NEW YORK CANYON NEVADA

Location Nevada
Location Details 30 mi east of Hawthorne
Type of Project Advanced stage exploration
Number of Claims 21 patented and 60 unpatented claims in two separate claim blocks
Est. Property Size 1,500 ac
Emgold Ownership Transaction in progress to option and earn 100% ownership
Underlying Royalties 2% NSR on unpatented claims, which 1% can be purchased at any time for US$1 million
Exploration Completed ·       Soil and rock chip sampling

·       Sediment sampling

·       Trenching

·       Geophysics

·       107 drill holes totaling 98,433 ft. by Conoco from 1977 to 1991

·       54 drill holes totaling 13,018 ft. by Kookaburra from 1992 to 1997

·       73 drill holes totaling 27,605 ft. by Searchlight Resources from 2004 to 2006

·       Total of 234 drill holes and 139,056 ft .of drilling

·       Metallurgical test work

Key Exploration Targets Longshot Ridge, Copper Queen, Champion
Technical Report 2010 Technical Report completed by Searchlight Resources
Resources ·       Historic indicated resource of 16.3 million tons (14.8 million tonnes) of 0.43% Cu and an historic inferred resource of 2.9 million tons (2.6 million tonnes) of 0.31% Cu in the Longshot Ridge copper oxide skarn area (see Searchlight Technical Report

·       Historic 142 million ton (129 million tonne) inferred resource grading 0.35% copper, 0.015% molybdenum, 0.1% Zn, 4 ppm Ag, and 0.1% Au for the Copper Queen deposit in Conoco  internal report dated May 10, 1979

Highlights ·       North group of claims covers historic past producing copper operations and gold occurrences and is adjacent to the past producing Santa Fe Mine with reported production of 345,999 oz. Au and 710,629 oz. Ag

·       South group of claims has a historic oxide resource in the Longshot Ridge area and a historic copper porphyry resource in the Copper Queen area

·       Potential exists for Au, Ag, Cu, Mo, and other mineralization

·       Potential exists development of a large Cu/Mo near surface resource and deeper Cu/Mo/Au/Ag resource at depths – perhaps in the range of 200-400M tons subject to exploration success and other factors

Emgold is in the process of acquiring 100% ownership in the New York Canyon Property, NV (the “Property”).  The Property is an advanced stage base metal, gold and silver exploration property located about 30 miles east of Hawthorne, NV.  It consists of 21 unpatented mining claims and 60 patented mining claims covering about 1,500 acres.  The Property comes with a significant database of historic information. Total historic drilling on the Property, to date, is 234 holes totaling 139,056 ft. (43,384 m).  The south part of the Property has three main exploration targets – Longshot Ridge, Champion, and Copper Queen representing oxide copper skarn and sulfide copper/molybdenum porphyry targets.  The north part of the property abuts the historic past producing Santa Fe Gold Mine, and may also host gold-silver exploration targets in addition to base metals.

SUMMARY

On May 28, 2019, Emgold announced that it had signed a Letter of Intent with Searchlight Resources Inc. (TSX-V:  SCLT) to acquire an option to earn a 100 percent interest in the New York Canyon Property, NV.  The option gives Emgold the right to acquire 21 unpatented claims and 60 unpatented claims that comprise the Property plus all historic data, subject to any underlying royalties.  The Property is an advanced stage base metal exploration property that was explored from the mid-1960’s until the mid- 2000’s for near surface copper oxide skarn mineralization and deeper copper-molybdenum sulfide porphyry mineralization.   Three known exploration targets on the southern portion of the Property include Longshot Ridge, Copper Queen, and Champion.

Drilling by Conoco, reported in a May 10, 1979 internal report, included a significant interval of chalcopyrite and molybdenite mineralization in drill-hole MN-42, drilled in 1977, intersecting 1,020 ft. (311m) of 0.41% copper, 0.012% molybdenum, 4.5 ppm silver, and 0.1 ppm gold from 560 ft. (171 m) to 1,580 feet (482 m) (true width unknown) at the Copper Queen prospect, located approximately 2 mi. (3 km) west of the Longshot Ridge prospect (see details below).

