Gold Standard's coveted land bank in Nevada. Photo: Gold Standard Ventures

Gold Standard's coveted land bank in Nevada.
Photo: Gold Standard Ventures

Oceana Moves Into Newmont's Nevada Heartland

Issue 126, May 2015

OceanaGold, which agreed to pay $106m for Newmont Mining's Waihi gold mine in New Zealand two weeks ago, has struck a second deal closer to Newmont's heartland in Nevada.

On Monday, Oceana bought a 14.9 per cent stake in Toronto-listed Gold Standard Ventures, giving it a strategic interest in the company's Railroad-Pinion project, bordering Newmont's Emigrant mine.

Gold Standard has discovered 1.4m ounces at Pinion on Nevada's lucrative Carlin Trend since 2012 and sees the deposit as a sister to Emigrant, currently Newmont's lowest cost operation.

The two companies have spent time “comparing apples,” Gold Standard's co-founder Luke Norman told Global Mining Observer this week, making Oceana's move look like an unexpected foray onto Newmont's doorstep.

Newmont owns 19 mines in northern Nevada and 13 processing facilities, allowing it to bolt-on nearby discoveries, but Oceana is one of very few companies beyond Newmont and Barrick Gold to have expertise in refractory ore, dominant on the Carlin Trend, making it a plausible new player in the region.

Canada's Agnico Eagle, which has toeholds in several explorers sitting in the gold camps of its largest rivals, also has a 4 per cent stake in Gold Standard Ventures.

The company closed a $9m fundraising in February, with this week's deal lifting its cash position to around $23m. “We've been adding ounces at Pinion for less than $5 an ounce,” co-founder Luke Norman said by telephone, “so this can go a really long way for us.”

Drilling costs in Nevada have dropped by as much as 50 cents on the dollar since 2013, he says, benefitting companies with rigs turning. Gold Standard is due to begin its third round of drilling this month and believes Pinion, which outcrops at surface, is part of a much larger gold system.

“There's a footprint to this and it needs to be followed structurally. We want to step outside the known bounds of the asset, because when we overlap the geophysics, looking for structure, and the geochemistry, looking for pathfinders that are more transient like arsenic, the whole 12-mile long corridor lights up.”

Railroad-Pinion is “the real deal,” one rival explorer on the Carlin Trend says. Shares in Gold Standard last traded at C$0.66, valuing the company at C$94m ($79m).

“There’s a footprint to this and it needs to be followed structurally.”

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