Silver Standard sets sights on Maverick Springs

Vancouver — Silver Standard Resources (SSO-V) is looking to form a joint-venture deal with Colorado-based Vista Gold (VGZ-T) to acquire all the silver resources hosted in the Maverick Springs gold-silver prospect in northern Nevada.

Silver Standard proposes paying Vista US$300,000 on closing of a formal agreement and spending US$1.2 million on exploration, land holding costs and option payments.

Vista closed its agreement to acquire a 100% interest in Maverick Springs from Newmont Mining (nem-n) in October. Newmont retains either a 1.5% net smelter return royalty or the right to acquire a 51% interest in Maverick Springs by paying Vista cash equaling 200% of exploration expenditures. As part of the transaction, Vista agreed to undertake at least 20,000 ft. of drilling, of which 7,000 ft. will be completed before year-end.

Silver Standard’s payments reflect the current ratio of the gross value of silver and gold hosted by Maverick Springs. These payments are equivalent to about US1 per resource ounce of silver, subject to Newmont’s back-in rights.

Maverick Springs, situated near Elko, Nev., represents a Carlin-type, silver-dominant prospect. Snowden Mining Industry Consultants completed an independent technical study and provided resource estimates based on cutoff grades of 0.005 oz. gold per ton and 0.5 oz. silver per ton.

The indicated portion of the gold resource is pegged at 29.2 million tons grading 0.012 oz. gold per ton, or 350,000 contained ounces gold. The inferred portion of the gold resource is 67.9 million tons averaging 0.011 oz. gold, or 747,000 oz. gold.

The indicated resource is pegged at 27.4 million tons averaging 1.18 oz. silver, or 32.3 million contained ounces silver. In the inferred category are 56.8 million tons averaging 1.21 oz. silver, or 68.8 million contained ounces silver.

The formal agreement will split the ownership of the silver and gold resources. Silver Standard will own and control the deposit’s silver resources, and Vista will own and control its gold resources. Vista will also serve as operator.

While Silver Standard earns into the joint venture, a 2-person management committee will be responsible for decisions on property activities. Vista’s representative will have a 45% vote and Silver Standard’s representative will have a 55% vote. Upon earn-in, costs will be shared at the same ratio, subject to standard dilution provisions.

Subject to Newmont’s back-in rights at Maverick Springs, Silver Standard’s total measured and indicated silver resources will increase to 257 million oz., and inferred silver resources will total 344 million oz. Silver Standard is well-financed with a current cash position exceeding $15.7 million.

The company’s core silver projects are in Australia, Argentina, Chile, Mexico and the U.S.. In addition to drilling, now under way at Maverick Springs, a 6,000-metre program of diamond drilling has begun at the Manantial Espejo silver-gold project in Argentina. At the Bowdens silver project in Australia, the company is in the midst of a 13,500-metre program of reverse-circulation and diamond drilling.