Item
2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the accompanying notes and other information included elsewhere in this Form 10-Q and in our Form 10-K, for the fiscal year ended June
30, 2017, previously filed with the SEC.
Cautionary Statement about Forward-Looking Statements
Some of the statements made in this report may contain “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The words and phrases “should be”, “will be”, “believe”, “expect”, “anticipate”, “estimate”, “forecast”, “goal” and similar expressions identify forward-looking statements and express our expectations about future events. These include such matters as:
|
•
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The Company's financial position
|
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•
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Business strategy, including outsourcing
|
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•
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Meeting Company forecasts and budgets
|
|
•
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Anticipated capital expenditures
|
|
•
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Prices of gold and associated minerals
|
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•
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Timing and amount of future discoveries (if any) and production of natural resources on our Peak Gold Joint Venture Property
|
|
•
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Operating costs and other expenses
|
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•
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Cash flow and anticipated liquidity
|
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•
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New governmental laws and regulations
|
Although the Company believes the expectations reflected in such forward-looking statements are reasonable, such expectations may not occur. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results expressed or implied by the forward-looking statements. These factors include among others:
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•
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Ability to raise capital to fund capital expenditures
|
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•
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Operational constraints and delays
|
|
•
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The risks associated with exploring in the mining industry
|
|
•
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The timing and successful discovery of natural resources
|
|
•
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Availability of capital and the ability to repay indebtedness when due
|
|
•
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Declines and variations in the price of gold and associated minerals
|
|
•
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Price volatility for natural resources
|
|
•
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Availability of operating equipment
|
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•
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Operating hazards attendant to the mining industry
|
|
•
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The ability to find and retain skilled personnel
|
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•
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Restrictions on mining activities
|
|
•
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Legislation that may regulate mining activities
|
|
•
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Impact of new and potential legislative and regulatory changes on mining operating and safety standards
|
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•
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Uncertainties of any estimates and projections relating to any future production, costs and expenses.
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•
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Timely and full receipt of sale proceeds from the sale of any of our mined products (if any)
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•
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Stock price and interest rate volatility
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•
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Federal and state regulatory developments and approvals
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•
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Availability and cost of material and equipment
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•
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Actions or inactions of third-parties
|
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•
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Potential mechanical failure or under-performance of facilities and equipment
|
|
•
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Strength and financial resources of competitors
|
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•
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Worldwide economic conditions
|
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•
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Expanded rigorous monitoring and testing requirements
|
|
•
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Ability to obtain insurance coverage on commercially reasonable terms
|
|
•
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Competition generally and the increasing competitive nature of our industry
|
|
•
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Risks related to title to properties
|
You should not unduly rely on these forward-looking statements in this report, as they speak only as of the date of this report. Except as required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this report or to reflect the occurrence of unanticipated events.
See the information under the heading “Risk Factors” in this Form 10-Q for some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in forward-looking statements.
Overview
The Company is a Houston-based company, whose primary business is the participation in a joint venture to explore in the State of Alaska for gold ore and associated minerals. On January 8, 2015, the Company and Royal Gold, Inc. (
“Royal Gold”), through their wholly-owned subsidiaries, consummated the transactions (the “Transactions”) contemplated under the Master Agreement, dated as of September 29, 2014 (the “Master Agreement”), including the formation of the Joint Venture Company, to advance exploration of the Peak Gold Joint Venture Property (as defined below), which is prospective for gold and associated minerals. As of December 31, 2017, the Joint Venture Company leased or controlled over an estimated 849,900 acres for the exploration of gold ore and associated minerals.
Background
Contango Mining Company (“
Contango Mining”), a wholly owned subsidiary of Contango Oil & Gas Company (“Contango”), was formed for the purpose of mineral exploration in the State of Alaska. The Company was formed on September 1, 2010 as a Delaware corporation and on November 29, 2010, Contango Mining assigned all its properties and certain other assets and liabilities to Contango. Contango contributed the properties and $3.5 million of cash to the Company, pursuant to the terms of a Contribution Agreement (the “Contribution Agreement”), in exchange for approximately 1.6 million shares of the Company’s common stock. The transactions occurred between companies under common control. Contango then distributed all of the Company’s common stock to Contango’s stockholders of record as of October 15, 2010, promptly after the effective date of the Company’s Registration Statement Form 10 on the basis of one share of common stock for each ten (10) shares of Contango’s common stock then outstanding
.
Contango Mining acquired an interest in properties from Juneau Exploration, L.P., (“
JEX”) in exchange for $1 million and a 3.0% overriding royalty interest in the properties granted to JEX. JEX assisted the Company in acquiring additional properties in Alaska pursuant to an Advisory Agreement dated September 6, 2012, and the Company granted to JEX a 2% overriding royalty interest in the additional properties acquired. On September 29, 2014, pursuant to a Royalty Purchase Agreement between JEX and Royal Gold (the “Royalty Purchase Agreement”), JEX sold its entire overriding royalty interest in the properties to Royal Gold. On the same date, the Company terminated the Advisory Agreement with JEX. In connection with the closing of the Transactions with Royal Gold (the “Closing”), the Company formed the Joint Venture Company and contributed to the Joint Venture Company the Peak Gold Joint Venture Property near Tok, Alaska, together with other personal property (the “Contributed Assets”) with a historical cost of $1.4 million and an agreed value of $45.7 million (the “Contributed Assets Value”). At the Closing, the Company and Royal Gold, through their wholly-owned subsidiaries, entered into the JV LLCA.
Upon Closing, Royal Gold initially contributed $5 million to fund explorati
on activity of the Joint Venture Company. The initial $5 million did not give Royal Gold an equity stake in the Joint Venture Company. In connection with the initial contribution, Royal Gold received an option to earn up to a 40% interest in the Joint Venture Company by investing up to $30 million (inclusive of the initial $5 million investment) prior to October 2018. As of December 31, 2017, Royal Gold has contributed $29.3 million (including its initial $5 million investment) to the Joint Venture Company and earned a 39.0% interest in the Joint Venture Company. The proceeds of Royal Gold’s investment have been and will be used by the Joint Venture Company for additional exploration of the property it controls
.
Properties
Since 2009, the Company's primary focus has been the exploration of a mineral lease with the Native Village of Tetlin whose governmental entity is the Tetlin Tribal Council (“Tetlin Tribal Council”) for the exploration of minerals near Tok, Alaska on a currently estimated 675,000 acres (the “Tetlin Lease”) and almost all of the Company's resources have been directed to that end. All significant work presently conducted by the Company has been directed at exploration of the Tetlin Lease and increasing understanding of the characteristics of, and economics of, any mineralization. There are no known quantifiable mineral reserves on the Tetlin Lease or any of the Company's other properties as defined by the Securities and Exchange Commission ("SEC") Industry Guide 7.
The Tetlin Lease originally had a ten year term beginning July 2008 which was extended for an additional ten years to July 15, 2028. If the properties under the Tetlin Lease are placed into commercial production, the Tetlin Lease will be held throughout production and the Company would be obligated to pay a production royalty to the Tetlin Tribal Council, which varies from 2.0% to 5.0%, depending on the type of metal produced and the year of production. In June 2011, the Company paid the Tetlin Tribal Council $75,000 in exchange for reducing the production royalty payable to them by 0.25%. In July 2011, the Company paid the Tetlin Tribal Council an additional $150,000 in exchange for further reducing the production royalty by 0.50%. These payments lowered the production royalty to a range of 1.25% to 4.25%, depending on the type of metal produced and the year of production. On or before July 15, 2020, the Tetlin Tribal Council has the option to increase its production royalty by (i) 0.25% by payment to the Joint Venture Company of $150,000, (ii) 0.50% by payment to the Joint Venture Company of $300,000, or (iii) 0.75% by payment to the Joint Venture Company of $450,000.
The Joint Venture Company also holds certain State of Alaska unpatented mining claims for the exploration of gold ore and associated minerals. The Company believes that the Joint Venture Company holds good title to its properties, in accordance with standards generally accepted in the mineral industry. As is customary in the mineral industry, the Company conducted only a preliminary title examination at the time it acquired the Tetlin Lease. The Joint Venture Company conducted a title examination prior to the assignment of the Tetlin Lease to the Joint Venture Company and performed certain curative title work. Before the Joint Venture Company begins any mine development work, however, the Joint Venture Company is expected to again conduct a full title review and perform curative work on any defects that it deems significant. A significant amount of additional work is likely required in the exploration of the properties before any determination as to the economic feasibility of a mining venture can be made.
The following table summarizes the Tetlin Lease and unpatented mining claims (the "Peak Gold Joint Venture Property") held by the Joint Venture Company as of December 31, 2017:
Property
|
|
Location
|
|
Commodities
|
|
Claims
|
|
Estimated Acres
|
|
Type
|
Tetlin-Tok
|
|
Eastern Interior
|
|
Gold, Copper, Silver
|
|
131
|
|
10,900
|
|
|
State Mining Claims
|
Eagle
|
|
Eastern Interior
|
|
Gold, Copper, Silver
|
|
428
|
|
65,900
|
|
|
State Mining Claims
|
Bush
|
|
Eastern Interior
|
|
Gold, Copper, Silver
|
|
48
|
|
7,700
|
|
|
State Mining Claims
|
West Fork
|
|
Eastern Interior
|
|
Gold, Copper, Silver
|
|
48
|
|
7,700
|
|
|
State Mining Claims
|
Triple Z
|
|
Eastern Interior
|
|
Gold, Copper, Silver
|
|
45
|
|
7,200
|
|
|
State Mining Claims
|
Noah
|
|
Eastern Interior
|
|
Gold, Copper, Silver
|
|
482
|
|
75,400
|
|
|
State Mining Claims
|
Tetlin-Village
|
|
Eastern Interior
|
|
Gold, Copper, Silver
|
|
-
|
|
675,000
|
|
|
Lease
|
|
|
TOTALS:
|
|
|
|
1,182
|
|
849,800
|
|
|
|
Strategy
Partnering with strategic industry participants to expand future exploration work.
In connection with an evaluation of the Company’s strategic options conducted by the Board of Directors and its financial advisor, the Company determined to continue its exploration activities on the Peak Gold Joint Venture Property through a joint venture with an experienced industry participant. As a result, the Company formed the Joint Venture Company pursuant to the JV LLCA with Royal Gold. Under the JV LLCA, Royal Gold is appointed as the manager of the Joint Venture Company (the “Manager”), initially, with overall management responsibility for operations of the Joint Venture Company through October 31, 2018, and, thereafter, provided Royal Gold earns at least a forty percent (40%) percentage interest by October 31, 2018. Royal Gold may resign as Manager and can be removed as Manager for a material breach of the JV LLCA, a material failure to perform its obligations as the Manager, a failure to conduct the Joint Venture Company operations in accordance with industry standards and applicable laws, and other limited circumstances. The Manager will manage, and direct the operation of the Joint Venture Company, and will discharge its duties, in accordance with approved programs and budgets. The Manager will implement the decisions of the Management Committee of the Joint Venture Company (the “Management Committee”) and will carry out the day-to-day operations of the Joint Venture Company. Except as expressly delegated to the Manager, the JV LLCA provides that the Management Committee has exclusive authority to determine all management matters related to the Company. Initially, the Management Committee consists of one appointee designated by the Company and two appointees designated by Royal Gold. Each designate on the Management Committee is entitled to one vote. Except for the list of specific actions set forth in the JV LLCA Agreement, the affirmative vote by a majority of designates is required for action.
Structuring Incentives to Drive Behavior
. The Company believes that equity ownership aligns the interests of the Company's executives and directors with those of its stockholders. As of December 31, 2017, the Company's directors and executives beneficially
own approximately 14.9% of the Company's common stock. An additional 13.2% of the Company's common stock is beneficially owned by the Marital Trust of Mr. Kenneth R. Peak, the Company's former Chairman, who passed away on April 19, 2013.
Restricted Stock.
In November 2010, the Company granted 70,429 restricted shares of common stock to its executives and directors and an additional 23,477 restricted shares to a former technical consultant. All of the restricted stock from this grant is fully vested.
In December 2013, the Company's directors, executives, and a former technical consultant were granted an aggregate of 95,000 shares of restricted stock. The restricted stock was set to vest over two years, beginning with one-third vesting on the date of grant. All of the restricted stock granted in December 2013 is fully vested.
In November 2014, the Company granted 27,000 restricted shares of common stock to its executives. The restricted stock was originally set to vest over two years, beginning with one-third vesting on the date of grant. In September 2016, the restricted stock agreements were modified. The final one-third of the grant will now vest in January 2019. As of December 31
, 2017, there were 9,000 shares of such restricted stock that remained unvested.
In January 2015, the Company granted an aggregate of 30,000 restricted shares of common stock to two of its non-executive directors, of which 10,000 shares vested immediately and the remaining two-thirds vested equally over two years. In addition, the Company granted 10,000 restricted shares of common stock to a former technical consultant which vested immediately. The Compensation Committee also elected to immediately vest all of the stock options and restricted stock previously issued to the former technical consultant. All of the restricted stock granted in January 2015 is fully vested
.
In September 2015, the Company granted 85,000 restricted shares of common stock to its executives. The restricted stock was originally set to vest over two years, beginning with one-third vesting on the date of grant. In September 2016, the restricted stock agreements for two executives were modified such that the final one-third of their restricted stock grant will vest in January 2019. As of December 31
, 2017, there were 13,332 shares of such restricted stock that remained unvested.
In December 2015, the Company granted 40,000 restricted shares of common stock to two of its non-executive directors. The restricted stock vests over two years, beginning with one-third vesting on the date of grant. As of December 31
, 2017, all of the restricted stock from this grant was fully vested.
In August 2016, the Company granted 100,000 restricted shares of common stock to its executives. A portion of the restricted stock granted vests over two years, beginning one-third on the date of grant. The remainder of the restricted stock granted vests in January 2019. As of December 31, 2017, there were 46,666 shares of such restricted stock that remained unvested.
In November 2016, the Company granted 75,000 restricted shares of common stock to its non-executive directors. The restricted stock granted vests in January 2019. As of December 31, 2017, there were 75,000 shares of such restricted stock that remained unvested.
In November 2017, the Company granted 155,000 restricted shares of common stock to its executives and non-executive directors. The restricted stock granted vests in January 2020. As of December 31, 2017, there were 155,000 shares of such restricted stock that remained unvested.
Stock Options.
As of the date of this report, the option awards listed in the table below have been granted to directors, officers, employees and consultants of the Company:
Option Awards
|
Period Granted
|
|
Options Granted
|
|
Weighted Average Exercise Price
|
|
Vesting Period
(7)
|
Expiration Date
|
September 2011
(1)
|
|
50,000
|
|
$13.13
|
|
Vests over two years, beginning with one-third on the grant date.
|
September 2016
|
July 2012
(2)
|
|
100,000
|
|
$10.25
|
|
Vests over two years, beginning with one-third on the grant date.
|
July 2017
|
December 2012
(3)
|
|
250,000
|
|
$10.20
|
|
Vests over two years, beginning with one-third on the grant date.
|
December 2017
|
June 2013
(4)
|
|
37,500
|
|
$10.00
|
|
Vested Immediately
|
June 2018
|
July 2013
(5)
|
|
5,000
|
|
$10.00
|
|
Vested Immediately
|
July 2018
|
September 2013
(6)
|
|
37,500
|
|
$10.01
|
|
Vested Immediately
|
September 2018
|
September 2013
(6)
|
|
15,000
|
|
$10.01
|
|
Vests over two years, beginning with one-third on the grant date.
|
September 2018
|
(1)
The Company granted 40,000 stock options to its directors and executives and an additional 10,000 stock options to its technical consultant, the owner of Avalon, for services performed during fiscal year 2011. Of the total options granted 15,000 were later forfeited.
(2) The Company granted 75,000 stock options to its directors and executives and an additional 25,000 stock options to its technical consultant for services performed during fiscal year 2012. Of the total options granted as a part of this grant, 25,000 were later forfeited.
(3) The Company granted 175,000 stock options to its directors and executives and an additional 75,000 stock options to its technical consultant for services performed during fiscal year 2013. Of the total options granted as a part of this grant, 50,000 were later forfeited.
(4) The Company granted 37,500 stock options to its executives for services performed during fiscal year 2013.
