Mining Quarterly - Winter 2020 by Times-News/ Elko Daily Free Press

UARTERLY WINTER 2020

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FEATURED CONTENTS

‌COVER STORY Bald Mountain eyes expansion

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TOP STORIES SMD keeps on mucking in Nevada

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Historic Ely, Nevada

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Gibellini could start production in late 2023

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FROM THE EDITOR

Welcoming the New Year ‌W ell, it’s officially the holiday season, and that means the year 2020 will soon be in the history books. For many, I believe the memories of 2020 will not bring to mind images of NATHAN utter joy and HAVENNER happiness. It has been a challenging time for many. The year brought economic hardships that many American citizens and business owners have not experienced in their lifetime. As we begin purchasing our gifts this holiday season, I would like to encourage Mining Quarterly readers to support the local businesses in their communities, many of which have struggled greatly this year. Barring any unforeseen circumstances, I will be returning to Ohio to spend Christmas with my family, albeit in a different and more socially distant way than in years past.

While I imagine I am not the only one looking forward to the Christmas season and coming New Year, it is important to remember the families of the more than 240,000 Americans that died as a result of the coronavirus this year. The holidays will not be quite the same this year for them, or any other. While I know that simply ringing in 2021 will not bring about any significant changes to the issues facing the world, I would like to think that we can use the New Year as an opportunity to set aside the partisan issues that have divided our country for so long. It is time we come together and think more about caring for our fellow man. The holidays are also a time to reflect and be thankful for the things we do have. To be thankful for our health and the health of our friends and loved ones, and that we somehow survived another trip around the Sun. The mines of Northeast Nevada have continued to produce throughout the

pandemic, providing much needed jobs to a state significantly impacted by coronavirus and facing a projected budget shortfall of more than $800 million. Not only have the mines continued to operate, but they continue to make headway on capital improvement projects like the third shaft project at Turquoise Ridge Complex in Humboldt County, while the Kinross Bald Mountain mine in White Pine County has continued to move forward with expansion plans. Throughout its history, the United States has weathered its share of hardships, economic and otherwise, and the resiliency of the American people has always pulled our country through to a brighter tomorrow. I would like to encourage Mining Quarterly readers to think about their communities and what they can contribute to make them just a little better place than they were the day before. In the words of President John F. Kennedy, “One person can make a difference, and everyone should try.”

4 • MINING QUARTERLY • WINTER 2020

REMEMBERING

JOHN DOBRA

NATHAN HAVENNER t is with sadness that Mining Quarterly must report the death of longtime contributor John Dobra, who passed away Sept. 25 at the age of 70 in Reno. ‌John earned his P.h.D. in economics from Virginia Tech in 1980, and was Associate Professor of Economics and the Director of the Natural Resource Industry Institute at the University of Nevada

‌I

between 1980 and 2018. Dobra was also a Research Fellow for the Fraser Institute. He was recognized internationally as an expert in the economics of natural resources. He began contributing columns to Mining Quarterly in 2009, and his friendly style and significant knowledge of the mining industry was an asset that cannot easily be replaced. Former Mining Quarterly Editor Adella Harding said John

was a dependable columnist for the magazine. “John Dobra was my go-to source for comments on rising or falling gold prices and the mining industry for many years, whether for daily news stories or for stories in the Mining Quarterly,” she said. “He was great about answering my questions, and we also talked at mining conventions about the mining industry.” Dobra’s son Matthew, who

also holds a PhD in economics, said he was able to work with his Dad on research projects for the National Mining Association between 1996 and 2004. “I don’t even know if he needed my help to be honest, but it was a lot of fun and rewarding to work with my dad on research projects,” the younger Dobra said. John will be missed by everyone at The Elko Daily Free Press and Mining Quarterly.

ELKO DAILY FREE PRESS, Elko, Nevada • 5

SMD KEEPS ON MUCKING IN NEVADA

ADELLA HARDING

Mining Quarterly Correspondent ‌

‌S mall Mine Development is busy contract mining and developing underground mines in Nevada, and SMD’s general manager, Keith Jones, said the company’s focus is “to bring underground projects to fruition. We’ve been doing it a long time.” SMD is now 38 years old, and Jones said this has been an interesting year, with the COVID-19 pandemic that in turn sent gold prices higher. “Our business is tied to gold,” but while higher gold prices may lead to more projects, SMD’s contracts are “typically unit rates” rather than linked to gold prices or gold grades, Jones said. “We have done that in the past, but don’t have any of those in our portfolio right now.” He said there are “certainly more exploration and new projects” in the current time of high gold prices, and companies are “finally advancing projects that were developed and mined in the 2011-2012 time frame and shelved” when the gold price fell. The price flirted with $1,900 an ounce in September 2011. “I think there is an uptick for information and potential quotes,” Jones said. The company bids for most jobs, but there also is word of mouth and return business. Jones said SMD’s “focus has always been the horizontal development of portals and exploration drilling

SMD‌

Small Mine Development has a large shop for rebuilding and repairing mining equipment at Battle Mountain. The business office is in Boise. This is an overview of the shop featured on SMD’s website.‌

underground when sometimes there is better access from a drilling standpoint, and we sometimes do exploration drifting and development to get to the known ore bodies. We do a lot of production mining, as well.” The company’s business is “pretty concentrated in northeastern Nevada, but we do pursue work elsewhere and will work anywhere in the United States. Northeastern Nevada is where the bulk of the underground mines are,” he said. SMD‌ Outside Nevada, a unique Small Mine Development has offices and a large shop at Battle Mountain. project SMD is working on now The company, which develops underground mines and is a contractor See SMD, 6

miner, has roughly 300 pieces of equipment deployed. SMD’s business office is in Boise. ‌

6 • MINING QUARTERLY • WINTER 2020

SUBMITTED‌

Delivery of the bolter to Small Mining Development.

SMD From 5

is for the University of Arizona in Tucson, where the company is developing a portal and underground mine for teaching, research and demonstrations, Jones said. The company also had a job in Colorado, but that finished in May. That work was a drainage tunnel for a tailings complex. SMD currently has 500 employees, with nearly all of them working in Nevada. The company has an office and shop complex at Battle Mountain and a business office in Boise, and SMD owns “a huge number” of equipment, Jones said. There are roughly 300 pieces of mobile equipment currently deployed. “We do the bulk of day-today maintenance on site, and at Battle Mountain we do specialized work, like major rebuilds,” he said. The work includes rebuilding haul trucks and muckers. Jones said SMD reached 600 employees at the mining peak in 2012, which was “a crazy time. We finally had to turn away work.” He said the surge retreated as the gold price fell, and there were “a bunch of operators who got caught in bankruptcy.”

SMD‌

Small Mine Development is opening a portal for the University of Arizona at Tucson for teaching, demonstrations and research. At left is James Werner, director of the San Xavier Mining Laboratory, and at right is Nick Caruoso, site manager/engineer for San Xavier. ‌

Current work‌

One of SMD’s long-term contracts is at the Jerritt Canyon Mine north of Elko, where SMD crews have been mining at the Lee Smith Mine since 2010. They also have been mining at the SSX Mine there since 2014. Jerritt Canyon Gold owns the operations and operates the mill, while SMD provides the ore.

SMD also is mining at the underground El Nino Mine at South Arturo on the Carlin Trend, operated by Nevada Gold Mines in the joint venture with Newmont Corp. Barrick Gold Corp. operates NGM and had started El Nino before the JV was formed. Premier Gold Mines Ltd. owns 40% of South Arturo. SMD works at NGM’s Leeville

Mine, and is mining at NGM’s Vista underground operation at Twin Creeks in Humboldt County, as well. Twin Creeks is now considered part of the Turquoise Ridge Complex. SMD starting contract mining in 2017 at Vista, but the company also built the Vista portals back in 2011-2013, See SMD, 8

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SMD

SMD came back in 2011, when Newmont moved crews to the Exodus Mine. SMD owned the facilities at Chukar that had to be torn down, but Jones said Newmont had built the shop, change room and other facilities at Vista, and the company leaves it up to the company contracting SMD services who owns the surface facilities.

From 6

according to the Elko Daily Free Press archives. The company also is doing work on high capacity ground support at Turquoise Ridge around the shaft station, he said. A third shaft is under way at Turquoise Ridge, but SMD does not do shaft-sinking. “This year we picked up some work at North Post,” Jones also reported in a phone interview. North Post is part of the Meikle and Rodeo underground area at Goldstrike north of Carlin, and now that NGM has been created, this is where one of the advantages of the JV could pay. Barrick and Newmont shared a property line at Deep Post, which was closed in about 2009. “They are truly seeing the benefit with removal of the

COURTESY OF PREMIER GOLD MINES LTD.‌

Small Mine Development began the initial underground development work at El Nino at the South Arturo Mine in 2019, 60 percent owned and operated by Barrick Gold Corp. and 40 percent owned by Premier Gold Mines Ltd. El Nino is on the Carlin Trend near Barrick’s Goldstrike Mine. The portals are in the Phase II open pit that has been mined out.

property line,” Jones said. One of SMD’s long-time contracts was the Chukar underground mine at the Gold Quarry Mine north of Carlin, now part of the Nevada Gold Mines joint venture, but SMD mined it out and shut it down in December 2019. Jones said there was a

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five-month disruption after a pit wall collapse at Gold Quarry in 2018, but the company came back to finish mining. Final demolition of the site took place in March of this year. SMD mined Chukar the first time from 2002 to 2009, when Newmont crews took over when Newmont closed Deep Post.

COVID-19‌

The COVID-19 pandemic has been a challenge for the company as SMD has continued operating during the restrictions. Jones said SMD jumped onto COVID-19 guidelines for hygiene, with question forms and temperature checks, and the company purchased “a bunch” of vans, so that workers being transported to and from See SMD, 10

10 • MINING QUARTERLY • WINTER 2020

“We try to make sure we’re doing the best we can be doing. It truly takes everybody. It’s a tough thing.”

SMD From 8

job sites would be distanced. A 15-passenger van transports six people now and follows fresh air guidelines. “In May, we implemented a mask requirement,” he said. “We also implemented a contact tracing card and quarantine. People have actually been good about that.” Still, as of late October there had been 28 COVD-19 cases among SMD employees. “We’ve had the full gamut, one in ICU and fairly critical and still not back to work, and we’ve had five or six extremely sick” and five or six with high fevers and sinus infections and others with mild cases or barely any symptoms, Jones said. The pandemic costs SMD money, too, with the extra vehicles, supplies, temperature screening and loss of production when a small crew must

Keith Jones, SMD general manager

stop working due to COVID-19. Safety is emphasized at SMD, but Jones said even with every safety precaution, there are accidents. “I think we are always vigilant. The incident rates continue to come down, as they have for the industry. It’s a daunting thing” to achieve zero accidents, and SMD has had medical incidents this year but no severe injuries, Jones said. “We try to make sure we’re doing the best we can be doing. It truly takes everybody. It’s a tough thing.” Crews work 12-hour shifts, seven days on and seven days off, and SMD operates 24 hours a day.

than 28 years directing the company, selling the company to a group of senior leaders. Jones said the owner-operators are down to four now, but there were 13 in the beginning. “It’s changed quite a bit over the past 10 years,” Jones said. Guill started out in Spokane, moved the business to St. George, Utah, and later moved headquarters to Boise. The SMD company history on its website states that SMD pioneered the use of 100% cemented backfill in underhand cut and fill mining in 1984, and this method has been proven in challenging ground conditions and is now widely used in Nevada. SMD developed a portal into SMD history‌ a pit highwall the first time in SMD’s founder, Ronald Guill, 1989 and has constructed more retired in early 2011, after more than 60 portals since then,

“Simply the Best”

SMD‌

A Small Mine Development bolter is finishing up bolting a heading at an underground mine in Nevada, where the bulk of the company’s work takes place, including contract mining. ‌

according to the history, which also lists company advancements that included purchasing underground equipment with operator cabs for reduce noise and particulate matter exposure for workers when others still thought that wouldn’t work.

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ELKO DAILY FREE PRESS, Elko, Nevada • 11

COLUMN

Domestic Mining is Key to OUR NATION’S SUCCESS mined minerals. It’s relatively easy to visualize that we need mining for items such as cars, televisions, computers, cellphones, and even our national t is time that we as a nation security. New hybrid cars use living, but mined products are recognize the critical twice as much copper as cars key to the advanced, technoimportance of minerals powered by gasoline alone; eleclogical, comfortable and more to our national tric cars even more. Computer healthful existence we enjoy. security, our chips are made from as many as economy and our Mining is a unique industry in that it is the basis for our entire 60 different minerals or their everyday lives. constituent elements. Reports way of life, yet few people ever Most people from the World Bank Group and never think about give it a second thought, much the International Energy Agency less consider its significance. the pivotal role MARK shine a light on the growing That needs to change. mining plays in COMPTON Every year, the average Amer- need for minerals to fuel clean their lifestyle energy technologies, while the ican uses hundreds of newly and standard of

MARK COMPTON

Executive Director, American Exploration & Mining Association‌

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U.S. Department of Defense uses more than 750 thousand tons of minerals annually. We have heard a lot over the years about the importance of energy independence, but it is equally as important, if not more so, that we are minerals independent. Unfortunately, a lack of access to economically viable mineral deposits and a lengthy, inefficient federal permitting process has resulted in the U.S. being increasingly dependent on foreign sources of See Compton, 12

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strategic and critical minerals. This vulnerability has serious national defense and economic consequences. According to the U.S Geological Survey, the U.S. is more than 50 percent reliant upon foreign countries for 46 different metals and minerals and 100 percent import reliant for 17 of those, despite having the third largest mineral wealth in the world. Our mineral dependency is at a record high, double what is was 20 years ago. Today, less than half of the mineral needs of U.S. manufacturing are met from domestically mined resources. The COVID-19 pandemic has laid bare dangerous vulnerabilities in the supply chain for a number of industries, not limited to healthcare, renewable energy or even national security. We now know that early in the pandemic, certain countries hoarded medical supplies such as masks, medications and other supplies, using these as strategic bargaining chips around the world. With this troubling experience, our dependence on imported minerals suddenly became a flashing warning light. As global supply chains break down, it’s clear that a strong mining industry, and the resources it provides, is more critical than ever to our nation’s economic and national security. Importantly, there is growing bipartisan recognition of this problem and the federal government is taking steps to ensure we have a domestic supply of the minerals our society needs. President Donald Trump recently issued Executive Order 13953, which declares “that our Nation’s undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries constitutes

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an unusual and extraordinary threat … to the national security, foreign policy, and economy of the United States. I hereby declare a national emergency to deal with that threat.” This latest order builds off President Trump’s E.O. 13817, issued in 2017, which directed federal agencies to establish a list of critical minerals and strategies for reducing the nation’s dependence on foreign sources. The preliminary list identified 35 mineral commodities as critical. That was an important first step, but there are many minerals of vital importance to our economic and national security that are absent from the list. For example, copper, silver, gold, lead, zinc, phosphate and other minerals are indispensable to our infrastructure and are essential components of consumer products, military and defense equipment, numerous manufacturing sectors, medical applications and other uses. The availability of minerals with widespread uses in infrastructure, manufacturing, and consumer products is an issue

of national importance because shortages of these minerals would create serious economic disruptions that would have a ripple effect throughout our economy. Additional efforts to address these issues include multiple pieces of legislation introduced in Congress intended to address the domestic supply of critical minerals and the federal permitting inefficiencies facing the U.S. mining industry. Significant progress also was made this summer when the White House Council on Environmental Quality updated the implementing regulations for the National Environmental Policy Act for the first time in over 40 years. It is important to note that the streamlining of the mine permitting process does not equate to reducing environmental protections. Environmental safeguards, an efficient regulatory system, and environmental stewardship are vital components to any successful mining project. We are fortunate that America is blessed with a rich mineral

endowment, and it is more important than ever for the U.S. to responsibly utilize our own mineral and energy resources. In fact, it is a national imperative. But to really become a national priority, as a society we all need to make the connection between mining and our quality of life. We assume the things we need and want will always be there. We take for granted in this country that the lights will go on when we flip the switch, and our heating and cooling systems will keep us comfortable. But the bottom line is, without mining to provide the foundational minerals and metals for the things we use every day, our society would be much different. Like food and water, energy and minerals are essential. We welcome Executive Order 13953 and legislative efforts to allow the domestic mining industry to reach its true potential and fully contribute to our economic and national security. Considering the foundational importance of the mining industry to our way of life, these are bipartisan issues that deserve our Nation’s attention.

