Good PR for NJMC (OTCBB)
Newmont returns to Idaho silver valley looking for gold
Wallace, Idaho (Platts)--21Feb2008
Newmont and New Jersey Mining of Kellogg, Idaho, recently signed a term
sheet in advance of a deal to explore a 38 square-mile area 12 miles north of
Wallace, Idaho. Newmont's foray into northern Idaho's legendary Silver Valley
to search for gold reflects a change in how the Denver-based gold miner
evaluates future mining prospects, a Newmont spokesman tells Platts.
Under the proposed terms announced by the companies, Newmont can earn a
51% interest in the joint venture by spending $2 million over three years, and
can increase its interest to 70% by spending an additional $10 million or
completing a feasibility study in the years four through seven.
Nearly two decades ago, Newmont explored an adjoining property (the
Golden Chest mine) as a potential open-pit gold target but returned the Golden
Chest to its owners after deeming the 250,000 oz deposit too small for its
interests. Now, Newmont is downsizing its targets for deposit size.
"In the past, we would look at deposits of 5 million oz or larger, but
our new CEO has encouraged the team not to discount smaller deposits," company
spokesman Omar Jabara told Platts. "Finding large deposits is becoming more
and more difficult. We believe if small companies can mine smaller deposits
there's no reason we can't do so as well."
Excluded from the deal is the Golden Chest, which New Jersey is now
lease-operating as an underground gold producer. Also excluded, but available
for later option to Newmont, is New Jersey's nearby Niagara property, an
extension of the Montana copper-sulfide belt into Idaho.
New Jersey spokesman Grant Brackebusch told Platts Niagara could come
into play if limited gold showings in the Upper Revett formation improve at
depth in the Lower Revett. He said known gold grades at Toboggan were
sufficient for underground mining, as opposed to the open-pit strategy Newmont
used in evaluating Golden Chest back in the late 1980s.
"We told Newmont that underground mining and conventional flotation
milling would be the best way to go as far as politics and permitting are
concerned," Brackebusch added.
--David Bond; newsdesk@platts.com
platts.com |
