Through a portfolio of six gold exploration projects and one silver project in the state,
“Our objective is to generate as much exploration exposure as we can and put a foundation under the company with the acquisition of reserves and resources,” says Nevada Pacific Chairman David Hottman. “It’s growth on a two-prong approach.
Founded in March 1997 with a focus on gold exploration in Nevada, the junior has persevered through some lean years to emerge well-positioned to capitalize on revitalized investor interest in the mining sector. The company recently raised $715,000 from the sale of 1.3 million units priced at 55 apiece. Each unit consists of one share and half a warrant. Sitting with $1.5 million in its treasury, Nevada Pacific has 18.8 million shares outstanding, or 23.3 million shares fully diluted.
Two of Nevada Pacific’s projects are optioned to major gold producers: the Limousine Butte project, to
Recent lakebed deposits cover most of the property. Two large isolated outcrops expose a package of calcareous rocks containing structurally related alteration and mineralization within thin-bedded carbonaceous shale, mudstone and siltstone. Skarn alteration and silicification partially obscure the original lithologies.
Previous drilling by the property owner, privately run Dobson Exploration, has reportedly pulled gold numbers out of the intrusion, while gold was panned from the drill-hole cuttings. There is also some evidence of associated platinum and palladium mineralization. “The sample methodologies used in the past are not necessarily suspect; they’re just not normal,” cautions Hottman. Dobson has borne the costs of the current drilling program, while Nevada Pacific is paying for the assaying of the chip samples at Chemex Laboratories in Vancouver. A representative of Nevada Pacific was on-site to monitor Dobson’s drilling and take possession of the RC samples before shipping them off for assaying. Results are pending.
Nevada Pacific has the exclusive right to earn a 100% interest, which it can exercise by meeting annual work commitments of US$20,000 in year two through four, rising to US$30,000 in year five through 20. Dobson will retain a 3% net smelter return on precious metal production.
Picking up where Kennecott Exploration left off, Placer Dome can earn an initial 60% stake in the South Carlin project by spending US$4.6 million over five years, including US$600,000 in the first year of exploration. Placer can earn an additional 10% by completing a bankable feasibility study. The South Carlin project comprises a collection of public and private leases covering 17 sq. miles at the south end of the projected Carlin trend between Newmont’s Gold Quarry mine, 7 miles to the northwest, and the Rain mine, 3 miles to the southeast.
The project area includes the Woodruff Creek property, the South Carlin leases and the Tomera Ranch lease lands. Most of the area has seen limited exploration for surface gold deposits and remains untested for high-grade gold mineralization below a depth of 400 ft. So far, Nevada Pacific has spent US$900,000 exploring the South Carlin properties, including detailed surface mapping, geochemical sampling, geophysics, trenching and a limited, 8-hole RC drilling program.
In February 2001, the junior ended a 2-and-a-half-year strategic alliance with Kennecott on the Carlin trend. The South Carlin project was then shopped around and a deal was subsequently struck with Placer in November 2001. “One of the big things Placer liked about it was our team’s target selection using a combination of geophysics and geology,” says Nevada Pacific President Joseph Kajszo. “We have these two significant structural features coming together at South Carlin.”
The results of a magnetotelluric (MT) geophysical survey completed in 2000 by Reno, Nev.-based Quantech Consulting better defined the interpreted projection of the Rain horst fault as it runs through the South Carlin project area. The Rain horst is an uplifted block of lower plate limestone. The MT data suggest the structure’s targeted depth is in the order of 2,000 ft. Ongoing exploration by Newmont at the Rain mine has targeted this structure, stepping out to the northwest in the direction of the South Carlin project.
Nevada Pacific’s geologists have used a compilation of aeromagnetic, gravity and MT geophysical data to identify the interpreted edge of an uplifted carbonate platform that trends in a northeasterly direction. Labeled the Woodruff horst, the company believes this structure represents a depositional boundary between the massive limestone platform to the southeast and basin-filling rocks to the northwest. The edge of Woodruff horst would seem to represent a growth fault, where carbonate debris flows formed as the basin was forming. Kajszo says this structural and lithologic setting is a prime area for gold mineralization and is similar to what is being postulated for the Meikle and Betze-Post mines in the northern part of the Carlin trend.
Nevada Pacific remains the operator on South Carlin until such time as Placer elects to take over the reins. Working from a US$670,000 budget, which is funded entirely by Placer, Nevada Pacific is drilling four or five prime target areas at South Carlin, based on geophysical and surface geochemical results. One such target, known as the MT anomaly, is interpreted to be a zone of structurally controlled silicification less than 1,000 ft. deep. The company will also be deepening a 400-ft. hole drilled in 1999; the hole cut strong clay alteration and pathfinders in “highly altered and juiced” Mississippian Webb Formation, which overlies the Devonian Devil’s Gate Limestone. The highest gold grades in the hole were 220 parts per billion (ppb), which Kajszo considers to be anomalous for the area. The initial drilling will consist of a combination of RC and core drilling totalling 8,000-10,000 ft.
In the meantime, Newmont is back drilling at Nevada Pacific’s 15-sq.-mile Limousine Butte project, 40 miles northwest of Ely along the projected southern extension of the Carlin trend. Newmont entered into an option agreement on Limousine Butte in June 1999 and can earn an initial half-interest by spending US$1 million over four years. A further 20% can be earned by spending an additional US$2 million within two years. With this current phase of drilling, Newmont will have earned a half-stake.
