SolidusGold (SDC.V) had been looking to acquire a new property for quite a while now, and we’re glad to see patience has been paying off as Solidus entered into a definitive purchase agreement with Newmont Mining (NEM, NEM.TO) to acquire its Northumberland gold project in Nevada for US$20M in cash. Our sources confirm Solidus was able to outbid an unidentified group bidding $19M for the asset.
Northumberland is one of the projects included in the project pipeline of Fronteer Gold which was acquired by Newmont Mining several years ago. The project contains 3 million ounces of gold and 10.5 million ounces of silver in a historic resource estimate, and subsequent to this resource estimate, the previous owners spent approximately US$17.5M on additional exploration (almost 20,000 meters have been drilled post the publication of the resource), and more importantly, metallurgical test work.
The project is located approximately 400 kilometers southeast of Reno, and consists of 1,572 hectares on private land claims (which should make the permitting process fairly straightforward). Approximately 540,000 of the 3 million ounces are located in the oxide zones that could be mined with an open pit. The remaining 1.8 million ounces in the open pit are located in sulphide mineralization and even though the average grade of those ounces is in excess of 2.3 g/t (which is really high for open pits), the jury is still out on the sulphide zone as it requires a completely different processing method with very likely a lower recovery rate. So for now, the oxide resource is what matters.
To fund the US$20M acquisition cost, SolidusGold has engaged Haywood Securities to raise up to C$40M in a private placement priced at C$0.35, and several strategic investors have already expressed their interest to invest up to C$20M in this offering.
Go to SolidusGold’s website
The author has a long position in SolidusGold and plans to participate in the current private placement. Please read the disclaimer