Conoco reported a 142 million tons (129 million tonnes) inferred resource grading 0.35% copper, 0.015% molybdenum, 0.1% Zn, 4 ppm silver, and 0.1% gold for the Copper Queen deposit in the internal report dated May 10, 1979. In another internal report completed on September 20, 1979, Conoco reported “possible reserves from drill-hole data and geologic interpretation on cross sections” of 13.2 million tons (11.0 million tonnes) grading 0.55% copper for the Longshot Ridge prospect.  These are a historic resource before the implementation of NI 43-101 Standard of Disclosure and CIM standards and Emgold’s geologists have not verified the calculations or attempted to reclassify them according to current standards.

In a 2010 Technical Report, Searchlight defined a historic indicated resource of 16.3 million tons (14.8 million tonnes) of 0.43% copper and an historic inferred resource of 2.9 million tons (2.6 million tonnes) of 0.31% copper in the Longshot Ridge copper oxide skarn area was defined.  A cut-off grade of 0.20% copper was used.  This resource is being treated as a historic resource by Emgold’s geologists and no work has been done to verify the calculations or update them to treat the resource as current.

The exploration targets on the north part of the Property abut the historic The Santa Fe deposit was discovered in the late 1970’s and mined by Corona Gold in the late 1980’s and early 1990’s.  Historic production estimated from Santa Fe Mine is 345,499 ounces of gold and 710,629 ounces of silver between 1989 and 1995 (see details below).

New York Canyon thus hosts near surface copper oxide skarn exploration targets, deeper copper/molybdenum porphyry exploration targets, and may also host gold-silver exploration targets. The main goal of future exploration will be to confirm historic drilling and potentially develop a large base metal deposit, subject to exploration success.

New York Canyon Property
Location Map

LOCATION AND OWNERSHIP

The Property is located in the Santa Fe Mining District, Mineral County, in west-central Nevada, about 30 mi. (48 km) from Hawthorne, Nevada. The Property consists of 21-patented claims and 60-unpatented claims totaling about 1,500 ac. (607 ha).  The claims are divided into two groups – the North and South Groups.

The North Group of claims comprising the Property covers historic past producing copper operations and gold occurrences and is adjacent to the past producing Santa Fe Gold Mine owned by Victoria Gold Corporation (TSX:V: VIT) (“Victoria Gold”)  The Santa Fe deposit was discovered in the late 1970’s and mined by Corona Gold in the late 1980’s and early 1990’s.  Historic production estimated from Santa Fe Mine is 345,499 ounces of gold and 710,629 ounces of silver between 1989 and 1995 (source:  The Nevada Mineral Industry, Special Publication MI-2017, Nevada Bureau of Mines and Geology).  Note that the vicinity of the Property to a past producing mine is not necessarily indicative of the mineralization that may be hosted at New York Canyon Property.

The South Group of claims comprising the Property hosts the Longshot Ridge, Champion, and Copper Queen deposits, which host copper skarn oxide, copper skarn sulfide, and copper sulfide porphyry mineralization.

Emgold has agreed to purchase a 100 percent interest in the claims comprising the Property (the “Transaction”) from Searchlight Resources Inc. (TSX-V:  SCLT) under the following terms:

  1. C$10,000 on signing the LOI (paid);
  2. C$40,000 on closing of the Transaction;
  3. C$500,000 in common shares of the capital of Emgold at the date of closing, with the share price based on the 30-day volume weighted average price of the Company’s share  immediately prior to the announcement of the Transaction;
  4. C$100,000 within 6 months of the date of closing of the Transaction;
  5. C$100,000 within 12 months of the date of closing of the Transaction; and
  6. C$100,000 within 18 months of the date of closing of the Transaction.

The Transaction is subject, amongst other conditions, to completion of a definitive agreement and regulatory approval by the TSX Venture Exchange.

The Property has synergy with Emgold’s other properties in the Walker Lane structural trend on the western side of Nevada and locational synergy with the Mindora Property that Emgold is also in the process of acquiring.

New York Canyon Property
Looking East

HISTORY

The discovery of these deposits dates back to 1875 and historic production, by the Wall Street Copper Company during 1906-1929, came from a number of small surface showings in the Longshot Ridge area.  Historic production is reported to be 8.9 million pounds (4.04 million kg) of copper at an average grade of 5.5% (source:  USGS Mineral Resource Data System, Deposit ID 10301559, New York Canyon / Longshot Ridge Project).

