Nevada

By Muntean, J L; Castor, S B

Exploration in Nevada continued in 2006 at an even greater pace than in 2005, and increasingly others metals besides gold are being targeted. Nevada county recorders registered 180,568 claim tilings in 2006, an 8.2-percent increase from 2005. These included new claims and annual maintenance of existing claims. The U.S. Bureau of Land Management (BLM) has listed 26,512 new claims as filed in 2006. At least 116 projects were drilled in 2006. Junior companies – 53 different ones – drilled 74 of those projects. The remainder was done by 12 major or mid-tier companies. Even more projects would have been drilled if it were not for the shortage of drill rigs.

Continued focus on gold

The main exploration target in Nevada continued to be gold. Most of the drilling, in terms of footage, continued to be done by major or mid-tier companies in and around active mines.

The most exciting new discovery continued to be Barrick’s South Arturo deposit in the northern Carlin trend. More than 160 holes 58 km (192,000 ft) had been drilled there through September 2006.The discovery hole, drilled in August 2005 from mine dumps 31 m (100 ft) south of the old Dee openpit, encountered 75 m (245 ft) of 1.9 g/t (0.056 oz/st) gold beneath 260 m (850 ft) of post-mineral Carlin formation. Though the deposit is relatively deep and will require significant stripping, the mineralization is oxidized. Mineralization mostly occurs in breccias along the contact between the Popovich and overlying Rodeo Creek formations. Highlights from the drilling include intersections of 257 m (845 ft) of 4.04 g/t (0.118 oz/st) gold and 205 m (673 ft) of 5.1 g/t (0.149 oz/st) gold. Barrick plans to announce a resource estimate in 2007. It is very likely to contain more than 3It(I million oz) of gold.

Pre-stripping occurred throughout 2006 at Barrick’s new East Archimedes deposit near Eureka. Production will commence in 2007. Barrick’s takeover of Placer Dome was finalized in early 2006. Barrick carried out major drill programs at Cortez (60 percent Barrick, 40 percent Kennecott) and Bald Mountain, two of the mines formerly operated by Placer. Barrick significantly expanded the deep Lower Zone at Cortez Hills with surface drilling. The underground decline, aimed to access and better delineate the Lower Zone, was started, and about 2,000 m (6,562 ft) of development was completed in 2006.

Newmont continued to drill heavily around its active mines. Gold and copper production commenced in 2006 at its new Phoenix Mine near Battle Mountain. Permitting continued at Newmont’s Emigrant deposit at the south end of the Carlin trend.

Kinross started an underground decline aimed at assessing deep high-grade gold mineralization northwest of its Round Mountain pit (50 percent Kinross. 50 percent Barrick ). Kinross is in the process of permitting the Gold Hill deposit, located 8 km (5 miles) north of Round Mountain.

Queenstake Resources continued to replace production with new gold reserves and resources adjacent to its operating, underground SSX, Smith, West Dash and Steer deposits at Jerritt Canyon. In addition. Queens-take continued to expand its Starvation Canyon deposit, located at the south end of its Jerritt Canyon property. The highlight was from a hole drilled outside the known resource at Starvation, in which 43 m (140 ft) of 15.7 g/t (0.46 oz/st) gold was intercepted, beginning at 85 m (280 ft) below the surface.

Northumberland, Hollister, Gabbs and Tonkin Springs were the only major drill programs carried out by major or mid-tier companies outside active mine areas. At Northumberland, Newmont drilled 54 drillholes 16.8 km (55.357 ft). By the end of 2006. the company had spent about $6 million towards the $25 million it is obligated to spend by 2010 to earn a 60-percent interest from its joint venture partner NewWest. Newmont continued to expand the known Zanzibar deposit and drilled intercepts that approached underground-minable grades – 6.8 to 15.4 g/t (0.2 to 0.45 oz/st) gold at depths greater than 427 m (1.400 ft). Newmont also tested outlying targets. Mineralization at Zanzibar remains dominantly refractory and of moderate grade.

