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Cape Ray Project

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Overview

Mine TypeOpen Pit & Underground
StagePreliminary Economic Assessment
Commodities
  • Gold
  • Silver
Mining Method
  • Truck & Shovel / Loader
  • Longhole stoping
Mine Life7 years (as of Jan 1, 2020)
SnapshotAuMEGA holds a district-scale land package that spans 110 kilometres along the Cape Ray Shear Zone, a significant under-explored geological feature recognized as Newfoundland’s largest identified gold structure.

The Cape Ray Project covers four main deposits along a trend of approximately 14 km. These areas consist of the Central Zone, Window Glass Hill, Big Pond, and Isle Aux Mort.

A Scoping Study 2020 for Cape Ray Gold Project confirms the viability of a standalone gold operation assuming an initial 7-year mine life.

Jan, 2025 - AuMEGA is allocating meaningful capital to make new discoveries and add gold ounces at the Cape Ray Gold Project, which hosts the current mineral resources. AuMEGA will be flying an electromagnetic airborne magnetic survey in February 2025, with results to inform specific drill targets. AuMEGA expects to commence diamond drilling at Cape Ray in mid-2025.

Owners

SourceSource
CompanyInterestOwnership
AuMEGA Metals Ltd. 100 % Indirect
The mineral licenses for the Cape Ray Property are owned by Cape Ray Mining Ltd, a wholly owned subsidiary of AuMEGA Metals Ltd. (formerly Matador Mining Ltd).

Contractors

ContractorContractDescriptionRef. DateSource
unawarded or unknown Power supply Grid power will be provided from an incoming HV line along the access road to the property. Power will be provided by local authorities with an option for them to construct and maintain the transmission line. May 6, 2020

Deposit type

  • Vein / narrow vein
  • Mesothermal
  • Intrusion related

Summary:

Mineralization
The Cape Ray (CR) Fault Zone and its subsidiary structures host at least nine quartz vein-hosted gold zones within the boundaries of the CR Gold Property, recorded as 14 different developed prospects and prospects within the DNR’s Mineral Occurrence Data System (“MODS” or DNR, 2021b). MODS also shows 40 additional mineral showings or indications within the CR Gold Property most of which are gold ± silver and/or Cu-Pb-Zn occurrences in addition to one molybdenum occurrence, three kyanite, and three indications that are notably only for containing elevated pyrite and/or pyrrhotite.

Central Zone
The Central Zone consists of the 04, 41, 51, H, and PW zones, each of which is essentially a tabular body of increased quartz vein density that strikes northeast and dips moderately southeast (50- 60°).

Gold-silver mineralization in the Central Zone is hosted by zones of increased quartz veins, vein breccia, and fault fill veins that are themselves hosted by the “Main Shear”, a structure that separates the WP and GB complexes that is likely the CR Fault Zone. Quartz veins and breccias were preferentially emplaced in strongly deformed and/or altered subunits of mylonite, graphitic schist (20-70 metres wide), chlorite-biotite-magnetite schist (10-25 m thick at 41, 51 zones), and/or chlorite-calcite schist (up to 45 m at 04 Zone). Graphitic schist is perhaps the most common host and locally consists of up to 60% metre- to centimetre-scale fragments of mineralized quartz vein. Veins that occur further away from the Main Shear are typically hosted by more competent lithologies (Dubé and Lauzière, 1997).

WGH and Angus
he Window Glass Hill (WGH) and Angus deposits are centred approximately 2000 metres and 3000 metres, respectively, southwest of the Central Zone and are both entirely hosted within the 424 ± 2 Ma WGH Granite. Deformation in this host granite is generally weak, brittle, and includes a joint set oriented parallel to the mineralized quartz veins. Localized zones of higher deformation occur at the contact between the WGH Granite and host WP Complex and are defined by centimetre- to metre-wide zones of strongly strained veining and brecciation. It is likely that the WGH Granite acted as a rigid body and preferential site for fracturing and extension whereas the surrounding WP Complex accommodated the bulk of strain through ductile deformation.

