Bullish predictions on the potential size of a high-grade gold deposit on American Barrick Resources’ (TSE) North claim block near Carlin Nev., recently returned to haunt a company that holds a royalty interest in the property. Shares of Euro-Nevada Mining fell by $2.75 from $17.50 after Barrick announced that inferred reserves in its Purple vein deposit now stand at 13 million tons of grade 0.4 oz. gold per ton (five million oz.), or roughly half of what the royalty company had expected. Euro-Nevada holds a 4% net profits interest and 5% net profits interest in the North claims, three miles north of Barrick’s huge Goldstrike mine on the Carlin gold trend. Since the first high-grade intersections were reported last November, speculation over the size of the Purple vein and a second Rodeo Creek zone, 3,000 ft. further north, had driven the price of Euro-Nevada shares to $17.50. But after Barrick stated in a press release that inferred tonnage in the Purple Vein probably won’t be expanded significantly, shares of the Toronto company also fell by $1.12. An upswing in gold prices later lifted the Barrick issue up to $24.75. “They are trying to use the property to their best advantage and they got a little ahead of themselves,” said Barrick President Bob Smith, when asked about the Euro- Nevada predictions. While Euro- Nevada President Pierre Lassonde claims Rodeo Creek and the Purple Vein could turn out to be one orebody, Smith said it is much too early to make such a determination.
“We don’t have x-ray vision,” Smith said. “Much more drilling would have to be done.”
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