine
18.4.3.1 Mine Operating Costs
Mine operating costs have been estimated for each period of the mine plan using supplier pricing, in-house databases, and outside sources particularly
for materials, services, and consumables. The mine operating costs are based on operating the mining equipment, the labor associated with operating the
mine, the cost for explosives as well as pit dewatering, road maintenance, stockpile rehandle, and other activities.
The mine operating cost was estimated to average $2.05/t mined for 20.3-year life of mine. Table 18-14 presents the mine operating cost by activity and
Table 18-15 presents the mine operating cost by consumable.
Over the life of the mine, the mine operating costs have been calculated to total $1.91B. This amount includes $152M dedicated to rehandling of the low
grade ore stockpile. When excluding the low grade ore stockpile rehandling costs, the mine operating costs, based purely on mining run of mine material
from the pit equate to $1.89/t.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 18-14: Average annual and life of mine operating costs – by activity
Cost Item / Activity
Production Loading
Hauling
Drilling
Blasting
Support & Services
Mine Supervision & Technical Services
Other
LOM Cost
($M)
Average Annual
Cost
($M/y)
Cost per Ton
($/t mined)
Cost per Ton
($/t milled)
OPEX
(%)
187
802
168
275
305
133
39
8.9
38.2
8.0
13.1
14.5
6.3
1.9
0.20
0.86
0.18
0.30
0.33
0.14
0.04
0.39
1.69
0.36
0.58
0.64
0.28
0.08
10
42
9
14
16
7
2
Total
$1,910M
$90.9M/y
$2.05/t
$4.03/t
100%
Table 18-15: Average annual and life of mine operating costs – by consumable
LOM Cost
($M)
Average Annual
Cost
($M/y)
Cost per Ton
($/t mined)
Cost per Ton
($/t milled)
OPEX
(%)
573
366
31
148
389
99
13
266
24
27.3
17.4
1.5
7.1
18.5
4.7
0.6
12.7
1.2
0.61
0.39
0.03
0.16
0.42
0.11
0.01
0.29
0.03
1.21
0.77
0.06
0.31
0.82
0.21
0.03
0.56
0.05
30
19
2
8
20
5
1
14
1
Total
$1,910
$90.9M/y
$2.05/t
$4.03/t
100%
Cost Item / Activity
Labor
Fuel
Lube
Tires
PM & Repair Parts
Ground Engaging Tools
Electricity
Explosives
Other
18.4.3.2 Mine Equipment
The cost to operate the fleet of mining equipment considers fuel consumption, consumables such as tires, wear parts and ground engaging tools,
preventative maintenance, and repair parts. For the major equipment such as haul trucks, shovels, wheel loaders, production drills, track dozers, and road
graders, the maintenance costs have been calculated as a function of the hour intervals for each machine throughout the life of mine, while an average
cost per hour was considered for the support and service equipment.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
An extended life of up to 140,000 hours has been considered for the fleet of haul trucks and shovels with additional maintenance costs having been
provided by the equipment suppliers. Costs related to engine rebuilds and truck reframes have been treated as sustaining capital costs.
It is important to note that the fuel costs consider the addition of diesel exhaust fluid (DEF) for the Tier 4 equipment. A cost of $5.11/gallon has been used
for DEF which has been applied to 3% of the fuel burn. A cost of $15.14/gallon has been used for lubes and greases.
18.4.3.3 Explosives and Accessories
Explosives costs of $0.29/lb for ANFO and $0.69/lb for emulsion have been used, which are based on budgetary pricing from local explosive suppliers.
The suppliers also provided pricing for explosive accessories such as detonators, boosters, connectors, and surface wire, as well as a cost for delivery to
site.
18.4.3.4 Other Miscellaneous Costs
The mine operating costs include an additional $1.2M/y which consider the costs for ore grade control, dewatering costs that are in addition to the
operation of the pumps, as well as other miscellaneous costs.
18.4.3.5 Mine Personnel
The workforce cost for the mining operations averages approximately $27.3M per year, which has been calculated based on the number of employees
and their annual salaries. The salaries include 45% for fringe benefits and 5% overtime for non-supervisory positions.
18.4.4 Process Plant
Process plant operating costs over the 20.3-year mine life were calculated based on the metallurgical testwork program, the mine schedule, salary cost
tables (THM), comparable projects, literature reviews and recent supplier quotations. Operating costs for each rock type were developed and then
combined, based on the mine schedule, to calculate the overall operating cost on a per ton weighted average basis. The process plant operating costs
including the tailings management area are estimated to be $7.72/t over the life of mine.
The average operating cost includes reagents, consumables, grinding media, personnel (Salaried and Labor), electrical power, liquefied natural gas and
maintenance/operations parts. The consumables include spare parts, grinding media, liners and screen components. A breakdown of the process plant
operating costs is shown in Table 18-16. The main cost areas for the process plant are electrical power, crushing and grinding steel, and reagents and
chemicals. The majority of the reagent costs are associated with sodium cyanide and lime required for leaching.
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 18-16: Average annual and life of mine operating costs – process plant
Cost Item / Activity
Labor (incl. tailings management)
Power (incl. tailings management)
Grinding Steel
Reagents
Fuel
Maintenance and Operations
(incl. tailings management)
Crushing Steel
LOM Cost
($M)
Average Annual
Cost
($M/y)
Cost per Ton
($/t milled)
OPEX
(%)
277
1,415
497
1,136
129
186
19
13
67
24
54
6
9
1
0.58
2.98
1.05
2.40
0.27
0.39
0.04
8
39
14
31
4
5
1
Total
$3,659M
$174M/y
$7.72/t
100%
18.4.4.1 Crushing and Grinding Steel
The replacement costs of major equipment consumables, such as the primary crusher liners, pre-crusher/pebble crusher mantles and bowls, SAG and
ball mill liners, and screen decks, were calculated based on recommended change-out schedules, recent budgetary quotations and BBA’s internal
database.
The Livengood process flowsheet includes two types of grinding media for the SAG and ball mills. The consumption rates for the 5-inch SAG mill and 3-
inch ball mill media were calculated using MolyCop (V 3.0) tools and the abrasion index (Ai) distribution measured at the 50th percentile for the five rock
types to be processed over the LOM. The input data considered the average operating conditions for the SAG and ball mills, in terms of power draw,
rotational speed, pulp density and media loading. The wear and annual media consumption rates for each type are presented in Table 18-17. Crushing
and grinding steel represents approximately 15% of the total process operating cost at $1.09/t milled.
Table 18-17: Average LOM media wear and consumption rates
Media Type
SAG mill – 5-in steel media
Ball mill – 3-in steel media
Wear Rate
(lb/kWh)
0.081
0.110
Annual Consumption (t)
3,161
6,734
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
18.4.4.2 Reagents and Chemicals
The reagent and chemical consumptions were estimated based on testwork, industrial references, literature and assumed operational practice. Sodium
cyanide and lime have a higher consumption variability depending on rock type and, therefore, have been estimated based on an analysis of the various
testwork campaigns performed to date, as well as adjusted using scale-up factors and assumed process water recirculation rates within the process plant.
The reagent unit costs ($/t reagent) were established through recent vendor quotations and comparison to prices at reference sites and include delivery to
site. The Reagents and chemicals category represents approximately 31% of the total process operating cost at $2.40/t milled.
18.4.4.3 Electrical Power
The largest power consumers within the process plant are the SAG and ball mills. The respective power required for the SAG mill and ball mill were
calculated based on the comminution testwork program, which provided the material hardness indices (A x b value) for the SAG mill and the BWi of the
ball mill for the five rock types expected to be processed during the LOM.
The SAG mill specific energy (kWh/t) was estimated from the analyzed relationships derived from testwork between the A x b value and the SAG motor
input specific energy as determined by JKSimMet. The ball mill specific energy (kWh/t) was calculated from the BWi and the Bond formula, assuming the
ball mill will grind the rock from 2,900 µm (F80) to 250 µm (P80).
The overall process plant energy consumption was estimated based on the SAG and ball mill grinding energy requirements and factored balance of plant
equipment running loads. Various factors (efficiency, load, diversity, and annual factors) were applied to adjust for equipment motor efficiency, the power
used versus installed, the synchronous operation of equipment and average plant operating availability. The electrical power of the process plant
represents approximately 39% of the total process operating costs at $2.98/t milled.
18.4.4.4 Liquefied Natural Gas
Liquefied natural gas (LNG) is planned to be used for heating of the primary and secondary crusher buildings, the main process plant building and surface
ancillary facilities. LNG will also be used for process heat in the ADR circuit. LNG requirements have been estimated based on the building requirements
and similar sized installations. LNG represents approximately 4% of the total process operating costs at $0.27/t milled.
18.4.4.5 Maintenance and Operations Supplies
Maintenance supplies and materials are intended to cover the costs of maintaining the process facilities. Operations supplies are intended to cover the
cost of personnel protection wear, minor tools, oil and other consumables. The costs of maintenance and operations supplies were derived using a
percentage of the capital cost of plant mechanical equipment. Combined maintenance and operations supplies represent approximately 5% of the total
process operating costs at $0.39/t milled.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
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18.4.4.6 Personnel
A total of 140 employees (26 salaried and 114 hourly) divided into management and technical services, operations and maintenance departments are
required to operate and maintain the process plant and tailings management facility. No allowance for contractors has been allocated. The list of
personnel (Chapter 14), along with the salaries and benefits, was provided by THM. The estimated personnel cost (salaried and hourly combined)
represents approximately 8% of the total process operating cost at $0.58/t milled.
18.4.5 General and Administration (G&A)
General and Administration (G&A) costs are expenses not directly related to the production of goods and encompass items not included in the mining and
processing sectors of the Project. These costs were developed based on THM’s past project experience, similar sized operations and BBA’s in-house
database.
The General and Administration area includes the following items:
■ Site administration, accounting and payroll labor;
■ Human Resources, Information Technology (IT) and Health Services labor;
■ Computer hardware and software costs/license fees;
■ Electricity and LNG requirements for the Project’s surface infrastructure, such as the mine garage, administration building and the freshwater pumping
system;
■ Health and Safety supplies;
■ Insurance (Earthquake, Physical Plant, and Rolling Stock including loss of production);
■ Security, maintenance, laundry, snow removal and janitorial service contracts;
■ Warehouse administration and supplies;
■ Waste collection and recycling services;
■ Environmental testwork and permitting fees;
■ Mobile equipment and building maintenance;
■ Fairbanks Integrated Operations Centre (IROC) operating costs;
■ Telecommunications and data service fees;
■ Staff and labor training;
■ Employee transportation fees.
The total G&A operating cost equals $1.35/t milled. Table 18-18 shows life of mine and average annual operating costs for G&A expenses. The largest
costs within the G&A category is employee transport, representing approximately 15%, while insurance is the second largest cost, accounting for
approximately 13%. Electricity and heating, followed by costs related to the integrated operations center, environmental, and health and safety
departments are also significant contributors.
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 18-18: Average annual and life of mine operating costs – general and administration
Cost Item / Activity
General Management and Administration Labor
Environmental
Community Relations
Human Resources
Health, Safety & Security
Accounting
Information Technology and Communications
Warehouse
Purchasing
Integrated Operations Personnel
Employee Transport
Land
Electricity and Heating
Fuel, Tires and Maintenance for Mobile Equipment and Process Plant
Vehicles
Insurance
Integrated Operations - Collaborative Work, Building Lease and
Overhead
LOM Cost
($M)
Average
Annual Cost
($M/y)
Cost per Ton
($/t milled)
OPEX
(%)
21
51
19
24
53
31
24
25
13
58
97
11
75
40
82
14
1.0
2.4
0.9
1.2
2.5
1.5
1.1
1.2
0.6
2.8
4.6
0.5
3.6
1.9
3.9
0.7
0.04
0.11
0.04
0.05
0.11
0.06
0.05
0.05
0.03
0.12
0.20
0.02
0.16
0.08
0.17
0.03
3%
8%
3%
4%
8%
5%
4%
4%
2%
9%
15%
2%
12%
6%
13%
2%
Total
$639M
$30.4M/y
$1.35/t
100%
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
18.4.5.1 Personnel
A total of 69 employees are required by the general and administration group. The number of employees allocated to each administration department is
shown in Table 18-19.
Table 18-19: G&A employee list
Department
No. of Employees
General Management and Administration
Environmental
Community Relations
Human Resources
Health, Safety & Security
Accounting
Information Technology and Communications
Warehouse
Purchasing
Integrated Operations (IROC) Personnel
2
10
1
5
13
8
3
7
4
16
69
Total
18.5 Royalties
The annual royalty costs are based on the PFS mine design and production profile, along with the terms of the individual royalty agreements. Over the life
of the Project, based on an assumed 3.0% average royalty fee, approximately $323M in royalties is expected to be paid.
18.6
Transportation and Refining
A weekly shipment of doré bars will be transported to a refinery. A flat rate transportation cost will be incurred by the refinery in addition to a cost by
weight and a variable liability fee. A treatment cost per troy ounce of material shipped to the refinery will also be charged. THM will be paid for a set
recovery of the assayed gold content, which is assumed to be 99.9% based on typical contract terms. Over the LOM, a transport and refining cost
including the payability discount of $22M ($3.48/oz) is estimated based on typical terms and pricing.
FEBRUARY 2022
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International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
19.
