For the nine months ended May 31, 2022
This Management Discussion and Analysis ("MD&A") of Black Mountain Gold USA Corp. ("Black Mountain" or the "Company") has been prepared by management as of August 2, 2022 and should be read in conjunction with the Company's condensed interim consolidated financial statements for the three and nine months ended May 31, 2022 and 2021 (the "Financial Statements") and the Company's audited consolidated financial statements for the year ended August 31, 2021. The Financial Statements and related notes have been prepared in accordance with International Financial Reporting Standards ("IFRS"). Additional information regarding the Company can be found on SEDAR at www.sedar.com . All of the following amounts are expressed in Canadian dollars unless otherwise stated.
This MD&A contains forward-looking statements. Statements regarding the adequacy of cash resources to carry out the Company's exploration programs or the need for future financing are forward-looking statements. All forward-looking statements, including those not specifically identified herein, are made subject to cautionary language. Readers are advised to refer to the cautionary language when reading any forward-looking statements.
The Company was incorporated under the Canada Business Corporations Act on July 21, 2015. The Company is listed for trading on the TSX Venture Exchange (the "Exchange") as a Tier 2 mining issuer under the symbol "BMG.V" and on the OTCQB Venture Market under the ticker symbol "BMGCF".
In September 2021, the Company granted 1,700,000 stock options to various directors, officers, and consultants of the Company at an exercise price of $0.40 per share for a period of five years. These options vested immediately.
During the nine months ended May 31, 2022, the Company issued 7,112,500 common shares in connection with the exercise of 7,112,500 warrants with an exercise price of $0.12 for total proceeds of $853,500.
For the nine months ended May 31, 2022, the Company incurred acquisition and exploration expenditures of $668,140 as compared to $960,838 in the comparative period of 2021.
For the nine months ended May 31, 2022
For the nine months ended May 31, 2021
For the nine months ended May 31, 2022
The total cumulative acquisition and deferred exploration costs of the Company up to May 31, 2022, are summarized as follows:
Effective July 4, 2020, as amended August 30, 2020, October 7, 2020 and April 19, 2022, the Company entered into the Definitive Option Agreement to acquire, by way of option, up to 90% of certain mining claims in the Weaver Mining District, Mohave County, Arizona, USA. Pursuant to the Definitive Option Agreement, the Company can earn up to a 90% interest in the Mohave Gold Property by making cash option payments and incurring exploration expenditures as follows:
For the nine months ended May 31, 2022
As part of the Definitive Option Agreement, the Company assumed the obligations under Underlying Option Agreement with DDS Resources LLC and Mohave Mine Partnership LLC (collectively, the "Vendors"). To meet these obligations, the Company must complete the following:
Upon the final payment of US$3,000,000, the Vendors will be granted a net smelter royalty of 1.5% on the Mohave Gold Property.
The Mohave Gold Property, located in Mohave County, Arizona, consists of 149 lode claims and 11 mill site claims totaling about 1,177 ha. The area has seen small scale mining and exploration activity since the late 1800s and continued until 1995. No material exploration activity has been completed on the Property since 1995 with the exception of rock chip and soil sampling by McEwen Mining (2017-2018) and a surface sampling program completed by M3 Metals in 2020.
The Property area covers numerous historic gold mines in the Weaver Mining District, Mohave County, Arizona, USA. In addition to the historic gold mines on the Property, there is an approximate 5-kilometregold-in-soil and gold-in-rock geochemical anomaly that extends across the entire length of the Property. Large areas of the anomalous gold geochemistry including several historic gold mines have not had any modern exploration or drilling. Precious metal mineralization occurs in zones of low-sulfidation epithermal veining, breccia and stockworks dominated by quartz and calcite, most of which are low angle structures, in the northern part of the property. The precious metal mineralization in the southern part of the Property occurs with larger, steeply dipping quartz carbonate vein systems.
There have been more than 600 historic drill holes totaling approximately 63,000 feet drilled on the Property primarily focusing on the development of historic non-compliant resources within limited areas on the Property. All the historic drilling has been done in the northern half of the property, and most of these holes were shallow, 35m foot-deep,air-track holes, many of which stopped in gold mineralization. Most of the work was done by private companies in the 1980s and 1990s with an investment estimated at US$12,000,000 developing the historic resources in the northern part of the Property rather than exploring the potential for a much larger deposit.
Previous development work includes blasting of an initial bench at the Klondyke Mine representing the beginning of open-pit style operations. The blasted material remains stockpiled next to the primary jaw crusher located at the 350 tonne-per-hour crushing facility that remains on the Property's mill-site claims where heap-leach infrastructure including a heap-leach pad, buildings, a jaw crusher, two cone crushers and a conveyor system were installed and remain in good condition.
Significant potential for identifying and defining new mineralized areas is supported by widespread elevated gold-in-soil anomalies and mineralized rock outcrops occurring across the Property. Potential targets include expanding on historic drilled areas on the northern half of the Property and the large elevated geochemical untested/undrilled areas as well as historic small-scale underground mines that occur on the southern half.
For the nine months ended May 31, 2022
The historically reported high-grade underground mines on the southern half of the property have not been exploited at a commercial scale. Current geological models indicate that there may be depth extensions or "feeder zones" beneath the well-mineralized areas on the property. Surface rock chip sampling by M3 in 2020 and Black Mountain Gold in 2021 identified the potential for stacked zones of low angle mineralization in the northern part of the Property
Exploration by the Company commenced in November 2020 with the compilation of historic data to support the development of a geologic model for precious metal mineralization on the property and the planning of airborne geophysical surveys to identify trends associated with known prospects. The compilation work and the geophysical surveys will provide important data to support the targeting of drill holes in the planned 2021 program.
