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About Us
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- Operations
  - San Francisco Mine
  - Florida Canyon Mine
- Development Projects/Exploration
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Florida Canyon Mine

Operations
- San Francisco Mine
- Florida Canyon Mine
Development Projects/Exploration

Key Facts

Location

Nevada, USA

Ownership

100%

Status

Production

Land Position

7,140 hectares

Mine Type

Open Pit

Metals

Gold, Silver

Processing

Crushing and Heap Leach

Expected Mine Life

8 years

Measured Resources

72.2 Mt @ 0.446 g/t
containing 1.04 Moz gold

Indicated Resources:

4.1 Mt @ 0.685 g/t
containing 0.091 Moz gold

*The Mineral Resource estimate is dated March 16, 2016. A 43-101 compliant technical report was filed on March 16, 2016 and and Amended NI 43-101 compliant technical report supporting the estimate was filed on January 27, 2017.

The Florida Canyon Mine restarted production after a rehabilitation period in April 2017 and achieved commercial production in December 2017. Under the Preliminary Economic Assessment the mine is expected to produce approximately 75,000 ounces per year with an 8 year mine life.

The Preliminary Economic Assessment can be found here.

A new 43-101 technical report is underway and expected to be completed by the end of 2018. The report will include an update to the reserves and resources and an analysis of various opportunities to increase production and lower costs.

Location
Geology and Mineralization
History

Location

The Florida Canyon mine is located half way between Lovelock and Winnemucca, Nevada, and approximately 30 kilometres north of the Company’s Wilco, Lincoln Hill and Gold Ridge projects. The mine sits immediately adjacent to Interstate 80 and is located approximately 210 kilometres northeast of Reno, Nevada.

Geology And Mineralization

The Florida Canyon and Standard Mine deposits are located in the Humboldt Range, which is a major north-trending anticlinal structure likely formed during the Sevier orogeny (Hastings et al., 1987). The stratigraphy of the Humboldt Range is summarized from Taylor (2001) and Taylor et al. (2002).

Triassic Koipato Group are the oldest rocks exposed in the range, and consist of (from oldest to youngest) the Limerick Greenstone, Rochester Rhyolite, and Weaver Rhyolite members. These units consist of volcanic flows, tuff, and tuffaceous sedimentary rocks that have been tilted to the south and modified by regional block faulting.

The Koipato Group is unconformably overlain by rocks of the mid-Triassic Prida Formation, which are, in turn, overlain by the Upper Triassic Natchez Pass Formation. The Prida Formation grades upwards from coarse clastics to cherty, carbonaceous limestone and massive limestone. Mafic sills and conformable mafic flows are common throughout the Prida Formation. The Natchez Pass Formation is a massive, gray, medium-grained reef limestone that grades into a laminated, silty limestone to the east. The Natchez Pass Formation is separated from the Prida Formation by the regional Humboldt City Thrust. Both carbonate formations are well exposed in the ridges above both the Florida Canyon and Standard mines.

Pelitic rocks of the Grass Valley Formation unconformably overlay the Natchez Pass Formation. FCMI interprets the silty argillite and argillaceous sandstone that comprise the Grass Valley Formation to represent sedimentation related to a delta complex, with a coastal plain to the east and a marine basin to the west. Evidence for a deltaic environment includes channel cut and fill structures and turbidity breccias exposed in the Florida Canyon area.

Small plutons, stocks, dikes, and sills, of Triassic to Tertiary in age, and with compositions ranging from rhyolite and granodiorite to gabbro, are exposed throughout the area. Diabase sills are widespread in the Koipato Group and Prida Formation and, locally, intrude the Natchez Pass Formation.

Westward from the range margin, the region outward from the Humboldt Range is dominated by fluvial gravels and unconsolidated valley fill sediments associated with Cenozoic Basin and Range mountain building and Quaternary alluvium.

The Florida Canyon area is dominated by a major regional structural zone, termed the Humboldt Structural Zone, which is interpreted to be a 200-km wide northeasterly-trending structural zone with left-lateral strike slip movement (Hastings et al., 1987). One of the principal structural features within the Humboldt Structural Zone is the Midas Trench lineament, which abruptly terminates the north end of the Humboldt Range (Rowen and Wetlaufer, 1981). Mineralization and alteration in the Florida Canyon and Standard Mine deposit areas are localized where the Midas Trench lineament is intersected by the north-south trending Basin and Range frontal faults (Hastings et al., 1987).

History

The Florida Canyon property had been in continuous production since 1986, and the combined Florida Canyon and Standard mines have produced in excess of 2.5 million ounces of gold. Production from the property ceased in the second quarter of 2015 and was restarted in April 2017.

