No big lift for Atna (July 11, 2007)

Not even a 50% increase in resources could give Atna Resources (ATN-T) a substantial lift on the market.

The company issued its revised estimate for its flagship Pinson Property in Nevada but saw its share price rise just 2% or 4 to $1.85 on a volume of 230,000 shares.

Quite frankly, its fairly detailed information and it takes the market a while to absorb that sort of thing, says Atnas president and chief executive David Watkins. My sense is that over the next couple of weeks the market will begin to appreciate the value of what weve 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 the inferred category.

Measured and indicated resources increased to 1.06 million oz. 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 per tonne. The cut-off grade was 6.9 grams per tonne.

And those numbers may only be getting 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 on the project.

Atna optioned the project from Barrick back in 2004 roughly 5 years after Barrick had shut down an open pit operation there which produced roughly 1 million oz. of 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 and eight miles from Newmont Mining‘s (NMC-T, NEM-N) Twin Creeks mine.

Watkins says if Barrick doesnt decide to exercise its back-in, Atna has the money in place to drive the project ahead on its own.

With roughly US$12 million in the kitty, hes confident of being able to get to feasibility, and with Newmonts Twin Creeks plant not far a way, all Atna would have to do is mine it, muck it and truck it, Watkins says.

Twin Creeks already processes ore from Barricks Getchell, and with the metallurgy form Pinson fitting with Newmonts processing plant, he doesnt anticipate additional ore being processed there as a problem.

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

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