Information concerning our mining properties in this Annual Report on Form 10-K/A 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.
The map below shows the locations of our operations and our exploration Properties.
The following table summarizes the Company’s total in-situ mineral reserves (the Golden Chest Mine is the Company’s only property with calculated reserves) as of December 31, 2021:
The Company has not completed a Mineral Resource estimate for the year ending December 31, 2021, but is planning to complete one for the year ending December 31, 2022. In 2012, an historic resource estimate was completed as a part of a Canadian NI 43-101 by a third party and is provided for background only and does not represent a current SK 1300-compliant resource. A summary of the historic 2012 NI 43-101 is provided in Exhibit 96.1, the Technical Report Summary on the Golden Chest Mine, Idaho, prepared by the Qualified Person under Section 1300 of SEC Regulation S-K (QP), Grant Brackebusch who is the Qualified Person.
The Golden Chest Mine is the Company’s only Production Stage mine and is comprised of an underground mine, an open pit mine, and an exploration property located about 1.5 miles east of Murray, Idaho. The Golden Chest Mine includes 26 patented mining claims (319 acres) and 70 unpatented claims (562.5 acres). The mine is permitted with the Idaho Department of Lands and has posted a reclamation bond for an approved reclamation plan. IDR is the operator and owns 100% of the Golden Chest LLC (owner of the Golden Chest Mine). Production from the Golden Chest and an adjacent Area of Interest is subject a 2% NSR payable to Marathon Gold Corporation (Marathon). The mineralization occurs as gold-quartz veins associated with an orogenic deposit type. Ore from the Golden Chest Mine is processed off-site at the New Jersey Mill in Kellogg, Idaho. For more information concerning the Golden Chest Mine, please refer to the information set forth under the caption “Individual Properties-MATERIAL OPERATING PROPERTIES” and under the caption “Golden Chest Mine” in this Item 2.
The New Jersey Mill is a fully permitted, 360-tonne per day, flotation mill and concentrate leach plant (“CLP”) located two miles east of Kellogg, Idaho, in the Coeur d’Alene Mining District. The CLP is permitted with Idaho Department of Environmental Quality (IDEQ). The mill is located on the same property as the New Jersey Mine, adjacent to U.S. Interstate Highway 90 and easily accessed year-round by local roads. Three-phase electrical power is supplied to the New Jersey Mill by Avista Utilities.
The New Jersey Mill is operated by IDR. In 2011, IDR signed a joint venture (“JV”) agreement with Crescent Silver LLC (Crescent) to increase the capacity of the New Jersey Mill. Crescent funded the mill expansion in return for a 35% interest in JV assets plus the right to process 7,000 tonnes of its ore per month. IDR is the JV manager and retains a 65% interest in JV assets as well as the right to process its own ore at the rate of 3,000 tonnes per month and to allocate unused and excess capacity in its role as manager. The property covered by the JV agreement includes the crushing circuit, grinding circuit, gravity circuit, flotation circuit, CLP, buildings, and surface rights only over the patented mill site claim. Unpatented mill site claims are also part of the JV.
The mill expansion was completed in 2012, rendering the mill capable of processing 360 tonnes of sulfide ore per day to produce a single flotation concentrate. The expansion cost approximately $3.2 million, all of which was funded by Crescent under terms of the JV (Ex. 10.1). The expansion project included the installation of a new cone crusher, a new fine ore bin, new conveyors, a new 2.4-meter by 4.0-meter ball mill, additional flotation cells, a new paste thickener, associated pumps, and a new building.
In October 2016, the Company resumed operations at the New Jersey Mill, processing ore extracted from open pit and underground at the Golden Chest. In 2021, the New Jersey Mill processed 44,305 tonnes at an average head grade of 3.85 gpt gold with 89% gold recovery. Since restarting operations at the Golden Chest in October 2016, the Company has milled a total of 207,000 tonnes.
The mill recycles process water and utilizes a paste tailings disposal process patented by IDR founder Fred Brackebusch to minimize impacts to the environment. By implementing paste tailings processing methods, IDR can recycle process water and prevent the discharge of process water to surface waters. At full capacity, this method saves more than 50 million gallons of water per year. IDR was recognized as a “Pollution Prevention Champion” by the Idaho Department of Environmental Quality in 2014 for its efforts to reduce pollution at the mill. The Company has submitted a permit for an expansion of its existing tailings storage facility, TSF #1. If the tailings expansion permit approval was delayed beyond mid-2022, the Company would to most likely, back-haul tailings to the Golden Chest mine.
As of December 31, 2021, the Company had a net capital cost of $3,868,692 associated with the New Jersey Mill.
The New Jersey Mill has all the required environmental permits to operate currently and into the foreseeable. Some permits may require modification if operating conditions change, but typically these changes can be completed without impeding the milling operation. A summary of the permits held by the Company are found in following table:
Permit Descriptions
Permit Description | Reference |
Idaho Cyanidation Permit for NJ Mill | #CN-0026-001 Idaho Department of Environmental Quality |
Tailings Storage Facility (TSF) NJ Mill | 94-7509 Idaho Department of Water Resources |
Air Quality Exemption (Crushing) for NJ Mill | Idaho Department of Envirnmental Quality |
BUTTE HIGHLANDS PROPERTY
Property Location
The Butte Highlands property is an underground gold Exploration Stage property operated by Highland Mining LLC. In January 2016, IDR purchased a 50% interest in Butte Highlands Joint Venture LLC (“BHJV”) from Timberline Resources Corporation (“Timberline”). BHJV owns the Butte Highlands property, located 15 miles south of Butte, Montana, within a gold-producing region that includes several large gold deposits. The property can be accessed via State Highway 2 and county and USFS roads. Electricity and water are available on the property.
Property Ownership
The Butte Highlands property covers approximately 135 acres and includes 11 patented claims. All the private lands within the Butte Highlands property are patented lode and placer claims. BHJV is responsible for paying Montana state property taxes on all patented lands and for paying annual BLM maintenance fees on any unpatented mining claims.
