Item 8.01 Other Events.
On June 29, 2022, Augusta Gold Corp. (the "Company") recevied the signed summary
technical report for its newly acquired Reward Gold Project in Nye County,
Nevada. The report titled "Mineral Resource Estimate for the Reward Project, Nye
County, Nevada, USA" with an effective date of May 31, 2022 and a signing date
of June 29, 2022 (the "Technical Report"), was prepared for the Company by
Michael Dufresne, M.Sc., P. Geol., P. Geo., of APEX Geoscience Ltd. and Timothy
D. Scott, BA.Sc., RM SME, of Kappes, Cassiday & Associates, each of whom is a
qualified person under Item 1300 of Regulation S-K under the Securities Exchange
Act of 1934, as amended ("S-K 1300").
The following disclosure regarding the Reward Project is extracted or summarized
from the Technical Report and readers should consult the Technical Report to
obtain further particulars regarding the Reward Gold Project, which is filed
herewith as Exhibit 99.1.
Reward Gold Project, Nye County, Nevada
Property Location and Access
The Reward Gold Project (the "Project" or "Reward Project") is situated about
11.3 km (7 miles) south-southeast of the town of Beatty, NV about 3.2 km (2
miles) east of US Highway 95 in Nye County. The Project can be accessed from
Beatty by paved road on Highway 95 followed by traveling two miles east on a
gravel road. Several dirt roads diverge into various canyons of the Bare
Mountains.The Project area lies within Sections 1, 2, 3, 4, 9, 10, 11 and 16 of
Township 13 South, Range 47 East and Sections 33, 34, and 35 of Township 12
South, Range 47 East, all referred to the Mount Diablo Baseline and Meridian.
The Project can be accessed from Beatty by paved road on Highway 95 followed by
traveling two miles east on a gravel road. Several dirt roads diverge into
various canyons of the Bare Mountains.
Figure 1: Location Map
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Project Stage
The Project is an exploration stage property with measured, indicated and
inferred mineral resources but no known mineral reserves.
Mineral Resource Estimates
The Technical Report details an updated mineral resource estimate (MRE) for the
Reward Project. The 2022 MRE for Reward was completed by Mr. Warren Black,
M.Sc., P.Geo., of APEX under the direct supervision of Mr. Dufresne, M.Sc.,
P.Geol., P.Geo. and the QP who takes responsibility for the MRE. Mr. Steven
Nicholls, BA.Sc., MAIG, a QP and APEX's senior resource geologist performed an
internal audit of the MRE.
CR Reward and Augusta provided APEX with a drill hole database that consisted of
analytical, geological, density, and collar survey information, initial
estimation domains for the Good Hope Deposit and Gold Ace Zone, and a geological
model that contained a stratigraphic and structural 3D interpretation. A block
model size of 20 ft (X) by 20 ft (Y) by 20 ft (Z) was used for the gold
estimation.
The assay data was examined using a combination of histograms, cumulative
frequency plots, and summary statistics; this indicated gold samples generally
exhibited a single assay population. Samples were composited to 10 ft lengths.
Probability plots were used to evaluate grade statistics and determine whether
capping was warranted. A capping level of 0.292 oz/st (10.01 grams per tonne
[g/t]) Au was applied to samples in the Good Hope Deposit, and a cap level of
0.146 oz/st (5.01 g/t) Au to samples in the Gold Ace Zone. Semi-variograms for
gold were modelled using the 10 ft composites flagged within the estimation
domains. A bulk density of 2.59 g/cm3 was applied to all blocks in the Good Hope
Deposit. As there is evidence for the need for a higher bulk density value for
blocks flagged within the Morris Member in the Good Ace Zone, they were assigned
a value of 2.70 g/cm3. However, as there is an insufficient number of bulk
density measurements of the Sutton Member within the Gold Ace estimation domain,
all other blocks at the Gold Ace Zone were assigned a bulk density of 2.59
g/cm3.
Ordinary kriging (OK) was used to estimate gold grades for those blocks that
contained more than 1.56% mineralized material by volume. A block discretization
of 2 (X) by 2 (Y) by 2 (Z) was applied to all blocks during estimation. A
two-pass method was used. The first pass required a minimum of two drill holes,
a maximum of 15 composites and no more than three composites from any one drill
hole. Soft boundaries were used between the high and low-grade domains in the
Good Hope Deposit, and mineralization and waste in the Good Hope Deposit and the
Gold Ace Zone.
