Summary

Red Hill is a sediment-hosted gold project located 24 kilometers southeast of the 12 million ounce Cortez Hills gold deposit within the Cortez trend. The project covers an extensive area of hydrothermally altered lower plate carbonate rocks. In 2006, drill hole BRH-013 intersected 24.4 meters of 4.99 g/t Au from 585.4 to 609.8 metres, including 13.7 meters of 8.11 g/t Au from 585.4 to 599.1 meters. Gold mineralization is hosted in silty carbonate rocks of the Denay formation associated with altered lamprophyre dikes; and high levels of arsenic, antimony, mercury and thallium. These features are indicative of a Carlin-style gold system.

Previous drilling at Red Hill intersected 13.7 metres of 8.11 grams per tonne (g/t) gold. The Company believes that the Red Hill Property has been inadequately tested for the deep potential considering Barrick’s nearby multi-million ounce Goldrush discovery located 12km northwest of Red Hill along the Cortez trend.

American Pacific acquired the Red Hill Property for an initial payment of $25,000 and will make subsequent yearly payments¹ over 10 a ten year period beginning in 2022, plus annual claim maintenance fees of $13,244.

Upon production commencing on the Red Hill Property, American Pacific will pay Nevada North a 3% net smelter royalty (NSR), 1.5% of which American Pacific may buy back for US$3,000,000.

Figure 1. Red Hill property location, carbonate windows and major gold deposits.

During the NuLegacy Gold Corporation’s drilling campaigns at the Red Hill project, only one drill hole was directed at the deep potential of the property near BRH-013.  The property was inadequately tested for the deep potential considering Barrick’s nearby multi-million ounce Goldrush discovery, 7.5 mi (12km) northwest of Red Hill along the Cortez trend.  Goldrush occurs at similar depths as the mineralization in BRH-013.   In this drill hole, gold mineralization is hosted in silty carbonate rocks associated with altered lamprophyre dikes and high levels of arsenic, antimony, mercury, and thalium, indicating the potential for a Carlin-style gold system present at Red Hill.

Location

Red Hill is located in the northern Simpson Park Mountains, approximately 80 road miles (128 km) southwest of Elko, Nevada. The property is along the Cortez Gold Trend, a west-northwest alignment of bulk-mineable, sediment-hosted gold deposits including Pipeline, Cortez Hills, Gold Acres, Cortez, and Horse Canyon. (Figure 1)  Red Hill is 15 miles (24 km) southeast of the Cortez Hills gold deposit, a +12 million ounce sediment-hosted gold deposit owned by Barrick Gold Corporation.

Geology

Two distinct sedimentary rock packages occur on the property. They include:

1. Upper plate, siliceous sedimentary rocks of the Vinini and Valmy Formations. Chert, mudstone, and greenstone are typical rock types. These rocks are covered by pediment gravels in the northern and eastern portions of the property. Siliceous rocks are generally poor hosts for large, sediment-hosted gold deposits.
2. Lower-plate, Silurian to Devonian age carbonate rocks dominated by silty to muddy limestone, fossiliferous limestone, siltstone, and lesser chert. These rocks are included in the Horse Mountain, Devil’s Gate, Denay, and McColley Canyon Formations. At Red Hill, lower plate carbonate rocks crop out in the mountains and are present beneath pediment gravel and upper plate rocks to the north and east. Carbonate rocks are the preferred host for multi-million ounce gold deposits along the Cortez and Carlin Gold Trends.

The upper and lower plate rock packages are separated by a low angle, regional fault known as the Roberts Mountains thrust. Erosion of the upper plate rocks created "windows" that expose favorable lower plate carbonate rocks. At Red Hill, the JD Window is one of five unique carbonate windows along a 35 mile (56km), west northwest-striking corridor through the Shoshone, Cortez, and Simpson Park mountain ranges. The alignment of carbonate windows coincides with the Cortez Gold Trend (Figure 1). Within this corridor are the +12 million ounce Cortez Hills deposit and the +20 million ounce Pipeline deposit. They are located in the Cortez and Gold Acres windows, respectively.

