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Highgold Mining Inc
Symbol HIGH
Shares Issued 73,020,210
Close 2022-06-21 C$ 0.75
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Highgold met tests recover up to 97.2% Au at Johnson

2022-06-22 09:35 ET - News Release

Mr. Darwin Green reports

HIGHGOLD ANNOUNCES POSITIVE METALLURGICAL TEST RESULTS FROM JT DEPOSIT ALASKA, USA

Highgold Mining Inc. has released positive metallurgical test results for the Johnson Tract (JT) polymetallic gold project in south-central Alaska, United States. The project hosts the high-grade gold-zinc-copper-lead-silver JT deposit with a 750,000-ounce gold equivalent (AuEq) indicated resource at 10.9 grams per tonne AuEq and a 130,000 oz AuEq inferred resource at 7.1 g/t AuEq. An updated and expanded mineral resource estimation for the JT deposit is expected to be delivered before the end of the second quarter of 2022.

Highlights of metallurgical test results

The polymetallic (Au-Zn-Cu-Pb-Ag) JT deposit exhibits an excellent response using conventional metallurgical techniques. Locked cycle flotation tests yielded very high-quality copper, zinc, lead and gold concentrates produced at a coarse primary grind with very good metal recoveries, low impurities and negligible penalty elements. Highlights include:

  • Gold recovery of 97.2 per cent combined total of payable gold to concentrates and leaching of tails;
  • Zinc recovery of 92.3 per cent to a concentrate grading 52.6 per cent zinc;
  • Copper recovery of 84.5 per cent to a concentrate grading 30.6 per cent copper;
  • Lead recovery of 72.4 per cent to a concentrate grading 62.1 per cent lead;
  • Gold pyrite concentrate grading 64.3 g/t gold;
  • Coarse primary grind size of 125 microns.

"We are very pleased with these metallurgical results, which demonstrate excellent metal recoveries to highly quality concentrate products," commented president and chief executive officer Darwin Green. "Metallurgy is critically important to understanding the potential economics of a mineral project and these new results, which corroborate and enhance decades-old historic data, are an important step in derisking the JT project and laying the foundation for future engineering and economic studies. In addition to producing gold-enriched base metal concentrates that are highly attractive for global smelting market, the program was also successful in producing a saleable high-grade gold concentrate. The ability to produce a separate gold (pyrite) concentrate provides processing optionality with the added environmental benefit of generating tails that contain very low sulphide content."

Test program details

The metallurgical test program was completed by Blue Coast Research Ltd. (BCR), a leading metallurgical testing and consulting firm based in British Columbia. The test work was completed on a master composite sample prepared from approximately 180 kilograms of one-half sawn HQ drill core from two dedicated holes, JT21-125 and JT21-134, drilled into the JT deposit mineral resource in 2021. Sampled intervals included a blend from the upper and lower portions of the JT deposit representative of the dominant mineralization styles present within the deposit. The master composite has a head grade of 11.85 g/t gold, 6.2 g/t silver, 0.52 per cent copper, 5.13 per cent zinc and 1.27 per cent lead.

The program included mineralogical analysis, comminution test work, flotation optimization test work, locked cycle test work, cyanidation of rougher tails and cleaner concentrates for global gold recovery, and follow-up mineralogical analysis of concentrates and tailings for deleterious elements.

Discussion of test program results

Mineralogy and comminution

Mineralogical analysis of the master composite showed that primary sulphide minerals are sphalerite, pyrite, chalcopyrite and galena. Pyrite, sphalerite and chalcopyrite all show very good liberation, with galena showing moderate liberation. Comminution test work conducted on the master composite yielded the following results:

  • Bond ball work index of 16.6 kilowatt-hours per tonne indicating the sample is hard;
  • Bond abrasion index testing results indicated the sample is moderately abrasive;
  • SMC test work showed that this sample was soft with respect to impact.

Flotation

Flotation optimization was conducted on the master composite through a series of batch rougher and cleaner tests under a variety of conditions followed by a single locked cycle flotation test. The parameters explored included: i) primary grind size; ii) lead and zinc depressants; iii) lead regrind; iv) gold/pyrite circuit; and v) an MF2 (mill-float times two) flowsheet. The best flotation conditions were then applied to the locked cycle test.

The locked cycle test was conducted as a standard six-cycle test. The copper, lead and zinc circuits were conducted on all six cycles, and the gold circuit was added to cycle 6. A coarse primary grind of 125 microns was utilized, with flotation of a copper rougher concentrate reground and cleaned once, followed by flotation of a lead rougher concentrate reground and cleaned twice. The zinc rougher concentrate was cleaned once with no regrind. The gold circuit consisted of a secondary grind of the zinc rougher tails (MF2 flowsheet), followed by gold rougher, concentrate regrind and gold cleaner float.

All concentrates met target grades for the metal of interest and recoveries were over all very good. Gold concentration is at payable levels for all concentrate products, including the zinc concentrate, with a majority reporting to the copper, lead and pyrite concentrates where payability is highest. Low levels of deleterious elements and impurities were detected in the final concentrates and no penalties are expected for any of the concentrate products based on current smelter contract standards.