Butte Highlands Joint Venture
In 2009, Timberline formed a 50/50 joint venture, the BHJV, with Highland Mining LLC (“Highland”) for the purpose of developing and mining the Butte Highlands property, with Highland to operate and fund all mine development costs through to commercial production. In 2012, Montana State Gold Company LLC (“MSGC”) purchased Highland, assuming its project loan and its funding commitment.
IDR purchased Timberline’s 50% “carried to production” interest in BHJV in 2016 for total consideration of $435,000 with Highland funding all development costs and IDR’s 50% share of costs to be paid from proceeds of future mine production. Proceeds are to be split on an 80/20 basis (to Highland and IDR, respectively) until payback is reached, after which proceeds will be split evenly.
Property History
The Butte Highlands gold mine was an historic lode mine that produced an estimated 60,000 ounces of gold from 1937 until the War Production Board forced its closure at the onset of WWII. The property was later explored by Battle Mountain, Placer Dome, ASARCO, and Orvana in the 1980’s and 1990’s which, in total, drilled more than 30,000 meters at Butte Highlands, prior to its acquisition by Timberline in 2007.
In 2009, Timberline formed a 50/50 joint venture with Highland to create BHJV for the purpose of developing and mining the property. In 2009 and 2010, Timberline conducted surface exploration, drilling, and permitting work as Highland began building surface and underground infrastructure.
In 2011, BHJV completed an underground exploration ramp and a 16,000-meter underground core drilling program to support mine modeling, focusing on the upper portion of the “Old Mill Block” which has dimensions of approximately 85 meters along strike, 335 meters down dip, and a mineralized thickness of 2.5 to 4.5 meters.
A NI 43-101 compliant technical report for Butte Highlands was completed in May 2013 by Mine Development Associates of Reno, Nevada. However, the property has no mineral reserves or resources as defined by Regulation S-K Subpart 1300.
The project has experienced significant timeline delays due, in part, to miscalculations of the permitting process and other technical issues. Permitting advanced more effectively from 2013 to 2015 with the following critical milestones successfully achieved:
| · | In July 2013, the Montana Department of Environmental Quality (“DEQ”) issued the final Montana Pollutant Discharge Elimination System (“MPDES”) water discharge permit; |
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| · | In January 2015, the Montana DEQ authorized BHJV to construct and operate an underground gold mine by publishing positive Record of Decision (“ROD”) on Final Environmental Impact Statement (“EIS”); |
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| · | In October 2015, the U.S. Forest Service (“USFS”) released its Final Decision Notice on haul road with a Finding of No Significant Impacts. |
These milestones represent the final major hurdles to the receipt of necessary permits allowing the project to proceed. Final construction designs and completion of work will be required, along with bond payments, before final authority is granted to proceed with the proposed operation. Once final designs and road construction are complete, the USFS will grant authority to use local USFS roads for material haulage. Upon payment of the reclamation bond, the Hard Rock Operating Permit will be granted by the Montana DEQ.
Present Condition, Work Completed, and Exploration Plans
IDR does not anticipate any progress regarding BHJV (not the mine or operations) this year and is looking forward to one day cooperating with its partner to advance and or consolidate ownership in 2022. The partner maintains management and operation control and all plans are subject to their approval and direction and they have proven to be a less than optimal partner.
Present Condition of Plant & Equipment
Since 2009 Highland has invested nearly $40 million at Butte Highlands building a modern gold mine, including nearly 1.6 kilometers of underground mine development and construction of surface facilities, all of which are located on private lands owned by BHJV. As of December 31, 2021, the Company had a net capital cost of $435,000 associated with the Butte Highlands property.
Geology & Mineralization
Gold mineralization at Butte Highlands is hosted primarily in lower Paleozoic Wolsey Shale with higher-grade mineralization occurring within sediments proximal to diorite sills and dikes. The property is within a favorable geologic domain that has hosted several multi-million-ounce gold deposits. There are currently no mineral resources or reserves as defined by Regulation S-K Subpart 1300.
NEW JERSEY MINE PROPERTY
Property Location
The New Jersey Mine is an underground gold Exploration Stage property operated by IDR and located two miles east of Kellogg, Idaho, in the Coeur d'Alene Mining District. The mine is adjacent to U.S. Interstate Highway 90 and is easily accessed year-round by local roads. The New Jersey Mill is located on the same property. Three-phase electrical power is supplied to the New Jersey Mill by Avista Utilities.
Property Ownership
At the New Jersey Mine and Mill complex, the Company owns 102 acres of private land with surface and mineral rights, 108 acres of private land with mineral rights only, 40 acres of private land with surface rights only, and approximately 130 acres of unpatented mining claims. The unpatented claims are on federal land administered by the BLM. The gold-bearing Coleman vein system, including the underground workings and the Coleman pit, are located on the patented mining claims that are wholly owned by the Company and not part of the New Jersey Mill Joint Venture.
Property History
In the late 1800’s and early 1900’s, New Jersey Mining and Milling (an unrelated company) drove more than 760 meters of development workings on the Coleman Vein and its northwest branch, including drifts, crosscuts, shafts, and raises. The historic development also included a 10-stamp gravity mill that was operated for a short period.
Present Condition, Work Completed, and Exploration Plans
Since 2001, IDR has drilled 14 holes totaling 1,765 meters to explore the Coleman Vein and associated zones. Drilling confirmed vein system continuity and resulted in the discovery of the broad, low grade (averaging about 0.70 gpt gold) Grenfel zone. The Company’s best intercept of the Coleman vein assayed 2.76 gpt gold over 12.5 meters, which included 6.80 gpt gold over 2.5 meters.
In 2008, the Company performed underground exploration on the Coleman Vein at the 740 level, including 84 meters of drifting, with 20 meters along the vein before it was displaced by a fault.
In 2010, a raise was driven upward on the 740 level to explore a narrow high-grade vein that crosscut the main Coleman Vein. This raise was driven 12 meters vertically, leading to the extraction of 367 tonnes that assayed 2.68 gpt gold in processing at the New Jersey Mill.
IDR has not conducted material work at the New Jersey Mine since 2010 and has no plans for exploration in 2022.
While the Company has conducted significant drilling, underground development, and even limited gold production from the New Jersey Mine, the property has no mineral reserves or resources as defined by Regulation S-K Subpart 1300.