The WGH Deposit is formed by gently west-dipping (<25°) mineralized quartz veins hosted by a north-south striking shear zone that cuts the WGH Granite. These thicker veins are spatially associated with a stockwork of much narrower veins. A younger set of quartz veins strike northeast and dip steeply southeast (~80°), parallel to the D1 fabric within country rock schists. These veins are mineralized only where they intersect the older gently dipping veins (Wilton, 1983). Like the Central Zone, timing of mineralization is interpreted as syn- to late D3 (Dubé and Lauzière, 1997).

IAM
Gold mineralization at the Isle Aux Morts (IAM) Deposit consists of quartz veining, silicification, and pyritization that is spatially associated with the deformed contact between the CR Igneous Complex and WP Complex. Most (~95%) mineralized quartz veins occur within siltstone of the WP Complex with the remaining ~5% of veins occurring as extension veins in the CR Igneous Complex. Likely, space for quartz veining was generated by the strong competency contrast between the weaker WP Complex and stronger CR Igneous Complex in the footwall.

The IAM Deposit is a tabular body that strikes approximately 055° and dips between -45 to -70° (average of 60°) to the southeast. The true width of the deposit averages 8 metres within a range of 2 to 21 metres and can be traced along strike for 200 metres and to a maximum vertical depth of 125 metres. Mineralization plunges in both steep south-southwest and shallow east directions. The shallower plunge line may be related to flat segments of a thrust fault-like structure, with mineralization occurring during sinistral-reverse transpression.

Big Pond
The Big Pond Deposit is formed by a zone of quartz veining, brecciation, and silicification that occurs within and proximal to graphitic and chlorite-bearing schist layers in the WP Complex, which strike 030° to 040° and dip moderately towards the southeast. Interpretation by Dubé and Lauzière (1997) suggested that the Big Pond Deposit occurs on the short limb of a Z-shaped fold that wraps around the southwest end of the WGH Granite. This Z- fold is described as comprising a number of parasitic tight to isoclinal folds and shows evidence of high strain, including bedding transposition, fold limb and vein boudinage, and intense ductile shear fabrics (Dubé and Lauzière, 1997).

The largest vein at the Big Pond Deposit consists of relatively massive, milky-white to pale grey, quartz with locally up to 10% sulphide and altered inclusions of wall rock. Elsewhere, mineralization occurs in a zone of discontinuous, brecciated and stockwork-style, pale grey quartz veins hosted in brecciated and silicified chlorite and/or graphite schists. Brecciation and late pervasive silicification generally increase proximal to the Big Pond Deposit. Mineralization occurs both sporadically within the vein and in the altered wall rock of the vein.

Other showings
The CR Gold Property contains at least an additional 41 mineral prospects, showings, and indications in addition to the deposits described.

Deposit Types
Gold mineralization on the CR Gold Property has a number of features in common with mesothermal (or orogenic) gold deposits but also with intrusive-related deposits and, to a lesser extent, epithermal deposits.

Gold mineralization on the CR Gold Property shows several similarities to orogenic-style deposits, including spatial association with a large fault structure, quartz vein host, greenschist metamorphic grade, related sericite-chlorite alteration, and temperature of formation (~300°C in Wilton and Strong, 1986). Dubé and Lauzière (1997) also recognized that the spatial association of gold mineralization with graphitic schists is similar to some orogenic gold deposits in the Abitibi greenstone belt (e.g., Hollinger, McIntyre, Owl Creek).

The Cape Ray gold deposits also have some similarities to orogenic gold deposits of the Ashanti district in western Ghana, where mineralization is associated with shear zones, units of carbonaceous schists, and significant enrichment in galena (Pb), chalcopyrite (Cu), and sphalerite (Zn). These deposits also formed through multiple episodes of quartz veining and fault zone activation and so, like the CR deposits, the present-day vein morphologies include pinch-and-swells, boudins, and vein fragments hosted in fault gouge.