At Hollister, Hecla completed more than 2.133 m (7,000ft) of underground development and drilled more than 100 undergrounds holes equaling 16.7 km (55,000 ft) in order to define a resource for a feasibility study. Drill results were promising and established thickness and continuity of grade along the Gwenivere and Clementine veins. Numerous intercepts had vein thicknesses in the range of 0.6 to 2.1 m (2 to 7 ft) and gold grades in the range of 34.3 to 274 g/ t (1 to 8 oz/st). with the best intercept being 3.9 ft (1.2 m) grading 524.23 g/t (15.29 oz/t) gold and 1.105.38 g/t (32.24 oz/t) silver. In February 2007, Hecla sold ils interest in Hollister to its partner, Great Basin Gold for $60 million. Great Basin might lake the project to feasibility by itself.

Newcrest drilled more than 25 holes in 2006 at its Gabbs project, located just north of the old Paradise Peak Mine in northwestern Nye County. Better intercepts included 15.3 m (50 ft) of 178 g/t (5.2 oz/ st) gold, which contained 3.1 m (10.2 ft) of 23 g/t (0.67 oz/st), 16.8 m (55 ft) of 7.1 g/t (0.21 oz/st) gold (which contained 1.5 m or 4.9 ft of 34 g/t or 0.03 oz/st) and 41.2 m (35 ft) of 1.1 g/t (0.03 oz/st) gold.

U.S. Gold began its drill program at Tonkin Springs and completed 37 holes 17 km (55,000 ft).The 2000 program was primarily designed to test for extensions of previously identified deposits. The drilling expanded the known deposits, especially the Rooster deposit, albeit with grades similar to those identified in the past (<3.4g/t (<0.1 oz/st gold).'Hie gold mineralization is dominanlly refractory. In 2007. drilling is planned for targets outside the known deposit areas.

Junior companies carried out much of the drilling outside active mine areas, mainly around known, unmined resources that were drilled in the past or old mines that are no longer in production. They are either reurilling old resources to make them compliant with current regulations (43-101 ) or drilling to tesl for exlcnsions. In some cases, drilling is targeted at conceptual deep targets below known resources.

AuEx cleaned up land issues at its Pcquop property in far northeaslern Nevada by laking on New West as a partner on the east side of the property (now called Long Canyon) and Agnico-Eagle as a partner on the west side of the properly (now called West Pequop). Al Long Canyon, NewWcsl conlinued AuEx’s 2005 success by drilling addilional thick intercepts of oxide gold mineralization.

At West Pequop. Agnico-Eagle completed 11 drill holes totaling 2.409 m (7,905 ft), which resulted in the discovery of new gold mineralization including 17 m (55 ft) of 6.2 g/l (0.182 oz/st) gold in the northeast Section 34 target area. A major implication of the recent discoveries is that the sedimentary rock-hosted mineralization at Pequop is well off any of the known trends of Carlin-type gold deposits and will likely attract companies to this relatively under-explored area of Nevada.

Midway Gold conlinued to experience success at its Midway properly between Round Mountain and Tonopah and at its Spring Valley property near Lovelock. It drilled 52 holes at Midway, including 23 in the Dauntless zone, a new vein zone that was discovered in 2005. The average of all the gold intercepts encountered in the Dauntless zone was 7 m (23 ft) of 2.64 g/t (0.07 oz/st) gold, wilh intercepts up to 40 g/t (1.6 oz/st) gold.

Midway Gold released a measured and indicated resource estimate of its diatreme-hosted Spring Valley deposit in early 2006 – 9.09 Mt (10 million st) of 0.82 g/t (0.024 oz/st) gold, for 7.41 (239,143 oz). It drilled 79 holes 19 km (5,826 ft) in 2006.

At the West Diatreme target, 29 m (95 ft) of 4.77 g/t (0.14 oz/ st) gold and 44.2 m (145 ft) of 1.27 g/l (0.04 oz/st) gold were intercepted. Twenty of lhe holes were drilled in the Limerick Basin area. 4 km (2.5 mile) west of the Spring Valley diatreme. Intercepts in Limerick Basin include 1.5 m (4.9 ft) of 68.1 g/t (1.98 oz/st) gold and 6.1 m (20 ft) of 1.68 g/t (0.05 oz/st) gold.

