Gold Mining in Nevada: Exploring a Golden Opportunity

Landing on a gold mine is no longer akin to searching for a needle in a haystack like it used to be. Gold production has been incredibly strong in certain jurisdictions and miners are reaping the benefits. In 2020, gold miners reported record-high margins, with gold prices hitting a record high of US$2,070 per ounce.

Although gold is produced around the world, production in North America is led by the US, which was the fourth highest gold-producing country in the world in 2020. Gold production in the US is preceded by several key benefits, including mine security and stability.

US gold production is credited largely to the state of Nevada. The state was responsible for 83 percent of gold production in 2018, with a staggering 173.6 metric tons of gold produced. Nevada’s geologically diverse landscape backed with a rich mining history has made it one of the world’s most attractive gold jurisdictions.

Nevada ranked top jurisdiction in the world for mining

According to the Fraser Institute, Nevada was ranked the number one mining jurisdiction in the world based on the Investment Attractiveness Index. Nevada has also consistently ranked in the top 10 jurisdictions over the last eight surveys based on investment attractiveness. The Investment Attractiveness Index is based on two major factors: mining policies and mineral potential.

Nevada’s mining policies are so strongly supportive of mining that in the same survey conducted by Fraser Institute, more than half of the respondents had high confidence that they would be granted the required permits, with the rest having confidence. The reason for this confidence likely stems from legal and regulatory stability given that the mining policies in the federal Mining Act of 1872 can only be changed by Congress.

In addition to stable mining policies, Nevada is also secure and economically attractive compared to other regions around the world. Nevada’s tax regime includes no corporate or personal income tax, no inventory tax, no franchise tax, no unitary tax and no special intangible tax. The state also has strong mining infrastructure with access to power, natural gas and transportation.

Nevada’s mineral potential is thanks to three key geological trends — the Cortez trend, the Carlin trend and the Walker Lane trend. These three key geological trends are responsible for the majority of Nevada’s gold production and gold potential. From 1986 to 2018, the three trends have produced almost 170 million ounces of gold in Nevada, with the Carlin trend producing the largest share. The Carlin trend is considered to have the second largest concentration of gold in the world, with 255 million ounces of gold including past and current reserves and resources. Nevada is also considered one of the most important sources of critical base metals including copper, zinc, molybdenum, gold and silver.

Gold production in Nevada

Nevada was home to two of the 10 largest gold-producing mines in the world in 2020.

The Carlin trend gold mine is ranked sixth in the world and is owned and operated by Newmont (TSX:NGT,NYSE:NEM). The mine had combined and probable gold reserves of 12.46 million ounces. The mine produced 927,000 ounces of gold in 2018 and 972,000 ounces of gold in 2017. The Carlin trend gold mine features open-pit and underground mining methods.

The Cortez gold mine is ranked 10th in the world and is owned and operated by Barrick Gold (TSX:ABX,NYSE:GOLD). The mine had 8.6 million ounces of gold including 1.13 million ounces of proven and 7.59 million ounces of probable reserves. The Cortez gold mine also features open-pit and underground mining methods.

Barrick Gold and Newmont recently entered into a joint venture agreement to establish Nevada Gold Mines (NGM). The joint venture combined both company’s assets to create the single largest gold-producing complex in the world including the Cortez and Carlin trend mines. NGM is operated by Barrick Gold and is expected to produce more than 3 million ounces of gold in 2021. Barrick Gold owns 61.5 percent and Newmont owns 38.5 percent.

A company that is strategically positioned to leverage this success is Golden Independence Mining (CSE:IGLD,OTCQB:GIDMF,FWB:6NN). The company’s Independence project is surrounded by NGM properties and is 25 miles southwest of Battle Mountain in Nevada. Golden Independence has the option to earn up to a 75 percent interest in the project.

The Independence project contains near-surface gold mineralization with a measured and indicated total resource of 537,000 ounces of gold and 8.1 million ounces of silver, and an inferred total resource of 147,300 ounces of gold and 1.2 million ounces of silver. The high grade underground gold inferred resource is an impressive 796,000 ounces of gold. The company’s project target types include shallow, low-sulfidation epithermal and a deeper Carlin gold-copper skarn

Takeaway

With the average price of gold reaching US$,1828 in 2020 and Nevada producing more than $8 billion in gross mining revenue in 2016, investors looking to benefit from the gold market will likely be interested in opportunities in Nevada. Nevada’s prolific gold production, mineral potential and mining-friendly policies have made Nevada a world-class jurisdiction for high yields and exciting profits.

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