As of December 31, 2021, the Company had a capitalized development plus investment cost of $248,289 associated with the mine.
Permits for the New Jersey Mill are set forth in under the caption “New Jersey Mill” in this Item 2.
Geology & Mineralization
The New Jersey Mine area is underlain by argillites and quartzites of the Proterozoic-age Prichard Formation, which commonly hosts gold mineralization regionally. The property occurs adjacent to and north of the major Osburn Fault, an important geological structure of the Coeur d’Alene Mining District. The Prichard Formation is divided into nine units of alternating argillites, siltites, and quartzites; the units exposed in the New Jersey Mine area appear to belong to the lower members. Gold mineralization is associated with sulfide-bearing quartz veins that cut the bedding in Prichard argillite and quartzite. Associated sulfides are pyrite, arsenopyrite, chalcopyrite, low-silver tennantite, galena, and sphalerite.
ALDER GULCH PROPERTY
The Alder Gulch property is a gold Exploration Stage property operated by IDR and located just north of the town of Murray in Shoshone County, Idaho. The property is comprised of 880 acres of patented mining claims having both surface and mineral rights. IDR owns 100% of Alder Gulch, subject to convertible promissory notes secured by 512 acres of the property. The property’s mineralization styles include vein systems and alluvial deposits. The Company has not obtained permits for this property and there are no processing plants or other available facilities located on the property. For more information concerning the Alder Gulch property, please refer to the information set forth under the caption “Individual Properties – MATERIAL OPERATING PROPERTIES” and under the caption “Alder Gulch Property” in this Item 2.
BUCKSKIN PROPERTY
Property Location
The Buckskin property is a gold Exploration Stage property operated by IDR and located 1.5 kilometers north of the town of Murray in Shoshone County, Idaho. The property can be accessed via dirt roads from paved Forest Highway 9.
Property Ownership
The Buckskin property is comprised of 12 patented mining claims covering 218 acres and 73 unpatented mining claims covering approximately 1,367 acres. The 218 acres of patented mining claims were acquired through an exploration and mining lease. The Buckskin Lease term runs for 7.5 years and includes annual payments of $12,000 and a 2-percent NSR on future production from the property. If the property is placed into production, the lease will continue as long as production is underway and also includes a right of first refusal for IDR to purchase the property, and the lease payments are treated as an advance payment on the royalty. The unpatented lode claims adjacent to the core group of claims are wholly owned by the Company and not subject to a royalty. These claims require an annual claim fee payment to the BLM.
Property History
The Buckskin property was mined intermittently for both gold and base metals in the early 20th century with most of the mining completed in the 1930’s. The property contains numerous old workings, most of which are inaccessible. A mill was located on the property, but historic production is unknown.
Present Condition, Work Completed, and Exploration Plans
In 2019, the Company conducted exploration efforts in the Buckskin area with trenching mapping/sampling, road building, reopening historic underground workings, and underground mapping/sampling. The Company conducted additional field work in 2020 and 2021 such as mapping, trenching, and ground based magnetic surveys. Core drilling is planned for 2022. The Company has a capitalized investment cost of $332,728 associated with this property.
Geology & Mineralization
The bedrock geology at the Buckskin property is largely quartzites of the Burke Formation and argillite-siltite of the Prichard Formation. A major structural feature is the Murray Peak Fault, a northerly trending, high-angle reverse fault. Historical prospects and adits are developed along northerly trending shear zones that are likely related to the Murray Peak Fault, that contain silica flooded rock. Gold mineralization is found in quartz veins and is associated with sulfide minerals including pyrite, chalcopyrite, and galena. Anomalous tungsten was also detected in assays.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property.
BUTTE GULCH PROPERTY
Property Location
The Butte Gulch property is a gold Exploration Stage property operated by IDR and located 3 kilometers east of the town of Murray in Shoshone County, Idaho. The property lies immediately adjacent to the east side of Golden Chest Mine. It is accessed by paved Forest Highway 9, then on secondary dirt roads.
Property Ownership
The Butte Gulch property is comprised of 60 acres of both patented surface and mineral rights, 117 acres of patented mineral rights, and 602 acres of unpatented claims. The patented surface and mineral rights were purchased from a third party in mid-2018 and any lode production from the patented claims is subject to a 2% NSR. The patented claims where the Company only owns the lode mineral rights can be placer mined by the current owner. IDR holds a first right of refusal for the purchase of the surface rights not already owned by the Company. The unpatented lode claims are wholly owned by the Company and not subject to a royalty.
Property History
Butte Gulch has been placer mined by several different operations over the last century; however, there are no gold production records from these historic placer mining efforts. There is evidence of historic lode prospecting in the form of surface pits and exploration adits on the property, but the Company is not aware of any modern exploration occurring on the property.
Present Condition, Work Completed, and Exploration Plans
The property is an Exploration Stage property adjacent to the Golden Chest Mine. The property vendor has retained the placer mining rights in the bottom of the drainage on the patented claims and conducted placer mining activity last year. IDR has no affiliation or connection with the placer mining operation. Two historic adits have been reopened for mapping and sampling. Additionally, areas have been rock sampled where current placer operations have uncovered altered bedrock. More geologic fieldwork is planned for the upcoming 2022 season to explore for gold mineralization. The Company has a capitalized investment cost of $274,440 combined between this property and the Potosi property.
Geology & Mineralization
Outcrops in the Butte Gulch area are dominantly argillite, siltite, and quartzite units that belong to the Prichard Formation. The hinge line of a major regional scale fold called the Trout Creek Anticline traverses the property. Both northwest and northeast trending quartz veins containing pyrite, galena and chalcopyrite have been identified with anomalous silver mineralization.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property.
GIANT LEDGE PROPERTY
Property Location
The Giant Ledge property is a gold and base metal Exploration Stage property operated by IDR and located six kilometers east of the town of Murray in Shoshone County, Idaho. The property is situated in Granite Gulch and is accessed by paved Forest Highway 9 and secondary dirt roads.
Property Ownership
The Company’s land position consists of 57 unpatented lode claims covering an area of 1,119 acres. The claim group includes 3 separate claim blocks: Giant Ledge, Porphyry and Bear. The unpatented lode claims are wholly owned by the Company and not subject to a royalty. These claims require an annual claim fee payment to the BLM.
