Preliminary Economic Assessment

The full National Instrument 43-101 technical report titled "Technical Report and Preliminary Economic Assessment (PEA) for Combined Mill and Heap Leach Processing at the North Bullfrog Project, Bullfrog Mining District, Nye County, Nevada" is available HERE.   Below is a summary of the results as reported and effective as of June 16, 2015 as amended and restated May 18, 2016:


North Bullfrog Project - PEA Summary Results
(values in 2015 US$ based on $1,200 gold price, mining recoverable resources defined by pit shells and 0.52 g/t gold mill breakeven grade and 0.15 g/t gold heap leach breakeven grade)

Parameter Summary Data
Mineral resource - Measured Au and Ag 4.04 Mt @ 2.43 g/t  Au for 316.2 kozs & @ 18.89 g/t Ag  for 2.46 Mozs
Mineral resource - Indicated Au and Ag 22.14 Mt @ 0.41 g/t Au for 289.6 kozs  & @ 1.18 g/t Ag for 0.84 Mozs
Mineral resource - Inferred Au and Ag 137.09 Mt @ 0.21 g/t Au for 926.2 kozs & @ 0.75 g/t Ag for 3.32 Mozs
Pre-Tax Total Cash Flow; IRR at US$ 1,200* per Au oz US$ 479 M;  53%
Post-Tax NPV(5%) ; IRR at US$ 1,200* per Au oz US$ 246 M;  38%
Overall Strip Ratio 0.6 to 1 (overburden to mined mineral resource)
Avg. Annual Gold Production Years 1-6* 154 k Au oz/year
Avg. Annual Gold Production Years 7-10* 69 k Au oz/year
Avg. Gold Recovery - Mill 86.8%
Avg.  Gold Recovery – Heap Leach 73.9%
Avg. Cash Cost US$ 635/Au oz
Project Total Capital Cost US$ 206/Au oz
Avg. Silver Recovery - Mill 71.4%
Avg. Silver Recovery – Heap Leach 6%
Avg. Total Mining Rate 69.7 k tonne/day
Avg. Mineralized Material Mining Rate 44.4 k tonne/day

* - Silver:Gold price ratio = 73.7,  $900 gold WhittleTM pit used for base case production for PEA analysis 


Base Case Gold Price Sensitivity Analysis – North Bullfrog Project
(cash basis, all values in constant 2015 US$)

Gold Price
Pre-Tax Total Cash Flow ($M) NPV5% ($M)  Post-Tax* IRR
$1,000 234.7 $102.9 20.5 3.0
$1,100 356.7 $174.9 29.6 2.5
$1,200 478.7 $245.9 37.9 2.2
$1,300 600.8 $317.4 45.8 1.9
$1,400 722.8 $387.6 53.2 1.8

* - considers production royalties, Nevada mineral net proceeds and US Federal Income Tax


North Bullfrog
Corvus Gold land position at North Bullfrog with mineral resource areas shown


PEA Key Physical Data - North Bullfrog Mill & Heap Leach Project

Key Physical Data
Units Value
Heap Leach Feed Mined M tonnes 156.8
Mill Feed Mined M tonnes 7.1
Overburden Mined M tonnes 95.8
Total Material Mined M tonnes 259.7
Mine Life* Years 10
Contained Gold Mozs 1.53
Recovered Gold Mozs 1.19
Contained Silver Mozs 6.61
Recovered Silver Mozs 2.49
Average Strip Ratio Overburden/Process Feed 0.60
Avg. Diluted Gold Grade Heap Leach g/t 0.22
Avg. Diluted Gold Grade Mill g/t 1.92
Avg. Gold Recovery % 78%
Annual Process Feed Mined M tonnes/yr 16.2
Avg. Annual Gold Produced Au kozs/yr 117.0

*-excludes leach pad rinse period at end of mine life


Operating Costs - North Bullfrog Mill & Heap Leach Project

Cost Cost per Process tonne ($/tonne) Cost/Recovered Gold Oz ($/Oz)
Mining $2.41 $332
Processing $1.65 $227
Administration $0.43 $ 60
Reclamation $0.12 $17
Total Operating Cost $4.62 $635

PEA Initial Capital Estimate - North Bullfrog Project

Capital Area Estimated Capital Cost (US $M)
Initial Capital $129.8M
EPCM $19.1M
Contingency $26.5 M
Total Initial Capital Cost $175.4M
Sustaining Capital 83.3 M
Total LOM Capital Cost 258.7M

Estimated capital costs are listed in above, where they are divided between initial and sustaining capital.  The initial capital is estimated to be US $175.4M which includes equipment and construction, Engineering, Procurement and Construction Management (EPCM) and Contingency. Sustaining capital includes leach pad expansions, mobile equipment purchases and rebuilds. Life of mine sustaining capital is estimated to be US $83.3 M.


