Junior explores for Pipeline’s roots

Denver — Toronto geologist John Gardiner believes he holds the key to a major reinterpretation of the geology of Crescent Valley in central Nevada — a revision that could not only resolve long-standing questions about the famed Battle Mountain trend, but lead to an important gold discovery for his company, CMQ Resources.

For years, Nevada geologists have been looking for discoveries comparable to the Pipeline deposit, part of the Cortez joint venture. A clear moneymaker, the open-pit Pipeline operation has been cranking out more than 1 million oz. gold annually at cash operating costs of US$60 per oz.

Placer Dome (PDG-N), which holds a 60% interest in Cortez, expects production to reach 1.1 million oz. in 2001. The remaining 40% is held by Kennecott Exploration (Australia), a subsidiary of Rio Tinto (RTP-N).

Discovered in 1991 during condemnation drilling at the nearby Gold Acres mine, Pipeline proved to be a big find in a state full of big finds. Nevada, which hosts the famed Carlin trend, as well as more than 30 mines, produces in excess of 8 million oz. gold, ranking it third in the world among gold-producing regions, behind South Africa and Australia.

Gardiner, who spent more than a decade in Nevada (including a stint at Pipeline), believes that mineralization at Pipeline and Gold Acres is not only similar to mineralization at the Cortez mine, but that it is in fact the same, only seen at different levels in the earth’s crust.

Based on our understanding of the Carlin trend, Gardiner believes the mineralizing system at the Crescent Valley has been rifted apart into different pieces. He was not the first to suggest as much. In 1995, two geologists, John McCormack and Robert Hays, published a paper suggesting that Pipeline-Gold Acres and Cortez had been separated by 5 km of rifting in the last 14 million years.

The paper captured Gardiner’s imagination at a time when extensional tectonics had become increasingly an exploration concept for geologists. He took the idea and applied it to a broader scale; as a result, he too now believes that rifting, or extension, has helped shape the geology of Crescent Valley.

In Gardiner’s view, Pipeline and Cortez represent high levels of a large mineralizing system similar to the Carlin trend, situated to the northeast on the other side of the Dry Hills granitic batholith. To date, exploration for the roots of Pipeline and Cortez have come up short, suggesting that the high-grade root zone, akin to the Meikle mine, does not lie deeper but is laterally displaced.

Two years ago, CMQ and Gardiner, who is now the company’s vice-president of exploration, acquired land in the eastern Crescent Valley. Others had preceded them, including Homestake Mining (HM-N), which spent a lot of time at a target at Hot Springs Point, just to the north, and now-defunct Oro Nevada Resources, which drilled the Dean Ranch, to the south.

CMQ staked 807 claims, covering 42 sq. miles, and christened them the Montezuma property. Geophysics, including gravity and magnetics, pointed to a horst feature out in the valley. Many geologists believed the depth of the valley presented a barrier to further exploration. Last year, the company tested the horst hypothesis with a drill hole.

“The drillers thought we were nuts to drill where we did,” says Gardiner. They were told the hole would hit bedrock at 1,620 ft. below the surface. Ever-skeptical, the drillers noted the number on the dusty hood of the rig.

“We hit Valmy formation at 1,625 ft.,” adds Gardiner. “Even we were astonished at how close we were.”

Below a hundred feet of Valmy, the drill passed through a structural contact into granitic rock, which turned out to be a ringer for the Gold Acres stock and Mill Canyon stock, associated with the Cortez mine. Major element geochemistry and radiometric age-dating confirmed the similarities.

Gardiner also cites similarities in structures inferred from geophysics at Montezuma and Pipeline. The proximity of the enigmatic Northern Nevada Rift is also suggestive of an extensional past. The Northern Nevada Rift is a geophysical expression of what is thought to be a rift-related basaltic intrusion running northwestward across the region.

Famed Nevada geologist John Livermore welcomes a fresh look at the geology, and believes that the target could well be valid, though he admits that “it’s some brave exploration.” As a representative the old guard of Nevada geology, he says he’d be more inclined to view the data in light of compressional tectonics.

Hays, who is the chief geologist at Pipeline, says his paper was based on a two-dimensional restoration, and that a three-dimensional analysis is in the works. Nonetheless, he says he is eager to hear Gardiner’s ideas in person.

As a private company, CMQ is using Montezuma to launch the company. “We hoped to carry the project forward to a logical point before going public, and we feel we are near that point,” says CMQ President Paul Champagne. The company is also considering enlisting a major partner to fund further exploration.

To date, the company has spent US$1 million, financed from Calgary-based TOM Capital, a private merchant bank with considerable experience in oil and gas.

“Much of the exploration we’ve done over the past few years is well-known in the oil patch,” says Champagne. “Oil geologists have been using detailed geophysics to locate extensional features in the subsurface in Nevada for years.”

CMQ hopes to conduct more geophysics before resuming drilling. Using audiomagnetotellurics, the company hopes to pinpoint structural features.

“We hope to poke the eyes out of it with the drilling,” says Champagne.

The drilling will target narrow, high-grade mineralization in sedimentary rocks, similar to the high-grade Meikle deposit in the Carlin trend. If the program is successful, not only will it result in a significant discovery, one that could potentially be economic even at present gold prices; it could usher in a revitalization of exploration, changing the way geologists look at Nevada.

One look at a geologic map of the state shows that the most dominant colour is yellow, representing Quaternary alluvial material covering older rocks. Over the years, Nevada geologists have focused attention on these yellow areas, which cover what many believe will be Nevada’s next big discoveries. A renewed emphasis on extensional tectonics could also open up areas for exploration that previously had been assumed to have little or no potential.

Whether or not CMQ is successful, the effort will change the way geologists view Nevada’s major gold trends. Reconstruction of the Crescent Valley tends to straighten out the somewhat jagged and diffuse Battle Mountain trend. A clearer view of the trend could also lead to a greater understanding of how it and the Carlin trend formed.

Although CMQ remains focused on the potential in Nevada, it is also taking advantage of the increasing interest in platinum-palladium exploration. The company controls 135 sq. miles east of the advanced-stage Arctic Platinum project in Finland, owned by Outukumpu and Gold Fields (GOLD-Q).