Gold and silver mineralization at Relief Canyon is believed to be largely epithermal in origin, but the deposit also exhibits similarities to Carlin-type deposits (Fifarek et al, 2015) and to orogenic vein deposits.

Gold mineralization at the Relief Canyon mine is primarily found in three zones that are structurally controlled and characterized by distinctive host rocks. From structurally lowest to highest, the zones are the Jasperoid Zone, the Lower Zone, and the Main Zone. The Main Zone hosts the bulk of the current and historical gold resources at Relief Canyon, while the Lower and Jasperoid zones are newly discovered mineral zones encountered below the Main Zone in the North Target area during the recent Pershing Gold drill programs.

The Jasperoid Zone gold mineralization is hosted within the Deformed Limestone package in a sequence of limey ductile tectonites with local stretched and boudinaged quartz veins, stretched-quartz-pebble conglomerate/sandstone, folded and foliated limestone, and altered gabbro, all of which have been replaced by dark-colored quartz. Silicification is also found in a set of sheeted, N30-35°E-striking, steep fractures that may be extensional in origin. In addition, auriferous fluids were localized by brecciation along contacts between lithologies of contrasting competency, such as between the stretched-pebble conglomerate and carbonate units, or less commonly, between pale green schistose volcanic and carbonate horizons. Locally, collapse breccia is also a site of gold deposition in the Jasperoid Zone.

Gold in the Jasperoid Zone shows a strong spatial correlation with silicification, fluorite, and white illite with trace kaolinite. Fine-grained disseminations of pyrite and coarse euhedral pyrite of metamorphic origin are also present. Silver is generally more abundant (> 10 g/t) in this zone than in the Lower or Main zones.

Lower Zone gold mineralization displays a strong spatial association with gabbro sills and/or transposed dikes (i.e., dikes in which progressive ductile deformation has transposed originally discordant contacts into contacts subparallel to foliation, giving the dikes a sill-like appearance). Mineralization is hosted in, or is proximal to, complex tectonic breccias that show multiple generations of structural reactivation and/or shearing, decalcification, locally superimposed carbonate-dissolution collapse breccia, and the presence of illite and/or kaolinite, sulfides iron-oxides and fluorite.

The tectonic breccia was generated by multiple (minimum of two) episodes of movement in the North Target area. The principal clasts in the tectonic breccia comprise dark grey foliated limestone, jasperoid, and quartz. Finegrained gouge material is chiefly composed of quartz flour and kaolinite.

The Main Zone was the source of the historical gold production from the Relief Canyon mine. Gold in the Main Zone is found in a quartz-illite±fluorite-cemented, polyphase, dissolution collapse breccia with cave-fill sedimentary rocks.

As defined by drilling through September 2016, Relief Canyon mineralization occurs as a continuous body over 4,000 feet long north-south and 3,000 feet wide east-west. Mineralization crops out at the surface within the historical open-pits and extends to depths of over 900 feet.

The Relief Canyon deposit has been mined in the past by open-pit methods. Initially, truck haulage from the crusher was compared to conveyor stacking of the crushed material. The conveyor haulage of material had considerable cost advantages to the truck haulage case, and was assumed as the base case in this study. Both owner and contract mining cases were considered. The operating cost of both cases were fairly close when the equipment lease payments were included in the owner mining case, however, the contract mining case had lower capital requirements. Contract mining was considered to be the base case for this study.

The Relief Canyon mine is currently permitted to mine to a pit bottom elevation of 5,080 feet AMSL. Prior mining was concentrated in three open-pits, with several waste facilities, a heap-leach pad, a heapleach fluid process plant, and associated infrastructure.

A four month mine pre-production period is planned to start in the second quarter of 2018, while production is planned to start in the third quarter of 2018. The mine production schedule was developed by designing a Phase 1 mine plan that was planned only to mine to the 5,080 elevation, and a Phase 2 plan that was developed to stay inside the current permit boundary, but mine below the 5,080 elevation. Using this plan would enable ore supply from the design Phase 1 pit and mostly waste stripping from the design Phase 2 pit. Annual maximum ore production is planned to be about 6 million tons (about 16,700 tons per day), while total production is limited to a total of about 31 million tons of material. Both of these design pit phases utilized out-of-pit haul roads to move material that was above the 5,220 to 5,240 elevation and move the remainder of material out of the pit by nominal 85 foot wide, in-pit, 10 percent ramp systems. Phase 1 was later redesigned to include some material that was originally in the design Phase 2 pit as well as some material that was outside of the permit boundary in the Light Bulb area.

The process selected for recovery of gold and silver from the Main, Lower and Jasperoid Zones mineralized material is a conventional heap leach recovery circuit. The ore will be mined by standard open pit mining methods, primary crushed to approximately 3 inches in size, agglomerated using cement, and conveyor stacked onto heap leach pads in 20-foot lifts.

Ore will be leached with a dilute cyanide solution, and the leached gold will be recovered from solution using a carbon adsorption circuit. The gold will be stripped from carbon using a pressurized desorption process, followed by electrowinning to produce a precipitate sludge. The precipitate sludge will be processed using a retort oven for drying and mercury recovery, and then refined in a smelting furnace to produce doré bars.

