Resource and Platinum Group Element Exploration Across North America
This Aurex Energy profile is part of a paid investor education campaign.*
Aurex Energy Corp. (TSXV:AURX) is a resource exploration company focused on the acquisition and development of a diversified portfolio of resource properties including natural gas, gold and energy-related metals such as copper, zinc, nickel, cobalt and platinum group elements (PGEs). Aurex Energy has acquired a company with substantial natural gas reserves in the Barnett shale, Texas area and is exploring and developing four mineral projects in North America.
Through its Texas subsidiary, Aurex Energy owns interests in 10 shut-in natural gas wells, including eight horizontal and two vertical wells. The company has initiated a work program on one vertical well and four horizontal wells with the goal of generating significant cash flow. Aurex Energy expects to apply the program to the remaining wells once the current program is complete.
The wells are connected to pipelines and the natural gas receives the Henry Hub price plus 20 percent, which as of July 2019, was over C$3.50 per thousand cubic feet compared to less than C$1 per thousand cubic feet in Canada (the Henry Hub 52-week high price exceeded C$6.00 per thousand cubic feet). The company’s 51-101-compliant reserve report indicates that operating cash flow could exceed C$14 million per annum when the 10-well rework program is complete. Aurex Energy’s breakeven cost for the program is C$0.70 per thousand cubic feet.
The Cook gold-copper project, located in northern Nevada, is within 50 kilometers of the Sleeper mine, which was formerly operated by Amax Gold Inc. between 1986 and 1996. In 1987, Amax reported ore reserves of 3.1 million tonnes grading at 12.88 g/t gold and a lower grade reserve of 40.6 million tonnes grading at 0.72 g/t gold. The Sleeper mine is currently operated by Paramount Gold Nevada Corp. (NYSEAMERICAN:PZG) and they are reporting a measured and indicated resource of 297.1 million tonnes containing 3.1 million ounces of gold and 28.9 million ounces of silver.
In 2018, exploration work on the Cook project located and sampled 35 historic mine workings, with nearly 30 percent of the samples assaying over 10 g/t gold and 17 percent of samples assaying over 35 g/t gold. The sampling produced the highest-grade gold assay yet on the property: 90.9 g/t gold. High-grade copper was also discovered with assays as high as 15.6 percent copper.
The Whiskey Flat copper-zinc-cobalt project is in Mineral County, Nevada. The property is accessible year-round and hosts the historic Quailey mine, which features several types of mineralization including a cobalt-bearing massive sulfide zone with assays up to 11.05 percent copper, 11.08 percent zinc, 635 g/t silver and 0.15 percent cobalt. The property is also approximately 75 kilometers away from the Red Rock mill. Aurex has an option to acquire a 50 percent interest by bringing the Red Rock mill into commercial production. The mill historically processed ore for the Quailey mine and is configured as a gravity-flotation circuit capable of processing 200 tons of ore per day.
The Peter Lake project is located in the Swan River complex, which is considered to be prospective for magmatic breccia type PGE deposits. An independent resource report (non-43-101-compliant) completed in 2013, estimates a current resource of 15.2 million tonnes grading 0.272 percent copper, 0.076 percent nickel, 0.010 percent cobalt and 0.3 g/t combined gold-platinum-palladium. There are 17 other VTEM geophysical anomalies like the one represented by the current resource.
Finally, the Craig Lake project is located between Craig Lake, Saskatchewan and Flin Flon, Manitoba. The property is approximately 1.7 kilometers from the former producing Westarm mine, which has reported grades of 3.82 percent copper, 1.5 percent zinc, 17.4 g/t silver and 1.37 g/t gold. Aurex Energy plans to conduct a two-hole drill program on the property to test two large DPEM targets identified on the property.
Aurex Energy’s management, insiders and close associates hold up to 50 percent of the shares. The management team contains over 100 years of combined experience in the mining industry.
Aurex Energy’s Company Highlights
- Natural gas projects located in prolific Barnett Shale, Texas and tied into pipelines.
- Mining projects in top-ranked jurisdictions of Nevada, US and Saskatchewan, Canada.
- Year-round access to projects in Texas and Nevada.
- Potential to derive significant cash flow from natural gas to help support mineral exploration and development.
- Low overhead costs from being based in Saskatoon allow for more expenditure funneled towards exploration.
- Cook gold-copper project may be the northern extension of the prolific Battle-Mountain gold trend located 50 kilometers from past-producing Sleeper mine with current resources of 3.1 million ounces of gold and 28.9 million ounces of silver.
- Spectacular high-grade gold and copper results from 2018 work program on the Cook project.
- Hyperspectral survey at Cook confirms the potential for both a bonanza-gold epithermal system and porphyry gold-copper system.
- Hyperspectral work at Whiskey Flat confirms existence of large multi-source mineralizing system.
- Underground sampling at Whiskey Flat confirms extensive area of high-grade copper mineralization.
- Management, insiders and close associates own 50 percent of the shares.
Barnett Shale, Texas
Aurex Energy has acquired 100 percent of the common shares of a private US corporation that holds substantial natural gas assets in the Barnett Shale, Texas.
Highlights of the Barnett Shale:
- Established basin with low-risk opportunities and developed infrastructure
- One of the largest onshore gas fields in the US: thick, organic-rich shale covering 5,000 square miles
- Depth of 5,000 feet to 8,500 feet; formation thickness of 100 feet to 600 feet
- Current production from the field is 3.4 billion cubic feet per day
- Sweet gas pricing: high BTU content results in 20 percent premium pricing to Henry Hub
- Excellent pipeline infrastructure with ample capacity
- Portfolio shift of senior producers away from mature fields opens the door for small-cap companies with a focused, cost-conscious strategy
Aurex Energy’s strategy is to build a low-risk platform of cash-generating natural gas assets concurrently with establishing high-grade mineral resources focused on metals critical to non-fossil fuel energy-related technologies.
Aurex Energy has initiated a phased work program on five of the 10 wells, including one vertical and four horizontal wells. The company intends to bring the four horizontal wells back onstream to resume conventional production for a period. The vertical well is also to be brought onstream conventionally. Once online, the wells are expected to produce for several months, generating cash flow.
After this, the horizontal wells are expected to undergo a refracking program, which is designed to increase recoverable reserves and resume production. The second phase of work is designed to repeat the initial program with the remaining wells.
Aurex Energy is also looking to increase the size of the project with the goal of increasing production.
Cook Gold-Copper Project, Nevada
- 70 percent ownership in a 7.4-square-kilometer property in Humboldt County, Nevada
- 35 historic mine workings on the property
- 2018 work conformed high-grade gold and copper mineralization-almost 30 percent of the samples graded greater than 10 g/t gold and 17 percent of the samples graded greater than 35 g/t gold
- Highest grade gold sample: 90.9 g/t gold
- Highest grade copper sample: 15.6 percent copper
Aurex Energy owns a 70 percent working interest in 88 lode claims, covering 7.4 square kilometers, located 100 kilometers northwest of Winnemucca, in Humboldt County, Nevada. The property is accessible year-round by all-weather roads and four-wheel drive vehicles.
Predominately underlain by Permian intermediate volcanic rocks with a small area of Jurassic limestone in the northeast part of the property, the area has undergone extensive folding and faulting. Breccia zones occur along fold axes and at fault-fold intersections. Regionally, granitic intrusions are also evident.
There is extensive gold and copper mineralization across the property, with historic assay results from sampling old mine workings and surface outcrops outlining a corridor of higher-grade results with a strike length of 2,100 meters and width of 600 meters. Initial reconnaissance exploration over the property in May and June of 2018 identified four major mineralized structures in the corridor hosting high-grade gold and copper.
The recent exploration work located, mapped and sampled (where possible) 35 historic mine workings on the property with unknown production. These workings were generally shallow and focused on near-surface oxidized mineralization.
There is very little evidence that any detailed exploration has been carried out on the property, other than surface and limited underground sampling. There are no records of, nor field evidence for, any detailed drilling on the property.
In 1983, D.H. Sears conducted a sampling program within the vicinity of the old mines. He discovered that the mineralization deposits would accumulate at the intersections of the fold axes and faults. Assays from his exploration program graded between 15.01 g/t gold and 46.91 g/t gold and 10.63 g/t silver and 657.15 g/t silver.
In 2004, Nevada Pacific Gold Ltd. carried out an extensive surface sampling program over the projected area with 43 percent of samples assaying over 1 g/t gold, 27 percent assaying over 5 g/t gold, 19 percent of samples assaying over 10 g/t gold and three percent of samples assaying over 34 g/t gold. Despite these encouraging results the project did not advance further as the property exchanged hands in multiple mergers and acquisitions.
In 2011, a private Nevada corporation conducted surface sampling that produced assays showing significant gold and silver mineralization across the property. The results of the assays indicated eight areas of significant mineralization. Seven of these areas fell within the 2.1- kilometer by 0.6-kilometer main corridor and one area of significant mineralization was identified outside the corridor on the west side of the property. The highest gold assay was reported at 74.82 g/t gold.
Under the management of Axiom Exploration Ltd., of Saskatoon, Saskatchewan, the following fieldwork was carried out in May and June of 2018:
- An airborne magnetometer survey, carried out by Pioneer Aerial Surveys Ltd.
- Orthomosaic photogrammetry
- A fixed-wing airborne hyperspectral survey carried out by SpecTIR LLC of Reno, Nevada
- An initial surface prospecting, mapping and sampling program
The 2018 exploration program confirmed high-grade gold and copper mineralization on the property. Highlights include:
- 35 historic mine workings located in seven distinct areas of the property, collecting 69 rock samples, both in situ chip samples and grab samples from mine dumps, for assay.
- High-grade gold mineralization confirmed historic assay results:
- 20 samples (29 percent) assayed greater than 10 g/t (0.3 oz/T) gold.
- 12 samples (17 percent) assayed greater than 35 g/t (1.0 oz/T) gold.
- The highest-grade gold assay ran 90.9 g/t (2.65 oz/T) gold from an in-situ chip sample
- High-grade copper mineralization, not generally noted in the historic reports, was discovered:
- 19 samples (28 percent) assayed greater than 0.5 percent copper.
- 12 samples (17 percent) assayed greater than 2.0 percent copper.
- Six samples (9 percent) assayed greater than 5.0 percent copper.
- The highest-grade copper assay ran 15.6 percent copper from a mine dump sample.
- Four major mineralized structures were identified from the mapping and assay data:
- Structure 1: strike length of 2.1 kilometers, high-grade gold
- Structure 2: strike length of 1.75 kilometers, high-grade gold
- Structure 3: strike length of 1.95 kilometers, mostly high-grade copper with good gold assays in places
- Structure 4: strike length of 1.80 kilometers, high-grade gold
- The hyperspectral survey identified surface alteration dominated by propyllitic alteration that is present over a bedrock exposure area of approximately six kilometers by four kilometers. This is indicative of a large mineralizing system, potentially an extension of the Battle Mountain-Eureka gold belt and has high potential for low sulfidation epithermal gold mineralization (like the nearby Sleeper mine) and gold-copper porphyry-style mineralization. Phengitic to muscovitic illite and kaolinite are also present and high crystallinity illite appears to be associated with known occurrences of precious metals.
The initial sampling program focused on historic mine workings with in-situ chip samples taken where possible and, where not possible, grab samples from rock dumps near the adits and shafts. The mineralization is associated with fault structures and breccia zones in a volcanic host rock. As noted above, three of the four major linear structures identified are dominated by high-grade gold mineralization and one structure is dominated by high-grade copper mineralization.
The project is within 50 kilometers of the Sleeper mine which was operated by Amax Gold Inc. between 1986 and 1996. Ore reserves reported by Amax in 1987 were 3.4 million tons grading 0.376 oz per ton gold (3.1 million tonnes grading 12.88 g/t gold) and a lower grade reserve of 44.8 million tons grading 0.021 ounces per ton gold (40.6 million tonnes grading 0.72 g/t gold).
By 1996 the mill had processed 55 million tons (50 million tonnes) of ore producing 1.68 million ounces of gold and 2.33 million ounces of silver. The mine is currently being operated by Paramount Gold who reported a measured and indicated resource of 294.4 million tonnes (324.5 million tons) grading 0.36 g/t gold (0.01 oz/T gold) and 3.3 g/t silver (0.096 oz/T silver).
The Sleeper mine is located within the prolific Battle Mountain-Eureka trend of gold deposits. This trend hosts several multi-million-ounce deposits and over the last 30 years has produced more than 32 million ounces of gold from deposits in the trend. The Cook gold project area may well represent the northern extension of the Battle Mountain Eureka trend, but more work and analysis is necessary to make that determination.
Drill targets are currently being generated and tenders for the drill program are being prepared in anticipation of a 2020 drill program.
