ADELLA HARDING Mining Correspondent
Nevada Gold Mines and i-80 Gold Corp. reached an agreement that gives NGM full ownership of the South Arturo mine and gives i-80 Gold the Lone Tree and Buffalo Mountain properties. In addition, i-80 Gold acquires the Ruby Hill mine from Waterton Global Resources Management.
NGM also receives a low-cost option to acquire i-80 Gold’s Rodeo Creek exploration property adjacent to South Arturo on the Carlin Trend, and i-80 Gold will have the right to use the gold from NGM for a while.
“This is a win-win transaction for Nevada Gold Mines and i-80,” said NGM Executive Managing Director Greg Walker and i-80 CEO Ewan Downie echoed that. sentiment during a September 7 conference call.
The agreements with NGM and Waterton will allow i-80 Gold to eventually process gold from the company’s Granite Creek underground project in Humboldt County, its McCoy-Cove underground project south of Battle Mountain and the Ruby Deeps deposit in Ruby Hill at the Lone Tree autoclave, Downie said.
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Ore from all three is needed to fill the autoclave facility, and the operation of the autoclave will make i-80 Gold one of only three companies with refractory ore capabilities in Nevada, it said. he declares. The other two are NGM and First Majestic Silver, which owns the Jerritt Canyon mine north of Elko.
Future open-pit mining potential at Buffalo Mountain, near Lone Tree, is also tied to the NGM deal, and Downie said NGM has already begun licensing the deposit.
The money that came to i-80 Gold from South Arturo will initially be replaced by revenue from Ruby Hill and residual leaching at Lone Tree, he said.
The Lone Tree Mine along Interstate 80 west of Battle Mountain was a Newmont Corp. operation. which ceased active mining in 2006, but Newmont and then NGM continued to maintain the autoclave facility in a state of care and maintenance.
NGM is a joint venture between Barrick Gold Corp., which is the operator and owns 61.5%, and Newmont, which owns 38.5%.
Lone Tree’s large mill complex is “in terrific condition,” Downie said, also saying that Lone Tree’s facilities – including the autoclave, flotation plant, heap leach facilities, warehouse, offices and training room, analytical lab, fire station and railroad access – will save the i-80 Gold the money it would take to build new facilities.
He estimated the cost of upgrading the autoclave facility for i-80 needs at $150 million, but building a new one would cost up to $1 billion.
Lone Tree will become the “corporate hub” of the Reno-based i-80 Gold, Downie said.
He said Lone Tree, which also has additional mining potential, is midway between I-80’s Granite Creek site and his McCoy Cove property. The company is completing trial mining this year at Granite Creek, which is on the site of the former Pinson mine.
Downie said Granite Creek is the priority, followed by underground development at McCoy Cove and permission for underground work at the Ruby Deeps deposit at Ruby Hill.
“We plan to greenlight McCoy Cove this year,” he said.
An underground decline at the bottom of the East Archimedes open pit at Ruby Hill could begin in late 2022 or 2023, depending on clearances, Downie said on the conference call.
Ruby Hill is an open pit mine on the outskirts of the town of Eureka. Homestake Mining developed Ruby Hill and Barrick became the operator when the company acquired Homestake. After Barrick stopped mining, the company sold the mine. Ruby Hill later became Waterton property.
Walker said i-80 Gold’s acquisition of Lone Tree, which NGM was not utilizing, becomes a “transformational asset for i-80.” In return, NGM’s acquisition of 40% of i-80 in the South Arturo joint venture secures additional ounces with an open pit and underground option for our Carlin operation. »
The deal also removes NGM’s closure liability, with i-80 providing a replacement bond for reclamation obligations as a condition of closing the deal, which requires i-80 to pay up to $50 million. dollars based on the mineral resources of the Lone Tree property.
The arrangement also provides for NGM to enter into toll milling agreements to provide i-80 Gold with interim processing capacity at NGM’s autoclave facilities for up to three years, depending on when Lone Tree is operational, and in NGM’s roasting facilities for 10 years.
NGM will also subscribe for i-80 shares equivalent to approximately 9.9% interest for total proceeds not to exceed $50 million, making NGM one of the major shareholders of i-80. And NGM will repay i-80 Gold approximately $7.3 million that the company previously advanced to NGM for South Arturo projects.
For Ruby Hill, i-80 Gold is acquiring a 100% stake in the property for up to $150 million, but the company could make milestone payments to bring the price down to $130 million.
Payments to Waterton will include $75 million in cash and $8 million in stock and subsequent payments related to mineral resources, a feasibility study, construction decision and commercial production, according to the i-80 announcement. Gold.
Ruby Hill “has the potential to become one of the largest gold and silver properties,” Downie said, also noting that there is potential for base metals, and the plant could be modified to deal with base metals later.
Along with the deals with NGM and Waterton, i-80 Gold has also entered into an agreement with Orion Mine Finance for acquisition and development financing of up to $240 million, and Equinox Gold Corp. plans to participate in a private equity placement by exercising a portion of its anti-dilute rights.
Equinox Gold acquired Premier Gold Mines earlier this year and spun off i-80 Gold into a stand-alone company.
“The secured and ongoing financial arrangements with Nevada Gold Mines and Orion, combined with interim processing agreements, are intended to provide i-80 with the ability to immediately commence development of its substantial portfolio or advanced-stage deposits located in one of the most mining-friendly jurisdictions,” said Matthew Gollat, executive vice president of business and corporate development.