Fortitude Gold – East Camp Douglas

Fortitude Gold recently announced significant progress at East Camp Douglas. It’s a project that’s interested me for a number of years and for this reason, I’m going to go back and recap what we already know, and then take a closer look at Fortitude Gold’s recent announcement on the project.

But before we do this, we’re going to look at a former mining town called Goldfield, the mining boom that took place there in the early 1900’s, and also discuss some geology.

Goldfield, Nevada

Goldfield’s Location Relative to Isabella Pearl, East Camp Douglas & Dauntless

I found this great old map on the Nevada Bureau of Mines website, showing mining districts in Nevada in 1946. I thought I’d use it to show the town of Goldfield in Esmerelda County, Nevada. I’ve amended the map with yellow rectangles to show;

• The Santa Fe mining district to the north east of Luning in Mineral County where Fortitude Gold’s Isabella Pearl mine is located.
• The Silver Star mining district to the west of Mina where Fortitude Gold’s East Camp Douglas project is located.
• And the Lone Mountain mining district to the southwest of Tonopah where Fortitude’s new Dauntless property is located.

You can view the complete Nevada Mining District Map- 1946 here should you be interested.

The Goldfield Discovery

The following brief history of Goldfield was taken from Lode-Star Mining’s technical report, 15 January 2020.

“According to Ransome (1909), float gold was first discovered on Columbia Mountain by Harry Stimler and William Marsh in 1902. After prospecting without success for the source of this gold, Stimler and Marsh worked northward and staked the first 5 claims in December 1902 in the Sandstorm lode area. Other prospectors and claim stakers followed, but nothing of significance was found until May 24, 1903, when A.D. Meyers and R.C. Hart located speculative claims over ground south of Columbia Mountain. Hart soon sold his interest to T.D. Murphy, and it was Meyers and Murphy that ultimately found high-grade gold at what was to become the Combination Mine. Four months later, they sold their interests for $75,000 and the Goldfield ‘goldrush’ was on.”

“In December 1903, gold shipments from the Combination had begun and by mid-summer 1904 ore was also being shipped from the Jumbo, Florence and January mines. Total shipments by early 1905 greatly exceeded $1,000,000 in value (Ransome, 1909). The ore was sometimes incredibly rich, one example being a block of about 4.5 tons of ore from the Florence mine valued at between $6,000 and $7,000 per ton. At the time the gold price was $20.67 per ounce, therefore this single block graded approximately 290 to 339 ounces per ton (9.9 to 11.6 kg/t). The town went from a few tents in the summer of 1903 to 8,000 people early in 1905, and the Tonopah and Goldfield Railroad reached town in September of 1905.”

Between 1903-1925 Goldfield produced over 4 million ounces of gold. If production data is to be believed, the average grade approximated one ounce of gold per tonne, over this period, with multiple ounces per tonne in some of the early years. 1904 data suggests the 8,000 tons of ore mined contained 14 ounces of gold per ton, which seems almost unbelievable.

Production continued in years after 1925, but 1903-1925 were the most productive years.

Duffy’s Pillar – 1939

An interesting anecdote from the same LoneStar Technical report describes the following;

“In 1939, Martin Duffy discovered an ore pillar near the Little Florence Shaft. This 17’ x 6’ x 40’ block contained about 4,700 ounces (146 kg) of gold at an average grade of 15 oz Au/ton (514 g/t) (Duffy, 1973).”

That one pillar contained US$11million of gold at today’s current gold price of US$2,348/oz (26 April 2024) and supports the 1904 data of 14 ounces of gold per ton ore.

Geology of Goldfield

“The district is a classic example of a volcanic-hosted, epithermal gold deposit of the high-sulfidation, quartz-alunite type, some of which are extremely large. Other examples of this deposit type are Paradise Peak (Nevada), Summitville (Colorado), El Indio (Chile), Pascua-Lama (Chile-Argentina), and Tambo (Chile).” LoneStar Technical Report.