Estimation validation included visual inspection in plan view and in
cross-section, examination of swath plots, review of mineralization/waste
contact profiles and volume-variance effects. The estimate was found to be
reasonable.
Mineral Resources were classified using a combination of assessment of
geological confidence, data quality and grade continuity. Resource
classification was determined using a three-pass strategy, where Measured was
classified in the first run, Indicated in the second, and Inferred in the third
run. A small portion of blocks at the northern (>6500 N) and southern (<2750 N)
extents of the Good Hope Deposit were manually adjusted to Inferred as there is
insufficient drilling density in the QP's opinion to justify higher confidence
classifications.
Reasonable prospects of eventual economic extraction were considered by
constraining the estimate within a conceptual pit shell that used the
assumptions in Table 1.1.
Table 1.1. Reward Conceptual Open Pit Parameters.
Parameter Unit (Imperial) Cost (Imperial) Unit (Metric) Cost (Metric)
Gold Price US$/oz 1,700 US$/g 54.656
Gold Metallurgical % 80 % 80
Recovery
Pit Wall Angles ° 48-58 ° 48-58
Mining Cost US$/st 2.00 US$/tonne 2.20
Processing Rate Mst/a 3 Mtonne/a 2.7
Processing Cost US$/st $5.50 US$/tonne $6.06
G & A Cost US$/st 0.75 US$/tonne 0.80
Cut-off Grade (break oz/st 0.0047 g/tonne 0.158
even)
Royalty % 3 % 3
The MRE for the Reward Project is presented in Table 1.2 below.
Table 1.2. Reward Project Mineral Resource Estimate at May 31, 2022 Based on
USD$1,700/oz. Au
Classification Tonnage (Mt) Average Grade (g/t) Contained Au (koz)
Good Hope
Measured 6.19 0.86 169.9
Indicated 10.76 0.69 240.0
M&I Total 16.94 0.75 409.9
Inferred 0.29 0.56 5.3
Gold Ace
Indicated 0.83 0.63 16.8
Inferred 1.03 0.73 21.8
Reward (Combined Good Hope and Gold Ace)
Measured 6.19 0.86 169.9
Indicated 11.58 0.69 256.8
M&I Total 17.77 0.75 426.7
Inferred 1.23 0.68 27.1
Notes:
1. Oxide estimated Mineral Resources are reported within a pit shell using the
Lerch Grossman algorithm, a gold price of US$1,700/oz and a recovery of 80%
for Au were utilized.
2. Mining costs for mineralized material and waste are US$2.20/tonne.
3. Processing and general and administration are US$6.06/tonne and US$0.83/tonne
per tonne processed, respectively.
4. Due to rounding, some columns or rows may not compute as shown.
5. Estimated Mineral Resources are stated as in situ dry metric tonnes and are
partially diluted.
6. The estimate of Mineral Resources may be materially affected by legal, title,
taxation, socio-political, marketing, or other relevant issues.
7. The effective date of the Reward mineral resource estimate is May 31, 2022.
Property Holdings
The Project area lies within Sections 1, 2, 3, 4, 9, 10, 11 and 16 of Township
13 South, Range 47 East and Sections 33, 34, and 35 of Township 12 South, Range
47 East, all referred to the Mount Diablo Baseline and Meridian.
Canyon Resources Corporation (Canyon Resources) holds a 100% interest in the
mineral claims that form the Project. In 2008, Canyon Resources assigned all of
the patented and unpatented claims comprising the Project to an entity which was
subsequently converted into CR Reward.
The Project encompasses 121 unpatented Bureau of Land Management (BLM) placer
and lode mining claims and six patented placer mining claims, totalling
approximately 2,333 net acres (944 hectares). Only the patented claims have been
legally surveyed. Under United States mining law, claims may be renewed annually
for an unlimited number of years upon a small payment per claim (currently $155
per claim due to the BLM and an aggregate $1,502 due to Nye County) and the same
claim status-whether lode or placer-may be used for exploration or exploitation
of the lodes or placers.
Several blocks of unpatented claims are leased by CR Reward from underlying
owners, and are referred to as Connolly, Webster, Orser-McFall and Van Meeteren
leases.
