Great Basin hits bonanza grades at Ivanhoe

Great Basin Gold (GBG-V) has intersected bonanza gold and silver grades at its Ivanhoe property, in Nevada’s Carlin trend.

The junior hit a number of epithermal, multi-stage, quartz veins containing high-grade gold and silver while drill-testing gold feeder structures within the Valmy volcanic formation. The six holes were intentionally collared in the vicinity of the high-grade gold shoot drilled by Newmont Gold (NGC-N) in 1994, which ran 33.54 oz. gold per ton over 2.4 ft. Great Basin believes Newmont’s shoot is related to a potential deep-seated, high-grade gold deposit.

Assay results were received from three of the six holes. Hole 4 hit 10.6 ft.

grading 5 oz. gold and 47.8 oz. silver per ton. This included a 4.6-ft.

intercept grading 11.13 oz. gold and 103.4 oz. silver. Another 12.6-ft.

interval grading 1.64 oz. gold and 39 oz. silver was hit farther down the hole.

Hole 2 intersected 33.2 ft. grading 0.13 oz. gold and 3.2 oz. silver, including an 8-ft. interval grading 0.24 oz. gold and 1.8 oz. silver, followed by a 5.5-ft. interval grading 0.18 oz. gold and 13.4 oz. silver.

Hole 3 hit 9.3 ft. grading 0.28 oz. gold and 2.1 oz. silver.

Under the supervision of Chemex Labs, whole core samples were taken from select intervals to prevent potential sample bias and maximize sample size.

Assay results from the remaining 2,246 ft. of core are expected later this month.

Microscope and microprobe analysis suggest that the gold-silver mineralization is similar to that of the Ken Snyder mine, situated 15 miles northwest of the Ivanhoe property. Mineralization at both sites is found within finely banded quartz veins and occurs as coarse gold in the form of electrum and locally abundant silver in the form of naumannite and aguilarite.

The recognition that the Valmy rocks may represent a Midas-style gold-silver system has inspired the company to pursue the target more aggressively.

“We did not consider the Valmy a target,” says Scott Cousens, investor relations officer for Great Basin Gold. “All we wanted to do is map the feeder system at surface to help us get a better plunge and dip on it, so we could ultimately project it out to the lower plate carbonates. The fact that we happened to cross some Midas-style mineralization was a pleasant diversion, so now we have two targets.”

The Ken Snyder deposit, on the Midas property owned by Franco-Nevada (FN-T) and Euro-Nevada (EN-T), is hosted within a narrow corridor of veins that average 3 to 5 ft. in thickness. Current minable reserves weigh in at 2.17 million tons grading 1.04 oz. gold and 11.65 oz. silver. This works out to a contained resource of 2.25 million oz. gold and 25.3 million oz. silver.

Reserves were calculated using US$300 per oz. gold and US$6 per oz. silver.

The mine is slated for production in mid-1999 at a rate of 500 tons per day, and it is estimated that cash costs could slide in under US$80 per oz.

Situated on the northwestern extension of the Carlin trend, the Ivanhoe project consists of 503 unpatented claims covering an area of approximately 14.7 sq. miles. The Carlin trend represents a 40-mile-long metallogenic corridor that currently hosts 77 million oz. gold within delineated reserves. To date, mining operations have pulled approximately 30 million oz. from Carlin trend deposits.

The main controls to mineralization along the Carlin trend are a combination of host rocks and structural features. Paleozoic-age, silty carbonates have proven to be the best host rocks for gold mineralization in the area because of their favorable physical and chemical properties. Fault and shear structures also play a critical role by concentrating ore-bearing fluids.

Another host-rock relationship with gold mineralization is the tendency for large gold systems to form at the margins of sizable intrusive bodies.

>From the turn of the century until the 1980s, the Ivanhoe area was primarily exploited for mercury. Since that time, exploration has targeted molybdenum, uranium and, more recently, gold and silver.

In the early 1980s, United States Steel defined a large, low-grade gold system around what is now the Hollister mine area. In 1986, Cornucopia Resources (CNP-T) (then known as Touchstone Resources) helped define a proven and probable reserve of 18.4 million tons grading 0.04 oz., for 699,200 contained ounces. The mine was commissioned in 1990 and produced 114,706 oz. gold, using heap-leach methods, until the end of 1995.

Newmont bought a 75% interest in the property in 1992, but after three years and more than 80,000 ft. of drilling, the company failed to find an open-pit deposit that met its minimum operating requirements.

Consolidated North Coast Industries, which recently merged with Pacific Sentinel Gold to form Great Basin Gold, purchased Newmont’s interest in 1997.

The Ivanhoe joint venture currently consists of Great Basin Gold, which holds 75% operating interest, and Cornucopia, which holds the remainder.

In addition to Midas-type mineralization, Great Basin is exploring in the Hollister area and around the Hatter stock for what company terms “leakage-style” mineralization, in which gold from a deep high-grade deposit percolates to the surface, resulting in a low-grade gold anomaly at surface.

The Hollister mine area has a large, low-grade gold system associated with volcanics and the underlying upper-plate Valmy formation. The company believes that the large gold anomaly associated with the Hollister mine represents leakage-style gold mineralization derived from a deeper gold deposit in the lower-plate silty carbonates.

The Hatter Stock and the surrounding upper-plate rocks are considered to be another leakage-style target. Assays from the stock ran 10 ft. of 0.73 oz.

gold per ton and 20 ft. grading 0.74 oz. per ton. The rocks surrounding the stock have lower-grade intercepts, such as 525 ft. grading 0.01 oz. gold per ton.

A number of near-surface gold deposits on the Carlin trend have deep-seated, high-grade gold deposits under them. A few examples include: the Meikle deposit (10 million tons of 0.71 oz. per ton), located below a historic Mercury mine and the high-grade Deep Star deposit (1.5 million tons grading 0.87 oz. gold per ton) that underlies the low-grade North Star and Genesis pits.