Near-Term Production Options At North Bullfrog And Mother Lode Gold 

VANCOUVER, BC - Corvus Gold Inc. reported on mining optimization work for its district-wide production plan announced in its the November 2018 Preliminary Economic Analysis (PEA). The initial PEA results outlined robust economics at lower gold prices and strong leverage for higher gold prices with a USD $1.47B pre-tax cash flow at $1,450 gold price and a 5% post-tax net present value (NPV5%) of USD $914M and a 53% IRR for the combined North Bullfrog and Mother Lode project.  

The PEA is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.  Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Ongoing studies have focused on three main areas of optimization: Lower Cost & Near-Term Production: Improving the start-up plan to lower initial capex, accelerate production timeline, improve financial performance and reduce project risk; Improved Sulfide Processing: Expanding the metallurgical options for processing the high-grade Mother Lode sulfide mineralization with lower capex and opex while maintaining high gold recoveries; and Increase Mineral Resource Base: Expanding the mineral resource base at both the North Bullfrog and Mother Lode projects and evaluating their ability to operate as stand-alone mines that have potential to provide production and financial performance.

Initial deposit modeling work has shown potential for the North Bullfrog deposits to be developed as a multi-phase, low strip, open-pit heap leach project. Corvus is working on a Phase I project plan that it believes would have lower capex and a rapid start-up development phase, with a smaller footprint, near-term open-pit mining project focused on the YellowJacket and north Sierra Blanca area where baseline environmental permitting is well advanced and key infrastructure is in hand (power & water).  The Company believes the lower capital commitment and the “build as you go” approach has the potential to reduce risk and broaden the appeal of the project to a greater number of developers with production cash flow that could finance the development of a larger operation within the district. The Phase I project would be able to dovetail into the larger Phase II run of mine (ROM) low-grade heap leach project that has the potential to perform well in the +$1,300 per ounce gold price environment.

Corvus is in the process of modeling a Phase I starter pit of ROM oxide only heap leach material that it believes has the potential to generate positive cash flow while the new bio-oxidation (BiOx) sulfide recovery system is tested with a large-scale pilot facility (high-grade sulfide material excavated in the Phase-I pit).  The Company anticipates that the Mother Lode Phase-II project would focus on expanding sulfide processing to commercial scale in the years following Phase-I. 

To date, various processing alternatives of Mother Lode sulfide mineralization have been evaluated. The most promising processing technique that could significantly lower capex and opex costs and improve financial performance is BiOx.  Extensive BiOx test work was conducted by the previous owner of the Mother Lode project which included both sulfide concentrate (tank oxidation & leaching) and crushed rock column testing (heap oxidation & leaching) both of which produced positive results that have been validated by recent BiOx results obtained by Corvus on concentrate.  The new and past test work for bio-oxidation followed by standard cyanide leaching achieved gold recoveries of approximately 90% for concentrate and approximately 80% for ¾” crush heap leaching. 

The primary advantages of utilizing BiOx versus pressure oxidation of the sulfide concentrate is that it could result in a simplified mine and facility plan that includes lower capital requirements and reduced operating costs which could improve the overall financial performance.  Initial project scoping work utilizing BiOx processing at Mother Lode appears to suggest the project has the potential to generate results that the Company believes are similar to the North Bullfrog project, with stand-alone production and financial metrics.         

With the successful completion of the Phase 3 drill program at Mother Lode, the expanded deposit is currently being remodeled. Phase 3 drilling highlighted continued potential for expansion at depth and to the north that includes a new higher grade “deep zone” best characterized by the deep high sulfide intercept in hole ML19-104 (126.5m @ 1.85 g/t gold with the bottom 9.2m @ 6.7 g/t gold & 70 g/t silver). Preliminary conceptual models suggest that if the deposit extends to the full length of the property, it is possible that it could still be within open-pit mining depth with this “deep zone” target area hosting sulfide tonnage that Corvus believes to be comparable to that of the current known mineral resource area.  Corvus has developed an exploration plan to test this deposit extension and to follow-up with a mineral resource conversion drilling program.

On-going mineral resource expansion drilling at the Sierra Blanca deposit in the North Bullfrog project area is extending mineralization to the west as well as testing for new, YellowJacket type, high-grade vein systems in the surrounding area.  In addition, exploration work is also evaluating the extension of the regional scale low-grade gold systems, which in the current gold price environment is a very attractive target given the large size potential.  The company has also expanded its district-wide exploration to the south of North Bullfrog along the major north-south trending structural systems that control most of the known gold mineralization in the western part of the greater Bullfrog Mining District.  The Company has developed several new early stage targets in this area known as the Gap Zone.

Corvus will continue to advance its mineral resource expansion drilling, mining optimization studies and sulfide metallurgical test work with the goal of updating the PEA study in the first half of 2020.  In addition, the Company will continue with the North Bullfrog new discovery drill program, as well as pre-collar drilling of initial deep core drilling of the YellowJacket vein system, Spicerite target (similar to AngloGold’s Silicon target) and Deep Mother Lode. Corvus is currently planning the next phase of work on the Mother Lode Deep Zone, which would involve extensive core drilling.