ELKO DAILY FREE PRESS, Elko, Nevada â&#x20AC;¢ 13

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Alamos Gold appoints new vice president of exploration ASSOCIATED PRESS Alamos Gold Inc. has selected Scott R.G. Parsons to serve as its next vice president of exploration, following the retirement of Chris Rockingham in September. “On behalf of the entire organization, I would like to thank Chris for his contributions to Alamos, including leading and developing our strong exploration team over the past two years,” President and CEO John A. McCluskey said in a September statement. “We wish Chris all the best in his retirement,” McCluskey added. Parsons joined Alamos in January 2018, most recently serving as director of exploration, Canada where he has helped oversee the exploration programs at

“Scott brings a wealth of experience having held progressively senior exploration roles over the past 15 years.” Island Gold, Young-Davidson, and Lynn Lake. Prior to joining Alamos, Parsons was manager of regional exploration and geoscience with TMAC Resources, where he was responsible for resource expansion and regional exploration on the Hope Bay Project in Nunavut. Previously, he served as vice president, corporate development for Northern Superior Resources Inc., and as an exploration geologist and later project geologist, resource development & long-range planning with BHP Billiton.

John A. McCluskey, president and CEO

“Scott brings a wealth of experience having held progressively senior exploration roles over the past 15 years,” McCluskey said. “He has been intimately involved in our exploration efforts the last several years and is well positioned to lead our exploration program going forward.” Parsons holds a Bachelor of Science in geology and a Master of Science in geology from the University of Western Ontario. He also holds a

Master of Business Administration from Athabasca University and is registered as a Professional Geoscientist with Professional Geoscientists Ontario and Engineers Geoscientists Manitoba. Alamos is a Canadian-based intermediate gold producer with diversified production from three operating mines in North America. This includes the Young-Davidson and Island Gold mines in northern Ontario, Canada and the Mulatos mine in Sonora State, Mexico. Additionally, the company has a portfolio of development stage projects in Canada, Mexico, Turkey, and the United States. Alamos employs more than 1,700 people. The company’s shares are traded on the TSX and NYSE under the symbol “AGI”.

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Cortez Underground wins Sentinels of Safety award NATHAN HAVENNER nhavenner@elkodaily.com

‌Nevada Gold Mines Cortez Underground was recently recognized as the recipient of the National Mining Association’s 2019 Sentinels of Safety Award. The award recognizes the mine’s safety performance in the “ large underground metal” category. Established in 1925 by then Commerce Secretary Herbert Hoover, the award recognizes the mines in the United States that record the most hours in a calendar year without a single lost-time injury. “There is a very large sense of pride, I know that I am very proud of being able to achieve this milestone,” Henri Gonin, Cortez general manager, said. “It is an achievement going a full year without a reportable accident of any kind. In fact we are way beyond a year.” Gonin said that while the Sentinels of Safety Award recognizes safety measured in a calendar year, Cortez Underground is actually approaching 900 days without a losttime accident. Cortez Underground Operations Manager Dan Worthy said he believes that record stems from a safety-oriented culture at the mine. “It is not a single silver bullet or a single activity,” Worthy

said. “It is expectations that are put up and not just from Henri and myself, it is expectations that we establish throughout the entire workforce.” “We are accountable and we hold each other to account,” he added. “We do the right thing to ensure we go home safe and each other goes home safe.” Gonin and Worthy agree that there is no list of actions or steps that can be pointed to that explain why Cortez Underground has been so successful in avoiding lost-time accidents, but is rather rooted in establishing a culture of not accepting sub-standards and accidents from within, rather than from the top down. Worthy said it is important to keep a continuous eye on safety and not become complacent. “It is like riding a bicycle up hill, you stop peddling you go backwards,” he said. According to the Nevada Mining Association, the Sentinels of Safety Award “remain the nation’s most prestigious awards recognizing mining safety.” A mine must record at least 4,000 injury-free hours to qualify. Cortez Underground is a part of NGM’s Cortez Complex, which features both underground and open-pit mining operations.

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NATHAN HAVENNER The $300 million third shaft project at Nevada Gold Mines Turquoise Ridge Complex continues to advance throughout the coronavirus pandemic. The new shaft is expected to be up and running by 2022.

Third shaft project moving ahead at Turquoise Ridge

NATHAN HAVENNER‌

nhavenner@elkodaily.com ‌

‌Nevada Gold Mines is continuing to see steady progress on the construction of a third mine shaft at its Turquoise Ridge Complex. Manager of Capital Projects Joe Dase says the $300 million project, which has been in the works since 2017, is expected to be fully operational by 2022. Dase says the installation of a mine production shaft is a rare occurrence around the world, and there are only a handful of shafts currently being sunk. “For us, it is a huge to-do for the site,” Dase said. “Statistically, it hardly ever happens because the capital outlay is just so large that usually you force your way into the existing infrastructure.” While the project comes with a hefty price-tag, the new shaft See Turquoise, 18

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Turquoise From 16

will make Turquoise Ridge both a more efficient and improve ventilation of the underground operation. Chief Engineer Rory Howell, who originated the idea to sink a third shaft, says the main orebody has gradually moved away from the two existing shafts over time, making for a lengthy haul time. “When they put the first two shafts in they didn’t know a lot about the ore body, and it turned out that the bulk of the ore body was not close to where they put the shafts,” Howell said. With the current setup, drivers are having to haul ore nearly one-mile and up a 15 percent grade. The trip averages between 45-50 minutes. See Turquoise, 20

NATHAN HAVENNER‌

The winch building at Nevada Gold Mines Turquoise Ridge Complex houses four large winches that support the galloway structure of the third shaft.

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20 • MINING QUARTERLY • WINTER 2020

Turquoise From 18

Howell said that timespan will be reduced to 10-15-minutes once the new shaft is operational. Dase said the shaft project actually began before the 2019 joint-venture that brought together the Nevada mining assets of Barrick Gold Corp. and Newmont Corp. to form Nevada Gold Mines. “We broke ground on third shaft, for the project itself in August 2017,” he said. “That started earthworks and site-leveling and clearing and in August 2018 we broke ground on the shaft.” In addition to significantly reducing the amount of time it takes for ore to be transported, the new third shaft will also serve as a fresh-air intake for the mine, increasing airflow throughout it. “That will place us in a position where all our men and materials, our primary and secondary egress, everything, is always in fresh air,” Dase said. Currently, all of the mine’s fresh air comes in the number two shaft, goes through the mine and then comes back out the number one shaft. “From a safety aspect it is advantageous,” Dase says. “We will get more ventilation capacity out of the mine because we have a new airway to surface.” Howell said the mine is currently pushing through about 800,000 cubic feet of air per-minute, and it can get hot and humid, with some areas reaching 100 percent humidity and 90-degree temperatures. “When the new shaft goes in we will be going up to about 1.2 million CFM and have two fresh air intakes instead of one fresh air intake,” Howell says. “So it will improve the ventilation in the main ore zone a bunch.” “It will drop the temperature some, it will drop the humidity a

NATHAN HAVENNER‌

Nevada Gold Mines employees work on the new third shaft, which is currently being installed at the company’s Turquoise Ridge Complex.

lot,” he added. Thyssen Mining Construction Ltd. of Saskatchewan, Canada is the contractor for the project. Dase said the shaft as it currently exists is in its sinking configuration, but the head frame will go through multiple incarnations before the shaft is put into production.

“First we have to basically build the thing, we sink the shaft, we tear the thing back down, and we rebuild it and we go back into the shaft and configure the shaft,” he said. Dase compares the shaft sinking process with lateral mining with a jumbo, just turned on its end. Large clamshells not unlike

those seen in arcades are used to load the buckets before the rock waste is lifted out. “We drill, we blast, we muck it out, we support the ground,” he says. “Rise and repeat.” All of the work is done off a galloway 85-feet-tall, weighing in at 110,000 pounds. “That is your suspended work

ELKO DAILY FREE PRESS, Elko, Nevada • 21

platform that everything goes in and out of and everyone works out of,” Dase says. NGM has put a lot of effort into removing people from the hazards of the job with this project, significantly limiting the number of employees who are “on the bench.” In its final configuration, the Number 3 Shaft will feature a surface cage with the ability to move 30,000 pounds of gear. There will also be two-skips and a single cage that can hold about three-people. “These hoists, everything in the shaft is centered around the hoisting plant, they are special built for this project,” Dase said. “We will have as much if not more hoisting capacity as number 2 shaft, even though we are much deeper.” While the mine’s Number 2 Shaft bottoms out at about 1750 feet, the new Number 3 Shaft will bottom out at 3250 feet. It is what would be considered a medium range shaft in terms of depth of North America, the shaft is 24 feet in diameter. “This will be the deepest mine shaft in Nevada,” Dase says. Since 2017, the project has received only two medical treatments, with no lost-time injuries across all the business partners working on the project. “In terms of safety I feel we have been very successful, it is a heck of a milestone when you approach as many man hours as we have,” Dase said. There are currently about 60 contractors and a team of 21 Turquoise Ridge employees working on the project. While the global coronavirus pandemic has impacted the Number 3 Shaft project to a degree, it has not caused any significant setbacks to the overall plans, but has impacted the micro-details of the project. Dase said some of the issues the team has had to deal with have involve the fact that

Q&D is a Nevada-based , general contractor with multi-disciplinary construction and mining expertise. Our MSHA-trained work force is ready to help with all your needs, including: NATHAN HAVENNER‌

Construction continues to be underway at the new third shaft project at Nevada gold Mines Turquoise Ridge Complex. The project is expected to be complete in 2022.

workers are in a confined space, such as the galloway with its 3-foot diameter cage, and how to get workers in that space while social-distancing. “Our solution has been 100 percent respirators,” he said. “That is the only way you can guarantee that you are not inhaling each other’s (air particles) and you can be in closer proximity.” The team went through a crash course in planning cement deliveries, because the entire project is dependent upon the availability of cement and concrete production. “If we lose our cement the whole project stops,” he said. “It has been an interesting challenge.” Dase said he has faced his share of challenges throughout his career, including a tornado destroying a previous job-site, but those have had definitive timetables, unlike coronavirus. Dase said he is confident that NGM and Thyssen Mining Construction will be able to complete the project, leaving Turquoise Ridge a better and more efficient mine than when they found it. “We have a commitment not only to each other but to our shareholders to continue to generate money, you throw a challenge and you have got to figure out a way to overcome it, keep moving, because stopping isn’t an option.”

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All Politics is Local “All politics is local” is a quote often attributed to former Speaker of the US House of Representatives Tip O’Neil. While the Presidential race dominated the headlines, the Nevada Mining Association was focused on several hotly contested races in the Nevada State Legislature TYRE L. GRAY, ESQ. during the 2020 election cycle. It is these newly elected men and women who will be tasked with navigating the state through significant challenges when Nevada’s 81st Legislature gavels in this coming February. They will be responsible for managing one of the worst economic downturns ever, redrawing the electoral district lines, and considering the not one or two, but three joint resolutions aimed at increasing taxes on the mining industry by more than 380%. The greatest threat to Nevada’s mining industry “is local”. By now, you’ve likely heard of SJR1, AJR1, and AJR2, the three joint resolutions that were passed during this summer’s special sessions. These resolutions were the first of a three-step process needed to complete the constitutional amendment that would jeopardize the existence of

Nevada’s mining industry. The Nevada Mining Association and its members must work with the 81st Legislature to assist in moving the state forward while protecting mining communities and the 37,000 men and women who depend on mining to provide for their families. To achieve this, the Nevada Mining Association is building a Team of miners, vendors, and members of the community to come together to speak out and “Stand Up for Nevada Mining.” We are calling for the 500 NVMA member companies, 37,000 employees, and countless friends of the industry to answer the call to show that Nevada’s mining industry is not made up of faceless corporations, but a collection of diverse hardworking men and women spread all across Nevada. People who don’t care about national rhetoric, only about what is good for the people and the State of Nevada. Together, this team will

educate their fellow Nevadans about modern mining, engage lawmakers, and positively represent the mining industry. If we learned any lesson from this summer’s special sessions, it is how flawed some people’s perceptions of the mining industry are and how drastically the medium of communication has changed. Organizations with anti-mining agendas have used social media to define mining as it was in the 1880s. This has resulted in some legislators holding stereotyped negative beliefs about the industry. They don’t know Nevada’s mining industry adds $11.2 billion to Nevada’s economy. Or that it is a high-tech STEM industry that provides great middle-class jobs for thousands of Nevadans. They don’t know modern mining means having a strong safety and environmental culture that puts people and the community first. So, what do we need? We need people like you

to visit NevadaMining. org/StandUp and join our team. You do not need to be a member of the Nevada Mining Association or even employed in mining. We don’t care if you vote Democrat or Republican or something in between, because this is not about politics, it’s about policy. All that is required is that you are a proud Nevadan who believes that the 37,000 hardworking people who make up Nevada’s mining industry deserve to have a voice in the legislative process. Nevada miners have amazing and compelling stories to tell. With so much on the line in the coming months, now is the time to tell them. But we need people like you to be those storytellers. “Stand Up for Nevada Mining” and visit NevadaMining.org/StandUp and join us. Our vital industry is depending on you.

TYRE L. GRAY, ESQ., is President of the Nevada Mining Association

“If we learned any lesson from this summer’s special sessions, it is how flawed some people’s perceptions of the mining industry are and how drastically the medium of communication has changed.”

ELKO DAILY FREE PRESS, Elko, Nevada • 25

Robinson receives award for legacy reclamation ADELLA HARDING Mining Quarterly Correspondent‌

‌KGHM’s Robinson Mine in White Pine County continues to reclaim legacy sites at the historic copper operation, and state and federal agencies have recognized the mine for one of its reclamation projects. Robinson General Manager Samantha Hilton said that the “Robinson team is very, very committed to clean up those issues.” Fredrick Partey, manager of environmental resources for Robinson, said in accepting the award that he is proud of Robinson and the commitment to reclaiming legacy issues, and he said in a later phone interview that Robinson is working See Robinson, 28

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Robinson From 25

on the historic Keystone waste rock dump. “We’re reclaiming that right now,” he said. The Keystone dump is right next to the town of Ruth, and an environmental assessment approved by the U.S. Bureau of Land Management in 2018 included approval for over-dumping of waste rock that doesn’t generate acid to encapsulate the old material. Robinson has more reclamation projects “in the pipeline,” Partey said. He said Robinson also is looking at the U.S. Bureau of Land Management completing an environmental impact statement on the mine’s plans to expand in 2021. The expansion would extend mining to 2028 at Robinson, which employs

roughly 600 people. Robinson and Hudbay Minerals Inc.’s Mason Exploration Project in Lyon County received 2020 Nevada Excellence in Mine Reclamation Awards in a joint presentation by the Nevada Division of Minerals, BLM, Nevada Division of Environmental Protection, the U.S. Forest Service and the Nevada Department of Wildlife. “One of the key things about the awards is they require unanimous approval,” Michael Visher, administrator of the Nevada Division of Minerals and awards committee chairman, said in a virtual announcement from Carson City. The Robinson Mine’s legacy reclamation award was for its Lane City Waste Rock Facility that was started in the 1950s prior to Nevada reclamation regulations and was in use until 1978. The site was identified as

a potential source of contamination to groundwater and a nearby creek, according to details on the award winners. The award category was legacy waste rock remediation. The work involved regrading slopes, covering the slopes with limestone followed by seeding, construction of a stormwater water pond and rip-raps to drain sediment away from the creek. The limestone was added to cut the potential for acid generation. Visher said the project “looks really nice” and is an “excellent example of a mine operation’s commitment” to reclamation. He said any Robinson visitors can see the reclamation along U.S. Highway 50. The mine is near Ely. Brian Amme, deputy director of minerals for the BLM and on the nomination review team, said he drove by the Robinson site, and “the work done there

is awesome.” According to a history of Robinson on KGHM’s website, the beginnings of the mine can be traced back to 1867, and the first mining focused on gold and silver. However, in 1872, significant copper deposits were discovered, and underground copper mining in the vicinity of today’s Ruth Pit began in the early 1900s. Surface mining began at today’s Liberty Pit in 1906. The mine has been in operation since that time, except for closures for low copper prices. Current open-pit operations started in 2004, after a shutdown in 1999. The mine produces gold and molybendum, as well as copper. Normally, the agencies involved in awarding reclamation honors tour all the nominated sites, but this year COVID-19 restrictions prevented a tour, Visher said.

