California, Golden to the Kore?

Between 1850 and 1957, California was one of the most famous gold producing regions in North America. The Grass Valley district alone pulled out some 17 million Oz (largely by manual labour) from its impressive Empire, Golden Centre and Columbia Gulch properties. Some of these sites are still poked at by rigs hoping to strike lucky, some of the estimated 3060 historic mines (USGS) now welcome thousands of tourists and share the Golden State’s golden history through museums and preserved workings.

While Cali holds her own as a major industrial mining player today, with the world’s largest borax project (Rio Tinto) and North America’s biggest strategic reserve of REEs at Mountain Pass (MP Minerals), she’s been quiet on the precious metals front. One freshly launched company are planning to turn that around and inject new life into the state’s industry.

KORE Mining (TSX-V: KORE) completed a reverse takeover of Eureka Resources in October 2018 and brought the 100% owned Imperial (Ex-GoldCorp) and Long Valley (Ex-Vista gold) claims back to market. Both Californian properties hold modern (2012 & 2018 respectively) 43-101s and have a considerable history of exploration activity. The company also holds the ‘Gold Creek’ (ex-Bullion) and FG claims in British Columbia which has seen recent drilling and geophysical surveys.

KORE’s CEO and President Adrian Rothwell might be better known for his past positions from Director of Strategy for Goldcorp to CFA of NuLegacy, but he’s now set with exciting exploration positions at KORE and Fireweed Zinc. CFO Alan Alhgren (ex VP-Finance, Kinross Gold) and COO James Hynes bring technical experience to the board for large-scale financing and mining engineering.

Employing a technically proficient board with significant links to active majors suggests that KORE are serious about building their projects to production, not just sitting on an investment made during a low market.

The Company’s Imperial Project centres around a wonderfully simple oxidised breccia which should be case studied for future university textbooks if shovels ever go into the ground. Mineralisation at site occurs along a local scale fault that separates Jurassic volcanic sequences from Cretaceous gneisses. The fault’s breccias and gouge were not fully lithified after gold and sulphide bearing fluids were injected. This allowed meteoric waters to circulate and oxidise pyrites and associated sulphides to hematite, limonite and similar Fe-Oxides which now make up the bulk of the deposit.

Gold in this form is relatively easy to separate from oxides and gangue using existing cyanide heap leaching methods. A large amount of the gold here is found on grain and clast boundaries, meaning limited crushing and pre-leach production should be required. The metallurgical simplicity is lucky here, because the overall average gold grade is relatively low. KORE’s figures propose the mine could process 25,000 tonnes a day over 10 years at an average 0.54g/t across the open-pit mineable deposit of some 329 million tonnes.

KORE’s second California offering is a truly fascinating one. The Mono county ‘Long Valley’ Au-Ag prospect off highway-395, 45 miles north of Bishop and several miles from the Hoover and Ansel Adams Wilderness regions, two of the area’s nine environmentally protected zones (Search ‘Hot Creek Geological Site’ via google maps for location).

Gold mineralisation here is related to late stages of resurgent volcanism in the Long Valley Caldera after the major eruption of Bishop Tuff some 760ka. Disseminated gold is found throughout ash tuffs and agglomerate deposits formed in lake systems in the centre of the Caldera, as well as in related domed rhyolites. Gold grades are concentrated along the Long Valley Fault where KORE’s license sits. The Fault is still tectonically active with hot springs and earthquakes common along the trend.

Historic RC drilling identified potentially economic grades but didn’t conclude ore controls or enough data for modelling. The KORE team are focusing on bringing their existing data up to date and completing full assays for silver which may add a large upside to the existing 43-101.

Completion of new baseline environmental studies is going to be worth watching from a public interest perspective. A lot of regular controls regarding water quality monitoring and chemical leaching are effectively muted by the volcanic activity nearby which spews alkali salt-rich fluids from geysers and springs into the surrounding environment and already barren lakes. These springs and lakes form a tourist attraction at the nearby Forestry Service ‘Mammoth Centre’.

Returning the land to a clean, workable environment would effectively be impossible and any planning for remediation will require a novel interpretation of permitting laws which may or may not go KORE’s way.

The final arrow in KORE’s quiver is Gold Creek (British Columbia, Canada). This is a classic Cariboo gold licence that has seen limited sprees of drilling, has great access from a town 2km away and is surrounded by other reportable discoveries.

Gold here is found hosted in quartz veins, sometimes with silver, and also in stratabound carbonate alteration zones within the basal phyllite unit of the Cariboo Gold district. This is notably similar to the Spanish Mountain discoveries just 8km away (See TSX-V: Spanish Mountain Gold Ltd. (SPA) & Freeport Resources (FRI)).

On top of their 2017 hit with 84.65 metres at 1g/t of gold, KORE have intercepted 9m at 5.8g/t and 11.1m at 2g/t this winter season in their phase 1 drilling. The campaign was launched to learn about the geology of the project and its ore potential, not necessarily hit gold. These are all promising results in a region where we know that giant copper, silver and gold deposits may still be lurking in the depths.

Adrian and the team have picked a truly interesting set of licences at a potentially risky time to launch projects in the USA. There have been clashes between miners and populations across the country throughout 2018, from the I-186 debate in Montana and Rio Tinto’s Resolution copper project dividing the senate on permitting and regulation.

California itself hosted critical anti-coal mining protests in September during climate talks. Gold and other extraction may end up suffering on the back of indirectly associated environmental and political protests, especially when they’re so close to designated protected areas.

Adrian Rothwell from the company said during a December phone call:

‘We have seen regulations slowly develop to accommodate new investment and we now believe that it is a perfect time for miners that can operate with modern practices – to earn strong returns in a responsible way.’

‘We are lucky with our Imperial project as we are located near the existing Mesquite operation, the County is aware of the positive impact that mining can have on the local economy.

Imperial will be the most modern mining operation in the State, adhering to all current environmental regulations’

The team certainly have the Golden State’s history and the predictions of market experts on their side in California, but in these uncertain North American times, they’ll definitely be hoping for a little bit of luck too…!

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Written by Liam Hardy for Resource World Magazine, Jan 2019