NEVADA — Pallaum’s growth strategy hinges on Nevada projects — Bullion Mountain the most promising

As gold deposits in northern Nevada become increasingly difficult and expensive to find, major companies are leaving it to the juniors to locate potential mines.

One such company is Vancouver-based Pallaum Minerals (PLM-A), which this year intends to spend a total of $1 million exploring its 12 properties in the Sagebrush State.

In August 1995, the company acquired an option to earn a 65% interest in the 109-Claim Bullion Mountain gold property from Cimarron Minerals (CIU-V) and Cabo Exploration Ventures (CVE-V).

Situated within the Battle Mountain trend, the property is 8 miles northwest of the Pipeline, South Pipeline and Hilltop deposits of the Cortez joint venture, which is owned, on a 60-40 basis, by Placer Dome (PDG-T) and Kennecott. Bullion Mountain is also near the Robertson property of Coral Gold (CLH-V).

The geology of Bullion Mountain consists of Upper Plate quartzites and cherts of the Valmy and Slaven formations, which have been faulted, folded and intruded by Cretaceous-Tertiary granitic stocks. Previous work identified many altered fault structures containing up to 0.31 oz. gold per ton.

Pallaum’s 1996 exploration program consisted of geologic mapping and drilling of 10 shallow reverse-Circulation holes over 4,570 ft. Seven of those holes returned encouraging gold values, including significant intercepts of 0.02 oz. over 45 ft. and 0.015 oz. over 45 ft. Mineralization is associated with alteration in the fractured quartzite, near a thrust fault in the Valmy formation.

Although those gold values failed to be economic, both gold and arsenic values increase in the easternmost angle holes. The company plans to focus its exploration this year in an area east of where drilling in 1996 occurred, as well as in the nearby Corral Canyon fault. To date, Pallaum has completed 12 holes of a 17-hole program, which is expected to total 10,000 ft.

“Bullion Mountain is in an area that probably has 20 million oz. of gold within a 7-Mile radius,” says Stanley Ford, the company’s president. “We are on strike with, and on the same geological structure as, the Pipeline deposit.”

Pallaum owns interests in two other claim blocks in the immediate area of Bullion Mountain: a 75% interest in the 143-Claim CVP/CVP Wedge property, and a 65% stake in the 71-Claim East Cortez property.

Recently, the company signed an option to acquire a 100% interest in five additional properties in north-Central Nevada. In return, it must issue 260,000 shares in stages and spend US$650,000 by the year 2001, including 250,000 shares and US$250,000 in exploration during the first year. Pallaum has already budgeted for the first year’s work commitment.

Three of the five properties are within 6 miles of existing gold deposits.

Each spans 20 claims and has historical drilling with anomalous ore-grade intercepts of up to 115 ft. in length. The properties include the WC, Hill, Buff, W and RM. The company plans to drill at RM this year.

Pallaum also holds options for another four other properties in Nevada: n Stone Cabin, a 100-Claim property about 40 miles southeast of the Battle Mountain trend;

n LHS, which covers 133 claims and is 7 miles north of the Goldbanks deposit of Kinross Gold (K-T);

n Golconda Canyon, a 34-Claim property 13 miles southeast of Goldbanks, along the western side of the Tobin range; and

n La Plata, a 20-Claim property 24 miles east of Fallon on the southern end of the Stillwater mountain range.

Pallaum plans 5,000 ft. drilling at LHS for 1997, while, at Golconda Canyon and La Plata, more geological work is required before drill targets can be defined

“Nevada has major gold deposits, and new exploration techniques are leading to more discoveries each day,” says Ford. “We are looking for multi-Million-ounce deposits and we believe our properties have that potential.”

Pallaum has 10.1 million shares outstanding, with 13.8 million shares fully diluted. Working capital currently totals $1.6 million cash, or $7.5 million on a fully diluted basis.

— The author is a freelance writer based in Denver, Colo.