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Elko-based U.S. Gold Corp. hopes to begin exploration drilling again in good weather this year at its Keystone exploration site in Nevada’s Eureka County and maybe at its Copper King site near Cheyenne, Wyoming.

“It will probably be mid-April at some sites,” the company’s vice president of exploration, Dave Mathewson, said in late January. “May is always pretty safe.”

At Keystone, the company completed a late autumn drilling program on its 20-square-mile site that tested several major targets the company had earlier been unable to drill because of the U.S. Bureau of Land Management’s surface restrictions of 5 miles without a study.

Once an environmental assessment and plan of operation received BLM approval and additional permits were acquired, U.S. Gold began reverse-circulation drilling at six target sites and ended the drilling in December.

“We have a plan for almost the entire project area for a major exploration project,” Mathewson said. “It’s in the heart of the Cortez Trend. We’re very excited about it.”

Mathewson said the environmental assessment took 19 months and cost the company “an entire field season. I would like to see the permitting system changed. It’s discouraging to exploration.”

He said in late January that he believes geology at Keystone has been misinterpreted in the past, so the company has been doing a lot of work to “get a better understanding of the project,” which he said shows similarity to the geology of the Barrick Gold Corp.’s Cortez Hills and Goldrush sites.

U.S. Gold acquired the entire Keystone district in 2016, including Gold Bar North. Keystone is south-southeast of Cortez Hills and roughly 54 miles southeast of Battle Mountain. There was historic mining at Keystone in the 1880s, and remnants of foundations from a little town remain.

“I think its remoteness had an impact,” Mathewson said. He believes, however, that Keystone is a major opportunity.

“The largest push is Keystone and getting all the data. It’s a big project for a little company,” Mathewson said.

A master’s thesis completed by Gabriel Aliaga, a U.S. Gold-sponsored geology major at the University of Nevada, Reno, provided new understanding of the Keystone district’s geology, providing age-dating of intrusive rocks and their associated hydrothermal gold systems, according to a Dec. 18 news release from U.S. Gold.

U.S. Gold isn’t doing anything with the Gold Bar North property at this point but hopes to drill again at the Copper King location in Wyoming.

Copper King

At the Copper King site, the company completed eight holes of drilling at the site of an old mine in 2018 following the discovery of mineralization in one of four 2017 drill holes. The drilling on the one hole “hit big mineralization and was a big surprise,” Mathewson said.

U.S. Gold reported the 2018 holes showed mineralization extending to the west at the historic site where copper and gold were mined underground in the past.

“There are multiple metals here. Very early on there was copper and gold and high-grade zones mined in the past,” Mathewson said on a Nov. 6 tour of the Wyoming site.

He said silver and zinc also have been identified, and “those will be dealt with in an open pit situation.”

An assessment prepared by Mine Development Associates in 2017 showed a pretax net present value of $178.5 million based on gold at $1,275 an ounce and copper at $2.80 per pound. The preliminary assessment estimates a measured and indicated resource of 966,000 ounces of gold and 236 million pounds of copper and an inferred resource of 184,000 gold ounces and 62 million pounds of copper.

“It’s a big deposit, about 2,000 feet long by up to 800 feet wide and 600 feet deep,” Mathewson said. “It’s open pit. It has an open pit design to it.”

He said the gold deposit likely would need crushing and flotation to process because it is sulfidic material. Cyanide wouldn’t be used.

A pit lake after mining would not be acidic and could be a recreation resource or a water resource for the City of Cheyenne, Mathewson said.

A flotation mill could be located off Interstate 80 on a separate site from Copper King, he said he envisioned. Copper King is 1,120 acres roughly 20 miles west of Cheyenne.

“Copper King has had a long history of several exploration programs conducted by numerous companies, but U.S. Gold is the first company to significantly expand the potential in many years,” Mathewson stated in an October news release.

“The more time I spend on the Copper King property and looking at the data, the more I am convinced that we can continue to increase the overall metal endowment of the project,” he said.

U.S. Gold is examining all area exploration data to identify additional targets on the area.

The company has commissioned DataMine Associates of Denver to assist in creating an expanded exploration model for the Copper King deposit, and Mathewson estimates a roughly 20 percent increase in gold and copper mineralization.

U.S. Gold leases access to the Copper King exploration site west of Cheyenne near Curt Gowdy State Park from Ferguson Ranch Inc.

Paul “Robin” Jones, district one supervisor for the Wyoming Department of Environmental Quality’s Land Quality Division, said in early February that DEQ hasn’t received any new proposals for more drilling at Copper King, but DEQ permitted the earlier drill holes and found that U.S. Gold had met its reclamation obligation after the drilling.

“If they drill again, they will have to come in again,” he said.

DEQ requires permits and bonding for exploration projects to be sure the drill holes and roads are reclaimed after the drilling. The agency checks any proposed site before permitting and again when the work is completed, Jones said.

One of the companies that mined at Copper King was Hecla Mining Co., which had a mill to process copper and gold from the underground operations, probably in the 1930s, Mathewson said. The mill building is still standing, but the underground workings have been reclaimed for safety reasons.

“It’s all been underground at Copper King,” Mathewson said, describing the workings as shallow shafts. “They just chased the high-grade zones.”

Copper King history

The State of Wyoming holds the mineral rights at Copper King, and U.S. Gold leases them. The state would receive a 5 percent royalty, if there is mining. Copper King is in the Silver Crown Mining District. According to the preliminary assessment, the district started in the early 1880s.

The assessment lists numerous companies that explored in the Copper King area from early days to current times. Saratoga Resources drilled in 2006-2008, and that company was acquired by Strathmore in 2012. Strathmore was acquired by Energy Fuels in 2013, and Laidlaw Ltd. acquired Copper King was Energy Fuels in 2015.

“We’re not a mining company. We’re an exploration company that will then market to a company to mine,” Mathewson said. “The goal is to have a joint venture or sell the project.”

U.S. Gold Corp.’s president and CEO, Edward Karr, said in an October 2018 news release that “our future exploration programs will continue to attempt to expand the overall resource and net present value of the project.”

Mathewson joined Dataram Corp. in 2016. Dataram was a data chip company that decided to shift into a different business and officially became U.S. Gold in June 2017 with a new NASDAQ symbol of USAU. A news release on June 26, 2017, states that the symbol change was “the final evolution of our acquisition of Gold King Corp. (formerly U.S. Gold Corp.).”

Mathewson has 40 years of exploration experience in Nevada, including with Newmont Mining Corp. He also was involved with Gold Standard Ventures Corp. on the Railroad Trend and founded Tone Resources that was acquired by what is now McEwen Mining Inc.

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