(5) The Company granted 5,000 stock options to an employee of Avalon for services performed during fiscal year 2013.
(6) The Company granted 52,500 stock options to its executives for services performed during the first quarter of fiscal year 2014.
(7) If at any time there occurs a change of control, as defined in the Amended Equity Plan, any options that are unvested at that time will immediately vest. The Company's Compensation Committee has determined that the Transactions do not constitute a change in control under the Amended Equity Plan.
During the quarter ended December 31, 2017, the Company's current executives, directors, and consultants cashless exercised 190,000 stock options resulting in the issuance of 93,026 shares of common stock to the exercising parties and no proceeds to the Company. During fiscal year 2017, the Company's current and former executives, directors, and consultants cashless exercised 140,000 stock options resulting in the issuance of 71,454 shares of common stock to the exercising parties and no proceeds to the Company.
Exploration and Mining Property
Exploration and mining rights in Alaska may be acquired in the following manner: public lands, private fee lands, unpatented Federal or State of Alaska mining claims, patented mining claims, and tribal lands. The primary sources for acquisition of these lands are the United States government, through the Bureau of Land Management and the United States Forest Service, the Alaskan state government, tribal governments, and individuals or entities who currently hold title to or lease government and private lands.
Tribal lands are those lands that are under control by sovereign Native American tribes, such as land constituting the Tetlin Lease or Alaska Native corporations established by the Alaska Native Claims Settlement Act of 1971 (ANSCA). Areas that show promise for exploration and mining can be leased or joint ventured with the tribe controlling the land, including land constituting the Tetlin Lease.
The State of Alaska government owns public lands. Mineral resource exploration, development and production are administered primarily by the State Department of Natural Resources. Ownership of the subsurface mineral estate, including alluvial and lode mineral rights, can be acquired by staking a 40 acre or 160 acre mining claim, which right is granted under Alaska Statute Sec. 38.05.185 to 38.05.275, as amended (the “Alaska Mining Law”). The State of Alaska government continues to own the surface estate, subject to certain rights of ingress and egress owned by the claimant, even though the subsurface can be controlled by a claimant with a right to extract through claim staking. A mining claim is subject to annual assessment work requirements, the payment of annual rental fees and royalties due to the State of Alaska after commencement of commercial production. Both private fee-land and unpatented mining claims and related rights, including rights to use the surface, are subject to permitting requirements of federal, state, tribal and local governments.
Gold Exploration
The Joint Venture Company controls an estimated 849,800 acres consisting of the Tetlin Lease and State of Alaska mining claims for the exploration of gold and associated minerals. To date, our gold exploration has concentrated on the Tetlin Lease, with only a limited amount of work performed on the Tok, Eagle, Bush, West Fork, Triple Z, and Noah claims.
The Joint Venture Company initiated a summer of 2015 exploration program on the Tetlin Lease. The work program anticipated spending $5 million with a possible expansion of the work program in early fall if drilling results warranted further work. The dril
ling program included exploration targets that were helicopter-supported at the Tors, Saddle, North Saddle and Saddle Skarn targets and road-supported work at the Peak Zone area. Most of the initial work program (Phase I) was completed by early August with assay results received by early September. On August 31, 2015, the Joint Venture Company approved a budget of up to approximately $4 million for additional exploration work to be completed before the drilling season ended in October 2015 and incurred aggregate cost of approximately $6.8 million for the calendar 2015 exploration program
.
The Joint Venture Company initiated a calendar 2016 Phase I exploration program consisting of drilling the North Peak target area
which began in February 2016 on the Tetlin Lease with an approved budget of $4.4 million. An additional budget was approved for spending up to an additional $6.8 million during the remainder of calendar 2016. The Joint Venture Company initiated a 2016 Phase II exploration drilling program in May, which was completed in September. A Phase III exploration drilling program was initiated in October and completed in November. The project incurred an aggregate cost in calendar 2016 of approximately $10.6 million
.
The Joint Venture Company initiated a calendar 2017 Phase I exploration program consisting of drilling the North Peak target area and testing the True Blue Moon target area which began in February 2017 on the Tetlin Lease with an approved budget of $5.3 million. The 2017 Phase I program was completed in April. The Joint Venture Company initiated a 2017 Phase II exploration drilling and reconnaissance program in May, which was completed in July 2017.
The Joint Venture Company initiated Phase III of the 2017 drilling program, which consisted of exploration drilling in the West Peak, West Peak Extension, 7
O’clock, Forks, and North Peak areas in September 2017. Phase III was completed in October 2017. The calendar 2017 Phase I, Phase II, and Phase III programs and associated technical work incurred an aggregate cost through December 31, 2017 of approximately $12.2 million.
From inception to December 31, 2017, the Joint Venture Company has incurred $29.5
million in exploration program expenditures. As of December 31, 2017, Royal Gold had funded a total of $29.3 million (including the initial investment of $5 million) and earned a 39.0% interest in the Joint Venture Company.
The exploration effort on the Tetlin Lease has resulted in identifying two mineral deposits (Peak and North Peak) and several other gold and cop
per prospects following drilling programs starting in 2011. Surface, bedrock, and stream sediment data on the Tetlin Lease as well as on the Eagle, Noah and Tok state of Alaska claims adjacent to the Tetlin Lease have been gathered during the summer exploration programs. There was no exploration program in 2014. None of the exploration targets are known to host quantifiable commercial mineral reserves and none are near or adjacent to other known significant gold or copper deposits. There has been no recorded past placer or lode mining on Peak Gold joint venture project, and the Company and the Joint Venture Company are the only entities known to have conducted drilling operations on the Peak Gold joint venture project
.
Chief Danny Prospect Area
The Chief Danny Prospect Area currently is the most advanced exploration target on the Tetlin Lease and is comprised of several distinct mineralized areas: Main Peak Zone, Discovery Zone, West Peak Zone, North Peak Zone, Saddle Zone a
nd the 7 O’clock area. The Chief Danny prospect was discovered during rock, stream sediment and pan concentrate sampling in 2009 and since then has been explored using top of bedrock soil auger sampling, trenching, ground induced polarization (IP) geophysics, airborne magnetic and resistivity surveys and core drilling. Results from this work indicate the presence of a zoned metal-bearing system consisting of a gold-copper-iron enriched core covering six square miles at Chief Danny South (includes Main Peak, Discovery, West Peak, and North Peak) and a fault-offset arsenic-gold enriched zone to the north covering three square miles at the Saddle Zone. The Company has conducted extensive drilling on the Main Peak, North Peak, and West Peak Zones. The Company has also conducted some environmental base line studies on the areas surrounding the Chief Danny prospect, as well as airborne magnetic and resistivity programs. From 2009 through 2017, the Company conducted field-related exploration work at the Chief Danny Prospect, including collecting the following samples:
Year
|
|
Program
|
|
Core
Samples
|
|
Rock
Samples
|
|
Soil
Samples
|
|
Pan
Con
Samples
|
|
Stream
Silt
Samples
|
|
Core (feet)
|
|
IP/Geophysics
(kilometers)
|
|
Trenching
(feet)
|
2009
|
|
Chief
Danny
|
|
—
|
|
|
958
|
|
|
33
|
|
|
94
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
2,330
|
|
2010
|
|
Chief Danny
|
|
—
|
|
|
613
|
|
|
760
|
|
|
668
|
|
|
795
|
|
|
—
|
|
|
14
|
|
|
—
|
|
2011
|
|
Chief Danny
|
|
1,267
|
|
|
20
|
|
|
688
|
|
|
—
|
|
|
—
|
|
|
8,057
|
|
|
3,957
|
|
|
—
|
|
2012
|
|
Chief Danny
|
|
5,223
|
|
|
82
|
|
|
1,029
|
|
|
—
|
|
|
—
|
|
|
36,006
|
|
|
—
|
|
|
—
|
|
2013
|
|
Chief Danny
|
|
8,970
|
|
|
14
|
|
|
1,406
|
|
|
85
|
|
|
278
|
|
|
47,081
|
|
|
2,414
|
|
|
—
|
|
2014
|
|
Chief Danny
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2015
|
|
Chief Danny
|
|
8,352
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,128
|
|
|
—
|
|
|
—
|
|
2016
|
|
Chief Danny
|
|
10,450
|
|
|
21
|
|
|
694
|
|
|
—
|
|
|
—
|
|
|
67,336
|
|
|
24
|
|
|
—
|
|
2017
|
|
Chief Danny
|
|
11,864
|
|
|
112
|
|
|
975
|
|
|
408
|
|
|
408
|
|
|
59,347
|
|
|
48
|
|
|
—
|
|
|
|
Total
|
|
46,126
|
|
|
1,953
|
|
|
5,585
|
|
|
1,255
|
|
|
1,492
|
|
|
263,955
|
|
|
6,457
|
|
|
2,330
|
|
The map below depicts the grade times thickness in the Main Peak, North Peak, and West Peak zones:
2017 Exploration Program - Phase III
. The Phase III exploration drilling completed by the Joint Venture Company on the Peak Gold Joint Venture Property totaled 2,966 meters (9,731 feet) in 16 holes. The Joint Venture Company spent an estimated $4.7 million, during the September and December quarter combined, on program activities, including drilling, geochemical analyses, landholding fees and other related expenses. Phase III drilling consisted of exploration drilling West Peak and West Peak Extension (1,707 meters), 7 O’clock (203 meters), Forks (729 meters), and North Peak (327). The 2017 Phase III program was completed October 18, 2017, and statistics represent the full Phase III program.
A total of 363 pan concentrate, 364 stream sediment and 5 grab rock samples were collected over the Noah and southern Eagle claims in July and early August. Results from these efforts were received in t
he third quarter and revealed three large areas where anomalous gold, arsenic, and copper were concentrated. Gold, arsenic and copper in steams sediment samples range up to 377 ppb, 161 ppm and 412 ppm, respectively. Gold, arsenic and copper in pan cons range up to 9,929 ppb, 803 ppm and 206 ppm, respectively.
The map below depicts the location of the
core holes drilled during the 2017 Phase III program:
Significant Drill Intercepts from the 2017 Phase III Program.
Sample intervals are calculated using 0.5 grams per tonne (gpt) lower cut off for gold with no internal waste less than cutoff grade that is greater than 3 meters in thickness. Intercepts shown are drill intercept lengths. True width of mineralization is unknown. The grade cutoff for gold (Au) is 0.5 gpt; for silver (Ag) is 10 gpt; and for copper (Cu) is 0.1%. The following table summarizes the significant drilling results obtained for the complete Phase II of the 2017 Program:
DrillHole
|
Zone
|
From (mete
rs)
|
To (meters)
|
Interval (meters)
|
Au_gpt
|
Au_opt
|
Ag_gpt
|
Cu %
|
TET17408
|
West Peak Ext
|
78.05
|
82.01
|
3.96
|
1.35
|
0.039
|
0.1
|
0.006
|
and
|
West Peak Ext
|
88.33
|
93.75
|
5.42
|
1.33
|
0.039
|
0.3
|
0.013
|
TET17408
|
West Peak Ext
|
150.08
|
151.93
|
1.85
|
2.50
|
0.073
|
1.9
|
0.021
|
TET17409
|
West Peak Ext
|
113.07
|
117.54
|
4.47
|
0.86
|
0.025
|
1.3
|
0.010
|
TET17411
|
West Peak Ext
|
161.17
|
162.78
|
1.61
|
4.55
|
0.133
|
10.0
|
0.116
|
TET17412
|
West Peak Ext
|
140.19
|
141.22
|
1.03
|
4.79
|
0.140
|
2.1
|
0.018
|
and
|
West Peak Ext
|
148.44
|
151.19
|
2.75
|
0.76
|
0.022
|
0.9
|
0.005
|
TET17412
|
West Peak Ext
|
156.50
|
157.44
|
0.94
|
1.61
|
0.047
|
0.0
|
0.010
|
TET17413
|
West Peak Ext
|
140.50
|
142.57
|
2.07
|
1.68
|
0.049
|
2.97
|
0.082
|
TET17415
|
West Peak Ext
|
201.73
|
202.98
|
1.25
|
2.95
|
0.086
|
12.3
|
0.004
|
2017 Exploration Program - Phase I
I
. The Phase II exploration drilling completed by the Joint Venture Company on the Peak Gold Joint Venture Property totaled 9,761 meters (32,038 feet) in 44 holes. The Joint Venture Company spent an estimated $4.7 million, during the June quarter, on program activities, including drilling, geochemical analyses, landholding fees and other related expenses. Drilling, through the end of July, consisted of exploration drilling West Peak (461 meters), West Peak Extension (2,603 meters) Discovery (1,034 meters), 7 O’clock (1,443 meters), New Moon (1,398 meters), Waterpump (1,161 meters), Main Peak (570 meters) and North Peak (1,095). Soils auger sampling and IP geophysical surveys were conducted in the Chief Danny area. Stream sediment and pan concentrate samples were collected across the Noah group of claims. The 2017 Phase II program was completed July 31, 2017, and statistics represent the full Phase II program.
The map below depicts the location of the
core holes drilled during the 2017 Phase II program:
Significant Drill Intercepts from the 2017 Phase II Program.