WhittleTM Input Parameters used for the North Bullfrog Mineral Resource Estimation

Parameter Unit Mayflower* Jolly Jane* Sierra Blanca* YellowJacket
Mining Cost US$/total tonne 1.64 1.42 1.62 1.62
Au Cut-Off*** g/tonne 0.20 0.15 0.15 0.56
Processing Cost US$/ process tonne 1.72 1.72 1.72 11.57
Au Recovery % 70.0 72.0 74.0 86.8
Ag Recovery % 8.0 8.0 0 71.4
Administrative Cost US$/process tonne 0.50 0.50 0.40 0.40
Refining & Sales US$/tonne 0.07 0.04 0.02 0.11
Au Selling Price US$/oz 1,200 1,200 1,200 1,200
Slope Angle Degrees 50 50 50 50

 * - assumes heap leach processing of disseminated mineralization  
** - assumes Gravity - CIL mill processing of YellowJacket mineralization
*** - break-even grade derived from Whittle input parameters at US$1,200 per ounce gold price, and Gold:Silver price ratio of 59.2 for Mayflower and Jolly Jane, and of 73.7 for Sierra Blanca and YellowJacket

The Company cautions that the PEA is preliminary in nature, and is based on technical and economic assumptions which will be further evaluated in more advanced studies.  The PEA is based on the North Bullfrog resource model (as at June 16, 2015 as amended and restated May 18, 2016) which consists of material in the measured, indicated and inferred classifications.  Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.  The current basis of project information is not sufficient to convert the mineral resources to mineral reserves, and mineral resources that are not mineral reserves do not have demonstrated economic viability.  Accordingly, there can be no certainty that the results estimated in this PEA will be realized.  The PEA results are only intended as an initial, first-pass review of the potential project economics based on preliminary information.

The PEA assumes development of a conventional drill and blast, surface mine using haul trucks and front end loaders, milling of higher grade mineralization with gravity-cyanide leaching, of the YellowJacket mineral resource, and heap leach processing of low grade mineralized material from the Sierra Blanca, Jolly Jane, and Mayflower mineral resources .  Mineralized material from the YellowJacket vein and stockwork mineral resource would be delivered to a processing plant incorporating a gravity concentration circuit with intense cyanide leaching of the gravity concentrate followed by cyanide leaching of the gravity tail product. Tail materials would be stored in a conventional, lined tailing storage facility (TSF). Lower grade disseminated mineralization would be processed by heap leaching of run of mine (ROM) material. Ultra-high intensity blasting would be performed to minimize particle size for enhanced heap leach recoveries and would allow transport and stacking on a heap leach pad using a feeder/conveyor/stacker system.  Gold and Silver in leachate solutions would be recovered from carbon from both process plants and a doré would be produced in a refinery located in the Mill.  Sensitivity of the projected financial performance of the North Bullfrog project is listed around the Base Case assumption of a constant gold price of US $1,200 per ounce.

The PEA uses gold and silver recoveries for a gravity-cyanide leach mill that are estimated from two sets of metallurgical composite samples developed from PQ core materials generated in YellowJacket drilling programs during 2013 and 2014. Gravity concentrate samples were developed using a KnelsonTM concentrator. The KnelsonTM feed was ground to P80 -0.21mm (-65 mesh). The produced gravity concentrate was then re-ground to P80 -0.044mm (-325 mesh), and subjected to intense cyanide leaching. The leached concentrate was then re-combined with the gravity tail product and ground to P80 -0.074mm (-200 mesh) before the final cyanide leach to maximize gold and silver recovery. Average recoveries of 86.8% for gold and 71.4% for silver were assumed for the mill process plant.

Heap leach metallurgical recovery estimates are based on column leach testing data for composite samples constructed from Mayflower, Jolly Jane, and Sierra Blanca 2012 PQ core drilling. A total of 23 column leach tests have been run at McClelland Laboratories at a particle size of 80% passing -19 mm (-3/4 inch) for the four resource areas. The process recovery assumptions reflect consideration of particle size resulting from ultra-high intensity blasting with a particle size of P80 -84mm (-3.3 inch), similar to a primary crushing product, scaling for the effects of vertical lift heights of > 10m (30 ft) and a leach time of 1000 days. The leach pad production model predicts an average gold recovery of 74%, and an average silver recovery of 6% of the fire assay grade.

