2021 Shareholder Update
Dear Fellow Shareholders,
With the completion of our earn-in expected before the year’s end, the recent broad market volatility and 2021’s gold equity market weakness, I thought it prudent to review your company’s activities since signing an option agreement on the Independence project in August 2020 as well as a look forward at upcoming corporate milestones.
When we signed the option agreement on the Independence project, we saw the project as an asset providing not only near-term cash flow opportunity but one with world-class potential represented by the high-grade underground skarn resource.
Our initial goal at the Independence project was to demonstrate that the near surface resource provided an opportunity for Golden Independence to transform itself into a gold producing company with positive cash flow in a short period of time and at a manageable CAPEX.
In May we delivered the maiden NI 43-101 compliant resource for the project outlining a near surface resource of 537,300 ounces of gold and 8.1 million ounces of silver in the Measured and Indicated categories and an additional 137,300 ounces of gold and 1.2 million ounces of silver in the Inferred category, forming the basis for the upcoming Preliminary Economic Assessment (PEA) on the near surface resource which will deliver on our initial goal. We anticipate delivery of the PEA before year end 2021.
As we advanced the project towards a PEA over the last year, your company has also significantly de-risked it. The renegotiation (and payment) of the US$4 million cash bullet payment into US$1.7 million in cash and 4.9 million shares of the Company in January, the delivery of the maiden NI 43-101 compliant resource in May and the imminent delivery of a PEA (based on that NI 43-101 compliant resource) showing the near term cash flow potential of the project have all served to reduce risk.
As at November 1st, your Company has invested approximately US$2.8 million dollars in the Independence project as we complete our US$3 million earn-in commitment. Delivery of the PEA will be roughly concomitant with the completion of our earn-in at the Independence project and the formation of a formal Joint Venture Agreement with our private partner, Americas Gold Exploration Inc (AGEI). Formation of the Joint Venture provides clarity to other mining companies and investors regarding our relationship with AGEI and makes the path to an investment or other corporate transaction much clearer for Golden Independence.
With the delivery of the PEA, our focus in 2022 will shift to unlocking the world class potential of the high-grade skarn. The skarn was last drilled in the mid 1990s by Great Basin Gold and currently hosts a resource of 796,200 ounces of gold at a grade of 6.5 gpt gold. This resource is based on seven of nine deep core hills reaching the skarn horizon with one hole (IND-03) having been lost before reaching the skarn and one hole (WI-002) having intercepted a later stage intrusive that bisects the skarn at the north end of the Independence project. We believe that the Independence property offers the potential to double our current skarn resource and we know the skarn is drill confirmed to the north of the Independence property on NGM ground. Our goal in 2022 is to demonstrate that the Independence skarn is similar to the world class Fortitude skarn lying approximately a mile to the northeast which produced a total of 2.3 million ounces of gold at a grade of around 7.5 gpt gold and was mined out between 1985 and 1994.
While the last year has been challenging for all participants in the gold industry, Nevada remains a premier jurisdiction for gold companies and a wave of recent deal making has included the take-overs of Corvus Gold and Fiore Gold at significant premiums. After a year of choppy trading, the gold price seems to have stabilized and may be beginning a new rise. With our earn-in nearly complete and a formal JV soon to be in hand, we believe that Golden Independence is well positioned to begin unlocking the world class potential of the skarn and I would like to thank you for your continued support and shared vision of the potential of the Independence project.
Christos Doulis
Chief Executive Officer
Golden Independence Mining Corp.
