Richard (Rick) Mills
Ahead of the Herd
As a general rule, the most successful man in life is the man who has the best information
Almost 200,000 people heading to the California gold fields crossed through what is now Nevada via the California Trail. While many of them camped close to the confluence of the Humboldt River and Maggie Creek in northeastern Nevada none had any idea they were just a very short distance away from one of the most prolific gold deposits in the world.
The area, known as the Carlin Trend, is a belt of gold deposits roughly eight kilometers (km) wide by sixty km long extending in a north-northwest direction through the town of Carlin, Nevada. The Carlin Trend has yielded more than 50 million ounces since its discovery - the entire California Gold Rush produced 40 million ounces.
Although Nevada is called the Silver State the state is the fourth largest gold producer in the world supplying 5.6% of global demand - 79% of all the gold mined in the United States (5,640,000 troy ounces or 175 t in 2009) comes from Nevada. Total gold production from Nevada recorded from 1835 to 2008 totals 152,000,000 troy ounces (4,700 t), worth over US $228 billion at 2011 prices.
Almost all the gold in Nevada comes from large open pit mining and cyanide heap leaching recovery. A number of major mining companies, such as Newmont Mining and Barrick Gold Corporation, operate gold mines in the state.
In 1961 John Livermore was a Newmont geologist looking for gold in the windows of the Carlin Trend - windows occur where obscuring layers of rock, displaced by an uplift, have eroded to expose the rock below. Livermore found gold and staked the claims that became the Carlin Mine.
The vast bulk of Nevada gold production is from large mines where the deposits consist of microscopic gold particles - the gold in this type of deposit cannot be seen by the naked eye, nor can it be concentrated by panning.
"This gold is so fine you just can't pan it. You can't even see it under an ordinary microscope." John Livermore
The old timers principal means of exploration was the gold pan so it’s no wonder our California dreaming gold seekers passed it by - a standard fire assay will capture and reveal the gold with no difficulty.
Newmont Mining Corp. started mining gold at Carlin in 1965, by the end of the year the Carlin mine was the largest gold producer in Nevada and the second largest gold producer in the nation.
But by 1970 only one other new gold mine - the Cortez - had been discovered. Exploration in the area was at a standstill, almost everyone had given up and moved on but Newmont who was busy building a strong land position in the state - by 2002, Newmont owned or controlled 7,915km² of land.
John Livermore also felt there were further discoveries to be made so he started Cordex Exploration in 1971. One of the first things John did was hire Whit DeLaMare to prospect for the company - a smart move as DeLaMare’s work led to the discovery of the Pinson, Preble, Sterling, and Dee mines and the development of the Getchell Trend which is second only to the Carlin Trend in Nevada gold production.
Terraco Gold Corp. (TSX.V TEN | US: TCEGF), has a mix of advanced and early-stage gold-silver projects in Idaho and Nevada, USA.
Terraco’s Moonlight project (100% owned) area was identified by the Cordilleran (Cordex) Exploration Company. Cordex principals are John Livermore - credited with the discovery of the Carlin deposit in Nevada and the discovery and development of the Pinson and Dee mines, and Andy Wallace - credited with a major role in the discoveries of the Marigold and Stonehouse/Lone Tree gold deposits as well as the Daisy (Secret Pass) mine.
Terraco’s Moonlight property adjoins the Barrick Gold Corp./Midway Gold Corp. joint venture Spring Valley Project. The Spring Valley Project hosts a National Instrument 43-101 measured, indicated and inferred resource of 3,500,000 ounces of gold (as reported by Midway Gold). Barrick's drilling has confirmed the gold mineralization is open towards Moonlight and at depth.
Moonlight lies eight km north of Coeur’s Rochester silver-gold mine, the Rochester mine has produced over 125 million ounces of silver and well over one million ounces of gold in its 24 year history.
Gold and silver mineralization at Moonlight is known to be controlled by northerly-trending structures. The Black Ridge Fault Zone's eastern boundary controls the eastern margin of precious metals mineralization at Rochester.
Drilling at Moonlight indicates that this district-scale fault system continues through the Moonlight Project properties. So there is evidence to suggest that Moonlight could be the next mineralized event in a string of deposits on the Humboldt Trend ranging from Relief Canyon at the south end, north through Nevada Packard, Rochester, Spring Valley and Moonlight.
