Nevada and gold go together like peanut butter and jam. The state has produced more than 5 million oz. of gold each year for the last 20 years. Only three countries – China, Australia, and South Africa – produce more gold than the state of Nevada. Estimates of the amount of gold contained in the famous Carlin trend alone range as high as 180 million oz. Some of Nevada’s gold mines are astoundingly large. Barrick Gold‘s (ABX-T, ABX-N) Betze-Post mine, which taps into the Carlin’s largest deposit, produced 1.28 million oz. gold in 2008, while Newmont Mining‘s (NMC-T, NEM-N) Nevada operations combined to produce 2.2 million oz.
Since the Carlin trend was discovered a few decades ago, almost everyone searching for gold in Nevada has focused on the trends. And there are several. Carlin, which strikes 65 km northwest near the northeastern corner of the state, is the most famous, but the Battle Mountain-Eureka trend runs parallel to it to the southwest and is much larger, covering almost four times the area. And lying perpendicular to those two trends, to their north, is the Getchell trend.
The last few years, however, have marked a noticeable shift in exploration mentality in the state. While many explorers continue to search for new deposits on known trends, many others have moved off trend to probe in areas where prospective rocks lie beneath the cover of younger sediments and volcanics. Advances in geophysics are greatly aiding this search.
In 2010, drills will turn on more than 100 projects in Nevada, and the vast majority of those drills will be seeking gold.
There are far too many companies with projects in Nevada to do justice to all of them, so what follows is a quick look at some of the more promising gold exploration plays in the state.
Fronteer Gold & AuEx Ventures
Fronteer Gold (FRG-T, FRG-X) has three exciting gold projects in Nevada, all of which have moved beyond simple exploration and into development studies. Two of Fronteer’s projects are in northern Nevada: the Sandman project is in Humboldt county, near the historic Sleeper mine, and the Long Canyon project is in the northeastern corner of the state, in Elko county. Fronteer’s third project, Northumberland, is in Nye county, near the Round Mountain mine operated jointly by Barrick and Kinross Gold (K-T, KGC-T).
With a friendly merger with 49% Long Canyon partner AuEx Ventures (XAU-T), announced at the end of August, Fronteer is looking to dominate a new trend called the Pequops district. Last year, the partners completed an initial resource estimate and scoping study at the shallow, oxide deposit, which stretches along 2.7 km of strike. The project boasts 12.4 million measured and indicated tonnes grading 1.71 grams gold per tonne, plus 10.4 million inferred tonnes at 1.65 grams gold. The scoping study, though based on a smaller, earlier resource estimated Long Canyon’s pre-tax net present value at US$145 million, and projected an open-pit operation would produce 93,000 oz. gold annually, generating a 64% internal rate of return over a six-year mine life. To move the project towards a prefeasibility study, Long Canyon will see $20 million in spending this year.
Five drill rigs are turning at the project, focused on infill drilling and expansion to the northeast. And the expansion drilling is working – Long Canyon drill results this summer have included 44.2 metres of 10.14 grams gold, 64 metres of 5.27 grams gold, 27 metres of 5.99 grams gold, and 19.8 metres of 8.87 grams gold.
Fronteer’s $280-million offer for AuEx will win it all of the junior’s Pequops projects, in Nevada’s northeast, while its other Nevada projects, as well as properties in Spain and Argentina will be spun off into a new company. AuEx has four projects in a 400-sq.-km area of the Pequops, all of which contain Carlin-style, carbonate-hosted sedimentary gold mineralization. One of those projects is Long Canyon; the others are West Pequop, a joint venture with Agnico-Eagle Mines (AEM-T, AEM-N); Wood Hills South, a JV with private company NuLegacy Gold; and Pequop South, a JV with Golden Dory Resources (GDR-V).
At West Pequop, Agnico-Eagle has earned a 51% interest and is now working to increase its stake to 70%. The major is spending $3.25 million at the site this year and recently defined an initial resource of 1.3 million indicated tonnes grading 1.63 grams gold, plus 5.5 million inferred tonnes averaging 1.41 grams gold. Wood Hills South and South Pequop are still at the soil-sampling stage.
Fronteer’s Sandman project is also a joint venture, this time with Newmont Mining. Already home to four deposits, Sandman is an exploration focus for Newmont because the project is within trucking distance of the major’s Twin Creeks mine. Newmont can earn a 51% stake in Sandman by spending US$14 million on exploration in three years and then making a production decision based on a feasibility study by mid-2011.
The deposits at Sandman are likely amenable to open-pit mining and already host 7.3 million measured and indicated tonnes grading 1.17 gram gold. And these numbers look set to grow because of a decision by the Bureau of Land Management to increase the area permitted for exploration at Sandman to 100 sq. km from 5 sq. km. The expanded area covers eight high-priority geophysical targets that Newmont is now drill-testing.
