Nighthawk Defines Initial Underground Resource At Colomac And Converts 82% To Indicated Resources Establishing A Strong Foundation For Future Growth
Toronto, Ontario, July 28, 2020 – Nighthawk Gold Corp. (“Nighthawk” or the “Company”) (TSX: NHK; OTCQX: MIMZF) is pleased to report an updated Mineral Resource Estimate on the 100% owned Indin Lake Gold Property (“2020 MRE”), Northwest Territories, Canada, which includes an updated resource estimate for the Colomac Gold Project (“Colomac”, the “2020 Colomac MRE”), as well as an initial Mineral Resource Estimate on the Damoti Lake Gold Project (“Damoti”, the “Damoti MRE”), based on a gold price of US$1,425 (Figures 1 and 4). The 2020 Colomac MRE incorporates 924 drill holes totaling 177,598 metres that defines open pit and underground resources and outlines 25.89 million tonnes (“Mt”) at an average grade of 2.01 grams per tonne gold (“gpt”, “Au”) for 1.67 million ounces (“Moz”) of Indicated Resources and 5.71 Mt at an average grade of 2.03 gpt Au for 0.37 Moz of Inferred Resources (Table 1). The Damoti MRE is based on 266 drill holes totaling 33,433 metres and outlines 0.74 Mt at an average grade of 4.97 gpt Au for 0.12 Moz of Inferred Resources (Table 2). The 2020 MRE was prepared by InnovExplo Inc. (“InnovExplo”), an independent firm based in Val-d’Or, Québec, in accordance with National Instrument 43-101 (“NI 43-101”).
An Exploration Target for Colomac suggests anywhere from 18 Mt to 23 Mt at grades ranging from 1.80 gpt Au to 2.00 gpt Au for a total of between 1.0 Moz upwards to 1.5 Moz Au could be added to the current resource by continuing to drill the projected extensions of currently defined mineralized zones. The Exploration Target is based on the limited extension of known zones to depth and laterally as defined by the current drill density. The potential quantity and grade is conceptual in nature, and the Exploration Target is not a mineral resource and there remains uncertainty if a mineral resource would be delineated. However, this target illustrates a clear path forward for resource expansion opportunities proximal to the currently defined resource in the near term. Outside of this Exploration Target, there remains a large portion of the host quartz diorite (mineralized portion of the sill) that remains untested, and therefore a focus for continued exploration.
Conference Call Details – Nighthawk Gold 2020 Resource Update Management will host a conference call and webcast to discuss the updated resource estimate today, July 28, 2020 at 8:30am ET. To access the webcast and for further details, please see details listed at the end of this release or visit the Company website at nighthawkgold.com. Callers should dial in 5-10 min prior to the scheduled start time. NA Toll-free: 1-800-319-4610; Toronto: +1-416-915-3239; International: +1-604-638-5340 To access the Webcast please follow this link. Dr. Michael Byron, President & CEO commented, “This latest resource estimate is the most refined, and accurate representation to-date, and for the first time includes constrained open pit and underground Indicated Resources at Colomac with an average grade of 2.01 gpt Au. Constraining of resources has resulted in a substantial upgrade to the quality and level of confidence in the 2020 Colomac MRE, resulting in greater perceived value given that 82% of the resource now falls within the Indicated category. With additional infill drilling, Indicated Resources have the possibility to be upgraded to Measured Resources or possibly Mineral Reserves if determined to be economic to extract.
“A newly defined Exploration Target for Colomac suggests that up to 1.5 Moz Au with grades between 1.8 gpt Au and 2.0 gpt Au could be added to the current resource. We believe this can be achieved with anywhere from 50,000 to 75,000 metres of additional drilling, of which we plan to complete upwards of 25,000 metres this year with drilling already well underway. Furthermore, with limited drilling information available with respect to the recently discovered widening of the mineralized portion of the Colomac Main sill and especially in light of the sill’s expansion to upwards of 155 metres in true width at approximately 750 metres depth at Zone 1.5, this tremendous prospect was not captured in the current resource estimate. There remains significant upside to build additional ounces, over and above the Exploration Target within the vastly unexplored portions of the host quartz diorite. Given these strategic prospects we anticipate rapid resource growth in addition to the outlined Exploration Target areas.