Property History
The Giant Ledge property consists of several historical prospected areas with lead, copper, and gold mineralization in and along the contact of the igneous intrusive. The Giant Ledge Mine was active in the 1920’s when a 122-meter-deep shaft was sunk and about 450 meters of drift development was completed. A flotation mill was erected, and a minor amount of undisclosed production was achieved. Bunker Hill Mining Company also examined and mapped the mine workings in the 1950’s. Sunshine Mining Company conducted exploration at the Giant Ledge in the mid-1980’s and drilled two core holes. In 2008, the Company obtained core from Sunshine’s drilling program, and it was re-logged and assayed. The best of the mineralization showed 4.6 meters of 0.908 gpt gold and 0.24% combined copper and lead. An extensive soil sampling program was completed in conjunction with a VLF and magnetometer survey.
Present Condition, Work Completed, and Exploration Plans
The property is an Exploration Stage prospect east of the Golden Chest Mine. Although no significant work was performed at Giant Ledge during the 2009-2021 period, the Company is preparing to resume exploration efforts in 2022.
Geology & Mineralization
The primary structural feature on the Giant Ledge property is the French Gulch fault. The fault contact extends through the property, separating monzonitic intrusive rocks on the west, from Prichard Formation’s argillite and quartzites on the east. Structurally controlled mineralization is found in both, the contact between argillite-quartzite sediments and in the monzonite. Seams and disseminations of auriferous pyrite, galena and chalcopyrite are found up to 10 meters into the footwall and hanging wall.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property.
POTOSI PROPERTY
Property Location
The Potosi property is a gold Exploration Stage property operated by IDR and located 4.4 kilometers southwest of the town of Murray in Shoshone County, Idaho. The property is accessed by the paved Beaver Creek county road and other secondary dirt roads.
Property Ownership
IDR acquired fee simple title to of 3 patented lode claims as part of the 2018 Butte Gulch land acquisition. The 3 patented claims cover a 71-acre area.
Property History
Potosi has been placer mined in several different operations over the last century however, there is no gold production records from these historic placer mining efforts. There is evidence of historic lode prospecting in the form of surface pits and exploration adits on the property, but the Company is not aware of any modern lode exploration occurring on the property.
Present Condition, Work Completed, and Exploration Plans
Minor reclamation work, road improvements and timber harvesting was conducted in 2019, In 2020, the Company completed the remaining reclamation of surface disturbance caused by a previous operator. There are no exploration plans for 2022. The Company has a capitalized investment cost of $274,440 combined between this property and the Butte Gulch property.
Geology & Mineralization
Host rocks at the property are siltites and argillites of the Prichard Formation. Geologic mapping suggests fault structures associated with the Crown Point Shear Zone may cross the property.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property.
McKINLEY-MONARCH PROPERTY
Property Location
The McKinley-Monarch property is an early-stage, gold Exploration Stage property operated by IDR and encompasses several historic prospects in central Idaho and extends, from the town of Riggins northward for nearly five miles. The property is accessed via public and private dirt roads off US Highway 95.
Property Ownership
In 2013, IDR acquired the McKinley-Monarch property through its acquisition of Idaho Champion Resources (“ICR”). The Company also holds 28 unpatented claims, totaling 560 acres, adjacent the 4 patented claims of the McKinley Mine (not owned by the Company). These claims require an annual claim fee payment to the BLM.
Property History
The Monarch-McKinley property is located in the Simpson Mining District which was first prospected in 1891. The nearby McKinley Mine, intermittently active until World War II, was the largest lode gold mine in a mining district better known for its placer gold production. Approximately 3000 feet south-southwest of the McKinley Mine, is an area with substantial historic prospecting but lacking significant development, is the Monarch area. The southern bounds of the property, shows several historic underground developments but no records of production have been located. This area was formerly referred to as the “Big Easy Mine” but is now called the Fiddle Creek Prospect.
Present Condition, Work Completed, and Exploration Plans
Surface mapping and sampling by IDR identified an area with significant gold mineralization in outcrop: the Monarch Zone, about one kilometer S-SW of the McKinley Mine. At the Monarch Zone, several samples returned high-grade gold with values up to 26 gpt. There are no exploration plans for 2022. The Company has a capitalized investment cost of $200,000 associated with this property.
Geology and Mineralization
The Monarch-McKinley property is located within the rocks of the Riggins and Seven Devils Groups of the Blue Mountains Island-Arc Complex. The rocks are part of a sequence of accreted terranes sutured to the North American continent during late Mesozoic time. They are comprised of volcanic and volcano-clastic sediments metamorphosed to greenschist facies rocks. The complex structural environment of the collision boundary supplies ample pathways for mineralizing fluids, typical of orogenic systems. Rock alteration consists of carbonization and silicification. Gold mineralization is associated with auriferous pyrite and quartz-carbonate veining.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property.
EASTERN STAR PROPERTY
Property Location
The Eastern Star property is an early-stage gold Exploration Stage property operated by IDR and located about four miles west of Elk City in central Idaho. It consists of 11 patented lode mining claims (220 acres) acquired by IDR in 2014 and an additional 45 unpatented lode claims (413 acres) located in 2018. The property is accessible via improved dirt roads from Idaho State Highway 14.
Property Ownership
IDR acquired fee simple title to the 11 patented claims (220 acres) from Premium Exploration Inc. (“Premium”) for $250,817 in 2014. The Company also holds the 45 unpatented lode claims (413 acres) surrounding the core group of patented claims. All of the Eastern Star claims are wholly owned by the Company and not subject to a royalty. The unpatented claims require an annual claim fee payment to the BLM.
Property History
The Elk City Mining District is an historic gold mining region dating back to the 1860s that once supported more than 20 underground mines, including the Eastern Star.
In recent years, prior operator Premium collected grab samples from three separate locations, representing nearly one-half mile of mineralized trend. Of 25 grab samples, nine returned gold values greater than 16.9 gpt. Premium then drilled three core holes at Eastern Star, targeting a bulk mineable gold deposit.