ECONOMIC ANALYSIS
19.1
Introduction
The economic/financial assessment of the Livengood Gold Project is based on a financial model developed by Tower Hill Mines (THM) and BBA USA Inc.
(BBA). The model calculates revenues based on the recovered ounces determined by the mining plan and a gold price of $1,680/oz (base case). The
model then subtracts costs to generate the Project cash flow. The financial model provides the means to evaluate the Project’s discounted cash flow and
can guide future development decisions for the Project. The economic evaluation was carried out using a discounted cash flow approach on a pre-tax and
after-tax basis, based on Q4 2021 metal price projections. No provision was made for the effects of inflation. Current tax regulations were applied to
assess the federal income tax liabilities, while the most recent state regulations were applied to assess the Alaska income and mining tax liabilities.
The internal rate of return (IRR) on total investment was calculated based on 100% equity financing, even though THM may decide in the future to finance
part of the Project with debt financing. The net present value (NPV) was calculated from the cash flow generated by the Project, based on a discount rate
of 5%. The payback period based on the undiscounted annual cash flow of the Project is also indicated as a financial measure. Furthermore, a sensitivity
analysis has been performed for the after-tax base case to assess the impact of the following variations on the Project economics: capital costs, operating
costs, and price of gold.
The economic analysis presented in this section contains forward-looking information with regard to the mineral reserve estimates, commodity prices,
proposed mine production plan, projected recovery rates, operating costs, construction costs and Project schedule. The results of the economic analysis
are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those
presented here. The reader is cautioned that this PFS is preliminary in nature and there is no certainty that the PFS economics will be realized.
19.2 Assumptions and Basis
The economic analysis was performed using the following assumptions and basis:
■ The conceptual mine plan developed in Chapter 13 provided the following inputs to the financial model: mine life, annual ore and waste tons mined,
and annual mill tons and head grade, annual ounces recovered based on recovery algorithms internal to the block model;
■ The preproduction period and construction period financial inputs flow from the Project execution schedule developed in Chapter 21, taking into
consideration key Project milestones;
■ The financial model applies metal pricing of $1,680/oz, which was estimated on the basis of historical trailing averages and consensus analyst
estimates that were deemed to be credible. The forecasts used are meant to reflect the average metal price expectation over the life of the Project. It
is understood that metal prices can be volatile and that there is the potential for deviation from the LOM forecasts;
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
■ All cost and sales estimates are in constant Q3 2021 United States dollars with no inflation or escalation factors taken into account;
■ All metal products are assumed sold in the same year that they are produced;
■ Class specific capital cost depreciation rates for tangible property under the Modified Accelerated Cost Recovery System (MACRS) are used for the
purpose of determining the allowable taxable income;
■ All project related payment and disbursements incurred prior to the effective date of this TRS are considered as sunk costs. Disbursements that may
occur after the effective date of this TRS, but before the start of construction, are considered as sunk costs;
■ Net present value (NPV) was calculated using the middle of period approach;
■ The after-tax model includes Alaska state taxes and Federal taxes according to 2021 guidelines;
■ The model applies 3% royalties on net smelter returns across the life of mine based on an average royalty calculation;
■ Project revenue is derived from the sale of gold doré into the international marketplace. No contractual arrangements for doré smelting or refining
exist at this time. Provisions for gold transportation, insurance, refining and payable charges have been included in the financial model;
■ Final rehabilitation and closure costs will be incurred after production Year 21.
This financial analysis was performed on both a pre-tax basis and after-tax basis with the assistance of an external tax consultant hired by THM. The
general assumptions used for this financial model and the LOM plan tonnage and grade estimates are summarized in Table 19-1, and outlined in
Table 19-3.
Table 19-1: Financial model criteria
Description
Construction/Preproduction Period
Mine Life (after preproduction)
Total Ore Processed
Total Waste Mined (including 84Mt during preproduction)
Gold Head Grade (LOM)
Gold Head Grade (Year 1-5)
Gold Recovery (LOM)
Gold Production (LOM)
Average Annual Process Gold Production Rate (LOM)
Average Annual Process Gold Production Rate (Year 1-5)
Daily Milling Rate
Open Pit Mining Operating Cost (LOM Avg.)
Value
36
20.3
474
547
0.65
0.79
71.4
6,430,178
317,000
388,600
65,000
2.05
Unit
Months
Years
Mt
Mt
g/mt
g/mt
%
Troy oz
Troy oz
Troy oz
t/d
$/t mined
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Livengood Gold Project Pre-feasibility Study
Description
Processing Operating Cost (LOM Avg.)
General and Administration Operating Cost (LOM Avg.)
Gold Transportation and Insurance, Refining, and Payable Charges
Doré Gold Payable Terms
Royalty on Net Smelter Return (NSR)
Base Case Gold Price
Discount Rate
Initial Capital Cost
Sustaining Capital Cost
Reclamation and Closure Cost
Value
7.72
1.35
3.48
99.90
3.00
1,680
5
1.93
658
317
Unit
$/t milled
$/t milled
$/oz
%
%
$/oz
%
$B
$M
$M
19.3 Royalties
The annual royalty costs are based on the conceptual open pit mine design and production profiles described in Chapter 13. Due to the fact that there are
numerous individual royalty agreements, for the purposes of this financial evaluation, a fixed 3.0% NSR has been assumed. Over the life of the Project,
approximately $323M in royalties is expected to be paid based on the base case metal prices and Project assumptions.
19.4
Third Party Smelting, Refining and Transportation
A weekly shipment of doré bars will be transported to a refinery. A flat rate transportation cost will be incurred by the refinery in addition to a cost by
weight and a variable liability fee. A treatment cost per troy ounce of material shipped to the refinery will also be charged. THM will be paid for a set
recovery (99.9%) of the assayed gold content. Over the life of the mine, the transport and refining cost including payable charges are estimated to be
$3.48/oz.
19.5
Taxes
The Livengood Gold Project is subject to three levels of taxation, including federal income tax, Alaska State income tax, and an Alaska State mining
license tax. THM compiled the taxation calculations for the Project with assistance from third party taxation experts. This information was not verified by
BBA.
The current US tax system applicable to mineral resource income was used to assess the annual tax liabilities for the Project. The US Federal corporate
income tax, Alaska State corporate income tax and Alaska State license mining tax rates currently applicable over the operating life of the Project are
21.0%, 9.40% and 7.0% of taxable income, respectively.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
The tax calculations are underpinned by the following key assumptions:
■ The Project is held 100% by a corporate entity and the after-tax analysis does not attempt to reflect any future changes in corporate structure or
property ownership;
■ Assumes 100% equity financing and therefore does not consider interest and financing expenses;
■ Projected payments relating to Net Smelter Return (NSR) or Net Profits Interest (NPI) royalties, as applicable, are allowed as a deduction for federal
and state income tax purposes, but are added back for state mining tax purposes; and
■ Actual taxes payable will be affected by corporate activities, and current and future tax benefits have not been considered.
The combined effect on the Project of the three levels of taxation, including the elements described above, is a cumulative effective tax rate of 38%,
based on the Project’s LOM Operating Income (gross income less operating costs and depreciation). It is anticipated, based on the Project assumptions,
that THM will make tax payments of approximately $280M over the life of the Project.
19.6 Closure Costs
NewFields developed a dry closure plan for the tailings management facility. Closure costs track reclamation and closure expenses over a period of
36 years (Year 17 through 52), including costs to build and operate a water treatment plant in Years 17-21, prior to the termination of operations. The main
closure construction effort occurs from Year 22 through 31, accounting for 96% of the overall closure costs. Costs for pumping and management
operations are included in Years 23 through 52. Year 52 is the last year with planned closure expenses.
The total closure cost is $317M. This total closure cost is applied to the cash flow in Year 21. This cost includes closure of the overburden stockpile,
tailings management facility, solid waste landfill, and ancillary facilities, including indirect costs.
Closure cost funding will flow from a closure trust fund financed by mine cash flow. Annual contributions to the closure trust fund are included in the cash
flow model. The annual contribution is $11.7M during Years -2 through 21. The model includes trust fund earnings at a 3.0% annual percentage rate
(APR), applied to the fund balance until closure is complete.
19.7 Working Capital
Working capital is the maximum funding required during the initial operating period to offset expenses prior to the cumulative revenue offsetting the
cumulative expenses; that is, when the operation becomes self-sustaining in its cash flow. Working capital is recovered at the end of the Project.
The revenue was calculated on a weekly basis using the amount and price of the saleable product produced, allowing for the following ramp-up, which
corresponds to the mine production schedule:
Quarter 1:
Quarter 2:
Quarter 3:
Quarter 4:
Total:
15.3% of 1st year production
25.4% of 1st year production
27.1% of 1st year production
32.2% of 1st year production
100% of 1st year production (75% of design capacity)
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Revenue receipt was projected based on shipping and receipt of 85% of funds four weeks after the shipping date, with the balance of 15% of funds
received eight weeks after shipping doré.
Average weekly expenditure rates were calculated from the operating costs for Year 1. The average weekly expenditure of funds starts immediately in
week one of Year 1.
The maximum cash flow deficiency would occur in week 12, totaling $46.1M. The model contains this working capital cost in Year 1 and recovers the
equivalent amount in Year 21.
19.8 Gold Production
Figure 19-1 highlights the anticipated gold production schedule for the Livengood Gold Project. Total life of mine production is anticipated to be
6,430,178 oz or approximately 317,000 oz/y based on the PFS mine plan, estimated feed grade and recovery estimates. The average feed grade is
expected to be 0.65 g/mt and process plant recovery is estimated to be 71.4% over the life of mine. Over the first five years, the operation is expected to
produce approximately 388,600 oz/y due to higher grade material being preferentially sent to the process plant. Low grade material will be stockpiled in
these early years to be used for future process plant feed. During Years 18 through 21, the process plant feed will consist entirely of reclaimed ore from
the low-grade stockpile.
Figure 19-1: Annual gold production schedule
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
19.9 Operating, All-in Sustaining, and All-in Costs
The operating costs over the LOM to produce gold at Livengood total $6.87B or $1,068/oz. The all-in sustaining costs (AISC) including sustaining capital
total $7.53B or $1,171/oz. All-in costs including operating, capital (initial and sustaining) and reclamation funding are estimated to be $9.72B or $1,512/oz.
Table 19-2 highlights the all-in sustaining costs (AISC) and all-in cost of production over the first 5 years and the life of the Project.
Sustaining Capital Expenditures (1)
Initial Capital Expenditures (2) (3)
Funding of Reclamation Trust Fund (4)
Table 19-2: Operating, All-in Sustaining, and All-in costs (pre-tax)
Years 1-5
LOM
Operating Costs
$/oz
887
151
All-In Sustaining Costs (AISC)
1,038
0
30
All-In Costs
1,068
$Million
1,724
292
2,016
0
58
2,075
$/oz
1,068
102
1,171
299
42
1,512
$Million
6,870
658
7,529
1,925
268
9,722
Notes:
Rounding of some figures may lead to minor discrepancies in totals.
(1) Excludes $18M upfront funding included in reclamation and remediation above and $37M of recoverable initial stores inventory.
(2)
Includes initial capital expenditures only under LOM.
(3) Excludes $40 million of recoverable initial stores inventories.
(4) Total $317 million estimated costs.
19.10 Financial Analysis
A 5% discount rate was applied to the cash flow to derive the NPV for the Project on a pre-tax and after-tax basis. The summary of the financial
evaluation results for the Project base case, at a gold price of $1,680/oz, is presented in Table 19-3.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 19-3: Financial analysis summary (pre-tax and after-tax)
Description
Base Case
x
a
T
-
e
r
P
x
a
T
-
r
e
t
f
A
Net Present Value (0% disc)
Net Present Value (5% disc)
Internal Rate of Return
Simple Payback Period
Net Present Value (0% disc)
Net Present Value (5% disc)
Internal Rate of Return
Simple Payback Period
1,397.1
168.5
6.1%
9.8
1,137.1
44.6
5.3%
10.4
Unit
$M
$M
%
Year
$M
$M
%
Year
The pre-tax base case financial model resulted in an IRR of 6.1% and an NPV of $ 168.5M using a discount rate of 5%. The simple pre-tax payback
period is 9.8 years. On an after-tax basis, the base case financial model resulted in an IRR of 5.3% and an NPV of $ 44.6M with a discount rate of 5%.
The simple after-tax payback period is 10.4 years.