Gold was discovered in 1860 in Humboldt Canyon, which led to the organization of the Imlay Mining District. Numerous claims were filed in the area, and the population of Humboldt City grew to 500 by 1863. Mining in the district was limited until 1906 when the Imlay Gold Mine and the Black Jack Mercury Mine were discovered. Production from the district was low. However, continued exploration resulted in the production of gold, silver, mercury, and tungsten from small mines. The most productive mine in the district was the Standard Mine which produced more than $1 million in gold and silver between 1939 and 1949. The Valerie fluorspar deposit near the head of Black Canyon produced about 723 tons of 44% CaF2. Kaolin and sulfur were also shipped from the district.

In 1969, Homestake Mining Company (“Homestake”) obtained a lease on property in the Florida Canyon area. Seven widely spaced rotary holes were drilled with marginal results, and the property was dropped. Cordilleran Explorations (“Cordex”) next leased the property between 1972 and 1978. A comprehensive program of geologic mapping, geochemical sampling, and trenching was completed. A total of 25 of 37 drill holes completed were in a mineralized zone referred to as the “West Trend”, on the site of the present-day Florida Canyon Mine. When Cordex dropped their lease in 1978, Flying J Mines carried out a limited heap-leach operation on the “West Trend” material.

Between 1969 and 1982, three major mining companies explored the property and chose not to proceed with development of the deposit. For example, during 1980 and 1981, ASARCO completed a drill program of 69 rotary holes that significantly expanded the known mineralization. The grade was low, though, and ASARCO dropped its interest in the property, except for a portion of Section 11, where a 1% NP royalty, now known as the McCullough royalty, remains in effect.

In 1982, Montoro Gold Company (“Montoro”), a subsidiary of Pegasus Gold Corporation (“Pegasus”), acquired the property. Montoro began an aggressive program to expand reserves and enlarge the property position. Detailed geologic mapping and geochemical sampling led to discovery of other anomalous gold occurrences throughout the property. By the end of 1985, 241 drill holes were completed totaling 87,569ft in the “West Trend” and adjacent deposits. In addition, 46 holes were completed on other exploration targets to the south and east.

Large-scale column-leach tests were completed in conjunction with additional ore delineation. In November 1985, a decision was made by Pegasus to put the property into production. Permitting and project development followed with startup of a new mine in 1986. Since the original permit was granted in 1986, a total of 16 amendments to the operating plan have been made. Work on processing facilities began in May 1986, with the first ore crushed and delivered to the leach pad in November 1986. During the years that followed, additional drilling added reserves to the project. Most of the known oxide mineralization in the Florida Canyon area has been explored. However, new areas to the south of the current operation present opportunities for future development of the Standard Mine mineralized zones.

Pegasus operated the Florida Canyon Mine until January 1998. Pegasus was an international gold mining company incorporated in Canada, with headquarters located in Spokane, Washington and had gold production of 470,000 ounces from six operations in 1997. Pegasus began having financial problems in 1997 when the price of gold decreased from $370 per oz in January to $283 per oz in December. During this period Pegasus’ Mt. Todd project came on stream and had serious operational problems. In January 1998, Pegasus was unable to service $238 million in debt and filed for bankruptcy under Chapter 11 of the U. S. Bankruptcy Code.

Under two separate plans of reorganization approved by major creditors and confirmed by the court, certain former Pegasus affiliates emerged from bankruptcy protection during February 1999. The first involved the reorganization of Pegasus Gold International Inc. (the international exploration affiliate of Pegasus), which was reincorporated as Apollo Gold Inc. Apollo Gold Inc. became the holding company for three former Pegasus subsidiaries, including FCMI. Apollo Gold Inc. was acquired during the second quarter of 2002 by Nevoro Gold, Inc. (“Nevoro”). Nevoro became a publicly traded company on the Toronto Stock Exchange and subsequently changed its name to Apollo Gold Corporation (“Apollo”). Apollo operated the Florida Canyon Mine and the Standard Mine through its FCMI and SGMI subsidiaries until Jipangu International, the U.S. subsidiary of Jipangu Inc., acquired the Florida Canyon and Standard properties on November 18, 2005. Jipangu has operated the properties since that time through its wholly-owned subsidiaries FCMI and SGMI. In September, 2015 Jipangu defaulted on debt and the property became majority owned by Admiral Financial. Rye Patch Gold Corp., agreed to acquire the Florida Canyon property and related assets from Admiral Financial Group (“Admiral”), and Jipangu International Inc. (“Jipangu”) through the acquisition of their three subsidiary companies, FCMI, SGMI, and Jipangu Exploration.

Rye Patch restarted the mine in April 2017 and declared commercial production in December 2017. On May 25, 2018 Alio Gold acquired Rye Patch Gold Corp pursuant to an Arrangement Agreement and all its related assets including the Florida Canyon Mine.

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