Some key differences with typical orogenic gold deposits, however, include the low gold to silver ratios, abundance of base metals (Cu, Pb, Zn), limited carbonate content (within both veins and wall rock), and local preservation of vein textures that suggest near-surface deposition, especially at the WGH Deposit. The relatively high concentration of silver suggests similarities to epithermal deposits, but several key features of this deposit type are missing, including the characteristic alteration minerals, crustiform vein textures, and formation in an extensional (volcanic) setting.

A high-level orogenic gold-style deposit is the preferred deposit model for gold mineralization on the CR Gold Property.

Reserves at May 26, 2024

Mineral Resources are reported using a cut-off grade of 0.30 g/t gold for open pit and 2.00 g/t gold for underground.
CategoryTonnage CommodityGradeContained Metal
Indicated 6,211 kt Gold 2.25 g/t 450 koz
Inferred 3,449 kt Gold 1.44 g/t 160 koz

Mining Methods

  • Truck & Shovel / Loader
  • Longhole stoping

Summary:

Mining is proposed to be completed by conventional open pit mining practices. A small underground operation has also been assumed to occur from the base of two of the pits (04/41 and 51) once the open cut mining has been completed in these areas. This underground only accounts for 6% of the total production.

The parameters associated with the Whittle pit optimisations and open-cut mine operation are as follows:
- Dilution managed by applying a waste dilution skin halo around the orebody (average 22% grade dilution)
- Pits at 04/41, 51, PW, WGH and IAM
- Pit slopes – 50deg

The open pit design completed for Cape Ray contains the following features:

Zone 04
- Reaches a maximum depth of ~210m below surface.
- Contains a single 14m wide spiral ramp system to reach the base of the pit at 115mRl.
- Is approximately 500m long and 400 m wide at the surface.

Zone 41
- Reaches a maximum depth of ~120m below surface.
- Contains a single 14 m wide ramp system located on the footwall to reach the base of the pit at 205mRl.
- Is approximately 410m long and 225m wide at the surface.

Zone 51
- Reaches a maximum depth of ~125m below surface.
- Contains a single 14m wide ramp system located on the footwall to reach the base of the pit at 210mRl.
- Is approximately 750m long and 200m wide at the surface.
- Has three distinct pods, with the central pod being the deepest. PW
- Reaches a maximum depth of ~100m below surface.
- Contains a single 14m wide ramp system to reach the base of the pit at 120mRl.
- Is approximately 300m long and 200m wide at the surface

WGH
- Contains a main pit stage, with three smaller satellite stages.
The main pit:
- Reaches a maximum depth of ~125m below surface.
- Contains a complex ramp system design to access the base of the pit using internal walls where possible to minimise waste mining on the external walls.
- Is approximately 500m long and 400 m wide at the surface.
The satellite stages:
- A relatively small in size, and average 200m long, 100m wide and 20m deep.
- Require minimal final ramps as the material will be mined off the natural surface contours.

IAM
- Reaches a maximum depth of ~90m below surface.
- Contains a single 14m wide ramp system to reach the base of the pit at 255mRl.
- Is approximately 250m long and 150m wide at the surface.

As the potential size of the underground operations are relatively small in comparison to the open pit, no further analysis or designs were completed for the underground component of the Study.

It has been assumed that, subject to permitting, a combination of conventional open cut and underground mining methods will be utilised at Cape Ray based on orebody geometry and orebody depth from surface. The 04 and 41 deposits could be amenable to open cut mining followed by underground mining using a long-hole stope method.

Comminution

Crushers and Mills

TypeModelSizePowerQuantity
Jaw crusher 1
Cone crusher 2
Ball mill 1

Processing

  • Gravity separation
  • Centrifugal concentrator
  • Smelting
  • Carbon re-activation kiln
  • Crush & Screen plant
  • Agitated tank (VAT) leaching
  • Concentrate leach
  • Carbon in leach (CIL)
  • AARL elution
  • Solvent Extraction & Electrowinning
  • Cyanide (reagent)

Summary:

The plant is designed to process 1.2 Mt/y RoM ore and incorporates a single processing line of a primary jaw crusher, secondary and tertiary cone crushers and a crushed ore bin to provide 12 hours of surge capacity prior to the milling circuit. The grinding circuit consists of a single stage ball mill, with gravity concentration, followed by a leach-CIL circuit, elution and carbon regeneration, gold smelting, tailings thickening and cyanide destruction facilities. The detoxified tailings stream is stored in the Tailings Management Facility (TMF).

