Independence options Buckhorn South

Independence Mining has exercised an option with Royal Gold (RGLD-Q) for the Buckhorn South property in Eureka Cty., Nev.

Independence, a wholly owned subsidiary of Luxembourg-based Minorco (MNRCY-Q), is operator of the Jerritt Canyon gold mine, northeast of the Buckhorn, in Elko Cty.

By surrendering its working interest in 265 unpatented claims at Buckhorn South, Denver-based Royal receives various net profits interests (NPIs) and net smelter return royalties (NSRs).

Royal acquired control of the property in 1994. Independence signed an exploration agreement in October 1997 and spent more than US$425,000 on the property through to June of this year. As a result, the company gains control of Buckhorn South, though Royal Gold retains a 14% NPI on any mineral production. Royal also gains a 2% NSR on production from the 49-claim Lone Mountain project, adjacent to Jerritt Canyon, as well as a 15% NPI on the 24-claim Carico Lake property and a 2% NSR on production from 381 claims around the main Carico Lake property.

Exploration by Independence at Buckhorn South has identified targets in carbonaceous limestones of the Roberts Mountain formation, a major ore host at the Carlin trend, some 40 miles west. The Roberts Mountain formation is found in the lower plate of the Roberts Mountain thrust, a mid-Paleozoic overthrust belt cutting northeasterly across Nevada.

Independence, plans to examine these targets further, as well as delineate the existing Zeke deposit.

Royal already derives much of its income from a 20% NPI in the South Pipeline gold deposit, immediately south of Placer Dome’s Pipeline deposit in Lander Cty., Nev., and a 1.75% NSR from Placer’s Bald Mountain gold mine, northwest of Ely in eastern Nevada.

Meanwhile, Royal has reached an agreement with an Australian investor group to revive the exploration arrangement on the Milos gold project in Greece. The investor group, Rakov, worked out the agreement with Royal after Goldmax Resources (gdx-v) announced its intention to acquire all the capital stock of Rakov.

Since September 1997, Royal has spent US$1.1 million on reconnaissance mapping and sampling at Milos, where, currently, a 33,000-ft. program of reverse-circulation drilling is under way.