Silicon-Merlin

PROPERTY:
Silicon-Merlin
Operator:
AngloGold Ashanti NA
Location:
Nevada, U.S.
AOI (km2):
94
Commodity:
Gold
Royalty:
1.0% NSR
Status:
Development
Silicon-Merlin location map

Overview

  • Epithermal gold project owned by AngloGold Ashanti NA (“AngloGold”)
  • Orogen holds a 1% net smelter return (“NSR”) royalty on a 94 square-kilometre area of interest covering the Central Silicon deposit and Merlin Exploration Target on AngloGold’s Expanded Silicon project, part of the broader Beatty District Projects
  • Silicon: Total resource of 4.22 million ounces of oxide gold from the Central-Silicon deposit as of December 31, 2022, including 3.4 million ounces in the indicated category and 0.8 million ounces in the inferred category
  • Merlin: Exploration Target at Merlin ranges from 230 to 250 million tonnes grading 0.8 to 1.0 grams per tonnes (“g/t”) gold for a total of 6.0 to 8.0 million ounces of gold (see Cautionary Note)
  • AngloGold has completed over 200 kilometres of drilling on the Expanded Silicon project with a conceptual study designed to integrate the two mineral bodies (Central Silicon and Merlin) to be completed by the end of 2023
  • Mineralization at Central Silicon and Merlin consists of epithermal gold mineralization
  • AngloGold forecasts first production in the Beatty District by the end of 2025 with the region forming a greater than 300,000-ounce gold per year multi-decade mine1,2

Orogen’s Area of Interest: Silicon-Merlin

Latest Project Update

Merlin

On August 4, 2023, AngloGold provided a drilling and resource development update on Merlin that included the following highlights:

  • The Exploration Target at Merlin ranges from 230 to 250 million tonnes grading 0.8 to 1.0 g/t gold for a total of 6.0 to 8.0 million ounces of gold (see Cautionary Note)1,2,3
  • The Exploration Target at Merlin is exclusive of the 3.4 million ounces gold Indicated and 800,000 ounces gold Inferred resources at Central Silicon4
  • Impressive drill hole intercepts include drill hole MER-23-0105-RD grading 3.27 g/t gold over 285 metres and drill hole MDT-21 grading 2.61 g/t gold over 214.8 metres3
  • Over 261 drill holes totalling over 120 kilometres of drilling at Merlin completed as of July 20233
  • The Merlin zone remains open to the west, south-west, and north

AngloGold has completed over 200 kilometres of drilling on the Expanded Silicon project with a conceptual study designed to integrate the two mineral bodies (Central Silicon and Merlin) to be completed by the end of 2023. The mineralization at Central Silicon and Merlin consists of epithermal gold mineralization. At Merlin, mineralization appears to be dominantly hosted in the Bullfrog and Tram tuffs with the currently defined Exploration Target open to the west, south-west and north. AngloGold is currently working on an integrated concept study for the Expanded Silicon project to be completed in H2 2023. AngloGold predicts first production in the Beatty District by the end of 2025 with the region forming a greater than 300,000-ounce gold per year multi-decade mine1,2.

Table 1: Drill hole intercept results shown in Figure 11

Drill hole ID

From (m)

To (m)

Length (m)

Au (g/t)

MD-0017

425.2

592.8

167.6

0.82

MD-0016

397.8

617.2

219.4

0.62

MRC-0017

and

367.3

722.4

685.8

792.5

318.5

70.1

0.72

0.76

MDT-0021

448.1

662.9

214.8

2.46

MER-23-0105-RD

482.8

564.3

81.5

2.61

MER-23-0147-RD

284.1

569.1

285.0

3.27

MRC-0014

480.1

595.9

115.8

2.42

MD-0005

408.4

585.2

176.8

0.64

MER-23-0044-RD

316.5

553.5

237.0

0.67

MD-0001

342.0

556.0

214.0

1.19

ML20-171CT

256.4

454.8

198.4

1.40

ML21-185CT

323.4

506.1

182.8

0.83

CH21-056

143.3

196.6

53.3

0.55

CH21-072

123.4

167.6

44.2

0.43

(1) Results reported at 0.1g/t cut-off. Reported intervals are drilled core lengths, true widths are not yet established. Assay values are uncut.

