Bell Mountain Project

The Bell Mountain Project is comprised of four gold - silver resource deposits, the Spurr, Varga, Sphinx and East Ridge deposits.

The Bell Mountain Project is located southeast of Reno, Nevada in the Fairview mining district, approximately 54 miles (86 kilometres) from Fallon, Nevada. The property consists of 174 unpatented lode claims covering a land package of 1,463 hectares (3,616 acres). In addition, there are six mill site claims that cover an existing water well.

Geology & Mineralization

The Bell Mountain property is located within the Fairview Peak caldera, a small Miocene (~19.2 Ma) volcanic center comprised of a thick sequence of rhyolite-dacite flows, flow domes, and pyroclastic rocks. Epithermal low-sulfidation gold-silver mineralization is hosted by calcite and quartz-calcite veins and stockwork associated with pervasive silicification. Veins and hydrothermal alteration are controlled by east-northeast trending near-vertical structures and west-northwest cross structures.

To date, four main bodies of gold-silver mineralization (Varga, Spurr, Sphinx and East Ridge) have been defined by drilling. The larger Spurr and Varga zones are situated along the principal NE structural trend (Varga-Spurr fault), the Sphinx zone is controlled by a WNW cross structure (Sphinx fault). The East Ridge zone is controlled by a NE striking structure. The East Ridge Deposit consists of a single east-northeast trending quartz-calcite vein which dips steeply to the south

Exploration History

Gold was discovered on the property in 1914. The only recorded production from the property came from a 35-ton, hand sorted ore shipment in 1927 that graded 16 g/t gold and 510 g/t silver.

Over a 29-year period from 1984, nine different companies completed surface mapping and sampling, geophysics and drilled a total of 297 drill holes for a total of 62,303 feet of combined RC and diamond drill core holes.

In April 2015, Eros entered into a purchase agreement to acquire the Bell Mountain property. On May 3, 2015 Welsh Hagan Associates (formerly Telesto Nevada, Inc.) completed a NI 43-101 technical report on behalf of Eros and Globex Mining Enterprises.

On October 11, 2017, Eros issued the results of a Preliminary Economic Assessment (
“PEA”). A NI 43-101 technical report prepared by Welsh Hagen Associates was issued on October 31, 2017 presenting the results of the PEA on behalf of Eros and Globex Mining.

Mineral Resource

The mineral resource estimate was prepared by Zachary J. Black, SME-RM, with Hard Rock Consulting (“HRC”). The Project is subdivided into four (4) individual areas known as Spurr, Varga, Sphinx and East Ridge. Each modelled area was divided into three domains: country rock, stockwork and vein. HRC estimated the mineral resource using an ordinary krige algorithm. In order to meet the test of ‘reasonable prospects for economic extraction,’ HRC constructed a Lerchs-Grossmann pit shell based on $1,300/oz gold and $17.50/oz silver. Resources were assigned measured, indicated and inferred classifications based on the confidence of the estimate, domain of the geologic model and proximity to drill holes.

Resource Statement for the Bell Mountain Project, Churchill County, Nevada1

  1. Open pit optimization was used to determine potentially mineable tonnage. Measured, Indicated and Inferred mineral classification was determined according to CIM Standards. Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The 2017 Measured, Indicated and Inferred resource is constrained within a $1,300/oz Au and $17.50/oz Ag Lerchs-Grossman Pit shell. The base case estimate applies a AuEq cut-off grade of 0.005 oz/t for Varga and 0.004 oz/t for all other areas based on the estimated operating costs. Metallurgical recoveries used for the cut-off calculations were 83.7% on gold and 29.6% on silver for Spurr, 68.6% on gold and 12.8% on silver for Varga and 80% on gold and 10% on silver for Sphinx and East Ridge.
  2. Gold Equivalent (AuEQ) ounces were determined using the equations: AuEq Factor = (AuRec/AgRec) x ($Au/$Ag) and AuEq = Au + (Ag/AuEq Factor).

Processing and Metallurgical Recovery

The deposits of the Bell Mountain Property (Spurr, Varga, Sphinx and East Ridge) generally are quite amenable to processing by heap leaching. Metallurgical recoveries used were 83.7% on gold and 29.6% on silver for Spurr, 68.6% on gold and 12.8% on silver for Varga and 80% on gold and 10% on silver for Sphinx and East Ridge.

Capital & Operating Costs

Capital and costs were developed from scaling costs from similar facilities for production rates and from design assumptions including a contractor operated mining fleet. The life of mine capital cost for the base case is US$18,503,468 and operating cost per ton of ore processed is US$7.50 per ton.

Project Economics

A gold price of $1,300/oz and a silver price of $17.50/oz were chosen for the base case economic evaluation based roughly on the 3-year trailing London Gold Fix prices in combination with the current gold and silver prices at the effective date of the PEA. The economic evaluation base case is considered realistic and meets the test of reasonable prospect for eventual economic extraction. The base case economic results for the metal price assumptions are shown as follows

Cash Flow Summary

Please refer to the Preliminary Economic Assessment published Report for further details. This report is available on SEDAR at www.sedar.com and on this website at www.erosresourcescorp.com.

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