i-80 Gold strikes high-grade gold at Granite Creek, expands drill program

i-80 Gold (TSX: IAU; US-OTC: IAUCF) said it intersected “high-grade gold” in the South Pacific Zone of its Granite Creek project, located in the Potosi mining district of Humboldt County in Nevada.  

The 1300-hectare property hosts both open pit and underground resources and is situated less than 15 km from the Turquoise Ridge and Twin Creeks mines owned by Nevada Gold Mines, a joint-venture between Barrick Gold (TSX: ABX; NYSE: GOLD) and Newmont (TSX: NGT; NYSE: NEM).  

Between 2012 and 2013, Granite Creek’s former owner, Atna Resources, produced about 7,915 oz. of gold from an underground mine.  

Prior to that, Granite Creek produced about 987,000 oz. gold from various open pit operations between 1989 and 1999, and about 10,000 oz. gold between 1949 and 1950.  

Highlights of the latest drill results from the South Pacific Zone included 5.5 metres grading 25.5 grams gold per tonne starting from 436.5 metres in drill hole iGS21-12 and 3.4 metres grading 22 grams gold per tonne starting from 368.1 metres in drill hole iGS21-07.  

Drill results from the property’s Ogee and Mag Zones, released on February 8, included 73.2 metres grading 7.4 grams gold per tonne starting from 363.6 metres in drill hole iGS21-15 and 16.8 metres grading 3.4 grams gold per tonne starting from 127.9 metres in drill hole iGS21-14. 

“The consistency of high-grade gold mineralization … is truly impressive as the ongoing drill program continues to demonstrate the significant upside opportunity at Granite Creek,” Ewan Downie, the company’s CEO said in a press release.  

The news follows the release in late January of five drill results from the same area.   

Highlights included 10.2 metres grading 14.7 grams gold per tonne starting from 468.3 metres in drill hole iGS21-04 and 7.1 metres grading 16.3 grams gold per tonne starting from 391.4 metres in drill hole iGS21-03.  

A preliminary economic assessment released in November envisioned an open pit mine with a mine-life of nine years, producing a total of 1.2 million oz. of gold at an all-in sustaining cost of US$963.40 per oz. gold.  At a 5% discount rate, the study estimated the project would generate a post-tax net present value of US$244.9 million and a post-tax internal rate of return of 34.2% at a base case gold price of US$1,650 per ounce.  

The project’s open pit measured and indicated resources currently stand at 28.3 million tonnes grading 1.42 grams gold per tonne for 1.2 million oz. contained gold, and inferred resources add 1.53 million tonnes grading 1.26 grams gold per tonne for 62,000 ounces.   

Granite Creek’s underground measured and indicated resources total 1.01 million tonnes grading 10.40 grams gold per tonne for 337,000 oz. gold. Inferred resources add 741,000 tonnes grading 13.41 grams gold per tonne for 319,000 ounces.  

In September, the company initiated a test mining program at Granite Creek to verify mining methods, cycles and sequences for advancing the underground ore headings and test the mechanical cutting and conventional mining methods.  

The company’s current focus of development is to deepen the ramp to provide more opportunities to pull ore from, an i-80 Gold spokesperson told the Northern Miner.  

A series of acquisitions in 2021, which included the Granite Creek, Lone Tree and Ruby Hill properties, made i-80 Gold one of the largest holders of gold and silver resources in Nevada, the company said. 

 In January, the company announced plans to build a Nevada mining complex consisting of four mines in the next three years and produce about 500,000 oz. gold a year. 

The company, which was created as a spin-out of Premier Gold Mines’ assets in the United States, said it intends to execute a “hub and spoke” development plan with Lone Tree as the “hub” of the company’s operations with a central processing facility, operations office, assay lab and warehouse for all sites.  

Some of the company’s major shareholders include Equinox Gold (TSX: EQX; NYSE: EQX) and Barrick and Newmont’s Nevada Gold Mines. CEO Downie owns over 5 million shares in the company. 

Ovais Habib, a Scotiabank analyst, viewed the drill results favourably as he believes that the high-grade gold intercepts across wide intervals “bodes well for resource additions in the future.” 

“Drilling of the SPZ (South Pacific Zone) has been elevated to the primary exploration target at Granite Creek with an expanded program of 30 km of delineation and step-out drilling planned for 2022 using additional rigs,” he stated in a research note to clients.   

“The South Pacific Zone remains open along strike and at depth. I-80 plans to include the SPZ in a resource update following this year’s drilling program. I-80 is also working to complete ~20 km of exploration drilling between Ruby Hill and McCoy Cove in 2022.” 

At presstime the company’s shares were priced at $2.81 per share. Over the last year the company has traded in a range of $2.26 and $3.54.  It has 239 million common shares outstanding for a market cap of $654 million.