Don’t worry too much about the geological terms. We’re going to take a closer look at these in a moment. Just note that Goldfield is a high sulfidation type gold deposit.

“The Goldfield District is quite large, however most of the production of gold has come from high-grade bodies located in a relatively small area northeast of the Goldfield town site that is referred to as “the Main District.” Mineralization is generally localized in zones of strong silica-alunite alteration “ledges” surrounded by wider zones of clay alteration surrounded by a large area of propylitic alteration. The principal host rocks are a dacite and the Milltown Andesite. Higher gold grades are not distributed evenly throughout the altered host rocks and occur as asymmetrical sheets, blobs, pipes and shoots. Irregular breccia bodies associated with late stage silica and clays filling open spaces are usually present and gold mineralization is commonly associated with this late stage event.”

The 1975 paper by Ashley and Albers also makes this point that most of the ore came from a small area of the district, “The heart of the Goldfield mining district occupies 0.5 square mile within a 15-square-mile area of hydrothermally altered Tertiary volcanic rocks. Most of the ore shoots were irregular bodies of epithermal bonanza ore within a few contiguous silicified zones enclosed in clay-bearing altered rocks.” In the map below you can see the small ore-bearing area on the left, where the majority of the gold came from.

Again, don’t get too tangled up in the geology. Just note the mention of mineralisation associated with these silicified zones or ‘ledges’ and these clay-bearing altered rocks.

Below is Ashley and Albers full paper, should you wish to study it closer.

Mineralisation – Goldfield High Grade Ore

“Mineralisation at Goldfield consists of native gold with bismuth and copper-arsenic-antimony-bearing sulfides. For the most part the gold is present as tiny grains in sulfides and tellurides, or as disseminations in quartz.” LoneStar Technical Report.

I searched the internet and found a couple of examples of ore that are purported to come from mines in the Goldfield main district.

Geology – High-Sulphidation & Low-Sulphidation

There are a few geological terms that it would useful to understand. I.e. epithermal, high-sulfidation alteration, low-sulfidation veins and lithocaps. To help get a handle on the geology, let’s have a look at the following illustration (see below) that describes epithermal ore deposits (ie. high-sulfidation and low-sulfidation deposits) relative to an intrusive engine.

Epithermal, from Ancient Greek, literally means ‘on top of heat’ or ‘above heat’ and these types of deposits tend to form within 1km of the earth’s surface. In geological terms these are considered relatively shallow depths.

The heat source in the diagram below is the magmatic instrusion labelled here as a ‘Porphyry’. This intrusion is driving the magmatic fluids and vapours upwards through cracks and fissures in the rocks, towards the surface,

You should be able to locate the high sulfidation deposit towards the top right and the low sulfidation deposit towards the top left.

Epithermal Deposits

Acid

Before we go any further, it’s important to understand the role of acid in this subterranean world of extreme heat and pressure. This hot magmatic intrusion, once emplaced in the earth’s crust, will exsolve liquids and vapours, that migrate outwards from the intrusion through faults, cracks and fissures in the rock. As these liquids and vapours start to cool, chemical reactions will take place that increase the acidity of the fluids. Here’s a description of the process from a paper by Cook et. al. (2017). If chemistry isn’t your thing, skip to the last two sentences underlined in red.

Low-Sulfidation Veins

In the ‘epithermal deposit’ diagram above, notice how in the low-sulfidation deposit on the left of the diagram, the acidic vapours and liquids migrate away from the heat source and are neutralised by meteoric water (think rain water that’s found its way underground). This neutralisation is a key reason for the difference between high- and low-sulfidation deposits and the minerals that form.

High-Sulfidation Alteration Patterns

In high-sulfidation deposits, this aggressive acid is driven towards the surface, leaching the rock and altering it into a silicic type of rock. Silicic simply means rich in silica. Think of a glassy-type of rock like quartz. Notice the V-shaped upward flaring core of silicic rock where the acid did the most damage. As the alteration moves away from the core, the rocks aren’t as thoroughly transformed and turn into argillic type rocks. Argillic simply means ‘of or relative to clay or clay minerals.’

