Royalty twins pick up Romarco’s Midas play

Franco-Nevada Mining (FN-T) and Euro-Nevada Mining (EN-T) have tightened their grip on the Midas district in northern Nevada by acquiring the properties of Romarco Minerals (R-T) in a stock deal valued at $33 million (US$21.5 million).

The properties comprise 350 claims within the boundaries of the Ken Snyder mine, which Franco and Euro own jointly.

In return for 480,000 free-trading shares of Franco and 620,000 free-trading shares of Euro, Romarco will transfer to those companies ownership of its Belnap, Dixie and Bill Vest claims, along with the Unger fee land. The claims will expand incrementally the royalty sisters’ land package in Midas, which currently stands at 26,000 acres.

The Belnap claims are adjacent to proven reserves at the Ken Snyder mine, and cover the extension of the Gold Crown vein. The resource at Belnap stands at 589,300 tons grading 0.61 oz. gold and 6.9 oz. silver per ton, equivalent to 360,600 oz. gold and 4 million oz. silver. These calculations are based on a cutoff grade of 0.25 oz. gold-equivalent.

The additional ounces expand contained reserves at Ken Snyder to 2.5 million oz. gold and 29 million oz. silver. The mine is in the late stages of development, and annual production of 250,000 oz. gold-equivalent is expected to get under way in the first quarter of next year.

The operation, billed as one of the highest-grade and lowest-cost mines in the U.S., is being built at a capital cost of US$84 million. Cash costs are estimated to fall below US$80 per oz., not including silver credits.

Romarco’s directors have approved the agreement, and shareholders and regulators are expected to follow suit, in which case Romarco will hold 11 exploration properties across Nevada, including the Jake Creek property, 10 miles southwest of Midas.

Romarco is earning a 51% interest in the Jake Creek property from Echo Bay Mines (ECO-X), and recently completed five angle holes, totalling 2,150 ft. of reverse-circulation (RC) drilling and 503 ft. of core drilling. Results are as follows:

* Hole 1C hit 9 ft. of gold mineralization grading 0.34 oz. per ton starting at a depth of 349 ft. The intercept, drilled to verify a previous drill hole, occurred below a 40-ft. zone of altered and brecciated quartz stockwork.

* Hole 4C hit 32 ft. of 0.74 oz. gold, including a 15-ft. interval grading 1.45 oz. gold. The mineralization, starting at a depth of 336 ft., occurs 75 ft. downdip of an RC hole drilled by Echo Bay that intercepted 30 ft. of 0.11 oz. gold. The structure remains open to the northeast and south.

* Hole 3 encountered only 10 ft. of mineralization grading 0.041 oz., whereas holes 2 and 5 found no significant mineralization.

Romarco is also drilling at the Snowstorm property north of Midas and at the Converse project on the Battle Mountain trend.