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Nevada is one of the world’s most productive gold regions, and juniors are busy aiming to extend that legacy.
Though Nevada is known as the “Silver State,” it is one of the most productive gold jurisdictions in not only the United States, but also the world. This state, which hosts resource-rich areas such as the Cortez trend and Battle Mountain-Eureka trend, is responsible for nearly 7 percent of global gold production, according to the US Bureau of Land Management (BLM). In recent years, gold mining companies have been lured to far-flung regions, but some expect to see a resurgence of interest in Nevada.
The state has a long mining history that includes the early 1900s boom and bust story of Goldfield. This historic mining town is said to have grown from a handful of tents to the largest city in Nevada, boasting a population of around 20,000 after a span of about four years. The BLM states that Nevada has an estimated 300,000 abandoned mine features, remnants of the state’s rich mining past.
It was the 1962 discovery of the prolific Carlin trend that revived interest in Nevada’s gold-mining industry and gave rise to the thriving gold industry that exists in the state today. Considered one of the world’s premier gold fields, the Carlin trend is credited with driving innovations such as the now common open-pit and heap-leach operations.
Newmont Mining (TSX:NMC,NYSE:NEM) started producing gold from the Carlin deposit in 1965. Nearly half a century later, the company is still working in Nevada and has 14 open-pit mines, four underground mines and 14 processing facilities.
Other major miners in Nevada include Barrick Gold (TSX:ABX,NYSE:ABX), which holds mines such as Bald Mountain, Ruby Hill and Cortez. The company holds a minority interest in the Marigold mine, in which Goldcorp (TSX:G,NYSE:GG) has the majority interest.
John Kaiser of Kaiser Research told Investing News Network that he has been pounding the table about Nevada exploration for some time.
He foresees a return of interest to the US resource and exploration sector. And when that happens, he expects investors to find Nevada particularly attractive.
Nevada has interesting and unique geology that bears “Carlin-type” deposits. These deposits can span across vast areas, but contain fine-grained particles of gold. Many of the remaining deposits are believed to be buried deep beneath layers of sedimentary rock. But as history shows, once discovered, they can be extremely productive. And despite Nevada’s long gold-mining history, it is estimated that about half of the state remains unexplored.
Add to that attractive attributes such as a stable political environment, royalty-free mining on federal land, excellent infrastructure and a reputation for being a mining-friendly jurisdiction, and it is little wonder that an array of junior miners are also active in the state.
Junior miners in Nevada
Given the geology, a lot of blind drilling is conducted in the state. Nevada Exploration (TSXV:NGE) is of the opinion that traditional exploration techniques do not work well in covered settings like Nevada. The company thus developed proprietary hydrogeochemistry technology to explore covered basins. This groundwater chemistry sampling method identified high concentrations of gold and trace elements in spring water flowing from beneath the cover at the company’s Fletcher Junction project in Mineral County.
Spruce Ridge Resources (TSXV:SHL), Nevada Exploration’s partner, recently reported further positive results at the project. The first diamond drill hole at Fletcher Junction “penetrated the Aurora basalt and the gravel beds and intersected 324 metres of bedrock with alteration, and anomalous to highly anomalous pathfinder elements,” according to a company press release. The alteration and geochemical anomalies are the type that typically form halos for a few hundred meters around epithermal gold deposits, the company reported.
Gold Standard Ventures (AMEX:GSV,TSXV:GSV) claims to be the third-largest landholder in the Carlin trend. Work at the company’s flagship Railroad gold project led to a significant gold discovery, the high-grade North Bullion Fault Zone. Gold Standard recently announced that drilling extended the 1- to 3-gram envelope of gold mineralization to the north and south by more than 1,500 feet.
With a focus on the Western US, Orsa Ventures (TSXV:ORN) has found two properties in Nevada. Orsa has the option to earn a 100-percent interest in Coal Canyon, which is located in the Oreana trend. The primary exploration target is a sediment-hosted gold deposit. Last year, the company reported that road-building, trenching and a sampling program resulted in a gold discovery.
Pershing Gold (OTCQB:PGLC) has decided to focus on building a portfolio of properties in Pershing County, which it believes is an underexplored area of the state. The company has already acquired the historic Relief Canyon mine and heap-leach processing facilities. Its goal is to fast track the project and reopen the mine with a relatively modest capital investment.
This year, Klondex Mines (TSX:KDX,OTCQX:KLNDF) plans to be busy with its flagship Fire Creek project. Located near the center of the Battle Mountain gold belt, Fire Creek currently has 1.65 million gold ounces indicated and 458,000 ounces inferred. The company’s 2013 agenda includes beginning an environmental assessment, baseline studies and bulk sampling. Klondex recently announced a toll milling agreement with Veris Gold (TSX:VG), which will provide the company with a place to process mineralized material from Fire Creek and add to its third-party processing revenue stream.
Midway Gold (AMEX:MDW,TSXV:MDW) recently received a water pollution control permit for its Pan gold project in White Pine County. That is a key step in its production plans. Construction is expected to start later this year, with production from the Carlin-style deposit targeted for mid-2014. A draft environmental impact statement has been published and the BLM has opened the public comment period.
Securities Disclosure: I, Michelle Smith, own shares of Goldcorp.
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