TORONTO (miningweekly.com) – Canadian gold producer Veris Gold on Friday said it had agreed to process refractory ore from ASX-listed Anova Metals’ Big Springs project at its Jerritt Canyon mill complex, in Elko County, Nevada.

Under the terms of the agreement, Anova would deliver about 1 000 short tons a day of gold-bearing ore from Big Springs, located 42 km from Jerritt Canyon, for a year. The ore would be batch processed in lots of about 25 000 t and provide Veris with additional flexibility in processing ores from its four Jerritt Canyon underground gold mines.

The toll-milling agreement was structured so that all doré produced from the ore would remain the property of Anova throughout the process and the associated toll-milling fee charged for each ton would be treated as a separate revenue stream, offsetting the primarily fixed processing costs. Further terms of the agreement were confidential to both parties.

“This new toll-milling agreement with our northern neighbours will use some of the excess capacity at the Jerritt Canyon processing plant and further offset our operating costs. We look forward to working with the Anova team to further develop the Big Springs project,” Veris COO Graham Dickson said.

Veris was currently operating under protection of the Companies' Creditors Arrangement Act, owing to defaulting on a senior secured gold forward facility it entered into in 2011 and 2012 with Deutsche Bank London Branch. Veris had also filed a Chapter 15 case in the United States Bankruptcy Court for the district of Nevada.

BIG SPRINGS

The Big Springs gold deposits exhibit many of the characteristics of Carlin-type deposits and comprise five separate zones. The project was mined by Freeport McMoRan between 1987 and 1993, producing 386 000 oz of gold from six openpits. 

Mining at the project ceased in 1993 owing to low gold prices. From 2002, new owners of the project, Gateway Gold completed extensive exploration work on the project including 49 100 m of reverse circulation and diamond drilling. This work was combined with pre-existing drill data to produce a combined database with more than 2 400 drill holes.

In 2006, Gateway reported a National Instrument (NI) 43-101 inferred gold resource estimate within the project. Anova’s due diligence had been unable to validate the basis of the assumptions and estimates used in that NI 43-101 report and, accordingly, Anova noted that it would not rely on it.

Gold mineralisation extends from surface and is open along strike and at depth, and forms a series of high-grade shoots that extend well below the base of the previously mined openpits.

Anova had completed a new compliant inferred resource estimate according to the Joint Ore Reserves Committee Code (2012 edition) that comprised a total resource of 14.8-million tonnes at 2 g/t gold at a cutoff grade to 2.5 g/t gold, which resulted in a high-grade core to the deposit of 2.9-million tonnes at 4.2 g/t gold for 388 000 oz.