Present Condition, Work Completed, and Exploration Plans
In 2014, The Company completed mapping, sampling, and trenching programs. Company geologists identified several quartz veins that had been exploited by historic prospect pits and small shafts. Surface grab samples from these veins confirmed the widespread presence of high-grade gold within mineralized quartz vein material.
Channel samples across the vein zones intercepted notable gold mineralization including 10.4 m of contiguous samples reporting 2.25 gpt gold and 6.4 meters of 7.97 gpt gold, which includes 4.3 meters of 11.34 gpt gold. Select grab samples from trenched material returned values of up to 35.9 gpt gold. The Company has a capitalized investment cost of $250,817 associated with this property.
Although no significant work was performed at Eastern Star during the 2015-2021 period, the Company is preparing to resume exploration efforts in 2022. The Company’s exploration objective at Eastern Star is to evaluate the potential of these high-grade gold-bearing quartz veins for potential development and production.
Geology & Mineralization
The Eastern Star property is underlain by extensively weathered, high grade metamorphic rocks such as biotite gneiss and schist, intruded by felsic dikes and sills emanating from the Idaho Batholith. Two types of gold mineralization are present at the Eastern Star property. The first is the large, low-grade, bulk tonnage mineralization associated with the northerly trending Orogrande Shear Zone, and the second is the easterly trending high-grade gold quartz veins.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property.
DIAMOND CREEK RARE EARTH PROPERTY
Property Location
The Diamond Creek REE property is a rare earth elements (REE) Exploration Stage property operated by IDR and covers approximately 1,040 acres and is comprised of 52 unpatented mining claims. It is located in the Eureka Mining district, approximately 13 kilometers (8 miles) north-northwest of the town Salmon, Idaho. The property is accessed by a dirt road known as the Diamond Creek Road.
Property Ownership
The unpatented lode claims are wholly owned by the Company and there are no underlying royalties. The unpatented claims require an annual claim fee payment to the BLM.
Property History
The area was historically prospected for gold until 1949 when its unique geologic setting was recognized by the United States Geologic Survey (USGS) and the Idaho Geological Survey. In the early 1950’s the U.S. government sponsored country-wide exploration for raw materials related to nuclear power. This campaign resulted in the discovery of thorium in areas of Lemhi County, including the REE occurrence in the Diamond Creek area. Several other companies have undertaken minor rare earths exploration programs on the property including one stage of limited core drilling.
Present Condition, Work Completed, and Exploration Plans
The Company staked the claims that make up the property in early 2020. Some surface exploration activities including mapping and sampling were completed in 2021. Additionally, the Company submitted a Plan of Operations (POO) to the USFS for a core drilling program. The POO is currently under review by the USFS.
Geology & Mineralization
The REE mineralization at Diamond Creek is found in quartz veins over a large area approximately 3.2 km long and 0.8 km wide. There are at least eight known veins, and they range in width from 0.15 to 7.6 m in thickness. Vein widths appear best developed in the metasediments and can be traced on the surface for distances ranging from 33.5 to 780 m.
Samples taken by the USGS show total REE oxide contents ranging from 0.59 to 5.51 percent. Work by the USGS in 1979 reported three samples cut across one of the larger veins were assayed for gold and contained 0.5, 2.4 and 11.9 grams per tonne. Down-dip extensions of these mineralized veins have never been sufficiently tested. Historical reports indicate two short core holes have been completed with some significant REE mineralization noted.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property.
ROBERTS RARE EARTH PROPERTY
Property Location
The Roberts Rare Earth Element property is an early-stage REE Exploration Stage property operated by IDR and comprised of 63 unpatented mining claims covering an area of approximately 1,051 acres. This property is located within the Mineral Hill Mining District, approximately 48 kilometers (30 miles) northwest of Salmon, Idaho. Access to the property is via National Forest Road 036 (Indian Creek Road).
Property Ownership
The unpatented lode claims are wholly owned by the Company and there are no underlying royalties. The unpatented claims require an annual claim fee payment to the BLM.
Property History
The Mineral Hill district was historically prospected for gold and copper in the early 1900’s. Rare earth element (REE) mineralization was discovered later in the early 1950’s. Studies conducted by A. T. Abbott (1954) and A. L. Anderson (1958) from the Idaho Geological Survey, and E. P. Kaiser (1956) with the USGS, pioneered recognition of these REE occurrences. Abbott reported cutting a 2.5-foot sample across the Roberts Lode which returned 21.5-percent combined rare earth oxides and thoria.
Present Condition, Work Completed, and Exploration Plans
The Company staked the claims that make up the property in early 2020 and added to the position with additional claims in 2021. Surface exploration activities including mapping and sampling were completed in 2021. Sampling by Company geologists returned assays of combined rare earths elements in excess of 12%. The company’s samples show REEs like, neodymium, praseodymium, and samarium elements in abundance. Similarly, as with IDR’s Diamond Creek property, REE’s are not the only valuable commodities but gold and niobium may also be in profitable concentration as by-products. Recent samples collected from the Roberts’ property, show assays with gold values up to 8.8 grams per ton and niobium as high as 0.50 %. Exploration plans include geologic mapping, sampling, and geophysical surveys.
Geology & Mineralization
The REE mineralization at the Roberts property is associated with a unique group of igneous rocks known as carbonatites. Carbonatites are carbonate rocks sourced from magmatic origins, with primary carbonate compositions exceeding 50%. The Roberts property contains two of the eight known carbonatite occurrences within the Mineral Hill District. The first carbonatite can be found in a northwest-trending seam which measures approximately 400 meters (1,300 feet) long and 90 meters (300 feet) wide; the second occurrence occurs as a small carbonatite plug, measuring about 200 meters in diameter.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property.
Individual Properties – MATERIAL OPERATING PROPERTIES
GOLDEN CHEST MINE
Property and Location
The Golden Chest Mine is a gold Production Stage property comprised of an underground mine, an open pit mine, and an exploration property located about 1.5 miles east of Murray, Idaho, and 115 km east of the city of Coeur d’Alene, Idaho at Latitude 47o37’14” North and Longitude 115o49’43” West. The Golden Chest Mine includes 26 patented mining claims (319 acres) and 70 unpatented claims (1,390 acres). The mine is permitted with the Idaho Department of Lands and has posted a reclamation bond for an approved reclamation plan. Surface water monitoring is completed as a condition of the permit. The mine is along Forest Highway 9 and is accessible by several improved dirt roads from the paved highway. A three-phase power line was installed at the property in 2014 with power supplied by Avista Utilities.