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ELKO DAILY FREE PRESS, Elko, Nevada • 29

He said the Mason Exploration Project has been under way more than 10 years, and there has been continued concurrent reclamation that kept the project well below its permitted 50-acre disturbance. The copper exploration project operator has kept track of the work with before and after reclamation photos and maps. “If you have a hard time finding a site, you know they did a good job,” Visher said. Matt Donaldson of NDEP said the level of work at the Mason project is more than required in one of the more “challenging areas of the state” for reclamation. “You’ve nailed it,” he told Matthew Cunningham, exploration manager of the Mason

Exploration Project. Cunningham said in the awards presentation that “if you reclaim quickly, it is much easier today.” He also said that while the project is in the vicinity of the old Anaconda Mine, there is no association with that site. The Mason site is west of Yerington. According to a flyer about the reclamation awards, inspectors from the Nevada Bureau of Mining Regulation and Reclamation and the BLM’s Carson City office conducted a site visit to the Mason project in response to a bond release request that resulted in a bond release for 10.2 acres, or 42% of the surface disturbance. Reclamation included earthwork on exploration roads and

drill pads and successful re-vegetation, and the award was for concurrent exploration reclamation. To ro n to - ba se d H u d bay acquired the Mason project in 2018, and its website describes Mason as one of the largest undeveloped copper resources in the Americas. This is the 29th year for the mine reclamation awards, and Visher encouraged companies to send nominations for next year by the July 2, 2021, deadline. Only three projects were nominated this year. The division’s email for submissions is ndom@minerals. nv.gov. Mailed nominations can be sent to: ATTN: Reclamation Awards, Nevada Division of

Minerals, 400 West King St. No. 106, Carson City, NV 89703. In addition to nominations for outstanding reclamation, nominations can be for innovation to protect air and water quality, cultural preservation, offsite mitigation projects and wildlife habitat enhancement. Visher said in a news release on Sept. 28 that in showcasing the work of the reclamation honorees, “we hope to draw attention to the continued efforts by Nevada’s Mining industry to lead the nation in successful reclamation, community partnerships and environmental protection practices.” The Nevada Excellence in Mine Reclamation Awards program started in 1991.

30 • MINING QUARTERLY • WINTER 2020

Gold demand drops in third quarter ADELLA HARDING Mining Quarterly Correspondent ‌

‌Global demand for gold fell 19% to 892 metric tons in the third quarter as consumers continued to feel the impacts of the COVID-19 pandemic, according to the World Gold Council’s Gold Demand Trends report. The World Gold Council said the third-quarter figure was the lowest since the third quarter of 2009, while gold demand for the first three quarters of this year totaled 2,972 metric tons, down 10% from the same time period last year. “The impact of COVID-19 is still being felt in the gold market across the world. The combination of continued social restrictions in many markets,

the economic impact of lockdowns and all-time high gold prices in many currencies proved too much for jewelry buyers,” said Louise Street of

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with the 2019 quarter, the report states. Street said the World Gold Council believes the downward trend in jewelry demand “will likely continue for the foreseeable future.” While demand was down overall, there was significant growth in investment demand in the third quarter, rising 21% over the third quarter of last year. Worldwide, investors bought 222.1 metric tons of gold bars and coins and 272.5 metric tons through gold-backed exchange traded funds (ETFs) in the third quarter. market intelligence at the World Street said that “looking to the investor landscape, we Gold Council. Demand for gold jewelry was saw further record inflows into down 29% to 333 metric tons in the third quarter, compared See Gold, 32

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gold-backed ETFs in Q3, taking the global total to a record high.” Global holdings though ETFs were at a record 3,880 metric tons at the end of the quarter. Year to date, gold ETFs increased their holdings by a record 1,003.3 metric tons. “It was equally encouraging to see gold’s role as a safe haven for retail investors through this quarter, as people continue to seek stability in volatile markets,” Street said in a statement with the release of the Gold Demand Trends. The London-based World Gold Council reported the U.S. dollar price of gold rose to

a record high of $2,067 in early August but pulled back to around $1,900 at the end of the third quarter. Gold Demand Trends

also found that demand for gold in the technology sector fell by 6% from the 2019 quarter to 76.7 metric tons, but the technology demand

began improving as some key markets emerged from lockdown. The total world supply of gold fell 3% in the third quarter to 1,223.6

metric tons, despite 6% growth in gold recycling because some mines were still impacted by pandemic restrictions, the report stated. The report also notes that central banks generated modest net sales of 12 metric tons of gold in the third quarter, marking the first quarter of net sales since the fourth quarter of 2010, and buying continues at a moderate pace. The buying is driven by the need for diversification and protection in the current negative rate environment. Central bank sales were generated primarily by two central banks, Turkey and Uzbekistan, while a handful of banks continued steady but small purchases, according to the report.

ELKO DAILY FREE PRESS, Elko, Nevada • 33

What is capital, where does it come from, and why can’t the mines get enough of it?

‌W

ith high gold prices, many of Nevada’s gold mines are generating impressive volumes of cash, since the cost of producing an ounce of gold is significantly less than the gold price. Under those conditions, it seems like mines would be replacing all their old equipment, ED upgrading plants, LOMAS and engaging in more major projects. However, even in the best of times, operations seem to never get enough “capital,” meaning funds for improvements and upgrades, and some engineers and supervisors may wonder why, since their operations are providing vast amounts of cash to the corporation. Each fall, most mine staffs

prepare their annual budgets, which are typically divided into “operating” and “capital” budgets. Operating budgets cover monthly costs like labor, consumables, energy and overhead while capital budgets provide funds for items like new equipment, mine development, stripping, and plant improvements. Mine superintendents, supervisors and engineers are conscientious about focusing on operating costs but they tend to pay less attention to capital costs. Capital costs get less attention because monthly cost reports typically don’t provide much information on capital spending. Construction project costs are not tied to monthly production while equipment deliveries and contract payments are sporadic, so it’s difficult to monitor equipment purchases and construction

costs, especially with multiple ongoing projects. Another reason that staff pays less attention to capital is that capital spending is spread over the project’s operating life on the company’s financials, so cost overruns do not immediately affect monthly performance reports. However, capital’s importance to overall costs is often underestimated in mining. Mining is capital-intensive because capitalized activities like overburden removal and mine development must precede ore production, and these preliminary activities are timely and expensive. Mining equipment is likewise expensive, mobile equipment gets periodically replaced, and plants get rebuilt and improved. All these activities create a high need See Capital, 34

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for capital. A million-ounce-per-year gold operation with surface, underground, and processing activities would have an annual capital budget averaging about $175 million. Assuming that figure is consistent and without major expansions, $175 million adds $175/oz to the gold cost. The major cost groupings are labor, consumables (fuel and explosives, etc.), and maintenance, and for an operation of that size, labor would run about $200 million. Capital costs are thus on the same order of magnitude of those three major cost components that demand management attention. However, even after adding typical costs for capital, the costs of producing gold are

typically far below what the company receives for selling the gold, and it’s not obvious to mine supervisors and engineers why operations managers do not have free rein to buy new equipment and improve existing processing circuits. The main reason why capital is constrained at the mine level is that capital is also needed for growth plans at the corporate level. Capital budgets are limited by how much capital the corporation can raise without going into too much debt. Mine closures and planned growth require acquiring additional properties or merging with another company. These mergers and acquisitions are substantial investments in a mining company’s growth plan, often dwarfing the capital budgets of its operating mines. Acquisitions can’t be accurately budgeted, because

corporate managers can’t predict future acquisitions or their cost, especially when gold prices are high and other companies may be bidding for the same properties. If acquisitions cost more than expected, the acquisitions may draw on capital that would otherwise be used for new equipment or plant improvements. The three methods for raising capital are “retained earnings,” “debt,” and “equity.” Retained earnings is the least expensive, since it is profit not paid out as dividends to shareholders, and does not require visiting the capital markets to issue stock (equity) or bonds (debt). Mining companies typically need more capital than they can raise through profits, even when gold prices are high, because the amount of capital needed to buy a mine is often more than the earnings from the company’s

mines. This means that corporations have to sell bonds or issue company stock to make up the difference. The limit to issuing bonds is the size of the interest payments and how much debt the company can handle; similar to a household maxing out its credit cards, and while households can save and go into debt for major purchases, just like a corporation, only corporations can raise capital by selling stock. However, this “equity financing” has its limits as well, since selling stock means sharing income and company ownership with its new stockholders. Thus corporations prefer debt over equity financing when they need additional outside capital. So of the three methods to raise capital, issuing stock is by far the most costly. See Capital, 36

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Capital From 34

Nevertheless, small companies not yet turning a profit may be unable to raise money by selling bonds so they have no alternative than to sell their stock to raise capital. Large, established corporations that can avoid selling stock typically base their capital budget on how much additional debt that the company can take on, or on how much debt they can pay off, as well as mines that they might

expect to acquire. Capital for each operation is based on the ‘wish list’ each operation submits to corporate, along with explanations why each project is needed, its expected cost, and its expected financial return. For mines, capital is a zero sum game; if one operation spends too much on capital projects, than some other operation receives less capital than it needs. If too many individual projects or equipment purchases exceed budget, the corporation may have to either take on more

debt or scale back acquisition plans, which could limit the corporation’s growth or its ability to maintain production. This will hold down the stock price, especially if gold prices are high, because the markets operate on the philosophy that a company that is not growing is dying, and a declining stock price may have a greater effect on a company’s value than the amount overspent on capital projects. Gold prices, production volumes, operating costs, and capital spending all affect the stock price. By extension

these all affect employee bonuses and 401-K plans as well as an operation’s life. Mine staffs have no control over the gold price, but staff performance can affect mine profits by managing capital projects as well as they manage operating costs. Controlling day-to-day operating costs is essential to meeting financial goals, but controlling capital spending at the mine and plant level is also essential, since corporations need a steady supply of capital, just as mines need a steady supply of ore.

ELKO DAILY FREE PRESS, Elko, Nevada • 37

‘Major Mines of Nevada 2019’ now available NATHAN HAVENNER nhavenner@elkodaily.com

Every year since 1988, the Nevada Bureau of Mines and Geology has published an official report on the Silver State’s mining operations. Known as “Major Mines of Nevada,” the 2019 edition of the book is now available. “Suppliers, vendors and mining operators use this information for increasing potential sales and service,” Lucia Patterson of the Division of Minerals said. “The publication represents an annual snapshot of the minerals industry, which documents commodity production, employment and value generated by the mineral industry.”

As reported in the publication, Nevada’s mining industry recorded approximately $8.1 billion in total value of all commodities in 2019, representing a 3.8 percent decrease from the $8.42 billion value recorded in 2018. Nearly 85 percent of all value was driven by gold and silver, which contributed over $7.1 billion, based on the actual gross proceeds reported to the Nevada Department of Taxation. According to Kitco Metals Inc., the average prices for gold and silver in 2019 were $1,392.60 and $16.21 per troy ounce. Nevada also led the nation in the 2019 production of gold, barite,

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lithium compounds and magnesium compounds. The state experienced a 12.9 percent decline in gold production in 2019, producing 4,868,086 troy ounces compared to 5,581,160 troy ounces in 2018. According to the U.S. Geological Survey, Nevada remains the nation’s top gold producer with about 87 percent (173 metric tons) of the U.S. total (200 metric tons) and would rank 5th in world gold production, behind China (420), Australia (330), Russia (310) and Canada (180). According to the Nevada Department of Employment, Training and Rehabilitation, the Nevada minerals industry, including support activities and oil and gas extraction, directly employed an average of 14,887 people in 2019. The average yearly pay for mineral industry employees during this time was $105,862, the third highest average private employment sector in the state, behind company management and utilities. Patterson said that under Nevada Revised Statute 513, the division is required to collect and publish the information on the current status of the minerMajor Mines of Nevada 2019 published by the Nevada Bureau of Mines and Geology is now als industry in the state. available to the public. Significant additions to the map of the state’s major mines are Isabella Pearl Mine in Mineral County and Gold Bar Mine stockpiles to fulfill current in Eureka County. The publication represents an annual snapshot orders, so mine amounts might be zero, but they are processing The most significant recent of the minerals industry, which documents or shipping products.” mine to close is the baricommodity production, employment and um-barite Big Ledge Mine Close and open isn’t really value generated by the mineral industry.” located in Elko County, which a switch type of action, espeLucia Patterson, ceased mining operations in cially for smaller operations. Division of Minerals January 2017, Patterson said. While the mine might be active, Patterson said a mine being actual production might be out open or closed is not always “Many small industrial have several years of production a few years, due to permitting so black and white, especially mines have intermittent pro- without actually being closed,” or drastic changes in commodrelating to smaller mining duction and may report no she said. “Other mines may ity price or simply getting the production one year, but then produce from previously mined mine fully up and going. There operations.

ELKO DAILY FREE PRESS, Elko, Nevada • 39

were three mines that opened in 2019. Another recent addition for the Division of Minerals is a new interactive web map that showcases all reported mine production since 1987. “It is an interactive legend, and when you click on items in the legend, they will turn on and off, and then you can click on a particular mine, say you have gold, on, you can click on a particular mine and a pop up will come up and it will show all the historic production and then there is also a graph at the bottom,” Patterson said. “I am especially excited to get that done,” she added. Major mines information can be viewed online at http:// minerals.nv.gov/Programs/ Mining/Mining_Forms/ For a hard copy of Major Mines of Nevada 2019, contact the Division of Minerals at http://minerals.nv.gov/

Statistics on metal production in Nevada are published annually by the Nevada Bureau of Mines and Geology.

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Mining Companies Report Q3 Results ADELLA HARDING Mining Quarterly Correspondent ‌

Barrick Gold Corp.‌

Barrick Gold Corp reported adjusted net earnings of $726 million, or 41 cents per share, for the third quarter, a big jump from the 2019 quarter, and President and Chief Executive Officer Mark Bristow expressed enthusiasm for exploration prospects in Nevada. The adjusted net earnings compared with $264 million in the third quarter of last year, while net earnings totaled $882 million, or 50 cents per share, down from $2.28 billion in the 2019 quarter, when Barrick took large accounting gains. The average realized gold price was $1,926 per ounce in the quarter, up from $1,476 in the 2019 quarter, boosting free cash flow to $1.31 billion, up from $502 in the third quarter of 2019. A d d i t i o n a l l y, B a r r i c k announced a 9-cent dividend for the third quarter, and Graham Shuttleworth, executive vice president and chief financial officer, said this dividend represents the third increase in the quarterly dividend in the past year. Looking at Nevada, where Barrick is 61.5% owner and operator of Nevada Gold Mines, the joint venture with

Newmont Corp., which owns 38.5%, Bristow said in the earnings webinar that Nevada “has no shortages of opportunities, and the richly endowed Carlin Trend is our primary hunting ground.” He said that on the Carlin Tend Leeville as multi-millionounce potential and Goldrush, which is now connected to the Four Mile deposit, is “well on its way to being a 20 million-ounce asset that will deep the Cortez complex producing for decades to come.” Construction of twin declines at Goldrush is ahead of schedule, and Barrick is completing a changeover from contractor development work to Cortez owner-operator workers for the underground work at Goldrush, Bristow said. Meanwhile, Goldrush is on track to intersect gold ore in the first quarter of 2021, and Barrick is still expecting a record of decision from the U.S. Bureau of Land Management for Goldrush in the fourth quarter of next year to develop a mine. Goldrush is part of NGM, but the Fourmile deposit is still 100% Barrick owned. Bristow said the Turquoise Ridge Complex that includes Twin Creeks has potential, including exploration between Turquoise Ridge and the Twin Creeks properties. Before the joint venture, Newmont operated Twin Creeks. “It’s amazing to me just

how under-explored” the land between the two mines has been, he said. At Carlin, NGM is drilling north of Leeville targeting the footwall of the Basin Bounding Fault that could be a feeder of mineralization at the Turf and Four Corners deposits. The Leeville area will be a top exploration focus in this fourth quarter, according to Barrick. Drilling is also building a geological framework between Goldstrike and Leeville, a possibility made possible by the joint venture. Companywide, gold production totaled slightly less than 1.16 million ounces, compared with a little more than 1.3 million ounces in the 2019 quarter. Total cash costs were $696 per ounce, compared with $710 last year, and all-in sustaining costs averaged $966 per ounce, compared with $986 per ounce in the third quarter of 2019. “Our year-to-date gold production of 3.6 million ounces keeps Barrick on track to achieve our guidance of between 4.6 and 5.0 million ounces for the year,” Bristow said. Production included 538,000 ounces for Barrick’s share of Nevada Gold Mines in the third quarter, up from 535,000 ounces, and Barrick reported total NGM production was 875,000 ounces in the quarter, up from 870,000 ounces in the 2019 quarter.