“We are confident that this latest resource represents a giant step forward in terms of increasing project robustness and value and provides a solid platform from which to rapidly add ounces and to develop Colomac quickly and efficiently. We look forward to discussing these highlights in a conference call later this morning, the details of which are mentioned above”
Highlights:
The 2020 Colomac MRE Upgraded to Constrained Resources1,2 - Based on the level of exploration achieved to date and in accordance with the Canadian Institute of Mining (“CIM”) best practice guidelines, open pit resources are constrained by pit shells using GEOVIA WhittleTM, and underground resources optimized (manually constrained) to demonstrate a reasonable prospect for eventual economic extraction. Deposits are constrained based on economic and technical parameters that are relevant, reliable and in accordance with industry standards. Defining constrained resources are essential to the process of advancing Colomac towards a development decision.
82% Conversion Ratio to Indicated Resources4 – The excellent conversion ratio from Inferred to Indicated Resources substantiates the geological and grade continuities of the 2020 Colomac MRE deposits. With additional infill drilling, Indicated Resources (which carry a higher level of resource confidence and value), have the possibility to be upgraded to Measured Resources and eventually Mineral Reserves if proven to be economical to extract.
Defining an Underground Resource is an Important Step Forward in the Advancement of Colomac2 - This development opens up the largest part of the mineralized sill and supports continued drilling to depth where the deposit expands significantly in true width over 3.5 kms of the deposit’s total 7.0 km length strike length that has been drill tested to depth so far , thus improving the potential for future resource expansion. The Colomac Main underground Indicated Resource carries a much-improved average grade of 2.21 gpt Au and contemplates a bulk mining approach given the style of mineralization and distribution of gold within the quartz diorite.
Improved Average Resource Grade to 2.01 gpt Au for Indicated Resources and 2.03 gpt for Inferred Resources – The 2020 Colomac MRE reports an improvement in grade by up to 25% to 2.01 gpt Au for Indicated Resources and 2.03 gpt Au for Inferred Resources. This is a key improvement for a northern project and is expected to positively impact future project economics especially in-light of the vast underground potential.
Exploration Target3 Outlines Potential for Upwards of 1.5 Mozs of Additional Resources within Close Proximity to the Current Resource - With an estimated 50,000-75,000 metres of additional drilling it is reasonable to expect that between 18 Mt and 23 Mt at grades between 1.8 gpt Au and 2.0 gpt Au for a total of between 1.00 to 1.50 Mozs of gold could be added to the current resource by drilling the extensions of currently defined mineralized zones at depth and laterally, of which the Company intends to complete upwards of 25,000 metres in this year’s drill program.
Strong Foundation for Growth1,2 - The high conversion ratio from Inferred to Indicated Resources combined with the updated litho-structural model and constrained resources, have greatly improved project robustness, overall estimate confidence, and elevated the potential in situ value of the 2020 Colomac MRE. There remains considerable room for resource expansion given that after the 2019 drill program, extensive areas of the host quartz diorite remain unexplored.
Initial Resource Estimate for Damoti1,2 – Damoti is a high-grade gold deposit located south of Colomac and considered a primary candidate to provide higher-grade feed (with an average grade of 4.97 gpt Au) to possible future mining and milling operations at Colomac.
This Mineral Resource Estimate has been prepared using reasonable cut-off grades for pit constrained, bulk underground and selective underground extraction mining methods.
Specific extraction methods are used only to establish reasonable cut-off grades for various portions of the deposit. No Preliminary Economic Analysis, Pre-Feasibility Study or Feasibility Study has been completed to support economic viability and technical feasibility of exploiting any portion of the mineral resource, by any specific mining method.
The reader should be cautioned that this exploration target is not a mineral resource estimate and is conceptual in nature. There has been insufficient exploration to define this as a mineral resource, and it is uncertain if further exploration will result in the exploration target being delineated as a mineral resource. As well, the estimate on metres drilled to achieve this target is based on the Company’s projections derived from its experience with metres drilled and ounces added through its previous drilling campaigns and the resulting mineral resource estimates.
An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.
FUTURE OPPORTUNITIES AND NEXT STEPS: Realize Exploration Potential
As discussed above, the Company believes that with an additional 50,000 to 75,000 metres of drilling, up to 1.5Mozs could be added to the current mineral resource estimate.
A planned 25,000 metre drill program is underway on the Indin Lake Gold Property with approximately 70% of the drilling metres and two drills focused on further delineation of Colomac.