Whiskey Flat Project, Nevada
- Main mineralization located on patented mineral claims
- Accessible underground workings
- Assays of 9.86 g/t gold, 92.9 g/t silver, 1.63 percent copper and 5.69 percent zinc over 11.9 meters underground, including 245.55 g/t silver, 7.70 percent copper and 11.08 percent zinc over 3.7 meters
- Recent surface sampling with assays up to 635.0 g/t silver, 11.05 percent copper and 3.62 percent zinc
- Surface samples yield significant cobalt mineralization assaying up to 0.15 percent cobalt
The Whiskey Flat project is located in Mineral County, Nevada and is approximately 26 kilometers southeast of Hawthorne, Nevada in the Excelsior Mountains. In 2018, Aurex Energy (formerly Canadian Platinum) signed an option agreement with Silver Reserve Corp. to earn a 50 percent interest in the formerly producing Whiskey Flat copper-zinc-silver-cobalt property. Aurex Energy also has an option to acquire up to 50 percent in the Red Rock mill by bringing the custom mill into commercial production.
The 1,200-acre property has year-round access and is situated on 12 patented lode claims, that are owned or leased by Silver Reserve Corp. and 47 unpatented lode claims under the jurisdiction of the Bureau of Land Management.
There have been numerous types of mineralization documented on the property including sphalerite (zinc) and chalcopyrite (copper) replacing limestone; oxidized quartz veins with iron and copper oxides, copper carbonates with remnant sulfides that are associated with gold, silver, lead and zinc; scheelite (tungsten) and powellite (molybdenum) in a garnet skarn; magnetite bodies with 30 percent to 50 percent iron over three to 10 meter widths; and silver-copper oxide mineralization along the contact zone with the granitic intrusion on two of the patented lode claims.
The Quailey mine is the largest historic mine on the property. The focus is on an oxidized quartz vein called the Shaft quartz vein, but there are other intersecting signs of mineralization on the property.
Recent exploration work
In 2007, a small sampling program was implemented. Cobalt was first assayed during this program and the assays showed considerable cobalt values. In 2010, a ground magnetic survey was completed, and the results identified high magnetic areas associated with magnetite mineralization, which could be prospective for copper and silver.
In 2012, a ground Time Domain Electromagnetic (TDEM) survey was conducted. A significant anomaly was identified with the potential of being a bedrock feature. The anomaly was consistent with the orientation of various mineralization types found in the Quailey mine. The survey results also outlined potential drill locations to be considered. Future exploration work is expected to be focused on the copper-zinc zone originally discovered underground in the Quailey mine.
Baseline GIS and imagery studies are currently in progress. An airborne hyperspectral survey has been completed and ground follow-up on the previously identified large DPEM anomaly, geochemical surveys, geological mapping, surface and underground sampling and drill target selection are expected to be conducted on the property.
To date, Aurex Energy has released high-grade results from its underground sampling program at Whiskey Flat. The assays support previous findings from the 1970s. Highlights from the program are outlined in the table below:
Red Rock Mill
The Red Rock mill was used to process ore mined at the Quailey mine in the 1970s. The mill is currently being used as a gravity-flotation circuit capable of processing 200 tonnes of ore per day. The current set up of the mill is ideal for processing bulk samples from test mining, but its capacity can be increased to accommodate commercial production as well as custom milling materials from other projects under development in the area.
The mill is located approximately 75 kilometers away from the Quailey mine and is accessible year-round by an all-weather road. The mill sits on six mill site claims and is operated under the jurisdiction of the Bureau of Land Management.
Peter Lake Project, Saskatchewan
The Peter Lake project comprises seven mineral claims covering 31,500 hectares in northern Saskatchewan. The property is situated in the Peter Lake domain and covers a significant portion of the Swan River complex, both areas are known for hosting prospective magmatic breccia PGE deposits that are similar to those found in Lac des Iles, Ontario. There has been a strike length of 190 kilometers found in the Swan Lake complex, making this the second-largest layered mafic and ultramafic complex in North America. Along with the PGE deposits, there have been significant deposits of copper, nickel and cobalt found in the area.
Between 2009 and 2011, Aurex Energy completed extensive geophysical surveys, which included 10, 878 kilometers of airborne ZTEM, VTEM and magnetometer surveys and 35 kilometers of horizontal loop and pulse EM ground surveys. The results correlated with known PGE mineralization and many anomalies were identified in the Swan Lake area of the Swan River complex. As a result, a total of 59 drill holes totaling 16, 174 meters were completed during this time frame and 47 of those drill holes, totaling 13, 928 meters, were concentrated in the Swan Lake zone.
An independent resource report (non-43-101-compliant) completed in 2013, estimates a current resource of 15.2 million tonnes grading 0.272 percent copper, 0.076 percent nickel, 0.010 percent cobalt, and 0.3 g/t combined gold-platinum-palladium. There are 17 other VTEM geophysical anomalies similar to the one represented by the current resource.