NGM’s production in the 2020 quarter was affected by autoclave maintenance at Carlin, reliability upgrades and lower recoveries due to ore blend, and at Turquoise Ridge it was affected by equipment availability and utilization, but Barrick stated strategies are in place to improve production at Turquoise Ridge. T h e t h i rd s h a f t a t t h e underground Turquoise Ridge operations is still on schedule and within budget to provide increased hoisting capacity, more ventilation and shorter haulage distances, according to Barrick, which reported the shaft is expected to be commissioned in late 2022. Bristow also said the Phoenix Mine near Battle Mountain is on track to achieve the upper end of production guidance, and Long Canyon near Wells “had another good quarter.” The temporary hold on expansion permitting continues as NGM does additional studies. Bristow said that two quarters into the COVID-19 pandemic, results show Barrick has effectively dealt with the impact of the virus on its business, its people and the communities where the company operates, spending $25 million in host countries. He pointed to the I-80 fund developed by Nevada Gold Mines for small businesses impacted by COVID-19 restrictions in communities where

ELKO DAILY FREE PRESS, Elko, Nevada • 41

NGM is involved, and he said the idea has been replicated in Canada, the Dominican Republic and Africa. Bristow also said NGM has been inviting legislators to visit gold operations in Nevada in the aftermath of resolutions in a special legislative session to increase mining taxes. He said the resolutions were a surprise move after NGM offered to pay net proceeds in advance to help the state in its pandemic-related budget crisis. He said he was optimistic there will be a solution that “works for everyone.” Another Barrick focus is on developing its workforce locally throughout its regions and providing educational opportunities, including in Nevada, where NGM recently announced a $2.2 million investment in digital education for schools in partnership with Discovery

Education and the Nevada Department of Education, according to Darian Rich, group human resources executive. Barrick also reported adopting a new global closure standard and opportunities for economic opportunities during closures, such as at the Golden Sunlight Mine in Montana. Catherine Raw, chief operating officer for North America, said the closure strategy has created new business opportunities for Barrick, “like the Golden Sunlight Mine tailings reprocessing project. This involves the conversion of waste material into sulfur feedstocks for Nevada Gold Mines’ roasters and autoclaves while using the leftover benign materials as pit backfill.” She said the project “will reduce environmental liabilities and thus cut closure costs at Golden Sunlight while creating

more value for Nevada Gold Net income from continuing Mines and other stakeholders.” operations was down, however, in the quarter at $611 million, or 76 cents per share, compared with $2.23 billion in the third quarter of last year. Newmont Corp.‌ The company stated that the Newmont Corp. posted high net income in the 2019 adjusted net income of $697 quarter was due in part from a million, or 86 cents per share, recognized gain from formation for the third quarter, compared of Nevada Gold Mines, the joint with $292 million, or 36 cents venture of Barrick Gold Corp. per share, in the 2019 quar- and Newmont, and the 2020 ter, and the company reported quarter was impacted by lower record free cash flows with help sales volumes because of the sale from higher gold prices. of Kalgoorlie in Australia and Red Free cash flow totaled $1.3 Lake in Canada and higher costs billion in the quarter, and due to the COVID-19 pandemic. Newmont President and Chief Newmont’s production in Executive Officer Tom Palmer the quarter totaled 1.54 million said in an earnings teleconfer- attributable ounces of gold at a ence that this was “the most cost applicable to sales of $756 in one quarter in Newmont’s per ounce and an all-in sustainhistory.” Newmont was incor- ing cost of $1,020 per ounce, compared with production of porated in 1921. Free cash flow in the 2019 quarter was $365 million. See Results, 42

42 • MINING QUARTERLY • WINTER 2020

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1.64 million ounces in 2019 at a cost applicable to sales of $733 and an all-in sustaining cost of $987 per ounce. The company also produced 273,000 ounces of attributed gold equivalent ounces from co-products, including copper. Colorado-based Newmont reported its share of gold production from the Nevada Gold Mines joint venture that is 38.5% owned by Newmont at 62.5% owned and operated by Barrick was 337,000 ounces in the third quarter, produced at a cost applicable to sales of $761 per ounce and all-in sustaining cost of $904 per ounce. Newmont’s share of Nevada Gold Mines production in the 2019 quarter was 344,000 ounces. The 2019 third quarter was the first one after NGM became official on July 1, 2019. Revenue companywide was up 17% over the 2019 quarter at $3.17 million, which Newmont attributed to higher average realized gold prices, partially offset by a lower volume of gold sales. The average realized gold price was $1,913 per ounce, up $437 per ounce from the $1,476 price in the 2019 quarter, and Palmer said Newmont continues to see $400 million in revenue from every $100 increase in the gold price above a base of $1,200 per ounce. Palmer said Newmont has eight top tier operations in the best mining jurisdictions in the world, and “I firmly believe we have the right size portfolio.” Newmont has $4.8 billion in consolidated cash, and Chief Financial Officer Nance Buese said in the teleconference the company would spend money paring down debt, share buybacks, dividends for shareholders and re-investing in the business. She also

“This is the second increase to our dividend in 2020 and reflects the strength of Newmont’s portfolio to pay a higher dividend while we continue to advance profitable projects and maintain financial strength and flexibility.” Tom Palmer, Newmont President and Chief Executive Officer

said Newmont wants to keep a higher balance than normal because of the pandemic. With the higher gold prices and higher cash flow, Newmont’s board declared a dividend to 40 cents per share, up 60% from the dividend of 25 cents per share in second quarter of this year. The company stated the dividend is the highest in the gold sector. “This is the second increase to our dividend in 2020 and reflects the strength of Newmont’s portfolio to pay a higher dividend while we continue to advance profitable projects and maintain financial strength and flexibility,” Palmer said in the dividends announcement. The company reported continued efforts to manage the COVID-19 pandemic, including testing, quarantining and contact tracing procedures c o m p a ny w i d e . New m o n t reported COVID-19 specific costs totaled $32 million, and the company spent $35 million in case and maintenance costs as several mines ramped back up after pandemic shutdowns. Chief Operating Officer Rob Atkinson told those on the earnings call that the first autonomous haul trucks at the Boddington Mine in Australia will arrived in December, and his rundown on mining operations include the comment that the Cerro Negro Mine in Argentina has the “potential to become the largest gold producer in South America.” Cerro Negro has been running at 65% capacity currently because of COVID-19 travel restrictions in Argentina, according to the earnings report.

Kinross Gold Corp.‌ Kinross Gold Corp. reported adjusted net earnings for the third quarter of $310.2 million, or 25 cents per share, nearly triple the adjusted net earnings for the 2019 quarter of $104 million, or 5 cents per share, with high gold prices helping the bottom line. Net earnings totaled $240.7 million, or 19 cents per share, compared with $60.9 million, or 5 cents per share, in the third quarter of last year, and adjusted cash flow rose to $549.6 million, up from $295.4 million in the 2019 quarter. The average realized gold price was $1,908 per ounce, compared with $1,467 in the 2019 quarter. “Kinross delivered another strong quarter, generating robust free cash flow and a significant increase in earnings,” said J. Paul Rollinson, the president and chief executive officer of Toronto-based Kinross. “Our mines continued to perform well as our global teams have effectively managed the operational challenges cause by the COVID-19 pandemic,” he said. The Kinross board declared a quarterly dividend of 3 cents per share. Kinross had announced in September plans to pay a regular quarterly dividend. Rollinson stated in the earnings report that because of the strong quarter, Kinross is on track to meet the company’s guidance and costs for the

ninth consecutive year. Kinross expects to produce 2.4 million gold equivalent ounces in 2020 at cost of sales of $720 per ounce and all-in sustaining costs of $970 per ounce. In an Oct. 20 update on the company’s production profile, Kinross stated that it expects to produce an average of roughly 2.5 million gold equivalent ounces per year for 2020 to 2029, driven by promising opportunities across its global portfolio, with a 20% increase from 2021 through 2023. “Kinross has a diverse global portfolio with top-tier assets that have long mine lives, complemented by a large mineral reserve and resource base. The reinvestments in our portfolio, continuous improvement initiatives and exploration programs have enabled us to add lower cost and lower risk projects that leverage existing infrastructure and enhance our long-term production profile,” Rollinson said in the update. The outlook for more production for 2021-2023 includes higher anticipated gold production from the north area of the Bald Mountain Mine in Nevada and the Phase S extension at the Round Mountain Mine, also in Nevada, as well as projects elsewhere. Andrea Freeborough, senior vice president and chief financial officer for Kinross, said in the earnings call that the third quarter was the strongest year to date, and “we expect this trend to continue into Q4.” She also said that at current gold prices, Kinross expects to approach zero net debt at the end of 2021. For the third quarter, Kinross produced 603,312 gold equivalent ounces at a cost of sales of $737 per ounce and all-in sustaining cost of $958 per ounce, with Nevada production totaling 125,378 ounces, up from 116,190 ounces in the third

ELKO DAILY FREE PRESS, Elko, Nevada • 43

quarter of last year. Round Mountain Mine in Nye County produced 76,039 ounces in the quarter, compared with 82,195 in the 2019 quarter, and Bald Mountain Mine in White Pine County produced 49,339 ounces, up from 33,995 ounces last year. Kinross reported that Round Mountain’s production was largely in line with the second quarter of this year, with cost of sales decreasing mainly due to lower contractor costs. Production cost of sales for equivalent gold ounces was $683, down from $705 last year. The lower production total compared with last year was primarily due to lower mill grades, partially offset by higher ounces recovered from the heap leach pads, Kinross stated. Bald Mountain’s production rose in the third quarter over the 2019 quarter as more ounces were recovered from the Vantage Complex heap leach pad due to higher grades. The production cost of sales was $856 per ounce, up from $813 last year. In Alaska, the Fort Knox Mine produced 72,705 ounces in the quarter, up from 54,027 ounces in the 2019 quarter, and Kinross reported work on infrastructure and processing facilities is substantially complete on the Fort Knox Gilmore Project, with first ore placed on the new pad in early October. Kinross also acquired a 70% interest in the open pit Peak Project in Alaska on Sept. 30 for $93.7 million, and the company expects to process Peak ore at the Fort Knox mill. Blending higher grades from Peak with Fort Knox ore is expected to extend mill operation at Fort Knox, reduce overall costs and increase cash flow, according to the company. Production is slated to begin at Peak in 2024. The company stated that the

project is expected to benefit state and local communities, especially the Upper Tanana Athabascan Village of Tetlin. Kinross also announced that the Tasiast 24k Project in West Africa and projects in Russia are advancing, as are projects in Chile. Paul Tomory, executive vice president and chief technical officer, said the company’s portfolio of operations “continues to manage very well through COVID-19. We acted early and took important measures that have allowed us to minimize the impact of it on our business, and we continue to adjust to the new normal.”

Hecla Mining‌

Hecla Mining Co. reported a good third quarter, with adjusted net income of $24.23 million, or 5 cents per share, up from $11.8 million loss, or a loss of 2 cents per share, in the 2019 quarter, with the help of higher silver and gold prices. Phillips S. Baker Jr., president and chief executive officer of the Coeur d’Alene, Idaho-based company, said that “because of our strong operating performance and higher prices” the company had the highest free cash flow in a decade. Free cash flow was $49.75 million, compared with $28.8 million in the third quarter of last year, and Hecla stated that net income attributable to shareholders was $13.5 million, or 3 cents per share, up from a loss of $19.66 million, or 4 cents per share, in the third quarter of last year. “With the Lucky Friday ramp-up ahead of schedule, the expected improvements at Casa Berardi and our modest planned capital expenditures, we are well positioned to further strengthen our balance sheet, increase exploration See Results, 44

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44 • MINING QUARTERLY • WINTER 2020

Results From 43

activities and pay our enhanced dividend,” Baker said. The realized silver price for the quarter was $25.32 per ounce, up from $18.18 per ounce in the 2019 quarter, and the realized gold price was $1,929 per ounce, up from $1,475 last year in the third quarter. Silver production for the quarter totaled 3.54 million ounces and gold production was at 41,174 ounces in the quarter, compared with 3.25 million ounces of silver and gold production of 77,311 ounces in the 2019 quarter. Nevada production will not be realized until 2021, Hecla reported. Ore mined during the third quarter from Fire Creek near Crescent Valley has been stockpiled for third-party processing by Nevada Gold Mines expected in the fourth quarter. Hecla also stated that mining of oxide ore is substantially completed, but mining of refractory ore is expected to continue through the remainder of this year. Hecla said the production from the processing of refractory ore is expected to total roughly 5,000 ounces, and exploration is under way at Midas in northern Elko County. The earnings report stated that exploration involves four core rigs that will continue operating through November testing high-priority targets at Midas. Baker said in the earnings teleconference that the company has increased exploration capital to $16 million this year, with “more than half of the fourth-quarter spending in Nevada.” The work will be mainly at Midas, and he said that “we’ve got some development to do to be able to really put ourselves in position for the exploration that we need to do

“Strong production growth and higher gold and silver prices combined to generate multi-year high financial results during the third quarter.” Mitchell Krebs, Coeur Mining Inc. president and chief executive officer

at Fire Creek.” The Greens Creek Mine in Alaska produced 2.63 million ounces of silver and 12,838 ounces of gold in the third quarter, compared with 2.5 million ounces of silver and 13,684 gold ounces in the 2019 quarter. The Lucky Friday Mine in Idaho produced 636,389 ounces of silver, compared with 541,636 silver ounces and 4,699 gold ounces last year. San Sebastian produced 266,691 ounces of silver and 1,931 ounces of gold in the third quarter, compared with 541,636 ounces of silver and 4,699 ounces of gold in the 2019 quarter. Mining at San Sebastian was completed in the third quarter and milling is expected to be completed in the fourth quarter, according to Hecla. Casa Berardi in Quebec produced 26,405 ounces of gold, compared with 36,547 ounces in the 2019 quarter, with the drop in production mainly due to lower mill throughput resulting from downtime for major maintenance that took longer than planned, Hecla stated. The lower production also was impacted by a delay in the availability of higher-grade stopes at the underground mine. Baker also reported that Hecla has a couple of programs under way related to the COVID-19 pandemic. To support local businesses, Hecla is giving employees vouchers they can spend with businesses to inject money into the communities where they live. Hecla also brought a COVID19 laboratory for testing to Juneau, Alaska, because currently testing done in Alaska has to go to the lower 48 states

for results. The testing in Juneau will shorten quarantine times, Baker said. “We are offering key government organizations like first responders the opportunity to get one-day turnaround, and this is going to be critical when the legislative session starts in January,” Baker said of the Alaska lab.

Coeur Mining‌

Coeur Mining Inc. announced adjusted net income for the third quarter of $38.2 million, or 16 cents per share, compared with a loss of $5.3 million, or a loss of 2 cents per share, in the third quarter, and increased revenue helped by higher gold and silver prices. Net income for the quarter for the Chicago-based company was $26.9 million, or 11 cents per share, compared with a loss of $14.3 million, or a loss of 6 cents per share, in the 2019 quarter. “Strong production growth and higher gold and silver prices combined to generate multi-year high financial results during the third quarter,” the company’s president and chief executive officer, Mitchell Krebs, said in the earnings report. Revenue totaled $229.7 million, up from $199.5 million in the 2019 quarter, with the average realized gold price at $1,754 per ounce and the silver price, $24.15 per ounce. The average realized price for Coeur for gold in the 2019 quarter was $1,413 per ounce and for silver, $17.17. Coeur has hedged gold to support expansion at the Rochester Mine in Nevada.