The summary of the Livengood Gold Project discounted cash flow financial model (pre-tax and after-tax) is presented in Table 19-4.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Year
Period
Production Summary
Total Ore Mined (Mt)
Total Waste Mined (Mt)
Total Milled (Mt)
Mill Head Grade Au (g/mt)
Gold Recovery (%)
Revenue
Gross Revenue ($M)
Operating Expenditures
Mining ($M)
Processing ($M)
General and Administration ($M)
Smelting, Refining and Transport Costs ($M)
Royalty Payments ($M)
Capital Expenditures
Preproduction ($M) (1)
Sustaining ($M)
Reclamation and Closure ($M)
Working Capital ($M)
Pre-Tax Cash Flow
Annual Pre-Tax Cash Flow ($M)
Cumulative Pre-Tax Cash Flow ($M)
Taxes
Alaska State Income and Mining Taxes ($M)
Federal Income Tax ($M)
After-Tax Cash Flow
Annual After-Tax Cash Flow ($M)
Cumulative After-Tax Cash Flow ($M)
Summary
Pre-Tax NPV @ 5% ($M)
Pre-Tax IRR (%)
After-Tax NPV @ 5% ($M)
After-Tax IRR (%)
Table 19-4: Simplified cash flow table
-3
-2
-1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Total/Average
Preproduction
Production
1
18
0
0
3
33
0
0
1
34
0
0
0%
0%
0%
33
32
18
0.76
80%
31
35
24
0.69
79%
36
30
24
0.93
73%
40
26
23
29
37
24
30
30
24
27
34
24
27
34
23
27
34
24
19
45
24
23
43
24
27
21
24
27
20
23
26
14
23
27
14
23
0.93
0.61
0.61
0.64
0.64
0.69
0.58
0.61
0.72
0.77
0.77
0.71
69% 74% 78% 77% 75% 76% 75% 70% 67% 65% 62% 64%
27
12
23
0.73
64%
14
3
23
0
0
24
0
0
24
0
0
24
0
0
7
0.65
0.36
0.36
0.36
0.37
66% 75% 75% 75% 74%
474
547
474
0.65
71%
540
653
810
734
528
550
572
553
601
514
498
564
569
540
518
531
492
315
315
315
90
10,803
-106
-153
-134
-184
-115
-193
-114
-182
-107
-111
-117
-111
-112
-117
-136
-92
-93
-93
-99
-174
-174
-174
-175
-175
-178
-182
-188
-187
-188
-186
-31
-1
-16
0
-81
-12
-46
-31
-1
-20
0
-94
-12
0
-31
-2
-24
0
-41
-12
0
-31
-2
-22
0
-37
-12
0
-31
-1
-16
0
-38
-12
0
-31
-1
-16
0
-34
-12
0
-31
-1
-17
0
-38
-12
0
-31
-1
-17
0
-26
-12
0
-31
-1
-18
0
-29
-12
0
-31
-1
-15
0
-41
-12
0
-994
-937
93
177
392
-1,051
-1,989
-1,896
-1,719
-1,327
334
-993
148
171
181
180
-846
-675
-494
-314
223
-92
119
27
0
0
0
0
-5
-2
0
0
-7
-3
-10
-3
-0.5
-0.1
-3
-1
-5
-1
-7
-2
-13
-3
-6
-4
-994
-937
89
177
386
326
147
168
177
175
207
-1,051
-1,989
-1,900
-1,723
-1,338
-1,012
-864
-696
-519
-344
-137
109
-28
-31
-1
-15
0
-37
-12
0
84
111
-4
-4
76
48
-31
-1
-17
0
-38
-12
0
-31
-1
-17
0
-23
-12
0
-31
-1
-16
0
-35
-12
0
185
296
203
499
164
664
-15
-15
-16
-16
-13
-13
155
203
171
374
138
512
-31
-1
-16
0
-17
-12
0
156
820
-11
-11
134
646
-86
-186
-31
-1
-16
0
-15
-12
0
-47
-36
-36
-31
-180
-176
-176
-176
-31
-1
-15
0
-18
-12
0
-31
-31
-31
-1
-9
0
-15
-12
0
-1
-9
0
0
-12
0
-1
-9
0
0
-12
0
-18
-72
-9
0
-3
40
0
-12
46
184
188
36
51
56
63
1,003
1,192
1,228
1,279
1,334
1,397
-14
-15
154
800
-18
-19
151
951
-3
-3
30
982
-3
-3
-4
-4
0
0
45
48
63
1,026
1,074
1,137
-1,910
-3,659
-639
-22
-323
-1,925
-658
-268
0
1,397
1,397
-157
-123
1,137
1,137
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-58
-982
-926
0
-12
0
0
-12
0
0
0
0
-58
-58
0
0
-58
-58
168
6.1%
45
5.3%
(1) $40M of recoverable initial stores inventory in Year 21.
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International Tower Hill Mines Ltd.
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Livengood Gold Project Pre-feasibility Study
Figure 19-2 shows the cumulative cash flows for the Project projected for the life of the mine on a pre-tax and after-tax basis.
Figure 19-2: Life-of-mine cash flow projection (pre-tax and after-tax, discount rate: 5%)
19.11 Sensitivity Analysis
The economic evaluation includes an analysis of the Project sensitivity to key financial parameters compared to the base case. Sensitivity measures how
much impact a change in a given parameter has on the base Project value, all other factors remaining constant. Table 19-5 presents the after-tax IRR and
NPV (@ 5% discount rate) sensitivity results for varying gold recovery, gold price, total operating cost and total capital cost. Figure 19-3 and Figure 19-4
present each sensitivity analysis graphically, steeper curves represent greater sensitivity.
This sensitivity analysis shows that both gold price and recovery variations cause the greatest and almost equivalent impact on the Project value. A 30%
increase in gold price to $2,184/oz would yield an IRR of 14.1% and a NPV of $1,493. A 30% decrease in gold price to $1,176/oz would yield a reduced
IRR of -22.5% and NPV of -$1,647M. The impact of variations in operating and capital cost on both financial metrics is fairly similar, with the operating
cost changes resulting in marginally larger Project returns than capital cost changes, meaning that reducing operating expenses would benefit the Project
more than reducing capital costs by the same percentage.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table 19-5: Project sensitivity analysis – after-tax IRR and NPV
Base Case Variance
Gold Recovery (%)
After Tax IRR (%)
After Tax NPV @ 5% ($M)
Gold Price ($/oz)
After Tax IRR (%)
After Tax NPV @ 5% ($M)
Operating Cost ($M)
After Tax IRR (%)
After Tax NPV @ 5% ($M)
Initial Capital Cost ($M)
After Tax IRR (%)
After Tax NPV @ 5% ($M)
-30%
50%
-16.2%
-1,637
1,176
-22.5%
-1,647
4,345
10.6%
877
1,391
10.4%
580
-20%
57%
-4.2%
-1,044
1,344
-4.5%
-1,051
4,966
9.0%
609
1,589
8.4%
402
-15%
61%
-1.1%
-753
1,428
-1.2%
-758
5,276
8.1%
470
1,689
7.5%
312
-10%
64%
1.4%
-469
1,512
1.4%
-472
5,587
7.3%
330
1,789
6.7%
223
-5%
68%
3.5%
-209
1,596
3.5%
-$210
5,897
6.3%
189
1,889
6.0%
134
Base Case
71.4%
5.3%
45
1,680
5.3%
45
6,208
5.3%
45
1,989
5.3%
45
5%
75%
7.0%
293
1,764
7.0%
295
6,518
4.3%
-$103
2,089
4.7%
-$45
10%
78%
8.6%
536
1,848
8.6%
540
$6,828
3.1%
-$251
2,190
4.1%
-$134
15%
82%
10.1%
776
1,932
10.1%
781
7,139
1.9%
-403
20%
86%
11.5%
1,014
2,016
11.5%
1,020
7,449
0.5%
-567
2,290 M
$2,391 M
3.6%
-223
3.1%
-312
30%
93%
14.1%
1,483
2,184
14.1%
1,493
8,070
-3.1%
-906
2,594
2.2%
-491
Figure 19-3: After-tax sensitivity analysis for project net present value (NPV @
5% discount rate)
Figure 19-4: After-tax sensitivity analysis for project internal rate of return
(IRR %)
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
20.
ADJACENT PROPERTIES
This chapter provides public source information on producing and exploration properties adjacent to the Livengood Gold Project. The information related
to adjacent properties is not necessarily indicative of the mineralization on the Livengood Gold property.
20.1 Producing Properties
The Fort Knox Gold Mine is an open pit mine owned and operated by Toronto-based Kinross Gold (TSX:K). A conventional gravity/carbon-in-pulp (CIP)
mill processes up to 50,000 t/d (45,000 mt/d) of higher grade ore (0.6 g/mt), with a heap leach for lower grade ore (0.3 g/mt). The mine is located 26 mi
(42 km) northeast from the city of Fairbanks via a combination of paved and unpaved roads. In production since 1996 and surpassing production of
8 Moz, Fort Knox is the single largest producer of gold in the history of the State of Alaska and is the largest single property taxpayer in the Fairbanks
North Star Borough. This information has no relation to Livengood.
The Pogo Gold Mine is an underground mine owned and operated by Northern Star Resources. A conventional gravity/flotation/flotation concentrate CIP
leach processes up to 3,000 t/d (2,722 mt/d) of ore generally 7-10 g/mt. The mine is located 85 mi (137 km) southeast from the city of Fairbanks via a
combination of paved and unpaved roads. In production since 2006 and surpassing production of 4 Moz, Pogo is the largest underground gold mine in
Alaska. This information has no relationship to Livengood.
20.2 Exploration Projects
In 2014, Freegold Ventures Limited (FVL:TSX) acquired control of the Shorty Creek property comprising 27,000 acres (10,800 hectares) of State of
Alaska mining claims directly adjacent to and south of the Livengood Gold Project. During 2015, the company released a technical report on the property
(Abrams, Mark J., “Technical Report for the Shorty Creek Project, Livengood-Tolovana Mining District, Alaska”, March 31, 2015), completed a geophysical
program and conducted limited drilling.
In 2016, Freegold released an updated technical report on the property (Abrams, Mark J., “Updated Technical Report for the Shorty Creek Project,
Livengood-Tolovana Mining District, Alaska”, March 25, 2016), and conducted additional drilling. Hole SC 16-01 intersected 434.5 m grading 0.57%
copper equivalent from the base of oxidation at 86.1 m to EOH at 520.6 m. Within this broad intercept, a higher grade interval of 207 m grading 0.73%
copper equivalent from 138.6 m to 345 m was also intersected. Mineralization remains open to depth with the last 12 m grading 0.82% copper equivalent
(Cu 0.55%, Au 0.145 g/t and Ag 9.67 g/t). (Freegold Ventures Limited press release September 8, 2016).
In March 2019, Freegold announced that it had entered into an Agreement with a wholly owned subsidiary of South32 Limited (South32) whereby
South32 has the option to earn a 70% interest in the Shorty Creek property. Drilling was conducted during 2019 and 2021.
The QP has been unable to verify the information related to Shorty Creek and the information is not necessarily indicative of the mineralization at
Livengood. Shorty Creek has no relationship to Livengood.
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21.
OTHER RELEVANT DATA AND INFORMATION
21.1 Execution Plan and Schedule
The execution plan is conceptual in nature and will be adjusted and refined during a future phase of the Project. The plan covers the period from the
initiation of the Environmental Impact Study (EIS) process to commercial production in Q2 Year 1. It is based on a recommended Project configuration
that includes an open pit mine, a processing plant with a capacity of 65,000 t/d (59,000 mt/d), surface infrastructure and a tailings management facility
(TMF) with storage capacity for 21 years of production. The durations and milestones for the major Project activities are shown in Table 1-12 and
Figure 21-1.
Activity
Environmental Impact Statement and Permitting
Engineering Studies in Support of Permitting
Process Plant Detailed Engineering
Project Authorization
Pit Pre-Stripping / Waste Rock Supply for Construction
Tailings Management Embankment Construction
Process Plant Construction
Process Plant Dry Commissioning Completed
Start Process Plant Ramp-up to Commercial Production
Table 21-1: Key project activities (preliminary)
Start date
Completion date
Duration
(months)
Q1 YR -7
Q1 YR -7
Q1 YR -3
Q3 YR -3
Q3 YR -3
Q4 YR -3
Q1 YR 1
Q3 YR -3
Q3 YR -3
Q3 YR -2
Q3 YR -3
Q4 YR -1
Q4 YR -1
Q4 YR -1
Q1 YR 1
48
48
21
30
30
27
After the PFS, the next step for the Project would be a full feasibility study and detailed engineering necessary to support permit applications. In parallel,
environmental studies will be continued.
The Project schedule includes consideration of early work requirements, the permitting process, stakeholder engagement, engineering studies, the
procurement of long lead items and critical equipment, construction, and facility commissioning, including the power line and main substation, processing
plant, tailings management facility, and site infrastructure.
Off-site construction of a sub-station and a transmission line for the Project will need to be permitted, constructed, and operational by Q2 Year -1 to allow
for commissioning of the processing facilities.
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On-site construction at the Livengood site is planned to start with a major civil contractor preparing the site access roads, while contractor equipment and
crews begin preproduction stripping and site work in Q3 Year -3. THM mining equipment and crews will assume preproduction stripping and site work in
Q3 Year -2. The overall construction period from start of the access road construction to completion of the process plant is expected to last 32 months.
The civil contractor will begin the TMF embankment foundations in Q4 Year -3, while the ground is frozen. Waste rock excavated from the pit by the
mining team will be used for the construction of the embankment, haul roads, and other facilities. Waste rock fill will be delivered, placed and compacted
by the THM mining operations team. The civil contractor will be responsible for the installation of liners and smaller volume excavations and backfills.
Once road foundations and embankment foundations are completed, work will be maximized in warmer weather and scaled back during the coldest
winter months. The preproduction TMF embankment will be raised by the end of Q3 Year -1 to a height sufficient to accumulate process water required for
start-up and operations.
The construction of other surface facilities, including the main substation, process plant and surface fleet maintenance shop will begin in Q4 Year -3 with
the aim of completing construction and commissioning in Q1 Year 1. This schedule is in line with recent projects of similar scope and size.