You might notice the term mineralised vuggy quartz in the diagram below. Vuggy is a geological term that refers to a small unfilled cavity. After the acid has attacked the rock it will not only be silicified but can be left will lots of cavities which increases its permeability. Allowing further waves of mineralising fluids to permeate through this rock.

The reason for the pattern of alteration is also due to neutralisation but this time within the high-sulfidation system. Geologist R H Sillitoe describes the following; ‘The vuggy residual quartz forms erosionally resistant ledges that are typically bordered outwards by quartz-alunite, quartz-pysrophyllite/dickite/kaolinite and argillic assemblages that reflect the progressive neutralisation and cooling of acid outwards from the up flow channel.’ in a paper titled ‘Styles of High Sulphidation Gold, Silver and Copper mineralisation in Porphyry and Epithermal Environments’.

There’s that description ‘ledges‘ again, that was used to describe the localised area where high grade gold was found in Goldfield.

If we go back to this map of the Goldfield mining district we can now understand the area labelled ‘Surface projection of ore-bearing areas’ where the silicified ledges would have been located (high grade gold associated with these) and the ‘argillized areas’ where the altered clay-type rocks were located.

On the Mindat website, I read an anecdotal story describing how the high-grade gold was sometimes thrown onto the waste piles when it was mixed with the clay.

The Lithocap

The last geological feature we’re going to tackle is the Lithocap. The key to this feature is understanding the flow of fluids laterally rather than vertically. In the leached silicic-core that we’ve discussed earlier, it’s formed by acid flowing vertically upwards through a structural fault. But if this fluid reaches a layer of permeable rock (likely a horizontal-lying rock layer) that it can flow through, then the acid will alter the rock in a less defined way creating a mass of silicic, advanced argillic (clay-like) and argillic (clay-like) rock. The zonation is far less defined than in the high-sulfidation ore zone described above.

This was my attempt at describing how a lithocap is formed. This is how the experts describe things:

“Two main components of hydrothermal fluid flow are required to form a lithocap – structurally controlled upflow from the deeper-seated magmatic fluid source, and lateral outflow, which can occur when the ascending magmatic-hydrothermal fluids reach their neutral buoyancy level and encounter a permeable stratigraphic or structural aquifer. Broad vertical and narrow lateral alteration zonation patterns characterise the upflow beneath lithocaps, whereas very broad lateral and vertical zonation patterns typify the overlying lithocaps.” From Lithocaps – Characteristics, Origins and Significance for Porphyry Epithermal Exploration by Cooke, Zhang, White and Chang

It’s when you start to get these lateral systems that High-Sulfidation mineralisation tends to grow in scale, although at lower grades. As Hedenquist and Arribas point out, ‘The largest, although lowest-grade, deposits form at shallow depths, where the system mushrooms into permeable lithologies such as volcaniclastic rocks, lacustrine sediments and, in particular, ignimbrite.’ From Exploration for Epithermal Gold Deposits (2000).

Grade Tonnage Plot – High Sulfidation v Low Sufidation

In general terms, High Sulfidation deposits tend to be larger tonnage but lower grade than Low Sulfidation deposits. Notice the giant, but lower grade Yanacocha (Ya) and Pascua Lama (Pa) high sulphidation deposits on the right of the diagram below.

But life is rarely that straight forward and as Hedenquist et. al. point out, ‘Epithermal deposits are extremely variable in form, and much of this variability is caused by strong permeability differences in the near-surface environment, resulting from lithologic, structural, and hydrothermal controls.’

Geologist Greg Corbett describes the following; ‘While most high sulphidation systems are characterised by gold grades in the 1.0 – 3.5 g/t range, some display remarkably higher gold grades attributed to fluid evolution and improved mechanisms of mineral deposition (Corbett, 2001a).