Stacatto Gold drilled 17 core holes 6 km (20,291 ft) in and around the old Lookout Mountain openpit in the Ratio Canyon area south of Eureka. Highlights included 29 m (95.5 ft) of 7.479 g/t (0.218 oz/st) gold and 17 m (55 ft) of 17.2 g/t (0.503 oz/st) gold.The drilling program extended and demonstrated the continuity of high-grade breccia-hosted gold minerali/alion beneath, and southward along strike, from the Lookout Mountain pit.

Pan-Nevada (formerly known as Castleworth) drilled 97 holes 8.656 m (28,400 ft) at its Pan project at the southeast end of the Battle Mountain-Eureka trend. The 2006 program enlarged the footprint of the Black Stallion deposit and deepened it in several places. In addition to the drilling at Black Stallion, work was completed at in the Syncline, South Pan and Pilot Ridge sectors.

NewWest drilled 109 holes 12.192 m (40.000 ft) and breathed new life into its Sandman project, an old Kennecott and Santa Fe Pacific project located west of Winnemucca. The drilling produced high- grade intercepts associated with known mineralization, including 12 m (40ft) of 37 g/t (1.092 oz/st) gold and 23 m (75 ft) of 8.1 g/t (0.23\6 oz/st) gold. The drilling also resulted in a new discovery called Abel Knoll, where a hole intercepted 128 m (420 ft) of 2.98 g/ t (0.087 oz/st) gold starting 75 m (245 ft) below the surface.

Klondex released an indicated mineral resource of 1.6 Mt (1.8 million st) of 19.88 g/t (0.58 oz/st) gold, containing 32 t (1.04 million oz) of gold, at its Fire Creek deposit located near Ncwmont’s Mule Canyon Mine in the Northern Nevada Rift. Klondex drilled 44 holes in 200ft.

Columbus Gold drilled 28 holes 4.321 m ( 14.17ft ft) at its Golden Mile project in far northwestern Nye County. Initial intercepts included 7.6 m (25 ft) of 4.2 g/l (0.12 oz/st) gold and 9.1 m (30 ft) averaging 13.8 g/t (0.41 oz/st) gold. The gold mineralization occurs within irregularly distributed, structurally controlled zones in skarn and intrusive rock for 350 m (1.148 ft) in a northeasterly direction and to a depth of 100 m (328 ft) along a contact between a Cretaceous quartz monzonite and calcareous sediments of the Triassic Luning and Jurassic Dunlop formations.

Victoria Resources released results from two of three deep core holes it drilled northwest of the old Cove open-pit mine, located south of Baille Mountain. The first hole, drilled 1,804 ft (550 m) northwest of the pit, encountered multiple zones of mineralization, including several high-grade structurally controlled intervals at depths ranging from 436 m to 661 m (1.430 to 2.170 ft).The most significant intercept was 38 m (126 ft) of 10.95 g/t (0.32 oz/st) gold that included 10 m (34 ft) of 21.98 g/l (0.64 oz/st) gold. The intercept was approximately 150 m (492 ft) below the deepest holes drilled by previous companies.

Bonaventure (joint venture with While Knight) released a new inferred resource for ils New Pass project west of Austin, based on drilling completed in 2005 – 12.7 Mt ( 11.5 million st) of 0.77 g/t (0.0226 oz/st) gold, for 8 t (259.900 oz) of gold. Drilling continued in 2006.

At the Gemfield deposit in the Goldfield district, Metallic Ventures released a new measured and indicated resource that included a small 10-hole infill program in 2006- 11.3 Ml (12.4 million st) of 1.06 g/t (0.031 oz/st) gold, for 12 t (387,567 oz) of gold.

Junior companies are also permitting and putting new gold mines into production. Royal Standard has fully permitted and is currently test mining its Gold Wedge underground deposit in the Manhattan district. Ore is hosted predominantly by the Ordovician Zanzibar Limestone. The first gold pour is planned for 2007. Royal Standard believes that a through-put of 434 to 635 t/d (500 to 700 stpd) is manageable. The current resource estimate (including measured and inferred) is 299 kt (330,000 st) of 10.6 g/t (0.310 oz/st) gold for 3.2 t (102,300 oz) of gold.