And Fronteer’s third project, Northumberland, may sit south of the official Carlin trend, but the company still calls it one of the largest, undeveloped Carlin-style gold deposits in Nevada. Home to a historic mine that produced almost 300,000 oz. gold from a heap leach, Northumberland is currently home to 36.5 million indicated tonnes grading 1.92 grams gold plus 6.9 million inferred tonnes carrying 3.49 grams gold. Roughly 20% of the resource comprises oxidized material, while the rest is sulphide.
Explorers at Northumberland prior to Fronteer focused on the near-surface oxide zone. Fronteer, on the other hand, is targeting new areas on the western portion of the property and is hitting better grades. The western side now hosts two high-grade gold zones, which returned a best result of 7.1 grams gold over 37.4 metres. Fronteer continues to drill slowly at Northumberland, though the main focus for 2010 is metallurgical studies. Initial test work indicated good recoveries – better than 85% even for those samples containing refractory gold.
Another company with several promising gold projects, Midway Gold (MDW-V) has projects in three counties in the northern half of Nevada. Since optioning one of its main projects, Spring Valley, to Barrick in 2009 the company has focused most of its efforts at its Pan project, which is at the southern end of the Battle Mountain Eureka trend.
Those efforts recently culminated in a positive scoping study for Pan’s 38.8 million measured and indicated tonnes grading 0.55 gram gold per. An open-pit mine and heap-leach operation could produce 44,000 oz. gold annually over a 7.3-year mine life. The resource is contained in four deposits that all remain open in several directions.
Meanwhile, Barrick is spending US$5 million this year at Spring Valley. Just prior to the deal with Barrick, Midway defined an inferred resource at Spring Valley of 79.6 million tonnes grading 0.72 gram gold, for 1.8 million oz. gold. Then, in 2009, Barrick drilled 34 holes at the project, producing highlight intercepts of 103 metres grading 1.27 grams gold and 16 metres of 30.5 grams gold. The results expanded the limits of known mineralization, which is related to a porphyry intrusion.
To earn a 60% interest in Spring Valley, Barrick has to spend US$30 million before the end of 2013. The major met its earn-in requirement last year by spending US$4 million.
Rye Patch Gold
Also exploring in the area around Midway’s Spring Valley is Rye Patch Gold (RPM-V). In fact, Rye Patch has two projects that, together with Spring Valley, are potentially defining a new gold trend known as the Oreana trend.
The Wilco project was first explored more than 100 years ago and has seen many owners since. Currently, Rye Patch is earning 100% ownership from Newmont and, after three seasons of drilling, has updated the resource estimate twice. Defined resources now total more than 2.7 million oz. gold, contained in several shallow deposits. This year Rye Patch is drilling 5,000 metres at Wilco, primarily testing newly identified targets, while also conducting metallurgical test work on drill core from the project.
Ten kilometres away, Rye Patch completed an initial resource estimate for its Lincoln Hill project in May. The stockwork deposit with high-grade feeder zones now carries an inferred resource of 17.3 million tonnes grading 0.69 gram gold and 17.1 grams silver.
Evolving Gold (EVG-V) rebranded as a company focused on Nevada gold exploration just three years ago but it didn’t take long for the company to make itself noticed. The rebranding was based on the premise that there was still much Carlin-style mineralization to be found in Nevada – the more obvious, outcropping deposits may have all been discovered but the Evolving team focused on finding slightly deeper mineralization masked by a thin veneer of cover.
The company now holds some 320 sq. km of ground within and just northwest of the Carlin trend, giving it one of the largest land positions in the state. The Carlin project accounts for one-third of the land package. The wholly owned Humboldt project accounts for the other two-thirds of Evolving’s ground.
Evolving recently hit the longest mineralized intercept to date at Carlin: hole 9 returned 172 metres grading 0.31 gram gold, starting 1,135 metres down-hole. The hit included 1.1 metres of 7.79 grams gold, which is similar to the short, high-grade hit from 185 metres to the southeast, where hole 7 returned 18.3 metres grading 11.7 grams gold. The company believes the mineralized horizons are the same as those hosting producing mines within the Carlin trend that have become covered.
A recent high-resolution gravity survey over both the Carlin and Humboldt properties identified 24 new targets that fit Evolving’s geologic model. The company is currently drilling its first hole ever on the Humboldt property. And a recent $15-million private placement with Goldcorp has given Evolving funding to add a second deep-drilling rig to the projects.
