With a portfolio of eight early-stage projects, Vancouver-based
The company’s strategy is to conduct generative exploration by systematically acquiring, evaluating and drill-testing properties in prospective areas of Nevada and other western states in search of new, multi-million-ounce gold deposits. Management has been successful in optioning two of its projects, one each to
Nevada Pacific was founded in March 1997 by David Hottman, formerly of Eldorado Gold, and Joe Kajszo, who previously served as vice-president of exploration for Robert Friedland’s Ivanhoe Capital. The two were joined by Curtis Everson, a former exploration manager with Santa Fe Pacific Gold, who leads a team of experienced geologists out of Elko, Nev.
The company went public in March 1999 with an initial public offering of 3.2 million units priced at 65 each. Nevada Pacific is currently trading at around 27 and has almost 10 million shares outstanding, or 12.2 million fully diluted. With $300,000 cash on hand, the company is refurbishing its treasury with a $438,000 non-brokered private placement financing that is just closing. The placement consists of 1.75 million units priced at 25 each. A unit will consist of one share and one warrant entitling the holder to buy an additional share at 30 for one year.
Kajszo, Nevada Pacific’s president, says that with the exception of a few remaining juniors in Nevada, “our competitors have gone dormant, so we’re kind of proud of the fact that we’re still out there doing exploration, testing projects and picking up new acquisitions.”
Newmont recently completed a second round of drilling on the Limousine Butte project, results from which are to be announced shortly. Nevada Pacific inked a deal with Newmont in the summer of 1999, whereby the major can earn up to a 70% interest in Limousine Butte, 40 miles southeast of the Carlin trend in eastern Nevada. Newmont can earn an initial half-interest by spending US$1.5 million on exploration over four years. A further 20% can be earned by spending an additional US$1.5 million in years five and six.
The 24-sq.-mile project centres on a large, gold-bearing hydrothermal system that exhibits alteration features similar to sediment-hosted, structurally controlled gold deposits in the Carlin trend and elsewhere in the state. In 1997, when Nevada Pacific staked its first claims in the Limousine Butte area, its geologists recognized the presence of favourable host rocks, significant structural trends and a large, buried copper-gold porphyry system.
The project area is underlain by an Upper Paleozoic sequence of Eastern Assemblage sediments consisting of massive carbonate and calcareous shale, siltstone and sandstone. A large quartz porphyry intrusive stock has extensively altered and mineralized the surrounding sedimentary rocks. The Butte Valley stock is believed to have been emplaced along the Black Metals fault zone, a major structural front. Magnetic surveys indicate the potential for other intrusive bodies occurring along structural trends in the project area.
Nevada Pacific’s exploration team developed a conceptual target model indicating the potential for three styles of gold mineralization:
– high-grade mineralization occurring under a major low-angle thrust fault, close to the porphyry stock in favourable carbonaceous and calcareous shale units;
– replacement deposits caused by leakage of gold-bearing solutions along favourable units updip and east of the buried intrusive; and
– gold skarn deposits hosted by calcareous shale.
Last November, Newmont completed an initial 20-hole program of widely spaced reverse-circulation (RC) drilling that revealed highly anomalous gold intercepts in a large zone of hydrothermal alteration extending over an area 3 miles long and half a mile wide. The program was designed to test prospective target areas identified by geological mapping, soil geochemistry and ground geophysical surveys.
Thirteen of the 20 holes encountered “highly anomalous” gold values. Some of the better intercepts were greater than 20 ft., including:
– 0.061 oz. gold per ton over 20 ft. in hole 13, beginning at a down-hole depth of 370 ft., plus 0.016 oz. over 20 ft., starting at 510 ft.;
– 0.021 oz. over 35 ft. in hole 14, starting at 85 ft. down-hole;
– 0.019 oz. over 30 ft. in hole 16 at 235 ft. of depth; and
– 0.026 oz. over 50 ft. in hole 18 at a depth of 425 ft.
200-ft.-plus thickness
Nevada Pacific says silicification, clay alteration and brecciation were encountered over a large aerial extent, and several of the altered zones measured greater than 200 ft. in thickness. Strong pathfinder geochemistry, including arsenic, antimony, mercury, barium and tungsten, is present in the alteration zone, which is completely oxidized. The low-grade gold mineralization is associated with jasperoids.
Kajszo says the results from the first phase of drilling were sufficiently interesting for Newmont to continue. Newmont’s goal is to find an oxide gold deposit minable by open-pit methods. The major began a second phase of drilling in April using two RC rigs. In May, the planned program of approximately 14,000 ft. of drilling in 25 holes was expanded to include permitting for up to an additional 18 holes. Nevada Pacific is awaiting the results from this program, and Kajszo expects Newmont will keep working at Limousine Butte through the summer.