Metals besides gold

Though gold remained the focus, the number of exploration projects in Nevada targeting other metals increased significantly in 2006. The projects are focused on areas with historic resources. Silver was the primary target in three exploration projects that were drilled in 2006. The average price of silver surged 72 percent in 2006 to $0.36 cents/g ($12.61/oz).

AuEx (with joint venture partner Piedmont Gold) drilled 10 core holes 1,128 m (3,700 ft) at the old Trinity Silver Mine near Lovelock. The holes were designed to confirm the presence of relatively high-grade silver values encountered in previous drilling programs conducted on the property in the middle 1980s. Assay results showed four of the new holes contained 1.5 to 3 m (5 to 10 ft) thick intercepts of 343 g/t (111 oz/st) silver or greater with a high value of 891 g/t (25.99 oz/st) silver.

Fury Explorations is evaluating the old Taylor mine south of Ely. It drilled about 50 holes 3,048 m (10,000 ft), in 2006. Results reportedly demonstrate continuity within a high-grade fault zone, which remains open at depth and along strike. Known open pitiable mineralization appears expandable beyond historically established limits.

Silver Quest (with joint venture partner Bullion River) drilled three cure holes (1,338 m or 5.400 ft) at its Corcoran Canyon project east of Round Mountain and discovered a new zone where there had been no previous drilling. Intercepts from the discovery hole include 2.2 m (7.2 ft) of 795 g/t (23.2 oz/st) silver and 3.5 m (11.5 ft) of 411 g/t (11.98 oz/st) silver. Silver Quest has initiated a program of permitting in preparation for a larger drill program directed at the new discovery and the area of the known silver resource. The area has a historical geologic resource estimate of 1.61 Mt (1.7 million st) grading 175 g/t (5.1 oz/st) silver and 0.Sn g/t (0.02 oz/st) of gold that was completed by Echo Hay Exploration in 1988.

New York Canyon remained the most signilicant copper exploration project in 2006. It is a copper-oxide skarn deposit located near Luning in Mineral County. Canyon Copper (formerly Aherdene) drilled 33 holes, mostly in the Longshot Ridge area. Highlights included 70 m (230 ft) of 0.612 percent copper, 29 m (95 ft) of 1.08 percent copper and 58 m (190 ft) of 0.87 percent copper.

The Yerington district came to life in 2006. Three companies are now exploring the old Pumpkin Hollow, Ann Mason and MacArthur resource areas. Nevada Copper drilled five core holes at Pumpkin Hollow. Both in-fill and step-out holes upgraded the current resource classifications for purposes of a feasibility study planned for 2007. Copper grades and thickness are comparable to or better than adjacent drill hole intercepts, confirming the high copper grade and continuity of the Northwest and North Deposits. Highlights include 213 m (670 ft) grading 1.04 percent copper from a hole drilled 30m (98 ft) from the nearest old hole.

Boxxer Gold is exploring for copper and gold in and around the old iron deposits of the Buena Vista Hills southwest of Lovelock in Pershing County. Boxxer is applying an iron oxide-copper-gold deposit model and drilled one core hole in 2006. It intersected a magnetite body, approximately 7.3 m (24 ft) thick that assayed only 0.052 percent copper.

Newmont’s Phoenix Mine near Battle Mountain and Quadra’s Robinson Mine near Ely are the two operating copper mines in Nevada. Both carried out major drill programs to expand known resources. Quadra completed its molybdenum circuit at Robinson.

Golden Phoenix put its small Ashdown molybdenum mine, located in northwestern Nevada, into production and sold its first concentrate in December 2006. The mineralization is hosted in a narrow quartz vein characterized by bands of high-grade molybdenite. Masses of nearly pure molybdenite (assaying up to 46 percent molybdenum and occasionally weighing hundreds of pounds) have been encountered. The diluted head grades delivered to the mill for processing average between 1.75 percent and 4.75 percent molybdenum (valued at between $964 and $2,616/t or $875 and $2,374/st at $25/lb molybdenum).

