Mineable gold confirmed west of Casper

2011-06-28T00:45:00Z 2011-06-30T11:15:12Z Mineable gold confirmed west of Casper

By Greg Fladager

CasperJournal.com
June 28, 2011 12:45 am  • 

Wyoming doesn’t have the reputation of being a gold mining state, but that might change if a company called Evolving Gold is right in its bet on a prospect west of Casper.

“Wyoming is known for not having any significant gold, and this discovery changes that,” said Evolving Gold CEO Bill Gee, “It’s only in the last couple of years that the importance of this discovery is clear.”

The deposits he is talking about are around Antelope Flats in the Rattlesnake Hills about 60 miles due west of Casper.

“It has some similarities in the overall geology to Cripple Creek, in terms of its association with the age of rocks, and kind of rocks,” Gee said, in reference to the Colorado mine that produced over 2-million ounces of gold between 1994 and 2005, and is projected to produce another 3.5 million by 2016.

“There’s different families of gold deposits, and it would be in the same family as that, but many differences also in terms of size and mineralogy,” Gee added.

Gee is not alone, however, in making the comparison to Cripple Creek. Former Wyoming Geological Survey Geologist W. Dan Hausel who explored the area for the state in 1981 did as well.

“This was an economic geologist’s dream” Hausel wrote of his finds 30 years ago. “The geology couldn’t be any better for discovery of major gold deposits, and it was unexplored in modern history.... It is likely that some 1 million ounce gold deposits will be outlined in the near future.”

Evolving Gold is not the first to try the area, with American Copper and Nickel drilling 32 test holes in the 1980’s, and Newmont Mining Corp. drilling 14 in the 1990’s. For various reasons, both companies abandoned the effort. It is not unusual, however, for another company to try again with a different or more substantial plan.

According to information released on the Evolving Gold website, they are drilling deeper than the previous companies, and the test cores for their Rattlesnake Hills project show some strong potential. They report gold amounts of between 1.25 and 10.8 grams per ton (gpt) in some rock samples (which compares with the Cripple Creek’s reported average of .56 gpt).

“They clearly have a deposit,” said Geologist Jon Kaminsky, the assistant field manager at the Bureau of Land Management’s Lander Office. “They have numerous core holes that have, what I would say, is an encouraging number of intercepts with mineable grades of gold.”

Evolving Gold has claims on some 14,000 acres, according to their website, mostly on BLM land, and a small amount on state (about 40 acres). They have drilled some 154 test holes over the past three years, ranging in length from 800 to 3,000 feet, as they attempt to determine the size and shape of the deposit.

“What we’ve done in the last three field seasons, and we’re just beginning now for our fourth season, is a drill campaign, that’s drilling core holes, of course their quite variable (in length),”Gee said, explaining they are still developing the geological “resource model” of the prospect. “We look very closely at the rock intercept, and of course we assay them for gold and a host of other elements, and try to unravel the mysteries of the geology to find where there’s gold concentrations.”

While the company reports 14,000 acres in claims, their active “claim block” with the BLM covers about 4,800 acres, according to Kaminsky, and within that, the project area is on some 614 acres, with an approved drilling plan permitting them to disturb 38.75 acres with well pads and operations. Still, a year ago, the company doubled the area of the drilling plan, and currently has a $726,000 reclamation bond on file with the BLM.

“Their findings were encouraging enough that they decided to come back to the BLM and take off a bigger chunk,” Kaminsky observed.

As noted on the company website, Evolving Gold is concentrating its exploratory drilling in three locations. The first drill phase turned up mineralization as high as 8 gpt in an area some 1300 by 600 feet, at a depth of about 1500 feet, according to a report of the Denver Regional Exploration Geologists Society. The size, depth and connection of the ore bodies, however, apparently remain a central question.

Meanwhile, the BLM supports the use of directional drilling, and placing multiple wells on one pad to minimize environmental impacts, which Evolving Gold has done, according to Kaminsky. Because there are no high-pressure water aquifers in the area, and no oil based muds or fracking involved in the drilling, the BLM will only require the company to fill the test holes and cap them at surface level, once they are finished.

“So far they’ve done an excellent job of sticking to the plan, and doing the things we’ve asked them to do,” Kaminsky said. “We have no issues with Evolving Gold.”

If the deposit is found to be commercially viable, Evolving Gold has a number of extraction options open to it, including open pit and/or underground mining. Gee said, however, that aspect would be determined by mining engineers, and probably involve a different type of company.

“We are an exploration company. We’ve never developed or operated a mine ourselves, and don’t anticipate that, that’s a different skill set,” Gee said. “Mine development and mine production is generally a larger, slower moving company and less willing to take risks. But of course they’re quite capable of doing systematic development and production.”

Kaminsky said the mineral owner has the right to extract the deposits, and the BLM land in the Rattlesnake Hills area has few restrictions.

“The 1872 mining law, in essence, states that a claimant with a valid claim for locatable minerals has the statutory right to develop that claim and obtain those minerals on the public lands, anywhere that land it open to claim,” Kaminsky said. (Under the 1872 law, signed by President Ulysses S. Grant, there is also no federal severance tax on gold. The annual cost of a mining claim is $140.

Most conventional extraction methods are permitted, Kaminsky noted, including the heap leach, which uses a mill to grind the ore to a coarse grade, placing it in a pile or “heap,” and washing the pile with a cyanide sultion to separate the gold. There are also underground mines, if the ore is too deep to economically accommodate an open pit operation.

Kaminsky said whoever develops the mine will have to do an Environmental Impact Statement (EIS), and go through the National Environmental Protection Act (NEPA) process to get a permit.

“On a strip mine, for instance, we may determine through analysis that certain practices could be unnecessary or cause harm to the environment as based on many different factors. There could be cultural or endangered species issues, or you’re tearing up too much land, and could just as easily do this underground,” Kaminsky said of the BLM’s review process. “When you do the environmental analysis under NEPA, you look at alternatives to what the company proposes ... It may not be the way you want it.”

Kaminsky noted, however, he was not aware of endangered or threatened species issues in the area, though there are Native American “cultural” sites within the lease block, which are already being protected.

“It’s an extra concern environmentally, that’s for sure,” Kaminsky said, but further noted, “We have no idea where they are going with this.”

“It will take a few more years of exploration and evaluation, and if that’s successful, a few years of permitting and engineering and feasibility analysis, and then financing and then construction and production,” Gee said. “Each of those steps is pretty significant. It needs to be done, and done well. “

“A lot of people think of gold exploration as mom and pop prospectors out there, and they come up with big nuggets or something,” Gee commented. “It’s in fact expensive, systematic work over many, many years, and with lots of different experts from geologists, geo-physicists, geo-chemists, engineers, drilling contractors. There’s a lot that goes into this.”

When asked if it might take another ten years, Gee said he hoped not that long, but would not give a time estimate. The current BLM drilling plan is for three years, and they are in the middle of it.

Evolving Gold is teaming up with a subsidiary of Agnico-Eagle Mines Ltd. to form a $76 million joint venture on the Rattlesnake Hills project, according to Gee. While both firms are incorporated in Canada, Gee says Evolving Gold’s staff is mostly American.

“We are a Canadian listed company, as is typical for junior exploration companies worldwide,” Gee explained. “Technically our corporate office is Vancouver, but our main operational office is Longmont, in the Denver area.”

“We have a choice of where we explore, and we’re very happy to be one of those exploring in the USA, and particularly in Wyoming,” Gee said. “We just like the people, the state, the country, and trying to do right by it. It’s a treat to be working here.”

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