Free cash flow rose to $56.5 million from $11.3 million in the 2019 quarter, Coeur reported. The company produced 95,995 ounces of gold in the third quarter, compared with 99,782 ounces in the 2019 quarter, and 2.6 million ounces of silver, down from 3 million in the third quarter last year. Krebs said that the expansion project at the Rochester Mine began on schedule in early August, advancing early-stage earthworks and establishing the infrastructure on site to support construction activities. The silver and gold Rochester Mine near Lovelock will construct a new leach pad, a new crushing facility equipped with two grinding roll units, a Merrill-Crowe process plant and related infrastructure to extend mine life, according to the company. Coeur stated that together with SNC-Lavalin as the engineering, procurement and project contractor, the company has completed more than 75% of the detailed design work for the project, and major construction should begin in 2021 and be largely completed by late 2022. Rochester produced 700,400 ounces of silver in the third quarter, down from 982,000 ounces in the third quarter of last year, and 6,462 ounces of gold, down from 7,901 ounces in the 2019 quarter, at a cost applicable to sales of $19.10 per silver ounce, and an adjusted silver cost of $14.98 per ounce. The third-quarter 2019 cost applicable to sales was $27.70 and the adjusted cost was $14.24. The adjusted cost of applicable sales for gold at Rochester was $1,148 per ounce, compared with $1,230 in the 2019 quarter, according to the earnings report. Wharf in South Dakota produced 33,440 ounces of gold in the third quarter, up from 25,946 ounces last year in the

ELKO DAILY FREE PRESS, Elko, Nevada • 45

third quarter, and 41,000 silver ounces, up from 17,000 in the 2019 quarter, while the Palmarejo Mine in Mexico produced 29,296 gold ounces, down from 31,779 ounces, and 1.78 million ounces of silver, up from 1.72 million ounces in the 2019 quarter. Kensington in Alaska produced 26,797 ounces of gold in the quarter, down from 35,452 ounces in the same quarter of last year, according to Coeur. According to Coeur, exploration at Rochester shows significant potential for additional reserve and resource growth at the existing open pit and at East Rochester, and priorities for future drilling will include north of East Rochester and East Packard, as well as around the Lincoln Hill, Gold Ridge and Independence Hill zones west of the Rochester Mine. Coeur reported that in addition to exploration at mine sites, up to three rigs were active at

the Crown exploration property in southern Nevada during the second quarter, drilling 23,465 feet. Coeur has the Sterling and Crown properties northeast of the historic Sterling Mine near Beatty. “With strengthening operational performance, successful execution of our near-term organic growth opportunities and a sustained commitment to our exploration investments, we remain on track to fundamentally reposition the company and unlock meaningful long-term value for our stockholders,” Krebs said.

the third quarter, compared with $11.5 million, or 3 cents per share, in the third quarter of last year, and Rod McEwen, chairman and chief owner, said the company’s operations are “starting to turn around and improve.” Cash and liquid assets totaled $18.8 million at the end of the quarter and working capital was at $21.6 million. McEwen said in the earnings announcement that “the financial pressure on our balance sheet has been alleviated and our future growth is becoming much brighter.” “Investment capital is still in the early stages of moving into precious metals. There are a number of companies that are still being largely ignored but appear to have considerMcEwen Mining‌ able upside potential. I believe M c E w e n M i n i n g I n c . McEwen Mining is one of those reported a net loss of $9.8 mil- companies whose share price lion, or 2 cents per share, for has a lot of catching up to do,”

he said. Looking back on the Toronto-based company’s operations last year, McEwen said the year was a “nightmare and as shareholders we all suffered great frustration over the large loss of share value at a time when the price of gold was climbing ever higher. Our problems were many, some due to non-recurring events and others were operational.” McEwen said that “senior management at both head office and at our mines are focused on improving operating efficiencies and profit margins. Over the next several quarters we expect to deliver better operating results along with exploration news that we hope will start to close the price performance gap.” Gold production totaled 23,100 ounces and

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46 • MINING QUARTERLY • WINTER 2020

Results From 45

silver production was 575,000 ounces, compared with 35,000 ounces of gold and 947,000 ounces of silver in the third quarter of 2019, but production is rebounding after temporary suspensions due to COVID-19 in the second quarter. Gold equivalent production was 30,400 ounces in the quarter, compared with 45,900 ounces last year. At G o l d B a r i n E u re ka County, the third-quarter gold equivalent ounces produced totaled 5,800 ounces, down from 11,000 ounces in the 2019 quarter, according to the earnings report, which shows all-in sustaining costs of $1,769 per ounce and cash costs of $1,585 per ounce. Operations at Gold Bar continued to ramp up during

September and savings from operational improvement initiatives are taking effect, the company stated, citing as an example lower contractor and unit mining costs per ton of ore and waste moved dropped from $3.42 per ton in the second quarter to $2.45 per ton in the third quarter. McEwen M ining also reported that evaluation of the resource estimate at Gold Bar continued in the third quarter, and the company expects new resource and reserve estimates and an updated feasibility study in the current quarter. Peter Mah, chief operating officer, said the recently completed 28-hole drill program designed to update some of the Pick deposit mineral resources from the inferred category to indicated appear positive, according to an earnings call transcript. Permitting also is under way

for Gold Bar South. T h e co m pa ny re p o r te d spending $8.5 million on exploration in the third quarter. In addition to Gold Bar, McEwen Mining produced 5,800 gold equivalent ounces at Black Fox at Timmins in Canada, where the company reported development of the access to the Froome underground deposit had advanced 47% by the end of the quarter. The company expects to reach the deposit in the second quarter of next year, with production expected in the fourth quarter of 2021. A preliminary economic assessment is under way for the Fox Complex that includes Grey Fox, Black Fox, Stock and Lexam resources to all use existing or potentially expanding milling capacity. Production in the third quarter also came from the San Jose Mine in Argentina, where

McEwen has a 49% interest. The company’s share was 15,900 gold equivalent ounces in the third quarter. Government-imposed COVID-19 travel restrictions limited the mobilization of personnel, which limited operations to below normal. From the El Gallo Mine in Mexico, McEwen Mining received 1,900 gold equivalent ounces from residual leaching while an updated feasibility study for the Fenix Project is being finalized, according to the company.

Franco-Nevada‌

Fra n c o - N e v a d a C o r p . reported net income of $153.9 million, or 81 cents per share, in the third quarter, a new record compared with net income of $101.9 million in the 2019

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quarter, and the royalty and streaming company announced acquisition of 25 new royalties in the quarter. The new royalties bring the number of mining-related assets to 316 for Toronto-based Franco-Nevada. President and Chief Executive Officer Paul Brink said in the earnings report that “it was exciting for the future to see the level or organic growth across our portfolio, advanced and exploration assets.” Franco-Nevada’s revenue rose 19% to a new record of $279.8 million, with 91.9% coming from gold and silver equivalents and additional mining assets and 8.1% from energy. The company reported energy assets benefitted from a rebound in oil and gas prices. Adjusted net income was $152.3 million, or 80 cents per share, compared with $101.6 million, or 54 cents per share,

“Our partners at our royalty and stream assets have done a great job managing the COVID-19 pandemic and implementing the necessary safety protocols and procedures, while delivering excellent operating performance.” Sandip Rana, Chief Financial Officer Franco-Nevada Corp.

in the third quarter of last year. The company stated that there were 134,817 gold equivalent ounces sold in the quarter, up from 133,219 ounces in the 2019 quarter, and it expects attributable royalty and stream sales from mining assets to be near the high end of the previously provided guidance of 475,000 to 505,000 gold equivalent ounces for this year. Fra n co - Neva d a ’s b oa rd declared a quarterly dividend of 26 cents per share. Franco-Nevada’s royalty interests in Nevada include Nevada Gold Mines’ Goldstrike Mine and South Arturo near Goldstrike, and the earnings

report stated that there were very positive drill results from expansion drilling at the El Nino underground mine at South Arturo reported in September. In the teleconference, Brink said Goldstrike is the company’s most substantial net profits interest. “We haven’t seen as much as we’d like from the Goldstrike NPI this year, with the Goldstrike material being fed to the mill at a slower rate, but that does leave more material for the future,” he said. “We have a variable rate royalty on Premier Gold’s and Nevada Gold Mines’ South Arturo Mine that we estimate

will be 6% on the sulfide material. On the prior reserves, we expect South Arturo to contribute for the next four years, although they have now discovered material extensions to the El Nino underground that will likely extend mine life when they update reserves and resources at year-end,” Brink said. Franco-Nevada also has royalty interests in other Nevada operations, including Gold Quarry, Marigold, Bald Mountain and Robinson Mine. On COVID-19, Franco-Nevada stated it supports measures to address the COVID-19 pandemic and continues to monitor the impact of the pandemic on its portfolio of assets. There are no known cases within the company. “Our partners at our royalty and stream assets have done a See Results, 48

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great job managing the COVID19 pandemic and implementing the necessary safety protocols and procedures, while delivering excellent operating performance,” Chief Financial Officer Sandip Rana said in the earnings presentation.

Argonaut Gold

Argonaut Gold Inc. reported adjusted net income of $12.2 million, or 4 cents per share, in the third quarter, a quarter that saw the closure of the at-market merger with Alio Gold that included the Florida Canyon Mine in Nevada. The adjusted net income compares with $6.5 million, or 3 cents per share, in the 2019 quarter. Net income for the quarter was $13.4 million, or 5 cents per share, compared with $4.9 million in the 2019 quarter, and the Toronto-based company reported revenue of $94.4 million, up from $66.8 million in the 2019 quarter. “It was an extremely busy third quarter for the company,” said Argonaut President and Chief Executive Officer Pete Dougherty, who reported on financing accomplished and an agreement for the sale of the Ana Paula Project in Mexico to AP Mining for $30 million, a $10 million Canadian dollars contingent payment, 1% net smelter returns royalty and 9.9% equity in the acquiring company. He also said that “after acquiring the Florida Canyon Mine at the beginning of the third quarter, we have begun to implement modifications to the

crushing and staking circuit, which we expect to lower operating costs. We expect these modifications to be completed in the first half of 2021.” The company reported quarterly gold production of 48,951 ounces at a cash cost of $1,008 per ounce and all-in sustaining cost of $1,401 per gold ounce sold, an increase from 44,303 ounces in the 2019 quarter due to ounces from Florida Canyon offset by decreases in Mexico. Florida Canyon at Imlay produced 11,289 gold equivalent ounces in the quarter. The third quarter was the first for Argonaut at Florida Canyon after the acquisition of Alio, so the company stated it was not making comparisons to earlier quarters there. The company reported that quarterly production was impacted primarily by a delay in permitting to allow for solution to the newly constructed leach pad and mining of low-grade material that was previously backfilled into a pit during historical operations. Argonaut operates the El Castillo Complex in Mexico that produced 26,690 gold equivalent ounces and La Colorada in Mexico, which produced 11,289 gold equivalent ounces. The company stated that the lower production at the mines in Mexico was due to a drop in ore to leach pads during the second quarter, when mining, crushing and stacking activities were on shutdown because of the pandemic. There also were weather challenges. “In spite of the rainy season, from a production standpoint, we managed to get the required ore tonnes (metric tons) to the leach pads during the third quarter, which leads us to believe the fourth quarter will be our strongest quarter of 2020,” Dougherty said. The average realized gold price for Argonaut was $1,915

per ounce, up from $1,474 in the 2019 quarter. The company reported continued COVID-19 support for communities surrounding its operations in Mexico, including safety training, donation of hygiene supplies and the sanitization of homes and local businesses, as well as a donation to a Red Cross station and food baskets in communities surrounding operations.

Royal Gold

Royal Gold Inc. announced a profit of $106.9 million, or $1.63 per share, for the quarter ending Sept. 30, the first quarter for its fiscal year, on revenue of $146.9 million. Revenue for the royalty and streaming company was up 23.7%. “Consistent performance from across our operating portfolio combined with strong metal prices led to record revenue this quarter,” said Bill Heissenbuttel, the president and chief executive officer of Royal Gold. Denver-based Royal Gold reported an average told price of $1,909 per ounce in the quarter, up 29.7% over the 2019 quarter. Royal Gold has royalties on Nevada mines, with Cortez the main one. The company reported revenue of $5.68 million on 37,600 ounces of gold produced from its royalty holdings at Cortez, which is part of Nevada Gold Mines, compared with $4.42 million from 35,100 ounces in the 2019 quarter. Royal Gold has other production royalties in Nevada, including at Bald Mountain, Robinson, Twin Creeks, Goldstrike, Leeville, Marigold and Relief Canyon. Adjusted net income was $53.8 million, or 82 cents per share. Royal Gold stated that

the adjustments included a one-time 52-cent per share gain on the sale of its Peak Gold interest in Alaska, and adjustments for taxes and a change in fair value of equity securities. The company divested its interest in the Peak Gold Project in Alaska and its common share position in Contango Ore Inc., the company’s joint venture partner in Peak Gold Ltd. Kinross Gold Corp. acquired Peak Gold and plans to mine there and process the ore at its Fort Knox Mine. “We worked over the past five years to define the value of the resource, and the time came this year to transfer our interest to a company with permitting, development and operating capability. Kinross, with a long and successful history of operating responsibly in Alaska was the ideal candidate”, Heissenbuttel said in the earnings teleconference. “We received cash of $61 million for our project interest and equity in our JV partner, and we also received additional royalty interest on the Peak Gold land package, which is in line with our core business,” he said. Heissenbuttel said that with the sale, Royal Gold can refocus efforts on the core business, and Kinross Gold’s integration plan with Fort Knox may shorten the time before Royal Gold receives royalties from production. “While we don’t intend to take direct ownership in projects again, we believe our approach at Peak was successful, and we remain exposed to this high-quality project through royalty interests, consistent with our strategy,” he said, according to a transcript of the teleconference. Royal Gold has interests in 188 properties on five continents, including interests in 40 producing mines and 17 development stage projects.

ELKO DAILY FREE PRESS, Elko, Nevada • 49

Local writer tells story of

Carlin Trend TIM BURMEISTER

Mining Quarterly Correspondent

Today the Carlin Trend is a stretch of mountainous and hilly landscape across northern Nevada dotted with sprawling mines where gigantic equipment moves and processes many tons of earth every day to extract the ounces of microscopic gold dispersed throughout the hills. See Review, 50

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The massive-scale mining operations that people in northern Nevada are familiar with today date back 50 to 60 years, to the 1960s and 1970s. When someone working at one of today’s mines is driving a haul truck filled with hundred of tons of ore, do they occasionally think back to what was going on in these gold-filled hills 70 or 100 or even 150 years ago? Back then explorers sometimes found gold in these goldrich hills, and occasionally there was a gold rush, the area filled with eager miners. These were the kind of miners which many people today still think of when they think of gold mining – hardy folk with pickaxes, shovels and pans. A lot of these miners found actual little nuggets of gold.

Those nuggets are gone now – the early miners got the easy pickings. But mining back then wasn’t easy. A winter trip to Carlin to get some supplies could be quite an ordeal. It could even be fatal. A haul truck in the Carlin Trend today might rumble right over the spot where 100 years

much of his life. About ten years ago, out of curiosity, he began to do some research to dig deeper into the history of mining on the Carlin Trend. Late last year, the stories and information Heitt gathered over the years were published in a book, “Before the Gold – Early Mining History of the Carlin Trend, 1874 – 1961.”

“I’ve been pretty much up and down the Carlin Trend. I worked pretty much every underground at one point or another, mostly as the chief geologist. Then the last few years I was mostly doing project development.” Dean Heitt, geologist

ago there was a little cabin that a hopeful miner set out from to search for gold nuggets. Dean Heitt of Elko, a geologist who worked for Newmont for more than 30 years at mines mainly in the Carlin Trend, has been interested in history for

The book was published by the Southern Nevada Conservancy. You can read some of the stories from the book in this issue of the Mining Quarterly. To get the complete story, the book is available for purchase at the Northeastern Nevada Museum

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Getting into geology Heitt grew up in Tekoa, Washington, a small town in the wheat fields south of Spokane. His interest in history probably dates to his high school years. Once Heitt got to college at Eastern Washington University he began to take a lot of history courses. “I was about one class short of a minor in history, but I ran out of time and money and had to graduate,” Heitt said. “I didn’t know I wanted to be a geologist when I went to college,” Heitt said. “I discovered it as a freshman. I took an intro to geology class, loved it, declared my major, and here I am 30-plus years later. “What really cemented it, though, was one of my professors used to take us mineral

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collecting. I was big into minerology, so we’d visit old mines and other places and go mineral collecting. That’s what I wanted to do. So I went to work at a mine so I could collect minerals, and then I ended up here, which is terrible for mineral collecting for the most part.” Heitt started working for Newmont as a sampler on a drill rig in March 1988, and he worked for the company for 31 years, until the formation of the joint venture with Barrick last year. “It was a great career,” Heitt said. “I loved the people I worked with. I loved what I did. But it’s time for a new chapter.” “I’ve been pretty much up and down the Carlin Trend,” Heitt said. “I worked pretty much every underground at one point or another, mostly as the chief geologist. Then the last few years I was mostly doing project development.” “The rocks are the foundation

for everything. We generally are charged with finding the ore, and then saying how much is there, and drilling it out.” The geologists also talk with engineers about blasting, with metallurgists about crushing and grinding, and with environmental people about reclamation. “We as geologists tend to be engaged in the process really from start to finish,” Heitt said. “That’s one of things I liked about geology is it really went through the whole process.” “I always considered myself a mine geologist, not really an exploration geologist. I always dealt with finding the gold or developing it, but always near the mine or in the mine. That was really my specialty, rather than going out into some hill and finding something new.” See Review, 54

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that when people wrote profes- discovered the Placer gold in sional papers about mining in Lynn Creek, which is just north From 51 the Carlin Trend there was often of the Carlin mine. So I started a short standardized history looking for things. section saying that “Joe Lynn Pursuing history During this time, Heitt was While working as a geologist, discovered placer gold in 1907, working four ten-hour workdays Heitt began to combine his inter- and then the Big Six came in …” each week and would spend Friest in mining with his interest Heitt included the same histori- day doing research, which soon in history. cal information in his papers. became a regular habit. “I think what really cemented the mining history was just listening to some of the older geol- “I think what really cemented the mining history ogists that I worked with early in was just listening to some of the older geologists my career,” Heitt said. that I worked with early in my career.” He took notes and wrote Dean Heitt, geologist down some of the history he was learning, and then more people started talking to him about the “ I t b a s i c a l l y wa s j u s t Heitt said his initial intention repeated by everybody,” Heitt in doing the research was just to history of the mines. “People would say, do you said. “So one day on a whim, I find some additional informaknow about this, or do you know was like, I’m going to go see if tion. The idea of writing a book about that, and so I would learn I can find something. I think I just evolved as he began to find more, and it just sort of took on did a quick internet search, and more and more mining history then I went to the museum and about the area. a life of its own.” Mostly he was looking at the started looking at the newspa“I think I started probably 10 history of Newmont and its pers for a specific time frame. years ago, the early research,” he I knew April 1907 was when said. “At least nine or 10 years. mines in Nevada. At some point, Heitt noticed Joe Lynn was supposed to have My wife says it’s longer.”

