Lacana’s Santa Fe swells Euro-Nevada royalty assets

After six months of negotiations, Toronto-based Euro-Nevada Mining (TSE) has added another gold property to its list of Nevada royalty holdings, the company said recently.

Euro-Nevada has acquired a 1.5% net smelter return royalty on the Santa Fe gold deposit and 4,500 acres of adjacent land from an elderly Reno, Nev., couple for $800,000(US).

Located about 32 miles east of Hawthorne, Nev., the Santa Fe deposit has proven mineable reserves of 8.5 million tons of oxide ore grading 0.037 oz gold per ton and 0.316 oz silver.

As reported (N.M., Dec 21/87), about 6.5 million tons consists of oxide material and the remaining two million tons are comprised of sulphide ore. The deposit is open along strike and at depth where the grade of sulphide ore is substantially higher, said President Pierre Lassonde.

Operator Lacana Mining (TSE) is planning to produce about 50,000 oz gold and 275,000 oz silver annually from a heap leach operation beginning in September.

“Former royalty owners, Grace and Gill Gaylord are getting on in years and they just decided to sell,” said Lassonde, who handled the negotiations.

Based on current reserves and a $450(US) gold price, Euro-Nevada’s latest royalty acquisition will add about $500,000 for at least five years to the company’s treasury.

“The exciting thing for us is that Lacana hasn’t looked at the deep sulphides underneath the oxide reserves,” said Lassonde.

Under the agreement, Euro- Nevada has also acquired a 75% net smelter return royalty on 1,500 acres of adjoining ground called the Gabbs property.

Considered a rank exploration play, the Gabbs has all the earmarks of a lode-type deposit, said Lassonde.