Juniors swarm Pipeline area near Placer find

Major mining companies may dominate Nevada, but juniors are spearheading an exploration boom on properties surrounding the Pipeline gold discoveries in Crescent Valley.

The Pipeline deposits are on the Battle Mountain trend, southwest of and parallel to the more famous Carlin Trend which hosts some of the continent’s most important gold deposits.

A feasibility study for the main Pipeline deposit was recently completed by a unit of Placer Dome (TSE), which holds a 60% interest. Minable reserves are 35.3 million tons grading 0.12 oz. gold per ton, made up of 19.6 million tons of mill ore, 14.3 million tons of heap-leach ore and 1.4 million tons of refractory ore suitable for treatment in the roaster at the nearby Cortez mine (also 60%-owned by Placer Dome).

Plans call for development of a 4,600-ton-per-day open pit and mill at a construction cost of US$250 million (including mine pre-stripping and contingencies). Aggregate gold production is estimated to total 3.69 million oz. over a 12-year mine life, at an indicated cash production cost (including royalties) of US$111 per oz.

About 40% of the deposit is subject to litigation brought against Placer Dome by Gold Fields Mining, a division of Hanson Natural Resources, which is seeking to recover damages and/or to revoke a 1991 prospecting permit and purchase option agreement between the parties.

Placer Dome also owns 60% of the South Pipeline deposit (the project is subject to a 20% interest). Exploration is continuing on this less-advanced property which has a drill-indicated resource estimated at 15.6 million tons of material grading 0.147 oz. gold per ton.

Adjacent to Pipeline, Amax Gold (NYSE) has been testing targets on a land package held by Coral Gold (VSE).

Gold Giant Minerals (VSE) is earning a 49% interest in four properties from Hemlo Gold Mines (TSE) by spending US$4.5 million on exploration over the next four years. The non-contiguous properties cover 14,000 acres within Crescent Valley.

A first-phase drill program is under way and will consist of about 30,000 ft. in 10 to 15 holes. The drilling, budgeted at US$500,000, will test airborne and ground geophysical and gold geochemical targets on the four properties that make up the joint venture.

Mutual Resources (VSE) is exploring its Shoshone property, seven miles north of Pipeline. The junior reports that eight drills are working on various properties nearby, and expectations are that the tempo will increase over the summer.

Mutual has entered an agreement allowing Consolidated Ramrod Gold (VSE) to earn a 50% interest by paying US$25,000 cash and completing expenditures of US$500,000 by the end of 1995. Ramrod can increase its interest to 60% through further expenditures.

Ramrod also acquired the right to earn up to 60% in a land package held by Akiko Gold (VSE) and Bradner Resources (VSE). The properties are about four miles north of the main Pipeline deposit.

X-Cal Resources (TSE) plans to acquire and develop more land in the Pipeline area. It recently signed an agreement allowing BHP Minerals to explore three of its properties and earn a 51% operating interest. BHP is required to pay US$720,000 cash over five years and spend US$2.4 million on drill programs. The agreement includes annual drilling of each property but allows BHP to drop one or more properties after the first year.

Calneva Resources (VSE) has several properties in the region. A 24-hole program is about to begin as part of a joint venture with Echo Bay Mines (TSE).

Cathedral Gold (TSE) did some limited drilling on its Trendline property in the Pipeline region but has yet to discover anything significant.