A summary of the PEA results for the base case gold price assumption of US $1,200 is listed in Table 3. Working capital and initial fills, which are recovered at the end of year 1 and at the end of the project respectively, were estimated to be US $16.4 M.  Operating costs included in the PEA were based on mining, processing, administration and reclamation, and are listed above, where they are normalized to process tonnage and recovered gold ounces.  Total LOM cash operating costs are projected to be US $635 / produced Au oz and LOM capital cost (adjusted for recovery of pre-strip mining, working capital recovery and initial fills recovery) was estimated to be an additional US $206 / produced Au oz.

Cash Flow Model Inputs and Assumptions

Mineral Resources - The analysis included measured, indicated and inferred mineral resources in the mining and economic study.  Measured and indicated mineral resources make up 91% of the mill gold production plan and 17% of the heap leach production plan with the remainder being inferred mineral resource. 

Project Schedule- The project schedule assumed a one (1) year period for construction of the mine infrastructure, and the initiation of mining at the YellowJacket and Sierra Blanca mineral resources. Mining was assumed to start at Mayflower in year 4 and at Jolly Jane in year 7.  Production from the four mineral resources was blended to level the required number of haul trucks with a peak mining rate of 89,300 tonnes per day.

Mining Method - A standard surface mine using a drill, blast, load, and haul mining plan was used for the study, assuming a 50 degree pit slope.  The mine volume was defined by Lerchs-Grossman optimization methods and the resulting mining volumes were used to develop a production plan that would be robust in a declining price market. Heap leach mineralization was assumed to be blasting using new, ultra-high intensity blasting to improve fragmentation for higher ROM leach recoveries without crushing. Within the mining shapes indicated by the WhittleTM analyses, a processing cut-off grade of 0.1 g/t gold was used for selection of mineralized material to be sent to the heap leach processing facility and 0.372 g/t for mineralized material to be sent to the mill processing facility.  Conceptual locations for the crusher, heap leach feeder/conveyor, and overburden dumps were used to estimate truck haulage cycles, and the production schedule was constrained by the truck fleet capacity.

Processing Methods - A conceptual heap leach model was developed for the northern area of North Bullfrog to be operated at a peak placement rate of 58,000 tonnes (average rate of 44,400 tonnes) of mineralized material per day, with all material assumed to be blasted to 80% - 84mm (-3.3 inch), and transported and placed by a conveyor/stacker system. The higher grade, YellowJacket vein and stockwork mineralization was assumed to be crushed and milled at a rate of 3,000 tonnes/day with a final grind size of 80% -0.074mm (-200 mesh). Gold would be recovered by intense cyanide leaching of a gravity concentrate and a final cyanide leaching of tail products. Both of these processing approaches are supported by metallurgical test data.

Gold Recovery Model - Mill process recoveries were estimated from metallurgical testing of gravity concentration, intense cyanide leaching of the gravity concentrate, and final cyanide leaching of the tail products. A total of six different sample composites were created from PQ core developed in 2013 and 2014 drilling programs, and were tested to characterize the variation of vein and vein stockwork materials. Heap leach process recoveries were estimated based on the results of column leach testing of composite samples created from the 2012 PQ core metallurgical drilling program.  A total of 23 sample composites from the 3 current resource areas were prepared from 2012 PQ core and used to create duplicate column tests at a nominal crushed size of 80% -19 mm (-3/4 inch).  The column leach test data was used with recovery models that simulated the ROM particle size gradation, the effects of time for 1000 days leaching and leach pad loading geometry to project the produced gold and silver. The recovery model predicted LOM average gold recovery to be 74% of contained gold content and 6% of contained silver content.

Operating and Capital Cost Estimates - Preliminary capital and operating costs were developed using information available from other Nevada milling and heap leach operations, a commercially available mining and development cost database, plus all available project technical data and metallurgical/process related test work.  Detailed design work, used to assess the potential for a smaller scale start up mine, has been used to refine the capital cost estimate.  Preliminary configurations of the site infrastructure alternatives (mill, heap leach pad, tailing storage facility, overburden storage facility, roads, shops, offices, etc.) have been evaluated and an arrangement was defined as the basis of capital cost estimates.  Capital costs were developed based on a nominal mining rate of 44,400 tonnes of mineralized material per day. Total processed material would be 163.7 M tonnes.  Major mobile equipment was assumed to be financed over the first five years of life.  All costs are in constant US$ from Q2 2015. No escalation was applied in the financial model.

Taxes and Royalties - Taxes and royalty charges were included in this PEA.  Taxes included the Nevada Mineral Net Profit tax at the maximum rate of 5% of cash flow net of operating costs, depletion and depreciation of capital costs. US Federal taxes were 26% of cash flow net of operating costs, depletion and depreciation of capital costs. Net smelter return (NSR) royalties apply to about 15% of the projected gold production with a 4% NSR on the Mayflower production and a 1-4% NSR on a portion of the Jolly Jane production (the Company has buy-out rights on all royalties).

