Log in

View Full Version : An update on the Wind property in Nevada -



Reno Chris
09-19-2012, 08:45 AM
Yesterday Bravada Gold, the small exploration company that has leased my Wind mine property in Nevada, announced they have inked a deal with a mid-tier gold producer to further explore and develop the property (and their stock went up 40% for the day). This is a very big deal and represents the next big step toward bringing the property into production. The producer, Argonaut Gold, is committed to spend 7.5 million exploring the property over the next three years. Their main target, called the North Hill target in the press release below, is about 90% on my claims. They have lots of ore remaining around the existing pits, but North Hill will be a new ore body, likely comparable with the others and having a couple hundred thousand ounces of gold once it is fully drilled out. With this agreement, the very slow process of exploring these claims by a company that does not have enough cash to really explore it properly should be rapidly accelerated. Argonaut Gold operates two producing gold mines in Mexico, and is bringing a third mine on line. They are a Canadian mining company. The Wind project is just too small for some big operator like Newmont, Barrick or Goldcorp, but It is just the right size for an outfit like Argonaut. Wind could, if done right, double their annual gold production - Wind could produce perhaps something on the order of 100,000 ounces per year. Of course this dance of going from exploration to developing a larger scale producing mine is a slow process, and actual production is still probably 5 to 8 years away (assuming high gold and silver prices).

For more info see:
http://www.bravadagold.com/en/news/45/bravada-enters-into-wind-mountain-property-loi-with-argonaut.php

Steve Herschbach
09-19-2012, 10:09 AM
Congratulations Chris! Another step in the right direction. And the way the central banks have committed to pumping cash for the rest of the decade looks like higher gold prices is a good bet.

foolinthecreek
09-19-2012, 05:52 PM
Congratulations Chris! Another step in the right direction. And the way the central banks have committed to pumping cash for the rest of the decade looks like higher gold prices is a good bet.

you think?

lol

Chris, how does a deal like this work? You get a percentage based on a contract you made with Bravada?

Reno Chris
09-19-2012, 07:49 PM
Typically deals like this are structured such that the company leasing the ground pays a minimum annual amount to hold the property each year - which may vary with how long they hold it (the annual payment often escalates over time up to a certain point). Then if they go into production, there is normally some big payment of a fixed amount, and a small percentage of the gross production goes as a royalty to the property holder. Actual numbers for annual payments, production "bonus" and Net refinery royalty percentage can vary widely depending on the property, the metals and mining markets at the time and available data about the deposit. There may (or may not) also be stipulations that the leasing company has to invest a certain amount of money each year in exploring the property.

foolinthecreek
09-20-2012, 03:08 AM
And how long have you held these claims?

geowizard
09-20-2012, 06:56 AM
Chris summed it up pretty well.

Every property is subject to negotiation. The deals are the business of those parties involved and generally not published. The location dates and owners of mining claims located on federal domain are part of the public record.

Good job Chris!

- Geowizard

Reno Chris
09-20-2012, 07:52 AM
And how long have you held these claims?

Without looking it up, I think 9 years. I was just after gold had put in its bottom and began to increase in price. The claim block had been dropped when prices were low. I staked them because they were adjoining to a deposit worked in the late 1980s and early 1990s and I thought the ore would continue onto my claims. This is the conclusion the mining companies have now come to agree with. Much low grade ore was left behind around the old pits, but it could not be mined at a profit with the low prices back then. The Canadian company that leased the claims got involved with the property in order to search for a deep high grade deposit. They drilled some deep holes, but found only more low grade ore. Eventually as prices started really increasing in recent years, they began to see its potential for reopening as a low grade producer as it once was. At $400 gold it was a money loser, but with gold above $1500, they would be making money hand over fist if it was in operation today. It also has significant silver in the deposit and that helps too. The point of what they are doing now is searching for more low grade ore close enough to the surface to mine profitably. It costs a huge amount of money to set up a large open pit heap leach mine (like on the order of $50 million), so they want to be sure they have plenty of ore to mine and to pay back their investment with plenty of profit left over.

So long as the price of gold and silver remain high (and it really doesn't need to go higher, just to stay in this range), the chances that this will get back into production in the coming years is very high.

geowizard
09-20-2012, 08:11 AM
Chris has an excellent write-up on this property on his website:

http://nevada-outback-gems.com/Wind_mtn_gold/Wind_claims.htm

It's an excellent example of hanging in there when everyone else walks away. Then applying traditional "know-how" to add value to a mining property. Managing and marketing of a mining property requires a mix of skills in earth sciences, business, and fundamental marketing. As Chris mentioned, increasing gold and silver prices are making things move. As gold and silver prices continue to move upward, other properies will become economic that were marginal or sub-economic. It's certainly good for those with the stick to-it iv'eness that take the time to study the properties, invest time and money and energy.

- Geowizard

Bill Bohan
09-21-2012, 11:21 AM
Thanks for the update Chris.

Reno Chris
10-25-2012, 10:41 PM
Went out to the wind claims today to watch the drilling in action for a while. It was exciting to see the guys drilling on my claims. Pretty much everything in the view is low grade ore, drilling and assaying determines actual grade and depth of the ore. The outcrops of dark colored rock are jasperoid / heavily silicified rock. It is closely associated with the mineralization.

Chris

Dreamer
10-26-2012, 01:16 AM
How deep do they usually drill Chris? And how do they deliver the drilling platform to the site? Just curious.