Newmont is targeting an oxide, potentially open-pit deposit in the range of 1-2 grams. The project area is underlain by an Upper Paleozoic sequence of sediments, consisting of massive carbonate and calcareous shale, siltstone and sandstone. Exploration for copper in the 1960s led to the discovery of a deep-seated porphyry system in the southwestern portion of the property. In the 1980s, a joint venture between Alta Gold and
Since optioning the property, Newmont has carried out geological mapping, rock and soil sampling, and airborne magnetic and ground gravitational surveys, as well as three rounds of exploration drilling. Late last summer, the major tested six target areas over a 4-mile strike length. Stepping out 400 ft. from a second round hole, which intersected 70 ft. of 0.14 oz. from a 415-to-485-ft. depth north of the previously mined Golden Butte open pit
, Newmont hit 35 ft. of 0.032 oz. starting at a depth of 515 ft. In addition, drilling on the Pony Express target returned 25 ft. of 0.027 oz. at 240 ft. The remaining wide-spaced reconnaissance drilling on four other targets yielded no significant gold values.
Kajszo says Newmont has continued to explore Limousine Butte because it has found a lot of low-grade mineralization in a district style setting. The ongoing exploration has identified a corridor of alteration and mineralization extending over 12 miles in length. “So far, they haven’t found a Newmont-size deposit, but because of the amount of mineralization that’s there, they keep coming back and looking for the big elephant,” says Kajszo. “Newmont has done a good job, and the project geologist is always generating more targets than budgeted for in the drill programs.”
In the latest round of drilling, now under way, Newmont has 18 drill sites permitted. Initially, the company intends to complete upwards of 3,500 ft. in seven holes using an RC rig. The major is targeting six new areas of anomalous gold, arsenic, copper, bismuth and tungsten, which lie in the southern portion of the property, 5-8 miles south of previously drilled areas.
“This year, we will have three projects drilled that are financed by others, and we will drill two or three projects of our own, including Amador Canyon [silver], Clover Valley [gold] and Keystone,” says Hottman. “The market likes 100%-owned drill plays.”
Earlier this year, Nevada Pacific grabbed an option on a 10-year renewable mining lease for the Amador Canyon silver property in exchange for completing 10,000 ft. of drilling within two years and spending $50,000 on exploration in years three and four. In addition, the vendor will receive annual minimum royalty payments of US$25,000 beginning in year three of the lease, increasing to US$50,000 in year five.
Situated 4 miles north of Austin in Lander Cty., Amador Canyon shows disseminated, stockwork-style oxide silver mineralization on surface, offering the potential for bulk-tonnage, open-pit mining. Austin is a historic, turn-of-the-century, underground silver mining district. Amador Canyon occurs in the northern part of the district in a unique wedge of quartzite and sandstone sediments interlayered with graphitic shale and siltstone. “We’ve got a series of surface samples from dumps, pits and outcrops that average more than 4 oz. silver,” says Hottman. Outcropping gossanous zones of silver mineralization are traced over a strike length of 4,500 ft. and a width of 500-2,000 ft. “We’ll do a small program on it and see what’s there,” says Kajszo.
The Clover Valley project covers 1.7 sq. miles along the western edge of the Spruce Mountain district, 35 miles south of Wells. During the mid-1980s, both Gold Fields Mining and Santa Fe Pacific Gold conducted reconnaissance gold exploration in the district. “We know of some big holes there that encountered relatively shallow gold mineralization,” says Hottman. Previous drill results included 80 ft. of 0.076 oz. gold, plus 40 ft. of 0.037 oz. in an adjacent hole. Curt Everson, a company director and president of Nevada Pacific’s wholly owned U.S. subsidiary, was a former exploration manager for Santa Fe, while Steven Brown, the company’s U.S. vice-president of exploration, was a past exploration manager for Gold Fields Mining.
The target area of mineralization occurs in the lower portion of the Pilot shale formation, together with related fault structures. An overlying thin-bedded, impermeable mudstone in the upper portion of the Pilot shale may have acted as a barrier to upward migrating mineralizing fluids, trapping the gold-bearing solutions within the lower portion.
Nevada Pacific previously held a piece of ground neighbouring the Clover Valley property, and, while still private in 1998, completed a 6-hole round of drilling aimed toward the two intercepts more than 1,000 ft. away. Hottman says the previous drilling attempt failed to test the target. Drilling was limited to 800-ft. holes, which cut a major fault zone but returned a background of pathfinder elements.
The company intends initially to confirm the previous drill intercepts at Clover Valley before stepping out on the zone. An adjacent area containing alteration and anomalous gold mineralization at surface will also be drill-tested.
Nevada Pacific acquired the Keystone project through staking in June 1999. The property is 3 sq. miles and situated on the northwestern flank of the Simpson Park Mountains, 18 miles south of Crescent Valley. The Keystone property is underlain by limestone, shale and sandstone, which have been intruded by a granodiorite stock. Geochemical sampling has identified anomalous gold areas, along with some massive sulphide and skarn mineralization snuggled up along the contact of the intrusion. Selected sampling of outcrop, float and dump material taken near the historic Keystone base metal mine yielded assays of up to 10% copper, 25% zinc, 22% lead and 24 oz. silver.
Plans for Keystone include infill soil sampling, geophysics and detailed mapping to define targets in preparation of drilling.
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