Newmont picks Clover (September 05, 2003)

Vancouver Just days after granting Great Basin Gold (GBG-T) the right to earn a 70% stake in its Golden Cloud property, Atna Resources (ATN-T) has dealt a second Nevada property, this time to the world’s largest gold producer.

Newmont Mining (NEM-N) can earn a 51% interest in Atna’s Clover property by spending $2.5 million on exploration and development, including cash payments to Atna and underlying option-maintenance payments. The major can increase its stake to 75% by completing a feasibility study and making undisclosed additional annual cash payments to Atna until production. The junior retains an option to buy back a 5% interest for $2 million.

The Clover project lies 11 miles east of Newmont’s Ken Snyder mine (2.7 million tons grading 1.23 oz. gold and 14.13 oz. silver), in what is known as the Jake Creek trend. Located along the northern margin of the Midas trough, the trend is a complex, northwest-trending structural corridor that hosts the same stratigraphy as Ken Snyder.

The property was originally explored in the 1980s for its bulk-tonnage gold potential. Previous drilling, consisting of 60 holes, intersected mineralized banded quartz-adularia veins and breccia fillings, with significant intercepts of 0.74 oz. gold over 32 ft., 8 oz. gold over 2.5 ft., 0.23 oz. gold over 25 ft., and 0.53 oz. gold over 5 ft.

Mineralization occurs within two zones that are largely open along strike and downdip, associated with north-northwest- and east-northeast-striking structures. High-grade float boulders grading up to 0.93 oz. gold and 9 oz. silver were discovered 2 miles northwest of the previous drilling. A recent airborne geophysical survey by Newmont outlined a 0.7-by-0.7-mile anomaly over the high-grade float.

Atna picked up the property earlier this year. Under terms of the option agreement, Atna can acquire the property by paying US$300,000 in staged payments. The vendor retains a 3% NSR, which Atna can buy back for US$1 million per 1% interest.