No big lift for Atna (July 23, 2007)

Not even a 50% increase in resources at its Pinson gold property, in Nevada, could give Atna Resources (ATN-T, ATNAF-O) a substantial lift on the market.

The company issued a revised estimate for its flagship property, but on the day the news was released, the Vancouver-based company saw its share price rise just 2%, or 4, to $1.85 on trading volume of 230,000 shares.

“Quite frankly, it’s fairly detailed information and it takes the market a while to absorb that sort of thing,” says Atna president and CEO David Watkins. “My sense is that over the next couple of weeks, the market will begin to appreciate the value of what we’ve got out there.”

The revised estimate not only increased the total gold resource, but also moved more mineralization to the measured and indicated category from inferred.

Measured and indicated resources increased to 1.06 million oz. gold from 712,600 oz., with an average grade of 14.4 grams gold per tonne.

Inferred resources increased 9% to 1.2 million oz. from 1.05 million oz., with an average grade of 11.7 grams gold. The cutoff grade was 6.9 grams gold per tonne.

And those numbers may get bigger.

With the positive results came assurances from Barrick Gold (ABX-T, ABX-N) that it is set to start an exploration and development program at the site.

Barrick has less than 21 months left to spend the US$30 million it needs to back in to a 70% interest in the project. To date, the gold giant has spent less than US$1 million at Pinson.

Atna optioned the project from Barrick in 2004 — about five years after Barrick shut down an open-pit operation there that had produced roughly 1 million oz. gold.

The site sits at the intersection of the Getchell gold belt and the Battle Mountain-Eureka trend, and is adjacent to Barrick’s Getchell and Turquoise Ridge mines, less than 13 km from Newmont Mining’s (NMC-T, NEM-N) Twin Creeks mine.

Watkins says if Barrick decides not to exercise its back-in rights, Atna has the money in place to move the project ahead on its own.

With roughly US$12 million in the kitty, he’s confident of being able to get to feasibility, and with Newmont’s Twin Creeks plant not far away, all Atna would have to do is “mine it, muck it and truck it,” Watkins says.

Twin Creeks already processes ore from Barrick’s Getchell, and with the Pinson metallurgy a good match for the processing plant, Watkins doesn’t anticipate a problem in having additional ore processed there.

Pinson is a Carlin-type gold system with micron-gold hosted in altered, fine-grained sedimentary rocks.

Mineralization at both Pinson and Getchell are controlled and locally hosted by the Getchell Fault zone, which defines the eastern margin of the Osgood Mountains. Fine-grained calcareous siltstone and shale of the Ordovician Comus and Cambrian Preble formations host the gold mineralization at Pinson. Gold occurs in decalcified and locally silicified zones along high-angle fault zones, in collapse breccias, and as stratigraphically controlled replacement bodies in receptive host rocks adjacent to feeder faults.