Rumors swirl of another Carlin find by Barrick

Barrick has been drilling the North claim block, less than half a mile north of its big Goldstrike mine. Euro-Nevada holds two royalties on the North block, a 4% net smelter and a 5% net profits royalty.

Although a spokesman for Euro- Nevada was unable to confirm or deny the rumor, he attributed the recent gains in the company’s share price to speculation that Barrick’s drilling on the North claims has yielded exceptional results.

Several brokerage sources have told The Northern Miner that the hole ranged from 400 ft to 500 ft grading 0.3-0.4 oz gold per ton. A second step-out hole is believed to have intersected 120 ft grading 0.45 oz.

Barrick confirmed that its drilling has encountered mineralization but additional work is required before the company will release any drill results, Isabel Mulligan, senior vice-president of investor relations at Barrick, told The Northern Miner.

“We have been drilling on the North block of claims in the area known as the Purple Vein and in the area close to Newmont’s Deep Star holes,” Robert Smith, president and chief operating officer of Barrick, told a group of institutional investors at a mining seminar this week. “We have established a mineral reserve in the Purple Vein area,” Smith added. “However, until we complete significant additional drilling, we cannot classify any of the resource as ore reserves.”

According to Euro-Nevada’s annual report, work completed by Barrick this year encountered sections of 40-150 ft grading 0.15-0.5 oz. The company says the North block has deep sulphide potential for more than two million ounces of gold at depths 1,000-1,500 ft.

If that estimate materializes, then it would be like “lightning striking twice” for both Barrick and Euro- Nevada’s major shareholder Franco- Nevada (TSE). Deep drilling by Barrick in 1987 on its Goldstrike property hit the Deep Post and Betze sulphide deposits below the known oxide reserves. The discoveries have blossomed into one of the world’s largest gold finds hosting more than 12 million oz. Franco- Nevada holds a 4% net profits and a 5% net smelter royalty on that property.

The speculation surrounding the North claims gained momentum after Newmont Gold (NYSE) announced another significant find just 500 yards north of its Genesis gold mine. Known as the Deep Star deposit, the find is only 200 ft south of the Goldstrike boundary and about 2.5 miles south of the North claims. The discovery hole at Deep Star came in at 350 ft of sulphide mineralization grading 0.768 oz.

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