Test resource expansion potential at depth where Colomac Main expands significantly in true width across the 3.5 km strike length from Zone 3.5 northwards to Zone 1.5 of the deposit’s total 7.0 km length that has been drill tested to depth so far.
Considering the sheer size of the host quartz diorite and surrounding deposits that have limited exploration to date, drilling beyond the Exploration Target is a key focus for the Company to continue adding ounces moving forward.
Continued Advancement of Colomac Towards a PEA Stage Project
As previously announced, the 2020 Colomac MRE will be utilized by JDS Mining and Energy to produce a preliminary internal scoping study to assess the economic viability of the project based on known information to date.
82% of the resources have been upgraded to the Indicated Resource category, providing more confidence in the future economic viability of the project. Furthermore, with additional drilling, these ounces could be upgraded to Measured Resources and possibly Mineral Reserves in the future.
The results of this study will assist with developing future exploration focus to expedite continued resource growth and advance the project towards a Preliminary Economic Assessment stage.
Regional Exploration Potential
Nighthawk continues to actively explore its many regional prospects. Two priority areas, the Leta Arm Gold Project and the Treasure Island Gold Project, are of particular interest as they lie within well mineralized and largely unexplored structural corridors that extend for several kilometres. Limited drilling since 2011 has resulted in many near-surface intercepts of strong mineralization showing good continuity laterally and to depth.
Archean greenstone belts hosting large regional deformation zones that are pregnant with gold mineralization are known to host significant deposits, thus they represent coveted targets. Nighthawk intends to continue to aggressively explore these areas and others within this fertile terrain.
Regional Prospecting
In 2020 Nighthawk will be active on a number of regional prospects and expects to maintain a similar scale of activity into the future with the goal of advancing known deposits and showings and to make new discoveries.
Heap Leach Potential and Ongoing Metallurgical Testing
Ongoing metallurgical testwork continues to deliver consistently strong results, with heap leach test results falling within an acceptable range.
Given the large amount of mineralized rock hosted by the Colomac Main and Goldcrest sills, heap leaching may augment a standard milling operation resulting in possible cost savings.
Table 1. Colomac Gold Project, 2020 Updated Mineral Resource Estimate - 2020 Colomac MRE, effective at July 28, 2020
(Broken down by deposits for combined open pit and underground bulk mining method scenarios)
Deposit
Area (mining method)
Cut-off (g/t)
Indicated resource
Inferred resource
Tonnage (T*1000)
AU (g/t)
Ounces
Tonnage (T*1000)
AU (g/t)
Ounces
Colomac Open pit
0.6
7,996
1.73
443,800
159
1.46
7,500
UG Bulk
1.3
14,922
2.21
1,058,800
4,740
2.08
316,500
Goldcrest Open pit
0.6
1,362
1.56
68,100
8
1.00
300
UG Bulk
1.3
780
2.08
52,200
217
1.79
12,500
Grizzly Bear Open pit
0.6
628
1.62
32,800
12
1.52
600
UG Bulk
1.3
202
1.89
12,300
30
1.80
1,700
24/27 Open pit
0.6
-
-
-
375
1.89
22,800
UG Bulk
1.3
-
-
-
171
1.92
10,600
Sub-total Open pit
0.6
9,986
1.70
544,700
554
1.75
31,200
Sub-total UG Bulk
1.3
15,904
2.20
1,123,300
5,158
2.06
341,300
TOTAL
25,890
2.01
1,668,000
5,712
2.03
372,500
Table 2. Damoti Mineral Resource Estimate – Damoti MRE, effective at July 28, 2020
(for an underground selective mining method scenario)
Mining Method
Cut-off (gpt Au)
Inferred Resources
Tonnes
(000’s)
Grade
(gpt Au)
Ounces
Damoti UG selective
2.00
736
4.97
117,800
Notes to accompany the Mineral Resource Estimate:
The Independent and Qualified Persons for the Mineral Resource Estimate, as defined by NI 43-101, are Marina Lund P.Geo., and Carl Pelletier, P.Geo., both from InnovExplo Inc., and the effective date is July 28, 2020.
These mineral resources are not mineral reserves, as they do not have demonstrated economic viability.
The mineral resource estimate follows current CIM definitions and guidelines for mineral resources.
The results presented are undiluted and are considered to have reasonable prospects of economic viability.
