The Quartz Mountain Property is a later stage exploration project located in south-central Oregon, approximately 50 km west-northwest of the city of Lakeview on the northern extension of the prolific Basin and Range Province of Nevada. Alamos acquired a right to earn a 100% interest in Quartz Mountain and 50% joint venture interest in the adjacent Angel’s Camp Gold Property through its September 2013 acquisition of Orsa Ventures for total cash consideration of approximately $3.5 million.
The Quartz Mountain gold and mercury district is located in a Mid-Tertiary volcanic highland within the northern transitional zone of the Great Basin. This highland area is characterized by a bimodal volcanic suite consisting of basalt flows and tuff with rhyolitic dome complexes Hydrothermal alteration in the district is characterized by acid leaching of the host rocks and subsequent precipitation of quartz in the gold zones. Mineralization at Quartz Mountain represents a low-sulphidation epithermal system based on the characteristic mineralogical assemblage of adularia, cinnabar and stibnite.
Quartz Mountain has seen approximately $60 million invested into exploration over the years comprising approximately 80,000 metres of drilling. The majority of this has been focused on the Crone Hill and Quartz Butte deposits which host the current inferred resource. Combined with the Angel’s Camp Property, the project covers a large land package with significant exploration potential. We believe the Quartz Mountain Project fits the Alamos profile perfectly, as a low capital intensity, low cost and low technical risk project. With an already large established resource and excellent metallurgy, the Company envisions Quartz Mountain developing into a low cost, open pit heap leach operation similar to its assets in Mexico and Turkey. Both properties are subject to underlying royalties.
The option agreement acquired through Orsa is with Seabridge Gold Inc. (“Seabridge”). Under the terms of the agreement, the Company made a payment of CAD$2 million to Seabridge on October 23, 2013 and is required to pay an additional CAD$3 million on completion of a compliant feasibility study and a positive production decision. Further, an additional payment of CAD$15 million or a 2% net smelter return royalty is payable on successful permitting of the project.
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