Precious metals prices have been sent skyrocketing in the wake of the global economic shutdown. As a result, there has been a renewed focus on the epicentre of gold and silver mining in the United States – Nevada. Since breaking $2,000 per ounce for the first time in late August, gold has hovered above $1,900 per ounce. Silver has stayed above $800 per ounce since early August. For companies with assets in the Silver State, companies like Kinross Gold (NYSE:KGC) (TSX:K), Argonaut Gold Inc. (TSX:AR) (OTC:ARNGF), Hecla Mining (NYSE:HL), Coeur Mining (NYSE:CDE), and Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF), these market conditions could not be better.
Every year, the Fraser Institute’s rankings of the most attractive mining jurisdictions in the world consistently place the State of Nevada at or near the top, and with good reason. Nevada was ranked 3rd overall in 2019 and 1st overall in 2018. As gold and silver continue their upward trend, the same factors that have always made the state attractive to mining companies glisten all the brighter.
Those factors include a very mining-friendly bureaucracy, with quick permitting processes and a favorable industry tax rate. Over the course of the state’s long mining industry history, Nevada has built up world-class mining infrastructure throughout the state. The sheer size of the Nevada mining industry assures that the state is home to a strong mining workforce of experienced professionals. Nevada’s mining industry is built around unique geology leading to an abundance of both ultra high-grade underground mines and large open pit ‘Carlin-type’ deposits, giving it the highest mineral wealth in the country.
The Tonopah Silver District: Nevada’s Last Great Silver District
As a precious metals surge adds to the attractiveness of the Silver State, Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF) is conducting drilling on one of Nevada’s most desirable districts. The last great silver district to be discovered (way back in 1900!), which grew to be the second-largest in the state, the Tonopah Silver District has produced more than 174 million ounces of gold and 1.8 million ounces of silver. Blackrock is the first group to target these historic workings, bringing modern exploration back to the district since production shut down nearly 100 years ago.
Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF) now controls more than half of the Tonopah District. The company’s Tonopah West land package includes 97 patented and 17 unpatented mining claims covering 4.5 sq km (1,100 acres). The company’s very first drill result into the project from July highlighted a new vein yielding 3 meters grading 2,198 g/t silver equivalent. That same drillhole intersected another vein that ran 30 meters of 965 g/t Ageq.
In early September, Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF) announced a second discovery at Tonopah drilling 2,215 G/T silver equivalent over 3.0 meters within 4.6 meters of 1,577 G/T silver equivalent. Blackrock has 2 drill rigs turning and more assays pending on this very same program.
SilverCloud: A Rare Grassroots Opportunity
Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF) is also set to commence a 3,500 meter, 14-drillhole program at a second property in September. The Silver Cloud project in Northeastern Nevada contains 573 claims covering 45 square kilometers.
The property was first staked in 1999 and has been owned by three mining majors including the Newmont Corp, but a series of unfavorable royalty agreements combined with low gold and silver values at the time rendered production unprofitable. The property was foreclosed in 2017, rendering the royalties void and has since been acquired by Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF) just as precious metals prices entered a boom period.
Silver Cloud is located at the tip of the Carlin Trend, where it collides with another prolific gold belt known as the Northern Nevada Rift, with neighboring mines owned by some of the biggest names in the surrounding mining industry. Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF) announced that it intends to spin out Silver Cloud into a seperate company that will be owned by Blackrock shareholders, giving investors exposure to two public companies with gold hovering around all-time highs.
Nevada Attracts the Biggest Names in Mining
Long before this gold and silver run, Nevada was attracting major mining companies.
Kinross Gold (NYSE:KGC) (TSX:K) added to their stake in the prolific region in 2016 when it purchased 50% of the Bald Mountain project. This is in addition to their Round Mountain mine near Tonopah, Nevada, which has poured over 15 million ounces of gold since it first came online. In 2018, the company acquired the remaining 50% of Bald Mountain from Barrick Gold and now owns the largest private mining land package in the US. Bald Mountain has 1.27 million ounces of gold in proven and probable reserves and produced 187,961 ounces of gold in 2019.
Hecla Mining (NYSE:HL) owns several mines in Nevada, including the company’s Hollister mine, which is located just five kilometers from Blackrock Gold Corp’s (TSXV:BRC) (OTC:BKRRF) Silver Cloud mine. In 2017, Hollister produced 172,301 ounces of silver and 32,887 ounces of gold.
Coeur Mining (NYSE:CDE) owns the Rochester mine in Pershing County, which produced 3.7 million ounces of silver and 35,400 ounces of gold, as well as the Sterling Gold Project located near Beatty, Nevada, which has a total inferred gold resource of approximately 709,000 ounces, averaging 0.066 oz/t.
Canadian gold company Argonaut Gold Inc. (TSX:AR) (OTC:ARNGF) also gained a slice of gold-endowed Nevada this year when it acquired Alio Gold Inc and its Florida Canyon mine, which has an inferred resource of 276,000 ounces of gold and 1.66 million ounces in the indicated resource estimate. On July 3, the company announced the results of an updated life of mine (LOM) plan for Florida Canyon which includes average annual production of 77,000 ounces of gold at all-in sustaining costs under $1,050 per ounce over 9.5 years.
This gold and silver run is a very opportune set of circumstances for companies with precious metals assets in the state of Nevada, and Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF) has two of the best. In fact, they just announced that they intend to spin out a second company, giving shareholders exposure to two public companies, unlocking value for both of their projects.
For more information about Blackrock Gold Corp (TSXV:BRC) (OTC:BKRRF), click here.
Featured image: DepositPhotos © gustavofrazao
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