The estimates encompass six (6) gold deposits (Colomac Main, 24, 27, Goldcrest, Grizzly Bear, and Damoti), subdivided into 52 zones (6 for Colomac Main, 1 for 24, 1 for 27, 3 for Goldcrest, and 3 for Grizzly Bear, and 38 for Damoti) each defined by individual wireframes with a minimum true thickness of 3.0 m for the Colomac Main, 24, 27, Goldcrest and Grizzly Bear deposits and a minimum true thickness of 2.0 m for the Damoti deposit, using the grade of the material when assayed or a value of zero when not assayed. One (1) low grade envelope was create using the quartz diorite geological solid for the Colomac deposit and four (4) low grade envelopes were created using the BIF geological solid for the Damoti deposit. The resource was estimated using GEOVIA GEMS 6.8.2.
High-grade capping supported by statistical analysis was done on raw assay data before compositing and established on a per-zone basis. Colomac Main deposit: all zones were capped at 50 g/t, except for the low-grade 1.0 zone and the low-grade envelop which were capped at 15.00 g/t; 24 and 27 deposits: not capped; Goldcrest and Grizzly Bear deposits: all zones were capped at 30.00 g/t; Damoti deposit: all high grade zones were capped at 100.00 g/t, except zones 2000, 2100 and 2200 capped at 45.00 g/t and zone 4300 capped at 40.00 g/t. The low-grade envelopes were capped at 20.00 g/t.
Grade interpolation was performed with the ID3 method on 1.5 m composites for the Colomac Main, Goldcrest and Grizzly Bear deposits, with the ID2 method on 1.5 m composites for the 24 and 27 deposits and by Ordinary Kriging on 1.0 m composites for the Damoti deposit. The Colomac Main, 24 and 27, Goldcrest, Grizzly Bear block models have block size of 5.0 m by 10.0 m by 10.0 m and the Damoti block model has block size of 3.0 m by 3.0 m by 3.0 m.
Bedrock was assigned a density value of 3.20 g/cm3 for the Damoti deposit and a value of 2.70 g/cm3 for the Colomac Main, 24. 27, Goldcrest and Grizzly Bear deposits corresponding to the mean of SG measurements. A fixed density value of 2.00 g/cm3 was assigned to the overburden.
The Mineral Resource Estimate is classified as Indicated and Inferred. For the Colomac Main, 24 and 27, Goldcrest and Grizzly Bear deposits, the Inferred category is defined with a minimum of two (2) drill holes within the areas where the drill spacing is less than 75 m and shows reasonable geological and grade continuity. The Indicated mineral resource category is defined with a minimum of three (3) drill holes within the areas where the drill spacing is less than 50.0 m. For the Damoti deposit, the Inferred category is defined with a minimum of two (2) drill holes within the areas where the drill spacing is less than 60.0 m and shows reasonable geological and grade continuity. Clipping boundaries were used for classification based on those criteria.
The Mineral Resource Estimate is locally pit-constrained using GEOVIA Whittle™ with a bedrock slope angle of 50° and an overburden slope angle of 30°. It is reported at a rounded cut-off grade of 0.60 gpt Au (in pit), 1.30 gpt Au (bulk underground), and 2.00 gpt Au (selective underground). The cut-off grades were calculated using the following parameters: mining cost = 4.79 to CA$ 65.00; processing cost = 22.50 to CA$ 25.00; G&A = 8.00 to CA$ 18.00; refining and selling costs = CA$ 5.00; gold price = US$ 1,425.00/oz; US$:CA$ exchange rate = 1.33; and mill recovery = 97.0%. The cut-off grades should be re-evaluated in light of future prevailing market conditions (metal prices, exchange rates, mining costs etc.).
The number of metric tonnes was rounded to the nearest thousand, following the recommendations in NI 43-101 and any discrepancies in the totals are due to rounding effects. The metal contents are presented in troy ounces (tonnes x grade / 31.10348).
InnovExplo Inc. is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, or marketing issues, or any other relevant issue not reported in the Technical Report, that could materially affect the Mineral Resource Estimate.