In the mid-1960s to the late-1970s, several companies explored the Property for major copper porphyry deposits. This work defined additional copper oxide skarn mineralization at Longshot Ridge and copper sulfide skarn and porphyry mineralization at the Copper Queen prospects. Historic drilling by Conoco, the operator of the Property from 1977 to 1991, totaled 107 holes totaling approximately 98,433 ft. (30,000 m).  Drilling by Conoco, reported in a May 10, 1979 internal report, included a significant interval of chalcopyrite and molybdenite mineralization in drill-hole MN-42, drilled in 1977, intersecting 1,020 ft. (311m) of 0.41% copper, 0.012% molybdenum, 4.5 ppm silver, and 0.1 ppm gold from 560 ft. (171 m) to 1,580 ft. (482 m) (true width unknown) at the Copper Queen prospect, located approximately 2 mi. (3 km) west of the Longshot Ridge prospect.

Between 1992 and 1997 Kookaburra Resources Ltd. (“Kookaburra”) conducted further exploration, including exploration with various joint venture partners, including Coca Mines and Phelps Dodge.  The tested the Longshot Ridge and Copper Queen skarns with an additional 54 drill-holes totaling 13,018 ft. (3,968 m).  The primary goal of this exploration was to increase the size of the oxide skarn resource.

Subsequent to Kookaburra’s work on the Property, the unpatented claims lapsed in 1999. New unpatented claims were staked by two individuals and subsequently acquired by Nevada Sunrise LLC (“Nevada Sunrise”), a privately held Nevada corporation, along with rights to acquire the patented claims.

Aberdene Mines Ltd. (subsequently Canyon Copper Corporation and then Searchlight Resources Inc.) acquired an option on the Property from Nevada Sunrise in March, 2004 and subsequently acquired rights to both the patented and unpatented claims that make up the current Property.  Searchlight completed 27,605 ft. (8,414 m) of drilling in 73 holes, focused on the Longshot Ridge deposit.  Total historic drilling on the Property to date is therefore 234 holes totaling 139,056 ft. (43,384 m).

No drilling on the Property has been done since 2006.  Searchlight completed a NI 43-101 Technical Report on the Longshot Ridge Project in 2010, including a resource estimate.  This Technical Report includes drilling to 2005 and excluded drilling done in 2006.

GEOLOGY AND MINERALIZATION

The Property lies within the central portion of the Walker Lane structural belt, a broad zone of NW-SE striking parallel to sub-parallel right lateral strike-slip faults extending for more than 400 miles through eastern Nevada and into northern California.  The structural belt was initiated during the Jurassic period at which time a number of porphyry copper deposits and related skarn n deposits were formed.  Volcanism and related hydrothermal mineralization, often of Tertiary age, are recognized along the length of this structural trend.

Copper mineralization is hosted primarily within the Triassic-age Gabbs Formation limestone sequence with some within the underlying Triassic-age Luning Formation limestone units and overlying Jurassic-age Sunrise Formations limestone sequence. Mineralization in skarns is adjacent to Cretaceous age felsic intrusive rocks.  Non-mineralized volcanic flows of Tertiary-age cover these older rocks on the hills and Quaternary–age alluvium and colluvium cover them in the valleys.

Mineralization is associated with three principal occurrences – Copper Queen on the west, Champion on the center, and Longshot Ridge on the east.  The copper occurrences lie along a west-northwest trend that likely reflects the deeper basement structures.

New York Canyon
Main Deposits and Structures

The Copper Queen prospect has no exposed mineralization at the surface but contains copper sulfide skarn at depth and an incompletely confirmed copper-molybdenum sulfide porphyry system at greater depth. The Champion and Longshot Ridge prospects, however, have numerous widespread exposures of copper skarn mineralization, both in surface outcrop and in old mine workings. The majority of recent exploration efforts on the Property have focused on the extensive oxide copper skarn mineralization at Longshot Ridge.  The principal alteration and mineralization at Longshot Ridge occurs as copper-rich skarn in porous and permeable zones within sedimentary rock units of the Luning, Gabbs and Sunrise Formations.  Additionally, small amounts of copper mineralization occur in stockwork veinlets in permeable fractures in some of the porphyritic intrusive sills and dikes that intrude the sedimentary rock units. The alteration associated with mineralization in these intrusive bodies consists of argillization, phyllic, and silicification – typical for this type of rock.

