Something’s brewing in Idaho

Idaho is becoming a popular mining destination, and with the Fraser Institute recently ranking the U.S. state as the fifth-best jurisdiction in the world for mining, that trend is likely to continue. 

Besides record-high gold and silver prices, the industry is benefiting from weakness in the forestry and ski industries. Idaho’s unemployment rate hovers between 20% and 30%, and both citizens and legislators have put a lot of hope in the region’s mineral potential.

In fact, Idaho is one of five states in the U.S. that has a joint-review agreement between the federal government and the state with regards to how permitting works. The joint review is designed to give more power to the state and create a more streamlined and efficient permitting process. 

Midas Gold (MAX-T) is at the forefront of the state’s gold exploration resurgence – its Golden Meadows project is one of the most prospective properties in the region. 

Golden Meadows sits on some well-positioned real estate in the central Idaho gold belt, a structure that has produced over 8 million oz. gold. 

Mineralization in the belt is associated with multiple intrusive events. Golden Meadows itself sits in a large intrusion with younger volcanics poking up through it.

The geological events at the site caused a series of ring fractures outside of the caldera, and gold mineralization is associated with those fractures. 

Fracture activity led to the creation of a few significant deposits on Midas’ ground. The company has already defined three deposits, each with resources over 1 million oz. 

That a junior mining company could stumble upon such a prolific region and claim it all to itself has much to do with the ground’s history. 

Golden Meadows was hidden from mainstream gold investors for many years because the land was broken up amongst a patchwork of owners who apparently didn’t like each other very much. 

Two haul roads on were built on the property at considerable costs so that the former owners could draw boundaries between  their land.

With so many owners carving up the property, drilling could never be done along strike of deposits, because it would mean crossing onto someone else’s ground. Historical exploration was confined to intense drilling into small areas, with no attention paid to the bigger picture, and no one able to test the notion that they were on top of a gold district. 

Midas corrected the problems by drilling out the Hangar Flats deposit. Hangar Flats was a former antimony mine that produced gold as a by-product.

The company knew it was onto something when drilling in 2009 and 2010 returned highlight assays of 177 metres grading 2.4 grams gold and 163 metres grading 2.2 grams gold.

Drill work in Hangar Flats’ maiden resource estimate outlined 1.5 million tonnes of inferred resources grading 0.79 gram gold in the oxide zone.

The sulphide zone proved to host higher grades, with 15.6 million inferred tonnes grading 2.44 grams gold and 9.7 million
indicated tonnes grading 2 grams gold. The company outlined 624,600 oz. indicated and 1.26 million oz. inferred resources.

After gaining a better understanding of Hangar Flats, Midas moved 3 km northeast to the West End deposit.

West End hosts four historic pits, but with only heap-leach mining on their minds, the former owners weren’t thorough in their examination of the ground. Stephen Quin, Midas’ president and chief executive, describes the historic work as “patchy little pits that were just scraping the tip of an iceberg.” 

The real meat of mineralization lay beneath the near-surface oxide zones down in the sulphides, where Midas returned highlight intercepts of 33 metres grading 3.43 grams gold and 47 metres grading 2.64 grams gold. 

The oxide zone at the West End has 7.5 million tonnes of indicated resource grading 0.96 gram gold and 1.2 million tonnes of inferred grading 0.83 gram gold, while the sulphide zone has 18.3 million tonnes of indicated resources grading 1.51 grams gold and 7.7 million tonnes of inferred resources grading 1.40 grams gold. 

That puts 1.1 million oz. gold in the indicated category and another 379,000 oz. in the inferred. 

The Yellow Pine deposit, located 1 km west of West End, is another area of interest in the property. 

Yellow Pine produced a large amount of tungsten and antimony during the Second World War. 

The area had been drilled by Hecla Mining (HL-N) and Barrick Gold (ABX-T, ABX-N) during the time they had a joint venture on the property. The companies only released results from their first three holes, which showed promising highlight assays of 53 metres grading 4.15 grams gold and 38 metres grading 2.84 grams gold. 

The companies stopped drilling, however, when they hit the sulphide zone. 

Midas also breaks Yellow Pine’s resources into oxides and sulphides, with the oxide zone holding indicated resources of 1.02 million tonnes grading 0.9 gram gold and inferred resources of 80,000 tonnes grading 1.37 grams gold. 

The sulphide zone has indicated resources of 4.32 million tonnes grading 2.19 grams gold and inferred resources of 28 million tonnes grading 2.32 grams gold. 

Hangar Flats and Yellow Pine have more antimony than they do silver and gold. Perhaps that’s one reason that Hecla and Barrick away. 

But for Midas, the antimony by-credits are only a positive. With antimony in the ground at Hangar Flats and Yellow Pine worth more than the gold and silver in the ground, the antimony credits mean the company can produce gold for “free”. 

Unlike Hangar and Yellow Pine, the West End deposit is primarily a gold deposit with smaller amounts of antimony and silver.

Midas has committed to spend $13 million on its exploration program, which will lead to a new resource by the end of next year’s first quarter.