Idaho General Mines is permitting the giant Mount Hope porphyry molybdenum deposit north of Eureka with plans of putting it into production. The company also acquired the Hall porphyry molybdenum deposit near Tonopah and plan to permit and possibly put it into production as well.

Companies are exploring for tungsten again in Nevada after almost 20 years of inactivity. Galway Resources is evaluating the Indian Springs tungsten skarn deposit in the Delano district north of Wells in northeastern Nevada. The project had undergone extensive exploration drilling and metallurgical testing from 1968 through 1986, including work by Placer Amex. Union Carbide and Utah International. Various historical resource and “reserve” estimates exist. The most recent was carried out by Utah International in 1984 that ranged from 8 Mt (8.8 million st) at 0.257 percent WO^sub 3^ to 19.9 Mt (21.9 million st) at 0.179 percent WO^sub 3^, depending upon the cutoff grade used. In 2006. Galway drilled 23 holes 2.134 m (7,000 ft) that verified ore grade intercepts and extended the known mineralization.

Uranium and gallium

Western Energy Development continued to explore for uranium in the McDermitt caldera in northern Humboldt County. In 2006, the company drilled 20 holes in a large claim block that it acquired and slaked in 2005 in the Moonlight Mine-Horse Creek area along the west margin of the caldera. where Chevron Minerals established a uranium resource in the late 1970s. The objective of the 2006 drilling was to confirm historic drill results. Highlights include 15 m (49 ft) of 0.153 percent U^sub 3^O^sub 8^ and 27.4 m (90 ft) of 0.18 percenl U^sub 3^O^sub 8^. The drilling also locally intercepted gold, silver and molybdenum mineralization, including 10.7 m (35 ft) of 1.26 g/t (0.04 oz/st) gold, 13.7m (49 ff) of 38.7 g/t (1.12 oz/st) silver and 19.8 m (65 ft) of 0.021 percent molybdenum. In addition, the company staked about 120 more claims to the north of this area in 2006.

Nearby. Gold Canyon continued to explore for gallium near the old Cordero mercury mine near McDermitt. The company drilled 72 drillholes 4.710 m (15,455 ft) and released an inferred resource of 6.4 Mt (7.1 million st) grading 52.3 ppm gallium.

Industrial minerals

The booming Las Vegas construction industry has recently fueled some controversial mining claim acquisitions. Nevada Aggregate Holdings continued to build a large claim block in an area mainly underlain by carbonate rock about 24 km (15 miles) northeast of Las Vegas and east of Interstate 15. In 2006, the company recorded more than 400 one-member placer claims in this area. By the end of the year, it had more than 15 sections of land under claim. These claims are south of the Apex Landfill, which, in addition to accepting the Las Vegas Metro area’s refuse, is the site of aggregate production for sale into Las Vegas. Las Vegas Paving mines aggregate in the landfill area. It staked a small number of eight-member placer claims to the north of the landfill. The validity of these clai\ms, which were apparently staked for construction aggregate, may be contested by the BLM. It has contested such claims in the past and is currently in litigation over similar claims to the south of Las Vegas.

In 2006, Frehner added 12 mill site claims to its patented claim block in the Sloan area south of Las Vegas, where it mines crushed carbonate rock aggregate, nee British Plasterboard filed on five mill site claims adjacent to its wallboard plant southwest of Las Vegas. The company no longer mines gypsum from the nearby Blue Diamond deposit, which has been sold to a real estate developer.

Ready Mix, a Las Vegas construction material supplier, slaked eight placer claims in 2006 in the area of the White Star gypsum prospect near Logandale, about 80 km (50 miles) northeast of Las Vegas in Clark County.

Barite is once again a commodity of interest in Nevada, following a decline of barite mining in the 1980s and many years of weak sales. The new interest is due to the increases in oil and gas prices and the ensuing increase in domestic oil and gas exploration. According to the USOS. the average monthly U.S. rig count has nearly doubled since 2002. This increased drilling activity has pushed domestic barite production up by nearly 30 percent during the same period.