Sample intervals are calculated using 0.5 grams per tonne (gpt) lower cut off for gold with no internal waste less than cutoff grade that is greater than 3 meters in thickness. Intercepts shown are drill intercept lengths. True width of mineralization is unknown. The grade cutoff for gold (Au) is 0.5 gpt; for silver (Ag) is 10 gpt; and for copper (Cu) is 0.1%. The following table summarizes the significant drilling results obtained for the complete Phase II of the 2017 Program:
DrillHole
|
Zone
|
From (mete
rs)
|
To (meters)
|
Interval (meters)
|
Au_gpt
|
Au_opt
|
Ag_gpt
|
Cu %
|
TET17351
|
Main Peak
|
16.30
|
18.55
|
2.25
|
1.88
|
0.055
|
1.0
|
0.025
|
TET17353
|
True Blue Moon
|
91.97
|
93.73
|
1.76
|
9.15
|
0.267
|
2.0
|
0.375
|
Including
|
True Blue Moon
|
91.97
|
92.14
|
0.17
|
81.60
|
2.380
|
2.4
|
0.249
|
TET17357
|
True Blue Moon
|
56.43
|
61.77
|
5.34
|
0.87
|
0.025
|
1.5
|
0.249
|
TET17360
|
North Peak
|
24.27
|
26.67
|
2.40
|
0.63
|
0.044
|
2.4
|
0.137
|
TET17362
|
New Moon
|
66.01
|
68.58
|
2.57
|
1.03
|
0.030
|
2.6
|
0.084
|
TET17363
|
New Moon
|
39.48
|
41.76
|
2.28
|
1.78
|
0.052
|
0.0
|
0.016
|
and
|
New Moon
|
213.59
|
215.31
|
1.72
|
0.95
|
0.028
|
1.1
|
0.017
|
TET17367
|
Discovery
|
44.65
|
45.11
|
0.46
|
4.33
|
0.126
|
6.1
|
0.069
|
and
|
Discovery
|
182.06
|
183.80
|
1.74
|
1.11
|
0.032
|
1.9
|
0.102
|
and
|
Discovery
|
253.68
|
257.10
|
3.42
|
1.28
|
0.037
|
1.0
|
0.052
|
and
|
Discovery
|
313.34
|
315.15
|
1.81
|
1.44
|
0.042
|
1.6
|
0.121
|
TET17368
|
West Peak Ext
|
117.15
|
118.00
|
0.85
|
2.70
|
0.079
|
17.7
|
0.063
|
and
|
West Peak Ext
|
123.75
|
126.70
|
2.95
|
0.70
|
0.020
|
2.9
|
0.073
|
and
|
West Peak Ext
|
142.35
|
147.22
|
4.87
|
0.76
|
0.022
|
1.2
|
0.021
|
and
|
West Peak Ext
|
175.41
|
178.11
|
2.70
|
1.14
|
0.033
|
0.7
|
0.020
|
TET17369
|
West Peak Ext
|
172.82
|
186.91
|
14.09
|
2.75
|
0.080
|
3.1
|
0.101
|
Including
|
West Peak Ext
|
172.82
|
173.79
|
0.97
|
9.57
|
0.279
|
4.7
|
0.022
|
and
|
West Peak Ext
|
174.94
|
176.17
|
1.23
|
9.51
|
0.277
|
5.1
|
0.206
|
TET17370
|
Discovery
|
100.30
|
103.03
|
2.73
|
0.66
|
0.019
|
2.4
|
0.058
|
and
|
Discovery
|
166.73
|
167.73
|
1.00
|
6.30
|
0.184
|
1.3
|
0.041
|
and
|
Discovery
|
221.36
|
223.04
|
1.68
|
0.93
|
0.027
|
0.0
|
0.002
|
TET17371
|
West Peak
Ext
|
196.94
|
199.75
|
2.81
|
0.74
|
0.022
|
3.2
|
0.075
|
TET17372
|
Discovery
|
292.78
|
298.19
|
5.41
|
0.58
|
0.017
|
1.7
|
0.047
|
and
|
Discovery
|
304.01
|
305.65
|
1.64
|
1.87
|
0.055
|
1.8
|
0.077
|
TET17375
|
Seven o'clock
|
218.14
|
219.54
|
1.40
|
13.20
|
0.385
|
24.7
|
0.594
|
TET17377
|
Seven o'clock
|
246.66
|
249.10
|
2.44
|
4.25
|
0.124
|
59.6
|
0.540
|
TET17379
|
West Peak Ext
|
103.24
|
111.40
|
8.16
|
5.22
|
0.152
|
0.7
|
0.010
|
Including
|
West Peak Ext
|
108.36
|
109.14
|
0.78
|
18.20
|
0.531
|
1.5
|
0.025
|
and
|
West Peak Ext
|
116.60
|
145.70
|
29.10
|
2.53
|
0.074
|
0.6
|
0.030
|
Including
|
West Peak Ext
|
143.16
|
143.86
|
0.70
|
8.93
|
0.260
|
2.4
|
0.091
|
TET17381
|
West Peak Ext
|
135.90
|
138.17
|
2.27
|
1.27
|
0.037
|
1.7
|
0.012
|
TET17385
|
West Peak Ext
|
154.53
|
160.07
|
5.54
|
2.06
|
0.060
|
80.5
|
0.278
|
TET17388
|
West Peak Ext
|
6.71
|
12.48
|
5.77
|
0.67
|
0.020
|
0.8
|
0.162
|
and
|
West Peak Ext
|
20.47
|
22.08
|
1.61
|
2.59
|
0.076
|
0.0
|
0.080
|
and
|
West Peak Ext
|
127.56
|
133.50
|
5.94
|
0.55
|
0.016
|
0.4
|
0.013
|
and
|
West Peak Ext
|
151.66
|
166.73
|
15.07
|
1.66
|
0.048
|
1.3
|
0.027
|
TET17389
|
West Peak Ext
|
162.60
|
166.12
|
3.52
|
0.66
|
0.019
|
2.1
|
0.042
|
TET17390
|
West Peak Ext
|
57.15
|
60.33
|
3.18
|
1.92
|
0.056
|
1.6
|
0.258
|
and
|
West Peak Ext
|
206.96
|
213.17
|
6.21
|
1.31
|
0.038
|
0.8
|
0.031
|
and
|
West Peak Ext
|
264.99
|
266.49
|
1.50
|
6.31
|
0.184
|
0.0
|
0.004
|
TET17393
|
Main Peak
|
2.13
|
20.51
|
18.38
|
3.22
|
0.094
|
2.0
|
0.082
|
Including
|
Main Peak
|
3.96
|
5.18
|
1.22
|
10.60
|
0.309
|
2.1
|
0.073
|
and
|
Main Peak
|
19.04
|
19.51
|
0.47
|
15.10
|
0.440
|
8.6
|
0.205
|
TET17393
|
Main Peak
|
27.98
|
71.82
|
43.84
|
6.93
|
0.202
|
1.9
|
0.057
|
Including
|
Main Peak
|
39.06
|
40.08
|
1.02
|
92.70
|
2.704
|
33.9
|
0.127
|
and
|
Main Peak
|
50.06
|
52.00
|
1.94
|
19.70
|
0.575
|
2.2
|
0.088
|
TET17393
|
Main Peak
|
78.33
|
102.72
|
24.39
|
2.29
|
0.067
|
1.1
|
0.010
|
Including
|
Main Peak
|
82.75
|
83.54
|
0.79
|
8.75
|
0.255
|
1.5
|
0.019
|
and
|
Main Peak
|
93.57
|
94.38
|
0.81
|
11.40
|
0.333
|
6.5
|
0.014
|
TET17393
|
Main Peak
|
111.86
|
134.99
|
23.13
|
12.56
|
0.366
|
9.0
|
0.086
|
Including
|
Main Peak
|
127.91
|
128.83
|
0.92
|
48.70
|
1.420
|
25.7
|
0.131
|
and
|
Main Peak
|
133.20
|
134.99
|
1.79
|
71.20
|
2.077
|
15.9
|
0.157
|
TET17395
|
Main Peak
|
34.11
|
36.15
|
2.04
|
4.55
|
0.133
|
0.0
|
0.031
|
and
|
Main Peak
|
51.80
|
55.13
|
3.33
|
0.90
|
0.026
|
3.6
|
0.141
|
and
|
Main Peak
|
62.55
|
73.59
|
11.04
|
4.72
|
0.138
|
5.7
|
0.147
|
TET17395
|
Main Peak
|
78.51
|
219.37
|
140.86
|
13.27
|
0.387
|
42.6
|
0.609
|
Including
|
Main Peak
|
116.62
|
118.70
|
2.08
|
49.20
|
1.435
|
94.7
|
0.997
|
and
|
Main Peak
|
118.70
|
120.25
|
1.55
|
93.40
|
2.724
|
175.0
|
1.830
|
and
|
Main Peak
|
155.39
|
158.37
|
2.98
|
44.30
|
1.292
|
78.0
|
1.180
|
TET17396
|
Waterpump
|
33.77
|
35.55
|
1.78
|
1.07
|
0.031
|
2.3
|
0.264
|
TET17397
|
Main Peak
|
23.47
|
47.89
|
24.42
|
12.42
|
0.362
|
7.8
|
0.236
|
Including
|
Main Peak
|
24.89
|
25.62
|
0.73
|
71.60
|
2.088
|
14.8
|
0.137
|
and
|
Main Peak
|
30.14
|
32.29
|
2.15
|
49.50
|
1.444
|
8.0
|
0.283
|
and
|
Main Peak
|
32.29
|
32.65
|
0.36
|
40.80
|
1.190
|
24.4
|
0.907
|
TET17397
|
Main Peak
|
56.87
|
94.03
|
37.16
|
1.70
|
0.050
|
4.2
|
0.093
|
Including
|
Main Peak
|
61.80
|
63.55
|
1.75
|
7.02
|
0.205
|
20.3
|
0.148
|
and
|
Main Peak
|
66.14
|
67.24
|
1.10
|
10.20
|
0.298
|
8.6
|
0.280
|
TET17397
|
Main Peak
|
99.44
|
165.21
|
65.77
|
20.14
|
0.587
|
8.8
|
0.260
|
Including
|
Main Peak
|
124.66
|
124.94
|
0.28
|
162.70
|
4.745
|
23.8
|
0.613
|
and
|
Main Peak
|
124.94
|
125.75
|
0.81
|
68.00
|
1.983
|
11.4
|
0.237
|
and
|
Main Peak
|
148.44
|
149.12
|
0.68
|
57.00
|
1.663
|
31.0
|
1.000
|
2017 Exploration Program - Phase I
. During the quarter ending March 31, 2017, exploration drilling was completed by the Joint Venture Company on the Peak Gold Joint Venture Property totaling 5,236 meters (17,179 feet) in 47 holes. The Joint Venture Company spent an estimated $2.8 million, during the quarter, on program activities, including drilling, geochemical analyses, landholding fees and other related expenses. Drilling consisted of infilling and expanding the mineralized zone in North Peak totaling 3,703 meters, target testing in West Peak totaling 282 meters and target testing of True Blue Moon totaling 1,251 meters.
The map below depicts the location of the core holes drilled during the 2017 Phase I program:
2017 PHASE I CORE HOLES DRILLED
Significant Drill Intercepts from the 2017 Phase I Prog
ram.
Sample intervals are calculated using 0.5 grams per tonne (gpt) lower cut off for gold with no internal waste less than cutoff grade that is greater than 3 meters in thickness. Intercepts shown are drill intercept lengths. True width of mineralization is unknown. The grade cutoff for gold (Au) is 0.5 gpt; for silver (Ag) is 10 gpt; and for copper (Cu) is 0.1%. The following table summarizes the significant drilling results obtained for the complete Phase I of the 2017 Program:
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au_gpt
|
Au_opt
|
Ag_gpt
|
Cu %
|
TET17312
|
North Peak
|
4.27
|
33.39
|
29.12
|
7.12
|
0.208
|
69.4
|
0.121
|
Including
|
North Peak
|
16.46
|
18.92
|
2.46
|
24.10
|
0.703
|
368.0
|
0.044
|
and
|
North Peak
|
22.95
|
24.08
|
1.13
|
57.40
|
1.674
|
72.9
|
0.237
|
TET17312
|
North Peak
|
36.79
|
37.59
|
0.80
|
4.93
|
0.144
|
37.6
|
0.190
|
TET17313
|
North Peak
|
3.66
|
31.70
|
28.04
|
8.80
|
0.257
|
83.8
|
0.147
|
Including
|
North Peak
|
18.29
|
20.27
|
1.98
|
55.25
|
1.611
|
443.3
|
0.072
|
TET17313
|
North Peak
|
37.62
|
39.92
|
2.30
|
4.67
|
0.136
|
27.5
|
0.110
|
TET17313
|
North Peak
|
79.07
|
84.43
|
5.36
|
3.20
|
0.093
|
39.0
|
0.231
|
TET17313
|
North Peak
|
85.34
|
85.65
|
0.31
|
18.95
|
0.553
|
588.0
|
1.055
|
TET17313
|
North Peak
|
85.95
|
86.87
|
0.92
|
9.03
|
0.263
|
266.0
|
1.140
|
TET17314
|
North Peak
|
137.02
|
139.90
|
2.88
|
1.23
|
0.036
|
217.1
|
0.102
|
TET17315
|
North Peak
|
81.95
|
83.06
|
1.11
|
2.43
|
0.071
|
17.4
|
0.084
|
TET17316
|
North Peak
|
20.49
|
26.44
|
5.95
|
2.56
|
0.075
|
23.5
|
0.296
|
TET17316
|
North Peak
|
87.03
|
87.97
|
0.94
|
2.79
|
0.081
|
13.4
|
0.178
|
TET17316
|
North Peak
|
100.18
|
105.16
|
4.98
|
1.00
|
0.029
|
21.3
|
0.243
|
TET17317
|
North Peak
|
38.95
|
46.57
|
7.62
|
8.72
|
0.254
|
4.1
|
0.086
|
Including
|
North Peak
|
44.48
|
46.57
|
2.09
|
27.80
|
0.811
|
11.2
|
0.149
|
TET17318
|
North Peak
|
116.91
|
117.16
|
0.25
|
64.20
|
1.873
|
14.5
|
0.008
|
TET17320
|
North Peak
|
2.44
|
6.46
|
4.02
|
2.59
|
0.076
|
26.0
|
0.054
|
TET17320
|
North Peak
|
50.90
|
57.52
|
6.62
|
7.81
|
0.228
|
170.0
|
0.323
|
TET17321
|
North Peak
|
49.99
|
52.20
|
2.21
|
2.28
|
0.067
|
258.0
|
0.430
|
TET17322
|
North Peak
|
29.01
|
32.46
|
3.45
|
0.88
|
0.026
|
39.3
|
0.193
|
TET17323
|
North Peak
|
1.27
|
7.32
|
6.05
|
2.34
|
0.068
|
40.3
|
0.016
|
TET17325
|
North Peak
|
5.49
|
6.20
|
0.71
|
22.00
|
0.642
|
9.5
|
0.128
|
TET17325
|
North Peak
|
10.04
|
14.83
|
4.79
|
3.63
|
0.106
|
2.0
|
0.036
|
Including
|
North Peak
|
12.68
|
13.22
|
0.54
|
21.50
|
0.627
|
7.7
|
0.162
|
TET17325
|
North Peak
|
19.11
|
20.32
|
1.21
|
41.10
|
1.199
|
17.4
|
0.145
|
TET17325
|
North Peak
|
24.88
|
25.60
|
0.72
|
5.40
|
0.158
|
56.0
|
0.308
|
TET17326
|
North Peak
|
3.73
|
9.99
|
6.26
|
11.98
|
0.349
|
172.7
|
0.038
|
Including
|
North Peak
|
7.40
|
7.67
|
0.27
|
84.50
|
2.465
|
656.0
|
0.115
|
TET17328
|
North Peak
|
17.68
|
19.20
|
1.52
|
2.25
|
0.066
|
1.6
|
0.008
|
TET17331
|
North Peak
|
2.13
|
18.98
|
16.85
|
8.68
|
0.253
|
5.1
|
0.023
|
Including
|
North Peak
|
8.53
|
9.79
|
1.26
|
22.40
|
0.653
|
7.0
|
0.048
|
and
|
North Peak
|
17.84
|
18.98
|
1.14
|
28.80
|
0.840
|
8.8
|
0.029
|
TET17331
|
North Peak
|
23.77
|
33.45
|
9.68
|
2.58
|
0.075
|
2.0
|
0.045
|
TET17331
|
North Peak
|
44.74
|
46.20
|
1.46
|
5.43
|
0.158
|
2.2
|
0.056
|
TET17333
|
North Peak
|
4.54
|
7.64
|
3.10
|
0.58
|
0.017
|
1.6
|
0.004
|
TET17335
|
North Peak
|
50.32
|
75.83
|
25.51
|
4.87
|
0.142
|
2.6
|
0.137
|
Including
|
North Peak
|
53.64
|
55.70
|
2.06
|
12.25
|
0.357
|
2.8
|
0.112
|
and
|
North Peak
|
60.19
|
61.32
|
1.13
|
18.80
|
0.548
|
4.3
|
0.202
|
and
|
North Peak
|
63.06
|
63.81
|
0.75
|
11.30
|
0.330
|
6.3
|
0.297
|
TET17335
|
North Peak
|
81.06
|
93.37
|
12.31
|
14.04
|
0.410
|
3.0
|
0.158
|
Including
|
North Peak
|
87.88
|
89.61
|
1.73
|
56.30
|
1.642
|
5.6
|
0.192
|
TET17336
|
North Peak
|
20.42
|
22.46
|
2.04
|
0.75
|
0.022
|
4.2
|
0.095
|
TET17336
|
North Peak
|
106.91
|
119.89
|
12.98
|
1.33
|
0.039
|
3.3
|
0.122
|
Including
|
North Peak
|
111.25
|
112.31
|
1.06
|
8.46
|
0.247
|
13.7
|
0.403
|
TET17339
|
North Peak
|
73.28
|
75.56
|
2.28
|
4.66
|
0.136
|
38.1
|
0.105
|
Including
|
North Peak
|
73.28
|
73.92
|
0.64
|
12.40
|
0.362
|
74.1
|
0.216
|
TET17340
|
North Peak
|
82.87
|
84.04
|
1.17
|
8.33
|
0.243
|
18.7
|
0.080
|
TET17342
|
North Peak
|
9.42
|
17.37
|
7.95
|
0.50
|
0.015
|
1.0
|
0.055
|
TET17342
|
North Peak
|
20.94
|
21.37
|
0.43
|
4.36
|
0.127
|
4.4
|
0.034
|
TET17343
|
North Peak
|
52.88
|
57.32
|
4.44
|
0.60
|
0.018
|
39.5
|
0.524
|
TET17344
|
North Peak
|
10.82
|
33.38
|
22.56
|
3.64
|
0.106
|
79.3
|
0.206
|
Including
|
North Peak
|
15.70
|
16.38
|
0.68
|
10.90
|
0.318
|
103.0
|
1.330
|
and
|
North Peak
|
31.09
|
32.00
|
0.91
|
19.35
|
0.564
|
152.0
|
0.024
|
TET17345
|
North Peak
|
4.71
|
22.86
|
18.15
|
2.99
|
0.087
|
31.4
|
0.330
|
Including
|
North Peak
|
14.87
|
16.53
|
1.66
|
12.75
|
0.372
|
73.3
|
0.983
|
TET17345
|
North Peak
|
28.04
|
31.70
|
3.66
|
9.07
|
0.265
|
118.6
|
0.056
|
Including
|
North Peak
|
31.09
|
31.70
|
0.61
|
23.50
|
0.685
|
56.9
|
0.049
|
TET17346
|
North Peak
|
4.57
|
7.45
|
2.88
|
6.37
|
0.186
|
58.8
|
0.080
|
TET17348
|
North Peak
|
11.28
|
12.53
|
1.25
|
21.10
|
0.615
|
62.2
|
0.431
|
TET17348
|
North Peak
|
16.30
|
17.21
|
0.91
|
5.09
|
0.148
|
79.1
|
0.182
|
2016 Exploration Program - Phase III
. During the quarter ending December 31, 2016, exploration drilling was completed by the Joint Venture Company on the Peak Gold Joint Venture Property totaling 3,883 meters (12,739 feet) in 37 holes. The Joint Venture Company spent an estimated $2.6 million, during the quarter, on program activities, including drilling, geochemical analyses, landholding fees and other related expenses. Drilling was all completed in the North Peak area with the objective of infilling the mineralized area to support a resource estimation.