In November 2020, the Company completed airborne magnetic ("MAG") and radiometric ("RAD") geophysical surveys on its Mohave Gold Property in Arizona. The survey was completed by Precision GeoSurveys Inc. utilizing helicopter-borne survey equipment over a grid covering the entire Mohave Gold Property (approx. 12 km2) with line spacings of 50m.
The geophysical survey consisted of 99 east-west survey lines spaced 50m with 7 north-south tie lines spaced 500m for a total survey coverage of 298 line km. Flight height was 30m above surface and a Scintrex CS-3 cesium vapour magnetometer sensor, with sensitivity better than 0.01 nT, in a nose-mounted stinger configuration was utilized. The radiometric survey was completed with a self-calibrating NaI(T1) gamma radiation detection system with 256 channel output and a 1 Hz sampling rate.
The geophysical surveys provide a regional overview of the Property geology and a preliminary review of the data indicates several areas of potential gold mineralization which warrant further investigation by drilling. The preliminary Total Field MAG survey reveals a north-south trending high along the eastern margin of the property. This feature is interpreted as the main fault-bounded contact between the Precambrian gneiss to the east and the Tertiary volcanic package to the west which hosts the majority of the precious metal mineralization encountered to date on the property. In the centre east part of the block a strong oval MAG high, approx. 1km by 500m, within a general MAG high 3km by 3km, correlates with and expands the interpreted footprint of an intermediate intrusion with sericite alteration identified during mapping. This intrusion is interpreted as a potential heat source that drove the hydrothermal system that scavenged gold and silver from the Precambrian rocks to the east and fed the main fault and hangingwall structures that host the precious metal mineralization prior to extension and tilting on the Property. Several additional small MAG highs occur on the property and warrant further investigation.
The preliminary results of the RAD Total Count Survey identified an anomaly high coincident with the high MAG anomaly discussed above and likely represents the widespread sericite alteration identified by mapping and that is prevalent throughout the eastern part of the Property. Compilation and interpretation of the geophysics data is ongoing and final results which will be incorporated in the geological model in preparation for drillhole target definition.
Late in 2020 the final results of the airborne surveys were received.
The MAG survey data, predominantly Total Magnetic Intensity (TMI) and Reduced to the Pole (RTP), suggest two domains, north and south, of variable magnetic signature. In the northern half of the Property the MAG data outlines several discrete circular MAG-high anomalies which correlate well with mapped diorite bodies associated with areas of precious metal mineralization as well as several additional zones with little to no exploration history. In addition, the MAG data reveals several prominent areas of northeast- trending faulting and zones of intersecting faults that correlate with relatively flat-lyinggold-bearing quartz- calcite veining which warrant additional geological mapping and sampling.
For the nine months ended May 31, 2022
In the southern portion of the property the MAG data indicates the area is dominated by north-south trending faults which intersect a MAG-low corridor. Historic mining and sampling in the southern portion of the Property indicates gold mineralization is hosted primarily by steeply dipping quartz-carbonate veins. The MAG data suggests some of the quartz veining in the area correlates to the intersection of north-south trending structures and the northwest trending MAG-low corridor. This area has not been explored extensively or drilled and presents interesting targets for follow-up exploration.
The results of the RAD surveys also provided interesting general data. A large Potassium anomaly, approx. 2 km by 1.5 km, is centred over several of the northern prospects, possibly generated by the widespread sericite-alteration identified during geological mapping. A Thorium anomaly is associated with the diorite intrusions and smaller anomalies in areas of limited exposure indicate the potential for buried exploration targets.
The 2021 exploration program at Mohave Gold Property included ongoing data compilation and development of a geological model for the property and for the controls on gold mineralization. A mechanical rock chip channel sampling program of prospective areas delineated by last year's surface sampling program which returned significant gold values, including 78.1 g/t Au over 1.5m, (see M3 Metals press release dated May 5, 2020) was completed during the quarter. Sampling was undertaken using a portable mechanical rock saw with diamond blades via cutting two continuous parallel lines approx. 5 cm deep and then chiseling out the rock sample. One hundred samples, including standards and blanks, were submitted to American Assay Laboratories in Sparks, Nevada and results were included in the Company press release dated June 9, 2021 and in the table below. Channel sampling was focused on the northern half of the Project with the prospects Klondyke, Apex, Jim & Jerry and Scout. Results of composited channel samples are presented in the table below and indicate that gold grades vary from 0.31 g/t Au to 53.8 g/t Au and composited widths vary from 1m to 24.75m. Sampling focused on areas of low sulfidation epithermal gold mineralization hosted by quartz-calcite veins, stockwork zones and breccias associated with low angle structures. Zones of gold mineralization varied from quartz-calcite veins and breccia returning 53.8 g/t Au and 92.4 g/t Ag over 2.8m to large zones of stockwork veining dominated by quartz-calcite in altered andesite which yielded up to 24.75m of 0.71 g/t Au and 4.2 g/t Ag.
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Black Mountain Gold USA Corp. published this content on 02 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 August 2022 23:11:03 UTC.