Arizona mineral sands – big claims, little verification

According to Utah-based Global Platinum and Gold Inc., the richest mineral deposit in the world is the one the company owns smack in the middle of Yapavai Cty., Ariz.

Known as the Weaver Creek and Oro Grande deposits, Global says the property hosts a combined 162 million tons of placer sands and intrusive rock respectively. Global values the deposits at $80 billion(US).

Welcome to the world of high grade mineral sands and gravels. For all those who feel they missed this one, fear not. Many more similar projects exist throughout the southwestern U.S. — all reporting extraordinarily rich values in gold and platinum-bearing sands.

In the Moapa Valley, near Reno, Nev., Micron Mining and Louisiana Mining (ASE) have built a pilot plant which is processing gold and platinum-bearing sands. As at Weaver Creek, the Moapa reserves are immense. In one site alone, reserves are said to approximate 100 million tons with a value in excess of $750 million(US).

Unfortunately for Global and the handful of other small-time operators, few in the mining industry believes their claims.

“Nevada does not have the geology for platinum. That’s all there is to it,” Richard Jones, economic geologist with the Nevada Bureau of Mines and Geology, told The Northern Miner. “There are occurrences, but they’re just that, platinum occurrences,” he added. He did note that the state has some platinum production history, about 200 oz in the 1940s, but none of any significance.

A geologist with Billiton USA was a bit harsher. “Moapa is a joke in the industry. We did a lot of sampling and came up with diddly squat.” In 1988, Billiton sampled the property with the intention of concluding an agreement with Louisiana Mining. After assaying yielded no economic values, the company terminated discussions. The Billiton geologist, who asked not to be identifie d, said that the assaying carried out by Louisiana was done by an unreliable lab which contaminated the samples. This led to the outstanding values reported by Louisiana.

Cade Havard, Louisiana’s president, defends his project. “We spent $20 million between both companies (Micron and Louisiana). We did the kind of work the majors never did. And we’re looking at the end product in our hands.” Havard refers to a stockpile of metal salts which he claims are “worth seven figures.” The pilot plant is expected to reach capacity by September, he added.

When asked to reveal the average grade for all the metals in the deposit, Havard refused. “We will not announce the grade. That is confidential, but all past grades are legitimate,” he told The Northern Miner. He argues that both companies are in a land acquisition program and don’t need outside competition from majors.

Gordon Lee, president of Micron, a private Nevada company, and Havard’s partner, has been more liberal with respect to releasing information about grades. Reports from Micron list values from the 16,000-acre Moapa No 1 property ranging from nil to 0.9 oz gold per ton. In addition, Micron reported values in platinum, palladium and rhodium — the latter an extremely rare platinum group metal.

The assays are part of a feasibility study completed by Micron in June, 1988. Containing more than 80 pages of confusing and sometimes incomprehensible assay reports, releases and letters of correspondence, the study concludes that a simple 1,000-ton-per-day earth-moving operation could generate yearly profits of $16.5 million(US). Lee argues that the 1988 report is out of date and should not be criticized for its deficiencies.

Richard Jensen, president of Global, says his company’s valuation of $80 billion(US) for its two deposits is real. “We hired a professional to do it. We’re also working with a major right now who is assaying a 400-lb sample.” Jensen refused to identify the major company.

The chief problem common to these gold-platinum sands projects is that of assaying. No assay lab in Canada, where samples have been tested, has been able to yield any economic results. Yet on-site labs using so-called proprietary technique’s continue to churn out superb results for the companies involved.

Micron, in fact, claims in its 1988 report that “the chemistry is not fully understood.” Force Resources (COATS), a company which holds a 10% interest in Micron’s Moapa No 1 project, was suspended from trading on the Vancouver Stock Exchange after three Vancouver- based assay labs failed to yield any economic results. Gordon Lee, who is also president of Force, then had the stock delisted. It now trades on the over-the-counter market.

“This is a classic red flag,” said Stephen Acker, a Nevada-based geologist with Franco-Nevada Mining Corp., commenting on the inability of established labs in reproducing assay results. “Typically the promotor speaks of a specific assay technique required to get the desired result.”

Jones agrees, saying that Micron and others use unrecognized labs in Nevada. “Some guy in a backroom does it (the assaying) over his cookstove. He can come up with any values you like,” Jones said. “They take it seriously, so seriously in fact that they’ve convinced themselves that their assaying works.”

Despite the almost total lack of support for these projects from the traditional mining industry, Micron, Louisiana, Global and others are proceeding with exploration and production plans. In most cases, financing for activities come from private placements of stock from people unfamiliar with mining.

Micron and Louisiana are going a step further. Both companies plan to merge with Candol Developments (TSE), an inactive TSE-listed shell. When the paper work is complete, the new entity will be called Micron Metals. More importantly, from Lee and Havard’s perspective, their Moapa Valley project will have made it onto a major stock exchange.

As for Global’s Jensen, he says his company will go it alone with a 1,000-ton-per-day mill if a major mining company fails to option the property. When asked if he actually believed the astronomical valuation for his properties, he responded: “If I wasn’t convinced, I’d be some kind of kook.”

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