A Nevada gold project, once fast-tracked to
production, is the focus of additional exploration.
Terraco
Gold Corp. (TEN:TSX.V; TCEGF:OTCPK), a gold royalty company with a
portfolio centered on the Spring Valley Gold Project in Nevada, has reported
that Waterton Global Resource Management, the project's owner/operator, is
drilling on the property. The company first reported the drilling on October 31, and followed up on
November 13 with more details.
The royalty company noted that Waterton is drilling as many as 30 holes on
land where Terraco holds up to a 3% NSR royalty. Most of the drilling is in a
grid pattern. "The drill grid pattern is at the southern end of Spring
Valley and covers part of a high-grade gold section of the resource. The
drill grid also appears to test the west and southwest extension of this
targeted high-grade area," Terraco reported.
The grid is just south of an area where Barrick Gold and Midway Gold reported in 2013 a drill intercept of 361 meters of 1.47
grams per tonne (g/t) gold, including 23m of 3.02 g/t gold and 21m of 7.54
g/t gold.
Todd Hilditch, president and CEO of Terraco, commented, "We believe
that Waterton is now moving Spring Valley forward on the same track that
Barrick had been on as operator of the Spring Valley joint venture prior to
its sale in late 2015. Based on the number of 30 spotted holes and an assumed
drill depth in line with previous Spring Valley drilling, this program is a
further multi-million-dollar financial commitment of Waterton."
Barrick Gold had an earn-in agreement with Midway Gold and actively
explored the project. In Barrick's Third Quarter 2014 report, the company stated, "The Spring Valley project, 70 percent owned
by Barrick and approximately 60 miles west of Cortez, continues to advance
through a prefeasibility study which is on track for completion in late 2015.
This is a low capital cost, heap leach project with the potential to become a
standalone mine. Barrick expects to report an initial resource estimate with
its 2014 year-end results."
In August 2014, Midway announced "substantial resource growth" in the Spring
Valley Project, which included a 102% increase in the Measured and Indicated
ounces, to 4.37 million ounces of gold, over the 2011 resource estimate, as
well as a 20% increase in the Measured and Indicated gold grade. The resource
estimate also included 1.07 Moz gold in the Inferred category.
Those results prompted Ken Brunk, then CEO of Midway, to comment at the
time, "The accelerated progress on the project continues to give us
confidence that Spring Valley has the potential to be a world-class gold mine
in the near future."
Barrick's Spring Valley project budget for 2014 was $17.4 million, for
both in-fill drilling and an internal prefeasibility study, and was planning
to conduct "additional metallurgical studies, hydrological studies,
environmental baseline studies, and geotechnical wall rock stability studies
required for mine planning." Midway noted at the time, "Beyond the
resources added by the infill program, Spring Valley has excellent growth
potential and exploration upside. The current resource remains open to the
south, to the northwest and at depth."
Midway's subsequent bankruptcy led to Waterton's purchase of the Spring
Valley property at the end of 2015. Waterton then consolidated the area in
2016 by purchasing Terraco's adjacent Moonlight property and additional
lands.
"We believe that Spring Valley is the only remaining
multimillion-ounce Nevada-based gold asset that is currently not owned by a
major gold production company," Hilditch noted.
Terraco's royalties on the Spring Valley property date from 2016 and
include:
- up to a 3% NSR on a majority of the current resources of
Spring Valley (claims boundary in red);
- up to a 1.5% NSR on a portion of Spring Valley on the
north side of the resource (claim boundary in green);
- up to a 0.5% NSR within a one-half mile of the red
claims and outlined in blue (not including the area in green);
- a 2% NSR on the 35sq km Moonlight Project adjoining
Spring Valley to the north.
Image reproduced from news release with boundaries being approximate
Waterton Global Resource Management is a private equity firm that
specializes in metals and mining. According to the firm, it has
raised two private equity funds with total combined committed capital of
$1.75 billion and holds a portfolio of more than 75 assets in the U.S. and
Canada.
Waterton states that it "actively manages its project-level
investments and leverages its in-house mining, permitting and investment
origination expertise to create value at its assets by:
- Improving resource quality and size
- Advancing permitting initiatives
- Developing and implementing mine plan optimization
strategies
- Right-sizing mining equipment and infrastructure to
reduce mining costs and capital expenditures
- Determining optimal processing methods to improve
recoveries
- Consolidating assets to achieve greater economies of
scale
It also states that the firm "employs a disciplined approach to
exiting investments, waiting until value creation initiatives have been
completed and market conditions allow, in order to maximize value for its
investors."
Terraco is one of several royalty holders on the Spring Valley property;
all the royalties combined total 7%, but Terraco owns the largest portion of
up to 3% NSR.
[NLINSERT]
Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and
provides services to Streetwise reports as an employee. She or members of her
household own securities of the following companies mentioned in the article:
None. She or members of her household are paid by the following companies
mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors
of Streetwise Reports: Terraco Gold. Click here
for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not
of Streetwise Reports or its officers. The information provided above is for
informational purposes only and is not a recommendation to buy or sell any
security.
4) The article does not constitute investment advice. Each reader is
encouraged to consult with his or her individual financial professional and
any action a reader takes as a result of information presented here is his or
her own responsibility. By opening this page, each reader accepts and agrees
to Streetwise Reports' terms of use and full legal disclaimer.
This article is not a solicitation for investment. Streetwise Reports does
not render general or specific investment advice and the information on
Streetwise Reports should not be considered a recommendation to buy or sell
any security. Streetwise Reports does not endorse or recommend the business,
products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers,
employees or members of their families, as well as persons interviewed for
articles and interviews on the site, may have a long or short position in
securities mentioned. Directors, officers, employees or members of their
immediate families are prohibited from making purchases and/or sales of those
securities in the open market or otherwise from the time of the interview or
the decision to write an article until three business days after the
publication of the interview or article. The foregoing prohibition does not
apply to articles that in substance only restate previously published company
releases. As of the date of this article, officers and/or employees of
Streetwise Reports LLC (including members of their household) own securities
of Terraco Gold, a company mentioned in this article.
