The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Bringing Brewery Creek, Tonopah gold projects under one roof North of 60 Mining News – March 5, 2021
The heap leach pad on Golden Predator's Brewery Creek project in the Yukon is estimated to host 248,000 oz of gold in about 9.5 million metric tons of previously processed material.
Viva Gold Director Ted Mahoney and geologist Ed Bryant inspect samples from 2020 drilling at Tonopah gold project.
Golden Predator Mining Corp. and Viva Gold Corp. have agreed to a merger that will bring two advanced stage gold mine projects – Brewery Creek in the Yukon and Tonopah in Nevada – under one roof.
"This transaction brings together all of the key ingredients required to build a premier junior gold producer – two advanced stage gold development projects ready for permitting and development, exploration upside, excellent mining jurisdictions, strong management skillsets, a solid balance sheet, and strong market liquidity," said Viva Gold President and CEO James Hesketh.
Under a definitive agreement announced by the two companies on March 3, Golden Predator will acquire all Viva shares by issuing 1.6 shares in exchange for each Viva share. Upon the closing of the transaction, former Viva shareholders will hold roughly 27% of the outstanding shares of the merged Golden Predator. Based on the exchange ratio and stock value of each company, this represents a 35% premium to Viva Gold shareholders.
Hesketh will serve as president and CEO of the merged company and Golden Predator Mining Chief Operating Officer Mike Maslowski will continue in his same role moving forward.
"The Golden Predator board of directors looks forward to working with James Hesketh and the Viva team," said Golden Predator Mining Executive Chairman William Sheriff. "Mr. Hesketh is deeply familiar with Brewery Creek and its potential for economic production. We strongly believe our shareholders and the communities we operate in will benefit from jurisdictional diversification and the addition of proven mine building expertise at this pivotal time."
Sheriff will continue to serve as executive chairman of the merged Golden Predator board of directors, which will include four Golden Predator nominees and three Viva Gold nominees.
Golden Predator's current CEO Janet Lee-Sheriff will assist in the transition and work with the merged company to uphold corporate values and objectives surrounding progressive relations with Yukon communities and First Nations.
Janet recently took on the role of president at Group 11 Technologies, a new company advancing the development of a proprietary technology for the in-situ recovery of gold, silver, and other metals.
More information on Group 11 Technologies can be read at Group 11 nabs in-place mining properties in the October 21, 2020 edition of Metal Tech News - https://www.metaltechnews.com/story/2020/10/21/mining-tech/group-11-nabs-in-place-mining-properties/360.html.
Advancing Brewery Creek
Brewery Creek, Golden Predator's current flagship asset, is an advanced stage gold project at the site of a former mine about 35 miles (55 kilometers) east of Dawson City.
Over a seven-year span beginning in 1996, Brewery Creek produced roughly 280,000 ounces of gold from a summer seasonal heap leaching – a method of gold recovery that involves stacking ore in a lined facility and using cyanide to separate the gold from the rock – to recover gold mined from a series of seven open pits spanning the property.
Despite the abundance of rich, near-surface gold mineralization remaining along the six-kilometer- (3.7 miles) corridor at Brewery Creek, Viceroy Resource Corp. opted to wind down operations due to gold prices hovering around US$300/oz in 2002.
A feasibility study currently underway is detailing plans for a phased resumption of mining at Brewery Creek.
During the initial phase, the renewed operation will reprocess material on the heap leach pad, which hosts roughly 248,000 oz of unrecovered gold, and newly mined oxide ore from areas of the Brewery Creek property already permitted for mining. A second expansion phase of the operation is expected to include mining gold mineralization identified outside of the area that fall under the permits from Viceroy-era mining.
According to a calculation completed in August, Brewery Creek hosts 22.2 million metric tons of indicated leachable resource averaging 1.11 grams per metric ton (789,000 ounces) gold, plus 16.8 million metric tons of inferred leachable resource at 0.92 g/t (497,000 oz) gold.
The new calculation also includes 30.6 million metric tons of inferred sulfide resource at 0.84 g/t (828,000 oz) gold, which will be considered for mining in later phases of Brewery Creek operations.
A 32-hole drill program completed last fall focused primarily on expanding and upgrading these resources ahead of the feasibility study that is slated to be completed in the coming weeks.
Strategic Tonopah plan
Viva's Tonopah gold project in Nevada is also transitioning to the development stage.
Situated on the Walker Lane gold trend about 19 miles (30 kilometers) southeast of Kinross Gold Corp.'s Round Mountain Mine, Tonopah hosts 12.83 million metric tons of measured and indicated resources averaging 0.79 g/t (326,000 oz) gold; plus 8.4 million metric tons of inferred resource averaging 0.67 g/t (181,000 oz) gold.
A preliminary economic assessment completed in 2020 outlined plans for a low-cost open pit and heap leach operation similar to what is being considered for Brewery Creek that would produce 40,000 to 50,000 oz of gold per year.
Viva is currently carrying out field and engineering studies aimed at having Tonopah ready for permitting by the end of the year.
"In 2021, Viva will focus on the execution of its strategic business plan, which includes advancing the Tonopah gold project to feasibility study and permitting, while simultaneously continuing to develop the significant exploration potential of this highly prospective land position," Hesketh said in January. "Our plan is to develop an open pit-heap leach gold mine at Tonopah around our currently identified gold resource base to produce at least 40,000 to 50,000 ounces of gold per year with a six- to nine-year mine life, while continuing to increase the gold resource base. To put this in context: our goal is to develop a business that at current gold prices would produce annual revenues in the range of US$80 to $100 million."
Under the Golden Predator banner, this plan for Tonopah will benefit from a strengthened management team with the expertise to advance projects; an enhanced balance sheet with more than C$6.3 million in cash and marketable securities; and the synergies from developing the similar and slightly more advanced staged Brewery Creek gold project in the Yukon.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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