Lower and upper plate rocks are complicated by numerous high-angle east-northeast, northwest, northeast and north-south striking faults and northwest-striking folds. These structural features provide pathways for hydrothermal alteration and metals. For example, the east northeast-striking Long fault contains hydrothermal alteration and anomalous gold along 7,000 ft (2,134m) of strike length. This fault cuts through a 3,200 by 4,000 ft (975 by 1,219m) area of pervasive red to yellow iron oxidation, decalcification and localized silicification in lower plate carbonate rocks. Historic drilling in this area did not systematically test favorable rocks of the Denay/Red Hills member and McColley Canyon Formation.

Figure 2. Red Hill American Pacific Property Map

Exploration History

Initial work focused on economic evaluation of outcropping antimony mineralization on the east side of the property. Beginning in the 1960's, Cordero, Homestake, Kennecott, Pathfinder, Uranerz, and Romarco completed gold exploration programs on portions of the Red Hill property. Exploration concentrated on silicified and brecciated carbonate rocks exposed along the east-northeast striking Long fault. Four dozen shallow rotary holes tested these altered rocks for near surface, oxide gold mineralization. (Figure 3)  Drill results confirmed anomalous gold and pathfinder elements, but economic gold intercepts were thin and low grade. Other widely spaced, shallow drill holes targeted geochemical and geophysical anomalies within the mountain range.

Figure 3 illustrates drill hole locations and grade thickness (GT) values. Grade thickness values are calculated by multiplying a mineralized interval by the corresponding gold grade. These intervals are summed for the length of a drill hole. The GT value indicates strength of gold mineralization in a drill hole where cooler colors (blue, green) represent lower GT's and warmer colors (orange, red) represent higher GT's. GT values are not tied to economic criteria.

The north and east portions of the project are covered by a thin veneer of unconsolidated pediment (alluvial) gravels. The pediment is a gently sloping surface away from the mountain range where the gravels cover bedrock and potential exploration opportunities. Multi-million ounce, economic gold deposits have been discovered under pediment cover in Nevada including: Pipeline, Cortez Hills, Gold Quarry, and Twin Creeks. Historic drilling at Red Hill did not test for large, sediment-hosted gold deposits beneath pediment gravels. This exploration opportunity was recognized by Miranda and Barrick and it led to the significant results in BRH-013: 45 ft of 0.237 oz Au/t (13.7m of 8.105g Au/t) from 1,920 to 1,965 ft (585.4 to 599.1m).

Figure 3. Red Hill Geology with targets

Joint Venture Exploration

Miranda Gold optioned Red Hill to Placer Dome US, Inc. (PDUS), in 2004. PDUS completed geologic mapping, a CSAMT survey, a systematic soils program, a CO2 gas survey, and one drill hole in 2005. Drill hole PRH0508 was designed to test a gravel covered horst margin inferred from CSAMT data. The hole ended at 940 feet in upper plate chert/mudstone. Favorable lower plate carbonate rocks were not intersected and no significant gold intercepts were encountered.

In 2006, Barrick became Miranda's funding partner at Red Hill following its merger with Placer Dome. Barrick, as operator, completed 9,860 feet (3,006m) of drilling in four holes at the West Pediment prospect and detailed gravity at the East Pediment prospect (Figure 3). Hole BRH-013 intersected 80 feet of 0.146 oz Au/t (24.4m of 4.987g Au/t) from 1,920 to 2,000 feet (585.4 to 609.8m), including 45 feet of 0.237 oz Au/t 913.7m of 8.105g Au/t) from 1,920 to 1,965 feet (585.4 to 599.1m) (Figures 3 and 4). Gold mineralization is hosted by lower plate carbonate rocks of the Red Hill member of the Denay Formation. Altered lamprophyre dikes and high levels of arsenic, antimony, mercury, and thallium are associated with the gold intercept. (Figures 5, 6 and 7)  These features indicate that a Carlin-style gold system is present at Red Hill.

Figure 4. Drill rig on hole BRH-10

Figure 5. EAst-WEst, north viewing cross section

Figure 6. Red Hill Exploration Summary, 2008

Figure 7. Photo of Drill Cuttings from the BRH-013 Gold Zone

In late 2006, Barrick offset BRH-013 with two inclined holes, BRH-014 and BRH-015. These holes were drilled from the BRH-013 site. Both holes tested the lower-plate stratigraphy that hosts the BRH-013 gold intercept. The inclined holes intersected the target horizon approximately 230 ft east-northeast (BRH-014) and 315 ft southwest (BRH-015) from the BRH-013 intercept. Although neither of the two offset holes intersected significant gold mineralization, both holes are locally anomalous in Carlin-style pathfinder trace elements. Silicification and clay alteration occur in both holes and dikes occur in BRH-014. Due to down- hole deviations in the angle holes, drill hole piercepoints are aligned along a northeasterly trend such that stratigraphic and mineralization geometries in BRH-013 could not be defined. Mineralization in BRH-013 is open in a northwest - southeast direction.