The map below depicts the location of the core holes drilled during the 2016 Phase III program:
2016 PHASE III CORE HOLES DRILLED
Significant Drill Intercepts from the 2016 Phase III Program.
Sample intervals are calculated using 0.5 grams per tonne (gpt) lower cut off for gold with no internal waste less than cutoff grade that is greater than 3 meters in thickness. Intercepts shown are drill intercept lengths. True width of mineralization is unknown. The grade cutoff for gold (Au) is 0.5 gpt; for silver (Ag) is 10 gpt; and for copper (Cu) is 0.1%. The following table summarizes the significant drilling results obtained for the complete Phase III of the 2016 Program:
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au gpt
|
Au opt
|
Ag gpt
|
Cu %
|
TET16274
|
North Peak
|
10.65
|
18.67
|
8.02
|
5.56
|
0.162
|
73.5
|
0.297
|
Including
|
North Peak
|
17.37
|
18.67
|
1.30
|
23.90
|
0.697
|
82.5
|
0.146
|
TET16274
|
North Peak
|
32.62
|
39.09
|
6.47
|
0.99
|
0.029
|
42.9
|
0.241
|
TET16274
|
North Peak
|
46.40
|
46.78
|
0.38
|
4.56
|
0.133
|
65.4
|
0.475
|
TET16275
|
North Peak
|
33.07
|
36.88
|
3.81
|
0.90
|
0.026
|
19.1
|
0.321
|
TET16275
|
North Peak
|
70.76
|
71.84
|
1.08
|
2.04
|
0.060
|
9.4
|
0.226
|
TET16276
|
North Peak
|
30.30
|
34.80
|
4.50
|
1.21
|
0.035
|
13.3
|
0.048
|
TET16276
|
North Peak
|
38.99
|
55.00
|
16.01
|
3.23
|
0.094
|
51.1
|
0.046
|
Including
|
North Peak
|
45.57
|
46.10
|
0.53
|
12.35
|
0.360
|
39.5
|
0.066
|
and
|
North Peak
|
52.58
|
55.00
|
2.42
|
11.75
|
0.343
|
237.0
|
0.020
|
TET16276
|
North Peak
|
71.68
|
78.24
|
6.56
|
1.67
|
0.049
|
47.5
|
0.150
|
TET16276
|
North Peak
|
82.90
|
86.36
|
3.46
|
1.53
|
0.045
|
50.1
|
0.166
|
TET16276
|
North Peak
|
90.68
|
94.66
|
3.98
|
0.70
|
0.020
|
8.2
|
0.141
|
TET16276
|
North Peak
|
99.30
|
104.88
|
5.58
|
1.19
|
0.035
|
4.1
|
0.119
|
TET16277
|
North Peak
|
7.45
|
9.75
|
2.30
|
1.66
|
0.048
|
37.2
|
0.160
|
TET16277
|
North Peak
|
16.90
|
18.14
|
1.24
|
1.84
|
0.054
|
55.0
|
0.163
|
TET16277
|
North Peak
|
41.15
|
42.95
|
1.80
|
1.49
|
0.043
|
45.4
|
0.018
|
TET16277
|
North Peak
|
65.02
|
67.13
|
2.11
|
1.02
|
0.030
|
21.1
|
0.124
|
TET16277
|
North Peak
|
83.27
|
95.79
|
12.52
|
2.56
|
0.075
|
128.1
|
0.091
|
Including
|
North Peak
|
93.88
|
95.79
|
1.91
|
9.51
|
0.277
|
479.0
|
0.200
|
TET16277
|
North Peak
|
121.47
|
123.70
|
2.23
|
1.91
|
0.056
|
11.8
|
0.129
|
TET16277
|
North Peak
|
129.97
|
134.00
|
4.03
|
1.45
|
0.042
|
17.7
|
0.042
|
TET16278
|
North Peak
|
31.81
|
45.86
|
14.05
|
10.58
|
0.309
|
16.5
|
0.137
|
Including
|
North Peak
|
31.81
|
32.99
|
1.18
|
26.00
|
0.758
|
10.7
|
0.292
|
and
|
North Peak
|
38.73
|
39.88
|
1.15
|
30.60
|
0.893
|
42.6
|
0.239
|
and
|
North Peak
|
42.38
|
43.11
|
0.73
|
31.50
|
0.919
|
29.8
|
0.175
|
and
|
North Peak
|
44.42
|
45.86
|
1.44
|
30.00
|
0.875
|
38.4
|
0.163
|
TET16278
|
North Peak
|
55.81
|
59.03
|
3.22
|
1.56
|
0.046
|
11.3
|
0.076
|
TET16278
|
North Peak
|
73.02
|
83.97
|
10.95
|
3.08
|
0.090
|
26.5
|
0.025
|
TET16278
|
North Peak
|
104.62
|
105.77
|
1.15
|
1.46
|
0.042
|
66.5
|
0.982
|
TET16278
|
North Peak
|
119.33
|
120.33
|
1.00
|
1.90
|
0.055
|
57.7
|
0.880
|
TET16278
|
North Peak
|
142.97
|
148.53
|
5.56
|
2.78
|
0.081
|
19.1
|
0.060
|
TET16278
|
North Peak
|
156.32
|
157.87
|
1.55
|
2.14
|
0.062
|
43.7
|
0.136
|
TET16279
|
North Peak
|
129.88
|
134.47
|
4.59
|
1.75
|
0.051
|
5.6
|
0.022
|
TET16279
|
North Peak
|
160.22
|
163.75
|
3.53
|
1.52
|
0.044
|
2.9
|
0.014
|
TET16279
|
North Peak
|
169.94
|
173.50
|
3.56
|
5.06
|
0.148
|
17.6
|
0.027
|
Including
|
North Peak
|
172.88
|
173.50
|
0.62
|
17.60
|
0.513
|
93.8
|
0.138
|
TET16279
|
North Peak
|
176.61
|
178.79
|
2.18
|
5.40
|
0.158
|
28.3
|
0.025
|
TET16280
|
North Peak
|
141.16
|
143.23
|
2.07
|
1.07
|
0.031
|
10.8
|
0.017
|
TET16280
|
North Peak
|
165.74
|
167.70
|
1.96
|
1.15
|
0.034
|
94.0
|
0.220
|
TET16280
|
North Peak
|
198.15
|
200.08
|
1.93
|
1.96
|
0.057
|
5.9
|
0.032
|
TET16280
|
North Peak
|
205.20
|
205.70
|
0.50
|
5.95
|
0.174
|
3.1
|
0.004
|
TET16280
|
North Peak
|
210.98
|
212.89
|
1.91
|
0.91
|
0.027
|
3.6
|
0.010
|
TET16281
|
North Peak
|
14.33
|
22.86
|
8.53
|
22.01
|
0.642
|
63.0
|
0.060
|
Including
|
North Peak
|
17.37
|
19.51
|
2.14
|
43.90
|
1.280
|
96.5
|
0.055
|
and
|
North Peak
|
22.37
|
22.86
|
0.49
|
57.40
|
1.674
|
227.0
|
0.017
|
TET16285
|
North Peak
|
7.32
|
21.63
|
14.31
|
11.59
|
0.338
|
6.2
|
0.096
|
Including
|
North Peak
|
11.58
|
16.15
|
4.57
|
26.63
|
0.777
|
8.2
|
0.116
|
TET16286
|
North Peak
|
37.80
|
56.58
|
18.78
|
5.02
|
0.146
|
6.2
|
0.044
|
Including
|
North Peak
|
48.07
|
52.75
|
4.68
|
14.44
|
0.421
|
12.1
|
0.083
|
TET16287
|
North Peak
|
75.60
|
81.72
|
6.12
|
7.35
|
0.214
|
1.9
|
0.069
|
Including
|
North Peak
|
81.17
|
81.72
|
0.55
|
20.00
|
0.583
|
4.0
|
0.211
|
TET16288
|
North Peak
|
96.32
|
105.77
|
9.45
|
1.11
|
0.032
|
27.3
|
0.029
|
Including
|
North Peak
|
101.29
|
102.72
|
1.43
|
3.28
|
0.096
|
3.9
|
0.050
|
TET16289
|
North Peak
|
10.52
|
36.00
|
25.48
|
18.73
|
0.546
|
8.3
|
0.071
|
TET16289
|
North Peak
|
39.12
|
55.70
|
16.58
|
13.52
|
0.394
|
7.4
|
0.044
|
TET16291
|
North Peak
|
0.60
|
4.63
|
4.03
|
6.39
|
0.186
|
10.3
|
0.028
|
TET16291
|
North Peak
|
11.28
|
33.21
|
21.93
|
4.69
|
0.137
|
10.9
|
0.064
|
Including
|
North Peak
|
22.85
|
25.33
|
2.48
|
18.03
|
0.526
|
31.7
|
0.245
|
and
|
North Peak
|
26.52
|
26.92
|
0.40
|
28.40
|
0.828
|
28.9
|
0.178
|
TET16291
|
North Peak
|
42.30
|
44.98
|
2.68
|
2.05
|
0.060
|
3.5
|
0.016
|
Including
|
North Peak
|
44.33
|
44.98
|
0.65
|
7.00
|
0.204
|
8.8
|
0.044
|
TET16291
|
North Peak
|
50.90
|
53.27
|
2.37
|
5.48
|
0.160
|
11.7
|
0.056
|
TET16292
|
North Peak
|
5.79
|
21.18
|
15.39
|
1.58
|
0.046
|
22.3
|
0.108
|
Including
|
North Peak
|
8.53
|
10.97
|
2.44
|
5.55
|
0.162
|
55.3
|
0.215
|
TET16292
|
North Peak
|
24.63
|
28.80
|
4.17
|
0.83
|
0.024
|
22.9
|
0.034
|
TET16293
|
North Peak
|
7.11
|
11.89
|
4.78
|
1.26
|
0.037
|
50.5
|
0.133
|
Including
|
North Peak
|
11.48
|
11.89
|
0.41
|
5.15
|
0.150
|
66.6
|
0.073
|
TET16294
|
North Peak
|
9.10
|
16.71
|
7.61
|
6.56
|
0.191
|
86.2
|
0.233
|
Including
|
North Peak
|
12.03
|
12.60
|
0.57
|
17.05
|
0.497
|
141.0
|
0.051
|
TET16295
|
North Peak
|
5.66
|
20.65
|
14.99
|
11.67
|
0.340
|
11.5
|
0.111
|
Including
|
North Peak
|
7.94
|
10.35
|
2.41
|
32.40
|
0.945
|
14.1
|
0.317
|
TET16296
|
North Peak
|
6.13
|
9.80
|
3.67
|
1.78
|
0.052
|
40.7
|
0.267
|
TET16296
|
North Peak
|
24.13
|
26.28
|
2.15
|
0.87
|
0.025
|
45.3
|
0.059
|
TET16297
|
North Peak
|
6.91
|
30.09
|
23.18
|
3.72
|
0.109
|
10.9
|
0.196
|
Including
|
North Peak
|
16.06
|
17.78
|
1.72
|
9.51
|
0.277
|
10.3
|
0.139
|
and
|
North Peak
|
24.85
|
26.91
|
2.06
|
12.80
|
0.373
|
21.9
|
0.419
|
TET16297
|
North Peak
|
39.91
|
41.44
|
1.53
|
11.50
|
0.335
|
505.0
|
0.131
|
TET16298
|
North Peak
|
6.75
|
14.30
|
7.55
|
4.37
|
0.127
|
17.0
|
0.106
|
Including
|
North Peak
|
8.91
|
10.79
|
1.88
|
13.60
|
0.397
|
20.2
|
0.218
|
TET16298
|
North Peak
|
24.82
|
31.57
|
6.75
|
15.53
|
0.453
|
33.2
|
0.383
|
Including
|
North Peak
|
31.27
|
31.57
|
0.30
|
108.00
|
3.150
|
33.8
|
0.282
|
TET16298
|
North Peak
|
34.90
|
37.94
|
3.04
|
1.40
|
0.041
|
35.8
|
0.295
|
TET16298
|
North Peak
|
44.18
|
59.02
|
14.84
|
3.08
|
0.090
|
25.6
|
0.302
|
Including
|
North Peak
|
52.00
|
53.19
|
1.19
|
8.78
|
0.256
|
12.6
|
0.267
|
TET16299
|
North Peak
|
24.77
|
39.32
|
14.55
|
5.46
|
0.159
|
66.0
|
0.348
|
Including
|
North Peak
|
31.39
|
33.68
|
2.29
|
17.05
|
0.497
|
93.2
|
0.476
|
and
|
North Peak
|
39.05
|
39.32
|
0.27
|
60.00
|
1.750
|
428.0
|
0.964
|
TET16299
|
North Peak
|
47.85
|
50.90
|
3.05
|
9.83
|
0.287
|
156.0
|
0.062
|
TET16299
|
North Peak
|
53.95
|
54.71
|
0.76
|
9.49
|
0.277
|
120.0
|
0.093
|
TET16299
|
North Peak
|
59.74
|
65.46
|
5.72
|
2.14
|
0.062
|
59.1
|
0.159
|
Including
|
North Peak
|
64.95
|
65.46
|
0.51
|
13.95
|
0.407
|
301.0
|
0.741
|
TET16299
|
North Peak
|
81.38
|
84.43
|
3.05
|
7.82
|
0.228
|
53.0
|
0.095
|
TET16300
|
North Peak
|
0.00
|
1.52
|
1.52
|
1.08
|
0.032
|
10.4
|
0.073
|
TET16300
|
North Peak
|
16.63
|
21.41
|
4.78
|
0.90
|
0.026
|
16.8
|
0.289
|
TET16300
|
North Peak
|
24.73
|
39.78
|
15.05
|
5.15
|
0.150
|
62.7
|
0.299
|
Including
|
North Peak
|
36.27
|
38.79
|
2.52
|
22.10
|
0.645
|
175.0
|
0.060
|
TET16300
|
North Peak
|
44.81
|
47.70
|
2.89
|
2.90
|
0.085
|
64.5
|
0.030
|
TET16300
|
North Peak
|
51.00
|
67.00
|
16.00
|
3.43
|
0.100
|
64.8
|
0.141
|
Including
|
North Peak
|
51.51
|
53.96
|
2.45
|
10.57
|
0.308
|
61.1
|
0.032
|
and
|
North Peak
|
57.91
|
58.52
|
0.61
|
10.20
|
0.298
|
180.0
|
0.070
|
TET16300
|
North Peak
|
70.10
|
71.78
|
1.68
|
2.19
|
0.064
|
41.3
|
0.366
|
TET16301
|
North Peak
|
147.29
|
151.66
|
4.37
|
1.37
|
0.040
|
7.6
|
0.084
|
TET16302
|
North Peak
|
7.14
|
9.14
|
2.00
|
10.98
|
0.320
|
7.2
|
0.041
|
TET16302
|
North Peak
|
14.31
|
37.05
|
22.74
|
26.61
|
0.776
|
5.2
|
0.035
|
Including
|
North Peak
|
19.31
|
21.95
|
2.64
|
103.50
|
3.019
|
12.5
|
0.069
|
and
|
North Peak
|
27.09
|
29.20
|
2.11
|
58.70
|
1.712
|
9.2
|
0.075
|
TET16302
|
North Peak
|
44.36
|
48.44
|
4.08
|
7.78
|
0.227
|
3.4
|
0.065
|
Including
|
North Peak
|
45.67
|
46.36
|
0.69
|
22.90
|
0.668
|
6.3
|
0.070
|
TET16302
|
North Peak
|
52.54
|
57.60
|
5.06
|
1.05
|
0.031
|
6.2
|
0.049
|
Including
|
North Peak
|
52.54
|
53.64
|
1.10
|
3.40
|
0.099
|
19.7
|
0.143
|
TET16303
|
North Peak
|
59.45
|
60.96
|
1.51
|
1.64
|
0.048
|
28.5
|
0.041
|
TET16303
|
North Peak
|
91.95
|
97.70
|
5.75
|
1.03
|
0.030
|
0.2
|
0.009
|
Including
|
North Peak
|
91.95
|
92.27
|
0.32
|
3.92
|
0.114
|
0.9
|
0.012
|
TET16304
|
North Peak
|
16.31
|
37.51
|
21.20
|
11.86
|
0.346
|
3.9
|
0.044
|
Including
|
North Peak
|
24.26
|
26.12
|
1.86
|
35.40
|
1.033
|
8.1
|
0.123
|
and
|
North Peak
|
28.31
|
30.94
|
2.63
|
27.62
|
0.806
|
5.8
|
0.050
|
TET16304
|
North Peak
|
46.97
|
69.52
|
22.55
|
5.49
|
0.160
|
12.5
|
0.051
|
Including
|
North Peak
|
48.01
|
48.62
|
0.61
|
21.50
|
0.627
|
3.2
|
0.105
|
and
|
North Peak
|
64.31
|
65.42
|
1.11
|
19.05
|
0.556
|
3.8
|
0.078
|
and
|
North Peak
|
67.42
|
67.72
|
0.30
|
22.40
|
0.653
|
8.7
|
0.169
|
TET16304
|
North Peak
|
75.52
|
77.70
|
2.18
|
2.78
|
0.081
|
1.5
|
0.064
|
TET16304
|
North Peak
|
80.93
|
82.79
|
1.86
|
5.88
|
0.172
|
4.1
|
0.343
|
TET16304
|
North Peak
|
87.01
|
87.30
|
0.29
|
28.80
|
0.840
|
13.6
|
0.133
|
TET16305
|
North Peak
|
11.13
|
13.41
|
2.28
|
4.43
|
0.129
|
4.3
|
0.051
|
TET16305
|
North Peak
|
17.70
|
47.24
|