In addition, Nevada Pacific is awaiting drill results from a program conducted this spring by Echo Bay on the Moreau gold property, 30 miles east of Parker, Ariz., and 25 miles northeast of the Copperstone gold project of
The Moreau property covers Tertiary-age sandstones and conglomerates that have been detached over Precambrian quartz-feldspar-chloride gneiss. The gneiss is intensely brecciated along the detachment surface and where it has been cut by high-angle structures. Oxide gold and copper mineralization is found along the detachment fault surface and the high-angle faults.
9-hole program
In May 1999, Nevada Pacific completed an initial 9-hole, 3,500-ft. program of RC drilling that yielded the following results:
– 45 ft. of 0.097 oz. gold and 0.52% copper, starting at a down-hole depth of 20 ft., in hole 1;
– 50 ft. of 0.016 oz. gold and 0.4% copper, beginning at 25 ft. of depth, in hole 2;
– 30 ft. of 0.021 oz. gold and 0.15% copper in hole 4; and
– 15 ft. of 0.088 oz. gold and 0.1% copper in hole 7.
Echo Bay has since developed five new target areas with additional surface sampling and geologic mapping. Sixty-one stream-sediment samples defined two anomalous areas to the southeast and northwest of the area drilled by Nevada Pacific.
Echo Bay also conducted bio-geochemical (plant) sampling of the pediment on a 600-by-500-ft. grid. The results show anomalous gold in three separate areas. Kajszo believes this can be an effective exploration tool in the desert-like environment, as the roots systems can go down 30-40 ft. or more. “It’s a system of gathering anomalous gold out of the alluviums,” he says.
Echo Bay targeted 10 holes in a recently completed program.
The South Carlin project, which covers 20 sq. miles in the southern end of the Carlin trend in Nevada, is shared with Kennecott. While Nevada Pacific is the operator and 100% owner of the properties, exploration costs are shared on a 50-50 basis. Kennecott can earn up to a 60% interest in any discovery area, which can be no larger than 8 sq. miles at a time, by spending US$5.2 million on exploration and development.
Woodruff Creek
The 1-sq.-mile Woodruff Creek property is excluded from this arrangement. Nevada Pacific optioned Woodruff Creek from Kennecott in late 1997 and can earn a 100% interest by spending US$500,000 on exploration over four years. The lithologic and structural setting of the property is said to resemble Newmont’s Rain deposit, 4 miles to the east-southeast, where gold mineralization is hosted in solution collapse breccias formed at the contact between the Devil’s Gate limestone and the overlying Webb shale formations, close to the west-northwesterly trending Rain fault.
Nevada Pacific tested the property last fall with three widely spaced, deep RC drill holes. The holes were each 1,200 ft., 2,200 ft. and 3,000 ft. deep. The best hole encountered 400 ft. of anomalous 200-parts-per-billion gold. Just as important, says Kajszo, is the fact that drilling encountered many zones of brecciation, silicification, hydrothermal and clay alteration, as well as pathfinder elements — “basically, all the things that you would want to see over a Carlin-type deposit… and we are looking forward to continuing exploration there.” He adds: “We feel we are in the envelope of the system.”
Earlier this year, the company contracted Quantec Geoscience to design and execute a 12-line-mile natural source magnet telluric (MT) geophysical survey over a portion of the South Carlin property. This type of survey is being used by other majors with operations in the Carlin trend. The MT technology is designed to help determine the location and depth of lithologic, structural and alteration features from near the surface to depths approaching 5,000 ft. The survey results will help Nevada Pacific decide how best to proceed at the project.
Free Gold
In March, the junior acquired the Free Gold project, 60 miles west of Winnemucca, off the main trends in the northwestern part of the state. The project area is stuck between: the Florida Canyon mine, to the southeast; the Rosebud and Hycroft mines, to the west; and the Sleeper mine, to the north. “We recognize the area as a belt of low-sulphidation, hydrothermal bonanza gold deposits in volcanics,” states Kajszo.
Nevada Pacific picked up 54 sq. miles of private railroad checkerboard land held by Nevada Land & Resource. Under terms of the option agreement, Nevada Pacific will have the exclusive right to conduct exploration on the Free Gold property for five years in exchange for annual payments of US$15,000. The company can elect to lease or purchase all or a portion of the property, subject to a net smelter return royalty.
The property hosts hundreds of historical workings and prospects that date back to the turn of the century, the more recent exploration work having been conducted by Santa Fe Pacific Gold and Nevada Land & Resource. Nevada Pacific’s geologic team is currently gathering data from prospecting and early-stage mapping programs. Kajszo says some structural trends are evident. Most of the prospects are on quartz-gold veins running from 0.5 to 1.5 oz. per ton. The veins are hosted in altered granodiorite intrusive dykes or plugs, the age of which is estimated to be 90 million years. The age factor is important, Kajszo says, because similarities can be drawn to the Fort Knox deposit and the Tintina gold belt in Alaska and the Yukon.
“If you took that Fort Knox model, which holds together pretty well, we’re starting to see the same things down here in Nevada, and there hasn’t been a concerted effort to look for Fort Knox-type intrusives in Nevada,” says Kajszo.
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