I suppose this is why we get exceptions to the rule, like Goldfield! You should be able to locate Goldfield on the graph above with the symbol ‘Go’.

Using what I’ve learnt, if I wanted to find another Goldfield type gold deposit, I’d start looking in the Walker Lane area of Nevada for evidence of silicified rocks surrounded by clay. Luckily for Fortitude Gold shareholders, Jason Reid (CEO), Bill Conrad (Chairman) and Greg Patterson (VP Corp Development)’s team are a few step ahead of me.

Fortitude Gold’s Acquisition of East Camp Douglas

Gold Resource Corp, prior to the Nevada assets being spun out into Fortitude Gold, acquired 100% of the East Camp Douglas property in January 2017 from Diversified Inholdings, LLC for a total of US$2million, of which US$1million was cash and US$1million was stock. This was a rare use of stock by management.

Barry Devlin, Vice President of Exploration at the time commented, “We have been watching the East Camp Douglas property for some time now and are excited to have acquired 100% interest in this large prospective exploration property. This property represents a district-scale exploration opportunity with the potential to host a deposit, similar to the neighbouring Paradise Peak deposit, which produced over a million ounces of gold.“

The news release went onto say that, ‘Precious metal epithermal mineralization at East Camp Douglas occurs as both widespread high sulfidation alteration areas and low sulfidation veins.‘ and provided a brief history, explaining that ‘Gold was first discovered at East Camp Douglas in low sulfidation quartz-adularia veins in 1893. Gold mining flourished in the district until 1902, with intermittent production through the 1980’s. Historic district gold production is estimated at approximately 100,000 ounces. Modern exploration (post-1960s) by several mining and exploration companies has established modest gold resources in five separate areas in the district, with over 3,000 meters of drill core and a large exploration database.‘

Third party drill intercepts attributed to the property were as follows:

• 22.86 meters of 13.55 g/t gold (from 4.6 meters down hole)
• 13.72 meters of 2.88 g/t gold (from 13.7 meters down hole)
• 18.29 meters of 2.42 g/t gold
• 23.86 meters of 1.99 g/t gold (from surface) 
• 23.47 meters of 1.72 g/t gold
• 27.40 meters of 1.62 g/t gold
• 9.10 meters of 1.00 g/t gold (from surface)
• 7.62 meters of 2.86 g/t gold (from 3.0 meters downhole)

A news release on 24 July 2023 suggests that these results were from the north of the property and therefore likely connected with the vein system found in that part of the property. I’m assuming that these are likely low-sulphidation veins not high sulphidation.

Form S-1 Registration Document – October 2020

When Fortitude Gold was spun out from Gold Resource Corp, a Form S-1 was filed with the SEC. This is what was said about East Camp Douglas. Notice mention of a Lithocap in the second last sentence, as well as mention of High Sulfidation Alteration and Low Sulfidation Veins.

East Camp Douglas (ECD) – Maiden Drill Results – June 2021

The news release for the maiden drill program at East Camp Douglas, released 9 June 2021, provided a wealth of information on the project.

Tenement Outline – ECD

The following map, taken from the June 2021 news release shows the location of the East Camp Douglas tenement. Notice the blue outline showing the lithocap. Notice also the blobs of yellow. If you look closely you might be able to see the key that defines yellow as ‘Argillized Area’. Remember the clay area found surrounding the silicified core in High Sulfidation deposits. Remember also the argillized area of clay rocks to the east of Goldfields.

This slide from the same release also discusses the large area of silicification at East Camp Douglas and compares it to other High Sulphidation deposits. Notice the quote at the bottom of the slide from the geologist Dr Jeffrey Hedenquist. We’ve looked at his work earlier when we reviewed the epithermal diagram and the grade tonnage graph.

The following slide from the same news release shows the topography and provides a visual of the silicified rock.

Drill results included 17.9m at 1.29 g/t Au from 34.9m below surface.