Terraco’s Moonlight Project is one of the largest early stage properties remaining on the Humboldt Trend and the company has been quietly consolidating and increasing its land position over the last three years.
Terraco executed a definitive agreement with Seymork Investments Ltd., a British Columbia company, for the acquisition of a significant land package and mineral rights at, and in, the area of the Moonlight property. This strategic acquisition provides Terraco with 100% ownership of a larger land package and a better overall exploration opportunity for its Moonlight Property.
Terraco has also enhanced its presence in the Humboldt trend by entering into a three-way transaction. Terraco arranged for a US$5,000,000 (non-dilutive) cash infusion and acquired a royalty on mineral production from claims covering the Barrick-led Spring Valley Project. The Spring Valley project currently hosts a National Instrument 43-101 measured, indicated and inferred resource of 3,500,000 ounces of gold.
Terraco completed two royalty transactions (since December 2011) on the Barrick-led Spring Valley Project. The first transaction is a 2.5% royalty option on approximately 75 percent of the claims covering the currently outlined ore body at the Spring Valley Project (outlined in red above). The second transaction captured the remaining portion (approx 23%) of the Spring Valley ore body where Terraco has a one percent net smelter return royalty (outlined in green above). Terraco also has the right of first refusal for a 0.5 percent royalty in a specific area of interest - an almost one kilometer radius around the bulk of the deposit (in red).
The Almaden (Nutmeg Mountain) Project
Terraco’s Almaden Project is 100% owned and is located 109 km north of Boise, Idaho. The advanced-stage project has excellent access and infrastructure and has over 66,140 meters of drilling in 903 drill holes. The project is host to a low-sulphidation, epithermal gold deposit.
The Almaden project is a flat-lying outcropping ore body that, within surface to approximately 300 feet hosts a National Instrument 43-101 compliant measured resource of 239,000 ounces of gold, an indicated resource of 625,000 ounces of gold and an inferred resource of 84,000 ounces of gold in oxide, mixed and sulfide mineralization.
Terraco is in the midst of drilling to explore the extension of the near surface mineralization that is open to the north and south, as well as test for high-grade, bonanza-style structurally controlled gold mineralization at depth.
Terraco's 2012 Phase I drill program consists of infill and development core drilling together with a third rig that drilled several large four inch diameter core holes for metallurgical test work.
"Terraco started the 2012 program with 3 core rigs in an effort to provide, as quickly as possible, infill drill assay information necessary for the next step of evaluation. We are aggressively pushing towards the economic and geological studies required for a production decision." Todd Hilditch, President and CEO, Terraco
Project comparisons for Almaden are The Ken Snyder "Midas Mine" (Newmont) and the Hollister Mine (Great Basin Gold) located in northeast Nevada.
The Almaden acquisition created a lot of unrealized value for Terraco shareholders and could add considerably more - very few drill holes at Almaden were below 125 meters. Terraco has put together such a drill program in order to test underneath and proximal to the existing resource for high-grade feeder zones and shoots.
Almaden already has near one million ounces of gold and it could prove to be significantly larger.
Terraco’s Moonlight project has obvious upside exploration potential.
The royalty transactions on the Barrick-led Spring Valley Project, currently host to over 3,500,000 ounces of gold, not only gave Terraco a non-dilutive US$5,000,000 cash infusion in late 2011 but also gave the company what in reality is an ATM card. TEN can use that ATM card and pull out millions of dollars in future non-dilutive financings in order to fund the company going forward by selling pieces or small percentages of the royalty.
All of the gold ever mined in the history of the world would only fill two Olympic-sized swimming pools. The U.S. Geological Society (USGS) estimates that just 51,000 tons of global gold reserves remain in the ground - gold mining is obviously a very lucrative business. Terraco has a royalty on a huge gold deposit that must look desirable to a number of companies, not the least of which may be Barrick itself.
For all these reasons Terraco Gold Corp. TSX.V - TEN should be on everyone’s radar screen.
Is Terraco on yours?
If not, maybe it should be.
Richard (Rick) Mills
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Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.
Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.
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