An analysis of the construction schedule developed during the PFS facilitated the development of a preliminary site workforce plan, which is expected to
peak at approximately 800 workers during construction. The total estimated workforce takes into account the development of the open pit, direct and
indirect construction labor for the tailings and water management facilities, process plant construction, and the construction of other site facilities. The
estimate also incorporates commissioning crews and an allowance for THM operating and supervision personnel. A construction camp will be built to
lodge the labor force.
Figure 21-1 shows the summary schedule for the Project.
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Figure 21-1: Summary project execution schedule
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21.2
Logistics and Transportation
21.2.1 Introduction
In 2012, SR International Logistics (SRIL) completed a logistics and transportation study to support the FS. SRIL reviewed and compiled extensive data to
plan a seamless and uninterrupted flow of materials and equipment from global suppliers to the Project site. SRIL, with input from shippers Lynden
Transport and Totem Ocean Express, created a comprehensive report detailing the logistics and transportation needs of the Project. This study will need
to be updated as part of a future FS, including pricing details for ocean freight, inland freight, air freight, heavy haul requirements, rail freight, consolidation
and marshaling points, and warehousing.
21.2.2 Freight Options Considered
The construction and commissioning of the Project will require effective frontend planning and a complete, schedule-driven transportation and logistics
plan. All freight forwarding activities will feature identification of critical path items. Expediting and inspection personnel will control, verify and facilitate the
movement of goods to the Project site.
Key Project personnel and/or agents acting on behalf of the Project will be located at strategic points to ensure that ocean freight and inland freight
schedules are met and that freight inspections/inventories and import customs documentation are compliant with US government requirements.
Foreign shipments will be pre-inspected to verify quantities, purchase order engineer’s compliance (EC) certification, customs documentation and
completeness. The B-Harmonization classification number will be incorporated in all import documents to expedite customs clearance and delivery of
goods to the Project site; duties and taxes will also be based on this number.
Designated key equipment will require pre-inspections to verify quality and quantities, EC certification and packing/handling compliance.
THM will set up a primary receiving yard to hold and consolidate freight near the Project site. It is assumed that the primary receiving yard would be
located on the northern outskirts of Fairbanks, near Highway 2. Alternatively, THM may decide to place the primary receiving yard closer to site, near the
current Alaska DOT station.
Ocean freight will be the dominant mode of transporting materials and equipment not readily available in Alaska. All methods of ocean freight may be
utilized. Ships may take five days and barges ten days duration from Puget Sound (Seattle, WA) to Anchorage.
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Trucking will be the primary method to move materials and equipment to the Project yards from Alaskan arrival ports. Freight will be consolidated at a
primary receiving yard assumed to be located near Fairbanks. The distances and drive time elements between Alaska ports and the prospective
Fairbanks yard are given below:
■ Anchorage Port to Fairbanks yard: 360 mi (576 km) (6 hours) via State Highways 1 and 3. The road has year-round state maintenance and
regulations.
■ Valdez Port to Fairbanks yard: 365 mi (584 km) (7 hours) via State Highway 4 with year-round state maintenance and regulations.
■ Seward Port to Fairbanks yard: 485 mi (776 km) (8 hours 30 min) via State Highways 1 and 3 with year-round state maintenance and regulations.
This route holds little benefit and should be avoided, but ocean shipping situations may dictate its use.
■ Whittier Port to Fairbanks yard: 417 mi (667 km) (7 hours 30 min) via State Highways 1 and 3 with year-round state maintenance and regulations.
The primary size restriction is the Anton Anderson Tunnel, which all road and rail must use. This is not a desirable location for on-forwarding freight by
road. The port is primarily used for rail. Ocean alternatives may dictate this route.
Railroads have very detailed size-weight restrictions but are, pound for pound, the most cost-effective method to move materials and equipment to
Fairbanks. Regularly scheduled rail service connects with US and Canadian lines via hydro-train barges.
Caterpillar, Komatsu and other mining and construction equipment dealers use rail as their primary method to move equipment to the Alaskan market.
Rail should be considered for any producer with national rail contracts selling FOB Fairbanks. Also, any mining contractor moving equipment from the
lower 48 states to Alaska should consider rail.
21.2.3 Recommended Base Routes
The preferred base route for most project equipment and materials contains four legs and is shown in Figure 21-2. The legs are listed below with the
approximate distances:
Table 21-2: Preferred base route legs and distances
Number
Leg
Distance (miles)
1
2
3
4
EX-works to Puget Sound
Puget Sound to Anchorage
Anchorage to Fairbanks
Fairbanks to Livengood
Total
Puget Sound to Livengood
-
1,726
352
71
2,109
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Figure 21-2: Primary route, Livengood logistics plan (Google Earth)
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22.
INTERPRETATION AND CONCLUSIONS
22.1 Overview
This TRS was prepared by a group of independent consultants (QPs) to demonstrate the economic viability of an open pit mine and process plant
complex based on the reserves estimated for the Livengood Gold Project. This TRS provides a summary of the results and findings from each major area
of investigation, to a level that is equivalent and normally expected for a PFS of a resource development project. Standard industry practices, equipment
and processes were used in this study.
This TRS is based on an updated resource estimate effective as of August 20, 2021, and has an optimized Project configuration with a throughput of
65,000 t/d (59,000 mt/d) compared to the 52,600 t/d (47,700 mt/d) Project evaluated in the 2017 PFS.
22.2 PFS Improvements
The Project configuration evaluated in the PFS remains a conventional, owner operated surface mine that will utilize large-scale mining equipment in a
blast/load/haul operation. Mill feed would be processed in a 65,000 t/d (59,000 mt/d) comminution circuit consisting of primary and secondary crushing
(pre-crushing), wet grinding in a single semi-autogenous (SAG) mill and single ball mill, a gravity gold circuit, two parallel conventional carbon in leach
(CIL) circuits, followed by an ADR system and dewatering.
This configuration is estimated to have an initial capital cost of $1.93B, process operating costs of $7.72 per ton, and sustaining costs of $658M,
excluding a $317M reclamation and closure cost.
The slightly higher initial capital cost as compared to the 2017 PFS ($1.84B) can mostly be attributed to higher mine equipment and mine development
costs and escalation offset by cost savings forecast from design modifications and project execution strategy. Only minor changes were made to the
process equipment selection, which, in combination with a decision based on the Whittle EO project led to coarsen the grind, resulting in a higher
throughput and overall annual gold production.
A slightly higher OPEX was estimated in this PFS as compared to the 2017 PFS. This can largely be attributed to escalation in mining, process and G&A
costs. However, cost escalation was also mitigated by such developments as incorporating autonomous drilling and an integrated remote operations
center, as examples. One of the most significant developments reflected in this study was the decision to increase the grind size from 180 µm to 250 µm
(P80), which allowed a higher throughput, effectively distributing many fixed OPEX costs to more tons, e.g. operating personnel, and lowering the power
consumption per ton milled. Reagent costs were also further optimized as a result of the testwork leading up to this PFS.
The total G&A costs, developed on a similar basis to the 2017 PFS, went up due to escalation, but were also offset somewhat on a unit basis due to the
higher throughput.
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22.3 Key Outcomes
The key outcomes of this PFS study are:
■ The Livengood Gold Project mineral resource is estimated at 646.0 M measured metric tons at an average grade of 0.60 g/mt (12.48 Moz) and
58.5 M indicated metric tons at an average grade of 0.61 g/mt (1.14 Moz), for a total of 704.5 M metric tons at an average grade of 0.60 g/mt
(13.6 Moz). Mineral resources are inclusive of mineral reserves.
■ This PFS has converted a portion of these mineral resources into proven mineral reserves of 411.5 Mmt at an average grade of 0.64 g/mt (8.5 Moz
contained) and probable mineral reserves of 18.5 Mmt at an average grade of 0.86 g/mt (0.5 Moz contained), for a total of 430.1 Mmt at an average
grade of 0.65 g/mt (9.0 Moz contained). To access these mineral reserves, 496.1 Mmt of overburden and waste rock must be mined, resulting in a
strip ratio of 1.15:1
■ The mine plan developed for the PFS provides sufficient ore to support an annual production rate of approximately 317,000 oz/y over an estimated
20.3 year mine life, producing a total of approximately 6.4 Moz of gold.
■ The material mined from the open pit peaks at 66 Mt (60 Mmt) per year and averages 57 Mt (52 Mmt). A total of 105 Mt (95 Mmt) of ore is sent to the
low grade ore stockpile over the life of the mine, with an average gold grade of 0.38 g/mt. The maximum size of the low grade ore stockpile is 88 Mt
(80 Mmt).
■ The peak mine fleet requirements have been estimated at 18 -320 t haul trucks, 2 -40 yd3 hydraulic shovels, 2 -40 yd3 wheel loaders and 5-
production drills.
■ Metallurgical testwork has confirmed the preferred flowsheet consisting of primary crushing, secondary crushing and a comminution circuit (SABC
configuration) producing a final grind size of 250 µm (P80), with gravity recovery followed by whole ore leaching of the gravity tailings (CIL). LOM gold
recovery is estimated to be 71.4% based on the rock types tested.
■ Important Project surface infrastructure include:
- O’Connor Creek Substation and 50 mi (81 km) of new 230 kV transmission line;
- Administration, dry, maintenance, and warehouse complex;
- Fresh water wells, pumping and distribution system;
- Process plant including mechanical workshop, offices, cafeteria, HVAC, electrical rooms within the complex. The oxygen plant and sulfur burner
are stand-alone buildings found near the process plant;
- Waste rock, low grade ore and growth media stockpiles;
- Tailings management facility with capacity for approximately 486 Mt (441 Mmt) of mill tailings along with a supernatant pond. Design incorporates
best practices, including lined rock fill embankments with a lined tailings basin;
- Off-site Integrated Remote Operations Center (IROC) located in Fairbanks.
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■ The initial capital cost (-20% / +25% accuracy) of the open pit mine, 65,000 t/d (59,000 mt/d) process plant and general site infrastructure is estimated
at $1.93B, including a contingency of $220M. Additional pre-production costs include $40M for spare parts and initial fills (the costs are recovered
during the last year of operations) and $23M for funding of the reclamation trust fund.
■ LOM Project sustaining capital costs total $658M, which include mine equipment, tailings management facility construction and mobile equipment in
the mill. Additional sustaining costs of $317M are required for the reclamation and closure.
■ The mining cost is estimated at $2.05/t mined, process plant operating cost is estimated at an average of $7.72/t ore processed, and general and
administrative costs of $1.35/t ore processed.
■ The total power demand is estimated to be approximately 57.8 MW, including network losses.
■ Over the life of mine, the total number of personnel averages 355, including mining, processing and G&A. The total personnel numbers peak in Year 6
at 430 employees.
■ Based on review of the studies completed to date, there are no known environmental issues that are anticipated to materially impact the Project’s
ability to extract the gold resource.
22.4
Indicative Economics
The financial analysis performed as part of this PFS using the base case assumptions results in an after-tax net present value (NPV) of $44.6M at a 5%
discount rate and an internal rate of return (IRR) of 5.3% after mining and income taxes. The payback period is 10.4 years. The all-in sustaining
costs (AISC), including sustaining capital, total $7.53B or $1,171/oz. All-in costs including operating, capital (initial and sustaining) and reclamation
funding are estimated to be $9.72B or $1,512 /oz.
The results of the PFS indicate that the proposed Livengood Gold Project is technically feasible, and has marginally positive economics at the base case
gold price of ($1,680/oz). However, development of the Project could have the potential to generate improved results with additional efforts as detailed by
the opportunities in Table 22-2. The Project QPs recommend advancing the Project to the feasibility study level including the completion of additional
metallurgical testwork and various confirmatory studies to improve the Project’s economics, study potential opportunities and reduce overall
implementation risk. The decision and timeline to pursue the feasibility study is at the discretion of THM.
22.5 Project Risks and Opportunities
As with most mining projects, there are risks that could affect the economic viability of the Project. Many of these risks are based on a lack of detailed
knowledge and can be managed as more sampling, testing, design, and engineering are conducted at the next study stages. Table 22-1 identifies what
are currently deemed to be the most significant internal Project risks, potential impacts, and possible mitigation approaches that could affect the technical
feasibility and economic outcome of the Project.
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External risks are, to a certain extent, beyond the control of the Project proponents and are much more difficult to anticipate and mitigate. Although, in
many instances, some risk reduction can be achieved. External risks are things such as the political situation in the Project region, metal prices, exchange
rates and government legislation. These external risks are generally applicable to all mining projects. Negative variance to these items from the
assumptions made in the economic model would reduce the profitability of the mine and the mineral resource estimates.
There are opportunities that could improve the economics, timing, and/or permitting potential of the Project. The major opportunities that have been
identified at this time are summarized in Table 22-2 excluding those typical to all mining projects, such as changes in metal prices, exchange rates, etc.
Further information and assessments are needed before these opportunities should be included in the Project economics.
Table 22-1: Project risks (preliminary risk assessment)
Area
Risk and Potential Impact
Possible Mitigation Approach
Geology and
Resource Estimation
1. Use of Reverse Circulation drilling. TMH has used both core and
reverse circulation (RC) drilling above and below the water table.
The use of RC drilling beneath the water table can result in
inaccurate assay data, due to cyclicity and/or downhole
contamination.