Leach tests

Separate cyanidation leach tests were performed to evaluate different processing scenarios, including a) cyanidation of rougher tails in the absence of floating a gold concentrate, b) cyanidation of rougher tails generated after producing a gold concentrate, and c) cyanidation of the gold concentrate itself.

Total payable gold recovery

Estimated total payable gold recovery is 97.2 per cent. For the purpose of calculating total payable gold recovery, it is assumed that the gold concentrate will be sold (not leached) and all final tails products (Au rougher tails plus Zn and Au cleaner tails) will be combined and leached together at 81-per-cent recovery.

Additional test work and opportunities

Additional metallurgical test work is continuing to assess JT deposit variability, including the evaluation of other mineralization styles such as the footwall copper zone. Several opportunities for further optimization and flowsheet refinement exist and will be evaluated in future studies.

2022 exploration program

The company recently announced plans for a $9-million (U.S.) summer exploration program for the project (see company press release dated May 31, 2022), which includes a minimum of 13,000 metres of diamond drilling with two drill rigs, geological mapping, prospecting and geochemical sampling programs, airborne drone magnetic surveying, the commissioning of a new on-site sample preparation facility to reduce assay turnaround times, and preliminary engineering and baseline studies. One-third of the planned drilling will focus on infill and stepout drilling on the JT deposit, while the remaining two-thirds will follow up on the new high-grade DC (Difficult Creek) prospect discovery (see company press release dated Oct. 6, 2021) and other new regional prospects.

About the Johnson Tract gold project

Johnson Tract is a polymetallic (gold, copper, zinc, silver, lead) project located near tidewater, 125 miles (200 kilometres) southwest of Anchorage, Alaska, U.S. The 21,000-acre property includes the high-grade JT deposit and at least nine other mineral prospects over a 12-kilometre strike length. Highgold acquired the project through a lease agreement with Cook Inlet Region Inc. (CIRI), one of 12 land-based Alaska native regional corporations created by the Alaska Native Claims Settlement Act of 1971. CIRI is owned by more than 9,100 shareholders who are primarily of Alaska native descent.

Mineralization at Johnson Tract occurs in Jurassic-age intermediate volcaniclastic rocks and is characterized as epithermal-type with submarine volcanogenic attributes. The JT deposit is a thick, steeply dipping silicified body (20 m to 50 m average true thickness) that contains a stockwork of quartz-sulphide veinlets and brecciation, cutting through and surrounded by a widespread zone of anhydrite alteration. The Footwall copper zone is located structurally and stratigraphically below the JT deposit and is characterized by copper-silver-rich mineralization.

The JT deposit hosts an indicated resource of 2.14 million tonnes grading 10.93 g/t AuEq comprising 6.07 g/t Au, 5.8 g/t Ag, 0.57 per cent Cu, 0.80 per cent Pb and 5.85 per cent Zn. The inferred resource of 580,000 tonnes grading 7.16 g/t AuEq comprises 2.05 g/t Au, 8.7 g/t Ag, 0.54 per cent Cu, 0.33 per cent Pb and 6.67 per cent Zn. Reported mineral resources are based on drill holes completed to the end of 2019. Approximately 27,000 metres of new drilling have subsequently been completed and a new resource estimate is anticipated in Q2 2022. For additional details see National Instrument 43-101 technical report titled "Updated Technical Report for the Johnson Tract Project, Alaska," dated Aug. 9, 2021, authored by Ray C. Brown, CPG, and James N. Gray, PGeo. Gold equivalent is based on assumed metal prices and 90-per-cent recovery and payabilities for Au, Ag, Cu, Pb and Zn. Assumed metal prices for the resource are $1,350 (U.S.)/oz for gold, $16 (U.S.)/oz for silver, $2.80 (U.S.)/pound for copper, $1 (U.S.)/lb for lead and $1.20 (U.S.)/lb for zinc, and are based on nominal three-year trailing averages as of April 1, 2020. Metallurgical testing has indicated that excellent gold and base metal recoveries and marketable concentrates can be expected.

Prior to Highgold, the project was last explored in the mid-1990s by a mid-tier mining company that evaluated direct shipping material from Johnson to the Premier Mill near Stewart, B.C.

About Highgold Mining Inc.

Highgold is a well-financed mineral exploration company focused on high-grade gold projects located in North America. Highgold's flagship asset is the high-grade Johnson Tract gold (Zn-Cu) project located in south-central Alaska, U.S. The company also controls a portfolio of quality gold projects in the greater Timmins gold camp, Ontario, Canada, that includes the Munro-Croesus gold property, which is renowned for its high-grade mineralization, and the large Golden Mile and Timmins South properties. Highgold's experienced board and senior management team are committed to creating shareholder value through the discovery process, careful allocation of capital and environmentally/socially responsible mineral exploration.

Qualified person and quality assurance

Ian Cunningham-Dunlop, PEng, senior vice-president, exploration, for Highgold Mining and a qualified person as defined by Canadian National Instrument 43-101, has reviewed and approved the technical information contained in this release.

The company has a robust quality assurance/quality control program that includes the insertion of blanks, standards and duplicates.

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