As geologist Richard Sillitoe points out, “Many lithocap remnants, however, contain numerous siliceous ledges that are apparently devoid of appreciable HS mineralisation.” from his paper ‘Styles of High Sulphidation Gold, Silver and Copper mineralisation in Porphyry and Epithermal Environments’.

Remember also Greg Corbett’s comment that ‘most high sulphidation systems are characterised by gold grades in the 1.0 – 3.5 g/t range‘.

In this context, the results were encouraging.

In the news release Fortitude discuss the geology as follows, “The Company completed its initial eleven core holes into three small areas of the lithocap target. The lithocap is an expansive 1.5 kilometer by 1.0-kilometer geologic structure that has the potential to host a significant near-surface gold deposit.

Lithocaps are stratabound alteration domains that are laterally and vertically extensive and typically have steeply dipping structural roots with significant lateral fluid flow during formation. The lithocap structure at the south end of the Company’s East Camp Douglas property has been of particular interest, as high-grade gold surface samples have been taken around the eroded margins of this large lithocap which conforms with extensive lateral fluid flows during formation. In addition, high-grade gold rock chip samples from the lithocap’s surface have graded as high as 31 g/t gold.

The geologic model being developed through the Company’s exploration program looks to test for gold mineralization potentially consolidated in areas beneath the large lithocap structure. Initial drill targets included “D2 Cliffs”, “Gypsum Shaft” and “Discovery Breccia” targeted primarily for an understanding of the geologic structural setting of the lithocap as well as testing for gold mineralization. All reported lithocap gold intercepts are oxidized, and preliminary cyanide leach assaying suggests that mineralization could be amenable to cyanide leach processing methods.”

Notice mention of lateral and vertical fluid flow during formation of the lithocap and mention of steeply dipping structural roots. Remember the silicified ledges at Goldfield where the high grade gold would “occur as asymmetrical sheets, blobs, pipes and shoots.’? These are the steeply dipping structural roots that Fortitude Gold are trying to locate at East Camp Douglas.

Barry Devlin, former VP Exploration went onto say, “We are encouraged with these initial drill results as they give credence to our geologic model whereby high angle structures feeding this system trap potential gold-bearing fluids beneath the impermeable lithocap structure. We are excited to have intercepted gold mineralization in our first drill program from which we plan to build on with future drill programs by following-up on the most significant mineralized structures in search of the potential throat of the system. This is a large mineralized system and drill target that will take time for us to explore. We expect to return to East Camp Douglas during the third quarter of 2021 for a phase two drill program to build on these positive initial drill results.”

Interestingly, Fortitude Gold suggest that the lithocap is impermeable and might be working as a trap for mineralised fluids. Perhaps this once permeable layer – during formation of the lithocap – became impermeable during subsequent geological events. None-the-less, gold has been found associated / beneath the lithocap and the hunt for the structural roots to the system is the main objective.

The Challenge

Lithocaps can be hard to explore.

“They can be particularly challenging for exploration due to their lack of easily mappable alteration zonation patterns.” Source: Lithocaps – Characteristics, Origins and Significance for Porphyry Epithermal Exploration by Cooke, Zhang, White and Chang.

In addition, the structural roots can be hard to find. At Goldfield the silicified ore was often found in near vertical shoots and “Mineable gold grades within the ledges decrease outward to low grade or barren silicified rocks over distances of often less than a meter.” Lone-Star Technical Report

Given these challenges, it’s no wonder Barry Devlin suggested East Camp Douglas would take time to explore.

The full news release from 9 June 2021 can be viewed here:

3 January 2023

There wasn’t much news on East Camp Douglas through the remainder of 2021 and through 2022. Then on 3 January 2023, some new drill results were released. They included multiple incercepts above a gram per tonne gold and an intercept of 4.5m at 5.4 g/t gold. Above the usual grade for a high sulphidation deposit.