US Gold‘s (UXG-T) main focus may be its El Gallo project in Mexico, but the company is also advancing an interesting gold play in the Carlin trend. Much of the interest comes from its location – the Gold Bar and Tonkin projects sit directly south of Barrick’s Cortez mine, which is expected to soon churn out 1 million oz. gold annually from a 35-million oz. deposit.
Gold Bar is a historic mine that now hosts 33.5 million measured and indicated tonnes grading 0.905 gram gold per tonne. Last year, a scoping study assessed the potential to build an open-pit mine and heap-leach operation at Gold Bar, with positive results: a capital investment of US$137 million should build an operation generating a 35% internal rate of return, based on US$950-per-oz. gold.
And the nearby Tonkin project hosts slightly more defined gold – almost 1.8 million oz. – though it has not yet been subjected to an economic analysis.
Allied Nevada Gold
Allied Nevada Gold (ANV-T, ANV-X) is a proven Nevada success story. The company picked up a past-producing gold mine in Humboldt county, proved up an oxide resource totalling 333 million measured and indicated tonnes grading 0.45 gram gold and 7.5 grams silver, and built a heap-leach operation that, in its first year, produced 100,000 oz. gold and 300,000 oz. silver. The Hycroft mine is now undergoing an expansion to lift production to 300,000 oz. gold and 1 million oz. silver annually by 2013.
The Hycroft deposit remains open to the north, south, and west. In addition, Allied Nevada has defined a sulphide resource below the oxide layer that contains another 5 million oz. gold and 240 million oz. silver. A scoping study found the resource could be mined economically as an open pit, so the company is spending $10 million this year on a feasibility study.
And Allied Nevada also holds a host of exploration-stage projects in Nevada, the most advanced of which is Hasbrouck Mountain. Located 50 miles south of the Round Mountain mine, Hasbrouck is an epithermal deposit that currently hosts 18.9 million indicated tonnes grading 0.79 gram gold and 10.97 grams silver.
Great Basin Gold
The developing Burnstone gold mine in South Africa may steal the spotlight, but Great Basin Gold (GBG-T, GBG-X) also operates a nice high-grade gold-silver mine in Nevada. The Hollister mine sits in the northeastern part of the Carlin trend and holds 1 million measured and indicated tonnes of rock grading 40 grams gold and 295 grams silver. Yes, those numbers are correct – this is high-grade stuff.
There is great potential to find more of that high-grade stuff at Hollister as the three main vein systems remain open along strike and Great Basin plans to develop an underground adit to allow faster and more targeted exploration.
And to process the ore from Hollister, Great Basin bought, rehabilitated, and expanded an old mill called Esmeralda. The mill was a good deal, purchased from a company that was facing bankruptcy, and it came with a blue-sky bonus: several companies have hit interesting gold and silver grades at Esmeralda but none have ever put the data together properly (hence the bankrupt owner). As soon as Burnstone gets up and running, Great Basin plans to head to Esmeralda to see what it can find.
Golden Predator (GPD-T) is one of several companies hedging their bets on two solid jurisdictions: Nevada and the Yukon. It is a good balance, because as winter sets in up north, the company can shift its focus to the south.
Golden Predator has a whole whack of royalty properties and early stage projects as well as two small mills, but its core Nevada asset is Adelaide. Located in southeast Humboldt county, near the projected intersection of the Getchell and Battle Mountain Eureka trends, the Adelaide project has seen intermittent exploration for the last 30 years. The epithermal, vein-style, gold-silver system does not carry a defined resource but data from more than 200 drill holes continue to show promise, indicating the mineralization at surface is from the upper levels of an epithermal event, which suggests potential for increasing gold grades with depth.
And that is precisely what the company has been hitting. The Margarite vein system now stretches along 280 metres strike and down 50 metres of vertical extent, returning such intercepts as 21.7 grams gold over 7.1 metres and 33.2 grams gold over 6 metres. The grade at Margarite appears to be increasing with depth and the company is also probing several other vein targets in the area.
Premier Gold Mines
Better known for its projects in Ontario, Premier Gold Mines (PG-T) is a newcomer to the Nevada gold scene. Its Saddle property, though, is not new – it comes with a historic resource (not compliant with National Instrument 43-101) of 3.6 million tonnes grading 12.7 grams gold. The Saddle property is on the Carlin trend and, more importantly, sits directly adjacent to the past-producing Rain mine. The de
posit remains open along strike and at depth.
Premier only got its hands on the project in June, when it took over Saddle Gold, which also owned a 1.5% production royalty on the Emigrant Springs deposit a few kilometers east of Saddle. Emigrant Springs is a 1.2-million oz. gold zone that owner Newmont plans to develop in the future.
– The author is The Northern Miner’s Western Editor, and is based in Vancouver.