Based on their experience in Nevada's Carlin and Cortez Gold Trends, Miranda's senior geologic staff believe the gold intercept in BRH-013 signifies the presence of a new Carlin-type gold system and that extensive drilling will be required to define the geometry and size of the system.

In late 2007, Barrick completed 11,765 ft (3,587m) of reverse-circulation drilling in six vertical holes. Two holes (BRH-016 and BRH-021) were completed offsetting BRH-013. Two additional drill holes at West Pediment, BRH-017 and BRH-017A, ended prematurely in limestone voids / karsting before testing the intended targets. Two holes (BRH-023 and BRH-024) tested gravity gradients and projected splays of the Long fault at the East Pediment prospect. These holes are illustrated in Figure 6.

From drill hole BRH-013, BRH-016 was drilled 650 ft (200m) to the north and BRH-021 was drilled 720 ft (220m) to the northwest. The holes intersected intervals of variably decalcified, silicified and weakly oxidized lower plate limestone and sulfidized igneous dikes similar to those intersected in the BRH-013 gold-bearing interval. Gold mineralization was limited to 10 ft of 0.081 oz Au/t (3.1m of 2.776 g Au/t) from 2,125 to 2,135 ft (648 to 651m) in BRH-021.

At the East Pediment prospect two drill holes, BRH-023 and BRH-024, tested pediment-covered targets outboard from a series of historic antimony prospects. The holes were located based on three criteria: 1) Prospect pits exposing strong decalcification, silicification, antimony mineralization, and anomalous gold mineralization in lower plate limestone; 2) Gravity data that identified structural features beneath shallow pediment cover; and 3) Projected splays of the Long fault. The holes intersected similar geology: A thin veneer of alluvium, upper plate siliciclastic rocks and a fault gap that removed the targeted lower plate limestone. Anomalous gold was restricted to 5 to 10 ft (1.5 to 3.1 m) zones. Exploration opportunities remain near the historic antimony prospects.

In 2008, Barrick completed 5,110 ft (1,558 m) of drilling in two vertical reverse-circulation holes (BRH-025 and BRH-026) at the West Pediment prospect. No significant gold values were intersected in either drill hole. Barrick terminated the funding agreement in October, 2008. Exploration expenditures exceeded $1.3 million.

Previous operators believed a variety of high-quality drill targets exist at Red Hill and that the property has not been systematically drill tested. Priority targets include (Figure 6):

1. A high quality exploration opportunity exists on the strike projection of the CSAMT anomaly, east-southeast of BRH-013. This 2,300 foot by 4,600 foot (700m by 1,400m) area is defined by hydrothermally altered bedrock, a gold/mercury soil anomaly, a gravity low, and a mapped syncline. Bedrock exposures indicate a shallower target zone than in BRH-013.
2. Structurally controlled, high-grade gold targets proximal to BRH-013 (Figure 7). The high-grade gold/lamprophyre dike association may represent a more compact and structurally controlled Carlin-style gold system than previously envisioned. Widely spaced drill holes may have underestimated the exploration potential of this gold system.
3. Drill targets proximal to the historic antimony pits on the east side of the project. Twenty holes were drilled in this area, however, only three holes exceeded 700 ft (213 m) depths. These three holes ended in 35-150 ppb gold. A review of historic drilling indicates these holes did not systematically test the Red Hill member of the Denay Formation, the unit hosting mineralization in BRH-013. Deeper targets in the McColley Canyon Formation have not been tested

NuLegacy has consolidated four separate properties that encompass approximately 45 square miles (28,800 acres) of mining claims into their "Red Hill Prospect." (Figure 8)

Figure 8. Red Hill Prospect

The first property NuLegacy optioned was American Pacifics’s Red Hill project in October, 2009.

