Junior busy in Nevada

Having ended a two-and-a-half-year venture arrangement Kennecott Exploration, junior Nevada Pacific Gold (NPG-V) is raising $300,000 to continue exploring for gold in Nevada.

The non-brokered private placement consists of 1.5 million units priced at 20 apiece. A unit consists of one share and a half-warrant. A whole warrant will entitle the holder to buy an additional share at 25 for one year.

Earlier in February, Nevada Pacific and the Rio Tinto (RTP-N) subsidiary mutually agreed to end their Carlin trend alliance, which began in July 1998. The alliance controlled 18 sq. miles in northeastern Nevada, and included the South Carlin, Tomera Ranch, High Dollar and Dixie Flat properties. Exploration expenditures and underlying property payments were shared 50-50 by the pair. Kennecott had the option to earn up to a 60% interest in any discovery area by meeting certain expenditure requirements.

Nevada Pacific will retain all the properties except Dixie Flat, which was brought to the alliance by Kennecott. In addition, Kennecott has agreed to eliminate a 51% back-in right to the Woodruff Creek property, also on the Carlin trend, in exchange for a 1% net smelter return royalty.

A magnetotelluric (MT) geophysical survey was completed last year on the South Carlin properties, including Woodruff Creek. Several anomalies were outlined. This type of survey is being used in the Carlin trend to aid in exploration for buried deposits. The MT technology assists in defining lithologic, structural and alteration features.

Nevada’s portfolio of early-stage properties includes Limousine Butte, which is optioned to Newmont Mining (NEM-N). Newmont has incurred costs of about $500,000 on the project, including two rounds of reverse-circulation drilling.