Excaliber Minerals a division of Newpark Resources, staked nine claims near the south end of the Independence Mountains in Elko County in 2006. The claims are in the vicinity of the Heavy Spar barile prospect and are near the busy Maggie Creek portion of the Carlin gold trend.

Spirit Minerals, has filed an application for a reclamation permit to explore the Big Ledge Mine area in the Snake Mountains of Elko County, an area that was explored by Chromalloy American in the late 1970s and later mined by Circle A Construction in the 1990s. Spirit Minerals also plans to begin milling 6S kt (75,000 st) of stockpiled barite ore mined by Old Soldier Minerals from another property in the area. It has slaked 38 mill site claims on the east side of the Snake Range.

Heemskirk Canada operates a barite processing plant in Alberta uses Nevada harite. It has leased the Monitor barite property in the Northumberland District of Nye County.

Nevada Cement, a subsidiary Cemex, staked claims in several areas near its plant at Fernley. The largest group consists of 25 claims staked on limestone deposits along the southwest edge of the Trinity Range in Perching County. The company located a similar, but smaller, group of seven claims in the Hot Creek Range of Churchill County about 32 km (20 miles) northeast of its plant.

A third group of four claims was also staked about 32 km (20 miles) south of Fallon in Churchill County by Nevada Cement in 2006. On the basis of a plan of operations submitted to the BLM in January 2007, Nevada Cement prepared plans in 2006 for a limestone mine on claims staked in the early 1990s near Rye Patch Reservoir in Pershing County, about 112 km (70 miles) northeast of its Fernley plant. It is not known how the limestone properties located in 2006 will he integrated with this plan. However, in the past the company was considering a new cement plant in the Rye Patch area.

Ash Grove Cement announced plans for a major cement plant northeast of Las Vegas on the Moapa Indian Reservation in 2004. Construction was slated to begin in 2006, with completion predicted by 2007 or 2008. Proposed annual capacity of the proposed $250 million plant, is 1.36 Mt (1.5 million st) of cement. The limestone feed for the plant will come from a quarry on the reservation. The plant site is on an Indian reservation, which is not subject to as many stale and federal laws as other lands. However. Ash Grove will adhere to environmental regulations required by the U.S. Environmental Protection Agency (EPA), and has applied for air quality permilling. The EPA has determined that the use of proposed control devices and emission limits for the plant meet the requirements of 40 CTR 52.21 and that the proposed project will not violate any of the National Ambient Air Quality Standards.

Moltan is a Tennessee-based, family-owned firm that produces significant amounts of absorbent products and cal litter in a plant a lew miles northeast of Fernley. It filed a block of about 100 claims, mostly placer claims, over diatomite in the Desert Peak area in Churchill County near Interstate 80 about 40 km (25 miles) northeast of Fernley. The company also staked 18 claims for the Black Butte diatomite deposit near Hazen and 15 lode claims in the area of a zeolile deposit about 56 km (35 miles) northeast of Fernley, both in Churchill County. In addition, Moltan staked nine placer claims over the San Emidio clay deposit near Empire in Washoe County, and 12 lode claims on zeolite in the Ash Meadows area in Nye County. This flurry of filing on industrial mineral deposits by Moltan all took place in September and October of 2006.

Shortly after, HP Minerals (formerly Eagle-Picher Minerals), filed a block of 35 placer claims oxer the Trinity diatomite deposit about 48 km (30 miles) northeast ot Fernley in Churchill County. EP Minerals produces diatomite from three other locations in Nevada.

Two small claim groups were staked in 2006 in Nevada for the probable purpose of dimension stone mining. State Stone, a Salt Lake City, UT wholesale construction materials supplier, staked three lode claims in Lincoln County about 50 km (30 miles) southeast Caliente. Nevada Rock of Carson City, staked seven claims in Nye County about 32 km (20 miles) east of Tonopah. The Nexada Rock claims are in the vicinity of the McKinney Tanks zeolite occurrence, and so may have been located for that commodity instead of stone.

J.L. MUNTEAN and S.B. CASTOR, member SME, Nevada Bureau of Mines and Geology

Copyright Society for Mining, Metallurgy, and Exploration, Inc. May 2007

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