Atna sees potential at Pinson

Vancouver — Atna Resources (ATN-T) has entered into an agreement to acquire all of the former Pinson gold mine in Nevada from Barrick Gold (ABX-T).

Homestake Mining closed the mine in 1999, at which time it owned the mine equally with Barrick. Barrick then merged with Homestake and, in so doing, increased its stake to 100%. The major has retained back-in rights in the deal with Atna.

The agreement allows Atna to acquire an initial 70% stake in Pinson by spending US$12 million over four years. After vesting a 70% interest and delivering a preliminary feasibility study, Barrick has the choice to back-in for 70% either by spending US$30 million over three years, forming a 70-30 joint venture (with Atna as operator), or selling its remaining 30% stake to Atna for US$15 million.

The Pinson property is 15 km southwest of Newmont Mining‘s (NEM-N) Twin Creek mine complex, 8 km south of Placer Dome‘s (PDG-T) Getchell-Turquoise Ridge mine complex, and 32 km north of Newmont’s Lone Tree mine.

The Pinson open pit produced more than 987,000 oz. gold from relatively low-grade oxidized ore. Mineralization is focused along, and adjacent to, the Getchell fault zone, a major ore control at the Getchell mine. The Carlin-type gold mineralization is associated with elevated levels of mercury, arsenic and antimony.

Homestake closed Pinson after it failed to reach production targets. In 1998, the mine produced only half the 68,800 oz. it was expected to produce, owing to problems associated with clay-rich ore. For the fourth quarter, cash costs totalled US$537 per oz.; for the year, US$446.

But exploration continued: between 1997 and 2003, more than 200 diamond and rotary drill holes (greater than 70,000 metres) were drilled to explore for extensions of mineralization exposed at the bottom of the mine’s several open pits.

Atna’s initial exploration efforts will focus on drilling to establish a resource in areas of known mineralization.

“We are really looking at this from a totally different perspective,” says Atna President David Watkins. “Homestake and Barrick were looking at it as a modest-grade open-pit operation, whereas we see it as a high-grade underground operation. We see good potential to develop a resource within about six to eight months.”

Meanwhile, the company has optioned its nearby Clover property to Grandcru Resources (GR-V), and its Sno property to Pacific Ridge Exploration (PEX-V).