Antique newspapers proved to be an invaluable source for Hewitt, who credits the aged and yellowed pages with providing a significant amount of the information he utilized in his book. “I could not have written that book without newspapers,” Heitt said. While modern records about mining can be found in company documents and government records, that is not the case for the early days of mining the Carlin Trend. The early records are either extremely difficult to track down, or they do not exist at all. “The government really didn’t write anything until the 1930s, so that’s 20 years almost after the discovery,” Heitt said. Heitt said he always tried to backup the period newspaper accounts with additional sources. When Heitt started doing his See Review, 56

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56 • MINING QUARTERLY • WINTER 2020

Review From 55

research 10 years ago, a lot of old newspapers were not online yet – some of them still aren’t – so Heitt would spend hours flipping through pages of newspapers or scrolling through microfilm, scanning for names or whatever information he was looking for. Sometimes he got distracted. “Because I just love history, I’d start off, especially when it came to the wars or lots of other interesting things, I’d be reading the newspaper, and I’d say, oh, I’ve got to go back to work,” he said. Heitt even utilized genealogy websites like ancestry.com to gather more information about some of the individuals and families involved in mining the early Carlin Trend. He was also able to interview some of the descendants of those early miners for the book. “That was interesting to talk to those people,” Heitt said. While digging through newspapers and interviewing people, Heitt began organizing his information and writing it as a book. He made efforts to write in an approachable style, to make the book enjoyable for a larger audience of individuals interested in the mining history of Northeastern, Nevada.

Getting published

“I got it to a certain point,” Heitt said, “and then I shopped it around to a couple publishers and they weren’t interested, and then I would let it sit for a while, and I wouldn’t do anything, and then I would start again.” A press at the University of Nevada, Reno asked Heitt if he would be interested in expanding the book to bring the history up to the current day, instead of ending at 1961. “That just wasn’t going to happen,” Heitt said. “I just didn’t

want to put another five years in.” Heitt eventually connected with Andy Hart, who was the executive director of the Southern Nevada Conservancy. Hart was interested in publishing a local history book. “He wanted to publish a

book and I had one available,” Heitt said. “So that’s how we got together” “It was fortuitous and I’ve enjoyed it,” Heitt added. Heitt retired from Newmont shortly before the book’s publication, and now has more time to

pursue his research. As he gathers more information, he may end up putting together another book someday. “It’s just a passion,” Heitt said. “I like doing the research. I enjoy learning about history. That’s why I would do it again.”

ELKO DAILY FREE PRESS, Elko, Nevada • 57

FEATURE The 1907 East Ely Depot served as a museum, documenting the history of the railroad once operated by Kennecott Copper Corp. in Ely between 1906 and 1983. NATHAN HAVENNER ‌

ELY: PRESERVING ITS PAST, READY FOR ITS FUTURE NATHAN HAVENNER nhavenner@elkodaily.com‌

‌While Nevada has long been known as the “Silver State,” silver is just one of many heavy metals and minerals that have been mined within Nevada’s borders since the first mining boom of the 1850s. For the White Pine County town of Ely, it was copper that became king. Founded in the 1870s as a stagecoach stop and situated along U.S. Route 50, Ely remains an active mining town

that makes a conscious effort to celebrate its history. Today, visitors to Ely can experience a variety of both local and mining history, ranging from a historic railroad to Ward Charcoal Ovens State Historic Park and the White Pine Public Museum. Those looking for overnight accommodations can follow in the footsteps of Hollywood icon Jimmy Stewart, daredevil Evel Knievel and President Lyndon Johnson by staying at the historic Hotel Nevada, built in 1929.

Nevada Northern Railway

Kyle Horvath, executive director of the White Pine County Tourism Board, said the Nevada Northern Railway and East Ely Depot Museum are a great first stop for anyone looking to spend some time in Ely. Originally built in 1906 to transport copper ore for the Kennecott Copper Corp., the railroad and all its components were donated to the town of Ely when the company closed its

doors in 1983 after the price of copper plummeted. “When they up and left they just locked the doors to the train depot and just left, so what we have is the most well preserved, intact steam train yard in the country,” Horvath says. Visitors to the railroad today can experience a fully operational turn of the century railroad, complete with Baldwin steam locomotives, diesel trains and other equipment See Ely, 58

58 • MINING QUARTERLY • WINTER 2020

Ely From 57

NATHAN HAVENNER PHOTOS‌

The storeroom at the East Ely Railroad Depot is preserved as it was when the Kennecott Copper Corp. shut down mining operations in Ely in 1983.

displayed in the railroads original buildings. “You can walk into the buildings,” Horvath said. “They have tons of the original rolling stock in the old engine house. The old snow blowers and the cranes and you can just walk through and check it out.” A variety of train excursions are available throughout the year, with the most popular being a 90-minute round trip that takes passengers through two tunnels and up to the Ruth Mining District. Other special event train rides are offered throughout the year include the Night Sky Star Train during the summer months and a Fire and Ice train ride typically held in January that features fireworks. “When they are repairing trains they are literally making

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Left: The wheels of a steam locomotive are pictured in the trainyard of the Nevada Northern Railway in Ely. Right: A caboose in the trainyard at the historic Nevada Northern Railway located in Ely.

parts with the original tools because you are not going to NAPA and going to buy a train gear,” Horvath says. During its heyday, the railroad was used to transport copper ore from the mine to the smelter located a few miles away in McGill. The trains could then

go through Cherry Creek and connect up with the Transcontinental Railroad and make its way to a major city like San Francisco or Salt Lake City. Before leaving the property, be sure to check out the restored 1907 East Ely Depot Museum, which documents the history of

the Kennecott Copper Corp. and the railroad in Ely. Museum Director Sean Pitts says walking inside the historic structure is like taking a step back in time to when the railroad closed down nearly 40 years ago. “My favorite thing about the museum is the distinct

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impression you get as you walk around that people expected to come back to work but never made it back to work,” says Pitts. The calendars on the walls have not been turned since 1983, and office equipment is left See Ely, 61

60 • MINING QUARTERLY • WINTER 2020

Ely From 59

exactly where it was when the mine shut down and all railroad activity ceased. In one desk, an employee’s spare change still sits. “The storeroom has every single form necessary to run this railroad stacked on the shelves. I am careful to dust it off periodically, but leave it exactly the way they left it,” he said. The East Ely Depot Museum is one of seven state museums in Nevada, and more than $3.2 million has been spent on its restoration.

White Pine Public Museum NATHAN HAVENNER PHOTOS‌

The Hotel Nevada, 501 E Aultman St, has welcomed Ely’s overnight guests since 1929. Notable guests throughout the years include Hollywood icon Jimmy Stewart, daredevil Evel Knievel and President Lyndon Johnson.

Horvath says that history buffs looking for the classic one-two-punch in Ely should

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make the quick drive over to the White Pine Public Museum after spending some time at the railroad. “I always tell people to get the train history at the train yard and then you hear the rest of the story at the museum,” he says. “That is going to be your mining, geology, Native American history, what life was like on the frontier.” “It is cool because a lot of the history that is in there is from families that live here,” Horvath added. One museum display showcases the history of The Lincoln Highway in the area, which is known as the first transcontinental highway in the United States. The historic highway forms of what is now U.S. Route 50. The Original cement markers

featuring a red, white and blue stripe and bronze relief of the highways namesake, President Abraham Lincoln, can be seen in downtown Ely.

Ward Charcoal Ovens State Historic Park Those looking for another dose of Ely’s mining history can make the 18-mile drive south to the 1,600-acre Ward Charcoal Ovens State Historic Park. While the park features the beautiful scenery of the Egan Mountain range and a variety of hiking, ATV trails and camping, the six stone beehive shaped ovens are the park’s star attraction. Built by Eastern European immigrants between 1873 and 1876, the ovens were used to

Constructed by Eastern European immigrants between 1873 and 1876, the Ward Charcoal Ovens were used to make the charcoal necessary to extract the silver from the ore mined nearby.

make the charcoal that was diameter and has 20 inch thick needed to heat the crushed ore stone walls. Their parabolic to extract the silver. Each oven stands 30 ft. high, is 27 ft. in See Ely, 62

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62 • MINING Downtown Ely,QUARTERLY Nevada. • WINTER 2020 NATHAN HAVENNER ‌PHOTOS

Ely From 61

shape reflected heat back into the center of the oven to reduce heat loss. “You had two mines in the area,” Park Supervisor Steven Gray said. “You had the Ward mine and you had the Taylor mine, this is back in the 1870s.” It took three-years to build the ovens, which were only active for three years. The local timber needed to make the charcoal was soon exhausted, and it was not economically feasible to transport trees in from farther away, Gray said. After they were abandoned by the mining companies, the

Ely today

Horvath says copper is still actively mined in the area, and the nearby Robinson mine is the single-biggest employer for Ely residents. After the last economic bust, Ely lost about 2,000 residents, which leaves its population at about 4,500 with a total of 10,000 residents throughout White Pine County. As Tourism and Recreation Board director, Horvath is working to show that Ely is a great place both to visit for a weekend, but also to put down roots. The Nevada Northern Railway trainyard in Ely, Nevada. He has a goal of bringing 2,000 new residents to town. “We have the infrastructure ovens were used as shelters for Monument in 1969. The area cowboys and outlaws before has been recognized as a Nevada for it, we have the jobs for it,” he being made a Nevada State State Park since 1994. says. “It is sitting here waiting.”

ELKO DAILY FREE PRESS, Elko, Nevada • 63

Bright gold prices spur

EXPLORATION

ADELLA HARDING

Mining Quarterly Correspondent‌

‌Exploration is on the upswing in Nevada with a boost from higher gold prices and a push for mining companies to increase gold resources in the state where mining has long been a part of the economy, but there are snags. When gold prices go up, “people will invest in the gold market,” said NV Gold Corp. President and Chief Executive Officer Peter Bell. “It’s a perfect storm with high gold prices and the need to build resources and reserves.” Gold prices have been hovering between the high $1,800s and the high $1,900s per ounce in the last few months, even reaching more than $2,000 per ounce in August. Bell said there are many issues driving the market, such as the “U.S. printing dollars and the debt, and the pandemic. So is there money coming into the gold market. Yes. We’ve got capital, drillers are busy and exploration companies are busy.” He said that at the same time, big producers “need to fill up their inventory sheets” to increase their gold resources and reserves. Major mining companies often look to the exploration companies to find that gold. Dave Shaddrick, president of the Nevada Mineral Exploration Coalition that is open to anyone in exploration and related businesses, said that “as long as the big companies keep pumping out

Major Drilling is operating a reverse circulation rig at a Gold Standard Ventures exploration site in Nevada in this early morning photograph taken on Nov. 13. Courtesy of Major Drilling.

those millions of ounces, they have to be replaced.” He said that in his opinion “exploration is increasing. Certainly, there are more deals being made and people seem to be busy.” The COVID-19 pandemic is having an impact on exploration, however, at least on the Canadian junior exploration companies facing travel restrictions and quarantine when they return home, Shaddrick said. Another exploration shortcoming is the shortage of

geologists, he said, “because of the cyclical nature of our businesses. Geologists are the first to be hired and the first to be fired.” He said young geologists must have a real desire to be in exploration, especially when they see that when exploration slows, they face layoffs.

Mining claims

One statistic that shows more interest in exploration is the number of mining claims. Nevada Division of Minerals Administrator Michael Visher

said the latest information from the U.S. Bureau of Land Management showed as of Oct. 6 that there were 199,862 active mining claims in Nevada, up 2% over the same time last year. To encourage exploration and mining, Nevada has a reclamation bond pool, and the minerals division handles the pool established with the BLM to provide notice-level bonds for smaller exploration projects and bonds for plan-level projects. Regulations updated at the end of 2019 reduced the annual premium on notice-level bonds from 3% to 2% and for plan-level bonds, the premium amount refunded upon exit increases from zero to up to 75%, Visher’s slides for the exploration summit show. Brian Mikelson of Envirotech Drilling LLC said the drilling company is “super busy right now. Things have really picked up. We’re running at 100% capacity. We’re optimistic we will have a good 2020-21.” He said there are a lot of factors leading to the uptick in exploration, including the higher gold prices and reserves and resources becoming depleted. Although exploration is up in a time of good gold prices, Mikelson pointed out that the permitting process for major drill programs and mining projects takes time, and sometimes just the planning for a drill project takes years “before everything See Exploration, 64

64 • MINING QUARTERLY • WINTER 2020

Exploration From 63

comes together.” Salt Lake City-based Boart Longyear said there is increased exploration in Nevada. Boart Longyear’s marketing coordinator, Nicole Maier, provided a statement: “Higher commodities prices, including gold, have contributed to an increase in exploration in Nevada. In addition, existing operating mines are now playing ‘catch-up’ with previously delayed programs due to COVID.” Much of the exploration projects are currently in areas of Nevada outside the well-known and well-mined Carlin, Cortez and Battle Mountain trends. Major Drilling is seeing exploration increase in Nevada compared to 2019 “due to junior companies raising more money,” said Nguygen Do, general manager for Major in North America. He attributed the success in raising capital to higher gold prices. Kevin Slemko, corporate business development manager for Major, said reverse circulation drilling has picked up in the U.S. because RC drilling “gets results quicker and is cheaper than core drilling, and a lot of that is that gold projects are picking up.”

Exploring Nevada

Shaddrick estimated there are about six companies exploring for gold in southern Nevada. Among them is Coeur Mining Inc., which has the Sterling and Crown exploration project northeast of the historic Sterling Mine near Beatty. The company reported that during the third quarter of this year there were up to three rigs on site, and Coeur stated that there would be more drilling for the remainder of the year. Premier Gold Mines Ltd.’s lead exploration geologist, Tyler

The Nevada Division of Minerals prepared this graphic showing numbers of mining claims issued by the U.S. Bureau of Land Management.

Hill, said “there is certainly more interest in exploration in Nevada. There has definitely been a shift in exploration strategies. They are looking at districts that had been overlooked.” Premier’s senior vice president for operations, Brent Kristof, said that with higher gold prices companies are looking at properties and possible mergers. Premier Gold is an exploration company and a mining company, owning 40% of the South Arturo Mine operated by Nevada Gold Mines, which owns the remaining 60%, and owning 100% of the Mercedes Mine in Mexico. The Canadian company’s exploration projects in Nevada include McCoy-Cove south of Battle Mountain that is advancing toward an underground mine, the earlier-stage Baby Doe west of Tonopah near the California border, and Rodeo Creek on the Carlin trend adjacent to South Arturo. Premier also is in the process of acquiring the Getchell

Project from Waterton Global. The project site includes the old Pinson Mine. NV Gold is busy in Nevada with two exploration projects, the Slumber in Humboldt County and Sandy in Lyon County. The company has 15 projects in the state but picks two or three each year to drill and “cross our fingers,” Bell said. “We don’t waste shareholder dollars.” The Vancouver-based company began drilling at its 100%owned Sandy Project in late October and planned to drill at Slumber in November. NV Gold believes Slumber turns into a Sleeper, the high-grade gold mine that operated in Humboldt County but closed in the early 1990s. NV Gold staked 400 acres of Sandy on the same day that Eclipse Gold “staked the entire valley,” and now “it is a nice place to be,” Bell said. NV Gold had only spent about $40,000 to get to the point of drilling while Eclipse raised $20

million, so “we’re drilling and they’re drilling.” Sandy is now surrounded by the Eclipse’s Hercules Gold Project. Major Drilling is continuing drilling for Nevada Gold Mines at Cortez, Goldstrike and Turquoise Ridge. The company also is drilling at the Bald Mountain Mine operated by Kinross Gold Corp. and working on a couple of projects near Tonopah, Do said. Major has roughly 350 employees in the United States, with U.S. offices in Salt Lake City and headquarters in New Brunswick, Canada. Mikelson said Envirotech is doing exploration drilling at Starvation Canyon for Jerritt Canyon Gold north of Elko, Ridgeline Minerals’s Swift Project south of Battle Mountain, Western Exploration outside Mountain City in Elko County and Eclipse’s Hercules Project south of Dayton and is starting a drill project for Coeur Mining at the Sterling Mine.

ELKO DAILY FREE PRESS, Elko, Nevada • 65

Drillers hard to find He said Envirotech was running six drill rigs in October with roughly 45 employees, and it is difficult to find and keep good workers because it is “demanding and physical work.” The company needs people comfortable around equipment, working in the dark and working on steep hillsides. “The pay is very good.” Boart Longyear stated that “it has always been difficult finding qualified people whether in times of increasing or decreasing demand for our services,” which include surface and underground core drilling, production drilling, reverse circulation, sonic, rotary and directional drilling, as well as water drilling and pump services. “It’s still challenging to get people to work for us,” Do said. Major also is still having problems due to COVID-19, according to Slemko, who said Nevada

Major Drilling’s presentation with its September earnings report includes this slide that illustrates what is happening in exploration.

