Australian gold miner Newcrest has entered four separate option and earn-in agreements with CSE-listed Headwater Gold, pursuant to which the major would have an option to acquire up to a 75% interest in projects in Oregon and Nevada.

Newcrest would earn its interest in the Mahogany project, in Oregon, as well as Agate Point, Midas North and Spring Peak project, in Nevada, for a cumulative exploration spend of $145-million and the completion of prefeasibility studies with a minimum resource of 1.5-million gold or gold-equivalent ounces per project.

“The proceeds of the transaction will allow Headwater to continue self-funding our highest-priority 100%-owned opportunities, while Newcrest’s project-specific funding will allow for rapid advancement of several projects which require a scale of exploration expenditure and drilling currently impractical for Headwater,” said president and CEO Caleb Stroup.

“Our potential carried project interests to the completion of prefeasibility studies and back-end royalties ensure that shareholders retain significant upside on these projects with minimum corporate dilution,” he added.

Newcrest GM for exploration, Fraser MacCorquodale, said that the Great Basin was a “great location” for discovering high-grade gold epithermal deposits.

The 100%-owned and royalty-free Agate Point project is located in north-western Nevada, 50 km along trend from the historic, bonanza grade Sleeper Gold mine. The claim block covers a linear ridge of untested widespread, high-level epithermal alteration with consistent highly anomalous trace element geochemistry typical of other known epithermal systems. There has limited exploration on the project and there is no known exploration for high-grade vein targets.

The 100%-owned and royalty-free Mahogany project is located in south-eastern Oregon, 20 km northwest of Integra Resources’ DeLamar deposit. Surface alteration at Mahogany is typical of a high-level epithermal system. Headwater’s initial drill programme at Mahogany, completed in late 2021, consisted of five diamond core drill holes totaling 810 m. Drilling focused on a 500-m segment of the Main Ridge Fault zone, which Headwater geologists interpreted as a possible feeder to the epithermal alteration cell manifest at surface. Drilling confirmed the presence of structurally-controlled high-grade gold zones, including a drill intercept that returned 9.37 g/t gold over a drilled thickness of 0.73 m in hole MH21-02.  

Headwater’s 100%-owned and royalty-free Midas North project adjoins Hecla Mining's Midas mine complex and covers a large hydrothermal alteration cell, extending at least 4 km in strike and 1 km in width, which is interpreted by Headwater geologists as representing the high-level manifestations of an epithermal precious metal system. To date, 90 rock chip samples and 54 stream sediment samples have been collected by the company from the project area which has highlighted several priority areas of anomalous precious metal values, with highly anomalous values of epithermal pathfinder elements. Extensive epithermal alteration exists on the project, including widespread zones of high-level chalcedonic to opaline silica flooding, clay alteration, and local sinter formation, including fossilized geyser vents. The project has seen limited historic exploration with no documented exploration drilling.  Headwater believes the project has potential for high-grade epithermal mineralisation at depth similar to that found at the Midas complex.

The Spring Peak project is located in the Aurora mining district of west-central Nevada, about 50 km southwest of the town of Hawthorne. The project adjoins Hecla Mining’s Aurora mine complex, where existing infrastructure includes a 350 t/d mill, several production water wells, and high-voltage three-phase power.

A large hydrothermal alteration cell occurs in the center of the Spring Peak area, which represents a high-level manifestation of an epithermal precious metal system. A five-metre-thick silica sinter, which extends over 500 m in strike, occurs in the center of this alteration cell and displays various vent facies textures interpreted to reflect a high-energy hydrothermal vent environment.

In 2021, Headwater conducted an initial first-pass reverse circulation drill programme consisting of five holes totalling 1 350 m. Drilling successfully intersected epithermal quartz veins at a range of elevations in multiple structures.

Headwater holds an option to acquire a 100% undivided interest in the Spring Peak project from the underlying owner, subject to retained royalties.