Property Ownership
IDR owns 100% of the Golden Chest LLC (owner of the Golden Chest Mine). The core of the Golden Chest Mine is a contiguous group of 26 patented claims where all modern mining has taken place to date. The Company owns the rights to both the surface and subsurface mineral on all patented claims directly and through its 100% held subsidiary Golden Chest LLC (GCLLC), excluding the Joe Dandy Claim where IDR owns only the subsurface mineral rights. As these patented claims are considered private lots, legal access is allowed. Property taxes on patented claims are assessed by Shoshone County each year and IDR has paid the taxes in full.
IDR currently maintains 70 unpatented mining claims covering 562.5 ha (1,390 acres). The claims have been filed with the United States Bureau of Land Management (BLM) agency and at the Shoshone County Courthouse. Annual maintenance fees are paid to the BLM by September 1, and the Golden Chest unpatented claim fees have been paid and are in good standing.
Production from the Golden Chest and an adjacent Area of Interest is subject a 2% NSR payable to Marathon Gold Corporation (Marathon).
Property History
The Golden Chest Mine was developed in the late 1800’s through the early 1900’s as part of the first gold production from the Coeur d’Alene Mining District. Historical accounts vary, but the district is believed to have produced approximately 300,000 ounces of gold from placer sources. It is estimated that the historic hard rock mining at the Golden Chest (prior to IDR’s ownership) produced approximately 65,000 ounces of gold, primarily from shallow, underground, high-grade veins. The Golden Chest Mine is considered to be the largest historic lode producer of gold in northern Idaho.
Modern exploration of the Golden Chest area began in the late 1970’s with several companies, including Cominco-American and Golden Chest Inc. (“GCI”), targeting gold and massive sulfides. Drill tests by GCI included a 200-foot hole from surface that intersected a 60-foot zone containing multiple low-grade gold-bearing quartz veins.
Newmont Exploration Ltd. followed GCI’s discovery by evaluating the veins for bulk mineable potential in the late-1980’s. Newmont drilled 35 shallow reverse-circulation and five core holes. In 2010 and 2011, a joint venture between IDR and Marathon Gold drilled 18,300 meters of core and published a resource report in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).
In September 2013, the Skookum Shoot portion of the Golden Chest property was leased to Juniper Mining Company. Juniper began construction in Q3 2014, spending an estimated $7 to $9 million on mine development and infrastructure, building a modern gold mine that reached production in May 2015. Mining activities continued until September 2015 when Gold Hill ceased operations and terminated its lease, forfeiting the mine and infrastructure back to Golden Chest LLC.
Present Condition, Work Completed, and Exploration Plans
Current Underground Operations
The Golden Chest underground mine is accessed by primary decline ramp (MAR) with a complimentary escape-way incline ramp. The primary mining method is underhand drift-and-fill utilizing cemented rock-fill (CRF). During 2021, IDR mined a total of 17,180 tonnes of ore at an average grade of 5.32 gpt gold. The ore came from the 891, 842, 833 and 824 stopes. The decline (MAR) was extended at depth during 2021 to the 815 sublevel which required about 190 meters of ramp development and two exhaust ventilation raises were completed by IDR miners. A two-boom jumbo was added late in the year to accelerate MAR development.
Current Open-Pit Operations
In 2021, IDR continued its open pit mining operation which commenced in August of 2016. Mining in the Klondike pit advanced from the 1032 bench to the 1002 bench during the year. A total of 27,125 tonnes of ore at average grade of 2.92 gpt gold and 174,000 tonnes of waste were mined during the year. Ore tonnes and grade in the Klondike Pit were lower than modeled because of unmapped, historic stopes in the Klondike where high-grade material had been mined out by the old-timers.
Exploration Plans and Results
Modern exploration, including over 30,000 meters of drilling, reveals six NW-trending ore shoots at Golden Chest that demonstrate strong periodicity, consistent width and spacing, along the Idaho Fault. Most historic production came from the northernmost of these shoots, the Katie-Dora and the Klondike. Current underground mining occurs within the Skookum Shoot. Excellent exploration potential remains in unmined portions of the northern shoots as well as in the unmined Paymaster and Joe Dandy shoots to the south. During 2021, a total of 6,935 meters of core drilling was completed with drilling at the Joe Dandy, Paymaster, Skookum, and Klondike areas. A highlight of the 2021 drilling included drillhole GC 21-193 which intercepted 7.3 meters of 11.5 gpt gold in the Paymaster area. This intercept is significant as it shows high-grade, thick sequences of the vein and is more than 400 meters south and 125 meters below the current underground mining area in the Skookum. Additionally, drilling in the Klondike such as drillhole GC 21-204 found a new zone of gold mineralization. Drillhole GC 21-204 intercepted 7.5 meters of 5.2 gpt gold (including 3.3 meters of 9.4 gpt gold) in the upper vein and 3.4 meters of 12.2 gpt gold (including 1.1 meters of 34.1 gpt gold) in the lower vein. This newly discovered zone of gold mineralization is in the hanging wall of the Idaho Fault which is significant because it opens a new area for future exploration and the intercepts are reasonably close to the surface. Core drilling totaling approximately 8,000 meters is planned for 2022 using the company’s drill rig. Drilling is planned to explore and define gold resources in the Klondike, Golden Chest, Skookum, and Paymaster areas.
Present Condition of Plant & Equipment
The Golden Chest underground mine is accessed by primary decline ramp (MAR) with a complimentary escape-way incline ramp. The MAR was originally developed in 2013 at nominal 4-meter by 4.5-meter cross-section. Additional development by IDR in the MAR has been completed recently. There are several metal buildings on the mine surface constructed from 2012 through 2021 including a core shed with offices, a mine shop, and associated mine dry and warehouse. The mine electrical service is a three-phase, 500 kVA installation supplied by Avista Utilities.