Figure 1: Merlin long section looking northwest showing drill results. Adapted from Interim 2023 Merlin Exploration Target1

Figure 2: Plan map displaying drill collar locations (red dots) at the Silicon and Merlin targets1

 

A full report and transcript are available at: https://www.anglogoldashanti.com/

References:

  1. https://thevault.exchange/?get_group_doc=143/1691123637-Interim2023MerlinExplorationTarget.pdf
  2. https://thevault.exchange/?get_group_doc=143/1691123886-AGAInterim2023ResultspresentationFINAL.pdf
  3. https://thevault.exchange/?get_group_doc=143/1691118404-AGA-Interim-2023-Results-Report.pdf
  4. https://reports.anglogoldashanti.com/22/wp-content/uploads/2023/04/AGA-IR22.pdf

Silicon

On February 22, 2023, AngloGold declared a total mineral resource on the Silicon deposit of 4.22 million ounces,, including indicated resources of 3.4 million and inferred resources of 800,000 ounces gold. The increase in mineral resource ounces was a result of successful greenfields exploration, supported by an open pit optimization at US$1,750 per ounce gold to demonstrate reasonable prospect of economic extraction. Testing completed in 2022 provided more details regarding metallurgical variability of the transitional and unoxidized material. This resulted in a reduction in heap leach recovery compared to the previous assumptions. Continued studies will further refine the recovery estimates and evaluate the addition of a third processing option that may be more suitable for those materials. The table below illustrates the year-on-year changes in mineral resource:

Source: AngloGold Ashanti Mineral Resource and Mineral Reserve Report as at December 31, 2022 [1]

Additional highlights include the following:

  • Indicated resources of 121.56 million tonnes grading 0.87 g/t gold for 3.4 million ounces and 3.98 g/t silver for 15.54 million ounces, signalling a full conversion from inferred resources announced in 2022;
  • Additional inferred resources of 36.03 million tonnes grading 0.70 g/t gold for 800,000 ounces and 1.92 g/t silver for 2.23 million ounces;
  • Silicon concept study to integrate Merlin area for potentially larger scale mining activity is expected to be completed in 2023; and
  • Over US$50 million was spent in the Silicon camp in 2023, including twelve drill rigs.

As disclosed in AngloGold’s Mineral Resource and Mineral Reserve Report as at December 31, 2022 [1], the following activities were completed to date on the Silicon project including:

  • Exploration drilling comprised of 262 RC drill holes, 65 DD holes and 40 RC pre-collar/diamond tail for a total of 146,109 metres;
  • Detailed geological mapping at 1:5,000 scale has been completed over a total of 58 square kilometres;
  • Ground geophysics was carried out on the project including a total of 1,307 kilometres of induced polarization/resistivity, ground magnetics and gravity surveys;
  • Geochemical sampling comprising outcrop rock chip sampling and 26 x 2.3 kilometres soil survey was also carried out at various phases of the exploration program; and
  • Drilling program is continuing not infill and further delineate the deposit as well as collect test work material in support of the planned concept study.

Other exploration targets are present within the Silicon claim block, including Merlin and Maverick where Merlin is a drilling-stage prospect that is showing potential and is planned to move into project work during 2023.

[1] https://reports.anglogoldashanti.com/22/wp-content/uploads/2023/03/AGA-RR22.pdf

Figure 3: SW-NE Cross-section view across the Silicon deposit, highlighting the location
of gold mineralisation associated with the Silicon-Tramway fault corridor in metres AMSL

History

In February 2015, Orogen entered into a royalty agreement with Altius Minerals Corp. (“Altius”) whereby Orogen acquired via staking, a 100% ownership of the Silicon-Merlin project under an alliance in 2013 between Orogen and Altius, for a 1.5% NSR royalty payable to Altius. AngloGold optioned the project from Orogen in 2017, subject to a US$3.0 million in cash payments and a 1% NSR royalty to Orogen.  AngloGold exercised the option in August 2020.

Cautionary Note:

The ranges of tonnage and grade of the exploration target are conceptual in nature and could change as the proposed exploration activities are completed. There has been insufficient exploration of the relevant property or properties to estimate a Mineral Resource at this point in time. It is uncertain if further exploration will result in the estimation of a Mineral Resource and the exploration target therefore does not represent, and should not be construed to be, an estimate of a Mineral Resource or Mineral Reserve. Given the conceptual stage of the project, a number of risks, uncertainties and opportunities, are evident in the confidence of the known orebody and the potential for upside at Silicon, Merlin and in the surrounding area. The Merlin exploration target grade and tonnage ranges have been determined by a preliminary review of the location and weighted average grade of the mineralised intercepts. The geology of the deposit contains a significant number of faulted offsets, which require detailed geological modelling to fully define the extent and continuity of the mineralisation. A bulk density value of 2.4 t/m3 was used. No economic constraint has been applied to the deposit to determine the extent of what material may ultimately be extracted.