NEVADA AND THE WESTERN STATES — Nevada Pacific finances hunt for Nevada gold

Proceeds from a recently completed private placement will enable Nevada Pacific Gold to fund exploration at its Woodruff Creek and Limousine Butte projects in Nevada.

The private firm raised $1.5 million in a non-brokered private placement of 2.5 million shares at 60 cents each.

The primary focus of Vancouver-based Nevada Pacific is the exploration and development of gold projects in the western United States. Of the company’s nine projects, five are situated in Nevada, three in Montana and one in Arizona.

The exodus of North American exploration and mining companies from the western U.S. to foreign soil has created opportunities to acquire promising properties, says Nevada Pacific President David Hottman, noting that over two-thirds of all active Nevada mineral claims registered in 1990 have since been dropped. Moreover, low gold prices have deterred many companies from acquiring new projects.

Nevada Pacific has been built around a nucleus of experienced geologists who have been instrumental in the discovery and/or development of seven deposits containing, in aggregate, some 30 million oz. gold. Hottman himself was one of the co-founders of both HRC Development and Eldorado Gold, and was involved in raising over US$300 million in venture-capital financing.

Nevada Pacific’s 100%-held Limousine Butte property lies 40 miles northwest of Ely, Nev. It covers 5,960 acres of ground along the projected southern extension of the Carlin trend and centres on a large, gold-bearing hydrothermal system that exhibits alteration features similar to sediment-hosted, structurally controlled gold deposits found elsewhere in the state.

A large copper-gold porphyry intrusive complex was discovered in the 1960s in the western portion of the property, at a depth of approximately 2,000 ft. Extensive alteration and gold mineralization occurs in both the quartz porphyry stock and the surrounding calcareous sandstone and shale units of the Chainman, Joana and Pilot formations.

Widely spaced drilling in the 1960s encountered significant widths of strongly anomalous gold mineralization, including 767 ft. averaging 0.02 oz.

gold per ton; individual assays showed concentrations of up to 0.19 oz. gold.

Outcropping gold-bearing jasperoids occur in the same formations, 4.5 miles to the east of the intrusive centre. The jasperoids exhibit a typical hydrothermal suite of minerals and are believed to be related to the porphyry system.

Nevada Pacific believes the property is prospective for three possible styles of gold mineralization:

* Fortitude-style skarn replacement deposits occurring in the Joana limestone near the intrusive;

* Meikle-style high-grade sedimentary/intrusive-hosted mineralization occurring near structural traps; and

* Alligator Ridge-style bulk-minable mineralization at, or near, the contact of vertical and low-angle structures within the prospective shale and limestone units.

The 1998 exploration program will involve surface mapping, geochemical sampling and geophysical surveying.

The Woodruff Creek property

lies on the Carlin trend, 5 miles south of the town of Carlin. Nevada Pacific can earn a 100% interest in the 640-acre property from Rio Tinto (RTP-N) unit Kennecott Exploration by incurring US$500,000 in exploration expenditures over a 4-year period and issuing US$50,000 worth of shares during the second year. Kennecott retains a back-in right to a 51% interest, which is exercisable at feasibility by reimbursing Nevada Pacific one-and-a-half times 51% of its incurred costs.

The lithological and structural setting of the Woodruff Creek property is said to closely resemble Newmont Gold’s nearby Rain mine, where gold mineralization is hosted in solution-collapse breccias formed at the contact between the Devil’s Gate limestone and the overlying Webb shale and in close proximity to the west-northwesterly trending Rain fault.

Woodruff Creek lies 4 miles northwest of the Rain open-pit along the same structural setting. Pervasive argillization, iron-oxide staining and small jasperoid breccia bodies are exposed along a prominent north-south-trending fault. First pass sampling revealed anomalous gold, arsenic, antimony and mercury values in the altered areas. The property has never been systematically explored.

Nevada Pacific’s exploration plans include a comprehensive program of surface mapping, sampling and detailed geophysics.

The company recently signed a letter of intent with Euro-Nevada Mining (EN-T) and Franco-Nevada Mining (FN-T) on a renewable 10-year exploration and mining lease on the 2,240-acre South Carlin property in Nevada.

The deal would commit Nevada Pacific to carrying out minimum escalating exploration expenditures on the property, including US$50,000 in the first year.

In addition, the company has signed a letter of intent granting Columbia River Resources (CRVV-Q) the right to earn a 100% interest in the Blue Basin gold property, situated on the southern end of Nevada’s Independence trend.

Columbia River will be required to spend a total of US$500,000 over four years and pay a total of US$100,000. Nevada Pacific will retain a back-in right to a 51% interest.

Nevada Pacific currently has 6.7 million shares outstanding. The company is seeking a listing with the Vancouver Stock Exchange and is preparing to file a preliminary prospectus.