Sabre Gold Mines Corp. acquired the Copperstone gold mine located in Arizona in 2014. The mine is fully permitted with significant mining infrastructure, mineral resources and processing infrastructure in place.

The high-grade Copperstone Gold Mine is located in western Arizona, in the United States, within the Walker Lane mineral belt where it intersects gold provinces in Southern California and Western Arizona. These provinces host a total known gold endowment of over 40 million ounces of gold. Copperstone is located within a lesser-known, globally significant, high-grade gold province.

1. Mineral Resources have an effective date of February 15, 2023.  The Qualified Person responsible for the Mineral Resource estimate is Mr. Richard A. Schwering, P.G., SME-RM, an employee of Hard Rock Consulting, LLC. 
2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
3. Inferred mineral resources are that part of a mineral resource for which the grade or quality are estimated on the basis of limited geological evidence and sampling. Inferred mineral resources do not have demonstrated economic viability and may not be converted to a mineral reserve. It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Indicated mineral resources with continued exploration.
4. The mineral resource is reported at an underground mining cut-off of 0.092 oz/ton (3.15 g/t) Au beneath the historic open pit and within coherent wireframe models, and for estimated blocks which meet the criteria of a minable shape. The cut-off is based on the following assumptions: a gold price of $1,800/oz; assumed mining cost of $90/ton ($99.21/tonne), process costs of $47/ton ($51.81/tonne), general and administrative and property/severance tax costs of $15.00/ton ($16.53/tonne), refining and shipping costs of $12.00/oz, a metallurgical recovery for gold of 95%, and a 3.0% gross royalty.
5. Rounding may result in apparent differences when summing tonnes, grade and contained metal content. Tonnage and grade measurements are in Metric units. Contained metal is reported as troy ounces.

GEOLOGY AND MINERALIZATION

The Copperstone Project encompasses approximately 13.8 square miles of surface area and mineral rights in La Paz County, County, Arizona. The Project is wholly owned by Sabre Gold, which controls the 546 federal unpatented mining claims and two Arizona state mineral leases which together comprise the Copperstone Project area.

Prior production at Copperstone included open pit mining with a 2,500 tpd carbon-in-pulp heap leach from 1987 to 1993 with reported production of 514,000 oz of gold from 5,600,000 tons of ore grading 0.089 oz/t (2.8 g/t) of gold.  In 2011, a 450 tpd floatation mill was built on site and in 2012 underground mining commenced from two declines that were previously developed in the bottom of the open pit.  Operations took place from January 2012 to July 2013 with reported production of approximately 16,900 oz of gold from 163,000 tons of ore grading 0.104 oz/t (3.2g/t) of gold.

Sabre Gold owns 100% of the Copperstone Project which is situated at the northern tip of the Moon Mountains in west-central Arizona, regionally within the Basin and Range geo-physiographic province, and within the westernmost extent of the Whipple-Buckskin-Rawhide detachment system. Mid-Tertiary low-angle normal faults (detachment faults) are recognized as significant regional structures in this portion of the Basin and Range, where major detachment faults are associated with mylonitization of lower-plate rocks and brittle faulting and rotation of upper-plate rocks.

2023 PEA SUMMARY

The Preliminary Economic Assessment supports a high-grade gold underground mining operation at Copperstone producing an average of 40,765 payable oz gold per year for just over a 5-and-a-half-year mine life.  Sabre Gold management worked with Hard Rock Consulting, LLC (“HRC”) to complete the PEA, which included comprehensive reviews of the construction, operations and costs, to provide confidence for potential project commencement and completion within budget and schedule.  Trade off studies will continue on initial capital items and initial earthworks will commence as soon as the Company moves towards a formal construction decision.  The Company will also continue to have discussions with potential providers of initial construction capital.

The Company notes that a preliminary economic assessment is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have economic consideration applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.

The PEA base case assumes a gold price of $1,800 per oz and the PEA also presents project sensitivities using a range of spot gold prices between $1,600 to $2,000 per oz. All currency references herein are in US$.

PEA Highlights:

• Consistent Production – Models an underground mine operation that will process 198,000 tonnes of ore at 544 tonnes per day (“tpd”) over the 5.6-year mine life (“LOM”).
• Excellent Payback Period – The mine plan sequences the high-grade portions of the resource in early years to optimize grade and cash flow resulting in a payback period of less than 2 years and generating nearly $90m in after-tax cumulative undiscounted cash flow.
• Low Initial Capital – Significant site infrastructure, such as pre-existing tailings and processing facilities, surface buildings and rehabilitated underground development allow for reduced upfront construction cost and low initial capital per payable gold ounce produced over the LOM.
• Fully Licensed and Permitted – Permits are in place for initial construction and subsequent operation of the project as well as the necessary water and surface rights.  Minor modifications required for the revised mine plan and flow sheet as a result of the PEA will be addressed  as required in the coming months by the Company.

Abbreviations include: NPV = net present value, IRR = internal rate of return, LOM = life of mine, AISC = all-in sustaining cost.

Free Cash Flow

The average annual after-tax free cash flow is $15.3 million and the cumulative LOM after-tax free cash flow are estimated at $85.9 million.  The Company has a large tax asset base which significantly reduces the tax impacts on cash flow.

Project Sensitivities

At base case prices and a 5% discount rate, the after tax NPV and IRR are most sensitive to gold prices and to a much lesser extent capital (“CapEx”) and operating expenditures (”OpEx”). 

THE COPPERSTONE MINE IS A HIGH-GRADE, FULLY-PERMITTED GOLD DEPOSIT LOCATED IN MINING-FRIENDLY WESTERN ARIZONA, ALONG THE WALKER LANE BELT. HAVING HISTORICALLY PRODUCED ~500,000 OUNCES OF GOLD, COPPERSTONE CONTAINS EXISTING INFRASTRUCTURE WHICH REDUCES INVESTMENT REQUIREMENTS AND SPEEDS UP THE TIMELINE TO PRODUCTION.