1. Detailed analysis of drilling data indicated the potential for cyclicity
contamination in portions of 12 holes. The data for the suspect
intervals was removed from the database used for resource
calculation. Similar analyses for downhole migration of mineralized
material indicated that significant downhole contamination is not an
issue.
Open Pit Mining
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1.
2.
Unable to provide sufficient construction material from the open
pit during pre-production. This may result in delays to the start of
operations and potential cost overruns.
1. Develop a detailed Project Execution Plan (PEP) to determine
appropriate productivities and ensure adequate fleet sizing.
Develop a more detailed earthworks mass balance.
Construction material sourced from mine waste. Uncertain what
proportion of mine waste can be used for construction purposes.
2. Testwork supports PFS construction plan but future regulatory
changes will need to be monitored.
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Area
Risk and Potential Impact
Possible Mitigation Approach
1. Local utility short-circuit capacity too low for motor mill starting.
Local utility short-circuit capacity might cause issues to start the
mill motors.
1.
Instead of a STATCOM compensation for the 230 kV power line,
the design has been done using two 15 MVAR synchronous
condensers at the Livengood substation. The synchronous
condensers will contribute positively to the short-circuit capacity
available. A mill motor starting study should also be performed
during the next development phase of the Project.
Metallurgy and
Process Plant
3.
4.
5.
1.
2.
Electrical availability and network studies date back to 2013.
Foundation design. Foundation quantities were estimated
according to available preliminary geotechnical investigation
report that does not provide details for all areas. The actual
soil/rock conditions encountered during construction may differ
from what is currently understood. The result could have
negative implications to both the execution schedule and
CAPEX.
Circuit design. The thickener design was based on best practice
as recent sedimentation testwork results were inconsistent.
2. Update all required electrical and network studies before or in
parallel to a future feasibility study.
3. Additional geotechnical investigations should be performed in the
next engineering stage to improve the confidence in the design
parameters for foundation works for the selected locations for
crushing and processing areas.
4. Perform additional thickening and sedimentation tests to confirm
thickener sizing and flocculant dosages for the next study phase.
5. Cold stripping should be investigated and modeled in the next
Circuit design. Cold stripping design was based on best practice
as no testwork was performed.
study phase.
Impact of climate change on site conditions. Climate change could
have impacts on weather and soil conditions.
1. Review Project designs to take into consideration the impact of
climate change on site conditions.
Environment
2. Evolving ESG and government guidelines. Over time, social
acceptance of the Project could be a risk as ESG becomes a
more critical deciding factor in project advancement.
2. Ensure that permitting guidelines are carefully monitored and ESG
trade-offs are performed.
Water Management
1. Operation of flow-through drain. The flow-through drain conveys
stormwater from upstream to downstream, under the TMF. The
integrity of the flow-through drain system in perpetuity is critical to
the permitting and long-term stability of the TMF.
1. Further the refinement of hydrological modeling and flow-through
drain system design focusing on system redundancy, integrity and
cost.
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Area
Risk and Potential Impact
Possible Mitigation Approach
1. Deleterious waste rock. Some waste rock proposed to be used as
1.
construction material may have acid generating or arsenic
leaching potential.
Identify additional testing, incorporate the results into the
geological block model. Include TMF construction material
requirements in the waste rock management plan.
Waste and Tailings
Management
2. Large area of liner installation.
The Project will require the surface preparation and placement of
approximately 24 Mft2 (2.2 Mm2) of LLDPE liner at the TMF during
the construction of the starter facility and prior to production.
There is a risk that the contractor may not be able to place the
quantity of liner required in the time available. The result could
have significant negative implications to both the execution
schedule and cost.
2. A detailed PEP should be developed, which will identify required
milestones for the earthworks and production rates for the liner
installation.
1. Less than optimum Project start date. The PFS execution plan
assumes a July 1st mobilization date for construction activities.
The actual Project release date is uncertain given the combination
of market variables and the multi-year permitting process that
must be completed prior to a construction decision. There is a risk
that a Project release date that is substantially different than July
1st could have negative implications to both the execution
schedule and Project cost.
Execution Plan
1. A detailed PEP should be developed, which will identify alternative
approaches to minimize the construction timeline and Project cost.
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Table 22-2: Project opportunities (preliminary opportunity assessment)
Area
Opportunity Explanation
Benefit
Open Pit Mining
1.
In-Pit backfilling of waste rock. Waste rock can be placed back in
the pit once the eastern portion is mined to final design.
1. Reduction in hauling distances and provide a cost savings.
However, future potential resources may be sterilized.
1. Revision of the local utility network modification study. The latest
study available stating the required local utility modifications was
completed in 2013 and is based on a plant power demand of
90 MW. Some decisions, such as the selection of 230 kV for
power transmission, could prove not to be the most cost-effective
solution.
1. Potentially reducing the Project CAPEX if electrical power
transmission is proved to be more cost-effective at 138 kV. In
general, the CAPEX will benefit from a lower voltage. However,
the cost of energy for the OPEX may increase. It is mainly a
matter of validating if 230 kV is still the best decision for the
Project in 2021 and moving forward.
2. Reagent optimization. The impact of lead nitrate is not fully
developed and shows minor improvements to gold recovery
considering the high OPEX associated to the reagent.
Metallurgy and
Process Plant
3. Product grind size. No testwork has been conducted to investigate
a grind size above 250 µm (P80).
2. Perform additional testwork with and without lead nitrate using CIL
methodology and optimized reagent conditions (O2, NaCN, CaO
and pH) to determine whether and how to incorporate the addition
of lead nitrate into the circuit.
3. Coarser grinds would allow for higher throughput, which could be
achieved, and it is possible to separate the activated carbon from
the pulp at coarser grind sizes.
4. ADR circuit design is adequate; however, value engineering could
4. Potential reduction in required equipment and building space thus
lead to reduction of equipment and building space.
leading to CAPEX savings.
5. Reagent optimization. Perform leaching tests in stirred leach
reactor test to further optimize lime and cyanide consumption.
5. Lower reagent consumption would lead to a lower OPEX
Water and tailings
management
1. Reduce earthworks quantities. Continue to refine the TMF design
through a detailed grading and layer definition in the basin of the
Livengood Valley.
1. This opportunity could reduce the volume of waste rock required
during construction and reduce the volume of processed gravels
required. Potential CAPEX reduction
1. Alternative construction techniques. Investigate the application of
1. These concepts could compress the construction schedule and
Execution Plan
the following concepts to the Project:
- Pre-assembly of leach tank bridges, structural steel, and pipe
racks;
- Pre-welding of tanks and piping off-site;
- Use of pre-cast foundations;
- Use of prefabricated buildings for offices and non-industrial
use facilities.
reduce pre-production CAPEX.
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23.
RECOMMENDATIONS
23.1 Summary
This Technical Report Summary on Tower Hill Mines Livengood Gold Project was prepared by experienced and competent independent consultants using
accepted engineering methodologies and standards. It provides a summary of the results and findings from each major area of investigation including
exploration, geological modelling, mineral resource, mine design, metallurgy, process design, infrastructure, environmental management, tailings and
water management, capital and operating costs, and economic analysis. The level of investigation for each of these areas is considered to meet or
exceed what is normally expected of a preliminary feasibility study (PFS).
The 2021 PFS details a project which will process 65,000 tons per day and produce 6.4 million ounces of gold over 21 years at an all-in-sustaining cost of
$1,171/oz. Based on the results of the PFS, the QPs recommend that Tower Hill Mines proceed with a feasibility study (FS) as part of the Livengood Mine
development plan. Timing for the proposed FS and associated data collection activities is at the discretion of Tower Hill Mines. Recommendations and
associated budgets are provided by the QPs to ensure sufficient information is available going forward. It is also recommended that the ongoing
environmental work continue to support project development and maintain continuity of baseline information.
It is estimated that the full feasibility study including the recommended field activities, metallurgical testwork and environmental studies would cost
approximately $10.2M including a 20% contingency. A breakdown of the key components of this study is summarized in Table 23-1
Table 23-1: Cost estimate for feasibility study recommendations
Activities
Estimated Cost ($M)
Sampling Program (5,000 ft)
Metallurgical Studies and Testwork
Feasibility Study
Environmental Baseline
Contingency (20%)
2.5
1.0
4.0
1.0
8.5
1.7
Sub-total
Total
$10.2M
Sections 23.2 to 23.5 summarize the key recommendations arising from this study.
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23.2 Sampling Program to Obtain Fresh Core
Metallurgical testwork completed in Phases 7 to 13 between 2013 and 2021 were conducted on core and RC chips obtained by drilling programs
completed between 2008 and 2012. There has been a considerable evolution and improvement in the laboratory protocols and testwork flowsheet applied
to the composite samples during this period of time. As a recommended best practice, the final laboratory protocols and the final flowsheet recommended
in the PFS should be applied to recently obtained fresh core and the recovery estimates confirmed.
It is estimated that approximately 5,000 feet (1,500 m) of PQ core should be drilled targeting all 5 major rock types of the Livengood deposit.
23.3 Metallurgical Testwork
Additional metallurgical testwork using the fresh rock samples gathered above should be performed and include the following:
■ PFS recovery equations and reagent consumptions by rock type should be validated.
■ The PFS work has indicated that net operating income increases as the grind size (P80) is increased up to the limits of existing testwork at 250 µm.
Additional testwork should be completed to establish the upper economic boundary of a coarser grind size (above 250 µm)
■ Sedimentation and filtration testwork at a P80 of 250 µm and coarser.
■ Column leach results of 12.5 mm show a negative sloping linear grade/recovery relationship over the grade ranges tested (approximately 0.5 to 1.0
g/mt). When evaluating the potential economics of an auxiliary heap leach that might process material with gold grades below mill cut-off
(approximately 0.25 to 0.5 g/mt). extrapolation of the negative sloping linear relationship into the lower grade ranges resulted in low recovery and
unfavorable economics. If the grade/recovery relationship is not linear into the lower grade ranges, it could alter the economics of the auxiliary heap
leach. Additional column leach testwork should be completed on 12.5 mm crush to assess gold recovery at 0.25 to 0.5 g/mt.
23.4
Feasibility Study
A feasibility study that includes the additional metallurgical testwork results, as detailed in Section 23.3, should be completed to detail out designs to a
feasibility level of engineering, including the open pit, stockpiles, mine haul and site roads, mine maintenance facilities, electrical supply & distribution,
process plant, infrastructure, and reclamation and closure. These designs will be required to estimate the initial capital cost, sustaining capital cost and
operating costs at the feasibility study level (+/- 15%), which will be in turn used to support a financial analysis and a potential development decision.
Additional studies as listed below should be undertaken as part of the FS or prior to the start of the FS as internal studies:
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
■ Additional tailings studies are recommended to confirm the selected approach for the FS. These studies should be completed in coordination with the
mining team to optimize the use of in-pit material to construct portions of the facilities to save costs, but also understand the overall cost to the mine
with different configurations;
■ Update the 2013 detailed hydrologic/hydrogeological analysis and water balance to determine water intake, storage and discharge requirements;
■ Evaluate proposed and alternative designs for the flow-through drain system of the TMF for cost reductions and operational improvements;
■ Update of the geotechnical study to support the most recent designs for the mine, process plant, TMF and general site infrastructure is recommended
to verify foundation conditions for consideration in the FS design work.
23.5 Environment
Environmental baseline studies and geochemistry studies should continue to be progressed to support a timely environmental approvals process, as well
as to support the feasibility study engineering design.
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Livengood Gold Project Pre-feasibility Study
24.
REFERENCES
24.1 General Project
Kunter, R., Carew, T., Rehn, C., Levy, M., Prenn, N., 2013, Livengood Gold Project: Feasibility Study: Livengood, Alaska, Samuel Engineering 43-
101 Technical Report, Effective: September 4, 2013, 189 p.
Census Area: Data Source: https://live.laborstats.alaska.gov/cen/2020/downloads.
Federal Subsistence Board, 1992.
FNSB: Data Source: https://www.co.fairbanks.ak.us/ArchiveCenter/ViewFile/Item/311.
Hardie, C., Baker, R., Levy, M., Carew, T., Wilson, S., George, T. April 10, 2017: NI 43-101 Technical Report on the Livengood Gold Project – Pre-
feasibility Study, Livengood, Alaska: Technical report prepared by BBA for International Tower Hill Mines Ltd., effective date March 8,
2017.
24.2 Geology and Resources
Abrams, Mark J., 2015. “Technical Report for the Shorty Creek Project, Livengood-Tolovana Mining District, Alaska”, March 31, 2015.
Abrams, Mark J., 2016. “Updated Technical Report for the Shorty Creek Project, Livengood-Tolovana Mining District, Alaska”, March 25, 2016.
Athey, J.E., Layer, P.W., and Drake, J., 2004, 40Ar/39Ar ages of rocks collected in the Livengood C-3, C-4, and B-5 quadranges, Alaska: Alaska
Division of Geological and Geophysical Surveys Raw-Data File 2004-1, 12 p.
Athey, J.E., Szumigala, D.J., Newberry, R.J., Werdon, M.B., and Hicks, S.A., 2004, Bedrock geologic map of the Livengood SW C-3 and SE C-4
Quadrangles, Tolovana mining district, Alaska, Preliminary Interpretive report 2004-3, Division of Geological and Geophysical Surveys.
Bieniawski Z.T., Engineering Rock Mass Classifications, John Wiley & Sons, New York, 1989.