At Longshot Ridge, the oxide copper minerals are apparently the products of supergene weathering and oxidation of primary copper sulfide minerals present in the original skarn. The copper mineralization consists almost entirely of secondary copper minerals, principally malachite, azurite, chrysocolla and copper wad. Additionally, some copper-rich limonite (goethite) is reported, and a fairly common greenish alteration mineral is thought to be a zinc bearing clay. Because limestones tend to buffer solutions carrying copper in a supergene environment, copper weathered from the skarn sulfide minerals migrates to the non-skarn limestone units where it may be enriched as much as 300 to 400 percent.

New York Canyon Property
Oxidized Mineralization at Longshot Ridge

Geophysics

Historic work on the Property includes induced polarization (IP), ground magnetic (GMAG), and gravity (GRAV) surveys spanning from the mid-1960’s to 2004.  In 2006, Wright Geophysics reviewed the historic data and completed new GMAG and IP studies.  This work has identified a number of exploration targets in addition to known targets, for follow up.

Drilling

Prior to Searchlight, approximately 161 drill holes totaling 111,451 ft. (3,490 m) of drilling was completed on the Property.  Searchlight completed 73 drill holes totaling 27,605 ft. (8,484 m) for a grand total of 234 holes totaling 139,056 ft. (43,284m).

New York Canyon Property
2006 Drilling Program

EMGOLD’S QUALITY ASSURANCE AND QUALITY CONTROL PROGRAM

QA/QC procedures on historic work are unknown and work was completed prior to the implementation of NI 43-101 Standards of Disclosure and CIM standards.  Work was completed by reputable companies and it is expected industry standards were followed.

Work done by Searchlight was done after the implementation of NI 43-101 Standards of Disclosure and CIM Standards.  Sampling methods, analysis, and security of samples for their work is detailed in the 2010 Technical Report completed by Searchlight.

In completing the 2010 Technical Report, it was noted that during the 2006 drill program there was a change in laboratories part way through the drilling program.  The labs used a different set of procedures for sample preparation and copper analysis.  The check-assay system identified a variation in sample results between the labs, including analysis of sample blanks.  It was recommended that re-assays be done at a third party lab and the 2006 drill data was not used in the 2010 resource estimate.   The 2006 drill program included 7 HQ sized diamond drill holes totaling 2,805 ft. (855 m) and 26 RC holes totaling 8,828 ft. (2,688 m).

Resources and Reserves

Conoco reported a 142 million tons (129 million tonnes) inferred resource grading 0.35% copper, 0.015% molybdenum, 0.1% Zn, 4 ppm silver, and 0.1% gold for the Copper Queen deposit in the internal report dated May 10, 1979. In another internal report completed on September 20, 1979, Conoco reported “possible reserves from drill-hole data and geologic interpretation on cross sections” of 13.2 million tons (11.0 million tonnes) grading 0.55% copper for the Longshot Ridge prospect.   These are historical reserve and resource estimates prepared prior to the implementation of NI 43-101 and use terminology not compliant with current reporting standards.  A qualified person has not audited or verified these historical estimates nor made any attempt to re-classify the estimates according to current NI 43-101 Standards of Disclosure or the CIM standards.

In a 2010 Technical Report, Searchlight defined a historic indicated resource of 16.3 million tons (14.8 million tonnes) of 0.43% copper and an historic inferred resource of 2.9 million tons (2.6 million tonnes) of 0.31% copper in the Longshot Ridge copper oxide skarn area.  A cut-off grade of 0.20% copper was used.  This mineral resource estimate is considered historical as defined by NI 43-101 and a qualified person has not audited or verified this resource as a current mineral resource. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. The Company is not treating the historical estimate as current mineral resources or mineral reserves.

The Searchlight mineral resource was estimated using industry standards that conformed with CIM Definition Standards on Mineral Resources and Mineral Reserves.  The mineral resource estimate database contains 58 historic drill holes from prior operators to Searchlight totaling 18,469 feet, 38 drill holes (10 HQ diamond drill holes and 28 reverse circular drill holes) totaling 14,585 feet completed by Searchlight during the period from 2004 to 2005, and various surface and trench samples from 34 trenches and road cuts obtained from Longshot Ridge.  The estimate does not include 33 drill holes (7 HQ diamond drill holes and 26 reverse circulation holes) completed by the Company in 2006.