The plant is based on a conventional processing flowsheet using industry standard equipment. Plant operations will be monitored using a control system from a centrally located control room.

Recoveries & Grades:

CommodityParameterAvg. LOM
Gold Recovery Rate, % 96
Gold Head Grade, g/t 2
Silver Recovery Rate, % 56
Silver Head Grade, g/t 6.13

Water Supply

Summary:

A Water Use Licence has been acquired from the Newfoundland Department of the Environment and Conservation, Water Resources Division, as well as a Certificate of Approval for Septic System for water use and disposal for project site facilities.

Water infrastructure: Raw and Process Water Dams, Water Treatment Plant.

All excess water released from the TMF will be treated in the water treatment plant and sedimentation captured in sedimentation ponds before controlled release into the environment via the polishing ponds.

Production

CommodityUnitsAvg. AnnualLOM
Gold koz 88484
Silver koz 124864
All production numbers are expressed as metal in doré.

Operational metrics

Metrics
Annual mining capacity 25 Mt *
Annual ore mining rate 1.2 Mt *
Annual production capacity 100 koz of gold metal in doré *
Annual processing capacity 1.2 Mt *
Ore tonnes mined, LOM 7.8 Mt *
Total tonnes mined, LOM 92.7 Mt *
Tonnes processed, LOM 7.83 Mt *
* According to 2020 study.

Production Costs

CommodityUnitsAverageAverage
Credits (by-product) Gold USD -32 / oz *  
Cash costs Gold USD 709 / oz *  
All-in sustaining costs (AISC) Gold USD 808 / oz *  
All-in sustaining costs (AISC) Gold USD 776 / oz * **  
Assumed price Silver USD 18 / oz *  
Assumed price Gold USD 1,550 / oz *  
Operating margin Gold USD 774 / oz * **  
* According to 2020 study / presentation.
** Net of By-Product.

Operating Costs

CurrencyAverage
OP mining costs ($/t mined) CAD 2.8 *  
UG mining costs ($/t mined) CAD 90 *  
Combined mining costs ($/t milled) CAD 40.3 *  
Processing costs ($/t milled) CAD 21.4 *  
G&A ($/t milled) CAD 4.94 *  
Total operating costs ($/t milled) CAD 66.6 *  
* According to 2020 study.

Project Costs

MetricsUnitsLOM Total
Pre-Production capital costs $M CAD 8.7
Sustaining CapEx $M CAD 47.3
Total CapEx $M CAD 145.4
Total Taxes $M CAD 137
Gross revenue (LOM) $M CAD 1,093
EBITDA (LOM) $M CAD 583
Pre-tax Cash Flow (LOM) $M CAD 583
After-tax Cash Flow (LOM) $M CAD 253
Pre-tax NPV @ 5% $M CAD 300
Pre-tax NPV @ 10% $M CAD 231
Pre-tax NPV @ 8% $M CAD 256
After-tax NPV @ 5% $M CAD 196
After-tax NPV @ 10% $M CAD 152
After-tax NPV @ 8% $M CAD 168
Pre-tax IRR, % 61
After-tax IRR, % 51
After-tax payback period, years 1.8

Heavy Mobile Equipment

Fleet data has not been reported.

Personnel

Mine Management

Job TitleNameProfileRef. Date
Exploration Manager Giles Dodds LinkedIn Jan 23, 2025
Managing Director and CEO Sam Pazuki LinkedIn Jan 23, 2025
VP Exploration Rick Greenwood LinkedIn Jan 23, 2025

Aerial view: