HIGHGOLD MINING INC. HIGHGOLD MINING INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the six months ended June 30, 2023
HIGHGOLD MINING INC.
Management's Discussion and Analysis
For the Six Months Ended June 30, 2023
(Expressed in Canadian Dollars)
GENERAL
The information in this Management's Discussion and Analysis ("MD&A") is intended to assist the reader in the understanding and assessment of the trends and significant changes in the results of operations and financial conditions of HighGold Mining Inc. (the "Company" or "HighGold"). This MD&A should be read in conjunction with the unaudited condensed consolidated interim financial statements of the Company for the six months ended June 30, 2023 and the audited consolidated financial statements of the Company for the year ended December 31, 2022, and other information relating to the Company on file with the Canadian provincial securities regulatory authorities on SEDAR at www.sedar.com. The Company's consolidated financial statements for the six months ended June 30, 2023 and for the year ended December 31, 2022 have been prepared in accordance with International Financial Reporting Standards ("IFRS").
This MD&A contains forward-looking statements. Please refer to the cautionary language at the end of this document.
Historical results of operations and trends that may be inferred from the following discussions and analysis may not necessarily indicate future results from operations.
HighGold is a mineral exploration company focused on premier high-grade gold projects located in North America. HighGold's flagship asset is the high-grade Johnson Tract Gold (Zn-Cu) Project, ("JT" or the "Project") a gold-dominant polymetallic deposit, located in an accessible area of south-central coastal Alaska, USA. HighGold's experienced Board and senior management team, are committed to providing shareholder value through discovery, careful stewardship of capital, and environmentally and socially responsible mineral exploration activities.
The Company is a reporting issuer in British Columbia, Alberta and Ontario and trades on the TSX Venture Exchange ("TSX-V") under the symbol HIGH. HighGold's symbol on the US Over-the-Counter trading market was changed to HGMIF as a result of the spin-out of the Company's Canadian assets to Onyx Gold Corp. ("Onyx Gold").
This MD&A has taken into account information available up to and including August 24, 2023.
HIGHLIGHTS
Spin-out of Canadian Mineral Properties
In March 2023, the Company completed an arrangement agreement for the spin-out of its Ontario and Yukon exploration properties to its wholly-owned subsidiary, Onyx Gold . The spin-out was conducted by way of a plan of arrangement (the "Arrangement") under the British Columbia Business Corporations Act effective on June 6, 2023. Pursuant to the Arrangement, the shareholders of the Company were entitled to receive one Onyx Gold share for every four shares of the Company held, distributed on a pro rata basis and the Company received 5,000,000 shares of Onyx Gold.
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HIGHGOLD MINING INC.
Management's Discussion and Analysis
For the Six Months Ended June 30, 2023
(Expressed in Canadian Dollars)
The intention is for Onyx Gold to continue to maintain an association with HighGold, leveraging the strength and efficiency of our in-house technical teams under one umbrella. HighGold owns approximately 12% of the Onyx Gold, following completion of the spin-out and $8.4M financing. The spin- out of Canadian assets to Onyx Gold now enables HighGold to dedicate 100% of the Company's effort on the important next steps at Johnson Tract. The Company has outlined an advanced exploration plan designed to support future underground drilling, engineering and economic studies, in parallel with significant exploration drilling to grow the property-wide mineral resource base and to continue testing new targets. Additionally, it provides existing HighGold shareholders with exposure to a new, well financed, discovery-focused exploration company with an exciting portfolio of Canadian assets.
$9.25 Million Private Placement Completed
In April 2023, the Company completed a non-brokered private placement, consisting of 14,029,243 shares at a price of $0.66 per share for aggregate gross proceeds of $9,259,300.
Johnson Tract Project
The Company started the 2023 exploration program in late June with plans for a two rig, 8,000 meter drill program in addition to engineering, hydrogeology and environmental studies to support permitting an underground exploration ramp as part of a multi-year advanced exploration plan.
The objective of the 2023 drill program is to expand the known zones of mineralization at the Ellis Zone and JT Deposit and to test new high-potential target areas. Key drill targets include:
- Ellis Zone Expansion - Follow-up expansion drilling on 50 to 100-meter centers on the high- grade Au-Ag-Zn-Pb (+Cu) structurally controlled vein and breccia zone. The Ellis Zone shows similarities to the JT Deposit and remains open in multiple directions.
- East Difficult Creek (Ellis Zone Regional) - A new interpretation suggests that the mineralized system hosting the Ellis Zone is large and continues north and east under cover, and across syn- mineralization faults. Drilling will test offset and geophysical targets under overburden cover towards the East Difficult Creek prospect.
- JT Deposit - A potential east-westcross-fault has been identified south of the JT Deposit as the result of drilling and interpretative work completed in 2022. Drilling will test the continuation of the known mineralization to the south across this fault.
- South Valley Target (JT Deposit South) - A blind target is interpreted under overburden cover approximately one (1) km along strike to the south of the JT Deposit. Drilling will test a geophysical anomaly that shares a similar signature to the JT Deposit. Anhydrite alteration, a key alteration type surrounding the JT Deposit, borders the South Valley target.
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HIGHGOLD MINING INC.
