There have been massive metal finds and staking rushes west of the Mississippi in the past, like the Comstock Lode and the 1849 California Gold Rush. More recently, at Glamis Gold’s prosperous Picacho Gold Mine in southeastern California, Vancouver’s Chester Millar pioneered the heap leach gold recovery process, which is now widely used.
Because of its prospectively, stable mineral tenure, and ease of access, the Western United States remains one of the world’s major mineral producers and a popular investment destination for Canadians. We are going to take up on a few highlights because there are far too many businesses to cover.
The popular Coeur d’Alene District of northern Idaho has produced enormous amounts of silver, lead, and zinc – and continues to do so at Hecla Mining’s Lucky Friday Mine, which has been in operation for nearly 80 years.
The true star of the Western United States, however, is Nevada, which is the country’s largest gold producer. The Nevada Bureau of Mines and Geology has released Major Mines of Nevada, an official study on the Silver State’s mining operations. According to the publication, the total value of all commodities generated by Nevada’s mining industry was approximately US$8.1 billion in 2019, down 3.8 percent from the US$8.42 billion reported in 2018. According to the actual gross proceeds registered to the Nevada Department of Taxation, gold and silver accounted for nearly 85% of all value, contributing over US$7.1 billion.
According to the United States Geological Survey, Nevada continues to be the nation’s top gold producer, accounting for around 87 percent (173 tones) of the country’s total (200 tones) and ranking fifth in the world behind China (420), Australia (330), Russia (310), and Canada (180).
Nevada is also home to a slew of gold, silver, and copper mining projects.
Eros Resources Corp.’s flagship project in western Nevada is the Bell Mountain Gold Project, which received a favorable preliminary economic assessment (PEA) in 2017. Heap leaching is an option for the gold deposits – see the profile below.
Gold79 Mines Ltd. [AUU-TSXV] is investigating three gold ventures: the Jefferson Canyon and Tip Top gold projects in Nevada, and the Gold Chain Project in Arizona (see profile below).
Ely Gold Royalties Inc. [ELY-TSXV; ELYGF-OTCQB] has a 100% option agreement with Goldcliff Resource Corp. [GCN-TSXV; GCFFF-OTCBB] to purchase the Aurora West property in Mineral County.
Nevada Copper Corp. [NCU-TSX] operates the Pumpkin Hollow Mine, which is located 100 miles southeast of Reno and has both an underground and open pit plant.
Hard rock mining produces $4.29 billion in Arizona, including $482 million in business and employee taxes on a total payroll of $1.23 billion. Arizona generated 66 percent of all copper in the United States in 2018. Arizona, if it were a nation, would be the world’s seventh largest copper producer. Every month, the state produces between 70,000 and 80,000 tons of copper.
Arizona, on the other side, has been a major gold producer. Arizona has produced higher than 16 million troy ounces (498 tonnes) of gold as a by-product of copper mining through the end of 2019.
The Moss Mine in the Oatman District, northwest Arizona, produced 12,401 gold equivalent ounces in Q4 2020, according to Northern Vertex Mining Corp. [NEE-TSXV; NHVCF-OTC].
The in-situ Florence Copper Project, 65 miles southeast of Phoenix, is in the permitting stage for Taseko Mines Ltd. [TKO-TSX, LSE; TGB-NYSE American].
Equinox Gold Corp. [EQX-TSX; NYSE American] delivered 141,300 ounces of gold in 2020 from its 100%-owned Mesquite Mine in Imperial County in southeast California. After announcing commercial production in late November 2020, the company’s Castle Mountain Mine on the Nevada border delivered 5,300 ounces. The mine is estimated to produce 200,000 ounces of gold per year.
Southern Empire Resources Corp. [SMP-TSXV] is also exploring the past-producing Oro Cruz mine and the adjacent 100%-owned American Girl mine property in southeast California, where substantial historical gold resources remain from previous operations – see profile below.
Providence Gold Mines Inc. [PHD-TSXV] is considering the optioned Tuolumne property in Motherlode nation, which once housed a gold mine.
Viscount Mining Corp. [VML-TSXV; VLMGF-OTCQB] recently drilled 702.7 g/t silver over 14.9 meters at its Silver Cliff Project in Custer County, Colorado, including 1,259 g/t silver over 7.6 meters.
Adamera Minerals Corp. [ADZ-TSXV; DDNFF-OTC] established a joint venture with senior mining company Hochschild Mining LLC in northeast Washington State to fund discovery on its Cooke Mountain gold project.
Paramount Gold Nevada Corp. [PZG-NYSE American] recently filed a Feasibility Study for its Grassy Mountain gold project, located 22 miles southwest of Vale in eastern Oregon, for a potential high-grade, underground mining operation.
In the Western US, there is a lot of exploration and mining going on, and despite some setbacks caused by the COVID-19 virus, several ventures are moving forward.
