Golden Predator Mines to spin-out gold assets

Golden Predator Mines (GP-T) is going to separate its gold and silver assets from its base metal assets in a spin-off that should draw attention to the company’s strong portfolio of precious metals in Nevada.

The markets embraced the news, sending Golden Predator shares up 47.83% to close the day at 17¢ per share.

“We found we weren’t really getting credit for the gold assets in the company because they were buried by our Springer tungsten mine and what was likely investor concern about getting that into production,” Steve Vanry, Golden Predator’s president, told The Northern Miner.

“What we’ve done is simplify the story significantly…in a lot of cases investors didn’t know about these other precious metals assets that were also part of the company, some of them very significant.”

If shareholders approve the concept, Golden Predator’s precious metals portfolio will become a Nevada-focused gold company, and its specialty metals and alloys assets a separate company consisting of   tungsten, molybdenum, vanadium and uranium.

Golden Predator shareholders will receive one unit in the gold-silver spin-off for each four shares of Golden Predator they currently hold. Each unit of the new company will comprise one common share and one unit purchase right.

On closing, shareholders of Golden Predator will have the same percentage interest in the gold-silver spin-off company as they held in Golden Predator. Golden Predator will hold about 1.56% of the new gold-silver company, based on its current holdings of its own shares.

The new gold and silver spin-off likely will be called Golden Predator Mines, while the base metals company is to be called Emerging Metals, Vanry said.

The gold and silver entity will control precious metal assets including the income producing Campbell Royalty Trust (which includes claims and royalty positions covering the Pan property, leased by Midway Gold Corp. (MDW-V, MDW-x), the Taylor silver mine and mill complex, the Adelaide, Lantern and Tuscarora projects, and the Lewis and Platte River joint ventures. It will also include Angel’s Camp in Oregon.

The claims and royalty positions include portions of Barrick Gold’s (ABX-T, ABX-n) Bald Mountain property and the Tonkin Springs property leased to US Gold Corp. (UXG-T). All in all, there will be 23 property interests in the portfolio made up of more than 70,000 acres.

The Taylor project includes a 1,320-ton per day mill, water rights and about 2,700 acres of mining claims. The mill complex is made up of primary, secondary and tertiary crushers, eight ball mills, a leaching and counter-current decant thickening circuit, Merrill Crowe equipment, a flotation circuit, a maintenance shop, an assay office, an electrical substation and mine office.

The Adelaide project is at the intersection of the Getchell and Battle Mountain-Eureka gold trends and has been the focus of exploration by several companies over the last 30 years. Golden Predator is nearing completion of a 16,145-foot drill program testing various targets for potential high grade chutes on 1.6 miles of strike length along the mineralized, Adelaide structure.

Emerging Metals will incorporate the Springer tungsten facility, which over the last two years Golden Predator has been rehabilitating and expanding. That project is 85% complete. Once it moves into operation, the Springer mill is expected to process about 1,200 tonnes per day of scheelite ore.

In 1982, when the Springer mine was closed by General Electric due to falling tungsten prices, the mine had a non-NI 43-101 compliant historic resource of 3.59 million tons grading 0.446% tungsten. (The new company will leave the Springer facility on care and maintenance, however, until an economic recovery takes hold, at which time it may be re-commissioned, Vanry says.)  

Emerging Metals will also own the Spruce Mountain moly project in Nevada’s Elko County. Spruce Mt. is made up of 1,280 acres adjacent to Mosquito Consolidated Gold Mines’ (MSQ-V) Spruce Mt. porphyry molybdenum project.

In addition the new base metals company will own the Carlin vanadium deposit, also known as the Black Kettle project, where Union Carbide estimated a non NI 43-101 compliant historic resource of 19.69 million tons grading 0.83% vanadium using a 0.4% vanadium cutoff grade.

The new entity will also hold  other tungsten assets including

the Fostung deposit in Ontario, with an inferred mineral resource of 12.4 million tonnes grading 0.21% tungsten using a 0.125% cut-off, the Hamme tungsten mine in North Carolina, the Copper King deposit in Nevada’s Pershing county, and other exploration projects.