Management's Discussion and Analysis
For the Six Months Ended June 30, 2023
(Expressed in Canadian Dollars)
To support the design and permitting of an underground exploration ramp and related surface infrastructure, the 2023 exploration program includes the following activities:
- Geotechnical and Hydrogeological Drilling - Six (6) dedicated drill holes for conducting detailed hydrogeological studies including packer tests and monitoring wells, and geotechnical evaluation of the underground exploration ramp, road and airstrip.
- Baseline studies - A variety of studies and surveys including archaeological studies, characterization of surface hydrology, water quality sampling, aquatic surveys, wetland surveys, environmental rock geochemical analyses, and installation of an onsite weather station.
- Road Permitting - An application for a Section 404 permit was submitted in May to the US Army Corps of Engineers to lengthen and realign the existing airstrip and constructing of approximately 2.6 miles (4 km) of access road connecting the airstrip and Johnson Tract camp to the proposed exploration portal site. The permitting process for the road and airstrip is anticipated to take eight to 12 months to complete with the objective of having approvals in hand in advance of the 2024 field season.
In addition, the 2023 exploration program includes geological mapping, prospecting, and soil & rock sampling programs to follow-up and expand on the positive results generated from the 2022 program and refine new drill targets. The Company has also initiated an approximately 600-linekilometer airborne MagnetoTelluric ("Mobile MT") geophysical survey over key prospect areas to identify new deeper targets.
COMPANY BACKGROUND
HighGold was listed on the TSX Venture Exchange in September 2019 under the ticker "HIGH". A history of the Company's financings is listed in the table below:
Date | Amount | Shares Issued | Price | Warrants |
$C | $C | |||
August 20, 2019 (1) | $200,000 | 1,000,000 | $0.20 | ½ @ $0.45, 5-year term |
September 23, 2019 | $7,650,000 | 17,000,000 | $0.45 | ½ @ $0.70, 2-year term |
December 5, 2019 (2) | $2,304,000 | 1,280,000 | $1.80 | N/A |
December 5, 2019 | $7,000,000 | 5,600,000 | $1.25 | N/A |
July 28, 2020 | $13,800,166 | 7,976,975 | $1.73 | N/A |
July 28, 2020 (3) | $772,445 | 446,500 | $1.73 | N/A |
December 23, 2020 (2) | $3,000,000 | 1,500,000 | $2.00 | N/A |
December 23, 2020 (2,3) | $700,000 | 350,000 | $2.00 | N/A |
October 27, 2021(4) | $18,800,000 | 12,750,000 | $1.60 | N/A |
April 12, 2023(5) | $9,259,300 | 14,029,243 | $0.66 | N/A |
- Seed round completed by management and directors.
- Flow-throughfinancing at premium to market.
- Side-carfinancing pursuant to existing investor rights agreement with strategic shareholder.
- Two-partfinancing - a $13,800,000 prospectus offering bought deal and $5,000,000 private placement to an existing strategic shareholder.
- Non-brokeredprivate placement.
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HIGHGOLD MINING INC.
Management's Discussion and Analysis
For the Six Months Ended June 30, 2023
(Expressed in Canadian Dollars)
EXPLORATION PROPERTIES
Overview
HighGold Mining is focused on its flagship Johnson Tract Property in south central coastal Alaska, USA with the intent to grow existing high-grade resources and make new high-grade discoveries. A multi-year advanced exploration plan has been developed for Johnson Tract designed to support future engineering, environmental and economic studies that evaluate the potential for a high-grade underground mine. A key component of this plan is establishing an underground exploration ramp to accommodate year-round exploration drilling.
Johnson Tract Property
JT Deposit
The large, 21,000-acre Johnson Tract property is located near tidewater on Cook Inlet, 125 miles (200 kilometers) southwest of Anchorage. It includes the high-grade Johnson Tract Gold (Zn-Cu) Deposit ("JT Deposit") along with excellent exploration potential indicated by several other prospects over a 12- kilometer mineralized trend. Prior to HighGold, the project was explored in the mid-1990s by a mid-tier mining company that evaluated direct shipping gold mineralized material from Johnson to the Premier Mill near Stewart, British Columbia.
HighGold acquired Johnson Tract through a lease agreement with Cook Inlet Region, Inc. ("CIRI"), an Alaska Native regional corporation that is the largest private landowner within the Cook Inlet region. The Johnson Tract property is an inholding in Lake Clark National Park and was conveyed to the CIRI Native Corporation under the terms of the Alaskan Native Claims Settlement Act ("ANSCA") and the Cook Inlet Land Exchange. Ratified by an act of Congress CIRI is entitled to transportation and port easements through Park lands for mineral extraction.
JT Deposit Mineral Resource (July 2022)
-
Indicated Resource of 3.49 million tonnes ("Mt") grading 9.39 g/t gold equivalent ("AuEq") for
1,053,000 oz AuEq - Inferred Resource of 0.71 Mt grading 4.76 g/t AuEq for 108,000 oz AuEq
- Indicated resource averages 40-meter horizontal width, roughly 10 times the mineable width of most high-grade (+5 g/t) underground gold deposits
- Open to expansion along strike/down-dip/down-plunge with numerous high-priority property- wide targets
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Highgold Mining Inc. published this content on 29 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 August 2023 23:19:12 UTC.