The acquisition, exploration, and production of gold deposits in North America is the priority of Southern Empire Resources Corp. [SMP-TSXV; SMPEF-OTC; 5RE-FSE].
Renowned geologist Ron Netolitzky and Dale Wallster, Chairman and CEO, respectively, lead Southern Empire. Both have long careers that have included important mineral deposit discoveries and subsequent acquisitions by major mining companies.
At Cargo Muchacho Mountains of southeastern California, SMP is considering the past-producing 2,160-hectare (5,338-acre) Oro Cruz mine and the adjacent 100 percent-owned American Girl mine property (collectively the “Oro Cruz Gold Project”). The Oro Cruz Gold Project is located 22.5 kilometres (14 miles) southeast of Equinox Gold Corp.’s Mesquite gold mine and 25 kilometers north of Yuma, Arizona.
The Oro Cruz Gold Project, which has expanded historical large-scale open-pit and underground mining of the American Girl, Padre y Madre, Queen, and Cross oxide gold deposits occurred between 1987 and 1996, is where Southern Empire’s management believes they can find substantial gold mineralization. Until 1996, when falling gold prices curtailed mining activities, gold was recovered by both heap leaching of lower-grade material and milling of higher-grade material.
Southern Empire claims it will add substantially to the current historical inferred reserve, speculated at 341,800 ounces of gold based on 4,386,000 tones averaging 2.2 g/t gold at a cut-off grade of 0.68 g/t gold (4,835,000 tones at 0.07 oz/ton gold), which is estimated at 341,800 ounces of gold based on 4,386,000 tones averaging 2.2 g/t gold at a cut-off grade of 0.68 Company geologists believe there is still a lot of gold to be found in the untested down-dip extensions of the historical inferred deposits and elsewhere on the land, based on impressive historical drill results such as 10.7 meters of 20.9 g/t gold and 12.2 meters of 13.4 g/t gold.
There is still gold left in the old heap leach pads and waste rock dumps, which could provide immediate cash flow. Southern Empire has shipped samples from its first phase sonic drilling program, which consisted of 20 holes drilled on the two ancient heap leach pads. Besides, airborne magnetic and radiometric geophysical surveys have been flown over the entire land, and Oro Cruz recently completed surface and underground LiDAR surveys.
Southern Empire has a leg up on the competition since it was previously a manufacturer. There is already infrastructure in place, such as paved road access, a high-voltage power transmission line, historical heap leach pads, 3 km of underground construction, and a skilled local workforce.
Southern Empire got a positive decision letter from the Bureau of Land Management (BLM) of the United States Department of the Interior in January 2021 for its Oro Cruz exploration Plan of Operations. Southern Empire’s exploration plan was reviewed by the BLM and found to be compliant with federal surface management regulations and meeting the necessary content specifications. Before the BLM decides on a final approval decision on Southern Empire’s planned exploration, this critical BLM decision provides for the start of the environmental review process and a public comment period.
Southern Empire’s 2021 exploration plans include the construction of 65 drill pads for Reverse Circulation (RC) and/or core drilling in seven target areas, as well as related temporary access road construction, once final permitting is in hand.
Geochemical and geophysical surveys, geological mapping of the open pits and underground workings to find further drill target areas, and identifying a compliant reserve for the unrecovered gold hosted in the old heap leach pads are among the other objectives of SMP’s 2021 exploration. Metallurgical research is also in the works.
A large shareholding in Augusta Gold Corp. [G-CSE; formerly Bullfrog Gold] of 1,625,000 Augusta shares and 1,125,000 warrants, worth approximately $5 million, is another primary asset of Southern Empire. Augusta Gold, which has an advanced gold project in Nevada, is a major shareholder (15.3 percent) of Barrick Gold, and Richard Warke’s holding company recently completed a $22 million financing in Augusta.
Southern Empire is lucky to have acquired the highly prospective, past-producing Oro Cruz and American Girl assets in the Caborca Orogenic Gold Belt, which hosts prosperous gold mining operations, including Fresnillo Plc’s Herradura mine (2019 gold output of 482,722 oz) and Equinox Gold’s Mesquite mine (2020 gold production of 141,300 oz).
As of February 16, 2021, Southern Empire Resources had 50,906,800 shares issued and outstanding, with a working capital of approximately $9.65 million (approximately $0.29 per share); genuinely a “Value Proposition.”
[ERC-TSXV; BPUZF-OTC] Eros Resources Corp. is a junior gold-focused company founded by Ron Netolitzky, a well-known Canadian geologist.
He was personally involved in three major gold discoveries in North America, including Snip and Eskay Creek, two of Canada’s most prolific high-grade precious metal mines. Both are found in British Columbia’s Golden Triangle area. The Brewery Creek mine, located near Dawson City, Yukon, is the seventh.
In 2015, he was inducted into the Canadian Mining Hall of Fame for his exceptional lifetime achievements. Eros was founded by Netolitzky with the help of Chief Financial Officer Andrew Davidson, as well as directors Tom MacNeill and Ross McElroy. Each has a successful track record of bringing greenfield projects to fruition.