As of December 31, 2021, the Company had a capitalized development and investment cost of $2,633,706 associated with the Golden Chest.
Geology & Mineralization
Gold mineralization occurs in veins associated with multiple faulting and folding events in the Coeur d’Alene Mining District. The mineralization occurs as gold- quartz veins associated with an orogenic deposit type. The orogenic system at the Golden Chest appears to have an association with igneous rock activity. Hence, the vein deposits may be described as intrusion-related orogenic gold. The principal vein being exploited at the Golden Chest Mine is associated with the Idaho Fault, which juxtaposes the quartzites of the upper Prichard Formation against finer-grained argillites, also of the upper Prichard Formation.
Veins occur adjacent to the Idaho Fault both in its footwall, and in its hanging wall. The mineralization occurs in two types of quartz veins, banded and massive. These veins are generally conformable to bedding in the Proterozoic age Prichard Formation. The banded veins, which occur primarily in argillite, contain, pyrite, arsenopyrite, galena, sphalerite and visible gold. Thicker, massive veins occur in quartzite and contain pyrite, galena, chalcopyrite, sphalerite, scheelite and visible gold.
The Company has not completed a Mineral Resource estimate for the year ending December 31, 2021, but is planning to complete one for the year ending December 31, 2022. In 2012, an historic resource estimate was completed as a part of a Canadian NI 43-101 by a third party and is provided for background only and does not represent a current SK 1300-compliant resource. A summary of the historic 2012 NI 43-101 is provided in Exhibit 96.1, the Technical Report Summary on the Golden Chest Mine, Idaho, prepared by the Qualified Person under Section 1300 of SEC Regulation S-K (QP).
Open pit ore reserves were not calculated for the year ending December 31, 2021. The Klondike open pit is an area with a low density of core drilling and extensive, unmapped stopes (mined-out voids) from historic mining that make it difficult to produce an accurate reserve estimate. The open pit is mined on a drill-as-you-go basis where each bench is economically evaluated based on the blastholes assays to determine whether enough revenue will be available to generate a profit for the bench. These factors combine to make the outlook for continued open pit mining relatively uncertain.
The Company prepared an underground mine reserve estimate in accordance with the requirements of subpart 1300 of Regulation S-K. A block model was completed using Vulcan software and an inverse-distance squared methodology for the underground mine. The underground reserves calculated are entirely in the Skookum shoot where sample density and mining experience gave enough confidence that grades could be reasonably predicted. A gold price using the three-year trailing average of $1,650 was used to calculate reserves for the year ending December 31, 2021. Economic parameters such as mining costs, milling costs, metallurgical recovery, mining dilution, and gold payment under smelter contracts were obtained from the Company’s recent operating history and applied to the reserve calculation exercise. More details related to the reserve calculation are attached as Exhibit 99.2.
The reserve was calculated by mining engineer Andrew Brackebusch, EIT under the supervision of Grant Brackebusch, P.E. who is the qualified person.
Classification | | Year | | Tonnes | | | Grade (grams gold per tonne) | | | Cut-off (grams gold per tonne) | | | Metallurgical Recovery | |
Proven reserves | | 2020 | | | 42,500 | | | | 5.17 | | | | 2.0 | | | 93% | |
Proven reserves | | 2021 | | | 38,700 | | | | 4.87 | | | | 2.0 | | | 93% | |
Total mineral reserves | | | | | 38,700 | | | | 4.87 | | | | 2.0 | | | 93% | |
There was approximately a 9% decrease in tonnes and a 6% decrease in grade in the reserve estimate in 2021 versus 2020 which is due to a lower density of core drilling (wider spacing) below the lowest reserve blocks limiting the area that could be included in a proven reserve estimate. Company block modeling procedures require a minimum of two samples with a 25-meter search radius to estimate a block value for reserve calculations.
Two cut-off grades are used for stope planning, the go/no-go cut-off and the in-stope cut-off. The go/no-go cut-off represents any material that has the potential to be mined but does not have to be mined as part of the operational plan. The go/no-go cut-off is used for initial stope planning as any given stope or sublevel does not have to be mined and should only be mined if it is economic. The go/no-go cut-off is equation is presented in Equation 1.
Equation 1 go/no-go cut-off
Go/No-Go Cut-off Parameters
The backfill costs are included in the mining cost in above Table. This formula yields a value of 3.18 gpt for the cut-off and was rounded down to 3.0 gpt for a more natural break.
The in-stope cut-off is used when material in a previously defined stope must be mined to reach higher grades. In this scenario the mining cost is considered sunk and is omitted from Equation 1 as the cost was incurred regardless of the ore/waste determination at the face. Evaluating equation 1 omitting mining cost yields a value of 1.09 gpt which was raised to 2.0 gpt to be more selective in the mining process.
For more information, see Section 12-2 of Exhibit 96.1, the Technical Report Summary on the Golden Chest Mine, Idaho, prepared for the Company by the Qualified Person under Section 1300 of SEC Regulation S-K (QP), Grant Brackebusch, P.E. who is the qualified person.
Permit Requirements
The Golden Chest Mine has all the required environmental permits to operate currently and into the foreseeable. Some permits may require modification if operating conditions change, but typically these changes can be completed without impeding the mining operation. A summary of the permits held by the Company are found in the following table:
Permit Descriptions
Permit Description | Reference |
Idaho Surface Mine Reclamation Plan for Golden Chest Mine | #S312900 Idaho Department of Lands |
US EPA Stormwater Pollution Prevention Plan For NJ Mill and Golden Chest Mine | Multi-Sector General Permit |
Idaho Shallow Injection Well for Golden Chest Mine | #S94X-0026-001 Idaho Department of Water Resources |
In 2021, MSHA issued four citations for Section 104 S&S violations associated with the Golden Chest Mine and fined the Company $3,754. Reference is made to exhibit 95 to this report.
Alder Gulch
The Alder Gulch property is a gold Exploration Stage property operated by IDR and located just north of the town of Murray in Shoshone County, Idaho. The property can be accessed via dirt road from paved Forest Highway 9. There are no facilities or existing infrastructure located on this property.