Brechtel, C.E., Carew, T.J., Myers, R., Pennstrom, W., Puchner, C., and Wilson, S., 2011, August 2011 Summary report on the Livengood Project,
Tolovana District, Alaska, 275 pp.
Brooks, A. H., 1916, Preliminary report on the Tolovana district: U.S. Geological Survey Bulletin 642, p. 201-209.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Carew, T., Pennstrom, W., and Bell, R.J., 2010, November 2010 Summary report on the Livengood Project, Tolovana District, Alaska, 210 p.
Carew, T., 2011. Internal report analyzing drill sampling cyclicity.
D.L., 1997, Plutonic related gold deposits of interior Alaska, Society of Economic Geologists, Economic Geology Monograph 9, pp. 91-241.
Ebert, S., Dodd, S., Miller, L., and Petsel, S., 2000, The Donlin Creek Au-As-Sb-Hg deposit, southwestern Alaska, in Geology and Ore Deposits
2000, The Great Basin and Beyond, Symposium Proceedings, Geological Society of Nevada, ed., Cluer, J.K., Price, J.G., Struhsacker,
E.M., Hardyman, R.F., and Morris, C.L., p. 1069-1081.
Freegold Ventures Limited press release September 8, 2016.
Giroux Consultants Ltd, 2007, Livengood resource evaluation, Consultants report to THM, 22 p.
Giroux Consultants Ltd, 2008, Livengood resource evaluation, Consultants report to THM, 35 p.
Giroux Consultants Ltd, 2009, Livengood resource evaluation, January 2009, Consultants report to THM, 36 p.
Goldfarb, 1997, Metallogenic evolution of Alaska: Economic Geology Monograph 9, Society of Economic Geologists, pp. 4-34.
Goldfarb, R., Hart, C., Miller, M., Miller, L., Farmer, G.L., Groves, D., 2000, The Tintina gold belt – a global perspective, in The Tintina Gold Belt:
Concepts, Exploration, and Discoveries, British Columbia and Yukon Chamber of Mines, Cordilleran Roundup Special Volume 2, pp. 5-
31
Hoek E., Carranza-Torres CT, Corkum B., Hoek-Brown Failure Criterion, 2002 Edition. In: Proceedings of the Fifth International North American
Rock Mechanics Symposium, Toronto, Canada, Vol. 1, 2002. pp. 267-273.
Klipfel, P., 2006, Summary report on the Livengood Project, Tolovana District, Alaska, consultants report to THM, 37 p.
Klipfel, P. and Giroux, G., 2008a, Summary report on the Livengood Project, Tolovana District, Alaska; Consultants report to THM, 62 p.
Klipfel, P. and Giroux, G., 2008b, October 2008 Summary report on the Livengood Project, Tolovana District, Alaska; Consultants report to THM,
90 p.
Klipfel, P. and Giroux, G., 2009, January 2009 Summary report on the Livengood Project, Tolovana District, Alaska: consultant’s technical report
to THM, 99 p.
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Klipfel, P., Barnes, T., and Pennstrom, 2009a, July 2009 summary report on the Livengood Project, Tolovana District, Alaska: consultant’s
technical report to ITH, 120 p.
Klipfel, P., Carew, T., and Pennstrom, W., 2009b, October 2009 summary report on the Livengood Project, Tolovana District, Alaska: consultant’s
technical report to ITH, 144 p.
Lechner, M., 2017, Internal report, Summary or RMI’s August 2017 Block Model.
McCoy, D., Newberry, R.J., Layer, P., DiMarchi, J.J., Bakke, A., Masterman, J.S., and Minehane, D.L., 1997, Plutonic related gold deposits of
interior Alaska, Society of Economic Geologists, Economic Geology Monograph 9, pp. 91-241.
Newberry, R.J., McCoy, D.T., and Brew, D.A., 1995, Plutonic-hosted gold ores in Alaska: Igneous vs. metamorphic origins: Resource Geology
special issue, N0 18, pp. 57-100.
24.3 Mining
AMEC, 2013. “Livengood Gold Project, Feasibility Study Geotechnical Design Report, August 6, 2013” prepared by AMEC Environment &
Infrastructure, Inc. 625 pgs.
SRK Consulting (U.S.), 2012. Report on acid rock drainage potential of the Livengood waste rock, titled “Metal Leaching and Acid Rock Drainage
Assessment, Livengood Project, Alaska. Progress Report 3 - Final. September 2012. 853 pgs.
SRK Consulting (U.S.), Inc., 2013a, Feasibility Pit Slope Evaluation, Livengood Project. Report prepared for Tower Hill Mines Inc. dated July
2013. 213 pgs.
SRK Consulting (U.S.), Inc., 2013b. Report titled “2012 Hydrogeologic Investigations and Modeling Results - Draft 3, Livengood Project”.
Prepared for Tower Hill Mines Inc. dated July 13, 2013. 286 pgs.
SRK Consulting (U.S.), Inc., 2016, Geotechnical Slope Optimization of Years 1 and 3 Pit Designs, Livengood Gold Project. Letter report prepared
by Michael Levy and John Tinucci for Tower Hill Mines Inc. dated March 14, 2016. 37 pgs.
24.4 Mineral Processing and Metallurgy
Altman, K., 2013. Report on the Metallurgical Sample Selection Livengood Project, for Tower Hill Mines, Inc., Alaska, USA. RPA Report.
Anon. 2013. “Sample Characterization particle Size Analysis Flocculant Screening Gravity Sedimentation and Pulp Rheology Studies”. Pocock
Industrial, Inc. Report conducted for Samuel Eng. (on behalf of Livengood Project).
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Del Bosco, R., 2016, Blasting Review & PSD Estimation, International Tower Hill – Livengood Project, BBA consultant’s presentation to THM, 8 p.
Deschênes, G, 2016, Optimisation of Leaching Parameters to Extract Gold from a Sample for the Livengood Project Containing Antimony
Minerals: Scoping Study. BBA report (3661003-010001-49-ERA-0001/R00.doc), June 7, 2016.
Ding, L., Gajo, M. and Lascelles, D., 2018. “Phase 9B Metallurgical Test Program on Material from Livengood Deposit”. SGS Project 50223-014 –
Final report. May 29, 2018.
Fullam, M., 2021. “Gravity Modeling Report Livengood Gold Project”. FLSmidth report prepared for Torrealba, J. on behalf of THM. June 15, 2021.
Fullam, M., 2013. “Gravity Modeling Report Livengood Gold Project”. FLSmidth report prepared for Altman, K. on behalf of THM. February 15,
2013.
Gajo, M. and Lang, J., 2016. “Phase 8 Metallurgical Test Program on Material from Livengood Deposit”. SGS Project 50223-005 – Final Report
February 23, 2016.
Gajo, M. and Lascelles, D., 2017. “Phase 9A Metallurgical Test Program on Material from Livengood Deposit”. SGS Project 50223-013 – Final
report. December 6, 2017.
Gajo, M. and Prout, S., 2019. “Phase 11 Metallurgical Test Program on Material from Livengood Deposit”. SGS Project 50223-015 – Final report.
March 22, 2019.
Gajo, M. and Prout, S., 2019. “Phase 12 Metallurgical Test Program on Material from Livengood Deposit”. SGS Project 50223-16M – Final report.
September 18, 2019.
Hall , A. and Prout, S., 2016. “Phase 8a Metallurgical Test Program”. SGS Project 50223-007 – Final Report June 21, 2016.
Hall , A. and Lang, J., 2016. “Phase 9 Metallurgical Test Program”. SGS Project 50223-012 – Final Report May 27, 2016.
Lascelles, D. and Imeson, D., 2016. “Phase 8d Metallurgical Test Program on Material from the Livengood Deposit”. SGS Project 50223-011 –
Final Report June 17, 2016.
McClelland., 2011. “161020 Preg-Rob Test Data Summary slides.pptx”. Power point presentation provided by THM.
McMullen, J., 2015. Geological Section Review. BBA report (3661001-000000-40-ERA-0002-R01.docx), October 28, 2015.
Peevers, R., Pan, J. and Whittle, G., 2021. “Enterprise Optimization Report for the Livengood Gold Project by: Whittle Consulting”. June 2021.
FEBRUARY 2022
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Pocock Industrial Inc., (August 2011). Sample Characterization & PSA Flocculant Screening Gravity sedimentation and Pulp Rheology Studies
Conducted for Talon Gold Alaska Inc., Livengood Project.
Pocock Industrial Inc. (February 2013). Sample Characterization Particle Size Analysis Flocculant Screening Gravity Sedimentation and Pulp
Rheology Studies Conducted for Samuel Engineering, Livengood Project.
Richardson, M., JKSimMet Raw Simulation files: Livengood v5.3, Version.jksm5, Livengood w Revised Conditions.jksmx, and Livengood.jksmx.
SGS Canada Inc. Phase 13 Metallurgical Test Program Data.
SGS Canada Inc. (February 2013). Comminution Testing of Samples from the Livengood Property.
SGS Canada Inc. (February 2013). Metallurgical Development Testing on Four Rock Types from the Livengood Property - Phase 1 Optimization.
SGS Canada Inc. (March 2013). Cyanide Detoxification of CIL Tailings.
SGS Canada Inc. (March 2013). Metallurgical Variability Testing of the Livengood Property.
Tajadod, J. and Lang, J., 2013. “Metallurgical Development Testing on Four Rock Types from The Livengood Property”. SGS Project 50223-001 –
Report 1. February 13, 2013. Phase 1 Optimization.
Tajadod, J. and Lang, J., 2013. “Metallurgical Variability Testing of the Livengood Property”. SGS Project 50223-001 – Report 4. October 7, 2013.
Phase II, Variability.
Tajadod, J. and Lang, J., 2013. Preparation of Final Tailing Samples Using Mine Water” SGS Project 50223-002 – Final Report. December 17,
2013
Tajadod, J. and Lang, J., 2015. “Phase 7 Metallurgical Test Program on Material from Livengood Deposit”. SGS Project 50223-003 – Final report.
April 6, 2015.
Tajadod, J. and Lang, J., 2016. “Phase 8b Metallurgical Test Program on Material from Livengood Deposit”. SGS Project 50223-008 – Final
Report. February 12, 2016.
Tajadod, J. and Lang, J., 2016. “Phase 8c Intensive Cyanide Leach Test Program”. SGS Project 50223-010 – Final Report. February 26, 2016.
Tajadod, J. and Lang, J., 2013, Comminution Testing of Samples from the Livengood Property. SGS Project 50223-001 – Phase III, Comminution
Report 3. February 26, 2013. SGS Report.
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Livengood Gold Project Pre-feasibility Study
Wang, Z. and Prout, S., 2013, An Investigation by High Definitional Mineralogy into the Mineralogical Characteristics of Four Samples from the
Livengood Project. SGS Project 50223-001, MI5083-APR12, MI5101-MAY12, MI5004-MAY12, MI5005-MAY12. Revised May 3, 2013.
Weir, M., SMC Test Report for Tower Hill Mines, JKTech Job No 16007/P1. Testing date January 2016.
24.5
Infrastructure
Cope, L., Mayer, J., (February 2016), Analysis of 2015 PW-03 Pumping Test – Livengood Project, SRK Consulting, February 19, 2016, project
193800.050.
Electric Power Systems INC (EPS), (August 14, 2013). McCoy, D., Newberry, R.J., Layer, P., DiMarchi, J.J., Bakke, A., Masterman, J.S., and
Minehane.
Huffman, G.D, 2011 Power cost evaluation for the Livengood mine, Dryden & LaRue, Inc., October 6, 2011.
Meyer, D.A., Burlingame, D.W., International Tower Hill Mines, Ltd., Livengood Gold Project Power Supply Study, Project # 13-0126.
24.6
TMF and Water Management
AMEC, 2013. Feasibility Study report titled “Geotechnical Design Report August 6, 2013.
Ecological Resource Consultants, Inc., 2016, Livengood Water Balance for Pre-Feasibility Study, Technical Memorandum, dated September 2,
2016.
Knight Piésold and Co. 2012, Report on Pre-Feasibility Design of Geotechnical Infrastructure, Livengood Gold Project, dated May 11, 2012.
Samuel Engineering, Inc., 2013, Livengood Gold Project Feasibility Study, Volumes I and VII, dated August 25, 2013.
SRK Consulting (U.S.), Inc., 2016, Analysis of 2015 PW-03 Pumping Test – Livengood Project, Memorandum to Tower Hill Mines Inc. dated
February 19, 2016.
FEBRUARY 2022
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25.
RELIANCE ON INFORMATION PROVIDED BY REGISTRANT
The consulting firm’s and their Qualified Persons (QPs) have relied upon written reports and statements of other individuals and companies with whom
they do business. It is believed that the basic assumptions are factual and accurate, and that the interpretations are reasonable. This data has been relied
upon in the prefeasibility study and there is no reason to believe that any material facts have been withheld or misstated. The QPs have taken all
appropriate steps, in their professional judgment, to ensure that the work, information, or advice from the below listed employees of THM or others, is
sound and the QPs do not disclaim any responsibility for the Technical Report Summary. THM personnel who have been instrumental in supporting this
study are as follows:
■ Karl L. Hanneman – Chief Executive Officer
■ Debbie L. Evans – Corporate Controller
■ Denise A. Herzog – Environmental Affairs Manager
All of these individuals have had a longstanding affiliation with the Project.