29.54
|
7.17
|
0.209
|
1.6
|
0.032
|
Including
|
North Peak
|
18.14
|
19.66
|
1.52
|
24.93
|
0.727
|
3.0
|
0.085
|
and
|
North Peak
|
21.34
|
22.86
|
1.52
|
36.76
|
1.072
|
5.9
|
0.061
|
and
|
North Peak
|
30.18
|
30.48
|
0.30
|
21.80
|
0.636
|
4.0
|
0.075
|
TET16306
|
North Peak
|
58.83
|
60.50
|
1.67
|
1.31
|
0.038
|
39.8
|
0.035
|
TET16306
|
North Peak
|
65.65
|
68.19
|
2.54
|
3.13
|
0.091
|
94.8
|
0.143
|
Including
|
North Peak
|
67.67
|
68.19
|
0.52
|
9.15
|
0.267
|
174.0
|
0.087
|
TET16306
|
North Peak
|
93.94
|
94.63
|
0.69
|
6.79
|
0.198
|
18.9
|
0.090
|
TET16306
|
North Peak
|
113.00
|
122.53
|
9.53
|
3.79
|
0.111
|
117.1
|
0.147
|
Including
|
North Peak
|
121.96
|
122.53
|
0.57
|
17.80
|
0.519
|
92.2
|
0.099
|
TET16307
|
North Peak
|
58.03
|
68.88
|
10.85
|
3.29
|
0.096
|
41.2
|
0.187
|
Including
|
North Peak
|
60.07
|
61.12
|
1.05
|
9.32
|
0.272
|
79.6
|
0.442
|
and
|
North Peak
|
64.58
|
65.32
|
0.74
|
9.00
|
0.263
|
82.3
|
0.091
|
TET16307
|
North Peak
|
139.64
|
141.31
|
1.67
|
1.23
|
0.036
|
60.6
|
0.237
|
TET16308
|
North Peak
|
41.68
|
51.36
|
9.68
|
1.79
|
0.052
|
20.3
|
0.055
|
TET16310
|
North Peak
|
38.56
|
43.40
|
4.84
|
1.88
|
0.055
|
0.4
|
0.013
|
Including
|
North Peak
|
38.56
|
39.10
|
0.54
|
13.80
|
0.403
|
3.7
|
0.055
|
2016 Exploration Program - Phase II
. During the quarter ending December 31, 2016, exploration drilling was completed by the Joint Venture Company on the Peak Gold Joint Venture Property totaling 6,498 meters (22,795 feet) in 30 holes, a continuation of the 2016 Phase II program, started in the prior quarter. The Phase II program, which was initiated in the quarter ended June 30, 2016, has completed 12,601 meters (41,342 ft) of exploration drilling in 63 holes. The Joint Venture Company spent an estimated $3.9 million, during the quarter, on program activities, including drilling, geochemical analyses, landholding fees and other related expenses. Drilling targeted three areas, North Peak, West Peak, and Connector Zones to better define the areas with known mineralization. During the full program, high grade-gold mineralization was drilled in the area that joins North Peak to the Connector Zone mineralization identified in the 2016 Phase I program. Several holes drilled revealed significant grade-thickness intervals of gold such as drill hole 16235 which intercepted 38.88 meters grading 51.62 gpt gold starting at 14.50 meters, drill hole 16237 which intercepted 14.19 meters grading 45.33 gpt gold starting at 9.75 meters, drill hole16271 which intercepted 17.12 meters grading 51.89 gpt gold starting at 24.08 meters, and drill hole 16256 which intercepted 13.20 meters grading 48.59 gpt gold starting at 7.92 meters.
The map below depicts the location of 63 core holes drilled during the 2016 Phase II program:
2016 PHASE II CORE HOLES DRILLED
Significant Drill Intercepts from the 2016 Phase II Program.
Sample intervals are calculated using 0.5 grams per tonne (gpt) lower cut off for gold with no internal waste less than cutoff grade that is greater than 3 meters in thickness. Intercepts shown are drill intercept lengths. True width of mineralization is unknown. The grade cutoff for gold (Au) is 0.5 gpt; for silver (Ag) is 10 gpt; and for copper (Cu) is 0.1%. The following table summarizes the significant drilling results obtained for the complete Phase II of the 2016 Program:
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au gpt
|
Au opt
|
Ag gpt
|
Cu %
|
TET16211
|
Connector
|
16.11
|
26.42
|
10.31
|
3.500
|
0.102
|
34.4
|
0.299
|
Including
|
Connector
|
20.57
|
21.00
|
0.43
|
13.650
|
0.398
|
45.6
|
0.199
|
TET16211
|
Connector
|
29.87
|
42.82
|
12.95
|
3.090
|
0.090
|
58.9
|
0.295
|
Including
|
Connector
|
41.61
|
42.82
|
1.21
|
14.350
|
0.419
|
251.0
|
0.681
|
TET16211
|
Connector
|
50.04
|
54.25
|
4.21
|
2.700
|
0.079
|
18.0
|
0.147
|
TET16211
|
Connector
|
114.76
|
121.05
|
6.29
|
1.440
|
0.042
|
66.3
|
0.09
|
TET16212
|
North Peak
|
52.88
|
55.85
|
2.97
|
0.900
|
0.026
|
2.5
|
0.151
|
TET16212
|
North Peak
|
142.22
|
144.57
|
2.35
|
1.560
|
0.046
|
—
|
0.028
|
TET16213
|
North Peak
|
115.98
|
127.84
|
11.86
|
0.610
|
0.018
|
1.0
|
0.042
|
TET16214
|
North Peak
|
54.67
|
56.49
|
1.82
|
1.400
|
0.041
|
5.6
|
0.025
|
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au gpt
|
Au opt
|
Ag gpt
|
Cu %
|
TET16214
|
North Peak
|
140.47
|
143.77
|
3.30
|
1.270
|
0.037
|
20.5
|
0.730
|
Including
|
North Peak
|
140.47
|
141.10
|
0.63
|
4.890
|
0.143
|
83.1
|
2.970
|
TET16215
|
North Peak
|
50.58
|
66.20
|
15.62
|
2.400
|
0.070
|
42.0
|
0.520
|
TET16215
|
North Peak
|
86.10
|
89.68
|
3.58
|
0.930
|
0.027
|
7.5
|
0.012
|
TET16216
|
North Peak
|
17.28
|
32.99
|
15.71
|
1.840
|
0.054
|
19.4
|
0.107
|
Including
|
North Peak
|
17.28
|
18.17
|
0.89
|
9.720
|
0.284
|
74.5
|
0.317
|
TET16216
|
North Peak
|
55.85
|
69.79
|
13.94
|
0.900
|
0.026
|
48.8
|
0.384
|
TET16216
|
North Peak
|
110.33
|
112.00
|
1.67
|
0.940
|
0.027
|
22.3
|
0.044
|
TET16217
|
West Peak
|
50.02
|
52.64
|
2.62
|
0.780
|
0.023
|
—
|
0.007
|
TET16217
|
West Peak
|
88.30
|
89.40
|
1.10
|
1.470
|
0.043
|
2.9
|
0.093
|
TET16218
|
West Peak
|
49.53
|
55.42
|
5.89
|
1.980
|
0.058
|
—
|
0.005
|
TET16218
|
West Peak
|
60.76
|
63.82
|
3.06
|
1.760
|
0.051
|
—
|
0.009
|
TET16218
|
West Peak
|
77.11
|
85.80
|
8.69
|
2.250
|
0.066
|
0.7
|
0.008
|
TET16218
|
West Peak
|
191.47
|
206.48
|
15.01
|
7.100
|
0.207
|
8.9
|
0.325
|
Including
|
West Peak
|
194.18
|
194.91
|
0.73
|
73.500
|
2.144
|
37.0
|
1.550
|
TET16218
|
West Peak
|
215.60
|
216.96
|
1.36
|
1.280
|
0.037
|
0.6
|
0.018
|
TET16219
|
West Peak
|
37.65
|
47.55
|
9.90
|
1.370
|
0.040
|
0.2
|
0.019
|
TET16219
|
West Peak
|
195.24
|
199.32
|
4.08
|
0.640
|
0.019
|
9.0
|
0.025
|
TET16219
|
West Peak
|
207.11
|
210.16
|
3.05
|
0.910
|
0.027
|
0.8
|
0.025
|
TET16220
|
North Peak
|
23.27
|
56.23
|
32.96
|
4.870
|
0.142
|
2.4
|
0.045
|
Including
|
North Peak
|
27.70
|
29.41
|
1.71
|
12.300
|
0.359
|
7.3
|
0.124
|
and
|
North Peak
|
32.96
|
33.99
|
1.03
|
15.150
|
0.442
|
4.5
|
0.138
|
and
|
North Peak
|
33.99
|
34.98
|
0.99
|
14.950
|
0.436
|
5.7
|
0.108
|
and
|
North Peak
|
42.72
|
44.37
|
1.65
|
12.900
|
0.376
|
5.3
|
0.040
|
and
|
North Peak
|
51.89
|
53.24
|
1.35
|
11.900
|
0.347
|
5.9
|
0.110
|
TET16220
|
North Peak
|
64.16
|
66.14
|
1.98
|
6.810
|
0.199
|
6.0
|
0.111
|
TET16220
|
North Peak
|
71.72
|
73.75
|
2.03
|
1.340
|
0.039
|
2.3
|
0.064
|
TET16221
|
North Peak
|
21.61
|
39.53
|
17.92
|
8.230
|
0.240
|
3.0
|
0.035
|
Including
|
North Peak
|
30.82
|
32.90
|
2.08
|
18.300
|
0.534
|
3.1
|
0.067
|
and
|
North Peak
|
37.50
|
39.53
|
2.03
|
17.150
|
0.500
|
5.0
|
0.063
|
TET16221
|
North Peak
|
74.07
|
92.63
|
18.56
|
2.910
|
0.085
|
3.3
|
0.023
|
Including
|
North Peak
|
74.07
|
77.27
|
3.20
|
9.730
|
0.284
|
2.8
|
0.019
|
TET16221
|
North Peak
|
97.82
|
99.86
|
2.04
|
3.060
|
0.089
|
11.7
|
0.127
|
TET16221
|
North Peak
|
105.71
|
117.65
|
11.94
|
2.740
|
0.080
|
10.3
|
0.035
|
TET16221
|
North Peak
|
125.10
|
129.54
|
4.44
|
4.430
|
0.129
|
3.3
|
0.051
|
TET16223
|
North Peak
|
56.44
|
57.63
|
1.19
|
2.670
|
.078
|
20.4
|
0.070
|
TET16223
|
North Peak
|
74.36
|
85.80
|
11.44
|
1.070
|
0.031
|
30.6
|
0.184
|
TET16223
|
North Peak
|
93.42
|
95.48
|
2.06
|
3.390
|
0.099
|
42.0
|
0.476
|
TET16223
|
North Peak
|
103.10
|
109.08
|
5.98
|
2.920
|
0.085
|
4.3
|
0.093
|
TET16224
|
North Peak
|
109.07
|
115.61
|
6.54
|
2.500
|
0.073
|
8.8
|
0.168
|
TET16225
|
North Peak
|
55.60
|
64.90
|
9.30
|
11.770
|
0.343
|
51.1
|
0.041
|
Including
|
North Peak
|
63.09
|
64.90
|
1.81
|
36.200
|
1.056
|
171.0
|
0.093
|
TET16225
|
North Peak
|
87.64
|
105.14
|
17.50
|
2.950
|
0.086
|
33.7
|
0.187
|
Including
|
North Peak
|
102.41
|
105.14
|
2.73
|
8.630
|
0.252
|
19.7
|
0.103
|
TET16226
|
North Peak
|
11.58
|
13.46
|
1.88
|
0.960
|
0.028
|
88.4
|
0.016
|
TET16226
|
North Peak
|
18.75
|
26.09
|
7.34
|
16.970
|
0.495
|
6.7
|
0.040
|
Including
|
North Peak
|
18.75
|
20.20
|
1.45
|
71.300
|
2.080
|
18.2
|
0.045
|
TET16226
|
North Peak
|
35.51
|
36.88
|
1.37
|
1.430
|
0.042
|
8.3
|
0.028
|
TET16226
|
North Peak
|
54.08
|
57.81
|
3.73
|
1.430
|
0.042
|
5.8
|
0.035
|
TET16227
|
North Peak
|
21.56
|
32.31
|
10.75
|
18.620
|
0.543
|
10.2
|
0.083
|
Including
|
North Peak
|
24.00
|
25.20
|
1.20
|
81.900
|
2.389
|
19.3
|
0.116
|
and
|
North Peak
|
25.20
|
26.14
|
0.94
|
43.400
|
1.266
|
15.0
|
0.140
|
TET16227
|
North Peak
|
88.11
|
90.22
|
2.11
|
1.320
|
0.039
|
0.6
|
0.002
|
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au gpt
|
Au opt
|
Ag gpt
|
Cu %
|
TET16228
|
North Peak
|
25.42
|
40.23
|
14.81
|
4.640
|
0.135
|
21.7
|
0.257
|
Including
|
North Peak
|
33.81
|
35.95
|
2.14
|
17.900
|
0.522
|
41.9
|
0.602
|
TET16228
|
North Peak
|
43.89
|
51.47
|
7.58
|
3.540
|
0.103
|
12.3
|
0.255
|
TET16228
|
North Peak
|
56.86
|
59.74
|
2.88
|
3.140
|
0.092
|
1.3
|
0.022
|
TET16228
|
North Peak
|
62.94
|
75.23
|
12.29
|
1.090
|
0.032
|
26.6
|
0.234
|
TET16230
|
North Peak
|
42.95
|
50.22
|
7.27
|
4.170
|
0.122
|
24.0
|
0.303
|
TET16231
|
North Peak
|
18.61
|
23.52
|
4.91
|
0.990
|
0.029
|
5.3
|
0.062
|
TET16231
|
North Peak
|
53.89
|
57.32
|
3.43
|
0.730
|
0.021
|
7.0
|
0.053
|
TET16231
|
North Peak
|
68.17
|
70.83
|
2.66
|
7.730
|
0.225
|
26.1
|
0.118
|
TET16231
|
North Peak
|
75.61
|
81.16
|
5.55
|
3.090
|
0.090
|
21.1
|
0.235
|
TET16231
|
North Peak
|
88.19
|
90.34
|
2.15
|
1.110
|
0.032
|
4.3
|
0.031
|
TET16231
|
North Peak
|
101.08
|
102.64
|
1.56
|
3.810
|
0.111
|
5.5
|
0.054
|
TET16231
|
North Peak
|
128.15
|
132.89
|
4.74
|
2.000
|
0.058
|
9.3
|
0.139
|
Including
|
North Peak
|
131.41
|
131.97
|
0.56
|
6.930
|
0.202
|
6.7
|
0.125
|
TET16232
|
North Peak
|
43.28
|
50.90
|
7.62
|
1.180
|
0.034
|
55.4
|
0.054
|
TET16232
|
North Peak
|
117.35
|
121.62
|
4.27
|
0.710
|
0.021
|
64.0
|
0.355
|
TET16232
|
North Peak
|
138.53
|
152.21
|
13.68
|
5.520
|
0.161
|
12.4
|
0.067
|
Including
|
North Peak
|
139.47
|
139.75
|
0.28
|
32.400
|
0.945
|
52.7
|
0.117
|
and
|
North Peak
|
142.29
|
143.89
|
1.60
|
18.400
|
0.537
|
12.8
|
0.260
|
and
|
North Peak
|
146.94
|
147.36
|
0.42
|
28.100
|
0.820
|
93.8
|
0.095
|
TET16233
|
North Peak
|
23.11
|
24.14
|
1.03
|
7.890
|
0.230
|
13.3
|
0.032
|
TET16233
|
North Peak
|
38.23
|
42.98
|
4.75
|
2.060
|
0.060
|
16.4
|
0.070
|
TET16233
|
North Peak
|
56.10
|
70.69
|
14.59
|
5.760
|
0.168
|
35.2
|
0.389
|
TET16234
|
North Peak
|
16.00
|
17.75
|
1.75
|
8.280
|
0.242
|
27.2
|
0.016
|
TET16234
|
North Peak
|
23.90
|
35.63
