Drilling at Midas adding lustre to royalty sisters

A second phase of drilling is being completed by Franco-Nevada Mining (TSE) and Euro-Nevada Mining (TSE) on their 22,000-acre Midas gold property in northern Nevada.

For the past three years, the companies have been assembling ground in the only area within the Carlin trend where historic gold production has been recorded. The Midas camp, which lies at the intersection of the Getchell trend and the northwestern extension of the Carlin trend, produced 300,000 oz. of the yellow metal from high-grade, gold-bearing quartz veins.

In 1994, the Midas joint venture spent $1.7 million assembling the 10,000-acre land position and drilling 85 holes to an average depth of 675 ft.

This year, the venture will spend about $2 million drilling more holes and accumulating additional ground. So far, the venture has more than doubled its land position to 22,000 acres, and has drilled 32 holes using two reverse-circulation rigs and one diamond drill rig. This year, the companies expect to complete a total of 120-150 exploration holes to an average depth of more than 900 ft.

Since April, when the program began, encouraging results have been obtained from holes drilled along a 20,000-ft.-long anticline. Particularly noteworthy are results from 10 holes drilled along a 1,200-ft. section of the anticline, referred to as the Rex-Grande. The holes, drilled to a maximum depth of 1,250 ft., have returned what the company refers to as “substantial widths of very high-grade gold and silver mineralization.” Although no assay results were available, silver content is estimated to be 10 times that of gold. The Rex-Grande remains open at depth and along strike to the north and south.

Drilling over the next few months will attempt to determine the extent of mineralization at Rex Grande. Several other targets, identified by earlier work along the Midas anticline, will also be tested.

The Midas is but one of many properties within the Carlin trend in which Franco and Euro hold royalty interests. The trend hosts 10 active gold mines and 30 known deposits containing 80 million oz. of gold resources. Total annual production from the trend is 3.4 million oz. Both Franco and Euro have extensive holdings in the camp, amounting to 64,000 and 67,000 acres, respectively.

The Carlin property royalties have been the main source of Franco’s growth. In 1994, the company reported a 51% increase in earnings and a 28% jump in gold production, compared with the previous year.

Over the past year, Franco has diversified by picking up a 5% net profits interest in the Pandora platinum property in South Africa’s Bushveld Complex.

The Bushveld produces more than half the world’s platinum, or about 2.1 million oz. annually. The Pandora hosts an estimated 31 million oz. of proven and probable platinum group metal (PGM) reserves. Both the Merensky Reef and UG2, which are known for hosting PGM mineralization, cross the southern portion of the Pandora property.

In addition to the Carlin interests, Franco holds royalties in Ontario’s Hemlo mining camp.

Meanwhile, sister company Euro-Nevada is also poised for growth, with four properties in which it holds royalties expected to perform well in 1995. These include: Barrick Gold’s (TSE) Meikle mine in Nevada; the Henty gold project in Tasmania; the Browns Creek gold mine in Australia; and Homestake Mining’s (NYSE) recently commissioned Eskay Creek mine in British Columbia.