Atna aims to revive Pinson gold mine

Winnemucca, Nevada — Deep drilling by Atna Resources (ATN-T) could breathe life into the past-producing Pinson gold mine, which decades ago helped establish one of Nevada’s most productive gold belts.

A year ago, Atna inked a deal with Barrick Gold (ABX-T) to acquire an option on the Pinson mine property, covering 12,765 acres of private fee lands and federal lode mining claims in the heart of the Getchell gold belt. The Pinson property is 27 miles northeast of the town of Winnemucca in north-central Nevada. The Twin Creek mining complex of Newmont Mining (NEM-N) lies 15 km northeast of the property, Placer Dome‘s (PDG-T) Turquoise Ridge underground mine is 5 miles to the north and Newmont’s Lone Tree mine is 20 miles to the south. Today, the Getchell belt is second only to the Carlin trend in Nevada gold production.

Gold production in the Getchell belt began much earlier than mining in the majority of the Carlin-type deposits, with the original discovery made in 1934 where the Getchell mine now sits. This led to other discoveries in the district including the Pinson and Ogee deposit in the mid-to-late 1930s. Ore from this original discovery was mined by open-pit methods and processed at the Getchell mill in 1949 and 1950. About 100,000 tons averaging a grade of 0.14 oz. per ton were processed at the time.

More recent discoveries were made in the early 1970s by the Cordex I Syndicate, a group of partners that included Rayrock Yellowknife Mines, famed Nevada geologist John Livermore and Peter Galli. Livermore was the driving force behind the 1961 discovery of the Carlin gold mine in northern Nevada. The Cordex I Syndicate significantly expanded the zone of moderate-grade gold mineralization beyond the original Pinson and Ogee deposit, resulting in the formation of the Pinson Mining Co. Further discoveries by Pinson Mining included the A, B, C and CX deposits in the late 1970s and early 1980s, as well as the Mag deposit in the mid-1980s.

Over its approximate 20-year life, Pinson produced just shy of 1 million oz. from relatively low-grade oxidized ore mined from a series of open pits. Production at Pinson comprised gold recovered from both milling and heap-leach operations. Combating a dwindling oxide reserve base and high cash costs, the Homestake Mining-Barrick partnership permanently closed the mine in 1999. The last major exploration effort was conducted from 1997 through 2000 by Homestake, on behalf of the joint venture. Homestake, which was the operator of the mine, drilled more than 200 holes on numerous targets throughout the property. The work confirmed that higher-grade gold mineralization continues beneath the pit limits along fault zones that served as “feeders” for mineralizing fluids to the low-grade zones historically mined at Pinson. It was determined that gold mineralization in the CX fault zone continued below and beyond the existing pit limits, and mineralization associated with the Range Front fault zones showed significant strike and down-dip continuity. “This property has excellent deep exploration potential under the Pinson deposit,” states a 1997 Barrick annual report.

The gold mineralization at Pinson is focused along and adjacent to the range bounding Getchell fault zone, a major 30-mile-long regional fault system that strikes northeast, parallel to the contact of a late Cretaceous granodiorite stock. The ore mineralization occurs in a package of slightly metamorphosed Paleozoic sequence of silicified shale, cherts and limestones of the Comus Formation. The gold shows up as micron-size disseminated grains, strongly associated with pyrite and elevated levels of mercury, arsenic and antimony. The Pinson mineralization displays numerous physical and geochemical similarities to the neighbouring Getchell, Turquoise Ridge and Twin Creek mines, all of which are considered Carlin-type, sediment-hosted gold deposits.

Atna can earn an initial 70% interest in the Pinson property by spending US$12 million on exploration over four years and delivering a prefeasibility study recommending further development. At that point, Barrick, which owns 100% of the property through the acquisition of Homestake, would have three options: back-in for a 70% interest by spending another US$30 million over three years; retain a 30% interest by participating in the continued development of the property; or sell its remaining 30% interest outright to Atna for US$15 million. Atna has spent in excess of US$2 million on the property through to February 2005.

Since taking on the project, Atna has explored the potential for the underground development of several zones of higher-grade sulphide mineralization dipping below the Pinson open pits by completing 31 holes totalling almost 30,000 ft. The most important of these are the CX and Range Front zones, two sub-parallel fault zones of mineralization that lie 600 ft. apart and dip to the southeast at about 55 degrees.

The CX zone plunges beneath the CX, C and B pits, whereas the Range Front zone is the southern extension of the Getchell fault zone and dips below both the CX and Mag pits. Atna’s initial efforts focused on establishing a resource in areas where high-grade intercepts had been encountered in previous drilling. Many of the recent Atna holes were pre-collared and cased using a reverse-circulation (RC) drill rig and then converted to core prior to intersecting the target fault zone.

In addition, Atna re-assayed intercepts from 65 holes drilled over the past 20 years to provide appropriate standards and quality control so that results from previous drilling could be assimilated.

Geological consultant Robert Sim used the results of some 236,000 ft. of historic drilling in 401 holes, including the 30,000-ft. program completed by Atna, to estimate that the CX and Range Front zones contain measured and indicated resources of 1.8 million tons grading 0.3 oz., equivalent to 519,000 oz., based on a cutoff of 0.15 oz. If the cutoff grade is raised to 0.3 oz., measured and indicated resources fall to 715,000 tons at 0.39 oz., or 281,000 contained ounces. The mineral resource estimate was made from three-dimensional block models generated using commercial mine planning software and is compliant with National Instrument 43-101.

Additional inferred resources are estimated at 4.2 million tonnes of 0.32 oz., for a contained 1.3 million oz. using a cutoff of 0.15 oz., or 1.6 million tonnes averaging 0.43 oz., equal to 690,000 oz. based on a cutoff of 0.3 oz.

With plans to drive an adit from the base of the CX pit, which will provide access for resource definition drilling and allow the collection of a bulk sample for detailed metallurgical testing, Atna recently began further surface drilling. As a first step, Atna is sinking 21 holes totalling 16,000 ft. into the upper portion of the Range Front zone on a 100-by-100-ft. spacing to better define the understanding of geology, structural controls and detailed distribution of gold grades. Several of the newly completed RC pre-collars have intersected unexpected zones of mineralization grading up to 0.53 oz. across 10 ft.