|
11.73
|
8.760
|
0.256
|
14.8
|
0.034
|
TET16234
|
North Peak
|
58.67
|
65.60
|
6.93
|
5.530
|
0.161
|
15.8
|
0.015
|
TET16235
|
North Peak
|
14.50
|
53.38
|
38.88
|
51.620
|
1.506
|
216.0
|
0.020
|
Including
|
North Peak
|
17.68
|
20.73
|
3.05
|
320.000
|
9.333
|
589.0
|
0.025
|
and
|
North Peak
|
23.93
|
24.47
|
0.54
|
371.000
|
10.821
|
3,210.0
|
0.006
|
and
|
North Peak
|
24.47
|
25.76
|
1.29
|
109.000
|
3.179
|
265.0
|
0.016
|
and
|
North Peak
|
28.85
|
29.34
|
0.49
|
116.000
|
3.383
|
151.0
|
0.003
|
and
|
North Peak
|
52.98
|
53.38
|
0.40
|
125.000
|
3.646
|
143.0
|
0.014
|
TET16235
|
North Peak
|
59.50
|
65.92
|
6.42
|
8.730
|
0.255
|
43.4
|
0.053
|
TET16235
|
North Peak
|
70.05
|
73.00
|
2.95
|
4.970
|
0.145
|
13.1
|
0.019
|
TET16236
|
North Peak
|
4.67
|
7.23
|
2.56
|
0.830
|
0.024
|
2.1
|
0.007
|
TET16236
|
North Peak
|
60.45
|
63.09
|
2.64
|
2.930
|
0.085
|
51.4
|
0.012
|
TET16237
|
North Peak
|
9.75
|
23.94
|
14.19
|
45.330
|
1.322
|
9.3
|
0.078
|
Including
|
North Peak
|
11.58
|
13.56
|
1.98
|
97.000
|
2.829
|
19.6
|
0.248
|
and
|
North Peak
|
13.56
|
14.80
|
1.24
|
166.000
|
4.842
|
14.3
|
0.019
|
TET16237
|
North Peak
|
28.81
|
33.23
|
4.42
|
2.170
|
0.063
|
4.7
|
0.014
|
TET16237
|
North Peak
|
41.15
|
42.95
|
1.80
|
6.720
|
0.196
|
1.9
|
0.021
|
TET16237
|
North Peak
|
50.90
|
53.82
|
2.92
|
1.550
|
0.045
|
—
|
0.003
|
TET16237
|
North Peak
|
57.38
|
61.18
|
3.80
|
1.660
|
0.048
|
0.9
|
0.014
|
TET16238
|
North Peak
|
68.42
|
74.68
|
6.26
|
4.980
|
0.145
|
34.3
|
0.099
|
TET16238
|
North Peak
|
77.90
|
93.57
|
15.67
|
3.170
|
0.092
|
3.1
|
0.023
|
Including
|
North Peak
|
79.92
|
81.35
|
1.43
|
18.200
|
0.531
|
3.1
|
0.034
|
TET16239
|
North Peak
|
35.66
|
38.45
|
2.79
|
1.230
|
0.036
|
5.1
|
0.005
|
TET16239
|
North Peak
|
50.79
|
54.72
|
3.93
|
7.760
|
0.226
|
23.3
|
0.023
|
Including
|
North Peak
|
50.79
|
51.27
|
0.48
|
26.800
|
0.782
|
104.0
|
0.129
|
TET16239
|
North Peak
|
109.41
|
116.13
|
6.72
|
1.420
|
0.041
|
9.6
|
0.071
|
TET16240
|
North Peak
|
119.33
|
132.85
|
13.52
|
1.590
|
0.046
|
1.7
|
0.020
|
TET16241
|
North Peak
|
56.43
|
56.79
|
0.36
|
11.450
|
0.334
|
172.0
|
0.066
|
TET16242
|
North Peak
|
19.38
|
25.45
|
6.07
|
2.720
|
0.079
|
70.5
|
0.236
|
TET16242
|
North Peak
|
31.04
|
34.41
|
3.37
|
5.720
|
0.167
|
64.4
|
0.541
|
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au gpt
|
Au opt
|
Ag gpt
|
Cu %
|
TET16242
|
North Peak
|
37.58
|
63.93
|
26.35
|
5.550
|
0.162
|
39.3
|
0.134
|
Including
|
North Peak
|
50.44
|
53.15
|
2.71
|
18.300
|
0.534
|
75.5
|
0.097
|
and
|
North Peak
|
58.18
|
63.09
|
4.91
|
12.050
|
0.351
|
38.8
|
0.149
|
TET16242
|
North Peak
|
151.88
|
152.58
|
0.70
|
3.860
|
0.113
|
56.7
|
0.070
|
TET16242
|
North Peak
|
156.00
|
157.25
|
1.25
|
3.170
|
0.092
|
66.5
|
0.376
|
TET16243
|
North Peak
|
10.93
|
12.30
|
1.37
|
14.950
|
0.436
|
28.8
|
0.105
|
TET16243
|
North Peak
|
15.85
|
21.55
|
5.70
|
4.300
|
0.125
|
47.6
|
0.247
|
TET16243
|
North Peak
|
25.82
|
34.29
|
8.47
|
3.990
|
0.116
|
49.6
|
0.391
|
TET16243
|
North Peak
|
39.68
|
57.19
|
17.51
|
4.970
|
0.145
|
61.2
|
0.116
|
TET16243
|
North Peak
|
99.42
|
104.70
|
5.28
|
2.600
|
0.076
|
18.7
|
0.210
|
TET16244
|
North Peak
|
35.08
|
51.00
|
15.92
|
11.740
|
0.342
|
51.1
|
0.183
|
TET16244
|
North Peak
|
62.14
|
67.55
|
5.41
|
2.050
|
0.060
|
34.6
|
0.152
|
TET16244
|
North Peak
|
76.60
|
87.06
|
10.46
|
2.580
|
0.075
|
4.9
|
0.035
|
TET16245
|
North Peak
|
43.11
|
46.02
|
2.91
|
0.630
|
0.018
|
2.5
|
0.022
|
TET16245
|
North Peak
|
50.36
|
52.65
|
2.29
|
1.210
|
0.035
|
12.0
|
0.047
|
TET16245
|
North Peak
|
63.55
|
71.74
|
8.19
|
2.160
|
0.063
|
30.0
|
0.161
|
TET16245
|
North Peak
|
83.27
|
86.11
|
2.84
|
2.600
|
0.076
|
26.5
|
0.030
|
TET16246
|
North Peak
|
90.80
|
92.49
|
1.69
|
2.180
|
0.064
|
26.1
|
0.113
|
TET16246
|
North Peak
|
126.39
|
128.51
|
2.12
|
0.900
|
0.026
|
2.2
|
0.010
|
TET16247
|
North Peak
|
14.31
|
16.56
|
2.25
|
1.560
|
0.046
|
88.5
|
0.064
|
TET16247
|
North Peak
|
61.30
|
66.74
|
5.44
|
3.970
|
0.116
|
12.6
|
0.104
|
TET16247
|
North Peak
|
71.78
|
74.18
|
2.40
|
0.670
|
0.020
|
18.1
|
0.094
|
TET16247
|
North Peak
|
77.39
|
83.97
|
6.58
|
1.220
|
0.036
|
23.2
|
0.127
|
TET16247
|
North Peak
|
107.49
|
108.58
|
1.09
|
3.180
|
0.093
|
38.1
|
0.080
|
TET16247
|
North Peak
|
137.78
|
145.02
|
7.24
|
1.970
|
0.057
|
0.5
|
0.003
|
TET16248
|
North Peak
|
9.38
|
10.75
|
1.37
|
9.290
|
0.271
|
25.2
|
0.063
|
TET16248
|
North Peak
|
13.83
|
22.89
|
9.06
|
5.020
|
0.146
|
6.1
|
0.035
|
Including
|
North Peak
|
18.36
|
19.35
|
0.99
|
13.400
|
0.391
|
5.8
|
0.054
|
TET16248
|
North Peak
|
30.78
|
36.56
|
5.78
|
1.790
|
0.052
|
4.4
|
0.081
|
TET16248
|
North Peak
|
43.22
|
45.96
|
2.74
|
10.620
|
0.310
|
3.8
|
0.052
|
TET16248
|
North Peak
|
52.75
|
57.73
|
4.98
|
5.530
|
0.161
|
5.7
|
0.037
|
Including
|
North Peak
|
52.75
|
53.95
|
1.20
|
17.100
|
0.499
|
5.9
|
0.045
|
TET16248
|
North Peak
|
61.23
|
72.02
|
10.79
|
4.050
|
0.118
|
13.0
|
0.042
|
Including
|
North Peak
|
67.80
|
70.55
|
2.75
|
10.400
|
0.303
|
32.5
|
0.042
|
and
|
North Peak
|
71.48
|
72.02
|
0.54
|
11.350
|
0.331
|
10.7
|
0.087
|
TET16251
|
North Peak
|
118.21
|
120.82
|
2.61
|
0.800
|
0.023
|
0.8
|
0.025
|
TET16252
|
North Peak
|
49.43
|
51.94
|
2.51
|
2.220
|
0.065
|
1.7
|
0.010
|
TET16253
|
North Peak
|
105.65
|
107.96
|
2.31
|
0.860
|
0.025
|
0.8
|
0.033
|
TET16255
|
North Peak
|
35.30
|
44.72
|
9.42
|
5.530
|
0.161
|
56.2
|
0.230
|
Including
|
North Peak
|
36.90
|
37.43
|
0.53
|
16.700
|
0.487
|
113.0
|
1.165
|
and
|
North Peak
|
43.35
|
44.72
|
1.37
|
19.200
|
0.560
|
80.6
|
0.071
|
TET16256
|
North Peak
|
7.92
|
21.12
|
13.20
|
48.590
|
1.417
|
112.2
|
0.053
|
Including
|
North Peak
|
8.55
|
10.66
|
2.11
|
222.000
|
6.475
|
316.0
|
0.021
|
TET16257
|
North Peak
|
73.82
|
74.33
|
0.51
|
3.300
|
0.096
|
526.0
|
0.080
|
TET16261
|
East Peak
|
215.78
|
216.57
|
0.79
|
3.940
|
0.115
|
11.7
|
0.004
|
TET16262
|
West Peak
|
35.05
|
35.72
|
0.67
|
4.040
|
0.118
|
35.8
|
0.084
|
TET16262
|
West Peak
|
60.22
|
63.09
|
2.87
|
1.730
|
0.050
|
0.6
|
0.029
|
TET16262
|
West Peak
|
151.08
|
159.61
|
8.53
|
5.750
|
0.168
|
37.6
|
0.136
|
Including
|
West Peak
|
151.65
|
152.57
|
0.92
|
16.500
|
0.481
|
55.4
|
0.260
|
and
|
West Peak
|
152.57
|
153.73
|
1.16
|
13.850
|
0.404
|
92.9
|
0.191
|
TET16262
|
West Peak
|
195.76
|
198.19
|
2.43
|
1.720
|
0.050
|
5.7
|
0.111
|
TET16262
|
West Peak
|
210.69
|
216.02
|
5.33
|
4.560
|
0.133
|
5.7
|
0.199
|
TET16262
|
West Peak
|
221.50
|
222.90
|
1.40
|
1.510
|
0.044
|
96.2
|
0.151
|
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au gpt
|
Au opt
|
Ag gpt
|
Cu %
|
TET16263
|
West Peak
|
52.20
|
54.07
|
1.87
|
5.540
|
0.162
|
0.8
|
0.036
|
TET16263
|
West Peak
|
180.50
|
182.03
|
1.53
|
10.650
|
0.311
|
12.7
|
0.099
|
TET16263
|
West Peak
|
197.21
|
199.77
|
2.56
|
2.040
|
0.060
|
1.0
|
0.027
|
TET16263
|
West Peak
|
204.00
|
216.64
|
12.64
|
1.280
|
0.037
|
0.3
|
0.010
|
TET16264
|
West Peak
|
237.78
|
244.53
|
6.75
|
0.630
|
0.018
|
2.2
|
0.100
|
TET16265
|
West Peak
|
77.02
|
78.04
|
1.02
|
4.200
|
0.123
|
2.2
|
0.421
|
TET16265
|
West Peak
|
84.42
|
86.45
|
2.03
|
0.990
|
0.029
|
1.5
|
0.446
|
TET16265
|
West Peak
|
245.97
|
247.01
|
1.04
|
1.720
|
0.050
|
7.9
|
0.271
|
TET16265
|
West Peak
|
255.43
|
257.19
|
1.76
|
1.440
|
0.042
|
22.5
|
0.395
|
TET16265
|
West Peak
|
270.23
|
279.30
|
9.07
|
1.590
|
0.046
|
1.1
|
0.028
|
TET16266
|
North Peak
|
115.58
|
118.77
|
3.19
|
0.660
|
0.019
|
6.7
|
0.035
|
TET16266
|
North Peak
|
143.21
|
147.31
|
4.10
|
0.530
|
0.015
|
7.1
|
0.193
|
TET16266
|
North Peak
|
155.94
|
158.81
|
2.87
|
10.010
|
0.292
|
11.5
|
0.091
|
TET16266
|
North Peak
|
166.76
|
184.16
|
17.40
|
1.060
|
0.031
|
22.1
|
0.061
|
Including
|
North Peak
|
166.76
|
167.22
|
0.46
|
6.760
|
0.197
|
2.3
|
0.008
|
TET16267
|
Main Peak
|
110.39
|
161.24
|
50.85
|
12.050
|
0.351
|
11.5
|
0.184
|
Including
|
Main Peak
|
110.39
|
113.38
|
2.99
|
148.500
|
4.331
|
39.6
|
0.474
|
and
|
Main Peak
|
136.02
|
136.25
|
0.23
|
32.400
|
0.945
|
17.7
|
0.232
|
and
|
Main Peak
|
154.32
|
154.59
|
0.27
|
31.400
|
0.916
|
179.0
|
3.320
|
TET16267
|
Main Peak
|
165.04
|
170.93
|
5.89
|
14.740
|
0.430
|
14.1
|
0.392
|
Including
|
Main Peak
|
165.04
|
165.28
|
0.24
|
70.200
|
2.048
|
99.1
|
2.360
|
TET16268
|
Main Peak
|
16.61
|
19.05
|
2.44
|
0.660
|
0.019
|
47.0
|
0.258
|
TET16268
|
Main Peak
|
49.37
|
49.92
|
0.55
|
4.350
|
0.127
|
3.4
|
0.102
|
TET16268
|
Main Peak
|
90.31
|
93.66
|
3.35
|
11.860
|
0.346
|
4.3
|
0.157
|
Including
|
Main Peak
|
91.88
|
92.53
|
0.65
|
37.500
|
1.094
|
12.5
|
0.497
|
TET16268
|
Main Peak
|
105.39
|
173.28
|
67.89
|
8.700
|
0.254
|
3.8
|
0.146
|
Including
|
Main Peak
|
118.97
|
127.41
|
8.44
|
22.520
|
0.657
|
5.5
|
0.246
|
and
|
Main Peak
|
134.53
|
137.55
|
3.02
|
20.540
|
0.599
|
4.9
|
0.192
|
TET16269
|
North Peak
|
25.30
|
42.93
|
17.63
|
2.270
|
0.066
|
1.3
|
0.026
|
Including
|
North Peak
|
27.43
|
30.18
|
2.75
|
8.020
|
0.234
|
2.7
|
0.072
|
TET16269
|
North Peak
|
47.93
|
56.47
|
8.54
|
2.000
|
0.058
|
1.6
|
0.032
|
Including
|
North Peak
|
50.42
|
52.17
|
1.75
|
6.670
|
0.195
|
2.8
|
0.058
|
TET16269
|
North Peak
|
60.66
|
74.56
|
13.90
|
13.970
|
0.407
|
2.6
|
0.048
|
Including
|
North Peak
|
69.39
|
71.27
|
1.88
|
61.320
|
1.789
|
7.9
|
0.144
|
TET16269
|
North Peak
|
91.90
|
94.92
|
3.02
|
8.840
|
0.258
|
2.3
|
0.095
|
TET16269
|
North Peak
|
108.27
|
125.65
|
17.38
|
9.700
|
0.283
|
2.2
|
0.127
|
Including
|
North Peak
|
118.39
|
120.24
|
1.85
|
36.000
|
1.050
|
2.6
|
0.107
|
TET16270
|
North Peak
|
78.03
|
93.60
|
15.57
|
8.560
|
0.250
|
2.3
|
0.097
|
Including
|
North Peak
|
88.68
|
91.09
|
2.41
|
21.500
|
0.627
|
3.1
|
0.085
|
TET16270
|
North Peak
|
105.30
|
111.06
|
5.76
|
11.240
|
0.328
|
2.4
|
0.071
|
TET16270
|
North Peak
|
119.09
|
122.73
|
3.64
|
1.430
|
0.042
|
3.9
|
0.078
|
TET16271
|
North Peak
|
24.08
|
41.20
|
17.12
|
51.890
|
1.513
|
23.7
|
0.088
|
Including
|
North Peak
|
31.50
|
34.31
|
2.81
|
181.920
|
5.306
|
49.8
|
0.133
|
TET16271
|
North Peak
|
44.73
|
53.92
|
9.19
|
41.020
|
1.196
|
18.1
|
0.043
|
Including
|
North Peak
|
51.51
|
53.15
|
1.64
|
151.500
|
4.419
|
37.5
|
0.070
|
TET16271
|
North Peak
|
57.25
|
71.20
|
13.95
|
24.280
|
0.708
|
20.5
|
0.058
|
Including
|
North Peak
|
67.43
|
69.62
|
2.19
|
62.900
|
1.835
|
49.4
|
0.146
|
TET16271
|
North Peak
|
82.32
|
85.63
|
3.31
|
4.470
|
0.130
|
1.9
|
0.041
|
TET16272
|
North Peak
|
1.83
|
4.88
|
3.05
|
0.840
|
