Monster Gold on a Shoestring
In September of 2012 I wrote a piece about the heroes of mining. The first person mentioned in the article was Carl Pescio from Nevada. Carl staked hundreds of properties in Nevada before joining forces with Vista Gold to form Allied Nevada in 2008. Allied did very well for years before needing to raise over $1.3 billion to build a processing plant to process 120,000 tonnes per day of sulfide material. That sort of money just isn’t to be found easily today and Allied Nevada slid over 90% from $45 a share in 2011 to just over $4 today.
Carl kept a few of the choice projects and did a deal with a tiny junior named Rimrock Gold (RMRK-OTCBB) on several project surrounding the ultra high-grade Hollister Mine northwest of Elko Nevada at the intersection of the Carlin Trend and the Northern Nevada Rift. When it was in production, the Hollister Mine produced 80,000 ounces of gold a year at a grade of 1.3 ounces per tonne.
Great Basin Gold operated Hollister until the company went into bankruptcy in 2012 because of their South African properties. The Hollister Mine was put up for auction and sold to Waterton Global Resource Management in early 2013 for $15 million. Waterton shut down mining at Hollister in late November of 2013 in order to focus on resource development drilling.
The Hollister/Midas deposits and surrounding projects now controlled by Rimrock Gold are in the nature of epithermal veins systems capped by sinters. I’ve tried in vain to find a good discussion of just what a sinter is because it has so much to do with the mineralization of both Hollister and the high-grade Midas mine nearby. This is the best and closest I could find.
Rimrock management feels their projects will be similar in nature to both Hollister and Midas but, due to uplifting, believe gold will be found nearer to the surface than at Hollister and Midas.
A sinter is nothing more than a cap of silica that overlies a hot water system similar to those hot springs at Yellowstone. Hot water seeps through cracks in the rocks until it starts to boil based on lower pressure and minerals that have been absorbed along the way precipitate out.
When the hydrothermal fluids contain silica, a sinter or cap of silica may form. This cap traps the hydrothermal fluids below it and that concentrates the minerals. So Midas has over 1 ounce of gold equivalent per tonne and Hollister has North America’s highest-grade deposit at 1.3 ounces of gold per tonne.
(Click on images to enlarge)
On my tour of the Rimrock properties, we saw signs of sinter all over the place. In fact, the largest mercury mine in the US was located on Rimrock’s Silver Cloud project. Rimrock has completed CSMAT surveys over their projects and come up with new targets for drilling. Millions of dollars in exploration have been spent on the various projects in past drilling. Rimrock has consolidated the drill data and ground surveys and come up with a new model they want to prove.
Rimrock believes their ground between Midas and Hollister has been uplifted and gold will be found closer to the surface. They know the silica precipitated out at the surface and the gold level should be 150 to 300 meters below the sinter cap. Drilling should be cheaper and more productive than at Midas and Hollister.
For the last three years, gold has been in a bear market. Money has been close to impossible to find for both majors and juniors. The Hollister Mine followed Great Basin Gold into bankruptcy and was sold last year for $15 million to Waterton Global. Newmont sold the Midas Gold Mine to Klondex in early 2014 for $83 million. Allied Nevada remains on the ropes needing $1.3 billion to complete their advance sulfide mill.
Rimrock is caught in the middle. Without question, the district contains multiple Hollister/Midas type deposits. Carl Pescio picked the projects up in the first place because he thought there would be several high-grade deposits found. To Rimrock’s credit, they have kept expenses down to an absolute minimum. Gold has turned the corner and money is waiting on the sidelines. The potential for Rimrock is very high but they will need money and top-notch technical people. And I think they have the people, they just need the money.
Rimrock is not an advertiser. I have been to the projects and I have bought some shares in the open market. I am biased. As always, you are responsible for your own investment decisions.
Rimrock Gold Corp