There’s gold in those dumps

The Sleeper gold mine in Nevada operated as a high-grade open pit from 1986-1996 and according to operations reports by its then owner, Amax Gold, about 54 million tonnes of waste were cast off in waste dumps over the course of the mine life. Today Sleeper’s new owners, Paramount Gold (PZG-T, PZG-N), have confirmed that drilling has demonstrated the waste dumps have resource potential based on favorable assay results from sixty-five drill holes.

Highlights from the assays include a 45-metre intercept grading 0.558 gram gold per tonne, a 24-metre intercept grading 0.754 gram gold, and an 18 metre intercept averaging 0.963 gram gold. Of the sixty-five drill holes, 72% or 47 of the holes returned intercepts with grades above 0.20 gram gold per tonne, including 18 holes with significant intervals averaging averaging more than 0.40 gram gold.

“We are frankly surprised that some of this material did not go to the leach pads when it was first mined even given the lower gold prices at that time,” Paramount’s chief executive, Christoper Crupi said in a statement. Crupi noted that while the company needs to see final results from the leach column tests, he is “increasingly confident of the economic potential” of the material.

Paramount has engaged mining consultants Tetra Tech to prepare a resource estimate for the project’s three waste dumps.

In the meantime Tetra Tech expects to complete a preliminary economic assessment of the Sleeper gold project before the end of the current quarter. The Sleeper project in Humboldt County consists of the original mine and numerous concessions that have been acquired since 1996 that make up a consolidated land package of about 30 sq miles. When the Sleeper mine was in production under Amax Gold, it produced 1.66 million ounces of gold and 2.3 million ounces of silver and Paramount believes, based on historic production records, that less than half of the gold mined at Sleeper was ever recovered. “The very high-grade veins at Sleeper were milled and thus allowed operations to be very profitable,” the company writes on its website, “without attempting to maximize recoveries from other gold-bearing material such as the heap leach ore, or sulphide material. A significant number of ounces are above ground on the site.”

Paramount estimates that roughly 49 million tons of material exists above ground in the heap leach pads at Sleeper and the material is covering in part some exploration drill targets.

Currently measured and indicated resources at Sleeper stand at 172.76 million tonnes grading 0.47 gram gold for 2.63 million ounces of contained gold and 4.56 grams silver per tonne for 25.34 million ounces of contained silver. Inferred resources add 81.75 million tonnes grading 0.43 gram gold for 1.12 million ounces of contained gold and 3.12 grams silver for 8.20 million ounces of contained silver.

The Sleeper project is about 40 km from the town of Winnemucca and Paramount acquired it in 2010.

Shares of Paramount in Toronto closed the session 1.12% higher at $2.72 per share within a 52-week range of $1.99-4.40 per share. The junior has about 136.9 million shares outstanding.