Aurex Energy is seeking a partner on the project. Additional drilling is necessary to increase the current resource estimate.
Craig Lake Project, Saskatchewan
The Craig Lake project covers 2, 764 hectares between Craig Lake, Saskatchewan and Flin Flon, Manitoba. The project is approximately 1.7 kilometers away from the former producing Westarm mine which was operated by Hudson Bay Mining and Smelting between 1978 and 1985 and between 1994 and 1996. In 1981, the Westarm mine reported grades of 3.82 percent copper, 1.5 percent zinc, 17.4 g/t silver and 1.37 g/t gold.
Work to date includes a versatile time domain electromagnetic (VTEM) geophysical survey, conducting a ground mobile metal ion survey, completing four test drill holes, and carrying out a downhole geophysical survey. The downhole geophysical survey results detected a significant high-conductance source that outlined an area of 300 meters by 300 meters along strike and down dip. These tests were followed up by a deep penetrating electromagnetic survey (DPEM TEM) to confirm and better define the downhole anomaly.
The DPEM TEM survey outlined two separate targets. One of the targets consisted of three separate, steeply dipping plates measuring 500 meters by 500 meters. The other target is located 800 meters north of the first target and contains a single plate measuring 800 meters by 800 meters along strike and down dip. A surface mobile metal ion survey has also yielded anomalous values for copper, zinc, silver, gold and nickel.
Aurex Energy has been issued permits from the Saskatchewan Ministry of Environment to carry out a two-hole drilling program.
Aurex Energy’s Management Team
Gary Billingsley, CPA, P.Eng., P.Geo. — President, CEO and Director
A professional engineer and geoscientist with more than 40 years of experience in the mineral industry, with most of those years spent in Saskatchewan. Gary Billingsley has been an officer and director of several public mining and mineral exploration companies during the past 31 years. In addition to experience with uranium and base-metal exploration, he has been directly involved with putting Saskatchewan’s largest gold mine into production and has played a major role in the discovery of diamond-bearing kimberlite in Saskatchewan on several occasions.
Prior to 2012, Billingsley served as Executive Chairman of Great Western Minerals Group Ltd., where he identified, very early on, the importance of achieving self-reliance across the entire supply chain for critical and strategic minerals, in particular rare earth elements.
Karen Frisky, BComm, CPA, CGA — Chief Financial Officer
Karen Frisky brings extensive accounting experience to Aurex Energy Corp. She received her Bachelor of Commerce with a major in Accounting from the University of Saskatchewan in 1994 and holds a Certified General Accountant (CGA) designation. She has served as an officer of several public companies in positions including Director of Finance, and Chief Financial Officer.
Prior to entering the mining industry, Frisky worked in public practice before moving to private industry where she worked in senior accounting positions in the non-profit, health, manufacturing and construction sectors.
Doug Billingsley, MBA — Director
Throughout his career, Doug Billingsley has held numerous executive positions (CEO, COO, CFO, SVP Corporate Planning, VP Marketing & VP Product Development) in large financial services and manufacturing organizations. His experience spans private and public companies as well as successfully starting and growing his own businesses. Coming from a mining family, he is very familiar with the mining industry, and has served on the boards of several publicly traded junior mining companies.
Billingsley has won several AMA awards, including Marketer of the Year. His experience ranges from strategic planning and systems development, to asset securitization, financial derivatives and raising capital. He holds a BA in political science/economics from the University of British Columbia and an MBA in finance/marketing from the University of Saskatchewan.
Billingsley is currently a Partner with Hong Kong based, Battalion Partners LLC. Battalion is a business advisory and consulting firm that specializes in working with companies to prepare and structure them to successfully attract investment capital.
Jim Engdahl — Chairman and Director
Jim Engdahl is currently operating a private, global, financial and management consulting business. He has extensive experience as a director and officer of public companies including, prior to 2012, Shore Gold Inc. and Great Western Minerals Group Ltd.
Prior to that, Jim was involved in corporate finance, specializing in mergers and acquisitions, and successfully financing many projects in Canada. He got his business and finance background working for many years in banking, where he last served as a Vice President of Barclays Bank of Canada.
David Ludwar — Director
Over the past 30 years, David Ludwar has held a number of senior management positions with major financial institutions, both in operational and strategic planning roles. He has extensive experience in communications, planning, project management, financial management and organization. He currently runs his own consulting business with a global clientele.
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