For the specific purpose of this Technical Report Summary, the QPs relied upon legal, environmental, and tax matters provided by the registrant as
follows:
■ Ownership and legal status of the mineral tenures comprising the Livengood Gold Project provided by THM as of September 30, 2021 as set forth in
Section 3.1, Appendix A, and the relevant portions of Chapter 1. The various agreements under which THM holds title to the mineral claims for this
Project have not been reviewed by the QPs, and the QPs offer no legal opinion as to the validity of the mineral title claimed.
■ Environmental status of the LIvengood Gold Project, the required permits for project development and the socioeconomic conditions in the Project
area as provided by THM, as of November 13, 2021, as set forth in Chapter 17 and in the relevant portions of Chapter 1.
■ Taxes, royalties, and other government levies or interests applicable to revenue or income from the Livengood Gold Project, relevant to and
incorporated into the financial model developed as summarized in Chapter 19 and the relevant portions of Chapter 1.
FEBRUARY 2022
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Livengood Gold Project Pre-feasibility Study
Appendix A:
Properties and Claims
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
ADL
Number
330936
330937
330938
330939
330940
330941
330942
330943
330944
330945
330946
330947
330948
330949
330950
330951
330952
330953
330954
330955
330956
330957
330958
330959
330960
330961
330962
330963
330964
330965
330966
330967
330968
330969
Table A1: State of Alaska Claims – 100% Owned
Parcel Name
Meridian Township
Range and Section
Acres
Count
LUCKY 55
LUCKY 56
LUCKY 64
LUCKY 65
LUCKY 66
LUCKY 72
LUCKY 73
LUCKY 74
LUCKY 75
LUCKY 76
LUCKY 82
LUCKY 83
LUCKY 84
LUCKY 85
LUCKY 86
LUCKY 91
LUCKY 92
LUCKY 93
LUCKY 94
LUCKY 95
LUCKY 96
LUCKY 101
LUCKY 102
LUCKY 103
LUCKY 104
LUCKY 105
LUCKY 106
LUCKY 202
LUCKY 203
LUCKY 204
LUCKY 205
LUCKY 206
LUCKY 207
LUCKY 208
F009N004W33
F009N004W33
F009N004W32
F009N004W33
F009N004W33
F009N004W33
F008N004W05
F008N004W05
F008N004W05
F008N004W04
F008N004W04
F008N004W05
F008N004W05
F008N004W05
F008N004W04
F008N004W04
F008N004W05
F008N004W05
F008N004W05
F008N004W05
F008N004W04
F008N004W04
F008N004W05
F008N004W05
F008N004W05
F008N004W05
F008N004W04
F008N004W04
F008N004W08
F008N004W08
F008N004W08
F008N004W09
F008N004W09
F008N004W09
F008N004W09
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
APPENDIX A
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S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
ADL
Number
Parcel Name
Meridian Township
Range and Section
Acres
Count
330970
330971
330972
330973
330974
330975
330976
330977
330978
330979
338477
338478
338479
338480
338481
338482
338483
338484
338485
338486
338487
338488
338489
338490
338491
338492
338493
338494
338495
338496
338497
338498
338499
338500
338501
LUCKY 302
LUCKY 303
LUCKY 304
LUCKY 305
LUCKY 306
LUCKY 307
LUCKY 308
LUCKY 404
LUCKY 405
LUCKY 406
LUCKY 198
LUCKY 199
LUCKY 295
LUCKY 296
LUCKY 297
LUCKY 298
LUCKY 299
LUCKY 392
LUCKY 395
LUCKY 396
LUCKY 397
LUCKY 398
LUCKY 399
LUCKY 400
LUCKY 491
LUCKY 492
LUCKY 493
LUCKY 494
LUCKY 495
LUCKY 496
LUCKY 497
LUCKY 498
LUCKY 499
LUCKY 500
LUCKY 504
F008N004W08
F008N004W08
F008N004W08
F008N004W09
F008N004W09
F008N004W09
F008N004W09
F008N004W08
F008N004W09
F008N004W09
F008N004W07
F008N004W07
F008N005W12
F008N005W12
F008N004W07
F008N004W07
F008N004W07
F008N005W11
F008N005W12
F008N005W12
F008N004W07
F008N004W07
F008N004W07
F008N004W07
F008N004W08
F008N005W11
F008N005W11
F008N005W12
F008N005W12
F008N005W12
F008N005W12
F008N004W07
F008N004W07
F008N004W07
F008N004W07
F008N004W08
F008N004W08
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
ADL
Number
Parcel Name
Meridian Township
Range and Section
Acres
Count
338502
338503
338504
338505
338506
338507
338508
338509
338510
338511
338512
338513
338514
338515
338516
338517
338518
338519
338520
338521
338522
347943
347944
347945
347946
347947
347948
347949
347950
347951
347952
347953
347954
347955
347956
LUCKY 505
LUCKY 589
LUCKY 590
LUCKY 591
LUCKY 592
LUCKY 593
LUCKY 594
LUCKY 595
LUCKY 596
LUCKY 597
LUCKY 598
LUCKY 599
LUCKY 689
LUCKY 690
LUCKY 691
LUCKY 692
LUCKY 693
LUCKY 694
LUCKY 697
LUCKY 698
LUCKY 699
LC 407
LC 408
LC 502
LC 503
LC 506
LC 507
LC 600
LC 601
LC 602
LC 603
LC 604
LC 605
LC 695
LC 696
F008N004W09
F008N005W14
F008N005W14
F008N005W14
F008N005W14
F008N005W13
F008N005W13
F008N005W13
F008N005W13
F008N004W18
F008N004W18
F008N004W18
F008N005W14
F008N005W14
F008N005W14
F008N005W14
F008N005W13
F008N005W13
F008N004W18
F008N004W18
F008N004W18
F008N004W09
F008N004W09
F008N004W08
F008N004W08
F008N004W09
F008N004W09
F008N004W17
F008N004W18
F008N004W17
F008N004W17
F008N004W17
F008N004W17
F008N004W16
F008N005W13
F008N005W13
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Claim Owner
ADL
Number
Parcel Name
Meridian Township
Range and Section
Acres
Count
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
347957
347958
347959
347960
347961
347962
347963
347964
347965
347966
347967
347968
347969
347970
347971
347972
347973
347974
347975
347976
347977
347978
347979
347980
348802
348803
348804
348805
348806
348807
348808
348809
348810
348811
348812
LC 700
LC 701
LC 702
LC 703
LC 704
LC 790
LC 791
LC 792
LC 793
LC 794
LC 795
LC 796
LC 797
LC 798
LC 799
LC 800
LC 801
LC 802
LC 803
LC 891
LC 892
LC 893
LC 894
LC 895
LC 688
LC 787
LC 788
LC 884
LC 885
LC 886
LC 887
LC 888
LC 984
LC 985
LC 986
F008N004W17
F008N004W18
F008N004W17
F008N004W17
F008N004W17
F008N004W17
F008N005W14
F008N005W14
F008N005W14
F008N005W13
F008N005W13
F008N005W13
F008N005W13
F008N004W18
F008N004W18
F008N004W18
F008N004W17
F008N004W18
F008N004W17
F008N004W17
F008N004W17
F008N005W14
F008N005W14
F008N005W13
F008N005W13
F008N005W13
F008N005W15
F008N005W15
F008N005W15
F008N005W16
F008N005W15
F008N005W15
F008N005W15
F008N005W15
F008N005W21
F008N005W22
F008N005W22
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
ADL
Number
Parcel Name
Meridian Township
Range and Section
Acres
Count
348813
348814
348815
348816
348817
348818
348819
348820
348821
348822
348823
348824
348825
348826
348827
348828
348829
348830
348831
348832
361326
361327
361328
361329
361330
361331
361332
361333
361334
361335
LC 987
LC 1083
LC 1084
LC 1085
LC 1086
LC 1183
LC 1184
LC 1185
LC 1186
LC 1282
LC 1283
LC 1284
LC 1285
LC 1286
LC 1287
LC 1288
LC 1382
LC 1383
LC 1384
LC 1385
LUCKY 90
LUCKY 100
LUCKY 200
LUCKY 294
LUCKY 300
LUCKY 394
LUCKY 401
LUCKY 402
LUCKY 403
LUCKY 501
F008N005W22
F008N005W21
F008N005W21
F008N005W22
F008N005W22
F008N005W21
F008N005W21
F008N005W22
F008N005W22
F008N005W21
F008N005W21
F008N005W21
F008N005W22
F008N005W22
F008N005W22
F008N005W22
F008N005W28
F008N005W28
F008N005W28
F008N005W27
F008N004W06
F008N004W06
F008N004W07
F008N005W12
F008N004W07
F008N005W12
F008N004W08
F008N004W08
F008N004W08
F008N004W08
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table A2: State of Alaska Claims – 100% Owned
ADL
Number
Parcel Name
Meridian Township
Range and Section
Acres
Count
669377
669378
669379
669380
669381
669382
669383
669384
669385
669386
669387
669388
669389
669390
669391
669392
669393
669394
669395
669396
669397
669398
669399
669400
669401
669402
669403
669404
669405
669406
669407
669408
669409
669410
669411
LVG 1
LVG 2
LVG 3
LVG 4
LVG 5
LVG 6
LVG 7
LVG 8
LVG 9
LVG 10
LVG 11
LVG 12
LVG 13
LVG 14
LVG 15
LVG 16
LVG 17
LVG 18
LVG 19
LVG 20
LVG 21
LVG 22
LVG 23
LVG 24
LVG 25
LVG 26
LVG 27
LVG 28
LVG 29
LVG 30
LVG 31
LVG 32
LVG 33
LVG 34
LVG 35
F008N004W09
F008N004W16
F008N004W16
F008N004W16
F009N004W20
F009N004W20
F009N004W21
F009N004W21
F009N004W22
F009N004W22
F009N004W20
F009N004W20
F009N004W21
F009N004W21
F009N004W22
F009N004W22
F009N005W25
F009N005W25
F009N004W30
F009N004W30
F009N004W29
F009N004W29
F009N005W25
F009N005W25
F009N004W30
F009N004W30
F009N004W29
F009N004W29
F009N005W35
F009N005W35
F009N005W36
F009N005W36
F009N005W35
F009N005W35
F009N005W36
40
40
40
40
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
ADL
Number
Parcel Name
Meridian Township
Range and Section
Acres
Count
669412
669413
669414
669415
669416
669417
669418
669419
669420
669421
669422
669423
669424
669425
669426
669427
669428
669429
669430
669431
669432
669433
669434
669435
669436
669437
669438
669439
669440
669441
669442
669443
669444
669445
669446
669447
669448
LVG 36
LVG 37
LVG 38
LVG 39
LVG 40
LVG 41
LVG 42
LVG 43
LVG 44
LVG 45
LVG 46
LVG 47
LVG 48
LVG 49
LVG 50
LVG 51
LVG 52
LVG 53
LVG 54
LVG 55
LVG 56
LVG 57
LVG 58
LVG 59
LVG 60
LVG 61
LVG 62
LVG 63
LVG 64
LVG 65
LVG 66
LVG 67
LVG 68
LVG 69
LVG 70
LVG 71
LVG 72
F009N005W36
F008N005W03
F008N005W03
F008N005W03
F008N005W03
F009N004W27
F009N004W27
F009N004W27
F009N004W27
F009N004W34
F009N004W34
F009N004W34
F009N004W34
F008N004W04
F008N004W03
F008N004W03
F008N004W02
F008N004W02
F008N004W04
F008N004W03
F008N004W03
F008N004W02
F008N004W02
F008N004W10
F008N004W10
F008N004W11
F008N004W11
F008N004W10
F008N004W10
F008N004W11
F008N004W11
F008N004W16
F008N004W15
F008N004W15
F008N004W14
F008N004W14
F008N004W16
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
ADL
Number
Parcel Name
Meridian Township
Range and Section
Acres
Count
669449
669450
669451
669452
669453
669454
669455
669456
669457
669458
669459
669460
669461
669462
669463
669464
669465
700008
700009
700010
700011
700012
700013
700014
700015
700016
700017
700018
700019
703377
703378
703379
703380
703381
703382
703383
703384
LVG 73
LVG 74
LVG 75
LVG 76
LVG 77
LVG 78
LVG 79
LVG 80
LVG 81
LVG 82
LVG 83
LVG 84
LVG 85
LVG 86
LVG 87
LVG 88
LVG 89
LVG 90
LVG 91
LVG 92
LVG 93
LVG 94
LVG 95
LVG 96
LVG 97
LVG 98
LVG 99
LVG 100
LVG 101
LVG 116
LVG 117
LVG 118
LVG 119
LVG 120
LVG 121
LVG 122
LVG 123
F008N004W16
F008N004W15
F008N004W15
F008N004W14
F008N004W14
F008N004W21
F008N004W21
F008N004W22
F008N004W22
F008N004W23
F008N004W23
F008N004W21
F008N004W21
F008N004W22
F008N004W22
F008N004W23
F008N004W23
F009N004W17
F009N004W17
F009N004W16
F009N004W16
F009N004W17
F009N004W17
F009N004W16
F009N004W16
F008N005W09
F008N005W09
F008N005W09
F008N005W09
F009N004W14
F009N004W14
F009N004W13
F009N004W13
F009N004W15
F009N004W14
F009N004W14
F009N004W13
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
242
243
244
245
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
274
275
276
277
278
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
ADL
Number
Parcel Name
Meridian Township
Range and Section
Acres
Count
703385
703386
703387
703388
703389
703390
703391
703392
703393
703394
703395
703396
703397
703398
703399
703400
703401
703402
703403
703404
703405
703406
703407
703408
703409
703410
703411
703412
703413
703414
703415
703416
703417
703418
703419
703420
703421
LVG 124
LVG 125
LVG 126
LVG 127
LVG 128
LVG 129
LVG 130
LVG 131
LVG 132
LVG 133
LVG 134
LVG 135
LVG 136
LVG 137
LVG 138
LVG 139
LVG 140
LVG 141
LVG 142
LVG 143
LVG 144
LVG 145
LVG 146
LVG 147
LVG 148
LVG 149
LVG 150
LVG 151
LVG 152
LVG 153
LVG 154
LVG 155
LVG 156
LVG 157
LVG 158
LVG 159
LVG 160
F009N004W13
F009N004W23
F009N004W23
F009N004W24
F009N004W24
F009N004W23
F009N004W23
F009N004W24
F009N004W24
F009N004W26
F009N004W26
F009N004W25
F009N004W25
F009N004W26
F009N004W26
F009N004W25
F009N004W25
F009N004W35
F009N004W35
F009N004W36
F009N004W36
F009N003W31
F009N004W35
F009N004W35
F009N004W36
F009N004W36
F009N003W31
F008N004W01
F008N004W01
F008N003W06
F008N004W01
F008N004W01
F008N003W06
F008N004W12
F008N004W12
F008N003W07
F008N003W07
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
160
279
280
281
282
283
284
285
286
287
288
289
290
291
292
293
294
295
296
297
298
299
300
301
302
303
304
305
306
307
308
309
310
311
312
313
314
315
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Claim Owner
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
Tower Hill Mines, Inc.
