Nevada Pacific grabs Limousine Butte

Vancouver Junior Nevada Pacific Gold (NPG-V) has reacquired sole ownership of the Limousine Butte project in Nevada.

The company picked up the remaining 50% interest it did not already own from Newmont Mining (NEM-N). The major retains a sliding scale net smelter return royalty of 1.5% to 2.5% on all production from the property, and receives an advance payment of US$1 million due at commercial production.

Newmont completed several rounds of drilling over Nevada Pacific’s 15-sq.-mile project, 40 miles northwest of Ely along the projected southern extension of the Carlin trend. The company tested for oxide, potentially open-pittable mineralization by geological mapping, rock and soil sampling, and airborne magnetic and ground gravitational surveys, as well as four rounds of exploration drilling. Late last summer, the major tested six target areas over a 4-mile strike length. Stepping out 400 ft. from a second round hole, which intersected 70 ft. of 0.14 oz. from a 415-to-485-ft. depth north of the previously mined Golden Butte open pit, Newmont hit 35 ft. of 0.032 oz. starting at a depth of 515 ft. In addition, drilling on the Pony Express target returned 25 ft. of 0.027 oz. at 240 ft. The remaining wide-spaced reconnaissance drilling on four other targets yielded no significant gold values.

The project area is underlain by an Upper Paleozoic sequence of sediments, consisting of massive carbonate and calcareous shale, siltstone and sandstone. Exploration for copper in the 1960s led to the discovery of a deep-seated porphyry system in the southwestern portion of the property. In the 1980s, a joint venture between Alta Gold and Echo Bay Mines (ECO-T) recovered just under 100,000 oz. gold in a heap-leach operation at the Golden Butte mine, along the northeastern corner of the property.

Newmont entered into an option agreement on Limousine Butte back in June 1999 and earned a 50% stake in the project last year by spending US$1 million over four years.