Atna Resources (ATN-T, ATNAF-O) outlined in a new technical report this week that it has increased the lifespan of its Briggs gold mine in California by two years to 2017.
Mining is now expected to continue at Briggs through the second half of 2016 and residual gold production from the leach pad into 2017, the company announced on May 22.
Wendell Zerb, a mining analyst at Canaccord Genuity in Vancouver, believes Atna remains undervalued and has a speculative buy rating on the stock with a twelve-month target price of $3.20 per share.
In a research note he explained that he continues to view Atna “as one of the best precious metal, small cap, growth companies in the sector, with a quick timeline for production growth (we believe with the potential to expand its gold production from 33,000 oz per year to over 150,000 oz per year by 2014), and low overall capital commitments to drive the growth.”
The main short-term catalyst for Atna, he adds, is a reserve estimate and mine plan for Pinson, which he says is expected before the end of June.
In terms of the company’s 100%-owned Briggs mine, while Atna’s extension of production to 2017 was based on a proven and probable reserve of 247,000 ounces, Zerb models the mine life to 2020 based on a larger resource base 662,000 ounces in the measured and indicated category, which was reported in January 2011.
Briggs produced gold by heap leaching both crushed and uncrushed (run-of-mine) material placed on leach pads between 1996 and 2004. In late 2008 and into 2009, Atna evaluated exploration targets that might extend the project’s mine life and re-started production in May 2009. The mine is in Inyo County, about 81 km east of the town of Ridgecrest, California.
The Pinson project is in Nevada near Winnemucca in Humboldt County. The mine is in the south-central portion of the Getchell gold belt southwest of Barrick Gold‘s (ABX-T, ABX-N) Getchell/Turquoise Ridge mines and Newmont Mining‘s (NEM-N) Twin Creeks Mine complex.
Gold mineralization at Pinson is characterized as a Carlin-type, sediment-hosted gold system that is hosted by the same sequence of Ordovician sedimentary rocks that hosts the gold deposits of Twin Creeks and Turquoise Ridge mines to the north.
Between 1980 and 1999, the mine produced 985,000 ounces of gold as an open pit, and since 1998 has seen more than US$60 million in exploration and development spending on the property, according to Atna’s website.
At presstime in Toronto, Atna was trading at 98¢ per share within a 52-week range of 52¢-$1.54. The junior has about 121.6 million shares outstanding.
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