Nevada back in the spotlight — Midas partners outline gold-silver resource

As equal partners in the Midas joint venture, Franco-Nevada (TSE) and Euro-Nevada (TSE) plan to step up the pace of exploration on a Nevada land package which, although barely explored, already hosts a resource of 13 million tons grading 0.16 oz. gold and 2.7 oz. silver per ton.

This preliminary resource estimate, prepared by Mine Development Associates of Reno, is based on 45 widely spaced holes (50% on 200-ft. spacings) which were drilled to test the Rex Grande zone. Within this resource is a high-grade core containing more than 1 million tons grading 1.13 oz. gold and 21.1 oz. silver, using a 0.5-oz.-per-ton cutoff grade. Although much work remains to be done to prove up reserves, the resource is expected to be minable through a combination of open-pit and underground methods.

“This is just chapter one of a 20-chapter book,” Chairman Seymour Schulich told mining analysts during a recent presentation in Toronto. His view was echoed by Pierre Lassonde, president of both companies, who described the project as having the makings of a major new gold camp at the northern end of the Carlin Trend. (The project is near the confluence of the Getchell and Carlin Trends.)

The project is attracting interest because, unlike the sediment-hosted, disseminated gold deposits of the nearby Carlin Trend, the known host rocks at Midas are volcanic.

The discovery was made by geologist Ken Snyder in the Gold Circle mining district, which, during the 1920s and ’30s, produced an estimated 500,000 oz. gold and 4 to 5 million oz. silver from gold-silver vein systems.

Euro-Nevada and Franco-Nevada took an interest in the region nine years ago, based on a view that it had potential for hosting bulk-tonnage, disseminated gold deposits. As Snyder explained, this interest was derived from observations of surface alteration and mineralization. Geochemistry, in particular, proved to be an effective exploration tool.

A land acquisition program followed, and today the joint venture controls about 37.5 square miles of land with no underlying royalties. In the past 15 months, a 150-hole drill program intersected substantial

intercepts of high-grade mineralization along the 3,000-ft. Rex Grande zone, which lies in the middle of the 20,000-ft. Midas anticline.

Some of the best holes are: 145 ft. of 1 oz. gold and 14.5 oz. silver per ton; 110 ft. of 0.78 oz. gold and 12.95 oz. silver; 175 ft. of 0.337 oz. gold and 2.85 oz. silver; and 320 ft. of 0.21 oz. gold and 3.66 oz. silver.

Also reported were two 85-ft. intervals from hole 95-6, returning 0.49 oz. gold and 11.5 oz. silver, and 0.37 oz. gold and 4.9 oz. silver, respectively. Hole 95-1 returned 53 ft. of 1.34 oz. gold and 18.56 oz. silver, while hole 95-12 returned 70 ft. of 1.45 oz. gold and 18.13 oz. silver.

Snyder described Midas’ overall structure as “an elongate dome or doubly plunging anticline.” And from a geological standpoint, he says the project is, in some ways, similar to the Round Mountain gold deposit, also in Nevada.

The mineralized horizons are structurally controlled, dip variously eastward and have been offset at several locations by post-mineral faulting (effectively bringing mineralization closer to surface as the faults step eastward). The strike is also disrupted by several right, lateral, offset faults.

The deposit is bounded to the west since the crustal portion of the anticline has been eroded away, yet it remains open to the north, east and south.

Some preliminary metallurgical work has been carried out and, so far, no evidence has been found to suggest problems such as silica encapsulation or toxic minerals. “The mineralogy is fairly simple and consists of gold-electrum for gold mineralization and various silver selenides,” Snyder said.

On the exploration front, the partners see potential for outlining additional tonnage within the Rex Grande. “We also have numerous targets elsewhere in the district,” Snyder said. “The Midas joint venture has now completed about 150 holes in the district, or 80 to 90 outside the Rex-Grande zone, and we have acquired data from holes drilled by other companies.”

Based on these results, the partners have identified targets that will be drill-tested further in 1996. Meanwhile, priority will be given to completing infill drilling of the Rex Grande zone, environmental base-line studies, and the initiation of a feasibility study by late 1996.

Euro-Nevada and Franco-Nevada are primarily royalty companies, and intend to remain as such. “But we are not going to trade 50% of a gold camp to gain [someone else’s] operating skills,” Lassonde said.

He added that the partners can hold 100% of Midas, and supervise development using outside contractors and engineering firms. Still, the companies have not ruled out the possibility of forming a joint venture with an operating gold company. “We have been watching Robert Friedland’s [performance] at Diamond Fields, and we think it could be a model for what we have here.”