Nevada has long been at the heart of the gold mining sector in the US. In 2015, Nevada production accounted for just shy of 78% of America’s total production and contributed to the United States qualifying as the fourth leading producer in the world. Again in 2015, Nevada production totaled 166 metric tons of gold and the industry that supported this production added $4.6 billion to U.S. GDP.
In short, when companies look for gold in the U.S., they do so in Nevada.
Faults such as the Carlin Trend and its neighbor the Cortez Trend have produced dozens of so-called “elephants” — gold deposits of more than 10 million ounces — and gold miners of all shapes and sizes are working right now in the state to find the next.
With this in mind, here are four Nevada projects currently under active exploration, as well as the gold miners that are associated with them. Each of these Nevada gold mine projects could be a stock-igniting game-changer for the company doing the exploring, if it proves gold-rich.
Nevada Gold Mine Projects to Watch: Roberston
Company: Barrick Gold (ABX)
On June 8, 2017, gold mining giant Barrick Gold Corp. (USA) (NYSE:ABX) acquired an exploration-stage gold mining project called Robertson from junior miner Coral Gold Resources Ltd. (USA) (OTCMKTS:CLHRF). This property includes a spate of claims spread across the already mentioned Cortex Trend — a region across which Barrick already commands massive land holdings and within which three of its already producing elephants are located: Goldrush, Pipeline and Cortez Hills.
Specifically, the claims include the Core, Gold Ridge, Excluded and the RUF mining claims, each of which has undergone varying degrees of exploration, and each of which Barrick intends to pull together to create a total resource estimate near term.
A Preliminary Economic Assessment (PEA) was completed in 2012, and this serves to offer a degree of insight into the volume of the potential resource. This PEA suggested a resource of 191.7 million tons rock at grade 0.014 per ounce. This suggests an inferred resource of a little over 2.7 million ounces.
As per the terms of the agreement between Barrick and Coral, the former will pay a sliding scale 1% to 2.25% net smelter returns royalty, payable quarterly. Of course, this assumes the project reaches production.
As a bit of background, Barrick used to control an interest in this property but discontinued development back in 2015. Readers may remember this as a tough period for Barrick and a period during which the behemoth unloaded a large number of non-core assets — one of which was the Robertson project. Now that the gold market is picking up, ABX has decided to give it another go.
Nevada Gold Mine Projects to Watch: Twin Creeks
Company: Newmont Mining (NEM)
Twin Creeks is located in Humboldt County, Nevada, which lies in the northwest region of the state. This one is located along the Carlin Trend, which is the more established of the Carlin-Cortez brother-sister trends. Historically, Carlin has produced more gold than has Cortez. As is increasingly becoming the case, however, Cortez contains some very attractive deposits.
Twin Creeks as a regional mine is already well into production phase. The open pit part of the mine produced 450,000 ounces in 2016 and began operations back in 1987. There’s a part of it, however, that’s yet to be explored, and it’s this part that Newmont Mining Corporation (NYSE:NEM) believes could hold the superior resource.
The part we’re talking about is underground, and aptly called Twin Creeks Underground.
The justification for this sort of expansion is simple: The infrastructure is already in place, having been established over a 30-year period by way of being supportive to the open pit project. It’s far cheaper to find gold underground (even if it’s harder to access) and process it using the existing facilities than it is to find easier to access metal and have to install an entirely new infrastructure to process it.
Estimates on potential volume are thin on the ground. With that said, preliminary indications (as inferred by two recently built portals from the open pit part of the project) suggest that the underground side of Twin Creeks could produce about 1,000 tons per day, containing good-quality ore.
We should get further insight into this one as 2017 matures.
Nevada Gold Mine Projects to Watch: Keystone
Company: US Gold (DRAM)
With Keystone, we’re headed back to the Cortez Trend. This one’s about 15 square miles, covering 9,000 acres and consisting of 479 claims (as things stand), located just south of Barrick’s Cortez deposit. Historical drilling at the project dates back to the 1960s, and the above discussed Newmont actually discovered a small concentration of gold there.
However, despite the project consistently changing hands across the last half century, and it having been subject to a number of small-scale exploratory programs, no company has undertaken a full-scale drilling program at Keystone. (That is, a drilling program that incorporates the technology and techniques that underpin the industry in its present form.)
U.S. Gold — which will trade as DRAM after a merger with, of all things, tech memory producer Dataram Corp — kicked off an early stage exploratory program last year, drilling five holes of varying depths and widths, and determined that the geology of the region is similar to that of Barrick’s Pipeline and Cortez resources (not surprising, based on location). This far from suggests that Keystone contains economically viable gold resources, of course, nevermind resources to the volume of those just mentioned. But it’s a strong start to a project that is dramatically underexplored given its proximity to some large, active deposits.
Interestingly, exploration at Keystone is headed up by David Mathewson, the geologist responsible for the discovery of three of Newmont’s largest resources in Nevada, Tess, Northwest Rain and Saddle.
Mathewson guided the above-mentioned drilling and he and his team are currently working to use the data derived from this early stage exploration to inform expansion.
Just as with Newmont’s Twin Creeks, this is an early-stage project, and unlike Barrick’s Robertson, it doesn’t yet have a PEA associated with it. As the exploratory (scouting program) matures throughout 2017, however, and if the follow up data supports that already produced, a PEA shouldn’t be too far off.
Nevada Gold Mine Projects to Watch: Snowstorm
Company: Seabridge Gold (SA)
Early June 2017, Seabridge Gold, Inc. (USA) (NYSE:SA) acquired a 100% interest in the Snowstorm project from PFR Gold Holdings, LP. Snowstorm is located at an intersection of the above discussed Carlin Trend and two faults not yet mentioned, the Getchell Trend and the Northern Nevada Rift Zone. The actual property lies just north of Twin Creeks.
This one is 700 claims strong and spread across an area of 5,800 acres, the majority of which has been the subject of extensive exploration over the past ten years or so. There are also an extra 260 claims as staked by Seabridge prior to its acquisition of Snowstorm, lying adjacent to the original property, across a further 5,200 acres of land.
Yet again, a PEA is still to be completed at Snowstorm, but there’s a large data package associated with it (put together by the previous owners and likely a large driver behind Seabridge’s wanting to acquire the project) that suggests strong geology and – by proxy – mineralization.
Specifically, it implies that that the project incorporates two primary types of mineralization: Midas style and Carlin style. The former serves as the namesake for the Midas Mine, which Newmont sold to Klondex back in 2014, and which has a 2.2 million-ounce annual capacity. The latter, we’ve already discussed, is related to the Carlin Trend, and is characterized by sedimentary, limestone type geology. This type of mineralization is found at both the Twin Creeks mine and the above noted Getchell Trend property, both of which are multimillion-ounce annual producers.
Seabridge is set to use the data it picked up as part of the acquisition to inform an expanded drilling program this year.
As of this writing, Samuel Rae did not hold a position in any of the aforementioned securities.