Atlas options ground in Arizona, Nevada

Atlas (NYSE) recently optioned two gold properties, one in Arizona and the other in Nevada.

For a 1-year option on the Commonwealth project in Arizona, Atlas must pay Harvest Gold US$125,000 initially, with a minimum exploration expenditure set at US$425,000. It would then pay Harvest US$25 per equivalent ounce of recoverable gold (75% of which is payable in common stock, and 25% in cash not to exceed US$1.3 million).

The Commonwealth is an historic silver-producer comprising 2 square miles in the Pierce district, east of Tucson.

To date, 126 drill holes have been drilled, although the company is confident that excellent exploration potential still exists. The resource is estimated at 7.7 million tons grading 0.03 oz. gold and 2.08 oz. silver per ton. The company envisions an open-pit, heap-leach operation with a Merrill-Crowe plant.

Gregory Shafter, vice-president of project development, says the company hopes to increase the size of the deposit to 10 million tons without lowering the cutoff grade.

The other property under option, Dixie Comstock, is in the southeastern part of the Stillwater range, northeast of Fallon, Nev. Atlas believes the 4-sq.-mile project has the potential for hosting 100,000 oz. gold.

Atlas can option the property from Horizon Resources for US$65,000. Horizon would receive 250,000 shares of Atlas common stock and retain a 7.5% net operating profit royalty.