Table 3. Colomac Mineral Resource Estimate Cut-Off Sensitivity Table (including the Colomac Main, Goldcrest, Grizzly Bear, 24 and 27 Deposits)
All Deposits, by mining method
Cut-off (gpt Au)
Indicated Resources
Inferred Resources
Tonnes (000’s)
Grade (gpt Au)
Ounces
Tonnes (000’s)
Grade
(gpt Au)
Ounces
Open pit
>3.00
982
4.46
141,088
47
3.70
5,623
>2.00
2,573
3.20
264,927
197
2.69
17,024
>1.50
4,228
2.62
356,840
296
2.39
22,705
>1.30
5,206
2.39
400,709
334
2.27
24,445
>1.20
5,754
2.28
422,658
366
2.18
25,690
>1.00
7,112
2.06
470,517
432
2.02
28,030
>0.80
8,520
1.86
511,239
479
1.91
29,388
>0.70
9,368
1.77
531,730
528
1.80
30,562
>0.60
9,986
1.70
544,662
554
1.75
31,124
>0.50
10,650
1.62
556,348
596
1.66
31,873
<0.50
16,264
1.14
593,392
793
1.33
33,749
Underground Bulk
>3.00
2,275
4.44
324,877
534
4.47
76,937
>2.00
6,326
3.14
637,297
1,758
2.99
169,154
>1.50
11,814
2.48
940,467
3,661
2.33
274,285
>1.30
15,904
2.20
1,123,367
5,158
2.06
341,364
>1.20
18,656
2.06
1,233,798
6,048
1.94
377,103
>1.00
25,818
1.79
1,485,717
8,215
1.72
453,410
>0.80
35,460
1.54
1,763,607
11,568
1.48
549,910
>0.70
41,076
1.44
1,898,769
13,709
1.36
601,018
>0.60
47,181
1.33
2,026,142
16,089
1.26
650,773
>0.50
53,694
1.24
2,141,106
18,664
1.16
696,225
<0.50
115,380
0.68
2,522,071
63,830
0.44
913,768
Note: The reader is cautioned that the figures in this table are not a Mineral Resource Statement. The figures are only presented to show the sensitivity of the block model estimates to the selection of cut-off grade.
Table 4. Colomac Mineral Resource Estimate Gold Price Sensitivity Table
Gold price (USD/oz)
Deposit
Area (mining method)
Cut-off (g/t)
Indicated resource
Inferred resource
Tonnage (T*1000)
AU (g/t)
Ounces
Tonnage (T*1000)
AU (g/t)
Ounces
1350
Colomac Open pit 0.65 6,419 1.81 373,954 103 1.58 5,223 UG Bulk 1.4 13,238 2.36 1,003,142 4,015 2.21 285,620 Goldcrest Open pit 0.65 564 1.55 28,205 3 0.99 86 UG Bulk 1.4 984 2.30 72,846 175 1.90 10,703 Grizzly Bear Open pit 0.65 633 1.62 33,075 7 2.02 439 UG Bulk 1.4 166 2.02 10,772 26 1.88 1,548 24 and 27 Open pit 0.65 - - - 351 1.93 21,820 UG Bulk 1.4 - - - 158 1.99 10,095 Sub-total 22,004 2.15 1,521,994 4,838 2.16 335,534 Damoti UG selective 2.1 - - - 710 5.09 116,016 TOTAL 22,004 2.15 1,521,994 5,548 2.53 451,550
1425
Colomac Open pit 0.6 7,996 1.73 443,800 159 1.46 7,500 UG Bulk 1.3 14,922 2.21 1,058,800 4,740 2.08 316,500 Goldcrest Open pit 0.6 1,362 1.56 68,100 8 1.00 300 UG Bulk 1.3 780 2.08 52,200 217 1.79 12,500 Grizzly Bear Open pit 0.6 628 1.62 32,800 12 1.52 600 UG Bulk 1.3 202 1.89 12,300 30 1.80 1,700 24 and 27 Open pit 0.6 - - - 375 1.89 22,800 UG Bulk 1.3 - - - 171 1.92 10,600 Sub-total 25,890 2.01 1,668,000 5,712 2.03 372,500 Damoti UG selective 2.0 - - - 736 4.97 117,800 TOTAL 25,890 2.01 1,668,000 6,448 2.37 490,300
1500
Colomac Open pit 0.6 8,937 1.72 493,101 190 1.38 8,468 UG Bulk 1.2 17,044 2.06 1,126,776 5,546 1.96 348,858 Goldcrest Open pit 0.6 1,492 1.52 73,004