Reno-based
The 24-sq.-mile Goldfield property, situated 270 miles southeast of Reno, is one of three advanced-stage gold projects in the state that Metallic intends to develop into producing assets in the coming years (T.N.M., March 10-16/03).
The Goldfield camp was discovered in 1902 and has since produced more than 4 million oz. at an average grade of 0.5 oz. per ton from bonanza-grade ore shoots. In more recent times, the camp has supported three open-pit, heap-leach mines.
Metallic acquired the property in March 2001 from
In the process, Metallic became the first company to consolidate a large land package at Goldfield, though the properties are still subject to various royalties, ranging from 2% to 7%, and fees payable under lease obligations and to the Bureau of Land Management.
The geology of the Goldfield camp is characterized by a volcanic-hosted, high-sulphidation gold-copper system. Previously defined resources are contained in three areas: Goldfield Main, where most of the mining has taken place; Gemfield, to the northwest of Goldfield Main; and McMahon Ridge, to the north.
At the Gemfield target, Metallic is building on last winter’s 28-hole infill program with a 120-hole program of infill and delineation drilling.
The work has tightened drill spacing to 100-ft. centres and confirmed the continuity of higher grades internally.
Geologists have also discovered a near-surface, peripheral zone of mineralization — which remains open — plus higher-grade feeder systems within the overall deposit limits.
In particular, one northeast-trending high-grade zone is 900 by 170 ft. in plan view, while a second north-trending high-grade zone is 730 by 135 ft. in plan view.
The best intersection this year came from hole 286, which cut an impressive 85 ft. (from 35 ft.) of 2.94 oz. gold per ton (100.8 grams gold per tonne), including 15 ft. (from 80 ft.) of 15.21 oz. gold.
Of particular interest were holes 307 and 310, which helped define new, high-grade gold mineralization associated with ledges situated on the southwestern edge of the mineralized zone. Hole 307 intersected 125 ft. (from 535 ft.) grading 0.119 oz. gold (4.08 grams gold) while hole 310 cut 290 ft. (from 330 ft.) of 0.088 oz. gold (3.02 grams gold), including 65 ft. (from 455 ft.) of 0.305 oz. gold (10.46 grams gold).
Other good results, out of the more than 100 holes reported so far this year, include:
— 80 ft. (from 70 ft.) of 0.13 oz. gold (4.46 grams gold), including 25 ft. of 0.27 oz. gold (9.26 grams gold), in hole 259;
— 165 ft. (from 35 ft.) of 0.21 oz. gold (7.20 grams gold) in hole 269; and
— 195 ft. (from 140 ft.) grading 0.047 oz. gold (1.61 grams gold) in hole 200.
Metallic believes these latest results will boost both the size and grade of the deposit when reserves are recalculated as part of an ongoing feasibility study.
In the meantime, crews are carrying out detailed geologic mapping, soil geochemistry, and geophysics in the area to define new exploration drilling targets.
As well, other gravel-covered areas outside of the Gemfield deposit will be drill tested for hidden structural blocks similar to the main Gemfield ore zone.
Elsewhere on the Goldfield property, Metallic has carried out a 54-hole, 26,000-ft. infill-and-delineation drilling program at the McMahon Ridge deposit as a follow up to last year’s 158-hole, 56,000-ft. campaign.
Results from several of the latest holes have extended gold mineralization farther down-dip on the McMahon Ridge structure, including hole 287, which cut 105 ft. (from 375 ft.) of 0.05 oz. gold and 50 ft. (from 505 ft.) of 0.11 oz. gold.
Metallic will now take the McMahon Ridge deposit to the prefeasibility stage and recalculate the resource base.
Prior to Metallic’s drilling, resources at the entire Goldfield property were calculated at 23.4 million tons grading 0.031 oz. gold (720,300 contained ounces) in the indicated category and 10.2 million tons of 0.024 oz. (247,000 oz.) in the inferred category.
Metallic has budgeted US$1.2 million this year for work at Goldfield.
Meanwhile, 100 miles southeast of Reno, Metallic is active at its Esmeralda gold project, which is similarly centred on an historic gold camp.
High-grade gold and silver were discovered in the area in the early 1860s, in quartz-adularia-sericite veins associated with fault zones. Records show 1.9 million oz. gold were produced at Esmeralda, of which 1.5 million oz. were mined from 670,000 tons between 1864 and 1920.
The company bought the Esmeralda property for US$457,000 in 2000 from the trustee in bankruptcy for Aurora Consolidated Mines, a U.S. subsidiary of Real Del Monte Mining.
Metallic then spent another US$1.1 million acquiring more properties in the district, and now holds claims and fee lands totalling 5,644 contiguous acres. The project is still subject to net smelter return royalties ranging from 1.5% to 6.5%.
This year, Metallic plans on drilling several targets and excavating two declines that will provide crews with access to high-grade zones in the Prospective and Martinez veins.
When the declines are completed this summer, Metallic intends to carry out 10,000 ft. of underground core drilling at Prospectus and 7,000 ft. at Martinez.
Metallic aims to expand the measured and indicated resource, which currently stands at 30.7 million tons grading 0.031 oz. gold per ton, or 952,700 contained ounces. A further 9.2 million tons at 0.025 oz. gold lie in the inferred category.
Also located at Esmeralda is a mothballed mill that Metallic is bringing back to life at a cost of about US$1 million.
The milling facility is fully permitted and comprises a 350-ton-per-day, carbon-in-leach mill, a refinery, an assay lab and an office complex.
Overall, US$1.9 million has been budgeted for work at Esmeralda this year.
The 11-sq.-mile Converse property, Metallic’s third major gold project, is situated 30 miles southeast of Winnemucca, Nev., at the southern end of the prolific Battle Mountain trend.
Metallic bought a 25% interest in Converse in 2001 through its acquisition of Romarco’s gold assets and in November 2002 bought out the remaining partners — Newmont and
Based on 155 drill holes totalling 104,000 ft., Converse hosts a skarn-hosted resource of 77.4 million tons grading 0.020 oz. gold, or 1.5 million contained ounces, in the indicated category and 61.8 million tons grading 0.018 oz. gold (1.1 million oz.) in the inferred category.
This year at Converse, Metallic has budgeted US$400,000 for geological and geophysical work, the re-logging of old drill core and cuttings, and 13,000 ft. of reverse-circulation and core drilling.
“We’re doing exactly what we told the investment community we were going to do when we went public — we pursued the development of the Esmeralda project and we went in aggressively at Goldfield with drilling — and the results have been fantastic,” says Ed Devenyns, Metallic’s vice-president of corporate development.
“At Converse, we’ve spent the time to become familiar with the data. So now we can better understand the deposit and get in there and do some infill drilling and hopefully upgrade what’s there.”
Metallic had its initial public offering in December, selling 8 million shares at $3 apiece for gross proceeds amounted to $22.3 million.
The IPO, the largest in the North American gold sector in 2002, was led by a syndicate consisting of Cannacord Capital, Haywood Securities, Griffiths McBurney & Partners, and Westwind Partners.
More shares were issued in January 2003, when the broker syndicate exercised their over-allotment option, bringing the total number of outstanding shares to 34.9 million shares.
Metallic’s two founders, CEO Jeff Ward and President Richard McNeely own 11.2 million and 9.1 million Metallic shares, respectively, or a combined 58% of the company.
Metallic has begun to make an appearance in the top-ten holdings of Canadian gold mutual funds, and has been one of the “top-three picks” of noted gold bull John Embry, president of Sprott Asset Management, during his television appearances this year.
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