Dreamer

shaftsinkerawc
10-26-2012, 06:47 AM
Any photo's of your silicified rock? Any of the ore? How low grade are we talking?

geowizard
10-26-2012, 08:42 AM
Since I have leased two properties in the past, I can relate to the excitement. The best thing about leasing a mining property is that you get to watch the process. The exploration company usually is required to keep the owner at arms length. There are unscupulous owners that might "affect" the process of measuring how much gold there is by adding a little of their own. Usually, the "amount" of the "option to buy" has already been negotiated. If exploration is done under the requirements of NI 43-101, then there are strict handling controls applied to the process of drilling, sampling and supervision of the samples. As far as releasing sample data, the owner is usually required under the exploration contract to not communicate data to the public (including gold forums). :)

Exploration is like playing a game of poker! You can look across the table and wonder what the other side is holding. You can look at their eyes and faces. They all keep a good "poker face"!

Sometimes I just ask anyway to see their expression; "Gettin' any gold?" reply... "Nope!":cool:

- Geowizard

Reno Chris
10-26-2012, 10:40 AM
How deep do they usually drill Chris?
The ore bearing rock is gently sloping and they drill until they are through it into the barren rock below. The holes have been running around 150 or so feet deep. There is no point in drilling deeper, they have tested the underlying rock and it is not ore bearing.

And how do they deliver the drilling platform to the site?
It is truck mounted and they drive out there. They lower the drilling mast down to horizontal - its similar in many ways to other drill used for water, oil, etc. They are not drilling core, the drill output is chips and sand.

Any photo's of your silicified rock? Any of the ore?
I'll try to get some the jasper rock but it just looks like really crappy jasper / agate. The best agatized material is gray, some has a pattern with red and gray and that is at least a little bit attractive.

How low grade are we talking?
The best ore of which there is any significant amount runs around 0.05 ounces of gold and an ounce+ of silver. Average for the whole deposit runs around 0.02 oz/ton gold and a half ounce of silver. What the stuff they were drilling yesterday runs, who knows? They have not assayed it yet. Its low grade but other than some shallow sands and sediment on the surface, its ore on down for a ways, so the stripping ratio is really low. Break even for similar Nevada mines runs around 0.005 ounces per ton gold.

Geowizard - you are right about the drillers being generally tight lipped, but I know the guy who was running the operation and while he could not tell me exactly what they were getting (no one knows until the assays are in) - he was willing to tell me how deep the holes they were drilling were - and I know its ore almost at grass roots, and they can tell when they've gone through the ore bearing layer, so knowing the depth of the holes gives a rough idea of the thickness of the ore, and it was running around 125 to 150 feet or so, which is good but not fantastic. Part of what needs to be determined is how far out the material goes in an east - west direction. Too far out east is a deep fault that drops the deposit down a long way (out of reach for all practical purposes). They wont be determining the size of either the E-W or N-S dimensions this year. More of that will be determined with a larger program to be done next spring.

geowizard
10-26-2012, 02:13 PM
Chris,

Your reply was well done as usual. :)

I was able to collect the core drill cuttings at regular intervals. The exploration company, Teck-Cominco, American, Inc. cored 6000 feet on my silver property here. It's always encouraging to get a company on the ground. At $40 bucks a ft = real money!

Teck also spent half a million on geophysics. Did they find anything? Nope!

- Geowizard

Reno Chris
01-20-2013, 09:09 AM
Well, the results are in from the fall drilling program and at least as far as my claims, it was a total bust! They drilled a bunch of holes on my claims and got pretty much nothing, which was very surprising to all of us as the surface soils gave good indications of elevated values. Never count your chickens before the eggs hatch. Oh well, back to the drawing board. Because it adjoins to existing, known ore bodies, they will surely keep the claims.

Steve Herschbach
01-20-2013, 11:18 AM
Well that is a surprise and sorry to hear that. You may not have been counting your chickens but I was counting them for you!

geowizard
01-20-2013, 07:37 PM
Chris,

Were they drilling a geophysical anomaly?

- Geowizard

Reno Chris
01-20-2013, 10:17 PM
The mineralization is confined to a certain rock formation where it is silicified. It was tough to see an obvious geophysical change in areas where the rocks are known to be mineralized. An adjoining high power line system and drop off from mineralized rock into a deep grabben basin make interpretation difficult. Surface samples in the area on my claim that was drilled showed elevated gold content, some high enough to be ore on the surface. Some drill holes from a few years ago at the very north end of my claim group showed intervals of mineralization, and at the very south east end of the claims is one of the existing pits and ore has been drilled there previously. It was assumed that since favorable faults that are seen as the source of the mineralized fluids connect these areas, and the favorable porous rock type connects the areas also, it was thought that mineralization would be more or less continuous between these previous holes with ore. It was not there. What I don't know is if they got elevated but sub ore grades or just nothing at all. I will get the actual results in a month or so.

geowizard
01-21-2013, 06:49 AM
Chris,

Thanks for the reply.

It really comes as a surprise to us all. Core drilling or any other drilling method for that matter that gets samples at depth provides the "real" data for decision making.

My recent experience with a silver property which had 6000 feet total of core drilling may be of interest to others. I asked the geo rep on site if I may collect the cuttings that were being discharged to the mud pit. He allowed me to bottle up cuttings samples. I labeled the samples with the depth from which the drill was cutting core and had assays performed. This provides a method for checking values independent of the lease operator.

- Geowizard