In 2010, NuLegacy optioned both the Barrick ground that is adjacent and west of Red Hill, and the Idaho Resource property that lies to the east of Red Hill. Terms of these option agreements can be found on NuLegacy's website.

During 2010 and 2011, NuLegacy’s drill effort concentrated on the east-northeast trending Long Fault extending across the southern portion of the Red Hill claim block.

By the end of 2010, NuLegacy completed four reverse circulation holes in American Pacific’s Red Hill property spaced more than 3,280 ft (1,000 m) apart and totaling 4,920 ft (1,515 m). Two of three holes collared in a large 7,380 ft x 3,300 ft to 9,900 ft (2,250 m x 1,000 m to 3,000 m) CSAMT/IP/Resistivity geophysical anomaly intersected mineralization in RHM10-001 10 ft of 0.016 oz Au/t (3m of 0.546g Au/t) and RHM10-002 30 ft of 0.012 oz Au/t (9.1m of 0.409 g Au/t). The fourth hole collared in a gold-in-soil anomaly intersected 69 ft (21 m) of near-surface anomalous gold.  See Miranda's press release dated January 13, 2011, for more details.

In 2011, significant gold mineralization was drilled, potentially being part of a larger gold system on the property in carbonaceous, pyritic siltstone, including the Horse Canyon Formation.  Horse Canyon is known as a geologic host for economic mineralization in the nearby Cortez District. Thick zones (up to 150 ft or 45.7 m) of 10 to 100 ppb gold were reported in all of the 2011 drill holes. The significant drill results for 2010-2011 are reported below.

*True widths of drilled gold intercepts cannot be determined at this time. Gold grades in oz Au/ton are calculated from original data in g Au/t.

Holes with significant gold intercepts, taken together with gold-anomalous holes, may all be part of one or more large gold systems, e.g., the distance between holes RHM10-001 and RHM10-002 is about 2,500 ft (760 m) and there are currently no holes in between the two.

NuLegacy’s efforts for 2012 was to further evaluate the mineralization in BRH-013, southeast of Barrick’s new discoveries at Red Hill (different from American Pacific’s Red Hill) and the Goldrush discovery, in addition to  other drilling, further defining mineralization along the Long Fault Anomaly. Barrick announced a total inferred resource of 3.5 M ozs Au for these discoveries that are located slightly up-trend to the northwest from BRH-13. 

The plan was to core two holes totaling 4,000 to 5,000 ft (1,219-1,524 m) to offset the high-grade gold mineralization in the 2006 reverse circulation hole, BRH-013, that intersected 80 ft of 0.145 oz Au/t (24.4 m of 4.960 g Au/t) including 45 ft of 0.235 oz Au/t (13.7 m of 8.064 g Au/t). The plan was dictated by the new IP(induced polarization)/R(resistivity) deep-penetrating survey completed by NuLegacy around drill hole BRH-13. The survey indicated the structures and hydrothermal alteration related to high-grade gold mineralization in drill hole BRH-13 are much larger and thicker than indicated by the prior IP/R survey. The one core hole, RHM-013C, drilled to a depth of 2,645 feet (805m). It was angled to intersect the high-grade mineralized zone of BRH-13. The down-hole survey confirmed a deflection of the targeted zone by 246 ft (75 m). Observed in the hole was thinly laminated silty-limestone with brecciation, dissolution cavities, and carbon. Long intervals of anomalous gold and trace elements were also present. Arsenic had an average content of 449 parts per million with a high of 2,230 ppm at the same horizon as the gold mineralization in BRH-13.  Joe Hebert, Miranda Gold’s Vice President of Exploration, previously commented, “We can now assume that the mineralization in BRH-13 is structurally controlled and that there is likely a north-south component to the controlling fault.”

American Pacific Mining acquired the Red Hill property from Nevada North Resources in 2021. Under the terms of the agreement, American Pacific will make yearly payments totaling $415,000 over 10 years beginning in 2022.

Upon the Red Hill project commencing production, American Pacific Mining will pay Nevada North a 3% net smelter royalty (NSR), 1.5% of which American Pacific may buy back for US $3,000,000.

Annual Payments
2021 - $25,000
2022 - $25,000
2023 – $25,000
2024 – $40,000
2025 - $40,000
2026 - $45,000
2027 - $50,000
2028 - $55,000
2029 - $55,000
2030 - $55,000