Eros’ two-pronged corporate strategy entails moving forward with its own gold project in Nevada while also making strategic investments in other well-positioned gold ventures.
The Bell Mountain Gold Mine, near Fallon, Nevada, is the company’s flagship project. A preliminary economic assessment (PEA) conducted in 2017 (and not revised to take into account current gold and silver prices) predicts a four-year mine life with cumulative output of 60,056 ounces of gold and 408,498 ounces of silver before expansion based on renewed exploration.
The PEA predicts a cash cost of US$759/oz generated over the life of the mine, excluding by-product silver and royalty payments of US$2.56 million.
Using a US$1,300/oz gold price and US$17.50/oz silver price, the PEA calculated the pre-tax present value (NPV @ 5% and internal rate of return at US$17.6 million and 41.4 percent, respectively, with a payback period of 1.7 years.
The Bell Mountain Property’s deposits (Spurr, Varga, Sphinx, and East Ridge) are typically amenable to heap leaching processing. They have 58,785 equivalent gold ounces in measured and indicated resources. On top of that, there are 31,103 ounces of gold equivalent ounces inferred.
The company recently hired McClelland Laboratories in Reno to estimate the Bell Mountain Project’s capital and operational costs (+20 percent).
In the meantime, Eros announced in an October 2020 update that it had begun a soil geochemical survey to find drill targets in order to extend the current resource model. A 200 x 200-foot sample grid was used to collect 1,000 soil samples, according to the company. Rock-chip samples were taken where bedrock was found.
The samples will be used to determine drill targets based on anomalous gold in soil and favorable geology (silicification) where present, according to Eros. As required, reverse-circulation exploration drilling will be used to test targets.
After Eros announced that it had submitted a Water Pollution Control Permit Application to the Nevada Bureau of Mining Regulation and Reclamation, the company received an update (BMRR). The application was part of a longer permit process that included an authorized mine plan of operations, an environmental review that found no significant effects, and a decision record authorizing the project’s progress.
In a letter, the US Navy’s Principal Deputy stated that the US Navy is committed to working with Bell Mountain to accommodate mine construction near the Fallon Naval Air Station.
“We strongly believe that further exploration work on the property in the near term will further increase the size of the Bell Mountain, and that is exactly what we intend to do,” Netolitzky said.
The company has stated that it expects to announce a production decision within the next 12 months.
Aside from Bell Mountain, Eros has an actively managed equity portfolio that includes hand-picked opportunities where management assumes significant value can be realized.
Skeena Resources Ltd. [SKE-TSXV; SKREF-OTCQX; RXFB-FSE], Southern Empire Resources Corp. [SMP-TSXV], and MAS Gold Corp. [MAS-TSXV] are among the companies in which the breadth of management expertise offers useful guidance in choosing opportunities.
Eros recently increased its holdings in MAS Gold to 11.8 percent through a private placement of 7.1 million MAS flow-through units at $0.07 per share. In northern Saskatchewan, MAS Gold is advancing a number of advanced gold exploration properties.
Southern Empire is a gold-focused corporation that owns the American Girl Mine property in southeast California as well as the neighboring Oro Cruz property, which is 100 percent optioned and situated approximately 22.5 kilometers southeast of Equinox Gold Corp.’s [EQX-TSXV; EQXGF-OTC] Mesquite gold mine in southern California. The Eskay Creek and Snip mines are being redeveloped by Skeena Resources.
Eros claims it could be a good investment opportunity due to the strength of its Bell Mountain gold mining project and successful investment portfolio.
Eros shares were valued at $0.095 on February 16, 2021, with a 52-week range of 16.5 cents and $0.055.
Gold79 Mines Ltd. [AUU-TSXV] is a TSX Venture-listed business that provides low-risk exposure to early-stage precious metals exploration in Nevada, a U.S. state that was named by the Fraser Institute as the most desirable mining jurisdiction in the world in 2019.
Gold79 is managed by a highly experienced team, including director James Franklin, a geoscientist and member of the Canadian Mining Hall of Fame who has spent most of his long career documenting the complex evolution of the Canadian Shield and its connection to its phenomenal mineral resources.
Gary Thompson, CEO of Brixton Metals Corp. [BBB-TSXV], was a co-founder of the company and previously worked with EnCana Corp. (now rebranded as Ovintiv Inc.), Newmont Alaska Ltd., and NOVAGOLD Resources Inc. [NG-TSX].
The company’s officers and directors own 15.3 percent of the company’s 91.4 million (121.1 million completely diluted) common stock, which traded at $0.09 on February 1, 2021, with a 52-week range of 14 cents and $0.02.
On three gold ventures, Gold79 has a 100 percent earn-in incentive and/or purchase agreement. Both of the priority projects are in Nevada. The gold ventures are Jefferson Canyon and Tip Top. The Gold Chain Project, which is located in Arizona, is the third.