Homestake discovery triggers staking rush

A gold discovery by Homestake Mining (NYSE) has triggered a staking rush in the southern portion of the Battle Mountain-Eureka trend in eastern Nevada.

A recent hole drilled by the major encountered 0.147 oz. gold per ton over 435 ft. on an exploration property in the Ruby Hill district, near Eureka. The initial discovery, however, was made by Homestake geologists well over a year ago. At that time, the Ruby Hill district was better known for its silver and base metal mineralization than for its potential to host major gold deposits.

Since then, 125 holes have been drilled, more than 50 of which intersected mineralization grading better than 0.03 oz. gold per ton over a minimum thickness of 30 ft. Individual drill holes returned gold grades and intersected widths ranging from 0.066 oz. gold over 180 ft. to 0.51 oz. gold over 120 ft.

“We are pleased with this discovery and give full marks to our exploration team,” Homestake President Peter Steen told The Northern Miner. “The discovery shows that Nevada still has plenty of exploration potential.” The company is applying for permits to start a US$4-million delineation drilling program early next year. A resource estimate will be not be made until that program is complete.

Homestake said the density of its current drilling “is insufficient to estimate the resource accurately at this time.” But this has not prevented speculation from other quarters that the project has multi-million-ounce potential.

Drilling to date on the unpatented claims has intersected mineralization extending for more than 3,000 ft. of strike. The mineralized zone is largely oxidized and covered by alluvium, ranging in thickness from 50 to 500 ft. Homestake has already staked a large block of claims near the discovery, and several other companies have staked, or are in the process of staking, claims in the region.

Cathedral Gold (TSE) recently staked 155 claims covering 3,100 acres in two blocks adjoining the Homestake discovery. Also active in the district is X-Cal Resources (TSE), which has a crew at work on its 1,800-acre Eureka gold project. Juniors associated with Murray Pezim are also reported to be acquiring ground in the region.

Newly reorganized Atlas (NYSE) also stands to benefit from interest in the area. The company continues to explore its Gold Bar claim block near Eureka, where it already has an operating gold mine. The Denver-based producer is now managed by Steven Manz and Michael Gross, both previously with Royal Oak Mines.