The overall life-of-mine (“LOM”) average gold recovery is 83 percent. Silver is also planned to be recovered. For the Main, Lower, and Jasperoid zones silver recovery is expected to be 36, 28, and 18 percent respectively.

Ore will be transported from the mine in surface haul trucks and dumped at the crusher area into two stockpiles. Ore will be fed to the crusher from one of two ore grade stockpiles: a low fines material stockpile or a high fines material stockpile. All feed to the crusher will bereclaimed by a Cat 992 loader from the stockpiles in a manner to produce a desired blend according to the fines content. Pershing Gold has indicated the average run of mine feed size to the crusher to be approximately 80 percent passing 4 inches.

Ore will be stacked on the heap leach pad using conveyors exclusively. Ore will be stacked in 20-foot high lifts to a maximum total height of 200 feet, with typical 20-foot benches between lifts to give an overall average slope of approximately 2.3 to 1. Dozer ripping to facilitate improved percolation will be performed after each lift has been stacked to the determined height.

After each irrigation cell has been stacked and dozer ripped, the irrigation system will be installed. Dripline emitters will be used to apply a cyanide solution concentration of 0.3 to 0.5 pounds of sodium cyanide per ton of solution, at an application rate of 0.003 gpm per square foot. A minimum primary leach cycle of 60 days is planned for a nominal flow rate of 3,000 gpm.

Barren leach solution pH will be at least 10 and controlled by the cement that has been added for agglomeration of crushed ore.

Barren solution will be delivered from the existing 24,000-gallon barren tank located at the ADR plant, by a pair of vertical multi stage pumps at the nominal flow rate of 3,000 gpm. This solution will be carried by a 14” steel pipeline to the base of the heap and then to a network of subheaders and risers to the top of the heap where it is delivered by the emitters.

Solution passing through the heap will dissolve the gold and silver contained therein and then collect in a network of perforated solution collection pipes, which feed to a common discharge point at the base of the heap. The solution will then be carried by gravity in a single solid HDPE collection pipe down to the existing 22,500-gallon pregnant solution tank. Excess solution from the heap will overflow from the pregnant tank to the existing pregnant solution pond, also called the Operating Pond East (OPE). Solution is pumped from the pregnant tank to the adsorption carbon column circuit at the ADR plant.

The carbon adsorption circuit consists of a series of four pressurized carbon columns, each column approximately 12.5 feet in diameter and 10 feet tall, and each holding 8 tons of carbon.

Pregnant solution is pumped through the existing columns to load the soluble gold onto the carbon. Barren solution exiting the columns is directed to the barren tank where make up cyanide is added and the solution returned to the heap for further leaching. Overflow from the barren tank is directed to a process pond, also called the Operating Pond West (OPW).

At the existing ADR plant, loaded carbon from the carbon adsorption circuit will be passed over a carbon dewatering screen, where process solution and any carbon fines in the undersize will be transferred to a carbon fines tank, and the oversize loaded carbon directed to the acid wash circuit. The loaded carbon will be acid washed in a dilute hydrochloric acid solution to remove scale and other contaminants as required. The existing acid wash capacity is 8 tons and will allow for acid washing after every strip, which is expected for optimum performance of the carbon.

Loaded, acid-washed carbon will then be pumped to the elution circuit where it will be batch stripped in a single 8-ton pressure stripping vessel, in a modified Zadra circuit. The loaded carbon will be eluted using a sodium hydroxide solution at a rate of about two bed volumes per hour at a temperature of 250-275°F. Strip times of 24-36 hours are anticipated, which allow for refurbishment and utilization of the existing plant boiler and associated equipment, and satisfies the expected demand of about three strips per week. The eluted pregnant solution will report to the electrowinning cells.

Eluted carbon will be passed over a sizing screen and then reactivated as necessary using a carbon regeneration kiln. Regenerated carbon will be again screened to remove fine carbon from the circuit, as required.

Carbon fines from the dewatering and sizing screens will be periodically sent to a filter press for collection.

Pregnant strip solution from the CIC strip circuit will be processed by electrowinning for recovery of gold and silver in a precipitated sludge. The gold and silver bearing sludge will be refined by smelting to produce a doré bar.

Solution from the strip vessel will be pumped through a new 100 ft3 electrowinning cell where gold and silver will be precipitated on stainless steel cathodes. The eluted barren solution from electrowinning will then be recycled back to a 11,000-gallon barren solution storage tank. Solution from the eluted barren tank will be pumped back to the strip vessel to be reused for loaded carbon stripping.

When sufficiently loaded, the electrowinning cells will be shut down, and the gold and silver sludge will be removed from the cathodes. The sludge will then be pumped to a filter press for dewatering, followed by manual transfer of the dewatered cake to a 5 ft3 retort oven for drying and removal of mercury.

The dried and retorted sludge will be blended with fluxes and then smelted in a propane-fired crucible furnace (700 lb red brass capacity), to yield doré. The doré will be shipped off site for final processing and sale.