Revenue - Revenue was determined in the base case financial model assuming a constant US $1,200 per gold ounce gold price. All sensitivities to gold price assumptions were assessed using constant US$ prices.

Qualified Person and Quality Control/Quality Assurance

Jeffrey A. Pontius (CPG 11044), a qualified person as defined by NI 43-101, has supervised the preparation of the scientific and technical information that form the basis for the news release dated June 16, 2015 titled “Corvus Gold Announces Preliminary Economic Assessment (PEA) Results for the North Bullfrog Project, Nevada and has reviewed and approved the disclosure herein.  Mr. Pontius is not independent of Corvus, as he is the CEO and holds common shares and incentive stock options.

Carl E. Brechtel, (Nevada PE 008744 and Registered Member 353000 of SME), a qualified person as defined by NI 43-101, has coordinated execution of the work outlined in the news release dated June 16, 2015 titled “Corvus Gold Announces Preliminary Economic Assessment (PEA) Results for the North Bullfrog Project, Nevada and has reviewed and approved the disclosure herein.. Mr. Brechtel is not independent of Corvus, as he is the COO and holds common shares and incentive stock options.

The work program at North Bullfrog was designed and supervised by Mark Reischman, Corvus’ Nevada Exploration Manager, who is responsible for all aspects of the work, including the quality control/quality assurance program.  On-site personnel at the project log and track all samples prior to sealing and shipping.  Quality control is monitored by the insertion of blind certified standard reference materials and blanks into each sample shipment.  All resource sample shipments are sealed and shipped to ALS Chemex in Reno, Nevada, for preparation and then on to ALS Chemex in Reno, Nevada, or Vancouver, B.C., for assaying.  ALS Chemex’s quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025:1999.  Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples.  Finally, representative blind duplicate samples are forwarded to ALS Chemex and an ISO compliant third party laboratory for additional quality control.

The Qualified Persons, Scott E. Wilson, Stephen Batman and William J. Pennstrom have visited the North Bullfrog site during 2014 and 2015. Mr. Wilson has performed data verification by examining core materials at the site, and has selected quarter core samples to develop independent verifying assays of intervals by the ALS Chemex laboratory in Reno, NV. Geologic data development processes were reviewed and observed during the site visit. All drilling geologic description, assaying data and geochemical data have been provided in a database format to Metal Mining Consultants Inc. for the purpose of estimating the resource.  All Qualified Persons have the news release dated June 16, 2015 titled “Corvus Gold Announces Preliminary Economic Assessment (PEA) Results for the North Bullfrog Project, Nevada and has reviewed and approved the disclosure herein. and approve its publication.

Mr. Scott E. Wilson, CPG, President of Metal Mining Consultants Inc., is an independent consulting geologist specializing in Mineral Reserve and Resource calculation reporting, mining project analysis and due diligence evaluations.  He is acting as the Qualified Person, as defined in NI 43-101, for the overall technical report, and the Mineral Resource estimate.  Mr. Wilson has over 26 years experience in surface mining and is a Registered Member (#4025107RM) of Society for Mining, Metallurgy and Exploration, Inc.  Mr. Wilson and Metal Mining Consultants, Inc. are independent of the Company under NI 43-101.

Mr. Stephen Batman, Principal Engineer at SBB Mining Solution LLC, is an independent consulting mining engineer specializing in mine design, production scheduling, pit optimization and equipment specification. He is acting as the Qualified Person, as defined in NI 43-101, for the mining methods section of the technical report. Mr. Batman has over 29 years of experience in the mining industry and is a Registered Member (#181580RM) of the Society for Mining, Metallurgy and Exploration, Inc. Mr Batman and SBB Mining Solution LLC are independent of the Company under NI 43-101.

Mr. Herbert Osborne, SME, a consulting metallurgist, has acted as the Qualified Person, as defined by NI 43-101, for evaluation of the metallurgical testing data and estimation of the process metallurgical recoveries. He has over 50 years of experience in mineral process design and operations. He is a Registered Member of the Society of Mining, Metallurgy and Exploration (#2430050 RM). Mr Osborne is independent of the Company under NI 43-101.

Mr. William J. Pennstrom, Jr., a consulting process engineer and President of Pennstrom Consulting Inc., has acted as the Qualified Person, as defined by NI 43-101, for process operating cost estimation, project capital cost estimation and evaluation of the financial performance for the PEA. He has over 30 years of experience in mineral process design and operation, and has been an independent process and metallurgical consultant for the mining industry for the last thirteen years.  He is a Registered Member of the Society of Mining, Metallurgy and Exploration (#2503900RM).  Mr. Pennstrom and Pennstrom Consulting Inc. are both independent of the Company under NI 43-101.