ADL
Number
703422
703423
703424
703425
703426
703427
703428
703429
703430
703431
703432
Parcel Name
Meridian Township
Range and Section
Acres
Count
LVG 161
LVG 162
LVG 163
LVG 164
LVG 165
LVG 166
LVG 167
LVG 168
LVG 169
LVG 170
LVG 171
F008N004W12
F008N004W12
F008N003W07
F008N003W07
F008N004W13
F008N004W13
F008N003W18
F008N004W13
F008N004W13
F008N004W24
F008N004W24
160
160
160
160
160
160
160
160
160
160
160
316
317
318
319
320
321
322
323
324
325
326
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Township
8 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
8 North
8 North
8 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
Range
5 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
5 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
Table A3: Federal Unpatented Placer Claims – 100% Owned
Section
BLM Claim #
Claim Name
15NW
31SE
32SW
32SW
32SW
32SW
32SW
32NE
32NE
32NE
32NE
32NE
29SE
28SW
28SW
29SE
6SW
6NE
5NW
32SW
32SE
32SE
32SE
32SE
32SE
32SE
32SE
32NE
1SE
61477
61478
61479
61480
61481
61482
61483
61484
61485
61486
61487
61488
61489
61490
61491
61492
61498
61499
61500
61501
61502
61503
61504
61505
61506
61507
61508
61493
61494
Patsy Bench
Black Bench
Little Ben Bench
Oregon
Moonshine
Blue Bird
Nerma Fisko
Prosper
#2 Below Heine Creek
Windy Association
Triangle
Black Dimond
Robin
Dimond Ski Association
Hoover Devide
Mellon
#9 Above Discovery Association
#10 Above Bench
Gem Association
#18 Above Discovery Association
Sunshine
Last Chance Fraction
#23 above Discovery Association
Star Association
May Association
Hot Air Association
Option Association
Tomtit Association
LaFrance Association
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table A4: Patented Claims – 100% Owned
Mineral
Survey
832
1604
1604
1604
1609
1609
1623
1624
1624
1625
1625
1640
1641
1641
1641
1641
1641
1641
1960
1960
1960
1960
1960
1963
1966
2060
2071
2152
2152
Patent
Number
743623
1041577
1041577
1041577
1043895
1043895
1073686
1073687
1073687
1075872
1075872
1069069
1069097
1069097
1069097
1069097
1069097
1069097
1036259
1036259
1036259
1036259
1036259
1045457
1031406
1117204
1117929
1127946
1127946
Claim Names
Wagner Association Bench
Snow Bird Bench
Mint Bench
Black Jack
Navada Bench Placer
Gold Brick Fraction Placer
Italy
Trustworthy Association
Imperial Association
Etna-Sunnyside Association
Sunny Bench Association
Duncan
Eureka or No. 22 Creek Above on Livengood
Placer Mining Claim No. 21 Above Discovery on Livengood Creek
Placer Mining Claim No. 20 Above Discovery on Livengood Creek
Placer Mining Claim No. 19 Above Discovery on Livengood Creek
Last Chance
Tolovana Bench
No.1 Above Discovery on Livengood Creek
The Tolovana Placer Mining Bench Claim on Right Limit of Livengood Creek
No.1 Above Discovery Bench
No. One Bench Fraction Above Discovery Right Limit Livengood Creek
Ready Bullion Placer Mining Bench Claim on Right Limit of Livengood Creek
Deep Channel Association
Golden Rod Association
Eldorado Bench
Marietta Association
Hidden Treasure
Hot Day
LPI
Ownership
100%
100%
100%
100%
100%
100%
100%
100%
100%
15/16
100%
100%
100%
100%
3/4
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Township
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
9 North
9 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
Range
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
4 West
4 West
4 West
4 West
5 West
5 West
5 West
5 West
5 West
5 West
4 West
4 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
Table A5: Federal Unpatented Placer Claims – 100% Owned
Section
BLM Claim #
Claim Name
11SE
11SE
11SW
11SE
11NE
11SE
11NE
11NE
11NE
12NW
12NW
12NW
12NW
1SW
1SW
7NW
6SW
6SW
6SE
11NE
11NE
12NW
12NW
12NW
1SW
33SW
33SW
28SW
28NW
21SE
21NE
21SE
16SE
16SW
16SW
16SE
61249
61250
61256
61257
61258
61259
61260
61261
61262
61263
61264
61265
61266
61267
61268
61269
61270
61271
61272
61273
61274
61275
61276
61277
61278
61292
61293
61322
61323
61324
61325
61326
61327
61328
61329
61330
#5 above Discovery
Star fraction
#3 above discovery
#4 above discovery
Dickey-fraction
#4-a above discovery
#5 above discovery bench
#5 bench fraction, 1st tier
Leitrim a/k/a letruim, letrium, letram association
#7 bench right limit 1st tier above discovery
#7 above discovery
Rosalind fraction
#8 above discovery
Chatham bench association
Gold dollar association claim
Basin association claim
Dorothy association bench claim
Riffle association claim
Montana association
High grade fraction
Triangle fraction
#6 above discovery
o.k. fraction
#1 frank (franklin) gulch
#2 franklin gulch
Cloud association
Ruby bench
Pete
Mike
Ike
Carolyn
Sunshine Fraction
Frio
Ring
Pilot
Dan
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Township
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
Range
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
Section
BLM Claim #
Claim Name
16SE
16SE
15SW
15SW
15NW
16NE
16NE
15NW
15NW
15NW
9SE
9SE
10SW
15NW
15NW
15NE
10SW
9SE
9NE
10NW
10NW
10NW
10SW
10NW
10SE
10SE
10NE
10NE
10NE
10SE
10NE
10NE
10NE
10NE
11NW
11NW
10NW
11NE
61331
61332
61333
61334
61335
61336
61337
61338
61339
61340
61341
61342
61343
61344
61345
61346
61347
61348
61349
61350
61351
61352
61353
61354
61355
61356
61357
61358
61359
61360
61361
61362
61363
61364
61365
61366
61367
61368
Nyuk
Sweede Association
Eureka Banch claim
Bessie Bench
Jeanne
Hawk
Gypsy
Reef Association
California Fraction
No. 1 Below Discovery
Horse
Close
No. 2 Below Myrtle Creek
No. 1 Bench Right Limit
No. 1 Bench Fraction
Discovery Livengood Cr. Association
Placer Mining Claim No. 1 Below Discovery
Destiny
Jackpot
Nancy
Paystreak Bench Claim
Eureka Bench Claim on Left Limit
Deep Channel Fraction
Colorado Association
George Association, 2nd Tier
Gan Fraction, 2nd Tier right limit
Colorado Fraction, 3rd tier right limit
Sacramento Bench
Three Star Association
Toni Placer Mining Claim
Little Butch
Horseshoe claim
Carryall
Fish Association
Homesite Bench
Virgina Association
Eagle Bench Association
Birch Fraction
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Township
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
8 North
9 North
8 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
9 North
Range
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
5 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
4 West
Section
BLM Claim #
Claim Name
2SE
2SW
2SE
1SW
1SW
1SW
1NW
1NE
1SE
1SE
1SE
6SW
6NW
6NW
6NW
6NW
6SW
6NE
6NE
6NW
31SE
6NE
31SE
32SW
32NW
32NW
29SE
28SE
28SE
28SE
27SW
28SW
29SW
1SW
61369
61370
61371
61372
61373
61374
61375
61376
61377
61378
61379
61380
61381
61382
61383
61385
61386
61387
61388
61389
61391
61392
61393
61394
61395
61396
61399
61406
61407
61408
61409
61420
63462
63466
Brendan or Brandon Bench
Xmas
Blanche
Audrey Fraction
Gold Dollar Fraction
Livengood Bench Right Limit
Snow
Ice
Harding (Pearson)
Mayflower Claim
Golden Gusher Bench Claim
Bonznza Bench
North Star Association
Black Bear Association
Tom Cat Bench
Flat Association
Magnus Opus
Banner Bench claim
Jewel Bench
Wild Cat bench
Hum Dinger
Red Claim
Jerry Association
Alaska
California Association claim
Gol Run Bench, 2nd Tier
Spring Association
Wedge Claim
Bulldozer
Eve
Resavoir Association
Alabam on the divide
Dome a/k/a Dome Association
Marjorie Bench
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table A6: State of Alaska Claims – 100% Owned
Claim Owner
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
ADL
Number
361349
361350
361351
Parcel Name
Galaxy 1
Galaxy 2
Galaxy 3
Livengood Placers, Inc.
361352
Galaxy 4
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
Livengood Placers, Inc.
361353
361354
361355
361356
361357
361358
361359
361360
361361
361362
361363
361364
361365
361366
361367
361368
603474
603475
603476
603477
Galaxy 5
Galaxy 6
Galaxy 7
Galaxy 8
Galaxy 9
Galaxy 10
Galaxy 11
Galaxy 12
Galaxy 13
Galaxy 14
Galaxy 15
Galaxy 16
Galaxy 17
Galaxy 18
Galaxy 19
Galaxy 20
FM9N4W28SW
FM9N4W28SE
FM9N4W28NE
FM9N4W28NW
Meridian Township
Range and Section
Acres
Count
F008N005W10
F008N005W10
F008N005W02
F008N005W02
F008N005W03
F008N005W10
F008N005W11
F008N005W10
F008N005W11
F008N005W02
F008N005W02
F008N005W11
F008N005W11
F008N005W02
F008N005W02
F008N005W11
F008N005W01
F008N005W02
F008N005W01
F008N005W02
F008N005W01
F008N005W02
F008N005W01
F008N005W01
F008N005W01
F008N004W06
F008N004W07
F009N004W31
F008N004W06
F009N004W31
F009N004W31
F009N004W31
F009N004W28
F009N004W28
F009N004W28
F009N004W28
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
40
160
160
160
160
327
328
329
330
331
332
333
334
335
336
337
338
339
340
341
342
343
344
345
346
347
348
349
350
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
Table A7: Hudson/Geraghty Lease - Federal Unpatented Lode Claims
BLM File
Number
55452
55453
55454
55455
55456
55457
55458
55459
55460
55461
55462
55463
55464
55465
55466
55467
55468
55469
55470
55471
Parcel Name
SHARON
DOROTHEA
LENORA
FOSTER
VANCE
TWERPIT
SAUNDERS
NICKIE
PATRICK
WHITE ROCK
SUNSHINE #1
SUNSHINE #2
OLD SMOKY
WITTROCK
BLACK ROCK
TRAPLINE
PATRICIA
ANNE
EILEEN
BRIDGET
Owner
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
GERAGHTY
GERAGHTY
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
HUDSON
APPENDIX A
FEBRUARY 2022
International Tower Hill Mines Ltd.
S-K 1300 – Technical Report Summary
Livengood Gold Project Pre-feasibility Study
The Property consists of the following six (6) unpatented Federal Lode and Placer claims:
Table A8: Tucker Lease – Federal Unpatented Lode and Placer Claims
File
Number
37580
37581
37582
37583
37584
37585
Parcel Name
Date Acquired
Acres
Type
Lillian No. 1
Satellite
Nickel Bench R.L.
The Nickel
Overlooked
The Lad
30-Sep-1968
30-Sep-1968
30-Jun-1972
12-Aug-1965
6-Sep-1975
12-Aug-1965
21
20
20
19
18
20
Lode Claim
Lode Claim
Placer Claim
Placer Claim
Placer Claim
Placer Claim
APPENDIX A
FEBRUARY 2022