A recent joint- venture agreement executed by a U.S. subsidiary of Mountain West Resources (VSE) will provide funds for continuing exploration of the Elkhorn gold project about 20 miles south of Helena, Mont. The agreement allows Newmont Exploration, a unit of Newmont Mining (NYSE), to earn a 50% interest in the property package by spending US$5 million and by paying Mountain West $410,000 over five years. The agreement also contains various options which Mountain West may exercise as further financing is required after Newmont earns its interest.
Gold mineralization on the property is reported to occur in three pipe-like bodies. In 1989, Mountain West calculated geological reserves and “fill-in potential” in the pipes of 1.4 million tons averaging 0.118 oz. gold at a 0.05 oz. per ton cut-off grade.
The junior company said geochemical surveys later in 1989, covering both previously owned land and new land acquired in a land exchange with Gold Fields Mining, found 15 new anomalies. Five occur in the Wolsey shale which Mountain West said is host to a “one million oz. geological reserve” on the neighboring Gold Field lands.
Mountain West has expanded the Elkhorn project from its initial land position of 680 acres in 1983 to a current total of about 2,200 acres.
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