0.025
|
0.9
|
0.004
|
TET16272
|
North Peak
|
14.33
|
16.76
|
2.43
|
7.040
|
0.205
|
11.7
|
0.008
|
Including
|
North Peak
|
16.16
|
16.76
|
0.60
|
19.150
|
0.559
|
33.8
|
0.006
|
TET16272
|
North Peak
|
23.13
|
32.96
|
9.83
|
49.010
|
1.429
|
146.7
|
0.015
|
Including
|
North Peak
|
29.99
|
30.38
|
0.39
|
345.000
|
10.063
|
735.0
|
0.006
|
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au gpt
|
Au opt
|
Ag gpt
|
Cu %
|
TET16272
|
North Peak
|
37.39
|
38.98
|
1.59
|
1.760
|
0.051
|
2.7
|
0.004
|
TET16272
|
North Peak
|
43.09
|
51.05
|
7.96
|
15.990
|
0.466
|
49.0
|
0.035
|
Including
|
North Peak
|
45.50
|
47.10
|
1.60
|
39.700
|
1.158
|
160.0
|
0.136
|
TET16272
|
North Peak
|
55.92
|
59.31
|
3.39
|
1.550
|
0.045
|
25.9
|
0.129
|
TET16272
|
North Peak
|
84.90
|
87.84
|
2.94
|
1.530
|
0.045
|
2.2
|
0.030
|
TET16273
|
West Peak
|
163.78
|
166.98
|
3.20
|
0.740
|
0.022
|
6.1
|
0.024
|
TET16273
|
West Peak
|
176.67
|
178.70
|
2.03
|
2.960
|
0.086
|
14.0
|
0.168
|
TET16273
|
West Peak
|
188.36
|
191.00
|
2.64
|
1.030
|
0.030
|
3.2
|
0.045
|
2016 Exploration Program - Phase I
. During the first three months of calendar year 2016, exploration drilling was completed by the Joint Venture Company on the Peak Gold Joint Venture Property totaling 4,040 meters (13,255 feet) in 19 holes, referred to as the 2016 Phase I program. The Joint Venture Company spent an estimated $1.9 million to complete the program including drilling, geochemical analyses, landholding fees and other related expenses. Drilling targeted two areas, North Peak and West Peak, with the objective of enhancing the understanding of mineralization geometry and geochemical variability. During the program, an area located between the Peak Zone and North Peak was tested, producing significant gold and copper assay intervals in a Connector Zone.
The map below depicts the location of 16 of the 19 core holes drilled during the 2016 Phase I program:
2016 PHASE I CORE HOLES DRILLED
Significant Drill Intercepts from the 2016 Phase I Program.
Sample intervals are calculated using 0.5 grams per tonne (gpt) lower cut off for gold with no internal waste less than cutoff grade that is greater than 3 meters in thickness. Intercepts shown are drill intercept lengths. True width of mineralization is unknown. The grade cutoff for gold (Au) is 0.5 gpt; for silver (Ag) is 10 gpt; and for copper (Cu) is 0.1%. The following table summarizes the significant drilling results obtained to date for Phase I of the 2016 Program:
DrillHole
|
Zone
|
From (meters)
|
To (meters)
|
Interval (meters)
|
Au gpt
|
Au opt
|
Ag gpt
|
Cu %
|
TET16192
|
North Peak
|
31.34
|
38.29
|
6.95
|
0.784
|
0.023
|
2.5
|
0.023
|
TET16192
|
North Peak
|
42.00
|
43.42
|
1.42
|
1.803
|
0.053
|
1.5
|
0.021
|
TET16192
|
North Peak
|
78.51
|
91.78
|
13.27
|
49.194
|
1.435
|
4.5
|
0.035
|
including
|
North Peak
|
80.96
|
81.59
|
0.63
|
416.000
|
12.133
|
26.7
|
0.066
|
TET16192
|
North Peak
|
102.84
|
105.46
|
2.62
|
2.536
|
0.074
|
4.5
|
0.151
|
TET16192
|
North Peak
|
122.07
|
123.79
|
1.72
|
3.850
|
0.112
|
1.1
|
0.067
|
TET16192
|
North Peak
|
139.90
|
143.78
|
3.88
|
3.992
|
0.116
|
3.1
|
0.119
|
TET16193
|
North Peak
|
85.91
|
90.62
|
4.71
|
12.452
|
0.363
|
3.6
|
0.065
|
including
|
North Peak
|
88.09
|
89.71
|
1.62
|
27.974
|
0.816
|
5.9
|
0.041
|
TET16195
|
North Peak
|
66.50
|
68.34
|
1.84
|
6.718
|
0.196
|
3.7
|
0.069
|
TET16196
|
North Peak
|
65.78
|
69.12
|
3.34
|
0.712
|
0.021
|
14.1
|
0.096
|
TET16199
|
West Peak
|
21.09
|
23.13
|
2.04
|
3.462
|
0.101
|
6.9
|
0.037
|
TET16199
|
West Peak
|
50.19
|
52.08
|
1.89
|
1.375
|
0.040
|
0.7
|
0.022
|
TET16199
|
West Peak
|
55.62
|
57.79
|
2.17
|
1.805
|
0.053
|
—
|
0.005
|
TET16199
|
West Peak
|
80.44
|
82.76
|
2.32
|
1.529
|
0.045
|
1.9
|
0.054
|
TET16199
|
West Peak
|
95.08
|
96.63
|
1.55
|
2.690
|
0.078
|
0.9
|
0.006
|
TET16199
|
West Peak
|
139.46
|
145.31
|
5.85
|
0.699
|
0.020
|
1.1
|
0.03
|
TET16204
|
North Peak
|
50.41
|
53.34
|
2.93
|
1.100
|
0.032
|
5.2
|
0.189
|
TET16204
|
North Peak
|
63.06
|
65.42
|
2.36
|
2.050
|
0.060
|
1.1
|
0.044
|
TET16204
|
North Peak
|
194.11
|
195.93
|
1.82
|
16.338
|
0.477
|
328.4
|
0.157
|
TET16205
|
North Peak
|
65.07
|
70.61
|
5.54
|
0.954
|
0.028
|
2.8
|
0.165
|
TET16205
|
North Peak
|
82.91
|
83.67
|
0.76
|
6.715
|
0.196
|
11.2
|
0.005
|
TET16205
|
North Peak
|
150.74
|
151.73
|
0.99
|
3.360
|
0.098
|
4.2
|
0.314
|
TET16206
|
North Peak
|
60.95
|
104.38
|
43.43
|
3.611
|
0.105
|
2.1
|
0.108
|
including
|
North Peak
|
98.34
|
100.04
|
1.70
|
30.700
|
0.895
|
2.3
|
0.108
|
TET16207
|
North Peak
|
92.88
|
95.92
|
3.04
|
2.590
|
0.076
|
1.4
|
0.057
|
TET16208
|
West Peak
|
55.02
|
58.20
|
3.18
|
2.543
|
0.074
|
0.5
|
0.005
|
TET16208
|
West Peak
|
88.66
|
108.65
|
19.99
|
2.822
|
0.082
|
0.1
|
0.006
|
including
|
West Peak
|
95.55
|
97.45
|
1.90
|
12.050
|
0.351
|
0.5
|
0.011
|
and
|
West Peak
|
98.93
|
100.02
|
1.09
|
14.200
|
0.414
|
0.7
|
0.013
|
TET16209
|
West Peak
|
46.33
|
48.95
|
2.62
|
2.222
|
0.065
|
0.8
|
0.007
|
TET16209
|
West Peak
|
52.73
|
58.98
|
6.25
|
4.863
|
0.142
|
0.5
|
0.014
|
including
|
West Peak
|
55.78
|
57.54
|
1.76
|
12.788
|
0.373
|
1.1
|
0.037
|
TET16210
|
Connector
|
16.95
|
60.91
|
43.96
|
3.275
|
0.096
|
30.6
|
0.402
|
including
|
Connector
|
18.12
|
22.29
|
4.17
|
9.006
|
0.263
|
51.5
|
0.291
|
and
|
Connector
|
51.90
|
53.26
|
1.36
|
10.150
|
0.296
|
19.6
|
0.583
|
and
|
Connector
|
56.57
|
57.15
|
0.58
|
10.550
|
0.308
|
50.4
|
2.28
|
TET16210
|
Connector
|
131.83
|
135.60
|
3.77
|
2.614
|
0.076
|
52.5
|
0.14
|
Consulting Services provided by Avalon Development Corporation
Until January 8, 2015, the Company was a party to a Professional Services Agreement (“PSA”) with Avalon to provide certain geological consulting services and exploration activities with respect to the Peak Gold Joint Venture Property. Pursuant to the PSA, Avalon provided geological consulting services and exploration activities, including all field work at the Tetlin Lease. In connection with the Transactions, the Company terminated the PSA with Avalon, and Avalon is now providing services to the Joint Venture Company.
Avalon is a Fairbanks, Alaska based mineral exploration consulting firm, which has conducted mineral exploration in Alaska since 1985. The President of Avalon is Curtis J. Freeman who graduated from the College of Wooster, Ohio, with a B.A. degree in Geology (1978) and graduated from the University of Alaska with an M.S. degree in Economic Geology (1980). From 1980 to the present Mr. Freeman has been actively employed in various capacities in the mining industry in numerous locations in North America, Central America, South America, New Zealand and Africa. Avalon's team of engineers and geoscientists combined with its geographic information systems (GIS) database allows Avalon to synthesize existing geological, geochemical and geophysical data and identify specific target areas for ground evaluation and/or acquisition. Avalon
’s exploration team has identified or conducted discovery drilling on several gold deposits in Alaska and has completed digital GIS compilations of the Tintina Gold Belt, a regional-scale mineral province stretching from southwest Alaska to the southern Yukon Territory. Avalon also has experience exploring for copper, nickel and platinum group elements (“Cu-Ni-PGE”) deposits and also created a comprehensive GIS compilation of Cu-Ni-PGE prospects in Alaska, an internally-owned database that contains data on over 200 PGE occurrences in Alaska.
Services Provided by Tetlin Village Members
Since the start of the term of our Tetlin Lease, the Company has worked closely with the Tetlin Tribal Council to train and employ Tetlin residents during Peak Gold Joint Venture project exploration programs. During the Company's exploration programs, there were 10 to 15 Tetlin residents working on the Peak Gold Joint Venture project employed on a seasonal basis through Avalon. Their duties included reconnaissance soil, stream sediment and pan concentrate sampling, diamond drill core processing, drill pad construction and related tasks, expediting services, food services, database management, vehicle transportation and maintenance services, reclamation activities, and project management tasks.
Community Affairs
In April 2015, the Joint Venture Company entered into a Community Support Agreement with the Tetlin Village for a one year period, which has been extended for an additional two year period under the same terms. Under the extended agreement the Joint Venture Company provides payments to the village four times during the year for an aggregate amount of $110,000 through January 1, 2017 and an additional $100,000 through January 1, 2018. The agreement was extended a second time for an additional two year period under the same terms.
Under the second extension, the Joint Venture Company provides payments to the village four times during the year for an aggregate amount of $100,000 through January 1, 2019 and an additional $100,000 through January 1, 2020.
The agreement defines agreed uses for the funds and auditing rights regarding use of funds. In addition, the Joint Venture Company supports the Tetlin Village in maintenance of the village access road, which is used by the Joint Venture Company.
Adverse Climate Conditions
Weather conditions affect the Joint Venture Company's ability to conduct exploration activities and mine any ore from the Peak Gold Joint Venture Property in Alaska. While the Company believes exploration, development work and any subsequent mining may be conducted year-round, the arctic climate limits many exploration and mining activities during certain seasons.
Competition
The Company currently faces strong competition for the acquisition of any new exploration-stage properties as well as extraction of any minerals in Alaska. Numerous larger mining companies actively seek out and bid for mining prospects as well as for the services of third party providers and supplies, such as mining equipment and transportation equipment. The Company's competitors in the exploration, development, acquisition and mining business will include major integrated mining companies as well as numerous smaller mining companies, almost all of which have significantly greater financial resources and in-house technical expertise. In addition, the Company will compete with others in efforts to obtain financing to explore our mineral properties.
