Golden Predator Mines (GP-T, GPDRF-O) is going to separate its gold and silver assets from its base metal assets in a spinoff that should draw attention to the company’s strong portfolio of precious metals in Nevada.
The markets embraced the news in mid-December, sending Golden Predator shares up 48% to close at 17¢ per share, gaining further by presstime to 19¢ apiece.
“We found we weren’t really getting credit for the gold assets in the company because they were buried by our Springer tungsten mine and what was likely investor concern about getting that into production,” Steve Vanry, Golden Predator’s president, told The Northern Miner.
“What we’ve done is simplify the story significantly. . . In a lot of cases, investors didn’t know about these other precious metals assets that were also part of the company, some of them very significant.”
If shareholders approve the concept, Golden Predator’s precious metals portfolio will become a Nevada-focused gold company and its specialty metals and alloys assets a separate company consisting of tungsten, molybdenum, vanadium and uranium.
Golden Predator shareholders will receive one unit in the gold-silver spinoff for every four shares of Golden Predator they currently hold. Each unit of the new company will comprise one common share and one unit purchase right.
On closing, shareholders of Golden Predator will have the same percentage interest in the new gold-silver company as they held in Golden Predator. Golden Predator will hold about 1.56% of the new gold-silver company, based on its current holdings of its own shares.
The new spinoff likely will be called Golden Predator Mines, while the base metals company is to be called Emerging Metals, Vanry said.
The gold and silver entity will control precious metal assets, including the income-producing Campbell Royalty Trust (which includes claims and royalty positions covering the Pan property, leased by Midway Gold [MDW-V, MDW-X]), the Taylor silver mine and mill complex, the Adelaide, Lantern and Tuscarora projects, and the Lewis and Platte River joint ventures. It will also include Angel’s Camp in Oregon.
The claims and royalty positions include portions of Barrick Gold’s (ABX-T, ABX-N) Bald Mountain property and the Tonkin Springs property leased to US Gold (UXG-T, UXG-X). All in all, there will be 23 property interests in the portfolio made up of more than 70,000 acres.
The Taylor project includes a 1,320-ton per day mill, water rights and about 2,700 acres of mining claims.
The Adelaide project is at the intersection of the Getchell and Battle Mountain-Eureka gold trends and several companies have explored the area over the last three decades.
Golden Predator is nearing completion of a 16,145-ft. drill program testing various targets for potential high-grade chutes on 1.6 miles of strike length along the mineralized Adelaide structure.
Emerging Metals will incorporate the Springer tungsten facility, which, over the last two years, Golden Predator has been rehabilitating and expanding. That project is 85% complete. Once it moves into operation, the Springer mill is expected to process about 1,200 tonnes per day of scheelite ore.
In 1982, when the Springer mine was closed by General Electric due to falling tungsten prices, the mine had a historic resource of 3.59 million tons grading 0.446% tungsten. (The new company will leave the Springer facility on care and maintenance, however, until an economic recovery takes hold, at which time it may be recommissioned, Vanry says.)
Emerging Metals will also own the Spruce Mt. molybdenum project in Nevada’s Elko Cty. Spruce Mt. consists of 1,280 acres adjacent to Mosquito Consolidated Gold Mines’ (MSQ-V, MQCMF-O) Spruce Mt. porphyry molybdenum project.
In addition, the new base metals company will own the Carlin vanadium deposit, also known as the Black Kettle project, where Union Carbide estimated a historic resource of 19.7 million tons grading 0.83% vanadium using a 0.4% vanadium cutoff grade.
The new entity will also hold other tungsten assets, including the Fostung deposit in Ontario, with an inferred mineral resource of 12.4 million tonnes grading 0.21% WO3 at a 0.125% cutoff, the Hamme tungsten mine in North Carolina, and the Copper King deposit in Nevada’s Pershing Cty., as well as other exploration projects.