Outlier high copper assays were capped at 4% Cu within the mineralized solid and at 1.3% Cu if outside the solid. Uniform 20 ft. composites were produced both inside and outside the mineralized solid from capped Cu values.  Semivariograms were produced for Cu inside and outside the mineralized solid and used both to estimate and classify the resource.  A three-dimensional geological and block model was generated using Gemcom and Techbase software. A block model with blocks of 50 x 50 x 40 feet in dimensions was placed over the mineralized solid with the percentage below topography and inside the mineralized solid recorded in each block.  Densities of 2.94 for the mineralized zone and 2.70 outside the mineralized zone were used.  Copper grades were interpolated into all blocks by using an ordinary kriging estimation method.  Blocks were classified as either indicated or inferred based on grade continuity quantified by the semivariogram.

To upgrade the historic resource to current, it is recommended that drilling by Searchlight from 2006 be re-assayed due to QA/QC issues identified in the 2010 Technical Report and the new data incorporated into the resource model.  The claims making up the Property package would also need to be updated.

Metallurgy

Both Conoco and Kookaburra conducted preliminary scoping tests on the economic viability of the project, including alkaline and acid bottle roll leaching and flotation metallurgical testing.  Conoco’s work focused on the Copper Queen sulfide mineralization while Kookaburra focused on the copper oxide mineralization at Longshot Ridge.

In 2005, McClelland Labs conducted specific gravity tests on 10 Longshot Ridge core samples from one drill hole.  These tests are not considered to be representative of the deposit because they came from a single hole.  In 2007, SGS Lakefield Research conducted various metallurgical tests to determine the best methods to recover copper at Longshot Ridge.  They concluded acid leaching showed the greatest recoveries, but acid consumption was high.  Additional test work is needed to optimize metallurgical recovery and that more samples are needed to be more representative of the deposit.

The historic metallurgical test work provides useful information to design future programs and it is understood that the oxide-sulphide deposits at New York Canyon, like similar deposits, will make metallurgy complex.

Permitting and Environmental 

The Property has been subject to past historic mining activity and more modern exploration programs.  Searchlight currently has two exploration bonds for exploration programs conducted by that company that will transfer to Emgold upon completion of the property acquisition.  No major environmental liabilities are known to occur on the Property.

The Property is located both on private patented claims under the jurisdiction of the State and unpatented claims under the jurisdiction of the BLM.  Permitting requirements will depend on the scope and size of an exploration programs and whether the exploration occurs on patented or unpatented mineral claims (or a combination of the two).

Conclusions

The New York Canyon Property is an advanced stage exploration property with potential for a major copper/molybdenum deposit, subject to additional exploration.  This deposit has near surface copper oxide skarn mineralization as outlined in a 2010 Technical Report by Searchlight at the Longshot Ridge target.  However, a much larger porphyry target occurs at depth as outlined by historic work by Conoco and others.  Epithermal gold-silver mineralization may also occur on the property given its vicinity to the adjacent past producing Santa Fe Gold Mine, subject to successful exploration.

Qualification

Emgold’s Qualified Person, Mr. Robert Pease CPG, consulting geologist for the Company, has reviewed and approved the scientific and technical information on this webpage.

References

Bollig, D.W. and Robinson, R.H. Initial Mining Costs Estimated tor Long Shot Ridge, Santa Fe Mining District, Mineral County, Nevada, Conoco Inc., Minerals Department, September 20, 1979

Broili, Chris; Klohn, Mel; and Giroux, Garry, Technical Report on the New York Canyon Copper Project, Nevada USA, Prepared for Canyon Copper Corp., April 6, 2010

Cowdery, P.H., Technical Report on the Longshot Ridge Copper Oxide Project, Core Engineering Associates for Kookaburra Resources Ltd., April 1993, April 23, 1993, revised June 23, 1993

Long, Roney C., Progress Report for the Copper Queen Area, New Your Canyon Project, Continental Oil Company Minerals Department, May 10, 1979

Disclaimer

Readers are cautioned to review the Disclaimer Page on this website for qualifications that may be applicable to the information contained on this Project Page, including Forward Looking Statements.