Property Ownership
The Alder Gulch property is comprised of 880 acres of patented mining claims having both surface and mineral rights. There is no underlying royalty attached to the Alder Gulch property. The acquisition of this property was funded by two tranches of secured convertible promissory notes (the “Notes”) issued in 2020 and 2021. The first tranche of Notes (2020 Notes) for 368 acres with an aggregate principal amount of US $885,000 were all converted to IDR common stock in 2020 and 2021 extinguishing the debt and releasing the land (368 acres) to the Company. A second tranche, the 2021 Notes, of secured convertible promissory Notes with an aggregate principal amount of $1,750,000 were issued in 2021 for another 512 acres. The 512 acres of land are the security underlying the Notes. The outstanding principal amount of the Notes will bear interest at an annual rate of 8.0% for a term of three years. The principal amount of the Notes will be convertible at the option of the investors for common shares of the Company at a price of US $4.90 per common share prior to the maturity date of the Notes. Interest only payments shall be made on the Notes payable, and the Company may prepay the Notes in whole or in part without written consent of the investors.
Property History
The Alder Gulch land was originally patented in the 1880’s due to its gold potential and has changed ownership only a couple of times since Idaho statehood in 1890. It was held in the same family for nearly 100 years. Timber harvesting was the main activity occurring on the property in the last century. There is no evidence of modern mineral exploration on the property, but there is evidence of placer mining of gravel deposits left by an ancient river channel along the hillside. There is also evidence of historic prospect pits and exploration adits on the Alder Gulch property.
Present Condition, Work Completed, and Exploration Plans
In 2021, the Company conducted surface sampling, geologic mapping, trenching, and re-opened an adit. Trenching uncovered two vein-systems, the Badger, and the Argus. The Argus vein zone has been tracked for 130 meters along strike through 8 trenches, each 15 meters long. Samples along these veins returned assay gold values up to 8 gpt. Of the 34 samples taken to date on the new uncovered Argus veins, 25 have anomalous gold and eight have values greater than 1 gpt Au. One sampled trench has a 45 cm banded vein interval that assayed 8.57 gpt Au with the 1 meter of wall rock below the vein assaying 0.5 gpt and the 1.5 m above the vein also assaying 0.5 gpt Au. The weighted average of this trench assays 4.68 gpt Au over a true thickness of 2.9 meters indicating a mineralized zone with good gold grades over significant widths. The Company is planning more exploration in 2022 including geologic mapping, trenching, sampling, and core drilling. As of December 31, 2021, the Company has a capitalized investment cost of $2,473,066 associated with this property.
Geology and Mineralization
The bedrock geology at the Alder Gulch Property is composed of siltite, argillite and quartzite belonging to the Proterozoic Prichard Formation and intrusive rocks of unknown age. A major structural feature is the Murray Peak Fault, a northerly trending, high-angle reverse fault which bisects the property. The ancient stream channel of auriferous gravels, the original justification for granting of the mining patent, extends across the Alder Gulch land from the northeast to the southwest. Gold mineralization is exposed through the gravel cover in numerous prospects, like on the Evans claim where a hydrothermally altered gold bearing intrusive sill barely outcrops above the gravels. The sill contains disseminated pyrite and galena with numerous quartz vein stringers mineralized with chalcopyrite, galena, and gold-bearing tellurides. A select sample from this sill assayed 4.75 gpt gold, 15.65 gpt silver, 2.2 % lead and 7.96 ppm tellurium.
Permits and Facilities
There are no permits associated with this property, and there are no processing plants or other available facilities located on the property. IDR would need to obtain permits for surface disturbances from the Idaho Department of Lands in order to develop this property. There are no current plans to permit the property and no estimates of associated timelines to obtain such permits.
No Mineral Resources or Reserves
The Company has not determined whether there are any mineral resources or reserves with respect to Alder Gulch.
Internal Controls
Exploration and development drilling programs are performed using industry standard quality control methods for drilling, logging, sampling, and analytical procedures. The laboratory used by IDR for sample preparation and analyses is: American Analytical Services, Inc. (AAS), 59148 Silver Valley Rd, Osburn, ID 83849. American Analytical is ISO 17025 Certified for Mineral and Ore Chemical Testing. Fire assaying is the only method used to quantify gold in core samples and muck samples. Occasionally Atomic Absorptions (AA) is use for multi-element analysis.
IDR’s QA/QC program has been in place since the GCLCC joint venture in 2011. The QA/QC program consists of inserting blanks and commercially certified standards into the sample stream. A blank or a standard is inserted into the sample sequence at least every 10 samples. All standards are commercially certified and have been prepared in advance by accredited labs. The QP’s reviewed the results of blank assay and only 2 of 241 samples returned an assay greater than the detection limit for fire assay, < 0.060 gpt gold.
For all the samples processed by AAS on behalf of GCLLC/IDR, the following methods were used to obtain a fire assay for gold. Samples received at the American Analytical are sorted and coded. They are then placed in the sample drying room and dried at 60°C. All drill samples are collected from the rig daily by Mine staff and transported to the locked and secure Mine Office/Core Shed building. Sample security has relied upon the fact that the samples were always attended or locked in appropriate sample storage areas. Samples remain within the custody of staff up to the moment the samples are delivered to the laboratory at which time AAS assumes custody. Chain of custody procedures include filling out sample submittal forms that are sent to the laboratory with sample shipments to make certain that all samples are received by the laboratory.
The sampling methods meet industry standard practices and are adequate for mineral resource and mineral reserve estimation and mine planning purposes. Sampling was conducted by appropriately qualified personnel under direct supervision of appropriately qualified geologists.Sample collection procedures used meet industry best practices. Sample preparation procedures meet industry best practices. QA/QC results produce acceptable results. Security procedures are consistent with industry standards. The databases are managed in a secure area using modern, commonly used software by trained staff. The staff are experienced in the nuances of narrow vein mining and treat the model with their experience in mind.
Drillhole logs are completed using Microsoft Excel and are only accessible by mine technical staff and timestamped at the last time of change. Geologic interpretation and solid modeling are accomplished using Leapfrog. Survey volumes, block modeling, and estimation of Mineral Reserves is accomplished using Maptek’s Vulcan. Data is stored at the mine site and backed up to a separate server stored at the corporate office quarterly.
