Gold exploration and development company US Gold on Thursday announced the sale of its interest in the Maggie Creek property to Nevada Gold Mines (NGM) for $2.75-million and a potential 0.5% net smelter returns royalty.
US Gold last year drilled two holes at the south end of Maggie Creek.
“While we knew that we had potential along the entire length of the claims, we followed the reasoning of our then chief geologist, Ken Coleman, that the geologic horizon hosting the large gold endowment was a stone's throw away at NGM's Gold Quarry mine and might be within reach on the Maggie Creek project. Previously, the consensus was that structures along the Carlin Trend had put important gold-bearing host horizons beyond reasonable reach. The holes drilled by US Gold intersected the Popovich Formation, the primary host of Carlin-style gold mineralisation and returned anomalous gold and significant elemental anomalies known to be associated with the most enriched gold deposits in the area. We believe all that remains is to vector into what could be significant occurrences of gold mineralisation, judging the extent of the alteration and pathfinder elements, through further exploration,” said US Gold president George Bee.
He went on to say, "Such exploration is very costly and, for US Gold, drilling Maggie Creek comes at a time when there is not a great deal of appetite in the capital markets to fund the resource sector and exploration in particular. We believe that pursuing deeper high-grade mineralization is best conducted by NGM, who have decades of experience on the Carlin Trend and understand the gold occurrences in the target horizons.
"We are content to have played a part in what we believe will be another extension to the prolific Carlin Trend, to have recovered more than our investment in the Maggie Creek property, and retained an interest, via a production royalty, for our shareholders in what we hope will be future exploration success.”
US Gold will focus its exploration efforts on its Keystone property, a 100% owned land package on the Battle Mountain Eureka/Cortez Trend, a highly prospective area just 10 miles on trend from the NGM Cortez Complex.
Pursuant to a 2019 exploration agreement, US Gold has the right to earn at least 50%, and up to 70%, of the Maggie Creek property from Orogen subsidiary Renaissance Exploration (RenEx) by making certain payments and incurring certain exploration expenditures.
Orevada has assigned its interests in the original earn-in agreement to NGM and, simultaneously, NGM and RenEx entered into an amended exploration agreement that will enable NGM to earn 100% interest in Maggie Creek.