Augusta buys Mt. Hamilton project

Vancouver — Northern Canadian diamond explorer Augusta Resource (ARS-V) is venturing south of the border by acquiring the Mount Hamilton gold project in Nevada’s Battle Mountain trend.

The advanced-stage project will cost the company US$3.6 million in cash and shares, plus a royalty granted to the vendor.

“I’ve known about the project since the 1980s, when it was owned by Westmont Mining [a subsidiary of Costain Holdings],” says Augusta President Richard Warke.

Historical resource estimates will be reviewed by Roscoe Postle Associates en route to producing a report compliant with National Instrument 43-101 standards.

Gold mineralization exists near the surface, which has bulk-tonnage potential, and also as high-grade veins.

In the mid-1990s, Rea Gold operated Mount Hamilton as an open-pit, heap-leach mine. Then, in late 1993, Rea Gold purchased the property from Costain Minerals for US$5.25-million. Costain, which retained a 2.5% net smelter return royalty, had spent more than US$9 million proving up the resource and completing a full feasibility study. An initial resource (not compliant with NI 43-101) of 8.2 million tonnes grading 1.78 grams gold and 12.7 grams silver per tonne was outlined in two contiguous orebodies: NE Seligman and Centennial.

Production started in late 1994 from the Seligman pit, which turned out about 80,000 oz. gold until low metal prices forced the operation to close in June 1997. Rea Gold then wrote down the operation and filed for bankruptcy.

Augusta has 19.6 million shares outstanding (following a recent financing), giving the company a market capitalization of $5.9 million. News of Augusta’s acquisition of Mount Hamilton drove the share price up over 60% to 30 on a volume of 1.6 million shares.