“hasn’t been too bad” but in other places, especially Alaska, employers are asking employees to work longer turnarounds and isolate. Visher said at the Nevada Mineral Exploration Coalition’s virtual summit in October that

after the industry’s recovery from the pandemic, there will eventually be renewed demand for exploration success. Rick Rule, president and CEO of Sprott US Holdings Inc., also spoke at the exploration summit,

and he said Sprott invests in Nevada, where there “probably is no deeper pool of mining-skilled people” and there is good infrastructure. “It is still one of the

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Exploration From 65

few places that value mining.” He said the Carlin Trend model led to an exploration boom in Nevada that is now 40 years old, and his “current fondness for Nevada is my history with Nevada.” He said he first started looking at Nevada in 1977, and he was not “particularly successful” at first but that changed in the 1980s, when he was an initial shareholder with Franco-Nevada. Rule also told the summit listeners that Nevada has a massive amount of historical exploration data that can be analyzed and can take advantage of new exploration technologies in the search for gold. Exploration covers more than gold. Exploration and proposed development of Thacker Pass for Lithium Americas is under way in northern Humboldt County,

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where subsidiary Nevada Lithium is working with the BLM to permit a mine, and ioneer Ltd. has the Rhyolite Ridge lithium-boron project in Esmeralda County. Also, American Lithium Corp. is exploring at its TLC Project near Tonopah. Lithium exploration has brought people to the Tonopah area, Shaddrick said.

Another COVID-19 impact Shaddrick pointed to another negative impact of the pandemic on exploration companies. The mining and exploration events that allow those in the business to network, talk about their projects, recruit workers and raise capital in person were put on hold or held virtually because of COVID-19. For example, the American Exploration & Mining Association that normally holds a large

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gathering in Sparks or Spokane each year scheduled a virtual convention this year on Nov. 30 through Dec. 4, and the Prospectors & Developers Association of Canada’s convention that normal attracts people from around the world is going virtual this year March 7-10.

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Bald Mountain eyes expansion NATHAN HAVENNER nhavenner@elkodaily.com ‌

‌KG Mining has begun the process of expanding its Bald Mountain Mine, located in White Pine County. If approved by the Bureau of Land Management, the potential footprint of Bald Mountain would increase by about 3,900 acres, or roughly 27% of the mine’s current footprint. The potential BLM authorization mine life would also extend from 2023 until 2040. Kinross Environmental Services Manager Josh Roderick said that since the federal permitting process regarding mining has

changed, it is important for the company to “get ahead of the process” and be as transparent as possible due to the shorter duration. “If you are familiar with Bald Mountain there are two areas of operation, there is the North area and the South operations area,” Roderick said. “This particular project is for the North operations area, it expands primarily some of the open pits and rock disposal areas and processing facilities that we already have in existence.” Bald Mountain was purchased by Barrick Gold Corp. in 2006, before being acquired by Kinross in 2016. As part of the

2016 purchase agreement, Barrick retained 50% of the Central Zone for joint venture exploration. In 2018, Kinross acquired the remaining 50% of the Bald Mountain, remaining 50% of the joint-venture, giving it full ownership of the site. Mining in the area dates back to the 1800s, with gold, silver and other metals being produced. According to company data, the mine-life of Bald Mountain is currently expected to expire during the fourth quarter of 2023, although the mine’s current BLM authorization runs through 2029. Roderick said the mine currently employees about 600

people, and draws 74% of its employees from Elko County, 6% from Eureka County, 3% in other Nevada counties and 7% in other states. With a total land package coming in at a little more than 220 square miles, Bald Mountain is unique in the fact that its operations are so spread out, featuring 22 individual pits with two new pits proposed as part of the Juniper project. Operations are divided into a North operations area and South operations area, which Maintenance Manager Dale Thompson said can make for an interesting work experience. See Bald, 72

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Bald From 71

“One thing that makes Bald Mountain unique from the bigger mines — most of us have been at the bigger mines or come from there — at the bigger mines, you leave the office and about a mile of driving and you are at the bottom of the pit,” Thompson said. “At Bald Mountain, it is seven miles from (the offices) to Top Pit.” “Then you start to work and when you get that load of ore you have to haul it another seven miles to the leach pad where it needs to go,” he added. Thompson said a large portion of the Bald Mountain workforce was shifted down to the South operations area to work the Vantage mining area when it came online, and have begun See Bald, 73

NATHAN HAVENNER‌

Superintendent of Mine Operations Dale Thompson, left, and Kinross Environmental Services Manager Josh Roderick are pictured at Bald Mountain’s Top Pit.

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Bald From 72

the process of moving people and equipment back up to the North operations area. “We have had to actually walk shovels all the way down to that South area, which takes a couple days and now we have started walking them back up,” he said. The moving of equipment is necessary at Bald Mountain, where it wouldn’t be at a different mine because there are so many smaller pits spread out over the property. “Bald Mountain keeps you on your toes,” Thompson said. “You are constantly thinking of what’s next so that you can prepare for that and be successful because we don’t have all these big processing structures and mills and things, so we just have to be smarter and better.” Thompson said that while the logistics of the property can prove to be challenging at times, all things considered, Bald Mountain is a fairly straightforward and relatively simple mining operation. Bald Mountain is a run-ofmine heap leach operation, and does not currently have dewatering, pit lakes or tailings facilities like some of the other mine sites in the area require. Roderick said near mining areas, the water depth at Bald Mountain is typically 500 ft. and in some instances can be over 1,000 ft. “That is actually why we don’t have dewatering issues like some sites,” he said. While Bald Mountain does not focus on water-related issues like some other area mine sites, it does utilize an extensive water monitoring and management plan, but it chooses to focus on other resources like wildlife management and visual aspects of the mine. As part of the mine’s internal

project development strategy, it was decided to relocate the Royale Area waste-rock facility slightly to the east, where it could be tucked behind a ridgeline and hidden from view. “Before we develop these projects, we kind of turn the mining engineers loose and develop the most economic or efficient mining facilities that we can, but after that we do try to balance out the project in consideration of environmental resources,” Roderick said. “Again, we know there are impacts of mining but we try to limit those where possible.” After further consideration and evaluation, it was decided to relocate the waste-rock facility slightly to the east, where it could be tucked behind a ridgeline and hidden from view. While safety is the number-one priority at Bald Mountain, wildlife conservation and reclamation projects are an important factor at the site. “We know mining does have an impact on the environment, there is no getting around that, but we try to do our best to limit

that and contribute in other areas to offset that,” Roderick said. “A lot of our employees, they are outdoorsmen, they are hunters, they are fishermen and they want to see us take care of the environment and the property as well.” Thompson said that Bald Mountain is surrounded by eight different working ranches, some of which are run by families that have been on the land for generations, and it is important for the mine to be good neighbors. “Our success depends on our relationship with the people around us, which is huge,” he said. The Bald Mountain pits that are currently being mined include Top Pit, Winrock, and Vantage, while there are plans to add Gator to that list next year. Deana Zakar, Kinross corporate social responsibility specialist, said this project will be the first EIS that Bald Mountain has undergone under the new, shortened permitting timeline, but the company has done smaller permitting actions.

Roderick said the mine is an economic benefit to Elko County and its surrounding areas, generating an estimated $300 million in wages and benefits since 2016. “We have spent approximately $500 million with Nevada suppliers, which equates to about 58 percent of our total spending, so a lot of that is spent within the state,” he said. Of that 58 percent of spending on Nevada suppliers, 67% of that is done locally in White Pine, Elko and Eureka Counties. Bald Mountain has made more than 2.6 million in cash and in-kind donations with a range of public partners, to date and paid $38.5 million in public taxes, with $9.2 million benefiting local area. Total local benefits, including wages, vendor spending, taxes and donations totaled $172 million in 2018 and $188 million 2019. With 22 pits on site, and around 3-4 active pits at any one time, reclamation is an important aspect of what goes on at Bald Mountain, and it is something employees take pride it. “They reminisce about when it opened up or when we mined it or first constructed it, but they really enjoy putting it back essentially the way it was or as close to it as we can and we take a lot of pride in that,” Thompson said. Roderick said during 2019 Bald Mountain produced 180,000 ounces, which is within range of what it has typically produced for some time. The proposed Juniper Project expansion would enable Kinross to potentially keep employment steady at the open-pit mine for the next two decades. It is anticipated that the public notice for the proposed expansion will occur in mid2021, resulting in a BLM environmental impact study, public comment and then a record of decision during the latter-half of 2022.

74 • MINING QUARTERLY • WINTER 2020

Premier plans to buy Getchell Project

ADELLA HARDING

Mining Quarterly Correspondent‌

‌P remier Gold Mines Ltd.’s newest acquisition in Nevada is expected to be the Getchell Project that encompasses the closed Pinson gold mine and adjoining land. The company is in the process of acquiring the exploration site from Waterton Global. Getchell will be an exploration project for the company, which also posts gold production from Premier’s 40% ownership of the South Arturo Mine operated by Nevada Gold Mines on the Carlin Trend and from its 100%-owned Mercedes Mine in Mexico. Brent Kristof, senior vice president of operations, said Premier will be “stepping back and looking at the whole property” and evaluating both the surface and underground potential at the Getchell Project. Premier reported that the Getchell Project, which is near the Turquoise Ridge and Twin Creeks mines operated by Nevada Gold Mines in Humboldt County, has 1.275 million ounces of measured and indicated resources at 0.057 ounces per ton in the open pit area. The underground has 0.19 million ounces of measured and indicated resources at 0.305 opt. “We are pleased to acquire such a high-quality project located in one of the world’s most productive gold districts,” Premier’s president and chief executive officer, Ewan Downie, said in an announcement about the project.

Premier Gold Mines Ltd.’s third-quarter earnings presentation included this graphic on South Arturo on the Carlin Trend. Nevada Gold Mines operates South Arturo, and Premier is 40% owner.

“We are pleased to acquire such a high-quality project located in one of the world’s most productive gold districts.” Ewan Downie, Premier’s president and chief executive officer,

He said the project will become the largest gold resource for Premier’s Nevada division. Looking at South Arturo, Kristof said the company works with NGM, which is currently producing gold from El Nino underground at South Arturo and exploring around El Nino, as well as looking at potential open pit mining, again. Tim George, manager of engineering services for Premier, said

NGM and Premier are looking at two more phases of the open pit. Phase one would extend the old Dee pit and phase three would be in between. Phase two has already been mined. “There is are quite a bit of reserves and resources without additional exploration,” George said. Premier reported on Nov. 4 that South Arturo produced 7,095 ounces of gold and 601

ounces of silver from El Nino for the company’s share in the third quarter, with a co-product cash cost per ounce of $987 an ounce and an all-in sustaining cost per ounce of $1,148 per ounce. Total gold production for the third quarter for Premier exceeded 19,000 ounces, with 12,183 ounces coming from Mercedes in Mexico and 7,096 coming from South Arturo for Premier’s 40% share of South Arturo. Mercedes was shut down in the second quarter for the COVID-19 pandemic but was back in operation in the third quarter. The 12,183 ounces was down

ELKO DAILY FREE PRESS, Elko, Nevada • 75

from 14,481 ounces in the third quarter of last year, according to the company’s earnings report that also showed silver production of 49,975 ounces in the quarter, up from 37,462 ounces in the 2019 quarter. Premier stated that net income for the quarter was $1.6 million, up from a loss of $4.1 million in the third quarter of last year, and mine operating income of $13.9 million, compared with a loss of $400,000 last year. Revenue totaled $30.5 million in the quarter. The average realized gold price was $1,876 per ounce, up from $1,382 an ounce in the 2019 quarter. The average realized silver price was $26 per ounce in the 2020 quarter, up from $17 last year. “With a focus on achieving operating margins, the revised mine plan implemented at Mercedes has exceeded our expectations since the mine resumed

Premier Gold Mines td. has marked the site of the Baby Doe exploration site west of Tonopah on this Google Earth view of Nevada. Courtesy of Premier Gold ‌

operations late in the second quarter,” Downie stated in the earnings announcement. “In additional, Nevada Gold Mines continues to over-deliver

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at South Arturo with year-to- suggest further potential to date production now having expand resources and mine surpassed the annual produc- life,” he said. tion plan, and the strong drill results from El Nino at depth See Getchell, 76

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More exploration projects Premier has two exploration projects in Nevada that are in the early stages – Baby Doe west of Tonopah near the California border and Rodeo Creek on the Carlin Trend adjacent to South Arturo. The company’s lead exploration geologist, Tyler Hill, said in a telephone call with Kristof and George that he is not expecting exploration drilling at Baby Doe until maybe 2022. Rodeo Creek has historic drilling data but Premier is not ready to drill there, as well. “This property contains two past producing mercury mines, the F&L and B&B mines. There was limited shallow drilling in the 80s and 90s by various

companies, but no deeper tests for gold-bearing epithermal veins, which is what we are targeting,” Tyler said in a later email. Premier also continues to work on its McCoy-Cove exploration project south of Battle Mountain in hopes of developing an underground mine there, depending upon the economic viability. “Our focus has been on getting an updated groundwater model,” Kristof said. He said the groundwater modeling is needed because the proposed underground mine would need to be dewatered, and “water comes into the economics of the project. We’re looking at what it would take to dewater and whether it would be economical.” In addition, Premier is focusing at McCoy-Cove on determining ore processing possibilities for the gold refractory ore, such as whether to process on site or look to other companies

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for toll milling at their facilities, Kristof said. Premier acquired McCoyCove from Victoria Gold and Newmont Corp. in 2012-2014 and has been exploring on the property since that time. McCoy-Cove as both an underground and surface mining operation in earlier years. The biggest exploration years for Premier were 2016 and 2017. Echo Bay Mines Ltd. mined for gold and silver at McCoyCove between 1987 and 2003. The Cove pit is roughly 10 miles south of Nevada Gold Mines’ Phoenix copper and gold mine. The company completed a preliminary assessment of the project in 2018 and will be updating that PEA with the new groundwater and metallurgical data, as well as a mine plan and processing costs, Kristof said. “Then, we will go underground to expand resources and generate reserves,” he said.

Premier also explores in Canada and Mexico, and Kristof said there is always the issue of how much to spend in Nevada on exploration, and it “varies from year to year.” The company has been spending between $2 million and $5 million a year in the state. “Our company is pretty good about providing for exploration,” he said. “We’re certainly looking at where the next drill hole will take us,” George said. Higher gold prices may mean looking at other opportunities, too, Kristof said. Thunder Bay, Ontario-based Premier additionally is 50% owner of the Greenstone Gold Mines Partnership in Ontario that is developing the Hardrock Mine Project that Premier calls one of the most significant large-scale, permitted mine development projects in North America.

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GIBELLINI COULD START PRODUCTION IN LATE 2023 first quarter of 2021,” said Jess amounts of uranium co-loHarvey, public affairs special- cated with the vanadium.” ist for the BLM’s Battle MounRon Espell, vice president of environment and sustain‌T he U.S. Bureau of Land tain office. Management could have the He said the BLM received ability for Nevada Vanadium, draft environmental impact statement for Nevada Vana“Right now, our folks are working diligently dium Co.’s proposed Gibellini to address all the comment we received. Mine in Eureka County out in It looks like we are on track to have a early 2021, and Nevada Vanadraft EIS ready for the public comment dium hopes to begin producperiod in the first quarter of 2021.” ing the critical mineral in the fourth quarter of 2023. Jess Harvey, public affairs specialist BLM’s Battle Mountain office “Right now, our folks are working diligently to address all the comment we received. “222 unique comments” on said in mid-November that It looks like we are on track to Gibellini, ranging from “pos- the BLM received “some good have a draft EIS ready for the sible effects on hunting areas productive scoping comments. public comment period in the to questions about the small It’s super important we make ADELLA HARDING

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sure to address all the scoping comments.” Some of the comments were especially positive and “quite a few” were from John Hadder, director of Great Basin Resource Watch, an environmental organization. “We think of him as a sounding board,” he said of Hadder. If the BLM approves, vanadium production will follow roughly 18 months of construction, and plans call for 120 workers during construction and 113 employees when the mine is completed.

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“There are very small amounts of naturally occurring uranium in the vanadium mine that will be leached along with the vanadium.”

Gibellini From 77

Gibellini will be a 24-hour operation, Espell said in an earlier presentation at the BLM scoping sessions. The open pit mine also will produce a small amount of uranium in the form of yellowcake as a secondary product, and Espell said in the later comments that the company wants to be sure the uranium mining and production is done right. “ T h e re a re ve r y s m a l l amounts of naturally occurring uranium in the vanadium mine that will be leached along with the vanadium,” or roughly 25 tons per year, he said in the BLM sessions. The uranium yellowcake will be packaged in lined steel drums “to ensure low risk,” and the Nevada Department of Health and Human Services will oversee permitting with the Nuclear Regulatory Commission, the U.S. Environmental Protection Agency, the BLM and the Nevada Division of Environmental Protection for the safety of employees, Espell said.

