Tuesday, May 24, 2011
MAY.V - Meadow Bay Gold Corp. Production in Gold-Rich Nevada? Great opportunity!
Meadow Bay Gold Corp. Prepare For Production in Gold-Rich Nevada
Fresh from its acquisition of Desert Hawk Gold, Meadow Bay Gold Corp (TSX-V: MAY) is working hard towards developing its three brand spanking new projects in the State of Nevada. With surface sample assays of up to 8.7 grams per tonne gold just in from the Colorback Gold Project, $11.3 million recently raised in a private placement and drilling and production plans lined up for the past-producing Atlanta Gold and Silver Mine, Meadow Bay Gold Corp., at only $1.29 a share, is screaming potential.
2011 has, thus far, been an eventful year for Meadow Bay. January saw the announcement of Robert Dinning as CEO, the man who is also the Chairman of Paramount Gold and Silver Corp (TSX-V: PZG), a $382 million publicly traded gold/silver mining company on the AMEX.
William Reed joined Dinning on the Meadow Bay board in March. A professional geologist with 40 years experience in the business, Reed is also Vice President of Exploration and co-founder of Paramount Gold and Silver Corp. He was credited with PZG's multi million ounce gold-silver discovery known as San Miguel in Chihuahua, Mexico and was also formerly the Chief Geologist for Hecla Mining (HL), a $2.26 billion silver giant.
Aside from assembling a veritable A-Team of experienced and impressively successful leaders to guide the Meadow Bay team, the company has of course been busy with prospective property acquisition.
Announced March 2nd 2011, Meadow Bay acquired all of the issued and outstanding common stock of Desert Hawk Resources Inc. and its three gold projects in Nevada – the Colorback Gold project, the Spruce Mountain molybdenum, copper, silver project and of course, the jewel in the Nevada crown; the past producing Atlanta Gold and Silver Mine.
The Atlanta mine consists of 12 patented and 49 unpatented lode claims in Eastern Nevada. Between 1975 and 1985, the mine produced 1.5 million tons of ore containing 0.09 ounces gold/ton and 1.25 ounces silver/ton and recovered 121,000 ounces of gold and 800,000 ounces of silver based on historic production records from the Bobcat Properties Inc.-Standard Slag Production Joint Venture.
The remaining indicated resource of 338,520 ounces gold (6.21 million tons grading 0.054 oz/ton Au) and inferred resource of 125,960 ounces of gold (3.07 million tons grading 0.041 oz/ton Au) and indicated resource of 3.1 ounces of silver (6.21 million tons grading 0.506 oz/ton Ag) and an inferred resource of 0.7million ounces of silver (3.07 million tons grading 0.236 oz/ton Ag) has been estimated by previous workers which is not compliant with standards as set out in National Instrument 43-101.
This historical resource is based upon an internal study completed by Kinross Gold U.S.A. Inc. between 1997 and 1998. Kinross performed extensive field mapping and sampling along with drilling of approximately 80 RC holes for a total of 54,255 feet. This drilling combined with the prior drilling by Gold Fields with 11 core holes (9,286 feet) and 71 reverse circulation holes (46,735 feet) and the drill program by Standard Slag provides the database for the internal resource estimate. Block models were prepared and resources calculated based upon various cut-off grades. The reported historical resources were calculated at a cut-off grade of 0.2 oz/ton Au.
Meadow Bay’s main aim right now is to reinstate production at the Atlanta mine. The company has retained Kirkness Diamond Drilling Inc. of Carson City, Nevada to commence a drill program at Atlanta with hopes high that old resources will be confirmed and new ones awaiting.
Newly appointed Director of Exploration Bill Reed commented “Given the current gold price, Meadow Bay Gold is very excited to drill the Atlanta Gold and Silver Mine with a view to confirming and expanding the historic Kinross gold and silver resources. We will also be looking at new targets and hope to make a new discovery.”
Whilst drill program plans are coming along nicely for Atlanta, sample assays from the Colorback Gold Project in Nevada are already in. Located 12 miles north of Barrick’s Pipeline in Nevada, the Colorback project consists of 120 unpatented lode claims, with a 43-101 report complete for filing on Sedar.
Meadow Bay has a first year budget of $750,000 to delineate shallow resources with RC drilling and to test the deeper Carlin Deposit target with core drilling on Colorback. According to a press release issued May 10th 2011, the results of the surface sampling program at the drill target site are as follows:
Sample Grams/ton gold
Results of previous exploration at the Colorback project indicate potential for thrust-related gold mineralization in the upper plate rocks similar to the nearby Hilltop deposit. Alternatively, the gold in the upper plate rocks may represent leakage from gold-bearing fluids passing through the carbonate formations of the lower plate. Disseminated gold mineralization in lower plate carbonate rocks hosts most of the large gold deposits in the Cortez – Battle Mountain trend as well as elsewhere in the prolific northern Nevada goldfields.
Meadow Bay intends to continue drilling on this promising property throughout 2011 in a bid to test the its seismic interpretation.
As part of its property portfolio, Meadow Bay also boasts the Spruce Mountain molybdenum, copper, silver project. With 63 unpatented lode claims adjacent and overlapping with a 100 million ton copper-molybdenum resource, Meadow Bay is negotiating a JV with Mosquito Gold on patented claims containing a porphyry copper deposit in the centre of the project area.
The company has a first year core drilling budget of $200,000 to test the molybdenum deposit and earn a 1% NSR royalty in the project.
Mining in Nevada
When it comes to digging for gold, you can’t go wrong with Nevada. The state currently mines 79% of all the gold in the United States and is one of the largest sources of gold in the world. Total gold production from Nevada recorded from 1835 to 2008 totals 4,700 tons, which is worth about US$180 billion at 2010 prices.
Plus, unlike coal and oil extraction, where mining companies pay royalties for minerals obtained from public lands, gold mining companies do not pay any royalties for deposits claimed on federal public lands. This is because gold mines on public land operate under the General Mining Act of 1872, making Nevada a friend to mining companies world round. For Meadow Bay to have secured not one but three properties in the mineral rich state, hints at big things to come for the ambitiously tenacious junior company.
Meadow Bay Gold Corp. is ferociously focused on increasing its gold reserve to more than 1 million ounces of gold and moving the Atlanta Mine back into production. The company has only 37 million shares outstanding and a market cap. of $47.73 million but boasts a management team with such a wealth of experience that success is almost imminent. With $5 million in the treasury, a closed financing of $11.25 million and three highly prospective properties on the golden grounds of Nevada, the future is certainly looking bright for Meadow Bay. For the month that’s in it, check out MAY.
Follow the company’s progress at www.meadowbaygold.com