Off-Balance Sheet Arrangements
None.
Contractual Obligations
The Tetlin Lease had an initial ten year term beginning July 2008 which was extended for an additional ten years to July 15, 2028, or so long as the Joint Venture Company initiates and continues to conduct mining operations on the Tetlin Lease. The Joint Venture Company is required to spend $350,000 per year annually until July
15, 2018 in exploration costs pursuant to the Tetlin Lease. However, exploration expenditures to date under the lease have already satisfied this work commitment requirement for the full lease term, through 2028, because exploration funds spent in any year in excess of $350,000 are credited toward future years’ exploration cost requirements. The Tetlin Lease also provides that the Joint Venture Company will pay the Tetlin Tribal Council a production royalty ranging from 2.0% to 5.0% should the Joint Venture Company deliver to a purchaser on a commercial basis precious or non-precious metals derived from the properties under the Tetlin Lease. As of December 31, 2017, the Company had paid the Tetlin Tribal Council $225,000 in exchange for reducing the production royalty payable to them by 0.75%. These payments lowered the production royalty to a range of 1.25% to 4.25%. On or before July 15, 2020, the Tetlin Tribal Council has the option to increase its production royalty by (i) 0.25% by payment to the Joint Venture Company of $150,000, (ii) 0.50% by payment to the Joint Venture Company of $300,000, or (iii) 0.75% by payment to the Joint Venture Company of $450,000.
On January 8, 2015, the Company assigned the Tetlin Lease to the Joint Venture Company in connection with the Transactions.
Until such time as production royalties begin, the Joint Venture Company will pay the Tetlin Tribal Council an advance minimum royalty of approximately $75,000 per year, plus an inflation adjustment. Additionally, the Joint Venture Company will pay Royal Gold an overriding royalty of 3.0% should it deliver to a purchaser on a commercial basis gold or associated minerals derived from the Tetlin Lease, Additional Properties and certain other properties, and an overriding royalty of 2.0% should it deliver to a purchaser on a commercial basis precious metals, non-precious metals or hydrocarbons derived from other properties. The Joint Venture Company pays claim rentals on state of Alaska mining claims which vary based on the ages of the claims. For the 2017-2018 assessment year, claims rentals totaled $155,505. Also, if the minimum work requirement is not performed on the property, additional minimum labor payments are due on certain state of Alaska acreage.
Application of Critical Accounting Policies and Management
’s Estimates
The discussion and analysis of the Company
’s financial condition and results of operations is based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have identified below the policies that are of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by management. The Company analyzes its estimates, including those related to its mineral reserve estimates, on a periodic basis and bases its estimates on historical experience, independent third party engineers and various other assumptions that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements:
Stock-Based Compensation.
The Company applies the fair value method of accounting for stock-based compensation. Under this method, the Company measures and recognizes compensation expense for all stock-based payments at fair value at the date of grant and amortize the amount over the employee’s service period. Management is required to make assumptions including stock price volatility and employee turnover that are utilized to measure compensation expense.
Investment in the Joint Venture Company.
The Company’s consolidated financial statements include the investment in the Joint Venture Company which is accounted for under the equity method. The Company has designated one of the three members of the Management Committee and on December 31, 2017 held a 61.0% ownership interest in the Joint Venture Company. Royal Gold will initially serve as the Manager of the Joint Venture Company and will manage, direct, and control operations of the Joint Venture Company. The Company recorded its investment at the historical cost of the assets contributed. The cumulative losses of the Joint Venture Company exceed the historical cost of the assets contributed to the Joint Venture Company; therefore the Company's investment in the Joint Venture Company as of December 31, 2017 is zero. The portion of the cumulative loss that exceeds the Company's investment will be suspended and recognized against earnings, if any, from the investment in the Joint Venture Company in future periods.
Results of Operations
Neither the Company nor the Joint Venture Company has commenced mining or producing commercially marketable minerals. To date, neither the Company nor the Joint Venture Company has not generated any revenue from mineral sales or operations. Neither the Company nor the Joint Venture Company has any recurring source of revenue and other than Royal Gold
’s contributions in connection with the Transactions, the Company’s ability to continue as a going concern is dependent on our ability to raise capital to fund our future exploration and working capital requirements. In the future, the Joint Venture Company may generate revenue from a combination of mineral sales and other payments resulting from any commercially recoverable minerals from the Peak Gold Joint Venture Properties. We do not expect the Joint Venture Company to generate revenue from mineral sales in the foreseeable future. If the Peak Gold Joint Venture Properties fail to contain any proven reserves, our ability to generate future revenue, and our results of operations and financial position, would be materially adversely affected. Other potential sources of cash, or relief of demand for cash, include external debt, the sale of shares of our stock, joint ventures, or alternative methods such as mergers or sale of our assets. No assurances can be given, however, that we will be able to obtain any of these potential sources of cash. We will need to generate significant revenues to achieve profitability and we may never do so.
Three Months Ended December 31
, 2017 Compared to Three Months Ended December 31, 2016
General and Administrative Expense.
General and administrative expense for the three months ended December 31, 2017 and 2016 were $808,344 and $592,142, respectively. Current year general and administrative expenses primarily relate to audit fees, legal fees, management fees, and stock-based compensation expense. We recognized $580,379 of stock-based compensation expense for the three months ended December 31, 2017, related to restricted stock granted to our officers and directors in November 2017, November 2016, August 2016, December 2015, September 2015 and November 2014, all pursuant to the Company’s 2010 Equity Compensation Plan.
We recognized $331,306 of stock-based compensation expense for the three months ended
December 31, 2016, related to restricted stock granted to our officers and directors in November 2016, August 2016, December 2015, September 2015, January 2015, and November 2014.
Six Months Ended December 31
, 2017 Compared to Six Months Ended December 31, 2016
General and Administrative Expense.
General and administrative expense for the six months ended December 31, 2017 and 2016 were $1,476,980 and $1,547,792 respectively. Current year general and administrative expenses primarily relate to audit fees, legal fees, management fees, and stock-based compensation expense. We recognized $998,117 of stock-based compensation expense for the six months ended December 31, 2017, related to restricted stock granted to our officers and directors in November 2017, November 2016, August 2016, December 2015, September 2015, January 2015, and November 2014 all pursuant to the Company’s 2010 Equity Compensation Plan. We recognized $959,650 of stock-based compensation expense for the six months ended December 31, 2016, related to restricted stock granted to our officers and directors in November 2016, August 2016, December 2015, September 2015, January 2015, and November 2014.
Liquidity
Prior to the Closing, the Company's primary cash requirements were for exploration-related expenses.
Since the Closing, the Company's primary cash requirements have been for general and administrative expenses. The Company's sources of cash have been from common stock offerings. The Peak Gold Joint Venture Property is still in the initial stages of exploration, and the longer term liquidity of the Company will be impaired to the extent the Joint Venture Company’s exploration efforts are not successful in generating commercially viable mineral deposits on the Peak Gold Joint Venture Property. In September 2016, the Company distributed a Private Placement Memorandum to its warrant holders to give them the opportunity to exercise their warrants at a reduced exercise price and receive shares of common stock, par value $0.01 per share of Contango ORE, Inc. by paying the reduced exercise price in cash and surrendering the original warrants. The offering applied to warrant holders with an exercise price of $10.00 per share originally issued in March 2013. The offering gave the warrant holders the opportunity to exercise the warrants for $9.00 per share. The offer expired on November 15, 2016. In conjunction with the offering a total of 587,500 warrants were exercised resulting in total cash to the Company of $5.3 million.
On October 13, 2017, the Company distributed a Private Placement Memorandum to its warrant holders to give them the opportunity to exercise their warrants at a reduced exercise price and receive shares of common stock, par value
$0.01 per share of Contango ORE, Inc. by paying the reduced exercise price in cash and surrendering the original warrants. The offering applied to warrant holders with an exercise price of $10.00 per share originally issued in March 2013. The offering gave the warrant holders the opportunity to exercise the warrants for $9.50 per share. The offer expired on November 10, 2017. In conjunction with the offering a total of 124,999 warrants were exercised resulting in total cash to the Company of $1.2 million. Proceeds from the exercise of the warrants will be used for working capital purposes and for funding future obligations to the Joint Venture Company.
As of December 31, 2017, the Company has approximately $15.8 million of cash, cash equivalents, and short term investments. In September 2017, a capital budget of $1.5 million was approved for the 2017 Phase III Drilling Exploration Program. Phase III was completed in October 2017.
On October 23, 2017, the Company completed the issuance and sale of an aggregate of 553,672 shares of common stock, par value $0.01 per share, of the Company at a purchase price of $19.00 per share of Common Sto
ck, in a private placement to certain purchasers pursuant to a Stock Purchase Agreement dated as of October 23, 2017, by and among the Company and each Purchaser. Brad Juneau, the Company's President and Chief Executive Officer, purchased 13,200 shares of Common Stock, at an aggregate purchase price of $250,800, in the Private Placement on the same terms and conditions as all other Purchasers. The Private Placement resulted in approximately $10.5 million of gross proceeds and approximately $10.0 million of net proceeds. The Company will use the net proceeds from the Private Placement to fund its exploration and development program and for general corporate purposes. Petrie acted as sole placement agent in connection with the Private Placement and received a placement agent fee equal to 6.50%, which was reduced to 3.25% for existing stockholders and other Purchasers referred by those existing stockholders, or a total of $0.5 million in placement agent fees. The Company believes that its current cash balances will be sufficient to meet its working capital requirements for the next twelve months.
On January 8, 2015, Royal Gold invested $5 million to fund exploration activity, and will have the option to earn up to a 40% interest in the Joint Venture Company by investing up to $30 million (inclusive of the initial $5 million investment) prior to October 31, 2018. As of December 31, 2017, Royal Gold had funded approximately $29.3 million (including the initial investment of $5 million) and earned a 39.0% interest in the Joint Venture Company. The proceeds of Royal Gold’s investment have been used by the Joint Venture Company for additional exploration of the Peak Gold Joint Venture Property. For additional information regarding the Joint Venture Company’s capital budget and expenditures, see the “Gold Exploration” section above
.
Any additional contributions to the Joint Venture Company by Royal Gold to fund future drilling programs, or otherwise, will bring Royal Gold
’s cumulative contributions closer to $30 million. Once Royal Gold contributes a total of $30 million, it will receive a percentage interest of 40% in the Joint Venture Company. Pursuant to the JV LLCA, upon the earlier of the investment by Royal Gold of $30 million into the Joint Venture Company or October 31, 2018, the Company and Royal Gold are required to jointly fund the joint venture operations in proportion to their interests in the Joint Venture Company. After such point, if a member elects not to contribute to an approved program and budget or elects to contribute less than its proportionate interest, its percentage interest will be reduced. The capital costs of developing a large gold mining facility could exceed $1 billion. The Company’s ability to contribute funds sufficient to retain its membership interests in the Joint Venture Company may be limited. To date, neither the Company nor the Joint Venture Company has generated any revenue from mineral sales or operations. In the future, the Joint Venture Company may generate revenue from a combination of mineral sales and other payments resulting from any commercially recoverable minerals from the Peak Gold Joint Venture Property. The Company does not expect the Joint Venture Company to generate revenue from mineral sales in the foreseeable future. Further, neither the Company nor the Joint Venture Company has any recurring source of revenue other than Royal Gold’s contributions in connection with the Transactions. As a result, the Company’s ability to contribute funds to the Joint Venture Company and retain its interest will depend on its ability to raise capital. The Company has limited financial resources and the ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions, the exploration results achieved at the Peak Gold Joint Venture Property, as well as the market price of metals. The Company cannot be certain that financing will be available to the Company on acceptable terms, if at all. If the Company were unable to fund its contributions to the approved programs and budgets for the Joint Venture Company, its interest in the Joint Venture Company would be diluted. In addition, once Royal Gold has earned a percentage interest of 40% in the Joint Venture Company, it has the option to require the Company to sell an additional 20% of the Company’s interest in the Joint Venture Company in a sale by Royal Gold of its entire percentage interest of 40% to a bona fide third party purchaser.
Further financing by the Company may include issuances of equity, instruments convertible into equity (such as warrants) or various forms of debt. The Company has issued common stock and other instruments convertible into equity in the past and cannot pre
dict the size or price of any future issuances of common stock or other instruments convertible into equity, and the effect, if any, that such future issuances and sales will have on the market price of the Company’s securities. Any additional issuances of common stock or securities convertible into, or exercisable or exchangeable for, common stock may ultimately result in dilution to the holders of common stock, dilution in any future earnings per share of the Company and may have a material adverse effect upon the market price of the common stock of the Company.
Risk Factors
In addition to the risk factors set forth below and the other information set forth elsewhere in this Form 10-Q,
you should carefully consider the risks discussed in our Annual Report on Form 10-K for the year ended June 30, 2017, under the headings “Item 1. Business — Adverse Climate Conditions,” “—Competition,” “— Government Regulation” and “— Environmental Regulation,” “Item 1A. Risk Factors,” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” which risks could materially affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K for the year ended June 30, 2017 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, other than updating the risk factors below. The risks described in our Annual Report on Form 10-K for the year ended June 30, 2017 are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. An investment in the Company is subject to risks inherent in our business and involves a high degree of risk. The trading price of the shares of the Company is affected by the performance of our business relative to, among other things, competition, market conditions and general economic and industry conditions. The value of an investment in the Company may decrease, resulting in a loss. The updated risk factors are as follows:
There can be no assurance that Royal Gold will continue to fund the Joint Venture Company to continue exploration work.
The JV LLCA contains earn-in periods where Royal Gold has the option to fund up to $25 million on or before October 31, 2018 after its initial $5 million investment at the Closing of the Master Agreement. As of December 31, 2017, Royal Gold has funded approximately $29.3 million (including the initial investment of $5 million) and earned a 39.0% interest in the Joint Venture Company. There is no requirement that Royal Gold contribute any future amounts to the Joint Venture Company to continue exploration work, and the Company will have limited funds to continue exploration of its Peak Gold Joint Venture Property, if Royal Gold fails to contribute additional amounts to the Joint Venture Company.
The Joint Venture Company has no assurance of title to its properties.
The Joint Venture Company holds approximately 175,000 acres in the form of State of Alaska unpatented mining claims, for gold ore exploration. Unpatented mining claims are unique property interests, in that they are subject to the paramount title of, the State of Alaska and rights of third parties to uses of the surface within their boundaries, and are generally considered to be subject to greater title risk than other real property interests. The rights to deposits of minerals lying within the boundaries of the unpatented state claims are subject to Alaska Statues 38.05.185 - 38.05.280, and are governed by Alaska Administrative Code 11 AAC 86.100 - 86.600. The validity of all State of Alaska unpatented mining claims is dependent upon inherent uncertainties and conditions.
With respect to the Tetlin Lease, the Company retained title lawyers to conduct a preliminary examination of title to the mineral interest prior to executing the Tetlin Lease. The Joint Venture Company conducted a title examination prior to the assignment of the Tetlin Lease to the Joint Venture Company and performed certain curative title work. In addition, in connection with the assignment of the Tetlin Lease from the Company to the Joint Venture Company, the Company and the Native Village of Tetlin entered into an Estoppel and Agreement and a Stability Agreement (the "Agreements") that were approved by the Tetlin Village Council and the Native Village of Tetlin members. The Agreements approved the assignment of the Tetlin Lease to the Joint Venture Company and, among other things, confirmed the validity and effectiveness of the Tetlin Lease. Nevertheless, a deficiency in title or claims by a third party may not be curable. It does happen, from time to time, that the title to a property is defective, having been obtained in error from a person who is not the rightful owner of the mineral interest desired. In these circumstances, the Joint Venture Company might not be able to proceed with exploration of the lease site or might incur costs to remedy a defect. It might also happen, from time to time, that the Joint Venture Company might elect to proceed with mining work despite any such deficiency or claim.
The Company's common stock is thinly traded.
As of December 31, 2017, there were approximately 6.0 million shares of the Company's common stock outstanding, with directors and officers beneficially owning approximately 14.9% of the common stock and the Marital Trust of Mr. Kenneth R. Peak, the Company's former Chairman, beneficially owning approximately 13.2% of our common stock. Since the Company's common stock is thinly traded, the purchase or sale of relatively small common stock positions may result in disproportionately large increases or decreases in the price of the Company's common stock.