John Hadder, director of Great Basin Resource Watch

cost because production will come from a simple heap leach process using sulfuric acid, and there will be no dewatering or pit lake after mining ends because the bottom of the mine is 110 feet above the water table, Espell said. This will be the first vanadium mine in the United States, according to the BLM.

Vanadium production

The company expects to have nine to 10 truckloads of sulfuric acid coming from Carlin per day, and the solid vanadium pentoxide product will require one truck a day to a railhead in Carlin.

Yellowcake will be shipped in one truck every two months to a licensed uranium facility. There also will be one or two trucks a week carrying diesel to the site. The vanadium project is low

The mine’s initial life for the first of five known vanadium targets is seven years, but the operations could be much longer if all the targets go into production. Reclamation bonding will be for 30 years. The mine is designed to produce roughly 5,000 tons of vanadium a year. See Gibellini, 83

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Fighting Covid-19 Nevada Gold Mines has always been committed to the health, safety, and well-being of our employees, partners, and neighbors. As we near the end of 2020, we stand with our communities because we are all in this together. Learn more at www.nevadagoldmines.com

ELKO DAILY FREE PRESS, Elko, Nevada • 83

Gibellini From 81

The Gibellini site is on 6,456 acres of public land in the southeast corner of Eureka County five miles south of the Fish Creek Ranch and 27 miles south of the town of Eureka, according to the BLM. Nevada Vanadium will be acquiring water for the project from the ranch. Nevada Vanadium added to the project site, however, with the Sept. 18 closure of its acquisition of the Bisoni Project adjacent to Gibellini from CellCube Energy Storage Systems Inc. The Bisoni site is roughly 4,077 acres.

said. Vanadium is one of the 35 critical minerals the U.S. Geological Survey has identified. According to Nevada Vanadium, the mineral is used for aircraft, missiles and personnel transport, in the production of synthetic rubber, polyester, fiberglass, as a component of catalytic converters, and in batteries, including lithium vanadium batteries for electric vehicles. “The most exciting new uses of vanadium are in the aerospace and defense industries. Vanadium-titanium alloys have the best strength-toweight ratio of any engineered material on Earth,” Espell said in a presentation during a BLM virtual session on Gibellini.

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“The most exciting new uses of vanadium are in the aerospace and defense industries. Vanadiumtitanium alloys have the best strength-to-weight ratio of any engineered material on Earth.” Ron Espell, vice president of environment and sustainability for Nevada Vanadium

The deal called for Nevada Vanadium’s parent company, Silver Elephant, to issue 4 million Silver Elephant shares to CellCube and pay that company $200,000 cash, along with a one-time $500,000 payment of shares should the price of vanadium pentoxide exceed $12 per pound for 30 consecutive business days. Espell said the company has designed the vanadium project to “avoid environmental impacts where possible,” and this effort included the planned placement of water lines, power lines and a road to steer away from sage grouse habitat.

He said less than 1% of vanadium and roughly the same amount of chromium “makes steel shock and vibration resistant. A thin layer of vanadium is used to bond titanium to steel, making it idea for aerospace applications,” he said. Espell also said that mixing titanium with vanadium and iron strengthens and adds durability to turbines that spin up to 70,000 rpm. “Energy storage is probably the area where vanadium has the greatest potential to add critical value,” he said. Vanadium-flow batteries are becoming a viable option for large-scale energy storage “because they are able to Vanadium uses provide hundreds of megawatt Va n a d i u m i s a “ ra t h e r hours at grid scale,” Espell said, obscure metal” that is con- meaning they can be charged sidered strategic that doubles the strength of steel, Espell See Gibellini, 84

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and discharged thousands of times without losing capacity. Production is estimated at 5,000 tons of vanadium a year and 25 tons of uranium. “Vanadium is one of 35 critical minerals identified by the U.S. Geological Survey. If approved, this project will not only provide hundreds of jobs, but it will contribute to the nation’s domestic source of critical minerals,” said Doug Furtado, Battle Mountain BLM district manager.

EIS process

Although there has been comment that the BLM is fast-tracking the project, Harvey said he “would like to point out that that is a misrepresentation of the 12-month timeline

we have for this project.” He said that in 2017, Secretarial Order 3355 was issued, and it stated, among other things, that the National Environmental Protection Act process for an EIS was to be completed within 365 days of publishing the notice of intent

“Vanadium is one of 35 critical minerals identified by the U.S. Geological Survey. If approved, this project will not only provide hundreds of jobs, but it will contribute to the nation’s domestic source of critical minerals.” Doug Furtado, Battle Mountain BLM district manager

to start the study. “Our aim is to do just that,” he said. Nevada Vanadium acquired the vanadium project in 2017. P r i o r o p e ra to r A m e r i ca n Vanadium started the EIS process for Gibellini with BLM in

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Development Corp. Preliminary issues the BLM identified for the Gibellini proposal included closure of the heap leach after mining ends, special status species, including the golden eagle and sage grouse, wildlife habitat, visual resources,

surface and groundwater resources, cultural resources eligible under the National Register of Historic Places and uranium management. Jon Alsad, senior project manager for ICF, the company helping prepare the EIS, said in the scoping meetings that closure of the heap leach facilities will be done in stages, as processing moves from one stage to the next. He estimated active closure of a pad would take four years. Re ga rd i n g s p e c i a l s ta tus species, he said there is one greater sage-grouse lek (breeding ground) 3.8 miles to the west of Gibellini site. “There are no active leks that occur in the project area,” he said in the virtual meeting. Species to be considered in the study include the sage grouse, bats, burrowing owls, pygmy rabbits and raptors, including the golden eagle.

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ELKO DAILY FREE PRESS, Elko, Nevada • 85

FATALITY REPORTED AT KINROSS ROUND MOUNTAIN ‌K inross Round Mountain reported an employee fatality at its Nye County mine on Nov. 8. According to a company statement, K inross Round Mountain received notification of an incident involving one employee at approximately 6:30 a.m. The company then initiated emergency rescue protocols, and the Round Mountain Mine Rescue Team was dispatched. The employee’s family has been notified, and Round Mountain Gold Corp. will continue to work closely with them to provide support. RMGC is working closely

“I would like to offer my deepest condolences to the employee’s family during this unfortunate circumstance.” Neil Jensen, vice president and general manager ‌ Kinross Round Mountain

with the Mine Safety and Health Administration and Nye County Sheriff’s Office, and a full investigation is underway. MSHA classified the fatality as machinery-related. “I would like to offer my

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community and this is a difficult time for us all. I would also like to extend my sincerest thanks to the Round Mountain Mine Rescue Team, who responded swiftly and prudently,” Jensen added. At this time, only essential functions remain operational, and RMGC continues to work closely with employees to provide support during this challenging time. The fatality at Round Mountain is the first at a Nevada mine in the past two years. There were two in 2018, at Pete Bajo on Nov. 11 and at Lee Smith in October.

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Nevada Exploration acquires more of Awakening Mining District ‌N evada Exploration Inc. has increased its land holdings at its Awakening Gold Project by staking additional unpatented mining claims covering approximately 25 square kilometers, according to an October company statement. Awakening is a low-sulfidation epithermal gold project located directly north of Paramount Gold Nevada Corp.’s 4.8 million-ounce Sleeper Gold Mine, where NGE has been active since 2008 completing a progressive series of district-scale geochemistry, geophysics, and orientation-drilling programs to build a comprehensive exploration dataset to target Sleeper-style mineralization. “As our stakeholders know, we founded NGE to leverage the latest technology to identify new high-quality gold projects,” NGE President James Buskard said in the statement. “We’ve completed one of the largest geochemistry-based generative exploration programs in recent history — certainly the largest in Nevada in several decades, and Awakening was one of the original high-priority projects identified by our industry-leading program.” Buskard said that as the company has been increasing its Awakening land position, NGE is committed to completing the next phase of drilling at the East Golden Gorge target at their flagship South Grass Valley project. “We are working through the remaining permitting steps, and in the meantime are continuing to review all of our results to

A map of Nevada Exploration Inc. land holdings at its Awakening Gold Project in Humboldt County. See Awakening, 88

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date, which now include more than 400,000 unique geochemical assays from more than 9,000 drilling, mapping, groundwater, and soil samples across an area comparable in size to the northern-Carlin trend, in order to fine-tune our geologic model and ensure that our planned drill holes sample and test as large a volume of the East Golden Gorge target as possible,” he said. “With a portfolio of four large projects, we are positioning our shareholders to participate in multiple opportunities for discovery, and we look forward to providing additional project-specific updates over the coming months as our work continues,” Buskard added. The Awakening Project is located in Humboldt County, approximately 50 kilometers

north-northwest of Winnemucca, and directly north of the Sleeper Gold Mine, which produced 1.66 million ounces from 1986 to 1996 and has a remaining measured and indicated mineral resource of 3.14 million ounces (297 Mt at 0.33 g/t Au). The project is largely covered by syn- to post-mineral volcanic units and post-mineral alluvium, and as a result has seen little historic exploration activity. Projections of favorable lithology, structure, and alteration at regional, district, and project scales suggest that gold mineralization may be located within economic depths beneath the cover at Awakening. To advance and de-risk the project, NGE, together with its former joint-venture partner Northgate Minerals Corp., has completed a series of systematic district-scale geophysics, geochemistry, and early-stage drilling programs to acquire the exploration data needed to

establish the larger-scale geologic features across the project. This work included: • 85 km2 detailed gravity geophysics survey; • 173 km2 airborne magnetic survey; • 42 line-km induced polarization and resistivity (IP) survey; • 1,830 sample soil geochemistry program; • 62 borehole hydrogeochemistry (groundwater) sampling program; and • 4,668 meters of core, reverse-circulation, and mud-rotary drilling from 24 holes (average depth 195 meters).NGE’s management believes that the results of these large programs have confirmed the potential to discover Sleeper-style mineralization along the structural zone extending north from Sleeper. Furthermore, combined with the in-depth research on the mineral controls at Sleeper, which is now being used to target additional

mineralization at the mine, the company believes its integrated exploration dataset at Awakening provides the foundation for building a robust geologic model to define and prioritize specific exploration targets. NGE also announced that it has granted incentive stock options to officers and directors entitling them to purchase an aggregate of up to 1,400,000 common shares of the company. The stock options are exercisable on or before October 20th, 2030 at a price of $0.185 per share, subject to TSX Venture Exchange acceptance. Nevada Exploration Inc. has spent 15 years developing and integrating new hydrogeochemistry and low-cost drilling technology to build an industry-leading, geochemistry-focused, under-cover toolkit specifically to explore for new gold deposits in the more than half of Nevada where the bedrock is hidden beneath post-mineral cover.

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Bozeman man eyes Little Rockies for possible underground mine BRETT FRENCH french@billingsgazette.com‌

‌BILLINGS, Mont. — Less than a month after the Bureau of Land Management proposed a 20-year withdrawal of mining on its federal lands in the Little Rocky Mountains, a Bozeman-based company is seeking permission to remove rock on adjacent private lands for testing. Blue Arc LLC has asked the Montana Department of Environmental Quality for consent to remove 1,000 tons of rock that would be shipped to Nevada for testing “to determine the quality for potential future mining

activities,” according to a DEQ press release. “Montana has a lot of potential,” said Luke Ployhar, owner of Blue Arc. “We want to see if it’s theoretically possible.” Because the proposed project is on private land it would not be subject to BLM’s mineral withdrawal, DEQ stated.

Reclaimed‌

Although the project area was previously mined, the land was reclaimed by the state of Montana and BLM. Consequently, Blue Arc “would have to ensure the proposed project does not jeopardize or hinder the existing

water treatment, reclamation and monitoring activities of DEQ and BLM,” according to the draft environmental assessment. That’s part of what has taken so long for Blue Arc to move ahead — going back and forth with DEQ over avoiding a liner that was installed as part of the reclamation, Ployhar said. Public comment on the document is being taken through Nov. 30. To comment or view the draft EA, log on to http:// deq.mt.gov/public/publiccomment. If the project meets DEQ’s requirements, the agency must issue the exploration license. Therefore, the draft EA is not a

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decision document. Instead, it is a disclosure of the project’s potential impacts.

Past‌

Blue Arc would be mining on the same ground that Pegasus Gold Corp. mined from 1979 to 1996. Pegasus used cyanide heap leaching to extract small amounts of gold from large amounts of rock. After the company declared bankruptcy in 1998, the state was left with a $100 million cleanup bill and water pollution requiring three dams to capture runoff. The water is cleaned in onsite See Underground, 90

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90 • MINING QUARTERLY • WINTER 2020

Underground From 89

treatment plants. Heavy metals, nitrates, selenium and cyanide leach from the old mine site. Water pollution in the area, which includes the small town of Zortman and the nearby Fort Belknap Reservation, may require treatment for 20 years or more. Despite this the lure of gold is strong, especially when prices are high. As of this week gold was more than $1,800 an ounce, trending downward after peaking at more than $2,000 in August. Demand for gold jewelry has dropped during the COVID-19 pandemic, while investment in bars and coins has increased due to economic uncertainty. MONTANA DEQ‌

This Montana Department of Environmental Quality photo shows where the rock would be taken for sampling as well as the haul road.

New‌

Blue Arc is listed as the owner

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for almost 60 mining patents in the Little Rockies. A patent means the miner owns the land and minerals. During a four-month period the company is proposing to remove rock from “a previously mined and exposed rock surface … a mineralized vein on an exposed highwall from the Ruby Pit within the Zortman Mine Complex.” In the process, less than a quarter of an acre would be disturbed for ore, but a mile of haul road would be built. Should the ore assay be deemed worthy of full-scale mining, Blue Arc would be required to seek DEQ approval and an additional environmental review would be conducted. “DEQ would make a permitting decision based on the criteria set forth in the Metals Mine Reclamation Act,” according to DEQ. The project, although close See Underground, 94

LARRY MAYER, BILLINGS GAZETTE‌

A Bozeman man is planning to assess the quality of the ore body at the old Zortman gold mine in Phillips County, shown here in 1990. If ore recovery is feasible, he plans underground mining on the patented claim.

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BL WHIPPLE WEALTH MANAGEMENT...........28

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94 • MINING QUARTERLY • WINTER 2020

Underground From 91

to 17 groundwater monitoring wells and Ruby Creek, “would not be expected to impact surface or groundwater resources in the vicinity,” DEQ said. “Stormwater controls would minimize impacts to surface water resources and the short duration and small footprint of the project would assist in the minimal impacts to water resources.”

Who?‌

Ployhar grew up in a mining family in Lewistown and spent his summers working in the business at Virginia City and the Yogo mine. A 1995 Montana State University graduate, he owns Afterglow Studios, a motion design company based in Minneapolis. In 2001 he bought the mining

patents in the Little Rockies with the hope of someday working the claims. Four years ago he moved back to Bozeman and began putting his plans in motion. “I’ve always wanted to keep pursuing mining,” he said. He sees great potential in using modern technology to mine underground, as opposed to the open pit mine Pegasus used. “A lot of bad things happened 20 years ago,” he said, but technology has solved a lot of the problems Pegasus created. “That place has gotten a black eye because of Pegasus.” While some environmental groups may oppose mining in general, he said it doesn’t make sense for the United States to rely on countries like China, which has no environmental regulations, to produce precious metals. What’s more, having a mine in Montana provides local jobs and tax revenue, he said.

Miner‌

It was Owen Voigt who filed the paperwork with Montana DEQ to test the ore body at the old mine site in the Little Rocky Mountains. Voigt is vice president of RCL Mining Inc. and CEO of Legacy Mining, both based in Helena. Legacy reprocesses and reclaims historic mine waste in the West. In a 2018 Montana Standard story, Voigt talked about recovering as little as .18 ounces of gold or less from a ton of ore. About 30 tons make up one semi-trailer truck load. Voigt and his partner were having the waste rock processed at Golden Sunlight Mine near Whitehall, the only place where cyanide processing was still allowed in the state. Since then, that processing facility has been shut down, which explains why the Zortman rock would be trucked all the way to Nevada for processing. In 1998, a voter initiative banned cyanide processing in

Montana, in part to prevent a new mine along the upper Blackfoot River. Voigt and his partner voiced their displeasure Voigt with the law because it makes it more expensive to truck ore long distances, specifically referring to rock being hauled from central Montana as an example. Ployhar said they may have a way to work around the lack of a mill. A miner working an old patent in the Judith Mountains near Lewistown may require a mill. The other option is building a mobile mill. But it’s all predicated on what the assay reveals about the ore grade in the Little Rockies. “Those mountains traditionally have a lot of silver that can help bridge that gap” to make it economically feasible to mine, Ployhar said.

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