The news release included this image of the drill site at East Camp Douglas:

Mr. Jason Reid, CEO and President of Fortitude Gold, stated, “These latest drill results, coupled with our first D2 Cliffs drill program, have exceeded our expectations. Our lithocap is very large and our drill programs were initially targeted to understand its structure. We have been fortunate we intercepted mineralization so early in its exploration with this latest drill program consistently intercepting mineralization in 94% of the holes. We hope to continue to expand on these great results which could lead us to the feeder of this system whereby both the feeder and the lateralized zones could potentially become a large, bulk tonnage gold deposit.”

East Camp Douglas – North

In mid-2023, Fortitude mentioned a drill program planned for the north of the property, where the vein system is located. This appears to have been a successful drill program, with assays announced in December 2023, January 2024 and February 2024, but I’m going to ignore these results, for the purpose of this article, as I believe they relate to low-sulphidation gold veins. My interest in East Camp Douglas relates to the High Sulphidation alteration system.

11 March 2024 – East Camp Douglas Lithocap Assays

A breakthrough was announced in March of this year when Fortitude announced that;

FORTITUDE GOLD DISCOVERS LITHOCAP HIGH-GRADE FEEDER INCLUDING 3.05 METERS GRADING 5.57 G/T GOLD WITHIN 12.19 METERS GRADING 2.90 G/T GOLD AT EAST CAMP DOUGLAS

As the news states, the ‘drill program focused at the D2 Cliffs target builds on the Company’s January 2023 drill results where 15.24 meters intercepted 1.87 g/t gold including 4.57 meters grading 5.24 g/t gold.’

Key drill intercepts were:

• 3.0m at 5.6 g/t gold
• 3.0m at 6.1 g/t gold

I’ve highlighted these drill intercepts in yellow in the diagram below.

Allan Turner, who was appointed as Vice President of Exploration for Fortitude Gold following Barry Devlin’s retirement commented, “It appears we have discovered an intersection point between two faults that is feeding high-grade gold mineralization into the lithocap. We continue to target feeder zones within high-angle structures at the D2 Cliffs zone within the much larger East Camp Douglas lithocap structure. While we have consistently intersected lower grade gold mineralization that is stratabound to the silicified tuffaceous unit typical in mineralized lithocaps, this discovery of an initial feeder zone may be the first of many feeding high-grade gold into this large lithocap system.”

Here’s the full news release:

Conclusion

High Sulphidation gold deposits typically form vertical silicic cores, surrounded by argillised (clay like) rocks. They can be large tonnage but usually lower grade than low-sulphidation deposits with grades mostly within 1.0 – 3.5 g/t Au. Goldfield was a bonanza grade exception to this rule where gold was associated with the silicic vertical core, known to the miners as ‘ledges’. As geologist Sillitoe points out, many lithocap remnants contain numerous siliceous ledges that are apparently devoid of appreciable HS mineralisation.

East Camp Douglas has had success finding 1.0 gram gold material below the lithocap, possibly disseminated gold. It has now found two intersecting structures with higher grade gold, that appear to represent a feeder zone. Fortitude Gold can now follow these two structures to look for more high grade gold. At Goldfield, ‘The change from rich ore to barren ledge matter may take place within a short distance.’ (Ransome) These targets will be hard to locate and so finding structures like a fault is key.

To date, the market appears to be rather uninterested in the exploration at East Camp Douglas. It seems unimpressed with the regular intervals of 1 gram materials and to some extent with the 4.5m at 5.4 g/t Au, 3.0m at 5.6g/t Au and 3.0m at 6.1 g/t Au higher grade intercepts. I wonder if it doesn’t understand the nature of these High Sulphidation type deposits and the scale of the system at East Camp Douglas. Perhaps Bonanza grade ore, like at Goldfield, would wake the market up. This remains a possibility. In the meantime, chasing the ‘high-angle’ structures to search for more high-grade gold will be fascinating to watch. East Camp Douglas has the potential to be a large deposit. I’ll be watching results closely.