Central Nevada Gold looks to revive Mule Canyon mine

Privately held Central Nevada Gold is working to reopen the past-producing Mule Canyon mine in the western U.S. state after acquiring the asset from Newmont (NYSE, ASX: NEM; TSX: NGT).

Central Nevada is focused on advancing Mule Canyon through pre-feasibility and permitting with the goal of delivering a construction decision, according to a statement issued Thursday. It expects to announce a new resource estimate for the property in the coming months while working on an initial public offering.

Discovered in 1986 by Gold Fields (JSE, NYSE: GFI), Mule Canyon was brought into production by Newmont in 1996, churning out about 500,000 oz. of the yellow metal over five years. Mining ended in 2000 due to low gold prices after only two of six zones were mined, leaving significant unexploited potential.

“We have acquired a standout brownfield project with a significant baseline of historical drilling, production data and environmental studies which will allow us to advance efficiently through development and permitting phases,” CEO Simon Griffiths said in the statement.

“The potential of this project is underwritten by the strong support from early-stage investors. Nevada is a jurisdiction where mining projects get permitted and built.”

Nevada remains one of the world’s leading gold regions, and brownfield projects with existing infrastructure have drawn renewed attention as producers search for ounces that can be developed faster than new discoveries. Mule Canyon’s new owner is betting that the property’s mining history and existing permits will shorten that timeline.

Seasoned executives

Created to acquire development-stage gold and silver projects in the state, Central Nevada is led by Griffiths and executive director Fraser Buchan, whose backgrounds include senior leadership roles at Andean Precious Metals (TSX: APM), OceanaGold (TSX, NYSE: OCG), Newcrest and Newcastle Gold. Griffiths is a former Andean CEO.

Over the course of their careers, the executives have developed and operated several precious metals mines, including Andean’s San Bartolomé operation in Bolivia and OceanaGold’s Haile mine in South Carolina.

Central Nevada is targeting a production decision for Mule Canyon in 2027, according to a presentation posted on the company’s website.

Mine planning and economic studies are underway, and “significant” advances have been made on the project’s critical permitting path, Central Nevada says. The mine has an active plan of operations, water rights and grid power directly on site.

As it works to reopen Mule Canyon, Central Nevada says it’s also evaluating a public listing on a North American stock exchange. It didn’t provide specifics.

Argenta district

Located about 700 km northwest of Las Vegas, Mule Canyon sits in the Shoshone Mountain Range’s historic Argenta mining district, near the prolific Carlin, Battle Mountain and Getchell trends.

A discovery drill intercept returned 41.1 meters grading 24.8 grams gold per tonne from an undisclosed depth, Central Nevada says. The company’s database comprises 2,149 drill holes covering more than 335,000 metres.

Historical operating data cited by Central Nevada indicates an average head grade of 3.8 grams gold and metallurgical recoveries of roughly 94%.

Subsequent exploration outlined six mineralized zones over 2.5 km, defining 8.2 million tonnes of open-pittable ore at an average grade of 3.81 grams gold, Central Nevada shareholder Giant Venture Capital says on its website.

Mule Canyon was initially designed and permitted to process about 7 to 10 million tons of gold-bearing ore by processing 4.1 million tons of low-grade oxide ore by cyanide heap leaching, according to Nevada’s Division of Environmental Protection.