Connolly Lease
This lease agreement (the Connolly Lease), effective as of September 28th, 2004,
covers a two-third interest in each of the Sunshine and Reward unpatented lode
claims (collectively, the Connolly Claims). The Connolly Lease is for an initial
term of 20 years and continues so long thereafter as the Project remains in
commercial production. A 3% NSR royalty is payable on any minerals mined from
the Connolly Claims, but is reduced to 2% due to the fact that CR Reward only
owns a two-third interest in the Connolly Claims. Annual advance minimum royalty
payments are payable under the Connolly Lease in an amount equal to $10,000 per
year. These annual advance minimum royalty payments shall be applied toward,
credited against and fully deductible from earned mineral production royalty
payments due from the Connolly Claims.
Webster Lease
This lease agreement (the Webster lease), effective as of November 9, 2004 (as
amended on November 9th, 2004 and November 8th, 2006), covers a one-third
interest in each of the Sunshine and Reward unpatented lode claims and a half
interest in the Good Hope unpatented lode claim (collectively, the Webster
Claims). The Webster Lease is for an initial term of 20 years and continues so
long thereafter as the Project remains in commercial production. A 3% NSR
royalty is payable on any minerals mined from the Webster Claims, but is (i)
reduced to 1% on the Sunshine and Reward claims due to the fact that the lessee
only owns a one-third interest, and (ii) reduced to 1.5% on the Good Hope claim
due to the fact that CR Reward only owns a half interest in this claim. Annual
advance minimum royalty payments are payable under the Webster Lease in an
amount equal to $7,500 per year. The annual advance minimum royalty payments
paid in any given year may be applied toward, credited against and fully
deductible from any earned mineral production royalty payments due on the
Webster Claims during the calendar year in which such annual advance minimum
royalty payments are due.
Orser-McFall Lease
This lease agreement (the Orser-McFall Lease), effective as of February 5, 2005
(as amended on August 18th, 2005 and November 14th, 2006), applies to 12
unpatented lode and six unpatented placer mining claims (collectively, the
Orser-McFall Claims). The Orser-McFall Lease is for an initial term of 20 years
and continues so long thereafter as the Project remains in commercial
production. The lessors under the Orser-McFall Lease own 100% of the
Orser-McFall Claims, except for the Good Hope claim, in which they own a half
interest (the other half being owned by the Daniel D. Webster Living Trust and
leased to CR Reward pursuant to the Webster Lease). A 3% NSR royalty is payable
on minerals mined from the Orser-McFall Claims, but is reduced to 1.5% on the
Good Hope claim due to the fact that the lessee only owns a half interest in
that claim. Annual advance minimum royalty payments are payable under the
Orser-McFall Lease in an amount equal to $20,000 per year. These annual advance
minimum royalty payments shall be applied toward, credited against and fully
deductible from earned mineral production royalty payments due from the
Orser-McFall Claims.
Van Meeteren et al Lease
This lease agreement (the Van Meeteren Lease), effect as of December 1st, 2011
(applies to the Double RS and the Durlers Hope unpatented placer claims (the Van
Meeteren Claims). The Van Meeteren Lease is for an initial term of 20 years and
continues so long thereafter as the Project remains in commercial production or
CR Reward is actively conducting exploration, development, reclamation or
remediation operations. A 3% NSR royalty is payable on minerals mined from the
Van Meeteren Claims. Annual advance minimum royalty payments are payable under
the Van Meeteren Lease in an amount equal to $15/acre from 2011 through 2020,
for a total of $1,800 per year, and $20/acre from and after 2021, for a total of
$2,400 per year. These annual advance minimum royal payments are recoupable from
earned mineral production royalties. All payments described above have been
timely paid by CR Reward and its predecessor and the agreements are all in good
standing.
The Project area mainly consists of Federal public domain lands administered by
the BLM. There are no State or private tracts within the Project area, except
the six patented claims owned by CR Reward, all of which carry surface and
mineral rights ownership.
The Project is not subject to any other back-in rights payments, agreements or
encumbrances.
CR Reward has the right to use 391,494 m3 (317.39 acre-ft) of water annually
under Application No. 61412, Certificate No. 16384 and Permit No. 76390.
The Amargosa River basin is an enclosed basin, and the water rights are thus not
affected by the Colorado River Compact or other agreements.
Infrastructure
The Project is located seven miles by road southeast of Beatty, a town of
approximately 1,000 people that serves as a transit hub and service centre for
travellers between Las Vegas and Reno, and those going to Death Valley. Several
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Name
99.1 Technical Report Summary for the Reward Gold Project
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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